Itc Limited · NSE:ITC
Itc — Investor Presentation (June 2006)
47 slides from Itc's investor presentation, June 2006
Slide 1: ITC Limited
ITC Limited
Slide 2: ITC - Financial Snapshot
ITC - Financial Snapshot Rs. Crores CAGR (%) DESCRIPTION 1995-96 2005-06 1995-96 to 2005-06 GROSS TURNOVER 5115 16224 12.2 NET TURNOVER 2536 9791 14.5 MARKET CAPITALISATION 5571 73207 * 29.4 PBDIT 584 3613 20.0 PBIT 536 3281 19.9 PBT 452 3269 21.9 PAT (before exceptional items) 261 2280 24.2 EPS - B
Slide 3: 2005-06 Financials
2005-06 Financials Rs. Crs. 2005/06 2004/05 Goly(%) Gross Turnover 16224 13350 21.5 Net Turnover 9791 7639 28.2 Exports 1827 1316 38.8 PBDIT 3613 3028 19.3 PBIT 3281 2716 20.8 PBT 3269 2673 22.3 PAT (Before Exceptional items) 2280 1837 24.1 PAT (After Exceptional items) 2235 2191 2.0 Capital Employe
Slide 4: Segment Revenues 2005/06
Segment Revenues 2005/06 Rs. crores Actuals Actuals 2005-06 2004-05 Goly (%) Segment Revenue a) FMCG - Cigarettes 11330 10003 13.3 - Others 1013 563 79.9 Total FMCG 12343 10566 16.8 b) Hotels 783 577 35.7 c) Agri Business 2678 1780 50.5 d) Paperboards, Paper & Packaging 1896 1565 21.1 Total 17701 14
Slide 5: Segment Results 2005/06
Segment Results 2005/06 Rs. crores Actuals Actuals 2005-06 2004-05 Goly (%) Segment Results a) FMCG - Cigarettes 2709 2289 18.3 - Others (172) (195) 12.0 Total FMCG 2537 2094 21.2 b) Hotels 258 141 83.1 c) Agri Business 91 96 (5.8) d) Paperboards, Paper & Packaging 351 280 25.5 Total 3237 2611 24.0
Slide 6: Segment Capital Employed
Segment Capital Employed Rs. crores 31.03.2006 31.03.2005 Goly (%) Capital Employed a) FMCG - Cigarettes * 1463 1240 18.0 - Others 489 262 86.5 Total FMCG 1953 1502 30.0 b) Hotels 1374 1401 (1.9) c) Agri Business 1060 740 43.3 d) Paperboards, Paper & Packaging 1908 1745 9.3 Total Segment Capital Emp
Slide 7: ITC Q4 05/06 - Key Financials
ITC Q4 05/06 - Key Financials Q4 Q4 Last Goly(%) Rs. Crs. Actuals Years Gross Turnover External 4420 3534 25.1 Net Turnover External 2784 2177 27.9 Total Forex Earnings 609 366 66.4 PBDIT 877 722 21.5 PBIT 791 633 25.0 PBT 781 632 23.6 PAT (before Exceptional Items) 567 417 35.9 Exceptional Items (N
Slide 8: Segment Revenue: Q4 2005/06
Segment Revenue: Q4 2005/06 Rs. crores Q4 05/06 Q4 04/05 Goly (%) Segment Revenue a) FMCG - Cigarettes 2883 2504 15.1 - Others 306 174 75.7 Total FMCG 3188 2678 19.1 b) Hotels 263 181 45.4 c) Agri Business 804 516 55.8 d) Paperboards, Paper & Packaging 476 412 15.5 Total 4731 3786 24.9 Less : Inter
Slide 9: Segment Results: Q4 2005/06
Segment Results: Q4 2005/06 Rs. crores Q4 05/06 Q4 04/05 Goly (%) Segment Results a) FMCG - Cigarettes 638 560 13.9 - Others (42) (69) 38.2 Total FMCG 596 492 21.2 b) Hotels 98 57 72.2 c) Agri Business 9 3 247.2 d) Paperboards, Paper & Packaging 79 54 46.4 Total 781 605 29.2 Less : i) Interest (Net)
Slide 10: ITC - One of India's most valuable corporations
ITC One of India’s most valuable corporations One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004 Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 5 bln. & are rated as the ‘most attractive companies for investors’ Only Indian FMCG Company to feature in Forb
Slide 11: Accolades & Awards (1)
Accolades & Awards (1) • Golden Peacock Global Award for Corporate Social Responsibility in Emerging economies for 2005 by World Council for Corporate Governance for the e-choupal and social & farm forestry initiatives • 2005 Golden Peacock Award for Excellence in Corporate Governance • ITC Centre,G
Slide 12: Accolades & Awards (2)
Accolades & Awards (2) • e-choupal initiative continues to win global recognition: – Stockholm Challenge Award 2006 in the Economic Development category which recognises initiatives that leverage Information Technology to improve living conditions and foster economic growth in all parts of the world
Slide 13: ITC - Business Portfolio
ITC - Business Portfolio ITC FMCG: Agri Business Paperboar Cigarettes Hotel Leaf Tobacco d Other FMCG s Agri Paper & Commodities Packaging
Slide 14: Strategy of Organisation to manage diversity of Portfolio
Strategy of Organisation to manage diversity of Portfolio Formal 3-tiered governance structure: Board of Directors : Comprising executive (4) and non-executive directors (8) Strategic supervision Corporate Management Committee : Comprising executive directors and senior managers Strategi
Slide 15: Corporate Strategies
Corporate Strategies Sustain multiple drivers of growth, matching internal capabilities with emerging market opportunities Pursue World class competitiveness in all businesses and across the entire value chain Best-in-class in terms of: Internal Vitality Market Standing Profitability S
Slide 16: FMCG - Cigarettes
FMCG - Cigarettes
Slide 17: ITC's Cigarettes Business
ITC’s Cigarettes Business Market leadership Powerful brands across segments Leadership in all segments - geographic & price Extensive distribution network Over 900 wholesale dealers serving more than 1 million retail outlets World-class state-of-the-art technology and products Investme
Slide 18: Cigarettes: Growth potential
Cigarettes: Growth potential Cigarettes account for only 14% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation Cigarettes (14% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from tobacco sector Of the 58% of adult Indian male
Slide 19: Per Capita Adult Cigarette Consumption (Sticks)
P er C apita A dult C igarette C onsum ption (S ticks) 175 3 1 66 2 11 90 561 488 141 USA C hin a P akistan N epal India W orld A vg. Source : Based on Cigarette consumption data(2003) from “World Cigarettes”,ERC Group plc.
Slide 20: Hotels & Tourism
Hotels & Tourism
Slide 21: Hotels & Tourism industry
Hotels & Tourism industry Foreign arrivals into India - 3.9 million appx. vs 31 million in China The two nations were on par 2 decades ago at 750,000 arrivals Today, Beijing alone has as many hotel rooms as the whole of India India’s luxury rooms availability lower than even smaller East Asi
Slide 22: Luxury hotel rooms - East Asia
Luxury hotel rooms - East Asia 80000 70000 60000 50000 40000 30000 20000 10000 0 India Bangkok Singapore HongKong Malaysia Source: Compendium of Tourism statistics, WTO
Slide 23: Indian hotel industry
Indian hotel industry Current supply – appx. 100000 rooms of which 5 Star category accounts for less than 30% India needs 130000 rooms to service 5 million tourists – a figure expected to be reached by 2007 Present mismatch between supply and demand expected to persist over the short term As
Slide 24: ITC's hotel business
ITC’s hotel business ITC-Welcomgroup : a leading hotel chain in India Strategy to establish presence in key business locations to complete the chain achieved in end 2004 Over 5200 rooms under 4 distinct brands Fastest growing hotel chain with highest operating efficiency (PBDIT/Net Income @
Slide 25: ITC's Hotel properties
ITC’s Hotel properties • ITC Hotel Maurya Sheraton & Towers,New Delhi • ITC Hotel Grand Maratha Sheraton & Towers,Mumbai • ITC Hotel Sonar Bangla Sheraton,Kolkata • ITC Hotel Grand Central,Mumbai • ITC Hotel Windsor Sheraton & Towers,Bangalore • ITC Hotel Kakatiya Sheraton & Towers,Hyderabad (thru’
Slide 26: ITC's Hotel Business
ITC’s Hotel Business • Manages 15 full service mid-market properties under the Fortune Hotels brand – 100% subsidiary company : Fortune Park Hotels Ltd. • Also operates 35 properties under the ‘WelcomHeritage’ brand – Maharaja Heritage Resorts Ltd. 50% JV with Marudhar Hotels (P) Ltd.
Slide 27: Paperboards, Paper & Packaging
Paperboards, Paper & Packaging
Slide 28: Indian paperboard market
Indian paperboard market Annual paperboard demand – appx. 1 million tonnes Fragmented capacity & obsolete technology Low per capita usage at 0.75 kg - 1/7th global average Indian paperboard market growing at 7% p.a. Value Added Coated board - the fastest growing segment (20% p.a.) in India
Slide 29: Paperboard Demand Projections - Asia
Paperboard Demand Projections - Asia Asian region demand (excluding Japan) growing by 0.5 million tonnes per annum This region expected to be a net importer by 2006 Significant export opportunities for high quality Indian manufacturers ITC paperboards exports - Rs. 2 billion appx.
Slide 30: ITC's Paperboards Business
ITC’s Paperboards Business Market leader in growth segment - value added coated boards World-class contemporary technology Elemental Chlorine Free (ECF) Pulp Mill fully operational – only one of its kind in India meeting world-class environmental standards Internationally competitive quality
Slide 31: ITC's Paperboards & Packaging businesses
ITC’s Paperboards & Packaging businesses Capacity expansion in recycled segment Acquisition of Kovai Unit in March 2004: +65000 TPA Another 75000 TPA commissioned in Jan. ‘05 ITC’s packaging SBU -India’s largest converter of paperboard into high quality printed packaging Leading supplier t
Slide 32: Agri Businesses - Leaf Tobacco - Agri Commodities
Agri Businesses - Leaf Tobacco - Agri Commodities
Slide 33: Indian Leaf Tobacco industry
Indian Leaf Tobacco industry India - the second largest producer of tobacco But, India’s share is only 7% in world tobacco trade Upgradation of tobacco consumption from other formats to cigarettes will enable: growing domestic base larger opportunities for value added exports ITC - India
Slide 34: ITC's Agri Commodity Exports
ITC’s Agri Commodity Exports Farm linkages in 14 states covering Soya, Wheat, Rice, Marine products, Edible nuts, Coffee Unique CRM programme in commodity exports Leveraging IT for the transformational ‘e-Choupal’ initiative Rural India’s largest Internet-based intervention Over 36000 vill
Slide 35: e-Choupal - Recognition
e-Choupal - Recognition • World Business Award – ICC-UNDP • Enterprise Business Transformation Award -Wharton Infosys • Harvard Business School – case study • Showcased at ICT4D*, Geneva – UN * Information and Communication Technologies for Development
Slide 36: ITC's strategic thrust
ITC’s strategic thrust Cost-effective extension services to enhance farm productivity and quality, and better align farm produce with requirements of the market, both domestic and international Enhances competitiveness of ITC agri-sourcing Create e-infrastructure to serve as transaction backbo
Slide 37: Future Growth & Value Capture: New FMCG Initiatives
Future Growth & Value Capture New FMCG Initiatives
Slide 38: Strategic Rationale
Strategic Rationale Blend multiple competencies residing within the ITC Group to create new avenues of growth Best fit between internal capabilities and emerging market opportunities Each segment enhances the depth and width of ITC’s FMCG distribution capability Business model retains critic
Slide 39: FMCG Business Initiatives: Branded Packaged Foods
FMCG Business Initiatives Branded Packaged Foods Leverages: Unique Agri sourcing skills ITC Welcomgroup’s specialist cuisine & bakery knowledge FMCG distribution synergies ITC R&D Centre,Bangalore 4 chosen categories: Staples Aashirvaad Atta, Salt, Spices Snack Foods Sunfeast Bis
Slide 40: FMCG Business Initiatives: Branded Packaged Foods
FMCG Business Initiatives Branded Packaged Foods • Aashirvaad Atta: – current market leader amongst national branded players; leverages the e-choupal network for cost-quality optimisation and region specific offerings • Sunfeast Biscuits: – Differentiated & innovative products; continues to build co
Slide 41: FMCG Business Initiatives: Lifestyle Retailing
FMCG Business Initiatives Lifestyle Retailing Leverages trade mark and services expertise of hotels Relaxed wear market growth > 25% p.a Upmarket product range available in exclusive Wills Lifestyle stores and multi-branded outlets/ large format retail stores across the country State-of-the-
Slide 42: FMCG Business Initiatives: Greetings, Gifting & Stationery
FMCG Business Initiatives Greetings, Gifting & Stationery Leverages print and paper know-how An emerging market in India - growth driven by increasing cross-cultural exposure ITC’s ‘Expressions’ range commenced with greeting cards; now widened to include stationery & gift wraps Distribution
Slide 43: FMCG Business Initiatives: Safety Matches
FMCG Business Initiatives Safety Matches Current industry consumer spend estimated at Rs.1250 crores p.a. for 24 billion match boxes Fragmented supply base arising from policy of reservation for small scale industry ITC markets its brands with value added products across each price point Sup
Slide 44: FMCG Business Initiatives: Incense sticks (Agarbattis)
FMCG Business Initiatives Incense sticks (Agarbattis) Current industry consumer spend estimated at over Rs. 900 crores p.a. Fragmented supply base arising from policy of reservation for small scale industry ITC markets its brands with value added products across each price point Support cott
Slide 45: FMCG business initiatives: IT enablement
FMCG business initiatives……. Concurrently, ITC’s IT subsidiary assists in web- enabling business processes CRM initiatives ERP transaction processing systems SCM including the e-choupal capability … hosted on ITC’s Virtual Private Network ITC awarded the best IT user in FMCG category by
Slide 46: Future Positioning of ITC
Future Positioning of ITC A leading FMCG player in India VPN providing SCM, ERP & CRM F capability M A e-choupal rural two-way A R fulfillment capability R M K Cigarette Trade Marketing capability E E R Expanded FMCG distribution capability T S S Greetin Brande Lifestyl Matches g d e & cards/s Foods
Slide 47: Forward-looking Statements
Forward-looking Statements Statements in this presentation describing the Company’s objectives, future prospects, estimates, expectations etc. may be “forward looking statements” within the meaning of applicable securities laws and regulations. Investors are cautioned that “forward looking statement