Varun Beverages (VBL) Q4 2020 earnings summary

Executive summary

• FY20 net revenue from operations was ₹64,501.4m, down 9.5% YoY; COVID-19 lockdowns disrupted the peak April–June season, followed by a steady demand recovery through H2.

• Cost-rationalization measures helped sustain full-year profitability amid lower volumes; production facilities were operating near-normal levels by year-end.

Financial highlights

• Consolidated EBITDA was ₹12,018.6m, down 17.0% YoY; EBITDA margin was 18.6% vs 20.3%, while gross margin was 57.1%.

• Net profit was ₹3,572.7m, down 24.3% YoY; EPS was ₹11.40 vs ₹16.83.

• Revenue from operations was ₹65,557.9m before excise duty of ₹1,056.5m; net revenue was ₹64,501.4m vs ₹71,295.8m in FY19.

• Exceptional items of ₹665.3m were asset write-offs for unused plant and equipment, glass bottles and plastic shells, following impairment provisions in Q1.

Outlook and guidance

• Demand recovery was expected to strengthen, with improving rural, semi-urban and urban consumption and reopening of transport, outdoor facilities, theaters and restaurants.

• Priorities include deeper distribution in under-penetrated markets, new geographies, innovative products, non-cola and non-carbonated offerings, debt repayment and operating leverage.

• International territories were seeing recovery; near-normal plant utilization and an owned logistics network supported readiness to meet improving demand.