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Varun Beverages Ltd - 540180 - Intimation Of Date Of 25Th Annual General Meeting ('AGM') Of The Company Through Video Conferencing/Other Audio Visual Means

 This is in continuation to our earlier letter dated March 31, 2020, the Board of Directors of the Company vide Circular Resolution dated June 1, 2020 considered and approved the following: 1. To convene 25th AGM of the Company on Friday, June 26, 2020 through Video Conferencing / Other Audio Video Means, without the physical presence of the Members at a common venue. 2. The Register of Members and Share Transfer Books shall be closed from Friday, June 19, 2020 to Friday, June 26, 2020 (both days inclusive) for the purpose of 25th AGM of the Company and Friday, June 19, 2020 shall be the cut-off date to determine the eligibility of Members to cast their vote through remote e-voting and e-voting during the AGM. 3. The remote e-voting shall commence from Tuesday, June 23, 2020 (9:00 a.m. IST) and end on Thursday, June 25, 2020 (5:00 p.m. IST). In compliance with the MCA Circulars, the facility for e-voting shall also be made available by the Company during the AGM.
01-06-2020

Varun Beverages will take a hit in June quarter, but recovery likely faster

 by Suhani Adilabadkar Varun Beverages (VBL) reported a more than 50% jump in net profit in the March quarter, but the scrip fell as the street wasn’t impressed with the bottom-line, which was supported by a tax write back, while seeing weak volume growth. Though the Q1CY20 setback seems to have been repaired, VBL stock has still lost more than 20% in share price since early March. A key player in Indian beverage industry and one of the largest franchisees of PepsiCo in the world (outside USA), Varun Beverages Ltd manufactures and distributes wide range of carbonated and non-carbonated drinks sold under Pepsi trademark, namely Pepsi, Seven-Up, Mirinda, Mountain Dew, Sting, Gatorade, Nimbooz masala soda and Slice in the carbonated soft drinks category along with wide range of Tropicana juices, dairy beverages and the Aquafina brand of packaged drinking water. Associated with PepsiCo since the 1990s, VBL operates across 27 States and 7 Union Territories in India as well as in Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe. Quick Takes VBL reported operating revenues of Rs. 1,676 crore rising 23% YoY with volume growth of 26% YoY at 114 million units in March quarter CY20. Operating profit growth moved 24% north from Rs. 218 crore in Q1CY19 to Rs. 271 crore in March quarter CY20. Product mix constituted 67% of colas, 7% juices and packaged drinking water at 26% of total sales volumes for March quarter CY20. The company has introduced value-added dairy beverages under the ‘Cream Bell’ brand in Q3CY19. March Quarter CY20 saw both exceptional items and tax writeback VBL reported operating revenues of Rs. 1,676 crore in Q1CY20 against Rs. 1,359 crore in the same period previous year, rising 23% YoY aided by south and west territories consolidation. Volume growth was 26% YoY at 114 million units in March quarter CY20 against 90.3 million units corresponding quarter, previous year. Organic volumes for the March quarter declined by 13.7% in India and 9.3% on a consolidated basis due to Covid-19 lockdown restrictions. Operating profit growth grew 24% from Rs. 218 crore in Q1CY19 to Rs. 271 crore in March quarter CY20. Operating margin came out at 16.2% expanding 10 basis points YoY in Q1CY20. PBT was impacted by exceptional items of Rs. 66 crore during the quarter representing provision for impairment in the value of plant and equipment, glass bottles and plastic shells declining to Rs. 8 crore in March quarter CY20 against Rs. 62.5 crore in the same period last year. Supported by a tax write back of Rs. 52 crore, PAT stood at Rs. 60 crore in Q1CY20 compared to Rs. 40 crore in the corresponding March quarter last year. PepsiCo has steadily opened up more territory to VBL VBL has a unique and agile business model, procuring raw material (concentrate) from Pepsi, manufacturing, bottling, packaging and managing the complete supply chain process while brand development and consumer marketing is done by PepsiCo. PepsiCo takes a specific percentage of net realization which has been standard for the last 25-30 years. Thus, with increasing prices of products, value accruing to PepsiCo has increased, though the percentage has remained constant. Over the past 28 years, this strategic association has resulted in VBL accounting for more than 80% of PepsiCo’s beverage sales volume in India with VBL’s sales volumes growing at a CAGR of 19.7% over the past four years (2015-19). In addition to this, revenue, PAT and EBITDA have grown at a CAGR of 21%, 53% and 23% over the past four years. Exhibiting faith in VBL management, PepsiCo has been divesting its sub territories in past few years, Delhi in 2013, Madhya Pradesh and Orissa in 2017, Jharkhand, Chhattisgarh and Bihar in 2018 covering north and eastern regions. Last year, the company covered south and western regions, Gujarat, Maharashtra, Karnataka, Telangana, Andhra Pradesh, Kerala, Tamil Nadu and five union territories and also prolonging its existing bottling agreement for a period of 20 years. Indian Subcontinent (India, Sri Lanka, Nepal) contributes about 85% to VBL’s total revenue mix and remaining 15% is from Morocco, Zambia, Zimbabwe with international business which grew 34% YoY in CY19. For the company as a whole as well, CY 2019 was a strong year with revenue growth of 40% and PAT rising by 58% YoY. According to VBL management, growth has been driven by under-penetrated sub-territories acquired in CY18 and 19 and expansion in rural markets with the improving power situation. Rural regions contribute roughly 30% of volumes, semi urban 20% and remaining 50% from urban areas. Product mix for VBL constituted 67% of colas, 7% juices and packaged drinking water at 26% of total sales volumes for the March quarter CY20. On the basis of realisation, juices score the highest realization followed by carbonated drinks and water. Gauging changing customer preference, the company is moving towards a healthier product mix and launched ambient temperature and value-added dairy beverages, under the ‘Cream Bell’ brand across three variants of Belgium Chocolate, Cold Coffee and Mango Shake in Q3CY19. Juice segment will also have a higher proportion with initiation of Pathankot facility in December quarter CY19. Mr. Ravi Jaipuria, Chairman, Varun Beverages said, “The production has just recently started in the last quarter, last year and we expect full utilization of the plant this year”. The management is expecting asset turn between 1.9 to 2, which will further go on full capacity utilization expected in CY20. Pathankot facility is being equally used for juices and CSD along with recently launched dairy products. Covid-19 cooled scorching summers for VBL January and February recorded 14% and 42% growth which later dwindled to negative 31% in the month of March. However, the June quarter will exhibit higher effects of Covid-19 as the company’s manufacturing facilities were completely shut for 15-20 days in the month of April. Though most of its facilities are back in action since May, the utilisation levels are low under essential commodities category. The June quarter typically accounts for about 40% of total annual sales for VBL. Speaking with respect to Covid-19 impact, Mr Jaipuria clarified, “We are in reasonably good shape and as markets are opening up, I don’t think people are shying away from having cold drinks. And as demand is improving on a day to day basis, volumes are going up and if we continue like this with Government opening territories and with additional margins as raw material prices are cheaper, we will not be in bad shape”. He further reiterated that the company is able to reach most of its distributors except in completely sealed red zones. VBL’s distribution network mainly comprises kirana stores making up 70-75% of its volumes followed by 10% institutional sales (hotels, cafes, restaurants) and the remaining balance through modern retail. In the near term, the current situation looks challenging (especially keeping in mind the exodus by working class migrants from cities, a percentage of which would be working in these kirana stores and stalls).But recovery will be faster as CSD and juices are low value discretionary products and sales volumes will improve as lockdown restrictions are gradually eased. With respect to long term, strong growth potential is intact with full utilization of Pathankot facility in CY 2020, product mix change towards higher realization products, juices and dairy products, lower raw material costs, south and west sub territories contributing fully in the next 2-3 years, strong cash flows and robust international business.
20-05-2020
Bigul

Varun Beverages extends fall, slips 7% on weak volume growth in March qtr

 Organic volumes for the company got severely impacted in the last 10 days of March due to the spread of Covid-19 and the subsequent lockdown restrictions, the company said.
07-05-2020

Analysts retain 'buy' on Varun Beverages but cut target, earnings estimates on lockdown impact

 Despite disruptions, the company maintained its operating margin on benign raw material costs and an easy base for the International business.
06-05-2020

Earnings Call Transcript - Q1CY20 for Varun Beverages

 Conference Call with Varun Beverages Management and Analysts on Q1CY20 performance and outlook. Listen in to the full transcript. Call Participants: Ravi Jaipuria - Promoter and Founding Chairman, Varun Jaipuria - Whole Time Director, Raj Gandhi - Director, Kapil Agarwal - Director & CEO, Vikas Bhatia - CFO Introductory Remarks from Ravi Jaipuria Good Afternoon everybody and thank you for joining us in the earnings conference call. I hope all of you had the opportunity to go through our results presentation which provides details of our operations and financial performance for the first quarter ended March 31st, 2020. We started the new fiscal year on a strong note with healthy demand and robust volumes. Growth across our domestic and international markets enabled us to deliver our top line growth of 23%, EBITDA growth of 24% and PAT growth by 50% during the quarter. However, a countrywide lockdown and similar restrictions in many of our international geographies during the last 10 days of March moderated both our domestic and international business. Performance during the quarter would have otherwise been even better. Total sales volume was up 26.2% YoY in Q1 2020. We registered double digit volume growth in the month of January and February. However, organic sales volume got severely impacted in the last 10 days of March due to the lockdown. As a result, organic volume for the quarter declined by 13.7% in India and 9.3% on a consolidated basis. Over the last two months, worldwide economies and various industries across India and International markets have been facing an unprecedented situation due to the Covid-19 pandemic. Our primary focus during this challenging period has been towards undertaking all necessary measures to ensure cash flows, ensure safety of our employees, business partners, communities and to overall safeguard the interests of all our stakeholders. On the operational front, in compliance with the government authorities and advisors, we have temporarily closed operations at our office across India and have already implemented work from home. As per the relaxations provided by the government of India for essential services and particularly packaged food and beverages, we have got the permissions from respective state governments to operate in several production facilities. These units are currently operational at a lower utilization level and we are undertaking all necessary measures to ensure and maintain the IS standard of hygiene and social distancing. In anticipation of the favourable uneconomic season, we have built up additional stock of inventory in the month of March and we have been able to sell most of the inventory. Furthermore, with initial relaxation in lockdown measures, we have also started to see an initial recovery in demand and in sync, we have fairly started production in most facilities. I have also been actively in contact with all our distributors in order to ensure streamlined delivery and supply. Our business model consisting of its own logistics supply chain systems and end to end infrastructure facilities provide adequate cushion to our business operations despite an industry wise supply chain disruption in the country. We are also very encouraged that VBL has a healthy balance sheet and strong financial status which we believe, most certainly should see through this disorderly challenge. To conclude, we are currently facing curtailed demand both in India and in our international geographies as a result of the ongoing macro situation. We believe in the near term, there should be a gradual bounce back in volumes. This will be enabled by easing of lockdown restrictions and restoration of consumer sentiments. We are confident that once things stabilise, we will once again see encouraging growth and we will further strengthen our position as a leading player in the beverage industry. Raj Gandhi providing highlights on operations and financial performance: Good afternoon and a warm welcome to everyone joining in today. Here’s the overview of the financial performance of the first quarter ended 31st March, 2020. Revenue from operations grew at 23.1% YoY in Q1 2020 to Rs. 16,764.4 million EBITDA increased by 24.2% to the level of Rs 2,711.6 million Total sales volumes were up 26.2% YoY at 114 million cases in Q1 2020 as compared to 90.3 million cases in Q1 2019 CSD constituted 67%, Juice 7% and Packaged Drinking water 26% of total sales volumes in Q1 2020 Post lockdown restriction imposed by the Govt. of India due to the COVID-19 pandemic, organic sales volumes got severely impacted in the last 10 days of March. Resultantly, organic volumes for the quarter declined by 13.7% in India and 9.3% on a consolidated basis even after double digit organic growth in the months of Jan and Feb Realization per case has come down by 2.3% in Q1 2020 essentially on account of lower sales realization in Zimbabwe in USD terms On the positive side, EBITDA increased by 24.2% to Rs. 2,711.6 million in Q1 2020 from Rs. 2,183.8 million in Q1 2019. EBITDA margins expanded by 11 bps in Q1 2020 as the major part of savings in raw material cost was offset by higher fixed cost amid negligible sales during the last 10 days of March Gross margins improved by 300 bps during Q1 2020 primarily due to favorable PET chips prices Depreciation and Finance Cost have increased by 36.4% and 47.3% respectively in-line with the increase in scale of business post consolidation of South and West India sub-territories w.e.f. 1st May 2019 The exceptional items amounting to Rs. 665.3 mn for the current quarter represents provision for impairment in the value of certain plant and equipment, glass bottles & plastic shells The Company has made an assessment of the impact of Ordinance and decided to continue with the existing tax structure until utilization of accumulated minimum alternative tax (MAT) credit and expiry of other tax benefits/holidays available In accordance with the Ind AS 12 "Income Taxes", the Company is also required to re-measure its deferred tax balances, for amounts that are expected to reverse in future when the Company would migrate to the new tax regime. The Company has re-measured its outstanding deferred tax balances and written back an amount of Rs. 731.85 mn to the Statement of Profit and Loss. To conclude, in these challenging times, as an organization, we have instituted some cost realization measures to conserve cash flows and ensure steady profitability. The company has also been timely servicing all its debt obligations. Overall, our focus remains on free cash flows over the coming years and in the whole, we look forward to delivering sustainable, operational and financial performance going ahead.
05-05-2020
Bigul

Varun Beverages Q4 profit gains 50% to Rs 60 cr

 The company, which follows calendar year as its financial year, posted a net profit of Rs 40.04 crore in January-March 2019.
05-05-2020
Bigul

Varun Beverages Ltd - 540180 - Announcement under Regulation 30 (LODR)-Press Release / Media Release

 Please find attached herewith a copy of the Proposed Press Release to be issued by the Company. The same is also being uploaded on website of the Company at www.varunpepsi.com.
05-05-2020
Bigul

Varun Beverages Ltd - 540180 - Announcement under Regulation 30 (LODR)-Investor Presentation

 Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find attached herewith a copy of the Presentation on Unaudited Financial Results of the Company for the Quarter ended March 31, 2020. The same is also being uploaded on website of the Company at www.varunpepsi.com.
05-05-2020
Bigul

Varun Beverages Ltd - 540180 - Outcome Of The Board Meeting

 The Board of Directors at their meeting held today (started at 11:00 A.M. and concluded at 11:45 A.M.) considered and approved the Unaudited Financial Results of the Company (Standalone and Consolidated) for the Quarter ended March 31, 2020 (Copy of the same along-with Limited Review Report issued by M/s. Walker Chandiok & Co., LLP, Chartered Accountants and M/s. APAS & Co., Chartered Accountants, Joint Statutory Auditors of the Company, with unmodified opinion are attached and the same are being uploaded on website of the Company). Further, please note that the Company is following 1st January to 31st December as its financial year in terms of Section 2 (41) of the Companies Act, 2013 as approved by the Company Law Board. You are requested to take the above on record.
05-05-2020
Bigul

Varun Beverages Ltd - 540180 - Unaudited Financial Results

 The Board of Directors at their meeting held today (started at 11:00 A.M. and concluded at 11:45 A.M.) considered and approved the Unaudited Financial Results of the Company (Standalone and Consolidated) for the Quarter ended March 31, 2020 (Copy of the same along-with Limited Review Report issued by M/s. Walker Chandiok & Co., LLP, Chartered Accountants and M/s. APAS & Co., Chartered Accountants, Joint Statutory Auditors of the Company, with unmodified opinion are attached and the same are being uploaded on website of the Company). Further, please note that the Company is following 1st January to 31st December as its financial year in terms of Section 2 (41) of the Companies Act, 2013 as approved by the Company Law Board. You are requested to take the above on record.
05-05-2020
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