Nigerian Breweries Plc · NSENG:NB
Nigerian Breweries — Investor Presentation (September 2024)
39 slides from Nigerian Breweries's investor presentation, September 2024
Slide 1: Rights Issue: Investors / Analysts Engagement Session
Rights Issue: Investors / Analysts Engagement Session September 2024
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements on the financial position and results of the activities of Nigerian Breweries Plc. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in
Slide 3: Table of Contents
Table of Contents 01 OVERVIEW OF THE COMPANY 03 02 OPERATING ENVIRONMENT REVIEW 13 SECTIONS PAGE 03 FINANCIAL HIGHLIGHTS 19 04 RIGHTS ISSUE TERMS 22 05 APPENDIX 26 3
Slide 4: NB & Operating Environment
NB & Operating Environment Hans ESSAADI Managing Director/CEO
Slide 5: Overview of the Company
1 Overview of the Company
Slide 6: Key Milestones
Key Milestones 1946 - 1949 1954 - 1960 1964 - 1976 1982 - 2000 2003- 2014 2015 - Present Kaduna Brewery Ama Brewery UAC and commissioned. commissioned HEINEKEN signed a contract for the Celebrated 30th Resumption of local incorporation of Reached a Anniversary production of Brand expansion: Nigerian
Slide 7: Why invest in the Right Issue
Why invest in the Right Issue Market Leader • Market leader in the beer sector- value share ≈60% of the beer market in Nigeria1 Experienced and Diversified Board and Management • Extensive experience within the sector and across markets Wide Portfolio of Products • A wide portfolio that includes fam
Slide 8: Strong Board and Management Team
Strong Board and Management Team Board of Directors Mr. Hans Essaadi Mrs. Juliet Anammah Mrs. Adeyinka Aroyewun Mr. Sijbe "Siep" Hiemstra (Managing Director/CEO) (Independent Non-Executive Director) (Independent Non-Executive Director) (Interim Non-Executive Chairman) • Joined the Board in 2021. • A
Slide 9: Nigerian Breweries' Extensive Portfolio
Nigerian Breweries’ Extensive Portfolio Lager Stout/Dark Beer Non-Alcoholic Wines/Spirits/RTD Core Portfolio Expansion 9
Slide 10: Key Strengths – NB is tested and trusted
Key Strengths – NB is tested and trusted Strong Support One of the Strong Production Experienced from Core Leading Beverage and Distribution Management Shareholder Companies Footprint Team • Market leader in the beer • Benefits from strong backing of • 7 strategic brewery locations • Extensive exper
Slide 11: Strategic Priorities
Strategic Priorities Business • Return to long term profitability and sustainable value creation for shareholders 1 Recovery • Reduce foreign exchange pressures through local sourcing and export operation development • Continue to invest in our premium market leadership with higher margin 2 Sustain
Slide 12: Sustainability and Compliance is at the heart of our Business
Sustainability and Compliance is at the heart of our Business Environmental Social Responsible > ₦5bn >₦100m ₦78m Invested in ongoing community Planned spend on addressing harmful We continue to raise the bar on our Investment in Decarbonisation impact projects in Kaduna and Imo use of alcohol by co
Slide 13: Modernized footprint and increased installed capacity
We have modernized our footprint and increased our installed capacity to capture future market growth Key Highlights • Ama expansion is operational and online • Kudenda expansion in progress. Planned completion end 2024 Main objectives: – Replacement of older equipment – Key enabler to drive our Pre
Slide 14: Omni channel coverage and improved transaction capture
We continue to drive our omni channel coverage and improve transaction capture 518k Outlets Directly Covered Enablers Net Promoter Score B2B Platform NPS = % of Promoters – Detractors NPS = 84 (Sustained vs LY) Front Line Sales NPS % of Revenue = 65% Customer Service / Telesales 14
Slide 15: Transforming our Operations through Digitization
Transforming our Operations through Digitization CONNECTED WORKER ✓ One2Improve deployed to drive efficiency and improvements. ✓ Swipe Guide for Standards and Procedures ✓ XM Reality deployment ✓ 3D printing capability SMART BREWERY ✓ IoT (Internet of Things) Platform deployed to our breweries. ✓ In
Slide 16: Operating Environment Review
2 Operating Environment Review 16
Slide 17: FX, Fuel and Food are impacting consumer disposable income
FX, Fuel and Food are impacting consumer disposable income at an accelerated rate. 2024 shows early signs of stabilization Official vs Parallel rate (USD ) Food Inflation (YoY) Change (%) Sorghum Price(₦) Petrol & Diesel (₦) 1500 1600 40.0 40.5 40.7 40.9 39.5 1,200 1,477 37.9 1,397 33.9 1,211 900 1,
Slide 18: NB has installed capacity to capture future market growth
The Lager, Stout and Malt market has historically shown solid growth. NB has installed capacity to capture future market growth Devaluation NB has installed production capacity Solid historical Lager, Stout and Malt (LSM) market growth Crisis to capture potential market growth 25 ? 20 15 10 5 2000 2
Slide 19: Key Industry Growth Drivers
Key Industry Growth Drivers • The largest consumer market in Africa • Large youth base - more brand-conscious and willing to spend Large Population on consumer goods 1 • The beer industry is rapidly developing and arguably Africa’s most promising Income Growth and • Growing middle class with increas
Slide 20: Financial Performance Review
Financial Performance Review Ben WESSELS BOER Finance Director
Slide 21: Financial Highlights
3 Financial Highlights 21
Slide 22: HY1 2024 Operating Performance
Summary HY1 2024 Operating Performance H1 performance Operating profit bridge (₦ billion) ₦479b Net Revenue 33.6% 201.5 138.0 OG +73% ₦160b Gross profit OG +47.4b 14.8 3.0 ₦38.3b 18.3 17.7 Operating Profit 28.6 38.3 OG +9.7b Operating Increase in Increase in Increase in Increase in Increase in Other
Slide 23: Strong Operating Performance (2019 – H1'2024)
Strong Operating Performance (2019 – H1’2024) 802 260 213 213 600 551 160 437 131 Gross Profit 119 Revenue 323 337 (₦‘bn) (₦‘bn) 2019 2020 2021 2022 2023 LTM (H1 2019 2020 2021 2022 2023 LTM (H1 2024) 2024) 104 91 92 83 68 68 EBITDA (₦‘bn) 2019 2020 2021 2022 2023 LTM(H1 2024) LTM = Last twelve mont
Slide 24: Key Ratios Impacted by Devaluation (2019 – 2023)
… but Key Ratios Impacted by Devaluation (2019 – 2023) 5 4.0x 10.0% 796 52 205 3.0x 5.0% 620 25 – 120 2.0x 446 486 51 383 (5.0%) 40 136 1.0x (10.0%) 7 Total debt 2 – (15.0%) Total Assets (20.0%) and 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 and ROA leverage Non-current (N'bn) Current (N'bn)
Slide 25: Rights Issue
Rights Issue Uaboi AGBEBAKU Company Secretary/Legal Director
Slide 26: Rights Issue Terms
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Slide 27: Key Issue Terms | Rights Issue Overview
Key Issue Terms | Rights Issue Overview Amount N599.1 billion to be raised via Rights Issue offer to existing shareholders Offer Price N26.50/share Number of New Shares 22.61 billion new ordinary shares to be issued 11 new shares for every 5 ordinary shares held as of the qualification date on 12th
Slide 28: Rationale and Impact of Rights Issue
Rationale and Impact of Rights Issue Rationale for Rights Issue Use of Proceeds Impact of Rights Issue ₦263 billion ₦591 billion • Deleverage Balance ₦328 billion • Reduced interest Sheet burden • Eliminate Overdue FX • Lower leverage loans and payables ratios • Reduce Naira loans • Strengthened Bal
Slide 29: Summary
Summary Hans ESSAADI Managing Director/CEO
Slide 30: Why invest in the Right Issue
Why invest in the Right Issue Market Leader • Market leader in the beer sector- value share ≈60% of the beer market in Nigeria1 Experienced and Diversified Board and Management • Extensive experience within the sector and across markets Wide Portfolio of Products • A wide portfolio that includes fam
Slide 31: Q & A
Q&A Olutade Olaegbe Vetiva Advisory Services Limited
Slide 32: Appendix
Appendix 32
Slide 33: Statement of Financial Position (1/2)
Statement of Financial Position (1/2) `₦’millions 2019 2020 2021 2022 2023 Assets Non-Current Assets Property, plant and equipment 201,907 213,412 257,217 358,968 441,433 Right of Use Asset 11,074 42,916 12520 9,902 8,945 Intangible assets and goodwill 96,466 95,272 94,334 93,425 91,914 Investments
Slide 34: Statement of Financial Position (2/2)
Statement of Financial Position (2/2) `₦’millions 2019 2020 2021 2022 2023 Liabilities Non-current Liabilities Loan and borrowing 38,893 39,637 6,831 2,426 136,284 Lease liabilities - - - 15 1 Employee benefits 13,434 16,720 10,964 11,422 11,838 Deferred tax liabilities 23,171 17,854 23,282 18,407 T
Slide 35: Income Statement
Income Statement (₦’millions) 2019 2020 2021 2022 2023 Revenue 323,007 337,046 437,285 550,628 599,643 Cost of sales (191,757) (218,355) (276,872) (337,310) (387,032) Gross profit 131,251 118,691 160,413 213,328 212,610 EBIT 35,206 29,605 41,494 51,756 43,963 Net finance costs (11,853) (18,028) (17,
Slide 36: Statement of Cashflow (1/2)
Statement of Cashflow (1/2) ₦'million 2019 2020 2021 2022 2023 Profit for the year 16,106 7,368 12,672 13,187 (106,307) Adjustments for: Depreciation 31,402 36,830 39,777 38,033 46,392 Amortization of intangible assets 1,328 1,439 1,522 1,567 1,639 Finance income (261) (246) (314) (349) (513) Intere
Slide 37: Statement of Cashflow (2/2)
Statement of Cashflow (2/2) ₦'million 2019 2020 2021 2022 2023 Gratuity Paid (776) (800) (824) (930) (1,087) Other Long term employee benefits paid (711) (775) (695) (1,380) (1,302) Share Based Payment (407) (304) - (534) (138) VAT Paid (13,574) (21,600) (27,975) (27,691) (33,909) Net Cash from oper
Slide 38: Rights Issue: Investors and Analysts Call
Rights Issue: Investors and Analysts Call September 2024
Slide 39: Rights Issue: Investors and Analysts Call
Rights Issue: Investors and Analysts Call September 2024
Nigerian Breweries — Investor Presentation (September 2024) on 6ix