Varun Beverages (VBL) Q4 2019 earnings summary

Executive summary

• CY19 delivered revenue growth of 39.7%, EBITDA growth of 43.8% and PAT growth of 57.5%, driven by higher volumes in domestic and international markets.

• Sales volume rose 45% YoY to 492.7 million unit cases; full-year results included South and West India territory acquisitions from May 2019.

• Operations spanned six countries, with India, Nepal and Sri Lanka contributing 85% of CY19 revenue and African markets contributing 15%.

Financial highlights

• Consolidated net revenue from operations was ₹71,295.8 million, up 39.7% YoY; revenue from operations before excise duty was ₹72,484.6 million, up 38.6%.

• EBITDA rose 43.8% to ₹14,476.5 million; PAT increased 57.5% to ₹4,722.1 million.

• Profit before tax was ₹6,962.7 million versus ₹4,338.0 million in CY18; net profit attributable to owners was ₹4,689.8 million.

• Consolidated basic and diluted EPS were ₹16.83 for CY19 versus ₹10.69 in CY18; prior-year EPS reflects the 1:2 bonus issue adjustment.

• Net worth grew 67.4% YoY; CY19 revenue, EBITDA and PAT CAGRs for 2015–19 were 20.8%, 22.9% and 52.6%, respectively.

Outlook and guidance

• Priorities include deepening penetration in newly acquired South and West territories, increasing volumes in underpenetrated markets and improving scale and asset utilization.

• Plans include expanding product categories and distribution reach, launching innovations aligned with consumer preferences, and pursuing selective geographic expansion and consolidation opportunities.

• Management expects to generate strong free cash flows by leveraging existing investments and to use cash generation for debt repayment and interest cost savings.