Varun Beverages (VBL) Q4 2015 earnings summary

Executive summary

• Standalone revenue rose 41.07% to ₹29,104.25 million and profit after tax increased 2.5x to ₹1,516.47 million, supported by newly acquired territories.

• Consolidated profit was ₹1,130.42 million, including ₹12.90 million from an associate, versus a ₹268.99 million loss in 2014.

Financial highlights

• Consolidated net revenue was ₹33,941.49 million versus ₹25,010.26 million; total revenue was ₹34,084.30 million versus ₹25,177.54 million.

• Consolidated expenses were ₹32,432.73 million; profit before tax after prior-period items was ₹1,651.57 million and profit after tax was ₹1,117.52 million.

• Standalone total expenses rose to ₹26,904.91 million from ₹20,118.63 million; profit before tax after prior-period items reached ₹2,189.55 million.

• Consolidated operating cash flow was ₹5,508.98 million versus ₹4,302.05 million; standalone operating cash flow was ₹5,102.68 million versus ₹3,826.49 million.

Outlook and guidance

• Expansion plans covered India and Southern Africa; management cited population growth, rising incomes and e-commerce as growth drivers.

• Two co-packer undertakings in Uttar Pradesh and Punjab were under acquisition process, expected to add to growth in 2016.

• Mozambique became a subsidiary effective 1 January 2016; controlling stakes in Zambia and Zimbabwe were acquired, with share transfers still in process.

• Agreements for Pepsi-brand businesses in Mozambique, Zambia and Zimbabwe carried a combined commitment of ~USD 25 million, subject to closing terms and approvals.