An Investor presentation

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• An Investor presentation
• AUG 2007

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Contents
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Contents

• The Journey So-Far
• Volume Growth Comparison
• Diageo Radico- The Blue Blood marriage
• Radico Liquor Segmentation
• Marketing Success Stories
• Treading Towards Global Growth
• Sustained Competitive edge of Radico

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The Indian Made Foreign Liquor Industry

• Growing at a CAGR of 9 for last decade and
  expected to grow at 8-9 in next three years.
• Total market value Rs.41,000 crore
  (US9.35 billion in 2007)
• Total market volume Approx 110 million cases
  in FY2007
• Liquor industry segmentation Whisky
  60 Brandy 18 Rum 15 White
  Spirits 7
• Lowest per capita consumption India 0.8
  liters Global Avg 3.1 liters (SourceUBS
  )

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Challenges of the IMFL Industry

• India is 28 countries in the context of one
  (There are 31 states but some are very small).
  There are at least 23 quite different market of
  importance.
• Each state levies taxation on alcohol at its own
  determined rates and excise duties. States
  control the distribution channels in its own way.
  It is a state subject not the federal subject.
• Prices vary by states and are low by
  international standards
• High investments for production distribution
  channels.
• Surrogate Liquor Advertising.
• Thereby leading to high entry barriers to launch
  brands
• by new companies

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Growth Drivers of the IMFL Industry

• Changing demographis 54 of youth and middle aged
  population increased in 2011 from 48 in 2001.
• In Indian demographics nearly 485m people are at
  the drinking age and another 270m will likely to
  be added over the next 30 years.
• Deregulation by state governments.
• Influence of western culture.

Source UBS
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Radico Today The Journey So Far
1943-1998 Spirit Company
Started Distillery in 1943 A Major Spirits
Supplier Supplier of Rum in Armed
Forces Bottler for others
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Radico Robust growth in the last 8 years
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Radico Volume Growth Comparison

• Radico Volume in cases Growth
• 2000-01 2.97 million -
• 2001-02 3.70 million 25
• 2002-03 4.72 million 28
• 2003-04 6.35 million 34
• 2004-05 10.02 million 58
• 2005-06 12.02 million 20
• 2006-07 13.5 million 13

• Industry Growth
• 2000-01 8-9
• 2001-02 8-9
• 2002-03 8-9
• 2003-04 10
• 2004-05 10-12
• 2005-06 10-12
• 2006-07 8-10

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9
CAGR
CAGR
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DiageoRadico Blue blood marriage

• DiageoRadico is a 5050 JV which marries
  Radicos distribution manufacturing base with
  Diageos marketing muscle to tap the fast growing
  Premium IMFL market to create new brands.
• The brands will be created in the gap area in
  brown spirit segment i.e Premium brown sprit
  segment.
• The two companies will continue to operate in
  their own independent businesses outside of the
  JV and will maintain their respective brand
  portfolios.
• The JV has launched its first brand
  Masterstroke, deluxe whisky priced in a range
  of Rs 300-Rs400
• Masterstroke clocked one hundred thousand cases
  in hundred days

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Radico Marketing Success Stories

• 8 PM Whisky
• Launched in 1998 first brand with Guala cap in
  its segment.
• First Indian whisky to be blended with scotch.
• Its ad campaign was adjudged among the best ads
  of the century.
• First brand to enter Limca book of Records for
  selling million case in first year of launch
• Old Admiral Brandy
• Frosted bottle / VSOP Brandy/ pricing were the
  brand differentiators
• Fastest growing brandy brand in the world for the
  past two years
• Sold one million cases in the second year of its
  launch

Source Drinks International,U.K,May 2006
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Radico Marketing Success Stories

• Contessa Rum
• It has 22 of the defence market share
• largest selling rum brand in the defence segment
• Magic Moments Vodka
• Fastest growing Vodka in India
• Packaging/Pricing brand differentiator
• Looking at gaining 15 market share by the end of
  the financial year.

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MASTERSTROKE Diageo-Radico JV

• Masterstroke
• - The first JV product launched in premium
  whisky segment
• Brand created by Peter J.Warren
• Sharukh Khan, a leading bollywood Superstar is
  endorsing the brand
• The brand clocked one hundred thousand cases in
  first100 days of launch.

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RadicoSustained Competitive Edge
Rampur distillery amongst the largest
Distillery in the world and production of spirit
90 million lit p.a Grain, Molasses Malt
Buoyant brands Millionaire Club 8 PM Whisky,
Contessa Rum Old Admiral Brandy
Most Awarded brands for quality at Monde
Selection, International Wine Spirit
Competition International Spirits Challenge
SAP-ERP/ Hewitt Associates for HR
35 bottling units across the country 2 units
overseas
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Way ForwardExpanding Domestic Branded Business

• War chest of 70 million USD both for domestic
  International growth -Organic Inorganic growth
• New brand launches expanding presence in all
  segments of liquor Industry, e.g. Magic Moments
  vodka segment
• Umbrella brands strategy
• Brand acquisition
• Grain based brands to be focus
• Aligning with Diageo the largest premium
  Alcoholic Beverage company in the world to create
  premium brands with high margins.

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Operative PerformancesFY2007 results
Gross Sales
Net Sales
Net Profit
313.9
194.5
10.4
US millions
US millions
US millions
EBIDTA Margin 10.5
Note Includes sales from contract bottling
units 1USRs43.5
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Operative PerformancesGross Sales and Profit
After Tax (PAT)
Gross Sales (US millions)
Profit After Tax (US million)
Note Includes sales from contract bottling units
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Operative PerformancesEBITDA Margin ()
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Operative Performances Dividend
Balance Sheet Ratios (Figures in )
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Operative PerformancesFY 2007
Rs(In Cr)
USD (In Mln)
During the year the company has incurred brand
building expenses of about Rs 10 cr, for its
fastest growing brand Magic Moment Vodka in the
deluxe category and the same has been charged to
profit 1USDRs 43
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Shareholding Pattern
As on 13.07.2007
The market cap of the company is Rs 1687.8 crs
(USD 392.5 mn).
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CONTACT DETAILS

• Radico Khaitan Ltd
• Add Plot No. J-1, Block B-1, Mohan Co-op Indl.
  Area,
• Mathura Road,
• New Delhi-110044
• EPABX (91-11) 26975403-9
• Fax [phone]
• Contact Person Mr. Jitendra Jain
• Direct line (Mumbai / Delhi) 022-56306739 /
  011-51678842
• Mobile (Mumbai / Delhi) 09821351340 /
  09818281340
• Fax (Mumbai / Delhi) 91-22-56306741 /
  91-11-26975339
• E-mail jainj_at_radico.co.in

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Disclaimer
Certain statements in this presentation
concerning our future growth prospects are
forward- looking statements, which involve a
number of risks, and uncertainties that could
cause actual results to differ materially from
those in such forward-looking statements. The
risks and uncertainties relating to these
statements include, but are not limited to, risks
and uncertainties regarding fluctuations in
earnings, our ability to manage growth, including
those factors which may affect our cost
advantage, wage increases, our ability to attract
and retain highly skilled professionals, time and
cost overruns on fixed- price, fixed-time frame
contracts, client concentration, restrictions on
immigration, our ability to manage our
international operations, reduced demand for
technology in our key focus areas, disruptions in
telecommunication networks, our ability to
successfully complete and integrate potential
acquisitions, withdrawal of governmental fiscal
incentives, political instability, legal
restrictions on raising capital or acquiring
companies outside India. Radico Khaitan may,
from time to time, make additional written and
oral forward-looking statements, including our
reports to shareholders. The Company does not
undertake to update any forward-looking statement
that may be made from time to time by or on
behalf of the company.