09-10-2012, 05:45 PM
McDOWELL & COMPANY UNITED BREWERIES LTD
McDOWELL & COMPANY.ppt (Size: 1.6 MB / Downloads: 97)
India’s leading drinks group
Beer :
48% market share nationally
Sold in over 52 countries
India’s 1st global consumer brand - Kingfisher
Spirits :
54% market share in the domestic market
2nd largest player in the world
Both businesses poised for spectacular growth
Compelling demographics
Rapid rise in disposable income
Changing lifestyle & spending pattern
Slow but sure dismantling of regulatory controls
The Market for Beverage Alcohol
Regulatory environment :
The Indian market is highly regulated,
highly restricted and highly taxed.
Licensing requirement exists for Raw material procurement, Stocking of raw material, Production, Inter-state movement, Retailing and Distribution.
Controls also exist on Brand entry, Advertising, Distribution & Pricing.
Acquisition of Shaw Wallace
Shaw Wallace was the 2nd largest player in spirits in India (MS - 15%).
UB Group acquired ~ 55% stake for a consideration of Rs.13,000 mio in July 2005
Stakes increased to 75% through open offer.
Valuation underpinned by growth prospects and synergies arising from combined MS.
Vision to bring all Spirits business together and create “United Spirits”
Combined business would be amongst top 50 private sector companies in India.
Mergers…update
Filing of schemes with Stock exchanges completed
Schemes to be filed with courts –1st week of December’05
Court convened meetings- Mid January
Final hearing by Courts –End March ’06
Filing of orders with RoC and listing by end April ‘06
Trends - Realization & Costs
Cost push offset by
Increase in NSR
Decrease in market spends
Strategic buying of raw material including stock build-up
Increase in NSR / Decrease in Spends
UB has been in the forefront of the industry initiatives to drive prices up and spends down
Have spearheaded industry meetings with State Govts to obtain price increases e.g. TN, Kerala, Delhi, Rajasthan
McDowell’s NSR increase Rs 29 / case
Decrease in COG
Stocks built up pre-April 2004 cushioning impact of the rise in prices
Imported molasses
Strategic timing of purchases to effect price reductions
Result:
HY-I costs of FY’04 are still lower than HY-I of FY’05 by Rs.19/case
Fuel cost impact accounts for Rs.5/case