Varun Beverages Limited has informed the Exchange about Investor Presentation
December 19, 2023
To,
National Stock Exchange of India Ltd. Exchange Plaza, Block G, C/1, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051 Email: cmlist@nse.co.in Symbol: VBL
BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai – 400 001 Email: corp.relations@bseindia.com Security Code: 540180
Sub: Regulation 30: Investor Presentation
Dear Sir/Madam,
Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, please find attached herewith a copy of the Presentation on the proposed acquisition of 100% stake in the business conducted by The Beverage Company (Proprietary)
Limited, South Africa along-with its wholly-owned subsidiaries.
The same is also being uploaded on website of the Company at www.varunbeverages.com.
You are requested to take the above on record.
Yours faithfully, For Varun Beverages Limited
Ravi Batra Chief Risk Officer & Group Company Secretary
Encl.: As above
South Africa territory M&A opportunity
(a PepsiCo franchisee)
December 19, 2023
Table of Contents
(a PepsiCo franchisee)
1
2
3
4
5
Transaction Overview
Soft Drinks Industry Overview
About BevCo
Brands Portfolio
Manufacturing footprint in Africa
2
Transaction Overview
(a PepsiCo franchisee)
➢ Acquisition of 100% stake in the business conducted by The Beverage Company (Proprietary) Limited, South Africa along-with its wholly-owned subsidiaries ("BevCo"), with an option to accept minority co-investment from large equity fund, subject to regulatory and limited to PepsiCo Inc. and Competition other approvals (if any) including but not Commission South Africa.
➢ BevCo is engaged in the business of manufacturing and distribution of licensed (PepsiCo
Inc.) / own-branded non-alcoholic beverages in South Africa.
➢ Bevco has franchise rights from PepsiCo Inc. in South Africa, Lesotho and Eswatini. Further, it
also has distribution rights for Namibia and Botswana.
➢ Proposed transaction is at an Enterprise Level is valued at ~ ZAR 3 Billion (~INR 13.20 bn; 1
ZAR = 4.4 INR). BevCo achieved net revenue of ZAR 3,615 mn (~ INR 15.90 bn) in FY23.
3
Soft Drinks in SA – Largest market in Africa
(a PepsiCo franchisee)
Largest Soft Drinks Market in Africa….
….along with one of the highest per capita consumption
Industry Volume CAGR (mn 8oz)
3.1%
1,186
1,019
5.3%
1,537
2017
2022
2027E
Per capita consumption of CSD (8oz)
Three top per cap markets are part of the deal
….with favourable demographics
Soft Drinks Industry – Market Share 2022
•
Total population is 60mn out of which 65% between 15-64 age group.
• Urbanization is between 60%-80%. •
The rising affluence of South African households has resulted in urbanization, coupled with longer workdays and emerging interest from female consumers, which has contributed to the growth in the Industry.
•
The beverage industry is dominated by B-brands with a market share of as much as half of its size.
• Amongst the global brands in the balance half, PepsiCo
• Product
has insignificant low single digit market share. with
favourable innovation demographics coupled with thrust on Go To Market Strategy shall drive the lateral growth across segments.
portfolio
Source: Euromonitor, Company Estimates
4
About BevCo
BevCo has an agreement with PepsiCo to bottle and distribute its products in Southern Africa
Sole Licensed Bottler
Distribution Rights
South Africa Swaziland Lesotho Botswana Namibia
BevCo manufactures and sells the following brands:
(a PepsiCo franchisee)
Sales Volumes-FY23 (8oz Cases mn) – 117mn
Energy Drink (Reboost - own brand) 14.6%
17.1 Mn
17.4 Mn
82.5 Mn
Pepsi Brands 14.9%
Other Own Brands 70.5%
•
•
•
•
•
PepsiCo franchise brands: 7UP FREE, Mirinda, Mountain Dew, Pepsi, Pepsi Light and Pepsi Max.
Refreshhh: High caffeine content drink available in 2L, 1.5L and 330ml bottles as well as 500ml can.
Reboost: Energy drink available in 500ml can.
Coo-ee: Carbonated drinks in classic flavours (like Cola and Iron Brew) and unique flavour fusions like Mango,
Cranberry and Pink Lemonade. Available in four different pack sizes (2L, 1.5L, 1.25L and 300ml).
JiVE: Fizzy Pink Lemonade, Blue Cream Soda & Kola flavours in 500ml and 2L packaging
5
Brands Licensed and owned by BevCo
(a PepsiCo franchisee)
Brands licensed by PepsiCo
Own Brands
Energy Drink
Own Brand
PepsiCo Brand
6
Manufacturing Footprint in South Africa
(a PepsiCo franchisee)
❖BevCo has five manufacturing facilities - two in Johannesburg and one each in Durban, East London and Cape town.
❖Total installed capacity is ~ 3,600 BPM and peak month capacity is ~22 million 8oz cases.
❖There are total 15 beverage manufacturing lines - 13 for PET and 2 for CAN. Apart from this, company has 1 BIB Line and 1 Pouch line.
❖ Out the 5-manufacturing facility, 3 plants are PepsiCo accredited plants, i.e. Boksburg (JHB), Amanzimtoti (Durban) and Epping (Cape Town).
7
Thank You!