Slide 1: Exchange filing cover letter: Investor Presentation
November 6, 2023 Listing Department Code: 531 335 BSE LIMITED P. J. Towers, Dalal Street, Mumbai–400 001 Listing Department Code: ZYDUSWELL NATIONAL STOCK EXCHANGE OF INDIA LIMITED Exchange Plaza, C/1, Block G, Bandra Kurla Complex, Bandra (E), Mumbai–400 051 Re: Investor Presentation Dear Sir / Mad
Slide 2: Q2 FY24 Earnings Presentation
Q2 FY24 Earnings Presentation November 6, 2023
Slide 3: Safe Harbour Statement
Safe Harbour Statement This presentation contains certain forward-looking statements including those describing Zydus Wellness’s strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that “forward looking statements” are based on certain expectations,
Slide 4: Agenda
Agenda Financial performance – Q2 FY 24 Zydus Wellness: Operating environment- Overview A leading Consumer Wellness Brand Highlights Company in India The Road Ahead 3
Slide 5: Financial Performance & Operating Environment - Overview
Financial Performance & ZY.dUS Wellness Operating Environment - Overview
Slide 6: Operating environment stable, challenges due to lag in demand revival
Operating environment stable, challenges due to lag in demand revival 01 02 Uneven weather Moderation in patterns commodity rates Delayed/uneven rains across key Commodity rates continues to states impacting offtakes moderate sequentially during the quarter 03 04 Slow demand recovery Global Macro ec
Slide 7: Sequential moderation of key input rates helping steady recovery of Gross Margins
Sequential moderation of key input rates helping steady recovery of Gross Margins Milk RPO* DMH* +26% vs Q2 FY22 -30% vs Q2 FY22 +29% vs Q2 FY22 -2% vs Q2 FY23 -25% vs Q2 FY23 +11% vs Q2 FY23 -0.4% vs Q1 FY24 -9% vs Q1 FY24 +1% vs Q1 FY24 Q2 FY22 Q2 FY23 Q1 FY24 Q2 FY24 Q2 FY22 Q2 FY23 Q1 FY24 Q2 FY
Slide 8: Gross margin recovery with right actions…
Gross margin recovery with right actions… Continuous efforts to improve gross margins with calibrated price increases across portfolio at appropriate time without compromising on growth Moderation of key input prices aiding gross margin recovery Gross Margin % to Net Sales Y-o-Y Gap - 479 - 433 + 10
Slide 9: Segment performance snapshot
Segment performance snapshot Net Sales (INR Million) Food & Nutrition 4,267 4,379 Sales Growth -0.4% Y-o-Y Q2FY23 Q2FY24 Y-o-Y Gr. On Personal Care Net Sales 2.6% Sales Growth Y-o-Y 17.5% *Q2 FY23 Net sales includes the sale of Sugarlite 8
Slide 10: Financial Highlights for the Quarter
Financial Highlights for the Quarter Q2 FY24 INR Million YoY Growth % Net Sales 4,379 2.6% Total Income from Operations 4,401 2.5% Gross Contribution 1,989 7.0% EBITDA 168 3.7% Reported PBT 86 4.9% Reported PAT 59 -30.6% ❑ Gross margin on net sales was at 44.9% (+198bps YoY) ❑ PAT was down mainly on
Slide 11: Business Highlights
ZY.dUS Business Highlights Wellness
Slide 12: Leaders in 5 out of 6 categories
Leaders in 5 out of 6 categories Strengthen “Energy” credential with new launches Strengthening core through Relaunch of the Brand • Category leading brand with 99% plus brand recall • Focused on scientifically proven claims on memory and • ~60% market share in the category concentration and enhance
Slide 13: Building sustainable business performance
Building sustainable business performance Driving the Winning in category competitive growth market Building relevance Navigating to new age challenges consumers 12
Slide 14: Driving the category growth
Driving the category growth Driving the prickly heat powder category penetration# MAT Aug'19 MAT Aug'20 MAT Aug'21 MAT Aug'22 MAT Aug'23 Prickly Heat Powder Nycil Driving continuous volume growth* Volume Market share 37.0 29.9 MAT Sep'18 MAT Sep'23 *As per MAT Sep 2023 Nielsen report #As per MAT Aug
Slide 15: Driving the category growth
Driving the category growth Driving the Glucose powder category penetration# Consumption impacted due to erratic weather MAT Aug'20 MAT Aug'21 MAT Aug'22 MAT Aug'23 Glucose powder category Glucon-D #As per MAT August Kantar World Panel Household data 14
Slide 16: Driving the category growth
Driving the category growth Driving market share ❖Widening the portfolio basket ❖Driving double digit growth at 3 year CAGR^ ❖Superior product offering along with strong campaigns focused on recruiting new users ❖Scrub continues to strengthen its leadership with growth in volume market share* +20bps
Slide 17: Winning in Competitive Market
Winning in Competitive Market Growing faster than category ❖Penetration# continues to grow for 3 successive years +30bps +10bps +30bps 2020 2021 2022 2023 ❖Volume offtakes* continue to grow ahead of the category ❖Growth driven by stronger campaign with 360-degree activation and price pack architectu
Slide 18: Winning in Competitive Market
Winning in Competitive Market Consistent strong volume growth ❖Widening the portfolio basket ❖Consistent double digit volume growth^ in 9 out of last 11 quarters driven by a wide portfolio and supported by focused B2B and B2C teams ❖Continued to support the brand with digital media, e-com channel ac
Slide 19: Building relevance to new age consumers
Building relevance to new age consumers Efforts to leverage changing shopper behavior and target new age consumers fruitful Channel specific innovative Increasing digital spends^ ahead of E-commerce saliency^ 1 marketing initiatives 2 overall spends 19x 10% 8% 15x 7% 7x 4% 4x X 1% Q2 FY 20 Q2 FY 21
Slide 20: Navigating Challenges
Navigating Challenges Offtake continues to get stronger ❖Sugar Free has maintained its number one position with a value MS of 96.1%*, +50bps YoY* ❖Despite WHO report on safety concerns related to use of Non-Nutritive sweeteners, offtake* continues to grow for Sugar Free ❖Driven by new campaign and d
Slide 21: Continuing to strengthen brand leadership
Continuing to strengthen brand leadership Glucose Sugar Blended Prickly heat *Facial Fat Category HFD Scrub Peel-off Dairy Powder substitute Sugar powder cleansing spread Mkt. Rank 1 5 1 NA 1 5 1 1 1# NA Mkt. Share % 60.0 4.4 96.1 NA 35.2 6.1 43.4 78.9 NA NA MS change YoY -2 -23 + 53 NA +19 -39 +162
Slide 22: Campaigns during the quarter (1/3)
Campaigns during the quarter (1/3) Driving consumption of Sugar Free Green “Chhota sa Change” Vernacular KOL led videos 21
Slide 23: Campaigns during the quarter (2/3)
Campaigns during the quarter (2/3) Influencer Recipe Videos Chef Sanjeev Kapoor Recipe Videos 22
Slide 24: Campaigns during the quarter (3/3)
Campaigns during the quarter (3/3) Campaign on Complan protein superiority Campaigns of Nycil Talc and Body Mist 23
Slide 25: Continued momentum in International business..
Continued momentum in International business.. UAE, Bahrain, Qatar, Kuwait, Myanmar, Malaysia, Taiwan, Kingdom of Saudi Arabia, Pakistan, Sri Lanka, Bangladesh, Oman, Lebanon Nepal, Bhutan, Maldives, Hong Kong ❖ Sugar Free franchise and Complan constituting ~ 90% of the overall business ❖ Ongoing se
Slide 26: International Business – Widening the portfolio basket
International Business – Widening the portfolio basket Sugar Free D’Lite portfolio expansion planned Existing Range New Launches – Planned in Q3 FY24 Granola Granola Bars Cookies Chocolates Instant Coffee & Hot Chocolate Butter & Cashew Cookies Spreads Chocolate Minis, Choco Almonds 25
Slide 27: Environmental, Social and Governance
Environmental, Social and Governance
Slide 28: Sustainable ESG Initiatives
Sustainable ESG Initiatives People Training & Engagement • 343 man-hours in trained on Awarded as ‘Most Preferred safety practices Water Workplace’ for FY 2023-24 100% Zero Liquid Discharge • 100% work force trained on Governance Targets for FY 2026-27 human rights issues • EHS - Software for • Ahme
Slide 29: The Road Ahead
ZY.dUS The Road Ahead Wellness
Slide 30: Three Pillars to drive growth – staying on course
Three Pillars to drive growth – staying on course Accelerate Growth of Build International Presence Significantly Grow Scale Core Brands Innovations to focus on portfolio Build scale in international Open to bolt-on acquisitions diversification and expansion business by focusing on SAARC, at the rig
Slide 31: The building blocks
The building blocks Category Building Leading Route to Market Digital backbone to decision Inorganic play for gap Volume led focus Plan to enhance distribution infra making filling Recruit new consumers and direct coverage over next 3 Digitizing the whole value chain – Proactively look for Bolt-on y
Slide 32: Traditional Trade capabilities in S&D
Building Route to market to adapt shifting channel mix • Direct reach ~6 lakhs stores • Channel mix shift towards expansion across sub channels, MT+Ecom from 17.5% (FY22) to • Implementation underway for plan to take it to ~7 lakhs in the 22.4% (Q2 FY24) dashboarding of key KPI’s as Building future
Slide 33: Appendix
ZY.dUS Appendix Wellness
Slide 34: Financial Summary – P&L
Financial Summary – P&L INR Million Q2 FY24 Q2 FY23 YoY Gr. % YTD FY24 YTD FY23 YoY Gr. % Net Sales 4,379 4,267 2.6% 11,371 11,197 1.6% Total Operating Income 4,401 4,294 2.5% 11,422 11,262 1.4% Gross Contribution 1,989 1,859 7.0% 5,680 5,641 0.7% Gross Contribution Margin-(% of net sales) 44.9% 42.
Slide 35: Zydus Wellness Limited
Zydus Wellness Limited Regd. Office: Zydus Corporate Park, Scheme No. 63, Survey No. 536, Khoraj (Gandhinagar), Nr. Vaishnodevi Circle, S. G. Highway, Ahmedabad – 382481, India. CIN: L15201GJ1994PLC023490 +91-79-71800000 www.zyduswellness.com Zydus Wellness, Oct 21, 2022 34