United Breweries Limited · NSE:UBL
United Breweries — Investor Presentation (October 2005)
30 slides from United Breweries's investor presentation, Oct 27, 2005
Slide 1: The UB Group presentation on McDowell & Company, United Breweries Ltd
The UB Group PRESENTATION ON McDOWELL & COMPANY UNITED BREWERIES LTD 27th October 2005
Slide 2: The UB Group - An introduction
The leading India’s UB Group- Angroup drinks introduction Beer : • The UB48% market Group, share is the nationally market leader in both Spirits&Sold Beerinbusiness over 52 countries in the country India’s 1st global consumer brand - • The Group has a turnover of Rs 3700 crores Kingfisher • Th
Slide 3: The Market for Beverage Alcohol
The Market for Beverage Alcohol Regulatory environment : • The Indian market is highly regulated, highly restricted and highly taxed. • Licensing requirement exists for Raw material procurement, Stocking of raw material, Production, Inter-state movement, Retailing and Distribution. • Controls also e
Slide 4: The Indian Market
The Indian Market Re-distribution structure – • Government market (65%) –State government is the sole distributor • Auction market (16%) – State government auctions geographical territories which has led to monopolies / cartels • Free market (19%) – Through trade licenses • Bargaining power in the d
Slide 5: The Indian Market
The Indian Market Spirits Market - • India is a 112 million cases market, growing at around 9-10% p.a • Armed Forces – another 12.5 million cases • Whisky dominates – 62% • Low Spirits consumption – Per capita < 2.1 liters p.a • Changing lifestyle, exposure to global trends fueling growth • MNC’s en
Slide 6: Acquisition of Shaw Wallace
Acquisition of Shaw Wallace • Shaw Wallace was the 2nd largest player in spirits in India (MS - 15%). • UB Group acquired ~ 55% stake for a consideration of Rs.13,000 mio in July 2005 • Stakes increased to 75% through open offer. • Valuation underpinned by growth prospects and synergies arising from
Slide 7: Restructuring Mechanics
Restructuring Mechanics Phase I • Investment division of McD to be demerged into NewCo – All non-spirits investments to be demerged – Demerged entity to have mirror shareholding as McD • Merge all operating spirits companies into McD –Swap ratios decided basis KPMG & Haribhakti valuations • SWC itse
Slide 8: Restructuring Process – Status Report
Restructuring Process – Status Report • Merger schemes of Phase I filed with Stock Exchanges • Time frame for completion of mergers • April – May 2006 • Appointed date April 1, 2005 • Following entities being merged • McDowell & Company Limited (Listed) • Herbertsons Limited (Listed) • Triumph Disti
Slide 9: Mergers…update
Mergers…update • Filing of schemes with Stock exchanges completed • Schemes to be filed with courts –1st week of December’05 • Court convened meetings- Mid January • Final hearing by Courts –End March ’06 • Filing of orders with RoC and listing by end April ‘06 UB Group (India)
Slide 10: Sales Performance HY-I FY'06
Sales Performance HY–I -- FY’06 Million cases % Company Line HY-I FY’04 HY-I FY’05 Grwth Main 9.39 11.16 19% McDowell line TOTAL 12.39 13.51 9% Million cases % Company Line HY-I FY’04 HY-I FY’05 Grwth Main ‘UNITED line 18.83 23.33 24% SPIRITS’ TOTAL 27.13 30.17 11% UB Group (India)
Slide 11: Resultant Structure McD Results
Resultant McD Results Structure Sep’05 UBHL & Associates Rs Crores YoY 2005 X% 2004 Net sales 17% 630.57 541.2 Cost of goods Sold y% 400.26 63% 337.32 62% Trust MCD (Spirits) Public staff cost 41.68 7% z% 41.57 8% Advt & Sp 36.72 6% 38.84 7% Other overheads 79.43 13% 83.58 15% EBI TDA 82% 72.49 11%
Slide 12: United Spirits Sep '05
United Spirits Sep ‘05 Rs Crores USL Net sales 957.22 Cost of goods Sold 477.22 51% EBI TDA 122.16 13% Interest/Finance cost 75.39 Depreciation 12.21 PBT 34.56 4% UB Group (India)
Slide 13: Brand Performance HY-I FY'06
Brand Performance HY–I -- FY’06 Brand FY’05 FY’06 % Grwth Bagpiper Whisky 3.49 5.45 56% McDowell’s No.1 Whisky 2.56 3.02 18% McDowell’s No.1 Brandy 2.32 2.80 21% McDowell’s Celebration Rum 2.03 2.18 7% McDowell’s Signature Whisky 1.48 2.04 38% Old Cask Rum 0.82 0.82 1% Gilbey’s Green Label Whisky 1.
Slide 14: Raw Material Price Trends
Raw Material Price Trends • Spirit prices have been rising since early 2004 • Failed sugarcane crop • Increased dosage of alcohol in motor spirit • Spirit prices softening – but quantum step-up from earlier levels • Furnace Oil prices spiralling 7,000 40.00 35.00 6,000 30.00 5,000 25.00 4,000 Rs. /
Slide 15: Trends - Realization & Costs
Trends - Realization & Costs • Cost push offset by • Increase in NSR • Decrease in market spends • Strategic buying of raw material including stock build-up • Increase in NSR / Decrease in Spends • UB has been in the forefront of the industry initiatives to drive prices up and spends down • Have spe
Slide 16: Trends - Realizations & Costs (contd.)
Trends - Realizations & Costs (contd.) • Brand building exercise continues • Packaging Innovations introduced; Others on the anvil • Reduces costs; beats counterfeiting • Tetra packs • Pouch Packs to replace mono-cartons • Other Tamper-proof and tamper-evident packaging • Synergies • Detailed exerci
Slide 17: Synergies – Costs & Revenues
Synergies – Costs & Revenues • Total synergies estimated in excess of Rs 100 cr on a sustainable basis (Rs 0.50/bottle) • Major synergies from areas other than consumer price increases • Majority of revenue synergies not quantified UB Group (India)
Slide 18: Outlook FY'06 United Spirits
Outlook FY’06 United Spirits • Sales Volumes > 61 million cases • Bagpiper – India’s Largest Alcobev brand > 11 million cases • McDowell’s No.1 family - ~ 17 million cases • EBITDA Rs. 275 crores •Realization of synergies would have commenced in full swing UB Group (India)
Slide 19: United Breweries Limited
The UB Group- An introduction • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores • The core Beverage Alcohol business account United Breweries Limited for 80% of the group turnover • Other interests include Fertilizer, Eng
Slide 20: Key Highlights
The UB Group- An Keyintroduction Highlights • PBDIT (UBL) for the half year Rs. 64.3 crores, and increase • The of Rs.40.5 crores versus last year UB Group, is the market leader in both Spirits & Beer business in the country • PBDIT (Combined business) Rs. 78.1crores, and • The Group increase has a
Slide 21: Summary P&L
The UB Group- An Summary P & introduction L Profitability Statement Half year ended Year ended United Breweries Limited 30.9.2005 30.9.2004 31.3.2005 • The UB Group, In rupees crore is the market Unaudited leader in both Audited Income Spirits & Beer business in the country Net Sales/ Income from op
Slide 22: Key Drivers of Performance
The UB Group- An Key Drivers of Performance introduction • •Volume growth The UB Group, is the market leader in both Spirits & Beer business in the country • •Implementation of price increase in key The Group has a turnover of Rs 3700 crores •states The core Beverage Alcohol business account • for R
Slide 23: Market Share Movements
The UB Group- An Market Share Movements introduction 2003-04 • The UB Group, is the market leader in both M M, 6 Others, 17 UBL, 46 UBL Spirits & Beer business in the country SAB MM Others • The Group has a turnover of Rs 3700 crores SAB, 31 2004-05 • The core Beverage Alcohol business account Other
Slide 24: Volume Performance
The UB Group- An Volume Performance introduction • The UB Group, Volume is the market leader in both Performance Spirits & Beer business in the country 100Group • The 91 has a turnover of Rs 3700 crores 90 • The80core Beverage Alcohol business account Volume - mio cases 70 of the group turnover for
Slide 25: Analysis by Pack Type
The UB Group- An Analysis introduction by Pack Type Pack Salience Sept 04 Draught • TheBottleUB Pint Group, 1% Cans is the market leader in both 10% 1% Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores Bottle Quartz • The core Beverage Alcohol business account 88% f
Slide 26: Average Realization and Cost
The UB Group- Average Realization An of sales and Cost introduction 140 Sales Realization Cost Index Realization drivers: • The UB Group, is the market129 • Andhra leader in –both Price revision after 7 years 120 Spirits & Beer business 115 in the country • Kerala – Price revision after 4 106 years
Slide 27: Cost of Sales Analysis
The UB Group- An Cost ofintroduction Sales Analysis Cost to Sales - Ytd Sept 05 • The UB Group, is the market leader in both Spirits & Beer business in the country Bottles • The Group has a turnover of Rs 3700 crores 41% • The Others core Beverage Alcohol business account 59% for 80% of the group tu
Slide 28: Integration of UBL and MABL
The UB Group- An Integration of UBL and introduction MABL • •Rationalisation of brand portfolio by state The UB Group, is the market leader in both Spirits & Beer business in the country • •Changes to sourcing of beer to achieve least The Group has a turnover of Rs 3700 crores •cost The supply core
Slide 29: Trading Outlook
The UB Group- Trading Outlook An introduction • Strong volume performance expected to continue • –The UBbeer Strong Group, is to segment the market continue lead leader in both • Spirits & Beer Hardening business of raw in the country material costs • –The Group has a turnover of Rs 3700 crores Barl
Slide 30: Thank You
The UB Group- An introduction • The UB Group, is the market leader in both Spirits & Beer business in the country • The Group has a turnover of Rs 3700 crores THANK • The core Beverage YOU Alcohol business account for 80% of the group turnover • Other interests include Fertilizer, Engineering , Life
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