Zydus Wellness Limited · NSE:ZYDUSWELL
Zydus Wellness — Q3 FY24 Earnings Presentation
38 slides from Zydus Wellness's earnings presentation, Feb 8, 2024
Slide 1: Q3 FY24 Earnings Presentation
Q3 FY24 Earnings Presentation February 8, 2024
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 – Q3 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: Buoyancy in few consumption spaces despite sluggish demand scenario
Buoyancy in few consumption spaces despite sluggish demand scenario Sluggish Demand trend Improvement in Commodities • Urban performing ahead of Rural • Commodity rates continues to moderate • Delayed winters and low festive demand also sequentially during the quarter impacting overall demand across
Slide 6: Sequential moderation of key input rates helping steady recovery of Gross Margins
Sequential moderation of key input rates helping steady recovery of Gross Margins Milk RPO* DMH* +26% vs Q3 FY22 +17% vs Q3 FY22 -30% vs Q3 FY22 +6% vs Q3 FY23 -8% vs Q3 FY23 -12% vs Q3 FY23 +2% vs Q2 FY24 -4% vs Q2 FY24 -1% vs Q2 FY24 Q3 FY22 Q3 FY23 Q2 FY24 Q3 FY24 Q3 FY22 Q3 FY23 Q2 FY24 Q3 FY24
Slide 7: Gross margin recovery with right actions…
Gross margin recovery with right actions… Continuous efforts to improve gross margins with calibrated price increases across portfolio Moderation of key input prices aiding gross margin recovery Gross Margin % to Net Sales Y-o-Y Gap - 433 + 10 - 165 + 198 + 418 bps 50.6% 52.4% 47.7% 48.1% 49.0% 43.5
Slide 8: Segment performance snapshot
Segment performance snapshot Net Sales (INR Million) Food & Nutrition 4,130 4,001 Sales Growth -5.1% Y-o-Y Q3FY23 Q3FY24 Y-o-Y Gr. On Personal Care Net Sales 3.1% Sales Growth Y-o-Y 15.7% *Q3 FY23 Net sales includes the sale of Sugarlite for the full quarter 8
Slide 9: Financial highlights for the Quarter
Financial highlights for the Quarter Q3 FY24 INR Million YoY Growth % Net Sales 4,001 -3.1% Total Income from Operations 4,030 -3.0% Gross Contribution 1,938 6.3% EBITDA 127 -55.1% PBT 37 -80.9% PAT 3 -98.5% ❑ Gross margin on net sales was at 47.7% (+418bps YoY) ❑ PAT includes 34 million rupees of d
Slide 10: Business Highlights
Business Highlights was.
Slide 11: 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 12: Building sustainable business performance
Building sustainable business performance Driving the Winning in category competitive growth market Building relevance Navigating to new age challenges consumers 12
Slide 13: Driving the category growth
Driving the category growth Driving the prickly heat powder category penetration# MAT Nov'20 MAT Nov'21 MAT Nov'22 MAT Nov'23 PHP NYCIL Driving continuous volume growth* Volume Market share 36.8 32.7 MAT Dec'19 MAT Dec'23 *As per MAT December 2023 Nielsen report #As per MAT November 23 Kantar World
Slide 14: Driving the category growth
Driving the category growth Recruiting new consumers for the Glucose powder category# MAT Nov'20 MAT Nov'21 MAT Nov'22 MAT Nov'23 Glucon D Glucose Powder Consumption dropped in 2023 due to poor seasonality #As per MAT November 23 Kantar World Panel Household data 14
Slide 15: Driving the category growth
Driving the category growth Driving market share ❖Widening the portfolio basket ❖Driving double digit growth at 4 year CAGR^ ❖Superior product offering along with strong campaigns focused on recruiting new users ❖Scrub and peel off continues to strengthen its leadership with growth in volume market
Slide 16: Winning in Competitive Market
Winning in Competitive Market Franchise continues to grow ❖Penetration# continues to grow for 3 successive years +19bps +22bps +35bps 2020 2021 2022 2023 ❖Volume offtakes* continue to grow ahead of the category ❖Growth driven by stronger campaign with 360-degree activation and price pack architectur
Slide 17: Winning in Competitive Market
Winning in Competitive Market Consistent strong volume growth ❖Widening the portfolio basket ❖Double digit growth at 4 year CAGR^ with consistent volume growth driven by a wide portfolio and supported by focused B2B and B2C teams ❖Continued to support the brand with digital media, e-com channel acti
Slide 18: Building relevance to new age consumers
Building relevance to new age consumers Efforts to leverage changing shopper behavior and target new age consumers fruitful Channel specific innovative E-commerce exclusive packs & E-commerce saliency^ 1 marketing initiatives 2 3 11% promotions 10% 8% 5% 1% Q3 FY20 Q3 FY21 Q3 FY22 Q3 FY23 Q3 FY24 22
Slide 19: Navigating Challenges
Navigating Challenges Offtake continues to get stronger ❖Sugar Free has maintained its number one position with a value MS of 96.0%*, +14bps YoY* ❖Despite WHO report on safety concerns related to use of Non-Nutritive sweeteners, offtake* continues to grow for Sugar Free ❖Ongoing legal case on Sugarl
Slide 20: 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 % 60.0 4.3 96.0 NA 35.1 6.2 44.4 79.5 NA NA MS change YoY +3 -23 + 14 NA +0 -17 +263
Slide 21: Campaigns and initiatives
Campaigns and initiatives Driving consumption of Sugar Free Green Strategic association with Fitness event 21
Slide 22: Campaigns and initiatives
Campaigns and initiatives Digital initiatives to drive Nutralite Professional range Participated in various forums like World Food India 23, Ahaar, Indus Food Expo 2024 22
Slide 23: Campaigns and initiatives
Campaigns and initiatives Upcoming new campaign with Celebrity Madhuri Dixit and Sneha Digital Initiatives - Complan Genius Quiz 23
Slide 24: Brand Awards and Recognitions
Brand Awards and Recognitions GOLD GOLD SILVER Mobile Advertising Mobile Advertising Best use of Gamification Excellence in Rich Media Excellence to amplify within Games Campaign content 24
Slide 25: Awards and Recognitions
Awards and Recognitions Won 1st prize in 7th CII National Circle competition Bagged “Great Place to Work” certification “Best HR Practices in Effective Recruitment and Retention second time in a row with improved Trust scores Strategy” 25
Slide 26: Continued momentum in International business..
Continued momentum in International business.. UAE, Bahrain, Qatar, Kuwait, Myanmar, Malaysia, Taiwan, Kingdom of Saudi Arabia, Pakistan, Sri Lanka, Bangladesh, ❖ Sugar Free franchise and Complan Oman, Lebanon Nepal, Bhutan, Maldives, Hong Kong constituting ~ 90% of the overall business ❖ Nigeria bu
Slide 27: International Business – Widening the portfolio basket
International Business – Widening the portfolio basket Complan portfolio expansion in Nigeria Sugar FreeFree Sugar D’Lite portfolio D’Lite expansion portfolio planned expansion Granola Granola Bars Instant Coffee & Hot Chocolate Butter & Cashew Cookies Chocolate Minis, Choco Almonds 27
Slide 28: Environmental, Social and Governance
Environmental, Social and Governance 28
Slide 29: Environmental
ENVIRONMENTAL Parameters – achieved Impact FY 2022-23 from FY 2021-22 Energy intensity 11.7% (2.04 from 2.31 per rupee of turnover) Scope 1 & 2 emission 45.5% (0.06 from 0.11 per lakhs of turnover) Water intensity 22.7% (1.7 from 2.2 per rupee of turnover) Zero Liquid Discharge (ZLD) Ahmedabad Plant
Slide 30: Social
SOCIAL Invested 1,660 man-hours in safety trainings in FY 2022-23 (18% increase Y-o-Y basis) Zero fatalities and lost days in all plants Women workforce increased by 7% Y-o-Y basis Set-up Zydus Wellness Institute, an educational initiative to advancing nutrition science and innovation. For more deta
Slide 31: Governance
GOVERNANCE At the board level, we have expanded the scope of the CSR Committee →Transformed CSR committee into the CSR & ESG Committee Ahmedabad and Sikkim plants are ISO 14000 and ISO 45001 certified Certification is in progress for Aligarh plant Strengthened the policy framework and review mechani
Slide 32: The Road Ahead
The Road Ahead was.
Slide 33: 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 34: 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 making filling Recruit new consumers infra and direct coverage Digitizing the whole value Proactively look for Bolt- over next 3 years chain
Slide 35: Traditional Trade capabilities in S&D
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 • Implementation underway for plan to take it to ~7 lakhs in the 21.2% (Q3 FY24) dashboarding of key KPI’s as Building future
Slide 36: Appendix
: Zydus Appendix Wéliness
Slide 37: Financial Summary – P&L
Financial Summary – P&L INR Million Q3 FY24 Q3 FY23 YoY Gr. % YTD FY24 YTD FY23 YoY Gr. % Net Sales 4,001 4,130 -3.1% 15,372 15,327 0.3% Total Operating Income 4,030 4,156 -3.0% 15,452 15,418 0.2% Gross Contribution 1,938 1,824 6.3% 7,618 7,465 2.0% Gross Contribution Margin-(% of net sales) 47.7% 4
Slide 38: 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 38