Marico Limited · NSE:MARICO
Marico — Investor Presentation (March 2009)
34 slides from Marico's investor presentation, March 2009
Slide 1: Uncommon sense
MalrlCO Uncommon sense March 2009
Slide 2: Disclaimer
Disclaimer This investor presentation has been prepared by Marico Limited (“Marico”) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied should not
Slide 3: Marico Overview
Marico Overview Beauty & Wellness Consumer Products, Services and Solutions Hair Care, Health Care, Skin Care A leading Indian FMCG Group Total Sales & Services FY08 ~Rs. 19.07 billion YTD Dec FY 09 ~ Rs 18.27 billion Net Worth ~Rs. 3.63 billion Sustained Profitable Growth(3 year CAGR) Turnover 29%
Slide 4: Beauty & Wellness Brands
Beauty & Wellness Brands Hair Care Hair Oils Pre wash and Post wash Healthcare Premium edible oils Functional Foods Kaya Life Skincare Cosmetic dermatological Services/ Products Ayurvedic skin care products Soaps 3
Slide 5: Sustained Profitable Growth
Sustained Profitable Growth 25,000 Strong Growth in Sales and Income 20,000 27% R2 9% YoY G CA (Rs. Mio) 15,000 10,000 19,067 18,273 15,569 14,392 5,000 11,439 0 FY06 FY07 FY08 YTD Dec YTD Dec FY 08 FY09 • Growth from all businesses in YTD Dec FY09 • Organic Growth : 11% • Inflation led Growth : 14%
Slide 6: EBITDA and EBITDA Margins
Sustained Profitable Growth EBITDA and EBITDA Margins 3,000 EBITDA EBITDA Margin 17.0% 2,500 15.0% 13.6% 12.6% 12.8% 12.9% 12.5% 2,000 13.0% (Rs. Mio) 2,287 1,953 1,500 11.0% 1,000 1,986 2,462 9.0% 1,440 500 7.0% 0 5.0% FY06 FY07 FY08 YTD Dec YTD Dec FY 08 FY 09 Source: Marico Annual Reports, Consol
Slide 7: Sustained Profitable Growth Consistent Across Quarters
Sustained Profitable Growth Consistent Across Quarters * Sales and Services 33 consecutive quarters Since Q2 FY 01 Profit after Tax 37 consecutive quarters Since Q2 FY 00 * Growth in quarterly performance measured by comparing quarterly performance of the relevant quarter compared to similar quarter
Slide 8: Turnover Growth – Organic & Inorganic
Turnover Growth –Organic & Inorganic Organic Growth Inorganic Growth Expand market Contiguous Categories for dominant brands Gain market share India for No. 2, No. 3 brands New Offerings Overseas Products and services 7
Slide 9: India itself as a market
India itself as a market Hair Care Market • India has 16% of the world population • Average length of the human hair ~ Twice that of the world average • India’s share in World hair – 28% Heart Care Market • Lifestyle Modification riding a trend Skin Care Market • Currently a low percentage of dispos
Slide 10: Coconut Oil
Coconut Oil • Grow the branded market – Conversion from loose to packed – Micro Marketing • Focus on smaller market segments Parachute • Market Share 48% (12 months ended November 2008) • Volume growth Q3FY09 in rigid packs : 9% Nihar • Acquired from HUL in Feb 2006 – Adds another 7% - 8% market sha
Slide 11: Hair Oil
Hair Oil 12 months ended FY04 December 08 • Differentiated offering Dabur 35.6% 31.4% • Gain market share Marico 17.8% 22.4% Dey’s Medical 10.1% 6.0% Bajaj 9.0% 10.9% All India Urban and Rural Market share for value added coconut oil, non-sticky hair oils, Amla and cooling oils Source: A.C.Nielsen •
Slide 12: Hair Oil Innovations in Parachute Advansed
Hair Oil Innovations in Parachute Advansed Parachute Advansed Easy Parachute Advansed Hot Champi Champi - Massager Champi Parachute Advansed 11 Hot Oil
Slide 13: Post Wash Hair Care
Post Wash Hair Care • More “Modern” and Youth Products • Invest in category creation 12
Slide 14: Saffola (Premium Refined Edible Oil)
Saffola (Premium Refined Edible Oil) • Strong “Good for Heart” positioning. • Doctor recommended • Safflower Oil and its blends • Premium niche • Volume Growth YTD Dec FY09 : 13% 13
Slide 15: Saffola – Leveraging Good For Heart Equity
Saffola – Leveraging “Good For Heart” Equity • Extend beyond Oils Atta Mix Saffola Zest ( “Baked , Not Fried Snacks) Saffola Rice (low GI Index) • Functional foods addressing conditions related to heart 14
Slide 16: New Product Pipeline
New Product Pipeline • Prototype Methodology – Enables experimentation & de-risked growth • Products Successfully Prototyped – Saffola functional foods – Cholesterol and Diabetes Management Atta Mix – Revive Liquid Stiffener – Parachute Advansed Starz – Hair Care for Kids – Hair & Care Almond Gold 1
Slide 17: Current Prototypes
Current Prototypes Saffola Zest – “Baked, not fried!” healthy snacks Saffola Rice - for weight management Revive Strong & White 16
Slide 18: Inorganic Growth
Inorganic Growth Year of Brands Products Primary Markets Acquisition Caivil, Black Chic and Hair Care and Health South Africa 2007 Hercules Care Fiancée and HairCode Hair Cream and Gels Egypt 2006 Coconut Oil and Nihar India 2006 Perfumed Coconut Oil 17
Slide 19: IBG – Gulf
IBG – Gulf • Commenced with targeting expat Indian – Parachute coconut oil • Introduced hair creams – Targets Arabs too – Market leader in the UAE – Closing gap on leader in GCC • Cream Restaged on platform of nourishment and protection from harsh water – Addresses local need – Supported by localize
Slide 20: IBG – Bangladesh
IBG – Bangladesh • Parachute gaining market share steadily – 70% (12 months ended August 2008) up from 66% on a year-on-year basis. • Retail Reach ~ 3,70,000 • Marico Bangladesh turnover (FY08) ~ 1.2 bn • Began Prototyping hair dye in Q3 FY 09 • Parachute – 6th Most Trusted Brand in Bangladesh (Glob
Slide 21: International Business
International Business Share of Group’s business up from 8.4% ( 2004) to 16% (2008) Leadership in coconut oil in Bangladesh Significant market share in hair creams in UAE More than 60% share of hair cream & gels in Egypt International Business Consumer Products Turnover (Rs mio) 3500 3000 3068 * 250
Slide 22: IBG - Egypt
IBG - Egypt • Fiancée and HairCode acquired in Sep ’06 and Dec ‘06 • Achieved Rs. 883 mio turnover in FY08 with healthy margin • Environmental factors + change in distribution system resulted in de- growth for YTD Dec 2008 • Back on track in Q4 FY 09 • Growth in Egypt and North African Countries 21
Slide 23: IBG – South Africa
IBG – South Africa • Acquisition of the consumer division of Enaleni Pharmaceuticals Limited, South Africa in October 2007 • Entry into the South African ethnic Hair care and Health care market estimated to be in the region of ZAR 1.1 billion ( about Rs. 6 bn) growing at ~15%. • Current annualised T
Slide 24: Entrenched Brands
Entrenched Brands Indicative Market Brand Category Share (%) # Rank Parachute Coconut Oil (India) ~ 48% 1 Parachute Coconut Oil (Bangladesh) ~ 70% 1 Refined Safflower Oil and its Saffola ~ 98% 1 blends Mediker Anti Lice Treatment ~ 90%* 1 Revive Instant Fabric Starch ~ 80%* 1 Parachute Jasmine, Shan
Slide 25: Kaya Concept
Kaya Concept • Safe, effective, result oriented cosmetology – in a spa like ambience • Skin care solution clinics & Branded products – 84 Clinics – 73 in India 20 cities, 11 in the Middle East • High efficacy- Holistic methodology, world class technology • Customer base more than 350,000, very high
Slide 26: Kaya Growth
Kaya Growth • Clinic expansion 12-15 per year • New Services • New Products – Currently 13% of Turnover • New Initiatives – Skin Zones 25
Slide 27: Kaya Middle East
Kaya Middle East Kaya clinics present in 11 centers 8 across UAE, 2 in Saudi Arabia and one in Oman Plans to open more clinics in these territories Current turnover at about Rs 300 million 26
Slide 28: Performance in Numbers
Performance in Numbers FY06 FY07 FY08 Three Three months months ended ended (Rs. crore, except ratios) Dec 08 Dec 07 Sales/ Services Income 1,144 1,557 1,907 623 506 EBITDA 144 199 246 79 64 Net Profit after Tax 87 113 169 51 46 Equity Capital 58 60.9 60.9 60.9 60.9 Net worth 261 192 315 432 305 EPS
Slide 29: Capital Expenditure & Funding
Capital Expenditure & Funding • Capex for Kaya Rs 180 million • Normal Capex Rs 150 million • New Factory – Uttaranchal Rs 150 million • New Office premises (net) Rs 1000 million • Debt at present Rs 3.6 billion • Operating cash flows sufficient to service this debt • Acquisitions ??? • Decided to b
Slide 30: Challenges
Challenges India New categories – Making a success International Integrating acquisitions Managing Currency risk and volatility Kaya Balancing growth & profitability Corporate Resourcing- Human , Financial Taxation - Contain climbing Effective Rates 29
Slide 31: Outlook
Outlook • Focus on maintaining the growth momentum – 20% + growth with some stretch in the medium term – Immediate term – some slow down in rates of growth • Maintain Operating Margins or increase marginally • Bias for Growth • No significant change in the competitive landscape • Continue to invest
Slide 32: Recognition & Awards
Recognition & Awards • Parachute is the 6th Most Trusted Brand in Bangladesh – Global Brand Forum and AC Nielsen (2008) • BusinessWeek’s Asia’s Hot Growth Companies (2007) – Overall rank 40th in a list of 100 companies – Rank 4th in a list of 13 companies from India. • CNBC-TV18 India’s Employer of
Slide 33: Recognition & Awards
Recognition & Awards • International Business - Parachute - The Gulf Marketing Review (GMR) Awards (Referred to as the Oscar of Marketing Awards) – Best Brand Extension Award (Gold) (2006) – Outstanding Marketing Achievement Award (Silver) (2006 & 2007) • Asia Pacific Effie Awards, Singapore, 2008 –
Slide 34: Thank You
Thank You