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United Breweries Limited ICICI Investors Conference Singapore. March 2007. India and the Beer Industry. Indian Economy. The current year growth rate is 9% The growth is largely propelled by local consumption hence lesser prone to global changes.

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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
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 through low alcohol beverages like beer – excellent opportunity for growth in beer consumption over the next decade and half.

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 for existing players, major barrier to entry
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 changes
  • There have been recent recommendations by some governing bodies to de link beer from spirit and have a common national duty structure much lower than the current duty levels
beer industry in india contd1
AFFORDABILITY

Duty not set according to alcohol content

Highest duty in the world

Expensive alcoholic beverage

AVAILABILITY

55,000 licensed outlets across the country

1 per 20,000 people

In UK 1 per 350 people

Beer Industry in India contd

Beer is not the alcoholic beverage

of the common man

alcohol consumption
Alcohol Consumption

<0.5%

Wine

5%

Spirits/

Liquor

8%

78%

21.5%

Beer

87%

Emerging

Markets

India

consumption per capita
Consumption Per Capita

83 litres

23 litres

24 litres

12 litres

0.7 litres

India

China

World Average

USA

Indonesia

industry growth
Industry Growth

30%

25%

20%

15%

10%

5%

5 Year

CAGR

2005

2007

2006

beer segmentation
Beer Segmentation

+23.1%

+35.4%

Dec 05

Dec 06

Dec 05

Dec 06

MILD

STRONG

market consolidation
Market Consolidation

UBL

Circa 83%

of market

SAB Miller

Mohan Meakins

MSIL

Others

Recent new Entrants:

APB

A – B

Carslberg

key brands
Key Brands

22m

20m

3m

1.8m

1.8m

1.5m

Kingfisher

Sandpiper

UB Export

Kingfisher

Zingaro

Bullet

Strong

Mild

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

market share
Market Share

Mild Beer

66%

Strong Beer

38%

slide18
Market position by state:

UBL is No.1 in 8 out of the top 10 state markets

UBL Position

% India Val.

No.1

No.1

No.2

No.1

No.1

No.1

No.2

No.1

No.1

No.1

Maharashtra

Tamil Nadu

Andra Pradesh

Karnataka

Mumbai

Rajasthan

Uttar Pradesh

Delhi

Madhya Pradesh

Kerala

16

13

13

10

8

7

6

5

3

2

shareholder return

Shareholder Return

Share price Rs.323 to Rs.1495

462%

05/06

Share price Rs.149.5 to Rs.268.5

76%

06/07*

* TSR to date, March 07

legal structure
S&N

UBHL

Public

37.5%

37.5%

25.0%

UBL

50%

50%

Millennium

Alcobev Ltd

Legal Structure

UBL & MAL Separate Legal entities

UBL subsidiaries – KBDL and its 2 subsidiaries

which would merge into UBL effective 1st Apr’06

UBL & MAL Separate Legal entities

UBL subsidiaries – KBDL and its 2 subsidiaries

which would merge into UBL effective 1st Apr’06

MAL has 3 Subsidiaries namely – MBIL, Empee and UMBL

board of directors
Board Of Directors
  • 2 x UB Group (VJM Chairman)
  • 2 x S & N
  • 2 x Executive Directors (CEO & CFO)
  • 3 x Independent Directors
slide22
Latest financials

December 2006

slide23
# Dec 06 results include ABDL + MBDL

Comparative results for Dec 05 Income Rs. 453.8Cr EBITDA Rs. 88.57 Cr.

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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