Marico Limited · NSE:MARICO
Marico — Investor Presentation (November 2008)
36 slides from Marico's investor presentation, November 2008
Slide 1: Uncommon sense
Uncommon sense November 2008
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 Overview
Marico Overview Beauty & Wellness Consumer Products, Services and Solutions Hair Care, Health Care, Skin Care A leading Indian FMCG Group Total Sales & Services (FY08) ~Rs. 19.07 billion Net Worth ~Rs. 3.63 billion Sustained Profitable Growth(3 year CAGR) Turnover 29% PAT 39% 2
Slide 4: Beauty & Wellness Brands
Beauty & Wellness Brands Hair Care Hair Oils Pre wash and Post wash Healthcare Premium edible oils Functional Foods Kaya Life Skincare Cosmetic dermatological Services/ Products Ayurvedic skin care products Soaps 3
Slide 5: Sustained Profitable Growth: Sales
Sustained Profitable Growth 25,000 Strong Growth in Sales and Income 20,000 29% R 29% YoY C AG (Rs. Mio) 15,000 10,000 19,067 15,569 11,439 12,044 5,000 9,329 0 FY06 FY07 FY08 H1 FY08 H1 FY09 • Growth from all businesses in Q2 FY09 • Organic Growth : 11% • Inflation led Growth : 16% • Inorganic Grow
Slide 6: Sustained Profitable Growth: EBITDA and Margins
Sustained Profitable Growth EBITDA and EBITDA Margins 3,000 EBITDA EBITDA Margin 17.0% 2,500 14.0% 15.0% 12.6% 12.8% 12.9% 12.4% 2,000 13.0% (Rs. Mio) 1,500 11.0% 1,000 1,986 1,308 1,496 9.0% 2,462 1,440 500 7.0% 0 5.0% FY06 FY07 FY08 H1 FY08 H1 FY09 Source: Marico Annual Reports, Consolidated Finan
Slide 7: Consistent Across Quarters
Sustained Profitable Growth Consistent Across Quarters * Sales and Services 32 consecutive quarters Since Q2 FY 01 Profit after Tax 36 consecutive quarters Since Q2 FY 00 * Growth in quarterly performance measured by comparing quarterly performance of the relevant quarter compared to similar quarter
Slide 8: Turnover Growth – Organic & Inorganic
Turnover Growth –Organic & Inorganic Organic Growth Inorganic Growth Expand market Contiguous Categories for dominant brands Gain market share India for No. 2, No. 3 brands New Offerings Overseas Products and services 7
Slide 9: India itself as a market
India itself as a market Hair Care Market • India has 16% of the world population • Average length of the human hair ~ Twice that of the world average • India’s share in World hair – 28% Heart Care Market • Lifestyle Modification Skin Care Market • Currently a low percentage of disposable income 8
Slide 10: Coconut Oil
Coconut Oil • Grow the branded market – Conversion from loose to packed – Micro Marketing • Focus on smaller market segments Parachute • Market Share 48% (12 months ended August 2008) • Volume growth Q2FY09 in rigid packs : 12% Nihar • Acquired from HUL in Feb 2006 – Adds another 7% - 8% market shar
Slide 11: Hair Oil
Hair Oil 12 months ended • Differentiated offering FY04 August 08 • Gain market share Dabur 35.6% 29.9% Marico 17.8% 20.4% Dey’s Medical 10.1% 6.2% Bajaj 9.0% 10.9% All India Urban and Rural Market share for value added coconut oil, non-sticky hair oils, Amla and cooling oils Source: A.C.Nielsen • V
Slide 12: Post Wash Hair Care
Post Wash Hair Care • More “Modern” and Youth Products • Invest in category creation 11
Slide 13: Heart Care in India
Heart Care in India • WHO Statistics • Increased awareness of heart care issues • Lifestyle modification 12
Slide 14: Saffola (Premium Refined Edible Oil)
Saffola (Premium Refined Edible Oil) • Strong “Good for Heart” positioning. • Doctor recommended • Safflower Oil and its blends • Premium niche • Volume Growth H1FY09 : 18% 13
Slide 15: New Product Pipeline
New Product Pipeline • Prototype Methodology – Enables experimentation & de-risked growth • Products Successfully Prototyped – Saffola functional foods – Cholesterol and Diabetes Management Atta Mix – Revive Liquid Stiffener – Parachute Advansed Starz - Cream Gel, Gentle Shampoo and non-sticky hair
Slide 16: Current Prototypes
Current Prototypes • Maha Thanda – Ayurvedic Cooling Hair Oil with 21 herbs which helps in reducing stress, headache and aids good sleep. • Parachute Night Repair Crème 15
Slide 17: Organic Growth
Organic Growth 3 year CAGR Growth in Volumes (upto FY08) Parachute Coconut Oil 11% Hair Oil (Rigid Packs)* 46% Saffola 20% Sustained growth in existing products New prototypes and product launches to fuel growth New categories: Post Wash Hair Care, Skin Care, Soap * Hair Oil includes Nihar Perfume O
Slide 18: Inorganic Growth
Inorganic Growth Year of Brands Products Primary Markets Acquisition Caivil, Black Chic and Hair Care and Health South Africa 2007 Hercules Care Fiancée and HairCode Hair Cream and Gels Egypt 2006 Coconut Oil and Nihar India 2006 Perfumed Coconut Oil 17
Slide 19: IBG – Gulf
IBG – Gulf • Commenced with targeting expat Indian – Parachute coconut oil • Introduced hair creams – Targets Arabs too – Market leader in the UAE – Closing gap on leaders in KSA • Cream Restaged on platform of nourishment and protection from harsh water – Addresses local need – Supported by localiz
Slide 20: IBG – Bangladesh
IBG – Bangladesh • Parachute gaining market share steadily – 70% (12 months ended August 2008) up from 66% on a year-on-year basis. • Retail Reach ~ 3,70,000 • Marico Bangladesh turnover (FY08) ~ 1.2 bn 19
Slide 21: International Business
International Business Share of Group’s business up from 8.4% ( 2004) to 16% (2008) Leadership in coconut oil in Bangladesh Significant market share in hair creams in UAE More than 60% share of hair cream & gels in Egypt International Business Consumer Products Turnover (Rs mio) 3500 3000 3068 * 250
Slide 22: IBG - Egypt
IBG - Egypt • Fiancée and HairCode acquired in Sep ’06 and Dec ‘06 • Achieved Rs. 883 mio turnover in FY08 • Margins ~ 18% • Consistently gaining on market share since acquisition – Current Share ~ 62% 21
Slide 23: IBG – South Africa
IBG – South Africa • Acquisition of the consumer division of Enaleni Pharmaceuticals Limited, South Africa in October 2007 • Entry into the South African ethnic Hair care and Health care market estimated to be in the region of ZAR 1.1 billion ( about Rs. 6 bn) growing at ~15%. • Current annualised T
Slide 24: Entrenched Brands
Entrenched Brands Indicative Market Brand Category Share (%) # Rank Parachute Coconut Oil (India) ~ 48% 1 Parachute Coconut Oil (Bangladesh) ~ 70% 1 Refined Safflower Oil and its Saffola ~ 98% 1 blends Mediker Anti Lice Treatment ~ 90%* 1 Revive Instant Fabric Starch ~ 80%* 1 Parachute Jasmine, Shan
Slide 25: Sources of Competitive Advantage
Sources of Competitive Advantage Portfolio of well recognized brands and extensions Market Segment leaders and segment defining brands Leadership Parachute, Saffola, Mediker, Revive, Kaya Weak competition Strong pan India distribution network Wide Distribution 32 C&F agents servicing 3,600 distribut
Slide 26: Kaya Concept
Kaya Concept • Safe, effective, result oriented cosmetology – in a spa like ambience • Skin care solution clinics & Branded products – 77 Clinics – 67 in India 20 cities, 10 in the Middle East • High efficacy- Holistic methodology, world class technology • Customer base more than 350,000, very high
Slide 27: Kaya Growth
Kaya Growth • Clinic expansion 15 per year • New Services – Skin Renewal • New Products – Range of Anti-Ageing products under Kaya Revive and Firm • New Initiatives – Kiosks 26
Slide 28: Kaya Middle East
Kaya Middle East Kaya clinics present in 10 clinics 8 across UAE, one each in Oman and Saudi Arabia Plans to open more clinics in these territories Current turnover at about Rs 200 million 27
Slide 29: Kaya Life
Kaya Life • Holistic Weight Management •Sustainable weight loss •Synergy 4 System •Three centers in Mumbai – Juhu, Malad and Bandra 28
Slide 30: Performance in Numbers
Performance in Numbers FY06 FY07 FY08 Three Three months months ended ended (Rs. crore, except ratios) Sep 08 Sep 07 Sales/ Services Income 1,144 1,557 1,907 603 464 EBITDA 144 199 246 74 65 Net Profit after Tax 87 113 169 47 42 Equity Capital 58 60.9 60.9 60.9 60.9 Net worth 261 192 315 391 266 EPS
Slide 31: Capital Expenditure & Funding – 3 years
Capital Expenditure & Funding – 3 years • Capex for Kaya Rs 750 million • Normal Capex Rs 500 million • New Office premises (net) Rs 1000 million • Debt at present Rs 5.0 billion • Operating cash flows sufficient to service this debt • Acquisitions ??? • Decided to be conservative in dividend to con
Slide 32: Challenges
Challenges India New categories – Making a success International Integrating acquisitions Managing Currency risk and volatility Kaya & Sundari Balancing growth & profitability Corporate Resourcing- Human , Financial Taxation - Contain climbing Effective Rates 31
Slide 33: Outlook
Outlook • Focus on maintaining the growth momentum – 20% + growth with some stretch in the medium term – Immediate term – some slow down in rates of growth • Significant cost push in the recent past – Could have some impact on operating margins in the short run • No significant change in the competi
Slide 34: Recognition & Awards
Recognition & Awards • Parachute is the 6th Most Trusted Brand in Bangladesh – Global Brand Forum and AC Nielsen (2008) • BusinessWeek’s Asia’s Hot Growth Companies (2007) – Overall rank 40th in a list of 100 companies – Rank 4th in a list of 13 companies from India. • CNBC-TV18 India’s Employer of
Slide 35: Recognition & Awards
Recognition & Awards • International Business - Parachute - The Gulf Marketing Review (GMR) Awards (Referred to as the Oscar of Marketing Awards) – Best Brand Extension Award (Gold) (2006) – Outstanding Marketing Achievement Award (Silver) (2006 & 2007) • Asia Pacific Effie Awards, Singapore, 2008 –
Slide 36: Thank You
Thank You