United Breweries Limited · NSE:UBL

United Breweries — CLSA Investor Presentation (November 2010)

21 slides from United Breweries's conference presentation, Nov 15, 2010

  1. Slide 1: Brewing a Success in India

    CLSA Investor Presentation BREWING A SUCCESS IN INDIA

  2. Slide 2: Disclaimer

    Disclaimer This investor presentation has been prepared by United Breweries Limited (“UBL”) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied shou

  3. Slide 3: India and the Beer Opportunity

    INDIA AND THE BEER OPPORTUNITY

  4. Slide 4: Demographics set for beer growth

    Demographics set for beer growth  Current population 1.2 billion  Core target market is 18-30 year olds  Young population, with net increase in working age population of 270 mln till 2030  The emerging young population hold more liberal views on alcohol  As initiation to alcohol consumption is

  5. Slide 5: But beer consumption very low

    But beer consumption very low India Emerging Markets Per Capita Beer Consumption at 1.5 liter 20 liter comparable GDP Share of alcohol <0.5% Wine 5% consumption 78% Spirits 8% 22% Beer 87%

  6. Slide 6: Two key reasons

    Two key reasons AFFORDABILITY AVAILABILITY  Highest duty in the  65,000 licensed world outlets across the  Duty not set country according to alcohol  1 per 18,000 people content  In China: 1 per 300  Expensive alcoholic people beverage Beer is not the alcoholic beverage of the common man

  7. Slide 7: A highly regulated market

    A highly regulated market  Excessive State regulation and intervention • Route to market • Economics, need to have a brewery in each state • Pricing  Driver of growth is Strong beer • Specific to Indian market  Ban on advertising alcohol • Difficult to build new brands

  8. Slide 8: Positive signs on the horizon

    Positive signs on the horizon  Government corporations are now approachable and not averse to make changes  There have been recent signs by some governing bodies to de-link beer from spirits  Maharashtra & Goa have gone ahead and issued beer only licences.

  9. Slide 9: Indian Beer market is at the start of the growth curve

    Indian Beer market is at the start of the growth curve Lowest consumption of BRIC countries GDP growth will drive consumption Per Capita Beer Consumption Per Capita Consumption vs. GDP Growth 120 120 Mexico Chile 98 100 100 PCC in Liters PCC in Liters Brazil Russia 86 80 80 Argentina 60 60 Colombia

  10. Slide 10: Our Position in the Market

    OUR POSITION IN THE MARKET %

  11. Slide 11: UBL's leadership is undisputed

    UBL’s leadership is undisputed All-India Market Share Market share by Brand UBL Kingfisher 51% 37% Nearest Competitor Nearest 25% Competitor 13% RMS: 2x RMS: 3x  Strong market position will continue to drive economies of scale and superior returns

  12. Slide 12: UBL's Capability

    UBL’s Capability  Iconic brand – KINGFISHER  Balanced portfolio of supporting brands  Manufacturing network across all major states  Best Route to Market • Established distributor relationships • Leadership in cold chain management, and point of sale visibility

  13. Slide 13: UBL is reaping the benefits: 100 million landmark reach in FY10

    UBL is reaping the benefits: 100 million landmark reach in FY10 Doubled in size every 4-5 years Driven by Kingfisher Strong Total Volumes in 7.8l cases Kingfisher Strong Volumes in 7.8l cases 120 60 100 50 80 2x 40 3x 4x 60 30 12x 40 20 20 10 - - 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09

  14. Slide 14: UBL significantly outperformed the market in FY10

    UBL significantly outperformed the market in FY10 All India Market share of over 50%  Share gains across almost all Change in market share FY10 markets  UBL achieved double the growth of the market in the year 2009-10, even when already holding 50% market share  Both Kingfisher Premium and Kingfi

  15. Slide 15: Results H1 FY2011

    RESULTS H1 FY2011 %

  16. Slide 16: Performance highlights H1

    Performance highlights H1  28% volume growth in UBL as against an industry growth of 24%  Mild beer segment back on the increase  Kingfisher growth - premium 22%, strong 40%, both gaining share  Star performing markets were Maharashtra, Andhra Pradesh, Karnataka, Uttar Pradesh and Orissa  UBL a

  17. Slide 17: Financial highlights H1

    Financial highlights H1 Strong top line growth, and realising operating leverage In Rs. million H1 2011 H1 2010 Change Revenue 15,993 12,156 32% EBITDA 2,446 1,436 70% Operating Margin 15.3% 11.8% 29% Net Profit 981 472 108%  Revenue growth higher than volume growth through selective price increase

  18. Slide 18: Financial highlights H1

    Financial highlights H1 Cash flow profile and financial strength have improved significantly H1 2011 H1 2010 Change In Rs. Million Net Working Capital 3,356 3,871 -13% Capex 533 706 -25% Net Debt 8,974 10,272 -13% Net Debt/EBITDA 2.6x 3.9x -34%  Working Capital reduction program started few months

  19. Slide 19: Unifying our operations

    Unifying our operations Merging all subsidaries into UBL Promoter Group  Simple Corporate Structure Public UB Group Heineken collapsing multiple legal entities to get unified ownership in one single entity 25.0% 37.5% 37.5% UBL  Optimised cash flows reduction in overall effective tax 100% rate ABD

  20. Slide 20: In Summary…

    In Summary…  Indian Beer market growth opportunity unparalleled in the world  UBL is excellently positioned to reap the benefits  Enhanced cash flow profile should deliver strong profit growth

  21. Slide 21: Questions Please…

    QUESTIONS PLEASE... %

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