United Breweries Limited · NSE:UBL
United Breweries — ICICI Investors Conference, Singapore, March 2007
29 slides from United Breweries's conference presentation, March 2007
Slide 1: United Breweries Limited – ICICI Investors Conference
United Breweries Limited ICICI Investors Conference Singapore March 2007
Slide 2: India and the Beer Industry
India and the Beer Industry
Slide 3: Indian Economy
Indian Economy • The current year growth rate is 9% • The growth is largely propelled by local consumption hence lesser prone to global changes. • Inflation currently at 6% giving impetus to growth • Substantial increase in the disposable income in the age group of 20 to 30 years
Slide 4: Indian Demographics – favorable to growth in beer consumption
Indian Demographics – favorable to growth in beer consumption • Current population 1.1 billion • Over 50% of the population is below the age of 25 years • The demographics to remain almost unchanged till the year 2020 •Core target market is 18-30 year olds • As initiation to alcohol consumption is t
Slide 5: Beer Industry in India
Beer Industry in India • Policies & Regulations are driven by State Government • Highly regulated with restriction in movement between states • 65% of the Indian market is state controlled – Distribution by Govt. Corporations, implications upon pricing • Advertising strictly prohibited, advantage fo
Slide 6: Beer Industry in India contd.
Beer Industry in India contd. • State governments like Punjab, Rajasthan, Haryana & Chandigarh have in recent past made substantial changes in the previous distribution methods making beer more affordable as well as profitable. • Government corporations are now approachable and not averse to make ch
Slide 7: Beer Industry in India contd
Beer Industry in India contd AFFORDABILITY AVAILABILITY • Duty not set • 55,000 licensed according to alcohol outlets across the content country • Highest duty in the • 1 per 20,000 people world • In UK 1 per 350 • Expensive alcoholic people beverage Beer is not the alcoholic beverage of the common
Slide 8: Alcohol Consumption
Alcohol Consumption <0.5% Wine 5% Spirits/ 78% 8% Liquor 21.5% Beer 87% India Emerging Markets
Slide 9: Consumption Per Capita
Consumption Per Capita 83 litres 23 litres 24 litres 12 litres 0.7 litres India Indonesia China World Average USA
Slide 10: Industry Growth
Industry Growth 30% 25% 20% 15% 10% 5% 5 Year 2007 2006 CAGR 2005
Slide 11: Beer Segmentation
Beer Segmentation +23.1% +35.4% Dec 05 Dec 06 Dec 05 Dec 06 MILD STRONG
Slide 12: Market Consolidation
Market Consolidation UBL Circa 83% of market SAB Miller Mohan Meakins MSIL Others Recent new Entrants: APB A–B Carslberg
Slide 13: UBL performance in the Indian Beer Story
UBL performance in the Indian Beer Story
Slide 14: Volume Growth – Combined Business
Volume Growth – Combined Business 70 60 50 40 30 Volumes in 20 Mio cases 10 0 2003- 2004- 2005- Est 04 05 06 2006- 07
Slide 15: Quarterly - EBITDA trend
Quarterly - EBITDA trend 60 50 40 2004 30 2005 2006 20 10 0 June Sept Dec March
Slide 16: Key Brands
Key Brands 22m 20m 3m 1.5m 1.8m 1.8m Kingfisher Sandpiper UB Export Kingfisher Zingaro Bullet Mild Strong Kingfisher Mild = No 1 top selling mild beer Kingfisher Strong = No 1 top selling strong beer Kingfisher Strong = No 1 top selling beer in India
Slide 17: Market Share
Market Share Mild Beer 66% Strong Beer 38%
Slide 18: Market position by state
Market position by state: UBL is No.1 in 8 out of the top 10 state markets % India UBL Val. Position Maharashtra 16 No.1 Tamil Nadu 13 No.1 Andra Pradesh 13 No.2 Karnataka 10 No.1 Mumbai 8 No.1 Rajasthan 7 No.1 Uttar Pradesh 6 No.2 Delhi 5 No.1 Madhya Pradesh 3 No.1 Kerala 2 No.1
Slide 19: Shareholder Return
Shareholder Return 05/06 Share price Rs.323 to Rs.1495 462% 06/07* Share price Rs.149.5 to Rs.268.5 76% * TSR to date, March 07
Slide 20: Legal Structure
Legal Structure S&N UBHL Public 37.5% 37.5% 25.0% UBL UBL & MAL Separate Legal entities UBL subsidiaries – KBDL and its 2 subsidiaries 50% 50% which would merge into UBL effective 1st Apr’06 Millennium Alcobev Ltd MAL has 3 Subsidiaries namely – MBIL, Empee and UMBL
Slide 21: Board Of Directors
Board Of Directors • 2 x UB Group (VJM Chairman) • 2xS&N • 2 x Executive Directors (CEO & CFO) • 3 x Independent Directors
Slide 22: Latest financials – December 2006
Latest financials December 2006
Slide 23: Results for nine months ended Dec 2006
Results Dec 06 Nine months ended United Breweries Limited 31.12.2006 31.12.2005 In rupees crore Unaudited # Net Sales/Income from operations 601.10 392.88 Other Income 9.59 10.92 Total Income 610.70 403.80 51% Expenditure Cost of production 283.05 182.76 Advertisement & Sales Promotion 115.48 82.22
Slide 24: EBITDA Dec 05 Vs Dec 06
EBITDA Dec 05 Vs Dec 06 Revenue effect in Rs. Crore Cost effect in Rs. Crore Higher Decrease price of in Interest Inputs, Income, Vol. (14.92) Increase Higher (1.33) driven other Ad increase, Selling spends, Increase 52.17 Costs, (40.43) on (21.82) realisation Higher Higher , 80.88 operating staff c
Slide 25: Summary Balance Sheet
Summary Balance Sheet UBL As at As at As at COMBINED BUSINESS Rupees Million 31.12.06 31.12.05 31.3.06 31.12.06 31.3.06 Sources Share Holders Funds 5,590 3,892 5,072 3,516 3,159 Loan Funds 3,988 2,035 2,534 6,613 5,586 Total Sources 9,578 5,927 7,606 10,129 8,746 Application Fixed Assets 2,823 1,382
Slide 26: Current Debt Profile
Current Debt Profile UNITED BREWERIES LIMITED Unaudited Audited Unaudited Debt Profile 31.12.06 31.3.06 31.12.05 Amounts in rupees million Long Term Debt 3,113 1,762 1,808 Working Capital funding 875 772 227 Total 3,988 2,534 2,035 Debt in Subsidiary 188 288 Debt in Joint Venture - UBL guarantee 1,8
Slide 27: Key Ratios
Key Ratios UBL As at As at As at COMBINED BUSINESS Rupees Million 31.12.06 31.12.05 31.3.06 31.12.06 31.3.06 Debt 3,988 2,035 2,534 6,613 5,586 Net Worth 5,590 3,892 5,072 3,516 3,159 GEARING 0.71 0.52 0.50 1.88 PBIDT 1,185 856 1,371 1,410 1,487 Interest 175 149 239 409 529 INTEREST COVER 6.78 5.75
Slide 28: Average Realization and Cost of sales
Average Realization and Cost of sales Sales Realization Cost Index NSR 120 COS 105 106 105 105 100 100 80 60 61 57 59 59 59 40 20 0 31/03/2005 31/03/2006 June qtr 31- Sept qtr Dec qtr 31- 03-2007 31-03-2007 03-2007
Slide 29: Outlook
Outlook • GDP growing at healthier rate • Continued growth in disposable income • Encouraging demographics for over a decade • Anticipated liberalization of policies & duty structures • Industry consolidated with high entry barrier • UBL is in advantageous position to capitalize on opportunities
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