Professional Documents
Culture Documents
Investor Presentation
January 2019
Agenda
1. Industry dynamics 2
2. Company overview 6
3. Strategic direction 15
4. Financial performance 22
7.9%
7.7% Population within legal drinking age
7.2% 7.1% 7.2%
6.5% 68%
66%
5.5%
65+ yrs 64%
55-64
6% 00-14
yrs
GDP growth rate
yrs
7%
28%
Median Age:
28 years
25-54 15-24
yrs yrs
41% 18%
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E FY2019E 2011 2016 2021
Source: Central Statistics Office, IMF World Economic Outlook Source: KPMG, Euromonitor International (May 2018)
12% Metro
20% 12% 12%
Elite
Share of household consumption
15% 10%
11% 6%
2016 2025 2016 2025
It is anticipated that by 2025, the top two categories elite and affluent will By 2025, 40% of India’s population is expected to migrate to cities and will
account for 40% of the total consumption (2016: 27%) account for about 60% of the total expenditure
Source: Boston Consulting Group Source: Boston Consulting Group
Note: Income distribution – Elites correspond to household income of more than Rs. 20 Lacs, Affluent between 10-20 Lacs,
Aspirers between 5-10 Lacs, Next Billion between 1.5-5 Lacs and Strugglers less than 1.5 Lacs
o Spirits sales in India was 299 million cases in CY2017 (up 2.3% y-o-y) and is expected to reach 339 million cases by CY2022
o During 2018-22 period, IMFL sales value is expected to grow at a CAGR of 5.8% and sales volume at 2.6%
Source: Euromonitor
A business may apply for a license for a fee defined by Company has reasonable Arunachal, Assam, Goa, Maharashtra,
Free / Open market
the state government subject to license availability independence over price increases Meghalaya, Tripura, Uttar Pradesh
The license for sale of liquor is auctioned by the Company has to negotiate price
Auction market Government to the highest bidder on an annual basis increases with state appointed Chandigarh, Haryana, Punjab
based on an auction process distributors
Prohibition States where sales of liquor is prohibited Not applicable Bihar, Gujarat
Strategically limiting
75 years of
One of the largest interstate taxes and
experience in spirits
1943 making. One of the 157 spirits manufacturers.
Operates three
33 transport costs.
Five own and 28
Year of most recognized Bottling
Million litres distilleries and one contract bottling
Incorporation IMFL brands in units
joint venture units spread across
India
the country
Consistently
Strong distribution
increasing Prestige
75,000
network. Sale
through over
26% & Above brand
contribution to
FY2018
Net Revenue
With EBITDA
Retailers
75,000 retail and
8,000 on premise
FY2018
Premium total IMFL 18.2 margin of 14.7%
volume share volumes; 43% in (Rs. billion)
outlets
value terms
Molasses
Country Liquor Bulk Spirits
ENA
(Molasses/Grain)
Grain
Malt Spirit
Distillery
Barley Malt
IMFL
Brands Packaging
Luxury
> Rs. 4,000
Semi Luxury
Rs. 1,000 – 1,500
Super Premium
Rs. 700 – 1,000
Semi-Premium /
Premium
Rs. 500 – 700
Deluxe
Rs. 400 – 500
Regular
Rs. 300 – 400
Ready to Drink
Rs. 100 – 150
7%
FY2018
Sales Split by
Geography
93%
Exports Domestic
Develop Recruit
Leadership Communication
Retain
1998 2002 2006 2009 2011 2012 2014 2015 2016 2017 2018
One of the few companies in India to have developed its entire brand portfolio organically
Four millionaire brands – 8 PM Whisky, Contessa Rum, Old Admiral Brandy and Magic Moments Vodka
flavours became a
3.0 launched Verve
launched millionaire
2.5 launched
brand
2.0
1.5 Verve launched
1.0 in new premium
packaging
0.5
0.0
FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Change of Indian consumer preference towards global vodka consumption pattern represents significant growth opportunity
White
Vodka ▪ Radico Khaitan’s Magic Moments vodka has over 50% market share
Spirits Vodka
5.5% 0.8% Whisky
35.4% Other
Rum 73.5% Spirits ▪ The Millionaire Club ranked Magic Moments as the 11th largest vodka globally
9.5% 28.2%
▪ Market share of vodka (in value terms) in the global spirits industry is about
Brandy India Global
10.7% spirits spirits 35% compared to only 5.5% in India
industry industry
(by value) (by value)
▪ Changing consumption patterns and consumer preference represent significant
growth opportunity for already a market leader, Radico Khaitan
Rum Whisky
13.5% 22.9%
Source: Euromonitor International, Industry research
0.8
Jaisalmer Indian Craft Gin
0.7
Volume (million cases)
0.6
• A triple-distilled neutral grain spirit, re-
Targeting
distilled in a traditional copper pot still;
0.5 million
0.4 cases the recipe is handcrafted in a time-
volume honoured way
0.3
0.2 • Derived from the ancient Indian
0.1 knowledge on herbs, the botanicals
0.0 beautifully release pine notes from
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Juniper
Gold Medal
World Wine & Whisky Advocate
Monde Selection
Spirits Awards Magazine
Belgium 2017
San Francisco 2017 USA
Top 10 The
Features
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Regular & Others brands (Million cases) Prestige & Above volume as % of Total volumes
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
14.7%
11.3% 12.5%
10.7% 10.4% 9.2%
17,163 18,572 18,465 16,518 16,799 18,228 1,842 1,935 1,704 1,861 2,101 2,674
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Net Comprehensive Income (Rs. Million) and Margin (%) EPS (Rs.) and Dividend (%) Trend
50.0%
6.7% 40.0% 40.0% 40.0% 40.0% 40.0%
4.5% 4.3% 4.7%
3.8% 3.7%
773 713 676 718 793 1,219 5.82 5.36 5.08 5.52 6.02 9.26
FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Notes:
EPS (Rs.) Dividend (%)
1 Net revenues includes sales from CBUs
2 Margins calculated based on revenue including CBU sales
3 FY2016 to FY2018 financials are based on IND-AS
Net debt reduction Leverage ratio improvement Net worth strengthened Leverage ratio improvement
Net Debt Net Debt / LTM Total Net Worth Gross Debt to Net
(Rs. Crore) EBITDA (x) (Rs. Crore) Worth (x)
Cumulative Net Debt reduction of Rs. 654 Cr since March 2016… …Resulted in annualized interest cost saving of 56%
Net Debt Position (Rs. Crore) Annual Interest Cost (Rs. Crore)
947
785
(162)
570
(215)
85
80
68
293
(277)
37
This presentation contains statements that contain “forward looking statements” including, but without limitation, statements relating to the
implementation of strategic initiatives, and other statements relating to Radico Khaitan’s future business developments and economic performance.
While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of
risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations.
These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency
exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us,
legislative developments, and other key factors that could affect our business and financial performance.
Radico Khaitan undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances.