East African Breweries Plc · NSEKE:EABL
East African Breweries — H1 F16 Earnings Presentation
26 slides from East African Breweries's earnings presentation, 2016
Slide 1: Half Year Results 2016
HALF YEAR RESULTS 2016
Slide 2: Half Year Results Briefing
F16 Half Year Review HALF YEAR Charles Ireland RESULTS BRIEFING Financial Performance Gyuri Geiszl Q&A
Slide 3: F16 Half Year Review
F16 HALF YEAR REVIEW Charles Ireland Group Managing Director
Slide 4: Focused on our ambition
Focused on 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 i
Slide 5: Good top line performance with solid profit growth
Good top line performance with solid profit growth vs LY Volume +21% Net Sales +8% Gross Profit +2% Operating Profit (excl. FX) +6% Profit After Tax +67% Cash Flow from Operations +51% 5
Slide 6: Good performance in Kenya mitigating challenges in other markets
Good performance in Kenya mitigating challenges in other markets Contribution Net Sales Net Sales to Overall Growth Growth (local Key Brands EABL (KES) currency) KENYA 74% +22% +22% UGANDA 15% -7% +3% TANZANIA 9% -12% -3% S Sudan 2% -74% -72% Total EABL 100% +8% 6
Slide 7: Double digit growth in 5 segments
Double digit growth in 5 segments Premium RTD’s Mainstream Emerging Beer & RTDs +10% +21% -10% +106% Reserve Premium Mainstream Emerging Spirits +45% -8% +14% -9% 7
Slide 8: Kenya Growth led by recovery of Senator
Kenya Growth led by recovery +22% of Senator New Tusker Excluding Senator NSV campaign +6% having impact Senator has more than New Tusker doubled Lite pack well received Premium beer still growing healthily driven by Reserve Guinness and Tusker Lite brands healthy growth Mainstream spirits i
Slide 9: Uganda Weakening currency impacting growth
Uganda Weakening currency +3%* impacting growth Innovation driven by the Waragi Double digit growth of Sachet and new Guinness Senator Stout New pack for Strong Premium Spirits Uganda performance Waragi Strong Reserve Bell Lager pack performance refreshed 9 * Net sales growth in local currency
Slide 10: Tanzania Consumer down trading in a tough economy
Tanzania Consumer down -3%* trading in a tough economy Pilsner volumes up Strong growth of Pilsner Lager Strong performance of value category Developing RTC Smirnoff double digit Reserve growth brands rapid growth 10 * Net sales growth in local currency
Slide 11: Volatile environment International in South Sudan
Volatile environment International in South Sudan Currency Rwanda volumes grew by challenges double digit $ South Sudanese Pound depreciation Tough East DRC market Political instability in Burundi 11
Slide 12: EABL Foundation celebrates 10 years of giving back
EABL Foundation celebrates 10 years of giving back to our communities #2 Employer of Choice in Africa #1 in Africa for number of women on the Board Water of life with 10x10 programme 1st Runners Up Corporate and social Skills for life - Career responsibility in Africa days+400 participants +32
Slide 13: Priorities going forward
Priorities going forward Opportunities for further growth Mitigate excise tax impact in Kenya Strengthen our mainstream beer brands Continued focus on Innvation Drive productivity up and costs out Complete and embed RtC transformation in Kenya and Uganda 13
Slide 14: Thank You
Thank You Please hold the questions to the end 14
Slide 15: Financial Performance
FINANCIAL PERFORMANCE Gyuri Geiszl Group Finance Director
Slide 16: Strong performance – Key highlights
Strong performance – Key highlights H1 F16 vs LY Volume +21% Net sales KES 37.5bn +8% Operating profit excl. FX losses KES 9.8bn +6% Profit from continued operations KES 5.5bn +16% Profit on sale of CGI (after tax) KES 2.2bn n/a Cash from operating activities KES 11.4bn +51% EPS / EPS from continuin
Slide 17: Net sales growth driven by Senator
Net sales growth driven by Senator Net sales up +8%, excluding FX and disposal of CGI growth is +12% Sales of Senator in Kenya more than doubled and is largest contributor to overall EABL growth For the other brands, collapse of South Sudan and weakness of beer in Uganda and Tanzania offsets s
Slide 18: Gross profit up 2% despite negative mix and inflation
Gross profit up 2% despite negative mix and inflation COGS growth of 16% is primarily driven by 21% volume increase Senator Gross Margin % improved vs last year as a result of better fixed cost absoption COGS/EU growth on other brands was only 4% as savings from cost reduction initiatives larg
Slide 19: Operating costs kept under control – FX loss of KES 900m in South Sudan
Operating costs kept under control – FX loss of KES 900m in South Sudan 31-Dec-15 31-Dec-14 Operating expenses are up vs LY KES ’m’ KES ’m’ due to higher volume, inflation and FX, offset by efficiency savings Operating expenses (8,339) (7,586) +10% Largest item in FX losses is due to devaluation
Slide 20: Substantial reduction in net debt and finance charges
Substantial reduction in net debt and finance charges 31-Dec-15 31-Dec-14 Total net borrowings vs LY KES ’m’ KES ’m’ (gross debt less cash) decreased by KES 6.5bn due to CGI sale and strong operating cash flow Net borrowings (22,485) (29,024) -23% Net finance cost decreased by 38% despite higher
Slide 21: Solid underlying PAT combined with sale of non-core CGI
Solid underlying PAT combined with sale of non-core CGI 31-Dec-15 31-Dec-14 vs LY KES ’m’ KES ’m’ Profit after tax – continuing operations 5,485 4,724 +16% Profit/(loss) from discontinued operations (CGI) 2,249 (101) Profit for the period 7,734 4,622 +67% Non-controlling interest (507) (479) +6% Pro
Slide 22: Cash from operating activities increased by 51%
Cash from operating activities increased by 51% 31-Dec-15 31-Dec-14 vs LY KES ’m’ KES ’m’ Operating profit 7,922 6,803 1,119 Depreciation and amortization 2,672 2,819 (147) Working capital movements 5,459 1,071 4,388 Inventory 618 (889) 1,507 Debtors 2,220 (1,503) 3,723 Creditors 2,621 3,463 (842) N
Slide 23: We continue to invest in future growth
We continue to invest in future growth Capital expenditure H1 F16 H1 F15 Vs LY KES m 1,544 1,097 +41% Returnable packaging to support increase in demand Effluent treatment plant upgrade in Uganda Fire safety across all sites 23
Slide 24: Proposed dividend
Proposed dividend Proposed dividend F16 F15 Vs LY Interim dividend (KES per share) 2.0 1.5 +33% 24
Slide 25: Q&A
) eabl Q&A NN LES ‘ 4.7% ‘ALISK 25
Slide 26: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This presentation contains ‘forward-looking’ statements. These forward-looking 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 statem
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