United Breweries Limited half yearly briefing – Apr 06- Sept 06

United Breweries Limitedhalf yearly briefing – Apr 06- Sept 06

Presentation October 2006

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

Operations Review

UB : Growth – Sept 06 vs Sept 05

18.60%

24.80%

30.09.05 30.09.06

Strong, 32.50%

Mild, 16.80%

H1 2006-07

*Combined Operations

Growth surge sustained…

… specially in the Strong beer segment

22%

48%

K F Premium K F Strong

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

Market Share

47.5%

30.6%

5.4% 3.6% 2.3%

10.6%

UBLGroup

SAB MohanM

Mt.Shiv

Fosters Others

Market Share

47.5%

30.6%

3.6%10.6%

2.30%

5.40%

UBL Group SAB + Mt. Shiv Others

MM

Fosters

38.3%

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

Financial Review

30.09.06 include results of recently merged ABDL & MBDL

Results Sept 06United Breweries Limited 30.9.2006 30.9.2005In rupees crore

Net Sales/Income from operations 415.12 272.00 Other Income 5.37 9.08 Total Income 420.49 281.08 50%ExpenditureCost of production 193.71 128.79 Advertisement & Sales Promotion 69.19 51.42 Selling & Distribution 45.12 17.61 Other operating Costs 25.51 18.94 PBIDT 86.96 64.32 35%Finance charges 12.00 10.39 Depreciation 10.15 5.68 Profit Before Non recurring items &Taxation 64.82 48.25 34%Non Recurring items - (13.18) Taxation (24.09) (17.17) Net Profit 40.72 17.90 127%

COMBINED BUSINESSPBIDT 109.73 78.14 40%Finance charges 27.29 24.60Depreciation 20.11 20.46 Profit Before Non recurring items &Taxation 62.33 33.08 88%

Half year ended

Unaudited

EBITDA SEPT 05 Vs SEPT 06

Revenue effect in Rs. Crore

Vol. driven

increase, 35.93 Increase

on realisation

, 54.39

Decrease in Interest Income, (3.70)

Cost effect in Rs. Crore

Increase other Selling Costs, (29.11)

Higher price of Inputs, (6.16)

Higher Ad

spends, (16.18)

Higher operating

costs, (6.58)

Higher staff costs, (5.94)

Rs. crore Rs. croreVol. driven increase 35.93 (6.16) Higher price of InputsIncrease on realisation 54.39 (29.11) Increase other Selling CostsDecrease in Interest Income (3.70) (5.94) Higher staff costs

(6.58) Higher operating costs(16.18) Higher brand spends

86.61 (63.96)+ 22.65

Revenue Effect Cost Effect

Key RatiosUBL As at As atRupees Million 30.9.06 30.9.05

Debt 3,058 1,779

Net Worth 5,479 5,196

GEARING 0.56 0.34

PBIDT 870 643

Interest 120 104

INTEREST COVER 7.25 6.19

Capital Employed 8,538 6,976

ROCE 10% 9%for the qtr for the qtr

EPS 18.85 7.82 EPS in the current year is on a face value of Re 1.

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