Berger Paints India Limited · NSE:BERGEPAINT
Berger Paints India — Investor Day
44 slides from Berger Paints India's investor day presentation
Slide 1: Keynote Address
Keynote Address ABHIJIT ROY MD & CEO BERG ER PAINT S INDIA LIMITED
Slide 2: The world is changing
The world is changing q The US is expected to steadily yield ground to China and India.
Slide 3: The old order changes
The old order changes q Global economic power will gradually shift to the E7 countries
Slide 4: India is also changing, for the better
India is also changing, for the better q The country has been out pacing World GDP growth by a wide margin qOne big difference from the past : greater transparency in the economy ( Demo,GST,RERA,Banking Reforms ),therefore growth more sustainable Source: http://www.worldbank.org/
Slide 5: Paint grows with the country and sometimes in spite of it
Paint grows with the country and sometimes in spite of it q The paint industry growth tends to be between 1.5 to 2 times GDP growth Source: http://www.worldbank.org/
Slide 6: Paint industry is resilient as well!
Paint industry is resilient as well! q YTD Q3 16-17: Even FMCG crawled, when hit by Demon & GST, but Paint held its own
Slide 7: Segments in Paint Industry
Segments in Paint Industry q Decorative Paints contributes to 75% of industry turnover. q Industrial Paints comprises:- q Automotive & General Industrial q Protective Coatings q Powder Coatings qExpected to grow at 14 % + CAGR
Slide 8: Growth Drivers: Decorative Segment
Growth Drivers DECORATIVE SEGMENT
Slide 9: Urbanization is rapid
Urbanization is rapid q 91 Mn people added to Urban popn. VS 90 Mn to Rural popn in last 10Y q Projected to add 404 mn to urban population between 2014 and 2050 q 41%+ of Indian popn. will live in cities by 2030, up from 32% currently q Affordable Housing & Housing For All drive by GoI in successive
Slide 10: Distribution is underpenetrated, but expanding
Distribution is underpenetrated, but expanding q Paint distribution is hugely underpenetrated (<0.1 Mn outlets) vis a vis relatively saturated categories like q FMCG (Nearly 10 Mn outlets in 2016) or q Telecom (estm. 10 Mn outlets Dec-17) q Distribution is growing steadily and creating new opportuni
Slide 11: Consumers are upgrading
Consumers are upgrading q Growing disposable incomes are seeing customers upgrade to higher value products q Distemper to Emulsion q Cement Paint to Exterior Emulsions q Regular to Premium Emulsion q Polish to Polyurethane (PU) q Floor Oxides to Floor Paint q and so on…..
Slide 12: Growth Drivers: Non-Decorative Segment
Growth Drivers NON-DECORATIVE SEGMENT AUTOMOTIVE, INDUSTRIAL & PROTECTIVE COATINGS
Slide 13: Infrastructure
Infrastructure q Witnessing a buildup that is fuelling demand q Highways – 83,000km planned q Ports – 6 new mega ports q Airports – 45 new locations under the Udan scheme q Metros – Kolkata 1984 & Delhi 2002 now 7 new cities and a few more to start q More investment needed and expected q Augurs well
Slide 14: Automotive
Automotive q World’s largest 2-Wheeler market. Women, 1st time owners and exports driving demand; 11% CAGR projected. q India soon to be the top-4 automobile markets in the world. #Source: Automotive Mission Plan 2016-26/SIAM & GoI
Slide 15: General Industrial & Powder Coating
General Industrial & Powder Coating q Made in India initiative,lower labour cost and good engineering skills likely to drive demand in this segment qGST has brought unorganized players into formal economy; negated price advantage and created a level playing field
Slide 16: Indian Paint Market
Indian Paint Market
Slide 17: Split of the Rs 50,000 Cr pie
Split of the Rs 50,000 Cr pie q India paint market is consolidated unlike Russia and China that are heavily splintered q The Top-4, Asian, Kansai, Akzo & Berger Paints have major market share @54%. q Advantages of market growth accrue to larger players whose share has been growing YoY Source: IPA
Slide 18: International Players in Indian Market
International Players in Indian Market q All paint majors of the world are here but have relatively small presence compared to the existing 4 big players. Reasons : q In Industrial – Price quality equation is key; Value proposition of intl. players not able to make impact. Berger leads in Protective
Slide 19: Berger Paints India Limited
Berger Paints India Limited
Slide 20: Accolades
Accolades
Slide 21: Coatings World Ranking 2017
Coatings World Ranking 2017 q in 2017, Berger Paints Group ranked 15 in the Global Rankings of the TOP manufacturers of paints, coatings, adhesives and sealants q First entered the global rankings list in 2011 q Rapidly climbed the ranks to No. 15. q Ranked No. 9 on the basis of Decorative paints bu
Slide 22: Forbes Super 50
Forbes Super 50 q Berger Paints features on the list of Forbes Super-50 companies in 2015, 2016 and 2017.
Slide 23: Business Today BT 500
Business Today BT 500 2009 2010 2011 2012 2013 2014 2015 2016 2017 No. 244 No. 233 No. 235 No. 180 No. 130 No. 138 No. 120 No. 103 No. 99 q Berger Paints has been steadily bettering its ranking and broke into the Top-100 last year.
Slide 24: Millward Brown Brandz Top 50
Millward Brown Brandz Top 50 q Consistently on the list of top Indian brands since 2014
Slide 25: CII Green Pro Certification
CII Green Pro Certification q The 1st paint company in India to get all it’s products and factories Green Certified q Low VOC q No added Lead & Mercury q Conforms to Green Building Specification
Slide 26: Financials
Financials
Slide 27: Decadal Track Record: BPIL Consolidated Sales
Decadal Track Record (from 2010) - BPIL Consolidated Sales : 2.8 x 7 INR Mn § FY 16 and FY 17 Figures are in compliance with IND AS
Slide 28: BPIL Consolidated Operating Profit
BPIL Consolidated Operating Profit 3.4 x 7 INR Mn § FY 16 and FY 17 Figures are in compliance with IND AS
Slide 29: Growth Drivers
Growth Drivers
Slide 30: Organic Growth Drivers
Organic Growth Drivers Network Brand Building Product Service Expansion Sustained investment Innovations Innovations YOY growth in behind key brands based Early spotting of Addressing key consumer distribution; Innovative on research driven opportunities in various pain-points in services new channe
Slide 31: Innovative Products – all winners!
Innovative Products – all winners! Omnipresent Dust bothered Dirty, grimy walls was Heat is a concern customers for years something consumers assumed they had to live with. Paint is not the typical solution Till we asked and listened Says who? Till we told them, no, use Anti DUST Easy Clean! Kool &
Slide 32: Service Innovation
Service Innovation Regular Painting Express Painting ◦ Information Asymmetry o Academy Trained Labor ◦ + Unclear Pricing o + Automatic Machines ◦ + Manual Processes o + Scientific Processes ◦ + Untrained Labor o + Site Supervision ◦ + Dust & Dirt o – 80% Dust* ◦ + Time Delays o – 40% Time* ◦ = Dissa
Slide 33: Training Initiatives
Training Initiatives q 25 iTrain locations across India q In excess of 50,000+ training sessions hosted for painters q NSDC recognized q Being extended to rural hinterland with Mobile iTrains
Slide 34: iTrain on Wheels mobile training truck
Slide 35: SMS XP 56767
pang inti SMS XP 56767
Slide 36: Mobile iTrain truck with demo area
Slide 37: Painter training session in the field
Slide 38: Stencil painting demonstration
Slide 39: Protective Coatings Outlook
Protective Coatings Outlook q Berger is the category leader in India q Clients include Railways, Highways, Bridges, Fly- over, Coach Factory, Power Plants,Oil and Gas Installations, Airports etc. q Govt. spending in sector has increased. Improvement expected in pvt. sector investments in coming year
Slide 40: Auto & GI Outlook
Auto & GI Outlook q We have built a strong presence in 2-Wheeler and Commercial vehicle categories. q Growth in 2-W and CV’s expected to be rapid next year- we will ride on the growth. Expansion in capacity underway at Jejuri q JV with Nippon will help build presence in 3W and 4 W categories and CED
Slide 41: Inorganic Growth thru Acquisitions
Inorganic Growth thru Acquisitions q ICI’s Motors and Industries business acquired in 2006 qBolix, Poland acquired in 2008 q Sherwin Williams decorative business acquired in 2013 (0.15 Million USD) q Saboo Coatings, acquired in 2017
Slide 42: Inorganic Growth thru Partnerships: Joint Ventures in Industrial Paints
Inorganic Growth thru Partnerships Joint Ventures in Industrial Paints
Slide 43: Inorganic Growth thru Partnerships: Cooperation through MoUs
Inorganic Growth thru Partnerships Cooperation through MoUs
Slide 44: Thank You