Uac Of Nigeria Plc · NSENG:UACN
Uac Of Nigeria — 2021 EFG Hermes Investor Conference
27 slides from Uac Of Nigeria's conference presentation, Mar 8, 2021
Slide 1: UAC of Nigeria PLC Investor Presentation
UAC of Nigeria PLC Investor Presentation 8 March 2021 Fola Aiyesimoju – Group Managing Director Funke Ijaiya-Oladipo – Group Chief Financial Officer
Slide 2: Disclaimer
Disclaimer 2 This presentation contains forward-looking statements which reflect management's expectations regarding UAC of Nigeria PLC's (“UAC”, the “Company” or “HoldCo”) future growth, results of operations, performance, business prospects, operating markets and opportunities. Wherever possible,
Slide 3: Contents
Contents 3 Overview 4 FY 2020 highlights 11 Compelling growth outlook 19 Appendix 26
Slide 4: Overview
Overview
Slide 5: Holding company with some of Nigeria’s most admired brands
Holding company with some of Nigeria’s most admired brands 5 Brands Reach/ Monthly Sales • 5 production facilities providing national coverage Agro-Allied • 30 thousand metric tonnes output Packaged • National distribution coverage Food and Beverages • 35 million units of snacks, water and dairy sol
Slide 6: Organized around 4 key verticals
Organized around 4 key verticals 6 HoldCo • N14.6 billion in Cash • N2.2 billion in Eurobonds • N2.3 billion in Investment Property Assets Agro Allied Packaged Food Chemicals and Quick Service Non-Controlling and Beverages Paints Restaurants Interests FY 2020 Revenue Breakdown1 FY 2020 EBIT Breakdow
Slide 7: Meaningful domestic manufacturing presence
Meaningful domestic manufacturing presence… 7 11 factories across Nigeria Sokoto Katsina 6 South West • Food • Chemicals Yobe • Agro Allied Zamfara Jigawa Factories Kebbi Kano Borno Kaduna Bauchi 2 South East • Agro Allied Gombe Niger Factories Adamawa Kwara FCT 2 Plateau Nasarawa North Central Oyo
Slide 8: Supporting nationwide distribution
… supporting nationwide distribution 8 Logistics – Warehouse Footprint Quick Service Restaurants (QSR) Outlets 35 warehouses across 29 states 56 restaurants across 13 states Paint Retail Stores Food and Agro-Allied Distributors 94 paint retail stores across 33 states 1,091 distributors across 32 sta
Slide 9: HoldCo management focused on value creation
HoldCo management focused on value creation 9 Fola Aiyesimoju Group Managing Director • Experienced finance professional and investor with prior roles at KKR and Standard Bank • Founder of Themis Capital, an active investment company • Earned the right to use CFA designation in 2006 Nkem Agboti Funk
Slide 10: …and key operating segments
…and key operating segments 10 Mr. Alex Goma Mr. Gboye Adedeji Dr. Dele Ajayi Mr. David Wright Mrs. Joan Ihekwaba MD, Grand Cereals Limited MD, Livestock Feeds PLC MD, UAC Foods Limited MD, CAP PLC MD, UAC Restaurants Limited • Seasoned business • Seasoned executive with • Experienced business • Exp
Slide 11: FY 2020 highlights
FY 2020 highlights
Slide 12: Revamped and exited UPDC
Revamped and exited UPDC 12 Loss Before Tax (₦ mn) Interest Expense (₦ mn) Net Debt (₦ mn) 2018 2020 2018 2020 2018 2020 (263) (2,667) (1,513) (4,799) (20,288) (13,244) Background • In 2018, UAC prioritized addressing the challenges with UACN Property Development Company PLC (“UPDC”) • UPDC’s challe
Slide 13: Progressed merger of CAP and Portland Paints
Progressed merger of CAP and Portland Paints 13 ▪ On 26 October 2020, Chemical and Allied Products PLC (“CAP”) and Portland Paints and Products Nigeria PLC (“Portland 1 Paints”) announced their intention to merge their respective businesses ▪ The proposed merger is another milestone aligned with UAC
Slide 14: 2020 Full year results (unaudited)
2020 Full year results (unaudited) 14 Operating Free Cash Return on Revenue EPS Profit Flow Invested Capital1 FY FY FY FY FY ₦81.6bn ₦3.6bn 106 kobo ₦(3.4)bn 6.3% +3.0% (35.7%) +289 kobo +₦2.0bn (65 bps) vs FY 2019 vs FY 2019 vs FY 2019 vs FY 2019 vs FY 2019 (1) Invested capital used for ROIC calcul
Slide 15: Clear inflection point in Group underlying performance
Clear inflection point in Group underlying performance 15 Profit for the year, in ₦ mn (FY 2016 to FY 20201) 5,667 4,328 963 (9,530) (9,256) 2016 2017 2018 2019 2020 1 – FY 2020 unaudited results
Slide 16: Segment performance highlights
Segment performance highlights 16 Animal Feeds • Classified as “essential” so revenues least impacted by the stringent, COVID-19 related restrictions & Other Edibles • Price increases across major categories to offset input cost escalation 44% of Group EBIT • Focus on rationalising excess capacity,
Slide 17: Balance sheet and liquidity (unaudited)
Balance sheet and liquidity (unaudited) 17 Net Assets Net Cash Net Capex Cash Cycle ₦61.7bn ₦19.7bn (₦4.3bn) 99 days +₦1.2bn +₦2.2bn (₦1.7bn) +24 days vs Dec 2019 vs Dec 2019 vs Dec 2019 vs Dec 2019
Slide 18: Net cash position (unaudited)
Net cash position (unaudited) 18 Net Cash Position as at 31 December 2020 (in ₦ mn)1 Intra-Group Cash & Cash Short-Term Long-Term Net Cash (excl. Receivable / Net Cash (incl. Equivalents Debt Debt Intra-Group) (Payable) Intra-Group) UAC Company (Holdco) 14,634 - - 14,634 581 15,215 Other Operating S
Slide 19: Compelling growth outlook
Compelling growth outlook
Slide 20: Potential for significant value uplift with negative value attributed to operating platform
Potential for significant value uplift with negative value attributed to 20 operating platform Market Capitalisation Bridge, in ₦ mn • Cash & cash equivalents: N14.6bn • Eurobond investment: N2.2bn • Investment properties: N2.3bn • Market value of listed UPDC REIT units: N3.6bn 1 8 companies • N81.6
Slide 21: With clear value creation plans focused on three levers
With clear value creation plans focused on three levers 21 Value created 3 Acquisitions ▪ Selective M&A and bolt-ons Consolidate overlapping subsidiaries 2 ▪ ▪ Divest underperforming businesses Grow operating platforms ▪ Aggressive growth plans for 1 core platforms Return of capital ▪ Stable dividen
Slide 22: Snapshot of the animal feeds segment
Snapshot of the animal feeds segment 22 Overview Value creation Grand Cereals Limited • Expansion of oil capacity (higher margin product) • Private company; 71% ownership Margins • Improve procurement processes to leverage • Produces animal feed, cereals, oils and dogfood combined scale for direct s
Slide 23: Snapshot of the paints segment
Snapshot of the paints segment 23 Overview Value creation Chemical and Allied Products PLC • Public company listed on The NSE; 52% ownership • Aggressive footprint expansion Expand • Expand mid-tier offering • Produces decorative paint; sells via dedicated distribution network Range • Grow industria
Slide 24: Snapshot of the packaged food & beverages segment
Snapshot of the packaged food & beverages segment 24 Overview Value creation • UAC Foods is a leading packaged food and beverages • Invest in greenfield state of the art factory company • Implement plans to optimise snacks margins Grow • UAC Foods manages a family of brands across several product •
Slide 25: Snapshot of the restaurants segment
Snapshot of the restaurants segment 25 Overview Value Creation • UAC Restaurants (UACR) pioneered QSR in Nigeria with the launch of Mr Bigg’s in 1986 • Piloted 5 company-owned stores earning annualised ROI of 39% (ahead of plan) • In addition to the Mr Bigg’s chain, UACR also operates the Debonairs
Slide 26: Appendix
Appendix
Slide 27: Overview of UAC’s portfolio
Overview of UAC’s portfolio 27 Animal Feeds & Other Edibles Quick Service Restaurants (44% of Group EBIT) (0.2% of Group EBIT) • 71.43% held in Grand Cereals Ltd (79% of segment revenue) • 51.00% held in UAC Restaurants Ltd in a partnership with • 73.29% held in Livestock Feeds PLC (21% of segment r