October 2002

1

Godrej Consumer Products Limited
October 2002
2
Agenda

• Background
• Product Profile
• Performance
• Shareholder Value
• Initiatives

3
Background
4
The Company

• GCPL is a result of the demerger of the Consumer
  Products Division of Godrej Soaps Limited (now
  renamed Godrej Industries Ltd.)
• Focused FMCG company
• Presence in Personal, Hair, Fabric Household
  care market categories
• Market Leadership in Hair Colour Liquid
  Detergents
• High Standards of Corporate Governance
• Owns all its Brands

GCPL - category-wise Revenue and Growth Figures
in parentheses refer to revenue growth rates (net
of excise) over corresponding period of previous
year
Liq.Detergents
Liq.Detergents
(54)
Toiletries
(10)
Toiletries
(-10)
(-6)
Soaps
Hair Care
Soaps
Hair Care
(10)
(14)
(14)
(17)
FY 2002
H1 FY2003
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Godrej Consumer - A new focus

• Godrej Soaps Limited
• Consumer business was part of the conglomerate,
  with core profitability of the consumer segment
  not being unlocked
• Godrej Industries focus on AOS and Fatty Alcohol
  along with investments in Godrej Sara Lee and
  Godrej Agrovet was not appreciated by the market
• Consequently, GCPL was de-merged from Godrej
  Soaps Limited (renamed as Godrej Industries
  Limited). GCPLs focus is the FMCG sector with
  emphasis on personal household care

• Godrej Consumer
• GCPL emerges as one of the fastest growing FMCG
  companies with a CAGR of 20 for past 3 years
• Four categories soaps, hair colours, toiletries
  and detergents
• Focus on employee empowerment and performance
  linked incentives has led to this phenomenal
  growth
• Asset efficiency ratios rank among the highest
  amongst peers with ROCE for FY2002 at 90

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Godrej Consumer Products Ltd A new management

• Board of Directors Qualifications
• Adi Godrej - Chairman Managing Director M.S.
  (MIT)
• Jamshyd Godrej B.S. (Illinois Institute of
  Technology)
• Nadir Godrej B.S. (MIT), M.S.(Stanford), M.B.A.
  (Harvard)
• Bala Balachandran Distinguished Professor at
  Kellogg
• Rama Bijapurkar Faculty at IIMA, Marketing
  Strategist
• Bharat Doshi FCA, FCS, LLM, PMD (Harvard)
• Anupam Puri Ex-partner, McKinsey
• Hoshedar Press -Exec.Director President B.Tech
  (IIT), PGDBM (IIM)

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Current Shareholding Pattern Shareholder
Information

• GCPL shares are traded on The Stock Exchange,
  Mumbai (BSE), National Stock Exchange (NSE)
  stock exchanges at Chennai, Kolkata, Delhi and
  Ahmedabad.
• Listed on BSE on 18-June-01
• Listed on NSE on 20-June-01

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Facilities Network
Manufacturing Facilities - 3 Branches - 4 C F
Agents - 32 Distributors - 2000 Retail Outlets
covered - Above 500,000 Retail Coverage of any
Godrej Soap - 1.6 mn Retail Coverage of any
Godrej Hair Dye - 1.2 mn
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Product Profile
10
GCPL Brand Matrix
Rs mn
Sources ORG-MARG retail sales audit for FY2002
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Key Brands
Hair Care
Personal Care
Fabric Household Care
12
Performance
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GCPL Performance Highlights

• GCPL outperformed its peers in the FMCG sector
• Market Growth GCPL Growth
• Q2 FY03 FY02 Q2 FY03 FY02
• Toilet Soaps -3.1 -6 16
  10
• Hair Colour -1.5 10 18 17
• Liquid Detergents 22.4 -11 51
  10

Q2 FY03 figures for Industry is for July August
02
Source ORG MARG retail sales audit for FMCG
industry
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Toilet Soaps

• Contributed 63 to own branded sales in H1 FY03
  (58 in FY02)
• Soap industry faced an extremely challenging
  environment in FY02. The top 10 brands contracted
  and overall sales for the industry was down by 6
• Godrej No. 1 continues to outperform and gain
  market share in the sub-popular category (now
  available in 3 variants Rose, Sandal Natural)
• Godrej Fairglow consolidated position in the
  fairness soap category
• Increased focus in the Cinthol range to improve
  presence in the premium segment

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Hair Colour

• Contributed 27 to own branded sales in H1 FY03
  (25 in FY02)
• Leader in this category with a 44.5 market share
  in H1 FY03 (44.6 in FY02)
• Presence across all price points powder, oil,
  liquid and high end fashion colours
• Low penetration suggests high growth potential
• Production at Guwahati to optimize fiscal
  benefits
• Launched new variants in the Godrej Colour Soft
  range and also Godrej Nupur in sachets

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Liquid Detergents

• Contributed 8 to own branded sales in FY02
• Ezee is the market leader with a share of 83.3
  in H1 FY03 (82 in FY02)
• Demand is seasonal in nature with application on
  woolens and soft clothing
• Plans to introduce a product targeted at other
  washing applications to reduce seasonality

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Toiletries

• Contributed 8 to own branded sales in H1 FY03
  (9 in FY02)
• Presence in shaving cream, fairness cream, talcum
  powder and deodorant
• High growth category providing exciting
  opportunities
• Gaining market share in shaving creams
• Production at Guwahati to optimize fiscal
  benefits
• New products in deodorants and other categories
  to drive growth

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Market Shares
2000-01 2001-02 Apr-Sep02 Toilet
Soaps 5.6 5.8 5.8 Hair
Colour 42.1 44.6 44.5 Liquid
Detergents 75.9 81.9 83.3 Fairness
Cream 2.1 3.4 2.5 Shaving
Cream 10.3 10.5 12.1 Talcum
Powder 1.7 1.3 1.7 Deodorant - - 1.5
Source ORG Data All figures shown are for All
India Value Market Share
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GCPLs Performance Highlights

• Growth drivers for future earnings
• Low incremental capex
• Growth in revenues expected to exploit economies
  of scale in purchases and manufacturing, further
  enhancing operational efficiencies
• Our advertising and promotional spending to
  branded sales is at the higher end of the FMCG
  sector as we invest aggressively in the business.
  AP to Sales is lower in FY03 because of
  efficiencies in buying media time, use of
  channels for rural market efficient execution
  of advertising.

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H1 FY03 Performance

• Power Brands
• Cinthol, Godrej FairGlow, Godrej No.1, Godrej
  Hair Colour, Ezee.
• Power Brands sales grew by 17
• Toilet Soaps
• Godrej Brand Soaps sales grew by 14 (against
  degrowth of the category) from Rs.1158mn in H1
  FY02 to Rs.1314mn in H1 FY03, led by Godrej No1
  which grew by 96
• Relaunched Godrej FairGlow
• Launched special trade and consumer initiatives
  to mark the completion of 50 years of the Cinthol
  Brand

• Hair Colour
• Hair Colour sales grew 14 from Rs.489mn in H1
  FY02 to Rs.560mn in H1FY03
• Launched Mehendi Power in sachets under the brand
  name Godrej Nupur
• Launched Copper Brown, Dark Mahogany Burgundy
  fashion shades of Godrej Coloursoft.
• No.1 in volume in fashion colours
• Godrej HairCare Institute (GHCI) salon activity
  intensified
• PHD sachet distribution continues to grow with
  special focus on rural distribution crosses 1.2
  million outlets

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Summary Financials
Sales are net of excise duty
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Shareholder Value
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High Free Cash Flow Generation

• Strong EVA growth
• Lower capital expenditure coupled with negative
  working capital enabled a high EVA of Rs301mn for
  FY02 (Rs.202mn for H1 FY03). EVA to capital
  employed at 40 for FY02 (41 in HI FY03)

• GCPL generates significant free cash flows, which
  are returned to shareholders as dividends
• FY 2002 Div Div per share
• 1st Interim Dividend 50.0 2.00
• 2nd Interim Dividend 87.5 3.50
• (on face value of Rs.4 Share)
• FY 2003
• 1st Interim Dividend 50.0 2.00
• 2nd Interim Dividend 50.0 2.00

We remain committed to deliver shareholder value
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High Free Cash Flow Generation

• GCPL has completed the shares buyback
• Shares bought back
• Number of share capital Amt utilised Avg
  price Period
• 1,456,593 2.5 Rs.92.6mn Rs.64 Jan-Jun 2002
• 411,962 0.7 Rs.46.0mn Rs.111 Jul-Sep 2002

• Third shares buyback
• Approved by the Board of Directors on October
  22, 2002
• Maximum outlay - Rs.100 mn
• Buyback from open market (BSE NSE) at market
  price
• Maximum price of Rs.175 per share of face value
  of Rs.4/-
• Buyback for both Demat as well as physical shares

25
Share Price Performance
Source Prowess
The stock outperformed the broad and narrow
indices
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Initiatives
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Initiatives

• Divisionalisation of business carried out with
  the formation of Soap and Personal Care teams
  effective 1st Oct 02 with mfg, procurement and
  marketing under one roof
• Focus on Personal, Hair Fabric care categories
• Consumer centricity to guide all business actions
• Restructuring of Distribution System - Super
  Sub Stockists appointed
• SKU Rationalisation
• Implementing distributor-level inventory
  management systems for its key dealers
• Leverage group synergies such as combined
  purchases of raw materials and media
• Exploit tax benefits in backward areas new
  factory in Guwahati to enhance profitability
• Return excess cash to the shareholders through
  dividend and shares buyback
• EVA Implementation complete across the
  organisation.
• Measurement Remuneration based on EVA.
  Introduction of Individual Performance Factor
  (IPF) in year 2
• Red Blue Team Project - Think Tank - Young
  Executive Board constituted

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Thank You