Varun Beverages Ltd. · NSE:VBL
Varun Beverages — Q4 CY2017 Earnings Presentation
26 slides from Varun Beverages's earnings presentation, Feb 16, 2018
Slide 1: Varun Beverages Limited Q4 & CY2017 Results Presentation
February 16, 2018 (a PepsiCo franchisee) Varun Beverages Limited Q4 & CY2017 Results Presentation
Slide 2: Disclaimer
Disclaimer (a PepsiCo franchisee) Certain statements in this communication may be ‘forward looking statements’ within the meaning of applicable laws and regulations. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ
Slide 3: Table of Content
Table of Content (a PepsiCo franchisee) 1 Company Overview 2 Q4 & CY2017 Results Overview 3 Financial Highlights 4 Industry Prospects 5 Annexure 3
Slide 4: Company Snapshot
Company Snapshot (a PepsiCo franchisee) Key player in the beverage industry Operations spanning across 6 countries – 3 in the Indian Subcontinent (India, Sri Lanka, Nepal) contribute ~90% to revenues; 3 in Africa (Morocco, Zambia, Zimbabwe) contribute ~10% Over 25 years strategic association with Pe
Slide 5: Brands licensed by PepsiCo
Brands licensed by PepsiCo (a PepsiCo franchisee) Manufacturing & Distribution: Carbonated Soft Drinks Juice Based Drinks Carbonated Juices Energy Drink Packaged Water Distribution: Juice Based Drinks Sports Drink Dairy 5
Slide 6: Key Player in the Beverage Industry – Business Model
Key Player in the Beverage Industry – Business Model (a PepsiCo franchisee) VBL- END-TO-END EXECUTION ACROSS VALUE CHAIN MANUFACTURING Concentrate Other Raw (PepsiCo) Materials Bottling 23 state-of-the-art production facilities SOLID INRASTRUCTURE 72 owned depots DISTRUBUTION & WAREHOUSING 2,1
Slide 7: Symbiotic Relationship with PepsiCo
Symbiotic Relationship with PepsiCo (a PepsiCo franchisee) VBL – Demand Delivery PepsiCo – Demand Creation 25 yrs + Investment in Production Facilities – Association Owner of Trademarks manufacturing plants Investment in R&D – Product & Sales & Distribution – Vehicles Packaging innovation
Slide 8: Chairman's Message
Chairman’s Message (a PepsiCo franchisee) Commenting on the performance for Q4 & CY2017, Mr. Ravi Jaipuria, Chairman – Varun Beverages Limited said, “I am pleased to report we have completed our first year post listing delivering a robust performance with net profit growing 346% to Rs. 214 crore. Th
Slide 9: Key Developments – Acquisition of territories
Key Developments – Acquisition of territories (a PepsiCo franchisee) Concluded the acquisition of PepsiCo India’s previously franchised territories of the State of Odisha and parts of Madhya Pradesh along with two manufacturing units at Bargarh (Odisha) and Bhopal (Mandideep, MP) w.e.f. 27th Sep 201
Slide 10: Key Developments - New Products Launches
Key Developments - New Products Launches (a PepsiCo franchisee) • Launched Pepsi Black, a zero calorie cola flavor CSD product currently available in 250ml cans and 250 ml non-returnable glass bottles PEPSI BLACK • Launch is part of PepsiCo’s plan to intensify focus on health and nutrition, reduce s
Slide 11: Key Developments
Key Developments (a PepsiCo franchisee) Company’s credit rating for long term debt of VBL got upgraded by one notch and short term debt rating continued to remain at top notch Rating Upgrade • Long Term Debt: CRISIL A+/Positive to CRISIL AA-/Stable • Short Term Debt / Commercial Paper: CRISIL A1+ •
Slide 12: Dividend Policy
Dividend Policy (a PepsiCo franchisee) With the listing of the Company in November 2016, the Board of Directors of the Company has decided to formalize a dividend policy, in line with good Corporate Governance practices. Salient Features:- • Endeavor to maintain a dividend payout in the range of 10-
Slide 13: Acquisition Guidelines
Acquisition Guidelines (a PepsiCo franchisee) Varun Beverages effectively utilizes retained earnings for inorganic growth through acquisition of new territories. Acquisitions have been a key component of the Group’s growth strategy for many years and substantially accelerated our revenue growth rate
Slide 14: Discussion on Financial & Operational Performance – CY2017
Discussion on Financial & Operational Performance – CY2017 (a PepsiCo franchisee) Revenues / Sales Volumes Operating Margins • Revenue from operations (net of excise / GST) grew 3.7% • EBITDA increased by 5.0% to Rs. 8,358 million in CY2017 from Rs. YoY in CY2017 to Rs. 40,034 million led by volume
Slide 15: Performance Highlights
Performance Highlights (a PepsiCo franchisee) VBL has adopted Ind-AS framework starting Q1 CY2017. Prior period numbers for respective periods have been restated in compliance with Ind-AS for a meaningful comparison. Net Sales (adj.) EBITDA 5.0% PAT 345.6% 3.7% 7,960 8,358 2,141 38,612 40,034 Rs. mi
Slide 16: Profit & Loss Statement (Ind-AS format)
Profit & Loss Statement (Ind-AS format) (a PepsiCo franchisee) Particulars (Rs million) Q4 2017 Q4 2016 YoY(%) CY 2017 CY 2016 YoY (%) 1. Income (a) Revenue from operations 5,433.2 4,878.4 11.4% 45,162.4 45,314.6 -0.3% (b) Other income 16.8 16.9 -0.1% 126.5 357.3 -64.6% Total income from operations
Slide 17: Balance Sheet (Ind-AS format)
Balance Sheet (Ind-AS format) (a PepsiCo franchisee) Particulars (Rs million) 31-Dec-17 31-Dec-16 Particulars (Rs million) 31-Dec-17 31-Dec-16 Equity and liabilities Assets Equity Non-current assets (a) Equity share capital 1,825.87 1,823.13 (a) Property, plant and equipment 35,411.66 33,558.49 (b)
Slide 18: GST Impact on Sales from Operations
GST Impact on Sales from Operations (a PepsiCo franchisee) Consequent to the introduction of Goods and Service Tax (GST) with effect from July 01, 2017, Central Excise, Value Added Tax (VAT), etc. have been subsumed into GST. In accordance with Indian Accounting Standard - 18 on Revenue and Schedule
Slide 19: Ind-AS Impact on VBL – Q4 & CY2016 P&L
Ind-AS Impact on VBL – Q4 & CY2016 P&L (a PepsiCo franchisee) Q4 CY2016 CY2016 Particulars (Rs million) IGAAP IND AS adjst. IND AS IGAAP IND AS adjst. IND AS Income Revenue from operations 4,804.9 73.5 4,878.4 45,241.1 73.5 45,314.6 Other income 44.3 (27.4) 16.9 347.9 9.5 357.3 Total income from ope
Slide 20: Ind-AS Impact on VBL – Key Adjustments
Ind-AS Impact on VBL – Key Adjustments (a PepsiCo franchisee) A. NPV calculation of deferred consideration for territory acquisition – As per IND AS, interest free outstanding to PepsiCo is recalculated at its NPV resulting in following – Balance Sheet: i. Reduction in outstanding deferred liability
Slide 21: Financial Highlights (2012-17)
Financial Highlights (2012-17) (a PepsiCo franchisee) Revenue PAT PAT Margins CAGR – 16.8% CAGR – 53.5% 5.3% 3000 6% 38,520 40,034 Rs. million Rs. million 2500 3.9% 2,141 5% 33,491 2000 1,513 4% 25,097 1500 2.6% 18,408 21,175 870 3% 1000 1.4% 500 251 -201 2% -395 0 1% -500 0% 2012 2013 2014 2015 201
Slide 22: Broad-based Growth To Continue Across Soft Drink Categories in India
Broad-based Growth To Continue Across Soft Drink Categories in India (a PepsiCo franchisee) Global Markets - Per Capita Soft Drink Consumption VBL Markets - Per Capita Soft Drink Consumption (Per Capita bottles) (Per Capita bottles) CAGR CAGR 2016-21 15.1% 3.4% 1.8% 2.8% -0.1% 0.7% 3.3% 2016-21 15.1
Slide 23: Outlook
Outlook (a PepsiCo franchisee) To periodically launch innovative Well-positioned to leverage PepsiCo products in select markets in line with brand to increase market changing consumer preferences penetration in licensed territories Focus on non-cola carbonated Consolidating existing distribu
Slide 24: Conference Call Details
Conference Call Details (a PepsiCo franchisee) Varun Beverages Limited (VBL) Q4 & CY2017 Earnings Conference Call Time • 4:00 pm IST on Friday, February 16, 2018 Conference dial-in Primary number • +91 22 3938 1071 Local access number • +91 70456 71221 International Toll Free Number • Hong Kong: 800
Slide 25: About Us
About Us (a PepsiCo franchisee) Varun Beverages Limited (VBL) is a key player in beverage industry and one of the largest franchisee of PepsiCo in the world (outside USA). The Company produces and distributes a wide range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonat
Slide 26: Thank You!
Thank You!