Motilal Oswal Investor Conference

Mumbai
September 7, 2015

Disclaimer
This presentation may contain statements which reflect Managements
current views and estimates and could be construed as forward
looking statements. The future involves certain risks and uncertainties
that could cause actual results to differ materially from the current
views being expressed. Potential risks and uncertainties include such
factors as general economic conditions, foreign exchange fluctuations,
competitive product and pricing pressures and regulatory
developments.
Responses can only be given to questions which are not price
sensitive.

Presentation structure
Group Overview

Economic Environment : Q1 & FY16

Financial Performance : Q1 & FY16
Business Review : Q1 & FY16

Risks and Outlook

Asian Paints Group Today

Over

No.

Paint Company
in India

11th
Largest Coating
Company
In the World

USD

rd

Billion

Group revenue

Operations in

19

Company; Four
times in a row

Largest Paint
Company in Asia

26

countries

Paint
Manufacturing
Plants

Part of NSE Nifty

Servicing
Consumers in over

50

65

Forbes Asias Fab

50

Countries

3
Times nearest
Competitor in India

47
Years of Market
Leadership in India

7000+
Employees
worldwide

Global standing
16.0
14.3
14.0

In Billion USD

12.0
10.0

11th largest in the World

11.6

10.0

8.0

2nd largest in Asia

6.4
6.0
4.5
4.0
2.0
-

4.4

4.4
3.6

3.1

2.9

2.3

2.3

2.1

2.1

2.0

1.7

1.7

1.5

1.0

1.0

* Coatings World 2015 Top companies report

Worldwide Operations

Jamaica

Egypt
Barbados

Trinidad & Tobago

Ethiopia

Bahrain
UAE
Oman

Nepal
India

Bangladesh

Sri Lanka

Singapore
Indonesia
Solomon Islands
Vanuatu
Samoa
Fiji
Tonga

Strong Brands

Aspiration

To be the fore runner of inspiring dcor and to actively

empower customers to create their dream homes

Stand for

Belief in fostering the principles of trust and transparency

Ability to adapt itself to the changing environment

Dynamic professional management team focused towards delivering stakeholder

value with highest levels of corporate governance

Innovative strategies in the marketplace

Efficient manufacturing and logistics

Capabilities to effectively harness Information Technology to improve efficiency

in operations (SAP, i2, etc.)

Prudent management of financial resources

Focus on Research and Development (dedicated group R & D centre in India at

Turbhe near Mumbai)

Innovative Market place Strategies

Small Packs

Exterior Paint Segment

Consumer and Dealer helpline

Colour Next (Prediction of Colour trends through

in-depth research)

Special effect and textured paints

Signature Stores

Colour Ideas store

Samplers

Beautiful Homes Guide

Water Proofing and Wallpaper business

Ezycolour Service brand

Home Solutions (Painting solution service)

Colour Consultancy @ Home

Powerful Consumer Connect

Signature Stores in Metros

Colour Ideas Stores

Innovative retailing strategy showcasing latest product and solution offerings

enabling consumers to get inspired, try and decide
Strong presence in all product segments, servicing over 34,000+ dealers

Robust Supply chain and IT

State of the art Supply Chain system using cutting edge latest technology for
efficient management and execution

World Class, large manufacturing facilities with latest automation technologies

Largest single location paint manufacturing capacities at Rohtak, Haryana and Khandala,
Maharashtra. Both these plants can be scaled up to 4,00,000 KL p.a.
Planning to set up a new, fully-automated manufacturing facility over the next 2-3 years

Strong distribution and logistic network across geographies using modern

material storage and handling technologies

Dedicated in-house IT team adding value to business process in terms of higher

productivity, lower costs, speed, consistency and standardization

Dedicated R&D

Dedicated Research and Technology facility at

Turbhe (Near Mumbai) with over 150
scientists

Supports
company
strategy
around
Technology development, Sustainable new
products, Green products, Value reengineering for productivity improvement and
cost optimization

Our scientists had won the Roon award in

2013 one of the highest technical
achievements in the coatings industry

Changing with times

Business Portfolio

Decorative Coatings India

Industrial Coatings India

13%
1%

PPG Asian Paints

5%

Asian Paints PPG

International Operations
81%

Home Improvement Business India

Sleek
ESS ESS

Decorative - India

Home Improvement - India

Industrial - India

Chemical Business
FY 2014- 2015

International Operations

Decorative Coatings - India

Largest business unit of the company

Primarily operates in four segments

o Interior Wall finishes
o Exterior Wall finishes
o Metal Finishes (Enamels)
o Wood Finishes

Introduced new categories like water-proofing & wallpapers

Product for every price point and requirement

Industrial Coatings - India

Asian Paints participates in the Industrial Coatings segment, through two 50:50
JVs with PPG Inc. of US

PPG Asian Paints (For Auto Coatings)

The Auto segment is catered through our JV (PPG AP)

Second largest supplier to the auto segment in India

Now, the largest player in auto refinish segment, post acquisition of ICI
Indias 2k auto refinish business in 2007

Commissioned a 3,200 KL / year plant in Chennai, Tamil Nadu in 2008

Asian Paints PPG (For Non Auto Industrial)

Protective coatings, floor coatings, road marking paints and powder coatings
segment catered to by this JV

Services customers in the sectors of Infrastructure, Oil & Gas, Power Plants,
White Goods, etc

International Operations

1.6%

Contributes about 13% to the group turnover

Began by establishing presence in Fiji in 1978

7.0%

11.8%

31.0%

48.6%

Presence in 19 countries spread over 5 regions

Caribbean : Jamaica, Barbados and Trinidad & Tobago
Middle East : UAE, Bahrain, Oman & Egypt
Asia : Nepal, Sri Lanka, Bangladesh, Singapore & Indonesia

Caribbean

Middle East

Asia

South Pacific

FY 2014- 2015

South Pacific : Fiji, Tonga, Solomon Islands, Vanuatu &

Samoa
Africa : Ethiopia

Focus on establishing presence and growing in high growth emerging markets

Looking for expansion in key markets of Africa and South East Asia
Acquired 51% stake in Kadisco Chemical Industry PLC, Ethiopia in Feb 2015
Setting up paint manufacturing facility at Indonesia

Africa

Home Improvement Business - India

In 2012, Asian Paints announced plans to consider opportunities in the area of Home
Improvement and Dcor

Entered Kitchen space in India in Aug13 by acquiring 51% stake in Sleek International
Sleek is a major organized player in the modern kitchen solution space with pan India
presence
Engaged in the business of manufacturing, selling and distributing kitchens, kitchen
components including wire baskets, cabinets, appliances, accessories etc.

Retail network of more than 30 showrooms including shop-in-shops and 250+ dealers

Entered the Bathroom fitting business in June14 through acquisition of front end sales
business (including brands, network and sales infrastructure) of ESS ESS Bathroom
products Pvt Ltd
ESS ESS is a prominent player in the bath business segment in India and has high quality
products in this segment

Chemicals

Asian Paints manufactures Phthalic Anhydride (PAN) and Pentaerythritol (Penta)

PAN manufactured in Gujarat and Penta in Tamil Nadu
More than 50% consumed internally

Contributes about 1% to the groups consolidated revenue

Contribution to the groups revenue has been continuously decreasing

Consistent performance
Consolidated Net Sales and
Operating Income ( ` Crores)

Net Profit (` Crores)

1,395
1,400

14,183

16,000

1,200

14,000
12,000
10,000

1,000
CAGR
18.6%

800

8,000

CAGR
23.1%

600

6,000
4,000

400

2,574

174

200

2,000

0
2004-05

2014-15

2004-05

2014-15

Sustained value creation...

Market Cap (` Crores)

60%

50%

7,000

3,751

30%

4,000

20%

3,000

10%

2,000

2013-14

2014-15

2012-13

2004-05

2009-10

2008-09

0%

1,000

2007-08

5,000

53%

46%

51%
47% 49%

39%

40%

2006-07

6,000

52% 51% 54%

2014-15

CAGR
35.42%

2005-06

8,000

60%

2004-05

9,000

70%

73%

2011-12

10,000

80%

2010-11

77,820

Dividend Payout Ratio

Recent Accolades

Felicitated as one of the Most Impactful Companies of the Decade by CNBC Awaaz in Jan 2015

Included in Forbes Indias List of Super 100 companies in India in 2015

Included in Forbes Magazine's Asia's Fab 50 List of cos 4 years in a row from 2011 to 2014

Rated as the 6th Most Valuable Brands in India Aug 2014 (Compiled by marketing and brand
consultancy Millward Brown and WPP Group)

Ranked as the 4th Most Admired Company in the FMCG Sector by Fortune India Aug 2014

Presented with the Asian Centre for Corporate Governance & Sustainability Award for the Best
Governed Company in 2011

Asian Paints receives the Best Audit Committee Award from the Asian Centre for Corporate
Governance & Sustainability in 2011

Sword of Honour" by the British Safety Council for all the paint plants in India, considered as the
pinnacle of achievement in safety across the world

Presentation structure
Group Overview

Economic Environment : Q1 & FY16

Financial Performance : Q1 & FY16
Business Review : Q1 & FY16

Risks and Outlook

Economic Environment
Industrial production data points to uneven recovery
Apr15-May15 industrial growth at 3%; marginally higher than 2.9% growth
seen last year
Domestic growth expected to remain on gradual recovery path
GDP growth expected to pick up to about 7.7%-7.9% from 7.3% for last year
led by higher public investments
Inflation trend continues to remain soft with headline CPI inflation at 5.4% in
June15
Monsoon has weakened after a good start for the season
Global markets remained volatile marred by uncertainty on various fronts
Feds assessment of the US economy and timing of rate hikes
Greece bailout and its impact on the wider Eurozone economy
Chinese stock market clampdown and resulting volatility in forex flows
25

Presentation structure
Group Overview

Economic Environment : Q1 & FY16

Financial Performance : Q1 & FY16
Business Review : Q1 & FY16

Risks and Outlook

Financials Q1 FY 2015-16

27

Growth over Last Year

Standalone Revenue Growth Trend

28

Dividend

In FY 2014-15
Total Dividend of ` 6.10 per share (610%)
Final dividend of ` 4.30 per share
Interim dividend of ` 1.80 per share
Payout ratio of 52.6% for the year (on standalone financials)

In FY 2013-14*
Total Dividend of ` 5.30 per share (530%)
Final dividend of ` 4.20 per share
Interim dividend of ` 1.10 per share
Payout ratio of 50.9% for the year (on standalone financials)

* Face Value split Rs 10 to Re 1 during FY 2013-14

29

Presentation structure
Group Overview

Economic Environment : Q1 & FY16

Financial Performance : Q1 & FY16
Business Review : Q1 & FY16

Risks and Outlook

Business Review
DECORATIVE BUSINESS
Decorative Paints business in India registered low double digit volume growth in Q1
No significant improvement in demand conditions
Low value products doing well
Profitability improvement mainly driven by softening of input prices
No price revision affected in Q1FY16
Cumulative price increase of 0.39% for FY15 against increase of 6.25% in FY14
Increased prices by 1% on 1st May14 & 1.2% on 1st June14
Price Reduction of 1.95% wef 11th Feb15
Continued focus on network expansion and opening new Colour Ideas store
Over 30,000 Colour Worlds & 250 Colour Ideas stores across the country

31

Business Review
DECORATIVE BUSINESS
CAPEX
Capex for FY16 estimated at ` 700 crores
Rohtak (Haryana) plant expansion work from 200,000 KL/annum to 400,000
KL/annum in progress as per schedule
Signed MOU with Government of Andhra Pradesh for setting up 400,000 KL
paint manufacturing facility at Visakhapatnam district
Discussion with Government of Karnataka for setting up paint manufacturing
facility at Mysuru District

32

Business Review
INTERNATIONAL BUSINESS

Business performed well amidst challenging market conditions in some key markets
Good performance from units in Middle East and Ethiopia
Decent growth registered by key markets like Egypt and Bangladesh

Operations in Nepal impacted in the aftermath of the devastating earthquake

In the process of setting up of paint manufacturing plant in Indonesia with 24,550 MT

capacity subject to necessary regulatory and other approvals

INDUSTRIAL BUSINESS

The Automotive coatings JV (PPG-AP), witnessed subdued demand conditions both in

General Industrial as well as Auto OEM segment
Auto Refinish segment registered decent growth
The Industrial Coatings JV (AP-PPG), registered good growth in the Industrial Liquid Paints
33 Powder coatings segment
and

Business Review
HOME IMPROVEMENT BUSINESS
Both, the Kitchen business (SLEEK) and Bath business (ESS ESS) impacted by subdued
demand conditions
Both businesses has now been co-branded with Asian Paints
Focus on network expansion and streamlining the business model

34

Presentation structure
Group Overview

Economic Environment : Q1 & FY16

Financial Performance : Q1 & FY16
Business Review : Q1 & FY16

Risks and Outlook

Outlook
INDIAN OPERATIONS
Cautious on the domestic demand outlook
Good monsoon and strong pick-up in economic activity required for significant uptick in
demand
Industrial products demand would need further push in investments public as well as
private, to see sustainable growth
Raw material prices expected to remain low in the near term

INTERNATIONAL OPERATIONS
May not see significant improvement in demand conditions from bigger units like Egypt &
Bangladesh
Outlook for unit in Nepal would depend on Governments effort in rebuilding the Nepalese
economy

36

THANK YOU

37

ANNEXURES

38

STANDALONE Q1 FY 2015-16

39

CONSOLIDATED Q1 FY 2015-16

40

KEY RATIOS

For Standalone and Consolidated results, PBT is before Exceptional Items

For Consolidated results, PAT is before Minority Interest

41