Asian Paints Ltd. — Investor Presentation 2021

Jul 20, 2021

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APL/SEC/22/2021-22/156

20[th] July, 2021

BSE Limited Corporate Relationship Department Phiroze Jeejeebhoy Towers, 25[th] Floor, Dalal Street, Fort, Mumbai – 400 001 Scrip Code: 500820

National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1, Block G, Bandra – Kurla Complex, Bandra (East), Mumbai – 400 051 Symbol: ASIANPAINT

Sir(s),

Sub: Investor Presentation

Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith a copy of the presentation made to the Investors on the Audited Standalone and Unaudited Consolidated Financial Results of the Company for the quarter ended 30[th] June, 2021.

This is for your information and record.

Thanking you,

Yours truly,

For ASIAN PAINTS LIMITED

Digitally signed by JEYAMURUGAN JEYAMURUGAN RAMALINGAM RAMALINGAM JEYAPANDIYAN JEYAPANDIYAN Date: 2021.07.20 18:55:53 +05'30'

R. J. JEYAMURUGAN CFO & COMPANY SECRETARY

Encl: As above

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20[th] July, 2021

Deli�eri�g joy si�ce �94�…. We exist to Beautify, Preserve, Transform all Spaces and Objects, bringing happiness to the World!

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Disclaimer

This communication, except for the historical information, may contain statements which reflect the Ma�age�e�t’s �urre�t �ie�s a�d esti�ates a�d �ould �e �o�strued as for�ard looki�g statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange and commodity price fluctuations, competitive product and pricing pressures and regulatory developments.

Market Conditions – Continued momentum from last quarter i.e. Q4 FY20-21, �it�essed i� April’��. May’�� i�pacted �ith �[nd] �a�e. Ju�e’�� �it�essed a� uptick with gradual withdrawal of restrictions. Overall, strong volume growth trend maintained as demonstrated by the 2/3 year compounded growth rates Decorative Business (India) – Quarterly Volume & Value Trend

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106%
95%
15.4%
8.8%
12.7% 4.5%
21% 19% 18%
14%
Volume Gr% Value Gr%
-38% Q1FY19 Q1FY20 Q1FY21 Q1FY22
-44%
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Despite the i�pact i� May’��, stro�g �olu�e gro�th tre�d �ai�tai�ed as demonstrated by the 3 year compounded growths since Q2 FY20-21 Decorative Business (India) – Quarterly Volume Trend

Volume in KL

22.7% 200 17.9% 180 15.4% 13.5% 160 140 120 100 80 60 40 20 * 3 year - compounded Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 growth rates FY19 FY19 FY19 FY19 FY20 FY20 FY20 FY20 FY21 FY21 FY21 FY21 FY22

Quarterly representation of Volumes sold on base of Q1 FY19 as 100

Material Prices seeing steep inflation since Q3 FY20-21. Q4 FY21 saw about 8%-10% inflation from previous quarter and material prices have seen a further inflation, of 13%-15% in Q1 FY22. Price increases implemented across businesses negating only a part of this impact. APL Standalone – Quarterly Gross Margin Trend

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46.3% 13%-15%
46.1%
45.4% Material
44.7%
inflation. ~3%
Price increase
taken in Q1.
39.6%
Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22
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Key Business Update – Domestic Decorative Business

❖ Growth this time led by T1/T2 centers unlike Q1 last year when T3/T4 grew faster given severe lockdown in T1/T2

❖ South impacted given protracted restrictive conditions over May’21 & June’21

• ❖ Economy and the Luxury range leading the growth

• ❖ Robust growth in Projects & Large institutional sales

• ❖ Smartcare waterproofing growth trajectory continues across Retail and Projects

• ❖ Adhesive Business has started to do well

• ❖ New products / propositions in Wood Finishes category getting huge traction

ALL Protek Fire Retardant Paint

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New Products – Q1 FY21-22

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Royale Glitz : Teflon With Luxury

AP Woodtech Ingenio

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Smart Care
Tile Grout
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Key Business Update – Domestic Decorative Business

• ❖ Network Expansion & Evolution continues

• ❖ Lots of new retailers with Colour Worlds added in Q1 to enhance the Rurban footprint

• ❖ 6 new Colour Ideas stores opened

• ❖ 18 Beautiful Homes Stores functional; another 15 in pipeline

❖ The Home Décor business

• ❖ Beautiful Home Stores have given good business in Kitchen ,Bath ,Furnishing, Furniture and Lighting

• ❖ Beautiful Homes Service now well accepted and growing

• ❖ New alignment with Pure Brand yielding results and has given good access in the market

Nilaya by Sabyasachi

❖ New cutting-edge designs from Sabyasachi

❖ Draping the Walls like a Sari

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An Alliance with Pure Ador | Royale | Nilaya - Furnishings

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Designer Tiles | AIDs | BH Stores

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• ❖ New Category launched : Strong response from the AID segment

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• ❖ Spreading the distribution to Premium Stores

• ❖ Anti Skid, 3D, Anti Stain, Anti Crack, Sheen level variants

Key Business Update – Domestic Decorative Business Services – A Key Differentiator; Unique Propositions

❖ Cutting edge, inspiring Décor service ‘Beautiful Homes Service’ gaining traction

• ❖ About 100 sites booked in Q1

• ❖ Safe Painting & San Assure services providing access to

customers

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Key Business Update – International Business

❖ Interrupted business conditions hurt the good

momentum of last few quarters

❖ International Portfolio delivered 50%+ revenue

growth over last year

• ❖ Growth led by Asia & Middle East

• ❖ Africa impacted by local challenges as well as steep inflation

❖ Focused push on Waterproofing & increasing share

of Premium / Luxury emulsions continues to yield strong results across markets

• ❖ Profitability significantly impacted by the steep

material inflation; Leading to PBT level loss

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Revenue
266
185
140
132
123 121
26 25
Africa Middle East Asia South Pacific
CY LY
PBT
11
8
-1 2 6 5
Africa Middle East Asia South Pacific
-9
CY LY
-14
13% 40% 119%
6%
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Key Business Update – Industrial Business

❖ PPG-AP

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PPG - AP
256
83
-6
-38
Revenue PBT
CY LY
AP - PPG
156
59
4 -6
Revenue PBT
CY LY
162%
207%
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• ❖ Revenue growth coming off an extremely low

base last year

• ❖ Refinish Business faced challenges with

bodyshops under timing restrictions

❖ AP-PPG

• ❖ Robust performance in Industrial Liquid Paints segment, even accounting the low base

• ❖ Strong project orders in Protective coatings supporting growth

❖ While Gross margins were impacted with material inflation, Profitability in both businesses supported by contained costs during the period

Key Business Update – Home Improvement Business

❖ Kitchen Business

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Kitchen Business
❖ Full Kitchen solutions leading growth 66
❖ New full kitchen dealer openings, luxury 26
-14
-8
offerings supporting growth
Revenue PBT
❖ Impact of Covid restrictions in the key Southern
CY LY
states impacted Components segment
Bath Business
Bath Business
55
❖ Supported by growth in Projects segment
❖ Strong collaboration with Decorative Projects 26
❖ Losses at PBT level lower in both businesses over last -2 -7
Revenue PBT
year, due to improved scale
CY LY
114%
152%
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• ❖ Bath Business

• ❖ However, lower run rates than Q3/Q4 due to

Covid 2[nd] wave, impacted performance

Summary – Standalone Financials

Quarter 1

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4,786
1,893
882 795
596

Revenue Gross Contribution PBDIT PBT PAT
CY LY
95.6%
67%
88.9%
135.9%
136.6%
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❖ Steep material inflation leading to contraction in Gross Contribution margin by 678 bps

❖ Improved scale over LY base and controlled overheads arresting the fall in PBDIT margins to only 66 bps

*** PBDIT before Other Income**

Summary – Consolidated Financials

Quarter 1

5,585

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2,146
914
779
574

Revenue Gross Contribution PBDIT PBT PAT
CY LY
64.1%
88.7%
154.6% 161.5%
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❖ Steep material inflation leading to contraction in Gross Contribution margin by 631 bps

❖ Improved scale over LY base and controlled overheads arresting the fall in PBDIT margins to only 21 bps

*** PBDIT before Share in profit of Associates & before Other Income**

Covid – Safety Precautions, Vaccinations, Stakeholder Support

• ❖ Safety precautions distancing, sanitization procedures in place at all manufacturing facilities, sales warehouses, offices

• ❖ on Strong push getting employees –

• vaccinated across businesses / locations About 90% of eligible employees at Group level vaccinated with 1st jab

• ❖ Rolled out Covid support for key stakeholders like Dealers, Contractors, Off-roll employees & the Community at large

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Working for Sustainable Future

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184.5% Water Replenishment in FY21 76% Water Replenishment in Q1 FY22

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57.2% Renewable Energy consumption out of total

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75.9% reduction in Specific effluent generation 56% reduction in Specific hazardous waste disposal

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Renewable content increased in 3 largevolume products from 20% in FY20 to 60% in FY21

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Health & Hygiene: 1,70,000+ lives touched in FY21

~ 51,000 lives touched in Q1 FY22

*** From Baseline year 2013-14**

Looking Forward

• ❖ Demand outlook looks positive, especially with 2[nd] wave abetting

• ❖ Good monsoon forecast would further support demand, especially from rural sector

• ❖ Long Diwali season would help Sept-Oct 21 Retail

• ❖ Critical to avoid 3[rd] wave / any further waves to retain full normalcy

• ❖ Some key raw materials showing early signs of softening; Will have to see this trend emerging more strongly

• ❖ Have announced one more price increase effective 1[st] July of about 1% at portfolio level

Thank You