Asian Paints Limited has informed the Exchange about Investor Presentation
APL/SEC/32/2023-24/71
17th January 2024
BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001 Security Code: 500820
Sir/Madam,
National Stock Exchange of India Limited Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (East), Mumbai – 400 051 Symbol: ASIANPAINT
Sub: Intimation under Regulation 30 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 - Investor Presentation
Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), please find enclosed the presentation made to the investors on the financial performance of the Company for the quarter and nine months period ended 31st December 2023.
The audio recording and transcript of the Investors Conference will be uploaded on the website of the Company (www.asianpaints.com) and the Stock Exchanges, as prescribed under the Listing Regulations.
You are requested to take the above information on record.
Thanking you,
Yours truly,
For ASIAN PAINTS LIMITED
R J JEYAMURUGAN CFO & COMPANY SECRETARY
Encl.: As above
Delivering joy since 1942…. We exist to Beautify, Preserve, Transform all Spaces and Objects, bringing happiness to the World!
2
Disclaimer
This communication, except for the historical information, may contain statements which reflect the Management’s current views and estimates and could be construed as forward-looking statements. The future involves many risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange and commodity price fluctuations, competitive product and pricing pressures and regulatory developments.
3
Double – Digit Volume Growth in Q3, Supported by Festive Demand
i
) a d n I (
s s e n i s u B e v i t a r o c e D
14.9% 4 Yr CGR
12%
Q3 FY'23 Q3 FY'24
0%
14.5% 4 Yr CGR
5.5%
1.2%
Volume Gr%
Value Gr%
15.6% 4 Yr CGR
9M FY'23
9M FY'24
13%
9%
15.4% 4 Yr CGR
22.6%
4.6%
Volume Gr%
Value Gr%
4
s t n a P
i
l
a i r t s u d n
I
l
s u P e v i t a r o c e D
Overall Domestic Paints: Industrial Continued to Grow Well
14.7% 4 Yr CGR
12%
Q3 FY'23 Q3 FY'24
0%
Volume Gr%
9M FY'23 9M FY'24
15.4% 4 Yr CGR
14%
9%
14.6% 4 Yr CGR
3.0%
6.1%
Value Gr%
15.3% 4 Yr CGR
23.5%
5.3%
Volume Gr%
Value Gr%
5
i
) a d n I (
s s e n i s u B e v i t a r o c e D
200 180 160 140 120 100 80 60 40 20 -
Sustained Double-Digit Volume Growth Trajectory on 4 Year Compounded Growth Rate Basis
*20.3%
*17.5%
*14.8%
*15.9%
*17.5%
*14.7% *14.9%
*15.2%
Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24
Quarterly Representation of Volumes Sold on Base of Q1 FY19 as 100 *% represents 4 Year Compounded Growth Rate
6
Tracking our Growth Drivers
i
) a d n I (
s s e n i s u B e v i t a r o c e D
❑ Double-digit volume growth across urban & rural markets; early signs of recovery in rural markets
▪ Over 4 years, both rural & urban centers growing equally well with similar double-digit CGRs
❑ Mix led by Luxury & Economy range of products
❑ Maintained
strong
growth
in
Smartcare
Waterproofing
❑ Growth in Projects / Institutional Business continued key
Factories & Govt
▪ Builder,
Sector
contributors
growing in double digits
❑ Continued our focus on innovation
▪ Premium products grew at slower pace
▪ New products contributed to ~12% of overall
❑ Continued expansion of distribution footprint
▪ Catering to over 1.62 retail touchpoints,
❑ Work on capacity expansion, backward integration
added 2,000 touchpoints in Q3
initiatives progressing well
revenues
▪ Brownfield expansions at Khandala & Kasna
have been completed
7
Creating Differentiation in the Market
❑ Safe Painting Services – rechristened as the
Beautiful Homes Painting Service in over 650 towns in India. Globally the largest Painting Service by any player
❑ Mechanization : With 23 Colour academies, have introduced mechanization to more than 3 lac painters – Revolution in Painting Productivity
❑ Painting Tools : Vertical Integration in Painting
tools including Spraying Machines – a first in the country
i
) a d n I (
s s e n i s u B e v i t a r o c e D
8
Creating Differentiation in the Market
❑ Innovation through new and differentiated
products - All product categories have product chemistries and product propositions which no other company offers
❑ Products launched are ‘New to World’ and hence
unique propositions
❑ New Products contribute in double digits to overall
revenue; Q3 contributions at ~12%
❑ Highest number of patents granted in the industry;
~30% commercialized
i
) a d n I (
s s e n i s u B e v i t a r o c e D
First Product which can be applied on 70% Damp Walls
Disrupting the Wood Finish Market, Bottom of the Pyramid
Building Brand – Asian Paints
❑Reinforcing the Proposition of ‘Har Ghar Kuch Kehta Hai : Where the Heart is’
❑Creating Innovative Propositions to stay ahead in Market : Anti Crack,
Waterproofing on Damp Surfaces, Creating the world of Surface Décor through Interior and Exterior Textures, Cutting edge Wallpaper designs
❑Digital & Social Marketing : Embracing new areas and creating strong communities
❑Democratizing Décor through Street Art
i
) a d n I (
s s e n i s u B e v i t a r o c e D
10
Asian Paints Har Ghar Kuch Kehta Hai | Mera Wala Mood
On World Braille Day, we at Asian Paints and St+art India Foundation are proud to present India's first-of-its-kind Art Museum created at the Rajasthan Netraheen Kalyan Sangh School. The initiative aims at inspiring and enriching young minds with the transformative power of tactile artwork there by making ‘Art’ accessible to all
No. 1 Integrated Home Décor Player
54 Beautiful Homes Stores – One Stop Home Décor Destinations
No. 1 in Decorative Lighting
No. 2 in Fabric & Furnishing
~ 4% of Decorative Revenue
No. 1 in Wallcovering & Textures
Collaborations with Sabyasachi, Jaipur Rugs, Sarita Handa
O U R
H O M E
D E C O R
F O R A Y
15
Home Décor: Sizing-up Our Home Décor Offerings
Kitchen, Kitchen Hardware & Components
Bath & Sanitary
Designer and General Tiles
Wardrobes and Vanities
Fabric and Furnishing
Designer Wall Paper
Furniture
Rugs
Lighting Solutions
uPVC Windows and Doors
Beautiful Home Stores: 54 stores now functional Beautiful Homes Services: now in 11 cities BeautifulHomes.com: ~50 Lakh visitors & over 5 Lakh Instagram followers
Committed to Home Décor Revenue Contribution of 8-10% of Deco Business by FY26
Partnering to Deliver Beautiful Homes through 1st of its Kind Customer Experience
Inspiring through ‘WoW’ Looks, Aspirational Stories
Selection Enhanced by Visualization
Purchase & Execution
New Launches in Home Décor
Launched campaign introducing Lotus 25 Hydrophobic Faucet enabling spotless bathrooms “Some spots are desirable while some are not”
Royale Wardrobes designed keeping in mind urban sensibilities of homeowners
18
s s e n i s u B r o c é D e m o H
Focused on Strengthening the Integration with our Beautiful Homes Network
Kitchen Business
❑ Flat revenue post 4 quarters of de-growth
▪ Efforts centered around expansion of reach
❑ Strong focus on driving operational efficiencies
▪ Resulted in PBT break-even for the quarter
Bath Business
❑ De-growth of 5% due to weak demand trend at industry level; Better performance than last 2 quarters
❑ Working on product innovation that elevates user
experience
Q3 FY'24 9M FY'24
1 1 %
293
100
Revenue
1 9 %
251
Q3 FY'24
9M FY'24
5 %
85
0
-4
PBT
-7
-10
Revenue
PBT
19
(figures in columns in Rs. crs)
White Teak & Weatherseal – Adding Range to our Home Décor Offerings
❑ Net Sales of Rs. 34 crs in Q3 with 18% growth
Weatherseal (uPVC Windows and Doors)
❑ Net Sales of Rs. 14 crs in Q3, more than doubling
s White Teak (Offering Decorative & Designer Lights) s e n i s u B r o c é D e m o H
Benefitting from synergies led by pan-India spread of dealer network & growing product portfolio
revenue YoY
20
s s e n i s u B
l
a n o i t a n r e t n
I
21
s s e n i s u B
l
a n o i t a n r e t n
I
Improved Profitability despite Macro-Economic Headwinds
❑ Flat growth in INR terms; constant currency growth of 5.2%
▪ Good growth in Middle East & Africa ▪ Subdued performance in Asian markets:
⁻
Liquidity crunch triggered soft sales in Nepal
⁻ Macro uncertainties continued to impact
Bangladesh
⁻ Stabilizing economic conditions supported
recovery in Sri Lanka
❑ Strong profit delivery despite flat revenue
growth
▪ Improvement in profitability driven by operating efficiencies & moderating raw material prices
.
1 8 %
2,249
779
AP Global Overall
% 6
125
% 8 5
58
Revenue
Q3 FY'24
9M FY'24
% 6
541
% 0 1
201
% 3 1
747
% 5
252
1 5 %
882
1 1 %
289
% 3 1
% 6 1
45
122
Africa
Middle East
Asia
South Pacific
PBT*
Q3 FY'24
9M FY'24
% 7 2 2
70
% 7 9 1
31
% 6 9 3
49
% 9 4 1
28
7 8 %
21
9 0 %
2
% 8 4
26
% 7 4
10
AP Global Overall
Africa
Middle East
Asia
South Pacific
* Before exceptional items (figures in columns in Rs. crs)
22
s s e n i s u B
l
a i r t s u d n
I
Robust Growth in Revenue & Profit Margins
PPGAP
❑ Double-digit revenue growth driven by Refinish &
Auto OEM segments
❑ Moderating raw material prices led to improvement
in margins
▪ PBT margin at 22.2% vs. 17.8% last year
% 0 1
1,543
Q3 FY'24 9M FY'24
% 2 1
576
% 0 4
128
% 9 5
287
Revenue
PBT
❑ Continued double-digit revenue growth
APPPG
% 4 1
833
Q3 FY'24 9M FY'24
❑ Growth driven by Protective & Powder coating
segments
❑ Enhanced sales mix coupled with moderating raw
material prices led to improvement in margins ▪ PBT margin at 11.5% vs. 9.8% last year
% 0 1
288
Revenue
% 0 3
33
% 7 9
101
PBT
23
(figures in columns in Rs. crs)
Soft Raw Material Environment & Work on Sourcing, Formulation
Efficiencies Driving Gross Margins
Material Inflation ~4% Price Increase ~15%
Material Inflation ~1%
Material Inflation ~6% Price Increase ~2%
Material Inflation ~2% Price Increase ~1%
Material Deflation -7%
Material Deflation -4%
Material Deflation ~2%
Material Deflation ~4%
Material Deflation ~0.2% Price Decrease ~1%
36.9%
39.7%
37.9%
35.6%
38.7%
43.0%
43.4%
43.9%
44.2%
Q3FY22
Q4FY22
Q1 FY23
Q2 FY23
Q3 FY23
Q4 FY23
Q1 FY24
Q2 FY24
Q3 FY24
Gross margin shown here is at standalone level & as a % of Net sales
24
Summary Standalone Financials
Q3
❑ Net Sales growth of 5.2% led by double – digit volume
growth
% 2
.
5
7,883
Q3 FY24 Q3 FY23
❑ ~550 bps improvement in gross margin to 44.2% driven by softening raw material prices and sourcing & formulation efficiencies
3,484
% 0 2
1,897
% 7 2
1,914
% 3 3
% 3 3
1,444
❑ PBDIT margin improved to 24.1% vs. 20.0% in Q3 last year
Net Sales
Gross Margins
PBDIT
PBT
PAT
9M FY24
❑ Net Sales growth of 4.1%
❑ ~640 bps improvement in gross margin to 43.8%
% 1 4
.
23,284
9M FY'24
Full Year
9M FY'23
❑ PBDIT margin improved to 23.5% vs. 18.2% last year
10,203
% 2 2
5,482
% 5 3
5,483
% 3 4
4,112
% 4 4
Net Sales Gross Margins
PBDIT
PBT
PAT
(figures in columns in Rs. crs)
25
Summary Consolidated Financials
❑ Net Sales growth of 5.4%; strengthened by APPPG
business
❑ ~510 bps improvement in gross margin to 43.4% driven
by robust profitability in Industrial Business
❑ PBDIT margin improved to 22.7% vs. 18.7% in Q3 last year
Q3
% 4 5
.
9,075
Q3 FY24
Q3 FY23
% 9 1
3,941
% 8 2
2,056
1,968
% 3 3
% 4 3
1,475
Net Sales
Gross Margins
PBDIT
PBT
PAT
❑ Net Sales growth of 4.2%
9M FY'24
9M FY'23
9M FY24
❑ ~600 bps improvement in gross margin to 43.1%
❑ PBDIT margin improved to 22.1% vs. 17.2% last year
% 2 4
.
26,681
11,505
% 1 2
% 4 3
5,894
5,724
% 3 4
4,282
% 6 4
Net Sales
Gross Margins
PBDIT
PBT
(figures in columns in Rs. crs)
PAT 26
❑ Expect to sustain the Q3FY24 volume momentum
Outlook for Q4FY24
❑ Satisfactory monsoon coupled with uptick in Government spending and moderating inflation likely
to bring in positivity for rural economy
❑ Softer raw material price trend witnessed in the first nine months to persist in Q4FY24
❑ Remain confident on further growth in our Industrial Business and optimistic on scaling up our
Home Décor foray
❑ Macro-economic headwinds expected to persist across some of our International geographies;
especially South Asia, Egypt
❑ Need to remain vigilant on geo-political developments and its potential fallouts
27
Thank You
28