ITC Limited One of India’S Most Admired and Valuable Companies ITC Performance Track Record
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ITC Limited One of India’s Most Admired and Valuable Companies ITC Performance Track Record Rs. cr. 18-yr Cagr 1995-96 2013-14 95-96 to 13-14 Net Revenue 2,536 32,883 15.3% PBDIT 584 13,562 19.1% PBIT 536 12,662 19.2% PBT 452 12,659 20.3% PAT 261 8,785 21.6% Capital Employed 1,886 27,626 16.1% ROCE % 28.4 45.8 Market Capitalisation 5,571 280708 24.3% Total Shareholder Returns % 25.9 Market Cap and TSR based on FY-end prices Sensex (CAGR 95-96 to 13-14) : 11.1% 2 Consistency of Performance Consistent performance over 18 year, 10 year, 5 year and 3 year horizons . In terms of Revenue, Profits, TSR Vs. Sensex 95-96 to 03-04 to 08-09 to 10-11 to CAGR 13-14 13-14 13-14 13-14 18 years 10 years 5 years 3 years NTO 15.3% 17.7% 16.1% 15.8% PAT 21.6% 18.6% 21.9% 20.8% TSR 25.9% 28.7% 33.7% 26.4% Sensex 11.1% 14.9% 18.2% 4.8% TSR and Sensex returns based on Mar-end of each FY 3 ITC’s ranking Amongst all listed private sector cos. PBT: No. 6 PAT: No. 5 Market Capitalisation: No. 3 Note: Based on Published Results for FY14, Market Capitalisation based on 30th Jun 2014 4 ITC is the only Indian Company to be ranked amongst the Top 10 global FMCG companies in value creation during the period 2008-12 (Boston Consulting) 5 One of India’s most valuable and admired companies . One of the foremost in the private sector in terms of : – Sustained value creation (BT-Stern Stewart survey) – Operating profits – Cash Profits . Only Indian FMCG Company to feature in Forbes 2000 List – A comprehensive ranking of world’s biggest companies measured by a composite of sales, profits, assets & market value . Also ranked amongst the Top 10 global FMCG companies in terms of value creation during the period 2005-2009 by Boston Consulting Group. Is the only Indian company to feature consistently amongst the Top 10 global FMCG companies. 6 Awards & Accolades (1) Harvard Business Review ranked Chairman Y C ITC Chairman Y C Deveshwar as Deveshwar was the 7th Best Performing CEO in conferred the the World Padma Bhushan by the Government of India (2011) ITC conferred the prestigious ‘World ITC Grand Chola, Business and the world’s largest Development LEED Platinum Award 2012’ rated hotel in the at the Rio+20 New Construction UN Summit for category, launched its Social and in September 2012 Farm Forestry Initiatives 7 Awards & Accolades (2) AIM Asian CSR Rainforest Alliance Businessworld Award by the awarded ITC's FICCI CSR Asian Forum Bhadrachalam Unit, award in Large on Corporate the Forest Enterprise Social Stewardship category Responsibility Council Forest Management certification ITC Hotels awarded the Best Overall Corporate ‘Most Trusted Social Responsibility Hotel brand’ in Performance : Institute the Public of Public Enterprise Choice Honours category at the Times Travel Honours 8 Accolades & Awards (3) • e-Choupal initiative wins global recognition: – World Development Report 2008 published by World Bank – 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 Indian Company and second in the world to win the Development Gateway Award 2005 for its trail-blazing e- Choupal initiative – Corporate Social Responsibility Award from The Energy and Resources Institute (TERI) – World Business Award 2004: International Chamber of Commerce & the HRH Prince of Wales & International Business forum – Harvard University case study – Applauded by the then President of India Dr APJ Kalam in his “special address during the national symposium to commemorate 60th year of Independence” 9 Accolades & Awards – 2013/14 • ITC was ranked 3rd among 40 leading companies in the Nielsen Corporate Image Monitor 2013- 14, and was featured among the top 5 most admired companies in India. ITC was also perceived to be the ‘Company most active in CSR’ for the third year in a row. • ITC voted among the top two “Buzziest Brands” in the “Corporate” category by “afaqs”, one of the world’s largest marketing and advertising portals. • The ITC Green Centre at Manesar was awarded the 5 Star rating by the Bureau of Energy Efficiency, Government of India. • ITC Hotels was recognised as the Most Respected Company in the Hospitality category by the Business World Magazine. • ITC’s Paperboards and Specialty Papers Business has been conferred the Green Product of the Year award at the India Green Business Summit 2014. • ITC’s Agri Business has bagged the Rural Marketing Association of India (RMAI) Flame Award 2013 in the category of excellence in Brand Promotion. 10 ITC’s Vision 11 ITC’s Vision . Make a significant and 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 12 Key Corporate Strategies . Focus on the chosen business portfolio – FMCG; Hotels; Paperboards, Paper & Packaging; Agri Business, Information Technology . Blend diverse core competencies residing in various businesses to enhance the competitive power of the portfolio . Position each business to attain leadership on the strength of world class standards in quality and costs . Craft appropriate strategy of organisation and governance process to : – Enable focus on each business and – Harness diversity of portfolio to create unique sources of competitive advantage 13 ITC Business Portfolio FMCG Cigarettes Foods Personal Care Lifestyle Retailing Education & Stationery Safety Matches & Incense Sticks Information Hotels Paperboards, Paper & Packaging Agri Business Technology 14 Strategy of Organisation Board of Directors Strategic Supervision Corporate Management Enabling Focus Committee Harnessing Diversity Strategic Management Divisional Management Committees Executive Management 15 ITC’s Cigarettes Business . Market leadership . Leadership across all segments - geographic & price . Extensive FMCG distribution network – Direct servicing of 1,00,000 markets & 2 million retail outlets . State-of-the-art technology and world class products 16 Cigarette Industry in India . Cigarettes account for less than 12% of tobacco consumed in India unlike world pattern of 85% due to prolonged punitive taxation – Cigarettes (<12% of tobacco consumption in India) contribute the bulk of Revenue to the Exchequer from tobacco sector . 48% of adult Indian males consume tobacco. Only 10% of adult Indian males smoke cigarettes as compared to 16% who smoke biris and 33% who use smokeless tobacco (Source: Global Adult Tobacco Survey India 2010) . Annual per capita adult cigarette consumption in India is appx. one ninth of world average 17 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 18 Per Capita Cigarette Consumption – per annum 2786 No. of cigarettes per capita per annum 1841 1711 1028 468 420 154 96 Russian Federation Japan China USA Pakistan Nepal Bangladesh India Source: The Tobacco Atlas - 4th Edition (American Cancer Society), 2012 • Although India accounts for 17% of world population, it’s share of world cigarette consumption is just 1.8% • Per Capita consumption in India ~11% of World average Rapid scale up of FMCG businesses… Rs. crs 8122 7012 5545 4482 3642 3014 2511 1704 1013 563 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 20 Creating world-class brands for Indian Consumers 21 Branded Packaged Foods Biscuits, Staples, Snacks, Noodles & Pasta, Confectionery & Ready to Eat 22 Branded Packaged Foods . Amongst one of the fastest growing Foods business in the country – Bakery and Confectionery Foods - Biscuits, Confectionery – Snack Foods - Savoury Snacks, Noodles and Pasta – Staples, Spices and Ready to Eat Foods - Atta, Salt, Spices, Ready to Eat (RTE) . Driven by strong brands- – Aashirvaad – Staples (Wheat flour, Salt, Atta (wheat flour) - #1 in Branded Spices), Ready to Eat – Ready Meals, Instant packaged Atta among national players Mixes – Sunfeast – Biscuits Biscuits - #3 All India – Sunfeast Yippee – Noodles and Pasta Noodles - #2 All India – Bingo! – Potato Chips – Yumitos, Finger Savoury Snacks - #2 All India Snacks – Mad Angles, Tedhe Medhe, Tangles, Galata Masti Confectionery - #3 in Sugar Confectionery – mint-o & Candyman – Confectionery Ready-to-Eat - Leveraging expertise of – Kitchens of India – Ready Meals, Premium Hotels business. Premium conserves, chutneys & cooking sauces Conserves/Chutneys– first in India 23 Education & Stationery . Products – Notebooks – Writing Instruments (Pen, Pencils etc) – Scholastic products . Brands – Classmate – Paperkraft 24 Education & Stationery Products Business . Leverages print and paper know-how to address suitable opportunities in the stationery market. An emerging (currently `12000 cr. Stationery) market in India - growth driven by increasing cross-cultural exposure, government spending on education . Classmate and Paperkraft continue to gain consumer franchise – Classmate : Market leader in Notebooks segment 25 Personal Care Products Brands: • Essenza Di Wills • Fiama Di Wills • Vivel • Superia • Engage Product portfolio: • Personal Wash (Soaps, Shower Gel) • Deodorants • Skin Care (Skin Cream, Face Wash etc.) • Hair Care