HAVELLS INDIA LIMITED

February 2019
 AN EVOLVING JOURNEY

Got listed on Stock Acquisition of ‘Lloyd’

Commenced Business Acquired global business
Exchange consumer durable
in Delhi of ‘Sylvania’
business

1958 1971 1993 2003 2007 2015 2017

* Launched Fans &

* Divestment of ‘Sylvania’
Lighting
Acquired ‘Havells’ Brand * Focus on domestic
* Set up plants for
expansion
Switchgears, Fans & CFLs
CONSISTENT DELIVERY
Financial performance Market capitalization

Revenue

EBIDTA

Net Worth

PBT

PAT
~30% ~38%
CAGR since CAGR since
listing listing
 KEY MILESTONES
 Leverage channel by expanding product portfolio
 Industrial to a consumer company
 Manufacturing
 Large scale manufacturing with high standards of quality
assurance
 ~90% in-house
 National Advertising and uniform discounting
 Disproportionate ad spend on ’non-consumer’ products
 Mass to ‘mass premium’
 Steady premiumisation
 Acquisition of Sylvania and pragmatic exit
 Changing industry dynamics and capital allocation
 Lloyd Acquisition
 Entry into high potential Large Consumer Durables
 Aligned with ‘Deeper into Homes’
 MOVING AHEAD
2004 2011 Onwards

Lighting Air Conditioner

• 20 Product verticals
Television
• Serving ~70%
Air Cooler
electric sockets
Fans
Water Heater
Switchgears
Refrigerator

Switches Water Purifier

Domestic Appliances

Till 2004
Washing Machine
Domestic Cable
Industrial Cable

DEEPER INTO HOMES

 EXPANDING CONSUMER FUNNEL

Electricals
Size: ~ Rs. 45,000 crores
CAGR (2018-23): ~12%

Home Appliances
Size: ~ Rs. 70,000 crores
CAGR (2018-23): ~15%
 SEGMENTS
Revenue Mix (9M FY19)
Switchgears Cables Lighting & Fixtures Electrical Consumer & Durables Lloyd

17% 32% 13% 20% 18%

Contribution Margin Mix (9M FY19)

Switchgears Cables Lighting & Fixtures Electrical Consumer & Durables Lloyd

27% 21% 15% 23% 14%

FAVOURABLE MACRO LEVERS
Urbanization
To be 40% by 2030 from 34% currently
Investment on infrastructure and housing will be key focus area

Electrification
High degree of focus on electrification, electrification now reaching semi
urban and rural

Aspirational shift for brands

Consumer preference accelerating for branded products
Regulatory measures viz GST narrowing gap with unorganised sector

Young Demography
Growing middle class across urban, semi urban.
Nuclearization of families, better standard of living and global exposure
HAVELLS ELECTRICAL
MARKET SHARE: TOP 3 ACROSS CATEGORIES
Indicative Market
Indicative Market Indicative Organized
Product Size Peers
Share Rank Penetration Level
(Rs. in crores)
Switchgears

MCB 2,200 27-28% #1 High Legrand, Schneider

Panasonic (Anchor),
Switches* 2,200 14-15% #3 Medium Legrand
Cable

Domestic 8,000 16% #3 Low Finolex, Polycab

Industrial 12,000 10% #3 Medium Polycab, KEI

Lighting
LED

Philips, Crompton, Bajaj,

Lighting & Fixtures 6,500 10-14% # 2-4 Medium Wipro

Fans 6,900 16% #3 High Crompton, Orient, Usha

ECD

Water Heaters 1,400 15% #2 Low Racold, AO Smith

Other Appliances 5,200 2-3% - Low Bajaj, Philips

* Premium modular plate switches

CONSISTENT NEW PRODUCT INTRODUCTIONS
2012: Water Heaters 2013: Domestic Appliances and Pumps

2016: Air Coolers 2017: Water Purification and Personal Grooming

 CHANNEL EXPANSION- DEEPER PENETRATION
Proximity to Consumer – Transition towards Rural & Semi-Urban Cities
TOWN PENETRATION – 25K ABOVE POPULATION RETAILER - COUNT

2283

~9,000
Direct Dealers
2 Lac
2000

1147 ~130,000
1.3 Lac Retailers

Ambition

Ambition
Current

Current
~250,000
Electricians

 Havells’ major penetration is in Metro, Tier I & II Towns

 Rural sector and Tier III & below towns key penetration opportunity
 CHANNEL EXPANSION
 Grow inclusively :
 MBOs
 Brand stores
 Organized retail chains
 Canteen Stores
 Projects & Enterprise Business
 E-commerce

Largest Brand Shop channel in electrical industry

433 Havells
Galaxy

77 Presence 20%
Havells Total 723
Gallery
in 297
40
Standard
Gallery

Brand Shops - 550 District Presence Business Contribution

(Ex Cable)
 RESEARCH AND DEVELOPMENT IOT Smart Homes

First Mover Trend Setter

Maturity

Develop solutions
(2015 onwards)

First Mover

Self development
from ground zero
Fast Follower (2000-2015) Trend Setter

JVs and alliances Time

(Upto 1990s)
 Fast catcher to thought leadership
 R&D spend to increase from 1% to 3% of net revenue
 Intelligent hardware, embedded software
 Products to solution
HIGH GROWTH POTENTIAL INDUSTRY
• Low Penetration
60%

30%
10% <5%

Colour Television Refrigerator Washing Machines Room Air Conditioner

• Each Product Group Expected To Grow At Double Digit

INR Cr

Washing Machines Refrigerator Room Air Conditioner Colour Television

14%
13,200 33,700 17% 23,800 15.0%
14% 60,000

12.2% 7,000 17,700

12.9% 9.9% 10,500 30,000
3,937 9,649 6,549

2011 2016 2021E 2011 2016 2021E 2011 2016 2021E 2016 2021E
% CAGR

Source: Industry data

 MASS PREMIUM POSITIONING
Air Conditioner Market in India LED TV Market in India
Key Players Other Players Key Players Other Players

Premium Premium

Mass- Premium Mass- Premium

Economy
Economy Economy
LLOYD WELL PLACED IN CONSUMER DURABLES MARKET

FY18 Gross sales of Gained 13% share in AC Among top three AC

c.INR 2,000 Cr segment of India in players in the country
~ 7 years

Gained 3% share in LED TV Innovative and aggressive in 10,000+

segment of India in brand building initiatives, Display points pan India
~ 5 years created a strong connect

600+ 6 decades Presence across

Service centers pan of brand vintage in AC 450+ cities
India segment
 LLOYD-AN EVOLVING JOURNEY
 An exciting 18 months journey

 Favourable demand demographics to drive long term

industry growth

 Investing behind brand, manufacturing, people and

distribution to extend Lloyd positioning

Lloyd AC Plant
 Leveraging Havells connect and trust

 Industry headwinds and disruptions in last year. Doesn't

diminish medium term outlook

FINANCIALS
STANDALONE FINANCIALS
Financial highlights in millions of Rupee

FY17 FY18 9M FY19

Net Revenue 61,353 81,385 73,057

Growth % 14% 33%** 30%**

EBIDTA % 13.4% 12.9% 11.9%

PBT % before exceptions 13.5% 12.3% 11.6%

PAT % before exceptions*

9.7% 8.6% 8.0%

CAPEX (incl. intangibles) 2,386 15,962 2,849

ROCE % 27% 30% 32%
Net Worth 32,736 37,392 40,384
Net Working Capital 5,274 3,131 9,079
Cash & Bank 19,375 15,262 10,835
* PAT for FY18 and FY17 was 8.8% and 8.8% including exceptional items
** Ex-Lloyd excise adjusted growth in FY18 and 9M FY19 was 13% and 27% respectively
 GROWTH WITH RESPONSIBILTY
Havells Mid-Day Meals Program Sanitation DOW JONES SUSTAINABILITY INDEX-2018
Overall Ranking
Rank Company
1 Signify NV Ranked 7th
2 Schneider Electric SE globally in the
3 Legrand SA Electrical
Components &
4 Prysmian SpA
Equipment
5 OSRAM Licht AG Industry
Serving 60,000+ students Built over 3,500 bio- 6 Fuji Electric Co Ltd.
daily toilets in 500+ schools 7 Havells India Limited

SUSTAINABILITY

Energy intensity 99% of waste GHG emissions

reduced by 40% recycled / reused reduced by 38% from
from FY16 to FY16 to FY18
9 of 12 manufacturing plants Generated 6%of clean energy
FY18
are zero water discharge from roof top plants
BENCHMARKING WITH THE BEST CORPORATE, FINANCIAL AND
SHAREHOLDERS GOVERNANCE Shareholding Pattern
As on 31.12.2018
 Promoters- single business focus Others, ESOP/ESPS,
9.49% 0.01%
 Transparent and detailed communication to
Mutual Funds, 4.41%
shareholders
 Committed to high standards of corporate and
shareholder governance FIIs, 26.54%
Promoters,
59.55%
EPS, DPS & Dividend Payout Ratio
15 11.4 50%
43% 40%
10 31%
30%
4.9 20%
4.0
5
1.3 10% - Corporate Governance
0 0% CGR 2+ rating by CARE
FY12 FY18 - Maintaining dividend pay-out
EPS- adjusted for bonus issue/ split (Rs.) and exceptional items of ~44%, stated policy of 30% to
Dividend Per Share (Rs.) 50%
Dividend payout ratio
 SUMMARY
 India represents large untapped opportunity with lower penetration, higher

unorganized sector & growing electrification

 Havells preparing for future with constant products expansion, deepening market reach

& brand reinforcement

 Organic leverage with opportunistic acquisition to drive growth

 Strengthening management bandwidth to lead ambitious growth plan

 Native business acumen, market connect and ethics remain core values
INDIA: ELECTRIFIED BY HAVELLS