Godrej Consumer Products Limited · NSE:GODREJCP

Godrej Consumer Products — Investor Presentation (February 2006)

52 slides from Godrej Consumer Products's investor presentation, February 2006

  1. Slide 1: Godrej Consumer Products Limited (GCPL)

    Godrej Consumer Products Limited (GCPL) February 2006 www.godrejcp.com

  2. Slide 2: All Round Growth

    All Round Growth • Robust macro economy…. o Strong GDP growth o Good monsoon; further driving agricultural incomes o Strengthening GDP (Purchasing Power Parity) – presently 4th highest globally o Higher disposable incomes driving demand – per capita income grows 5.2%, increasing urbanisation – visib

  3. Slide 3: GCPL – 9M FY06 Performance Overview

    GCPL – 9M FY06 Performance Overview • Sales and profitability growth sustained o Sales improve 16% o Godrej Brand Sales grow by 20% o EBITDA margins strengthen from 18.3% to 22.3% o Net profit higher by 50% • Stakeholder value creation o RoCE and RoNW ratios amongst the highest in corporate India at

  4. Slide 4: Highlights 9M 2005-06

    Highlights 9M 2005-06 Amts in Rs. Million 9M ’05-06 9M 04-05 Sales (own Brands) 4740 20% 3951 (net of excise) Contract Mfg 78 189 Total Sales 4932 16% 4242 Material Cost 2327 2112 Advt & Publicity 376 22% 308 PBDIT 1098 41% 777 PBT 988 47% 674 PAT 910 50% 608 EVA 809 48% 546 EPS (Rs.) 21.5 50% 14.3

  5. Slide 5: Category-wise Turnover 9M 2005-06

    Category-wise Turnover 9M 2005-06 Amts in Rs. Million Turnover (net of Excise) 9M 05-06 9M 04-05 Growth % Toilet Soaps 2942 2506 17% Hair Colours 1195 956 25% Liquid Detergents 353 318 11% Toiletries 250 172 46% Total Godrej Brands 4740 3951 20% Contract Mfg 78 189 (59%) By-Products 114 101 12% Tota

  6. Slide 6: Operating Categories FY 2004-05

    Operating Categories FY 2004-05 GCPL Soap Personal Care Revenue: Rs 3655 mil Category Revenue Mkt share Mkt share: 8.0% (Rs mil) (%) Hair colour 1336 39.9 Oct-Dec’05 Mkt Share 9.5% Liquid 365 87.5 detergents Toiletries 245 - Oct-Dec’05 Mkt Share Hair Colour 40.5% Healthy revenues from both businesse

  7. Slide 7: Segmental Overview

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  8. Slide 8: Toilet Soaps

    * d Toilet Soaps

  9. Slide 9: Toilet Soaps – Market Scenario

    Toilet Soaps – Market Scenario • Category grows 17% in value terms in 9M 0506 • Vegetable oil prices at reasonable levels • ‘Value For Money’ continues to be the dominant consideration in purchase decisions • Growing appreciation of our quality • Strong inclination to try new product offerings

  10. Slide 10: Performance Perspective 9M 0506

    GCPL Performance Perspective 9M 0506 • Strong performance sustained in line with business strategy o Sales growth outperforms segment o GCPL is the second largest toilet soaps player in India o Marketshare improves from 8.3% to 9.5% in the latest quarter • All brands enjoy improved consumer offtake

  11. Slide 11: Toilet Soaps - GCPL Brands Value Growth

    Toilet Soaps - GCPL Brands Value Growth 16.4 15 13.3 9.0 10 8.0 4.6 5 2.4 % 0 FY02 FY03 FY04 FY05 -1.3 -5 -10 -7.3 Industry GCPL brands Source: ORG MARG for Industry figures Company data for GCPL figures Consistent segment outperformance Growth improving year on year

  12. Slide 12: Toilet Soaps Revenue, Marketshare

    Toilet Soaps Revenue, Marketshare Mkt Share is 9.5% in Dec’05 Qtr 1100 10 9.5 1050 8.8 1045 1042 1000 9 950 8.3 8.3 8.6 900 7.5 8.1 850 8 877 865 Rs mil 855 835 800 % 7.0 750 7 765 764 700 6.8 650 6 600 624 550 500 5 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY04 FY04 FY05 FY05 FY05 FY05 FY06 FY06 FY06 Source: ORG

  13. Slide 13: Soap PBIT Perspective

    Soap PBIT Perspective 400 11 10.1 10 350 9.8 9 300 8.1 8 250 7 R s mil 200 % 368 6 150 306 5 237 100 4 50 3 0 2 FY 2002-2003 FY 2003-04 FY 2004-05 PBIT Margin Strengthening margins on the back of efficient operations

  14. Slide 14: Toilet Soaps: 90% Opportunity

    Toilet Soaps: 90% Opportunity • Evaluating new VFM product and variant offerings in all brands Innovation & efficiency • Enhancing margins by sweating assets and leveraging oil procurement expertise • Fiscal Benefits continue to accrue Sustained savings • Income Tax at Minimum Alternate Tax (MAT) ra

  15. Slide 15: Personal Care

    - : d Personal Care

  16. Slide 16: Hair Colours

    pny Hair Colours

  17. Slide 17: Hair Colours: Market Scenario

    Hair Colours : Market Scenario • Category improves growth momentum; grows by 25% in 9M 2005-06 • Market, however still under penetrated – concerns around price, attitudes, health need to be addressed • Increasing usage by younger generation

  18. Slide 18: Performance Perspective 9M 2005-06

    GCPL Performance Perspective 9M 2005-06 • GCPL continues to be the market leader in the category o Sales improve by 25% o Introduces offerings across price points, expands usage • New product and variant launches receive healthy consumer response, drives growth o Coloursoft relaunced in new ammonia

  19. Slide 19: Hair Colour: Value Growth

    Hair Colour : Value Growth 20 20.3 17.0 15 16.4 16.2 16.4 10 % 8.0 5 1.2 0 -2.3 FY02 FY03 FY04 FY05 -5 Industry GCPL Source: ORG MARG for Industry figures Company data for GCPL figures

  20. Slide 20: Hair Colour: Revenue, Marketshare

    Hair Colour : Revenue, Marketshare Mkt Share is 40.5% in Dec’05 450 50 42.4 41.8 40.6 41.2 40.2 40.0 39.8 40.5 400 38.9 40 350 30 350 425 411 % 300 20 380 360 331 301 250 10 279 273 200 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY04 FY04 FY05 FY05 FY05 FY05 FY06 FY06 FY06 Revenues Mkt share Source: ORG data % fo

  21. Slide 21: Liquid Detergents

    j d. Liquid Detergents

  22. Slide 22: Liquid Detergents: Value Growth

    Liquid Detergents : Value Growth 15 10 11.6 10.1 10.1 10.8 5 6.6 3.3 2.6 0 % FY02 FY03 FY04 FY05 -5 -9.6 -10 -15 Industry GCPL Source: ORG MARG for Industry figures Company data for GCPL figures Steady growth in a relatively small category

  23. Slide 23: Liquid Detergents: Revenue, Marketshare

    Liquid Detergents: Revenue, Marketshare 400 100 350 86.9 90 89.9 300 88.1 88.4 85.6 86.8 84.1 84.5 80.4 250 80 Rs mil 200 % 70 312 150 278 272 100 60 50 48 44 31 31 9 9 0 50 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY04 FY04 FY05 FY05 FY05 FY05 FY06 FY06 FY06 Revenues Mkt share Source: ORG data % for All India va

  24. Slide 24: Toiletries: GCPL Performance Perspective

    Toiletries GCPL Performance Perspective Shaving cream o New packaging and advertising campaign expected to enhance sales further • Talcum powder o ‘1+1’ offer drives sales o ‘Luxury’ and ‘Cologne’ variants introduced

  25. Slide 25: Personal Care: PBIT Perspective

    Personal Care : PBIT Perspective 800 40 38.1 38 700 36 36.3 R s m il 600 34.7 % 649 752 635 34 500 32 400 30 FY 2002-2003 FY 2003-04 FY2004-05 PBIT Margin

  26. Slide 26: Personal Care: Growth Thrust

    Personal Care :Growth Thrust • In house R&D focused on identifying offerings across price points Consumer centricity • Periodic consumer interactions facilitate up to date awareness of psychographic and habit changes • New rejuvenated packaging Visibility • Optimal use of above and below the line co

  27. Slide 27: Acquisition of Keyline Brands, UK

    Acquisition of Keyline Brands, UK • 100% ownership acquired effective October 31, 2005 • Keyline Brands is one of UK’s most admired FMCG Companies – Sales GBP 16.7 Mio ; Profit Before Tax GBP 2.2 Mio (CY 2004) • GCPL now has ownership of several international brands and trademarks including ‘CUTICUR

  28. Slide 28: Summarised Profit & Loss Account (Consolidated)

    Summarised Profit & Loss Account (Consolidated) Rs.Million Consolidated 9M 0506 Net Sales 5082 PBDIT 1112 PBT 986 PAT 907 PBDIT / Net Sales 22% PBT / Net Sales 19% PAT / Net Sales 18% Consolidated Results include one time financial costs of Rs.0.8 Mio related to the acquisition

  29. Slide 29: Key Success Factors

    Key Success Factors Operations in excise and income tax free areas Strong business enablers Sales, distribution Human and Supply chain resources

  30. Slide 30: Operations in Economically Backward Areas

    Operations in Economically Backward Areas • Baddi manufacturing facility commissioned in six months • Plant recognised for highest quality and environmental standards. One of the few facilities to have received integrated certification from BVQi comprising o ISO:9001:2000 certification for Quality M

  31. Slide 31: Income Tax

    Income Tax 250 40 33.6 200 30 150 23.6 R s m il 20 % 213 100 15.3 165 118 10 50 8.2 77 0 0 FY 2001-2002 FY 2002-2003 FY 2003-04 FY2004-05 IncomeTax Tax rate Income Tax inclusive of current and deferred tax

  32. Slide 32: Advertising & Publicity Spend

    Advertising & Publicity Spend 700 40 600 543 30 500 400 437 R s m il 378 20 % 300 345 13.6 200 8.7 10 8.3 100 7.4 0 0 FY 2001-2002 FY 2002-2003 FY 2003-04 FY2004-05 Advg &Publicity % of Brand Sales 200 40 175 150 30 150 125 129 Savings being 123 122 R s m il 100 20 % 108 103 100 ploughed back into 7

  33. Slide 33: Distribution and Supply Chain

    Distribution and Supply Chain • Virtual platform between company and distributors Project Sampark • Comprehensive Business Intelligence enables in depth primary and secondary sales analysis • Intensified rural approach: presence in all Increased locations with over 10,000 population penetration • 13

  34. Slide 34: Human Resources

    Human Resources • Godrej Sales Academy: Fresh graduates Rigorous • Career Path: Classroom and e learning courses training for all front line sales officers • GALLOP: Identifying future leaders • Baddi completely manned in six months HR planning • Recruitment at all premier management institutes: acc

  35. Slide 35: Recent recognitions

    Recent recognitions Godrej Consumer Products was selected as a Business Superbrand for the period 2004-06. Cinthol also recognised as a Superbrand

  36. Slide 36: Recent recognitions

    Recent recognitions Adjudged as the Best Managed Workforce in the CNBC Hewitt Survey judging the best employees in India from amongst 272 participating companies Survey conducted by GrowTalent and Businessworld: We continue to be ranked amongst the Top 25 for the third year in a row in 2005

  37. Slide 37: Recent recognitions

    Recent recognitions Malanpur factory first in the Indian Soap industry to have been certified for ISO 14001:2004 New version Adjudged the most popular brand by Indian consumers in the emulsion base liquid hair dye category at the AMGF Consumerworld FMCG Awards 04

  38. Slide 38: Financial Perspective

    * d Financial Perspective

  39. Slide 39: Quarterly Revenue Performance

    Quarterly Revenue Performance 1800 30 1600 25.6 25 1400 21.4 21.0 21.1 1200 20.1 20.5 19.9 20 1000 16.5 16.8 Rs mil 15 1691 % 1670 1571 1531 800 1385 1362 1349 1277 1214 600 10 400 5 433 200 327 334 331 291 258 249 225 226 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY04 FY04 FY05 FY05 FY05 FY05 FY06 FY06 FY06 R

  40. Slide 40: Yearly Revenue Performance

    Yearly Revenue Performance 6000 20.0 5627 19.5 5000 4896 19.0 19.0 4701 4586 4000 18.5 R s mil 3000 18.1 18.0 % 17.5 2000 17.4 17.0 16.8 1000 16.5 771 818 884 1069 0 16.0 FY 2001-2002 FY 2002-2003 FY 2003-2004 FY2004-05 Revenues PBIDT Margin

  41. Slide 41: Quarterly Earnings Performance

    Quarterly Earnings Performance 400 395 350 300 298 295 290 250 264 Rs mil 227 219 200 361 192 192 150 278 271 260 253 192 100 179 173 174 50 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY04 FY04 FY05 FY05 FY05 FY05 FY06 FY06 FY06 PBT PAT

  42. Slide 42: Yearly Earnings Performance

    Yearly Earnings Performance 1000 938 750 766 701 632 Rs mil 500 861 648 536 250 420 0 FY 2001-2002 FY 2002-2003 FY 2003-2004 FY 2004-05 PBT PAT

  43. Slide 43: Segmental Overview

    Segmental Overview 35.0 32.9 65.0 67.1 Soap Personal care Revenues (%) – FY 2004-05 Segment PBIT (%) – FY 2004-05

  44. Slide 44: Ratios

    Ratios Particulars FY 04-05 FY 03-04 FY02-03 EBITDA Margin (%) 19.0 18.1 17.4 EBITDA per share (Rs) 18.9 15.6 14.2 PBT Margin (%) 16.7 15.6 14.9 PBT per share (Rs) 16.6 13.5 12.2 PAT Margin (%) 15.3 13.2 11.4 PAT per share 15.2 11.4 9.3 EPS (Rs) 15.8 11.4 9.2 Dividend payout (%) 89.5 89.3 89.3 RoCE

  45. Slide 45: Cash Flow

    Cash Flow 900 821 750 715 600 665 598 Rs mil 450 300 150 0 FY 2001-02 FY 2002-03 FY 2003-04* FY 2004-05 Free Cashflows * After funding of Rs.190 Mln for Baddi Strong cashflows Soap factory out of internal accruals

  46. Slide 46: Shareholder Perspective

    Shareholder Perspective 900 15.8 16 800 788 700 600 11.4 12 Rs mn 500 9.2 537 % 400 417 300 8 301 200 7.0 100 0 4 FY 2001-2002 FY 2002-2003 FY 2003-2004 FY2004-05 EVA EPS Enhancing EVA

  47. Slide 47: Shareholder Perspective

    Shareholder Perspective 18 14 16.6 16 12.0 12 14 13.5 12.2 10 12 10.7 9.0 10 8.0 8 Rs Rs 8 6 6 5.5 4 4 2 2 0 0 FY 2001-2002 FY 2002-2003 FY 2003-2004 FY 2004-05 PBT per share Dividend Consistently improving PBT per share and dividend

  48. Slide 48: Dividend

    Dividend 800 771 100 89.3 89.3 700 89.5 80.3 80 600 579 500 478 60 R s m il 400 % 337 40 300 200 20 100 0 0 FY 2001-2002 FY 2002-2003 FY 2003-2004 FY2004-05 Dividend Payout ratio High dividend payout ratio

  49. Slide 49: Corporate Governance

    Corporate Governance • Independent and highly respected Board • Audit Committee, Human Resources Committee, Shareholders Committee and Nomination Committee • ICRA reaffirmed its rating to the Stakeholders Value Creation and Governance practices of GCPL at SVG2+ • Company’s rating on corporate govern

  50. Slide 50: Outlook

    Outlook • Buoyant economy driving disposable incomes • Consumption in both rural and urban areas expected to continue strong growth • Introduction of VAT improving transparency, simplifying processes, leading to better compliance and widen tax net • Rationalisation of taxes puts more money in the ha

  51. Slide 51: GCPL….Going Forward

    GCPL….Going Forward • Business decisions driven by EVA • A sound and sustainable growth platform comprising o A ‘Value For Money’ product portfolio: Quality at an affordable price o Efficient and lean operations: Continuously sweating assets o Continuously growing distribution network: Deepen penetr

  52. Slide 52: Thank You

    Godrej FT. Ltd. Thank You

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