Marico Limited · NSE:MARICO
Marico — Investor Presentation (November 2013)
36 slides from Marico's investor presentation, November 2013
Slide 1: Marico - November 2013
MallCO be more. every day. November 2013
Slide 2: Disclaimer
Disclaimer This investor presentation has been prepared by Marico Limited (“Marico”) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied should not
Slide 3: Marico FMCG: Snapshot
Marico FMCG : Snapshot Beauty & Wellness Solutions Hair Care, Health Care, Skin Care, Male Grooming A leading Indian MNC Group INR USD Market Capitalization* 14,000 Cr + 2.5 Billion Turnover FY 13 4,260 Cr 775 Million Profit FY 13 402 Cr 73 Million Turnover from overseas 24% Sustaine
Slide 4: Marico: Brief History
Marico : Brief History Established in the year 1990 Erstwhile Consumer Division of Bombay Oil Industries Parachute Coconut Oil and Saffola Refined Edible Oils Turnover of ~Rs 100 cr (~ USD 18 million), Profits of ~Rs 2 cr (~USD 0.4 million) Listed on BSE and NSE in 1996, Market Capitalizat
Slide 5: Organization Structure (Effective 1st April 2013)
Organization Structure (Effective 1st April 2013) Marico Ltd Chairman & Harsh Mariwala Managing Founded Marico in 1990 Transformed a traditional commodity driven business into a Director leading branded consumer products and services company. Saugata Gupta Milind Sarwate • Joined Marico in • Joined
Slide 6: Portfolio: Beauty & Wellness
Portfolio : Beauty & Wellness Hair Care Hair Oils Pre wash/Post wash/In wash Healthcare Healthy refined edible oils Functional Foods Male grooming/ styling Deodorants Hair Creams/Gels/Wax Skincare Body Lotion Cosmetics 5 5
Slide 7: Where We Play
Where We Play • Beauty & Wellness – Focus on hair care, skin care, health foods & male grooming • Developing & Emerging markets of Asia & Africa – Underpenetrated Markets • Aim to be profitable market leader : No.1 or 2 6
Slide 8: Market Leadership: Key to Category Choice
Market Leadership: Key to Category Choice Penetr Indicative Market Brand Category Rank ation Share (%) # Level Parachute Coconut Oil (India) ~ 45% 1 High Parachute Coconut Oil (Bangladesh) ~ 82% 1 High Super Premium Refined Edible Saffola ~ 58% 1 Low Oils Saffola Oats ~ 13% 2 Low Parachute Jasmine,
Slide 9: Leaders across Categories & Geographies
Leaders across Categories & Geographies India FMCG #>2 #>2 #2 1% 3% #2 96% #1 #1 Group #>2 #2 4% 7% 89% #1 Marico brands have a no 1 position in their respective segments over around 90% of its turnover 8
Slide 10: Future Growth Strategy
Future Growth Strategy • Expand Markets where we have significant leadership – Parachute coconut oil in India and Bangladesh – Saffola – Premium healthy refined edible oil – Hair Code/Fiancee – hair gels/creams in Egypt – Post Wash Conditioners in India • Increase Share in other categories – Hair Oi
Slide 11: Category Choice Making Framework
Category Choice Making Framework • Enter Categories/Segments with ‘Right to Win’ – Strong Brand, shared channel, shared consumer and shared supply chain • Underpenetrated categories with potential to grow – Changing consumer habits or affluence • Increase share of higher value added categories • Wil
Slide 12: Focus on Growth
Focus on Growth • Prioritize volume growth (consumer franchise expansion) over short term profit – Emerging markets with low/moderate penetration – Maintain unit gross margin within a band • Re-invest profits to reinforce established brands and build new growth engines for the future – Prototyping :
Slide 13: New Products Track Record
New Products Track record Brand Performance Success Saffola Arise Failed to garner scale. Withdrawn. Parachute Advansed Hot Oil Created a market where none existed. Parachute Advansed Meeting expectations. Adds a leg to the value Ayurvedic Oil added hair oils portfolio. Parachute Advansed Cooling Un
Slide 14: Learnings from NPD
Learnings from NPD • Enter categories where there is ‘Right to Win’ • Target larger categories with lower penetration and hence higher headroom for growth Incorporating these learnings has resulted in a better payout for recently launched NPD 13
Slide 15: Inorganic Growth
Inorganic Growth • Focused on hair care, skin care and health care in India – International : primarily hair care, skin care and male grooming • Internationally focused on developing markets in Asia and Africa • Establish potential to become No.1 or No.2 • Establish potential to add value in brandin
Slide 16: Coconut Oil
Coconut Oil The only Company with a national presence in INR 28 bn (~USD 518 mio) branded CNO market Volume Market Share Parachute 45% Market Size Nihar 9% Oil of Malabar 2% Branded ~ INR 28 bn (~USD 518 mio) Total 56% Loose ~ INR 8 bn (~USD 145 mio) 30-35% market (by volume) estimated to be in loos
Slide 17: Hair Oils
Hair Oils Value Added Hair Oils Market : INR 45 bn (~USD 818 mio) Value Added Light Hair Oils Amla Oils Cooling Oils Anti-Hair Fall Others Coconut Oils 24% 23% 18% 10% 7% 18% Category Play : Significant participation in most key sub-segments • Marico’s Volume Market Share in Hair Oil Market ~ 27%, u
Slide 18: Saffola
Saffola Evolution from an edible oil brand to a leading healthy lifestyle brand Riding a health care tailwind in India : 5 yr volume CAGR ~12% Leadership position in super premium refined edible oil segment (58% Volume Market Share) Entry into breakfast cereals market in 2010 (Saffola oats, savory o
Slide 19: Male Grooming: Competitive Advantage
Male Grooming : Competitive Advantage • Marico acquired Youth Brands (SetWet, Zatak, Livon) in May 2012 • Tail wind categories with low penetration • Synergies with existing business – Leverage widespread Distribution network • Gain access to cosmetic/chemist outlets – Buying synergies (hair gels &
Slide 20: Recent Launches
Recent Launches Body Lotion • Market Size : INR 550 cr • Market Growth Rate : ~15% • Marico Market Share : ~7% • No. 3 position Breakfast Cereals • Market Size : INR 600 cr • Market Growth Rate : ~25% • Marico Market Share : ~13% in Oats and 9% in Muesli • No. 2 player in Oats and No.3 in Muesli Par
Slide 21: International Business Group
International Business Group 1200 955 1007 1000 733 800 602 600 440 400 307 200 0 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 • Focus on emerging markets of Asia & Africa • Operates in Geographic hubs leading to supply chain and media synergies • Opportunities for expanding footprint – Current:
Slide 22: International Geographies
International Geographies Bangladesh Middle East Egypt Vietnam South Africa Categories : Categories: Categories : Categories : Coconut Oil, Value Categories : Hair Male Added Hair Oils, Hair Ethnic Hair Care, Oils, Hair Grooming, Kids Hair Care, Powdered Hair Creams/Gels Creams/Gels Dyes Skin Care &
Slide 23: Broad-based Growth
Broad-based Growth • Reduced dependence on one category, segment and geography • New growth engines such as Value Added Hair Oils, Male Grooming, Breakfast Cereals, Body Lotion 22
Slide 24: Margin Profile
Margin Profile EBITDA FY10 FY11 FY12 FY13 Margins India FMCG ~20% ~19% ~17% ~20% International ~10% ~11% ~11% ~8% FMCG Group 14.1% 13.3% 12.2% 13.6% India FMCG • Margins comparable to peers • Intend to hold the margin in a band of 17-19% International FMCG • Bring back margins to 10-11% in FY14 • In
Slide 25: Strong Distribution Network (India)
Strong Distribution Network (India) • Direct Reach: Over 900,000 outlets • Indirect Reach: ~ 4 million outlets Urban Rural Leveraged Modern Trade Channel to drive urban growth • 7% of India sales comes from modern trade Leveraged technology to drive impact Enhancing quality of rural reach Access to
Slide 26: Kaya De-Merger: Salient Features
Kaya De-Merger: Salient Features Effective April 1, Marico Limited to 2013 house FMCG Business Marico Kaya Enterprise (MaKE) to house Kaya business • Scheme of demerger sanctioned by Bombay High Court • The Order of the High Court filed with Registrar of Companies, Mumbai in October.2013 • November
Slide 27: Synergies of One FMCG Business
Synergies of One FMCG Business Strategic Unity Shared Vision & Common Choice Making Framework Common approach in Glocal Portfolio Management Fungible International Talent Pool Standardisation of Processes & Systems Synergies in Cost Structure Global Mindset 26
Slide 28: Dividend Distribution & Cash Deployment
Dividend Distribution & Cash Deployment • Focus on maximization of shareholder value • Marico has followed a conservation dividend policy over past few years – Deployed internal accruals to fuel organic & inorganic growth • Capped absolute amount of dividend till FY11 – Marginally increased payout i
Slide 29: Talent Management & Succession Planning
Talent Management & Succession Planning • Professionally managed organization • Believes ‘Culture drives business’ • Fosters entrepreneurial spirit and sense of ownership in all members • Strategic Business Planning (SBP) articulates Marico’s future imperatives and capability needs – Translated to i
Slide 30: Role of Board
Role of Board • Board meets at least once a quarter to review operations • Board Composition (6 independent members) – Harsh Mariwala, Chairman & Managing Director – Nikhil Khattau, Chairman of Audit Committee – Hema Ravichandar, Chairman of Corporate Governance Committee – Anand Kripalu – Atul Chok
Slide 31: Financial Highlights
Financial Highlights Particulars (INR Crores) FY09 FY10 FY11 FY12 FY13 CAGR % Revenue from Operations 2388 2661 3128 3980 4596 19% Profit Before Tax 230 298 376 400 552 22% Profit After Tax 189 232 286 317 396 19% EPS: Annualized (INR) 3.1 3.8 4.7 5.2 6.1 17% Book Value per Share (INR) 7.40 10.70 14
Slide 32: List of Acquisitions
List of Acquisitions Company/Brand Year of Country of Key Category Acquisition Acquisition Nihar 2006 India Coconut Oil Manjal 2006 India Soap Haircode & Fiancee 2006 Egypt Male Grooming Enaleni (Consumer Division) 2007 South Africa Hair Care Code 10 2010 Malaysia Male Grooming Derma Rx 2010 Singapo
Slide 33: The Most Awarded FMCG
The Most Awarded FMCG • Featured amongst eight Indian companies in Standards & Poor’s list of Global Challengers • Super brands voted Parachute a Super Brand in UAE & Bangladesh • Marico won the Annual Supplier Award by Bharti Walmart and Joint Business Planning – Best Debutant for 2012 • • Innovato
Slide 34: Shareholding Pattern as on September'13
Shareholding Pattern as on September’13 33
Slide 35: Investor Relations Communications
Investor Relations Communications • One on one meetings with the Buy side and Sell side • Marico Website • Annual Report • Latest Quarterly Updates • AGM Notice • Shareholding Pattern • http://www.marico.com/html/investor/overview.php • Quarterly Results • Information Update • Media Release • Earnin
Slide 36: Thank You
uncommon sense Thank You