Transcript
ITC Limited One of India’s Most Admired and Valuable Companies
Profile
One of India’s most Admired and Valuable companies - Market Market Capitalisation: Capitalisation: ~Rs. 3.3 lakh crores crores
A US$ 8 billion enterprise by Revenue - ~58% of of Net Net Revenue Revenue from non-Cigarette non-Cigarette segments
Leading Fast Fast Moving Consumer Goods (FMCG) marketer marketer in India - Established several several world-class brands in the last 10 10 years years
10 year Value Value Additio Addition n ~ Rs. 2.8 lakh crores crores (US $ 51 billion). 75% of the incremental Value-Added accrued to the th e Exchequer over the last 5 years. - Among the top tax payers payers in the country
ITC & its Group Group Companies employ over 32,000 people directly; directly; Sustainable development models and value chains have supported supported creation of ~6 million sustainable livelihoods
A global exemplar in sustainable business practices - Only enterprise enterprise in the world world of comparable comparable dimensions to have have achieved and sustained the 3 key key global indices of environmental sustainability of being 'water positive' (for 15 years), 'carbon positive' (for 12 years), and 'solid waste recycling recycling positive' (for 10 years)
ITC remains amongst the Top 3 Contributors to Exchequer (pvt. sector)
Over the last 5 years •
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Value Addition Additio n at ` 1.88 1.88 lakh cr. (Cagr 11.8%) and Contribution to the Exchequer Exchequer at ` 1.38 1.38 lakh cr. (Cagr 12.2%) 75% of the incremental Value-Added accrued to the Exchequer
ITC Performance Track Record (` crs) Rs. cr.
21-yr 21-yr Cagr
1995-96
2016- 17
Gross Revenue
5,115
55,002
12.0%
Net Revenue
2,536
38,979
13.9%
PBT
452
15,503
18.3%
PAT
261
10,201
19.1%
Capital Employed
1,886
47,238
16.6%
Segment ROCE%
36.3
61.0
5,571
340,673
21.6%
Market Capitalisation Total Total Shareholder Sharehold er Returns %
Sensex (CAGR 95-96 to 16-17) : 10.9% Market Cap and TSR based on FY-end prices for FY96 and FY17
95-96 to 16-17
23.6%
ITC’s ranking Amongst all listed private sector cos.
PBT: No. 5 PAT: No. 5 Market Capitalisation: No. 4
Note: Based on Published Results for Q2FY18, Market Capitalisation based on 31st Dec 2017
Awards & Accolades (1)
Fortune-Hay -Hay Group Group ITC ranked as the most admired company in India in 2014 ( Fortune survey )
: One of the foremost foremost in the private sector in terms of : –
Sustained value creation
–
Operating profits
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Cash Profits
ITC ITC won won the the pres presti tigi giou ouss Port Porter er Priz Prize e 2017 2017 for 'Excellen 'Excellence ce in Corpora Corporate te Governance and Integration' and for its exemplary contribution in 'Creating Shared Value'.
ITC ranked ranked 3rd amongst amongst leading leading corporat corporates es in India India in terms of Corpor Corporat ate e Reputation (Nie (Niels lsen en Co Corp rpor orat ate e Imag Image e Mo Moni nito torr 2014 2014-1 -15) 5)
ITC ITC ranked anked most activ active e in CSR for the third third year year in a row row (Niels (Nielsen en Corpor Corporat ate e Image Image Monit Monitor or 20142014-15) 15)
Awards & Accolades (2) Harvar rvard d Bus Business Review ranke nked ITC Chai Chairm rman an Y C Deve Devesh shwa warr as the the 7th 7th Best Best Performing CEO in the World.
Chai Chairm rman an Y C Dev Devesh eshwar war conf confer errred the the Indian Visionary - Business Leader Award by The Economic Times, for being the country’s most visionary corporate leader. Chairman Y C Deveshwar conferred the Management Man of the Year Award by the Bombay Management Association (BMA). Chairm Chairman an Y C Devesh Deveshwa warr confe conferre rred d the Lifet Lifetime ime Achie Achieve vemen mentt Award by Economic Times. Chairm Chairman an Y C Devesh Deveshwar war confe conferre rred d the Lifet Lifetime ime Achiev Achieveme ement nt Award by Business Standard Standard and CNBC TV18. Chai Chairm rman an Y C Deve Devesh shw war conf confer errred the the pres presti tigi giou ouss Bang Banga a Bibhus Bibhushan han awar award, d, the highes highestt civili civilian an honour honour instit institut uted ed by the Government of West Bengal.
Chairman Y C Deveshwar was conferred the Padma Bhushan by the Government of India (2011).
ITC ITC confe conferr rred ed the prestigious prestigious ‘World Busi Busine ness ss and and Development Award 2012’ at the the Rio+ Rio+20 20 UN Summit for its its Soci Social al and and Farm Farm Forestr Forestry y Initiatives.
Awards & Accolades (3)
Businessworld FICCI CSR award in Large Enterprise category
Rainforest Alliance awarde arded d ITC' ITC'ss Bhadrachalam Unit, Unit, the Fore Forest st Stewardship Coun Counci cill Fore Forest st Management certification
ITC Hotels awar awarde ded d the the ‘Most Trusted Hotel brand’ in the the Publ Public ic Choice Honours category at the Times Travel Honours
AIM Asian CSR Award by the Asian Forum on Corporate Social Responsibility
Best Overall Corp Corpor orat ate e Soci Social al Responsibility Performance: Institute Institute of Public Enterprise
Recent Awards & Accolades (1)
ITC named India's 'Buzziest' Corporate brand by afaqs!, the country's leading media portal
Vive Vivell feat featur ured ed amon among g the the top top 10 ‘Buzziest brands’ across categories
Sunfeast, Bingo! and Yippee! featured among the Top 5 in the Foods category
Vivel, Engage and Fiama featured among the Top 5 in the Personal Care segment. Savlon ranked No.2 in the OTC category
Wills Wills Lifes Lifestyl tyle e was was recog recognis nised ed at the 2016 2016 DMAi CREA CREATEFFECT TEFFECT Awards Awards for creativi creativity ty in ‘Interactive Experiential Marketing ’
John Players won top awards at Goa Fest 2016 (Creative ABBY Awards) for innovative use of image/design and social media content
Savlon Healthy Hand Chalk Sticks campaign won 7 Lions at Cannes 2017 and also recognised as one of the top 10 PR Campaigns in the World at Global SABRE Awards.
Recent Awards & Accolades (2)
ITC ITC Limi Limitted was recog ecogni nise sed d and and felic elicit itat ated ed as the the ‘Cor ‘Corpor porat ate e Trail railbl blaz azer’ er’ at the the Indi India a Toda oday Saf Safaigi aigiri ri Awar Awards ds.. ITC ITC was was the the only only Corp Corpor orat ate e to have have been been presented the Safaigiri Award by India Today.
ITC Hotels was awarded the Best Luxury Hotel Chain and ITC Grand Bharat was awarded the Best Luxury Hotel at the 6th edition of Travel + Leisure India & South Asia's ‘India's Best Awards’
ITC Grand Bharat was ranked #1 amongst the top resorts in Asia for the second year in a row in the coveted coveted Conde Nast Traveler U.S. Readers’ Choice Awards.
ITC’s Vision Statement
ITC’s Vision
Make a significant signifi cant and growing growing contribution towards : • mitigating societal challenges • enhancing shareholder rewards
By • creating multiple drivers of growth while sustaining leadership in
tobacco, and • focusing on ‘Triple Bottom Line’ Performance Enlarge
contribution to the Nation’s
- Financial capital - Environmental capital - Social capital
Key Corporate Strategies
Focus on the the chosen business portfolio –
FMCG FMCG;; Hotel Hotels; s; Pape Paperbo rboar ards, ds, Paper Paper & Pack Packag aging ing;; Agri Agri Busin Business ess;; Info Inform rmat atio ion n Technology
Blend diverse diverse core competencies competencies residing in in various Businesses Businesses to enhance the competitive power of the portfolio
Position Position each business business to attain attain leadership leadership on the strength strength of world-cl world-class ass standards in quality and costs
Craft appropriate ‘Strategy of Organisation’ and governance processes to: –
Enable focus focus on each business and
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Harness diversity of portfolio portfolio to create create unique sources of competitive advantage advantage
Strategy of Organisation 3-Tiered Governance Structure
ITC’s Business Portf Portfolio olio FMCG Cigarettes
Foods
Education & Stationery
Hotels
Paperboards, Paper & Packaging
Personal Care
Lifestyle Retailing
Safety Matches & Incense Sticks
Agri Business
Information Technology
ITC’s Cigarettes Business
Market leadership − Leadership across all segments - geographic geographic & price
State-of-the-art State-of-the-art technology and world-class world-class products products
Cigarette Industry in India
Legal cigarettes cigarettes account for for only only ~11% of tobacco consumed in India due to a punitive taxation taxation and discriminating regulatory regime
India is the 4th largest the World orld;; resu result ltin ing g in largest illegal illegal cigare cigarett tte e market market in the Revenue loss of over 9000 cr. p.a. to the National N ational Exchequer
48% of adult adult Indian Indian males consume consume tobacco tobacco.. Only 10% of adult Indian males smoke cigarettes as compared to 16% who smoke bidis and 33% who use (Sourc rce: e: Glob Global al Adul Adultt Tobac obacco co Surve Surveyy Indi India a 2010 2010)) smokeless tobacco (Sou
Annual per capita capita adult cigarette cigarette consumption in India is approx. approx. one-ninth of world average
Legal Cigarettes contribute 87% of Tax Revenue, despite constituting only 11% of Tobacco consumption
Consumption Share
Tax Revenue Share
The cumulative growth in tax incidence on cigarettes, cigarettes, after cognising for the latest increase in Cess rates, stands at a staggering 202% since 2011-12, i.e. the last 6 years.
Note: Consumption Share and Tax Revenue Revenue Share based on 2014/15 data
Widening differential in Excise Duty rates between Cigarettes and Other Tobacco Products
Source: Tobacco Institute of India
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On a per kg basis, the differential in Excise Duty rates between cigarettes and other widene ned d from from 29 time timess in 2005 2005/0 /06 6 to over over 53 time timess tobacc tobacco o product productss has wide currently
Cigarettes are least affordable in India
Source : WHO Report on the Global Tobacco Epidemic, 2015-Raising Taxes on Tobacco
Cigaret Cigarette te taxes taxes in India are 14 times times higher than USA, 9 times higher higher than Japan, 7 times higher than China, 5 times higher than Australia Australia and 3 times higher than Malaysia and Pakistan. Pakistan.
Per Capita Consumption of Tobacco Tobacco in India (gms per year)
Source:World Source:World Cigarettes – ERC Statistics, Statistics, Tob Tob Board & Industry Estimates Estimates – gms/Yr
Per Capita consumption is ~60% of World Average
Per Capita Cigarette Consumption – 11% of World average
Source: The Tobacco Tobacco Atlas Atlas - 4th Edition (American Cancer Society)
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Although India accounts for 17% of world population, population, its share of world cigarette consumption is just 1.8% Per Capita consumption in India ~11% of World average
FMCG Cigarett C igarettes es
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Legal cigarette industry volumes remain under pressure −
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Continued growth in Illegal industry
Cumulative Cumulative increase in tax incidence on Cigarettes Cigarettes up ~202% over the last 6 years
Hon’ble Karnataka High Court struck down the COTPA rules that mandated printing of 85% GHW on Cigarette packs in Dec’17; since stayed by Hon’ble Supreme Court
Creating world-class brands for Indian Consumers
Rapid scale up of FMCG businesses (` crs)
Annual Consumer Spends of nearly 14000 cr. (FY17)
Branded Packaged Foods Portfolio
Biscuits, Staples, Snacks, Noodles Nood les & Pasta, Confectionery, Confectionery, Ready to Eat, Juices, Dairy, Chocolates and Coffee
Fabelle Chocolate Boutiques
Ganache
Single Origin Cacaos
Fabelle Chocolate Chocolate Boutique at ITC Grand Chola
Fabelle Gift Hamper
Gianduja
Fabelle centre-filled chocolate bars
Branded Packaged Foods: Some recent launches (1)
CandyMan Candy Man Clea Clearr Candy Mango
Fabelle Fab elle Exqu Exquisite isite Choc Chocolat olates es
Candyman Crunchy Peanut
Sunfeast Sunf east Dairy Whitener
Candyman Duocho Candyman Duochoo o Strawbery
Mixed Fruit & Dry Fruits Juice
Branded Packaged Foods: Some recent launches (2)
Sunfeast Farmlite Protein Power
Bingo! No Rulz
Sunfeast Sunf east A2 Cow Milk Biscuits
Sunfeast Farmlite Digestive (5 Grain)
Sunfeast YiPPee! Mood Masala
Candyman Cola Josh
100% Not From Concentrate Pomegranate juice
Integrated Manufacturing and Logistics facilities – An update
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Civi Civill work workss at the the Inte Integr grat ated ed Manu Manuffactu acturi ring ng and and Logi Logisstics tics facil acilit itie iess progressing progressing as per schedule •
Panchla and Kapurthala facilities facilities operationalised in Nov’17.
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Capacity utilisation at at Uluberia, Mysuru and Guwahati facilities facilities being ramped ramped up.
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Steady progress is being made towards towards development of other such facilities facilities which are expected to be commissioned in the near to medium term.
Panchla
Kapurthala
Personal Care Products
Portfolio comprise following brands:
The ‘Engage’ range of deodorants strengthened its No. 2 position in this category. New portfolio addition with several new variants launched during the year. year. -
‘Engage ON’ Pocket Perfume record robust growth
on the back of unique value proposition.
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Portfolio Portfolio expanded with launch of ‘Engage ‘Engage premium perfumes’.
Launched moisturising skin cream under the recently acquired ‘Charmis’ brand.
Laboratoire Laboratoire Naturel – A state-of-the-art consumer and product interaction centre – leveraged to launch unique and differentiated products
Personal Care: Some recent launches (1)
Fiama Frangipani & Almond Cream Engage Premium Perfume Sprays
Fiama Gel + Crème Body Wash
Charmis Moisturising Cold Cream
Personal Care: Some recent launches (2)
Engage On+ Premium Perfume
Engage Pocket Perfume
Essenza Di Wills Fragrance
Engage Sport Range
Vivel Lotus Oil
Education & Stationery Products Business
Leverages Leverages printing and paper know-how know-how to address suitable opportunities in
the stationery market - Classmate, Saathi and Paperkraft brands continue to enhance market market standing
Industry growth growth driven by increasing literacy literacy and enhanced enhanced scale of government government and public-private education initiatives initiatives
Geometry boxes boxes witnessed witnessed robust growth growth backed backed by new launches
Portfolio Portfolio extension extension with the launch of Classmate Puzzles Puzzles
Classmate : Market leader in Notebooks segment
Lifestyle Retailing
‘Wills ‘Wills Lifest Lifestyl yle’ e’ brand, positioned at the premium end of the market continues to fulfil
lifestyle aspirations by offering elegant designs in high quality premium fabrics and styles across 56 cities including six exclusive boutique stores stores across available in 400 outlets across ITC Hotels.
In the Youth fashion segment, ‘John ‘John Players Players’’ continues to drive fashion imagery anchored on bold and edgy fashion.
– available in over 800 outlets.
Incense sticks (Agarbattis) & Safety Matches •
‘Mangaldeep’ continues to fortify its market standing in the Agarbatti and Dhoop segment.
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selling safety matches matches brand in India. ‘AIM’ continues to be the largest selling
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Launched Launched in September September 2016 on both Android Android & iOS platforms platforms the Mangaldeep App is currently available in seven languages and caters to the everyday devotional needs of consumers.
Hotels
• One of the
fastest fastest growing hospitality chains in India
•Greenest Hotel Chain in the world • Leader in Profitability
Hotels & Tourism industry
Foreign Tourist Tourist Arrivals (FT ( FTA) A) growth has picked up in the last few quarters. FTA A into India @ ~8.0 million remains far behind China (~56.8 million) – FT [Sourc [Source: e: UNWTO UNWTO Tourism ourism Highli Highligh ghts ts 201 2016 6 editio edition] n]
Going forward, as economic conditions and infrastructure improve, leisure – Going tourism and business related travel is also projected to grow faster
Foreign Tourist Tourist Arrivals into India is projected at ~11 million by 2021
Industry: Industry: Current Current Room invent inventory ory ~240,000 rooms, rooms, of which ~66,000 ~66,000 rooms are in the Luxury and Upper-Upscale segments
Hotels Business
The Chain: 104 properties across 74 locations −
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25 Five-Star Deluxe/ Five-Star Properties with over 4800 rooms
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45 Fortune Hotels Hotels with over 3500 rooms
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34 WelcomHeritage WelcomHeritage Properties with over 800 rooms
Industry has seen some improvement in ARR, in the last last couple couple of quarters. Overall, due to excessive excessive room inventory, inventory, pricing scenario continues to be sluggish.
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WelcomHotel, Fortune & WelcomHeritage WelcomHeritage 4 Brands: ITC Hotels, WelcomHotel,
Projects underway: ⁻
ITC ITC Hote Hotels ls:: Kolkat olkata, a, Hyder Hyderab abad, ad, Ahmedabad, Srinagar
⁻
WelcomHotels Bhubaneswar, Amritsar.
at 3 Guntur
cities; and
overseas project project in Colombo , being undertaken by a wholly-owned Company’s first overseas
subsidiary in Sri Lanka −
Construction activity is progressing as per schedule
ITC Hotels: World’s Greenest Luxury Hotel Chain
All ITC Luxury Hotels LEED Platinum certified
“Responsible Luxury ” ethos woven into the Brand Identity
Paperboards & Packaging Business • No. 1 in Size • No. 1 • World-class
in Profitability
Environmental Performance
Indian Paperboard market
Annual paperboard demand over 2.6 million million tonnes tonnes
Low per capita usage usage of paper at around around 9 kgs p.a. (world average average – over 58 kgs p.a.)
Indian paperboard market growing at 6% p.a.
Value-added Paperboards - the fastest fastest growing growing segment (12% p.a.) in India driven by :
Increasing demand for branded branded packaged products
Growth in organised retail retail
Use of packaging as a key key differentiator, differentiator, especially especia lly in the FMCG sector
ITC’s Paperboards, Paper & Packaging businesses
Market leader in Value-Added Value-Added Paperboards Paperboards segment
World-cla World-class ss technology technology & quality quality – Fully integrated Ozone bleached Pulp Mill (3.5 lakh TPA) – one of its kind in Asia meeting world-class environmental environmental standards – India’s first Bleached Chemical Thermo Mechanical Pulp (BCTMP) mill, recently commissioned commissioned by ITC, will further reduc reduce e depend dependenc ence e on im imp port orted pulp pulp and and provid ovide e sustained competitive competitive advantage advantage to the Business
Strategic Strategic projects projects underway underway - Value Added Paperboard (+1.5 lakh TPA), TPA), Decor (+0.2 lakh TPA) TPA)
BCTMP Mill
ITC’s packaging SBU - India’ India ’s largest converter of Paperboard into high quality qu ality packaging
– Provides superior packaging p ackaging solutions to the cigarettes and new FMCG businesses – Leading supplier to Indian FMCG industry capabilities as a one-stop-shop for packaging packaging solutions with the addition – Strengthened its capabilities of a rigid box and and a flexo flexo corrugation line TPA: Tonnes Tonnes per pe r annum
Agri Business
• Leading Agri Business player in India • Pioneer
in rural transformation
• No. 1 in Leaf Tobacco
Indian Leaf Tobacco industry
India – the second largest producer of tobacco (World excl. China)
However, India’s share is only at 9% of world tobacco trade to a eight-year eight-year low of ~200 million Kgs. – Leaf exports dropped to
India’s largest buyer, processor, consumer & exporter of cigarette ITC – India’s tobaccos largest leaf tobacco tobacco exporter in the world 5th largest
Pion Pionee eeri ring ng cult cultiv ivat atio ion n of flav flavou ourf rful ul Flue Flue-c -cur ured ed and and supe superi rior or Burl Burley ey tobaccos in India
Gr Growth owth in expor xports ts in recen ecentt year ears driv riven by improvement in farm realisations
ITC’ss Agri Commodity Business ITC’
Distinctive sourcing capability for ITC’s Branded Packaged Foods Businesses −
Identity-preserved Identity-preserved superior quality quality wheat for for ‘Aashirvaad’ atta
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High quality quality chip stock for ‘Bingo! Yumitos’ potato wafers
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Superior quality fruit pulp for ‘B Natural’ range of juices
Farm linkages in 17 States covering Wheat, Soya, Potato, Coffee etc.
Unique Customer Customer Relationship Relationship Management Management programme for commodity customers in both domestic and international markets
Leveraging Information Technology for the transformational ‘e -Choupal’ initiative – Rural India’s largest Internet-based intervention –
Over 35000 villages linked linked through around around 6100 e-Choupals servicing servicing around 4 million farmers farmers
Forayed into the Fruits & Vegetables segment –
Differentiated Differentiated variants of potatoes under the ‘Farmland’ brand and
–
Dehydrated onion flakes under the ‘ITC Master Chef Smart Onions’ brand for the institutional segment.
ITC Master Chef prawns
Farmland Potatoes
ITC Master Chef Super Safe Smart Onions
ITC’ss Agri Commodity Business ITC’ e-Choupal: Strategic Thrust
Procurement: cost & quality optimisation sourcing support to the Branded Packaged Packaged Foods Businesses – strategic sourcing
– cost-effective cost-effective sourcing for exports/domestic external external business
Rural retail
– 23 Choupal Choupal Saagars Saagars operation operational al
ITC e-Choupal – Global Recognition –
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World Development Report 2008 published by World Bank Stockh Stoc khol olm m Ch Chal alle leng nge e Aw Awar ard d 20 2006 06 in the Econom onomic ic Devel Developm opmen entt cate categor goryy which which recogn recognise isess ini initia tiativ tives es that that lev leverag erage e Inf Informa ormati tion on Techn echnol olog ogyy to im impr prov ove e livi living ng conditions and foster economic growth in all parts of the world.
First Indian Company and second in the world to win the Development Gateway Award 2005 for its trail-blazing eChoupal initiative. Corpo Corpora rate te Soc Social ial Re Respo sponsi nsibil bility ity Aw Award ard 200 2004 4 from from The The Energy and Resources Institute (TERI) . Worl World d Busi Busines nesss Awa Award rd 200 2004 4: Intern Internation ational al Chamber Chamber of Comm Co mmer erce ce & the HRH HRH Princ Prince e of Wale Waless & Inte Intern rnat atio iona nall Business forum. Harvard University case study Applauded by the then President of India Dr APJ Abdul Kalam in his special address during the national symposium to commemorate 60th year of Independence.
ITC - Key Financials – Q3 2017/18 ` Crs Crs
Q3 CY
Q3 LY
Gross Sales Value
16,7 16,746 46
15,7 15,747 47
Gross Revenue
9,853
13,471
-26.9%
PBDIT
3,905
3,546
10.1%
PBT (before exceptional items)
4,217
3,954
6.6%
Exceptional Exceptional items
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•
6.3%
413
PBT
4,630
3,954
17.1%
PAT
3,090
2,647
16.8%
87
(162)
3,1 3,177
2,485
Other Comprehensive Income (net of tax) Total Comprehensive Income •
GOLY
27.8%
Gross Sales Value Value growth driven driven by Foods, Personal Personal Care, Care, Paperboards Paperboards and tax-led growth in Cigarettes Exceptio Exceptional nal Items Items represen representt reversa reversall of TN Entry Entry Tax provision provision pursuant pursuant to favour favourable able Supreme Court judgement Positive swing in OCI driven by favourable movement in EIH valuation
Gross Sales Value includes all taxes (GST, Compensation Cess, VAT, Excise Duty, NCCD, etc.)
Gross Segment Revenue – Q3 17/18 (` crs) Q3
Q2 2017-18
2017-18
2016-17 Goly(%)
4629 2872 7501 404 1531 1280 10716 863
8288 2569 10857 371 1672 1336 14235 765
(44.1) 11.8 (30.9) 9.2 (8.4) (4.2) (24.7) 12.9
9853
13471
(26.9)
Segment Revenue (Gross) 4554 2804 7358 300 1968 1309 10936 1260 9676
a) FMCG
- Cigarettes - Others Total FMCG
b) Hotels c) Agri Bus ines s d) Paperboards , Paper & Packaging Total Les s : Inter s egment revenue Gross Revenue from sale of products & services
– Cigarettes: impacted by steep increase in GST rate – FMCG-Others: comparable Revenue growth at 16.2% driven by Foods & Personal Care; Apparel sales
impacted by ongoing restructuring of retail & trade footprint – Agri Business: limited trading opportunities (primarily Wheat), shortage & poor quality of AP leaf crop – Paper Paperboar boards, ds, Paper Paper and Packagi Packaging: ng: slowdo slowdown wn in FMCG FMCG & pressu pressure re on legal legal Cigar Cigaret ette te indus industry try
continue to weigh on demand Note: Gross Revenue not comparable with previous period a/c GST transition
Segment Results – Q3 17/18 ( ` crs) crs)
Q2
Q3
2017-18
2017-18
2016-17 Goly(%)
Segment Results
3292 20 3312
4 256 274 3847
29 (127) 3944 •
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a) FMC G
- C ig arettes - Others Tot al FMCG
b) Hotels c) Agri Bus ines s d) Paperboards , Paper & Packag ing Tot al
Les s : i) Finance C os t ii) Other un-allocable un-alloca ble (income) net of un-allocable expenditure P rofit Before Except ional it ems & Tax
3269 47
3034 (20)
3316
3014
55 233 268
42 237 246
3873
3539
24
14
(368)
(429)
4217
3954
7.8
10.0 29.9
(1.4) 9.0 9.4
6.6
FMCG-Others segment aided by enhanced scale, improved realisation Improvement Improvement in profitability profitability of FMCG-Others and mix enrichment; includes stepped up marketing expenses, gestation cost of new categories and impact of ongoing restructuring restructuring in Apparel retailing Hotels margin expansion driven by ARR and F&B revenue Agri Business segment profitability impacted a/c increase in leaf farm price, adverse crop quality, lower export incentives and limited l imited trading opportunities Paperboards, Paper and Packaging margin expansion driven by higher volumes, lower input cost, structural structural cost saving initiatives, improved mix
Segment Assets ( ` crs) crs)
Q2
Q3
2017-18
2017-18
2016-17 Goly(%)
Segment Assets
8390
a) FMC G
7744 16134
- Cig arettes
7829
7793
- Others
7437
6596
15266
14389
Total FMCG
5357 2930
b) Hotels c) Agri Bus ines s
5403 2987
5039 2751
6775
d) Paperboards , Paper & Packag ing
6816
6324
30471
28502
29357
23248
59828
51750
31195
25898 57093
To tal Segment Assets
Unallocated C orporate As s ets To tal Assets
0.5 12.7 6.1 7.2 8.6 7.8 6.9 26.3 15.6
Increase in Segment Assets primarily on a/c of Net Fixed Assets: -
Capacit Capacityy augment augmentati ation on in FMCG FMCG Business Businesses es
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Ongoing Ongoing invest investmen ments ts in Hotels Hotels Business Business
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Inve Invest stme ment nt in Value alue Adde Added d Paper aperbo boar ard d and and Déco Décorr capac apacit ityy augm augmen enttatio ation n in Paperboards, Paper & Packaging Business
Segment Liabilities ( ` crs) crs)
Q2
Q3
2017-18
2017-18
2016-17 Goly(%)
Segment Liabilities 4416 1749
a) FMCG
- Cigarettes * - Others
4685 1879
2999 1414
56.2 32.9
Total FMCG
4413 452
48.7
13.4
6166 480
b) Hotels
6564 513
1199
c) Agri Bus ines s
1028
1001
750 8593
d) Paperboards , Paper & Packaging Total Seg ment Liabilit ies
787 8891
616 6483
2.6 27.8
37.2
3925 12519
Unallocated Corporate Liabilities T o t a l L ia b i l i t i es
2981 11872
3303 9786
(9.7)
21.3
229
651
(64.8)
638
* Local Tax Prov ision not incl.
Increase in Segment Liabilities primarily a/c GST liability and trade payables
Headline Financials : YTD Dec-17 ` Crs Crs
YTD Dec YTD Dec CY LY
GOLY
Gross Sales Value
49,14 9,148 8
46,8 46,858 58
Gross Revenue
33,25 3,251 1
40,1 40,119 19
-17.1%
PBDIT
11,41 1,412 2
10,7 10,703 03
6.6%
PBT (before exceptional items)
12,10 2,106 6
11,4 11,456 56
5.7%
9.3%
413
Exceptional items
PBT
12,51 2,518 8
11,4 11,456 56
PAT
8,291
7,531
215
(123)
8, 8 ,505
7,408
Other Comprehensive Income (net of tax) Total Comprehensive Income
4.9%
10.1% -
14.8%
Gros Grosss Reve Revenu nue e for the the nine nine mon months ths en ende ded d 31st 31st Dece Decemb mber er,, 2017 2017 is not not comp compar arab able le with with the the prev previo ious us period a/c GST transition.
YTD Dec’17 Segment Revenue (` crs)
YTD Q3 2017-18
2016-17 Goly(%)
17958 8277 26234 1010 6259 3949 37452 4201
25047 7626 32673 955 6346 3990 43965 3846
33251
40119 (17.1)
Segment Revenue (Gross) a) FMCG - Cigarettes - Others Total FMCG b) Hotels c) Agri Busines s d) Paperboards , Paper & Packaging Total Less : Inter s egment revenue Gross Revenue from sale of products product s & services services
Note: Gross Revenue not comparable with previous period a/c GST transition
(28.3) 8.5 (19.7) 5.7 (1.4) (1.0) (14.8) 9.2
YTD Dec’17 Segment Results
( ` crs) crs)
YTD Q3 2017-18
2016-17 Goly(%)
Segment Results a) FMCG
- Cigarettes
9835
9255
73
(27)
9908 64
9228 44
c) Ag ri Bus ines s
725
771
d) Paperboards , Paper & Packag ing
800
726
11497
10768
63
34
(672)
(722)
12106
11456
- Others Tot al FMCG b) Hotels
Tot al Les s : i) Finance Cos t ii) Other un-allocable (income) net of un-allocable expenditure Profit Before Exceptional it ems & Tax
6.3
7.4 46.1 (6.0) 10.2 6.8
5.7
ITC - Key Financials – 2016/17 (` crs)
2017
2016
Goly %
Gross Re ve nue
55002
51582
6.6
PBDIT
14578
13715
6.3
Other Income
1986
1769
PBT
15503
14434
7.4
PAT
10201
9328
9.4
Othe r Compre he nsive Income
77
( 67)
-
Total Comprehe nsive Income
10278
9262
12.2
11.0
Over Overall all perfo performa rmanc nce e impact impacted ed by inc incre reasi asing ng regul regulat atory ory pressur pressures es & cumul cumulati ative ve impact impact of tax tax incre inc rease ase on Cigar Cigaret ettes tes,, weak weak demand demand conditi conditions ons,, steep steep hike hike in commo commodit dityy prices prices & impact impact of currency crunch
Gross Segment Revenue – Full Year (` crs)
2017
2016
G oly (%)
34002
32348
5.1
- Oth e rs
10512
9731
8.0
Total F MCG
44514
42079
5.8
b ) H o te l s
1342
1286
4.3
c) Agri B u s i n e s s
8265
7457
d ) Pa p e rb o a rd s , Pa p e r & Pa ck a gi n g
5363
5328
0.7
Total
59483
56150
5.9
Le s s : I n te r s e gme n t re ve n u e
4481
4568
55002
51582
a ) F MCG
- Ci g a re tte s
G ross Revenue •
•
•
10.8
-1.9 6.6
Legal Cigarette industry volumes under severe pressure FMCG Others Others: Overall Performance impacted by currency crunch in Q3, calibration of trade pipeline in ESPB and lower l ower consumer offtake offtake & heavy discounting in Apparel Hotels: Higher ARRs and F&B revenue
•
Agri Business: Leveraged opportunity opportunity of supplying imported wheat to domestic domestic millers
•
Paperboards, Paper & Packaging : impacted a/c slowdown in FMCG industry & capacity addition
Segment Results – Full Year (` crs)
2017
2016
Goly (%)
12514
11752
6.5
28
102
12542
11854
b ) H o te l s
111
56
c) Agri B u s i n e s s
906
933
d ) Pa p e rb o a rd s , Pa p e r & Pa ck a gi n g
966
908
6.4
14525
13751
5.6
23
49
(1001)
( 733)
15503
14434
a ) F MCG
- Ci ga re tte s - Oth e rs Total F MCG
Total
-72.4 5.8
99.2
-2.9
Less: F i n a n ce Co s t Other un-allocable (income) net of un-al locable e xpendi ture ure Total PBT •
FMCG Others Others Segment Results consider sharp hike in input prices, gestation cost, impact of currency crunch, heavy discounting in Apparel
•
Hotels growth driven by higher ARRs, F&B revenue
•
Agribusiness impacted by business mix & increase in leaf tobacco prices
•
7.4
Paperboards, Paper & Packaging Packaging margin expansion driven by benign input costs (Wood/Pulp) and richer product mix
ITC’s Economic Contribution to the Nation
l akh crore (US$ 51 billion) 10 year Value addition ~ Rs. 2.8 lakh – Appx. 75% of value addition accrued to the Exchequer (in FY17) •
Among the top tax tax payers payers in the country
Foreign exchange exchange earnings in the last 10 years: US$ 7 bln constituted ~56% – Of which agri exports constituted
Social Perf Performance ormance
Direct employment ITC Group : over 32,000
Supported creation of around 6 million sustainable livelihoods
largestt rural rural digit digital al inf infra rastr structu ucture re servin serving g more more than than 4 e-Choupal : world’s larges million farmers
Social Social and and Farm Farm fore forestr stry y initia initiativ tive e has greene greened d nearly nearly 620,000 acres and generated nearly 113 million person days of employment for for rural households, including poor tribal and marginal farmers.
Signif Significa icant nt thrust thrust on social sector investments investments under ‘Mission Sunehra Kal’ initiatives – – –
Natural resource management Sustainable livelihoods Commun Communit ityy devel develop opmen mentt progr program ammes mes in the the ec econo onomi micc vic vicin init ityy of oper operat atin ing g locations
Environmental Performance
Water positive - 15 years in a row row
Carbon
positive enterprise – 12 years in a row that the Sequestering over twice the amount of CO2 that Company emits
Solid waste waste recycling recycling positive – 10 years in a row
Over
48% of total energy consumed is from renewable sources
can be accessed on Sust Sustai aina nabi bili lity ty Repo Report rt 2017 2017 ca http://www.itcportal.com/ http://www .itcportal.com/sustainability/s sustainability/sustainability ustainability -report-2017/sustainability-report-2017.pdf Only enterprise in the world of comparable dimensions to have achieved and sustained the 3 key global indices of environmental sustainability of being Carbon positive, Water positive and Solid waste recycling positive
Forward-looking Statements
Statements Statements in this presentation describing the Company’s Company’s objectives, future prospects, estimates, expectations expectations etc. may be “forward looking statements” within the meaning of applicable securities laws and regulations. Investors are cautioned that “forward looking statements” statements” are based on certain assumptions of future events over which the Company exercises no control. The Company undertakes no obligation to publicly update or revise any forward-looking statements, statements, whether as a result of new information, future events, or otherwise. Therefore there can be no guarantee as to their accuracy. accuracy. These statements statements involve a number of risks, uncertainties and other factors that could cause actual results results to differ materially materially from those that may be projected or implied implied by these forward forward looking statements. statements. Such risks risks and uncertainties uncertainties include, but are not limited to: growth, competition, acquisitions, domestic and international economic conditions affecting demand, supply and price conditions in the various businesses in the Company’s portfolio, portfolio, changes in Government regulations, tax regimes and other statutes, statutes, and the ability to attract and retain high quality human resource.
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