Varun Beverages Ltd. · NSE:VBL
Varun Beverages — Q2 & H1 CY2017 Earnings Presentation
23 slides from Varun Beverages's earnings presentation, Aug 9, 2017
Slide 1: Varun Beverages Limited Q2 & H1 CY2017 Results Presentation
August 09, 2017 (a PepsiCo franchisee) Varun Beverages Limited Q2 & H1 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 Q2 & H1 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 20 state-of-the-art production facilities SOLID INRASTRUCTURE 71 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 Q2 & H1 CY2017, Mr. Ravi Jaipuria, Chairman – Varun Beverages Limited said, “We are glad to report a 65% YoY improvement in our net profit in H1 which covers the peak season for our products and accounts for majority of our
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) • The Board of Directors of VBL has approved its intent to enter into a binding agreement to acquire PepsiCo India’s previously franchised territories of the State of Odisha and parts of Madhya Pradesh along with three manufacturing units at Cuttack, Bargarh an
Slide 11: New Products / Promotional Campaigns
New Products / Promotional Campaigns (a PepsiCo franchisee) • Launched Pepsi Black, a zero calorie cola flavor CSD product currently available in 250ml cans priced similar to the other flavors New Products • Launch is part of PepsiCo’s plan to intensify focus on health and nutrition, reduce sugar co
Slide 12: Discussion on Financial & Operational Performance – Q2 & H1 CY2017
Discussion on Financial & Operational Performance – Q2 & H1 CY2017 (a PepsiCo franchisee) Revenues / Volumes Gross Margins / Operating Margins • Revenue from operations (net of excise) remained flat in H1 • Gross margins expanded 27 bps YoY to 52.91% in H1 CY2017 CY2017 at Rs. 25,126 million • EBITD
Slide 13: 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 Revenue EBITDA PAT 6,177 2,452 2,481 25,295 25,126 5,851 Rs. million 2,046 Rs.
Slide 14: Profit & Loss Statement (Ind-AS format)
Profit & Loss Statement (Ind-AS format) (a PepsiCo franchisee) Particulars (Rs million) Q2 2017 Q2 2016 YoY(%) H1 2017 H1 2016 YoY (%) Income from operations Gross sales/income from operations 19,269.17 19,701.46 -2.2% 29,731.60 29,972.06 -0.8% Other operating income 70.90 79.88 -11.2% 117.34 136.17
Slide 15: Balance Sheet Perspective (Ind-AS format)
Balance Sheet Perspective (Ind-AS format) (a PepsiCo franchisee) Particulars (Rs million) 30-Jun-17 31-Dec-16 30-Jun-16 Particulars (Rs million) 30-Jun-17 31-Dec-16 30-Jun-16 Equity and liabilities Assets Equity Non-current assets (a) Equity share capital 1,825.10 1,823.13 1,356.70 (a) Property, pla
Slide 16: Ind-AS Impact on VBL – H1 CY2017 & H1 CY2016 P&L
Ind-AS Impact on VBL – H1 CY2017 & H1 CY2016 P&L (a PepsiCo franchisee) H1 CY2017 H1 CY2016 Particulars (Rs million) IGAAP IND AS adjst. IND AS IGAAP IND AS adjst. IND AS Income from operations Gross sales/income from operations 29,731.60 29,731.60 29,972.06 29,972.06 Other operating income 117.34 1
Slide 17: 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 18: 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 19: 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 20: 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 21: Conference Call Details
Conference Call Details (a PepsiCo franchisee) Varun Beverages Limited (VBL) Q2 & H1 CY2017 Earnings Conference Call Time • 12:00 pm IST on Thursday, Aug 10, 2017 Conference dial-in Primary number • Primary number: +91 22 3938 1071 3940 3977 Local access number Available in - Gurgaon (NCR), Ahmedaba
Slide 22: 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 23: Thank You!
Thank You!
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