Slide 1: United Breweries Limited
United Breweries Limited Investors Meeting August 2007 1
Slide 2: The Indian Beer Industry
The Indian Beer Industry 2
Slide 3: Alcohol Consumption
Alcohol Consumption <0.5% Wine 5% Spirits/ 78% 8% Liquor Beer is under represented in India 21.5% Beer 87% India Emerging Markets 3
Slide 4: Consumption Per Capita
Consumption Per Capita 83 litres 1 litre per capita is a major milestone achieved in India in the last 12 months, BUT ……… 23 litres 24 litres 12 litres 1 litre India Indonesia China World Average USA 4
Slide 5: Industry Growth
Industry Growth 30% 25% Future: 20% strong double 15% digit growth 10% 5% 5 Year CAGR 2006 2007 2008 + 2005 5
Slide 6: Opportunity for Growth
Opportunity for Growth • Current population 1.1 billion • Over 50% of the population is below the age of 25 years, demographics remain until 2020 •Increasing personal GDP •The emerging young population hold more liberal views on alcohol, than earlier generations Higher penetration Sustainable profit
Slide 7: UBL's Capability
UBL’s Capability • Iconic brand – KINGFISHER • Balanced portfolio of supporting brands • Manufacturing network across all major states • Leadership in cold chain management, and point of sale visibility • Established trade relationships 7
Slide 8: UBL's Competitive Advantage- Through our Promoters
UBL’s Competitive Advantage- Through our Promoters Equal to competition Competitive Advantage UBL UB Group S&N • Brewing processes • Strength in distribution • Procurement synergies • Enhanced recognition through • International best practice KFA • Experience in capacity • Relationship with USL inve
Slide 9: Competitor Positions
Competitor Positions • SABM – Established in India as the No 2 player – Investment in capacity – Brand launches eg Peroni, Castle • International brands have not worked – Castle launched over 2 years ago > No market share – Peroni launched over 6 months ago > No market share – Fosters launched over
Slide 10: Competitor Positions
Competitor Positions • Carlsberg – Acquired Himneel brewery early 2007, new greenfield breweries in Rajasthan & Maharashtra. Plans to launch a Polish beer. • A–B – JV brewery with Crown in AP, plans to build more greenfield units. Recent launch of Budweiser & Armstrong beer brands • APB – 2007 acqui
Slide 11: Impact of Competitors
Impact of Competitors • Invest in the market • Invest in capacity • Provide consumers with more choice • Drive improvement through the upstream supply chain BENEFIT ALL PLAYERS IN THE INDUSTRY 11
Slide 12: Environment for New Competitors
Environment for New Competitors • Excessive State regulation and intervention – Route to market – Economics, need to have a brewery in each state – Pricing – Licensing • Driver of growth is Strong beer, – all new International entrants brands are leaders in Mild beer not Strong • Ban on advertising
Slide 13: UBL Reaction to Competition
UBL Reaction to Competition Maintain profitable Industry leadership • Aggressively invest in new capacity, and upgrade process technology – Lower cost of investment: • Europe $100 per HL • Russia $55 per HL • India $35 per HL • Develop and launch exciting new products – Kingfisher Ultra, Kingfisher
Slide 14: FULL YEAR FY'07
FULL YEAR FY’07 14
Slide 15: Performance Highlights – FY'07
Performance Highlights – FY’07 • KF Strong overtakes KF premium to become India’s biggest selling beer, sales of over 26m cases • Invested around Rs200Cr in new capacity, to increase own brewery capacity by 20%, and 2 new greenfield breweries with over 8.5m cases of capacity pa • Completed acquisiti
Slide 16: Market Share
Market Share 48% 33% 9% 6% 4% UBL SABM MM Mt Shiv Others 16
Slide 17: Profit Performance – FY'07
Profit Performance – FY’07 Rs172 Cr Rs162 Cr +24% +18% Rs65 Cr Rs55 Cr +350% +550% EBITDA Net Profit EBITDA Net Profit UBL Consolidated 17
Slide 18: Q1'08
Q1’08 18
Slide 19: Performance Highlights Q1'08
Performance Highlights Q1’08 • KF Strong and KF premium outgrow the industry • New greenfield breweries commissioned and in operation • Capacity investment for 2008-09 on track • Market capitalisation exceeds $1.7bn 19
Slide 20: Kingfisher Performance – Q1'08
Kingfisher Performance – Q1’ 08 9.3m 7.7m +28.5% +7.6% 7.15m 7.2m June 06 June 07 June 06 June 07 Industry Growth +7.2% Industry Growth +19.5% Premium Strong 20
Slide 21: Profit Performance Q1'08
Profit Performance Q1’ 08 • Price increases achieved on around 55% of volume • Results impacted by: – Capped capacity of Hyderabad brewery impacts UBL standalone results by Rs6Cr, profit of Rs6Cr recorded in UMBL – Continuing impacts of prices increases on barley and hops affects margins • UBL stand
Slide 22: Profit Performance – Q1'08
Profit Performance – Q1’08 Rs105 Cr +18% Rs79 Cr Rs71 Cr +54% +5% Rs65 Cr +57% EBITDA PBT EBITDA PBT UBL Combined 22
Slide 23: THANK YOU
THANK YOU 23