SOM Distilleries & Breweries Q2 FY2016 Earnings Presentation www.somindia.in November 2015 1 EARNINGS PRESENTATION – Q3 FY2015 Earnings Presentation – Q2 FY2016
Safe Harbor This presentation contains statements that contain “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to SOM Distilleries & Breweries’ future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. SOM Distilleries & Breweries undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances 2 Earnings Presentation – Q2 FY2016
Highlights H1 FY2016 Quantity Sold-Beer Quantity Sold-IMFL 29.2 Lakh Cases 3.6 Lakh Cases +11.7% +25.2% Gross Sales Total Income EBITDA Rs. 1,315 Million Rs. 1,214 Million Rs. 199 Million +13.3% +6.2% +13.4% Margin Expansion Profit After Tax Leverage Net Debt: 476 Million EBITDA: 16.4% Rs. 98 Million Net Debt / Equity: +3.2% +105 bps 0.37x 3 Earnings Presentation – Q2 FY2016
Management Commentary Management Commentary Commenting on the results and performance, Mr. Surjeet Lal, Chairman & Managing Director said: “Our performance in the first half of the year has been steady, driven by an expansion in sales volumes. This growth, across all our key markets, is a result of a continued focus on deepening our engagement with the customers. SOM’s topline grew by 6.2% y-o-y and operating profit grew by 13.4% y-o-y during the first six months of the financial year. Operating margins expanded 105 bps to 16.4% from 15.3% in the same period last year. Over the same period, volumes in the Beer segment grew by 11.7% while revenues grew by 12%. Strong acceptance of our product offering enables SOM to cater to a consistently broad pool of customers. In particular, the refurbished beer under the flagship brand Hunter, launched earlier this year, continues to gain growing market acceptance. The IMFL segment too has grown by a substantial 25.2%. We continue to leverage the underlying strength of this business which acts as a hedge against the seasonal beer demand, besides contributing to our bottom line. SOM’s financial discipline is unwavering. Our Net Debt to Equity now stands at 0.37x. This conservative leverage position is a measure of added strength in a business that is operationally sound. Volumes in the beer industry are expected to grow substantially over the medium to long term. SOM, with its broad based offering and strong share in key markets, is well positioned to capitalize on a likely upturn in the industry. Over the years, we have laid a strong foundation for growth which is expected to continue to serve us well in the quarters to come. ” 4 Earnings Presentation – Q2 FY2016
Q2 and H1 FY2016 Financial Highlights Standalone Financial Performance (Rs. Million) Q2 y-o-y Q1 q-o-q Half Year Ended y-o-y Growth Growth Growth (Rs. Million) FY2016 FY2015 FY2016 FY2016 FY2015 (%) (%) (%) Gross Sales 472 445 6.1% 844 (44.1)% 1,315 1,161 13.3% Total Income 439 438 0.2% 775 (43.4)% 1,214 1,143 6.2% EBITDA 79 67 17.3% 120 (34.1)% 199 175 13.4% Margin (%) 18.0% 15.4% 15.5% 16.4% 15.3% Interest 18 5 250.5% 15 17.3% 33 8 289.9% Depreciation 10 12 (19.6)% 10 0.0% 20 24 (19.6)% Profit Before Tax 52 50 2.7% 95 (45.8)% 147 143 2.7% Margin (%) 11.7% 11.5% 12.3% 12.1% 12.5% Net Profit 35 33 3.1% 64 (45.8)% 98 95 3.2% Margin (%) 7.9% 7.6% 8.2% 8.1% 8.3% Earnings Per Share (EPS) 1.25 1.22 2.5% 2.31 (45.9)% 3.57 3.46 3.2% Notes: 1. Total Income includes Other Operating Income 2. Operating Profit defined as earnings before depreciation, interest, exceptional items and taxes 5 3. All margins calculated as a percentage of Total Income (including Other Operating Income) Earnings Presentation – Q2 FY2016
H1 FY2016 Financial Highlights 6.2% • H1 FY2016 Total Income increased by 6.2% which includes the 1,214 effect of higher excise duty on bottling 1,143 • Beer volumes increased by 10.8% and IMFL volumes increased by 25.2% • Beer realisations increased by 0.3% while IMFL realisations decreased by (5.8)% H1 FY2015 H1 FY2016 13.4% • EBITDA increased by 13.4% y-o-y 199 • Depreciation decreased by (19.6)% and Other Expenses 175 decreased by (17.9)% • Margins increased by 105 bps to 16.4% from 15.3% in the same period last year H1 FY2015 H1 FY2016 3.2% • Net Profit for the six months was Rs. 98 million, an increase 98 95 of 3.2% compared to H1 2015 • Finance cost increased from Rs. 8 million to Rs. 33 million due to higher secured borrowings as at the end of H1 FY2016 as compared to the same period last year H1 FY2015 H1 FY2016 6 In Rs. million Earnings Presentation – Q2 FY2016
Quarterly Financial Highlights Total Income (Rs. Million) EBITDA (Rs. Million) and Margin (%) 775 120 537 81 79 438 67 439 394 61 18.0% 15.6% 15.4% 15.5% 15.0% Q2 FY2015 Q3 FY2015 Q4 FY2015 Q1 FY2016 Q2 FY2016 Q2 FY2015 Q3 FY2015 Q4 FY2015 Q1 FY2016 Q2 FY2016 PBT (Rs. Million) and Margin (%) PAT (Rs. Million) and Margin (%) 95 64 71 33 50 52 33 33 35 41 8.4% 8.2% 13.2% 7.9% 7.6% 12.3% 11.7% 11.5% 10.5% 6.2% Q2 FY2015 Q3 FY2015 Q4 FY2015 Q1 FY2016 Q2 FY2016 Q2 FY2015 Q3 FY2015 Q4 FY2015 Q1 FY2016 Q2 FY2016 7 Earnings Presentation – Q2 FY2016
H1 FY2016 Operational Highlights Quantity Sold by Category H1 y-o-y 12% 9% 14% 16% 18% (Lakh cases) FY2016 FY2015 Growth (%) 91% 88% 86% 84% 82% Total Beer 29.2 26.1 11.7% 3.6 2.9 25.2% Total IMFL Q2 FY15 Q3 FY15 Q4 FY15 Q1 FY16 Q2 FY16 Total Beer Total IMFL Brand Performance (0.9)% 8.3% 45.5% 8.9 9.8 10.2 10.1 9.0 6.1 H1 FY2015 H1 FY2016 H1 FY2015 H1 FY2016 H1 FY2015 H1 FY2016 Hunter Black Fort Power 8 Earnings Presentation – Q2 FY2016
Q2 and H1 FY 2016 Operational Highlights Beer Revenue by Category (Rs. Million) 12.0% Q1 Q2 Q3 Q4 Q1 Q2 Category FY2015 FY2015 FY2015 FY2015 FY2016 FY2016 Beer 622.2 353.7 287.4 447.2 721.0 372.1 1,093.1 975.9 Whisky 80.4 68.3 85.8 119.5 109.9 80.8 Gin 8.2 7.7 4.1 5.5 5.4 2.3 Rum 3.8 8.6 16.9 18.4 2.0 6.9 Vodka 1.9 5.4 5.3 1.2 5.7 8.4 H1 FY2015 H1 FY2016 Whisky Gin Rum Vodka 28.2% (51.6)% (28.4)% 93.6% 12.4 190.7 14.1 15.9 8.9 148.7 7.7 7.3 H1 FY2015 H1 FY2016 H1 FY2015 H1 FY2016 H1 FY2015 H1 FY2016 H1 FY2015 H1 FY2016 9 Earnings Presentation – Q2 FY2016
Leverage Profile Strong Balance Sheet with low leverage to support organic and inorganic growth Gross Debt and Gross Debt/EBITDA (x) (Rs. Million) 30.09.2015 30.06.2015 763 Secured Borrowings 705 671 605 1.92x Unsecured Borrowings 58 68 1.91x Gross Debt 763 738 Less: Cash & Cash Equivalents (287) (530) 0.37x 0.34x 0.20x Net Debt / (Net Cash) 476 210 109 108 60 Shareholder’s Equity 1,280 1,245 FY2012 FY2013 FY2014 FY2015 YTD FY2016 Gross Debt Gross Debt/EBITDA Gross Debt/ Equity (x)* • Net Debt/Equity of 0.37x at the end of H1 0.60x FY2016 0.51x • SOM maintains a conservative leverage profile along with consistent growth in revenues & 0.14x 0.12x 0.06x operating profit, and low net debt position FY2012 FY2013 FY2014 FY2015 YTD FY2016 * Net Debt/Equity stood at 0.17x and 0.37x as at the end of FY2015 and H1 FY2016 respectively 10 Earnings Presentation – Q2 FY2016
SOM at a glance • Major Brands SOM Distilleries and Breweries (SOM) was established in 1994. The Company is primarily engaged in brewing, fermentation, bottling, canning and blending of beer and Indian Made Foreign Liquor (IMFL) • SOM Distilleries is the flagship company of SOM Group of Companies. SOM Group is based out in Bhopal and is a leading liquor producer in India Beer • SOM has a global footprint with a vast distribution network spread over 13 states in India • The Company is primarily focused on achieving operational excellence through technological advancement coupled with strong manpower of over 600 employees Spirits • Currently, has an installed capacity of 59,200 KL of beer and 5,400 KL of IMFL • The Company’s Hunter and Woodpecker brands are supplied as draught beer to all the major hotels in Madhya Pradesh and Chhattisgarh 11 Earnings Presentation – Q2 FY2016
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