Itc Limited · NSE:ITC
Itc — Q4 FY2022 Earnings Presentation
68 slides from Itc's earnings presentation, May 18, 2022
Slide 1: Cover letter to stock exchanges
A lTC Limited Virginia House 37 J. L. Nehru Road Kolkata 700 071, India Tel. : 91 33 2288 9371 Enduring Value Fax : 91 33 2288 4016 I 1256 I 2259 I 2260 18th May, 2022 The Manager The General Manager The Secretary Listing Department Dept. of Corporate Services The Calcutta Stock National Stock Excha
Slide 2: Copy recipients
Enduring Value cc: Securities Exchange Commission Division of Corporate Finance Office of International Corporate Finance Mail Stop 3-9 450 Fifth Street Washington DC 20549 U.S.A. cc: Societe de Ia Bourse de Luxembourg 35A Boulevard Joseph II L-1840 Luxembourg
Slide 3: Media Statement: Standalone Financial Results Q4 and FY22
ITC Limited Virginia House 37 J. L. Nehru Road Kolkata, 700 071, India Tel.: 91 33 2288 9371 Fax: 91 33 2288 4016 / 1256 / 2259 / 2260 Media Statement May 18, 2022 Standalone Financial Results for the Quarter and Year ended 31st March, 2022 Highlights • Board recommends Final Dividend of Rs. 6.25 pe
Slide 4: Media Statement: Hotels, Paperboards and FY22 performance highlights
- Domestic leisure and wedding segments drive recovery; progressive improvement in business travel; nascent revival of international travel • Paperboards, Paper and Packaging Segment delivers strong performance; Q4 Revenue up 31.8% y-o- y along with margin expansion of 110 bps - Paperboard volumes a
Slide 5: Consumer-centric approach and digital platforms
A consumer-centric approach, backed by speed and agility in execution, was at the core of the Company’s response to navigate the heightened uncertainty and volatility in the operating environment. Digital technologies and platforms continue to be leveraged to effectively service emergent consumer de
Slide 6: Staples and foods portfolio performance
Sugar Release Control atta, posted robust growth driven by higher salience in Modern Trade and e- Commerce channels. The range was further augmented with the launch of Aashirvaad Vermicelli during the year. The Business also forayed into Frozen Indian Flat Breads (Paratha, Naan and Chapati) to servi
Slide 7: ICML expansion and Personal Care Products
Company also commissioned a new ICML at Medak, Telangana in March 2022. With this, 10 ICMLs are operational in locations proximal to large demand centres enabling delivery of fresher products and reduction in distance to markets, besides higher cost agility. Capacity utilisation at existing ICMLs co
Slide 8: Education and stationery, incense sticks and matches
The Business sustained its leadership position on e-Commerce platforms through consistent availability of customised product assortments backed by focused interventions to enhance consumer traction. Consumer engagement was enhanced through Classmateshop.com, a D2C platform, which facilitates brand a
Slide 9: Cigarettes industry, illicit trade and taxation
rapidly during the same period, accounting for about one-fourth of the domestic industry. It is pertinent to note that strong deterrent actions by enforcement agencies have led to significant rise in seizure of illicit cigarettes in recent years. The extremely stringent regulations along with the di
Slide 10: Agri Business segment performance
AGRI BUSINESS The Agri Business Segment delivered stellar performance with Segment Revenue and Results growing by 28.7% and 25.6% respectively. This was driven by strong growth in wheat, rice, spices and leaf tobacco exports on the back of strong customer relationships, robust sourcing network and a
Slide 11: Agri value chains and ITCMAARS
experience, use of multi-modal transportation comprising rail, road & coastal routes and enable supply of attribute based/identity preserved crop. The Business also ramped up direct buying at various atta factories. Milk procurement network in Bihar and West Bengal was strengthened towards meeting t
Slide 12: Contribution to Sustainable Development
addressing the consumer consciousness towards hygiene and safety). These products continue to receive encouraging response; the portfolio is being augmented progressively with a range of solutions that are under various stages of commercialisation. Investments are being stepped up in this fast-evolv
Slide 13: Q4 FY22 Results
Enduring Value NATION FIRST: SAB SAATH BADHEIN Q4 FY22 Results 18th May, 2022 |1|
Slide 14: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain forward-looking statements including those describing the Company’s strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that “forward looking statements” are based on certain assumptions o
Slide 15: Macro Economic Context
Macro Economic Context |3|
Slide 16: India witnessed 2 Covid waves in FY22
India witnessed 2 Covid waves in FY22 Economic activity severely impacted by Delta variant Delta in May/June’21 & Omicron in Dec’21/ Feb’22 Omicron impact relatively less India: Daily New Cases – Moving 7-day Average (‘000) 7 May’21 4,14,188 21 Jan’22 3,89,803 3,47,254 2,83,414 17 Sep’20 Daily New C
Slide 17: Inflation surging globally, interest rates moving up
Inflation surging globally Supply chain disruptions| Commodity supercycle | Greenflation Interest rates moving up Russia – Ukraine conflict exacerbates the situation Commodity Price Index CPI – YoY% March +8.5% March +7.6% United States Germany Britain Feb. +6.2% Source : World Bank Index at 2010 Pr
Slide 18: Retail inflation at 17-month high
Retail Inflation @ 17-month high Rural Inflation outpaces urban Inflation Soaring prices impacting household Budgets Sharp increase in inflation outlook by RBI CPI and Core CPI (YoY%) Rural and Urban Core CPI (YoY%) CPI Q4 FY22 (YoY%) Upward revision to Inflation estimates for FY23 (YoY%) Source : R
Slide 19: Bright Spots - Robust External Sector
Bright Spots - Robust External Sector | Buoyant tax collections | Resilient Agri Sector External Trade - Merchandise ($bn.) External Trade - Service ($bn.) Source : Ministry of Commerce Source : Ministry of Commerce GST Collection (Rs lakh cr.) Agriculture (YoY% growth in GVA.) Apr’22 – Rs. 1.68 lak
Slide 20: Challenging Macro Environment
Challenging Macro Environment Global Macro India Macro Key Positives Key Monitorables Slowdown in global growth momentum 2022 Global GDP growth revised down to 3.6% Vs. 4.4% earlier High Inflation GoI’s bold reform - Rising caseloads agenda and Infra push High Crude prices - Supply chain disruptions
Slide 21: Q4 and FY22 Results: Headline Financials & Business Highlights
Q4 and FY22 Results Headline Financials & Business Highlights |9|
Slide 22: Key Highlights: FY22
Key Highlights: FY22 Gross Revenue EBITDA Overall Segment PBIT Margin ex – Agri Business +22.7% +22.0% 35.8% 160 bps Strong rebound in ex Agri, up 16.6% performance PAT EPS Total Dividend +15.5% +15.4% Rs. 11.50 per share | 10 |
Slide 23: Key Highlights: FY22
Key Highlights: FY22 ▪ Strong growth across all operating segments ̶ Resilient performance despite Covid disruptions in Q1 & Q4 ▪ Robust broad-based recovery in Cigarettes ̶ H2 volumes surpass pre-pandemic levels ▪ FMCG Revenue up 8.6% YoY on a high base (+24.5% vs. FY20) ‒ EBITDA Margins at 9.1% de
Slide 24: Key Highlights: FY22
Key Highlights: FY22 ▪ Stellar growth in Agri Business Revenue ̶ Opportunities effectively leveraged for Wheat exports ̶ Robust growth in rice, spices and leaf tobacco ▪ Strong growth in Paperboards, Paper & Packaging; Revenue up 36.0% YoY ̶ Paperboard volumes at record high ̶ Robust growth aided by
Slide 25: Key Highlights: Q4 FY22
Key Highlights: Q4 FY22 Gross Revenue EBITDA Strong growth +15.7% +16.8% ex Agri, up 13.9% across all operating segments Profit After Tax Overall Segment PBIT Margin ex – Agri Business +11.8% 36.2% 20 bps For the quarter ended 31st March, 2022, YoY change | 13 |
Slide 26: Key Highlights: Q4 FY22
Key Highlights: Q4 FY22 ▪ Strong growth across all operating segments ̶ Resilient performance despite third wave of pandemic ▪ Robust broad-based recovery in Cigarettes ̶ Volumes surpass pre-pandemic levels despite disruptions caused by third wave ▪ FMCG revenue +12.3% on a relatively high base (+30
Slide 27: ITC Next Strategy
ITC Next Strategy Future Ready | Consumer Centric | Agile Multiple Growth Drivers Innovation and R&D Cost Optimization Best fit - market opportunity & enterprise strengths Agile & purposeful innovation to win Structural interventions across value Science-based research platforms chain Disruptive mod
Slide 28: FMCG
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Slide 29: FMCG Others – Q4 FY22 Resilient Performance
Resilient Performance FMCG Others – Q4 FY22 Segment Revenue up 30.1% over Q4 FY20 OFMCG Segment Revenue Rs. cr. ▪ Segment Revenue up 12.3% YoY; + 30.1% over Q4 FY20 4,400 - Strong growth in Discretionary/Out-Of-Home categories; Staples & 4,200 +30.1% 4,142 Convenience Foods remained resilient 4,000
Slide 30: FMCG Others – Q4 FY22 Segment EBITDA
FMCG Others – Q4 FY22 Segment EBITDA up 46% over Q4 FY20 Seg. EBITDA margins sustained at 9.0% despite inflationary headwinds Rs. cr. ▪ Q4 Segment EBITDA margins sustained at 9.0% despite unprecedented inflationary headwinds (+75 bps YoY; +100 bps Vs. FY20) 460 +46%; 100 bps margin expansion 9.0% ▪
Slide 31: Unprecedented Inflation in Commodity Prices
Unprecedented Inflation in Commodity Prices Edible Oil Soap Noodles Metallocene 239 15 8 179 160 17 5 13 8 16 5 18 00 15 5 17 00 150 11 8 14 5 16 00 13 5 12 5 137 98 15 00 133 14 00 11 5 13 00 10 5 100 78 100 12 00 100 95 11 00 85 58 10 00 Oct'20 Dec'20 Mar'21 Sep'21 Dec'21 Feb'22 Mar'22 Sep'20 Dec'
Slide 32: Driving Cost Agility & Productivity
Driving Cost Agility & Productivity Remove | Reduce | Re-engineer Manufacturing ICMLs Supply Chain Industry 4.0 Network Optimization (AI/ ML Enabled) TPM Direct to Market Lean, Six Sigma ITC One Supply chain Smart Transportation Delayering Operations Smart Last Mile Execution Smart Buying Marketing
Slide 33: Consumer Insighting
Consumer Insighting Triangulating multiple data sources in real-time Sources: Process: Output: Traditional + Social Listening, Image Insights + Content + Unconventional Data Analytics, AI, NLP, Efficient Media Targeting Sources Real Time Insights Analytical Solutions, etc. New product ideas & propos
Slide 34: Addressing Emerging Consumer Need Spaces with Agility
Addressing Emerging Consumer Need Spaces with Agility Hygiene++ , Protection & Care Convenience Interactive Education Savlon ITC Master Chef HandWash Powder Pastes & Gravies Savlon Disinfectants, Masks & Wipes Classmate Interaktiv Origami Books Aashirvaad Devotion ITC Master Chef Frozen Foods Instan
Slide 35: Addressing long-term consumer needs of Health, Hygiene & Immunity
Addressing long-term consumer needs of Health, Hygiene & Immunity… Aashirvaad Nature’s Super Foods Aashirvaad Salt Proactive Sunfeast Farmlite & B Natural | Sunfeast Nimyle Floor Cleaner Need for Organic Better Heart health Marie Veda Nutrilite Power of Neem Rising Gluten Intolerance & Going back to
Slide 36: …and Indulgence
…and Indulgence Sunfeast Bounce Fabelle A fun-filled flavourful experience Signature Luxury Dessert collection Sunfeast Dark Fantasy A unique decadent filled cookie Bingo! Snacks Candyman Fantastik experience Extravaganza of Flavour & Texture More chocolate in every experience | 24 |
Slide 37: Creating Purpose-led brand experiences for consumers
Creating Purpose-led brand experiences for consumers Savlon Swasth India Vivel - Women Empowerment Mom’s Magic- NoMoreMissedCallsFromMom Sunfeast India Run As One ITCstore.in ‘Basket of Care’ mobilised the country in support of livelihoods For Daily Wage and Frontline Workers | 25 |
Slide 38: Driving Digital Engagement
Driving Digital Engagement Leveraging OTT platforms AI Based Fragrance Finder 100% Share of Voice Association with series/IPL Personalize your shopping experience with Engage Fragrance Finder https://www.engagedeo.com/search/ Impactful Campaigns Partnering with Influencers & Celebrities 83%+ 3000+ o
Slide 39: Awards and Accolades
Awards and Accolades • Best Digital Experience Marketing Campaign • Best Influencer Marketing Campaign • Use of Video • Best Trend/Moment Marketing • Best Indian New Brand Launch • Small Budget Digital Marketing Campaign • Best Low Budget Marketing • Best Social Media Campaign of the Year • CSR Camp
Slide 40: Multi channel Go-to-Market Capability
Multi channel Go-to-Market Capability Driving Penetration & Accessibility Strengthening Convenience & Grocery Total Reach Direct Coverage 68 100000 90000 66 80000 70000 64 60000 62 50000 40000 60 30000 20000 58 10000 56 0 2018 2022 2018 2022 Market Coverage Stockists 180000 16000 160000 14000 140000
Slide 41: Expanding Reach in Emerging Channels
Expanding Reach in Emerging Channels Winning in Emerging Channels New Routes to Market On-the-Go Direct Marketing QSR Strategic Partnerships Fast-tracking E-Com, Modern Trade D2C, Cash & Carry Climate Controlled Supply Chain Scaling-up Expanding e-Com Frozen | Dairy | Chocolates Food Services 3x 900
Slide 42: Digital @ ITC
Digital @ ITC Building a dynamic 'Future-Tech' enterprise eB2B: UNNATI VIRU: Virtual Salesman VISTAAR: Rural App Project Zen Next Generation Agile FMCG Supply Chain ~3 lakh Outlet penetration | 30 |
Slide 43: FMCG Cigarettes
MM ENA Enduring Value FMCG Cigarettes
Slide 44: FMCG Cigarettes – Q4 FY22 Robust Broad-based Recovery
Robust Broad-based Recovery FMCG Cigarettes – Q4 FY22 Agile Supply Chain and Market Servicing ▪ Net Segment Revenue up 10.2%; Segment EBIT up 12.2%; Segment EBIT margins up 130 bps ▪ Robust broad-based recovery in Cigarettes; volumes surpass pre-pandemic levels Segment Revenue ▪ Innovation & democra
Slide 45: FMCG Cigarettes Recent Portfolio Interventions
FMCG Cigarettes Recent Portfolio Interventions Innovation Portfolio Fortification • Classic Connect • Gold Flake Luxury Filter • Gold Flake Neo • Gold Flake Neo SMART Filter • American Club Clove Mint • Navy Cut Deluxe • Gold Flake Indie Mint • Player’s Gold Leaf Chase • Capstan Fresh • Gold Flake S
Slide 46: Hotels Business
Hotels Business ITC Grand Goa Resort & Spa | 34 |
Slide 47: Hotels – Q4 FY22 Smart recovery
Smart recovery Hotels – Q4 FY22 despite third wave of pandemic Rs. cr. Segment Revenue ▪ Exit occupancies surpass pre-pandemic levels - Sequential improvement in ARRs; however, remain below pre-pandemic levels Q4 FY22: 390 cr. (+35 % vs LY; 84% of FY20) - Progressive improvement in business travel;
Slide 48: Trailblazer in Responsible Luxury
First 3 hotels in the world Trailblazer in Responsible Luxury to achieve LEED Zero Carbon Certification ITC Windsor ITC Grand Chola ITC Gardenia World’s 1st Hotel with World’s Largest Hotel with World’s 3rd Hotel with LEED Zero Carbon Certification LEED Zero Carbon Certification LEED Zero Carbon Cer
Slide 49: Expanding the Welcomhotel footprint
Expanding the Welcomhotel footprint Healthy pipeline of management contracts Welcomhotel Guntur Welcomhotel Chail Welcomhotel Brand footprint scaled up to 23 properties/2600 keys Portfolio additions to be launched progressively over coming quarters Welcomhotel Bhubaneswar Welcomhotel Katra | 37 |
Slide 50: Executing 'Asset-Right' Strategy
Executing ‘Asset-Right’ Strategy 2 New Brands Launched Mementos Storii Collection of unique luxury hotels across varied destinations Collection of intimate sized handpicked properties in the ranging from modern retreats to historic treasures premium segment | 38 |
Slide 51: Driving Value through Digitalisation
Driving Value through Digitalisation Brand/Guest Experience CRM One stop shop for all guest needs Room Reservation | Restaurant Booking Analytics & Insight driven personalisation Takeaway | Loyalty | Room Controls | 39 |
Slide 52: Agri Business
MM ENA Enduring Value Agri Business
Slide 53: Agri Business: Strong Revenue growth driven by Exports
Agri Business Strong Revenue growth driven by Exports ▪ Revenue up 29.6% driven by wheat, rice, leaf tobacco exports ̶ Strategic sourcing support to Branded Packaged Foods Businesses – Wheat, Dairy and Spices Segment Revenue ▪ Volume led growth in Leaf Tobacco exports 4366 cr. 29.6% ▪ Leveraging Dig
Slide 54: Paperboards, Paper & Packaging
Paperboards, Paper & Packaging | 42 |
Slide 55: Paperboards, Paper & Packaging: Strong Revenue Growth & Margin Expansion
Strong Revenue Growth & Margin Expansion Paperboards, Paper & Packaging Paperboard Volumes record new highs Paperboards & Specialty Paper Segment Revenue ▪ Revenue up driven by higher volumes & realization ̶ Revival of demand across most end user segments ̶ Strategic capacity expansion in VAP^ 2183
Slide 56: Scaling up Sustainable Solutions
Scaling up Sustainable Solutions ITC LSTC | External Collaborations Sustainable Solutions Portfolio Extrusion Laminating Coated Boards Base ToughPack Bio-based Paper + Barrier Flexible Coated Boards Coatings Packaging Paper Paper + HSL Anti fungal Online Coated Tableware, Moulded Boards Antifungal B
Slide 57: Financials
Financials | 45 |
Slide 58: Key Financials
Key Financials Rs. cr. Q4 FY22 Q4 FY21 GOLY FY22 FY21 GOLY Gross Revenue 16,227 14,023 15.7% 59,101 48,151 22.7% Net Revenue 15,307 13,176 16.2% 55,724 45,216 23.2% EBITDA 5,224 4,473 16.8% 18,934 15,523 22.0% PBT 5,442 4,854 12.1% 19,830 17,164 15.5% PAT 4,191 3,748 11.8% 15,058 13,032 15.5% Robust
Slide 59: Segment Revenue Q4 FY22
Segment Revenue Q4 FY22 Robust growth across Segments • FMCG- Others revenue up 12.3% (+30.1% vs FY20) Rs. cr. Q4 ‒ Strong growth in Discretionary/OOH categories FY22 FY21 Goly ‒ Staples & Convenience Foods remain resilient Segment Revenue ‒ Demand volatility in Hygiene portfolio; remains a) FMCG -
Slide 60: Segment Results Q4 FY22
Segment Results Q4 FY22 Robust growth across Segments (Rs. cr.) Q4 • FMCG-Others: Segment EBITDA up 22.5%; FY22 FY21 Goly Margin expansion of 75 bps despite Segment Results inflationary headwinds a) FMCG - Cigarettes 4114 3666 12.2% - Others 236 189 25.1% Total FMCG 4350 3855 12.8% • Hotels: EBITDA
Slide 61: ITC – A Global Exemplar in Sustainability
ITC – A Global Exemplar in Sustainability | 49 |
Slide 62: Impactful Social Performance
Impactful Social Performance ITC e-Choupal Afforestation Watershed Development Livestock Development Solid Waste Management Over 953,000 acres Over 1.29 million acres Well-being Out of Waste 4 Million Farmers Over 2,045,000 milch programme has covered empowered greened covered animals covered 18 mil
Slide 63: Sustainability 2.0 Targets 2030
Sustainability 2.0 Sustainability Targets 2030 REDUCE I RECYCLE I RESTORE Raising the Bar Strategic Interventions to Combat Climate Change Renewable Specific GHG Recyclable Plastic Plastic Energy Emissions Packaging Neutrality Building Green De-Carbonization 100% Infrastructure 50% 50% 100% Collecti
Slide 64: Sustainability – FY22 Highlights
Sustainability – FY22 Highlights • All Businesses aligned with 2030 targets • Comprehensive set of policies & guidelines put in place • Exceeded commitment on Plastic Neutrality; collected and sustainably managed over 54000 MT of plastic waste in FY22 across 35 states/UT • Achieved A- Leadership sco
Slide 65: ITC Infotech
~FOTECH ITC Infotech | 5353|
Slide 66: ITC Infotech: Robust Revenue & Profit Growth
ITC Infotech Robust Revenue & Profit Growth Revenue EBITDA PBT PAT Rs. cr. Goly: 16.3% ▪ Margin % Goly: 16.0% ▪ Margin % Goly: 19.1% ▪ Margin % Goly: 19.9% 25.2% 300 0 25.2% 25.1% 740 720 25. 3% 19.0% 560 740 280 0 25. 1% 25. 2% 720 700 2853 18. 9% 720 260 0 540 24. 7% 24.6% 680 541 24. 9% 717 240 0
Slide 67: ITC: Enduring Value
ITC: Enduring Value A passion for in a way that is and Profitable growth... Sustainable… Inclusive. | 55 |
Slide 68: Links
Links Product/initiative Link Bingo! on Instagram https://www.instagram.com/bingo_snacks/ YiPPee! on Instagram https://www.instagram.com/sunfeast_yippee/ Aashirvaad on Instagram https://www.instagram.com/aashirvaad/ Sunfeast Dark Fantasy on Instagram https://www.instagram.com/sunfeastdarkfantasy/ Cl