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BIRA Investor Presentation Q3FY25 Update:
Disclaimer: The presentation contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ from those expressed. B9 does not undertake any obligation to revise these statements to reflect events or circumstances after the date of the materials.
Key Highlights: Growth has returned in Q3FY25. Top-line growth includes a +50% increase in volume and +42% increase in revenue. Bottom-line growth includes 68% gross margins (+9% vs LY) and +50% EBITDA.
Company's Path to Profit: The company embarked on three key initiatives in FY25: Topline Growth, Gross Margin Improvement, and Cost Optimization. Actions include: (1) Topline Growth: Driving monthly volume of 1Mn cases. (2) Gross Margin Improvement: Achieving 66% margin, +7% vs last year. (3) Cost Optimization: Realizing a 27% reduction vs. last year. The company has successfully improved gross margins, stabilized them, and continues to actively manage costs. Top line repair is the main focus for the management team moving forward.
Significant Growth in H2FY25: Significant growth was seen after disruptions in H1FY25. Gross Revenue increased to 3,438 INR Mn in H1FY25 and 3,804 INR Mn in H2FY25LE, compared to 4,956 INR Mn in H1FY24. H1FY25 growth was impacted due to name changes which forced the company to re-register its brand and labels across breweries and state destinations, and policy changes due to central elections leading to disruptions in key markets such as Andhra Pradesh and Delhi. Disruptions have now subsided and stabilization of RTM in key states. Revenue has restored back in line with last year levels and distribution ramp up in H2FY25.
Distribution Growth: The company aims to bring Distribution Back to Pre-Disruption Levels through improving Distribution outcomes in stores (# of store and products per store); driving liquid-level distribution across stores along with growth in numeric distribution; and More activations to drive product availability.
Free Flow Fest: Large & Exciting Consumer Activation for Festive Period: The company’s “Free Flow Fest” was active Oct-Nov’24. It included: 3600 accounts, 2000 outdoor displays, 100 festivals, and 1 Million consumer trials.
Significant Improvement & Stabilization of Gross Margins in FY25: H1FY25 margins improved by 7% vs LY, driven by higher NSR in H1FY25 led by better state mix, product mix, and price increases, and Optimisation initiatives in raw material cost and other costs.
Strong Unit Economics: Bira 91 has Gross Margins higher by 20%+ Compared to Market Leader. Material Margins (% to NSR) are 66% for Bira 91, compared to 43% for UB.
Strong Control on Fixed Costs: Fixed costs saw a significant reduction vs last year (-27%). Active fixed costs management is in place. The company is investing in sales manpower to enable top line growth. The company optimizes marketing through tighter control of spends and quarterly plan tracking. Strengthen org capability through tech interventions.
Pubs & Taprooms Business: B9's expanding micro brewery and pubs footprint pan-India: Scaling to become the country's largest Pub Chain. Taproom numbers include: 37 in FY23A, 53 in FY24A, and an estimated 63 in FY25LE. EBITDA % is expected to be 13% in FY25LE. Bira 91 Taproom is at Kamala Mills, Lower Parel, Mumbai.
H2FY25 Outlook & Quarterly Performance (Q3 & Q4LE): Supply-linked / External disruptions are over for the most part. Q3FY25 has already delivered year-on-year growth. EBITDA Margins are likely to improve further from current levels.
FY25LE: P&L Summary: The company forecasts a rebound in H2FY25 and beyond, with revenue growth and improved EBITDA. The focus remains on reducing fixed costs and improving margins.
FY2026: Laying the Foundation for the Next 10 Years.
Positive Policy Tailwinds in Key States to Support Growth in FY26: Key policies include: Delhi - election results remove policy limbo and conflict between state and central governments. Uttar Pradesh - New policy increases the number of licensed outlets by 2x, thereby improving safe product access for consumers. Telangana - Price increase makes it viable for out-of-state player like Bira 91 to drive volume growth. Odisha - Policy changes improve ease-of-doing business. Andhra Pradesh - Stabilization of new RTM and private retail likely to improve shopping environment, and consumer access to premium products.
FY26: Simplifying operations, Optimizing Costs & Driving Focus: Includes: (1) Focus on Few Must-Win States and Go Deep; (2) Drive Further Reduction in Fixed Costs; (3) Ensure Timely Capital Raise.
INDIA – Realigning Zones for Focused Execution: Sales zones are led by Aditya Sud (Sales North + Beacon), Dheeraj Chaula (Sales Central + CSD), and G. Davedutt (Sales South).
Partnering with the Strongest Wholesalers in the Country to Drive Growth & Lay the Foundation for the Next 10 Years: Strategic partnerships: Delhi - Partnered with largest alcobev distributor in the country with exclusive long-term mandate to drive business growth in key territory (Q4FY25). Uttar Pradesh - New Partner aligned with state-of-the-art infrastructure and state-wide leading distribution network in the state for Premium alcobev. Maharashtra - Largest alcobev distributors to partner in key markets of Mumbai, Pune, Thane. Odisha - Increase capital allocation from partner in market Q4FY25. Haryana - Increase capital allocation from partner in market Q4FY25. Rajasthan - Change to larger partner Q3FY25.
FY26: Driving Business to Profitability: Includes: (1) Focus on Few Must-Win States and Go Deep, (2) Drive Further Reduction in Fixed Costs, (3) Ensure Timely Capital Raise. Specifically: Series E Round Expected in H1FY26 ($50MM+); NCD/Bonds of INR 1000 Mn issuance in Q1FY26.
Reaching a Critical Inflection Point: The Company will be well-positioned to list in CY26.
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