Conference Call with Britannia Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen to the full earnings transcript.

Remarks from Managing Director Varun Berry

We have started to see good growth and solid progress on our building blocks, different from the first three quarters of last year. Covid had a 7-10% decline in both our topline and bottomline due to the shutdowns. This led to a revenue growth for the FY of 2% which translated to a 24 month of 12%. PAT growth was 26% for the FY and 13.3% for 24 months. 

Our market share continues to grow, and we increased our market share. How we did it is a similar story - we have been strengthening our foundations. Very steady increase in numeric distribution. Direct reach is 22.2 lakhs. We have 21,000 rural distributors. Markets gain continued across the Hindi belt. Our campaign with Deepika for Good Day did quite well. 

Bread saw high single digit growth with improvement in profitability. Dairy maintained its profitability sequentially despite upsurge in milk prices.

While the Middle East continues to be challenging, rest of the international market is growing in high double digits. We took strategic positions in commodities to limit impact of rising inflation to 4%. There was in the market very high inflation on palm oil at 18% increase in prices, and milk as well where prices rose almost 50%. 

Impact of COVID19: We decided we should not have any hindsight bias, and we should take uncertainty very seriously. We worked to ensure faster approvals to be operational. Government was also caught wrong-footed, since central government directives were interpreted differently locally. We not only had to talk to central bodies but also district collectors, police etc. We got permission to operate all but four factories. We got 90% of distributors ready to accept stocks. Currently all our factories and distributors are now operational. 

We realized that there was a lot of demand in the market and whoever got first to market reaped the benefits. We decided that if we needed more capacity we would look at contract packers to meet capacity needs. 

We are also reviewing our costs in our current scenario. Looking at focusing advertisement, promotion & trade spends; looking at manpower productivity, direct sales from factories & lower turnaround time of vehicles. Also looking at renegotiation of contracts & avoiding discretionary spends, as well as wastage.

All these efforts have resulted in a consolidated revenue growth of 24% in the first 2 months of Q1’20-21.