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ITC Corporate Presentation
ITC Corporate Presentation
1
Profile
One of India’s most Admired and Valuable companies
- Market Capitalisation: ~Rs. 3.3 lakh crores
10 year Value Addition ~ Rs. 2.8 lakh crores (US$ 51 billion). 75% of the incremental
Value-Added accrued to the Exchequer over the last 5 years.
- Among the top tax payers in the country
ITC & its Group Companies employ over 32,000 people directly; Sustainable development
models and value chains have supported creation of ~6 million sustainable livelihoods
A global exemplar in sustainable business practices
- Only enterprise in the world of comparable dimensions to have achieved and sustained the 3 key
global indices of environmental sustainability of being 'water positive' (for 15 years), 'carbon
positive' (for 12 years), and 'solid waste recycling positive' (for 10 years)
2
ITC remains amongst the Top 3 Contributors to Exchequer
(pvt. sector)
(` crs)
Rs. cr.
21-yr Cagr
1995-96 2016-17
95-96 to 16-17
Market Cap and TSR based on FY-end prices for FY96 and FY17
4
ITC’s ranking
Amongst all listed private sector cos.
PBT: No. 5
PAT: No. 5
Market Capitalisation: No. 4
Note: Based on Published Results for Q2FY18, Market Capitalisation based on 31st Dec 2017
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Awards & Accolades (1)
ITC ranked as the most admired company in India in 2014 (Fortune-Hay Group
survey)
ITC won the prestigious Porter Prize 2017 for 'Excellence in Corporate
Governance and Integration' and for its exemplary contribution in 'Creating
Shared Value'.
ITC ranked most active in CSR for the third year in a row (Nielsen Corporate
Image Monitor 2014-15)
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Awards & Accolades (2)
ITC Hotels
awarded the
Best Overall
‘Most Trusted
Corporate Social
Hotel brand’
Responsibility
in the Public
Performance:
Choice
Institute of Public
Honours
Enterprise
category at
the Times
Travel
Honours
8
Recent Awards & Accolades (1)
ITC named India's 'Buzziest' Corporate brand Vivel featured among the top 10 ‘Buzziest
by afaqs!, the country's leading media portal brands’ across categories
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Recent Awards & Accolades (2)
ITC Hotels was awarded the Best Luxury Hotel Chain and
ITC Grand Bharat was awarded the Best Luxury Hotel at
the 6th edition of Travel + Leisure India & South Asia's
‘India's Best Awards’
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ITC’s Vision Statement
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ITC’s Vision
By
• creating multiple drivers of growth while sustaining leadership in
tobacco, and
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Key Corporate Strategies
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Strategy of Organisation
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ITC’s Business Portfolio
FMCG
Cigarettes Foods Personal Care Lifestyle Retailing
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ITC’s Cigarettes Business
Market leadership
16
Cigarette Industry in India
Legal cigarettes account for only ~11% of tobacco consumed in India due to a
punitive taxation and discriminating regulatory regime
India is the 4th largest illegal cigarette market in the World; resulting in
Revenue loss of over 9000 cr. p.a. to the National Exchequer
48% of adult Indian males consume tobacco. Only 10% of adult Indian males
smoke cigarettes as compared to 16% who smoke bidis and 33% who use
smokeless tobacco (Source: Global Adult Tobacco Survey India 2010)
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Legal Cigarettes contribute 87% of Tax Revenue, despite constituting
only 11% of Tobacco consumption
The cumulative growth in tax incidence on cigarettes, after cognising for the latest increase in Cess rates,
stands at a staggering 202% since 2011-12, i.e. the last 6 years.
Note: Consumption Share and Tax Revenue Share based on 2014/15 data
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Widening differential in Excise Duty rates between Cigarettes and
Other Tobacco Products
• On a per kg basis, the differential in Excise Duty rates between cigarettes and other
tobacco products has widened from 29 times in 2005/06 to over 53 times
currently
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Cigarettes are least affordable in India
Source : WHO Report on the Global Tobacco Epidemic, 2015-Raising Taxes on Tobacco
Cigarette taxes in India are 14 times higher than USA, 9 times higher than Japan, 7 times higher
than China, 5 times higher than Australia and 3 times higher than Malaysia and Pakistan.
20
Per Capita Consumption of Tobacco in India (gms per year)
Source:World Cigarettes – ERC Statistics, Tob Board & Industry Estimates – gms/Yr
• Although India accounts for 17% of world population, its share of world cigarette consumption is just 1.8%
• Hon’ble Karnataka High Court struck down the COTPA rules that mandated
printing of 85% GHW on Cigarette packs in Dec’17; since stayed by Hon’ble
Supreme Court
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Creating world-class brands for Indian Consumers
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Rapid scale up of FMCG businesses
(` crs)
25
Annual Consumer Spends of nearly 14000 cr. (FY17)
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Branded Packaged Foods Portfolio
Biscuits, Staples, Snacks, Noodles & Pasta, Confectionery, Ready to Eat, Juices,
Dairy, Chocolates and Coffee
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Fabelle Chocolate Boutiques
Single Origin Cacaos Fabelle Gift Hamper Fabelle centre-filled chocolate bars
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Branded Packaged Foods: Some recent launches (1)
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Branded Packaged Foods: Some recent launches (2)
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Integrated Manufacturing and Logistics facilities – An update
• Capacity utilisation at Uluberia, Mysuru and Guwahati facilities being ramped up.
• Steady progress is being made towards development of other such facilities which
are expected to be commissioned in the near to medium term.
Panchla Kapurthala
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Personal Care Products
Portfolio comprise following brands:
Launched moisturising skin cream under the recently acquired ‘Charmis’ brand.
35
Lifestyle Retailing
‘Wills Lifestyle’ brand, positioned at the premium end of the market continues to fulfil
lifestyle aspirations by offering elegant designs in high quality premium fabrics and styles
available in 400 outlets across 56 cities including six exclusive boutique stores across
ITC Hotels.
In the Youth fashion segment, ‘John Players’ continues to drive fashion imagery anchored
on bold and edgy fashion.
– available in over 800 outlets.
36
Incense sticks (Agarbattis) & Safety Matches
• ‘Mangaldeep’ continues to fortify its market standing in the Agarbatti and Dhoop segment.
• ‘AIM’ continues to be the largest selling safety matches brand in India.
• Launched in September 2016 on both Android & iOS platforms the Mangaldeep App is
currently available in seven languages and caters to the everyday devotional needs of
consumers.
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Hotels
• Leader in Profitability
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Hotels & Tourism industry
Foreign Tourist Arrivals (FTA) growth has picked up in the last few quarters.
– FTA into India @ ~8.0 million remains far behind China (~56.8 million)
[Source: UNWTO Tourism Highlights 2016 edition]
39
Hotels Business
The Chain: 104 properties across 74 locations
− 4 Brands: ITC Hotels, WelcomHotel, Fortune & WelcomHeritage
• 25 Five-Star Deluxe/ Five-Star Properties with over 4800 rooms
• 45 Fortune Hotels with over 3500 rooms
• 34 WelcomHeritage Properties with over 800 rooms
Industry has seen some improvement in ARR, in the last couple of quarters.
‐ Overall, due to excessive room inventory, pricing scenario continues to be sluggish.
Projects underway:
⁻ ITC Hotels: Kolkata, Hyderabad,
Ahmedabad, Srinagar
⁻ WelcomHotels at 3 cities;
Bhubaneswar, Guntur and
Amritsar.
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Paperboards & Packaging Business
• No. 1 in Size
• No. 1 in Profitability
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Indian Paperboard market
Low per capita usage of paper at around 9 kgs p.a. (world average –
over 58 kgs p.a.)
43
ITC’s Paperboards, Paper & Packaging businesses
ITC’s packaging SBU - India’s largest converter of Paperboard into high quality packaging
– Provides superior packaging solutions to the cigarettes and new FMCG businesses
– Leading supplier to Indian FMCG industry
– Strengthened its capabilities as a one-stop-shop for packaging solutions with the addition
of a rigid box and a flexo corrugation line
TPA: Tonnes per annum
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Agri Business
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Indian Leaf Tobacco industry
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ITC’s Agri Commodity Business
Distinctive sourcing capability for ITC’s Branded Packaged Foods Businesses
− Identity-preserved superior quality wheat for ‘Aashirvaad’ atta
− High quality chip stock for ‘Bingo! Yumitos’ potato wafers
− Superior quality fruit pulp for ‘B Natural’ range of juices
Farm linkages in 17 States covering Wheat, Soya, Potato, Coffee etc.
Unique Customer Relationship Management programme for commodity customers in both domestic
and international markets
Leveraging Information Technology for the transformational ‘e-Choupal’ initiative
– Rural India’s largest Internet-based intervention
– Over 35000 villages linked through around 6100 e-Choupals servicing around 4 million farmers
Forayed into the Fruits & Vegetables segment
– Differentiated variants of potatoes under the ‘Farmland’ brand and
– Dehydrated onion flakes under the ‘ITC Master Chef Smart Onions’ brand for the institutional segment.
ITC Master Chef prawns Farmland Potatoes ITC Master Chef Super Safe Smart Onions
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ITC’s Agri Commodity Business
e-Choupal: Strategic Thrust
Procurement: cost & quality optimisation
– strategic sourcing support to the Branded Packaged Foods Businesses
– cost-effective sourcing for exports/domestic external business
Rural retail
– 23 Choupal Saagars operational
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ITC e-Choupal – Global Recognition
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ITC - Key Financials – Q3 2017/18
` Crs
Q3 CY Q3 LY GOLY PDI
• Gross Sales Value growth driven by Foods, Personal Care, Paperboards and tax-led growth in
Cigarettes
• Exceptional Items represent reversal of TN Entry Tax provision pursuant to favourable
Supreme Court judgement
• Positive swing in OCI driven by favourable movement in EIH valuation
Gross Sales Value includes all taxes (GST, Compensation Cess, VAT, Excise Duty, NCCD, etc.)
50
Gross Segment Revenue – Q3 17/18
(` crs)
Q2 Q3
2017-18 2017-18 2016-17 Goly(%)
Segment Revenue (Gross)
4554 a) FMCG - Cigarettes 4629 8288 (44.1)
2804 - Others 2872 2569 11.8
7358 Total FMCG 7501 10857 (30.9)
300 b) Hotels 404 371 9.2
1968 c) Agri Business 1531 1672 (8.4)
1309 d) Paperboards, Paper & Packaging 1280 1336 (4.2)
10936 Total 10716 14235 (24.7)
1260 Less : Inter segment revenue 863 765 12.9
Gross Revenue from sale of
9676 9853 13471 (26.9)
products & services
Note: Gross Revenue not comparable with previous period a/c GST transition
51
Segment Results – Q3 17/18
( ` crs)
Q2 Q3
2017-18 2017-18 2016-17 Goly(%)
Segment Results
3292 a) FMCG - Cigarettes 3269 3034 7.8
20 - Others 47 (20)
3312 Total FMCG 3316 3014 10.0
4 b) Hotels 55 42 29.9
256 c) Agri Business 233 237 (1.4)
274 d) Paperboards, Paper & Packaging 268 246 9.0
3847 Total 3873 3539 9.4
29 Less : i) Finance Cost 24 14
ii) Other un-allocable (income) net
(127) (368) (429)
of un-allocable expenditure
3944 Profit Before Exceptional items & Tax 4217 3954 6.6
53
Segment Liabilities
( ` crs)
Q2 Q3
2017-18 2017-18 2016-17 Goly(%)
Segment Liabilities
4416 a) FMCG - Cigarettes * 4685 2999 56.2
1749 - Others 1879 1414 32.9
6166 Total FMCG 6564 4413 48.7
480 b) Hotels 513 452 13.4
1199 c) Agri Business 1028 1001 2.6
750 d) Paperboards, Paper & Packaging 787 616 27.8
8593 Total Segment Liabilities 8891 6483 37.2
3925 Unallocated Corporate Liabilities 2981 3303 (9.7)
12519 Total Liabilities 11872 9786 21.3
Increase in Segment Liabilities primarily a/c GST liability and trade payables
54
Headline Financials : YTD Dec-17
` Crs
YTD Dec YTD Dec
GOLY PDI
CY LY
Gross Revenue for the nine months ended 31st December, 2017 is not comparable with the previous
period a/c GST transition.
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YTD Dec’17 Segment Revenue
(` crs)
YTD Q3
2017-18 2016-17 Goly(%)
Segment Revenue (Gross)
a) FMCG - Cigarettes 17958 25047 (28.3)
- Others 8277 7626 8.5
Total FMCG 26234 32673 (19.7)
b) Hotels 1010 955 5.7
c) Agri Business 6259 6346 (1.4)
d) Paperboards, Paper & Packaging 3949 3990 (1.0)
Total 37452 43965 (14.8)
Less : Inter segment revenue 4201 3846 9.2
Gross Revenue from sale of
33251 40119 (17.1)
products & services
Note: Gross Revenue not comparable with previous period a/c GST transition
56
YTD Dec’17 Segment Results
( ` crs)
YTD Q3
2017-18 2016-17 Goly(%)
Segment Results
a) FMCG - Cigarettes 9835 9255 6.3
- Others 73 (27)
Total FMCG 9908 9228 7.4
b) Hotels 64 44 46.1
c) Agri Business 725 771 (6.0)
d) Paperboards, Paper & Packaging 800 726 10.2
Total 11497 10768 6.8
Less : i) Finance Cost 63 34
ii) Other un-allocable (income) net
(672) (722)
of un-allocable expenditure
Profit Before Exceptional items & Tax 12106 11456 5.7
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ITC - Key Financials – 2016/17
(` crs)
Overall performance impacted by increasing regulatory pressures & cumulative impact of tax
increase on Cigarettes, weak demand conditions, steep hike in commodity prices & impact of
currency crunch
58
Gross Segment Revenue – Full Year
(` crs)
59
Segment Results – Full Year
(` crs)
61
Social Performance
Social and Farm forestry initiative has greened nearly 620,000 acres and
generated nearly 113 million person days of employment for rural households,
including poor tribal and marginal farmers.
62
Environmental Performance
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For More Information & Updates
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