britannia biscuits
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Analyst Meet
21st February 2011
Disclaimer
This presentation may contain statements which reflect
Management’s current views and estimates and could be
construed as forward looking statements. The future involves
risks and uncertainties that could cause actual results to differ
materially from the current views being expressed. Potential
risks and uncertainties include factors such as general
economic conditions, commodities and currency fluctuations,
competitive product and pricing pressures, industrial relations
and regulatory developments. This communication is not an
offer to sell or the solicitation of an offer to buy securities.
Will talk about
• The opportunity in food - - market, consumers, growth
• How Britannia is positioned to tap that opportunity
– Consumer & Brands
– Customers & Markets
– Go To Market Approach
• The trajectory of our performance
Food is a large and growing space
Source: Ministry of Food Processing Industries, Indiahttp://www.worldoffoodindia.com/thefair/market_data.php* Projected
Mostly unbranded --- Therefore branded food is a big opportunity
Source: Ministry of Food Processing Industries, IndiaIndustry estimates, Nielsen Retail Audit
Food Non-Food
% Contribution to total FMCG
Total Sales (Rs Billion) 669 617
Top 5 Categories by Sales (Rs Billion)
Branded, packaged biscuits dominate food
Source: Nielsen Retail Audit
Branded Food growth has outstripped Non-Food growth
Source: Nielsen Retail Audit
… Driven by
Income growth
Convenience
Higher preference for branded foods because
of better quality and sensorial experience
However there are less noticed household/individual level shifts that have an equally big impact on business
Key insights driving our business
• Affordable Delight
• Health and Taste
• Any Time, Any Where -- on-the-go consumption
• Indulgent Delight
• Morphing of Categories
Any Time, Any Where and on-the-go consumption
Delight that is affordable to all
Combining Health and Taste
Food as entertainment: Delighting through morphing
Biscuit or Chocolate?
Rusk?
Biscuit ?
Salty Snack?
A deep understanding of this phenomenon is helping us diversify our portfolio
Increasing relevance and footprint of Britannia
• Biscuits
• Rusks
• Cake
In-between meals @ home
• On-the-go Packs
• Time Pass
• Daily Bread
Anytime Anywhere • Dahi
• Butter. Cheese
• Milk
Meal Accompaniment
• Bread
• Healthy Start
Main Meal
The Bread, Cake and Rusk Growth Story
Source: BIL
The Dairy Growth Story
100
116
139
161
190
2005-06 2006-07 2007-08 2008-09 2009-10
NSV (Indexed to 2005-06)
Source: BIL
We are ideally placed to benefit from the current trends
Key Momentum Fulcrums
Strong Brands
Right Position in the delight
Chain
Rich Innovation
Funnel
Go-to-market Infrastructure
Supply Chain Infrastructure
Strong Brands (1)Consumer connect
Universality ofAppeal
Enjoyable food that is good for you;
Anytime, Anywhere, Everyday
Umpteen BritanniaSpecial Moments
Delight And Enjoyment
In every Bite
9 decades of
Credentials
Among the top 10 brands in this country for the last 10 Years. No 1 food brand
2010
Strong Pillar Brands make for a diversified consumption foot print
Strong and versatile NutriChoice our seventh pillar brand
Digestive
5 GrainNature Spice Cracker Diabetes Friendly
Innovation to drive profitable growth
Activation of the Britannia Credo
The conventional Distribution infrastructure delivers to 35 Lakhs outlets. 8.5 Lakhs outlets are serviced directly
BIL
Co
nsu
mers
AW
RPD
Urban Retailer
(Direct)
Rural Retailer
(Direct) mk mkmk
Super
Stockist
Urban Retailer
(Indirect)
Rural Retailer
(Indirect)
Wholesalers
Institutions/Chain
retailers
And our brands are where people are
Coffee Day Xpress
Kiosk Corporate Canteen
Railway Station
Britannia at the closing plenary of the CGI Annual Meeting in 2009
CSR – Integral to our business proposition
Britannia @ PDS
Britannia – India’s Most Respected FMCG Company
The trajectory of our performance
10,000
15,000
20,000
25,000
30,000
35,000
05-06 06-07 07-08 08-09 09-10
Rs. M
M
NSV - Standalone 17,133 21,992 25,848 31,122 34,014
NSV - Consolidated 22,662 27,769 34,212 37,708
YTD December 10- Growth of 25%
NSV Doubled In 4 Years
6.3 6.2
7.0
6.8
7.9
5
6
7
8
9
10
800
1,300
1,800
2,300
2,800
2005-06 2006-07 2007-08 2008-09 2009-10
% N
SV
Rs. M
M
A & SP 1,071 1,356 1,797 2,112 2,688
Sustained Investment Behind Brands
YTD Dec 10 – Increase of 14%
Inflationary And Volatile Commodity Scenario….
800
1,300
1,800
2005-06 2006-07 2007-08 2008-09 2009-10
Rs. M
M
PAT
PAT - Standalone 1,464 1,076 1,910 1,804 1,165
PAT - Consolidated 1,051 1,774 1,515 1,032
…..And Competitive Intensity - Impacted Profit….
…..Despite cost reduction of over Rs. 2,000 MM
YTD Dec 10 – Rs. 1,020 MM
To Summarize
• The opportunity is large and Britannia is well positioned to exploit it
• Subsidiary losses curtailed
• Biscuit continues to be the most affordable packaged food, registering robust growth
• Commodity inflation will stress operating margin – being addressed through fundamental cost re-structuring and revenue management
• Investing in people, brands and infrastructure will enhance overall capability & competitiveness
Investor Relations Contact: