Crompton Greaves Consumer Electricals Ltd. · NSE:CROMPTON
Crompton Greaves Consumer Electricals — Investor Presentation (June 2022)
32 slides from Crompton Greaves Consumer Electricals's investor presentation, Jun 6, 2022
Slide 1: Investor presentation cover letter to exchanges
Crompton Crompton Greaves Consumer Electricals Limited Registered & Corporate Office: Tower 3, 1st Floor, East Wing, Equinox Business Park, LBS Marg, Kurla (West), Mumbai 400 070. India Date: June 5, 2022 Tel: +91 22 6167 8499 F: +91 22 6167 8383 W: www.cromoton.co.ln. CtN L31900MH2D15PLC26225•1 To,
Slide 2: Investor Presentation June 2022
INVESTOR PRESENTATION June 2022
Slide 3: Disclaimer
Disclaimer This presentation does not constitute an offer from Crompton Greaves Consumer Electricals Ltd. or any of its affiliates (“Crompton”) to any party and the information contained herein will not form the basis of any contract. Neither Crompton nor any of their respective affiliates, sharehol
Slide 4: Crompton Overview (1/3)
Crompton Overview (1/3) Crompton is the #1 electrical consumer durables company with an 80+ year old brand and a pan-India footprint Large market with Leading brand in Market leading Highly experienced secular growth Consumer Electricals distribution reach management team #1 in Fans INR 41,000 Cr. e
Slide 5: Crompton Overview (2/3)
Crompton Overview (2/3) Crompton has cemented its position as the market leader in fans and residential pumps while delivering long term industry-leading profitable growth through strengthened product portfolio Fans Lighting Pumps Appliances 13% (Water Heater) Market Share 28% 8% (LED Lighting) 17%
Slide 6: Crompton Overview (3/3)
Crompton Overview (3/3) Crompton’s Five Dimensional growth strategy has delivered consistent, market leading performance by successfully enabling the business using technology resulting in greater people productivity, better process efficiency and more relevant products. Brand Portfolio GTM Operatio
Slide 7: Key Investment Highlights
Key Investment Highlights 1 Large market opportunity of >INR 550bn with attractive macro drivers Leading brand in consumer electricals with market leadership and consistent market share gain 2 across major categories 3 Widest pan-India distribution network with 4k+ channel partners and 150k+ retaile
Slide 8: Attractive Macro: Large market
1 Attractive Macro: Large market Consumer electricals present a huge market opportunity of INR 550bn* growing at ~6% CAGR FY 22 Est. Market Size Market Growth (INR Bn) (CAGR 22-27) Long Term Growth Drivers ▪ Thrust on affordable houses under the Pradhan Mantri Awas Yojana 106 5-7% ▪ Urban replacemen
Slide 9: Attractive Macro: Multiple drivers for growth
1 Attractive Macro: Multiple drivers for growth Future revenue growth expected to increase due to (i) favourable demographics, (ii) strong regulatory tailwinds, (iii) low penetration and premiumization Increasing Penetration and Favourable Demographics Government push Channel Dynamics Rising disposa
Slide 10: Leading Brand: Strong brand recall
2 Leading Brand: Strong brand recall … with strong spontaneous recall across major categories; 20-30% improvement in the last 6 years driven by focused marketing efforts Fans Lighting Pumps +32% +25% +20% 67% 50% 54% 58% 61% 46% 38% 41% 35% 29% 26% FY 16 FY 19 FY 20 FY 22 FY 16 FY 19 FY 20 FY 16 FY
Slide 11: Leading Brand: Consistent share gain
2 Leading Brand: Consistent share gain FY 16 FY 18 FY 22 ▪ New brand architecture has helped drive growth in the premium segment Crompton’s Fans 21% +650 bps 28% ▪ Successful launch of Anti Dust and strong brand has Aura 2.0 Fans not only Focus Segments ▪ Increased spend on advertising to LTG - LED
Slide 12: Go-to-Market: Wide pan-India footprint
3 Go-to-Market: Wide pan-India footprint Crompton has a pan India footprint with 4k+ distributors, 150k+ retailers and 620+ service centres Jammu and Kashmir Reach, Extraction, Visibility ▪ MBO Expansion ▪ Star & A class outlets expansion Jalandhar Himachal Pradesh ▪ Extraction based on norms Punjab
Slide 13: Go-to-Market: Key initiatives
3 Go-to-Market: Key initiatives Key Initiatives Key Results ▪ Hybrid Model: Introduced to help double active billing points 2,000+ new channel appointments in FY22 ▪ Rural Coverage: Focused effort to tap into towns with 10- 28% increase in Star & A Class outlets sales 100K population ▪ Product: Leve
Slide 14: Go-to-Market: Accelerating growth in alternate channels
3 Go-to-Market: Accelerating growth in alternate channels Rebooting rural business and creating Channel of the Future – ECommerce & MOR rural centre of excellence FY 26 FY 26 FY 22 FY 22 6x revenue growth ~10x revenue growth #1 in Fans and Heaters Rurban (10k – 1 lakh pop. centre: ~21 Cr population)
Slide 15: Innovation: New product development themes
4 Energy Efficiency Innovation: New product development driven by identified focused themes Smart Connectivity Healthy Living Consumer Centric Design ▪ Power / energy ▪ Antibacterial & ▪ Smart home ▪ Comfort & consumption Antifungal Convenient ▪ Water consumption ▪ Smart connectivity ▪ Virus Killing
Slide 16: Innovation: Breakthrough innovation
4 Innovation: Breakthrough innovation Consumer Insight New Products Key Features ▪ Markle Designer - Consumes just 55-Watt power, ▪ Anti dust designer fan with metallic finish - lowest in the segment Markle Designer ▪ Energion HS - 35W BLDC Motor consumers 50% Fans ▪ Energy efficient fan - Energion
Slide 17: Optimized cost structure: Continue to improve efficiency through multiple levers
5 Optimized cost structure: Continue to improve efficiency through multiple levers 1 2 Buying Strategies Commercial Terms • Alternate vendor development • Price equalization • Cost sheet-based negotiation • Discounts based on Annual contracts • Bundling of materials • Credit / Tax benefit pass back
Slide 18: Organization being built for Sustained Excellence
6 Organization being built for Sustained Excellence Organisation Capability ▪ Go-to-Market & Service Excellence ▪ Innovation and Category Management Excellence ▪ Quality and Manufacturing Excellence Employee Engagement ▪ Driving engagement based on themes of Collaboration, Decision Making, Innovatio
Slide 19: Highly Independent and Experienced Board
6 Highly Independent and Experienced Board Area of Expertise Board Member Work Ex. Affiliations FMCG Marketing Distribution Operations M&A HR Hemant Nerurkar Chairman of the Board, Ex-MD, Tata Steel, India 35+ Tata Steel ✓ Shantanu Khosla MD, Crompton Ex-MD & CEO, P&G India 30+ P&G ✓ ✓ ✓ Mathew Job
Slide 20: Exemplary Corporate Governance & Sustainability initiatives
6 Exemplary Corporate Governance & Sustainability initiatives Governance initiatives ▪ Board comprising of 2/3rd of independent directors ▪ Quick adoption of changes in compliance requirements; zero tolerance for non-compliances ▪ Transparency in disclosures through annual report, website and exchan
Slide 21: Next Steps on ESG
6 Next Steps on ESG ESG Diagnostics and Purpose Definition (Initiated) 1 ▪ Define and articulate a clear and relevant purpose ▪ Identify gaps in policies, processes, systems and performance SEBIs Business Responsibility and Sustainability Reporting 2 ▪ Readiness assessment to identify gaps ▪ Focus o
Slide 22: Awards & Accolades
6 Awards & Accolades Crompton’s SilentPro Enso Ceiling Fan was the winner at the prestigious iF Design Awards Prestigious ‘Brand of the Decade Award’ by Herald Global and BARC Asia Crompton’s SilentPro campaign won the #ETBrandDisruption Gold Award under ‘Technology-Driven Campaign’ category Crompto
Slide 23: Financials: Strong earnings growth
7 Financials: Strong earnings growth Crompton has delivered revenue CAGR of 8%, EBITDA CAGR of 14% and PAT CAGR of 17% growth since demerger with strong FCF conversion (c. 155% of PAT) Revenue (in cr.)1 EBITDA (in cr.)2 PAT (in cr.) 3 FCF Conversion4,5 5,394 155% 148% 4,520 4,105 769 126% 3,365 102%
Slide 24: Butterfly Acquisition
Butterfly Acquisition Crompton Butterfly
Slide 25: Butterfly transaction overview
Butterfly transaction overview A transformational step to becoming a leading player in Small Domestic Appliances (SDA) Good FIT, aligned with Long Term Strategy Butterfly is amongst and Vision the Top 3 Brands in India in kitchen and ► Immediately achieves scale in kitchen appliances, increasing sha
Slide 26: Full Kitchen product portfolio
Full Kitchen product portfolio Kitchen Appliances LPG Stoves Mixer Grinder Electric Rice Cookers Juicer Mixer Grinder Wet Grinder Chimney Induction Cooktop Built In Hobs Cooker & Cookware Others Pop Up Hand Blender Hand Mixer Toaster Pressure Cookers Sandwich Flasks & Electric Maker Water Bottles Ke
Slide 27: Strong brand recall
Strong brand recall A high-recall brand well known pan-India forms a concrete launchpad for a deeper penetration across the country North Consumer Brand Perception #2 in Wet Grinders Associated with a perception of: West Top 3 (awareness) Durability in grinders & LPG Stoves ► High awareness and bran
Slide 28: Growth driven by multiple categories and strong presence across channels
Growth driven by multiple categories and strong presence across channels Strong performance coupled with healthy margins FY 22 Revenue Category Split Revenue (in Crs) Category Est. Market Size Revenue Mfg. % Mixer Grinders ~2,800 cr. 295 cr. (29%) 100% Mfg. Revenue (in cr.) LPG Stoves ~2,200 cr. 249
Slide 29: Complete SDA portfolio with a strong presence in kitchen segment
Complete SDA portfolio with a strong presence in kitchen segment #1 #2 #3 #4 …backed by capabilities in Immediate scale in key …a strong distribution and …and a ready manufacturing existing appliance kitchen segments… pan-India presence… & R&D infrastructure… segments... Mixer #2 Heaters #3 Grinders
Slide 30: Strategic roadmap: Where to Play
Strategic roadmap: Where to Play Crompton will maintain market leadership across core segments; attain leadership position in emerging segments and be among the top 3 in the new segments Medium term Long term Historical (15-22) (next 2-3 years) (3-5 years) Maintain #1 in Fans, Core Segments Achieve
Slide 31: Strategic roadmap: How to Win
Strategic roadmap: How to Win Strategic initiatives to capitalize on the Opportunity Brand Excellence Portfolio Excellence GTM Excellence Operational Excellence Organisational Excl. ▪ Advertising: Continue to ▪ Portfolio Expansion: ▪ Distribution: Increase in ▪ Operations: Focus on ▪ Build capabilit
Slide 32: Thank You!
Crompton Thank You!
Crompton Greaves Consumer Electricals — Investor Presentation (June 2022) on 6ix