DABUR INDIA LIMITED

Merrill Lynch - India Investor Forum

September 2011, London

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FMCG GROWTH STORY

India FMCG Sector Volume and Value Growth Rate (Y-o-Y %) High Growth Phase

Source: Industry data, Standard Chartered Research

Indias FMCG sector reported steady sales CAGR of 11.2% over FY00-10 on the bac o st o g a ua o u e g o t o back of strong annual volume growth of ~8.5%. 8 5% Growth being driven by increasing consumption led by rise in incomes, changing lifestyles and favorable demographics As per a recent study conducted by Booz & Company, FMCG sector is expected to grow in the range of 12% to 17% upto 2020 and would touch a market size between of Rs. 4,000 to Rs. 6,200 billion
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FMCG CURRENT SCENARIO

FMCG Split: OTC, Food and Non-Food
140,000

Rs.Crores 97,276 82,615

4 46 (14%) 48 4 (10%)

128,580 116,053
4 (14%) 45 (8%) 46 (19%)
OTCPRODUCTS NonFood FoodProducts

FMCG industry billion in CY10

pegged

at

US$30

120,000

(11%)

Of the entire FMCG sector, Food is 52%, Non-Food 52% Non Food at 45% and OTC 3% Rural sector accounts for about 33% of total revenue

100,000

80,000

60,000

40,000 ,

50 (20%)
20,000

52 (14 %) (14%)

48
MATSep'07

50 (22%)

FMCG Sales Channel Breakdown

MATSep'08 MATSep'09 MATSep''10

(Growth%)

Source: AC Nielsen
5.8%

5.0% 3.3% 5.9%

8.2%

Of the 7.8 million retail outlets for FMCG, Grocers are the dominant , format Modern Trade contributes to 6% of FMCG sales

58.6% 13.2%

Grocers PaanPlus Paan Plus ModernTrade

Source : AC Nielsen

GeneralStores FoodStores Food Stores

Chemists Others

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PENETRATION LEVELS: SUFFICIENT HEADROOM

Rural Penetration
90%

Urban Penetration

80%

77%

80% 67% 57% 59%

70%

60%

50%

42%
40%

37% 32% 26% 18% 18% 19% 5% 2%

Hair Dyes

30%

20%

10%

3%
Toothpaste Shampoo Hair Oil Skin Cream Mosquito Repellants Instant Noodles

4%
Floor Cleaners

0%

Source: Industry Data

Low penetration levels offer room for growth across consumption categories Rural penetration catching up with urban penetration levels

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PER CAPITA CONSUMPTION: ROOM FOR GROWTH

India has low per capita consumption as compared to other emerging economies
Skin Care Per Capita Consumption (in US$)
in US$
9 8 7 6 5 4 3 2 1 0 2 1.5 1

Shampoo Per Capita Consumption (in US$)

in US$
3 2.5

7.4

7.7 77

2.7 27

2.4

3.2 0.8 China Indonesia 0.3 India Malaysia Thailand

1.0

1.1 0.3

0.5 0

China

Indonesia

India

Malaysia

Thailand

Toothpaste Per Capita Consumption (in US$)

in US$ 3.5
3 2.5 2 1.5 1 0.5 0

2.9 2.0 20 1.0 0.5 0.4

China

Indonesia

India

Malaysia

Thailand

Source: MOSL

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INFLATION PLAYING SPOILSPORT

WPI has hovered in the 9% to 10% range this Calendar Year inspite of previous years high base Prices of agri-based and crude linked agri based inputs have witnessed sharp increase, exerting pressure on gross margins Persistently hi h i fl ti P i t tl high inflation may start t t impacting demand for FMCG
Domestic Coconut Oil Price (Jan-10 to June-11) Monthly WPI Trend (CY 2011)

9.5% 9.5% 9.7% 9.7% 9.1% 9.4%

Jan

Feb

Mar

Apr

May

Jun

Nymex Crude (Apr-10 till June-11)

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DABUR OVERVIEW
Established in 1884 - more than 125 Years of Trust & Excellence Among top 4 FMCG companies in India Worlds largest in Ayurveda and natural healthcare Revenue of Rs. 41.1 billion and profits of Rs. 5.7 billion in FY2010-11 Strong brand equity
Dabur is a household brand Vatika and Real are Superbrands Hajmola , Real & Dabur ranked among H j l R l D b k d Indias Most Admired Brands
Eleven Billion Rupee Brands

11 Brands with sales of over Rs. 1 billion each Wide distribution network covering 2.8 million retailers across the country 17 world class manufacturing plants catering to needs of diverse markets Strong overseas presence with around 30% contribution to consolidated sales
Dabur ranked 200 in the Fortune India 500 list Dabur moves up to take the 78th spot in the Super-100 list, released by Business India Dabur ranked among Most Trusted Brands in India, according to Brand Trust d Report, India Study, 2011

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FINANCIAL PERFORMANCE
Sales S l
in Rs. million
45000 40000 35000 30000 25000 20000 15000 10000 5000 0

12,004

12,849

12,356

14,170

17,565

20,803

23,963

28,341 28 341

34,158

41,099

FY02

FY03

FY04^

FY05

FY06*

FY07

FY08

FY09

FY10** FY11^^

EBITDA Margin (in %)

in % in Rs. million

Net Profit

22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0%

17.1% 15.3% 13.3% 13 3%

18.1% 18.5% 18.3%

19.8% 19.9%
6000 5000 4000 3000 2000 1000 0

1,065 1,558

2,142

2,817 3,329 2 817 3 329

3,913

5,032

5,686

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

^Sales show a decline in FY04 on account of de-merger of Pharma business *Balsara acquisition added 10% to topline in FY06 ** Fem acquisition added 3.5% to topline in FY10 ^^Hobi and Namaste acquisitions added 4% to topline in FY11

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GLOBAL FOOTPRINT
UK Turkey Nepal

Canada U.S.

Egypt

UAE

BDesh Nigeria

Domestic Mfg. Locations

Key markets Manufacturing Facilities Our strategy is to localize manufacturing, supply chain and product offerings to suit consumer requirements in each geography 9 9

ROBUST DISTRIBUTION NETWORK

Factory
C&FA Stockist
(Carry & Forward Agents)

Super Stockist

Institutions & Modern trade

Wholesalers

Sub Stockist

RETAIL TRADE CONSUMERS

Direct + Indirect Reach covering c.3 million Retail Outlets
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PRESENCE IN FMCG CATEGORIES

Category
Hair Care Oral Care Skin Care Ayurvedic Tonics Digestives Fruit Juices Honey Glucose

Position
3 3 3 1 1 1 1 2

Market Share
12% 13% 7% 67% 56% 52% 50% 25%

Key Brands
Dabur Amla hair Oil, Vatika hair oil & Vatika Shampoos Red toothpaste, Babool, Meswak, Red toothpowder Dabur Gulabari, Fem, Dabur Uveda

Dabur Chyawanprash

Hajmola

Real Fruit Juices, Real Activ

Dabur Honey

Dabur Glucose

Hair care includes Hair Oils & Shampoos; Oral care includes Toothpastes & Toothpowder; Skin care includes 11 moisturizers, face cleaning, lightening, anti ageing & other skin care products; Digestives includes herbal digestives

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BUSINESS STRUCTURE
Dab Dabur ope ates th o gh th ee focused St ategic B siness Units operates through three foc sed Strategic Business FMCGportfoliocomprisingfour distinctbusinesses: PersonalCare ConsumerHealthCare HomeCare Foods Cateringtohealthandpersonal careneedsofcustomersacross differentinternationalmarkets p g spanningMiddleEastand Africa,SouthAsia,EUandU.S.

68%

Consumer Care Division

22% 8%

International Business Division

Consumer Health Division

Range of ethical and OTC RangeofethicalandOTC productsthatdelivertheageold benefitsofAyurveda inmodern readytouseformats

Note: Percentage share in revenue based on FY11 Financials ; Hobi and Namaste included in International Business Division

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TRANSITION TO THE NEW INTEGRATED STRUCTURE

New structure to provide enhanced capability and scale to our consumer health business

Old Structure

68%

HairCare OralCare
Health Supplements

New Structure HairCare OralCare HPC HomeCare

22%
Dabur

Consumer Care Division

Digestives SkinCare HomeCare Dabur SkinCare Health Supplements Digestives HealthCare OTC Foods Ethicals International Business
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8%
Consumer Health Health Division International Business Division

Foods

OTC Ethicals

HPC CATEGORIES
Hair Oil
Market Share

Key Brands

Value Share-ACN MAT Mar 2011

Dabur Amla: Largest brand in the portfolio

Vatika: Value added coconut oil

Anmol Hair Oil: Value proposition

Shampoo
Market Share

Key Brands

Value Share-ACN MAT Dec-2010

Vatika range of shampoos 14 14

HPC CATEGORIES
Oral Care
Market Share

Key Brands

Value Share -ACN MAT Mar, 2011

Dabur Red: Toothpaste & Toothpowder

Babool: Targeted at economy segment

Meswak: Premium therapeutic toothpaste

Skin Care
Market Share*

Key Brands

*Company estimates; Includes Fem skin care portfolio

Gulabari range of rose based skin care products: Moisturizer, Face freshener & Rose water

Uveda: Range of Ayurvedic Skin Care

Fem Gold Bleach: Launched recently

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HPC CATEGORIES
Home Care
Market Share

Key Brands

Value Share-ACN MAT March, 2011 for Mosquito Repellants Cream category

Odonil: Air freshner range: Largest brand in the portfolio

Odomos: Mosquito repellant skin cream

Sanifresh: Toilet cleaner

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HEALTH CARE CATEGORIES

Health S H lth Supplements l t
Chyawanprash Market Share

Key Brands

Volume Share-ACN MAT - Mar, 2011

Dabur Chyawanprash: Largest selling health supplement in the country

Dabur Glucose: 2nd largest player in the country

Dabur Honey: Largest branded honey in the country; growing category through replace sugar strategy g gy

Digestives
Market Share

Key Brands

Hajmola: Flagship brand for branded Digestives

Value Share-ACN MAT Mar, 2011 for Herbal Digestives

Hajmola tasty digestive candy 17 17

HEALTH CARE CATEGORIES

OTC and Ethicals d Ethi l
OTC comprises: Generics Branded Products ETHICAL comprises: Tonic Classicals Branded Ethicals OTC Healthcare Focus

Honitus: Day & Night for Cold and Flu relief

Pudin Hara Lemon Fizz for digestion

O OTC Healthcare is Rs.130 billion size a a 30 b o industry Expected to grow at 14-15% p.a. as preference for Over-the-Counter products accelerates Dabur to expand its presence by : Consolidating / expanding current portfolio Launching new products in g g p emerging therapeutic areas Look at inorganic opportunities Acquired the energizer brand, Thirty Plus from Ajanta Pharma in May 2011

Promoting Dabur Ayurveda: Generating equity for Ethical portfolio

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FOODS
Foods portfolio comprises Juices and Culinary range Juices are under the brands Real, Activ and Burrst Culinary range i under H C li is d Hommade b d brand d

Foods
Market Share

Key Brands

Company Est. Mar, 2010 for Fruit Juice category

Real: Flagship beverages brand

Real Activ: Range of 100% pure juice

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INTERNATIONAL BUSINESS DIVISION

Started St t d as an Exporter Focus on Order fulfillment through India Mfg. Set S t up a franchisee at f hi t Dubai in 1989 Demand generation led to setting up of mfg in Dubai & Egypt Renamed f R d franchisee as Dabur hi D b International Ltd Local operations further strengthened Set up new mfg facilities in Nigeria,RAK & Bangladesh Building scale-22% of B ildi l 22% f overall Dabur Sales (FY11) High Levels of Localization Global Supply chain

1980s

Early 90s

2003 Onwards

Today

Highlights Daburs D b overseas b i business contributes 22% t ib t to consolidated sales led by CAGR of 32% in last 6 years Focus markets: GCC Egypt Nigeria Turkey Bangladesh Nepal U.S. High level of localization of manufacturing and sales and marketing Leveraging the Natural preference among local consumers t i l l to increase share i personal h in l care categories Sustained investments in brand building and marketing
in R i Rs. million illi
10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0

High Growth in IBD

8,922 6,025 4,770 1,807 2,258 2,917 3,760 3 760

1,281

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

New products contributing significantly to overseas sales

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OUR STRATEGY
Three pronged Growth Strategy
Expand Innovate Acquire

Our differentiation is the herbal and ayurvedic platform Expand Strengthening presence in existing categories and markets as well entering new geographies Maintain dominant share in categories where we are category builders like Health Supplements, Honey etc. and expand market shares in other categories Calibrated international expansion local manufacturing and supply chain to enhance flexibility p g pp y y / reduce response time to change in market demands Innovate Strong focus on innovation. Have rolled out new variants & products which have contributed to around 5-6% of our growth p.a. 5 6% Renovation of existing products to respond to changing demands (Toothpowder to Toothpaste) Acquire Acquisitions critical for building scale in existing categories & markets Should be synergistic and make a good strategic fit Target opportunities in our focus markets
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ACQUISITION OF HOBI GROUP, TURKEY

Acquisition of Hobi Group, Turkey for a total consideration of US$ 69 Million completed on October 7, 2010 Hobi manufactures and markets hair, skin and body care products under the brands Hobby and New Era Product range of the company complementary to our product range is

Acquisition provides an entry into another attractive emerging market and a good platform to leverage this across the region

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ACQUISITION OF NAMASTE LABORATORIES LLC.

Dabur India Limited through its subsidiary Dabur International Limited acquired 100% stake in Namaste Laboratories LLC for $100 million, in an all-cash deal on January 1, 2011 Namast is a leading ethnic hair care products company, having products for women of colour, with revenues of $95 million from US, Europe, Middle East and African markets The company markets a portfolio of hair care products under the brand Organic Root Stimulator and has a strong presence in ethnic hair care market for women of colour. Acquisition to enable entry into Ethnic Hair Care products market valued at more than US$1.5 billion and tap into significant market opportunity in the fast growing, hugely populated (~1 Bn) B ) yet hi hl underpenetrated consumer markets of S b S h t highly d t t d k t f Sub Saharan Af i Africa At an acquisition price of $100 million, the deal value is at 1.1x Sales and 8.3x EBITDA

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RECENT FINANCIAL PERFORMANCE

Sales: Q1 FY12 v/s Q1 FY11
in Rs. million
14 000 12 000 10 000 800 0 600 0 400 0

EBITDA: Q1 FY12 v/s Q1 FY11

in Rs. million

12,162 9,244

2 50 0

2 00 0

1,517 1 517

1,939

1 50 0

1 00 0

50 0
200 0 0

Q1 FY11

Q1 FY12

Q1 FY11

Q1 FY12

PAT: Q1 FY12 v/s Q1 FY11

in Rs. million
1 25 0 1 20 0 1 15 0 1 10 0 1 05 0 1 00 0 9 50

1,217 1,068

Sales for Q1 FY12 increased by 31.6%, largely driven by acquisitions and volumes EBITDA increased by 27.8% despite input cost inflation PAT grew by 19.6%

Q1 FY11

Q1 FY12

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STOCK PERFORMANCE AND SHAREHOLDING PATTERN

Market Capitalization in Rs. billion Shareholding Structure*
FIIs, 17.4 % Indian Public and Others, 6.7 %

190
FIs/ MFs/Ins. Cos., 7.1%

17
Prom oters oters, 68.7%

2001

2011
*As on May 6, 2011

Dabur ranked as the o g u d s organization that offers the best return to investors by o o s s u o s o s y the 6th Social & Corporate Governance Awards, presented by the Bombay Stock Exchange

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CONSOLIDATED P&L
InRs.million GrossSales Less:Excise Duty NetSales OtherOperatingIncome Other Operating Income MaterialCost %ofSales EmployeeCosts %ofSales AdPro Ad Pro %ofSales OtherExpenses %ofSales OtherNonOperatingIncome EBITDA %ofSales InterestExp.andFin.Charges Depreciation Amortization ProfitBeforeTax(PBT) TaxExpenses PAT(Beforeexceptionalitem) %ofSales PAT(AfterexceptionalItems) ( p ) MinorityInterest (Profit)/Loss PAT(AfterExtraordinaryitem&MinorityInt) Q1FY12 12,162 117 12,046 80 6,290 51.7% 951 7.8% 1,515 1 515 12.5% 1,583 13.0% 151 1,939 1 939 15.9% 126 154 57 1,602 323 1,279 10.5% 1,279 0.2 1,277 Q1FY11 9,244 79 9,165 77 4,346 47.0% 728 7.9% 1,507 1 507 16.3% 1,217 13.2% 73 1,517 1 517 16.4% 36 135 10 1,337 263 1,074 11.6% 1,074 0.6 1,068 YoY(%) 31.6% 31.4% 3.0% 3 0% 44.7% 30.6% 0.5% 0 5% 30.1% 108.7% 27.8% 27 8% 253.8% 14.2% 472.7% 19.8% 22.7% 19.1% 19.1% 19.6%
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CONSOLIDATED BALANCE SHEET

In Rs. million Sources Of Funds Shareholders' Fund: Share Capital Reserves & Surplus Minority Interest Loan Funds: Secured Loans Unsecured Loans Deferred Tax Liability y TOTAL Application of funds: Fixed Assets: Gross Block less: Depreciation Net block Capital WIP Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash & Bank balances Loans & Advances Less: Current Liabilities and Provisions: Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure Deferred Tax Assets TOTAL As on Jun 11 As on Jun 10

1,741 13,534 15,275 43 4,762 5,349 1,387 830

869 10,195 11,064 44

10,111 221 25,650

2,217 150 13,480

19,520 4,509 15,011 654 3,105 7,522 3,542 3 542 3,619 5,464

10,158 3,493 6,665 246 2,100 5,139 1,569 1 569 3,104 4,532

20,147 6,543 7,655 14,198 14 198 5,949 931 25,650

14,344 5,583 4,979 10,562 10 562 3,782 682 13,480

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Investor Relations Dabur India Ltd Contact:+91-11-42786000

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