Britannia Industries Ltd · NSE:BRITANNIA
Britannia Industries — Q2 2016-17 Earnings Presentation
26 slides from Britannia Industries's earnings presentation, Nov 9, 2016
Slide 1: Analyst Meet Q2'16-17 Results Conference Call
Analyst Meet Q2’16-17 Results Conference Call – Bangalore 9th November 2016
Slide 2: Disclaimer
Disclaimer This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements. The future involves risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Po
Slide 3: Biscuit market growth has shown some positive momentum
Q1 15-16 Q2 15-16 Q3 15-16 Q4 15-16 Source: Nielsen estimates Q1 16-17 Q2 16-17 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Biscuit market growth has shown some Mar-16 Apr-16 positive momentum in the last few months May-16 Jun-16 Jul-16 Aug-16 Sep-16 Market Growth%
Slide 4: We have outpaced the market & are back to double digit growth
We have outpaced the market & are back to double digit growth Consolidated FY 13-14 (11%) FY 14-15 (14%) FY 15-16 (10%) H1 –(10%) 2,430 2,186 2,203 2,167 2,162 1,955 2,015 2,032 1,998 1,740 1,772 1,777 1,773 1,540 Rs. Crs. Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 5: Backed by solid volume growths
Backed by solid volume growths Consolidated FY 13-14 (2%) FY 14-15 (8%) FY 15-16 (11%) H1 –(7%) Volume (Tonnes) Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Growth% 2% 1% 3% 3% 10% 6% 8% 8% 10% 12% 11% 10% 8% 7% 24 months 5% 4% 8% 5% 12% 8% 11% 12
Slide 6: And double digit volume growth in our base business
And double digit volume growth in our base business Base business FY 13-14 (4%) FY 14-15 (8%) FY 15-16 (11%) H1 –(10%) Volume (Tonnes) Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Growth% 6% 3% 4% 4% 11% 8% 7% 7% 9% 11% 13% 10% 10% 10% 24 months 6
Slide 7: We are deploying our energy on the right levers to grow faster than market
We are deploying our energy on the right levers to grow faster than market Expanding our distribution in Focus on rural growth agenda terms of direct reach accelerated [~80k outlets added in Q2 @ [Growth in high double 1.4 MM outlets; digit continues with Narrowed the gap with 9,000+ rural nearest c
Slide 8: Driving initiatives to strengthen our brands & boost consumption
Driving initiatives to strengthen our brands & boost consumption New launches help bolster the portfolio Celebrity endorsements & campaigns 50-50: Mathri Masti Goodday – Smiles Campaign Delightful Combination of Indian Spices with indulgence of butter Goodday Chocochip re-stage with South Star Taman
Slide 9: All these measures have helped us gain & sustain our market leadership
All these measures have helped us gain & sustain our market leadership
Slide 10: We continue to focus on efficiencies & wastage reduction
We continue to focus on efficiencies & wastage reduction in all aspects of operations….
Slide 11: We are targeting increased extraction from Trade Spends, Market Returns & Stock write off
We are targeting increased extraction from Trade Spends, Reduction in Market Returns & Stock write off 100 104 100 100 102 93 74 76 71 76 72 72 71 26 22 FY 12-13 indexed to 100
Slide 12: Material prices have firmed up significantly in the current quarter
Meanwhile, material prices have firmed up significantly in the current quarter….much higher than what we expected
Slide 13: Commodity prices continue to trend up significantly higher than expected
Commodity prices continue to trend up significantly higher than what we expected…. Rs./kg Rs./kg Flour Sugar Q2 Inflation: 15% Q2 Inflation: 46% 12-13 13-14 14-15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 12-13 13-14 14-15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 RPO Rs./kg Cashew Rs./Kg Q2 Inflation: 19% Q2 I
Slide 14: Government initiatives expected to provide respite from steep inflation
However, we expect that certain initiatives taken by the government in terms of reduction in import duties, imposition of stocking norms on traders etc. shall provide some respite from this steep inflation going forward…
Slide 15: Pricing & cost efficiency measures to address the impact of inflation
We have also initiated combination of pricing & cost efficiency measures to address the impact of inflation. However, being competitive & gaining market share are our key priorities…
Slide 16: Update on our subsidiary businesses
Update on our subsidiary businesses
Slide 17: Subsidiary businesses - Update
Subsidiary businesses - Update Dairy business: Topline growth has been strong. Bottomline has been impacted due to: Higher milk prices Normal tax payable (out of MAT) Supply chain integration plan is currently under review International business: India Exports: Topline & bottomline
Slide 18: Our bottom-line performance has been robust
Our bottom-line performance has been robust considering the hyper- inflationary environment that is currently prevailing
Slide 19: Our endeavor now would be to sustain the level of profitability
Our endeavor now would be to sustain the level of profitability we have achieved… Consolidated FY 13-14 (8.0%) FY 14-15 (9.3%) FY 15-16 (13.0%) H1-(13.0%) 12.8% 13.6% 13.3% 13.3% 13.1% 297 293 12.0% 288 310 261 259 9.8% 9.3% 10.0% 204 8.0% 7.8% 8.3% 7.8% 191 187 Rs. Crs. 7.7% 140 139 147 138 118 Q 1
Slide 20: We are confident of keeping our momentum going
We are confident of keeping our momentum going by working on multiple opportunity areas as we progress on our journey…!
Slide 21: We shall continue to work on these opportunity areas
We shall continue to work on these opportunity areas as we move ahead… Bridge Our Rural MS is portfolio gaps only ~2/3rd of our Urban MS (Eg. Goodday mid range) Focus on Value segment Weak States: We reach adjacencies: ~45% of the only 60% of We are only Cake & total market. We ~1/5th of the retail
Slide 22: We are actively working on our endeavor to…
We are actively working on our endeavor to… • Launch one new category every year • Launch differentiated products by leveraging new technologies • Enter new countries/geographies and increase our international play
Slide 23: Financials
Financials
Slide 24: Key Financial Lines – Consolidated
Key Financial Lines – Consolidated Rs. Crs. Particulars (Consolidated) Q2’16-17 Growth % Net Sales 2,430 11% Profit from Operations 310 4% Profit Before Tax 350 6% Profit After Tax 234 6% Particulars (Consolidated) 2011-12 2012-13 2013-14 2014-15 2015-16 Q1’16-17 Q2’16-17 Profit from Operations % 4.
Slide 25: Reconciliation - IND AS v/s earlier GAAP
Reconciliation - IND AS v/s earlier GAAP NSV Reconciliation FY 15-16 Q1’15-16 Q1’16-17 Q2’15-16 Q2’16-17 AS per IND AS 8,554 1,998 2,162 2,186 2,430 AS per earlier GAAP 8,607 2,003 2,176 2,191 2,432 Variance (53) (5) (14) (5) (2) Reasons for variance: Trade Loads, Discounts etc. re- classified from
Slide 26: [email protected]
Britannia Industries — Q2 2016-17 Earnings Presentation on 6ix