Godrej Consumer Products Limited · NSE:GODREJCP

Godrej Consumer Products — Investor Presentation (December 2021)

29 slides from Godrej Consumer Products's investor presentation, Dec 20, 2021

  1. Slide 1: Cover letter to stock exchanges on conference call presentation

    ` 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 December 20, 2021 BSE Limited Corporate R

  2. Slide 2: Volume Growth from Category Development

    Godrej Consumer Products Volume Growth from Category Development 20 December, 2021

  3. Slide 3: I've spent the last few months getting to know the company

    I’ve spent the last few months getting to know the company 2

  4. Slide 4: GCPL in a snapshot

    GCPL in a $ 13 bn $ 1.5 bn 12% snapshot Market Turnover CAGR in the Capitalisation last decade 22% +490 bps Among the top 3 Operating expansion in margin the last decade in categories of presence Presence in for 5 years in a row 6.1 mn stores in India 3

  5. Slide 5: After a few rough years, business performance is better

    After a few rough years, business performance is better 2021-H1 2011-15 2016-20 2016-20 FY21 H1 FY22 FY22 GAUM growth 13% 8% 32% Volume growth 15% 5% 9% Avg. EBITDA 14% 10% 11% Revenue growth 20% 5% 13% Lat Am growth (3%) 19% 11% Avg. EBITDA 17% 20% 22% Avg. EBITDA 13% 14% 17% Volume growth is impro

  6. Slide 6: We have some terrific strengths…

    We have some terrific strengths… Plastic Biodegradable Cost X Cost 0.5X Break through A frugal cost 1 innovation 2 Quality Obsession 3 mindset 5

  7. Slide 7: … and some more modest strengths

    … and some more modest strengths Indonesia MT GT GCPL 70% 30% Idea & Develop Investment Scale up Launch Validation FMCG 40% 60% Strong Good in-market Though somewhat 4 Processes 5 distribution 6 Urban centric 6

  8. Slide 8: Most importantly, we are blessed to have a really great portfolio

    Most importantly, we are blessed to have a really great portfolio 4 80% 30% of revenues of the world’s 2X GDP 4 ~40% of revenues 60% of profit < 20% penetration Countries population growth Products pool 7

  9. Slide 9: And categories with non-linear growth potential

    And categories with non-linear growth potential 4 3 5 Chile 3 Chile $4.5 5 China Category spend per capita ($) Category spend per capita ($) Category spend per capita ($) Malaysia 3 2 2 South Africa Thailand $1.4 Argentina 2 2 2 Indonesia $1.5 South Africa 1 Bangladesh 1 1 India $0.5 India $0.6 Indo

  10. Slide 10: But like my dance moves, we have a few weaknesses too…

    But like my dance moves, we have a few weaknesses too…

  11. Slide 11: A key one is the inability to drive category development

    A key one is the inability to drive category development Category penetration FY21 Air Fresheners (Indonesia) 28% Household Insecticide 23% Aerosols (Indonesia) Liquid Vapourisers (India) 28% Hair Colour Crème (India) 13% But stop at around a Fear of 1 We acknowledge it 2 quarter of the population 3

  12. Slide 12: Complexity: Our Achilles' Heel

    Complexity: Our Achilles’ Heel The one area we seem to be lacking across geographies and categories Leads to higher cost and inventory Kenya: INR 60 Cr FMCG business Inventory days 1.7X has 13 brands X Indonesia: 43 innovations last year Best in class Indian peer GCPL India And loss of focus from th

  13. Slide 13: But when we focus, we really win big

    But when we focus, we really win big Our consistent wins have the core of our business baked in Ghana India Soaps Revenue is up 27% and margins by Consistent advertising, pricing and 1,500 bps based on 1 relaunch product quality has given us 300 bps and 1 innovation of share in 5 years 12

  14. Slide 14: Not enough global collaboration

    Not enough global collaboration 1 category, 1 benefit, many Rollout of Goodknight in Nigeria positions shows promise 13

  15. Slide 15: And being frugal is often expensive

    And being frugal is often expensive Fixed Overheads 1.7X FY18 FY21 1.3X Advertisement X 8% 7% and Publicity Sampling 0.2% 0.2% Top 3 GCPL India GCPL Consol. Indian Peers Fixed costs can 1 be better 2 Not enough automation 3 Not enough media 14

  16. Slide 16: To summarise: From Good to Great

    To summarise: From Good to Great All we need are few key changes to an already robust base We already have We just need to Top of the line ESG - deeply rooted in Focus on a few transformative consumer purpose, values, sustainability tailwinds A top-class geographic and product portfolio Work more co

  17. Slide 17: What does category development for mosquitoes mean?

    What does category development for mosquitoes mean? Efficiency Relevance and Access 60% Penetration Distribution and Trial 20% Awareness and Product 5% Time The first 3 phases of category development need very high Advertisement & Publicity, Sampling and Distribution investment 16

  18. Slide 18: At the heart of our success lies penetration led volume growth

    At the heart of our success lies penetration led volume growth The Growth Plan Fuel for Growth Driver Contribution Save Invest Penetration gains on 50% of 50% Gross Margins Media and Sampling portfolio Moderate share gain on Discounts Salaries 15% 50% of portfolio Double Consumption led market digit

  19. Slide 19: An Operating Philosophy

    An Operating Philosophy 1. Less is more; Much less is much more 2. Consumer first, Business second 3. Think local, Act global 4. Tomorrow before Today 5. Better from within, Different from outside

  20. Slide 20: Less is more; much less is much more

    1 Fewer Bigger innovations, Consumer tasks Less is and SKUs more; much less is much more 19

  21. Slide 21: Less is more; much less is much more

    1 It’s not the green premium, it’s the green discount Less is more; much less is much more 20

  22. Slide 22: Consumer first, Business second

    2 Consumer investments delinked from short-term business performance Consumer first, Business second 21

  23. Slide 23: Think local, Act global

    3 Set up Global Category Team on 18 October, 2021 to manage 3 global categories Think local, Act global Central Local Global category strategy, Market development Product development and and Brand building innovation, Brand communication 22

  24. Slide 24: Tomorrow before today

    4 Bonus paid for ambition, but forecast for reality (98-102%) Tomorrow before today 23

  25. Slide 25: Better from within, Different from outside

    5 Better Robert Menzies Somasree Bose Tom Dawes from within, 8 years at GCPL 18 years at GCPL 10 years at GCPL Different Appointed Global Head of Categories on 18 October Appointed Chief Marketing Officer (India) on 18 October Appointed Global Head of Equity and Communication on 25 November from out

  26. Slide 26: A simple strategy for the next 3-5 years

    A simple strategy for the next 3-5 years Double-digit Volume Growth Led through category development Funded by radical simplification Consumers UVG Shareholders Employees But what does it mean in the short term? 25

  27. Slide 27: 2 factors will affect our short term

    2 factors will affect our short term Unprecedented cost inflation Indonesia: Environment + Mistakes but not structural Nov-20 Nov-21 Crude ($/barrel) 40 80 Palm Oil (MYR/t) 1,500 3,500 Tin (000 $/t) 18 36 26

  28. Slide 28: What this means for our business if costs are at current levels

    What this means for our business if costs are at current levels H2 FY22 FY23 Low Volume High Price Moderate High Price Growth Growth Volume Growth Growth Good GM recovery and moderate High GM dilution and EBITDA recovery because of media moderate EBITDA dilution and distribution investment 27

  29. Slide 29: Thank you

    Thank you fry | CONSUMER PRODUCTS

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