United Spirits Limited has informed the Exchange about Investor Presentation
United Spirits Limited
Registered Office: ‘UB Tower’ #24, Vittal Mallya Road, Bengaluru – 560 001 Tel: +91 80 4544 8000 Fax: +91 80 3985 6862 www.diageoindia.com
National Stock Exchange of India Limited Exchange Plaza, C-1 Block G, Bandra Kurla Complex, Bandra East, Mumbai- 400051 Scrip Code: MCDOWELL-N
4th June 2021
BSE Limited Listing Department Dalal Street, Mumbai 400 001 Scrip Code: 532432
Dear Sirs,
Sub: Investor presentation
Enclosed investor presentation on financials of the Company for quarter and year ended 31st March 2021. The same is being uploaded on our website.
This is for your information & records.
Thank you.
For United Spirits Limited
Mital Sanghvi Company Secretary
Encl: as above
Corporate Identity Number: L01551KA1999PLC024991
contactus.india@diageo.com
UNITED SPIRITS LIMITED
INVESTOR MEET 24TH MAY 2021
1
WELCOME HINA NAGARAJAN
2
FY21 : AN EVENTFUL YEAR
International Travel ban continues
Vaccine Update : 6.4 Crore Vaccinations administered (YTD MarFY21)
Bars / Pubs / Restaurants closed
Bars / Pubs / Restaurants closed
Bars / Pubs / Restaurants open
Bars / Pubs / Restaurants open
Alco-Bev Manufacturing Operations start in phases
Alco-Bev Manufacturing Operations started across India
Alco-Bev Manufacturing Operations started across India
Alco-Bev Manufacturing Operations started across India
Off Trade open (~65%)
Off Trade open (~100%)
Off Trade open (~100%) On Trade (~85%)
Off Trade open (~100%) On Trade (~85%)
Home Delivery: WB, CG, OR, MH, PB, JH eToken: DL, KL
Home Delivery: +ML
Home Delivery: -JH
Home Delivery: NO CHANGE
APR - JUN
JUL - SEP
OCT - DEC
JAN - MAR
Current vaccination status of 19.3Cr as of May 21 2021, Source : MOHFW
3
THE CHANGING DYNAMICS WITNESSED LAST YEAR
1
4
Alcohol to behave like a semi essential category
Large SKU & Big equity brands poised to deliver faster growth
2
5
Scotch poised to grow faster
Value conscious consumers to moderate rather than downgrade
3
6
Whisky to grow at the expense of beer
Accelerated in home consumption
4
OUR RESPONSE TO COVID IS ANCHORED ON TWO KEY PRINCIPLES
Manage The Crisis
Emerge Stronger
5
FY2021 UNDERLYING QUARTERLY PERFORMANCE
NSV Growth
Gross Margin
EBITDA, Margin %
1,030 2,146
2,489
2,224
429 904
1,110
978
(78)
270 384
412
TOTAL
(51.4%)
(3.4%)
(3.6%)
16.1%
(508bps)
(316bps)
24bps
103bps
(2350bps)
(497bps)
(100bps)
531bps
P&A
(52.2%)
1%
(0.7%)
25.8%
28.6%
27.6%
29.5%
30.5%
66.0%
70.7%
71.3%
68.9%
41.7%
42.1%
44.6%
43.9%
12.6%
15.4%
18.5%
Q1F21
Q2F21
Q3F21
Q4F21
Q1F21
Q2F21
Q3F21
Q4F21
-7.6%
Q1F21
Q2F21
Q3F21
Q4F21
P&A
Popular
Others
INR CR
Note: % comparison is on YoY basis
*Please note these are underlying numbers (rather than reported)
6
TODAY’S AGENDA
01
02
03
FY21 Strategic Building Blocks
FY21 Financial Highlights
Looking Ahead
7
TODAY’S AGENDA
01
02
03
FY21 Strategic Building Blocks
FY21 Financial Highlights
Looking Ahead
8
DIAGEO INDIA: OUR 5 STRATEGIC PRIORITIES
To be one of the best performing, most trusted and respected consumer products companies in India
5 Strategic Priorities
Strengthen & accelerate core brands
Evolve route to consumer
Drive productivity to invest in growth
Corporate citizenship
Winning organization
9
DIAGEO INDIA: OUR 5 STRATEGIC PRIORITIES
To be one of the best performing, most trusted and respected consumer products companies in India
5 Strategic Priorities
Strengthen & accelerate core brands
Evolve route to consumer
Drive productivity to invest in growth
Corporate citizenship
Winning organization
10
01
OUR BRAND PORTFOLIO AND KEY PASSION POINTS
PROGRESS
FOOD
UNWIND & RELAX
CRICKET
MUSIC
11
01
KEEP WALKING : #WALKINWITHJOHNNIE
1Opening film to promote the message 2 AMPLIFICATION
LAUNCH FILM - INVITATION
Engage celebs & influencers to amplify #WalkInWithJohnnie
COMMUNITY
3 X INCA partnership to engage bar owners
FINALE FILM
4
5
INSTALLATIONS
Striding man installation created by glass artists with the bottles collected @ our key accounts
12
01
BLACK & WHITE: MADE FOR SHARING
Black & White Rules
IWD Campaign
DRIVING SALIENCE AT HOME
13
01
BLACK DOG | SAVOUR THE PAUSE
Topical content with India’s Top Comedian
Product Led Content centered around WFH Theme
14
01
HIPSTER RE-INVIGORATING WHISKY
15
15
01
RC-RCB INTEGRATED CAMPAIGN
Digital Activation with RCB players promoting RCW
YouTube ‘Creator Award’ for surpassing 1M subscribers for RCB YT Channel
Special edition RCB players jersey inspired IPL pack
16
01
MCDOWELL’S NO1 : THE TRUE BONDS OF YAARI
EXPRESS
“Music”
EXPERIENCE
ENABLE
No.1 YAARIJAM ORIGINALS
No.1 YAARIJAM FESTS
No.1 YAARIJAM PADS
Content/Activation in F21
17
01
INNOVATION / RENOVATION BEING AT THE HEART
18
DIAGEO INDIA: OUR 5 STRATEGIC PRIORITIES
To be one of the best performing, most trusted and respected consumer products companies in India
5 Strategic Priorities
Strengthen & accelerate core brands
Evolve route to consumer
Drive productivity to invest in growth
Corporate citizenship
Winning organization
19
02
OPTIMALLY SERVING THE THREE INDIAs
AFFLUENT INDIA
MIDDLE INDIA
ASPIRING INDIA
Deliver unique, curated experiences
Leverage outlets to build brand equity & aid premiumization
Focus on retained states, support franchisees
“Horses for Courses”- led front line sales force optimization
Leveraging technology to monitor market execution
20
02
SCOTCH : FOCUSED INTERVENTIONS
WIN @ HOME
WIN @ STORE
WIN @ ON TRADE
Standout visibility
Enabled the in-home consumption through DIY drinks on digital & home bar promotions @ Off Trade
Festive packs
Scaled up Hipster pack
Go after duty free customers @ MoTs
Raise the Bar program to help get the community kick-start business
Took the lead in welcoming consumers back to their favourite bars through a scaled- up campaign
21
02
WIN @ STORE IN THE FESTIVE SEASON
BUNDLED PORTFOLIO PROMOS & LEP’s
NEW VISUAL IDENTITY UNLEASHED
Continued scale up of clutter breaking visibility
22
02
SCALE ON-GROUND RENOVATIONS
23
DIAGEO INDIA: OUR 5 STRATEGIC PRIORITIES
To be one of the best performing, most trusted and respected consumer products companies in India
5 Strategic Priorities
Strengthen & accelerate core brands
Evolve route to consumer
Drive productivity to invest in growth
Corporate citizenship
Winning organization
24
03
‘PRODUCTIVITY’ ACROSS THE VALUE CHAIN
Productivity Initiatives
NRM
Supply Optimization
▪
▪
▪
Effective spending
Stronger Price Mix
Supply footprint Transformation
▪ Distillation performance improvement & reduction in maturation losses
Marketing
▪
▪
Visibility elements rate productivity
Volume rebate on media spends
Overheads
▪ Office consolidation
▪
Leveraging vendor, re-negotiation & reverse auction
Cash
▪ Debt reduction of INR 1517 cr. during FY21
▪ Operating cash & finance cost savings of INR 25 cr
25
DIAGEO INDIA: OUR 5 STRATEGIC PRIORITIES
To be one of the best performing, most trusted and respected consumer products companies in India
5 Strategic Priorities
Strengthen & accelerate core brands
Evolve route to consumer
Drive productivity to invest in growth
Corporate citizenship
Winning organization
26
04
RAISING THE BAR
Standing with the Bar Community
• Starter kit deployed in 1500 outlets
• Euronics sanitization stations deployed in 1300 outlets
• Dineout contactless dining deployed in 1110 outlets
• Samsung 50” screens + TagTalk
customized content in 400 outlets
• Zomato digital ads across 1070
outlets that opted for the support
27
04
OUR SUSTAINABILITY JOURNEY
•
“Act Smart India” on Underage Consumption
• Moderation through
DRINKIQ
• UNITAR (United nations ) designed Anti Drink Drive training programme
• Global hospitality skills
programme “Learning for Life“
•
Empowering women generating sustainable livelihood
•
•
Initiated programme to replenish 20Bn m3 of water in FY 21
Reduced GHG emissions by 79%
28
DIAGEO INDIA: OUR 5 STRATEGIC PRIORITIES
To be one of the best performing, most trusted and respected consumer products companies in India
5 Strategic Priorities
Strengthen & accelerate core brands
Evolve route to consumer
Drive productivity to invest in growth
Corporate citizenship
Winning organization
29
05
WINNING ORGANIZATION
TALENT
CULTURE
SIMPLIFICATION
ENGAGE & ENERGIZE
30
01
02
03
FY21 Strategic Building Blocks
FY21 Financial Highlights
Looking Ahead
31
F21 FINANCIALS : BUSINESS SHOWED SEQUENTIAL QOQ RECOVERY
Q1
Q2
Q3
Net Sales
P&A net sales
Popular net sales
FY21
1 -13.2%
-7.2%
-17.7%
Gross Margin
-15.9% (140 bps)
EBITDA Margin
2 -34.4%
(405 bps)
Profit after tax
-56.0%
(382 bps)
Q4
16%
-54%
-49%
-7%
-3%
-4%
-4%
1%
0%
12%
19%
-51%
Reported Net Sales
Underlying Net Sales
Underlying without AP
Q1
Q2
Q3
Q4
31%
26%
8%
1%
5%
-1%
1 Underlying net sales declined (10.8)%, excluding one-off bulk Scotch sale. 2 Underlying EBITDA margin excluding one-off bulk Scotch sale declined 337bps
32
-52%
-49%
P&A Sales
Without AP
DECODING FY NSV PERFORMANCE
COVID Q4 F20 : (2.4)%, -240cr COVID Q1 F21 : +10.6%, +956cr
2.4%
2%
3.7%
8.2%
In INR Crore
+
CR
3.0%
Total Net Sales - F21 vs F20
-13.2%
CR
P&A Net Sales - F21 vs F20
COVID Q4 F20 : (2.7)%, -178cr COVID Q1 F21 : +10.4%, +638cr
5.4%
+5.9%
-7.2%
7.7%
CR
+
CR
33
EBITDA MARGIN SHADOWING NSV RECOVERY QOQ
16.6%
15.9% *
12.5%
Q1
Q2
(67)bps
(149)bps
84 bps
(106)bps
(167)bps
12.6%
Q3
15.4%
Q4
18.5%
1405
Reported EBITDA margin down 405bps Underlying EBITDA margin down 337 bps
Rs Crore
988
-7.5%
Underlying EBITDA decline is attributable to;
▪ Q1 lock-down
▪
Andhra Pradesh market access; Franchise
and unwinding costs
Reported
Underlying
*Underlying EBITDA margin excludes the impact of Bulk Scotch sale and one-off restructuring costs Underlying EBITDA margin for F20, net of bulk Scotch sale is 15.9%.
34
FY 21 PAT MARGIN MIRRORING THE EBITDA PERFORMANCE
405bps
11bps
(66)bps
(0.4)bps
(193)bps
272bps
3.9%
7.7%
Rs Crore
310
35
STRONG CASH GENERATION MOMENTUM CONTINUES
Rs. Crore
49
36
PROGRESSING TOWARDS ZERO DEBT
Debt reduction of Rs. 1517 Cr.
Interest saving of Rs. 25Cr.
Net debt
Debt-Equity ratio
Interest Cost
Interest Coverage ratio
Rs Crore
2,073
7 2
.
1 2
.
3 1
.
5 1
.
3 1
.
556
8 0
.
5 0
.
Net Debt F20
Net Debt F21
4 1 - 3 1
5 1 - 4 1
6 1 - 5 1
7 1 - 6 1
8 1 - 7 1
9 1 - 8 1
0 2 - 9 1
1 0
.
1 2 - 0 2
CRISIL has reaffirmed its 'CRISIL AA+/Positive/CRISIL A1+' ratings on the bank facilities and debt programme
191
153
166
91
Interest F20
Interest F21
Borrowing cost
Other finance cost
9 6
.
6 5
.
8 4
.
2 4
.
.
6 2 0 2
.
9 0
.
5 1 - 4 1
.
4 2 1 0 - - 3 1
6 1 - 5 1
7 1 - 6 1
8 1 - 7 1
9 1 - 8 1
0 2 - 9 1
1 2 - 0 2
37
EXITING F21 WITH PRIOR YEAR EPS METRICS
EPS Rs/share
Return on Capital Employed
F14 FY
F15FY
F16FY
F17FY
F18FY
F19FY
F20FY Q1 F21 Q2 F21 Q3 F21 Q4 F21 F21FY
13.5
2.3
7.7
9.1
9.7
1.8
3.2
2.3
4.3
-3.0
% 7 . 1 2
% 5 . 2 2
% 9 . 6 1
% 0 . 9 1
% 9 . 5 1
% 6 . 2 1
-26.9
-71.3
% 4 . 7
5 1 - 4 1
4 1 - 3 1
% 1 . 1 -
6 1 - 5 1
7 1 - 6 1
8 1 - 7 1
9 1 - 8 1
0 2 - 9 1
1 2 - 0 2
Note: EPS has been retrospectively adjusted for the 1:5 stock split that became effective in F19
38
01
02
03
FY21 Strategic Building Blocks
FY21 Financial Highlights
Looking Ahead
39
IN SHORT TERM, WE ARE COMMITTED TO…
Self Isolation Rooms
Salary Advances
Vaccination
Enhanced Medical Reimbursement
Free Tele Consultation
Employees
COVID Care Leave for self and Dependent
Domiciliary Medical expense
Employee Assistance Program
In case of demise of an employee, committing additional amount of one year salary
40
AND SOCIETY
1
16-bed mini-hospital units in 15 ‘most needy’ districts
2
3
PSA Oxygen Plants to nodal Government Hospitals in 21 districts
Medical equipment and consumables
4
Oxygen Concentrator, Ventilators & ICU Beds
41
While the short to medium term outlook remains uncertain…
42
WE ARE COMMITTED TO OUR LONG TERM INITIATIVES
SOCIETY 2030 SPIRIT OF PROGRESS
By 2030 Diageo will deliver a positive impact on society everywhere we live, work, source and sell
43
AND WE HAVE REASON TO BE OPTIMISTIC
Consumer Opportunity
Long-Term Premiumization
Category Resilience
17 million added to LDA* population per annum for the next 3-5 years
Improving household income in the long term
Robust Spirits demand during slowdowns of the recent past
*Legal Drinking Age assumed as >21 years for Spirits; period 2016-21
Source: World Economic Forum-Bain report, Census of India (for 2016), Internal analysis
Source: IWSR, MoSPI
44
8.8%3.8%4.8%3.8%7.9%7.9%7.9%8.1%7.7%3.1%7.9%8.5%5.2%5.5%6.4%7.4%8.0%8.2%7.2%7.0%2.4%8.4%2.8%9.8%7.7%1.8%9.8%12.0%18.0%26.8%32.5%12.0%8.9%4.0%2.6%4.0%4.7%1.3%10.6%19992000200120022003200420052006200720082009201020112012201320142015201620172018 A SPIRITED JOURNEY OF HOLISTIC & BREAKTHROUGH TRANSFORMATION THAT HAS CREATED A SOLID RUNWAY FOR THE FUTURE
PROFITABLE GROWTH
TRANSFORMED REPUTATION
BIG SHIFTS IN TALENT & CULTURE
45
THANK YOU
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46