Britannia Industries (BRITANNIA) Q4 02/03 earnings summary

Executive summary

• Difficult market conditions notwithstanding, comparable net sales grew 6%, operating profit rose 8% and PBT before exceptional items increased 17%.

• Reported PAT fell 51% to ₹992m, largely reflecting the prior-year ₹1,257m surplus from the dairy-business transfer; adjusted EPS excluding that transfer rose 27% to ₹36.89.

Financial highlights

• FY03 sales were ₹13,491m, down 7% reported; comparable net sales growth was 6% excluding the dairy business transferred in March 2002.

• Operating profit was ₹1,211m, up 8%; PBT before exceptional items was ₹1,429m, up 17%, and PAT before exceptional items was ₹929m, up 12%.

• After exceptional items, PBT was ₹1,473m versus ₹2,591m and PAT was ₹992m versus ₹2,032m, down 43% and 51%, respectively.

• Adjusted EPS, excluding the prior-year dairy-transfer impact, was ₹36.89 versus ₹29.07, up 27%; dividend was ₹10/share, up 33%.

• Cash flow generation before exceptional items was ₹1,191m, up 8%; net cash from operating activities was ₹768m versus ₹531m.

Outlook and guidance

• FY04 outlook was positive; timely monsoon arrival supported a 5% agricultural-growth forecast versus a 3% decline last year, with industry and services expected to grow around 6%.

• Planned growth drivers included premium and innovative product launches, wider distribution and low-unit packs, aggressive cost savings, and improved operational and supply-chain efficiency.

• The Union Budget 2003 reduction in excise duty on biscuits and cakes was expected to support demand.