Godrej Consumer Products Limited · NSE:GODREJCP
Godrej Consumer Products — Merger or Acquisition (April 2023)
25 slides from Godrej Consumer Products's merger presentation, Apr 28, 2023
Slide 1: Filing cover letter to BSE and NSE
` Godrej Consumer Products Ltd. Regd. Office: Godrej One, 4th Floor, Pirojshanagar, Eastern Express Highway, Vikhroli (E), Mumbai - 400 079, India. Tel : +91-22-2518 8010/8020/8030 Fax : +91-22-2518 8040 Website : www.godrejcp.com CIN : L24246MH2000PLC129806 April 28, 2023 BSE Limited Corporate Rela
Slide 2: A Hidden Jewel: Why GCPL bought RCCL
A Hidden Jewel Why GCPL bought RCCL April 28, 2023
Slide 3: Disclaimer
Disclaimer Some of the statements in this communication may be forward looking within the meaning of applicable laws and regulations. Actual results might differ substantially from those expressed or implied. Important developments that could affect the Company’s operations include changes in the in
Slide 4: A quick Reminder of GCPL Strategy – Circa Dec'21
A quick Reminder of GCPL Strategy – Circa Dec’21 Double-digit Volume Growth Led through category development Funded by radical simplification Consumers UVG Shareholders Employees A simple strategy for the next 3-5 years 3
Slide 5: Our Category Development Capability has got much better in 2 years
Our Category Development Capability has got much better in 2 years Sharper Insights Democratized Innovation More and Better Media An army on-ground 4
Slide 6: We feel confident of developing a few more underpenetrated categories
We feel confident of developing a few more underpenetrated categories Increasing share of underpenetrated categories (~35%) (~20%) India Household Insecticides Soaps Hair Colour International Air Fresheners (~15%) (~30%) Soaps FMCG High Penetration Low Penetration 5
Slide 7: Our strategy remains the same but with an addition
Our strategy remains the same but with an addition Develop a few more Category develop Funded by radical People and Planet underpenetrated existing portfolio simplification alongside Profit categories in India +
Slide 8: Acquisition of Raymond Consumer Care Business
Acquisition of Raymond Consumer Care Business
Slide 9: Overview of target business
Overview of target business Key brands Sales mix P&L overview 522 cr Others Revenue Shampoos INR (FY22) Soaps INR 622 cr (FY23) INR 411 cr (FY21) Condoms Deodorants & Fragrances Gross margin Advertising Largely in-line and publicity Market position with GCPL Mid single digits Others #2 #3 KamaSutra
Slide 10: Portfolio of Star SKUs
Portfolio of Star SKUs p \RIC AVENUE: |
Slide 11: Why we bought the business
Why we bought the business 1 2 3 Categories have strong Strong but under Significant cost growth runway leveraged brands synergies
Slide 12: Categories have strong growth runway
1 Categories have strong growth runway
Slide 13: Deodorants category has the potential to deliver double-digit, multi-decade growth
Deodorants category has the potential to deliver double-digit, multi-decade growth Deodorants category Per capita consumption of penetration (male, urban) deodorants (USD, 2022) Deos India 1X Vietnam 1 out of 5 3X 2.5X Indonesia 3X Thailand 7X Mexico 14X Deodorants category 2022 2032 2042 Per capita
Slide 14: But why not Cinthol as a play in Deodorants?
But why not Cinthol as a play in Deodorants? If you are not among the first few entrants, you can only enter if you have a seriously disruptive product 13
Slide 15: Contrary to perception, Deos neither disloyal nor fragmented
Contrary to perception, Deos neither disloyal nor fragmented Average # of brands purchased Number of brands contributing per household per year 2/3rds of the category 6 8 6 4 4 2 2 Soaps Deodorants Shampoo Washing Powder Soaps Deodorants Shampoo Washing Powder Source: Bain Consumer Survey; Customer
Slide 16: Condoms market is premiumising fast
Condoms market is premiumising fast % of commercial urban male condom volume sales Price range CAGR (INR per condom) (2017-2022) INR > 10 Premium Commercial Premium Mass 21% Commercial Commercial INR < 10 Mass Commercial Premiumise Mass -2% Non- commercial market Commercial Non- Commercial -4% Massi
Slide 17: Brands are strong but under leveraged
2 Brands are strong but under leveraged
Slide 18: Park Avenue: An underleveraged but strong equity
Park Avenue: An underleveraged but strong equity Low media investments and average distribution reach… …but high consumer advocacy Media investments Distribution reach NPS (INR cr, MAT Dec'22) (ND %) (% respondents) 70% 1.8X 53% 35% X 18% Competitor Competitor Competitor Competitor Competitor Park P
Slide 19: Massive distribution opportunity exists; GCPL well placed to capitalise
Massive distribution opportunity exists; GCPL well placed to capitalise # of urban outlets reach 4X Leverage GCPL’s extensive general trade footprint X Leverage KamaSutra’s and Park Avenue’s chemist footprint Park Avenue GCPL 18
Slide 20: Significant Cost Synergies
3 Significant Cost Synergies
Slide 21: Unlocking cost synergies
Unlocking cost synergies Trade promotion Manufacturing Procurement and distribution In house soaps Better negotiations on manufacturing combined aerosols volume Reduce MRP to NSV leakage and palm oil derivatives from current elevated levels Fixed Overheads Radical simplification Meaningfully reduce
Slide 22: Business Case and Valuation
Business Case and Valuation
Slide 23: Business case
Business case FY23 FY24 FY25 onwards Low double digits to Revenue INR 622 cr Mid-teens growth Expect revenue and EBITDA margin to be similar to FY23* EBITDA margin High single digit Mid twenties EPS Dilutive Neutral *Driven by category development and simplification initiatives (SKU rationalisation,
Slide 24: Valuation and Funding
Valuation Funding Gross valuation of INR 2,825 crore Acquisition to be funded via including ~ INR 100 crore of cash short-term financing Slump Sale structuring will result in Expect to be in net cash position by mid FY24 availing tax depreciation on brands, thus reducing cash tax. The NPV of cash ta
Slide 25: Thank you
Thank you www.godrejcp.com
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