Capitaline

Results 20-Oct-23

Analysis

United Breweries

Optimistic about the long-term growth potential of the industry

Consolidated net sales (including other operating income) of United Breweries has increased 12.35% to Rs 1890.05 crore. Sales of Beer segment has gone up 14.17% to Rs 4,192.57 crore (accounting for 99.99% of total sales). Sales of Non-Alcoholic Beverages segment has gone down 77.52% to Rs 0.29 crore (accounting for 0.01% of total sales).

Volume in Q2 increased 7% (+9% excl RTM changes) predominantly driven by Telangana, Orissa & Rajasthan, partially off-set by a decline in Delhi. The premium segment grew by 10% in the quarter. Within the segment, it saw double digit growth for the Kingfisher Ultra family & more than 20% contribution for Heineken Silver to the Heineken franchise.

Profit before interest, tax and other unallocable items (PBIT) has slumped 0.51% to Rs 237.77 crore. PBIT of Beer segment fell 1.75% to Rs 238.80 crore (accounting for 100.43% of total PBIT). PBIT of Non-Alcoholic Beverages segment rose 74.69% to Rs -1.03 crore (accounting for -0.43% of total PBIT).

PBIT margin of Beer segment fell from 6.62% to 5.70%. PBIT margin of Non-Alcoholic Beverages segment fell from negative 315.50% to negative 355.17%. Overall PBIT margin fell from 6.51% to 5.67%.

Operating profit margin has declined from 13.04% to 9.75%, leading to 16.01% decline in operating profit to Rs 184.29 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 52.87% to 54.58%. Purchase of finished goods cost rose from 0.92% to 1.34%. Employee cost increased from 8.19% to 8.64%. Other expenses rose from 25.16% to 25.82%.

Other income fell 14.62% to Rs 12.09 crore. PBIDT fell 15.93% to Rs 196.38 crore. Provision for interest rose 44.44% to Rs 1.43 crore.

PBDT fell 16.18% to Rs 194.95 crore. Provision for depreciation fell 2.15% to Rs 50.92 crore. Fixed assets declined from Rs 1,986.19 crore as of 30 September 2022 to Rs 1,926.64 crore as of 30 September 2023. Intangible assets stood at Rs 6.45 crore.

Profit before tax down 20.23% to Rs 144.03 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 36.86 crore, compared to Rs 46.43 crore. Effective tax rate was 25.59% compared to 25.72%.

Net profit attributable to owners of the company decreased 19.97% to Rs 107.28 crore.

Equity capital stood at Rs 26.44 crore as of 30 September 2023 to Rs 26.44 crore as of 30 September 2022. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 70.99% as of 30 September 2023 ,compared to 72.71% as of 30 September 2022 . Promoters pledged stake was 12.38% as of 30 September 2023 ,compared to 14.97% as of 30 September 2022 .

Investments in capex during the first half of the year was Rs. 91 crore, primarily in supply chain initiatives to cater for future growth.

Despite some inflationary softening seen in Q2, volatility will remain. UBL continues to remain optimistic about the long-term growth potential of the industry, driven by increasing disposable income, favorable demographics & premiumization.

For year-to-date (YTD) results analysis

Net sales (including other operating income) of United Breweries has increased 1.06% to Rs 4164.84 crore. Sales of Beer segment has gone up 6.48% to Rs 9,435.58 crore (accounting for 100.00% of total sales). Sales of Non-Alcoholic Beverages segment has gone down 96.64% to Rs 0.29 crore (accounting for 0.00% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has slumped 7.35% to Rs 485.80 crore. PBIT of Beer segment fell 6.43% to Rs 502.47 crore (accounting for 103.43% of total PBIT). PBIT of Non-Alcoholic Beverages segment fell 31.57% to Rs -16.67 crore (accounting for -3.43% of total PBIT).

PBIT margin of Beer segment fell from 6.06% to 5.33%. PBIT margin of Non-Alcoholic Beverages segment fell from negative 146.81% to negative 5,748.28%. Overall PBIT margin fell from 5.91% to 5.15%.

Operating profit margin has declined from 11.78% to 9.78%, leading to 16.10% decline in operating profit to Rs 407.38 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 53.72% to 56.14%. Purchase of finished goods cost rose from 1.23% to 1.43%. Employee cost increased from 6.97% to 7.52%. Other expenses fell from 26.40% to 25.16%.

Other income fell 8.46% to Rs 22.51 crore. PBIDT fell 15.73% to Rs 429.89 crore. Provision for interest rose 69.78% to Rs 3.09 crore. Loan funds rose to Rs 15.40 crore as of 30 September 2023 from Rs 11.60 crore as of 30 September 2022. Inventories rose to Rs 1,464.18 crore as of 30 September 2023 from Rs 1,166.50 crore as of 30 September 2022. Sundry debtors were higher at Rs 1,427.86 crore as of 30 September 2023 compared to Rs 1,257.80 crore as of 30 September 2022. Cash and bank balance declined from Rs 778.97 crore as of 30 September 2022 to Rs 652.27 crore as of 30 September 2023. Investments declined from Rs 8.16 crore as of 30 September 2022 to Rs 8.00 crore as of 30 September 2023.

PBDT fell 16.04% to Rs 426.8 crore. Provision for depreciation fell 6.69% to Rs 102.3 crore. Fixed assets declined from Rs 1,986.19 crore as of 30 September 2022 to Rs 1,926.64 crore as of 30 September 2023. Intangible assets stood at Rs 6.45 crore.

Profit before tax down 18.61% to Rs 324.50 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 80.99 crore, compared to Rs 102.07 crore. Effective tax rate was 24.96% compared to 25.60%.

Minority interest decreased 95.83% to Rs 0.02 crore. Net profit attributable to owners of the company decreased 17.78% to Rs 243.49 crore.

Equity capital stood at Rs 26.44 crore as of 30 September 2023 to Rs 26.44 crore as of 30 September 2022. Per share face Value remained same at Rs 1.00.

Cash flow from operating activities increased to Rs 517.68 crore for YTD ended September 2023 from Rs 218.30 crore for YTD ended September 2022. Cash flow used in acquiring fixed assets during the YTD ended September 2023 stood at Rs 91.06 crore, compared to Rs 90.95 crore during the YTD ended September 2022.

The scrip is currently trading at Rs 1612

United Breweries : Consolidated Results
Particulars	2309 (03)	2209 (03)	Var.(%)	2309 (12)	2209 (12)	Var.(%)	2303 (12)	2203 (12)	Var.(%)
Net Sales	1,890.05	1,682.31	12	4,164.84	4,121.02	1	7,499.92	5,838.44	28
OPM (%)	9.8	13.0		9.8	11.8		8.2	11.9
OP	184.29	219.42	-16	407.38	485.56	-16	616.23	696.62	-12
Other Inc.	12.09	14.16	-15	22.51	24.59	-8	49.43	29.79	66
PBIDT	196.38	233.58	-16	429.89	510.15	-16	665.66	726.41	-8
Interest	1.43	0.99	44	3.09	1.82	70	4.64	14.78	-69
PBDT	194.95	232.59	-16	426.8	508.33	-16	661.02	711.63	-7
Depreciation	50.92	52.04	-2	102.3	109.64	-7	210.59	217.19	-3
PBT	144.03	180.55	-20	324.5	398.69	-19	450.43	494.44	-9
Share of Profit/(Loss) from Associates	0	0	-	0	0	-	0	0	-
PBT before EO	144.03	180.55	-20	324.5	398.69	-19	450.43	494.44	-9
EO Income	0	0	-	0	0	-	-33.12	0	-
PBT after EO	144.03	180.55	-20	324.5	398.69	-19	417.31	494.44	-16
Taxation	36.86	46.43	-21	80.99	102.07	-21	112.63	128.36	-12
PAT	107.17	134.12	-20	243.51	296.62	-18	304.68	366.08	-17
Minority Interest (MI)	-0.11	0.07	LP	0.02	0.48	-96	0.7	0.62	13
Net profit	107.28	134.05	-20	243.49	296.14	-18	303.98	365.46	-17
EPS (Rs)*	#	#		#	#		12.4	13.8
Notes
* EPS is on current equity of Rs 26.44 crore, Face value of Rs 1, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

United Breweries : Consolidated Segment Results
	% of (Total)	2309 (03)	2209 (03)	Var.(%)	% of (Total)	2309 (12)	2209 (12)	Var.(%)	% of (Total)	2303 (12)	2203 (12)	Var.(%)
Sales
Beer	100	4,192.57	3,672.22	14	100	9,435.58	8,860.96	6	100	16,641.15	13,094.04	27
Non-Alcoholic Beverages	0	0.29	1.29	-78	0	0.29	8.63	-97	0	9.94	29.88	-67
Total Reported Sales	100	4,192.86	3,673.51	14	100	9,435.87	8,869.59	6	100	16,651.09	13,123.92	27
PBIT
Beer	100.43	238.8	243.05	-2	103	502.47	537.01	-6	105	760.09	840.8	-10
Non-Alcoholic Beverages	-0.43	-1.03	-4.07	75	-3	-16.67	-12.67	-32	-5	-37.34	-65.1	43
Total PBIT	100	237.77	238.98	-1	100	485.8	524.34	-7	100	722.75	775.7	-7
Less : Interest		-1.43	2.65	PL		3.09	1.82	70		4.64	14.78	-69
Add: Other un-allcoable		-95.17	-55.78	-71		-158.21	-123.83	-28		-300.8	-266.48	-13
PBT		144.03	180.55	-20		324.5	398.69	-19		417.31	494.44	-16

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