Business Overview - Dabur India Limited

Dabur India LimitedCorporate ProfileMarch 201211

AgendaDabur India-IntroductionFMCG Industry ScenarioBusiness OverviewGrowth StrategyRecent Performance22

Dabur India: Overview Established in 1884 - more than 125Years of Trust & ExcellenceAmong top 4 FMCG companies in IndiaWorld’s largest in Ayurveda and naturalhealthcareRevenue of Rs. 41.1 billion and profits ofRs. 5.7 billion in FY2010-11Strong brand equityDabur is a household brandVatika and Real are SuperbrandsHajmola , Real & Dabur ranked amongIndia’s Most Admired Brands11 Brands with sales of over Rs. 1 billioneach Wide distribution network covering 2.8million retailers across the country17 world class manufacturing plantscatering to needs of diverse markets Strong overseas presence with c. 30%contribution to consolidated salesDabur has beenranked as the MostTrusted Leader inthe Healthcarecategory in theBrand Trust Report2012Eleven Billion Rupee BrandsDabur rankedas No. 2 MostSocial Brand ofIndia, in theSocial Mediareport launchedat Click AsiaSummit 2012Dabur rankedthe No. 2 IndianGreen Brand byGreen BrandsGlobal Survey33

Key Milestones1884•Dr. SK Burmanstarted an AyurvedicPharmacy in Kolkatta1972•The companyshifted base toDelhi from Kolkata1986•Registered asPublic LimitedCompany1994•Listed on theBombay StockExchange1998•Professionalized withBurman Family handingover day tomanagement2003•Pharmaceutical Businessde-merged d to focus on coreFMCG business2004•InternationalBusiness set up inDubai to tap overseasopportunity2005•Acquired Balsarastrengthening Oralcare & gaining entryinto Home care2006•Dabur Figured in Top10 Great Places ToWork2008•Acquired Fem CarePharma enteringmainstream Skin care2010• Overseas acquisitions -Hobi Group, Turkey andNamaste Laboratories, US2011•Crossed Rs. 40 bnmark in annualrevenues and MarketCap of US$4 billion55

Dabur Consolidated : Overviewin Rs. millionSales5000040000300002000010000012,004 12,849 12,356 14,17041,09934,15828,34117,56520,803 23,963FY02 FY03 FY04^ FY05 FY06 FY07 FY08 FY09 FY10 FY11EBITDA Margin (in %)Net Profitin %in Rs. million22.0%20.0%18.0%16.0%14.0%12.0%10.0%19.8% 19.9%17.1% 18.1% 18.5% 18.3%15.3%13.3%FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY1160005000400030002000100005,0325,6863,9132,8173,3292,1421,0651,558 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11^Sales show a decline in FY04 on account of de-merger of Pharma business66

Global FootprintUKCanadaTurkeyU.S.EgyptUAENepalB’DeshNigeriaDomestic Mfg.LocationsKey marketsManufacturing FacilitiesOur strategy is to localize manufacturing, supply chainand product offerings to suit consumer requirementsin each geography77

Research & Development FocusTeam of scientists includingAyurvedic doctors, Pharmacists,Agronomists, Botanists, TissueCulture specialists, etc.Strong New Product Development Ayurvedic Medicines Personal CareFoodsAgro Biotech InitiativesHome CareOTC HealthcareProtecting endangered herbsTechnical assistance to farmersContract cultivation of herbsGreen House at NepalDabur introduced more than 20 newproducts/variants during FY11Dabur Research FacilitiesAgronomy Initiatives : Greenhouse atDabur Nepal & Uttaranchal99

AgendaDabur India-IntroductionFMCG Industry ScenarioBusiness OverviewGrowth StrategyRecent Performance1010

FMCG Industry SnapshotFMCG Industry Size (in Rs. bn)FMCG Industry Urban (in Rs. bn)FMCG Industry Rural (in Rs. bn)1,8001,6001,4001,2001,0008006004002001,4511,6711,4001,2001,0008006004002009601,111800700600500400300200100491559000CY10CY11CY10CY11CY10CY11Source: AC NielsenOverview FMCG sector in India continues on a strong growth path with both Urban andRural India contributing to growth. Rural India contributes to c. one third of FMCGsales in India Growth driven by increasing consumption led by rise in incomes, changinglifestyles and favorable demographics As per a study conducted by Booz & Company, FMCG sector is expected to growin the range of 12% to 17% upto 2020 and would touch a market size between ofRs. 4,000 to Rs. 6,200 billion1111

Penetration Levels: Sufficient Headroom90%Rural PenetrationUrban Penetration80%77%80%70%67%60%57%59%50%42%40%37%32%30%26%20%18% 18%19%10%5%3% 2%4%0%Toothpaste Shampoo Hair Oil Skin Cream MosquitoRepellantsInstantNoodlesHair DyesFloor CleanersSource: Industry Data Low penetration levels offer room for growth across consumption categories Rural penetration catching up with urban penetration levels1212

Per Capita Consumption: Room for GrowthIndia has low per capita consumption as compared to other emerging economiesSkin Care – Per Capita Consumption (in US$) Shampoo – Per Capita Consumption (in US$)in US$in US$9 327 2.77.4 77 7.7872.52.4625433.21.511.0 1.1210.80.30.50.300China Indonesia India Malaysia ThailandChina Indonesia India Malaysia ThailandToothpaste – Per Capita Consumption (in US$)in US$3.532.92.5220 2.01.510.50.51.00.40China Indonesia India Malaysia ThailandSource: MOSL1313

Key Players: FMCGin Rs. millionCompany Key Categories Sales Profit Market CapHindustan Unilever LtdNestle India Ltd*Dabur India LtdSoaps, Detergents,Personal Care, FoodsFood, Beverages, InfantnutritionPersonal, Health &Homecare, Foods196,910 22,961 826,44574,908 9,615 428,08741,099 5,686 181,178178Godrej Consumer Hair Care, Soaps 36,430 5,147 151,534Colgate Palmolive (I) Ltd* Oral Care & Toiletries 19,624 4,341 140,399Glaxo Smithkline Consumer* Consumer Health Care 26,855 3,552 109,177Marico Ltd. Hair care, Food, Skincare 31,283 2,864 97,652Britannia Industries Ltd Biscuits 46,052 1,343 64,784Procter & Gamble Hygieneand Health Care^Feminine Hygiene,personal care10,003 1,509 63,299Source: Published results for year ending 31.03.11*Year ending 31.12.11^Year ending 30.06.11Market Cap. as of Mar 5, 20121414

Dabur: Strong Presence in FMCG CategoriesCategoryPositionMarket ShareKey BrandsHair Care312%Dabur Amla hair Oil, Vatika hair oil &Vatika ShampoosOral Care313%Red toothpaste, Babool, Meswak, RedtoothpowderAyurvedicTonicsDigestives1 67%Dabur Chyawanprash1 56%HajmolaFruit Juices 1 52%Real Fruit Juices, Real ActivHoney 1 50% Dabur HoneyGlucose 2 25% Dabur GlucoseSkin Care(Bleaches)1 50% FemHair care includes Hair Oils & Shampoos; Oral care includes Toothpastes & Toothpowder; Digestives includes herbal digestives 1515

AgendaDabur India-IntroductionFMCG Industry ScenarioBusiness OverviewGrowth StrategyRecent Performance1616

Business StructureDabur IndiaLimitedDomestic Business(69.4%)InternationalBusiness (30.6%)ConsumerCare(56.1%)Foods Retail(10.1%)(0.8%)Others*(2.5%)DaburHobi NamasteInternational Group Labs. LLC(17.5%) (2.7%) (10.4%)Note: % figure in brackets indicate % share in Consolidated Sales for 9MFY12* Others includes Commodity Exports etc1717

Consumer Care OverviewCategory-wise Share of Consumer Care SalesHealthOral Care18% Supplements22%Skin Care6%Home Care6%Digestives8%Hair Care29%OTC &Ethicals11% Hair Care is the largest category and contributes to 29% of Consumer Care sales Health Supplements contribute to 22% of Consumer Care sales Oral Care, comprising toothpastes and toothpowders contributes to 18% ofConsumer Care salesNote: Percentage share based on revenue for 9MFY121818

Consumer Care CategoriesHair OilsKey Brands#2 player inHair OilsDabur Amla:Largest brand inthe portfolioShampooVatika: Value addedcoconut oilKey BrandsAnmol Hair Oil:Value proposition#4 player inShampoosVatika range of shampoos1919

Consumer Care CategoriesOral CareKey Brands#3 player inToothpastes#2 player inToothpowderDabur Red: Toothpaste& ToothpowderBabool: Targeted ateconomy segmentMeswak: PremiumtherapeutictoothpasteSkin CareKey Brands#2 player inSkinLighteningGulabari range of rosebased skin careproducts: Moisturizer,Face freshener & RosewaterUveda: Range ofAyurvedic SkinCareFem Gold Bleach:Launched recently2020

Consumer Care CategoriesHome CareKey Brands#1 player in AirFresheners#1 player inMosquito RepellantCreamsOdonil: Air freshnerL t b din the portfolio#2 player in Toiletrange: Largest brandCleanersOdomos: Mosquitorepellant skin creamSanifresh:Toilet cleaner2121

Consumer Care Categories#1 player inAyurvedic TonicsHealth SupplementsKey Brands#2 player inGlucose#1 player inbranded HoneyDabur Chyawanprash:Largest selling healthsupplement in thecountryDabur Glucose:2 nd largestplayer in thecountryDabur Honey: Largestbranded honey in thecountry; growingcategory through replacesugar strategyDigestivesKey Brands#1 player inHerbalDigestivesHajmola: Flagship brandfor branded DigestivesHajmola tastydigestive candy2222

Consumer Care CategoriesOTC and EthicalsDescription Repository of Dabur’s Ayurvedic Healthcareknowledge Range of over 260 products Focusing on multiple therapeutic areas. Distribution coverage of 200,000 chemists,~12,000 vaidyas & 12,000 Ayurvedicpharmacies• Focus on growing the OTC Health-Careportfolio aggressivelyCHD StructureOTC (64%)ETHICAL (36%) Generics TonicBranded Products Classicals Branded EthicalsHealthcare Focus OTC Healthcare is Rs.130 billion size industry Expected to grow at 14-15% p.a. aspreference for Over-the-Counter productsaccelerates Dabur to expand its presence by : Consolidating / expanding currentportfolio Launching new products in emergingtherapeutic areas Look at inorganic opportunities Acquired the energizer brand, Thirty Plusfrom Ajanta Pharma in May 2011Promoting Dabur Ayurveda: Generatingequity for Ethical portfolio2323

Foods Business Foods portfolio comprises Juices and Culinary range Juices are under the brands – Real, Activ and Burrst Culinary range is under Hommade brandFoodsKey Brands#1 player inFruit JuicesReal: FlagshipReal Activ: Rangebeverages brandof 100% pure juice2424

International Business• Started as an• Set up a franchisee at• Renamed franchisee as Dabur• Building scale- c. 30% ofExporter• Focus on OrderDubai in 1989• Demand generationInternational Ltd• Local operations further strengthenedConsol. Sales• High Levels of Localizationfulfillment through led to setting up of • Set up new mfg facilities in Nigeria,RAKIndia Mfg.mfg in Dubai & Egypt & Bangladesh• Global Supply chain1980’s Early 90’s 2003 Onwards TodayHighlights• Dabur’s overseas business contributes c.30% to consolidated sales led by CAGR of32% in last 6 years• Focus markets:• GCC• Egypt• Nigeria• Turkey• Bangladesh• Nepal• U.S.• High level of localization of manufacturingand sales and marketing• Leveraging the “Natural” preference amonglocal consumers to increase share in personalcare categories• Sustained investments in brand building andmarketing100009000800070006000500040003000200010000in Rs. million1,281High Growth in IBD3,7602,258258 2,917 1,8074,7706,0258,922FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11International Sales Breakdown (9MFY12)Others3%US28%Asia14%Middle East30%Africa25%2525

Africa and Middle East OverviewReal GDP Growth Rates (YoY) in %Africa’s Bulging BaseSource: IMF Source: McKinsey on Africa, June 2010 Middle East and Africa have witnessed stable GDP growth rates Between 2005 and 2015, it is estimated that in Africa, the share of individuals earningabove US$1,000 will grow from 39% to 55%. The rapidly emerging African middle class could number as many as 300 million, out of atotal population of one billion The sheer volumes and the growth in the number of aspirational consumers withdisposable income creates huge opportunities for consumer products companies2626

Acquisition of Hobi Group, Turkey Acquisition of Hobi Group, Turkey for a totalconsideration of US$ 69 Million completed onOctober 7, 2010 Hobi manufactures and markets hair, skin andbody care products under the brands Hobbyand New Era Product range of the company iscomplementary to our product range Acquisition provides an entry into anotherattractive emerging market and a goodplatform to leverage this across the region2727

Acquisition of Namaste Laboratories Dabur India Limited through its subsidiary Dabur International Limited acquired 100% stakein Namaste Laboratories LLC for $100 million, in an all-cash deal on January 1, 2011 Namasté is a leading ethnic hair care products company, having products for women ofcolour, with revenues of c. $95 million (CY2010) from US, Europe, Middle East and Africanmarkets The company markets a portfolio of hair care products under the brand ‘Organic RootStimulator’ 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$1.5billion and tap into significant market opportunity in the fast growing, hugely populated (~1Bn) yet highly underpenetrated consumer markets of Sub Saharan Africa We intend to grow the non U.S. business ahead of U.S. business and are taking initiatives inthis direction We have commenced local manufacturing for Namaste at our RAK facility in UAE2828

AgendaDabur India-IntroductionFMCG Industry ScenarioBusiness OverviewGrowth StrategyRecent Performance2929

Growth StrategyThree pronged Growth StrategyExpand Innovate AcquireExpandOur differentiation is the herbal and ayurvedic platform 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/ reduce response time to change in market demandsInnovate Strong focus on innovation. Have rolled out new variants & products which have contributed toaround 5-6% of our growth p.a. 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 markets3030

AgendaDabur India-IntroductionFMCG Industry ScenarioBusiness OverviewGrowth StrategyRecent Performance3131

Recent Financial PerformanceRevenue(in Rs. mn)160001400012000100008000600040002000010,878Q3 FY1114,626Q3 FY12‣ Consolidated Sales grew by 34.5% duringQ3FY12.‣ Excluding acquisitions, sales grew at a robust20.2% driven by combination of volumegrowth, price increases and marginaltranslation gains‣ Volume growth was at 10.8%EBITDA(in Rs. mn)250020001500100050002,184Q3 FY112,446Q3 FY12‣ EBITDA increased by 12% while EBITDAmargin was lower at 16.7% in Q3FY12 v/s20.1%‣ Material costs pressures continued, withmaterial costs increasing to 50.6% of sales v/s48.1% previous year‣ Adpro during the quarter increased to 13.6%as compared to 12.4% in previous yearPAT(in Rs. mn)2000150010005001,5441,728‣ Consolidated PAT reported growth of 11.9%.‣ There was some impact of adverse foreigncurrency movements which may be recoveredif rupee continues to appreciate in Q40Q3 FY11Q3 FY123232

Stock Performance & Shareholding Pattern200180160140120100806040200Market Capitalization in Rs. billion181172001 2012FIIs, 19.2%DIIs, 5.7%*As on Dec 31, 2011Shareholding Structure*Others, 6.5%Promoters,68.7%Dabur ranked as the organization o that offers the best return to investors s bythe 6th Social & Corporate Governance Awards, presented by the BombayStock Exchange3333

Consolidated P&Lin Rs. million Q3FY12 Q3FY11 YoY (%) 9MFY12 9MFY11 YoY (%)Gross Sales 14,626.2 10,878.0 34.5% 39,485.8 29,926.4 31.9%Less:Excise Duty 99.4 78.3 289.9 234.1Net Sales 14,526.8 10,799.7 34.5% 39,195.9 29,692.3 32.0%Other Operating Income 104.0 69.1 267.1 256.1Material Cost 7,404.0 5,231.1 41.5% 20,002.9 14,162.2 41.2%% of Sales 50.6% 48.1% 50.7% 47.3%Employee Costs 1,055.8 801.3 31.8% 3,021.2 2,307.7 30.9%% of Sales 7.2% 7.4% 7.7% 7.7%Ad Pro 1,982.4 1,349.3 46.9% 4,774.7 4,071.4 17.3%% of Sales 13.6% 12.4% 12.1% 13.6%Other Expenses 1,869.7 1,322.6 41.4% 5,109.2 3,659.9 39.6%% of Sales 12.8% 12.2% 12.9% 12.2%Other Non Operating Income 127.22 19.5 553.6% 384.1 158.88 141.9%EBITDA 2,446.1 2,184.0 12.0% 6,939.1 5,905.9 17.5%% of Sales 16.7% 20.1% 17.6% 19.7%Interest Exp. and Fin. Charges 182.9 53.7 240.9% 481.2 144.3 233.5%Depreciation 187.8 159.6 17.7% 516.7 436.7 18.3%Amortization 20.3 73.3 -72.3% 119.1 130.4 -8.6%Profit Before Tax (PBT) 2,055.1 1,897.4 8.3% 5,822.1 5,194.5 12.1%Tax Expenses 336.9 356.9 -5.6% 1086.5 975.8 11.3%PAT 1,718.2 1,540.5 11.5% 4,735.6 4,218.7 12.3%% of Sales 11.7% 14.2% 12.0% 14.1%Minority Interest - (Profit)/Loss -10.0 -3.9 -8.2 2.9PAT (After Minority Int) 1,728.2 1,544.4 11.9% 4,743.8 4,215.8 12.5%% of Sales 11.8% 14.2% 12.0% 14.1%3434

Consolidated Statement of Assets and Liabilitiesin Rs. millionSOURCES OF FUNDS :Shareholders' Funds :CapitalAs at Dec' 31, 20111,742As at Dec' 31 20101,741Reserves & Surplus 14,689 16,431 11,880 13,620Minority Interest 33 41LOAN FUNDS:Secured Loans 5,259 6,573Unsecured Loans 4,978 85610,237 7,429Deferred Tax Liability (Net) 246 174Total 26,947 21,265265APPLICATION OF FUNDS :Fixed Assets :Gross Block 20,600 13,729Less : Depreciation 4,825 4,278Net Block 15,775 9,451Capital WIP (including capital advances) 799 16,574 414 9,86616573 9866Investments 3,570 1,200Current Assets, Loans and Advances:Inventories 7,287 5,446Sundry Debtors 4,029 2,689Cash & Bank Balances 4,129 6,364Loans & Advances 6,657 5,16222,102 19,661Less: Current Liabilities and ProvisionsLiabilities 9,085 6,087Provisions 6,995 4,30616,079 10,393Net Current Assets 6,023 9,269Miscellaneous Expenditure 781 930(To the extent not written off or adjusted)Total 26,947 21,2653535

Recent AccoladesDabur ranked 182 in theET-500 list of India Inc'sHeroesDabur ranked 7thMost RespectedCompany in the FastMoving ConsumerGoods space in IndiaDabur ranked among Top10 Best Companies ToWork For in the ConsumerGoods and Durables sectorChyawanprash, Hajmola,Real chosen by Indianconsumers as 'PowerBrands 2010-11'Dabur ranked 200 inthe Fortune India 500list that ranks India's500 largestcorporationsDabur ranked in the Top100 in Business Today'sBT 500 list of India's MostValuable Companies.Dabur was ranked 62Dabur India Ltd awardedthe Best Run Award InSupply Chain by SAPDabur moves up totake the 78th spot inthe Super-100 list,released by BusinessIndia3636

DisclaimerSome of the statements made in this presentation contain forward looking information that involve anumber of risks and uncertainties. Such statements are based on a number of assumptions, estimates,projections or plans that are inherently subject to significant risks, as well as uncertainties andcontingencies that are subject to change. Actual results can differ materially from those anticipated in theCompany´s forward‐looking statements as a result of a variety of factors, including those set forth fromtime to time in the Company´s press releases and reports and those set forth from time to time in theCompany´s analyst calls and discussions. We do not assume any obligation to update the forward‐lookingstatements contained in this presentation.No part of this presentation shall form the basis of or may be relied upon in connection with any contractor commitment. This presentation is being presented solely for your information and is subject to changewithout notice.3737

Investor RelationsDabur India LtdContact:+91-11-427860003838