HAVELLS INDIA LIMITED

HAVELLS INDIA LIMITEDAugust 2019

AN EVOLVING JOURNEYGot listed on StockExchangeCommenced Businessin Delhi19581971Acquired ‘Havells’ Brand1993Acquired global businessof ‘Sylvania’2003* Launched Fans &Lighting* Set up plants forSwitchgears, Fans & CFLs2007Acquisition of ‘Lloyd’consumer durablebusiness20152017* Divestment of ‘Sylvania’* Focus on domesticexpansion

CONSISTENT DELIVERYMarket capitalizationFinancial performanceRevenueEBIDTANet WorthPBTPAT 30%CAGR sincelisting 38%CAGR sincelisting

KEY MILESTONES Leverage channel by expanding product portfolio Industrial to a consumer company Manufacturing Large scale manufacturing with high standards of qualityassurance 90% in-house National Advertising and uniform discounting Disproportionate ad spend on ’non-consumer’ products Mass to ‘mass premium’ Steady premiumisation Acquisition of Sylvania and pragmatic exit Changing industry dynamics and capital allocation Lloyd Acquisition Entry into high potential Large Consumer Durables Aligned with ‘Deeper into Homes’

MOVING AHEAD20042011 OnwardsLightingAir ConditionerTelevisionAir CoolerFansSwitchgearsWater HeaterRefrigeratorWater PurifierDomestic AppliancesSwitchesTill 2004Washing MachineIndustrial CableDomestic CableDEEPER INTO HOMES 20 Product verticals Serving 70%electric sockets

EXPANDING CONSUMER FUNNELElectricalsSize: Rs. 45,000 croresCAGR (2018-23): 12%Home AppliancesSize: Rs. 70,000 croresCAGR (2018-23): 15%

SEGMENTSRevenue Mix (FY19)SwitchgearsCables17%32%Lighting & Fixtures13%Electrical Consumer & DurablesLloyd20%18%Contribution Margin Mix (FY19)Switchgears27%CablesLighting & FixturesElectrical Consumer & DurablesLloyd22%16%22%13%

FAVOURABLE MACRO LEVERSUrbanizationTo be 40% by 2030 from 34% currentlyInvestment on infrastructure and housing will be key focus areaElectrificationHigh degree of focus on electrification, electrification now reaching semiurban and ruralAspirational shift for brandsConsumer preference accelerating for branded productsRegulatory measures viz GST narrowing gap with unorganised sectorYoung DemographyGrowing middle class across urban, semi urban.Nuclearization of families, better standard of living and global exposure

HAVELLS ELECTRICAL

ECDLEDLightingCableSwitchgearsMARKET SHARE: TOP 3 ACROSS CATEGORIESProductIndicative MarketIndicative Market IndicativeSizeShareRank(Rs. in crores)OrganizedPeersPenetration LevelMCB2,500HighLegrand, Schneider 26%#1Switches*2,20014-15%#3MediumPanasonic (Anchor),LegrandDomestic8,000 16%#3LowFinolex, PolycabIndustrial12,000 10%#3MediumPolycab, KEILighting & Fixtures6,50010-14%# 2-4MediumPhilips, Crompton, Bajaj,WiproFans7,000 16%#3HighCrompton, Orient, UshaWater Heaters1,400 15%#2LowRacold, AO SmithOther Appliances5,0005-6%-LowBajaj, Philips* Premium modular plate switches

CONSISTENT NEW PRODUCT INTRODUCTIONS2012: Water Heaters2016: Air Coolers2013: Domestic Appliances and Pumps2017: Water Purification and Personal Grooming

CHANNEL EXPANSION- DEEPER PENETRATIONProximity to Consumer – Transition towards Rural & Semi-Urban CitiesTOWN PENETRATION – 25K ABOVE POPULATIONRETAILER - COUNT2283 9,0002 Lac2000 130,0001147RetailersAmbitionCurrentAmbition1.3 LacCurrentDirect Dealers Havells’ major penetration is in Metro, Tier I & II Towns Rural sector and Tier III & below towns key penetration opportunity 250,000Electricians

CHANNEL EXPANSION Grow inclusively : MBOs Brand stores Organized retail chains Canteen Stores Projects & Enterprise Business E-commerceLargest Brand Shop channel in electrical industry433 HavellsGalaxy77HavellsGalleryTotal 723Presencein 29720%40StandardGalleryBrand Shops - 550District PresenceBusiness Contribution(Ex Cable)

RESEARCH AND DEVELOPMENTMaturityIOT Smart HomesTrend SetterFirst MoverDevelop solutions(2015 onwards)First MoverFast FollowerSelf developmentfrom ground zero(2000-2015)JVs and alliances(Upto 1990s) Fast catcher to thought leadership R&D spend to increase from 1% to 3% of net revenue Intelligent hardware, embedded software Products to solutionTrend SetterTime

HIGH GROWTH POTENTIAL INDUSTRY Low Penetration60%30%Colour TelevisionRefrigerator10% 5%Washing MachinesRoom Air Conditioner Each Product Group Expected To Grow At Double DigitINR CrWashing 01114%Room Air 00030,00010,5006,5499,649201617%Colour Television20162021E201120162021E20162021E%Source: Industry dataCAGR

MASS PREMIUM POSITIONINGAir Conditioner Market in IndiaKey PlayersOther PlayersPremiumLED TV Market in IndiaOther PlayersKey PlayersPremiumMass- PremiumMass- PremiumEconomyEconomyEconomy

LLOYD WELL PLACED IN CONSUMER DURABLES MARKETFY19 Gross sales ofc.INR 2,000 CrGained 3% share in LED TVsegment of India in 5 years600 Service centers panIndiaGained 13% share in ACsegment of India in 7 yearsInnovative and aggressive inbrand building initiatives,created a strong connect6 decadesof brand vintage in ACsegmentAmong top three ACplayers in the country10,000 Display points pan IndiaPresence across450 cities

LLOYD-AN EVOLVING JOURNEY An exciting 2 years journey Favourable demand demographics to drive long termindustry growth Investing behind brand, manufacturing, people anddistribution to extend Lloyd positioningLloyd AC Plant Leveraging Havells connect and trust Industry headwinds and disruptions in last year. Doesn'tdiminish medium term outlook

FINANCIALS

STANDALONE FINANCIALSFinancial highlightsin millions of RupeeFY17FY18FY19Q1 TA %13.4%12.9%11.9%10.2%PBT % before 925,2743,1317,6257,18519,37515,26212,84814,083Net RevenueGrowth %PAT %before exceptions*CAPEX (incl. intangibles)ROCE %Net WorthNet Working CapitalCash & Bank* PATfor FY18 and FY17 was 8.8% in both years including exceptional items** Ex-Lloyd excise adjusted growth in FY18, FY19 and Q1 FY20 was 13%, 23% and 9% respectively

GROWTH WITH RESPONSIBILTYHavells Mid-Day Meals ProgramServing 60,000 studentsdailySanitationBuilt over 4,000 biotoilets in 400 schoolsDOW JONES SUSTAINABILITY INDEX-2018Rank1Overall RankingCompanySignify NV234567Schneider Electric SELegrand SAPrysmian SpAOSRAM Licht AGFuji Electric Co Ltd.Havells India LimitedRanked 7thglobally in theElectricalComponents &EquipmentIndustrySUSTAINABILITY94% of wasteEnergy intensityreduced by 41%recycled / reused10 of 13 manufacturing plants Generated 6%of clean energy from FY16 to FY19are zero water dischargefrom roof top plantsGHG emissionintensity reduced by40% from FY16 toFY19

BENCHMARKING WITH THE BEST CORPORATE, FINANCIAL ANDShareholding PatternSHAREHOLDERS GOVERNANCEAs on 30.06.2019 Promoters- single business focus thers,10.97%ESOP / ESPS, 0.01%MutualFunds, 2.55% Committed to high standards of corporate andshareholder governanceFIIs, 26.95%Promoters,59.52%EPS, DPS & Dividend Payout Ratio1510543%31%4.912.74.51.30FY12FY19EPS- adjusted for bonus issue/ split (Rs.) and exceptional itemsDividend Per Share (Rs.)Dividend payout ratio50%40%30%20%10%0%- Corporate GovernanceCGR 2 rating by CARE- Maintaining dividend pay-outof 43%, stated policy of 30% to50%

SUMMARY netration,higherunorganized sector & growing electrification Havells preparing for future with constant products expansion, deepening market reach& brand reinforcement Organic leverage with opportunistic acquisition to drive growth Strengthening management bandwidth to lead ambitious growth plan Native business acumen, market connect and ethics remain core values

INDIA: ELECTRIFIED BY HAVELLS

Water Heater Domestic Appliances Industrial Cable Switchgears Domestic Cable 2004 Till 2004 2011 Onwards . (Ex Cable) Total 723 Presence in 297 433 Havells Galaxy 77 Havells Gallery 40 Standard Gallery 20% . Havells Mid-Day Meals Program Serving 60,000 students daily Sanitation Built over 4,000 bio-toilets in 400 schools