Conference Call with Varun Beverages Management and Analysts on Q4CY22 Performance and Outlook. Listen to the full earnings transcript.
Varun Beverages announced Q4CY22 results: Q4CY22 vs Q4CY21: Revenue from operations (net of excise / GST) grew by 27.7% YoY to Rs 22,142 million. Net realization increased by 6% to Rs 164 primarily due to price hike in select SKUs, rationalized discounts/incentives, and improvement in mix of smaller SKUs (250ml) especially the energy drink – Sting, which has a higher net realization. Sales volumes grew by 17.8% in Q4CY22 to 132.0 million cases. EBITDA increased by 48.1% to Rs 3,075 million from Rs 2,076 million. EBITDA margins improved by 192 bps to 13.9% in Q4CY22. PAT improved by 150.2% to Rs 815 million from Rs 326 million in Q4CY21 in a seasonally weak quarter. CY22 vs. CY21: Revenue from operations (net of excise / GST) grew 49.30% YoY to Rs 1,31,731 million in CY22 as compared to Rs 88,232 million in CY21. Sales volume grew by 40.9% in CY22 to 802 million cases supported by strong performance in India as well as International territories. EBITDA increased by 68.5% to Rs 27,881 million in CY22 from Rs 16,546 CY21. Gross margins reduced by 180 bps to 52.5% from 54.3% in CY22 primarily due to increase in perform prices by over 30% during the year. EBITDA margin improved by 241 bps to 21.2%, led by higher realizations and operating leverage from increased sales volume. PAT increased by 107.8% to Rs 15,501 million from Rs 7,461 million in CY21, driven by high growth in revenue from operations, improvement in margins, and transition to a lower tax rate in India. Depreciation increased by 16% in CY22 on account of the capitalization of assets and Finance cost remained almost flat in CY22. Commenting on the performance for Q4 & 2022 Mr. Ravi Jaipuria, Chairman, Varun Beverages Limited said, “We are pleased to close the year on a strong note with exceptional operational and financial performance reported throughout CY22. The strong recovery in demand post the pandemic and our continued efforts towards expanding the distribution network across markets resulted in a 41% growth in consolidated sales volume. Additionally, we achieved growth in realization per unit through strategic measures such as selective price hikes, rationalized discounts and incentives, and improved product mix. This allowed us to deliver revenue growth of 49% and PAT growth of 108% YoY on a consolidated basis in CY22. We are excited to share that our energy drink, Sting, had a remarkable year, contributing significantly to both volume and realization growth. As the product is in an expanding category, we anticipate its strong performance to sustain in the coming year. Our recent launches in the value-added Dairy segment have also been well-received by consumers, and we are confident that these products will continue to drive growth in the future. As a leading beverage company serving over 1.3 billion customers globally through our extensive network of over 3 million retail outlets, we take our responsibility to the environment seriously. We are committed to sustainable & responsible operations and have taken a proactive stance in promoting sustainability in the beverage industry. Our aim is to minimize our impact on the environment and foster sustainable practices throughout our supply chain. Looking forward, we aim to further strengthen our position as a key player in the beverage industry by leveraging our strong presence in fast-growing markets, solid infrastructure, and well-established distribution network. Our focus remains on delivering high-quality products, further expanding our reach in key markets, and capitalizing on new opportunities to create sustainable long-term value for all stakeholders.” Result PDF
Tejas MD looks at Pepsi franchisee Varun Beverages (VBL), which has been on a sharp rise in 2022. Can the stock maintain its momentum? Listen to the full transcript.