Slide 1: Q2 FY 2020/21 Results
Q2 FY 2020/21 Results 6th November, 2020 Forward‐Looking Statements This presentation contains certain forward‐looking statements including those describing the Company’s strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that “forward looking state
Slide 2: Daily Covid cases rose sharply in Aug & Sep'20; Industry recovery
Daily Covid cases rose sharply in Aug & Second Wave in Europe & USA Sep’20; sharp fall in Oct’20 India : New Cases – Moving 7‐day Average (‘000s) Global : New Cases – Moving 7‐day Average (‘000s) 100 17 Sep’20 160 90 Daily New Cases – 97,894 140 80 7 Day Average – 93,199 120 70 100 60 80 50 60 40 40
Slide 3: Aggregate Demand remains significantly below pre-Covid Levels
Aggregate Demand remains significantly below pre‐Covid Levels Supply side relatively better Aggregate Demand Aggregate Supply 99.6 93.4 91.7 79.6 84.5 76.8 82.1 81.1 86.8 85.6 67.8 70.5 71.8 56.6 50.6 43.1 47.3 20.0 Nomura estimates Aggregate Demand at 77% and Aggregate Supply at 92% of pre‐COVID le
Slide 4: ITC's Strategic Responses - Covid 19
Downward revisions to FY21 GDP estimates FY21 GDP Forecast in Mar'20 in Jul'20 post Aug'20 Citi SBI Research Bank of America ICRA ‐3.5 ‐4.0 ‐5.0 ‐5.0 ‐6.0 ‐6.8 ‐7.5 ‐8.0 ‐9.5 ‐10.9 ‐11.0 FY21 GDP de‐growth estimated at ~10% 7 Agile in Adversity ITC’s Strategic Responses ‐ Covid 19 Compassionate in C
Slide 5: Q2 FY21 Results Headline Financials & Business Highlights
Contributing to the Fight Against Covid Contribution to Covid Relief Food Products to the needy Saluting Frontline Warriors 215 Cr. Contingency fund set up; over 80% deployed https://www.itcportal.com/about‐itc/shareholder‐value/pdf/lodr26062020‐d.pdf 9 Q2 FY21 Results Headline Financials & Business
Slide 6: Key Highlights: Q2 FY21
Key Highlights: Q2 FY21 Strong Sequential recovery across segments; localised lockdowns weighed on recovery momentum ‒ Gross Revenue & PBT up 26% & 37% sequentially ‒ Gross Revenue up 1.2% & PBT down 11% y‐o‐y FMCG‐Others Segment delivers strong growth ‒ Highest ever quarterly sales for all FMCG
Slide 7: FMCG Others Q2 FY21: FMCG Industry Trends
FMCG Others Q2 FY21 FMCG Industry Trends Essential products & ‘at‐home’ consumption witnessed moderation; remain at elevated levels Strong traction continued for Hygiene products Discretionary and Out‐of‐Home consumption categories witness recovery ‒ Snacks regain traction with increased mobil
Slide 8: FMCG industry trends; Strong growth in Segment Revenue
Rural > Urban FMCG industry trends Traditional Trade > Modern Trade Base Period=100 Lockdown 3 & 4 Unlock 1.0 Unlock 2.0 Unlock 3.0 Unlock 4.0 Dec + Jan + Feb 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Overall FMCG Value Index 100 75 98 106 94 100 117 108 109 104 100 Market Index 100 84 100 92 95 95 92 8
Slide 9: Sustained improvement in Profitability; 70+ New launches in H1
FMCG‐Others Segment EBITDA margin up 300 bps Sustained improvement in Profitability Robust Purposeful Brand 9.7% Innovation Portfolio 6.7% 5.0% Levers of 3.2% Margin 2.4% Power Expansion Operating Of Leverage Digital 65 90 159 221 366 FY17 FY18 FY19 FY20 FY21 Q2 Supply Chain Segment EBITDA (Rs. cr.)
Slide 10: 70+ New launches in H1
70+ New launches in H1 (2) Insight + Innovation >> Impact Mangaldeep ITC Master Chef Aashirvaad God Series Agarbatti, Treya Cones & Cooking Pastes Marigold Dhoop Organic Atta & Dals Aashirvaad Farmland On‐the‐Go Range Frozen Vegetables Sunfeast Caker 19 70+ New launches in H1 (3) Insight + Innovatio
Slide 11: Cutting Edge Digital Campaigns, Deepening Consumer Engagement
Cutting Edge Digital Campaigns Deepening Consumer Engagement Purpose led brand campaigns #AbSamjhautaNahin Global Handwashing Day # No Hand Unwashed Savlon Mask Hai Mazak Nahi Gender Inequality Festival Activations Leveraging IPL Building Brand Advocacy Nim Wash – Michelin chef Engaging Influencer
Slide 12: FMCG Cigarettes
FMCG Cigarettes Net Revenue up 33% vs. Q1; y‐o‐y decline of 14.4% Segment Revenue ₋ Localised lockdowns in July & Aug’20 impacted recovery momentum ₋ South, Metros and large town markets relatively more impacted 5121 cr. 3.9 % ₋ Temporary disruption in certain wholesale markets impacted sales ₋ Ea
Slide 13: Hotels Business Q2 FY21
Smuggled Cigarettes remain widely available, FMCG Cigarettes despite deterrent actions by authorities 25 Hotels Business Q2 FY21 ITC Royal Bengal
Slide 14: Hotels: Marginal sequential recovery; leisure locations gain traction
Marginal sequential recovery; leisure locations gain traction Hotels Aggressive cost reduction Severe impact on Business a/c restrictions on Travel & Tourism ̶ Segment Revenue at 82 cr. down 81% Vs. LY ̶ Leisure locations witness strong demand pick up ̶ New F&B initiatives receive excellent respon
Slide 15: Agri Business Q2 FY21
Excellent response to new F&B Initiatives Hotels Digital interventions ensure continued Guest Connect Launch of Takeaway/Delivery menu 29 Food for thought series Well Being Master Series 29 29 Agri Business Q2 FY21
Slide 16: Agri Business: Resilient performance
Resilient performance Agri Business Continued Value Addition to Foods Businesses Segment Revenue • Revenue growth driven by trading opportunities in Rice, Mustard, Coffee & 2985 cr. Wheat for Aashirvaad Atta 12.8 % • Value Added business up 25% (Ex. Aqua) Segment Results Strong performance in Froz
Slide 17: Paperboards, Paper & Packaging
Paperboards, Paper & Continued robust performance in Exports Packaging Sharp sequential recovery in Domestic market • Segment Revenue Robust growth in Exports partly offset by subdued demand in Domestic market • Strong recovery in Liquor, Tobacco, Cup‐Stock, Décor & Personal Care segments 1,459 cr.
Slide 18: Key Financials: Q2 FY21
Key Financials: Q2 FY21 ` cr. Q1 CY GOLY Q2 CY Q2 LY GOLY 9,436 ‐16.9% Gross Revenue 11,892 11,750 1.2% 8,875 ‐20.5% Net Revenue 11,150 11,542 ‐3.4% 2,647 ‐42.0% EBITDA 4,061 4,562 ‐11.0% 3,128 ‐35.0% PBT 4,274 4,808 ‐11.1% 2,343 ‐26.2% PAT 3,232 4,023 ‐19.7% • Strong Sequential recovery across segm
Slide 19: Segment Results Q2 FY21
Segment Results Q2 FY21 (Rs. cr.) Q1 Q2 2020‐21 2020‐21 2019‐20 GOLY% Segment Results • FMCG Others: Segment EBITDA up 66% to 366 cr. (+300 2356 a) FMCG ‐ Cigarettes 3245 3844 (15.6) bps) 125 ‐ Others 253 90 179.3 ‐ Enhanced scale and operating efficiencies despite 2482 Total FMCG 3497 3935 (11.1) g
Slide 20: Segment Results; ITC – A Global Exemplar in Sustainability
Segment Results Cigarettes FMCG Others Hotels Agri Paper Q2 FY20/Q2 FY21 Growth Vs. # SPLY ‐16% 1.8x 17/‐185 3% ‐7% Q1 FY21/Q2 FY21 Growth Vs. Q1 FY21 38% 100%+ ‐243/‐185# 43% 1.1x # Represents absolute profit / loss (Rs. Cr.) in the corresponding periods 39 ITC – A Global Exemplar Impactful Social
Slide 21: ITC: Creating Enduring Value
Top ESG ratings by Sustainalytics & MSCI ^ ITC Rated AA by MSCI‐ESG Highest amongst Global Tobacco cos. & ahead of FMCG peers ^ 41 ITC: Creating Enduring Value A passion for profitable growth…. …..in a way that is sustainable……. …. and inclusive 42
Slide 22: Thank You
Links Product/initiative Link ‘Yippee!’ Noodles https://youtu.be/0zk6Hke_uVY Disinfectant Spray https://www.youtube.com/watch?v=6Wpa2nLiYdk Mangaldeep Temple Fragrance of God range https://youtu.be/3E7Ccy13WXY https://www.youtube.com/watch?v=I‐ Candyman Fantastik iYYyg7hgI&feature=emb_rel_end Bingo!