Guinness Nigeria Plc · NSENG:GUINNESS
Guinness Nigeria — FY2022 Earnings Presentation
32 slides from Guinness Nigeria's earnings presentation, July 2022
Slide 1: GNL Full Year Results Investors' Call
Baker Magunda, Managing Director/ ° Chief Executive Officer " S4c Emmanuel Difom, es Finance & Strategy Director F22 GNL Full Year Results Investors’ Call Rotimi Odusola, Corporate Relations Director & Company Secretary and other members of the Guinness Nigeria Executive team. ¥ \\ige 100.
Slide 2: Agenda
DIAGEO Agenda FULL YEAR = osrhogins RES U LTS F22 Full Year Financial Performance Review | NVESTO RS’ Emmanuel Difom F23 Prioriti CALL Baker Magunda Q&A Rotimi Odusola
Slide 3: Baker Magunda, Managing Director
AFRICA Baker Magunda Managing Director
Slide 4: Strategic Imperative
Deliver OM of 10% from F21 projected OM of 2.6%. Win TBA Value market share, and improve OP month on month in F22 in order to become the best performing, most trusted and respected company by F24 WHAT HOW • Grow Guinness Share in Beer by 1% • Deliver Smooth volumes of 134keu’s MPERATIVE STRATEGIC •
Slide 5: GDP and Population Growth, FX Scarcity, Inflation
GDP and Population Growth FX Scarcity Inflation FX Scarcity - In the interim, the NAFEX rate is Inflation projected to remain high at 17.1% GDP: Economic growth rate is overvalued at N415.1/$ in comparison to a in 2022 driven by: projected to decelerate to 3.0% in parallel market mid-rate of approxi
Slide 6: To mitigate the impact of the challenging environment, we ...
To mitigate the impact of the challenging environment, we ... TOOK BOLD & DELIBERATE PRICE INCREASES INCREASED SPEND BEHIND STRATEGIC BRANDS SUSTAINED STAKEHOLDER ENGAGEMENT CONTINUED INVESTMENT IN COMMUNITY IMPACT
Slide 7: Our prices are ahead of market in Stout, RTS, Malt and MSS
Our prices are ahead of market in Stout, RTS, Malt and MSS Industry Category Price growth-in % GN Price growth -in % YTD vs LY. 3M vs LY C3M vs P3M YTD vs LY. 3M vs LY C3M vs P3M Beer 28.8% 30.% 3.5% Beer 25.0% 29.2% 3.9% Lager 30.7% 31.8% 3.4% Lager 18.8% 29.3% 1.2% Stout 22.5% 26% 3.8% Stout 24.5%
Slide 8: We continue to spend behind our strategic brands
We continue to spend behind our strategic brands… A&P Spend (N’b)
Slide 9: F22 Media Relations & Employee Engagement
F22 Media Relations & Employee Engagement DIAGEO GUINNESS A significant highlight of F22 is the official opening of our ultra-modern Headquarters in Ogba, which was accompanied by the 724 anniversary of Guinness Nigeria. This reinforced the commitment of our organization to remain and invest in Nige
Slide 10: F22 Media Relations & Employee Engagement
F22 Media Relations & Employee Engagement AFRICA Sustained engagement with all stakeholder groups, including the media and KOFs. 2 JiibarEeN inance Banking Sharcholders Approve Guinness Nigeria N1.008bn Dividend ‘Nigeria pends gn servicing commercial loans * — Positive Guinness Nigeria’s Media Featu
Slide 11: F22 Media Relations & Employee Engagement
F22 Media Relations & Employee Engagement DIAGEO AFRICA Stakeholders and KOFs know what we stand for, with numerous external recognition and awards received. ¢ Unveil of New Brand Diageo Identity. * — Recognitions awarded to Guinness Nigeria corporate and product brands. * GN shone at Diageo Pride o
Slide 12: Doing the right thing: Responsible Drinking
Doing the right thing: Continued investment in people, communities and the environment through Diageo’s Spirit of Progress Responsible Drinking * With Wrong Side of The Road, we reached 12,733 individuals with over 8000 reporting attitude change from the post survey completion data. * Through DrinkI
Slide 13: Medical Equipment & Office Furniture Donation to Guinness Eye Clinic
• • • Medical Equipment & Office Furniture Donation to the Guinness Eye Clinic, LUTH – In addition to the annual N5m medical equipment grant to the eye hospital, we donated 20 office tables, 10 ergonomic chairs and 6 cabinets to the clinic in support of their furniture needs.
Slide 14: Reducing Environmental Impact
DIAGEO AFRICA Doing the right thing: Continued investment in people, communities and the environment through Diageo’s Spirit of Progress Reducing Environmental Impact * Fully functional Water Recovery Plant in Ogba Brewery: reduction of water taken from the environment by up to 800,000 cm3 - about t
Slide 15: Diversity & Inclusion
DIAGEO AFRICA Doing the right thing: Continued investment in people, communities and the environment th h Diageo’s Spirit of Progress. Diversity & Inclusion Internally, = Improved employees’ D&I scores at Your Voice - +3 over 2021; +5 over Diageo overall = Increased female representation via deliber
Slide 16: Malts & RTDs
MAINSTREAM WITHIN STOUT SPIRIT PREMIUM SPIRITS MALTS & RTDS
Slide 17: Emmanuel Difom, Finance & Strategy Director
A Emmanuel Difom Finance & Strategy Director AFRICA 7
Slide 18: Full Year F22 at a Glance
Full Year F22 at a Glance AFRICA Volume and Market share: (+1%) and (+33bps) vs F21 resp.ly Revenue growth: Abs (+N46.4bn); vs F21 (+29%) Cost of Goods Sold: Abs (N19.4); vs F21 (+17%) Distribution and Mktg expenditures : +36% and +50% vs F21 Government Revenue: Abs (N20.4bn); vs F21 (+13%) Net cost
Slide 19: Volume and Revenue by Brand
GROWTH F22 P12 F21 P12 FY H1 Q3 Q4 Volume (k'eu) Guinness 1,482 1,530 -3% 9% -9% -20% Malta 1,726 1,237 40% 107% 7% -11% RTD 399 346 15% 32% -8% 9% Dubic 334 820 -59% -51% -59% -80% Others 44 105 -58% -12% -78% -90% MSS 2,849 2,725 5% 2% 7% 9% IPS 180 215 -16% 12% -40% -53% Total 7,014 6,977 1% 13%
Slide 20: Net Revenue Management and Innovations fuelling value growth
Net Revenue Management and Innovations fuelling value growth... TBA GUINNESS COMPETITION Price index (per RSP) Vol Impact £22 Launches STRATEGY DRIVER PI% | % PI% Target_| F22 Act STOUT FOLLOW /|Market leader led 26% 2% PREMIUM LAGER (Heineken| 25% | | 1.2 11 . Orijin Tigernut & LAGER FOLLOW [Market
Slide 21: Inflation Impact and Productivity
NGN'b NGN'b Inflation Impact Embedded FX 4.3 Can 5.9 Sorghum Grain 3.3 Customs Demand Notice Sugar 2.4 ODBB/ODBM 0.7 Transport 1.5 IPS 1.4 Diesel (AGO) 1.3 Total Custom DN 2.1 Cartons 1.2 Lager Malt 1.0 Productivity 6.7 Ethanol 0.9 Other Cereals 0.7 OEE Improvement 5.1% MRO/Spares 0.6 Labels 0.6 Was
Slide 22: Work-In-Progress Projects
Work-In-Progress Projects Project Description NGN'b Water Recovery Project - Ogba and Benin 5.1 Ogba Brewhouse Upgrade 1.3 Environmental Sustainability Project - Biomass Energy 16.0
Slide 23: Sound Operating Working Capital
Sound Operating Working Capital AFRICA Inventory: +Nt11bn driven by F22: N32.0b * Business growth and high inflation in the cost base. -2% vs Q3 * Increase in stock holding of key to avoid stock out and air freighting cost. +49% vs F21 * 38% reduction in year-end SIT . Trade debtors: Flat vs LY * Tr
Slide 24: Capital Structure Ratios
Capital Structure Ratios AFRICA N’ Bn F22 F21 A% EBITDA 32.51 | 18.46 76% NET INTEREST 0.25 | (1.48) 117% EQUITY 89.98 | 74.29 21% NET DEBT (37.79) | (19.88) 90% TARGET NET DEBT/EBITDA (1.16x) | (1.08x) 0.5x - 1.0x NET DEBT/EQUITY (42%) | (27%) 30% - 50% NET INTEREST COVER | (130.7x)| 9.7x > 4x Inte
Slide 25: F23 Priorities
F23 Priorities Baker Magunda Managing Director AFRICA 25
Slide 26: F23 Mission Statement
F23 Mission Statement: DIAGEO Deliver OM of 18.2% as a Step to Delivering OM of 20% by F24 Increase NSV/EU through direct price increases or more efficient trade spend * Drive Innovation - Fewer, Bigger, Better Project Reduce COGS/EU by driving productivity and efficiency despite rojects headwinds *
Slide 27: Within Stout, Mainstream Spirit, Premium Spirits, Malts & RTDs
MAINSTREAM PREMIUM WITHIN STOUT SPIRIT SPIRITS MALTS & RTDS ✓ GROW SHARE ✓ GROW SHARE ✓ GROW SHARE ✓ HOLD SHARE ✓ GROW EQUITY ✓ GROW EQUITY ✓ HOLD EQUITY ✓ HOLD EQUITY ✓ EXPAND ✓ EXPAND ✓ EXPAND ✓ EXPAND FOOTPRINT FOOTPRINT FOOTPRINT FOOTPRINT ✓ PROTECT ✓ PROTECT ✓ PROTECT ✓ COST MARGINS MARGINS MAR
Slide 28: F23 Ambition: Digital/E-commerce Landscape
F23 Ambition F23 Digital/ E-commerce Landscape Deliver GSV of £10M Strategic Digitalize GNPLC DBs Joined Business Partnership with & Wholesalers planning with top Ecommerce leveraging Diageo key partners players in Nigeria one and thebar.com Key Enablers Digital Marketing to Rate of Sales initiative
Slide 29: People Priorities
age DIAGEO People Priorities : Our Approach to making it happen. AFRICA PERFORMANCE AMBITION PEOPLE STRATEGY PERFORMANCE ENABLEMENT EMPLOYEE EXPERIENCE (EE) TALENT & CAPABILITIES OUTCOMES 29
Slide 30: We will continue to deliver on our ESG commitments
We will continue to deliver on our ESG commitments for DIAGEO positive impact. 40 additional awards to undergraduates (including people living with disabilities) in Nigerian public universities 30
Slide 31: Rotimi Odusola, Corporate Relations Director
DIAGEO Rotimi Odusola Corporate Relations Director & Company Secretary
Slide 32: Cautionary Statement concerning forward-looking statements
AFRICA Cautionary Statement concerning forward-looking statements * — This presentation is based on Guinness Nigeria Ple’s audited financial results for full year period ended 30% June 2022. Guinness Nigeria Plc ("GN" or the “Company”) has obtained some information in this presentation from sources