FNB News - Varun Beverages revenue from operations grew by 28.3% YoY to Rs 71,968.6 mn

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MARKETING

Varun Beverages revenue from operations grew by 28.3% YoY to Rs 71,968.6 mn

Monday, 05 August, 2024, 12 : 00 PM [IST]

Our Bureau, New Delhi

Varun Beverages Limited, a key player in the beverage industry, announced its financial results for the second quarter and half year ended June 30, 2024.

Financial Performance Highlights
* Performance Review for Q2 CY2024 vs. Q2 CY2023 •

Revenue from operations grew by 28.3% YoY to Rs 71,968.6 million in Q2 CY2024 as compared to Rs 56,114.0 million in Q2 CY2023
Consolidated sales volume grew by 28.1% to 401.6 million cases in Q2 CY2024 from 313.5 million cases in Q2 CY2023. This includes ~28 million cases from BevCo during the quarter
India volumes grew by 22.9% while International volumes (before BevCo volumes) was almost flat primarily on account of volumes in Zimbabwe getting affected due to portfolio transition to zero sugar without affecting profits.

EBITDA increased by 31.8% to Rs. 19,912.2 million from Rs. 15,110.2 million

Gross margins improved by 222 bps to 54.7% from 52.5% during Q2 CY2024 primarily due to timely procurement and storage of PET chips to avail pricing benefits as well as the focus on reducing sugar content and light-weighting of packaging.
~ 46% of consolidated sales volumes come from Low sugar / No sugar products.
EBITDA margin improved by 74 bps to 27.7% in Q2 CY2024, led by higher gross margins
Performance Review for H1 2024 vs. H1 2023
Revenue from operations grew 21.1% YoY to Rs 115,141.8 million in H1 2024 as compared to Rs 95,043.8 million H1 2023
EBITDA increased by 29.1% to Rs 29,799.8 million in H1 2024 from Rs 23,090.6 million in H1 2023
PAT higher by 25.3% to Rs 18,098.2 million in H1 2024 from Rs 14,439.9 million in H1 2023

Commenting on the performance for Q2 CY2024, Ravi Jaipuria, chairman, Varun Beverages Limited, said, “We are pleased to report robust performance for the second quarter of CY2024, achieving a consolidated sales volume growth of 28.1%, which includes volumes from BevCo. The impressive volume growth of 22.9% in India primarily contributed to this outstanding performance, supported by our expanded capacities, enhanced distribution network, and a strong summer season. Meanwhile, our international markets remained relatively flat, moreover it was a seasonally weak quarter for African market.”

He added, “We are excited to announce further expansion in our partnership with PepsiCo, having entered into an Exclusive Snacks Franchising Appointment to manufacture, distribute, and sell "Simba Munchiez" in Zimbabwe by October 2025 and in Zambia by April 2026. This follows our recent announcement to manufacture and package Cheetos in Morocco by May 2025. These agreements complement our existing distribution of PepsiCo’s portfolio, marking another significant step forward in our strong, symbiotic partnership.”

Jjaipuria further stated, “Additionally, we are pleased to share that we have commenced commercial production of carbonated soft drinks and packaged drinking water at our Greenfield facility in DRC. With the region representing an untapped market for PepsiCo, this expansion offers a huge growth opportunity for us.”

He observed, “In line with our dividend policy, the Board of Directors has approved an interim dividend of 25% of the face value, i.e., Rs 1.25 per share. Additionally, the Board has considered and recommended the subdivision/split of existing equity shares of the company from 1 equity share with a face value of Rs 5 each fully paid-up into such number of equity shares having face value of Rs 2 each fully paid-up. This is subject to the approval of equity shareholders of the company. This is intended for wider retail participation. “

“With strong performance in a key quarter, we are on track to deliver healthy double-digit growth in this calendar year. India remains a high-demand market with massive growth potential, driven by a growing consuming class and a young population. To capitalise on this demand, we are focused on further strengthening our infrastructure, distribution network, and product portfolio. With a focus on strategic growth and leveraging new opportunities in both India and international markets, we are confident in our ability to deliver sustainable value to all stakeholdsers.”