East African Breweries Plc · NSEKE:EABL
East African Breweries — Debt Investor Presentation (2016)
25 slides from East African Breweries's debt investor presentation, 2016
Slide 1: Fixed Income Investor Roadshow 2016
CELEBRATING LIFE, EVERY DAY, EVERYWHERE FIXED INCOME INVESTOR ROADSHOW 2016 1
Slide 2: Contents
Contents Section Page 1. Overview 3 2. The Macroeconomic Environment 9 3. Financial Highlights 3.1 Financial Performance Overview 15 3.2 H1 2017 Result Summary 20 4. Investment Case 23 2
Slide 3: Section 1: Overview
SECTION 1 Overview 9 eabl
Slide 4: Company Overview
Company Overview East African Breweries Limited (EABL) is East Africa's leading branded alcohol beverage business with an outstanding collection of brands that range from beer, spirits and adult non alcoholic drinks Diageo, a global leader in alcoholic beverage owns 50.03% of EABL with the rest of t
Slide 5: Our Ambition
Our Ambition To create the best performing, most trusted and respected consumer products company in Africa Strengthen and accelerate our premium core brands Win in reserve in every market Innovate at scale to meet new consumer needs Build and then constantly extend our advantage in route to consumer
Slide 6: Senior Management
Senior Management Andrew Cowan Mr. Cowan was appointed Group Managing Director & CEO in July 2016. Group MD & CEO He is an established business leader, with a wide range of commercial and strategic management experience spanning over 20 years in the FMCG sector. Prior to this appointment he led Diag
Slide 7: Senior Management
Senior Management Helene Weesie Ms. Helene Weesie was appointed Managing Director of Tanzania Breweries in 2015 Managing Director Ms. Weesie has deep experience of our industry and Africa. She joined Heineken from SBL Unilever in 1993. During her time with the company Helene held a number of roles i
Slide 8: EABL Milestones
EABL Milestones EABL launches EABL (formerly Senator Stout, known as KBL) Senator Dark Extra, Successful incorporated as EABL is Equity interest is Jebel Gold, launch of a private listed on the acquired in EABL cross-lists Serengeti Platinum, Tusker Cider company Nairobi Kilimanjaro on the Uganda Li
Slide 9: Section 2: The Macroeconomic Environment
SECTION 2 The Macroeconomic Environment 9
Slide 10: East Africa Market is Growing
East Africa Market is Growing East Africa’s potential for growth is underpinned by strong macroeconomic factors Growth in the middle class due to economic progress Positive demographics supporting a rising consumer base Urbanization leading to increased disposable income and developed distribution n
Slide 11: Economic Drivers – Kenya
Economic Drivers – Kenya Population Overview 60 50 East Africa’s most diversified economy 40 Millions 30 Regional business hub 20 10 Economic growth driven by robust infrastructure 0 investment, improving financial conditions and tourism Outlook Drivers Real GDP-KES 7,000 6,000 Bank interest rates r
Slide 12: Economic Drivers - Uganda
Economic Drivers - Uganda Overview Population 60 50 Landlocked country 40 Millions Rich in natural resources - fertile soils, copper, cobalt, gold and 30 crude oil 20 10 Economy is expected to receive a boost once crude oil 0 production commences Real GDP (UGX) Outlook Drivers 80,000 70,000 60,000 P
Slide 13: Economic Drivers - Tanzania
Economic Drivers - Tanzania Population Overview 70 60 Widely regarded as East Africa’s most stable democracy 50 Millions 40 The economy depends heavily on agriculture 30 20 10 Significant presence of hard metal commodities 0 Outlook Drivers Real GDP (TZS) 7,000 6,000 Magufuli government’s policies 5
Slide 14: Section 3.1: Financial Highlights
SECTION 3 Section 3.1 Financial Highlights 14
Slide 15: Overview of Financial Statements
Overview of Financial Statements KES Millions 2014 2015 2016 H1 2017 Revenue 61,292 60,749 64,322 35,156 Profit after tax 6,859 9,575 10,271 5,585 Net Profit Margin 11.30% 14.86% 15.97% 15.89% Total Debt (Borrowings) 36,598 33,764 26,649 27,435 Total Shareholders Equity 9,101 13,353 10,867 11,946 Ca
Slide 16: Company Leverage
Company Leverage 80 450% 70 400% 350% 60 300% 50 KES Billions 250% 40 200% 30 150% 20 100% 10 50% 0 0% 2014 2015 2016 H1 2017 Total Average Debt Total Average Equity Total Assets Total Debt/ Equity ratio Debt levels have declined over the period, driven by a 50% reduction of long term debt. Coupled
Slide 17: Revenue and Cash Flow
Revenue and Cash Flow NET CASH FLOW FROM OPERATIONS REVENUE 64.3 18.6 61.3 60.7 13.6 35.2 6.2 6.0 2014 2015 2016 H1 2017 2014 2015 2016 H1 2017 Sales growth from 2015 to 2016 has been driven by organic growth in beers and spirits in Kenya and improvements of business in Tanzania and Uganda Excise du
Slide 18: Company Profits
Company Profits GROSS PROFIT NET PROFIT 35 32.0 12 32.2 30.2 10.3 30 10 9.6 25 8 6.9 KES Billions KES Billions 20 16.6 6 5.6 15 4 10 5 2 0 0 2014 2015 2016 H1 2017 2014 2015 2016 H1 2017 Gross Profit Net Profit Increase in gross profit margins has been driven by companywide cost reduction initiative
Slide 19: Revenue Contribution
Revenue Contribution H1 2017 2016 2015 Key Brands KENYA 74% 71% 61% UGANDA 17% 16% 18% TANZANIA 9% 10% 11% Other 0% 3% 10% Total EABL 100% 100% 100% 19
Slide 20: Section 3.2: H1 2017 Results
SECTION 3 Section 3.2 H1 2017 Results 20
Slide 21: Down Trading and Productivity are the Two Main Drivers of Performance
Down Trading and Productivity are the Two Main Drivers of Performance vs LY Volume +5% Net sales -6% Gross profit -5% Profit from continuing operations +2% Operating cash conversion +94% 21
Slide 22: Growth in Profit from Continued Operations
Growth in Profit from Continued Operations H1 F17 H1 F16 vs LY KES bn KES bn Operating profit 9.5 9.3 +3% Finance costs, net (1.5) (1.4) +11% Profit before tax 8.0 7.9 +1% Income tax expense (2.4) (2.4) 0% Profit after tax-continuing operations 5.6 5.5 +2% Profit from sale of CGI - 2.2 N/A Profit fo
Slide 23: Section 4: Investment Case
9 eabl SECTION 4 Investment Case 23
Slide 24: Building Blocks for EABL's Credit Story
Building Blocks for EABL’s Credit Story Prudent financial risk Profile Ability to generate strong and stable cash flows Strong Management Team EABL has an experienced and diverse management team Africa strategy Market leader in East Africa Competitive Advantage in Africa Diversified brand portfolio
Slide 25: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This document contains ‘forward-looking’ statements. These statements can be identified by the fact that they do not relate only to historical or current facts. In particular, forward-looking statements include all statements that express fo
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