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United Breweries Limited: 2006 Half-Yearly Performance Highlights and Growth Strategy

United Breweries Limited reported impressive results for the half-year ending September 2006, showcasing a 28% growth in volume. Kingfisher Strong emerged as the top-selling strong beer brand in India, while Kingfisher Premium maintained its leading position. The company achieved an EBITDA of Rs. 87 Crore, a significant 35% increase from the previous year, and more than 100% growth in profit after tax. With a robust capacity expansion program worth Rs. 141 Crores and plans for greenfield sites, UBL is poised for sustained growth amid increasing market competition.

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United Breweries Limited: 2006 Half-Yearly Performance Highlights and Growth Strategy

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  1. United Breweries Limitedhalf yearly briefing – Apr 06- Sept 06 Presentation October 2006

  2. Key performance highlights • 28% volume growth • Growth of Kingfisher mild 22%, strong 48% • KF Strong now No. 1 Brand in India • KF Premium remains No.1 • EBITDA Rs.87 Crore as against Rs.64 Crore, growth of 35% versus H1 last year • Profit after tax - over 100% growth • Operating margins remain at over 20%. • Capacity expansion program (Rs.141 crores , 22% increase capacity) ,& green field sites underway (Rs.92 crores), Orrisa – 15lac cases & Rajasthan – 72 lac cases p.a.) • Enhanced capacities to be completed before the coming summer season

  3. Operations Review

  4. UB : Growth – Sept 06 vs Sept 05 Growth surge sustained… … specially in the Strong beer segment *Combined Operations

  5. KINGFISHER GROWTH • K F Strong now the No. I strong beer brand AND No.I top selling brand in India • K F Premium 2nd top selling brand in India, and No.1 Mild beer brand

  6. Market Share

  7. Market Share 38.3% MM Fosters

  8. Competition • International players entry likely to stimulate market growth • APB: Possible acquisition of Manav, Lilasons and in addition to Arlem • Carlsberg : License for Greenfield in Rajasthan; acquisition of Himneel • Budweiser: Stake in Crown/AP for Greenfield • Fosters acquisition by SABMiller • Most likely to be positioned as ‘affordable premium’(5%), cross lined to Kingfisher • Investment in brands and brand equity will play a key role in driving competitive advantage

  9. Financial Review

  10. 30.09.06 include results of recently merged ABDL & MBDL

  11. EBITDA SEPT 05 Vs SEPT 06

  12. Key Ratios

  13. Outlook • Expect strong double digit growth, led by strong beer • Focus on building brand equity • MAPL debt restructuring now complete, savings will accrue to combined operations in H2 • KBDL operations to be merged with UBL by end March 2007 • Continuing price control in major markets • Real inflationary increases in key raw materials • Large Capital outlay to meet growing demand

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