Tata Consumer Products Limited · NSE:TATACONSUM
Tata Consumer Products — Merger or Acquisition (January 2024)
32 slides from Tata Consumer Products's merger presentation, Jan 12, 2024
Slide 1: Proposed Acquisition of Capital Foods and Organic India
Proposed Acquisition of Capital Foods and Organic India 12th January 2024
Slide 2: Disclaimer
Disclaimer The contents of this presentation are for informational purposes only and are intended to provide only a broad overview of the proposed transactions. The presentation does not purport to be all inclusive or to provide the complete details of the proposed transactions, as may be required t
Slide 3: Glossary
Glossary Term Description 3P Third Party Manufacturer Company Tata Consumer Products CF Capital Foods Private Limited Desi Chinese Desi Chinese refers to Chinese cuisines adapted to Indian tastes Gross Margin Net Revenue less manufacturing costs includes material cost of goods sold, processing fees
Slide 4: Agenda
Agenda Overview Capital Foods Organic India Synergies Financials/Transaction Annexure Overview 4 Public
Slide 5: Overview
@) Overvie' TATA CONSUMER PRODUCTS Public
Slide 6: We are Tata Consumer Products
We are Tata Consumer Products In a nutshell Integrated F&B company #2 branded tea player with rich heritage of Tata, globally aspiring for a larger share of the FMCG World ₹ 13.8K crore consolidated Reach of 200mn+ revenue in FY23 with a households in India and market cap of ~ ₹ 1 Lac Cr. distribute
Slide 7: Over the past years, TCPL has invested significantly in building a strong foundation
Over the past 3 years, TCPL has invested significantly in building a strong foundation to drive accelerated growth Rapid expansion of distribution footprint Investment in infrastructure Strengthened digital capabilities 1.5x 3x 1.5 Shifted to Cloud 3.8 Channel partners including 2.5 0.5 distributors
Slide 8: In line with our stated strategic priorities
In line with our stated strategic priorities Strengthen & Drive Digital & Unlock Create Future Explore new Embed accelerate Innovation synergies Ready Org opportunities sustainability core business 8 Public
Slide 9: Announcing the acquisition of Capital Foods and Organic India
Announcing the acquisition of Capital Foods and Organic India… Acquisition of Capital Foods Acquisition of Organic India Massive potential to drive synergies by leveraging Tata Consumer’s distribution network, increasing scale along with scope to deliver significant operating efficiencies Public 9
Slide 10: …which add strong complementarity to Tata Consumer’s F&B platforms and fill stated whitespaces
…which add strong complementarity to Tata Consumer’s F&B platforms and fill stated whitespaces… Liquids Mini-meals Current core Pantry platform Horizon 3 platform platform Breakfast cereals Tea, Coffee Pulses, spices Sauces, Chutney Water Protein platform RTEs Salt Besan, poha, other staples Noodles
Slide 11: …and turbocharge our progress towards becoming a premium F&B platform
…and turbocharge our progress towards becoming a premium F&B platform… What we are/have What we become ✓Portfolio of market leading F&B brands ✓Strong momentum in expansion of S&D network ✓Potential to deliver steady growth over the medium-to-long term ✓Mid-teens EBITDA margin ✓A strong innovation b
Slide 12: Capital Foods
@ Capital Foo TATA CONSUMER PRODUCTS Public
Slide 13: Unique platform synonymous with the largest single cuisine block in India
Unique platform that is synonymous with the largest single cuisine block in India… Umbrella platform brands with a diverse portfolio of unique products for “in-home” consumption FY24E: ~INR 936/750 Cr Gross/Net revenue; ~50% GM; 20%+ EBITDA Margin Fast-growing F&B player: 20% CAGR in Net Revenue (FY
Slide 14: …with a product portfolio that has market leadership across categories
…with a product portfolio that has market leadership across categories… Chutneys Blended Masala Ginger Garlic Sauces Soups (Schezwan) (Desi-Chinese) Paste 87% 55% 27% 12% 27% #1 #1 #1 #1 #2 # Market position Market Share in respective categories as of 2022. Sauces include green chilli, red chilli an
Slide 15: …and strong brand recall…under-indexed on distribution
…and strong brand recall…under-indexed on distribution… Capital Foods enjoys strong brand recall Massive potential to leverage TCPL’s distribution to scale up Capital Foods1…. Significant investment to drive brand awareness Incremental GT unlock 3.8 Awareness* 88% ~10X Total retail reach Maximize gr
Slide 16: …and under-penetrated “in-home” consumption segment
…and under-penetrated “in-home” consumption segment… The Chinese Food Service (FS) market is expected to grow at 12-14% CAGR, indicating strong consumer preference (INR Cr) “Desi Chinese” transcends regional flavors, unlike the high diversity of Indian cuisines Others Indian cuisines are across regi
Slide 17: …providing category leading growth opportunities across sub-segments with high gross margins
…providing category leading growth opportunities across sub- segments with high gross margins… CF focus categories to grow at ~2x of relevant market …with high gross margin Relevant market* to grow at ~13% Market Growth (CAGR CY22-27) (INR Cr) 41,600 Overall ~24% Blended Masalas ~38% ~50% 21,400 Chi
Slide 18: …along with potential to cross synergize Capital Foods’ export strengths
…along with potential to cross synergize Capital Foods’ export strengths for Tata Consumer’s packaged foods products… Combined international presence Leverage CFs’ retailed relationships and presence to sell its own brands Canada UK Poland USA Middle East UAE Australia South Africa TCPL* Capital Foo
Slide 19: In summary
In summary Facilitates entry into high-growth categories with significant potential – INR 21,400 Cr TAM; with rapidly growing business – Capital Foods’ Net Revenue grew at ~20% CAGR between FY20-23 In line with our strategic priority to expand total addressable market into adjacent, high-margin, hig
Slide 20: Organic India
@) Organic Inc TATA CONSUMER PRODUCTS Public
Slide 21: The leading platform of “better for you” organic products with a truly organic supply chain
The leading platform of “better for you” organic products with a truly organic supply chain… TCPL to acquire upto 100% stake in Organic India 25+ years ► Leading “better for you” organic brand of F&B and herbal supplements Established products Brand ► Caters to booming, highly fragmented INR 82,000
Slide 22: …with an established brand across premium and emerging categories
…with an established brand across premium and emerging categories… Product Portfolio (Revenue Split%) Herbal Supplements Tea & Infusions Organic Packaged (~40%) (~40%) Food (~20%) Condition Specific Daily Nutrition Psyllium Green Tea Wellness Tea Infusion Ghee Honey Jaggery Powder Organic India Tea
Slide 23: …with a strong supply-chain moat and end-to-end certifications for organic products
…with a strong supply-chain moat and end-to-end certifications for organic products… Long-standing relationships with farmers enables flexible sourcing End-to-end certifications for organic products International certifications ~130 members strong operations team including Agri development and procu
Slide 24: …providing a unique opportunity to develop a high-growth, high-margin health and wellness platform
…providing a unique opportunity to strategically develop a “high- growth”, “high-margin” health and wellness platform TCPL TAM to expand by ~82K Cr globally (INR Cr.) (INR Cr.) 110,000 12,000 Operates in high growth and highly fragmented market 75,000 7,000 Winning customer trust is key to its succe
Slide 25: …by leveraging Tata Consumer’s existing distribution strength and unlocking the pharma channel
…by leveraging Tata Consumer’s existing distribution strength and unlocking the pharma channel with a relevant product basket Massive potential to leverage Tata Consumer’s domestic …Opportunity to unlock pharma channel and maximize distribution prowess with... export potential TCPL to develop the ph
Slide 26: In summary
In summary Provides an opportunity to develop a high-growth, high-margin health and wellness platform with the leading “better for you” organic brand In line with our strategic priority to expand TAM by expanding into adjacencies with high-growth and high-margin categories; INR 82,000 Cr TAM globall
Slide 27: Synergies
(04) Synergie TATA CONSUMER PRODUCTS Public
Slide 28: Potential to capture significant revenue and cost synergies
Potential to capture significant revenue and cost synergies Revenue Synergies Cost Synergies Increase GT footprint Optimize trade margins Optimize selling expenses Deliver high growth in MT and E-commerce Fixed cost optimization Enhance export footprint Higher capacity utilisation Significant synerg
Slide 29: Financials / Transaction Overview
. oc Sai eo 8 8 8 © 6 le . @ @) Financial Transaction overv TATA CONSUMER PRODUCTS Public
Slide 30: Transaction Overview
Transaction Overview TCPL to acquire 75% stake upfront; balance 25% to be acquired within 3 Transaction years Upfront purchase of upto 100% stake Structure TCPL to have full operating control and majority in board representation Potential earnout linked to FY26 financial performance Ajay G
Slide 31: Annexure
66) Annexur TATA CONSUMER PRODUCTS Public
Slide 32: Advisors to TCPL
Advisors to TCPL Financial Advisor Legal Counsel Due Diligence Advisors Technical Due Diligence Advisor 32 Public
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