IR presentation 2011

Brewing a success in India

Guido de Boer CFO United Breweries

UBL: Key facts and figures

10

54%

1.5

18

39%

75%

Source: FY2011 company Information, Industry Reports

million hectoliters

market share, the largest brewer in India

litre per capita consumption

owned breweries, and 10 contract

breweries

share for the Kingfisher brand - it is

synonymous with Indian beer

owned by Dr Vijay Mallya and Heineken

India and the Beer opportunity

Demographic dividend to be reaped Population increase fuels potential for rapid beer market growth

Source: United Nations (2011), McKinsey Global Institute (2007)

India will have the world’s largest

population by 2025

In 2030, India will have over 1.5bn

inhabitants

Net increase in working population

of 270 million by 2030

In 2030:

20% of the world’s below 25 year

olds will be Indian…

…compared with 11% from China

Significant growth in the legal

drinking age population in India

1%

2%

11%

20%

0% 10% 20% 30%

Russia

Brazil

China

India

Below 25 year olds as % of total

population in 2030

0 500 1,000 1,500

Russia

Brazil

China

India

Population in 2030

mln

Consumption is set for strong growth A significant middle class will emerge supporting increased spending power

Source: McKinsey Global Institute (2007)

Beer will become

increasingly affordable

to a growing number

of people in India

Increase in number of

upper & middle class

households of 123m by

2025

Middle and upper class

will drive 12.5x

consumption growth

Higher income

expected to support

significant increase in

discretionary spend

Household income brackets thousand, Indian rupees, 2000

101.1

91.3

10.9

2.4

1.2 Globals (>1,000)

Strivers (500-1,000)

Seekers (200-500)

Aspirers (90-200)

Deprived (<90)

2005

49.9

93.1

94.9

33.1

9.5

2025

Number of households million

4.1

8.5

2.1

1.0

1.2 Globals (>1,000)

Strivers (500-1,000)

Seekers (200-500)

Aspirers (90-200)

Deprived (<90)

2005

2.4

11.9

24.6

16.5

14.1

2025

Aggregate consumption trillion, Indian rupees, 2000

+123m

12.5x

Beer consumption in India is well below

other ‘BRIC’ countries

The Indian beer market has grown strongly over the past 5 years from a low base

Source: Canadean (2011)

0.8 0.9 1.1 1.2 1.3 1.5

34.5

64.5

76.1

0

20

40

60

80

2005 2006 2007 2008 2009 2010 China Brazil Russia

Per Capita Beer Consumption

PCC in lit

res

India

CAGR 14%

Today’s beer consumption is very low India is far below other emerging markets of similar income levels

22% 87% Beer

Spirits

Wine 5%

8%

<0.5%

78%

Per Capita Beer

Consumption at

comparable GDP

India

Comparable Markets

Share of alcohol

consumption

1.5 liter 20 liter

Note: 2010 data of India versus markets with a similar GDP per capita

High prices & low availability

Two key reasons

AVAILABILITY

65,000 licensed outlets

across the country

1 per 18,000 people

In China: 1 per 300 people

Beer is not the alcoholic beverage

of the common man

AFFORDABILITY

Highest duty in the world

Duty not set according to

alcohol content

Expensive alcoholic

beverage

An Indian has to work up to 7x as

long to afford a beer

India is the only BRIC where a beer

is more expensive than a Big Mac

Affordability

7

8

18

51

0 20 40 60

China

Russia

Brazil

India

Minutes work for a beer

0.2x

0.5x

0.5x

1.1x

0.0x 0.5x 1.0x 1.5x

China

Russia

Brazil

India

Beer relative to Big Mac

Beer prices in India are very high

Taxation is significantly higher

than other countries

Beer is taxed significantly higher

than hard liquor

Excise is highest among BRICs and drives preference for hard liquor

Affordability

0% 20% 40% 60%

China

Russia

Brazil

India

Taxation of Beer

Excise Duty VAT and other tax

29

75

- 50 100

Bagpiper

Kingfisher Premium

Relative pricing vs spirits per unit of pure

alcohol

2.6x

Indicative rates as % of consumer price. VAT is only

levied on value added, so effective rate is lower. Based on consumer prices in Tamil Nadu

12% 14%

31%

Liquor shops Permit rooms Beer shops

Availability Case Study: Mumbai Beer shops

Source: Company estimates. Percentages depict volume growth rates for FY11

New Policy established

Since the 1970’s no new licenses

have been issued for liquor shops

In 2006, the Maharashtra

government started to issue ‘beer

shop’ licenses for outlets that can

only sell beer and wine, but not

spirits

Number of beer shops has increased

sharply…

…driving high growth in beer shop

volumes

…accelerating growth of the overall

market

190 215

300

Mar10 Mar11 Nov 11

8%

3%

4% 15%

Liquor shops Permit rooms Beer shops Industry

A highly regulated market Leveraging the existing framework

Excessive State regulation and intervention

Route to market

Economics, need to have a brewery in each state

Pricing

India is not homogeneous country

27 uniquely different states

Ban on advertising alcohol

Difficult to build new brands

Requires ability to operating in very different

structures

Source: Canadean (2011), World Bank (2011), Company forecasts

India is at the start of the growth curve

Income growth will drive per capita beer consumption

Demographics will fuel further market

growth

UBL expects to grow volume at an average annual rate of 15% over the next five years

By the end of 2015, India is expected to reach 3 liter per capita

Kenya

Nigeria

Vietnam

India

Philippines

China

Colombia

Brazil Mexico

Russia

0

20

40

60

80

$0 $5,000 $10,000 $15,000 $20,000

Per

Cap

ita B

eer

co

nsu

mp

tio

n

GDP per Capita (in USD, PPP)

Beer consumption versus income level

Capitalising on UBL’s strengths

for growth

Market leading position in India

UBL’s leadership is undisputed

Strong market position will continue to drive economies of scale and superior

returns

All time high market share of over 54%

UBL is more than two times its

nearest competitor

UBL 54% SAB

23%

M Meakins 4%

Mt Shivalik 4%

Carlsberg 4%

AB-Inbev 1%

Others 10%

0%

10%

20%

30%

40%

50%

On a brand basis the leadership is even more apparent

All-India market share FY11

What is this leading position resulting from? UBL’s Competitive Advantages

UBL has been able to achieve its market leadership by

leveraging four competitive advantages:

Brands

Manufacturing footprint

Route-to-Market

People

The strength of the Kingfisher Brand is

unparalleled

Iconic brand – KINGFISHER is

synonymous with beer for Indian

consumers

No other beer brand comes

close:

Brand Equity among young consumers:

Kingfisher is India’s most liked

beer brand by far. No.2 has only

172k fans

On a global basis, Kingfisher is

the most liked alcohol brand

after Heineken

Leaving all global beers such as

Budweiser and Corona, and

renowned spirits as Smirnoff

and Bacardi well behind it 0% 20% 40% 60%

Golden Eagle

Tuborg

Sandpiper

Kalyani

Budweiser

London Pilsner

UB Export

Fosters

Royal Challenge

Kingfisher

All-India market share Mild Beer FY11

Brands in green are part of UBL portfolio

>6x

But it is not only Kingfisher…

…UBL leads across all segments

Mumbai mild beer portfolio Q2FY12

Economy

Mainstream

Premium

Super

Premium

80

100

135

170+

PR

ICE IN

DEX

Key brand Segment

share

65%

49%

70%

81%

Relative

share

0.25x

0.96x

0.23x

0.19x

No.2

Corona

Carlsberg

Fosters

Golden Eagle

Investing behind the brand Leveraging aspirational properties in fashion and sports

Cricket: Indian Premier League

Formula One: Force India

Football: Kingfisher East Bengal

Fashion: Kingfisher swimsuit calendar

Heineken Building brand equity for the future

Selective launch in key metros: Mumbai, Delhi, Bangalore, Kolkata and Goa

Gradual roll-out based on: 1. Perfect execution

Targeted Distribution

Premium Visibility

Cold & Fresh Stock management

2. Driving awareness & be part of the conversation.

Strong focus on digital media

3. Set benchmarks at every touch-point - Quality over quantity

K2 bottles

World class PoS materials

4. Leveraging UBL strengths in market

IPS segment is still a very small part of the overall market

Manufacturing network across all major

states

UBL brewery footprint Unique brewery footprint

In line with the requirements of

a complex regulatory

framework

18 owned breweries and 10

contract breweries

Closeness to market a critical

success factor

Freight costs

Import and export duties

Freshness

Ability to manage contract

brewers in key states

Owned breweries

Contract breweries

Best Route to Market

India has 27 states that have distinctly different routes

to market

Ability to manage this complexity is one of UBL’s

core strengths

Established distributor relationships

Group scale - with 60% share in spirits and 54% in

beer - provides significant benefits

Most distributors have been UB Group partners for

multiple decades

The best distributors and trade partners aligned

with UB Group

In distribution…

Best Route to Market

Leadership in cold chain management

Point of sale visibility

Must stock brands provides portfolio

benefits

Economies of scale

…as well as in retail

Fastest selling brands

Cold stock

freshness

People

Most experienced management in the industry Customer facing management has been with the group for 20+ years

Very low churn rate

Strong background in dealing with regulatory environment and market complexities

Very difficult for foreign entrants to replicate

Chairman’s added value

Dr Vijay Mallya provides significant added value as ambassador for the industry’s interests and is a member of parliament

UBL has a proven track record

0

2

4

6

8

10

12

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

Exceptional volume growth

UBL Sales volumes

In Million Hectoliters

5x

UBL volumes increased five fold in less than a decade

Performance highlights FY2006-2011

Continued outstanding performance

Sales up with an average 32% y-o-y EBITDA exceeds Rs 4 billion

Net Profit has grown with 54% CAGR EBIT has quadrupled since FY2006

0

10

20

30

40

2006 2007 2008 2009 2010 2011

0.0

1.0

2.0

3.0

4.0

2006 2007 2008 2009 2010 2011

0.0

0.5

1.0

1.5

2.0

2006 2007 2008 2009 2010 2011

-

1.0

2.0

3.0

4.0

5.0

2006 2007 2008 2009 2010 2011

All amount are in Rs bln, for year ending 31 March

Closing remarks

In Summary…

Indian beer market growth opportunity unparalleled in

the world

UBL is the clear market leader with strong segment

leadership positions

UBL expects to grow volume at a CAGR of 15% over the

next 5 years

A superior route-to-market and manufacturing footprint

provides consumer reach and scale benefits

Strong fundamentals in place to continue strong profit

growth

Questions, please?