Varun Beverages Ltd. · NSE:VBL
Varun Beverages — Q3 & 9M CY2017 Earnings Presentation
24 slides from Varun Beverages's earnings presentation, Nov 6, 2017
Slide 1: Varun Beverages Limited Q3 & 9M CY2017 Results Presentation
November 06, 2017 (a PepsiCo franchisee) Varun Beverages Limited Q3 & 9M CY2017 Results Presentation Fizzy Juicy Packaged Water
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 Q3 & 9M CY2017 Results Overview 3 Industry Prospects 4 Financial Highlights 5 Annexure 3
Slide 4: Company Snapshot
Company Snapshot (a PepsiCo franchisee) Key player in the beverage industry Operations spanning across 5 countries – 3 in the Indian Subcontinent (India, Sri Lanka, Nepal) contribute ~90% to revenues; 2 in Africa (Morocco and Zambia) contribute ~10% Over 25 years strategic association with PepsiCo –
Slide 5: 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 22 state-of-the-art production facilities SOLID INRASTRUCTURE 74 owned depots DISTRUBUTION & WAREHOUSING 2,0
Slide 6: 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 7: Chairman’s Message
Chairman’s Message (a PepsiCo franchisee) Commenting on the performance for Q3 CY2017, Mr. Ravi Jaipuria, Chairman – Varun Beverages Limited said, “We have delivered a strong performance in the first nine months of the year recording a profit growth of 79.2% YoY to Rs. 2,861.9 million. EBITDA margin
Slide 8: 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 9: 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 10: Key Development
Key Development (a PepsiCo franchisee) • VBL 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) on slump sale basis at a derived EV of Rs.
Slide 11: New Products Launches
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 sugar content in bev
Slide 12: Promotional Campaigns
Promotional Campaigns (a PepsiCo franchisee) • As part of its summer promotions, labels of Pepsi cans and bottles had popular and colloquial words in eight Moments different Indian languages. Words like Muah, Dhaakad (for north Indian market), Jhakaas (for Mumbai Campaign market), Adipoli (for Keral
Slide 13: Discussion on Financial & Operational Performance – Q3 & 9M CY2017
Discussion on Financial & Operational Performance – Q3 & 9M CY2017 (a PepsiCo franchisee) Revenues Sales Volumes • Revenue from operations (net of excise / GST) grew 7.4% • Total sales volume were up 5.4% YoY at 66.14 million unit cases YoY in Q3 CY2017 to Rs. 9,634 million led by volume growth as c
Slide 14: 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 4.3% PAT 79.2% 1.4% 34,269 34,760 7,698 8,032 2,862 Rs. mil
Slide 15: Profit & Loss Statement (Ind-AS format)
Profit & Loss Statement (Ind-AS format) (a PepsiCo franchisee) Particulars (Rs million) Q3 2017 Q3 2016 YoY(%) 9M 2017 9M 2016 YoY (%) Income from operations Net Sales from operations (refer slide 16) 9,634.48 8,974.53 7.4% 34,760.40 34,269.39 1.4% Other income 28.92 229.73 -87.4% 210.95 340.47 -38.
Slide 16: 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 17: Ind-AS Impact on VBL – Q3 & 9M CY2016 P&L
Ind-AS Impact on VBL – Q3 & 9M CY2016 P&L (a PepsiCo franchisee) Q3 CY2016 9M CY2016 Particulars (Rs million) IGAAP IND AS adjst. IND AS IGAAP IND AS adjst. IND AS Income from operations Gross sales/income from operations 10,243.73 - 10,243.73 40,215.79 - 40,215.79 Other operating income 84.22 - 84.
Slide 18: 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 19: 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 20: 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 1
Slide 21: Financial Highlights (2012-16)
Financial Highlights (2012-16) (a PepsiCo franchisee) Revenue PAT PAT Margins CAGR – 20.3% CAGR – 56.7% 3000 3.9% 5% Rs. million Rs. million 38,520 2500 33,491 4% 2000 2.6% 1,513 25,097 1500 3% 18,408 21,175 870 1000 1.4% 2% 500 251 -201 -395 0 1% -500 0% 2012 2013 2014 2015 2016 2012 2013 2014 2015
Slide 22: Conference Call Details
Conference Call Details (a PepsiCo franchisee) Varun Beverages Limited (VBL) Q3 CY2017 Earnings Conference Call Time • 4:00 pm IST on Monday, November 06, 2017 Conference dial-in Primary number • Primary number: +91 22 3938 1071 3940 3977 Local access number Available in - Gurgaon (NCR), Ahmedabad,
Slide 23: 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 24: Thank You!
Thank You!
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