Itc Limited · NSE:ITC
Itc — Q3 FY2021 Earnings Presentation
46 slides from Itc's earnings presentation, Feb 11, 2021
Slide 1: Q3 FY21 Results
Q3 FY21 Results 11th February, 2021
Slide 2: 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 3: Sustained decline in daily Covid cases in India
Sustained decline in daily Covid cases New wave in US / Europe spurs fresh since Sep’20 in India lockdowns/restrictions India: New Cases – Moving 7-day Average (‘000s) US/Europe: New Cases – Moving 7-day Average (‘000s) 100 17 Sep’20 300 90 Daily New Cases – 97,894 80 250 7 Day Average – 93,199 70 2
Slide 4: High Frequency Indicators
Progressive improvement since Sept’20 High Frequency Indicators with easing of restrictions High Frequency Indicators (Goly) Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Exports Growth -2.1 3.3 -34.3 -61.0 -35.7 -12.2 -9.5 -12.2 6.0 -5.1 -8.7 0.1 5.4 Imp
Slide 5: Upward revisions to FY21 GDP estimates
Upward revisions to FY21 Improvement in Quarterly outlooks GDP estimates FY21 GDP Forecast in Mar'20 in Jul'20 Aug-Sep'20 Jan'21 Q3 FY21 Citi ICRA 0.5 0.4 2.1 Citi SBI Research ICRA RBI -1.7 -0.9 -2.3 -5.4 -1.0 in Mar'20 in Jul'20 Aug-Sep'20 Jan'21 -3.5 Q4 FY21 Citi ICRA -5.0 -5.0 5.0 -6.0 0.7 0.4 1
Slide 6: Aggregate Supply and Demand recovery
Aggregate Supply sustains at ~92% of Improvement in Aggregate Demand to 82% pre-Covid levels Aggregate Demand Aggregate Supply 99.8 92.5 91.9 91.4 91.0 83.6 82.6 82.1 87.7 87.1 76.8 78.3 79.4 82.1 72.4 67.1 70.2 56.9 50.4 43.7 47.5 20.0 Source: Nomura India Normalisation Index 6
Slide 7: Industry
Industry Capacity utilisation & Pvt. Capex remain subdued Persistent weakness in Core Sector Index of Industrial Production (YoY %) Manufacturing PMI (YoY %) Industry Credit Growth (YoY %) 10 2.2 5.2 0.5 4.2 2.5 2.2 58.9 0 56.8 56.3 56.4 57.7 55.3 54.5 1.7 1.7 -1.9 52.7 52.0 50.6 51.2 -10 51.8 -10.5
Slide 8: Services
Services Slower recovery in Services sector Services PMI moderates after festive season Nomura India Normalisation Index : Services Domestic Air Passenger Traffic Growth (YoY%) Services Export Growth (YoY %) 9.8 90.0 84.9 80.2 1.5 9.0 7.0 6.9 80.0 4.0 70.0 1.2 60.0 -1.0 45.7 41.0 45.0 -32.9 -1.4 50.
Slide 9: Headline Financials & Business Highlights
Q3 FY21 Results Headline Financials & Business Highlights
Slide 10: Key Highlights: Q3 FY21
Key Highlights: Q3 FY21 ▪ Strong Sequential recovery momentum continues Gross Revenue (y-o-y) PBT (y-o-y) 14. 0% 4.9% ‒ Gross Revenue & PBT up 5% & 13% sequentially 9.0 % -1.0% -6.2% ‒ Improvement in y-o-y growth trajectory 4.0 % -6.0% 1.2% -11.1% -11.0% -1.0% -35.0% -6.0% -16.0% ▪ FMCG Others posts
Slide 11: FMCG Others Q3 FY21
MM ENA Enduring Value FMCG Others Q3 FY21 SMe AASHIRVAAD a N Sunfeast Farmlite Seven) Vivel PM ciara DERMARIQUE «a5 Vegetable & Fruit Wash ENGAGE
Slide 12: FMCG Industry Trends
FMCG Industry Trends ▪ Demand for Health & Hygiene, Immunity, Ayurveda products remained elevated albeit at lower levels ▪ Staples & Convenience foods witnessed moderation after surge in H1 ‒ Broadening of purchase assortment by consumers and lower ‘at-home’ consumption on the back of increased mobi
Slide 13: FMCG Others Segment Revenue
FMCG Others Segment Revenue* up 11% in Q3 and 16% in YTD Q3 Staples, Convenience Foods, Discretionary / Health & Hygiene Products Hygiene OOH YTD Dec’20 +23% -5% Q1: +34% Q1: -25% Q2: +25% Q2: -2% Q3: +11% Q3: +11% c. 75%^ c. 25%^ *Ex ESPB & LRBD; ^% Portfolio salience 13
Slide 14: FMCG Others: Sustained improvement in Profitability
FMCG Others Q3 Segment EBITDA margin up 150 bps Sustained improvement in Profitability Q3 9.2% YTD Q3 8.9% 7.7% 6.8% Robust Purposeful Brand 5.4% Innovation Portfolio 5.0% 4.3% 3.4% Levers of 2.2% Margin 1.9% Power Expansion Operating Of Leverage Digital 49 122 173 256 326 171 281 460 657 950 FY17 F
Slide 15: 100+ New launches in YTD Dec'20 (1)
100+ New launches in YTD Dec’20 (1) Insight + Innovation >> Impact B Natural Sunfeast Dark Fantasy Aashirvaad ITC Master Chef Yippee! Immunity Soups Choco Chip, Choco Nut Fills Organic Atta & Dals All purpose Gravies Saucy Masala Aashirvaad Fabelle Aashirvaad Sunfeast ITC Master Chef Crystal & Proac
Slide 16: 100+ New launches in YTD Dec'20 (2)
100+ New launches in YTD Dec’20 (2) Insight + Innovation >> Impact Charmis Facewash, Face Serum Nimeasy & Nimwash Nimyle Dermafique Savlon Hand Wash Dish Wash Liquid; Neem & Lemon Grass Bio Cellulose face masks Pichkiao & Hand Cream Fruits & Vegetable Cleaner Savlon Savlon Mangaldeep Engage On Vivel
Slide 17: Building Brands With Purpose
Building Brands With Purpose Healthier Children. Women Responsible Citizens Saluting Healthier India Empowerment for the Future Mothers Women Empowerment 17
Slide 18: Driving Digital Engagement
Driving Digital Engagement Building Influencers and Communities Drive Engagement Driving Engagement Deep understanding of Moment Marketing Regional tastes & Preferences 18
Slide 19: Driving Digital Engagement
Driving Digital Engagement Educating & Engaging Consumers DIY & Influencer led Creating Brand love DIY and Influencer led Creating Brand Love Digital First Brands 19
Slide 20: Consumer intimacy: Hygiene++ and Skin Care @home
Consumer intimacy Many First-to-Market Innovations Hygiene++ Protection & Care SkinCare Skin Care @home @home Savlon Dermafique Savlon - Wipes - Bio Cellulose - Masks & Surface - Moisturising Mask Disinfectants Sanitizer Charmis Nimeasy - Laundry Spray - Face Serum - Dishwash 20
Slide 21: Consumer intimacy: Addressing Continuously evolving Needs
Consumer intimacy Addressing Continuously evolving Needs Convenience ‘Free From’ & ‘Good for You’ Interactive Education Interactive Education Aashirvaad Super Foods Instant Gravies, Classmate Interaktiv ITC Master Chef Super Safe Prawns RTE, On-the-Go Origami Books Farmlite Digestive Biscuits B Natu
Slide 22: Creating Impactful Communications
Creating Impactful Communications Hygiene & Safety Spreading Positivity Self Care 22
Slide 23: Creating Impactful Communications
Creating Impactful Communications Dominating India’s Building on India’s Immersive Mass Puja for India’s Kitchen Passion Media Content Wellbeing 23
Slide 24: Sales & Distribution: Smart, Agile, Responsive
Sales & Distribution SMART | AGILE | RESPONSIVE VIRU UNNATI ITC E-Store Store Locator ML/AI (Virtual Salesman) Digital Ordering & ITC’s eB2B App for WhatsApp Chatbot Machine Learning - Direct to Consumer Scheme engagement with based ITC Store Locator outlet level insights e-Com platform rolled Commu
Slide 25: Virtual Retailer Summit
Virtual Retailer Summit ‘Digital enablement for Kirana outlets’ 25
Slide 26: FMCG Cigarettes
FMCG Cigarettes Progressive easing of restrictions aid strong sequential recovery ▪ Net Revenue up 8% vs. Q2; y-o-y decline of 8% Segment Revenue ₋ Smart recovery in metros and large town markets after a soft H1 5498 cr. 3.5 % ₋ Metro markets remain relatively more impacted compared to pre-Covid lev
Slide 27: Key Portfolio Interventions
FMCG Cigarettes Key Portfolio Interventions Innovation @ Premium End 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 • G
Slide 28: Smuggled Cigarettes remain widely available
Smuggled Cigarettes remain widely available, FMCG Cigarettes despite deterrent actions by authorities 28
Slide 29: Hotels Business Q3 FY21
Hotels Business Q3 FY21 ITC Royal Bengal
Slide 30: Hotels: Significant sequential recovery
Significant sequential recovery Hotels Leisure locations gain traction Aggressive cost reduction ➢ Significant sequential recovery (3x Q2); however, behind pre-covid levels ̶ Wedding business, staycations/motorable getaways were the key drivers besides healthcare/quarantine related business ̶ Leisur
Slide 31: Hotels: Special Packages to drive demand
Hotels Special Packages to drive demand Room Initiatives – Special Packages F&B initiatives – Season’s festivities & New Launches in exclusive dining Takeaway/Home Delivery menu 31
Slide 32: Agri Business Q3 FY21
MM ENA Enduring Value Agri Business Q3 FY21
Slide 33: Agri Business: Resilient performance
Resilient performance Agri Business Continued Value Addition to Foods Businesses Segment Revenue ▪ Revenue growth driven by trading opportunities in Rice, Soya & Wheat for Aashirvaad Atta 2482 cr. 18.5 % ‒ Wheat Exports to Bangladesh, Malaysia, Sri Lanka & UAE Segment Results ▪ Leveraged the e-Choup
Slide 34: Paperboards, Paper & Packaging Q3 FY21
Paperboards, Paper & Packaging Q3 FY21
Slide 35: Paperboards, Paper & Packaging
Paperboards, Paper & Progressive recovery in most segments Packaging Continued robust performance in Exports • Subdued demand in Domestic market partly offset by robust growth in Exports Segment Revenue ‒ Progressive recovery in most segments ‒ Liquor, Publications, Notebooks, Wedding Card segments
Slide 36: Innovation: Sustainable Paperboard & Packaging solutions
Innovation Developing Sustainable Paperboard & Packaging solutions Plastic Substitution Antibacterial / Antiviral Paper (Oil & Grease resistant) Sustainable Packaging Bio-Seal Bio compostable packaging solutions for packaged/fast-food & Personal Care industries. Launched on commercial scale. Complet
Slide 37: Key Financials: Q3 FY21
Key Financials: Q3 FY21 (Rs. cr.) Q3 CY Q3 LY GOLY Gross Revenue 12,492 11,912 4.9% Net Revenue 11,705 11,702 0.0% EBITDA 4,281 4,613 -7.2% PBT (bei) 4,848 5,168 -6.2% Exceptional items (132) PBT 4,848 5,036 -3.7% PAT 3,663 4,142 -11.6% Other Comprehensive Income 63 (364) - (net Strong of tax) seque
Slide 38: Segment Revenue Q3 FY21
Segment Revenue Q3 FY21 (Rs. cr.) Q2 Q3 • FMCG Cigarettes: Net Revenue (7.6%) Vs. LY 2020-21 2020-21 2019-20 GOLY% Segment Revenue (Gross) • FMCG Others: Revenue up 11%^ - Robust growth in Health & Hygiene, Noodles, Snacks, Spices, 5121 a) FMCG - Cigarettes 5498 5311 3.5 Agarbatti and Matches 3795 -
Slide 39: Segment Results Q3 FY21
Segment Results Q3 FY21 (Rs. cr.) Q2 Q3 • FMCG Others: Segment EBITDA up 28% to 326 cr. (Margin @ 2020-21 2020-21 2019-20 GOLY% 9.2% +150 bps) Segment Results 3245 a) FMCG - Cigarettes 3453 3756 (8.1) - operating leverage, enhanced operational efficiencies, product mix 253 - Others 207 108 92.7 enri
Slide 40: Quarterly Trends
Quarterly Trends Figs. in Rs. cr. Segment Revenue Segment Results 6000 y-o-y% 5000 y-o-y% 5000 5498 4000 5121 4000 3000 3245 3453 3854 3746 2356 3000 2000 2985 2000 235 2482 1000 179 256 196 160 330 285 1000 1459 1478 0 82 1026 -243 -185 -67 0 23 -1000 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1
Slide 41: ITC – A Global Exemplar in Sustainability
ITC – A Global Exemplar Impactful Social Performance in Sustainability 41
Slide 42: Top ESG ratings
Top ESG ratings Globally Recognised Sustainability Interventions ITC rated AA by MSCI-ESG Highest amongst Global Tobacco cos. ITC included in Dow Jones Sustainability Emerging Markets Index Recognition of being a sustainability leader in the industry & Company’s commitment to People and Planet. ITC
Slide 43: Adjudged 'Best Governed Company'
Adjudged ‘Best Governed Company’ at the 20th ICSI National Award for Excellence in Corporate Governance 2020 43
Slide 44: ITC: Creating Enduring Value
ITC: Creating Enduring Value A passion for profitable growth…. …..in a way that is sustainable……. …. and inclusive 44
Slide 45: Links
Links Product/initiative Link ‘YiPPee!’ Saucy Masala Noodles https://youtu.be/7EL60151PRE Sunfeast Caker Trinity https://youtu.be/T5WXDHLS18c Aashirvaad Svasti Select Milk https://www.aashirvaadsvasti.in/select-milk.aspx Khatta Meetha Poha, Veggie Upma, Mini Idli https://www.aashirvaad.com/Instant-m
Slide 46: Thank You
Thank You 46