Zambeef Products Plc · LSE:ZAM
Zambeef Products — FY2011 Earnings Presentation
40 slides from Zambeef Products's earnings presentation, September 2011
Slide 1: Zambeef
Slide 2: Sinazongwe Farm
Sinazongwe Farm
Slide 3: Disclaimer
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Slide 4: Contents
CONTENTS Zambia Overview Zambeef Group Overview Divisional Review 2011 Performance Growth and Development
Slide 5: Zambia Overview
Zambia Overview
Slide 6: Attractive Zambia Agriculture Fundamentals
ATTRACTIVE ZAMBIA AGRICULTURE FUNDAMENTALS Zambia has the potential to expand agricultural production given its considerable resource endowment in terms of land, labour and water Of Zambia’s total land area (752,620 km2) 58% is classified as having medium to high potential for agricultural produ
Slide 7: Zambia Overview
ZAMBIA OVERVIEW Strong, Broad-based GDP Growth Single Digit Inflation & Relatively Stable Exchange Rate 8.0% 7.6% 6,000 20.0% 4,878 5,046 Average = 6.4% 6.4% 4,797 6.2% 6.2% 5,000 16.6% 16.0% 6.0% 5.7% 4,128 3,837 4,000 12.0% 4.0% 3,000 9.9% 8.9% 7.9% 8.0% 8.2% 2,000 2.0% 4.0% 1,000 0.0% - 0.0% 2006
Slide 8: Mpongwe Farm
Mpongwe Farm
Slide 9: Zambeef Group Overview
Zambeef Group Overview
Slide 10: Attractive Investment Opportunity
ZAMBEEF ATTRACTIVE INVESTMENT OPPORTUNITY Sound macro- economic backdrop of sub-Saharan Africa Experienced management team Large supplier of with established track record “Farm cropping and protein in Zambia to Fully diversified and Fork” Strong recognised integrated business brands model Global dem
Slide 11: Zambeef History
Zambeef History 1994 2003 2005 & 2007 2008 2010 2011 Incorporation LuSE Listing West Africa 1st Capital Raise Expansion AIM Listing & Expansion Acquisition of Mpongwe Farm Nigeria & Ghana Master Pork Ltd Chiawa Farm expansion Zamanita Ltd New stock feed plant Chiawa Farm Assets Zampalm Ltd From a be
Slide 12: Overview of Group's Business
Overview of Group’s Business 12
Slide 13: Historic Financial Performance
Historic Financial Performance TURNOVER GROSS PROFIT 983 [28%] 335 [38%] 771 [10%] 697 242 [11%] 219 207 (28%) 70 [38%] 138 162 (18%) 51 [26%] 40 2008/09 2009/10 2010/11 2008/09 2009/10 2010/11 Turnover (ZMK'bn) Turnover (USD'm) Gross Profit (ZMK'bn) Gross Profit (USD'm) EBITDA PROFIT AFTER
Slide 14: Segmental Summary
Segmental Summary TURNOVER GROSS PROFIT Leather West Africa West Africa 1% Leather Operations Operations Bakery & Flour 1% 3% 3% Beef Beef Bakery & Flour Edible Oils 3% 23% 18% 24% 6% Edible Oils 23% Chicken Chicken Zamchick Inn 9% 8% 1% Zamchick Inn Crops - Raw Eggs Milk 1% 8% 2% Crops - Raw Pork 1
Slide 15: Kabulonga Retail Outlet
Kabulonga Retail Outlet
Slide 16: Divisional Review
Divisional Review
Slide 17: Cropping
CROPPING One of the largest irrigated row cropping operations in Zambia 8,000 Ha irrigated and 9,000 Ha rain fed, arable, developed land available for planting each year Double cropping opportunity on irrigated crop Growing mostly wheat, maize and soya beans Crop production focussed on soy
Slide 18: Beef
BEEF One of the largest suppliers of beef in Zambia, slaughtering over 43,000 cattle p.a. One of the largest feedlotter of quality beef in Zambia, feedlotting over 14,000 grain fed cattle p.a. 8 abattoirs and 3 feedlots located throughout Zambia BEEF - TURNOVER (ZMK'bn) 300 280 [38%] 60% 225
Slide 19: Chicken & Egg
CHICKEN & EGG One of the largest chicken and egg producers in Zambia Processing 4 million chickens p.a. Producing 30 million eggs p.a. Further investment in new chicken houses planned for 2012 POULTRY - TURNOVER (ZMK'bn) 140 126 [23%] 60% 120 102 [42%] 50% 72 100 40% 80 60 30% 28% 30% 17%
Slide 20: Pork
PORK One of the largest piggeries, pig abattoir and pork processing plant in Zambia Processing over 42,000 pigs p.a. Piggery producing over 6,000 pigs p.a. Produces full range of cooked, smoked and processed meat products Installing new Hirschpro 400 processing plant, plus further investme
Slide 21: Milk & Milk Processing
DAIRY - TURNOVER (ZMK'bn) MILK & MILK PROCESSING 60 90% 43 [4%] 52 [22%] 80% 50 41 Dairy farm with over 1,900 dairy cattle, with 700 70% 40 65% 64% 60% 50% currently lactating, and producing an average of 5.8 30 45% 40% 20 30% million litres of milk p.a. 10 20% 10% 0 0% Milk pasteurised and ho
Slide 22: Edible Oils
EDIBLE OILS One of the largest edible oil and soya cake producers in Zambia Adds value to the soya beans from the Zambeef farms Current capacity to crush 60,000 tons of oil seeds p.a. Upgrade and expansion of plant planned during 2011/2012, to increase crushing capacity to 100,000 tons p.a.
Slide 23: Stock Feed
STOCKFEED - TURNOVER (ZMK'bn) STOCK FEED 140 128 [65%] 60% New stock feed plant commissioned in 2010 120 50% 100 77 [51%] 40% 80 51 Operating at close to full capacity (7,000 tons p.m.) 30% 60 40 22% 21% 22% 20% Adds value to the protein by-product from the 10% 20 0 0% Zamanita crushing plan
Slide 24: Mill & Bakery
MILL & BAKERY Wheat mill and bakery commissioned in 2007 Currently milling 24,000 tons of wheat p.a. and baking 9 million loaves p.a. Adds value to the wheat from the Zambeef farms MILL & BAKERY - TURNOVER (ZMK'bn) 70.0 [48%] 80. 0 60% 70. 0 50% 60. 0 47.2 47.3 [0.3%] 40% 50. 0 40. 0 30% 30.
Slide 25: Leather & Shoes
LEATHER & SHOES Tannery and shoe plant to add further value to the by- product of the beef abattoir division (cattle hides) Currently processing 63,000 hides p.a. Producing wet blue leather, finished leather, industrial footwear and protective leather clothing LEATHER AND SHOES - TURNOVER (ZMK
Slide 26: Palm
PALM First commercial palm plantation in Zambia Pilot phase commenced in 2008 Scope to increase plantation size Aim to provide Zamanita with locally produced raw material feed stock (crude palm oil) 26
Slide 27: Retail Outlets
RETAIL OUTLETS All food products of Zambeef retailed to end consumer through extensive retail channel, including 45% of edible oils output High growth of consumer demand Focus on upgrading and refurbishing existing stores Focus on wholesale operations to attract informal and commercial secto
Slide 28: West Africa
WEST AFRICA - TURNOVER (ZMK'bn) WEST AFRICA 45 40% 32 39 [26%] 31 [4%] 40 35% Exciting opportunity for the Zambeef Group 30% 35 30% 30 25 22% 24% 25% Partnership with Shoprite 20% 20 15% 15 10% 10 Large expansion plans for Shoprite 5% 5 0 0% 2008/09 2009/10 2010/11 Setup of infrastructure
Slide 29: Palm Farm Mpika, Palm Plantation
Palm Farm Mpika Palm Plantation
Slide 30: 2011 Performance
2011 Performance
Slide 31: Abridged Income Statement
Abridged Income Statement ACTUAL ACTUAL % CHANGE TO ACTUAL ZMK'Ms Y/E 2011 Y/E 2010 Turnover 983,138 770,528 28% Gross Profit 334,947 242,144 38% Other Income 1,147 290 296% Administrative expense (265,857) (208,673) 27% Operating Profit 70,237 33,761 108% Interest Costs (18,319) (10,236) (79%) Fore
Slide 32: Abridged Balance Sheet
Abridged Balance Sheet ACTUAL ACTUAL ZMK'Ms Y/E 2011 Y/E 2010 Non Current Assets 817,702 530,362 Current Assets 359,365 248,908 TOTAL ASSETS 1,177,067 779,270 Capital and Reserves 744,593 456,425 Non-Current Liabilities 188,494 144,794 Current Liabilities 243,980 178,051 TOTAL EQUITY AND 1,177,067 7
Slide 33: Abridged Cash Flow
Abridged Cash Flow ACTUAL ACTUAL ZMK'Ms Y/E 2011 Y/E 2010 Profit Before Taxation 50,356 15,534 EBITDA 88,420 61,329 Movement in Working Capital (65,840) 7,176 Cash inflow from operating 22,580 68,505 activities Purchase of PPE (88,688) (89,665) Purchase of Mpongwe (234,774) - Proceeds from disposal
Slide 34: Segmental Summary
Segmental Summary Turnover Gross Profit Gross Profit Margins Segment 2011 2010 Change 2011 2010 Change 2011 2010 ZMK'Ms ZMK'Ms % ZMK'Ms ZMK'Ms % Beef 279,898 202,895 38% 79,796 63,320 . 26% 29% 31% Chicken 106,108 83,382 27% 26,571 20,978 27% 25% 25% Pork 84,169 64,288 31% 25,848 20,084 29% 31% 31%
Slide 35: Mpongwe Dairy Farm Plant
Mpongwe DairyFarm Plant
Slide 36: Growth and Development
Growth and Development
Slide 37: Growth Prospects
Growth Prospects • ZAMANITA - Upgrade and expansion of the Zamanita plant to increase crushing capacity and improve efficiencies; upgrade completion in 2012 • FARMING - Acquisition of Mpongwe Farm to increase supply of soya beans for Zamanita - Further expansion and upgrade of Mpongwe Farm • GROWTH
Slide 38: Mpongwe Zamanita Farm Oil Plant
Mpongwe ZamanitaFarm Oil Plant
Slide 39: Notes
Notes
Slide 40: Contact
CONTACT uo\* Private Bag 17, Woodlands Plot 4970, Manda Road Industrial Area, Lusaka, Zambia Tel: +260211 369000 Fax: +260211 369050 www.zambeefplc.com