Itc Limited · NSE:ITC
Itc — JP Morgan India Investor Summit 2020
44 slides from Itc's conference presentation, Sep 22, 2020
Slide 1: Participation in Investor Conference cover letter
22nd September, 2020 The Manager The General Manager The Secretary Listing Department Dept. of Corporate Services The Calcutta Stock National Stock Exchange of BSE Ltd. Exchange Ltd. India Ltd. P. J. Towers 7, Lyons Range Exchange Plaza, Dalal Street Kolkata 700 001 Plot No. C-1, G Block Mumbai 400
Slide 2: Enduring Value / cc addresses
Enduring Value cc: Securities Exchange Commission Division of Corporate Finance Office of International Corporate Finance Mail Stop 3-9 450 Fifth Street Washington DC 20549 U.S.A. cc: Societe de la Bourse de Luxembourg 35A Boulevard Joseph II L-1840 Luxembourg
Slide 3: Creating Multiple Drivers of Growth through Responsible Competitiveness
Creating Multiple Drivers of Growth through Responsible Competitiveness Focus on FMCG Business & Sustainability JP Morgan India Investor Summit 2020 21st September 2020 1
Slide 4: ITC's Non-Cigarette Business Portfolio
ITC’s Non-Cigarette Business Portfolio Foods Personal Care Education & Stationery Safety Matches & Incense Sticks FMCG Hotels Paperboards, Paper & Packaging Agri Business 2
Slide 5: Strategic directions – ITC FMCG
Strategic directions – ITC FMCG Invest in cutting-edge product Impactful campaigns in conventional & development & R&D capabilities digital media Leverage LSTC for innovation Purpose-led brands Consumer - first-to-market, science-driven R&D and Connect & Deepen Digital/social media consumer differen
Slide 6: Foods – Driving Synergistic Growth
Driving Synergistic Growth Brand Building Capability Life Sciences & Deep & Wide Technology Distribution Capability Network High Quality Foods Agri Sourcing Consumer Expertise Engagement Packaging Cuisine Knowhow Knowledge 4
Slide 7: Rapid scale up of FMCG businesses
Rapid scale up of FMCG businesses (` cr.) 14000 12844 12505 11329 10512 12000 9731 10000 9038 8122 8000 7012 6000 5545 4482 4000 3642 2000 0 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 3rd Largest FMCG Player in India One of the fastest growing Foods Busin
Slide 8: Significant increase in Scale & Profitability of FMCG businesses
Significant increase in Scale & Profitability of FMCG businesses (` cr.) Segment Revenue Segment EBITDA 8122 10512 12844 165 265 914 FY14 FY17 FY20 FY14 FY17 FY20 Consistent improvement in EBITDA Margin 7.6% 8.1% 6.7% 7.7% 7.0% 5.9% 5.4% 5.7% 5.0% 4.5% 4.3% 3.2% 3.2% 2.4% 2.6% 2.4% 1.9% 58 69 128 18
Slide 9: Created over 25 world-class mother brands for Indian Consumers
Created over 25 world-class mother brands for Indian Consumers 7
Slide 10: Category Leadership in a relatively short span of time
Category Leadership in a relatively short span of time Annual Consumer Spends 19700 cr. (FY20) Market Standing ~6000 cr. # 1 in Branded Atta # 1 in Notebooks ~4000 cr. #1 in Cream ~2700 cr. Biscuits # 2 in Deodorants # 3 Overall ~1400 cr. # 1 in Bridges segment # 2 in Bodywash # 1 in Potato Chips
Slide 11: Branded Packaged Foods – Diverse Portfolio, Strong Brands
Branded Packaged Foods – Diverse Portfolio, Strong Brands Biscuits, Staples, Snacks, Noodles & Pasta, Confectionery, Ready to Eat, Juices, Dairy, Chocolates and Coffee 9
Slide 12: Personal Care
Personal Care Soaps, Shower Gels, Fragrancing products, Antiseptic Liquids, Hand Wash, Sanitizers, Disinfectants, Wet Wipes, Skin Care, Shampoos, Floor Cleaner, Fruit & Vegetable Wash 10
Slide 13: ITC FMCG – well positioned for rapid growth
ITC FMCG – well positioned for rapid growth Market Size potential : Illustrative Categories (` cr.) Snacks Spices Biscuits Branded Atta 143000 110000 111000 50000 87000 100000 70000 31000 61000 56000 39000 19000 32000 38000 22000 12000 2020 2025 2030 2035 2020 2025 2030 2035 2020 2025 2030 2035 2020
Slide 14: First-to-Market Innovations
First-to-Market Innovations Dark Fantasy ChocoFills Luscious chocolate filling Sunfeast YiPPee! Sunfeast Wonderz B Natural Juices Sunbean Beaten Caffe enrobed within a rich Unique round shape and Real fruit inclusions Aseptic PET format cookie non-sticky noodles Savlon Savlon germ Nimwash Engage Fli
Slide 15: Premiumising the Portfolio
Premiumising the Portfolio Aashirvaad Select and Nature’s Fiama handwash B Natural APET Juices Fabelle India’s first Candyman Jelimals, Tadka Super Foods range chocolates Ruby Time & Fantastik chocolate Premium Perfume range Classmate Asteroid Paperkraft premium Body Wash with fragrance Dermafique S
Slide 16: Building a 'Free From' and 'Good For You' portfolio
Building a ‘Free From’ and ‘Good For You’ portfolio Aashirvaad Aashirvaad Aashirvaad Nature’s Super Foods range ITC Master Chef B Natural Sugar Release Control Multigrain Atta Ragi Flour, Multi Millet Mix, Gluten Free Flour Super Safe Prawns immunity juices Atta Sunfeast YiPPee! Veda Marie Light Bin
Slide 17: Winning in Strategic & Emerging Channels
Winning in Strategic & Emerging Channels Modern Trade e-Commerce Key Strategies Deepening capability Developing tailored products Strategic planning with large accounts Explosive growth in e-Com – MT Growth @ 2x of General Trade holds immense potential On-the-Go and Institutional Food Service Opport
Slide 18: Leveraging Digital to deepen consumer engagement – The 3C's
Leveraging Digital to deepen consumer engagement – The 3C’s Content Connect Commerce Innovative & Unique Recipes ITCstore.in Fostering Learning through Gamification & Augmented reality Online Entertainment & Recipes Classmateshop.com Devotional Content Brand Advocacy by employees myClassmate Mangald
Slide 19: Sixth Sense - Marketing Command Centre
Sixth Sense - Marketing Command Centre Marketing Command Centres operational in Kolkata & Bengaluru Dashboards on Social Media & Brand Performance Indicators (online / offline) Nearly 2000 creatives generated 210 Mn+ impresssions 185 Mn+ Reach Social Listening Tracking Reporting performance Analytic
Slide 20: Education & Stationery Products
Education & Stationery Products Classmate - No. 1 Notebook brand in the country Superior quality in-house paper + best-in-class distribution Adjacent Stationery products – Pens, Geo Boxes etc. 18
Slide 21: Incense sticks (Agarbattis) & Safety Matches
Incense sticks (Agarbattis) & Safety Matches Mangaldeep No. 1 Dhoop brand; No. 2 overall AIM No.1 Matches Brand 19
Slide 22: ICML – Cost advantage, Freshness, Agility and Scalability
ICML – Cost advantage, Freshness, Agility and Scalability Centres of manufacturing excellence - safety, quality, cost, people capability KAPURTHALA HARIDWAR Recipe secrecy & integrity GUWAHATI Protection of manufacturing know-how ULUBERIA PANCHLA Fresher products RANJANGAON KHURDA Distance-to-market
Slide 23: LSTC – Cutting-edge R&D capability
Cutting-edge R&D capability Life Sciences & Technology Centre, Bengaluru 350 highly qualified Partnering with Global R&D scientists; over centers and 900 patent Academia applications LSTC Pilot Plants for all State of the Art product Analytics Labs categories 21
Slide 24: Unique sources of competitive advantage – FMCG
Unique sources of competitive advantage – FMCG • Superior Consumer Insight discovery & Established Trademarks Key levers of profitable growth • Deep rural linkages, agri-sourcing, culinary expertise of Hotels • Purposeful Innovation • Relentless focus on quality, hygiene and food safety • Brand Port
Slide 25: Covid-19 - Response
Covid-19 - Response Agility in Adversity I Compassionate in Crisis 23
Slide 26: Responding with Speed & Agility > 40 new launches in last 5 months
Responding with Speed & Agility > 40 new launches in last 5 months Savlon Savlon Hexa Savlon Savlon Disinfectant Spray Hand Sanitiser, Soaps and Bodywash Multi Purpose disinfectant 50p Sanitiser pouch spray & liquid Savlon B Natural Vivel Aashirvaad Svasti NimWash Germ Protection Wipes Neem Oil + Al
Slide 27: Strategic Interventions: Supply chain & Distribution
Strategic Interventions : Supply chain & Distribution Business Continuity & Alternative Channels of Agility & Innovation Managing Rapid Bounce-Back Distribution in Execution Uncertainty & Risk Rapid capacity ramp up (Sanitisers ITC Store on Wheels; Serviced Rapid scale up of Direct-to- Short
Slide 28: Strong Performance Delivery in Q1 FY21
Strong Performance Delivery in Q1 FY21 • Comparable Revenue up 19%; EBITDA margins up 170 bps Atta, Noodles, Biscuits, Dairy, Handwash & Sanitizers posted strong growth – market share gains • 9R Staples, Convenience Foods and Discretionary/ OOH Heath & Hygiene Products c. 75% (Growth of 34%) c. 25
Slide 29: Agri Business
Agri Business Leading Agri Business player in India & Pioneer in rural transformation Sourcing & Supply operations spread across 22 states Largest procurer of wheat after FCI 5th largest leaf tobacco exporter in the world - 39% value share of Indian exports 27
Slide 30: Agri SBU: Strategic Direction
Agri SBU: Strategic Direction Deliver sustainable competitive edge to ITC’s FMCG Businesses through agri sourcing Enhance scale & scope of external business leveraging deep and wide sourcing network Build a robust portfolio of value-added products to expand margin Establish B2B & B2C brands Develop
Slide 31: Strategic sourcing support to Foods Businesses
Strategic sourcing support to Foods Businesses Wheat Potato Fruit Pulp Spices Milk New Varietal Security of Supply High quality at Sourcing Food Safe Sourcing of high Development competitive prices products quality milk through Yield improvement farmer network, Securing premium Develop supply chain
Slide 32: Scaling up presence in Value Added Agriculture
Scaling up presence in Value Added Agriculture 30
Slide 33: ITC – Hotels and Paperboards & Packaging businesses
ITC – Hotels and Paperboards & Packaging businesses Paperboards & Packaging Hotels Clear market leader - scale, profitability & One of the fastest growing hospitality chains in sustainability India Best-in-class operating metrics Trailblazer in Green Hoteliering Fully Integrated Operations
Slide 34: ITC's Sustainability Initiatives
ITC’s Sustainability Initiatives Creating Innovative, Synergistic models Sustainable competitive advantage & foster inclusive growth 32
Slide 35: ITC – A Global Exemplar in Sustainability
ITC – A Global Exemplar in Sustainability 30 33
Slide 36: Top ESG ratings by Sustainalytics & MSCI
Top ESG ratings by Sustainalytics & MSCI ^ ITC Rated AA by MSCI-ESG Highest amongst Global Tobacco cos. & ahead of FMCG peers ^ 34
Slide 37: Social and Farm Forestry
Social and Farm Forestry Greening over 8,00,000 acres High yielding varieties Clonal Saplings grown in Creating 147 million person days of developed by ITC R&D Nursery employment 35
Slide 38: Watershed Development
Watershed Development Nearly 19,000 structures creating rainwater harvesting potential of 38.2 Million KL irrigating 11.3 lakh acres (3x of ITC’s net water consumption) 36
Slide 39: Baareh Mahine Hariyali: ITC's Pilot project in Eastern UP
Baareh Mahine Hariyali : ITC’s Pilot project in Eastern UP ITC e-Choupal: ITC’s Agri Footprint in UP Pradesh e-Choupal district Baareh Mahine Hariyali district Multiplying Farmer Incomes 2,00,000 30% to 75% farmers covered. To be income rise for those who rolled out to over 10 lakh have implemented
Slide 40: Impactful Social Performance
Impactful Social Performance 38
Slide 41: Global Recognition
Global Recognition World Business and Development Inaugural UNDP-ICC Award Sustainability Leadership Award, Zurich Award 2012 at the Rio+20 UN Summit The Stockholm Challenge Award Development Gateway Award 39
Slide 42: ITC: Creating Enduring Value
ITC: Creating Enduring Value A passion for profitable growth…. …..in a way that is sustainable……. …. and inclusive 40
Slide 43: Thank You
Thank You 41
Slide 44: Forward-looking Statements
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 statements” are based on certain assumptions o