Emami Limited · NSE:EMAMILTD
Emami — Investor Presentation (February 2021)
69 slides from Emami's investor presentation, Feb 5, 2021
Slide 1: Exchange filing cover letter
cmami limited Date: 5th February, 2021 The Secretary The Secretary The National Exchange of India Ltd. Stock BSE Limited Exchange Plaza, Plot No. C/1, G. Block Phiroze Jeejeebhoy Towers Bandra Kurla Complex, Bandra (E) Dalal Street Mumbai - 400 051 Mumbai - 400 001 Dear Sirs, Pursuant to Provision o
Slide 2: Refuelling Its Growth Spirit: Company Overview
REFUELLING ITS GROWTH SPIRIT EMAMI LIMITED COMPANY OVERVIEW FEBRUARY 2021
Slide 3: Disclaimer
DISCLAIMER Some of the statements made in this presentation may look forward looking information that involves number of risks and uncertainties. Such statements are based on certain assumptions, estimates, projections or plans that are inherently subject to significant risks, uncertainties and cont
Slide 4: This presentation is segregated into two parts
THIS PRESENTATION IS SEGREGATED INTO TWO PARTS FOR EASY READING 3 PART ONE. Review of Emami’s performance in 2019-20 PART TWO. How are we transforming Emami
Slide 5: What you need to know about our company before you proceed
WHAT YOU NEED TO KNOW ABOUT OUR COMPANY BEFORE YOU PROCEED Background 4 Promoted and Headed by the founded by RS founders and the Experienced eminent Agarwal and RS second generation Independent Directors Goenka; commenced promoters; supported on the Board with commercial by a team of diverse backgr
Slide 6: Promoter Directors and Independent Directors
LX Promoter Directors ‘mn RS Agarwal RS Goenka SK Goenka Mohan Goenka _| Aditya V Agarwal | Harsha V Agarwal Priti A Sureka Prashant Goenka Founder & Founder & Managing Executive Non-Executive Executive Executive Executive Executive Chairman | Executive Director _| Director Director Director Directo
Slide 7: Business Structure
BUSINESS STRUCTURE Revenue split in % 3.6 3.8 13.3 15.6 6 83.1 80.6 FY19 FY20 Domestic: 83.1% Domestic: 80.6% International business: 13.3% International business: 15.6% Institutional business: 3.6% Institutional business: 3.8%
Slide 8: Products
PRODUCTS Manufacturing and Power Brands distribution of comprise Navratna, personal care and BoroPlus, Zandu, healthcare products Mentho Plus, Fair and with an Ayurvedic bias Handsome and Kesh 7 in most cases King, among others
Slide 9: Locations, manufacturing strengths, global footprint, people
Locations Manufacturing Global footprint People strengths Headquartered in Seven manufacturing Products sold in 60 Professionals having Kolkata, West Bengal units in India; one in countries across the deep experience in State-of-the-art R&D Bangladesh globe respective centre in Kolkata T
Slide 10: Power Brands
POWER BRANDS 9
Slide 11: Navratna
NAVRATNA Leading player in Cool oil category the niche cool oil penetration at and cool talc 15% category 10 Navratna Cool Oil’s market Successfully share at 66.4% extended to extra and Cool Talc thanda oil, warm market share at oil and cool talc 25.9%* *MAT September 2019
Slide 12: BoroPlus
BOROPLUS India’s trusted Antiseptic Cream multipurpose category No.1 Antiseptic penetration at Cream 24% 11 Extensions in BoroPlus lotions, prickly Antiseptic Cream heat powder and market share at aloe vera gel; 74.1% foray into hygiene range
Slide 13: Zandu & Mentho Plus
ZANDU & Zandu - largest Balm Balm’s market share at MENTHO balm brand in India category penetration 54.9% PLUS at 37% Balms 12
Slide 14: Zandu
Health Offering OTC Range- Major Generics and expert for a ayurvedic products include Ethicals Range - ZANDU changing solutions for Zandu Pancharishta, Wide range of lifestyle lifestyle- Zandu Nityam, Zandu ayurvedic Healthcare Range related health Kesari Jivan, Zandu generic and problems Chyawanpra
Slide 15: Fair and Handsome
FAIR AND HANDSOME First brand to Men's Fairness revolutionize cream category men’s grooming penetration at segment in India 4% 14 Successfully Market share extended into 65.3% face wash
Slide 16: Kesh King
Leading brand Category penetration Market share Revamped brand KESH in the ayurvedic oil at 9% only for ayurvedic oils. at 26.6% and re-launched brand extension- KING space ayurvedic shampoo 15
Slide 17: Market Size and Market Shares
MARKET SIZE AND MARKET SHARES Brands Segment Market Market Market Size (₹ bn) Size (US$ share (%)* in mn) Navratna Oil Cooling oil 10.3 136.1 66% Zandu & Mentho Plus Balms Balms 12.6 167.5 55% 16 BoroPlus Antiseptic Cream Antiseptic Cream 6.5 85.6 74% Fair and Handsome Fairness Cream Men's Fairness
Slide 18: Key Facts
KEY FACTS Category 5 Power brands Flagship creator with a enjoying company of the differentiated market Emami Group niche leadership positioning More than 130 17 products sold Reach in 4.5 Presence in every second mn retail 60+ countries across the outlets world Entered mainstream 41x returns Market
Slide 19: Business Highlights
BUSINESS HIGHLIGHTS • One of the fastest • Superior Industry • Production in tax-free growing personal and Margins- zones. healthcare businesses Gross Margins at 67.0% in India • Direct Reach at 9.4 lac EBIDTA Margins before Revenues growing at a outlets. A&P at 43.8% 10-year CAGR of 10% • Bes
Slide 20: Emami's Journey Down the Years
EMAMI’S JOURNEY DOWN THE YEARS 1974 1978 1982 1989 1995 Emami started with Acquired Launched Launched Listed on BSE meagre capital Himani Ltd BoroPlus Navratna 19 2004 2005 Issued 1:1 bonus Public issue 2007 2008 2009 Listed on NSE Launched Navratna Acquired Zandu Raised ₹ 310 cr Stock split from La
Slide 21: Emami's Journey Down the Years
EMAMI’S JOURNEY DOWN THE YEARS 2012 2014 2010 Commissioned 2013 Launched Fair & Stock split from Issued 1:2 bonus Handsome Face manufacturing unit ₹ 2 to ₹ 1 shares Wash and HE & 7 in Bangladesh Oils in One 20 2018 2015 2017 • Strategic investments in The 2019 2020 Commenced Acquired Creme21, Acquir
Slide 22: Ownership Structure
OWNERSHIP STRUCTURE Shareholding break-up Major institutional investors L&T MF Others 9.15% PREMJI INVEST OTHERS 21 DSP BLACKROCK Promoters Institutional MF 53.86% 36.99% MIRAE ASSET MF SBI MF NIPPON BIRLA SUNLIFE UTI MF HDFC LIFE MF INSURANCE As on 31st December 2020
Slide 23: Celebrity Endorsements
CELEBRITY ENDORSEMENTS 22 • Emami is a pioneer in engaging celebrities to endorse its brands. These comprise renowned names from India’s film industry, sportspersons and performing artists. • Emami brands have been associated with more than 60 celebrities over the years. • Invested ₹ 2284 cr in Adve
Slide 24: Emami's Research and Development
30,000 sq. ft. state- of-the-art ultra- modern R&D centre in Kolkata Focus on product Advisory panel innovation, comprising top differentiation, cost ayurvedic experts EMAMI’S control and superior quality RESEARCH AND 23 DEVELOPMENT Team comprises Modern laboratory qualified with cGMP ayurvedacharya
Slide 25: Part One: Review of Emami's Performance in 2019-20
PART ONE REVIEW OF 24 EMAMI’S PERFORMANCE IN 2019-20
Slide 26: Challenging FMCG Times; Emami's Performance, 2019-20
CHALLENGING FMCG TIMES Reported CAGR Industry went Cautious Growth slowed Significant of 10% in the through environment to 3% in the last decline in past 10 years structural marked by GST, three years consumer changes in the demonetization, sentiment in past three years wholesale FY2019-20 resulting
Slide 27: Financial Highlights, 2019-20
FINANCIAL HIGHLIGHTS, 2019-20 2655 2695 1 Rs cr, Revenues, Rs cr, Revenues, % decline in Revenues 2019-20 2018-19 Revenues Challenging business environment; winter portfolio impacted due to delayed winters and unfavorable seasonality in Q3; sale of the summer portfolio affected due to operations dis
Slide 28: Financial Health of Our Business
FINANCIAL HEALTH OF OUR BUSINESS 31.3% 28.6% 270 Return on RoCE* %, RoCE* %, BPS growth in Capital 2019-20 2018-19 RoCE* Employed Despite a challenging business scenario, RoCE strengthened *Calculated on cash profit (PAT+ Depreciation + Amortization) 67.0% 65.7% 130 bps 27 Gross Gross margin Gross m
Slide 29: Attractive Valuations
ATTRACTIVE VALUATIONS 7,710 18,157 Rs cr, market capitalization as Rs cr, market 58% Market capitalization as decline on 31 March on 31 March 2019 valuation 2020 While the revenues flattened and Cash Profits increased marginally by 2% Market cap decreased by 58% - a clear opportunity for Investors 2
Slide 30: Our Operational Highlights, 2019-20
OUR OPERATIONAL HIGHLIGHTS, 2019-20 Growth in market shares 66.4% 54.9% 26.6% 74.1% 65.3% 10 bps+ 130 bps+ 140 bps+ 30 bps+ Maintained Navratna Cool Oil Zandu and Kesh King BoroPlus Fair and Handsome Mentho Plus Ayurvedic Antiseptic Cream Cream Balms Medicinal Oil *Volume market shares, MAT, Decembe
Slide 31: Emami's Segmental Presence Has Wide Room for Growth
EMAMI’S SEGMENTAL PRESENCE HAS WIDE ROOM FOR GROWTH Emami’s products are Being niche, the in niche categories for The Company focused on Company is relatively mass consumers, a rare remunerative product segments protected from interplay of volume and competition value 30 Low penetration – Increased
Slide 32: Part Two: How Are We Transforming Emami
PART TWO HOW ARE WE 31 TRANSFORMING EMAMI
Slide 33: Transforming Emami
TRANSFORMING EMAMI Focus on 1 Revamping Power Brands 2 traditional and 3 Enhanced focus on Health and Hygiene emerging Channels 32 Aggressively driving Optimizing costs - 4 International 5 Investing on brands Business
Slide 34: What a Transforming Emami Intends to Achieve
WHAT A TRANSFORMING EMAMI INTENDS TO ACHIEVE 1 2 3 4 5 Grow existing Expand to Enter new Plough back Increase the brands adjacent categories cost reductions proportion of categories to brand International investments for Business in aggressive overall revenues growth 33 Introduce Blend product Stren
Slide 35: 9 Engines to Re-energise Emami
9 ENGINES TO RE-ENERGISE EMAMI 1 Re- energizing our research 2 Establishing leadership cost 3 Deepening COVID- 19 relevance 34 4 Building on brands 5 Driving digitalization 6 Riding e-commerce 7 Widening distribution 8 Deepening governance culture 9 Leveraging financials strong
Slide 36: Re-energising Our Research; Establishing Cost Leadership
1 RE-ENERGISING OUR RESEARCH Strengths Initiatives Desired outcomes Category creator Continuous product re- Enhanced product Creating under-addressed engineering differentiation and niches Combining and blending competitiveness following therapeutic impact product repositioning and re- G
Slide 37: Deepening COVID-19 Relevance
3 DEEPENING COVID-19 RELEVANCE Leveraging three platforms Health Care Personal Home Care Hygiene Hygiene 36 Increasing relevance All three Key focus area platforms for the increasingly consumers relevant during the pandemic
Slide 38: Our Health Care Segment Strategy
OUR HEALTH CARE SEGMENT STRATEGY 37 1 2 3 Building on the Focus on Introducing Zandu brand immunity- offerings enhancing complementary brands to traditional treatment
Slide 39: Our Personal Hygiene Segment Strategy
OUR PERSONAL HYGIENE SEGMENT STRATEGY 38 1 2 3 Leverage the Brand extension Using multi- BoroPlus brand (sanitizers/hand decade wash/soap) antiseptic platform
Slide 40: Our Home Care Segment Strategy
OUR HOME CARE SEGMENT STRATEGY 1 2 3 39 Heightened hygiene Introducing a range of home Range includes disinfectant consciousness witnessed hygiene products under the floor cleaner, toilet cleaner, during and after COVID-19 Emasol brand bathroom cleaner, dish wash pandemic. gel and an all surface san
Slide 41: Building on Power Brands
BUILDING ON POWER BRANDS Introduction Cumulatively of Relevant generate nearly extensions 80% of our revenues 40 Adequate Marked by room for Re-energising our leadership growth Power Brands positions Reinvestment Address to enhance growth market share opportunities
Slide 42: Navratna
41 NAVRATNA
Slide 43: Navratna: strengths, shifts, initiatives, outcomes
Market leader in a Available in more Successful niche category than 4.5 mn brand Strengths with no significant retailers across extensions competitors the country 4 subtle shifts Initiatives Outcomes From standalone to Strengthened presence in core markets Strengthened market extensions (UP, B
Slide 44: Pain Management
43 PAIN MANAGEMENT
Slide 45: Zandu Balm and Mentho Plus: strengths and initiatives
Zandu Balm as all-round Cumulatively Available in solution provider whereas account for ~55% over 1.6 mn Strengths Mentho Plus is positioned of India’s balm retailers across as headache specialist market by volume the country 4 subtle shifts Initiatives From single use to Core markets: Deepen pres
Slide 46: BoroPlus
/ Ya AYURVEDIC Antiseptic f Cream sf ae AYURVEDIC Antiseptic Cream BOROPLUS
Slide 47: BoroPlus: anti-septic leadership and shifts
Anti-septic Combination of Availability in Gained share in leadership ayurveda and more than 3.2 mn the emollient Strengths positioning boro is effective retail outlets pan- category against yet benign on skin India MNC players 7 subtle shifts Initiatives Desired outcomes From anti-septic to Pro
Slide 48: Healthcare Range
HEALTHCARE RANGE 47
Slide 49: Healthcare range: strengths, initiatives, outcomes
Deep Products Tie-up with A strong team of knowledge in backed by sectoral think- brand Strengths ayurveda with scientific tanks for new representatives for a cutting-edge studies for product promotions with R&D centre efficacy development ayurveda doctors Initiatives Outcomes Going ahead Relaunch
Slide 50: Kesh King
2 TIMES NORE, EFFECTIVE: 30/- OFF “a KESH KING
Slide 51: Kesh King: strengths, initiatives, outcome
Strong Availability in ~8 Leading volume ayurveda lac retail outlets market share of Strengths positioning 26.6% (MAT, December 2019) Initiatives Outcome Strengthened Kesh King as a complete Ayurvedic Increase market solution for hair fall and allied problems shares in the Rejuvenated Kesh Kin
Slide 52: Fair and Handsome
emami FAIR ANE HANDSOM I emami FAIR AND Mn FAIR AND HANDSOME
Slide 53: Fair and Handsome: strengths, initiatives, outcomes
Expert in High brand Market leader Men’s awareness with >65% Strengths Grooming volume market for 15 years share Initiatives Outcomes Going ahead Initiatives Refreshed packaging with ’radiance’ promise on all • Campaign to strengthen the products new brand promise in light of Introduced new diff
Slide 54: International Business
53 INTERNATIONAL BUSINESS
Slide 55: International Business: strengths, shifts, initiatives
Presence De-risking to extensive Strengths in 60+ Indian presence (84% countries revenues, 2019-20) Subtle shifts Key Initiatives From organic to • Working on ayurveda globalization; introduced localized herbal acquisitions products From steady growth to • Focus on top 5 countries (>65% of globa
Slide 56: Driving Digitalization
DRIVING DIGITALIZATION Implemented sales force automation (increased productivity) 55 Graduated the Distributor Deepened Management System investments in to a Cloud-based analytics distributor system, for better data managenent
Slide 57: Strengthening Our Distribution
Overhauled global distribution channel – Restructuring of distribution in key geographies Focused on Widened direct modern trade reach STRENGTHENING OUR 56 DISTRIBUTION Strengthened Empowered sales distribution and force with hand- analytics held devices
Slide 58: How we have strengthened in this area
~50 ~40 How we have %, erstwhile %, existing strengthened in dependence on dependence on this area wholesale wholesale channel channel Growth in 6.4 9.4 Lacs, outlets, Lacs, outlets, 57 outlets FY16 FY20 4 9 Modern trade %, contribution %, contribution presence from modern from modern trade, 2018 tr
Slide 59: Riding E-Commerce
RIDING E-COMMERCE Overview Access Initiatives Goal Ecommerce adoption Products available Ensuring on-time Reach global average in FMCG at ~5 % across all major availability of stocks, of ~5% of total sales globally; Emami platforms – faster processing closer to India’s Marketplaces: purcha
Slide 60: Widening Distribution
Focus Wholesaler and rural growth, people growth and accountability Rural Introductions Extended rural van to 21,000 villages Introduced a Privilege Club with a population of ~ 3000 in program for the rural channel; Madhya Pradesh, Maharashtra, Uttar introduced a standalone Modern Pradesh, Andhra Pr
Slide 61: Strengthening Our Governance
STRENGTHENING OUR GOVERNANCE Principal investor concerns Possibility of pledged High promoter debt shares being revoked 60 How we are addressing investor concerns Promoter debt and pledge reduced substantially upon Committed to pare repayments done promoter debt by sale from the proceeds of of other
Slide 62: Transformation at Emami... Turning into a Reality
TRANSFORMATION AT EMAMI… TURNING INTO A REALITY Quick return to double-digit Sales better than International domestic volume pre-COVID levels in Growth across all Business also grew Overview growth in Q2 & channels; in double digits in Q3FY21 despite current months Q2 & Q3FY21 COVID impact. Record q
Slide 63: Performance Highlights - Q2 & Q3FY21
PERFORMANCE HIGHLIGHTS - Q2 & Q3FY21 11% 15% 13% 70.3% 70.4% Growth in Growth in Combined Gross Revenues Q2FY21 Q3FY21 Growth in Margins +60 bps +210 bps Q2 + Q3 Q2FY21 Q3FY21 33% 29% 31% 35.0% 36.4% Combined 62 Growth in Growth in EBIDTA +580 bps +390 bps EBIDTA Q2FY21 Q3FY21 Growth in Margins Q2 +
Slide 64: Performance Highlights - Q2 & Q3FY21
PERFORMANCE HIGHLIGHTS - Q2 & Q3FY21 Q2: +53% Q2: +31% Q2: +45% Q2: -25% Q2: +14% Growth across Q3: +38% Q3: +12% Q3: +16% Q3: +21% Q3: -12% most Power Q2 +Q3: +44% Q2 +Q3: +21% Q2 +Q3: +28% Q2 +Q3: +5% Q2 +Q3: +3% Brands Healthcare Pain Mgmt. Kesh King BoroPlus Navratna Range Range Range Range Rang
Slide 65: Key Investment Rationale
KEY INVESTMENT RATIONALE EBIDTA margins of Debt-free company over 26% despite despite acquisitions 1 High gross margins of ~65% 2 one of the highest 3 worth ~Rs. 2,600 cr A&P spends of ~18% in 12 years. 64 High dividend 4 payout of around 5 Rating of A1+ by CRISIL and CARE 6 Strong past performance
Slide 66: Key Sustainability Initiatives
Minimising fossil fuel use Initiated use of renewable energy sources and energy efficient techniques Giving back to the society Reduction in water Emami promotes healthcare, consumption education, rural development and Installed new social upliftment programmes technologies; treated effluent dischar
Slide 67: Corporate Social Responsibility
CORPORATE SOCIAL RESPONSIBILITY 66 Enhancing Promoting Providing Promoting Social Sanitation vocational healthcare clean water education upliftment facilities in skills programs rural areas
Slide 68: Major Awards & Rankings
MAJOR AWARDS & RANKINGS Awarded the ‘Golden Peacock Awarded by the Economic Navratna’s ‘Saarthi 2.0’ campaign, Innovation Management Award’ for the Times Bengal Corporate created a record and featured in the year 2016 in the FMCG Sector and Awards for its ‘Best Financial prestigious Limca Book Of Re
Slide 69: Thank You
Thank You