Transcript United Breweries Limited quarterly briefing – Apr 06

United Breweries Limited
quarterly briefing – Apr 06- Jun 06
Presentation August 2006
Key performance highlights
• 23% volume growth
• Kingfisher growth mild 18% (Industry 20.4%),
strong 41% (Industry 28.8%)
• EBITDA (Adjusted for KBDL) Rs. 75.49 Crore,
growth of 54% versus Q1 last year
• Profit after tax (unadjusted) 100% growth
• Growth in operating margins
• Merger plans on track
• Capacity expansion program underway.
Greenfield developments have commenced
Industry Growth
Region
growth Comment
North
77% Primarily driven by policy change
West
17% Change in duty policy on mild beer in Maharashtra
East
0% Insufficient supply on account of growth in North
South
Central
All India
11% Growth in Kerala & TN offset by decline in
Karnataka due to duty increase
9% Growth in AP offset by decline in Orissa
26%
Profitability Statement
United Breweries Limited
In rupees crore
Quarter ended
Quarter ended
30.6.2006
30.6.2005
Unaudited
Unaudited
Income
Net Sales/Income from operations
192.06
155.10
Other Income
2.40
7.86
Profits from KBDL operations
1.28
7.56
Total Income
195.74
170.52
Expenditure
Cost of Production
89.28
73.72
Advertisement & Sales Promotion
44.90
32.92
Other operating Cost
10.23
15.00
PBIDT
51.32
48.88
Profits earned by KBDL after payout to UBL *
24.17
Comparable PBIDT
75.49
48.88
Margin on Net sales
39%
32%
Finance charges
6.05
4.59
Depreciation
3.31
2.83
Profit Before Non recurring items &Taxation
41.97
41.46
Non Recurring items
(13.18)
Provision for Taxation
(14.43)
(14.45)
Profit after tax
27.53
13.83
COMBINED BEER BUSINESS
PBIDT
89.04
58.04
Finance Charges
12.06
12.30
Depreciation
9.24
11.23
Profit Before Taxation
67.74
34.51
* KBDL results to be consolidated into UBL results as a subsidiary in the year end
5%
54%
1%
99%
53%
96%
as reported
EBITDA JUNE 05 Vs JUNE 06
Revenue effect in Rs. Crore
Reduction
in other
OH, 4.76
Gain due of
efficiencies
, 2.21
Increase
on
realisation,
8.64
Vol. driven
increase,
8.35
Cost effect in Rs. Crore
Higher Ad
spends,
(3.75)
Higher staff
costs,
(0.87)
Drcrease in
Interest
Income,
(5.46)
Low er
Contract
profits,
(11.44)
Revevue Effect
Cost Effect
Rs. crore Rs. crore
Vol. driven increase
8.35
(5.46) Decrease in Interest Income
Increase on realisation
8.64
(11.44) Lower Contract profits *
Gain due to efficiencies
2.21
(0.87) Higher staff costs
Reduction in other OH
4.76
(3.75) Higher brand spends
23.97
(21.52)
48.88
23.97
(21.52) 51.32
* KBDL profits will be consolidated as a subsidiary in the year
Market Share
80%
70%
60%
50%
percentage
40%
points
30%
20%
10%
0%
1
2
3
4
5
6
period / segment
Bar chart colours
Market Share in %
Overall - UBL
Mild - UBL
Strong - UBL
Overall - Combined
Mild - Combined
Strong - Combined
1
2
3
4
5
6
Qtr Jun 06
35%
60%
24%
44%
65%
35%
2005-06 Qtr Jun 05
40%
37%
67%
65%
27%
24%
50%
48%
71%
70%
39%
37%
Volume in lac cases
Growth %
UBL
Qtr Jun 06 Qtr Jun 05
15.67
12.69
23%
Combined
Industry
Qtr Jun 06 Qtr Jun 05 Qtr Jun 06 Qtr Jun 05
19.40
16.40
43.50
34.40
18%
26%
• Growth both in UBL & the combined beer business
falling short of industry growth – a known phenomenon
as indicated in the previous slide where the market share
in June 05 (record breaking quarter) is lower than the
year end market share.
• However the drop has been ever sharper in June 2006
on account of the Northern markets of Punjab, Haryana
& Chandigarh growing at 300% plus.
• The loss of market share has been predominantly to
smaller players with marginal / seasonal brands.
• UBL has already triggered expansion & new capacity
creation in the North, plans revised in the light of this
years excessive demand.
Summary Balance Sheet
UBL
Rupees Million
Sources
Share Holders Funds
Loan Funds
Total Sources
Application
Fixed Assets
Investments
Net Current Assets
Total Application
As at
As at
As at COMBINED BUSINESS
30.6.06
30.6.05
31.3.06
30.6.06
31.3.06
5,656
2,438
8,094
5,155
1,492
6,646
5,380
2,409
7,790
2,567
5,173
7,740
2,226
5,544
7,770
1,271
2,695
4,127
8,094
1,116
1,465
4,065
6,646
1,140
2,695
3,954
7,790
2,856
1,215
3,669
7,740
2,754
1,248
3,767
7,770
Key Ratios
UBL
As at
As at
30.6.06
#
2,776
30.6.06
#
1,830
31.3.06
#
2,747
30.6.06
31.3.06
5,173
5,544
Net Worth
5,656
5,155
5,380
2,567
2,226
GEARING
0.49
@
755
0.35
@
489
0.51
2.02
1,148
890
1,231
60
46
219
121
492
INTEREST COVER
12.49
10.64
5.25
7.39
2.50
Capital Employed *
8,094
6,646
7,790
7,740
7,770
Rupees Million
Debt incl. guarantee
As at COMBINED BUSINESS
( # subsidairy guarantee 338)
PBIDT (@ kbdl 241.7)
Interest
ROCE
EPS
9%
7%
15%
12%
16%
for the qtr for the qtr for the year for the qtr for the year
1.23 *
1.62
* Includes KBDL investment of Rs. 1230 million
The ROCE on the combined business is higher than that of UBL standalone resultant lower Capital Employed on account of losses in subsidiaries
Average Realization and Cost of sales
Sales Realization Cost Index
SR
120
100
100
105
61
57
111
80
60
55
40
20
0
31-03-05
31-03-06
June qtr 31-032007
COS
Share Movments
Index
Rs. Per shares
31.03.05
30.04.05
6493
6154
323
409
31.05.05
6715
440 S & N Infusion
30.06.05
31.07.05
31.08.05
7194
7635
7805
472
510
647
30.09.05
8634
651 Performance
31.10.05
30.11.05
7892
8789
675
680
31.12.05
9398
756 Merger
31.01.06
28.02.06
9920
10370
880
1,104
31.03.06
11280
1,495 Combined Performance
30.04.06
31.05.06
12042
10399
1,745
1,484
30.06.06
10609
124
The index values are from a
base of 1000 as on 31.3.05
&
The price of UBL shares from a
Base of Rs. 1000 as on 31.3.05
Split restated at Rs. 10
Sub-division
UBL Share movement
Market Index
31
.0
3
30 .0 5
.0
4
31 .0 5
.0
5
30 .0 5
.0
6
31 .0 5
.0
7
31 .0 5
.0
8
30 .0 5
.0
9
31 .0 5
.1
0
30 .0 5
.1
1
31 .0 5
.1
2
31 .0 5
.0
1
28 .0 6
.0
2
31 .0 6
.0
3
30 .0 6
.0
4
31 .0 6
.0
5
30 .0 6
.0
6.
06
UBL stock prices
Date
Outlook
• Merger of ABDL & MBDL into UBL –
procedures complete court order awaited
• Work started on green field projects &
expansion of existing capacities
• Continuing management of costs /
overheads & Cash