ITC Ltd — Interim / Quarterly Report 2021

Feb 11, 2021

lTC Limited Virginia House 37 J. L. Nehru Road Kolkata 700 071, India Tel. : 91 33 2288 9371 Fax : 91 33 2288 4016 I 1256 I 2259 I 2260

11th February, 2021

The Manager Listing Department National Stock Exchange of India Ltd. Exchange Plaza Plot No. C-1, G Block Bandra-Kurla Complex Sandra (East) Mumbai 400 051

The General Manager Dept. of Corporate Services SSE Ltd. P. J. Towers Dalal Street Mumbai 400 001

The Secretary The Calcutta Stock Exchange Ltd. 7, Lyons Range Kolkata 700 001

Dear Sirs,

Unaudited Financial Results - Media Statement and Presentation

Further to our letter dated 11th February, 2021 forwarding the Unaudited Standalone and Consolidated Financial Results of the Company for the Quarter and Nine Months ended 31st December, 2020, we now enclose copies of the Media Statement issued by the Company and a presentation on the Company's financial performance for the aforesaid period for information of the investors.

Yours faithfully, lTC Limited

"·';..GU- ~ c1 •1

(N. Bajaj) Deputy Company Secretary

Encl. as above.

• cc: Securities Exchange Commission Division of Corporate Finance Office of International Corporate Finance Mail Stop 3-9 450 Fifth Street Washington DC 20549 U.S.A.
• cc: Societe de la Bourse de Luxembourg 35A Boulevard Joseph II L-1840 Luxembourg

ITC Limited Virginia House 37 J. L. Nehru Road Kolkata, 700 071, India Tel.: 91 33 2288 9371 Fax: 91 33 2288 4016 / 1256 / 2259 / 2260

1

Media Statement

February 11, 2021

Standalone Financial Results for the Quarter ended 31st December, 2020

Highlights

• Board recommends Interim Dividend of Rs. 5 per share for the Financial Year ending 31st March, 2021.
• Strong sequential recovery momentum continues across segments including Cigarettes. Gross Revenue up 5% sequentially (q-o-q) and over last year (y-o-y); PBT up 13% q-o-q.
• FMCG-Others Segment sustains double-digit revenue growth despite demand moderation in certain categories with consumers broadening their purchase assortment and lower 'at-home' consumption on the back of increased mobility.
  • Revenue up 11% y-o-y on a comparable basis* (up 16% YTD December'20)
    • Staples, Convenience Foods and Health & Hygiene products record growth of 11% (YTD +23%).
    • Discretionary/'out-of-home' categories post smart recovery to grow by 11% (YTD -5%).
  • 'Savlon' clocks Rs. 1000 crores consumer spend in YTD December'20.
  • Segment EBITDA up 28% (YTD up 44%); Segment EBITDA margins expand 150 bps to 9.2% (YTD +210 bps).
• Progressive improvement in Hotels Revenue aided by higher RevPar and F&B business across most locations; turned EBITDA positive in December'20 and breakeven for the quarter.
• Relentless focus on cost reduction helps mitigate impact of negative operating leverage.

*Excluding Lifestyle Retailing Business (restructuring underway) & Education and Stationery Products Business (impact of closure of educational institutions).

*** The operating environment remained challenging even as economic activity picked up pace progressively during the quarter with the easing of restrictions and increased mobility. High frequency lead economic indicators pointed to green shoots of recovery in aggregate demand and supply, leading to upward revisions in GDP growth estimates for FY 2020-21. The agriculture sector remained resilient while core sector industries witnessed persistent weakness although an improving trajectory was visible there as well. Contact-intensive segments of the services sector such as aviation and hospitality, and discretionary consumption continued to lag the rest of the economy.

Against this backdrop, the Company recorded a strong recovery in operational performance. Gross Revenue stood at Rs. 12491.63 crores, up 5% y-o-y (Q1: -17%, Q2: +1%) driven mainly by the Agribusiness and FMCG-Others Segment, which sustained double-digit comparable revenue growth momentum despite moderation of demand in certain categories after a sharp lockdown induced surge in the first half of the financial year. The impact of negative operating leverage was partially mitigated through relentless focus on cost reduction. Profit After Tax stood at Rs.3662.85 crores representing a decline of 3.7%, on a comparable basis (adjusting for one-time benefit of Rs. 340 crores in base period due to reduction of corporate tax rate). Total Comprehensive income stood at Rs. 3726.18 crores (previous year Rs.3777.71 crores). Earnings Per Share for the quarter was Rs. 2.98 (previous year Rs.3.37).

The Company was declared the 'Best Governed Company' at the 20th Institute of Company Secretaries of India (ICSI) National Awards for Excellence in Corporate Governance, 2020, in the 'Listed Segment: Large Category'.

The marked reduction in daily Covid cases and ongoing vaccination drive are expected to provide a fillip to business sentiment and consumer confidence, as well as boost economic activity going forward. The Company continues to closely monitor the situation and is well prepared to respond with agility to strengthen its market standing.

The focus of the Union Budget 2021 on enhanced capital expenditure, heightened spends on agriculture, rural infrastructure development, healthcare, innovation and R&D along with stability in taxation will provide an accelerated thrust to economic recovery and engender a virtuous cycle of consumption, investment and employment.

FMCG - OTHERS

The significant surge in demand for staples and convenience foods witnessed during the lockdown phase ebbed during the quarter with consumers broadening their purchase assortment and lower 'at-home' consumption on the back of increased mobility. Demand for health & hygiene products remained elevated even as the pace of growth moderated as compared to the first half of the year. Discretionary/'out-of-home' consumption products witnessed smart recovery buoyed by pent-up demand and increased availability across channels. Heightened concerns on hygiene and safety continued to manifest in consumers' preference for trusted brands.

Against this backdrop, the 'Savlon' range of Health & Hygiene products sustained its high growth trajectory, albeit at a relatively lower pace as compared to the previous two quarters. 'YiPPee!' Noodles continued to record strong growth while 'Aashirvaad' Atta and 'Sunfeast' Biscuits, which had witnessed significant surge in demand in H1, moderated during the quarter. 'Bingo!' Snacks regained double-digit revenue growth while deodorants and confectionery saw appreciable sequential uptick.

Segment Revenue stood at Rs. 3562 crores representing a growth of 11% on a comparable basis driven mainly by robust growth in Health & Hygiene products, Noodles, Snacks, Spices, Dairy, Agarbatti and Matches. Most major categories enhanced their market standing during the quarter. Segment EBITDA grew by 28% to Rs.326 crores with margins expanding by 150 bps y-o-y to 9.2%. This was driven by higher operating leverage, enhanced operational efficiencies, portfolio premiumisation and product mix enrichment, notwithstanding incremental operating costs due to Covid-19 and gestation costs of new categories/facilities.

Consumer preference for 'contactless shopping' and home delivery, continues to gain prominence. The Businesses remained proactively engaged with e-Commerce platforms and aligned supply chains to deliver the right SKUs and service emergent demand in an efficient manner. Sales through the e-Commerce channel continued to grow at a rapid pace, doubling over last year. The channel now accounts for 5% of Segment Revenue. The Modern Trade channel, staged a strong recovery after a soft H1. Sales in rural markets remained strong while urban markets witnessed progressive improvement aided by increased mobility and easing of restrictions.

Risks and uncertainties associated with fluctuating demand levels continued to be managed with agility leveraging shorter operations planning cycles and predictive analytics. Market and outlet coverage were stepped up to appx. 1.3x and 1.1x respectively compared to pre-Covid levels. Direct-to-market shipments were also scaled up substantially to ensure freshness and reduced time-to-market in categories like atta, snacks and biscuits.

The FMCG Businesses continue to leverage digital technologies to drive productivity, improve market servicing, draw actionable insights for sharp-focused interventions, augment sales force capability and deepen connect with retailers. Recent initiatives include UNNATI (eB2B App) & VIRU (Virtual Salesman App) platforms, which facilitate digital ordering and trade engagement; direct-to-consumer e-Commerce platform (ITC e-Store); WhatsApp based chatbot (ITC Storelocator) enabling easier access for consumers to ITC products in their vicinity; deployment of innovative delivery models and use of alternate channels (ITC Store-on-Wheels) and use of AI/ML for outlet level actionable insights, etc.

The Company's innovation strategy remains focused on addressing continuously evolving consumer needs through world-class products leveraging the state-of-the-art capabilities of its Life Sciences & Technology Centre. During the first nine months of the year, the Company launched over 100 new products in record time with compelling value propositions, demonstrating its agility and execution excellence in testing times. A range of innovative and first-to-market products were recently launched, which include:

• 'YiPPee!' Saucy Masala Noodles, in unique red colored noodle blocks, with a drizzle of tomato sauce;

• 'Sunfeast Dark Fantasy' Choco Chip and Choco Nut Fills biscuits comprising a combination of cashews, almonds and hazelnuts;

• 'B Natural' Pom+ immunity juice and ready-to-drink immunity soups in two variants - Red Veggie and Tomato;

• 'Aashirvaad Svasti' 'Select Milk' with the added assurance to consumers through ready online access to quality report for each pouch;

• Khatta Meetha Poha, Veggie Upma, Mini Idli Sambar, Suji Halwa with Jaggery under Aashirvaad range of breakfast and snacking meals made with the goodness of grains and vegetables;

• 'Sunfeast Caker' an exciting range of cakes with variants such as Trinity and Swiss Roll;

• Range of organic dals and pulses under 'Aashirvaad Nature's Super Foods';

• Range of frozen snacks and all-purpose gravies under 'ITC Master Chef';

• 'Savlon 'Pichkiao' Handwash in a unique easy squeeze pack.

• ➢ The Branded Packaged Foods Businesses delivered a resilient performance driven by strong growth in Noodles, Snacks, Spices and Dairy categories.

  • Aashirvaad Atta fortified its leadership position in the branded atta industry with robust growth in value added variants. Aashirvaad Salt also recorded strong growth**.** Organic atta & pulses and low sodium salt variants, launched in recent months, continued to receive encouraging consumer response.
  • YiPP=ee! Noodles sustained its high growth trajectory with significant gains in market standing.
  • Sunfeast Biscuits sales moderated after robust growth in the first half, in line with industry trends. The recently launched Sunfeast Caker Trinity and Swiss Roll cakes received excellent response from consumers.
  • Bingo! Snacks regained double-digit growth, driven by potato chips and Tedhe Medhe.
  • Aashirvaad Svasti range of fresh dairy products and ghee posted robust growth; product range was expanded in select markets of Patna and Kolkata.
  • The ITC Master Chef range of Frozen Snacks, comprising 30 differentiated variants, continued to garner increasing consumer franchise.

• ➢ The Personal Care Products Business recorded strong growth, albeit at a lower pace compared to the first half of the financial year.

  • In the Health and Hygiene space, the Savlon range of antiseptic liquids, handwash, sanitising products and soaps continued to grow at a rapid pace; the brand clocked over Rs.1000 crores of consumer spend during the nine months period ending December'20.
  • Liquids portfolio comprising Handwash & Bodywash continued to grow at a fast clip.
  • With growing preference for natural products, 'Nimyle', a 100% natural floor cleaner grew rapidly strengthening its market standing in the East (No.1 brand of floor cleaner in West Bengal and Odisha) while continuing to gain traction in new

markets. The range was augmented with the launch of a lemongrass fragrance variant.

• The product range of 'Dermafique', a Digital First premium skin care brand, was augmented with the launch of bio-cellulose sheet masks - co-designed by dermatologists and made from bio-degradable fibres derived from 100% natural coconut water using patented technology. Leveraging the face equity of the 'Charmis' brand, the Business launched the 'Charmis Radiance Range' of face wash, face serum and hand cream in target markets.
• ➢ The Matches and Agarbatti Business posted strong growth driven by festive season demand, strong brand equity, focused initiatives to enhance availability and targeted trade inputs. The 'Mangaldeep' Agarbatti & Dhoop portfolio stood augmented with the launch of Anushri 3-in-1 & Anushri Pineapple Agarbattis and Treya 3-in-1 Dhoop.

➢ Digital marketing interventions

Capabilities of the state-of-the-art Marketing Command Centre - 'Sixth Sense' continued to be leveraged to launch several contextual and relevant communication campaigns based on real time insights and data analytics.

• Key campaigns during the quarter include:
  • Home Plate League (HPL): a creative idea that ran during the IPL enabled home chefs to interact with leading food bloggers.
  • #ChillwithBingo: a campaign on social media platforms deepening consumer engagement with Bingo!
  • Aashirvaad's association with the popular Tamil webseries 'Vallamai Tharayo' on YouTube drove consumers to access the brand's innovative recipes online.
• Focused campaigns led to manifold increase in followers of YiPPee! and Bingo! on Instagram during the period April-December'20, enhancing brand engagement on social media.
• A virtual summit on 'Digital Enablement for Kirana Outlets' was held to educate and upskill retailers on best practices in retail management. The summit saw an overwhelming participation of over 1500 retailers, securing a place in the GUINNESS WORLD RECORDS® for 'Most viewers for a retail management live stream on a bespoke platform'.

FMCG - CIGARETTES

• Volumes and revenue witnessed strong sequential recovery led mainly by metros and large town markets on the back of progressive easing of restrictions and enhanced mobility. On a y-o-y basis, Net Revenue was lower by 7.6% compared to 14.4% y-o-y in Q2.

• Several innovative variants such as 'Gold Flake Neo' in a new format, 'Classic Connect', 'American Club Clove Mint', 'Gold Flake Indie Mint' and 'Capstan Fresh Flavour' were launched in recent months to cater to continuously evolving consumer preferences and reinforce market standing.

• Portfolio was further fortified with the introduction of 'Gold Flake Luxury Filter', 'Gold Flake Neo SMART Filter', 'Navy Cut Deluxe Filter', 'Player's Gold Leaf Chase', 'Gold Flake Star'.

• Refreshed packs of 'Navy Cut', 'Navy Cut Deluxe Filter', 'Navy Cut Special' and 'Navy Cut Century' were launched.

• Other portfolio interventions in focus markets include 'Player's Gold Leaf Rush', 'Gold Flake Super Star', 'Gold Flake Regal Special', 'Royal Rich Flavour' and 'Royal Premium Blend'.

• Strengthened direct reach in target markets across all traditional trade channels; stockist network was also augmented to service rural/semi-urban markets more efficiently.

• Further consolidated market standing leveraging a robust portfolio, wide distribution reach, superior market servicing infrastructure and portfolio interventions.

• 13% Tax hike w.e.f 1st Feb.'20 continues to weigh on Legal Industry volumes.

• Wide availability of smuggled cigarettes continues despite deterrent actions and heightened levels of seizures by concerned authorities; remains a key challenge for the legal cigarette industry which has witnessed significant reduction in volumes in recent years.

HOTELS

• Segment Revenue witnessed progressive recovery with improvement in Room and F&B business. Turned EBITDA positive in December'20 and break-even for the quarter.
  • Wedding business, staycations/motorable getaways were the key drivers besides healthcare/quarantine related business.
  • Leisure destinations turned in a strong performance reflecting the continuing trend of short getaways with hill stations, Rajasthan and Goa leading the charts.
  • New F&B initiatives received excellent response. Home delivery/takeaway offerings augmented with the introduction of 'Biryani & Pulao Collection' comprising timeless flavours of classic culinary dishes from across the nation.
  • RevPar improves across business locations; however, remains below pre-Covid levels.
• Aggressive cost reduction measures led to ~44% reduction in controllable cash fixed costs.
• In line with the 'Asset-Right' growth strategy, the portfolio of managed properties was augmented with the addition of Welcomhotel Shimla; Welcomhotel Port Blair (formerly, Fortune Resort Bay Island) was relaunched after comprehensive refurbishment of rooms and other amenities.

PAPERBOARDS, PAPER & PACKAGING

• Paperboards and Specialty Papers business recorded strong recovery in volumes with exports continuing to grow at a rapid pace. Softer realisations weighed on revenue growth.

• Consumer offtake continued to improve across most major end user segments in paperboards barring publication, notebooks and wedding cards. Specialty papers witnessed strong growth driven by pharma and décor segments.
• The cartons segment of the Packaging and Printing Business recorded robust growth led by exports.
• The Business continues to focus on developing sustainable paperboard and packaging solutions for end-customers leveraging the Company's state-of-the-art Life Sciences and Technology Centre. The recyclable barrier board 'Filo' series and biodegradable 'Omega Series' continue to gain robust customer franchise. Further, the Business has also developed antiviral paper for applications in pharma and education & stationery businesses which is in the process of commercialisation. Similarly, the Packaging Business has developed unique and novel solutions including Bio-seal (bio-degradable packaging solution for QSR, personal care and packaged foods industries) and Oxyblock (a recyclable packaging solution with enhanced barrier properties) which are under various stages of commercialisation.

AGRI BUSINESS

Robust growth of 18.5% in Segment Revenue driven by higher wheat supplies for Aashirvaad atta and trading opportunities in rice, soya and wheat exports.

• Leveraged the e-Choupal network to enhance direct procurement amidst challenging operating conditions.
• In the Value Added portfolio, export of spices to Food Safe markets continued to gain strong traction.
• Leaf exports were impacted by subdued demand for leaf tobacco in international markets. Adverse business mix weighed on Segment Results.

CONTRIBUTION TO SUSTAINABLE DEVELOPMENT

ITC has sustained its 'AA' rating by MSCI-ESG - the highest amongst global tobacco companies. ITC has also been included in the Dow Jones Sustainability Emerging Markets Index - a reflection of being a sustainability leader in the industry and a recognition of the Company's continued commitment to people and planet.

ITC is a global exemplar in sustainability, the key highlights of which are given alongside:

The Board of Directors, at its meeting in Gurugram on 11th February, 2021, approved the financial results for the quarter ended 31 st December, 2020, which are enclosed.

Product/initiative	Link
YiPPee! Saucy MasalaNoodles	https://youtu.be/7EL60151PRE
Sunfeast Caker Trinity	https://youtu.be/T5WXDHLS18c
Aashirvaad Svasti Select Milk	https://www.aashirvaadsvasti.in/select-milk.aspx
Khatta Meetha Poha, VeggieUpma, Mini Idli Sambar, SujiHalwa	https://www.aashirvaad.com/Instant-meal
Charmis Deep Radiance FaceSerum	https://youtu.be/KQF3krebVzI
YiPPee! and Bingo! onInstagram	https://www.instagram.com/sunfeast_yippee/https://www.instagram.com/bingo_snacks/
Home Plate League (HPL)	https://www.instagram.com/p/CGSfGXGBZi2/
#ChillwithBingo	https://youtu.be/GhNGC2xjVXo
"WeAssure" programme	https://www.itchotels.in/content/dam/projects/hotelswebsite/itchotels/WeAssure/WeAssure-itc-hotels.pdf
Results Presentation	https://www.itcportal.com/investor/pdf/ITC-Quarterly-ResultPresentation-Q3-FY2021.pdf

(Nazeeb Arif) Executive Vice President Corporate Communications

Q3 FY21 Results

11th February, 2021

This presentation contains certain forward-looking statements including those describing the Company's strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that "forward looking statements" are based on certain assumptions of future events over which the Company exercises no control. Therefore there can be no guarantee as to their accuracy and readers are advised not to place any undue reliance on these forward looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. These statements involve a number of risks, uncertainties and other factors that could cause actual results or positions to differ materially from those that may be projected or implied by these forward looking statements. Such risks and uncertainties include, but are not limited to: growth, competition, acquisitions, domestic and international economic conditions affecting demand, supply and price conditions in the various businesses in the Company's portfolio, changes in Government regulations, tax regimes and other statutes, and the ability to attract and retain high quality human resource.

Sustained decline in daily Covid cases since Sep'20 in India

New wave in US / Europe spurs fresh lockdowns/restrictions

Decline in daily Covid cases & vaccine roll out expected to boost Consumer Confidence & Business Sentiment

Union Budget 2021 will provide accelerated thrust to economic recovery and engender a virtuous cycle of consumption, investment & employment

India: New Cases – Moving 7-day Average ('000s) US/Europe: New Cases – Moving 7-day Average ('000s)

		Vaccine Roll out

Progressive improvement since Sept'20 with easing of restrictions High Frequency Indicators

HighIndicators(Goly)Frequency	Jan-20	Feb-20	Mar-20	Apr-20	May-20	Jun-20	Jul-20	Aug-20	Sep-20	Oct-20	Nov-20	Dec-20	Jan-21
GrowthExports	-21	33	-343	-610	-357	-122	-95	-122	60	1-5	-87	01	54
GrowthImports	-07	36	-280	-597	-510	-480	-296	-260	-196	-115	-133	76	21
CargovolumesPorts	25	44	-51	-211	-233	-145	-132	-104	9-1	2-1	28	44
RailwayFreightTraffic	30	65	-139	-353	-213	-77	-46	39	155	153	90	87
TrafficDomesticAirPassenger	15	98	-329	-999	-974	-835	-826	8-75	-658	2-57	-509	-437
SalesDomesticTractor	48	213	-499	-794	40	224	385	747	283	77	513	431
DomesticSalesPassengerCar	-81	-88	-521	NA	-899	-580	-120	141	289	97	-28	84
WheelersSalesDomesticTwo	-170	-101	-471	NA	-838	-386	-152	30	116	169	134	74
CommercialVehicleRegisration	-69	130	NA	NA	-966	-838	-722	-574	-337	-303	-312	-135
ThreeWheelerSales	127	-310	-583	NA	-953	-801	-772	-753	-719	-609	-576	-589
CollectionsGST	81	83	-84	-717	-380	-90	-144	-120	39	102	14	116	81
IIP	22	52	-187	-573	-334	-166	-105	-71	05	42	-19
DurablesIIPConsumer	-37	-58	-365	-957	-703	-348	-237	-102	34	180	-07
Non-DurablesIIPConsumer	-06	15	-202	-361	-97	69	18	-30	24	71	-07
SteelProduction	16	29	-219	-828	-404	-232	-65	05	62	40	-05	-27
ProductionCement	51	78	-251	-852	-214	-68	-135	-145	-34	32	-73	-97
CoalProduction	80	113	40	-155	-140	-155	-57	36	210	117	33	22
FertilizersProduction	-01	29	-119	-45	75	42	69	73	-03	63	16	-29
NaturalProductionGas	-90	-96	-151	-199	-168	-120	-102	-95	-106	-86	-93	-72
InflationCPI	76	66	58	72	63	62	67	67	73	76	69	46
Food&InflationCPIBeverages	117	95	78	105	84	79	85	83	98	101	89	39
FoodBankCreditNon	85	37	67	37	68	67	67	60	85	65	60	95
IndustryCredit	25	07	07	17	17	22	08	05	00	-17	-07	-12

Upward revisions to FY21 GDP estimates

Improvement in Quarterly outlooks

FY21 GDP is expected to decline by ~7.7% (1st AE) H2 FY21 GDP growth is expected to be flattish y-o-y

Aggregate Supply sustains at ~92% of pre-Covid levels

Improvement in Aggregate Demand to 82%

Industry

Capacity utilisation & Pvt. Capex remain subdued Persistent weakness in Core Sector

Index of Industrial Production (YoY %)

50.6 51.2 52.7 55.3 54.5 51.8 27.4 30.8 47.2 46.0 52.0 56.8 58.9 56.3 56.4 57.7

Eight Core Sector Growth (YoY %)

Manufacturing PMI (YoY %)

Industry Credit Growth (YoY %)

New Project Announcements (Rs Lakh Crore; CMIE)

Services

Slower recovery in Services sector Services PMI moderates after festive season

Nomura India Normalisation Index : Services

India Services PMI: ( > 50 denotes improvement)

1.5 9.8 -32.9 -99.9-97.4 -83.5-82.6-76.0 -65.8 -57.2-50.9-43.7

Domestic Air Passenger Traffic Growth (YoY%)

Railway Passenger Bookings (Millions)

(-ve denotes higher refunds)

Services Export Growth (YoY %)

Services Import (YoY %)

Q3 FY21 Results Headline Financials & Business Highlights

Key Highlights: Q3 FY21

• Strong Sequential recovery momentum continues
  • ‒ Gross Revenue & PBT up 5% & 13% sequentially
  • ‒ Improvement in y-o-y growth trajectory
• FMCG Others posts another quarter of strong performance
  • ‒ Comparable Revenue^ up 11% in Q3; up 16% YTD Q3
    • Robust growth in Health & Hygiene, Noodles, Spices, Dairy, Agarbatti and Matches
    • Savlon clocks 1000 crores consumer spend
  • ‒ 100+ innovative products launched in last 9 months– hygiene, health & wellness, naturals, convenience
  • ‒ Segment EBITDA up 28%; Margins expand 150 bps to 9.2%
• Progressive recovery in Hotels and Cigarettes
  • ‒ Hotels business turned EBITDA positive in Dec'20
• Continued closure of educational institutions impacts ESPB sales

FMCG Others Q3 FY21

FMCG Industry Trends

• Demand for Health & Hygiene, Immunity, Ayurveda products remained elevated albeit at lower levels
• Staples & Convenience foods witnessed moderation after surge in H1
  • ‒ Broadening of purchase assortment by consumers and lower 'at-home' consumption on the back of increased mobility
• Discretionary and Out-of-Home consumption categories regained momentum
  • ‒ Snacks category posts double-digit growth in Q3; Sequential recovery in Deos & Confectionery
• Rural markets remained strong; Urban demand witnessed progressive recovery
• Sustained consumer preference for 'contactless shopping'
  • ‒ E-Commerce channel continues to witness robust growth
    • ITC FMCG Sales doubled: now accounts for ~5% of revenue
  • ‒ Increasing digital adoption by Traditional Trade & Collaboration with Online-delivery platforms

FMCG Others

FMCG Others Q3 Segment EBITDA margin up 150 bps

Q3 Consolidated Segment EBITDA Margin @ 10% - incl. Sunrise

100+ New launches in YTD Dec'20 (1)

Insight + Innovation >> Impact

B Natural Immunity Soups

Yippee! Saucy Masala

Sunfeast Dark Fantasy Choco Chip, Choco Nut Fills

Aashirvaad Organic Atta & Dals

ITC Master Chef All purpose Gravies

Aashirvaad Crystal & Proactive Salt

Fabelle Luxury Chocolates

Aashirvaad On-the-Go Range

Sunfeast Caker

ITC Master Chef Bakery Range

100+ New launches in YTD Dec'20 (2)

Insight + Innovation >> Impact

Charmis Facewash, Face Serum & Hand Cream

Nimeasy & Nimwash Dish Wash Liquid; Fruits & Vegetable Cleaner

Nimyle Neem & Lemon Grass

Dermafique Bio Cellulose face masks

Savlon Hand Wash Pichkiao

Engage On Value Pack

Vivel Glycerin Neem Oil Soap

Savlon Hexa soaps, body wash Disinfectant Sprays

Savlon Masks Germ Protection Wipes

Mangaldeep 'Fragrance of God' Agarbatti, Treya Cone & Marigold Dhoop

Building Brands With Purpose

Driving Digital Engagement

Building Influencers and Communities

Driving Digital Engagement

Educating & Engaging Consumers

Creating Brand Love Digital First Brands

Consumer intimacy Many First-to-Market Innovations

Consumer intimacy

Addressing Continuously evolving Needs

Creating Impactful Communications

Creating Impactful Communications

Sales & Distribution SMART | AGILE | RESPONSIVE

Virtual Retailer Summit 'Digital enablement for Kirana outlets'

Segment Revenue

5498 cr. 3.5 %

Segment Results 3453 cr. 8.1%

• Net Revenue up 8% vs. Q2; y-o-y decline of 8%
  • ₋ Smart recovery in metros and large town markets after a soft H1
  • ₋ Metro markets remain relatively more impacted compared to pre-Covid levels
• Focused portfolio/market interventions aid consolidation of market standing
  • ₋ Innovative & competitive offerings, portfolio fortification, small packs
  • ₋ Augmented distribution: stockists, grocery outlets, rural/semi urban markets
• Legal Industry volumes remain impacted a/c 13% Tax hike w.e.f. 1st Feb'20

FMCG Cigarettes Key Portfolio Interventions

Innovation @ Premium End	Portfolio Fortification
•ClassicConnect	•GoldFlakeLuxuryFilter
•GoldFlakeNeo	•GoldFlakeNeoSMARTFilter
•AmericanClubCloveMint	•NavyCutDeluxe
•GoldFlakeIndieMint	•Player'sGoldLeafChase
•CapstanFresh	•GoldFlakeStar
Focused Market offers	Other Interventions
•Player'sGoldLeafRush	Refreshed Packs of Navy Cut Longs, Navy CutDeluxe, Navy Cut Special and Navy Cut Century
•GoldFlakeSuperStar(SuperMint)
•GoldFlakeRegalSpecial	Gold Flake Super Star and Flake 5s HL Packs
•Royal

Smuggled Cigarettes remain widely available, despite deterrent actions by authorities FMCG Cigarettes

Hotels Business Q3 FY21

Significant sequential recovery Leisure locations gain traction Aggressive cost reduction

➢ Significant sequential recovery (3x Q2); however, behind pre-covid levels

• ̶ Wedding business, staycations/motorable getaways were the key drivers besides healthcare/quarantine related business
• ̶ Leisure locations continue to witness strong demand
• ̶ New F&B initiatives received excellent response

➢ Turned EBIDTA positive in Dec'20 and breakeven for the quarter

• ̶ Extreme focus on cost reduction – Controllable cash costs down 44%
• ➢ Commissioned Welcomhotel Shimla and relaunched Welcomhotel Port Blair

Hotels Special Packages to drive demand

Room Initiatives – Special Packages F&B initiatives – Season's festivities & exclusive dining

New Launches in Takeaway/Home Delivery menu

Agri Business Q3 FY21

Agri Business

Resilient performance Continued Value Addition to Foods Businesses

• Revenue growth driven by trading opportunities in Rice, Soya & Wheat for Aashirvaad Atta
  • ‒ Wheat Exports to Bangladesh, Malaysia, Sri Lanka & UAE
• Leveraged the e-Choupal network to enhance direct procurement amidst challenging operating conditions
• Exports of Value added Spices to Food Safe Markets continue to gain strong traction
• Leaf exports impacted by lower volumes and adverse crop/grade mix

Paperboards, Paper & Packaging Q3 FY21

Paperboards, Paper & Packaging

Progressive recovery in most segments Continued robust performance in Exports

• 1,478 cr. 5.0 % Segment Revenue Segment Results 285 cr. 14.6%
• Subdued demand in Domestic market partly offset by robust growth in Exports
  • ‒ Progressive recovery in most segments
  • ‒ Liquor, Publications, Notebooks, Wedding Card segments remain subdued
  • ‒ Strong growth in Specialty papers – Pharma and Décor segments
• Higher operational efficiencies partially mitigate impact of softer realisations, negative operating leverage and adverse business mix
• Paper Machine Rebuild Project at Bhadrachalam on schedule
• High Pressure Recovery Boiler project on schedule despite Covid disruptions pulp mill capacity expansion (import substitution), reduced Carbon footprint and operational efficiencies

Innovation

Developing Sustainable Paperboard & Packaging solutions

Antibacterial / Antiviral Paper

Antiviral Specialty Paper:

• Specialty Paper treated with antiviral chemicals
• Certified by IISER Kolkata (under Commercialisation)

Plastic Substitution (Oil & Grease resistant)

Completely Recyclable in existing standard recycling conditions

Filo Serve : Food serving applications Filo Pack : Food delivery

Completely Biodegradable under composting conditions

Omega Bev : Exclusively for paper cups Omega Barr : Deep freeze applications

Sustainable Packaging

Bio compostable packaging solutions for packaged/fast-food & Personal Care industries. Launched on commercial scale.

Recyclable structure to provide barrier properties for packaged foods, edible oils etc. Commercialisation under progress

Leveraging ITC LSTC capability for cutting-edge innovation

Key Financials: Q3 FY21

	Q3CY	Q3LY	GOLY
GrossRevenue	12492,	11912,	9%4
NetRevenue	11705,	11702,	00%
EBITDA	2814,	6134,	2%7-
(bei)PBT	4848,	5168,	2%6-
Exceptionalitems		(132)
PBT	4848,	5036,	37%-
PAT	3663,	1424,	116%-

(Rs. cr.)

Strong sequential recovery momentum continues (net of tax) 63 (364) -

Comparable PAT (excl. one time benefit in LY) de-grew by 3.7%

Q2			Q3
202021-		202021-	201920-	GOLY%
	(Gross)SegmentRevenue
5121	a)FMCGCigarettes-	5498	5311	35
3795	Others-	3562	3312	75
8916	TotalFMCG	9060	8623	51
82	b)Hotels	235	552	(574)
2985	c)AgriBusiness	2482	2095	185
1459	d)PaperboardsPackaging&Paper,	1478	1555	(50)
13442	Total	13255	12826	33
1550	LessIntersegmentrevenue:	763	914	(165)
11892	fromsaleofproductsGross&Revenueservices	12492	11912	49

(Rs. cr.)

• FMCG Cigarettes: Net Revenue (7.6%) Vs. LY

• FMCG Others: Revenue up 11%^

• Robust growth in Health & Hygiene, Noodles, Snacks, Spices, Agarbatti and Matches
• Subdued performance in Atta, Biscuits, Confectionery and Deos
• Hotels: Revenue at 3x Q2
• Paperboards, Paper & Packaging:
  • Progressive recovery in most segments; Liquor, Publications & Paper and Wedding Cards remain subdued
  • Continued strong growth in Exports & Specialty Paper
  • Softer realisations weighed on Revenue growth

Q2			Q3
2020-21		2020-21	2019-20	GOLY%
	ResultsSegment
3245	a)FMCG- Cigarettes	3453	3756	(81)
253	- Others	207	108	927
3497	TotalFMCG	3660	3864	(53)
(185)	b)Hotels	(67)	87	NA
256	c)AgriBusiness	196	213	(81)
330	d)PaperboardsPackaging&Paper,	285	334	(146)
3899	Total	4074	4498	(94)
14	i)LessFinanceCost:	14	12
(389)	ii)(income)Otherun-allocablenetofun-allocableexpenditure	(787)	(682)
4274	ProfitBefore(beforeexceptionalitems)Tax	4848	5168	(62)

(Rs. cr.)

• FMCG Others: Segment EBITDA up 28% to 326 cr. (Margin @ 9.2% +150 bps)

- operating leverage, enhanced operational efficiencies, product mix enrichment and portfolio premiumisation drive PBIT margin expansion of 260 bps

• Hotels: Cash breakeven achieved

• - Controllable cash costs down 44% Vs. LY
• Agri Business: Subdued leaf exports, lower export incentives & adverse business mix
• Paperboards, Paper & Packaging: Margins impacted a/c softer realisations & negative operating leverage

Quarterly Trends

ITC – A Global Exemplar in Sustainability Impactful Social Performance

Top ESG ratings

ITC rated AA by MSCI-ESG

Highest amongst Global Tobacco cos.

ITC included in Dow Jones Sustainability Emerging Markets Index

Recognition of being a sustainability leader in the industry & Company's commitment to People and Planet.

ITC PSPD - Kovai Unit, awarded Alliance for Water Stewardship Platinum-level Certification

Highest recognition for water stewardship in the world - second facility globally, first in India.

Adjudged 'Best Governed Company' at the 20th ICSI National Award for Excellence in Corporate Governance 2020

ITC: Creating Enduring Value

A passion for profitable growth….

…..in a way that is sustainable…….

…. and

inclusive

	Product/initiative	Link
	'YiPPee!' Saucy Masala Noodles	https://youtu.be/7EL60151PRE
	Sunfeast Caker Trinity	https://youtu.be/T5WXDHLS18c
	Aashirvaad Svasti Select Milk	https://www.aashirvaadsvasti.in/select-milk.aspx
	Khatta Meetha Poha, Veggie Upma, Mini IdliSambar, Suji Halwa	https://www.aashirvaad.com/Instant-meal
	Charmis Deep Radiance Face Serum	https://youtu.be/KQF3krebVzI
	YiPPee! and Bingo! on Instagram	https://www.instagram.com/sunfeast_yippee/https://www.instagram.com/bingo_snacks/
	Home Plate League (HPL)	https://www.instagram.com/p/CGSfGXGBZi2/
	#ChillwithBingo	https://youtu.be/GhNGC2xjVXo
	"WeAssure" programme	https://www.itchotels.in/content/dam/projects/hotelswebsite/itc-hotels/WeAssure/WeAssure-itc-hotels.pdf

Thank You