DABUR INDIA LIMITED
Investor Communication
2004-2005
Dabur. Celebrate life.
AGENDA
INDUSTRY SCENARIO
COMPANY PERFORMANCE
BUSINESS REVIEW
OTHER UPDATES
DETAILED FINANCIALS
BALSARA ACQUISITION – WAY FORWARD
Dabur. Celebrate life.
INDUSTRY SCENARIO
Continuing previous trend, the Indian Economy grew by 6.7% in 20042005
Per-Capita Growth of around 5.2% in 2004-2005
Smart Revival in the FMCG Sector
Revival of Consumption - Improved off-take in both urban and rural
areas
Price Stabilization – Stabilization after the price wars; Inflation led
price increases in some products
Input costs continued to show a upward trend with the Wholesale Price
Index remaining above the 5% mark for most of the year and touching a
high of 8% in September’04
Industry grappling with hybrid VAT scenario with some states choosing
to remain outside VAT net
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REVIVAL ACROSS CATEGORIES
FMCG GROWTH : SOME CATEGORIES
15
11.7
10
5
PER CENT
GROWTH
7.2
1.9
3
2.9
1.2
2003-04
0
Glucose
-5
-10
Hair Oil
Shampoo
Toothpaste
2004-05
-3.7
-10
-15
Source: ORG MARG, based on sales value April 04 – March 05
Dabur. Celebrate life.
AGENDA
INDUSTRY SCENARIO
COMPANY PERFORMANCE
BUSINESS REVIEW
OTHER UPDATES
DETAILED FINANCIALS
BALSARA ACQUISITION – WAY FORWARD
Dabur. Celebrate life.
FY 2004-2005 Performance Snapshot
CONSISTENT DOUBLE DIGIT GROWTH
15.6% growth in Consolidated Revenues
46.2% growth in Consolidated Net Profit
Foods business grew by 51.2%, crossing Rs 100 crores
International Business grew by 43.4%
SHAREHOLDER VALUE CREATION
Consolidated Return on Net Worth up at 43.5% from 38.1%
Total Dividend declared 250%, Dividend Payout 48.3%.
BALSARA ACQUISITION
Rs.143 Cr all cash deal – synergistic and complementary
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Sales Performance
DIL Sales Comparison
Key Divisions
Consumer Care Division
grew by 9%
Consumer Health Division
grew at 12%
Sales from south region
increased by 24%
Dabur Foods touched
sales of Rs.129.7 Crore
growing at 51%
IBD became 12% of total
sales with growth of 43%
1300
1250
1200
1150
1100
1050
1268.7
1148
10.51%
2003-2004
2004-2005
Year
DIL
Growth
DIL Consolidated Sales Comparison
Sales (Rs crores)
DIL Standalone –
10.5%
Consolidated – 15.6%
Sales (Rs crores)
Sales Growth
1600
1500
1400
1300
1200
1537
1329.6
15.6%
2003-2004
DIL Consolidated
Growth
2004-2005
Year
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Net Profit
NET PROFIT
Net Profit of DIL increased from Rs 101.2 crore to Rs 148.0 crore, a growth of
46.3%. Net profit margin increased from 8.8% to 11.7%
Consolidated Net Profit (after minority interest) up from Rs 106.5 crore to
Rs.155.8 crore, growing by 46.2%. Net profit margin went up from 8.0% to
10.1%
Company
Net Profit Growth
155.8
DIL
CONSOLIDATED
106.5
2004-2005
2003-2004
148.0
DIL
101.2
0
50
100
150
200
Ne t Profit (Rs crore s)
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EBIDTA Margins
EBIDTA MARGIN
EBIDTA Margins have increased from 12.0% in 2003-2004 to 14.8% in 20042005 for DIL
Consolidated EBIDTA Margins are up from 12.6% of sales in 2003-2004 to
14.2% of Sales
EBIDTA has grown by
DIL – 36% over 2003-2004
DIL Consolidated – 29.6% over 2003-2004
MARGIN ( AS A % SALES)
EBIDTA MARGINS
16.00%
14.81%
15.00%
14.00%
13.00%
14.21%
12.65%
12.00%
12.04%
11.00%
10.00%
2003-2004
DIL
DIL CONSOLIDATED
2004-2005
YEAR
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Key costs
Other Key Highlights of the Operational Performance are
Material Costs came down from 43.8% to 42.8% of Sales for DIL. On
consolidated basis material costs witnessed a reduction from 43.7% to
42.9% of Sales.
Adpro expenditure was maintained at 13.5% of sales for DIL. For
consolidated business Adpro increased from 12.9% to 13.3% of sales.
Other expenditure has reduced from 25.5% to 23.8% of Sales for DIL.
The same trend was also seen on a consolidated level where other
expenditure came down from 24.9% to 23.7% of Sales.
The reduction in costs has been mainly due to
Savings flowing in from new manufacturing units
Cost efficiencies in manufacturing, supply chain and distribution
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Interest cost
REDUCTION IN INTEREST COST
Interest Cost for DIL has reduced from Rs 6.9 crore to Rs 4.3 crore in 200405, a reduction of 38%.
Interest Cost on consolidated basis came down from Rs 15.3 crore to Rs 12.4
crore, a reduction of 19%.
In spite of Capex of Rs.56 Crore and the Balsara acquisition amounting to
Rs.143 Cr, there was no major change in debt / equity ratio of the company
Interest Cost (Rs crores)
Interest Cost
20
16%
15
5
15.28
38%
10
2003-2004
12.76
2004-2005
6.9
4.3
0
DIL
DIL CONSOLIDATED
Company
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Capital Employed
DIL Standalone - Capital Employed
Rs (crores)
191.6
154.9
171.2
2003-2004
100
-16.9 -70.3
0
-100
Net Block of
Fixed Assets
Investments
2004-2005
Rs (crores)
270.9
300
200
DIL Consolidated - Capital Employed
350
300
250
200
150
100
50
0
294.5
250.0
233.3
7.8
DIL Standalone - Debt & Equity
363.9
400
338.1
268.7
2003-2004
200
2004-2005
100
Net Working
Capital
DIL Consolidated - Debt & Equity
39.8
48.6
0
RS (Crores)
RS (Crores)
300
Investments
Type of Assets
Type of Assets
400
2004-2005
45.9
Net Block of
Fixed Assets
Net Working
Capital
2003-2004
129.8
300
286.1
200
124.5
150.9
2003-2004
2004-2005
100
0
Shareholder Funds
Type of Liabilities
Debt
Shareholder Funds
Debt
Type of Liabilities
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Return on Capital
RETURN ON CAPITAL EMPLOYED
ROCE for DIL Standalone is up from 34.9% in 2003-2004 to 38.7% in 20042005
Consolidated ROCE is up from 29.2% in 2003-2004 to 31.5% in 2004-2005
40.00%
39.00%
38.00%
37.00%
36.00%
35.00%
34.00%
33.00%
32.00%
38.77%
34.80%
2003-2004
2004-2005
Year
Return on Capital Employed (DIL Consolidated)
ROCE (%)
ROCE (%)
Return on Capital Employed (DIL )
32.00%
31.50%
31.00%
30.50%
30.00%
29.50%
29.00%
28.50%
28.00%
27.50%
31.52%
29.17%
2003-2004
2004-2005
Year
Dabur. Celebrate life.
Return on Net Worth
Return on Net Worth
The return on Net Worth has gone up from
DIL Standalone – 38.6%in 2003-2004 to 44.5% in 2004-2005
DIL Consolidated – 38.1% in 2003-2004 to 43.5% in 2004-2005
Return on Net Worth
46.0%
RONW ( %)
44.0%
44.5%
42.0%
43.5%
40.0%
38.0%
2003-2004
2004-2005
38.6%
38.1%
36.0%
34.0%
DIL
DIL Consolidated
Company
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Working Capital Performance
Negative Working Capital
The company further improved it Net Working Capital from negative 5 days of sales
last year to negative 20 days of sales.
Net Working capital also went down on consolidated basis from 13 days of sales to 2
days of sales
Working Capital (No of Days)
No fo Days ( basis - sa
30
23
20
10
13
14
5
0
0
March-5
'04
Sep' 04
Dec '04
2
March '04
-10
-20
DIL
DIL CONSOLIDATED
-20
-30
Time Period
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AGENDA
INDUSTRY SCENARIO
COMPANY PERFORMANCE
BUSINESS REVIEW
OTHER UPDATES
DETAILED FINANCIALS
BALSARA ACQUISITION – WAY FORWARD
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Revenue Break Up – Division Wise
FY 2004-05
International
Business
12%
Foods
8%
Consumer
Health
7%
FY 2003-04
Misc
2%
Consumer
Care
71%
International
Business
10%
Foods Misc
6%
1%
Consumer
Care Division
77%
Consumer
Health
Division
6%
Dabur. Celebrate life.
Business Review: CCD Revenue Break Up
Chart C: Composition of the Consumer Care Portfolio
7%
Health Supp
23%
20%
Digestives and
candies
Hair Care
12%
38%
Oral Care
Baby oils/skin
care
Dabur. Celebrate life.
Business Review – CCD
HAIR CARE
Overall the Category witnessed growth of 11%
Dabur Amla Hair Oil, the flagship brand crossed 200 crores
turnover with a strong 16% growth supported by a new brand
communication “ Asli Amla – Balon Mein Dum to Life Mein Fun”
Vatika Hair Oil registered 13% growth and was also able to increase
its market share from 6.9% to 7.6%.
The Anmol Sarson Amla Hair Oil, the country’s first branded hair oil
offering in the mustard oil market, showed good growth potential
Dabur’s Shampoo category grew by 14% in volume terms. However
due to price rationalization , the value growth was restricted to
0.4%
Dabur’s share in shampoo market increased from 7.5% to 8.2%,
together with Anmol range of shampoos which spearheaded
Dabur’s entry into the value segment.
Dabur. Celebrate life.
Business Review – CCD
ORAL CARE
The Oral Care Segment performed well registering a 10.1% growth
Dabur Red Toothpaste recorded turnover of Rs. 50 crore in the 2nd year of
launch
Sales of Dabur Lal Dant Manjan were under stress, as the category declined by
7.1%. However Dabur was able to gain market share in this category and went
up from 30.1% to 31.7%. A new campaign starring Virendra Sehwag titled “Solid
Indian Daanth” was launched during the year.
With the addition of Balsara Oral Care brands, Dabur ‘s presence would now be
extended into the growing economy segment of the toothpaste market through
Babool and in the premium segment through Meswak
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Business Review – CCD
Health Supplements
The overall category grew by 2.4%
Dabur Chyawanprash: The brand declined by 3.6% mainly due to the poor winter
season in the north. The Chyawanprash market registered a decline of 5.7%.
However Dabur Chyawanprash continued to maintain its market share at 61%.
Dabur Honey: Dabur Honey pursued its strong growth and achieved a 24.6%
growth over the previous year. The focus was mainly on promoting the food
usage of honey.
Dabur Glucose: Sales were more or less stagnant as the category was impacted
by seasonal factors. New campaign launched to rejuvenate the brand.
New product activity: A new initiative is being launched in this category with an
innovative herbal nutritional supplement. Test launch expected in current
quarter.
Dabur. Celebrate life.
Business Review – CCD
Digestives and Confectionery
Overall the Digestives and Confectionery grew by 2%
Hajmola Tablets: Hajmola Tablets registered a 9.1% growth on the
back of a new packaging coupled with new ad campaign
Hajmola Candy: The sales were more or less stagnant. However
the brand is expected to pick up with re-launch in a depositor
format and contemporary packaging, which is currently being test
launched
Pudin Hara – Pudin Hara liquid performed well with strong growth
coming in. However Pudin Hara brand as a whole experienced a
decline of 1.5% mainly due to decline in Pudin Hara pearls.
New product activity: Another addition was made to Hajmola
franchise with Hajmola Yumstick - an ethnic Imli and Aam paste
in a pipe format
Dabur. Celebrate life.
Business Review – CCD
The Baby and Skin care category registered a growth of
13.7%
Baby Care
Dabur Lal Tail: The brand clocked a growth of 9.5% over
the previous year. The brand passed the FDA scrutiny in
Maharashtra and was the only baby oil to do so.
Skin Care
Gulabari – Gulabari continued its consistent growth
trend and closed the year at 21.7% growth over PY.
Vatika Fairness Face Pack: The brand grew by over 50%
affirming the brand Vatika’s equity in skin care area
New product activity: Dabur continued to increase its
depth in Skin care with additional launches of
Dabur Anmol Cold Cream – economy Segment
Vatika Honey and Saffron Soap – mid segment
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Business Review – CHD
The Division clocked a double digit growth of 12.4% and closed
the year at Rs 107.8 crore, breaking the Rs. 100 crore barrier for
the first time
An organizational re-structuring was initiated during the year including
induction of senior professionals with wide experience in healthcare.
A strategy Road Map has been prepared which includes
Synergized marketing initiatives
Strengthening relationships with Ayurvedic market stakeholders
Focus to be mainly on
Building Strong OTC capability
Endorsements by health care professionals
Effective Pharmacy coverage
Focused media thrust
Dabur. Celebrate life.
Business Review – International Business
The IBD business grew by 43.4% to touch Rs 183.6 crore in 2004-2005.
The share of IBD has increased from 9.6% to 11.9% of consolidated sales.
Bangladesh recorded turnover of Rs. 10 crore in first full year of Operation.
Dabur Egypt turnover almost doubled with hair care and oral care products
performing well.
Dabur’s products in the Middle East gained ground on the back of focused
brand building and marketing efforts and the region witnessed a 24% growth.
Dabur’s holding in Dabur Nepal Pvt Ltd increased from 80% to 97.5% through
acquisition of additional 17.5% stake from minority partners in Nepal.
Dabur. Celebrate life.
Business Review – Dabur Foods
Dabur Foods Sales Growth
120.00
100.00
80.00
51% Growth
129.70
6
PAT (Rs crores)
Sales (Rs crores)
140.00
Dabur Foods PAT Growth
85.80
60.00
40.00
20.00
0.00
5.3
5
247%
Growt
h
4
3
2
1.5
1
0
2003-2004
2004-2005
Year
2003-2004
2004-2005
Year
The Foods Division grew by 51.2% in 2004-2005 touching sales of
Rs.129.7 crore and achieved a PAT of Rs.5.3 Crore.
Real Fruit Juice – The brand crossed the Rs.100 Crore mark .
Real Activ –A new contemporary packaging and new fruit and vegetable flavours
have been introduced to strengthen the health positioning and to create a
distinct identity for the brand Activ .
Hommade clocked a growth of 31% with good growth in coconut milk and
tomato puree.
Dabur. Celebrate life.
AGENDA
INDUSTRY SCENARIO
COMPANY PERFORMANCE
BUSINESS REVIEW
OTHER UPDATES
DETAILED FINANCIALS
BALSARA ACQUISITION – WAY FORWARD
Dabur. Celebrate life.
Operations
PRODUCTION
State of the art manufacturing facility at Uttaranchal fully operational
Dabur Foods’ fruit processing facility at Siliguri, West Bengal, became fully
operational during the year.
Dabur Foods has also recently acquired a facility in Jaipur for manufacturing its
smaller SKU’s of 200ml
International Business – The plant in Nigeria commenced operations and the facility
at Bangladesh had its first full year of operations
Addition of 3 more manufacturing facilities at Kanpur, Silvasa and Baddi after the
Balsara Acquisition
SOURCING
Successful Deployment of the ‘Spend Visibility’ programme in collaboration with
‘ARIBA (formerly FreeMarkets) to further strengthen procurement efficiencies.
The E-Sourcing initiative was extended to more Raw and Packing Materials to further
drive down costs
Agronomy initiatives into contact farming for selected herbs to create a backwardintegration platform for herbal inputs, especially those on the endangered list.
New plant at
Uttaranchal
Dabur. Celebrate life.
AGENDA
INDUSTRY SCENARIO
COMPANY PERFORMANCE
BUSINESS REVIEW
OTHER UPDATES
DETAILED FINANCIALS
BALSARA ACQUISITION – WAY FORWARD
Dabur. Celebrate life.
Dabur India Limited - P&L ( Standalone)
DIL (standalone) P&L
Sales
Material Cost
FY04-05
FY03-04
1268.7
543.6
1148.0
503.2
42.8%
43.8%
Employee Costs
75.0
70.3
% of Sales
5.9%
6.1%
Ad Pro
171.8
155.0
% of Sales
13.5%
13.5%
Other Expenses
301.9
292.4
% of Sales
23.8%
25.5%
EBIDTA
187.9
138.2
% of Sales
14.8%
12.0%
Interest
Depreciation
Profit Before Tax
Profit after Tax
4.3
17.1
165.0
148.0
6.9
15.8
113.4
101.2
% of sales
11.7%
8.8%
% of sales
+/- %
10.5%
8.0%
6.7%
10.9%
3.3%
36.0%
-37.7%
8.6%
45.5%
46.3%
Q4' 04-05 Q4 ' 03-04
312.8
128.1
287.9
134.3
40.9%
46.6%
19.0
18.8
6.1%
6.5%
41.4
34.3
13.2%
11.9%
76.6
71.6
24.5%
24.9%
52.2
34.6
16.7%
12.0%
1.3
4.8
45.9
41.2
0.4
4.1
30.2
26.6
13.2%
9.2%
+/- %
8.6%
-4.6%
1.4%
20.6%
6.9%
51.1%
243.2%
15.5%
52.1%
55.1%
All figures in Rs crores
Dabur. Celebrate life.
Dabur India Limited - Balance Sheet ( Standalone)
DIL (standalone) Balance Sheet
Shareholder Funds
Share Capital
Reserves and Surplus
Loans
Deferred tax Liability
Total
Net Fixed Assets
Investments
Current Assets, Loans and Advances
-Inventories
-Sundry Debtors
-Cash and Bank Balances
-Loans and Advances
Current Liabilities
Provisions
Net Current Assets
Miscellaneous Expenditure
Defferred Tax Assets
Total
31st March 05
28.6
309.5
128.0
49.3
10.7
64.0
238.4
83.8
338.1
48.6
12.8
399.5
191.6
270.9
31st March'04
28.6
240
268.6
39.8
8
316.4
154.9
171.2
252.0
111.5
42.1
11.9
53.8
219.3
322.2
164.5
71.7
236.2
-70.3
5.85
1.4
399.5
-16.9
6.6
0.6
316.4
All figures in Rs crores
Dabur. Celebrate life.
Dabur India Limited - P&L ( Consolidated)
DIL (Consolidated) P&L
Sales
Material Cost
FY04-05
FY03-04
1537.0
659.4
1329.6
581.5
% of sales
42.9%
43.7%
Employee Costs
100.2
85.7
6.5%
6.4%
% of Sales
Ad Pro
203.8
171.5
% of Sales
13.3%
12.9%
Other Expenses
364.7
331.7
% of Sales
23.7%
25.0%
EBIDTA
218.0
168.3
% of Sales
14.2%
12.7%
Interest
Depreciation
Profit Before Tax
Profit after Tax
PAT after minority Interest
12.4
28.0
176.1
157.0
155.8
15.3
24.9
124.2
109.3
106.5
% of sales
10.2%
8.2%
+/- %
15.6%
13.4%
17.0%
18.8%
9.9%
29.6%
-18.8%
12.6%
41.8%
43.6%
46.3%
Q4' 04-05 Q4 ' 03-04
395.0
166.6
343.1
158.3
42.2%
46.1%
25.4
22.7
6.4%
6.6%
49.3
39.3
12.5%
11.4%
96.0
85.3
24.3%
24.9%
60.9
41.9
15.4%
12.2%
2.6
9.5
48.6
43.3
43.7
2.3
6.8
31.4
27.3
26.6
11.0%
8.0%
+/- %
15.1%
5.2%
11.7%
25.6%
12.5%
45.5%
15.6%
39.3%
54.6%
58.3%
64.3%
All figures in Rs crores
Dabur. Celebrate life.
Dabur India Limited - Balance Sheet (Consolidated)
DIL (Consolidated) Balance Sheet
31st March 05
Shareholder Funds
Share Capital
Reserves and Surplus
Minority Interest
Loans
Deferred tax Liability
Total Liabilities
Net Fixed Assets
Investments
Current Assets, Loans and Advances
-Inventories
-Sundry Debtors
-Cash and Bank Balances
-Loans and Advances
203.1
75.9
14.7
113.8
Current Liabilities
Provisions
304.4
95.3
Net Current Assets
Miscellaneous Expenditure
Defferred Tax Assets
Total Assets
28.6
335.3
363.9
15.2
150.9
12.8
542.8
294.5
233.3
31st March'04
28.6
257.5
286.1
14.4
124.5
8.0
432.9
250.1
129.8
407.5
154.8
71.2
20.2
93.7
339.8
399.7
213.7
80.2
293.9
7.8
5.8
1.4
542.8
46.0
6.6
0.6
432.9
All figures in Rs crores
Dabur. Celebrate life.
AGENDA
INDUSTRY SCENARIO
COMPANY PERFORMANCE
BUSINESS REVIEW
OTHER UPDATES
DETAILED FINANCIALS
BALSARA ACQUISITION – WAY FORWARD
Dabur. Celebrate life.
BALSARA ACQUISITION
Dabur India Limited acquired Balsara’s hygiene and home products business,
by taking over the entire promoters’ stake in three Balsara companies :100 per
cent in Balsara Home Products; 99.4 per cent in Balsara Hygiene Products; and
97.9% of the shareholding in Besta Cosmetics Limited.
The deal was signed on 27th January 2005 and the acquisition of shares took
place on 1st April 2005 after obtaining shareholders’ approval
Rationale for Acquisition:
Synergistic fit with Dabur’s existing Oral care segment – Enables Dabur to
occupy all 3 segments in the market - economy, middle and premium
Adds avenues for growth in Home Care category, an area with significant
growth potential
Economies of Scale through integrated Sales and Distribution and
Common backend
Complementary regional saliency of Balsara in West and South region
Dabur. Celebrate life.
BALSARA ACQUISITION: Way Forward
End to end integration of Sales and Distribution underway
Oral Care portfolio being merged with Dabur’s existing Oral Care portfolio
under the Dabur brand umbrella
Household Care brands to operate as stand alone brands till the branding
strategy is finalized
Supply Chain, Sourcing and other support functions to be centralized to
maximum extent
Current Year Focus :
Brands to be re-energized with focused advertising and marketing
strategies
Integration with Dabur to a maximum extent in order to unlock cost
synergies
Craft a robust long term strategy and business plan to exploit growth
potential
Dabur. Celebrate life.
Thank You
Dabur. Celebrate life.