Itc Limited · NSE:ITC
Itc — Q1 FY22 Earnings Presentation
64 slides from Itc's earnings presentation, Jul 24, 2021
Slide 1: Cover letter to stock exchanges
ITC Limited Virginia House 37 J. L. Nehru Road VAAN Kolkata 700 071, India Tel. ; 91 33 2288 9371 Enduring Value — Fax : 91 33 2288 4016 / 1256 / 2259 / 2260 24th July, 2021 The Manager The General Manager The Secretary Listing Department Dept. of Corporate Services The Calcutta Stock National Stock
Slide 2: Copy distribution list
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 la Bourse de Luxembourg 35A Boulevard Joseph II L-1840 Luxembourg
Slide 3: Media Statement July 24, 2021
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 July 24, 2021 Standalone Financial Results for the Quarter ended 30th June, 2021 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Slide 4: Media statement: financial performance
Localised lockdowns and mobility restrictions imposed by States in a bid to contain the sharp increase in daily Covid‐ 19 infections in the second wave rendered the operating environment during the quarter extremely challenging and impacted the strong recovery momentum witnessed in recent quarters.
Slide 5: Media statement: FMCG and digital initiatives
a wide range of the Company’s FMCG products across 45+ categories and over 800 products under one roof. Consumer response has been excellent and the platform has received the highest rating in the ‘Experience Leaders’ quadrant (Delivery Delight Index survey, Redseer). Risks and uncertainties assoc
Slide 6: Media statement: Hotels and Cigarettes
wave consequent to the easing of restrictions, even as certain parts of Kerala, Odisha and the North East remain partially impacted. This augurs well for a pick‐up in the recovery momentum in the ensuing months. The Company sustained its leadership position in the cigarette industry through its un
Slide 7: Media statement: Paperboards and other segments
Significant improvement in margins was driven by increase in realisations (especially in VAP and Specialty Papers), structural investments to enhance competitiveness including in‐house pulp manufacturing capacity expansion and sharper focus on operational efficiency leveraging data analytics and I
Slide 8: Q1 FY22 Results
Q1 FY22 Results 24th July, 2021
Slide 9: 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 10: Covid 2.0: More Intense & Widespread
Sharp Rise in Daily Cases Covid 2.0: More Intense & Widespread Severe Impact in April & May’21 India: New Cases – Moving 7‐day Average Rural Vs. Urban (% Share of Daily Cases) 7 May’21 90% 450 4,14,188 Rural Urban 3,89,803 400 350 70% 300 250 50% 200 17 Sep’20 20 July’21 150 Daily New Cases – 97,894
Slide 11: Pace of Vaccination: A Key Monitorable
Pace of Vaccination: A Key Monitorable Vaccination Tracker (in Millions) 70% of adult population to receive 1st dose by Oct 21 (at current pace) 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1st Dose 7 Day MA (1st Dose) Monthly Average (1st Dose) 740 million additional doses ordered for Aug‐Dec period Vaccine
Slide 12: Subdued Sentiments
Sharp Drop in Economic Activity in Apr/May’21 Subdued Sentiments Recovery Since June’21 Nomura India Business Resumption Index (NIBRI) CMIE Consumer Sentiment Index Source : CMIE 96.5 99.3 96.4 91.7 90.7 81.6 86.3 103 70.5 65.1 45.1 60.2 58.5 29 Mar 28 Jun 27 Sep 27 Dec 4 Apr 27 Jun 52.8 52.0 47.7 4
Slide 13: Strong Inflationary Headwinds
Strong Inflationary Headwinds Sticky and Elevated ‘Core Inflation’ CPI Core CPI WPI Core WPI 12.9% 12.1% 10.7% 7.6% 6.6% 7.5% 6.2% 5.9% 6.3% 5.6% 10.0% 10.4% 7.2% 7.3% 5.3% 4.4% 8.7% 6.3% 6.1% 7.4% 5.4% 5.4% 5.5% 1.3% 4.8% 4.6% 4.3% ‐0.8% ‐0.9% 1.3% 2.0% ‐1.6% ‐1.8% Mar‐20 Jun‐20 Sep‐20 Dec‐20 Mar‐2
Slide 14: Agri Sector Remains Resilient
Agri Sector Remains Resilient External Demand – A Bright Spot Monsoons 3% Below LPA Till Date Monsoon Tractor sales at an all time high Merchandise Exports & Imports ($ bn) (‘000units) 48 115 42 110 34 76 32 17 61 56 Export Import 10 12 Fertiliser sales below FY20 but higher Vs. pre‐Covid levels Ser
Slide 15: Headline Financials & Business Highlights
Q1 FY22 Results Headline Financials & Business Highlights 8
Slide 16: Key Highlights: Q1 FY22
Key Highlights: Q1 FY22 Strong rebound across operating segments despite operational constraints in the wake of the second wave ̶ Gross Revenue up 36.6%, EBITDA up 50.8% on y‐o‐y basis FMCG Revenues up 10.4% y‐o‐y (incl. Sunrise) on a high base (LY Reported +10.3%; Comparable +18.8%) ̶ Elevated
Slide 17: Key Highlights: Q1 FY22
Key Highlights: Q1 FY22 Strong sequential recovery momentum in Cigarettes led to volumes reaching nearly pre‐Covid levels in Q4 FY21; second wave caused disruptions in convenience store operations during the quarter ̶ Week‐on‐week improvement underway since mid‐June’21 with most markets returning
Slide 18: FMCG Others
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Slide 19: FMCG Trends
FMCG Trends Hygiene portfolio bounced back after normalizing in H2 FY21 at elevated levels Discretionary/OOH products impacted by Covid 2.0; relatively less impacted vs. Wave 1 Sequential pickup in Staples & Convenience Foods; H1 FY21 witnessed lockdown induced demand surge Rural markets rem
Slide 20: Sharp Escalation in Input Cost
Sharp Escalation in Input Cost Edible Oil (Rs/kg) PET Film (Rs/Kg) Metallocene ($/MT) 1 4 0 1 04 135 1 ,8 0 0 1,700 127 1 53 135 1 3 0 1 ,7 0 0 1 03 125 1 ,6 0 0 125 122 1 2 0 1 52 120 103 1 ,5 0 0 1,500 1 1 0 1 02 1 ,4 0 0 1,344 1 0 0 1 51 1 ,3 0 0 1,204 95 1 01 9 0 76 1 50 1 ,2 0 0 1,021 8 0 1 0 1
Slide 21: FMCG Others: Segment Revenue up 10.4% in Q1
Segment Revenue up 10.4% in Q1 FMCG Others Margin Expansion Despite Strong Inflationary Headwinds • Segment Revenue up 10.4% in Q1; sequentially revenue up 1.1% despite second wave led operational disruptions − Robust growth in Health & Hygiene, Fragrances, Snacks, Spices, Dairy and Agarbatti − High
Slide 22: LSTC: Cutting-edge R&D capability
Cutting‐edge R&D capability Fuelling Growth through Innovation ITC Life Sciences & Technology Centre, Bengaluru Capabilities 350 highly Partnerships with qualified scientists; Global R&D over 900 patent centers & applications Academia LSTC Pilot Plants for all State of the Art product categories Ana
Slide 23: Purposeful Innovation
Purposeful Innovation Leveraging Science‐based R&D Platforms @ ITC LSTC Savlon Surface Disinfectant Spray Savlon Soaps Savlon Handwash Savlon Moisturizing & Laundry Disinfectant Liquid Hexa / Cool Hexa Pichkiao / Moist Shield Hand Sanitizer Nimyle Lemongrass Floor Fiama Menthol & Magnolia Engage On
Slide 24: Purposeful Innovation
Purposeful Innovation Leveraging Science‐based R&D Platforms @ ITC LSTC Dark Fantasy Vanilla Crème, Sunfeast All Rounder & B Natural Shahi Litchi Sunfeast Milk Shakes Choco Crème and Choco Chip Bounce Milk Aloe Vera Aashirvaad Svasti Candyman Fantastik Misthi Doi, & Mango Lassi, Mangaldeep Cup Sambr
Slide 25: Purpose led Brands
Purpose led Brands “The Basket of Care” in collaboration with Akshaya Patra Savlon – Educative social content 8.4M 319K Total Reach Total Engagements ~3.2M 16M+ Total Reach Impressions 1,40,949 Visit at : Total Engagements https://www.youtube.com/watc World Milk Day h?v=x6CRxk6GdtM #RaiseAGlassOfMil
Slide 26: Digital @ Consumer
Digital @ Consumer Multi Pronged Digital Interventions Deepening Consumer Connect 1 Mn+ Total Views Covered in Mad over Marketing #HarRecipeKaPehlaStep Celebrities Spreading the message of Nimwash Chef Kunal Kapur ITC Connect: A platform to engage with consumers in Digital World Digestive Health (ww
Slide 27: FMCG Others Strategy Pillars
FMCG Others Strategy Pillars Insights ITC Wide & Deep & Synergy Distribution Innovation Agile & Value Future Ready Purposeful Efficient Accretive Portfolio Brands Supply Chain M&A Power of Digital Extreme Quality & Cost Focus 20
Slide 28: FMCG Others Strong Growth Platforms
FMCG Others Strong Growth Platforms Fortifying the Core Addressing Adjacencies through Mother Brands Building the New Core No.1 In Branded Atta No.1 In Cream Biscuits No.1 In Bridges Snacks No.1 In Notebooks No.1 In Dhoop No.2 In Noodles No.2 in Agarbatti Annual Consumer Spends ~22,000 cr. 21
Slide 29: Creating Structural Advantage
Distributed Manufacturing & Agile Supply Chain Creating Structural Advantage ICML Network Reduce Distance-to-Market Fresher Products Responsive supply chain 01 04 02 Delayering Operations Direct shipments Eliminate Multiple Handling Smart Manufacturing Industry 4.0 03 Automation Energy, Quality, Yie
Slide 30: Power Of Digital
Power Of Digital SMART | AGILE | RESPONSIVE Smart Consumer Smart Trade • App for online ordering/engagement with Retail top outlets Tech • Virtual Salesman App for online ordering/scheme communication Continuous Superior Consumer Tracking & Insights & Feedback POS AI driven customised consumer offer
Slide 31: FMCG Cigarettes: Strong Recovery Momentum
Strong Recovery Momentum impacted by Covid 2.0 FMCG Cigarettes Agile Supply Chain & Market Servicing Segment Revenue and Segment EBIT up 33% and 37% y‐o‐y respectively; Margins up 210 bps y‐o‐y Strong sequential recovery momentum in Cigarettes led to volumes reaching nearly pre‐Covid levels in Q
Slide 32: FMCG Cigarettes Recent Portfolio Interventions
FMCG Cigarettes Recent 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
Slide 33: Hotels Business
Hotels Business ITC Grand Bharat
Slide 34: Hotels: Second Wave Causes Severe Disruption
Hotels Business Focused Packages, F&B takeaway/delivery Second Wave Causes Severe Disruption Extreme Focus on Cost Reduction Recovery momentum gained in H2 FY21 impacted by Covid 2.0 Segment Revenue Leisure locations gained traction from Jun’21 as travel restrictions eased Q1 FY22: 127 cr. vs. S
Slide 35: Responsible Luxury
Responsible Luxury Highest Standards of Hygiene & Safety ITC Windsor ‐ LEED Zero Carbon Certification WeAssure awarded Platinum Certification by DNV First Hotel in the World ITC Hotels ‐ First Hotel Chain in the World Sustainability | Authenticity | Well Being & Safety 28
Slide 36: Focus on Leisure Tourism
Focus on Leisure Tourism Leisure Travel Packages Welcomhotel Chail launched Strengthening the Brand’s Leisure footprint 29
Slide 37: Special Offers & Food Promotions
Special Offers & Food Promotions Augment Revenue Special Community Offers F&B – Takeaways/Home Delivery Defence Forces & Doctors Acknowledging their commitment to the nation 30
Slide 38: Hotels Business Strategy Refresh
Hotels Business Strategy Refresh Refreshed & Distinctive Identity & Positioning of Loyalty Programs: Maximise Welcomhotel brand enrollments and drive engagement Gifting: Partnership, Launch boutique Engagement and Offers experiential brand ‐ curated experiences for ASSET RIGHT AUGMENT REVENUE Takeaw
Slide 39: Agri Business
MM EX Enduring Value Agri Business tates | |
Slide 40: Agri Business: Resilient performance led by Exports
Resilient performance led by Exports Agri Business Dynamic and digitally enabled sourcing strategies Strong growth in external revenue of Agri Businesses ̶ Wheat, Rice & Leaf Tobacco exports and Soya in the domestic market Segment Revenue ̶ Zero disruptions in supplies to key customers despite sig
Slide 41: Agri Business Transformation Pillars
Agri Business Transformation Pillars Deliver sustainable competitive advantage to ITC Businesses High quality & cost competitive agri‐sourcing Develop a Future Ready portfolio of value‐added products to drive growth & margins Organic/Food safe Develop a robust business model to scale up e‐Choupal 4.
Slide 42: Agri SBU Moving up the Value Chain
Agri Business – Agri SBU Moving up the Value Chain ‒ Customised supply chain & infrastructure ‒ Food safe, Organic, Certified ‒ End‐use specific offerings Value Added – Niche & Brands ‒ Focus on product development ( Spices, Fruits & Vegetables, MAPE) ‒ Long‐term supply commitments ‒ Long‐term suppl
Slide 43: Paperboards, Paper & Packaging
Paperboards, Paper & Packaging
Slide 44: Paperboards: Strong Revenue Growth & Margin Expansion
Paperboards, Paper & Strong Revenue Growth & Margin Expansion Packaging Robust growth driven by Value Added Paperboards, Décor Paper (Soft base) and Carton Segment Revenue packaging; Significant growth in Exports Global Pulp prices touched record highs 1583 cr. 54% - Business relatively insulate
Slide 45: Future-ready Innovation
Developing Sustainable solutions Future‐ready Innovation Leveraging ITC LSTC capability & External collaborations Exclusively for Deep freeze Replacing takeaway Exclusively for Food serving Food delivery/ paper cups applications plastic bowls paper cups applications deep freeze application Completel
Slide 46: Paperboards Business Strategy Pillars
Paperboards, Paper & Packaging Business Strategy Pillars Scale Up Value Added product portfolio Proactive Capacity augmentation; New substrates One‐stop Packaging Solutions Provider Leverage multi‐platform capability to ensure world‐class quality and speed‐to‐market at competitive cost Augment Renew
Slide 47: Financials
Financials 40
Slide 48: Headline Financials: Q1 FY22
Headline Financials: Q1 FY22 Rs. cr. Q1 CY Q1 LY GOLY Gross Revenue 12,884 9,436 36.6% Net Revenue 12,133 8,875 36.7% EBITDA 3,992 2,647 50.8% PBT 4,015 3,128 28.4% PAT 3,013 2,343 28.6% 41
Slide 49: Segment Revenue Q1 FY22
Segment Revenue Q1 FY22 (Rs. cr.) Q1 FY22 FY21 GOLY% Segment Revenue (Gross) • FMCG Others a) FMCG ‐ Cigarettes 5122 3854 32.9% - Growth driven by Health & Hygiene & Discretionary ‐ Others 3726 3375 10.4% products, Spices - High base effect in Staples & Convenience Foods Total FMCG 8848 7228 22.4% b
Slide 50: Segment Results Q1 FY22
Segment Results Q1 FY22 (Rs. cr.) Q1 • FMCG Others FY22 FY21 GOLY% - Segment EBITDA up 16% to 299 cr. Segment Results - EBITDA Margin up 40 bps; Segment EBIT Margins up 100 bps. a) FMCG ‐ Cigarettes 3221 2356 36.7% - Input cost escalation (oil, packaging, soap noodles) mitigated ‐ Others 173 125 38.
Slide 51: Shaping the Future
Shaping the Future Powered by Data & Digital ITC Royal Bengal
Slide 52: Digital @ ITC Strategic Impact Areas
Digital @ ITC Strategic Impact Areas Insights Supply Chain & Platform Manufacturing Consumer Employee Experience Digital‐first Culture Engagement DigiNext / Young Digital Leaders Forum State‐of‐the‐Art Digital Technologies, Infrastructure and Security 45
Slide 53: Smart Consumer Personalised Consumer Journey
Smart Consumer Personalised Consumer Journey across Touchpoints ITC SIXTH SENSE COMMAND CENTER MOMENT MARKETING • AI‐powered hyper Contextual Communications & personalised platform Superior Consumer Impactful Brand Consumer Promotions Insights & Campaigns & 2000+ Content Assets created • Strong part
Slide 54: Integrated Real Time Operations
Integrated Real Time Operations Execution Platform • Integrated & synchronized planning Next generation agile FMCG supply chain • Automated end‐to‐end processes processes • Flexible design • Advanced demand & forecasting models • Supply Chain Cockpit • Planning Control watch tower + Data AI/ML & Adv
Slide 55: ITC – A Global Exemplar in Sustainability
ITC – A Global Exemplar in Sustainability 48
Slide 56: ITC: A Global Exemplar in Triple Bottom Line Performance
ITC: A Global Exemplar in Triple Bottom REDUCE I RECYCLE I RESTORE Line Performance Action on Climate Water Security for 360₀ Approach to Future‐Ready Agri Sustainable Recent Global Change All Plastic Waste Value Chains Livelihoods Recognitions 41.3% Energy from Renewables Rainwater Harvesting (RWH)
Slide 57: Impactful Social Performance
Impactful Social Performance ITC e‐Choupal Afforestation Watershed Development Livestock Development Solid Waste Management Over 875,000 acres Over 12,53,000 acres Well‐being Out of Waste 4 Million Farmers Over 19,72,000 milch programme covers empowered greened covered animals covered 15 million cit
Slide 58: Sustainability 2.0: ITC's 2030 Sustainability Targets
Sustainability 2.0 ITC’s 2030 Sustainability Targets Raising The Bar Bolder Goals Renewable Specific Energy Specific GHG Sustainable Supporting Sustainable Energy (RE) Consumption* Emissions* Packaging Plan Livelihoods 50% 30% 50% 100% 10 million RE Energy Recyclable Plastic From 6 million Packaging
Slide 59: ITC Infotech
ITC Infotech Making clients successful by providing Business led technology solutions 52
Slide 60: ITC Infotech: Robust Revenue Growth & Margin Expansion
ITC Infotech Robust Revenue Growth & Margin Expansion Strategy Pillars Delivering Differentiated and Large Deals Pipeline Business‐friendly Solutions Clients across Banking, Financial Services, Consumer Packaged Goods, Manufacturing, Travel, Hospitality, Healthcare Revenue EBITDA PAT (Rs. cr.) (Rs.
Slide 61: Covid 2.0 – Helping the Nation Combat the Crisis
Covid 2.0 – Helping the Nation Agility in Adversity, Compassionate in Crisis Combat the Crisis Supporting the Nation’s Fight against the Pandemic Ensuring safety and well‐being of employees, partners and associates Setting up of Covid Care Centres, ICU beds, Modular ICU Units Facilitating sett
Slide 62: ITC: Enduring Value
ITC: Enduring Value A passion for in a way that is and Profitable growth... Sustainable… Inclusive. 55
Slide 63: Thank You!
‘SMS’ Everyday KEEP THE VIRUS AWAY Thank You! Keep yourself and others safe at home, at work, and in your community. Do not drop your guard. Follow the ‘SMS’ rule.
Slide 64: Links
Links Product/initiative Link https://youtu.be/zxuVCyvhA2A Basket of care https://itcstore.in/pages/the‐basket‐of‐care Aashirvaad Svasti Select Milk https://www.aashirvaadsvasti.in/select‐milk.aspx Aashirvaad Svasti Ghee https://youtu.be/3G9nLe1T_Sw https://www.instagram.com/sunfeast_yippee/ YiPPee!