Radico Khaitan Limited · NSE:RADICO
Radico Khaitan — B&K Conference - Trinity 2019
46 slides from Radico Khaitan's conference presentation, May 30, 2019
Slide 1: Intimation Regarding Investor Meetings
“a Radio 30" May 2019 Listing Compliances Listing Compliances Bombay Stock Exchange Ltd. National Stock Exchange of India Ltd. Phiroze Jeejeeboy Towers Exchange Plaza, 5" Floor Dalal Street Plot no. C/1, G Block Mumbai — 400001 Bandra-Kurla Complex, Bandra (E) Mumbai — 400051 Symbol: 532497 Symbol:
Slide 2: Radico Khaitan Ltd. Investor Presentation May 2019
Radico Khaitan Ltd. (BSE: 532497; NSE: RADICO) Investor Presentation May 2019
Slide 3: Agenda
Agenda 1. Industry dynamics 2 2. Company overview 6 3. Strategic direction 15 4. Financial performance 22 5. Branding & marketing 27 Investor Presentation | May 2019 1
Slide 4: India consumption growth
India consumption growth Poised to become the third largest consumer market globally India is one of the fastest growing economies in the world... … with a young demographic profile and 67% of population within legal drinking age 8.0% 8.2% 7.4% Population within legal drinking age 7.2% 7.0% 6.4% 69%
Slide 5: India consumption growth
India consumption growth Driven by rising affluence, rapid urbanization and changing consumption patterns Further, rising affluence… … rapid urbanization and changing consumption patterns towards higher quality and lifestyle products are the key growth drivers 12% Metro 20% 12% 12% Elite Share of ho
Slide 6: Spirits industry in India: Premiumization driven growth
Spirits industry in India Premiumization driven growth Sales of Spirits by Category (Volume) Sales of Spirits by Category (Value) 3.8% 4.0% Industry 6.3% 7.3% Industry 73.5% 73.8% CAGR: 2.8% CAGR: 5.6% 14.2% 61.3% 12.7% 62.4% 9.5% 9.4% Whisky: 3.2% Whisky: 5.7% 10.7% 2018: 2023: 2018: 9.4% 2023: 304
Slide 7: Industry landscape
Industry landscape A highly regulated industry with complex structure Market Structure Overview Pricing Control States A business may apply for a license for a fee defined by Company has reasonable Arunachal, Assam, Goa, Maharashtra, Free / Open market the state government subject to license availab
Slide 8: Company overview
Company overview One of the largest spirits manufacturers in India Strategically limiting 75 years of One of the largest interstate taxes and experience in spirits 1943 making. One of the 157 spirits manufacturers. Operates three 28 transport costs. Five own and 23 Year of most recognized Bottling M
Slide 9: Integrated business model
Integrated business model Transformation led by vertical integration Molasses Country Liquor Bulk Spirits ENA (Molasses/Grain) Grain Malt Spirit Distillery Barley Malt Bottle Printing IMFL Bottling Section IMFL Brands Packaging Civil Defense Exports Investor Presentation | May 2019 | Company Overvie
Slide 10: Brand portfolio
Brand portfolio Broad choice for consumers with focus on premium brands MRP Whisky Rum Brandy Vodka Gin Ready to Drink Luxury > Rs. 4,000 Semi Luxury Rs. 1,000 – 1,500 Super Premium Rs. 700 – 1,000 Semi-Premium / Premium Rs. 500 – 700 Deluxe Rs. 400 – 500 Regular Rs. 300 – 400 Ready to Drink Rs. 100
Slide 11: Global presence
Global presence Significant progress in building the brand equity in the overseas markets Exports 5% FY2019 Sales Split by Geography Domestic 95% Exports to over 50 countries across the world Investor Presentation | May 2019 | Company Overview 9
Slide 12: Consumer centric go-to-market strategy
Consumer centric go-to-market strategy Deliver the right product to customers where they want it most Pan India manufacturing platform to cater to customer needs Location Distilleries Molasses Grain Malt Total Strategically located manufacturing units in two of the largest sugarcane Capacity (millio
Slide 13: Senior management
Senior management Experienced management team with in-depth industry experience Key Executives Background Dr. Lalit Khaitan, Chairman & Managing Director • Has over 50 years of industry experience • He is on the managing committee of a number of associations, including the PHD Chamber of Commerce an
Slide 14: Senior management
Senior management Experienced management team with in-depth industry experience Key Executives Background Dilip. K. Banthiya, Chief Financial Officer • Has around 35 years of in corporate finance, treasury, international finance and corporate mergers and acquisitions • Invited to the CFO100 Roll of
Slide 15: Human resource development
Human resource development Recruit, retain and develop a team for future growth Innovation & Quality Focus Accountability Develop Recruit Leadership Communication Retain Adaptability Team Focus Investor Presentation | May 2019 | Company Overview 13
Slide 16: Corporate social responsibility
Corporate social responsibility Proactively fulfilling responsibility towards the society Infrastructure & educational support Skill development & job opportunities Practical knowledge of students studying in Radico Khaitan is conducting skill 10th & 12th classes is lagging due to development activi
Slide 17: Clearly defined strategic roadmap
Clearly defined strategic roadmap Focus on building brands and driving a profitable growth Strong cash flow generation and Innovation and brand building Premium growth deleveraging • Established track record: Magic Moments • Growth driven by Prestige & Above category • Focused on a profitable growth
Slide 18: Innovation and brand building
Innovation and brand building Twelve brands launched in the last decade, eleven are in premium categories Started the branded After creating brands Launched IMFL division and in high volume Jaisalmer, a luxury launched its first regular categories, Indian craft gin, brand 8 PM launched the first Lau
Slide 19: Innovation and brand building: Track record of developing successful brands
Innovation and brand building Track record of developing successful brands Magic Moments family of vodka leads the Indian vodka industry with 56% market share 4.5 Magic 4.0 Magic Moments Verve Electra Moments Magic flavours Vodka launched 3.5 Vodka Moments launched flavours Volume (million cases) la
Slide 20: Innovation and brand building: Track record of developing successful brands
Innovation and brand building Track record of developing successful brands Morpheus leads the super premium brandy segment with 56% Rampur Indian Single Malt testifies the Company’s innovation market share and R&D strengths • Morpheus is a premium aged brandy • Aged in the foothills of the Himalayas
Slide 21: Brand and packaging innovation
Innovation and brand building Brand and packaging innovation 8 PM Whisky Pluton Bay Rum • Packaging innovation in the 180 ml SKU with the launch • The bottle is transparent and has a rustic view of Tetra Pak • A key differentiator from the existing competition having • Offers the consumer value for
Slide 22: Rampur Single Malt receives laurels worldwide
Innovation and brand building Rampur Single Malt receives laurels worldwide Double Gold Rank #5 Awards Gold Medal World Wine & Whisky Advocate Monde Selection Spirits Awards Magazine Belgium 2017 San Francisco 2017 USA Top 10 The Features Cigar & The Spectator Whiskies of Guardian, online for 2016 W
Slide 23: The Millionaire Club 2018 global rankings
Innovation and brand building The Millionaire Club 2018 global rankings 4th Fastest growing whisky in the th 11 in the world by Largest vodka 7th Largest rum in the world by 5th Largest brandy in the world by world volume volume volume Largest whisky 11th in the world by volume Investor Presentation
Slide 24: Historical financial trend
Historical financial trend Strong premiumization focus with over 10% growth since FY2014 Prestige & Above brands (Million cases) Total volumes (Million cases) 21.61 6.12 20.36 19.49 19.50 5.05 17.85 18.26 4.75 4.04 4.06 3.72 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2014 FY2015 FY2016 FY2017 FY201
Slide 25: Historical financial trend
Historical financial trend Consistent revenue with significantly improved profitability Net Sales (Rs. Million) EBITDA (Rs. Million) and Margin (%) 16.7% 14.7% 11.3% 12.5% 10.4% 9.2% 18,572 18,465 16,518 16,799 18,228 20,969 1,935 1,704 1,861 2,101 2,674 3,492 FY2014 FY2015 FY2016 FY2017 FY2018 FY20
Slide 26: Q4 FY2019 performance highlights
Historical financial trend Q4 FY2019 performance highlights Q4 y-o-y 12 Months y-o-y FY2019 FY2018 Growth (%) FY2019 FY2018 Growth (%) Operational Performance (Million Cases) Prestige & Above 1.38 1.13 22.1% 6.12 5.05 21.3% Regular & Others 3.76 3.71 1.3% 15.48 14.45 7.1% Total Volume 5.14 4.84 6.2%
Slide 27: Reduced leverage and improved capital structure ratios
Historical financial trend Reduced leverage and improved capital structure ratios Net debt reduction Leverage ratio improvement Return on equity improvement Return on capital employed improvement Rs. 250 Cr. 1.22x +400 bps +540 bps 569.70 319.35 2.13 0.91 11.2% 15.2% 12.7% 18.1% Mar-18 Mar-19 Mar-18
Slide 28: Historical financial trend
Historical financial trend Improved profitability and cash flows resulted in deleveraging and interest cost reduction Cumulative Net Debt reduction of Rs. 628 Cr since March 2016… …Resulted in annualized interest cost saving of 58% Net Debt Position (Rs. Crore) Annual Interest Cost (Rs. Crore) 947 7
Slide 29: Brand performance
Branding & marketing Brand performance Rampur Indian Single Malt • Launched select variants: o Rampur PX Sherry: Limited 48 cask batch where American Oak were handpicked and transferred to PX Sherry Butts from Jerez, Spain o Rampur Double Cask: Matured in hand-picked American Bourbon barrels and Eur
Slide 30: Brand performance
Branding & marketing Brand performance Magic Moments Vodka • Sales volumes crossed 4 million case mark • Launched Magic Moments Verve in a new premium canister packaging • Marketing campaign with Bollywood stars Kartik Aryan and Jacqueline Fernandez • Continues to gain market share with Magic Moment
Slide 31: Focus on brand specific marketing campaigns
Branding & marketing Focus on brand specific marketing campaigns Investor Presentation | May 2019 | Branding & Marketing 29
Slide 32: Jaisalmer Indian craft gin
Branding & marketing Jaisalmer Indian craft gin Investor Presentation ||May May2019 2019| Branding & Marketing 30 30
Slide 33: Rampur Indian single malt
Branding & marketing Rampur Indian single malt Rampur Indian Single Malt Whisky: Decades of Perfection Takes forward the rich heritage of Rampur, a princely state of British India and the 75 years of distillation expertise of Radico Khaitan, the pioneers of legendary spirits in India. Aged in the fo
Slide 34: Magic Moments vodka and Magic Moments Flavours
Branding & marketing Magic Moments vodka and Magic Moments Flavours Magic Moments Vodka: Zing up Life A rage overnight, the enthralling taste of Magic Moments not only set towns buzzing but also unleashing the thirst of making every moment grand. Produced from finest grains, its triple distilled pro
Slide 35: Electra ready-to-drink and Magic Moments Verve
Branding & marketing Electra ready-to-drink and Magic Moments Verve Investor Presentation ||May May2019 2019| Branding & Marketing 33 33
Slide 36: Morpheus Blue super premium brandy
Branding & marketing Morpheus Blue super premium brandy Investor Presentation ||May May2019 2019| Branding & Marketing 34 34
Slide 37: Morpheus premium brandy
Branding & marketing Morpheus premium brandy Investor Presentation ||May May2019 2019| Branding & Marketing 35 35
Slide 38: 1965 premium rum
Branding & marketing 1965 premium rum Investor Presentation ||May May2019 2019| Branding & Marketing 36 36
Slide 39: Regal Talon whisky
Branding & marketing Regal Talon whisky Regal Talons Rare Generation Whisky: Unbeatable Spirit The finest blend that combines Indian grain spirits with imported aged scotch malts to deliver an exceptional smoothness. Regal Talons has been especially made for those who believe in conquering and alway
Slide 40: Pluton Bay rum
Branding & marketing Pluton Bay rum Pluton Bay Rare Exotic Rum: Spirit of Adventure A unique experience, with a perfect blend of international design and world-class packaging. Rare and smooth taste, offering a premium blend. A rich, full and spicy dark rum with caramel and spice on the nose. Smooth
Slide 41: After Dark premium whisky
Branding & marketing After Dark premium whisky After Dark Fine grain whisky: One life, many passions. Why wait? Night has different connotations for different people, it unfolds differently and brings a unique world of desire, adventure and excitement. It’s where fun and action begins and party neve
Slide 42: 8PM whisky
Branding & marketing 8PM whisky Investor Presentation ||May May2019 2019| Branding & Marketing 40 40
Slide 43: Contessa rum
Branding & marketing Contessa rum Contessa XXX rum: For the Man of Courage Another millionaire brand from Radico Khaitan’s straddle. This brand has surpassed expectations and has garnered strong foothold in the Indian market. This rum truly reflects the real meaning of courage and the taste simply t
Slide 44: Old Admiral brandy
Branding & marketing Old Admiral brandy Old Admiral Brandy: For Real Men Only Made specially for the men with pride, honour and courage. The splendid taste of this spectacular brandy celebrates the greatness achieved and passion for all good things in life. The classic taste perfectly blended with r
Slide 45: Contact information
Contact information This presentation contains statements that contain “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Radico Khaitan’s future business developments and economic perfo
Slide 46: Radico Khaitan Limited
Radico Khaitan Limited (CIN: L26941UP1983PLC027278) J-I, Block B-I, Mohan Co-operative Industrial Area, Mathura Road, New Delhi – 110044 Ph.: +91 11 4097 5400/5500 Fax: +91 11 4167 8841/8842 www.radicokhaitan.com