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8/8/2019 ITC Nov 04
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ITC LIMITEDITC LIMITED
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ITC - Financial Snapshot
Rs. croresRs. crores1997 2004 CAGR %
Gross Turnover (Ext.) 5863 11815 11
Net Turnover (Ext.) 2912 6470 12
PBIT 707 2344 19
PBT 587 2319 22PAT 347 1593 24
Capital Employed 2085 6619 18
EPS (Rs.) 14 64 24
Book Value per share (Rs.) 55 259 25
Op. Profit Margin (%) 24 36
Net Profit Margin (%) 12 25
Return on Capital Employed (%) 34 35
Total Shareholders Return (%) 23
(Rs. 1 crore = Rs. 10 million)
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2003-04 Financials
(Rs. crore = Rs. 0 million)
2003/04 2002/03 Goly (%)
Gross Turnover 11815 11025 7.2
Net Turnover 6470 5866 10.3
Exports 1103 1336 -17.4PBDIT 2585 2323 11.3
PBIT 2344 2086 12.4
PBT 2319 2056 12.8
PAT
1593 1371 16.2
CapitalEmployed 6619 5546 19.3
Rs. crores
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S m nt Capital mplo a ch 04
Rs. crs.
00 04 00 0
. Capital mplo
a) FMCG - Cigarettes * 1572.50 1621.58 (3. )
- Others 212.10 80.41 63.
Total FMCG .6 1701.99 .9
b) Hotels 978.68 943.09 3.
c) Agri Business 476.90 410.88 6.
d) Paperboards, Paper & Packaging 1468.89 1260.91 6.5
Total Segment Capital Employed 9. 4316.87 9.
* Luxury Tax Provision not incl. 366 970.00 .
(Rs. crore = Rs. 0 million)
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Key Financials - Q2 FY 0Rs. rs
Q2
Last Year
Q2
ct als Goly (%)
2856 Gr ss T r er E ter al 219 12.7
1536 Net T r er E ter al 1738 13.1
688 PBDIT 76811.6
628 PBIT 698 11.1
624 PBT 688 10.2
428 PAT 486 13.5
6257 Ca ital E l ye 754020.5
4295 Operati Cap.E pl ye 4562 6.2
17.29 EPS 19.61 13.4
(Rs. crore = Rs. 0 million)
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Key Financials - H FY 0
H as
Yea
H
c als
2004
Goly (%)
5611 Gross Turnover External 6455 15.0
2965 Net Turnover External 3513 18.5
1357 PBDIT 1523 12.3
1238 PBIT 1385 11.9
1228 PBT 1362 10.9
825 PAT 948 14.9
6257 Capital Employed 7540 20.5
4295 Operating Cap.Employed 4562 6.233.33 EPS 38.25 14.8
(Rs. crore = Rs. 0 million)
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Segment even es - H FY 0
04/05 03/04 Amt %
1. Segment Revenue
a) FMCG - Cigarettes 5079 4575 504 11
- Others 237 127 111 87Total FMCG 5317 4702 615 13
b) Hotels 131 107 24 23
c) AgriBusiness 862 734 128 17
d) Paperboards, Paper & Packaging 763 604 159 26
Total 7073 6147 926 15
Less : Inter-seg ent revenue 617 535 82 15
Gross sales / Income from operations 6455 5611 844 15
GrowthRs c s
(Rs. crore = Rs. 0 million)
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Segment Res lts- H FY 0
04/05 03/04 Amt
2. SegmentResu ts
a)F CG -Ci ar tt s
-Oth rs ( ) ( ) ( ) ( )
Tot F CG 081 983 10
b)H t ls
c) Agri B si ess
) Paperb ar s Paper& Packagi g 150 114 35 31
Tot 1321 1167 154 13
GrowthRs c s
(Rs. crore = Rs. 0 million)
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Capital mployed-H FY 0
04/05 03/04 Amt %
3. Capital Employed
a) FMCG - Cigarettes 1240 1275 (35) (3)- Others 238 157 81 52
Total FMCG 1478 1432 46 3
b) Hotels 993 967 26 3
c) Agri Business 495 317 179 56
d) Paperboards, Paper & Packaging 1579 1301 278 21
Total Segment Capital Employed 4545 4016 529 13
GrowthRs c s
(Rs. crore = Rs. 0 million)
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One o Indias most val able co po ations
Included in the F be -list* featuring 400 of theWorlds best big companies
Among top in :Sustained value creation
Operating profits
Cash Profits
High rating for Corporate overnance First company in India to be CG rated
* Sales or Market Cap. of US$ 5 billion or more
ITC
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ITC - siness o t olio
ITC
FMCGCIGARETTES
* OTHER FMCGHOTEL
S
PAPERBOARD
PAPER &PACKAGING
AGRI BUSINESSLEAF TOBACCO
AGRI COMMODITIES
* FOCUS AREA FOR
FUTURE GROWTH
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St ategy o O ganisation to managediversity
o ort olio
Formal 3-tieredgovernance structure:
Board o Directors :Comprising e ecutive (4) and non-e ecutive directors ( )
Strategic supervision
Corporate Management Committee :Comprising e ecutive directors and senior managersStrategic management
C O & Divisional Management Committee :Executive management
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Sustain multiple drivers o growth, matching internalcapabilities with emerging market opportunities
ursue World class competitiveness in all businesses and
across the entire value chain
Best-in-class in terms o :
Internal Vitality
Market Standing
Profitability
Strategy o Organisation and Governance processes
geared to manage multiple businesses
Blend core competencies and leverage ITC umbrella
strengths to create new avenues o growth
Corporate Strategies
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FMCG - Cigarettes
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ITCs Cigarettes BusinessITCs Cigarettes Business
Market leadership owerful brands across segments
eadership in all segments - geographic & price
Extensive distribution network
Over 900 wholesale dealers serving more than million
retail outlets
World-class state-of-the-art technology and
productsInvestment - Rs billion in six years
Exciting long term growth potential
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Cigarettes:Growth potential
Cigarettes account for only 14% of tobacco consumed inIndia unlike world pattern of 85% due to prolongedpunitive taxation
Cigarettes ( 4% of tobacco consumption) contribute nearly
% o f R evenue to the Exchequer from tobacco sector Of the 58% of adult Indian males who consume tobacco,
barely 15% can afford cigarettes
Biri : Cigarettes ratio = 10 : 1
Annual per capita adult cigarette consumption in India isone tenth world average : 117
Future growth depends on relative rates of growth of per
capita income and moderation in taxes
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Annual er Capita Adult Cigarette ConsumptionAnnual er Capita Adult Cigarette Consumption
0
500
1000
1500
2000
2500
3000
Source: Tobacco Institute ofIndia
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Hotels & TourismHotels & Tourism
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Hotels & Tourism industryHotels & Tourism industry
Foreign arrivals into India - million appx. vs
31 million in China
The two nations were on par 2 decades ago at750,000 arrivals
Today, Beijing alone has as many hotel rooms
as the whole of India
Indias luxury rooms availability lower than
even smaller East Asian countries
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Luxury hotel roomsLuxury hotel rooms -- East AsiaEast Asia
0
10000
20000
30000
40000
50000
60000
70000
80000
HongKo
ng
Bangk
ok
Singapore
Malaysia
India
Source: Compendium ofTourism statistics, WTO
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Indian hotel industryIndian hotel industry
Current supply - 80,000 rooms of which 5 Star
category accounts for less than 30%
To support GD growth of 6% p a , Indian room
capacity needs to double in five years
resent mismatch between supply and demand
expected to persist over the short term
As infrastructure for trade & commerce improves -growing potential for leisure tourism
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ITCs hotel businessITCs hotel business
One ofthree chains in India
Immediate strategy to establish pr esence in key business
locations to complete the chain expected to be achieved by
end 2004
Revenue leadership in most locations
Leverage unique service proposition and
international alliance with Sheraton
Large tax advantages on investments on ITCBalance Sheet
Attractive medium / long term prospects
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Amalgamation
Board meeting on 25th August 2004 approvedscheme ofamalgamation for merger of ITCHotels and Ansal Hotels with ITC
Merger ratios:
3 shares of ITC for 25 shares of ITC Hotels
1 share of ITC forevery 150 shares of Ansal
Hotels Proposed date of merger: 1st April 2004,
subject to High Court/otherapprovals
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ITCs Hotel roperties & rojects
ITC Ltd
ITC Hotels Ltd
Maurya Sheraton, ew Delhi
ITC One, ew Delhi
GrandMaratha, Mumbai
SonarBangla, Kolkata
Grand Central, Mumbai
roject Ansal Hotels Ltd. 81.5%
WindsorManor, Bangalore
Rajputana alace, Jaipur Mughal, Agra Licensed)
Chola, Chennai Licensed)
Park, Chennai Managed)
Vadodara Licensed)
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Other Hotel Properties - ITC Hotels Ltd.
Srinivasa Resorts
68% shareholding)
Bay Island Hotels
100% shareholding)
FortuneParkHotels
100% shareholding)
Marudhar Hotels
50% shareholding)
Kakatiya, Hyderabad
Bay Island, Port Blair
Manages mid-segmenthotels
Manages Heritage hotels
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Paperboards, PaperPaperboards, Paper
&&
PackagingPackaging
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Indian paperboard marketIndian paperboard market
Annual paperboard demand - 0.90 million
tonnes
Fragmented capacity & obsolete technology
Low per capita usage at 0.75 kg - 1/7th global
average
Indian paperboard market growing at 6 -7%
p.a.Value Added Coated board - the fastest growing
segment 20% p.a.) in India driven by the
growing sophistication ofthe consumer
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Paperboard DemandProjections - Asia
Asian region demand (excluding Japan) growing
by 0.5 million tonnes per annum
This region expected to be a net importer by 2005
Significant export opportunities for high quality
Indian manufacturers
ITC paperboards exports - Rs. 1 billion
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ITCs Paperboards Business
Market leader in growth segment - value added coated boards
World-class contemporary technology
Elemental Chlorine Free (ECF) Pulp Mill commissioned only
one of its kind in India meeting world-class environmental
standards Internationally competitive quality and cost
Social farm forestry in mill command area to improve access to
cost effective fibre & to attain self-sufficiency
Biotech research based high yielding Clones Eff ectivenesstested in about 24,000 hectares
Pulping capacity enhanced by 100,000 MT to strengthen
competitiveness
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ITCs Paper & Packaging businessesITCs Paper & Packaging businesses
Capacity expansion in recycled segment
Acquisition of Kovai Unit in March 2004: +65000 TPA
Another 75000 TPA to be commissioned by Q3 2004
ITCs packaging SBU -Indias largest converter of
paperboard into high quality printed packaging
Leading supplier to Indian FMCG segment
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Agri BusinessesAgri Businesses
-- LeafTobaccoLeafTobacco
-- Agri CommoditiesAgri Commodities
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Indian LeafTobacco industryIndian LeafTobacco industry
India - the second largest producer oftobacco
But, Indian exports constitutes mere 0.7% of the value of
world trade in tobacco
Upgradation of tobacco consumption from other formatsto cigarettes will enable:
growing domestic base
larger opportunities for value added exports
ITC - Indias largest buyer, processor, consumer &
exporter ofcigarette tobaccos
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ITCs Agri CommodityExports
Farm linkages in 14 states covering Soya, Wheat,Rice, Marine products, Edible nuts, Coffee
Unique CRM programme in commodity exports
Leveraging IT for the transformational e-Choupalinitiative
Rural Indias largest Internet-based intervention
Over 22000 villages link ed through 4700 e-Choupalsservicing more than 2.8 million farmers
First rural mall christened Choupal Sagar opened in M.P
Distinctive sourcing capability for ITCs Foods
business
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e-Choupal - Recognition
World Business Award ICC-UNDP
Enterprise Business Transformation Award -
Wharton Infosys
Harvard Business School case study
Showcased at ICT4D, Geneva UN
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ITCs strategic thrustITCs strategic thrust
Cost effective extension services to enhance farm
productivity and quality, and better align farm produce
with requirements of the market, both domestic and
internationalEnhances competitiveness of ITC agri sourcing
Createe-infrastructure to serve as transaction backbone
Provides ITC two-way fulfilment capability in and out of rural markets
fora range of goods and services
Rural marketing initiativesbeing scaled up progressively
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FutureGrowth & Value Capture
New FMCG Initiatives
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Strategic Rationale
Blend multiple competencies residing within the ITC Group
to create new avenues of growth
Best fit between internal capabilities and emerging market
opportunities Each segment enhances the depth and width ofITCs FMCG
distribution capability
Business model retains critical elements of value chains
within ITC with other elements outsourced
Contributing to the competitiveness of SMEs
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FMCGBusiness InitiativesBrandedPackaged Foods
Leverages:Unique Agri sourcing skills
ITC Welcomgroups specialist cuisine & bakery knowledge
FMCG distribution synergies
ITC Group R& centre,Bangalore
4 chosen categories:
Staples
Aashirvaad Atta & Salt
Biscuits
SunfeastConfectionery
Candyman, mint-o
Ready to Eat
Kitchens of India, Aashirvaad ReadyMeals
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FMCGBusiness Initiatives
BrandedPackaged Foods
Aashirvaad Atta - current market leader amongst national
branded players; leverages the e-choupal network for cost-quality
optimisation and region specific offerings
Sunfeast Biscuits - ifferentiated & innovative products ; very
encouraging response in launch markets ;distributed & outsourced
supply chain being ramped up
Number of innovative products in the pipeline leveraging the
capabilities of the ITC Group R& centre
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FMCGBusiness Initiatives
LifestyleRetailing
Leverages trade mark and services expertise ofhotels
Relaxed wear market growth > 25% p.a
Upmarket product range available in exclusive Wills
Lifestyle stores and multi-branded outlets/ large formatretail stores across the country
State-of-the-art Master Facility aids speed of execution
Outsourced JIT plant for quick response manufacturing
Product and brand range being expandedWills r ange expanded to Formals and Social evening wear
segments
Strong distribution network in place for the mid-market
brand John Players
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FMCGBusiness Initiatives
Greetings & Gifts
Leverages print and paper know-how
An emerging market in India - growth driven by
increasing cross-cultural exposure
ITCs Expressions range commenced with greeting
cards; now widened to include stationery & gift wraps
Serves to expand the width of ITCs FMCG distribution
capability with negligible incremental investment
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FMCGBusiness Initiatives
SafetyMatches
Current consumer spend estimated at Rs.1250 crores
p.a. for 24 billion match boxes
Fragmented supply base arising from policy ofreservation for small scale industry
ITC markets its brands with value added products
across each price point
Support SMEs with complementary marketing strengths
AIM Indias largest selling Safety Matches brand
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FMCGBusiness Initiatives
Incense sticks (Agarbattis)
Current consumer spend estimated at over Rs.900crores p.a.
Fragmented supply base arising from policy of
reservation for small scale industry ITC markets its brands with value added products
across each price point
Support cottage sector with complementary marketing
strengthsAll India roll out of Mangaldeep umbrella brand under
way
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FMCG business initiatives.
Concurrently, ITCs IT subsidiary assists in web-
enabling business processes
CRM initiatives
ERP transaction processing systems
SCM including the e-choupal capability
hosted on ITCs Virtual Private Network
ITC awarded the best IT user in FMCG categoryby Nasscom
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FuturePositioning ofITC
A leading FMCG player in India
F
A
R
M
E
R
S
M
A
R
KE
T
S
Cigarette TradeMarketing capability
BRANDEDFOODS
EXPANDED FMCG DISTRIBUTION CAPABILITY
E-CHOUPAL RURAL TWO-WAYFULFILLMENT CAPABILITY
BASIS FOR STRATEGIC PARTNERSHIPS WITH OTHER FMCG BRAND OWNER
VPN PROVIDING SCM, ERP & CRM CAPABILITY
LIFESTYLERETAILING
GREETINGCARDS/STATIONERY
MATCHES &AGARBATTI
S
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Q12004/05 Financials
2004/05 2003/04 Goly ( )
Gro Turno er 3236 2756 17.4
Ne Turno er 1775 1429 24.2
Expo
rts312 207 50.4
PBDIT 755 669 12.9
PBIT 687 610 12.8
PBT 675 604 11.6
PAT 462 397 16.3
Capital Employed 6974 5830 19.6
(Rs. crores)
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Segment Revenue Q12004/05
Rs. Crores
2004 05 200 04 Goly
Actuals Actuals -
1. Segment evenue
a) FMCG - Cigarettes 2538.28 2291.05 10.8
- Others 105.22 51.66 103.7
Total FMCG 2643.50 2342.71 12.8
b) Hotels 62.47 50.07 24.8
c) Agri Business 459.27 331.32 38.6
d) Paperboards, Paper & Packaging 377.33 295.64 27.6
Total 3542.57 3019.74 17.3
Less : Inter segment revenue 306.30 264.12 16.0
Gross sales / income from operations 3236.28 2755.62 17.4
Q1
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Segment Capital Employed Q12004/05
Rs. Crores
2004 05 2003-04 Goly
3. apital E ployed Actuals Actuals 2004-05
a) FMC - Cigarettes * 1110.78 1281.43 (13.3)- thers 227.38 114.45 98.7
Total M 1338.16 1395.88 (4.1)
b) otels 983.33 960.36 2.4
) gri Business 617.40 467.77 32.0
d) Paperboards, Paper Pa kaging 1526.40 1282.82 19.0
Total Seg ent apital E ployed 4465.29 4106.83 8.7
* uxury Tax Provision not included 1468 1069 37.3
1