ITC Ltd — Investor Presentation 2019

Jun 12, 2019

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

12thJune, 2019

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

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

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

Dear Sirs,

Participation in Investors' Conference

Further to our letter dated 10thJune, 2019 on the subject, we write to advise that Mr. S. Puri, Chairman and Managing Director of the Company, also made a presentation at the Morgan Stanley's 'Twenty-First Annual India Summit' today at Mumbai.

A copy of the said presentation is enclosed in terms of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Yours faithfully,

IT sLimited 41110

(R. K. Si ghi) Executive Vice President & 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

Creating Multiple Drivers of Growth through Responsible Competitiveness

Morgan Stanley's 21st Annual India Summit 12th June 2019

1

• Leading FMCG marketer in India
• Clear market leader in the Indian paperboards, paper and packaging industry - scale, profitability & sustainability
• 2 nd largest Hotel chain by Revenue, leader in profitability & trailblazer in Green Hoteliering
• India's foremost Agribusiness player pioneering rural transformation
• Global exemplar in Sustainability

ITC FMCG Business Transformation

(` cr.)

ITC TSR : 20.3% Vs. Sensex: 14.8%

Growth largely organic-led and funded through Retained Earnings

Market Cap and TSR based on FY-end prices for FY09 and FY19

Gross Sales Value includes all taxes (GST, Compensation Cess, VAT, Excise Duty, NCCD, etc.)

Cumulative Value Addition in the last 5 years @ 2.2 lakh cr. Contribution to Exchequer @ 1.6 lakh cr.

ITC consistently in the Top League

ITC's Vision

• Make a significant and growing contribution towards :
  • mitigating societal challenges
  • enhancing shareholder rewards

By

• creating multiple drivers of growth while reinforcing leadership in tobacco, and
• focusing on 'Triple Bottom Line' Performance
  • Enlarge contribution to the Nation's
    • Financial capital
    • Environmental capital
    • Social capital

Key Corporate Strategies

• Focus on the chosen business portfolio
  • Best fit market opportunity & enterprise strengths
  • FMCG; Hotels; Paperboards, Paper & Packaging; Agri Business
• Blend diverse core competencies residing in various Businesses to enhance the competitive power of the portfolio
• Position each business to attain leadership on the strength of world-class standards in innovation, quality, accessibility and costs
• Pursue Triple Bottom Line objectives and leverage sustainable business practices as a distinct source of competitive advantage
• Build & nurture a world-class talent pool and foster a 'proneurial' spirit

Strategy of Organisation

3-Tiered Governance Structure

ITC won the prestigious Porter Prize 2017 for 'Excellence in Corporate Governance and Integration' and for its exemplary contribution in 'Creating Shared Value'.

ITC's Non-Cigarette Business Portfolio

FMCG

Education & Stationery

Lifestyle Retailing

Safety Matches & Incense Sticks

Paperboards, Paper & Packaging Hotels Agri Business

Structural Drivers of Growth - FMCG in India

13 Source: CIA Factbook, BCG, United Nations, HHP, Nielsen

Strategic directions – ITC FMCG

Enhance scale in existing categories while simultaneously seeding new categories

Driving synergistic growth

Rapid scale up of FMCG businesses

FMCG – Others: Significant increase in Scale & Profitability

(` cr.)

*On comparable basis

Creating over 25 world-class mother brands for Indian Consumers

Annual Consumer Spends of over 18000 cr. (FY19)

Impressive market standing in a relatively short span of time

Branded Packaged Foods Portfolio

Biscuits, Staples, Snacks, Noodles & Pasta, Confectionery, Ready to Eat, Juices, Dairy, Chocolates and Coffee

Personal Care

Soaps, Shower Gels, Fragrancing products, Antiseptic Liquids, Hand Wash Skin Care, Shampoos, Floor Cleaner

Education & Stationery Products

Notebooks, Pens, Pencils, Art Stationery, Geometry Boxes, Scholastic Products

Incense sticks (Agarbattis) & Safety Matches

First-to-Market Innovations

Dark Fantasy ChocoFills Luscious chocolate filling enrobed within a rich cookie

Sunfeast YiPPee! Unique round shape and non-sticky noodles

Sunfeast Wonderz Real fruit inclusions

B Natural Juices Aseptic PET format

Sunfeast Bounce Minis Bite Sized Cream Filled Cookies

Fabelle India's first Ruby Chocolate

Bingo! No Rulz Multiple shapes in every pack

Mad Angles Fillos Peanut masala filled Snacks

Engage Flip Dual 2 fragrances @ pocket format

Fiama Body Wash Fragrance encapsulation technology

Savlon Hand sanitizer Pen format

Regional Taste & Preferences

Bingo! Tedhe Medhe Wakhra Style, Tomato Masti & Pudina Twist

Aashirvaad MP Atta Aashirvaad Koora Karam Spices

Sunfeast Marie Light Vita

Red Tomato

YiPPee! WoW Chicken Bingo! Red Chilli Bijli & Fiery Mangaldeep Jathimalligai

26

Premiumising the Portfolio

Classmate Asteroid Geo Boxes

Time & Fantastik

Building a 'Free From' and 'Good For You' portfolio

Aashirvaad Nature's Super Foods range Ragi Flour, Multi Millet Mix, Gluten Free Flour

ITC Master Chef Super Safe Prawns

Aashirvaad Sugar Release Control Atta

Aashirvaad Atta with multigrains

YiPPee! Power Up Masala Noodles

Sunfeast Farmlite Digestive & Protein Power

Sunfeast A2 Cow Milk Biscuits

Farmland Low Sugar & Anti-oxidant Potato

Addressing the Food Services opportunity

Leveraging Digital to deepen consumer engagement – The 3C's

Sixth Sense - Marketing Command Centre

Harmanpreet Kaur Century – B Natural

Mothers Day – Mom's Magic

Virat Kohli 10000 Runs – YiPPee!

Moment Marketing

Mary Kom Gold Medal – Vivel

Apna Time Aayega – Farmlite

10 year Challenge – Aashirvaad

Anchoring Brand Purpose on larger consumer needs

Savlon 'Healthy Hands Chalk Sticks' Campaign : Global Recognition

WARC = World Advertising Research Center, U.K.

in 2018 globally by WARC.

ICML – Cost advantage, Freshness, Agility and Scalability

Develop centers of manufacturing excellence safety, quality, cost, people capability, process

Ensure recipe secrecy and integrity & protect manufacturing know-how

Provide fresher products and reduce distance to market

Optimise Inventories & reduce logistics cost with co-hosted warehouses

ICML Kapurthala, Punjab

Commissioned in November 2017 - Currently manufacturing Atta, Biscuits, Beverages, Noodles, Snacks

ICML Trichy, Tamil Nadu

Commissioned in August 2018 - Currently manufacturing Atta, Biscuits, Noodles, Snacks

ICML Uluberia, West Bengal

Commissioned in November 2016 - Currently manufacturing Atta, Biscuits, Snacks

Cutting-edge R&D capability Life Sciences and Technology Centre, Bengaluru

Smart Value Chain

41

Unique sources of competitive advantage – FMCG

• Deep rural linkages, agri-sourcing, culinary expertise of Hotels
• State-of-the-art ICMLs structural cost management & driving efficiency in market servicing
• Relentless focus on quality, hygiene and food safety
• Established trademarks facilitating effective forays into new categories/adjacencies
• Cutting-edge R&D capability LSTC, Bengaluru
• World-class & motivated talent pool 'proneurial' spirit

Agri Business

Leading Agri Business player in India & Pioneer in rural transformation

Sourcing and supply operations spread across 20 states

Largest procurer of wheat after FCI

5th largest leaf tobacco exporter in the world - 43% value share of Indian exports

Strategic sourcing support to Foods Businesses

Delivering competitive advantage to Aashirvaad Atta

Securing Premium Varieties, Cost Quality Optimisation, Identity Preserved SCM, Lowest Landed Cost Logistics

Multiple distributed bulk buying, storage & manufacturing locations

Optimised delivery network

Securing Long Term Advantage through R&D and Crop Development

Identification of Alternate Varieties New Variety Development & Seed multiplication

ITC Hotels

One of the fastest growing hospitality chains in India Trailblazer in Green Hoteliering Leader in Profitability

ITC Kohenur & ITC Grand Goa added to portfolio in FY19

ITC Kohenur - 271 keys, 6 F&B Outlets

ITC Grand Goa 252 keys, 6 F&B outlets, 36,000 sq. ft. of Spa space

Projects in progress: 'ITC Hotels' & 'WelcomHotel'

ITC Royal Bengal Phase 1 commissioned in Jun'19

ITC Narmada, Ahmedabad

WelcomHotel, Guntur WelcomHotel, Bhubaneswar WelcomHotel, Amritsar

Hotels: Strategic Direction

• Drive profitable growth by leveraging world-class infrastructure & capability
  • Iconic properties
  • Iconic cuisine brands
  • Loyalty programmes
  • Cutting-edge digital infrastructure / distribution
• Leveraging assets and growing through management contracts
  • Asset-right approach WelcomHotel brand proposition sharpened for management contracts in 5-Star segment

Paperboards & Packaging Business

No. 1 in Size

No. 1 in Profitability

World-class Environmental Performance

Paperboards & Packaging Business

Market leader in fast growing Value Added Paperboards segment

Integrated Operations

• In-house ozone bleached pulp mill
• Bleached Chemical Thermo Mechanical Pulp Mill commissioned in Mar'17 – first-of-its-kind in India
• Secure, sustainable & cost competitive fibre base
  • Cumulative plantations @ 7.3 lakh acres
• 42% of energy used in operations is from renewable sources

Key Sustainability Initiatives

ITC's approach to Sustainability

Create innovative, synergistic models that reinforce sustainable competitive advantage & foster inclusive growth as well as create sustainable value chains

• Embed sustainability in Business operations
  • Low Carbon footprint, Water and Solid waste management
• Deepen engagement in ITC's core catchments (agri-business & factory areas) for higher impact
  • Drive behavioural change through focus on demand generation
    • Enabling participation, contribution & asset creation for the community
  • Strengthen capability of community based organisations and NGOs in project catchments
    • Foster participatory planning ownership and sustainability of interventions
• Build capability through strategic partnerships with national & international organisations

Impactful Social Performance

Making Agri value chains competitive Quality, productivity, market access, sustainable practices

Baareh Mahine Hariyali Initative

Doubling Farmers Income through round-the-year interventions

Climate Smart Agriculture (eg. Zero Tillage, Micro Irrigation)

Cropping Intensity (High Yielding, Short Duration Varieties)

Creating Market Linkages (via ITC e-Choupal and Foods Brands)

• Partnering NITI Aayog in 27 Districts
• Over 2 lakh farmers trained till date

Social and Farm Forestry

Greening over 7,33,000 acres

Creating 125 million person days of employment

Social and Farm Forestry

High yielding varieties developed by ITC R&D Clonal Saplings grown in Nursery

Wasteland Conversion

Agro-Forestry Model

Watershed Development

Over 15,000 structures creating rainwater harvesting

potential of 34.6 Million KL irrigating 10.1 lakh acres

(3x of ITC's net water consumption)

Participatory Watershed Planning

Water User Groups

Low Carbon Footprint

Renewable Energy – 41% of energy consumed 24 Platinum rated Green Buildings;

ITC Sankhya: World's First LEED Platinum Data Centre

World's Greenest Luxury Hotels chain

Continuous Reduction in Specific Energy/Water Consumption

Global Recognition

Award 2012 at the Rio+20 UN Summit

World Business and Development Sustainability Leadership Award, Zurich

The Stockholm Challenge Award Development Gateway Award

ITC: Creating Enduring Value

A passion for profitable growth….

…..in a way that is sustainable…….

…. and

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.

Thank You