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8/8/2019 Investors Q1 0607
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ITC LIMITEDITC LIMITED
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ITC - Financial Snapshot
(Rs. 1 crore = Rs. 10 million)
Rs. Crs.
1995-96 2005/06 10-Ye rgr %
GRO URNOVER 5115 16224 12.2
NET TURNOVER 2536 979114.5
MARKET CAPITALISATION 5571 73207 * 29.4
PBDIT 584 3613 20.0
PBIT 536 3281 19.9
PBT 452 3269 21.9
PAT (before exceptional items) 261 2280 24.2
EPS (Rs.) - before exceptional items 0.7 6.1 24.0
NETWORTH 1121 9061 23.2
CAPITAL EMPLOYED 1886 9506 17.6
ROCE (%) 28.4 34.5
Book Value Per Share ( Rs. ) 3.0 24.1 23.0
Total Shareholder Returns % 30.3
* Market Capitalisation as on 31/3/06
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2005-06 Financials
(Rs. 1 crore = Rs. 10 million)
Rs. s
2005-06 2004-05 G oly %
Gr r v r t r l 21.5
Net r ver ter l 28.2
t l F r ex r i g38.9
I 19.3
I 20.8
22.3
24.1
- fter xcepti l Items 2.0
pit l mpl yed 9506 8517 11.6
Segment pit l mpl yed 6295 5388 16.8
EPS ( s.) - ef r e Excepti nal Items 6.08 4.91 23.8
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S m nt v nu s 2005/06
(Rs. 1 crore = Rs. 10 million)
R s. rs
1. Se e R e e e
a FMCG - Ciga e es 13.3
- Othe s 79.9
Total FMCG 12343 10566 16 .8
b) Hote s 3 577 35.7
c) Agri Business 2678 1780 50.5
d) Pa erboards, Pa er & Pac aging 1896 1565 21.1
Total 17701 14489 22.2
Less : Inter segment r e enue 1476 1139 29.6
Gross sales / income f rom operations 16224 13350 21.5
2005-06 2004-05 Goly (%)
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S m nt sults 2005/06
(Rs. 1 crore = Rs. 10 million)
R s. Crs
2. eg e t esults
a) MCG - i arettes 2709 2289 1 .3
- Others (172) (195) -
Tot l G 2537 2094 21.2
b) Hote s 258 141 83.1
c) A r i Busi ess 91 96 (5.8)
d) Paperboards, Paper Packa i 351 280 25.5
Tot l 3237 2611 24.0
Less : i) Interest (Net) 12 42 (71.9 )
ii) Other un-a ocab e expenditure (44) (105) -
et of un-a ocab e i come
Prof it Before Tax 3269 2673 22.3
2005-06 2004-05 Goly ( )
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S m nt Capital mploy d ± 2005/06
(Rs. 1 crore = Rs. 10 million)
* Before consid er ing provi sion of Rs. 426 crs ( 31.03.05 ± Rs. 337 crs ) in respect of
di sput ed St t e t xes, the l evy / coll ection of which h s been st yed .
Rs. C rs
3. Cap a E p oyed
a F CG C ga e es * 1463 1240 18.0
O he s 489 262 86 .5
To a F C 1953 1502 30.0
b Ho els 1374 1401 (1.9)
c Ag Bus ness 1060 740 43.3
d Pape boa ds, Pape Packag ng 1908 1745 9.3
To a Seg en Cap a E p oyed 6295 5388 16 .8
2005 06 2004 05 Go
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ITC ± K y Financials ± Q1 2006-07
Q1 06/07
Act als
Q1 05/06
Act alsGol y
ross T rnov r xt rnal 4634 3876 19 6
Net r over xter al 2850 2267 25.7
PBDIT 1056 911 15.8
PBIT 968 831 16.4
PBT 967 830 16.5
PAT 652 558 16.8
Ca ital loye 10350 8972 15.4
Se e t Ca ital loye 6869 5226 31.4
(Rs. 1 crore = Rs. 10 million)
Rs. rs
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On of th 8 Indian Compani s to f eat r e in µFo b s A-list¶ f or 2004 Feat ring 400 of t e World¶s µ best big co panies¶ wit -ca p. > 5 bln.
ar e r ated as t e µmost attr active com panies f or investor s¶
Only Indian F C Company to f eat r e in Fo b s 2000 List
A com pr ehensive r ank ing of world¶s biggest com panies measur ed by a
com posite of sales, pr ofits, assets & mar k et value
Among top in :
Sustain d valu c ation (BT- ter n tewart survey)
Op ating p of its
Cash Prof its
R ank s No. 8 among Indian listed Com panies by market cap.(@30/06/06)
No. 1 in F C Sector; 6th amongst Private Sector
R ated as one of India¶s ost espected Companies (I R B-Businessworld
urvey 2006)
ITCOne of India¶s most valuable corporations
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Accolades & Awards (1)
olden Peacock Global Award f or Cor por ate Social R es ponsi bility in
merging economies f or 2005 by World Council f or Cor por ate Gover nance
f or the e-choupal and social & f arm f orestry initiatives
2005 Golden Peacock Award f or xcellence in Cor por ate Gover nance
ITC Centre,Gurgaon awar ded Platinum Green building rating by SGr een Building Council - eader shi p in nergy and nvir onmental esign
± largest latinum r ated building in the world; 7th such building in the world
Bhadrachalam paperboard unit :
± adjudged µGreenest paper mill in India¶ by The Centr e f or Science &
Envir onment; won the Greentech nvironment xcellence Gold Award
µJohn Players¶ adjudged the µMost Admired Shirt Brand of the Year¶ at
the Lycr a® Images Fashion Awar ds (LIFA) awar ds in Jan¶06
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ITC - Business Portf olio
ITC
FMCG:CIGARETTESOTHER FMCG
HOTEL S
AGRI BUSINESSLEAF TOBACCO
AGRICOMMODITIES
PAPERBOAR D
PAPER &PACKAGING
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Strategy of Organisation to manage diversity
of Portf olio
Formal 3-tiered governance structure:
Board of Directors :
Com prising executive (4) and non-executive dir ector s (8)
Str ategic su pervision
Corporate Management Committee :
Com prising executive dir ector s and senior manager s
Str ategic management
C O & Divisional Management Committee :
Executive management
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Sustain multiple drivers o
f growth, matching internal capabilities
with emerging market opportunities
Pursue World class competitiveness in all businesses and across
the entire value chain
Best-in-class in terms of :
Inter nal itality
ar k et Standing
Pr ofita bility
Strategy of Organisation and Governance processes geared to
manage multiple businesses
Blend core competencies and leverage ITC umbrella strengths to
create new avenues of growth
Corporate Strategies
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ITC¶s Cigarettes BusinessITC¶s Cigarettes Business
Market leadership
Powerf ul brands across segments
Leadership in all segments - geographic & price
Extensive FMCG distribution network Direct servicing of 85000 markets & nearly 2 million
retail outlets
World-class state-of -the-art technology and products
Investment - s.10 billion in six years
Exciting long term growth potential
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Cigarettes: Growth potential
Cigarettes account f or only 14% of tobacco consumed in India
unlike world pattern of 85% due to prolonged punitive taxation
Cigar ettes (14% of tobacco consum ption) contri bute nearly 85% of
R evenue to the Exchequer fr om tobacco sector
Of the 58% of adult Indian males who consume tobacco, barely
15% can aff ord cigarettes
Biri : Cigarettes ratio = 10 : 1
Annual per capita adult cigarette consumption in India is appx. onetenth world average : 141
Future growth depends on relative rates of growth of per capita
income and moderation in taxes
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Source : Based on Cigarette consumption data(2003) f rom
³World Cigarettes´,ER C Group plc.
Per C apita Adult Cigarette C onsum ption
(Sticks)
16621753
561488
141
1190
U SA C hina Pakistan N epal Ind ia W orld Avg.
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Hotels & TourismHotels & Tourism
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Hotels & Tourism industryHotels & Tourism industry
Foreign arrivals into India - 3.9 million appx. vs 31 million
in China
The two nations were on par 2 decades ago at 750,000
arrivals
Today, Beijing alone has as many hotel rooms as the whole
of India
India¶s luxury rooms availability lower than even smallerEast Asian countries
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Luxury hotel roomsLuxury hotel rooms -- East AsiaEast Asia
0
10000
20000
30000
40000
50000
60000
70000
80000
H o n g K o
n g
B a n g k
o k
S i n g a p o r e
M a l a y s i a
I n d i a
Source: Compendium of Tourism statistics, WTO
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Indian hotel industryIndian hotel industry
Current supply ± appx. 100000 rooms of which 5 Star
category accounts f or less than 30%
India needs 130000 rooms to service 5 million tourists ± a
f igure expected t o be reached by 2007
Present mismatch between supply and demand expected to
persist over the short term
As inf rastructure f or trade & commerce improves - growing
potential f or leisure tourism
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ITC¶s Hotel BusinessITC¶s Hotel Business
ITC-Welcomgroup : a leading hotel chain in India
Str ategy to esta blish pr esence in k ey business locations to
com plete the chain achieved in end 2004
Over 5200 r ooms under 4 distinct br ands
Fastest gr owing hotel chain with highest operating eff iciency
(PBDIT/ et Income @ 41%) amongst the 3 leading chains
Leverages unique service proposition and international
alliance with Sheraton
Large tax advantages on investments on ITC Balance Sheet
Attractive medium / long term prospects
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ITC¶s Hotel properties
ITC Hotel aurya Sher aton & Tower s, ew Delhi
ITC Hotel Gr and ar atha Sher aton & Tower s,Mum bai ITC Hotel Sonar Bangla Sher aton,Kolk ata
ITC Hotel Gr and Centr al,Mum bai
ITC Hotel Windsor Sher aton & Tower s,Bangalor e
ITC Hotel K ak atiya Sher aton & Tower s,Hyder a bad (thr u¶ a 68% holding
in Srinivasa R esorts Ltd.)
ITC Hotel Par k Sher aton & Tower s ,Chennai (managed pr operty)
WelcomHotel R a jputana Palace Sher aton,Jai pur
WelcomHotel Chola Sher aton, Chennai
WelcomHotel Mughal Sher aton,Agr a
WelcomHotel, ew Delhi
WelcomHotel R ama Inter national , Aur anga bad
WelcomHotel adodar a (thr u¶ associate com pany)
WelcomHotel ew Delhi
WelcomHotel Gr and Bay,Visak ha patnam (managed pr operty)
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ITC¶s Hotel Business
Manages 15 f ull service mid-market properties under the
Fortune Hotels brand
± 100% subsidiary company : Fortune Park Hotels Ltd.
Also operates 35 properties under the µWelcomHeritage¶
brand
± Maharaja Heritage Resorts Ltd. 50% JV with Marudhar
Hotels (P) Ltd.
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Paperboards, PaperPaperboards, Paper
&&
Pack agingPack aging
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Indian paperboard marketIndian paperboard market
Annual paperboard demand ± appx. 1.1 million tonnes
Fragmented capacity & obsolete technology
Low per capita usage at around
6k gs p
.a
.(world average ±
over 50 k gs p.a.)
Indian paperboard market growing at 7% p.a.
Value Added Coated board - the f astest growing segment
(20% p.a.) in India driven by the growing sophistication of
the consumer
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Paperboard Demand Projections - Asia
Asian region demand (excluding Japan) growing by 0.5
million tonnes per annum
This region expected t o be a net importer by
2006
Signif icant export opportunities f or high quality Indian
manuf acturers
ITC pa per boar ds exports - R s. 2 billion a ppx.
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ITC¶s Paperboards & Pack aging businessesITC¶s Paperboards & Pack aging businesses
Capacity expansion in recycled segment
Acquisition of Kovai nit in Mar ch 2004: +65000 TPA
Another 75000 TPA commissioned in Jan µ05
ITC¶s pack aging SBU -India¶s largest converter of
paperboard into high quality printed pack aging
Leading su pplier to Indian FMCG segment
Pr ovides su perior pack aging solutions to the cigar ettes and
new FMCG businesses
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Agri BusinessesAgri Businesses
-- Leaf TobaccoLeaf Tobacco
-- Agri CommoditiesAgri Commodities
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Indian Leaf Tobacco industryIndian Leaf Tobacco industry
India ± the third largest producer of tobacco
However, India¶s share is only 7% in world tobacco trade
Upgradation of tobacco consumption f rom other f ormats
to cigarettes will enable:
gr owing domestic base
larger opportunities f or value added exports
ITC ± India¶s largest buyer, processor, consumer &
exporter of cigarette tobaccos
Pioneering cultivation of f lavourf ul Flue-cured, superior
Burley and Oriental tobaccos in India
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ITC¶s Agri Commodity Exports
Farm link ages in 14 states covering Soya, Wheat, R ice,Marine products, Edible nuts, Coff ee
Unique CR M programme in commodity exports
Leveraging IT f or the transf ormational µe-Choupal¶
initiative
R ur al India¶s largest Inter net- based intervention
Over 36000 villages link ed thr ough ar ound 6300 e-Chou pals
servicing over 3.5 million f ar mer s ± 10 µChou pal Saagar s¶ oper ational; 9 mor e to be launched
shortly (40 nos. over the next 18 months)
Distinctive sourcing capability f or ITC¶s Foods business
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e-Choupal - Recognition
Stock holm Challenge Award 2006 ± Economic Development
Category
World Business Award ± ICC-UNDP
Enterprise Business Transf ormation Award -Wharton Inf osys
Harvard Business School ± case study
Showcased at ICT4D*, Geneva ± UN
* I nformation and Communication Technologies for Development
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ITC¶s strategic thrustITC¶s strategic thrust
Cost-eff ective extension services to enhance f arm productivity
and quality, and better align f arm produce with requirements
of the market, both domestic and international
Enhances com petitiveness of ITC agri-sour cing
Create e-inf rastructure to serve as transaction back bone
Pr ovides ITC two-way f ulfilment ca pa bility in and out of r ur al
mar k ets f or a r ange of goods and services
R ur al mar k eting initiatives being scaled u p pr ogr essively
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Future Growth & Value Capture
New FMCG Initiatives
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FMCG Business Initiatives
Branded Pack aged Foods
Leverages:Unique Agri sour cing sk ills
ITC Welcomgr ou p¶s s pecialist cuisine & bak ery knowledge
FMCG distri bution synergies
ITC R &D Centr e, Bangalor e
4 chosen categories:
Staples
± Aashirvaad Atta, Salt, S pices
Snack Foods
± Sunf east BiscuitsConf ectionery
± Candyman, Mint-o
Ready to Eat
± K itchens of India, Aashirvaad R eadyMeals, Aashirvaad Instant Mix,
Sunf east Pasta
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FMCG Business Initiatives
Branded Pack aged Foods
Aashirvaad Atta:
± Current market leader amongst national branded
players; leverages the e-choupal network f or cost-quality
optimisation and region specif ic off erings
Sunf east Biscuits:
± Diff erentiated & innovative products; continues to build
consumer f ranchise; distributed & outsourced supplychain being ramped up
Number of innovative products in the pipeline leveraging the
capabilities of the ITC R &D Centre
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FMCG Business Initiatives
Lif estyle Retailing
Leverages trade mark and services expertise of hotels
Relaxed wear market growth > 25% p.a
Upmarket product range available in exclusive Wills
Lif estyle stores and multi-branded outlets/ large f ormat
retail stores across the country
State-of -the-artMaster Facility aids speed of execution
Outsourced JIT plant f or µquick response¶ manuf acturing
Product and brand range being expanded
Pr emium segment com prising the µClassic¶ r ange of f or mal
wear , µWills S port¶ r elaxed wear and µWills Clu blif e¶
evening wear
Str ong distri bution networ k in place f or the mid-mar k et
br and µJohn Player s¶
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FMCG Business Initiatives
Greetings, Gif ting & Stationery
Leverages print and paper k now-how
An emerging market in India - growth driven by increasing cross-
cultural exposure
ITC¶s
µEx pressions¶ range commenced with greeting cards; now
widened to include stationery & gif t wraps
Distribution network being strengthened to scale up the Stationery
business signif icantly
µClassmate¶ brand already the most widely distributed brand in India
Serves to expand the width of ITC¶s FMCG distribution capability with
negligible incremental investment
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FMCG Business Initiatives
Saf ety Matches
Current industry consumer spend estimated at R s. 1250 crores p.a.
f or 24 billion match boxes
Fragmented supply base arising f rom policy of reservation f or
small scale industry
ITC markets its brands with value added products across each
price point
Su pport SMEs with com plementary mar k eting str engths
µAIM¶ ± India¶s largest selling Saf ety Matches brand
Successf ul acquisition of WIMCO Ltd. by R ussell Credit
(shareholding as at 30/06/06: 93.84%)
K ey brands:
Homelites, Ship, Cheetah Fight etc
.
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FMCG Business Initiatives
Incense stick s (Agarbattis)
Current industry consumer spend estimated at over R s. 900
crores p.a.
Fragmented supply base arising f rom policy of reservation
f or small scale industry
ITC markets its brands with value added products across
each price point
Su pport cottage sector with com plementary mar k eting
str engths
µMangaldee p¶ : the only ational br and in the country
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Future Positioning of ITC
A leading FMCG player in India
F
A
R
M
E
R
S
M
A
R
K E
T
S
Cigarette Trade Marketing capability
BRANDEDFOODS
EXPANDED FMCG DISTRIBUTION CAPABILITY
E-CHOUPAL RURAL TWO-WAY FULFILLMENT CAPABILITY
BASIS FOR STRATEGIC PARTNERSHIPS WITH OTHER FMCG BRAND OWNER
VPN PROVIDING SCM, ERP & CRM CAPABILITY
LIFESTYLE RETAILING
GREETINGCARDS/ST ATIONERY
MATCHES &AGARBATTI
S
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Forward-look ing Statements
STATE MENTS IN THIS PR ESENTATION DESCRIBING THE CO MPANYS OBJECTIVES, FUTURE PROSPECTS, ESTI MATES, EXPECTATIONS ETC. MAY BE |F ORWARD L OOKING STATE MENTS} WITHIN THE MEANING OF APPLICABLE SECURITIES LAWS AND REGULATIONS. INVESTORS ARE CAUTIONED THAT | FORWARD LOOKING STATE MENTS} ARE
BASED ON CERTAIN ASSU MPTIONS OF FUTURE EVENTS OVER WHICH THE CO MPANY EXERCISES NO CONTROL. THEREFORE THERE CAN BE
NO GUARANTEE AS TO THEIR ACCURACY. THESE STATE MENTS INVOLVE A NU MBER OF RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FRO M THOSE THAT MAY BE PROJECTED OR I MPLIED BY THESE FORWARD LOOKING STATE MENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LI MITED TO : GROWTH, CO MPETITION, ACQUISITIONS, DO MESTIC AND INTERNATIONAL ECONO MIC CONDITIONS AFFECTING DE MAND, SUPPLY AND PRICE CONDITIONS IN THE VARIOUS BUSINESSES IN THE CO MPANYS PORTFOLIO CHANGES IN GOVERNMENT REGULATIONS TAX