business overview - future consumerplanning strategic tie ups with other dairy players in northern...

Investor Presentation September 17

Table of contentBusiness Overview1

2

3

4

5

Brands

Distribution Network and Channel Mix

Sourcing & Manufacturing

Board of Directors & Key Management

11

24

27

30

03

6 Financial Update 34

7 Value Creation for Stakeholders 42

3

BUSINESS OVERVIEW

Investor Presentation 4

Indian Consumer is Evolving….

Young, and

Experimental

Globally

Aware

Confident

and

Expressive

Wedded to

choice and

convenience

Investor Presentation

Indian house makers spend 13.2

hours within the kitchen,

compared to global peers who

spend just 6 hours

5

More Value for their Time

Source: GFK Research

Quality, consistency and value-

added basic food to make time

more productive


Barely one-third of the US$185

billion FMCG market is branded,

dominated by home and personal

care and tobacco products.

6

Premium and Value Ad FMCG Products

Source: Boston Consulting Group

Demographic and income

changes are moving consumption

towards discretionary food

items such as snacks, savories,

juices, ready to cook packs

growing at 3-4X over next five

years.

Consumers are looking at

premium products and value ads


Over 80% of India’s home and

personal care market, estimated

to be around US$ 28 billion, is

branded

Yet existing brands face new

challenges with changes in

consumer preference towards

premium products

7

Safer and Holistic Home and Personal Care Options

Source: FMCG market details are as per Boston Consulting Group research

Healthier options that take care of

body


What do we Offer?

FCL is tapping into the unmet

needs and unexpressed desires

of this generation to create an

organization that is geared to

deliver...

Food and Fast Moving

Consumer Goods to the

Fast Moving Generation


Integrated Food & FMCG Company

Two Strong Pillars

of Business Purpose

Supporting the Furtherance

Sourcing & Manufacturing

Overall distribution footprint of ~67,000 stores

Access to a vast network of over 1,000 Future Group retail

outlets (including Heritage Stores)

Strong presence in sourcing of agri commodities and fresh

produces

Dairy & Bakery manufacturing facility in Southern India

Frozen Vegetables / Snacks, Chutney and Wafer Biscuit facilities

Oats facility in Sri Lanka

International tie-up with global brands

Ke

y F

oo

d &

FM

CG

Bra

nd

s

Distribution Network


JVs & Associations

Known for Tilda rice in India, Hain Celestial is a leading organic, natural, and better-for-you products company

JV, long with a manufacturing base at the Food Park, will introduce brands and products comprising of:

― Terra vegetable chips, Garden of Eatin Tortilla Chips, Dream rice and soya milk, Sensible Portions, health

snacks for toddlers

Leaders in packaged rice, led by basmati rice brand, “Dawaat”

Set up a Rice Mill and Processing plant at the Food Park

Currently operationalized for Sona Masoori rice with an aim of developing the first national brand in this space

Swiss-based Mibelle, one of the largest Consumer Goods company in

Central Europe

‘Swiss Tempelle’ has launched body wash and lotions and further

extending the range

Commissioned state of the art “oats-based” food manufacturing facility in Sri Lanka via a JV with SVA India

Launched ‘Kosh’ to make oats the third grain of the Country.

Offerings currently include instant oats, broken oats, wheat and oats flour and plans to launch variety of sweet and

savory oats categories

Tie-up for the distribution of New Age FCL products and increasing reach of General Trade outlets across India

11

BRANDS


Portfolio: Key Brands and Categories

Food and Beverages (93%)

Home & Personal Care (7%)

Staples, Dairy and Bakery, Fruits and Vegetables, Snacks, Juices, Frozen Foods, Ready to Cook Foods

among others

Wipes, Body Wash, Body Lotion, Toilet and Floor Cleaners, Kitchen Aides

Note:

1) Remaining 7% largely represents revenues from Food Park, Aadhaar and others.


INR6,623 mn

Total Revenue for Q1 FY18

Golden Harvest Prime

3%

Karmiq

2%

Others36%

Golden Harvest

59%

13

Revenue Split Across SBUs & Brands Thereof

CleanMate

16%

CareMate

11%

Tasty Treat30%

Kara

9%

34%

Aadhaar & Others*

6%

FMCG Brands

14%

Centre of Plate52%

F & V Brands

20%

Nilgiris8%

Others Include:

Kosh

Pratha

Sunkist

Veg Affaire

Sangi’s Kitchen

Puretta

TS

Others Include:

Natures Choice

Desi Atta

Ektaa

Fresh&Pure

Agri Pure

Kosh Atta

35%

112%

63%7% -3%

*Adjusted for Intercompany

(Numbers inside the SBU pie chart represent YoY Growth (%))


Portfolio of Brands under Centre of Plate


Expanding Dairy and Bakery Footprint / Portfolio

An iconic dairy and bakery brand with over 110 year heritage

operating an integrated portfolio of over 200 SKUs

Nilgiris enjoys a strong patronage in southern markets, the brand is

perceived as ‘Made, Not Manufactured’

Undertook mass advertising for the first time with newspaper

advertising in Chennai and Bengaluru

Building digital with presence on Facebook and Instagram

Exploring distribution opportunities outside the Group network with

launches in HyperCity, Spencers etc.

Recently launched 4 variants of flavoured Greek Yogurt


Broad Range of Value Added Offerings


Personal and Homecare


Ab khaana

yummy yummy,

pet healthy

healthy

18

Roti ke pet

mein kya hai?

Kosh Advertisement Campaign

https://www.youtube.com/watch?v=5FNc5RLASv4

https://www.youtube.com/watch?v=5FNc5RLASv4

https://www.youtube.com/watch?v=fc8FYQDwO_c

https://www.youtube.com/watch?v=fc8FYQDwO_c


Key Initiatives & Associations for Enhancing Brand Awareness

https://www.youtube.com/watch?v=xDDg2XxFOLA



Innovative Products Catering to Indian Festive Habits

http://www.desiattacompany.com/recipeList/shravan-maas-recipes/?utm_source=newsletter&utm_medium=email&utm_campaign=Shravan maas

http://www.desiattacompany.com/recipeList/shravan-maas-recipes/?utm_source=newsletter&utm_medium=email&utm_campaign=Shravan maas


Extending the Portfolio across Food & Beverages

Pooof! Potato Kettle Chips

Introduced new range of Kettle Chips with 2

new flavors:

1. Spicy Peri-Peri

2. Tangy Tomato

Launched FCL’s first Organic, all natural,

pesticide free Brand –

Mother Earth, offering:

1. Pulses

2. Spices

3. Rice

4. Sugar and more

Introducing Tasty Treat Twist – adding a spicy

twist with a launch of 5 new Indian flavors:

1. Spicy Pineapple

2. Chilli Guava

3. Fruit Chaat

4. Chatpata Kokum

5. Litchi Rose

All new range of Frozen Snacks by

Tasty Treat

1. Aloo Tikki

2. Barbeque Potato Bites

3. Cheese Poppers

4. Crinkle – Cut Fries

5. Hash Browns

Sunkist extending its fusion drinks range with the launch of

peppy summer flavors

1. Citrus Twist

2. Kiwi Lemon

3. Apple Ginger Honey

4. Pinacolada

5. Berry Punch


Other New Product Launches & Brand Initiatives


Media Campaigns and Promotions

Click to watch the Video



https://www.youtube.com/watch?v=QY71FHgHb98

https://www.youtube.com/watch?v=QY71FHgHb98

https://www.youtube.com/watch?v=DWV6fSTzF8w

24

DISTRIBUTION


Aadhaar2%

Nilgiris 8%

Big Bazaar53%

EasyDay, 11%

Other MT & GT 26%

25

Distribution Network Spanning across Channels

Channel Wise

Sales Mix

Q1 FY18

26

SOURCING AND MANUFACTURING


Significant Value Addition Capabilities


Created fully integrated agri-commodity sourcing

capabilities

− Sourcing capacity of 1.5 lakh tonnes agri-produce

− 71 sourcing hubs across the country and APMC

licenses in 26 states

− ~50 Warehousing and Processing centers

28

Created Strong Backend Infrastructure

Sourcing Strengths

Other Facilities

Dairy & Bakery Facilities

One manufacturing facility each for dairy and bakery near

Bangalore

Daily milk handling capacity of 1.8lac ltr per day

Installed capacities for dairy for wide range of products like

milk, butter, different variants of cheese, curd etc

“Dedicated” Chilling Center at Muthur

Planning strategic tie ups with other dairy players in

Northern & Western markets

Dairy business procures 54,000 litres of milk everyday from

a network of over 9,000 farmers and 200 milk traders in

Tamil Nadu and Karnataka

Monthly installed capacities of 450 tonnes of bread, 100

tonnes of cake among other products

− Launched an Oats manufacturing facility

− Enables to capture Oats segment in India with a wide variety of products

− F&V unit at the Food Park recently achieved ISO 22000 Food Safety Management System

certification

− Land leased to Hain Celestial – Organic Food Company

− Set up Rice and Combi Mills

− Working with leading Food & FMCG manufacturers across segments


Significant Value Addition Capabilities

30

BOARD OF DIRECTORS & KEY MANAGEMENT


Effective Board with Vast Experience

Director

Currently on the Board ofprestigious companies like AsianPaints, Tata Chemicals, IndianHotels, Go Airlines, Taj SATS AirCatering, PNB Metlife IndiaInsurance, Tata Teleservices

CEO Future Group

Founder and Group CEO of FutureGroup. Has over 25 yearsexperience and is known as thepioneer of modern retail industry inIndia

Chairman

Previously been the Chairman ofSEBI, LIC, the CorporateGovernance Task Force ofInternational Organization ofSecurities Commission and theChairperson of the InsuranceInstitute of India and Served on theBOD of various institution

Director

Founded Verlinvest & has been itsmanaging director since then,serves as non-executive director ofportfolio companiesActing as representative of DLF SAPreviously served on the Board ofDirectors of Interbrew and Spadeal

Director

Acting representative of ProterraInvestment PartnersManaging Director of the privateequity team in Proterra and serveson Board of various investeecompanies


Effective Board with Vast Experience

Director

Been associated with Future Groupsince 2002Instrumental in successfully leadingagri-sourcing business of the groupHelped in building strong brandssuch as Golden Harvest, Fresh &Pure, Premium Harvest, Ekta

Director

Qualified Chartered Accountant andcompany secretaryPreviously served as CEO of FutureVentures and CFO with erstwhilePantaloon Retail India Limited

Independent Director

Member of the Bar Council ofMaharashtra & Goa and has beenpracticing as an Associate at D.M.Harish & Co., AdvocatesPrimary expertise in the area of realestate laws & instrumental insuccessful completion of numerousreal estate transactions

Director

Instrumental in bringing in design-led thinking within the groupLed the conceptualization andlaunch of a number of retail formatsfor Future Group


Management Team Footprint Well in Place Now

Interim CEO

With over 20 years of experience inthe industry and has been withFuture Group for more than 12years. Previously worked withHindustan Lever & Asian PaintsHolds a Post Graduate Diploma inBusiness Management from XLRIJamshedpur

Agri & Staples Brands

Been associated with Future Groupsince 2002Instrumental in successfully leadingagri-sourcing business of the groupHelped in building strong brandssuch as Golden Harvest, Fresh &Pure, Premium Harvest, Ektaa

Manufacturing

~20 years of manufacturing andsupply chain experience acrossFMCG, printing and packagingAt HUL, looked after supply andoperations of 3 company ownedand 15 contract manufacturingplants of FMCG products

Food Park

25 years of professional career inIndia & abroad with leading MNC,large corporate & start-ups inFinance, strategy, governance andgeneral managementAssociated with Sara Ltd (HK),Cura Group, Alghanim Group(Kuwait)

Marketing

Joined from Times Group, mostrecently served as ExecutivePresident looking after brand andbusiness strategy for TOI, Mirrorsand language brandsPrevious experience of leadershippositions at Leo Burnett, MudraCommunications, Ogilvy & Mather

CFO

Recently appointed as CFO of FCLOver 11 years experience at Maricoof working in various positions, lastheld position being Head-Treasury,IR, M&AExperience across CorporateFinance, Cross Border M&A, postacquisition integration, treasury,forex, fund raise etc.

Packaging

26+ years of experience in FMCGPackaging portfolio coveringBeauty, Homecare, Food andhealthcare etc. for both Indian aswell as Global MarketsAssociated with Marico, Dabur &Unilever India previously

CTO

Recently joined FCL with over 26years of prior experience in the fieldof Information TechnologyAssociated with Marico for over 24years with last held position beingHead - IT and Business AnalyticsPreviously worked with Bristleconeand Mahindra Consulting

34

FINANCIAL UPDATE


FY17 & Q1 FY18 - At a Glance

Reported Cash Profit at

Consolidated level in

Q1 FY18

Consolidated Q1 FY18

EBITDA expansion

3.3x42%

Q1 FY18 Topline Growth

(Consolidated)

Reported Q1 FY18 Net

Profit on Standalone basis

₹62 mn

Reported Consolidated

FY17 EBITDA

₹207 mn

₹500 mn

Promoter Warrant Money

Received in August

39%FY17 Topline Growth

(Consolidated)

Market Cap grew by

120% XIRR

in last 3.5 years*

*Over 1st April 2014 to 18th Sep 2017 on fully diluted basis


FY 2017-18 FY 2016-17

Q1 Q1

16,450 13,380 Total Income from Operations 5,173 3,573

2,143 1,758 Gross Profit 680 482

317 -51 EBITDA 143 76

1.9% -0.4% EBITDA% 2.8% 2.1%

80 -588 PBT 62 -35

78 -585 PAT 62 -35

0.5% -4.4% PAT % 1.2% -1.0%

250 -433 Cash Profit 113 9

Particulars (INR Mn)FY 2016-17 FY 2015-16

36

Standalone Income Statement

42%

INR317 mn vs INR-51 mn

Turnaround of INR667 mn



FY 2017-18 FY 2016-17

Q1 Q1

21,158 17,021 Total Income from Operations 6,623 4,671

2,928 2,553 Gross Profit 924 662

207 -74 EBITDA 117 36

1.0% -0.4% EBITDA% 1.8% 0.8%

-427 -877 PBT -74 -151

-610 -1,077 Consolidated PAT -88 -207

-2.9% -6.3% PAT % -1.3% -4.4%

-284 -793 Cash Profit 1 -130

Particulars (INR Mn)FY 2015-16FY 2016-17

37

Consolidated Income Statement

39%


narrowed by INR467 mn

of INR1 mn in Q1 FY18


Evolution of Profitability Over the Last 3 Years

INR207 mn

Profit

INR463 mn

Loss

INR585 mn

Loss

INR78 mn

ProfitStandalone PAT

Turnaround over

Last 3 YearsINR938 mn

Loss

INR74 mn

Loss

INR17,021 mnINR21,158 mn

Strong

Consolidated

Topline Growth INR13,122 mn


Evolution of Operating Profits

Going

forward

potential to

scale upPrior to 2016

reported

Operating Losses

Network expansion and

increasing penetration

Expansion of General

Trade network

New product launches

Premiumization of

products

Economies of scale

Currently achieving

profitability at

operating level


Consolidated Balance Sheet

While the Top Line witnessed a growth of 42% in Q1 FY18 the balance sheet grew only by 5% YoY

31-Mar-17 30-Jun-17

Shareholder's Fund 8,885 8,848

Minority Interest 78 65

Gross Debt 4,714 5,117

Less: Cash and Cash Equivalents 475 121

Net Debt 4,239 4,996

Net Adjusted Capital Employed 13,202 13,908

Fixed Assets 5,173 5,341

Goodwill and Intangibles 4,163 4,176

Net Current Assets & Others 3,866 4,392

Total Net Assets 13,202 13,908

Particulars (INR mn)As on


Market Capital (INR mn) 103,906

Shares Outstanding 1,882,839,795

Free Float (%) 56%

Symbol (NSE/BSE) FCONSUMER / 533400

Stock Exchange Data (as on 18th September, 2017)

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

01-A

pr-

14

01-D

ec-1

4

01-A

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15

01

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6

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17

FCL Index FMCG Index Sensex

41

Value Creation for Stakeholders

FCL CAGR of 120%

FMCG CAGR of 11%

Sensex CAGR of 11%

Note: CAGR is calculated using XIRR | Shareholding & Market Capital on Fully Diluted Basis

Top Institutional Holders % Holding

Arisaig 8.1%

Verlinvest 7.5%

Proterra 7.0%

IFC 3.1%

Promoters43.8%

Institutional Investors

28.7%

Others27.4%


The Road Ahead…

Leveraging the Group’s strong knowhow of Indian Consumer

Building a dynamic organization based on holacratic design to execute multiple ideas and

initiatives at a time

Building a strong portfolio of brands in high margin and value add categories

Tap the immense potential of Modern Retail as the urban consumption story grows

At the same time, building a strong multi-channel distribution across the country

Continue journey towards profitability with expansion of operating profit with each quarter

Further improving balance sheet position to improve stakeholder returns

Significant portion of capital employed has recently got into commercial activity and should now

gradually lead to value creation


Disclaimer

This report contains forward-looking statements, which may be identified by their use of words like ‘plans’, ‘expects’, ‘will’,

‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’, or other words of similar meaning. All statements that address

expectations or projections about the future, including but not limited to statements about the Company’s strategy for growth,

product development, market position, expenditures, and financial results are forward-looking statements. Forward-looking

statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these

assumptions and expectations are accurate or will be realized.

The Company’s actual results, performance or achievements could thus differ materially from those projected in any such

forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking

statements, on the basis of any subsequent developments, information or events.

Thank

You

Registered and Corporate Office:

Future Consumer Limited

Knowledge House, Shyam Nagar, Off.

Jogeshwari- Vikhroli Link Road

www.futureconsumer.in Email:

[email protected]

https://www.google.co.in/maps/place/Future+Group/@19.1369606,72.862784,18.25z/data=!4m8!1m2!2m1!1sKnowledge+House,+Shyam+Nagar!3m4!1s0x3be7c81e6bff470d:0xdb7b206124cdbf80!8m2!3d19.1369969!4d72.8624711?hl=en

https://www.google.co.in/maps/place/Future+Group/@19.1369606,72.862784,18.25z/data=!4m8!1m2!2m1!1sKnowledge+House,+Shyam+Nagar!3m4!1s0x3be7c81e6bff470d:0xdb7b206124cdbf80!8m2!3d19.1369969!4d72.8624711?hl=en

http://www.futureconsumer.in/

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