Havells India Limited · NSE:HAVELLS
Havells India — Annual Investor Meeting of Nalanda Capital 2023
36 slides from Havells India's conference presentation, Apr 18, 2023
Slide 1: Intimation of Schedule of Analyst Meet
18 April 2023 The National Stock Exchange of India Limited BSE Limited Exchange Plaza, 5th Floor Phiroze Jeejeebhoy Towers Plot No. C/1, G Block Dalal Street Bandra Kurla Complex Mumbai- 400 001 Bandra (E) Mumbai- 400 051 Scrip Code : 517354 NSE Symbol : HAVELLS Sub: Intimation of Schedule of Analys
Slide 2: Growth In Focus
ew Sk. Growth In Focus
Slide 3: Retrospect, Industry Trends, Moving Ahead
RETROSPECT INDUSTRY TRENDS MOVING AHEAD 2
Slide 4: Retrospect
RETROSPECT INDUSTRY TRENDS MOVING AHEAD 3
Slide 5: Humble Origin
HUMBLE ORIGIN ➢ Founded a small trading business at Bhagirath Palace, Delhi ➢ Acquired Havells brand in 1971; an unconventional move ➢ Key foundational values- Transparency, Simplicity and Integrity RETROSPECT INDUSTRY TRENDS MOVING AHEAD 4
Slide 6: An Evolving Journey
AN EVOLVING JOURNEY Acquisition of Got listed on Stock ‘Lloyd’ consumer Commenced Exchange durable business business with Acquired global Switchgears and business of First foray into South Cables ‘Sylvania’ India with 2 new plants 1958 1971 1993 2003 2007 2015 2017 2019 2023 Acquired ‘Havells’ Dives
Slide 7: Deeper Into Homes
DEEPER INTO HOMES 2004 2011 Onwards INDUSTRIAL TO CONSUMER BRAND Lighting Air Conditioner Television Air Cooler MASS TO Fans Switchgears Water Heater MASS-PREMIUM Refrigerator Switches Water Purifier Domestic Appliances Till 2004 Washing Machine Domestic Cable Industrial Cable RETROSPECT INDUSTRY TR
Slide 8: Constant Re-imagining Growth
CONSTANT RE-IMAGINING GROWTH 2022: $1,700 mn Consistently Creating 2017: Lloyd & Water runway Purifier $ 840 mn 2016: Air Coolers $ 737 mn 2013: Pumps $ 579 mn 2012: Water Heaters, $ 495 mn 2011: SDA $ 395 mn 2003: Fans & Lighting $ 35 mn 2000 2005 2010 2015 2020 2025 RETROSPECT INDUSTRY TRENDS MOVI
Slide 9: Performance: 5Y & 10Y
PERFORMANCE: 5Y & 10Y In Rs Crore FY12 FY17 FY22 5Y CAGR 10Y CAGR Revenues 3,616 6,135 13,889 18% 14% EBITDA 459 824 1,758 16% 14% EBITDA % 12.7% 13.4% 12.7% PAT 305 539 1,195 17% 15% PAT % 8.4% 8.8% 8.6% Net Worth 1,608 3,274 5,989 13% 14% Market Cap 7,135 29,253 72,272 20% 26% Product Lines 13 14
Slide 10: Cash Generation & Allocation
CASH GENERATION & ALLOCATION FY15 opening ~Rs 700 crores cash Cash Sources Operating Cash Flow Proceeds from Sylvania Others (including ~Rs 6,200 crores & other sale other income) (~76% of EBITDA) ~Rs 1,100 crores ~Rs 1,000 crores Cash Generation ~Rs 8,300 crores Allocated to Capex Lloyd Acquisition
Slide 11: Business Mix Evolution
BUSINESS MIX EVOLUTION Revenue Contribution RETROSPECT INDUSTRY TRENDS MOVING AHEAD 10
Slide 12: Seeding & Scaling Businesses
SEEDING & SCALING BUSINESSES Rs 1,000+ Crores Categories Consumer Cable Wire Lighting 6 Fans Residential AC Switchgear RETROSPECT INDUSTRY TRENDS MOVING AHEAD 11
Slide 13: Seeding Emerging Channels
SEEDING EMERGING CHANNELS Emerging Channel (% of revenue) Emerging Channel Mix 23% MFR B2B 22% 42% 8% 15% E-com 8% 13% 5Y AGO NOW CSD/CPC Rural RETROSPECT INDUSTRY TRENDS MOVING AHEAD 12
Slide 14: Premiumising Portfolio
PREMIUMISING PORTFOLIO Ceiling Fans Mixer Grinders * Premium refers to >1.2x of average selling price (ASP); Value refers to <0.8x of ASP RETROSPECT INDUSTRY TRENDS MOVING AHEAD 13
Slide 15: What We Are Known For
WHAT WE ARE KNOWN FOR A trusted & household FMEG brand Aspirational – Mass Premium Well regarded for governance & values Entrepreneurial vision and professional rigour Debt free, cash positive, AAA rated Performance delivered through business cycles RETROSPECT INDUSTRY TRENDS MOVING AHEAD 14
Slide 16: Culture Built Over Decades
CULTURE BUILT OVER 5 DECADES Customer Centricity Ethics & Honesty Entrepreneurship Values Empathy Equality RETROSPECT INDUSTRY TRENDS MOVING AHEAD 15
Slide 17: Industry Trends
RETROSPECT INDUSTRY TRENDS MOVING AHEAD 16
Slide 18: Two Deep Pools of High Growth
TWO DEEP POOLS OF HIGH GROWTH Electricals Electronics Market Size In Rs Cr (Annual) Market Size In Rs Cr (Annual) 2,00,000 1,75,000 1,25,000 1,00,000 Today In 5Y Today In 5Y Source: Internal & industry estimates RETROSPECT INDUSTRY TRENDS MOVING AHEAD 17
Slide 19: Industry Position
INDUSTRY POSITION Product/Segment (Market Size in Rs) AC (25k cr) >10% SDA WM Ref (7k cr) (13k cr) Lighting (25k cr) (14k cr) Water Heater (2.5k cr) Revenue Growth Switches Fans Wires (4.5k cr) (8.5k cr) (17k cr) 5-10% Motor Pump Cables Switchgear (5.5k cr) (6.5k cr) (17k cr) (3k cr) <5% <5k cr 5-15
Slide 20: ~75% Portfolio in High Growth
INDUSTRY POSITION Product/Segment AC >10% SDA WM Ref ~75% Portfolio in High Growth Water Heater Lighting Revenue Growth Switches Fans Wires 5-10% Motor Pump Cables Switchgear <5% <5k cr 5-15k cr >15k cr Size RETROSPECT INDUSTRY TRENDS MOVING AHEAD 19
Slide 21: Megatrends
MEGATRENDS Aspirational, informed & Greater share of wallet demanding Consumer Uniqueness Home IoT & smart connected homes Traditional GTM relevant but Increasing intensity challenged Competition GTM Follow the consumer – Omni New disruptors Channel RETROSPECT INDUSTRY TRENDS MOVING AHEAD 20
Slide 22: Megatrends
MEGATRENDS Digital discovery + Physical Remains relevant execution Brand Digital Deep consumer digital Trust, reliability & continuity engagement Purpose Way of life Talent Wealth creation ESG Adding real value to businesses RETROSPECT INDUSTRY TRENDS MOVING AHEAD 21
Slide 23: Moving Ahead
RETROSPECT INDUSTRY TRENDS MOVING AHEAD 22
Slide 24: Strategic Pillars – Past Couple of Decades
STRATEGIC PILLARS – PAST COUPLE OF DECADES Brand Distribution Manufacturing People RETROSPECT INDUSTRY TRENDS MOVING AHEAD 23
Slide 25: Strategic Pillars
STRATEGIC PILLARS Brand Distribution Manufacturing People RETROSPECT INDUSTRY TRENDS MOVING AHEAD 24
Slide 26: Brand: Straddling Across Electrical Industry and Consumer Durables
BRAND: STRADDLING ACROSS ELECTRICAL INDUSTRY CONSUMER DURABLES Socio Economic/ Income MASS MASS PREMIUM PREMIUM/PREMIUM + MASS PREMIUM/PREMIUM + LIFESTYLE NEED STATE ASPIRATIONOL AFFORDABLE RETROSPECT INDUSTRY TRENDS MOVING AHEAD 25
Slide 27: Omni Present Havells: Closer, Deeper, Wider
OMNI PRESENT HAVELLS: CLOSER, DEEPER, WIDER Traditional Modern Trade E-Commerce Exclusive Stores Projects Canteen Stores International Rural RETROSPECT INDUSTRY TRENDS MOVING AHEAD 26
Slide 28: Rural - Untapped Opportunity
RURAL- UNTAPPED OPPORTUNITY ₹ ➢ Improved electricity penetration creating demand ➢ Informed rural customer shifting to trusted brands ➢ Direct presence in 3k towns with population range of 10K-50K ➢ Havells is the most penetrated FMEG brand in Rural markets RETROSPECT INDUSTRY TRENDS MOVING AHEAD 27
Slide 29: Innovation: Fast Follower to Thought Leadership
INNOVATION: FAST FOLLOWER TO THOUGHT LEADERSHIP IOT Smart Homes First Mover Trend Setter Maturity Develop solutions (2015 onwards) First Mover Self development from ground zero Fast Follower (2000-2015) Trend Setter JVs and alliances Time (upto 1990s) RETROSPECT INDUSTRY TRENDS MOVING AHEAD 28
Slide 30: Digitization: Driving Business Efficiency
DIGITIZATION: DRIVING BUSINESS EFFICIENCY Supplier Factory Channel Partner Sales Team Retailer Consumer 3600 Integration of Stakeholders, Business Processes and Data Closer to the Consumer Global Vendor Portal Consumer App Consultation Retailer Engagement DMS WA for Business D2C Channel Electrician
Slide 31: Talent
TALENT “KHJJS” Integrating individual & company aspiration Instituting wealth creation Entrepreneurial opportunity Distributed leadership Laterals to “leaders from within” RETROSPECT INDUSTRY TRENDS MOVING AHEAD 30
Slide 32: Organic Incubations
ORGANIC INCUBATIONS “Others” Category Revenue Trajectory Motor ~Rs 1,000 cr Pump 10x In 7 Years Revenue Solar Personal Grooming Rs 91 cr (FY15) Water Purifier Years RETROSPECT INDUSTRY TRENDS MOVING AHEAD 31
Slide 33: White Spaces – Criteria to Evaluate
WHITE SPACES – CRITERIA TO EVALUATE Organic Inorganic Sunrise Sector Large Market Size Growth & Strategic fit Profitability High Growth Brand Leverage Channel Synergies Technology Play Inability to seed Premiumisation Scope Adjacencies such business internally RETROSPECT INDUSTRY TRENDS MOVING AHEAD
Slide 34: Growth With Responsibility
GROWTH WITH RESPONSIBILITY Mid-day Meal Green Cover Program Sanitation Programs Heritage Programs 60k hot meals served 15 lakh saplings planted 4600 bio-toilets Installed till First of its kind CSR daily across 693 schools till date date restoration project DJSI (Global) Ranked 7th in the global ele
Slide 35: Governance
GOVERNANCE AAA credit Rating CG2+ Corporate Governance rating Consistent Dividend payout ratio of ~40% Highly reputed independent professional board 14 member board; only 3 family members on the board RETROSPECT INDUSTRY TRENDS MOVING AHEAD 34
Slide 36: Summary
SUMMARY An Indian brand born, survived and thrived amidst fierce competition Uniquely positioned to serve the Value creation for all its aspiring nation and build an stakeholders institution Entrepreneurship with guts, integrity and humility Excited with opportunities ahead RETROSPECT INDUSTRY TREND
Havells India — Annual Investor Meeting of Nalanda Capital 2023 on 6ix