4. 2009/10: Segment Revenues
Full Year
2009-10 2008-09 Goly
1. Segment Revenue (Gross)
a) FMCG - Cigarettes 17,283 15,115 14.3
- Others 3,642 3,014 20.8
Total FMCG 20,925 18,129 15.4
b) Hotels 911 1,020 (10.7)
c) Agri Business 3,862 3,846 0.4
d) Paperboards, Paper & Packaging 3,234 2,822 14.6
Total 28,931 25,817 12.1
Less : Inter segment revenue 2,672 2,674 (0.1)
Gross sales / income from operns. 26,260 23,144 13.5
2009-10 2008-09 Goly
2. Segment Revenue (Net)
a) FMCG - Cigarettes 9,321 7,781 19.8
- Others 3,634 3,006 20.9
Total FMCG 12,955 10,786 20.1
b) Hotels 851 935 (9.1)
c) Agri Business 3,862 3,846 0.4
d) Paperboards, Paper & Packaging 3,108 2,647 17.4
Total 20,776 18,215 14.1
Less : Inter segment revenue 2,622 2,603 0.8
Net sales / income from operns. 18,153 15,612 16.3
5. 2009/10: Segment Results
Full Year
2009-10 2008-09 Goly
3. Segment Results
a) FMCG - Cigarettes 4,938 4,184 18.0
- Others (350) (483) 27.7
Total FMCG 4,589 3,700 24.0
b) Hotels 217 316 (31.5)
c) Agri Business 436 256 70.3
d) Paperboards, Paper & Packaging 684 509 34.5
Total 5,926 4,781 23.9
Less : i) Interest (Net) 53 18 191.2
ii) Other net un-allocable expenditure/ income (143) (63) 127.6
Total PBT 6,015 4,826 24.7
6. 2009/10: Segment Capital Employed
Full Year
2009-10 2008-09 Goly
4. Capital Employed
a) FMCG - Cigarettes * 2,998 2,936 2.1
- Others 1,719 2,101 (18.2)
Total FMCG 4,717 5,037 (6.4)
b) Hotels 2,457 2,189 12.3
c) Agri Business 1,580 1,039 52.1
d) Paperboards, Paper & Packaging 3,711 3,771 (1.6)
Total Segment Capital Employed 12,465 12,035 3.6
* Local Tax Provision not incl. 628.64 542.86 15.8
8. Q1 2010/11: Segment Revenues
Rs. crores
Q1
2010-11 2009-10 Goly(%)
1. Segment Revenue (Gross)
a) FMCG - Cigarettes 4670 4161 12.2
- Others 1006 759 32.4
Total FMCG 5675 4920 15.4
b) Hotels 225 186 21.2
c) Agri Business 1350 941 43.5
d) Paperboards, Paper & Packaging 829 731 13.5
Total 8079 6777 19.2
Less : Inter segment revenue 1036 646 60.4
Gross sales / income from operns. 7043 6131 14.9
2010-11 2009-10 Goly(%)
2. Segment Revenue (Net)
a) FMCG - Cigarettes 2484 2210 12.4
- Others 1001 758 32.2
Total FMCG 3485 2968 17.4
b) Hotels 210 173 21.5
c) Agri Business 1350 941 43.5
d) Paperboards, Paper & Packaging 794 703 13.0
Total 5838 4784 22.0
Less : Inter segment revenue 1022 636 60.6
Net sales / income from operns. 4817 4148 16.1
9. Q1 2010/11: Segment Results
Q1
2010-11 2009-10 Goly(%)
Segment Results
a) FMCG - Cigarettes 1305 1125 16.0
- Others (89) (100) 10.5
Total FMCG 1216 1026 18.5
b) Hotels 39 31 25.9
c) Agri Business 123 100 23.2
d) Paperboards, Paper & Packaging 188 128 47.5
Total 1566 1284 22.0
Less : i) Interest (Net) 6 6 (0.7)
ii) Other net un-allocable expenditure/ income (10) (39) (74.4)
Total PBT 1570 1317 19.2
10. Segment Capital Employed
Q1
2010-11 2009-10 Goly(%)
4. Capital Employed
a) FMCG - Cigarettes * 3032 2632 15.2
- Others 1888 1929 (2.1)
Total FMCG 4920 4561 7.9
b) Hotels 2511 2272 10.5
c) Agri Business 1441 1389 3.7
d) Paperboards, Paper & Packaging 3636 3707 (1.9)
Total Segment Capital Employed 12507 11930 4.8
* Local Tax Provision not incl. 657 554 18.6
11. ITC
One of India’s most valuable and admired companies
One of the 8 Indian Companies to feature in ‘Forbes A-list’ for 2004
Featuring 400 of the World’s ‘best big companies’ with M-cap. > USD 5 bln. & are
rated as the ‘most attractive companies for investors’
Only Indian FMCG Company to feature in Forbes 2000 List
A comprehensive ranking of world’s biggest companies measured by a composite of
sales, profits, assets & market value
One of the foremost in the private sector in terms of :
Sustained value creation (BT-Stern Stewart survey)
Operating profits
Cash Profits
Ranks No. 4 among Indian listed Private Sector Companies by market cap.
• No. 1 in FMCG Sector
Rated as one of India’s Most Respected Companies (IMRB-Businessworld Survey
2006)
11
12. Awards & Accolades (1)
• ‘ITC received the FICCI Outstanding Vision Corporate Triple Impact Award 2007 for invaluable
contribution to the triple bottom line benchmarks of building economic, social and natural capital
for the nation.
• Global Leadership Award conferred on Chairman Y C Deveshwar by the US India Business Council
of the US Chamber of Commerce
• Sustainability Leadership Award 2007 conferred on Chairman Y C Deveshwar by the Sustainability
Forum, Zurich and SAM/SPG at the International Sustainability Leadership Symposium
• Business Today Award for the Best Managed Company – Retail and Consumer Products, has
been conferred on ITC in recognition of its outstanding initiatives in the consumer products segment.
• Ryutaro Hashimoto Incentive Prize 2007 for Environment & Development from the Asia Pacific
Forum
• In the first of its kind S&P Environmental, Social and Corporate Governance (ESG) ratings
released recently, ITC ranked second among top Indian companies.
• The Company has won the Corporate Social Responsibility Crown Award for Water Practices
from UNESCO and Water Digest for its distinguished work carried out in the water sector in India.
• ITC Limited won the top UNIDO award at the International Conference on Sharing Innovative
Agribusiness Solutions 2008 at Cairo in recognition for its initiatives in agri business.
• ITC has been conferred the ICAI Award for Excellence in Financial Reporting with its Annual
Report and Accounts, adjudged as a commendable entry under the “Manufacturing and Trading
Enterprises” category.
• The Best Corporate Social Responsibility Practice Award 2008 jointly instituted by the Bombay Stock
Exchange, Times Foundation and the NASSCOM Foundation. 12
13. Accolades & Awards (2)
• e-Choupal initiative wins global recognition:
– Stockholm Challenge Award 2006 in the Economic Development category which
recognises initiatives that leverage Information Technology to improve living
conditions and foster economic growth in all parts of the world.
– First Indian Company to win the Development Gateway Award 2005 for the most
exemplary contribution in the field of Information & Communication Technologies
(ICT) for development during the last 10 years
– World Business Award 2004: International Chamber of Commerce & the HRH
Prince of Wales & International Business forum
– Harvard University case study
– Recognised in World Development Report 2008 published by World Bank
– Applauded by President of India Dr APJ Kalam in his “special address during
the national symposium to commemorate 60th year of independence”
13
14. ITC Business Portfolio
FMCG
Cigarettes Foods Personal Care Lifestyle Retailing
,
Education & Stationery Matches Incense Sticks
Paper & Agri Information
Hotels Packaging Technology
Business
15. Strategy of Organisation to manage diversity of
Portfolio
Formal 3-tiered governance structure:
Board of Directors :
Comprising executive (3) and non-executive directors (11)
Strategic supervision
Corporate Management Committee :
Comprising executive directors and senior managers
Strategic management
Divisional Chief Executive & Divisional Management Committee :
Executive management
15
16. Corporate Strategies
Sustain multiple drivers of growth, matching internal capabilities
with emerging market opportunities
Pursue World class competitiveness in all businesses and across
the entire value chain
Best-in-class in terms of:
• Internal Vitality
• Market Standing
• Profitability
Strategy of Organisation and Governance processes geared to
manage multiple businesses
Blend core competencies and leverage ITC umbrella strengths to
create new avenues of growth
16
18. ITC’s Cigarettes Business
Market leadership
Powerful brands across segments
Leadership in all segments - geographic & price
Extensive FMCG distribution network
Direct servicing of 1,00,000 markets & 2 million retail outlets
World-class state-of-the-art technology and products
Investment - Rs.10 billion in six years
Exciting long term growth potential
18
19. Cigarettes: Growth potential
Cigarettes account for less than 15% of tobacco consumed in India
unlike world pattern of 85% due to prolonged punitive taxation
• Cigarettes (15% of tobacco consumption) contribute nearly 85% of
Revenue 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 is appx. one
tenth world average : 85
Future growth depends on relative rates of growth of per capita
income and moderation in taxes
19
20. Per Capita Consumption of Tobacco in India
(gms per year)
1256
1145
743
438 461 468
China USA Pakistan Nepal India World
Source:World Cigarettes – ERC Statistics, Tob Board & Industry Estimates – gms/Yr
Per Capita consumption is ~ 60% of World Average
21. 2920
Per Capita Cigarette Consumption
3000
2500
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1771
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21
22. Cigarettes: Challenges
Competitive context
• Competition including international majors becoming more active
• Domestic illegal volumes still very strong. Along with smuggled
contraband, has emerged as substantive segment
Regulatory & Taxation
• Pictorial Graphic warnings in place w.e.f. June 09.
• VAT hikes in Maharashtra, Delhi, Rajasthan & Pondicherry-
threatening the concept of the ‘Indian Common Market’
Cost table increasing with increase in leaf costs
22
24. Hotels & Tourism industry
Foreign arrivals into India: 5 million appx. Vs. 35 million in China
• The two nations were on par 2 decades ago at 750,000 arrivals
Today, Beijing alone has as many hotel rooms as the whole of India
India’s luxury rooms availability lower than even smaller East Asian
countries
80000
70000
60000
50000
40000
30000
20000
10000
0
HongKong Bangkok Singapore Malaysia India
Source: Compendium of Tourism statistics, WTO 24
25. Indian Hotel Industry
Current supply – appx. 110,000 rooms of which 5 Star category
accounts for appx. 30%
India needs an additional 50,000 rooms in the next 2/3 years to
service projected tourist arrivals
Present mismatch between supply and demand expected to
persist over the short term
As infrastructure for trade & commerce improves - growing
potential for leisure tourism
25
26. ITC’s Hotel Business
ITC-Welcomgroup : a leading hotel chain in India
• Established presence in key business locations
• Over 6000 rooms under 4 distinct brands
Category Brand Positioning
Luxury ITC Hotel: Luxury Collection "Mansions of Luxury"
Upper upscale WelcomHotel: Sheraton "Passion for Quality"
Upscale - mid-scale Fortune Hotels "Promise of True Value"
Heritage WelcomHeritage "Unique Experiences"
Bangalore 292 room luxury hotel launched in October ‘09
Capacity expansion underway at Chennai & Kolkata; plans for other locations also
being progressed.
Fastest growing hotel chain with highest operating efficiency (PBDIT/Net Income
@ 40%) amongst the 3 leading chains
Leverages unique service proposition and international alliance with Starwood
Hotels & Resorts - ‘Luxury Collection’ / ‘Sheraton’
26
27. ITC’s Hotel Business
• Manages 34 full service mid-market properties (2000 +
rooms ) under the Fortune Hotels brand
– 21 more hotels in pipeline; room inventory- 4800 appx.
– 100% subsidiary company : Fortune Park Hotels Ltd.
• Also operates 60 properties under the ‘WelcomHeritage’
brand in 19 states - Maharaja Heritage Resorts Ltd. 50% JV with
Marudhar Hotels (P) Ltd.
27
29. Indian paperboard market
Annual paperboard demand – appx. 2 million tonnes
Fragmented capacity & obsolete technology
Low per capita usage at around 7 kgs p.a. (world average – over 55
kgs p.a.)
Indian paperboard market growing at 7% p.a.
Value Added Coated board - the fastest growing segment (15% p.a.) in
India driven by the growing sophistication of the consumer
29
30. ITC’s Paperboards Business
Market leader in growth segment - value added coated boards
World-class contemporary technology
• Ozone bleached Pulp Mill fully operational – only one of its kind in
Asia 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 – effectiveness tested in >
1,00,000 hectares
Fully integrated operations with in-house pulping capacity at appx.
2.80 lac MT
30
31. ITC’s Paperboards & Packaging businesses
Capacity expansion projects installed – at optimum capacity utilization
• 120000 TPA Pulp Mill – Machine stabilised
• 100000 TPA paper machine (to support Education & Stationery business
growth plans) Machine stabilized
• Investment in 100,000 TPA paperboards machine underway
ITC’s packaging SBU -India’s largest converter of paperboard into high
quality printed packaging
• Leading supplier to Indian FMCG and Consumer Electronic segments
• Provides superior packaging solutions to the cigarettes and new FMCG
businesses
31
33. Indian Leaf Tobacco industry
India – the third largest producer of tobacco
However, India’s share is only 7% in world tobacco trade
Upgradation of tobacco consumption from other formats to cigarettes
will enable:
• growing domestic base & larger opportunities for value added exports
ITC – India’s largest buyer, processor, consumer & exporter of cigarette
tobaccos
6th largest leaf tobacco exporter in the world
Pioneering cultivation of flavourful Flue-cured, superior Burley and
Oriental tobaccos in India
Export business - robust growth in export volumes with improvement in
realization over the last 2 years
33
34. ITC’s Agri Commodity Business
Farm linkages in 14 states covering Soya, Wheat, Marine
products, Coffee etc. Focus on value added agri commodities
Unique CRM programme in commodity exports
Leveraging IT for the transformational ‘e-Choupal’ initiative
• Rural India’s largest Internet-based intervention
• Over 40000 villages linked through around 6500 e-Choupals
servicing over 3.5 million farmers
Distinctive sourcing capability for ITC’s Foods business
34
35. e-choupal: Strategic Thrust
Procurement: cost & quality optimisation
• strategic sourcing support to the Foods business (support creation of
verticals in wheat, soya, corn, potato etc.)
• cost-effective sourcing for exports/domestic external business
Rural Distribution
• ‘last mile connectivity’: 100 partnering companies
• diverse range of goods/services: FMCG, consumer durables, agri-inputs,
paid extension services etc.
Financial Services
• insurance (focus: weather)
• credit (focus: Kisan Credit Card scheme)
Rural retail
• 24 Choupal Saagars operational
35
37. 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 of ITC’s FMCG
distribution capability
Business model retains critical elements of value chains within ITC with
other elements outsourced
• Contributing to the competitiveness of SMEs
37
39. Branded Packaged 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:
– Differentiated & innovative products; continues to build consumer
franchise; distributed & outsourced supply chain being ramped up
– Targeted cost management actions shore up margins
• Number of innovative products in the pipeline leveraging the capabilities
of the ITC R&D Centre
39
40. Lifestyle Retailing
Leverages trade mark and services expertise of hotels
Relaxed wear market growth > 20% p.a
Upmarket product range available in exclusive Wills Lifestyle stores (56)
and multi-branded outlets/ large format retail stores across the country
• Premium segment comprising the ‘Classic’ range of formal wear, ‘Wills
Sport’ relaxed wear and ‘Wills Clublife’ evening wear
• Designer association with leading Indian designers – ‘Wills Signature’ line
• Strong distribution network in place for the mid-market brand ‘John Players’
• availability in 225 Exclusive Branded outlets, 200 multi branded outlets and
departmental stores
• Wills Lifestyle rated amongst the top 5 Luxury brands in the country (Global
Luxury Survey conducted by TIME Magazine)
40
41. Education & Stationery Products Business
Leverages print and paper know-how. Forward linkages with new paper
capacity (already commissioned).
An emerging (currently Rs 9000 cr stationery) market in India - growth
driven by increasing cross-cultural exposure, govt. spending on
education
• Mostly commoditized. Offers opportunity for branding
Robust distribution network in place to scale up the Stationery business
significantly
• ‘Classmate’ brand already the most widely distributed brand in India. Scholastic
products launched
• Branded Copier Paper ‘Paperkraft’ footprint being enhanced. Enthusiastic
customer response based on green credentials.
Comprehensive portfolio approach with new variant/category launches
41
42. Safety Matches
Current industry consumer spend estimated at Rs. 1250 crores p.a. for 24
billion match boxes
Fragmented supply base arising from policy of reservation for small scale
industry
Mass market moving from 0.50 p price point to Re 1.00.
ITC markets its brands with value added products across each price
point
• Support SMEs with complementary marketing strengths
‘AIM’ – India’s largest selling Safety Matches brand
Successful acquisition of WIMCO Ltd. by Russell Credit
• Key brands: Homelites, Ship, Cheetah Fight etc.
42
43. Incense sticks (Agarbattis)
Current industry consumer spend estimated at over Rs. 900 crores 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
• ‘Mangaldeep’ : second largest national brand in the country
• Support cottage sector with complementary marketing strengths
• Provides livelihood opportunities to more than 8000 under privileged
women
43
44. Personal Care Products
Current market size estimated at over Rs. 29000 crores (growing at 12%
p.a.)
ITC presence established in Body Wash (Soaps, shower gels), Hair Care
(Shampoos, conditioner).
Product portfolio enlarged with the launch of Fairness cream.
Portfolio approach straddling all consumer segments with 4 umbrella brands
• Essenza Di Wills (Prestige)
• Fiama Di Wills (Premium)
• Vivel Di Wills and Vivel (Mid)
• Superia (Popular)
Products well received in the market, gaining customer acceptance
Supported by investments in brands – celebrity endorsements
Investments being made in Research & Development and strategic tax
incentivised manufacturing sites 44
45. Forward-looking Statements
Statements in this presentation describing the Company’s objectives, future
prospects, estimates, expectations etc. may be “forward looking statements”
within the meaning of applicable securities laws and regulations. Investors are
cautioned that “forward looking statements” are based on certain assumptions
of future events over which the Company exercises no control. Therefore there
can be no guarantee as to their accuracy. These statements involve a number of
risks, uncertainties and other factors that could cause actual results to differ
materially from those that may be projected or implied by these forward looking
statements. Such risks and uncertainties include, but are not limited to: growth,
competition, acquisitions, domestic and international economic conditions
affecting demand, supply and price conditions in the various businesses in the
Company’s portfolio, changes in Government regulations, tax regimes and other
statutes, and the ability to attract and retain high quality human resource.
45
