ITC Limited · NSE:ITC

ITC — Investor Presentation (March 2016)

58 slides from ITC's investor presentation, March 2016

  1. Slide 1: ITC Limited

    ITC Limited One of India’s Most Admired and Valuable Companies 1

  2. Slide 2: Profile

    Profile  One of India’s most Admired and Valuable companies - Market Capitalisation: over US$ 40 Billion  A USD 8 Billion enterprise by Revenue - ~58% of Net Revenue from non-Cigarette segments  Leading Fast Moving Consumer Goods (FMCG) marketer in India - Established several world-class brands i

  3. Slide 3: ITC Performance Track Record

    ITC Performance Track Record Rs. cr. 19-yr Cagr 1995-96 2014-15 95-96 to 14-15 Gross Revenue 5,115 49,965 12.7% Net Revenue 2,536 36,083 15.0% PBT 452 13,998 19.8% PAT 261 9,608 20.9% Capital Employed 1,886 32,420 16.1% ROCE % 28.4 43.4 Market Capitalisation 5,571 2,60,865 22.4% Total Shareholder Re

  4. Slide 4: ITC's ranking

    ITC’s ranking Amongst all listed private sector cos. PBT: No. 6 PAT: No. 6 Market Capitalisation: No. 4 Note: Based on Published Results for H1 FY16, Market Capitalisation based on 31st Dec 2015 4

  5. Slide 5: Awards & Accolades (1)

    Awards & Accolades (1) ITC is the only Indian Company ranked amongst the Top 10 global FMCG companies in terms of value creation during the period 2009-13 (Boston Consulting Group) − Also ranked amongst the Top 10 global FMCG companies by Boston Consulting Group in terms of value creation in the yea

  6. Slide 6: Awards & Accolades (2)

    Awards & Accolades (2)  ITC ranked as the most admired company in India in 2014 (Fortune-Hay Group survey)  One of the foremost in the private sector in terms of : – Sustained value creation – Operating profits – Cash Profits  ITC ranked 3rd amongst leading corporates in India in terms of Corpora

  7. Slide 7: Awards & Accolades (3)

    Awards & Accolades (3) Harvard Business Review ranked Chairman Y C Deveshwar was ITC Chairman Y C Deveshwar as conferred the Padma Bhushan the 7th Best Performing CEO in by the Government of India the World (2011) ITC conferred the prestigious ‘World ITC Grand Chola, Business and the world’s largest

  8. Slide 8: Awards & Accolades (4)

    Awards & Accolades (4) Businessworld AIM Asian CSR Rainforest Alliance FICCI CSR Award by the awarded ITC's award in Large Asian Forum Bhadrachalam Unit, Enterprise on Corporate the Forest category Social Stewardship Responsibility Council Forest Management certification ITC Hotels awarded the Best

  9. Slide 9: Major Awards & Accolades 2014/15

    Major Awards & Accolades 2014/15 'Sunfeast' and 'Vivel' voted as the 'Buzziest ITC Grand Bharat, ranked No. 4 amongst the Brands' in the Foods and Personal Care ‘Top 100 Hotels & Resorts of the World’ on the categories, respectively by Afaqs – one of the coveted Conde Nast Traveler U.S. Readers’ wor

  10. Slide 10: Major Awards & Accolades 2014/15

    Major Awards & Accolades 2014/15 ITC's Packaging & Printing Business won 4 'World Star Awards' from the World Packaging Organisation, 4 'Asia Star The Kovai Unit of ITC's Awards' from the Asian Paperboards and Specialty Packaging Federation and Papers Business received 17 'India Star Awards' ITC's K

  11. Slide 11: ITC's Vision Statement

    ITC’s Vision Statement (— ) Sustain ITC’s position as one of India’s most valuable and admired corporations through world-class performance, creating growing value for the Indian economy and the Company’s stakeholders Ne y,

  12. Slide 12: ITC's Vision

    ITC’s Vision  Make a significant and growing contribution towards : • mitigating societal challenges • enhancing shareholder rewards By • creating multiple drivers of growth while sustaining leadership in tobacco, and • focusing on ‘Triple Bottom Line’ Performance  Enlarge contribution to the Nati

  13. Slide 13: Key Corporate Strategies

    Key Corporate Strategies  Focus on the chosen business portfolio – FMCG; Hotels; Paperboards, Paper & Packaging; Agri Business; Information Technology  Blend diverse core competencies residing in various Businesses to enhance the competitive power of the portfolio  Position each business to attai

  14. Slide 14: Strategy of Organisation

    Strategy of Organisation 3-Tiered Governance Structure Board of Directors Strategic Supervision  Enabling Focus on each Business Corporate Management  Enabling Focus Committee  Harnessing Diversity of  Portfolio Harnessing Diversity Strategic Management Divisional Management Committees Executive

  15. Slide 15: ITC's Business Portfolio

    ITC’s Business Portfolio FMCG Cigarettes Foods Personal Care Lifestyle Retailing Education & Stationery Safety Matches & Incense Sticks Paperboards, Paper Information Hotels Agri Business & Packaging Technology 15

  16. Slide 16: ITC's Cigarettes Business

    ITC’s Cigarettes Business  Market leadership − Leadership across all segments - geographic & price  State-of-the-art technology and world-class products 16

  17. Slide 17: Cigarette Industry in India

    Cigarette Industry in India  Legal cigarettes account for only ~11% of tobacco consumed in India due to a punitive taxation and discriminating regulatory regime  Illegal cigarette industry in India estimated to constitute 1/5th of the Total industry; 4th Largest Market in the World; resulting in R

  18. Slide 18: Legal Cigarettes contribute 87% of Tax Revenue

    Legal Cigarettes contribute 87% of Tax Revenue, despite constituting only 11% of Tobacco consumption Other Legal Legal Cigarettes Cigarettes Other Tobacco 11% 87% Tobacco Products Products 89% 13% Consumption Share Tax Revenue Share • Over the last 3 ½ years, Excise Duty has increased by 98% and VAT

  19. Slide 19: Per Capita Consumption of Tobacco in India

    Per Capita Consumption of Tobacco in India (gms per year) 1256 1145 743 438 461 468 China USA Pakistan Nepal India World Source:World Cigarettes – ERC Statistics, Tob Board & Industry Estimates – gms/Yr Per Capita consumption is ~60% of World Average 19

  20. Slide 20: Cigarettes are least affordable in India

    Cigarettes are least affordable in India Affordability (% of per capita GDP required to purchase 100 packs 10.8 of 20 Cigarettes of most sold brand) 3.7 3.4 2.9 2.5 2.1 1.6 1.7 1.1 1.3 USA Russia Germany Canada China Australia UK Malaysia Pakistan India Source : WHO Report on the Global Tobacco Epid

  21. Slide 21: Per Capita Cigarette Consumption – per annum

    Per Capita Cigarette Consumption – per annum 2786 No. of cigarettes per capita per annum 1841 1711 1028 468 420 154 96 Russian Federation Japan China USA Pakistan Nepal Bangladesh India Source: The Tobacco Atlas - 4th Edition (American Cancer Society), 2012 • Although India accounts for 17% of world

  22. Slide 22: Creating world-class brands for Indian Consumers

    Creating world-class brands for Indian Consumers 22

  23. Slide 23: Rapid scale up of FMCG businesses

    Rapid scale up of FMCG businesses Rs. cr. 9038 8122 7012 5545 4482 3642 3014 2511 1704 1013 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 23

  24. Slide 24: Annual Consumer Spends of over 11000 cr. (FY15)

    Annual Consumer Spends of over 11000 cr. (FY15) >2000 cr. >1000 cr. >500 cr. 24

  25. Slide 25: Branded Packaged Foods Portfolio

    Branded Packaged Foods Portfolio Biscuits, Staples, Snacks, Noodles & Pasta, Confectionery, Ready to Eat, Juices and Dairy 25

  26. Slide 26: Branded Packaged Foods: Some recent launches

    Branded Packaged Foods: Some recent launches Sunfeast Delishus Choco Chip Sunfeast Farmlite Oats with Chocolate B Natural Apple Awe Sunfeast Hi Fi Cookies Candyman Jellicious Orange B Natural Festive Delights Sunfeast Marie Light GumOn Strawberry Aashirvaad Svasti 26

  27. Slide 27: Personal Care Products

    Personal Care Products  Portfolio approach straddling all consumer segments with 4 umbrella brands in the Personal Wash segment – Essenza Di Wills – Fiama Di Wills – Vivel – Superia  Acquired ‘Savlon’ and ‘Shower to Shower’ in Feb’15 to widen the portfolio of offerings  Complemented by ‘Engage’ b

  28. Slide 28: Personal Care: Some recent launches

    Personal Care: Some recent launches 28

  29. Slide 29: Education & Stationery Products Business

    Education & Stationery Products Business  Leverages printing and paper know-how to address suitable opportunities in the stationery market - Brands: Paperkraft, Classmate, Classmate Pulse and Saathi  Industry growth driven by increasing literacy and enhanced scale of government and public-private

  30. Slide 30: Lifestyle Retailing

    Lifestyle Retailing  Upmarket product range available in exclusive Wills Lifestyle stores (118) across 55 cities and more than 500 ‘shop-in-shops’ in leading departmental stores and multi-brand outlets  Strong distribution network in place for the mid-market brand ‘John Players’ – availability in

  31. Slide 31: Hotels

    Hotels • One of the fastest growing hospitality chains in India • Leader in Profitability 31

  32. Slide 32: Hotels & Tourism industry

    Hotels & Tourism industry  Foreign Tourist Arrivals grew by 4% in Q3 FY16 Vs. 7% in Q2 FY16 and 8% in FY15 – Foreign Tourist Arrivals into India @ ~7.7 million remains far behind China (~55.6 million) [Source: UNWTO Tourism Highlights 2015 edition] – Going forward, as economic conditions and infras

  33. Slide 33: Hotels Business

    Hotels Business  The Chain: 103 properties across 75 locations − 4 Brands: ITC Hotels, WelcomHotel, Fortune & WelcomHeritage  20 Five-Star Deluxe/ Five-Star Properties with over 4400 rooms  48 Fortune Hotels with over 3900 rooms  35 WelcomHeritage Properties with over 850 rooms  Industry impact

  34. Slide 34: Hotels: World's Greenest Luxury Hotel Chain

    Hotels: World’s Greenest Luxury Hotel Chain All ITC Luxury Hotels LEED Platinum certified * “Responsible Luxury” ethos weaved into the Brand Identity * ITC Grand Bharat (opened in Nov’14) in the process of obtaining LEED certification 34

  35. Slide 35: Paperboards & Packaging Business

    Paperboards & Packaging Business • No. 1 in Size • No. 1 in Profitability • No. 1 in Environmental Performance 35

  36. Slide 36: Indian Paperboard market

    Indian Paperboard market  Annual paperboard demand over 2.5 million tonnes  Low per capita usage of paper at around 9 kgs p.a. (world average – over 58 kgs p.a.)  Indian paperboard market growing at 7.5% p.a.  Value-added Paperboards - the fastest growing segment (10% p.a.) in India driven by :

  37. Slide 37: ITC's Paperboards, Paper & Packaging businesses

    ITC’s Paperboards, Paper & Packaging businesses  Market leader in Value-Added Paperboards segment – Recently commissioned 1 lakh MT per annum Paperboard machine fully dedicated to Value Added Paperboards  World-class technology & quality – Ozone bleached Pulp Mill fully operational – one of its ki

  38. Slide 38: Agri Business

    Agri Business • Leading Agri Business player in India • Pioneer in rural transformation • No. 1 in Leaf Tobacco 38

  39. Slide 39: Indian Leaf Tobacco industry

    Indian Leaf Tobacco industry  India – the second largest producer of tobacco (World excl. China)  However, India’s share is only at 7% of world tobacco trade – In 2014-15 Tobacco Exports de-grew by 7%  ITC – India’s largest buyer, processor, consumer & exporter of cigarette tobaccos – 5th largest

  40. Slide 40: ITC's Agri Commodity Business

    ITC’s Agri Commodity Business  Distinctive sourcing capability for ITC’s Branded Packaged Foods Businesses − Identity-preserved superior quality wheat for ‘Aashirvaad’ atta − High quality chip stock for ‘Bingo! Yumitos’ potato wafers − High quality fruit pulp for ‘B Natural’ range of juices  Farm

  41. Slide 41: ITC's Agri Commodity Business

    ITC’s Agri Commodity Business e-Choupal: Strategic Thrust  Procurement: cost & quality optimisation – strategic sourcing support to the Branded Packaged Foods Businesses – cost-effective sourcing for exports/domestic external business  Rural retail – 23 Choupal Saagars operational 41

  42. Slide 42: ITC e-Choupal – Global Recognition

    ITC e-Choupal – Global Recognition – World Development Report 2008 published by World Bank – Stockholm Challenge Award 2006 in the Economic Development category which recognises initiatives that leverage Information Technology to improve living conditions and foster economic growth in all parts of t

  43. Slide 43: ITC - Key Financials – 2014/15

    ITC - Key Financials – 2014/15 Rs. cr. 2014/15 2013/14 Goly % Net Revenue 36083 32883 9.7 PBDIT 15017 13562 10.7 PBIT 14055 12662 11.0 PBT 13998 12659 10.6 PAT 9608 8785 9.4 On a comparable* basis : - FY15 Pre-tax Profits up 13.0% - FY15 Post-tax Profits up 12.5% *Excluding expenditure on Corporate

  44. Slide 44: Segment Revenue - 2014/15

    Segment Revenue - 2014/15 Rs. cr. Full Year 2014-15 2013-14 Goly(%) Segment Revenue (Net) a) FMCG - Cigarettes 16805 15456 8.7 - Others 9011 8099 11.3 Total FMCG 25816 23555 9.6 b) Hotels 1187 1133 4.8 c) Agri Business 8380 7752 8.1 d) Paperboards, Paper & Packaging 4974 4861 2.3 Total 40357 37301 8

  45. Slide 45: Segment Results - 2014/15

    Segment Results - 2014/15 Rs. cr. Full Year 2014-15 2013-14 Goly(%) Segment Results a) FMCG - Cigarettes 11196 9858 13.6 Liability no longer reqd written back 158 FMCG - Cigarettes 11196 10016 11.8 - Others 34 22 56.2 Total FMCG 11230 10038 11.9 b) Hotels 49 140 (64.9) c) Agri Business 904 835 8.3 d

  46. Slide 46: Segment Capital Employed - 2014/15

    Segment Capital Employed - 2014/15 Rs. cr. Full Year 2014-15 2013-14 Goly(%) Capital Employed a) FMCG - Cigarettes 5819 5705 2.0 - Others 3988 3384 17.9 Total FMCG 9806 9089 7.9 b) Hotels 4301 3625 18.6 c) Agri Business 1959 2052 (4.6) d) Paperboards, Paper & Packaging 5426 5319 2.0 Total Segment Ca

  47. Slide 47: ITC – Financial Highlights – Q3 2015/16

    ITC – Financial Highlights – Q3 2015/16 Net Revenue +3.4% PBDIT +4.1% Pre Tax Profit +5.4% Post Tax Profit +0.7% – Performance for the quarter impacted by: • Continued pressure on Legal cigarette industry • Persistent weakness in FMCG demand (particularly rural); additional impact a/c Chennai floods

  48. Slide 48: ITC - Key Financials – Q3 2015/16

    ITC - Key Financials – Q3 2015/16 Rs. Cr. Q3 15/16 Q3 14/15 Goly % Net Revenue 9103 8800 3.4 PBDIT 3605 3464 4.1 PBT 4004 3800 5.4 PAT 2653 2635 0.7 48

  49. Slide 49: Segment Revenue – Q3 2015/16

    Segment Revenue – Q3 2015/16 Rs. Cr. Q3 GOLY(%) 2015-16 2014-15 Segment Revenue (Net) a) FMCG - Cigarettes 4380 4142 5.7 - Others 2478 2314 7.1 Total FMCG 6858 6456 6.2 b) Hotels 345 330 4.5 c) Agri Business 1481 1598 (7.3) d) Paperboards, Paper & Packaging 1260 1199 5.1 Total 9944 9583 3.8 Less : I

  50. Slide 50: Segment Results – Q3 2015/16

    Segment Results – Q3 2015/16 Rs. Cr. Q3 GOLY(%) 2015-16 2014-15 Segment Results a) FMCG - Cigarettes 2984 2886 3.4 - Others 19 11 63.6 Total FMCG 3003 2898 3.6 b) Hotels 26 29 (10.0) c) Agri Business 231 239 (3.1) d) Paperboards, Paper & Packaging 241 214 12.7 Total 3501 3379 3.6 Less: i) Finance Co

  51. Slide 51: Segment Capital Employed – Q3 2015/16

    Segment Capital Employed – Q3 2015/16 Rs. cr. 2015-16 2014-15 GOLY(%) Capital Employed a) FMCG - Cigarettes 5028 5888 (14.6) - Others 4463 3681 21.2 Total FMCG 9491 9569 (0.8) b) Hotels 4419 3733 18.4 c) Agri Business 2003 1807 10.8 d) Paperboards, Paper & Packaging 5405 5482 (1.4) Total Segment Cap

  52. Slide 52: Segment Revenue – YTD Q3 2015/16

    Segment Revenue – YTD Q3 2015/16 Rs.` Cr. Crs. YTD Q3 GOLY(%) 2015-16 2014-15 Segment Revenue (Net) a) FMCG - Cigarettes 12847 12594 2.0 - Others 7000 6445 8.6 Total FMCG 19847 19039 4.2 b) Hotels 923 841 9.8 c) Agri Business 5650 6953 (18.7) d) Paperboards, Paper & Packaging 3779 3771 0.2 Total 301

  53. Slide 53: Segment Results – YTD Q3 2015/16

    Segment Results – YTD Q3 2015/16 Rs. Cr. ` Crs. YTD Q3 GOLY(%) 2015-16 2014-15 Segment Results a) FMCG - Cigarettes 8734 8490 2.9 - Others - (14) Total FMCG 8734 8476 3.0 b) Hotels 13 7 85.2 c) Agri Business 759 740 2.7 d) Paperboards, Paper & Packaging 705 731 (3.6) Total 10210 9953 2.6 Less: i) Fi

  54. Slide 54: ITC's Economic Contribution to the Nation

    ITC’s Economic Contribution to the Nation  10 year Value addition ~ Rs. 2.2 lakh crore (US$ 43 billion) – ~75% of value addition accrued to the Exchequer • Among the top tax payers in the nation (Private sector) • Excise payments represent ~ 7% of India’s total Excise collection  Foreign exchange

  55. Slide 55: Social Performance

    Social Performance  Direct employment ITC Group : over 32,000  Supported creation of 6 million sustainable livelihoods  e-Choupal: world’s largest rural digital infrastructure serving more than 4 million farmers  Social and Farm forestry initiative has greened nearly 200,000 hectares and generat

  56. Slide 56: Environmental Performance

    Environmental Performance  Carbon positive enterprise – 10 years in a row – Sequestering over twice the amount of CO2 that the Company emits  Water positive - 13 years in a row – Creating over twice the rainwater harvesting potential than ITC’s net water consumption  Solid waste recycling positiv

  57. Slide 57: Forward-looking Statements

    Forward-looking Statements Statements in this presentation describing the Company’s objectives, future prospects, estimates, expectations etc. may be “forward looking statements” within the meaning of applicable securities laws and regulations. Investors are cautioned that “forward looking statement

  58. Slide 58: For More Information & Updates

    For More Information & Updates Visit Our Website ITC Corporate App http://www.itcportal.com/default.aspx http://www.itcportal.com/app/itc-apps.aspx Subscribe to News Update http://www.itcportal.com/itcnewsticker /UserRegistration.aspx 58

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