Britannia Industries (BRITANNIA) Q4 04/05 earnings summary

Executive summary

• FY05 net sales grew 10% and operating profit rose 12%; PBT before exceptional items increased 23%, with cost control supporting margin improvement despite input-cost pressure.

• After exceptional items, PBT was Rs. 2,203 mn and net profit Rs. 1,488 mn; EPS was Rs. 60.59.

Financial highlights

• Gross sales were Rs. 16,154 mn versus Rs. 14,705 mn; net sales were Rs. 15,876 mn versus Rs. 14,396 mn.

• Operating profit was Rs. 1,649 mn, up 12%; PBT before exceptional items was Rs. 2,420 mn, up 23%.

• Adjusted for exceptional items, PAT was Rs. 1,624 mn versus Rs. 1,265 mn; reported PAT after exceptional items was Rs. 1,488 mn versus Rs. 1,188 mn.

• Cash flow generation after exceptional items was Rs. 1,678 mn, up 19%; net cash from operating activities was Rs. 1,925 mn versus Rs. 826 mn.

• Cost-control initiatives generated Rs. 202 mn in savings; EBITDA/Gross Sales was 16.3% versus 15.3% in FY04.

Outlook and guidance

• FY06 focus: profitable growth through brand and pack mix, broader distribution and availability, product innovation, and continued supply-chain and cost initiatives.

• New Uttaranchal plant began commercial production in April 2005; ramp-up efforts targeted full capacity by the end of Q3 FY06.

• Rising raw-material, packaging, transportation and fuel costs, alongside limited pricing flexibility, make margin preservation without price increases a key challenge.