Zydus Wellness Limited · NSE:ZYDUSWELL
Zydus Wellness — Q3 FY24 Earnings Presentation
39 slides from Zydus Wellness's earnings presentation, Feb 8, 2024
Slide 1: Zydus Wellness cover letter: Investor Presentation filing to exchanges
ZY.dUS Wellness _ _ _ _ _ _ _ _ _ _ __ February 8, 2024 Listing Department Code: 531 335 BSE LIMITED P. J. Towers, Dalal Street, Mumbai–400 001 Listing Department Code: ZYDUSWELL NATIONAL STOCK EXCHANGE OF INDIA LIMITED Exchange Plaza, C/1, Block G, Bandra Kurla Complex, Bandra (E), Mumbai–400 051 R
Slide 2: Q3 FY24 Earnings Presentation
Q3 FY24 Earnings Presentation February 8, 2023 Zv.dus Wellness
Slide 3: Safe Harbour Statement
Safe Harbour Statement ZY.dUS Wellness This presentation contains certain forward-looking statements including those describing Zydus Wellness’s strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that “forward looking statements” are based on certai
Slide 4: Agenda
Agenda Zv.dus Wellness Financial performance – Q3 FY 24 Zydus Wellness: Operating environment- Overview A leading Consumer Wellness Brand Highlights Company in India The Road Ahead ~ G/ucon-01., /ns/;Jntfnergy ( Sugar Nutralite· \ Free·· ,aw.tau, 3
Slide 5: Financial Performance & Operating Environment - Overview
Financial Performance & ZY.dUS Wellness Operating Environment - Overview
Slide 6: Buoyancy in few consumption spaces despite sluggish demand scenario
Buoyancy in few consumption spaces despite sluggish demand scenario Zv.dus Wellness Sluggish Demand trend Improvement in Commodities • Urban performing ahead of Rural • Commodity rates continues to moderate • Delayed winters and low festive demand also sequentially during the quarter impacting overa
Slide 7: Sequential moderation of key input rates helping steady recovery of Gross Margins
ZY.dUS Sequential moderation of key input rates helping steady recovery of Gross Margins Wellness Milk RPO* DMH* +26% vs Q3 FY22 +17% vs Q3 FY22 -30% vs Q3 FY22 +6% vs Q3 FY23 -8% vs Q3 FY23 -12% vs Q3 FY23 +2% vs Q2 FY24 -4% vs Q2 FY24 -1% vs Q2 FY24 Q3 FY22 Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY22 Q3 FY23
Slide 8: Gross margin recovery with right actions
Zv.dus Gross margin recovery with right actions… Wellness Continuous efforts to improve gross margins with calibrated price increases across portfolio Moderation of key input prices aiding gross margin recovery Gross Margin % to Net Sales Y-o-Y Gap - 433 + 10 - 165 + 198 + 418 bps 50.6% 52.4% 47.7%
Slide 9: Segment performance snapshot
Zv.dus Segment performance snapshot Wellness Net Sales (INR Million) Food & Nutrition 4,130 4,001 ~ ( Sugar Free·· Q3FY23 Q3FY24 Sales Growth Y-o-Y ( -5.1% J Y-o-Y Gr. On Personal Care Net Sales 3.1% • Sales Growth Y-o-Y [ 15.7% ] *Q3 FY23 Net sales includes the sale of Sugarlite for the full quarte
Slide 10: Financial highlights for the Quarter
Zv.dus Financial highlights for the Quarter Wellness Q3 FY24 INR Million YoY Growth % Net Sales 4,001 -3.1% Total Income from Operations 4,030 -3.0% Gross Contribution 1,938 6.3% EBITDA 127 -55.1% PBT 37 -80.9% PAT 3 -98.5% ❑ Gross margin on net sales was at 47.7% (+418bps YoY) ❑ PAT includes 34 mil
Slide 11: Business Highlights
ZY.dUS Business Highlights Wellness
Slide 12: Leaders in 5 out of 6 categories
Zv.dus Leaders in 5 out of 6 categories Wellness Strengthen “Energy” credential with new launches Strengthening core through Relaunch of the Brand Glucon·D< Jnstantfnergy • Category leading brand with 99% plus brand recall • Focused on scientifically proven claims on memory and • ~60% market share i
Slide 13: Building sustainable business performance
Zv.dus Building sustainable business performance Wellness Driving the Winning in category competitive growth market Building relevance Navigating to new age challenges consumers 12
Slide 14: Driving the category growth
Zv.dus Driving the category growth Wellness Driving the prickly heat powder category penetration# 1•+111+1 MAT Nov'20 MAT Nov'21 MAT Nov'22 MAT Nov'23 PHP ■ NYCIL Driving continuous volume growth* Volume Market share 36.8 32.7 MAT Dec'19 MAT Dec'23 *As per MAT December 2023 Nielsen report #As per MA
Slide 15: Driving the category growth
Zv.dus Driving the category growth Wellness Glucon-0,t, lns~ y/ ~ Recruiting new consumers for the Glucose powder category# MAT Nov'20 MAT Nov'21 MAT Nov'22 MAT Nov'23 Glucon D ■ Glucose Powder "Creative v1suali2ation. Glucon-0 does not contain any fruits. Fruits ore !or creative depiction."Con toin
Slide 16: Driving the category growth
Zv.dus Driving the category growth Wellness Driving market share ❖Widening the portfolio basket ❖Driving double digit growth at 4 year CAGR^ ❖Superior product offering along with strong campaigns focused on recruiting new users ❖Scrub and peel off continues to strengthen its leadership with growth i
Slide 17: Winning in Competitive Market
Zv.dus Winning in Competitive Market Wellness Franchise continues to grow ❖Penetration# continues to grow for 3 successive years +19bps +22bps +35bps 2020 2021 2022 2023 ❖Volume offtakes* continue to grow ahead of the category ❖Growth driven by stronger campaign with 360-degree activation and price
Slide 18: Winning in Competitive Market
Zv.dus Winning in Competitive Market Wellness Nutrcllite· Consistent strong volume growth ..,511$1J,,M♦ ❖Widening the portfolio basket ❖Double digit growth at 4 year CAGR^ with consistent volume growth driven by a wide portfolio and supported by focused B2B and B2C teams ❖Continued to support the br
Slide 19: Building relevance to new age consumers
Zv.dus Building relevance to new age consumers Wellness Efforts to leverage changing shopper behavior and target new age consumers fruitful Channel specific innovative E-commerce exclusive packs & E-commerce saliency^ 1 marketing initiatives 2 3 11% promotions 10% Suglr Free 0l'W! 8% 5% EK CHOTA SA
Slide 20: Navigating Challenges
Zv.dus Navigating Challenges Wellness Offtake continues to get stronger ❖Sugar Free has maintained its number one position with a value MS of 96.0%*, +14bps YoY* ❖Despite WHO report on safety concerns related to use of Non-Nutritive sweeteners, offtake* continues to grow for Sugar Free ❖Ongoing lega
Slide 21: Continuing to strengthen brand leadership
Zv.dus Continuing to strengthen brand leadership Wellness Glucon·DI. "-":::::"/ Suga~ Free™ suga■ ever,,lf h ® N_u~r~te· ~ Jnaturals ♦---- - - ---- - - ---- - - ---- - - ---- - - ► __,; ♦- - - ---- - - ---- - - --► Category 0 Glucose Powder D HFD [_____)[ Sugar substitute Blended Sugar l [__)[ Prick
Slide 22: Campaigns and initiatives
Zv.dus Campaigns and initiatives Wellness ✓ -- ),- ( Sugar Driving consumption of Sugar Free Green Strategic association with Fitness event Free~ SWEET MOMENTS ~ - 21
Slide 23: Campaigns and initiatives
Zv.dus Campaigns and initiatives Wellness Digital initiatives to drive Nutralite Professional range Participated in various forums like World Food India 23, Ahaar, Indus Food Expo 2024 Nutralite f,ofe~f 22
Slide 24: Campaigns and initiatives
Zv.dus Campaigns and initiatives Wellness Upcoming new campaign with Celebrity Madhuri Dixit and Sneha Digital Initiatives - Complan Genius Quiz ZY.d US Wellness Compton· Zv.d us Wellness Comp/an's new campaign with Complan's new campaign with Madhuri Dixit is ready to leave Sneha is ready to /eave
Slide 25: Brand Awards and Recognitions
Zv.dus Brand Awards and Recognitions Wellness GOLD GOLD SILVER Mobile Advertising Mobile Advertising Best use of Gamification Excellence in Rich Media Excellence to amplify within Games Campaign content E4M MARTECH-2023 II BEST USE OF MARTECH FOR BEST USE OF BEST USE OF MARTECH FOR MARTECH FOR BEST
Slide 26: Awards and Recognitions
Zv.dus Awards and Recognitions Wellness ,·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·- r·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·-·- Won 1st prize in 7th CII National Circle competition Bagged “Great Place to Work” certification “Best HR Practices in Effective Recruitment and Retention second time in a
Slide 27: Continued momentum in International business
Zv.dus Continued momentum in International business.. Wellness UAE, Bahrain, Qatar, Kuwait, Myanmar, Malaysia, Taiwan, Kingdom of Saudi Arabia, Pakistan, Sri Lanka, Bangladesh, ❖ Sugar Free franchise and Complan Oman, Lebanon Nepal, Bhutan, Maldives, Hong Kong constituting ~ 90% of the overall busin
Slide 28: International Business – Widening the portfolio basket
Zv.dus International Business – Widening the portfolio basket Wellness Complan portfolio expansion in Nigeria Sugar FreeFree Sugar D’Lite portfolio D’Lite expansion portfolio planned expansion Granola Granola Bars Com2lan Instant Coffee & Hot Chocolate Butter & Cashew Cookies Com2lan Com-plan Chocol
Slide 29: Environmental, Social and Governance
Zv.dus Wellness Environmental, Social and Governance 28
Slide 30: Environmental
Zv.dus ENVIRONMENTAL Wellness Parameters – achieved Impact FY 2022-23 from FY 2021-22 Energy intensity 11.7% (2.04 from 2.31 per rupee of turnover) Scope 1 & 2 emission 45.5% (0.06 from 0.11 per lakhs of turnover) Water intensity 22.7% (1.7 from 2.2 per rupee of turnover) Zero Liquid Discharge (ZLD)
Slide 31: Social
SOCIAL Invested 1,660 man-hours in safety trainings in FY 2022-23 (18% increase Y-o-Y basis) Zero fatalities and lost days in all plants Women workforce increased by 7% Y-o-Y basis Set-up Zydus Wellness Institute, an educational initiative to advancing nutrition science and innovation. For more deta
Slide 32: Governance
GOVERNANCE At the board level, we have expanded the scope of the CSR Committee →Transformed CSR committee into the CSR & ESG Committee Ahmedabad and Sikkim plants are ISO 14000 and ISO 45001 certified Certification is in progress for Aligarh plant Strengthened the policy framework and review mechani
Slide 33: The Road Ahead
ZY.dUS The Road Ahead Wellness
Slide 34: Three Pillars to drive growth – staying on course
Three Pillars to drive growth – staying on course Accelerate Growth of Build International Presence Significantly Grow Scale Core Brands Innovations to focus on portfolio Build scale in international Open to bolt-on acquisitions diversification and expansion business by focusing on SAARC, at the rig
Slide 35: The building blocks
The building blocks Category Building Leading Route to Market Digital backbone to decision Inorganic play for gap Volume led focus Plan to enhance distribution making filling Recruit new consumers infra and direct coverage Digitizing the whole value Proactively look for Bolt- over next 3 years chain
Slide 36: Traditional Trade capabilities in S&D
Building Route to market to adapt shifting channel mix • Direct reach ~6 lakhs stores • Channel mix shift towards expansion across sub channels, MT+Ecom from 17.5% (FY22) to • Implementation underway for plan to take it to ~7 lakhs in the 21.2% (Q3 FY24) dashboarding of key KPI’s as Building future
Slide 37: Appendix
ZY.dUS Appendix Wellness
Slide 38: Financial Summary – P&L
Financial Summary – P&L INR Million Q3 FY24 Q3 FY23 YoY Gr. % YTD FY24 YTD FY23 YoY Gr. % Net Sales 4,001 4,130 -3.1% 15,372 15,327 0.3% Total Operating Income 4,030 4,156 -3.0% 15,452 15,418 0.2% Gross Contribution 1,938 1,824 6.3% 7,618 7,465 2.0% Gross Contribution Margin-(% of net sales) 47.7% 4
Slide 39: Zydus Wellness Limited
Zydus Wellness Limited Regd. Office: Zydus Corporate Park, Scheme No. 63, Survey No. 536, Khoraj (Gandhinagar), Nr. Vaishnodevi Circle, S. G. Highway, Ahmedabad – 382481, India. CIN: L15201GJ1994PLC023490 +91-79-71800000 www.zyduswellness.com Zydus Wellness, Oct 21, 2022 38