Itc Limited · NSE:ITC
Itc — Investor Presentation (August 2010)
45 slides from Itc's investor presentation, August 2010
Slide 1: ITC Limited
ITC Limited One of India’s Most Admired Companies 1
Slide 2: Performance Track Record - Snapshot
Performance Track Record - Snapshot Rs crores Cagr 95-96 Rs Crs 95-96 09-10 to 09-10 Gross Turnover 5115 26,260 12.4% Net Turnover 2536 18,153 15.1% Market Capitalisation 5571 100,475 22.9% PBDIT 584 6,677 19.0% PBIT 536 6,069 18.9% PBT 452 6,015 20.3% PAT (After Exceptional Items) 261 4,061 21.7% E
Slide 3: ITC - Key Financials – 2009/10
ITC - Key Financials – 2009/10 09/10 08/09 Rs crs Goly % Actuals Actuals Gross Turnover External 26260 23144 13.5 Net Turnover External 18153 15612 16.3 PBDIT 6677 5393 23.8 PBIT 6069 4844 25.3 PBT 6015 4826 24.7 PAT 4061 3264 24.4
Slide 4: 2009/10: Segment Revenues
2009/10: Segment Revenues Full Year 2009-10 2008-09 Goly 1. Segment Revenue (Gross) a) FMCG - Cigarettes 17,283 15,115 14.3 - Others 3,642 3,014 20.8 Total FMCG 20,925 18,129 15.4 b) Hotels 911 1,020 (10.7) c) Agri Business 3,862 3,846 0.4 d) Paperboards, Paper & Packaging 3,234 2,822 14.6 Total 28,
Slide 5: 2009/10: Segment Results
2009/10: Segment Results Full Year 2009-10 2008-09 Goly 3. Segment Results a) FMCG - Cigarettes 4,938 4,184 18.0 - Others (350) (483) 27.7 Total FMCG 4,589 3,700 24.0 b) Hotels 217 316 (31.5) c) Agri Business 436 256 70.3 d) Paperboards, Paper & Packaging 684 509 34.5 Total 5,926 4,781 23.9 Less : i
Slide 6: 2009/10: Segment Capital Employed
2009/10: Segment Capital Employed Full Year 2009-10 2008-09 Goly 4. Capital Employed a) FMCG - Cigarettes * 2,998 2,936 2.1 - Others 1,719 2,101 (18.2) Total FMCG 4,717 5,037 (6.4) b) Hotels 2,457 2,189 12.3 c) Agri Business 1,580 1,039 52.1 d) Paperboards, Paper & Packaging 3,711 3,771 (1.6) Total
Slide 7: ITC - Key Financials – Q1 2010/11
ITC - Key Financials – Q1 2010/11 Q1 10/11 Q1 09/10 Rs Crs Goly % Actuals Actuals Gross Turnover External 7043 6131 14.9 Net Turnover External 4817 4148 16.1 PBDIT 1736 1475 17.7 PBIT 1576 1323 19.1 PBT 1570 1317 19.2 PAT 1070 879 21.8
Slide 8: Q1 2010/11: Segment Revenues
Q1 2010/11: Segment Revenues Rs. crores Q1 2010-11 2009-10 Goly(%) 1. Segment Revenue (Gross) a) FMCG - Cigarettes 4670 4161 12.2 - Others 1006 759 32.4 Total FMCG 5675 4920 15.4 b) Hotels 225 186 21.2 c) Agri Business 1350 941 43.5 d) Paperboards, Paper & Packaging 829 731 13.5 Total 8079 6777 19.2
Slide 9: Q1 2010/11: Segment Results
Q1 2010/11: Segment Results Q1 2010-11 2009-10 Goly(%) Segment Results a) FMCG - Cigarettes 1305 1125 16.0 - Others (89) (100) 10.5 Total FMCG 1216 1026 18.5 b) Hotels 39 31 25.9 c) Agri Business 123 100 23.2 d) Paperboards, Paper & Packaging 188 128 47.5 Total 1566 1284 22.0 Less : i) Interest (Net
Slide 10: Segment Capital Employed
Segment Capital Employed Q1 2010-11 2009-10 Goly(%) 4. Capital Employed a) FMCG - Cigarettes * 3032 2632 15.2 - Others 1888 1929 (2.1) Total FMCG 4920 4561 7.9 b) Hotels 2511 2272 10.5 c) Agri Business 1441 1389 3.7 d) Paperboards, Paper & Packaging 3636 3707 (1.9) Total Segment Capital Employed 125
Slide 11: ITC: One of India's most valuable and admired companies
ITC One of India’s most valuable and admired companies One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004 Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 5 bln. & are rated as the ‘most attractive companies for investors’ Only Indian FMCG Company to featur
Slide 12: Awards & Accolades (1)
Awards & Accolades (1) • ‘ITC received the FICCI Outstanding Vision Corporate Triple Impact Award 2007 for invaluable contribution to the triple bottom line benchmarks of building economic, social and natural capital for the nation. • Global Leadership Award conferred on Chairman Y C Deveshwar by th
Slide 13: Accolades & Awards (2)
Accolades & Awards (2) • e-Choupal initiative wins global recognition: – Stockholm Challenge Award 2006 in the Economic Development category which recognises initiatives that leverage Information Technology to improve living conditions and foster economic growth in all parts of the world. – First In
Slide 14: ITC Business Portfolio
ITC Business Portfolio FMCG Cigarettes Foods Personal Care Lifestyle Retailing , Education & Stationery Matches Incense Sticks Paper & Agri Information Hotels Packaging Technology Business
Slide 15: Strategy of Organisation to manage diversity of Portfolio
Strategy of Organisation to manage diversity of Portfolio Formal 3-tiered governance structure: Board of Directors : Comprising executive (3) and non-executive directors (11) Strategic supervision Corporate Management Committee : Comprising executive directors and senior managers Strateg
Slide 16: Corporate Strategies
Corporate Strategies Sustain multiple drivers of growth, matching internal capabilities with emerging market opportunities Pursue World class competitiveness in all businesses and across the entire value chain Best-in-class in terms of: • Internal Vitality • Market Standing • Profitability S
Slide 17: FMCG - Cigarettes
FMCG - Cigarettes 17
Slide 18: ITC's Cigarettes Business
ITC’s Cigarettes Business Market leadership Powerful brands across segments Leadership in all segments - geographic & price Extensive FMCG distribution network Direct servicing of 1,00,000 markets & 2 million retail outlets World-class state-of-the-art technology and products Investmen
Slide 19: Cigarettes: Growth potential
Cigarettes: Growth potential Cigarettes account for less than 15% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation • Cigarettes (15% of tobacco consumption) contribute nearly 85% of Revenue to the Exchequer from tobacco sector Of the 58% of adult Indian
Slide 20: Per Capita Consumption of Tobacco in India
Per Capita Consumption of Tobacco in India (gms per year) 1256 1145 743 438 461 468 China USA Pakistan Nepal India World Source:World Cigarettes – ERC Statistics, Tob Board & Industry Estimates – gms/Yr Per Capita consumption is ~ 60% of World Average
Slide 21: Per Capita Cigarette Consumption
2920 Per Capita Cigarette Consumption 3000 2500 No Of Cigarettes 2000 1886 1771 1500 1000 844 618 488 500 303 243 85 0 Bangladesh Average Japan Pakistan India USA China Nepal Sri Lanka World Countries Per Capita consumption in India ~ 10% of World average 21
Slide 22: Cigarettes: Challenges
Cigarettes: Challenges Competitive context • Competition including international majors becoming more active • Domestic illegal volumes still very strong. Along with smuggled contraband, has emerged as substantive segment Regulatory & Taxation • Pictorial Graphic warnings in place w.e.f. June 09
Slide 23: Hotels & Tourism
Hotels & Tourism 23
Slide 24: Hotels & Tourism industry
Hotels & Tourism industry Foreign arrivals into India: 5 million appx. Vs. 35 million in China • The two nations were on par 2 decades ago at 750,000 arrivals Today, Beijing alone has as many hotel rooms as the whole of India India’s luxury rooms availability lower than even smaller East Asian
Slide 25: Indian Hotel Industry
Indian Hotel Industry Current supply – appx. 110,000 rooms of which 5 Star category accounts for appx. 30% India needs an additional 50,000 rooms in the next 2/3 years to service projected tourist arrivals Present mismatch between supply and demand expected to persist over the short term As
Slide 26: ITC's Hotel Business
ITC’s Hotel Business ITC-Welcomgroup : a leading hotel chain in India • Established presence in key business locations • Over 6000 rooms under 4 distinct brands Category Brand Positioning Luxury ITC Hotel: Luxury Collection "Mansions of Luxury" Upper upscale WelcomHotel: Sheraton "Passion for Qual
Slide 27: ITC's Hotel Business
ITC’s Hotel Business • Manages 34 full service mid-market properties (2000 + rooms ) under the Fortune Hotels brand – 21 more hotels in pipeline; room inventory- 4800 appx. – 100% subsidiary company : Fortune Park Hotels Ltd. • Also operates 60 properties under the ‘WelcomHeritage’ brand in 19 state
Slide 28: Paperboards, Paper & Packaging
Paperboards, Paper & Packaging 28
Slide 29: Indian paperboard market
Indian paperboard market Annual paperboard demand – appx. 2 million tonnes Fragmented capacity & obsolete technology Low per capita usage at around 7 kgs p.a. (world average – over 55 kgs p.a.) Indian paperboard market growing at 7% p.a. Value Added Coated board - the fastest growing segme
Slide 30: ITC's Paperboards Business
ITC’s Paperboards Business Market leader in growth segment - value added coated boards World-class contemporary technology • Ozone bleached Pulp Mill fully operational – only one of its kind in Asia meeting world-class environmental standards Internationally competitive quality and cost Soci
Slide 31: ITC's Paperboards & Packaging businesses
ITC’s Paperboards & Packaging businesses Capacity expansion projects installed – at optimum capacity utilization • 120000 TPA Pulp Mill – Machine stabilised • 100000 TPA paper machine (to support Education & Stationery business growth plans) Machine stabilized • Investment in 100,000 TPA paperboar
Slide 32: Agri Businesses
Agri Businesses - Leaf Tobacco - Agri Commodities 32
Slide 33: Indian Leaf Tobacco industry
Indian Leaf Tobacco industry India – the third largest producer of tobacco However, India’s share is only 7% in world tobacco trade Upgradation of tobacco consumption from other formats to cigarettes will enable: • growing domestic base & larger opportunities for value added exports ITC – In
Slide 34: ITC's Agri Commodity Business
ITC’s Agri Commodity Business Farm linkages in 14 states covering Soya, Wheat, Marine products, Coffee etc. Focus on value added agri commodities Unique CRM programme in commodity exports Leveraging IT for the transformational ‘e-Choupal’ initiative • Rural India’s largest Internet-based inter
Slide 35: e-choupal: Strategic Thrust
e-choupal: Strategic Thrust Procurement: cost & quality optimisation • strategic sourcing support to the Foods business (support creation of verticals in wheat, soya, corn, potato etc.) • cost-effective sourcing for exports/domestic external business Rural Distribution • ‘last mile connectivity’
Slide 36: Future Growth & Value Capture: New FMCG Initiatives
Future Growth & Value Capture New FMCG Initiatives 36
Slide 37: Strategic Rationale
Strategic Rationale Blend multiple competencies residing within the ITC Group to create new avenues of growth Best fit between internal capabilities and emerging market opportunities Each segment enhances the depth and width of ITC’s FMCG distribution capability Business model retains critic
Slide 38: Branded Packaged Foods
Branded Packaged Foods Leverages: • Unique Agri sourcing skills • ITC Welcomgroup’s specialist cuisine & bakery knowledge • FMCG distribution synergies • ITC R&D Centre, Bangalore 5 chosen categories: • Staples – Aashirvaad Atta, Salt, Spices • Biscuits – Sunfeast • Salty Snacks – Potato chips,
Slide 39: Branded Packaged Foods
Branded Packaged Foods • Aashirvaad Atta: – Current market leader amongst national branded players; leverages the e- choupal network for cost-quality optimisation and region specific offerings • Sunfeast Biscuits: – Differentiated & innovative products; continues to build consumer franchise; distrib
Slide 40: Lifestyle Retailing
Lifestyle Retailing Leverages trade mark and services expertise of hotels Relaxed wear market growth > 20% p.a Upmarket product range available in exclusive Wills Lifestyle stores (56) and multi-branded outlets/ large format retail stores across the country • Premium segment comprising the ‘Cl
Slide 41: Education & Stationery Products Business
Education & Stationery Products Business Leverages print and paper know-how. Forward linkages with new paper capacity (already commissioned). An emerging (currently Rs 9000 cr stationery) market in India - growth driven by increasing cross-cultural exposure, govt. spending on education • Mostly
Slide 42: Safety Matches
Safety Matches Current industry consumer spend estimated at Rs. 1250 crores p.a. for 24 billion match boxes Fragmented supply base arising from policy of reservation for small scale industry Mass market moving from 0.50 p price point to Re 1.00. ITC markets its brands with value added produc
Slide 43: Incense sticks (Agarbattis)
Incense sticks (Agarbattis) Current industry consumer spend estimated at over Rs. 900 crores p.a. Fragmented supply base arising from policy of reservation for small scale industry ITC markets its brands with value added products across each price point • ‘Mangaldeep’ : second largest national
Slide 44: Personal Care Products
Personal Care Products Current market size estimated at over Rs. 29000 crores (growing at 12% p.a.) ITC presence established in Body Wash (Soaps, shower gels), Hair Care (Shampoos, conditioner). Product portfolio enlarged with the launch of Fairness cream. Portfolio approach straddling all c
Slide 45: Forward-looking Statements
Forward-looking Statements Statements in this presentation describing the Company’s objectives, future prospects, estimates, expectations etc. may be “forward looking statements” within the meaning of applicable securities laws and regulations. Investors are cautioned that “forward looking statement