Britannia Industries Limited

Varun Berry

VICE CHAIRMAN AND MANAGING DIRECTOR, BRITANNIA INDUSTRIES LIMITED

Rajneet Kohli

EXECUTIVE DIRECTOR AND CEO, BRITANNIA INDUSTRIES LIMITED

N. Venkatraman

EXECUTIVE DIRECTOR AND CFO, BRITANNIA INDUSTRIES LIMITED

Vipin Kataria

CHIEF SALES OFFICER, BRITANNIA INDUSTRIES LIMITED

Amit Doshi

CHIEF MARKETING OFFICER, BRITANNIA INDUSTRIES LIMITED

Manoj Balgi

CHIEF PROCUREMENT OFFICER, BRITANNIA INDUSTRIES LIMITED

Sudhir Nema

CHIEF DEVELOPMENT AND QUALITY OFFICER, BRITANNIA INDUSTRIES LIMITED

Yashwardhan Bagri

INVESTOR RELATIONS, BRITANNIA INDUSTRIES LIMITED

16%

age number 3, that will give you the three parameters of our business. Our year-on-year growth is 16% on revenues. On operating profits, we have grown 55% and we continue to gain market share through

55%

f our business. Our year-on-year growth is 16% on revenues. On operating profits, we have grown 55% and we continue to gain market share through this quarter as well. Moving to the next slide, whic

6%

s happening to the Indian overall consumer food price inflation which is showing at approximately 6% year-on-year in Q3 of 23. US dollar is obviously strengthening versus the Indian rupee. You go to

rs,

ide that shows inflation versus Q3 of 2021. Basically, what has happened is that in the last 2 years, we have seen very high inflation and even on a year-to-date basis, we have seen an inflation of ap

12%

very high inflation and even on a year-to-date basis, we have seen an inflation of approximately 12%. In this quarter, because of RPO softening as well as us consuming cheaper wheat covers which we

330 basis point

n improved operating margin. So, as a result of that we have seen operating margin improvement of 330 basis points quarter-on-quarter, however, as market leaders we always need to lead the price increases and we

1.5 lakh

he COVID relapse so to say, we have been focusing on getting wider direct reach and we have added 1.5 lakh outlets during this year. So, from 24.9 lakh outlets, we have gone to 26.4 lakh outlets with our

24.9 lakh

using on getting wider direct reach and we have added 1.5 lakh outlets during this year. So, from 24.9 lakh outlets, we have gone to 26.4 lakh outlets with our direct reach program. Moving to the next sl

26.4 lakh

and we have added 1.5 lakh outlets during this year. So, from 24.9 lakh outlets, we have gone to 26.4 lakh outlets with our direct reach program. Moving to the next slide, which is about the marketing a

150%

launched in Q2 has been scaled up and it is doing very well. Both of these products are at about 150% which is two-and-a-half times what they were during launch and 130% which is 2.3 times what they

130%

f these products are at about 150% which is two-and-a-half times what they were during launch and 130% which is 2.3 times what they were at launch, so good progress on innovation as well as adjacency

51%

er you happened to be in that part of the country and you know that we hold the majority stake at 51% and Bel holds 49% stake. Now, to give you an update on where we stand on this, Cheese Lines and C

“So, as a result of that we have seen operating margin improvement of 330 basis points quarter-on-quarter, however, as market leaders we always need to lead the price increases and we have done that and despite leading that we have been able to gain share, however, there are pockets where we have seen a comparative reaction, so there will be some modifications that we will have to make from where we are at today and we will do so in the coming quarter.”

“Sorry, I just want to go back to the previous slide, not shift to it, but while advertising wins awards, there are no awards for sales, but I will be remiss in not mentioning Vipin Kataria and the sales team making some superlative efforts in getting the results that I was talking about on the previous slide.”

“We are looking at differentiated portfolio of very innovative Cheese products and these will be produced in our new state-of-the-art facility at Ranjangaon.”

“Now, to give you an update on where we stand on this, Cheese Lines and Cheddar Cheese Lines will be commercialized in Q1 of 23-24.”

“They will be ready in the second half of 23-24 and on these processed cheese lines, we will produce Slices, Cubes, Blocks and Spreads.”

“So, that will be ready in the second half of the next financial year.”

“There will be some products which will be imported to start with, namely the Rs.”

“10 sachet of cheese which Bel currently sells which is imported from Bel Vietnam that will continue to be imported but will be put through our distribution system and hence will be accessible to a lot more consumers as we put it into a lot more outlets across the country.”

“The second product which will be imported will be the Triangular Portions, great products which will continue to be imported from Vietnam.”

“What we have done for ourselves, we have set clear benchmarks on where these products have to reach in terms of revenues before we trigger line in Ranjangaon, so we are planning line of the sachets as well as the portions in Ranjangaon, but the timing of that would be in the next year to the next 2 years depending on how we scale up these products in the market.”

Varun Berry

32

Moderator

11

Avi Mehta

5

Latika Chopra

4

Percy Panthaki

4

Vivek Maheshwari

4

Abneesh Roy

3

Jaykumar Doshi

3

Sheela Rathi

3

Kunal Vora

3

Yashwardhan Bagri

Thanks Neerav. Hello, everyone. This is Yash, filling in for my colleague Mayank today. I welcome you all to the Britannia Earnings Call to discuss the Financial Results of Quarter 3 22- 23. Joining us today on the earnings call are our Vice Chairman & Managing Director – Mr. Varun Berry; Executive Director & CEO – Mr. Rajneet Kohli; Executive Director & CFO – Mr. N. Venkatraman; Chief Sales Officer – Mr. Vipin Kataria; Chief Marketing Officer – Mr. Amit Doshi; Chief Procurement Officer – Mr. Manoj Balgi and Chief Development & Quality Officer – Mr. Sudhir Nema. The Analyst Deck is uploaded in our website. Before I pass on to Mr. Varun Berry, I would like to draw your attention to the safe harbor statement in the presentation. Over to you, Mr. Varun Berry with remarks on the performance.

Varun Berry

Good afternoon everyone. Very happy to be here with you. So, without much ado, let me get to the presentation. If you get to page number 3, that will give you the three parameters of our business. Our year-on-year growth is 16% on revenues. On operating profits, we have grown 55% and we continue to gain market share through this quarter as well. Moving to the next slide, which gives a look at what is happening through the environment as far as inflation is concerned. The food inflation in India, it continues albeit at a slightly lower level. Wheat is one commodity which remains on the boil, so if you were to look at the first quadrant on the left that shows what is happening to the Indian overall consumer food price inflation which is showing at approximately 6% year-on-year in Q3 of 23. US dollar is obviously strengthening versus the Indian rupee. You go to the third quadrant on the left that shows wheat, so if you would look at the red line, the red line shows the Chicago Board of Tr

Amit Doshi

Yes, I think as Varun said, we have continued to make investments in our core brands to ensure that we continue to drive penetration for these brands and each of them is top of mind in their respective categories. As Varun said, it is also heartening to get the industry recognition because we believe that we want to do worth that wins in the market and it is always good to get peer recognition. For both, there is Campaign India there and the Storyboard18 there and three of our pieces, the first one being for Good Day, then 50-50 and then NutriChoice were among the top 50 ads in the country and top 25 ads in the country, respectively. For Milk Bikis Classic, we have won awards for Best Regional Marketing in Tamil Nadu at the FE Awards, they are the best when it comes to effectiveness and one of our NutriChoice digital pieces was actually voted at the Viewer's Choice ad of 2022 by the Outlook Magazine.

Varun Berry

Sorry, I just want to go back to the previous slide, not shift to it, but while advertising wins awards, there are no awards for sales, but I will be remiss in not mentioning Vipin Kataria and the sales team making some superlative efforts in getting the results that I was talking about on the previous slide. Moving onto the next slide, which is about Innovation, so we have had some very good launches, Biscafe which is a very unique product, has moved almost five times in terms of revenue since we launched it, similarly NutriChoice Seeds, Herbs & Protein which was launched in Q1 again has moved 4 times since launch. We also had focused scaleup drives on 50-50 Golmaal, which is a very interesting product. It wasn’t national till some time ago, it was only East and even today, it remains predominantly East while we are trying to spread it across the country, great product, it has moved two times its revenues during this year; Milk Bikis Classic, very nostalgic and a great product doing v

Manoj Balgi

Yes, so we are working on four pillars as far as the ESG agenda goes; People, Resources, Growth and Governance and we have taken targets which are good for the community and good for the business and if we were to go through the people quadrant where our focus is on targeting farmers who Varun talked about 2,800 odd farmers that we collect milk directly from. We do a lot of CSR work in and around our factories partnering with the Wadia Foundation and we have reached about 14,500 odd beneficiaries. The work is more on sanitation and water management and hygiene around those communities and again on the nutrition side, we have reached more than 2 lakh beneficiaries till December 2022. In terms of Resources, we have increased our share of renewable electricity source for our operations from 33% to 38%. The share of renewable energy is about 18% from 14% last year, 3% reduction in emission and additional 61,000 kilos of plastic has been discarded in this period till December. We are on tra

Varun Berry

Thanks Manoj. Now, moving to the financials, so actually there is nothing much to say here. The results speak for themselves, so full year 22-23, we have grown 16%. Q3 is also incidentally 16% for the year and if you look at the 24 month's growth it is at 32%, so both very healthy, good growths that we have registered from a topline revenue perspective. Next slide is about operating profits. Again, operating profits have grown this year at 15.5%. This quarter, it is at 55%, 24-month growth is at 35% because last year Q3 there was a decline of 13%, but a very healthy 35% even on a 24-month basis with margins being at 18.5% of revenue. Now, getting to the next slide which gives the key financial ratios, so net sales of 16%, operating profit of 55%, profit before tax is at 127%, but this includes Rs. 376 crores of exceptional gain which is on account of the 49% stake sale pursuant to the joint venture with Bel on our Cheese business. So, this is the exceptional number and a result of that