Zydus Wellness Limited · NSE:ZYDUSWELL
Zydus Wellness — Q1 FY24 Earnings Presentation
27 slides from Zydus Wellness's earnings presentation, Aug 3, 2023
Slide 1: Q1 FY24 Earnings Presentation
Q1 FY24 Earnings Presentation August 3, 2023
Slide 2: Safe Harbour Statement
Safe Harbour Statement This presentation contains certain forward-looking statements including those describing Zydus Wellness’s strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that “forward looking statements” are based on certain expectations,
Slide 3: Agenda
Agenda Financial performance – Q1 FY 24 Zydus Wellness: Operating environment- Overview A leading Consumer Wellness Brand Highlights Company in India The Road Ahead 3
Slide 4: Financial Performance & Operating Environment - Overview
Financial Performance & Operating Environment - Overview
Slide 5: Operating environment stable, External factors impacting demand
Operating environment stable, External factors impacting demand 01 02 Erratic weather Moderation in patterns commodity rates Unseasonal rains across key states Commodity rates continues to impacting off-takes of summer moderate sequentially during the products across industries quarter 03 04 Slow de
Slide 6: Proactively addressing all cohorts on safety
Concerns over consumption of Non-Nutritive Sweeteners raised again WHO assessment outcome • Aspartame declared “possibly carcinogenic” → There is limited / insufficient evidence in humans and animals • Declared to be safe at recommended consumption doses Proactively addressing all cohorts on safety
Slide 7: Moderating price inflation to help improve Gross Margins going ahead..
Moderating price inflation to help improve Gross Margins going ahead.. Milk RPO* DMH* +33% vs Q1 FY22 -14% vs Q1 FY22 +29% vs Q1 FY22 +4% vs Q1 FY23 -31% vs Q1 FY23 +12% vs Q1 FY23 +0.3% vs Q4 FY23 +0% vs Q4 FY23 +1% vs Q4 FY23 Q1FY22 Q1FY23 Q4FY23 Q1FY24 Q1FY22 Q1FY23 Q4FY23 Q1FY24 Q1FY22 Q1FY23 Q4
Slide 8: Gross margin recovery with right actions…
Gross margin recovery with right actions… Continuous efforts to improve gross margins with calibrated price increases across portfolio at appropriate time without compromising on growth Unfavorable product mix due to unseasonal rains in summer season impacted the gross margin recovery for Q1 FY24 Gr
Slide 9: Segment performance snapshot
Segment performance snapshot Net Sales (INR Million) Food & Nutrition 6930 6992 Sales Growth -1.6% Y-o-Y Q1FY23 Q1FY24 Y-o-Y Gr. On Personal Care Net Sales O.9% Sales Growth Y-o-Y 11.8% 9
Slide 10: Financial Highlights
Financial Highlights INR Million Q1 FY24 YoY Growth % Net Sales 6,992 0.9% Total Income from Operations 7,021 0.8% Gross Contribution 3,691 -2.4% EBITDA 1,165 -21.3% Reported PAT* 1,104 -19.4% Adjusted PAT 1,246 -10.9% ❑ Gross margin on net sales was at 52.4% (-165bps YoY) mainly impacted due to unf
Slide 11: Brand Highlights
Brand Highlights Waliness
Slide 12: Leaders in 5 out of 6 categories
Leaders in 5 out of 6 categories Strengthen “Energy” credential with new launches Strengthening core through Relaunch of the Brand • Category leading brand with 99% plus brand recall • Focused on scientifically proven claims on memory and • ~60% market share in the category concentration and enhance
Slide 13: Continuing to strengthen brand leadership
Continuing to strengthen brand leadership Glucose Sugar Blended Prickly heat *Facial Fat Category HFD Scrub Peel-off Dairy Powder substitute Sugar powder cleansing spread Mkt. Rank 1 5 1 NA 1 5 1 1 1# NA Mkt. Share % 59.9 4.5 96.2 NA 35.5 6.2 42.4 78.7 NA NA MS change YoY -57 -31 + 67 NA +117 -48 +4
Slide 14: Quarterly brand performance
Quarterly brand performance Supporting brand with activations and Strengthened “Energy” credential with new communication launches ❖Quarterly volume offtakes growing faster than the category for ❖Unseasonal rains across country during summer season impacted the brand and the brands volume market sha
Slide 15: Quarterly brand performance
Quarterly brand performance Growing faster than the market Summers driving the growth ❖Differentiated brand in the skin care space, uniquely positioned to ❖Despite intensive competitive scenario building around the brand, meet facial cleansing needs of younger audience the brand registered strong gr
Slide 16: Quarterly brand performance
Quarterly brand performance Strong growth across the range of products Offtake turnaround continues to get stronger ❖Sweeteners portfolio witnessed a mid single digit offtake growth ❖The brand renovation with a wider portfolio segment around during the quarter dairy and non-dairy, supported by focus
Slide 17: Strong momentum in International business continues..
Strong momentum in International business continues.. UAE, Bahrain, Qatar, Kuwait, Myanmar, Malaysia, Taiwan, Kingdom of Saudi Arabia, Pakistan, Sri Lanka, Bangladesh, Oman, Lebanon Nepal, Bhutan, Maldives, Hong Kong ❖ Sugar Free franchise and Complan constituting ~ 90% of the overall business ❖ Sig
Slide 18: Campaigns during the quarter (1/3)
Campaigns during the quarter (1/3) Driving consumption of Sugar Free Green “Chhota sa Change” ‘Sugar Free Sundays’ with Sanjeev Kapoor! 18
Slide 19: Campaigns during the quarter (2/3)
Campaigns during the quarter (2/3) New campaign launched – “Thakaan Gone, Energy On” Driving daily nutrition need 19
Slide 20: Campaigns during the quarter (3/3)
Campaigns during the quarter (3/3) Strong digital presence and Influencer recipe videos Campaigns of Nycil Talc and Body Mist 20
Slide 21: The Road Ahead
The Road Ahead was.
Slide 22: Three Pillars to drive growth – staying on course
Three Pillars to drive growth – staying on course Accelerate Growth of Build International Presence Significantly Grow Scale Core Brands Innovations to focus on portfolio Build scale in international Open to bolt-on acquisitions diversification and expansion business by focusing on SAARC, at the rig
Slide 23: The building blocks
The building blocks Category Building Leading Route to Market Digital backbone to decision Inorganic play for gap Volume led focus Plan to enhance distribution infra making filling Recruit new consumers and direct coverage over next 3 Digitizing the whole value chain – Proactively look for Bolt-on y
Slide 24: Building Route to market to adapt shifting channel mix
Building Route to market to adapt shifting channel mix • Direct reach ~6 lakhs stores • Channel mix shift towards expansion across sub channels, MT+Ecom from 17.5% (FY22) to plan to take it to ~7 lakhs in FY 24 • Implementation underway for 21.1% (Q1 FY24) dashboarding of key KPI’s as Building futur
Slide 25: Appendix
: Zydus Appendix Wéliness
Slide 26: Financial Summary – Quarterly P&L
Financial Summary – Quarterly P&L INR Million Q1 FY24 Q1 FY23 YoY Gr. % Net Sales 6,992 6,930 0.9% Total Operating Income 7,021 6,968 0.8% Gross Contribution 3,691 3,782 -2.4% Gross Contribution Margin-(% of net sales) 52.4% 54.0% HR Cost 473 451 4.9% Advertisement Expenses 1044 962 8.5% Other Expen
Slide 27: Zydus Wellness Limited
Zydus Wellness Limited Regd. Office: Zydus Corporate Park, Scheme No. 63, Survey No. 536, Khoraj (Gandhinagar), Nr. Vaishnodevi Circle, S. G. Highway, Ahmedabad – 382481, India. CIN: L15201GJ1994PLC023490 +91-79-71800000 www.zyduswellness.com Zydus Wellness, Oct 21, 2022 27