Investor Presentation Q1 FY 2020 Date: 15/07/2019 FLOW BCL - - PowerPoint PPT Presentation

Investor Presentation Q1 – FY 2020

Date: 15/07/2019

FLOW

• BCL TRANSFORMATION FOR GROWTH PILLARS & ACTION TAKEN
• INDUSTRY OVERVIEW
• FINANCIAL INFORMATION

2

VISION VALUES

WINNING WITH BRANDS WINNING IN MARKET WINNING WITH PROCESSES WINNING WITH PEOPLE

TRANFORMING FOR GROWTH – BCL PATHFINDER

PILLARS OF GROWTH

MISSION

3

GROWTH PILLARS INTO ACTION

WINNING WITH BRANDS - INNOVATIONS , RENOVATIONS, COLLABORATIONS

Haircare

• Bajaj Cool Almond Drops Launched in March 19 to extend Almond Drops Equity into the cooling segment
• Increase in TV advertising spends to improve penetration
• Focus on using Digital media to target Urban consumers

Skincare

• Bajaj Nomarks Antimarks Ayurvedic Sunscreen launched in March 19
• Ayurvedic sunscreen products were developed with proven efficacy and consumer-validated sensorials. Products’ fragrances were

developed in partnership with internationally acclaimed fragrance house

• Product very well accepted by Modern Trade and E-commerce

Consumer and Technical Expertise Creation

• Fully trained panel who actively contributed to validate sensorially delighting products- Bajaj Cool Almond Drops, Nomarks Ayurvedic

Sunscreens

• Consumer tests to validate product efficacy and product likability

4

Q1– MARKET CONTEXT

HAIROILS

• Hair Oils category grew by 8.9% in volume in MAT Jun 19, whereas value growth has been 16%
• Volume MS% of Bajaj Almond Drops improved to 7.7% in MAT Jun 19 vs 7.4% in MAT Jun 18
• Value MS% of Bajaj Almond Drops improved to 9.6% in MAT Jun 19 vs 9.5% in MAT Jun 18
• Strong Penetration increase in ADHO at 21% (MAT Mar 19) vs 17.8% (MAT Mar 18) with a 22% increase in Households

NOMARKS

• Antimarks category grew by 7.3% in volume and 10.2% in value in MAT Jun 19
• No Marks MAT Jun 19 MS% improved to 8.6% from 8.0% in MAT Jun 18

5

Source: Nielsen Retail Audit Report, Jun 2019,

KWP IMRB Household Panel Report, Mar 2019

ADHO Volume Share has Increased Steadily across Urban and Rural

Source : RMS Data Jun’19

7.2 7.2 7.3 7.3 7.4 7.5 7.5 7.6 7.7 7.7 7.8 7.8 7.8 7.8 7.8 7.8 7.7 7.7 7.8 7.8 7.9 7.9 8.0 8.1 8.2 8.2 8.2 8.3 8.3 8.4 8.4 8.3 8.3 8.3 6.6 6.6 6.7 6.7 6.7 6.8 6.9 6.9 7.0 7.1 7.1 7.1 7.1 7.2 7.1 7.1 7.1 6.0 6.5 7.0 7.5 8.0 8.5 MAT FEB18 MAT MAR18 MAT APR18 MAT MAY18 MAT JUN18 MAT JUL18 MAT AUG18 MAT SEP18 MAT OCT18 MAT NOV18 MAT DEC18 MAT JAN19 MAT FEB19 MAT MAR19 MAT APR19 MAT MAY19 MAT JUN19 All India (U+R) All India - Urban All India - Rural 6

Nomarks has maintained share at a higher level post restage

7

Source: Nielsen Retail Audit Report, Jun 2019

7.6 7.8 7.9 8.1 8.2 8.1 8.2 8.0 8.0 8.2 8.3 8.5 8.6 8.7 8.7 8.6 8.5 8.5 8.6 8.6

6.0 6.5 7.0 7.5 8.0 8.5 9.0

MS Val

Building a Hair Oil Portfolio – Bajaj Cool Almond Drops

• Pricing - ~ 20% Premium to ADHO
• Packaging -
• Classic ADHO shape to leverage ADHO

Equity

• Red Color to tie in with category codes
• Available in Rs. 1 Sachet also
• Ravindra Jadeja taken on Board as Brand

Ambassador

• Brand supported with 360 media in Apr

May 2019

8

Cool Almond Drops : Positive early results

9

9 9 35 31 4 135 112 23 163 134 29 AI (U+R) AI- U AI-R

Value Offtakes (Lac)

Mar-19 Apr-19 May-19 Jun-19

• Bajaj Cool Almond Drops has the highest offtake amongst new

launches in Hair oil ( 4 months since launch )

• Market Share of 1.3 % in cooling oils in June 2019

Source: Nielsen Retail Audit Report, Jun 2019

Bajaj Nomarks Ayurvedic Antimarks Sunscreen

10

• Sunscreen is Rs 250 Crs category but with

Low Penetration

• Consumers hesitant to use current
• ptions because of perception of harsh

chemicals

• Opportunity to extend Nomarks equity of

Ayurveda + Marks Prevention

• Launched with Proposition of –

Protection from Sunmarks through Ayurveda

• Value Pack of Rs 49 /- to drive trials

Sunscreen – Supported through Digital Media and On ground Visibility

• Campaign reached 4.3Mn women and even got 5Mn Video Views - in

Launch Markets - Delhi + NCR, UP, Kolkata and Bangalore

• Campaign used Multiple Digital platforms like – YouTube, Facebook,

Instagram, Voot, Google Displays etc.

• Share in MT Chains ( Grofers , Apollo , Vishal ) has hit 3-4%.
• In test market Sunscreen contributes to 13-14% of Nomarks turnover

11

Enhancing Quantity and Quality of Distribution

• Improving Quality and quantity of coverage through effective use of SFA
• Numeric and Weighted distribution at an all time high
• Bajaj Almond Drops now available in over 40 lakh outlets
• Lowering of WS contribution from 60% to 33% over the last 2.5 years

12

Source: Nielsen Retail Audit Report, June 2019

Outlet no. in Lakhs 16-17 17-18 Q1-18 Q2 -18 Q3 -18 Q4 18 Q1 19 AC Nielsen Coverage 37.5 39.0 39.6 39.9 40.01 39.8 40.12 Direct Coverage 1.4 2.8 4.8 4.9 4.92 5.02 5.11 % of direct coverage 4% 8% 11.8% 12% 12% 12.5% 12.7%

GROWTH PILLARS INTO ACTION

WINNING IN MARKET – QUALITY & QUANTITY

General Trade:

• Growth have been sluggish across rural and urban
• Rural markets continues to lead growths across states , sequential slowdown observed
• Wholesale has seen sharper sequential slowdown
• Urban Retail continues to be stable
• Cool Almond Drops accepted well by trade

Alternate Channel:

• Modern Trade continued its strong growth at 22.5% for Q1
• Channels like E Commerce and Pharma grew by 217% and 117% helping overall growth of alternate Channel
• Nomarks brand showed a growth of 300% plus with the help of Sunscreen and increase in reach
• No business done in CSD for the quarter due to procedural issues in CSD

International Business:

• IB reboot completed last fiscal
• Business growing rapidly – added 250 bps to total company growth (value)
• Focus on key geographies, all of which are firing
• Thrust on secondary sales; registered 60%+ growth (value)

13

Q4 – MARKET CONTEXT

Source: Nielsen Retail Audit Report, Jun 2019

WINNING WITH PEOPLE

• Annual Rewards Cycle of FY 20 was implemented effective April 1, 2019 alongwith introduction
• f market competitive and flexible compensation and benefits.
• Key highlights of ARC’20 cycle was:
• Compensation Benchmarking completed for all Critical Roles
• 100% employees covered under “Variable Pay Plan”
• Assessment Centre was organized for Sales team. This initiative has ensured a strong pipeline of

internally promoted Managers who took larger roles across different geographies.

• Sales rewards & recognition programs for front-line was completely revamped to ensure it is

competitive and strongly linked with business performance.

• Manpower rationalisation action across support function initiated in line with revised business

strategy

INDUSTRY OVERVIEW

Industry Size and Structure

Light Hair Oils 40,675 Tn 2,044 Cr FMCG

• Rs. 3,97,003 cr

Hair Care

• Rs. 25,562 cr

Shampoo

• Rs. 7,622 cr

(30%)* Coconut Oil

• Rs. 4,520 cr

(18%)* Hair Oil

• Rs. 8,261 cr.

(32%)* Hair Conditioners

• Rs. 695 cr.

(3%)* Hair Dyes

• Rs. 4,464 cr

(17%)* Amla Based Oils 62,478 Tn 2,065 Cr VACNO 33,807 Tn 1,343 Cr 6% CONTRIBUTION

All India (U+R) MAT DEC 2018

*Others (5% vol contribution) 6,040 Tn 664 Cr

Ayurvedic/ Herbal 9,259 Tn 1033 Cr Cooling Hair Oils 21,294 Tn 1,113 Cr

25% 25% 17% 12% 14%

* Indicates Value Contribution to Hair Care

16

5,728 6,981 7,867 8,676 9,390 9,928 10,103 11,200 13,168 3,494 2,000 4,000 6,000 8,000 10,000 12,000 14,000 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 YTD Jun'19 236 238 247 269 255 254 264 283 309 80 50 100 150 200 250 300 350 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 YTD Jun'19 441 594 746 861 906 962 994 1,069 1,269 329 200 400 600 800 1,000 1,200 1,400 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 YTD Jun'19 11.0 13.9 16.3 18.1 18.1 18.8 19.2 20.5 24.2 6.01 0.0 5.0 10.0 15.0 20.0 25.0 30.0 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 YTD Jun'19

Growth 8.7%

Hair Oil Market in India

Overall Hair Oil Market – Volume Overall Oil Market – Value Almond Drops Hair Oil Market – Volume Almond Drops Hair Oil Market – Value

Hair Oils category shows Vol & Val growth at a YTD May 19 level. LHO segment also shows Val & Vol growth.

Source: Nielsen Retail Audit Report, Jun 2019

(In ‘000 KLtr) (Rs. Cr.) (In ‘000 KLtr) (Rs. Cr.)

Growth 7.4% Growth 3.9% Growth -0.2% Growth -5.3% Growth 3.9% Growth 5.7% Growth 8.2% Growth 10.3% Growth 12.7% Growth 25.6% Growth 6.1% Growth 5.3% Growth 3.4 % Growth 15.3% Growth 2.3% Growth 3.5 % Growth -0.3% Growth 10.9% Growth 17.3 % Growth 8.5% Growth 10.9% Growth 7.1% Growth 7.5 % Growth 16.8% Growth 16.9% Growth 18.1% Growth 1.8 % Growth 1.2% Growth 21.9% Growth 26.2 % Growth 34.8%

17

Growth 4.4% Growth 9.1% Growth 3.3% Growth 8.1%

Market Shares Trends in Total Hair Oil Category (All India - Urban Plus Rural)

Volume MS Value MS

At MAT level, ADHO has increased in Vol & Val MS

Source: Nielsen Retail Audit Report, Jun 2019

18

4.7% 5.8% 6.6% 6.7% 7.1% 7.4% 7.3% 7.3% 7.8% 7.4% 7.7% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 MAT Jun 18 MAT Jun 19 7.7% 8.5% 9.5% 9.9% 9.7% 9.7% 9.8% 9.5% 9.6% 9.5% 9.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 MAT Jun 18 MAT Jun 19

Factory (9)

OWN – Himachal Pradesh -2, Uttarakhand- 1, Guwahati 1 THIRD PARTY - Himachal Pradesh-2, Bangladesh-1, Uttarakhand- 2

Central Warehouse (2) Regional Distribution Centre (22) Urban Distribution Rural Distribution Redistribution Stockist 754

Retail Outlets 15,90,038

Super Stockist - 315 Sub-Stockist- 7800

Retail Outlets – 24,22,210

Distribution Network Distribution Structure

The company reaches consumers through 40.12 Million retail outlets serviced by 8869 distributors

757 774 247 297 294 84 265 20 2381 713 786 271 120 53 80 386 565 170 233 121 72 04 317 08 17 04 02 60

Total Stock Point (Direct + Indirect) Registered Zonal Office Regional Zonal Office

01 09

Strong Distribution Network

19

Source: Nielsen Retail Audit Report, Jun 2019

Updated

ORGANISATION STRUCTURE

Kushagra Nayan Bajaj

Chairman

Sumit Malhotra

Managing Director

Ankit Chudiwala

Head - Internal Audit

Apoorv Nayan Bajaj

Executive President

Devendra Jain

Head - Supply Chain and Procurement

Makarand Karnataki

Head - Legal

Dipankar Ghosh

Assistant Vice President - Human Resources

Naresh Gehlaud

Head - Operations

Dilip Kumar Maloo

Chief Financial Officer

Rajat Ghosh

Head - Sales

Ravi Nagar

Head - International Business

Abhishek Prasad

Head - Marketing

He has been appointed as Managing Director of the company with effect from August 08, 2011. He holds a bachelors degree in pharmacy from IIT

• Benaras Hindu University, Varanasi

and a PGDBM from IIM - Ahmedabad. He has over 31 years of experience in the FMCG sector. Joined BCCL in Feb 2017. He is a qualified Chartered Accountant (ICAI), Company Secretary (ICSI) and L.L.B (Government Law College, Mumbai), with 15 years of core experience in Internal Audit, Risk Management, Financial Controlling and Managerial Finance. Joined BCCL in Sep 2017. Makarand is Commerce and Law Graduate from Mumbai University and also a member of Institute of Company Secretaries of India. He has 20 years of experience and worked with organizations like Colgate- Palmolive (India) Ltd. & Godrej Agrovet Ltd. Joined BCCL on Aug 2018. He is Fullbright Fellow and holds a MBA from Jadavpur University and has 20+ years of experience in organizations like Diageo & Tata Motors. Joined BCCL on May 2018. He is an Electrical Engineer and a MBA in Marketing and has 23+ years of experience in

• rganizations like Emami & Marico.

Joined BCCL on May 2018. He holds a MBA from FMS, Delhi and has 20 years of experience in organizations like Reckitt Benkiser, Kraft Heinz & Pidilite. Joined BCCL on April 2016. He is a PGDBM from IMT, Ghaziabad and has 21 years of experience in organizations like Dabur and Britannia Joined BCCL in May 2018, Ravi is an engineer and a PGDM from XIM,

• Bhubaneswar. He has got 17 years of rich

and diverse FMCG experience across sales, marketing, international business & business strategy.

Dharmesh Sanghavi

Head - IT

• Dr. Suman Majumder

Head – R&D

Joined BCCL on May 2019. He holds a Ph.D. in Organic Chemistry from Center

• f Advanced Studies, Kolkata and has
• ver 15 years of rich experience in

various R&D role in organizations like Avery Dennison India, L’oreal and Unilever. Joined BCCL on Sep 2012. He is a computer Engineer and a diploma in Business Management from ICFAI University, Dehradun and has 14 years of experience in

• rganizations like Yash Birla Group & The

Loot India (P) Ltd Joined BCCL on Nov 2015. He is a Civil Engineer & MBA and has 15 years of experience in organizations like GSK, Johnson & Johnson. & Dabur Joined BCCL on April

• 1991. He is a

qualified CA & CS professional and has more than 30 years of experience across Finance, Accounts, Taxation & Secretarial

Rohit Saraogi

Assistant Vice President - Finance

Joined BCCL on Mar 2019. He is a commerce graduate from St. Xavier’s, Kolkata and a qualified CA & CS Professional and has 17 years

• f experience in organizations like Diageo India

& Marico.

Financials

Sales Value Growth Q1 FY20

Sales Vertical Salience% Q1FY20 (Value) Growth Q1FY20 (Value) Salience% Q1FY20 (Volume) Growth Q1FY20 (Volume)

General Trade 89.47% 6.04% 89.97% 2.60% Modern Trade 7.60% 20.64% 6.50% 13.15% Total Domestic excluding CSD 97.07% 7.05% 96.46% 3.25% Canteen Stores Department 0.00%

• 100.00%

0%

• 100.00%

Total Domestic 97.07% 5.18% 96.46% 1.11% International Business 2.93% 1474.93% 3.54% 2351.3% Total For the Company 100.00% 8.14% 100% 4.66%

• Sales grew by 8.14% lead by strong performance in ADHO and IB business
• IB business grew on the back of soft base last year.
• CSD was a set back as orders were not released.
• Total Value growth (ex-CSD) is 10.06% over Q1 FY19

Financial Information (Standalone)

Summary Income statement Summary Balance Sheet

Particulars Q1FY20 Q1FY19 FY19 (Rs. In Crore) Sales (Net) 232.46 214.97 880.94 Other Operating Income 7.78 6.44 28.41 EBITDA 71.89 70.48 283.85 EBITDA Margin 30.93% 32.79% 32.22% Profit Before Tax(PBT) 74.77 68.54 288.26 Net Profit after Tax 58.66 53.77 226.13 Net Profit Margin 25.23% 25.01% 25.67% Particulars As on 30.06.2019 As on 31.03.2019 (Rs. In Crore) Shareholders Equity 543.56 485.12 Net Fixed Assets 54.45 55.40 Investments (including Bank FDs, Bank CDs and Government Securities & Bonds) 437.24 400.62 Net Current Assets 51.87 29.10

Profit & Loss Quarter ended June 30,2019 (Standalone)

• Rs. in Cr.

✓ Sales increased by 8.14% over corresponding Qtr. ✓ PAT increased by 9.09% over corresponding Qtr.

Particulars Q1FY20 Q1FY19 YoY% FY19 Net Sales 232.46 214.97 8.14% 880.94 Other Operating Income 7.78 6.44 28.41 Total Operating Income 240.24 221.41 8.50% 909.36 Material Cost 77.49 73.94 301.10 % of Sales 33.34% 34.40% 34.18% Employees Cost 21.39 22.08 94.02 % of Sales 9.20% 10.27% 10.67% Advertisement & Sales Prom. 39.06 31.19 134.10 % of Sales 16.80% 14.51% 15.22% Other Expenses 30.40 23.72 96.30 % of Sales 13.08% 11.03% 10.93% EBITDA 71.89 70.48 2.00% 283.85 % of Sales 30.93% 32.79% 32.22% Other Income 5.97 1.17 17.53 Finance Cost 0.37 0.26 1.10 Depreciation 1.30 1.50 6.59 Corporate Social Responsibility 1.42 1.36 5.43 Profit Before Tax(PBT) 74.77 68.54 9.10% 288.26 Tax Expenses 16.12 14.77 62.13 Profit After Tax(PAT) 58.66 53.77 9.09% 226.13 % of Sales 25.23% 25.01% 25.67% Other Comprehensive Income (net of tax)

• 0.30

Total Comprehensive Income (net of tax) 58.66 53.77 9.09% 225.83 Basic & Diluted EPS (Rs.) 3.98 3.65 15.33

Performance over the last 13 quarters

1.80% 3.47%

• 4.75%
• 1.94%
• 3.60%

3.84% 5.86% 5.01% 9.45% 1.01% 12.50% 11.10% 8.14% 0.77%

• 6.46%
• 6.89%
• 7.77%

5.09% 5.17% 5.86% 8.68%

• 2.82%

7.00% 5.50% 4.66% 35.37% 34.82% 33.44% 32.96% 31.51% 29.26% 35% 34.08% 32.79% 30.10% 32.61% 33.17% 30.93%

• 10.00%
• 5.00%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Gr (Value) Gr (Vol) EBIDTA

Change in Prices of Key Ingredients

✓The landed cost of LLP for the quarter increased marginally by 0.5% over corresponding Qtr. ✓The landed cost of RMO for the quarter increased by 2.6% over corresponding Qtr.

27 70.12 61.40 70.47 71.89 20 40 60 80 100 Qtr1 FY19 vs FY20 FY18 vs FY19 Amount (Rs.)

Per Kg Landed Rates of LLP

85.98 79.53 88.21 89.22 20 40 60 80 100 Qtr1 FY19 vs FY20 FY18 vs FY19 Amount (Rs.)

Per Kg Landed Rates of RMO

Dividend Payout History

Year

• No. of Shares

(in Lacs) Face Value Dividend Payout (Rs in Lacs) % to Capital Dividend per share(Rs.) 2018-19 1,475 1 20,650.00 1400% 14.00 2017-18 1,475 1 17,700.00 1200% 12.00 2016-17 1,475 1 16,962.50 1150% 11.50 2015-16 1,475 1 16,962.50 1150% 11.50 2014-15 1,475 1 16,962.50 1150% 11.50 2013-14 1,475 1 9,587.50 650% 6.50 2012-13 1,475 1 9,587.50 650% 6.50 2011-12 1,475 1 5,900.00 400% 4.00 2010-11 295 5 2,802.50 190% 9.50

Thank you

For more information & updates Contact:

• Mr. Kushal Maheshwari

kushal@bajajconsumer.com