britannia biscuits

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Analyst Meet 21 st February 2011

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Page 1: Britannia Biscuits

Analyst Meet

21st February 2011

Page 2: Britannia Biscuits

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.

Page 3: Britannia Biscuits

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

Page 4: Britannia Biscuits

Food is a large and growing space

Source: Ministry of Food Processing Industries, Indiahttp://www.worldoffoodindia.com/thefair/market_data.php* Projected

Page 5: Britannia Biscuits

Mostly unbranded --- Therefore branded food is a big opportunity

Source: Ministry of Food Processing Industries, IndiaIndustry estimates, Nielsen Retail Audit

Page 6: Britannia Biscuits

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

Page 7: Britannia Biscuits

Branded Food growth has outstripped Non-Food growth

Source: Nielsen Retail Audit

Page 8: Britannia Biscuits

… Driven by

Income growth

Convenience

Higher preference for branded foods because

of better quality and sensorial experience

Page 9: Britannia Biscuits

However there are less noticed household/individual level shifts that have an equally big impact on business

Page 10: Britannia Biscuits

Key insights driving our business

• Affordable Delight

• Health and Taste

• Any Time, Any Where -- on-the-go consumption

• Indulgent Delight

• Morphing of Categories

Page 11: Britannia Biscuits

Any Time, Any Where and on-the-go consumption

Page 12: Britannia Biscuits

Delight that is affordable to all

Page 13: Britannia Biscuits

Combining Health and Taste

Page 14: Britannia Biscuits

Food as entertainment: Delighting through morphing

Biscuit or Chocolate?

Rusk?

Biscuit ?

Salty Snack?

Page 15: Britannia Biscuits

A deep understanding of this phenomenon is helping us diversify our portfolio

Page 16: Britannia Biscuits

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

Page 17: Britannia Biscuits

The Bread, Cake and Rusk Growth Story

Source: BIL

Page 18: Britannia Biscuits

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

Page 19: Britannia Biscuits

We are ideally placed to benefit from the current trends

Page 20: Britannia Biscuits

Key Momentum Fulcrums

Strong Brands

Right Position in the delight

Chain

Rich Innovation

Funnel

Go-to-market Infrastructure

Supply Chain Infrastructure

Page 21: Britannia Biscuits

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

Page 22: Britannia Biscuits

Among the top 10 brands in this country for the last 10 Years. No 1 food brand

2010

Page 23: Britannia Biscuits

Strong Pillar Brands make for a diversified consumption foot print

Page 24: Britannia Biscuits

Strong and versatile NutriChoice our seventh pillar brand

Digestive

5 GrainNature Spice Cracker Diabetes Friendly

Page 25: Britannia Biscuits

Innovation to drive profitable growth

Page 26: Britannia Biscuits

Activation of the Britannia Credo

Page 27: Britannia Biscuits

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

Page 28: Britannia Biscuits

And our brands are where people are

Coffee Day Xpress

Kiosk Corporate Canteen

Railway Station

Page 29: Britannia Biscuits

Britannia at the closing plenary of the CGI Annual Meeting in 2009

CSR – Integral to our business proposition

Britannia @ PDS

Page 30: Britannia Biscuits

Britannia – India’s Most Respected FMCG Company

Page 31: Britannia Biscuits

The trajectory of our performance

Page 32: Britannia Biscuits

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

Page 33: Britannia Biscuits

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%

Page 34: Britannia Biscuits

Inflationary And Volatile Commodity Scenario….

Page 35: Britannia Biscuits

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

Page 36: Britannia Biscuits

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

Page 37: Britannia Biscuits

Investor Relations Contact:

[email protected]