Varun Beverages Ltd. · NSE:VBL
Varun Beverages — Q1 2017 Earnings Presentation
20 slides from Varun Beverages's earnings presentation, May 12, 2017
Slide 1: Varun Beverages Limited Q1 CY2017 Results Presentation
May 12, 2017 (a PepsiCo franchisee) Varun Beverages Limited Q1 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 Q1 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 21 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 Q1 CY2017, Mr. Ravi Jaipuria, Chairman – Varun Beverages Limited said, “We have made a healthy start to the year with steady operational performance. Going into the second quarter, we are happy to share that the summer has k
Slide 8: Key Developments
Key Developments (a PepsiCo franchisee) • Increased stake in its Zambia subsidiary, Varun Beverages (Zambia) Limited, to 90% from 60% Stake Increase in • Acquisition comes at a very reasonable valuation with an attractive payback given growth prospects and promising earnings potential Zambia Subsidi
Slide 9: 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 10: Discussion on Financial & Operational Performance – Q1 CY2017
Discussion on Financial & Operational Performance – Q1 CY2017 (a PepsiCo franchisee) Revenues Sales Volumes • Revenue from operations (including excise) grew 1.8% YoY in Q1 • Total sales volume were up 2.3% YoY at 67.2 million unit CY2017 to Rs. 10,509 million cases as compared to 65.7 million unit
Slide 11: Performance Highlights
Performance Highlights (a PepsiCo franchisee) VBL has adopted Ind-AS framework starting Q1 CY2017. Prior period numbers for Q1 2016 have been restated in compliance with Ind-AS for a meaningful comparison. The annual numbers for 2016 and 2015 are as per I-GAAP. Revenue EBITDA PAT 45,223 7,952 1,513
Slide 12: Profit & Loss Statement
Profit & Loss Statement IND AS IGAAP (a PepsiCo franchisee) Particulars (Rs million) Q1 2017 Q1 2016 YoY(%) 2016 2015 YoY (%) Income from operations Gross sales/income from operations 10,462.43 10,270.60 1.87% 44,954.06 38,854.83 15.70% Other operating income 46.44 56.29 -17.50% 268.80 204.11 31.69%
Slide 13: Ind-AS Impact on VBL - Q1CY17 & Q1CY16 P&L
Ind-AS Impact on VBL - Q1CY17 & Q1CY16 P&L (a PepsiCo franchisee) Q1 CY2017 Q1 CY2016 Particulars (Rs million) IGAAP IND AS adjst. IND AS IGAAP IND AS adjst. IND AS Income from operations Gross sales/income from operations 10,462.43 10,462.43 10,270.60 10,270.60 Other operating income 46.44 46.44 56
Slide 14: 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 15: 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 16: 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 17: 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 18: Conference Call Details
Conference Call Details (a PepsiCo franchisee) Varun Beverages Limited (VBL) Q1 CY2017 Earnings Conference Call Time • 4:00 pm IST on Friday, May 12, 2017 Conference dial-in Primary number • Primary number: +91 22 3938 1071 3940 3977 Local access number Available in - Gurgaon (NCR), Ahmedabad, Banga
Slide 19: 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 20: Thank You!
Thank You!