ITC Limited :: Newsroom :: Media Releases

Highlights

Net Revenue : +23.1%

Profit from Operations : +20.1%

Profit Before Tax : +19.4%

Net Profit : +20.6%

Harvard Business Review ranks ITC Chairman Mr. Y C Deveshwar as the 7th Best Performing CEO in the World

Non-Cigarette FMCG segment registers robust revenue growth of 30.1% and improves profitability

ITC Grand Chola, the world's largest LEED Platinum rated hotel makes an encouraging start setting new benchmarks in guest experience

The Company posted strong topline and earnings growth for the Quarter ended 31st December 2012. Gross Revenue/Income from Operations at Rs 10824.67 crores grew by 22.9% driven primarily by Branded Packaged Foods, Personal Care, Agri Business and Cigarettes. Profit from Operations grew by 20.1% to Rs 2652.54 crores while Profit Before Tax and Net Profit at Rs 2957.19 crores & Rs 2051.85 crores registered a growth of 19.4% and 20.6% respectively. Earnings Per Share for the quarter stood at Rs 2.61.

The stellar performance by the Company is particularly remarkable when viewed against the backdrop of the challenging business environment in which it was achieved, namely, a slowdown in economic growth, sustained high inflation and impact of the steep hike in taxes on cigarettes during the year.

The Business recorded significant growth during the quarter across all categories driven by strong volume growth and an enriched product mix. 'Sunfeast' biscuits sustained its robust growth trajectory and augmented its differentiated and innovative product portfolio with the addition of new variants under the Dream Cream and Dark Fantasy Choco Fills range. The brand has emerged as the clear market leader in the highly competitive premium cream biscuits segment.

'Sunfeast Yippee!' Noodles and the 'Bingo!' range of savoury snacks continued to record strong growth driven by an increasing consumer franchise for the existing product range and the new variants launched during the year. The Business has built a healthy pipeline of innovative product formats/variants to further enhance its market standing in these high growth categories.

In the Confectionery category, the Business launched 'mint-o Ultramintz'- a sugar-free extra-strong mint in select markets. The product has met with encouraging consumer response.

'Aashirvaad' atta further consolidated its leadership position across markets aided by increasing consumer traction for the value-added and premium offerings viz. 'Select' and 'Multi-grain' variants.

The Business continues to invest in disaggregated manufacturing and distribution infrastructure with a view to optimising supply chain costs and improving market servicing.

The product portfolio was strengthened during the quarter with the launch of the 'Couture Spa' range of soaps under the 'Fiama Di Wills' brand. The signature series, created in alliance with fashion guru Wendell Rodricks, aims at providing consumers an exciting and intriguing bathing experience. In line with the brand's 'Feel Young' value proposition, the series of three exciting Couture Spa gel bars are infused with real gold, known for its youthful skin care properties.

The Business also launched a 'Collector's Edition' soap series in association with the Lonely Planet Magazine under the Fiama Di Wills Men's range. The six exciting Collector's Edition packs are inspired by various water sports and destinations renowned for rejuvenating and revitaliing experiences, in line with the brand's value proposition of 'rejuvenation'.

The product portfolio was further augmented with the launch of Fiama Di Wills Aqua Pulse deodorant in select markets. The Skin Care range was also expanded during the quarter with the launch of 'Vivel Cell Renew' Body Lotion, Hand Creme/Moisturizer and Perfect Glow Skin Toner in target markets.

Classmate notebooks continued to expand its consumer franchise and recorded strong growth in sales during the quarter. The brand further consolidated its leadership position in the student notebook category during the quarter.

Besides notebooks, the 'Classmate' brand offers a wide range of products that includes ball/gel pens, wood cased and mechanical pencils, mathematical instruments, erasers, sharpeners and scales. 'Classmate' also endorses 'Colour Crew', an art stationery brand, with a range of wax crayons, colour pencils and sketch pens for children.

The Business continues to strengthen the Paperkraft brand, its premium executive and office supplies range. It has positioned 'Paperkraft' as the finest green paper for business applications viz. copy-scan-print-fax, leveraging the Company's world-class fibre line at Bhadrachalam which is India's first ozone treated elemental chlorine free facility. Paperkraft's green credentials are supported, among other factors, by the Company's membership of the prestigious Global Forest & Trade Network, an international initiative of the WWF (World Wide Fund for Nature).

The cigarette industry in India continues to be impacted by a discriminatory taxation and regulatory policy framework. While cigarettes contribute nearly 75% of the tax revenues generated by the tobacco sector, it accounts for less than 15% of tobacco consumption in the country. Steep increase in Excise duty and VAT on cigarettes during the year have further exacerbated the situation vis-a-vis lightly taxed or tax evaded tobacco products like Bidi, Khaini, Chewing Tobacco and Gutkha. These lightly taxed or tax evaded tobacco products are the most dominant forms of tobacco consumption in India and constitute as much as 85% of total usage. Further, the high incidence of tax on cigarettes has created tax arbitrage opportunities leading to the growth of illegal cigarettes in the country. Consequently, legal industry volumes have come under severe pressure.

Despite these challenging conditions, the Company's Cigarettes Business, through its relentless focus on providing differentiated and world-class products to consumers, sustained its leadership position in the industry. Focus on innovation and consumer centricity supported by world-class brands, contemporary packaging formats, state-of-the-art manufacturing facilities and a deep and wide distribution network have enabled the business to consistently deliver superior value.

During the quarter, the Business introduced new variants / product enhancements across its brand portfolio leading to further consolidation of market standing. The launches in the new filter segment (cigarette length not exceeding 65 mm) have met with favourable consumer response and the business is rolling out the products to all markets in the country.

The hospitality sector continued to be adversely impacted by the weak economic conditions prevailing in key international source markets and India on the one hand and significant additions to room supplies in key Indian cities on the other. Consequently, growth in Segment Revenues was muted during the quarter.

ITC Grand Chola, which commenced operations in September 2012, received encouraging response in its first quarter post launch. The hotel has achieved the distinction of being the world's largest 'Leadership in Energy and Environmental Design' (LEED) Platinum rated hotel in the New Construction category bolstering the unique positioning of ITC Hotels as the greenest luxury hotel chain in the world.

Segment Revenues grew by 10% during the quarter, aided by improved realisations and product mix enrichment. Segment Results were, however, impacted by the steep hike in input prices particularly that of wood.

The investments in a new state-of-the-art paperboard facility at Bhadrachalam and the new packaging & printing facilities at Haridwar are nearing completion and are expected to become operational shortly. The Business continues to provide strategic sourcing support to the FMCG businesses enabling product differentiation and faster speed-to-market.

Segment Revenues recorded a robust growth of 43% during the quarter aided by exports of wheat and leaf tobacco and soya. Operations at the recently commissioned state-of-the art green leaf tobacco threshing plant in Mysore were scaled up leading to enhanced quality and supply chain efficiencies. The Business continues providing strategic sourcing support to the Company's Cigarettes and Branded Packaged Foods businesses by ensuring high quality supplies at competitive costs.

The Company's Social Investments Programme aims at addressing the challenges arising out of poverty, environmental degradation and climate change through a range of activities with the overarching objective of creating sustainable sources of livelihood for the stakeholders. The footprint of the Company's Social Investments Programme has spread to 58 districts in the States of Andhra Pradesh, Bihar, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal.

Intervention Areas	Unit of Measurement	Cumulative till date
Total Districts Covered	Number	58
Social and Farm Forestry Soil and Moisture Conservation Programme	Hectare Hectare	140845 101309
Sustainable Agricultural Practices Organic Fertiliser Units	Number	14237
Sustainable Livelihoods Initiative Cattle Development Centres Animal Husbandry Services	Number Artificial Insemination doses (in lakhs)	298 9.95
Economic Empowerment of Women Self Help Groups Members Livelihoods created	Persons Persons	17836 40005
Primary Education Beneficiaries	Children (in lakhs)	3.04
Health and Sanitation Low Cost Sanitary Units	Number	3628