Havells India Limited · NSE:HAVELLS
Havells India — Investor Presentation (August 2017)
20 slides from Havells India's investor presentation, August 2017
Slide 1: Deeper Into Homes
1 August 2017 DEEPER INTO HOMES
Slide 2: Introduction
INTRODUCTION Havells is an electrical consumer product company in India An efficient interplay Higher Market Share Higher Profitability Free Cash Flow Superior Return to shareholders 2
Slide 3: Havells – Snap Shot
HAVELLS – SNAP SHOT (Rs. in crores) An Indian FMEG FY 2012 FY2017 CAGR% (5yrs) Turnover 3,581 6,135 11% EBITDA % 12.8% 13.4% 12% Net Profit before exceptions 305 596 16% Market Capitalization 71,38 29,500* 31% * as on 17th Aug-17 3
Slide 4: Macro Levers - Favourable Outlook
MACRO LEVERS - FAVAOURABLE OUTLOOK To be 40% by 2030 from 31% currently Urbanization Investment on infrastructure and housing will be key focus area High degree of focus on electrification, presently 78% Electrification population electrified, low quality and regular supply are key issues Low to med
Slide 5: Business Overview: Havells Electrical
BUSINESS OVERVIEW: HAVELLS ELECTRICAL 5
Slide 6: Segments
SEGMENTS 6 * Havells’ total revenue and Lighting & Fixtures’ revenue includes sales to EESL. Without EESL and ex-CFL, growth in lighting is 29%
Slide 7: Market Share
MARKET SHARE Indicative Organized Indicative Indicative Product Market Size Penetration Peers Market Share Rank (Rs. in crores) Level Switchgears MCB 2,000 27-28% #1 High Legrand, Schneider Panasonic (Anchor), Switches* 2,200 14-15% #3 Medium Legrand Cable Domestic 8,000 16% #3 Low Finolex, Polycab
Slide 8: Product and Geographic Expansion
PRODUCT AND GEOGRAPHIC EXPANSION New Products • Expand and straddle existing product category led by product variants and technology • Bankroll fresh verticals with 2-3 years incubation, empirically constituting 8-10% of total revenue • ‘Standard’ and ‘Reo’ brands extended to new categories – maximi
Slide 9: Deepening Partnership with Channel: 360 Connect
DEEPENING PARTNERSHIP WITH CHANNEL : 360 CONNECT • Deeper focus on distribution and last mile connect with retailers and electricians, to be serviced through ~7,500 existing dealer Direct Dealers • Simplified incentive scheme for easier adoption and ~100,000 participation Retailers • Havells Galaxie
Slide 10: Sustained Investment in Brand & Supply Chain
SUSTAINED INVESTMENT IN BRAND & SUPPLY CHAIN Brand: Sizable investment in advertisement, 3-4% of revenue, comparable with industry leaders in paints, adhesive etc. Invested Rs 770 crores in advertisement and promotion over last 5 years. Fortifying Management Bandwidth: Strengthening organization str
Slide 11: Deeper Into Homes: Lloyd Consumer Durables
DEEPER INTO HOMES: LLOYD CONSUMER DURABLES 11
Slide 12: Product category expansion timeline
2004 2011 Onwards Lighting Air Conditioner Television Air Cooler Fans Water Heater Switchgears Refrigerator Domestic Switches Appliances Till 2004 Washing Machine Industrial Cable Domestic Cable 12
Slide 13: Consumer Durables Industry Overview
CONSUMER DURABLES INDUSTRY OVERVIEW ACs, Refrigerators, WMs and TVs Collectively Contribute c.70 - 75% of the Market Industry Structure • Overall Consumer Durables account for more than 40% of end consumer spending in India Consumer Durables • Annual turnover in excess of INR 80 -100k Cr (ACs, TVs,
Slide 14: Mass Premium Positioning
MASS PREMIUM POSITIONING Air Conditioner Market in India LED TV Market in India Key Players Other Players Key Players Other Players Premium Premium INR INR 45,000+ 50,000+ Mass-Premium Mass-Premium INR 30,000- INR 30,000- 45,000 50,000 Economy Economy INR 20,000- INR 20,000- 30,000 30,000 AC Volume
Slide 15: Lloyd
LLOYD • A significant player in AC market with ~ 70% of revenue accruing from Air Conditioners and ~ 25% from LED TVs • Developed a strong business with a market share of ~12% in AC segment within 8 years of launch • Pan India distribution network providing beachhead to diversify product expansion i
Slide 16: Lloyd: Sustain Industry Leading Growth
LLOYD: SUSTAIN INDUSTRY LEADING GROWTH • Broaden distribution channels into LFR, RR, CSD and CPC • Expand product categories with dedicated business heads and verticals • Accelerate business growth and profitability through: Increasing distribution reach Investment in brand Investment in produ
Slide 17: Financials
FINANCIALS HAVELLS
Slide 18: Standalone Financials
STANDALONE FINANCIALS Financial highlights in millions of Rupee FY16 FY17 Q1 FY18 Q1 FY18 Q1 FY18 Havells Havells Havells Lloyd Havells Total (from 8th May’17) Net Revenue 53,783 61,353 15,933 2,672 18,605 Growth % 4% 14% 9% -- 27% EBIDTA % 14.0% 13.4% 10.0% 48% 9.3% PBT % before exceptions 13.1% 13
Slide 19: Benchmarking with the Best Corporate, Financial and Shareholders Governance
BENCHMARKING WITH THE BEST CORPORATE, FINANCIAL AND SHAREHOLDERS GOVERNANCE Shareholding Pattern • Promoters- single business focus • Transparent and detailed communication to shareholders • Committed to high standards of corporate and shareholder governance, assigned CGR 2+ rating by CARE 19
Slide 20: Summary
SUMMARY • India represents large untapped opportunity with lower penetration, higher unorganized sector & growing electrification • Havells preparing for future with constant products expansion, deepening market reach & brand reinforcement • Organic leverage with opportunistic acquisition to drive g