Varun Beverages announces Q4 & 2020 Financial Results

Varun Beverages Limited (BSE: 540180, NSE: VBL), a key player in the beverage industry, announced its financial results for the fourth quarter and year ended December 31, 2020.

Financial Performance Highlights*

Performance Review for Q4 2020 vs. Q4 2019

- Revenue from operations (net of excise / GST) grew by 9.1% YoY to Rs. 13,308.9 million

- Total sales volumes (organic) were up 5.6% YoY at 87.1 million cases in Q4 2020

- EBITDA increased by 48.8% to Rs. 1,722.3 million from Rs. 1,157.4 million

- EBITDA margins improved by 346 bps in Q4 2020 on account of sustainable cost-optimization measures

- Gross margins improved by 472 bps during Q4 2020 primarily due to favorable PET chips prices (~12.5% decline) and higher mix of CSD

- Losses reduced significantly to Rs. (72.4) million from Rs. (539.5) million in Q4 2019

Performance Review for 2020 vs. 2019

- Revenue from operations (net of excise / GST) de-grew 9.5% YoY to Rs. 64,501.4 million as compared to Rs. 71,295.8 million

- Realization per case improved by ~4.8% in 2020 due to favorable mix and improvement in realization in the international market

- EBITDA declined by 17.0% to Rs. 12,018.7 million from Rs. 14,476.5 million

- PAT declined by 24.3 % to Rs. 3,572.7 million from Rs. 4,722.1 million

Commenting on the performance for Q4 & 2020 Mr. Ravi Jaipuria, Chairman, Varun Beverages Limited said, "We have ended the year 2020 on a steady note despite unprecedented macro-economic challenges. The spread of the COVID-19 pandemic in early March 2020 caused significant disruptions in our business operations, particularly during the seasonally strong period of April to June quarter. However, a faster-than-anticipated recovery across key markets in the second half of the year combined with our operational efficiencies enabled us to restrict revenue de-growth at 9.5% YoY for the full year.

On the profitability front, we were able to largely sustain some of the cost-optimization measures implemented during the pandemic that enabled us to report steady profitability in Q3 and Q4. It is also encouraging that even in seasonally soft quarter, the losses in Q4 2020 were significantly lower in comparison to Q4 2019 on account of better business efficiencies, cost rationalization strategies and healthy recovery in international territories.

I am also happy to share that in the month of Feb 2021, we introduced a new product variant - Mountain Dew Ice, which is lemon fruit juice-based drink. The initial response for these products has been positive and we remain highly confident of the long-term growth prospects of this new variant, especially in the upcoming season.

With overall economic activity picking-up sharply across the country, there is an improved consumption trend being witnessed on a month-over-month basis. This bodes well for all our product categories over the medium-to-longer term. On the whole, we are on a strong footing, operationally and financially, and remain confident that further stabilization of the macroeconomic environment will translate into strong growth for us going forward."

Shares of Varun Beverages Ltd was last trading in BSE at Rs.943.6 as compared to the previous close of Rs. 912.1. The total number of shares traded during the day was 28914 in over 1292 trades.

The stock hit an intraday high of Rs. 962 and intraday low of 916. The net turnover during the day was Rs. 27043286.

Source : Equity Bulls

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