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CG Investor Presentation v17.pptx 1
Draft—for discussion only
Cop
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Management presentation DEMERGER AND THE WAY FORWARD
© CG. Confiden+al. All rights reserved 2 �
Disclaimer!
Certain statements in this Investors’ Forum concerning our future growth prospects are forward-‐looking statements,
which involve a number of risks and uncertain+es that could cause actual results to differ materially from those in such
forward-‐looking statements. The risks and uncertain+es rela+ng to these statements include, but are not limited to, global
economic condi+ons, the economic condi+ons of the regions, loca+ons and industries that are major markets for
Crompton Greaves Limited (“CGL”), risks and uncertain+es regarding fluctua+ons in earnings, our ability to manage
growth, intense compe++on in sectors where we operate including those factors which may affect our cost advantage,
wage increases in India and worldwide, trends in raw material prices, market acceptance of new products and services,
changes in governmental regula+ons and costs associated with compliance ac+vi+es, withdrawal of governmental fiscal
incen+ves, poli+cal instability and regional / loca+onal conflicts, legal restric+ons on raising capital or acquiring companies
within and outside India, and unauthorized use of our intellectual property, interest rates, fluctua+ons in currency
exchange rates and general economic condi+ons affec+ng our industry.
CGL may, from +me to +me, make addi+onal wriRen and oral forward-‐looking statements, including statements
contained in the company's filings with the Stock Exchanges and Securi+es and Exchange Board of India and our reports to
shareholders. The company does not intend or undertake to update any forward-‐looking statements that may be made
from +me to +me by or on behalf of the company.
2
3
Agenda
CG at a glance
Rationale and plan for demerger
Way forward
Crompton Greaves Ltd (“CGL”)
Crompton Greaves Consumer Products Ltd (“CGCPL”)
Q&A
3
4
CG today: Two different businesses under the same umbrella
Customer
Regions(1)
Channels
Key success factors
Engineering and infrastructure
• Technology • Cost leadership
Domestic electrical appliances
• Brand • Products • Marketing
• Direct • Multichannel
EMEA 35%
India 35%
SE Asia 12%
Americas 18%
100%
Two strong businesses
(1): Revenue split by geography for FY14.
4
5
Agenda
CG at a glance
Rationale and plan for demerger
Way forward
Crompton Greaves Ltd (“CGL”)
Crompton Greaves Consumer Products Ltd (“CGCPL”)
Q&A
5
6
Right time for the demerger
Market conditions Why are we ready?
• Consumer demand revival
• Increasing preference for brands, faster product cycles, larger premium segment
• Consumer business has reached the right size to operate independently
• Crompton is a brand ready to be leveraged for acceleration
Two potential leaders
• Demand revival for energy efficient and smart grid infrastructure
• Market moving towards consolidation
• Integration of acquisitions completed and synergies captured
• CGL has reached the critical mass to establish global position
CGL
CGCPL
6
7
Benefits of the de-merger are substantial
Strong potential to create value
Strategic Operational Financial
• Agile and focussed strategies
• Compete with distinct competitors in channels and products
• Potential to tie up with global partners
• Specialized board and management
• Simplified organization structures
• Customised infrastructure and processes
• Unlock shareholder value
• Cost and cash cycle optimization
• Focused investor opportunities
7
8
Two entities going forward
FY 2014 revenue mix
CGL CGCPL
Revenue growth
• FY 2011 to FY 2014 growth: 9% • FY 2011 to FY 2014 growth: 12%
Key product segments
Key customer segments
• Power T&D • Power conversion – motors,
generators and drives • Automation solutions
• Air circulation • Lighting • Consumer water products • Home and kitchen appliances
• Power and utilities • Railways • Oil and gas • Mines and minerals
• Households • Commercial • Institutions
Services Systems
Products
Appliances
Pumps
Light
Fans
SE Asia
Americas India
EMEA
Focused and agile businesses 8
9
Demerger structure and shareholding
Indicative timing
Brand arrangement
• Trademark “Crompton Greaves” to be assigned to CGCPL • CG logo shall continue to be used and developed by CGL
• October 2014 – August 2015: requisite filings approval from stock exchanges, shareholders, creditors and high court
• Q4 CY2015 – proposed listing of CGCPL
43% 32%
25% plus one share
57% 43%
Industrial Power Systems
Public Promoters Public
CGL CGCPL
9
10
Agenda
CG at a glance
Rationale and plan for demerger
Way forward
Crompton Greaves Ltd (“CGL”)
Crompton Greaves Consumer Products Ltd (“CGCPL”)
Q&A
10
CG Investor Presentation v17.pptx 11
Draft—for discussion only
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3 by
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Crompton Greaves Ltd (“CGL”)
12
CGL has been on a transformational journey
Increased revenue
Improved presence in key markets
• Indian Play • International expansion with distributed field force
• Regional focus with Strong focus on EMEA
Widened product portfolio
and improved technology
• Largely electrical products (EHV range)
• Expanded electrical range to UHV (765kV)
• Introduced range of motors and traction electronics
• Best in class electrical and electronic range, expanded to 1200 kV
• Introduced drives and automation
• Strong systems offering and growing services business on large installed base
Increased customer access
• Largely India based utilities • Started making inroads in select industries
• Approved in several global utility and industrial players
2011 2014 Acquisition Consolidation Build
3.2 8.0 10.5
2005
<500 <2K >5K
Source: CGL internal data. Revenue – INR '000Cr # of customers
12
13
We have invested in moving up to high-end plays
Electrical Products – Key segments and CGL presence Acquisitions
(1) Investments from 2005–2014 on acquisitions – Exchange rate assumption – INR 65 / Euro. (2) Investments from 2011–2015.
2,500 Cr(1)
Manufacturing
Technology
1,000 Cr(2)
• T&D: UHV research center (1600 KV)
• Power conversion: BCC manufacturing in India, LRM plant in Bhopal
• Automation: Smart Grid lab (Spain), plant in Bangalore
• 1200KV PT, IT, LA
• 245KV GIS, SLIM® / BIO SLIM®
• IE2 / IE3 motors, IP21 drives, Global design center
• AMI (Smart Meter), DAS, SAS
400 Cr(2)
No.
of c
ompe
titor
s
Low
CGL in 2011
Only Niche LVRM play in this segment
CGL in 2014
High
Large ticket size
Low ticket size
High-end • Ultra high voltage • Large ratings • Value-added solutions • Turnkey play
Mid-end • Mid to High Voltage • Medium ratings • Product Play
Low-end • Low Voltage • Non-Industrial
13
14
Today, we are a significant player across segments
Power – T&D
Technology
Geography
• 100th UHV transformer to PGCIL in 2014
• First Indian indigenous maker of 800 kV circuit breakers
• Focus on EMEA and India • 50% of Europe’s offshore
wind farms use CG transformers
Power Conversion
• State-of-the-art large motor manufacturing facility
• Executed 10 MW (4-pole) large motor
• Focus on EMEA and India where we are large OEMs and leading end-users
Automation Solutions
• >20 AMI projects / pilots globally
• First Smart Grid facility in India
• Among top six esteemed suppliers for Linky, France
• Extensive presence in Europe and India
Offering • ~100,000 MVA power
transformer capacity globally (majorly in BCC)
• No.1 rotating machines player in India
• Full range of IE2 motors, IE3 launch by FY 2015
• 1.5 Mn p.a. smart meters capacity
• Transmission and distribution solutions
14
15
These investments have helped grow the business we have in the more attractive market segments
5,739 5,675 6,131
1,678 1,054
1,599 2,442 3,304
INR Cr.
FY 13-14
10,294
860
FY 12-13
9,171
FY 11-12
9,015
~7%
CGL Revenue & drivers – (March 2012 – March 2014)
• 22% growth in high-end UHV play • 28% growth in high margin India exports3 • ~690 Cr automation segment created • 97% growth in high margin services • 31% growth in profitable EMEA systems • 18% growth in Railways vertical
• >50% de-growth in low margins 400kV segment
• 10% reduction in share of low profitable US & India Systems1
Source: CG internal data; Annual reports. 1. Change from FY 12-13 to FY 13-14. 2. From the board presentation (may include IDT). 3. Only includes Power BU exports.
+44%
(28%)
6.8%
CAGR
Base business Unattractive segments Attractive segments
H1 FY 15 ~ INR 5,363 Cr2
15
16
Slowdown phase
Up- tick
Market has been challenging but is in a phase of transition
Markets declined but expected to revive… Margin(4) dip tough but stabilizing
Margins(4) Global Power T&D Capex ($ bn)(1)
Global Nominal GFI $ '000 bn(3)
Margin pressure easing out, uptick continues in H1 FY 2014–2015
India and EMEA to account for 45%–50% of T&D capex in
future(2)
India and EMEA to account for
30%–35% of GFI(3)
205 262 234 284
369
2005 2008 2011 2014 2018
10 13 15 17
22
2005 2008 2011 2014 2018
+6.8% +1.4% +8.5%
+7.0% +4.1% +11.3%
-10
0
10
20
TBEA
ABB(5)
Hyosung
CG
Siemens(7)
Alstom(6)
FY 13–14
FY 11–12
FY 09–10
FY 07–08
Source: Economist Intelligence Unit, CG Update Nomura Analyst report (Dec'13), Analyst Reports / Declaration, World Energy Investment Outlook 2014, GBI Research 2012 (1) GBI Research 2012; (2) World energy outlook 2014. (3) GFI – Total business spending on fixed assets, such as factories, machinery, equipment, dwellings, and inventories of raw materials. (4) Margins – OI + D&A 5. ABB Power Products & Power Systems margins considered. (6) Alstom Grid data available only for last 4 years; Segment created only then. (7) Siemens Power Transmission EBIT considered (Nomura Analyst Report).
16
17
6.2
2.2
2.3
3.6
4.9
0
5
10
EBITDA (%)
-2.9
Ongoing Improv ements (BTP)1
Recurrent benefits from one-time costs
1.9
Ongoing Improv ements (BTP)1
EBITDA FY 11-12
Mkt. Pricing Pressure
One-time costs
EBITDA FY 13-14
EBITDA FY 12-13
Mkt. Pricing Pressure
-3.0
-3.5
• 1.2% in restructuring & COPQ cost4
• 1.8% market access cost2
• 0.8% by reduction in employee costs • 0.3% improvement due to increased India
exports, UHV play & Automation • 1.2% reduction in process cost3
Consolidated EBITDA bridge (March '12 – March '14)
Source: CGL internal data; Annual Reports; Internal pricing estimates. 1. Improvements after adjusting for price decline & includes material cost reduction due to market scenario. Also netted off for process cost increase in FY 13. 2. Market access cost is the increase in employee cost due to front-end and back-end investments. 3. Process Cost improvement significant in international operations; 4. Additional 120 Cr below the line.
Recurrent benefit due to one-time costs
Part of the FY 12-13 EBITDA decline due to one-time costs, improvements visible in FY 13-14
17
18
Key themes – Power / Industrials
Recovery in international
markets
India capex spends
improving
Robust industrial demand
• Revival in domestic industrial capex cycle with new government initiatives • Stricter regulations for energy efficiency to drive robust growth in demand for
energy efficient motors • Product offering to railways expected to witness better demand going forward
with pending deliveries being cleared
• India recovery delayed but expected to deliver strong growth in T&D and Power Conversion in the longer term
• Conducive macroeconomic environment and policies to drive further power capacity addition in the country
• Increased spends expected in the high end T&D space to meet the higher demand requirements
• Automation / smart grid solutions are becoming increasing relevant
• India and EMEA to account for 45%–50% of T&D capex in future(1)
• Automation orders driven by increasing investments in smart grids • Margin recovery from higher margin automation orders as compared to
power transformers • Complete and customized offerings including EPC to create strong
competitive advantage
(1) World energy outlook 2014.
18
19
3 scenarios exist for CGL's future direction
• Global sales focus
• New segment entry using partnerships
• Acquisitions for technology & customer access
"Expansive Play" Partner to enter new
segments
• Continue to play across regions – India, EMEA, SEAP & NAM
• Supply from local factories
• Technology adds relevant to region
"Multi-local" In-country supply
chain
• Build front end sales focus in EMEA and India
• Add footprint in BCC to serve these markets
• Continue to invest in technology
"Focus: EMEA+ India" Optimized sales & mfg
footprint
19
20
"Focus: EMEA+ India" is best suited for CGL at this point
• Short term growth with high long term unpredictability
Sustain- ability
"Expansive Play" Partner to enter new
segments
"Multi-local" In-country supply
chain
"Focus: EMEA+ India" Optimized sales & mfg
footprint
Economics
Risks
• Moderate margins with continued investment
• Loss of cost competitiveness
• Sustainable position in key growth markets (EMEA, India)
• Investments required to continue to move up the value chain
• Market recovery & investments
• Competitive response
• Broad based presence with sustained investment
• Partner will share in the value created over the next few years
• Finding the right partner
• Integration of the key technologies
?
20
21
Offering Footprint Manufacturing and Cost Excellence
• Acquire technology for High-end products in T&D and power conversion
• Value-added automation solutions
• Systems play in Europe and SEA
• Services play $10bn installed base
• Geographical focus (EMEA, India)
• Vertical specialization (power, railway, oil and gas) and key account management
• India Hub for manufacturing
• Best cost country sourcing
• Lean operating model
• Vendor Rationalization and Centralized Procurement
1 2 3
"Focus: EMEA+ India" is based on three pillars
21
22
CGL has developed a strong offering of high-end and competitive products with different routes to market
Automation(1) T&D Power Conversion
• Strong INR 700 Cr.(2) revenue
• Good ~8%–10% EBITDA(3)
• Market growing at a strong rate of 15%
UHV revenue (INR Cr.) LVRM – IE2 / IE3 motors introduced • 4%–6% margin benefits
LRM – Entered > 3 MW • Success in 6MW bid
Exports Systems Service
• Exports share in India production increased to 26% in H1 FY 2015
• ~INR 110 Cr. negative working capital
• ~INR 30–35 Cr. cash inflow from operations
• Growing strongly in services driven by installed base
• $10bn installed base in EMEA
• Automation Solutions
• UHV transformers • High voltage SG
and motors
High-end products
Enhancing route to market
• Business models • Margin
improvements
EMEA UEOB (€ Mn) Service Revenue – INR Cr.(2) Export Revenue(3) (INR Cr.)
289 430
FY 11–12
FY 13–14
22%
115 153
FY 11–12
FY 13–14
15%
44 171
FY 11–12
FY 13–14
97% 496 808
FY 11–12
FY 13–14
28%
Source: CG internal data. (1) ZIV acquisition made in FY 11–12. (2) Figures for FY 13–14; Last 3 years average. (3) Only Power BU exports considered.
22
23
Focus on EMEA + India will translate to a different footprint over the next few years
FY 2004–2005
Supply model towards cost
competitive Asia
Diversified customer base with focus on
EMEA and India
FY 2013–2014 Target
10.0
90.0
21.0
79.0
50.0 50.0
90.0
10.0
35.0
12.0 35.0
18.0 35.0
15.0
40.0
10.0
Exports
Asia In-country
Exports
Asia In-country Exports
Asia In-country
EMEA
India SEA
NAM
EMEA
India India
NAM
SEA
EMEA
%
23
24
In summary: Our strategy combines capabilities of BCC and front end acceptance in European markets
European players CG strategy Low cost country players
• Best in class technology and quality
• Wide geo-footprint
• Strong service focus and installed base
• Leverage technology and installed base from EU acquisitions
• Front-end focus in EMEA and India with on ground presence
• Relatively behind on technology
• Low service focus and low installed base as entry in last 10 years
• Poor quality perception
• Relatively high cost supply base
• Cost competitive supply base in India
• Invested in building R&D capabilities in India
• Low cost manufacturing units
• Low cost and flexible R&D setups
24
25
5 key segments for CGL to focus on ...
Power
Industrials
Annual Report Segments
Power Products T&D
Power Systems & Services
Automation & Smart Grid solutions
Power Conversion
Transport & Defence
Key segments
Transformer & switchgears offerings
Full T&D system implementation and service of installed base Value added solutions for substation & distribution automation
Motors & drive offerings for power conversion to industrial business
Dedicated vertical focused offerings including products above as others e.g. Rail Signalling
Brief Description
1. Excluding Electric Transportation revenue Note: Doesn't includes Jalgaon
25
26
We have a very senior management team with significant relevant experience
• CEO-MD since Jun-2011 • Over 25 years of
experience and has worked with Alstom, Honeywell, etc.
• Leads Global Finance (incl. M&A)
• A part of Avantha Group for last 12 years
• Over three decades of global experience
• Deep management experience in design and marketing projects
• Ex-CEO and President of ZIV (which he founded 20 years ago)
• 27+ years of experience working with Essar steel, Vedanta Resources, JP Industries, etc.
• 19+ years of R&D experience
• Worked with ABB, Bombardier, etc. and is a owner of 15 patents and multiple publications
• 34 years of experience in the industry
• Actively involved in CII, IEEMA, ERDA
• Extensive experience in HR best practices globally
• Previously Tata Motors CV Business HR Head
Laurent Demortier
CEO and MD
Madhav Acharya CFO & CIO
J. G. Kulkarni President, Power BU
Ravi Rajagopal EVP Legal,
Secretariat & Risk
Anil Raina President,
Industrial BU
Noberto Santiago President,
Automation
Sanjay Singh Global Head - HR
Srinivas Ponnaluri
CTO
26
CG Investor Presentation v17.pptx 27
Draft—for discussion only
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Crompton Greaves Consumer Products Ltd (“CGCPL”)
28
Top 3 domestic small consumer durables player in India
FY14 revenue of ~INR 2,900 Cr with EBITDA of 12.3%
Highest growth in revenues & highest ROCE compared to peers
16% 195%
14% 51%
13% 82%
Revenue Growth FY 12–14 (%) ROCE FY 14 (%)
Crompton
Crompton has the highest ROCE due to market leadership in air circulation and residential pumps
and a tight, largely outsourced model (~60% sourced through vendors)
Source: CG internal data, Analyst reports (Ambit report dated September 2014).
+16 %
Revenue & EBITDA Margin (%) INR Cr.
Revenues (Cr) EBITDA (%)
2,134
2,593 2,847
1,604
12.70% 11.10%
12.30% 12.34%
0%
200%
400%
600%
800%
1000%
1200%
1400%
1600%
1800%
2000%
0
500
1000
1500
2000
2500
3000
EBIT in FY'15 H1
FY’12 FY’15 H1 FY’14 FY’13
28
29
We have a strong brand with the promise of quality and reliability reflecting in each of our product offering
Source: CG internal data
Quality Reliability
Durability Trustworthy "Crompton products are good, sturdy"
"Good brand with trusted quality" "Crompton is an old and trusted brand"
"Crompton delivers what it promises..." "Crompton is like a father figure - stable, reliable and responsible"
"Crompton taught everyone how to make good fans" "Quality of Crompton's LED is good, and price is better than Philips, so good positioned"
Crompton
29
30
Home & Kitchen appliances
Our brand resonates well among consumers for each of our product segments
Our core brand promise
Quality
Why consumers purchase Crompton products?
High speed air circulation & trouble-free
Air circulation Lighting Consumer Water
Products
Recommended by a trusted source
High brightness, low power
consumption, good technology
Retailer recommendation
Good after-sales service
Low replacement cycle
Durability
Reliability
Trustworthy
Long Life
Higher star rating in water heaters
BIS mark Multi-purpose use
High warranty
Peer recommendation
Low maintenance Low maintenance Good after-sales
service
Crompton brand equity
30
31
Strong performance across all product segments
Source: CG internal data, Analyst reports (Ambit report dated Sep'14).
Revenue (FY 12–14) (INR Cr.)
Market position and
market share (%)
Our positioning vs. closest competitor
• No.1 position with
26% market share, very strong hold in ceiling fans
• CGCPL: Wide product portfolio
• Closest competitor: Leadership only in premium segment
• Top 3 position; 14%
market share in conventional lighting; strong position in LED
• CGCPL: Value offering with mid-range pricing
• Closest competitor: Strong brand and awareness
• No.1 position in
domestic pumps, top 4 in water heaters, 10% market share
• CGCPL: Superior
domestic portfolio with excellent service
• Closest competitor: Distant No.2 in domestic
• Relatively newer entrant
in kitchen appliances; new segments to be launched
• CGCPL: Value offering
across price segments
• Closest competitor: Strong presence in kitchen and home
20% 13%
552 665
10%
60 63
2%
Air circulation Lighting Consumer water products
Home and kitchen appliances
685 879 837 1,201
FY 14 FY 12 FY 14 FY 12 FY 14 FY 12 FY 14 FY 12
31
32
Indian consumer spend is set to increase rapidly in core categories
Overall Indian consumer spend ($bn) to grow by 3.6x... ... leading to market expansion in all our core categories
Market size (INR Cr.) Housing and consumer durable spend to increase 4x • From $186bn in 2010 to $752bn in 2020
Driven by growth in all key indicators:
Note: All spends in nominal dollars. Years represented as calendar year. (1) Nielsen Global Consumer Confidence Survey, Q2 2014. Source: Euromonitor, NSSO; BCG Indian Consumer Survey December 2010, N=6278.
Income growth ~3 times increase in average household income
Consumer confidence
Urbanization
Nuclearization
Growing work force
40% population will live in urban cities in 2020 (31% in 2010)
180 m nuclear households growing at 4% vs. 2% population growth
137 m people will be added to the workforce by 2020 (total :752 m)
India ranks No.1 in Global Consumer Confidence survey(1)
CAGR (%)
10%
12%
12%
10,325 11,580 12,990 14,580
6,222 6,915
7,724 8,661 5,963
6,481
7,128
7,866
4,558
5,188
5,864
6,576
FY 2015 FY 2016 FY 2017 FY 2018
Lighting
Air circulation
Water products
Home and kitchen appliances
13%
37,683
27,068
30,164
33,706
32
33
Key themes – India consumer
Consumer expenditure story intact
“Rural” the new focus
Changing consumer
preferences
Brand and distribution –
Drivers for value creation
• Huge untapped opportunity with rural having large share of many categories • Most of the consumption is still un-branded / local brands • Power quality and brand consciousness continuously improving
• Macroeconomic recovery in urban discretionary demand in India • Rural household electrification to drive further growth in domestic
electrical products
• Shift from unorganized to organized and unbranded to branded • Premiumization trend to accelerate, especially in the metros / Tier I cities
• Brand and distribution penetration key drivers for sustainable competitive advantage
• Advertising critical for driving customer aspiration and brand positioning • Distributor loyalty for on-the-ground push
33
34
Demerger opens new avenues for Crompton
Follow the market "As-is"
Lead the market "Transform"
Enter new markets "Full consumer play"
• Retain share in strong market
• Mid-market positioning; limited portfolio expansion
• Build a strong brand with focus on NPD
• Enter adjacent markets by leveraging sourcing partners
• Play in a wide range of attractive consumer markets
• Enter into partnerships, JV, M&A to access product and reach
34
35
Transform scenario best suited for Crompton
Follow the market "As-is"
Lead the market "Transform"
Enter new markets �"Full consumer play" �
• Short term growth along with market but with long term unpredictability�
• Sustainable higher growth than market �
• Multifold growth due to capturing the entire consumer growth�
• Maintain current margins �
• Industry leading RoCE �
• Industry leading margins from pricing and premium portfolio �
• Moderate RoCE due to investments �
• Low margins on account of split with partner �
• Low RoCE from high investments �
• Potential loss of share to new entrants as market shifts
• Multi/sub-brand architecture needs to succeed
• Finding the right partner
Sustainability
Risks
Economics
?
35
36
Our core segments are first to enter a customer's home...�
Air �Circulation �
Small �kitchen
appliances �
Decorative lights�
Air circulation �
CGCPL's early consumer connect will be leveraged to enter successfully in new segments
Consumer �Water �
Products�
...we will leverage this early consumer connect to succeed in new segments �
Rooftop solar lighting solutions �
Personal care �
Large kitchen �appliances �
(hoods and hobs) �
Street light �automation�
36
37
Our four dimensional strategy to transform CGCPL
Further, the organization and processes are being re-designed to support this transformation
Brand equity
Offering
Reach
Cost & SCM optimization
1
2
3
4
(1): Refers to Advertising and Sales Promotion spend.
FY 2014
• Single brand across segments
• Low youth awareness • Low advertising spend(1)
• Value offering with mid-range pricing
• Limited portfolio expansion
• 156,000 retailers
• Urban middle class customers
• Material costs: 74% of sales
Target
• Multi / sub-brand positioning • High brand awareness • Double advertising spend(1)
• Premium offerings in air circulation, consumer water products and kitchen appliances
• New product offering in adjacent segments
• 270,000 retailers
• Urban elite, urban and small town middle class customers
• Material costs: 71% of sales
37
38
Brand Crompton (FY 2014) Brand Crompton (Target)
• Single brand for all segments
• Brand equity strongest in air circulation, lighting and consumer water products
• Strong brand connect with consumers aged 40–65 years
• Low awareness among younger consumers
• Advertising and promotion spend of 1.7%
• Multi/sub-brand strategy focusing on premium, mid-market and rural offering
• Clear and differentiated brand strategy for each segment
• Strong brand connect with consumers aged 25–39 and 40–65 years
• High awareness among younger consumers
• Advertising and promotions spend to double and to be in line with best in class
• Improved in-store experience
Brand equity
Target consumer
Brand awareness
Crompton will build on this connect and invest in the brand
38
39
Air Circulation Lighting Consumer Water Products
Home & Kitchen appliances
Current portfolio
New products
in existing range
New designs in premium ceiling fans, air circulators, TPW &
personal fans
Stainless steel pumps, premium range of water heaters
Premium range of small kitchen appliances
Home and street light automation and pole lighting
New product segments
Source: CG internal data
We have already begun development process in many of these categories
Full product range to support brand positioning and consumer connect
We have already begun development process in many of these categories 39
40 We have already begun development process in many of these
categories
Transformation strategy: Expand our customer base
• Buy aesthetic premium products • Brand conscious
Small town middle class Urban elite Urban middle class
• Core segment which historically drove growth
• Demand reliability & performance
• High aspirations • Access / availability is a
challenge
Leverage existing connect to cross-sell through wider product portfolio (86 mn households2 )
Drive premium offering &
target using new channels
Drive reach & nurture loyalty
Current focus (42 mn households1 )
1. Number of Households in 2015. 2. Number of Households in 2020.
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We have a very senior management team with significant relevant experience
• Previously President and CEO at Honeywell India
• Prior to this, he has spent 19 years with GE in various roles
• 16 years of Finance experience
• Previously Finance Controller for Pernod Ricard India and Finance Manager for Pepsico India
• 16 years of experience • Previously worked with
companies such as Aditya Birla Retail, Dabur, Reckitt Benckiser and Heinz
• 32 years of experience of which 23 years are with Crompton Greaves Ltd.
• Previously worked as All India Marketing Manager – Fans and Marketing Manager – West Region
• 35 years of experience with Crompton Greaves Ltd.
• Started his career with Pumps division of Crompton Greaves Ltd. as General Manager Accounts in 1979
• 21 years of experience. • Previously worked with
ABB Ltd. as Vice President. Joined Crompton Greaves Ltd. in 2012 as General Manager – Strategy
• 20 years of experience across E-tail, Retail, Automobiles and Petroleum
• Previously worked with HomeShop18, Reliance, Tata and Videocon
• 30 years of experience. • Joined Crompton
Greaves Ltd. in 1990 • Through the years has
moved across roles as AGM, AIMM, Unit Head and PL Head – Lighting
Ash Gupta President
Amit Ganguly
Finance Head Dhruva Chandrie
PL Head
Uday Mahajani
PL Head - Fans
Kunal Dhawan CMO & PL
Head - Lighting
Premanand Bhat PL Head - Pumps
Ramesh Kumar Global Sales &
Service
Sundar Iyer Strategy &
Business Planning Head
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Agenda
CG at a glance
Rationale and plan for demerger
Market environment
Way forward
Crompton Greaves Ltd (“CGL”)
Crompton Greaves Consumer Products Ltd (“CGCPL”)
Q&A
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