East African Breweries Plc · NSEKE:EABL
East African Breweries — FY2019 Earnings Presentation
35 slides from East African Breweries's earnings presentation, 2019
Slide 1: EABL 2019 Full Year Results Presentation
EABL 2019 East African breweries FULL-YEAR RESULTSltd FULL YEAR results presentation 1
Slide 2: Full Year Results Briefing
FULL YEAR F19 Commercial Review RESULTS Andrew Cowan BRIEFING F19 Financial Performance Gyuri Geiszl F20 Priorities Andrew Cowan Q&A 2
Slide 3: F19 Full Year Review
F19 FULL YEAR REVIEW Andrew Cowan Group Managing Director
Slide 4: We are clear on our ambition
We are clear To create one of the best on our performing, most trusted ambition and respected consumer products company in Africa Vibrant mainstream beer Explode mainstream spirits Win in premium Viable value recruitments Aspirational and accessible innovations Route to consumer Stakeh
Slide 5: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE Volume +11% Net sales +12% Operating profit +40% Operating Cash Conversion 111.3% Final dividend KES 6.0/share 5
Slide 6: Consistent growth across our markets
CONSISTENT GROWTH ACROSS OUR MARKETS Contribution to Net Sales Key Brands Overall EABL growth (KES) KENYA 73% +13% UGANDA 15% +8% TANZANIA 12% +20% Total EABL 100% +12% 6
Slide 7: Broad-based growth across all categories
BROAD-BASED GROWTH ACROSS ALL CATEGORIES Premium Mainstream Value RTD’s +7% +16% +15% +2% Beer Reserve Premium Mainstream Value +36% +3% +20% +4% Spirits 7
Slide 8: Innovation NSV contribution increased to 24%
INNOVATION NSV CONTRIBUTION INCREASED TO 24% KENYA UGANDA TANZANIA 19% 22% 47% 8
Slide 9: Kenya: Senator Keg and spirits grow
Kenya SENATOR KEG AND SPIRITS GROW +13%* DOUBLE DIGIT Bottled beer +3% despite Mainstream spirits excise increase growing +27% Scotch grew +28% +36% growth in innovation brands Reserve in +44% growth Senator +32% growth supported by new brewery * Net sales growth
Slide 10: Uganda: premium beer and mainstream spirits drive growth
Uganda PREMIUM BEER AND MAINSTREAM +8%* SPIRITS DRIVE GROWTH Reserve grew Tusker Lite and Guinness +17% delivering +24% growth Innovation in Premium beer driven by Uganda Waragi Pineapple Growth in Spirits Mainstream beer +1% despite sachet growing +33% driven by ban Pilsner and Bell * Net sales gro
Slide 11: Tanzania: beer growth driven by Serengeti
Tanzania BEER GROWTH DRIVEN BY +20%* SERENGETI AT +46% Pilsner in Strong growth +1% performance Premium of Serengeti Serengeti Lite Lager volumes up Spirits declined, impacted by electronic tax stamp implementation 11 * Net sales growth
Slide 12: Capital investments in the last 6 years
KES 14bn Capital investments in the last 6 Kisumu years to meet increasing demand investment 13.0 CAPEX Disposal 11.7 6.8 5.6 4.9 5.0 3.7 2.5 0.9 0.2 0.3 0.2 FY14 FY15 FY16 FY17 FY18 FY19
Slide 13: People
PEOPLE Robust Talent Assurance approach with critical roles filled including the new Kisumu brewery. Organizational Efficiency: reducing organisational layers and widening spans for simplified decision making and embedding cost saving culture. Capability: LEAP program ran for all middle and se
Slide 14: Excellence Awards
EXCELLENCE AWARDS Alcoholic beverages plant of the year & Sustainability initiative of the year – Africa food industry excellence awards Spirits Team, Plant of the Year, Partnership of the Year, President's Team Award, highest percentage NSV growth in F18 – Diageo ‘Pride of Africa’ Awards Over
Slide 15: Social Responsibility
SOCIAL RESPONSIBILITY Community Investment initiatives: Murara borehole project in Meru to benefit 10,000 people UBL planted over 40 hectares of trees Serengeti sponsored the national women premier league for a duration of three years Clean-Up Exercise at Ngumba Road and a 3,000 tree plant
Slide 16: Social Responsibility
SOCIAL RESPONSIBILITY Launch of Research Paper: Titled “Sorghum Production In Kenya” sharing knowledge and best practices. Project Heshima: Vocational training project had graduation of 285 students from various counties in Kenya Skills for life program: Sponsorship for 40 students in LRM grow
Slide 17: Thank You
Thank You Please hold the questions to the end 17
Slide 18: F19 Financial Performance
F19 FINANCIAL PERFORMANCE Gyuri Geiszl Group Finance and Strategy Director 18
Slide 19: Financial Highlights
FINANCIAL HIGHLIGHTS F19 vs LY Volume +11% Net sales KES 82.5bn +12% Operating profit KES 21.2bn +40% Profit after tax KES 11.5bn +59% Operating cash conversion 111% -6ppt Net debt KES 23.9bn -13% Final dividend KES 6.0/share 19
Slide 20: Strong volume growth driving NSV
STRONG VOLUME GROWTH DRIVING NSV F19 F18 vs LY KES bn KES bn Volume (mEU) 14.0 12.5 +11% Volume growth driven by Senator Keg recovery in Kenya, premium and mainstream beer in Uganda, continued growth of Gross sales 149.6 135.0 +11% Serengeti in Tanzania, mainstream spirits and innovation across th
Slide 21: Strong growth across the business
STRONG GROWTH ACROSS THE BUSINESS Movements in net sales (KES bn) 1.0 1.7 2.0 3.7 82.5 0.7 73.5 F18 Kenya Senator Kenya Tanzania Uganda F19 Bottled Beer Keg Spirits • Recovery of Senator in Kenya in a stable operating environment • Uganda delivering strong mix from premium and mainstream beer • Cont
Slide 22: Robust beer growth at +13%
ROBUST BEER GROWTH AT +13% Source of beer net sales growth by segment H1 +3% +17% +35% -32% +13% H2 +12% +14% +29% -34% +14% FY +7% +16% +32% -33% +13% -1.3 60.9 3.7 3.5 53.8 1.2 2018 Premium Mainstream Senator Other Value 2019 Beer 22
Slide 23: Mainstream drives +12% spirits growth
MAINSTREAM DRIVES +12% SPIRITS GROWTH Source of spirits net sales growth by segment H1 +54% -3% +29% -1% +1% +15% H2 +17% +10% +12% +9% +4% +10% FY +36% +3% +20% +4% +2% +12% 21.6 0.1 0.1 2.2 19.0 0.1 0.1 2018 Reserve Premium Mainstream Value RTDs 2019 Spirits 23
Slide 24: Additional COGS savings delivered
ADDITIONAL COGS SAVINGS DELIVERED Cost of sales increase +8% F19 F18 behind +11% volume growth vs LY KES bn KES bn with 3% CoGS/case improvement Volume (mEU) 14.0 12.5 +11% Also helped by mix: increase in volume of Senator Keg, despite Gross sales 149.6 135.0 +11% the impact of the new brewery (
Slide 25: Re-investment of productivity savings continues
RE-INVESTMENT OF PRODUCTIVITY SAVINGS CONTINUES F19 F18 vs LY KES bn KES bn Selling and distribution grew Gross profit 38.1 32.4 +18% by 12% from investing behind our brands to accelerate Selling & distribution (7.2) (6.4) -12% growth, in line with strategy Administrative expenses (9.4) (8.5) -10%
Slide 26: Lower net borrowings
LOWER NET BORROWINGS F19 F18 vs LY KES bn KES bn Lower net borrowings due to higher cash holding Net borrowings (23.9) (27.5) -13% from revenue growth Net finance charges flat F19 F18 vs LY KES bn KES bn EUR loan used to fund Kisumu brewery to be Finance costs, net (3.4) (3.4) - replaced by KE
Slide 27: Double digit growth in profit after tax
DOUBLE DIGIT GROWTH IN PROFIT AFTER TAX F18 F19 KES vs LY KES bn bn Operating profit 21.2 15.1 +40% Finance costs, net (3.4) (3.4) - Profit before tax 17.8 11.7 +52% Reduction in effective tax rate Income tax expense (6.3) (4.4) Profit after tax Profit after tax 11.5 7.3 +59% grew +59% (excludin
Slide 28: Consistently strong cash performance
CONSISTENTLY STRONG CASH PERFORMANCE F19 F18 vs LY KES bn KES bn Higher operating profit Profit before tax 17.8 11.7 6.1 translates to robust Depreciation and amortization 4.4 4.0 0.4 operating cash delivery due to consistent Loss/(gain) on asset sale - (0.7) 0.7 working capital Interest expense 3
Slide 29: We continue to invest in our future growth
WE CONTINUE TO INVEST IN OUR FUTURE GROWTH Kisumu Breweries CAPEX Total F19 investment of KES 11.7bn (F18 KES 13.0bn) • Construction of new brewery in Kisumu • Investment behind growth in returnables and coolers across all markets • SBL capacity expansion: brewing and fermentation Keg Rackers Envi
Slide 30: Dividend
DIVIDEND F19 F18 Dividends KES/share KES/share Interim 2.5 2.0 Final 6.0 5.5 Total 8.5 7.5 30
Slide 31: Thank You
Thank You Please hold the questions to the end 31
Slide 32: F20 Priorities
F20 PRIORITIES Andrew Cowan Group Managing Director 32
Slide 33: Priorities going forward
Priorities going forward Opportunities for further growth Commercialize the Kisumu brewery Bottled beer to maintain growth in Kenya Maintain mainstream spirits growth despite higher excise Win in premium leading with Scotch Deliver productivity initiatives Deliver key innovation projects
Slide 34: Q & A Session
Q & A Session 34
Slide 35: 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 f
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