Nigerian Breweries Plc · NSENG:NB
Nigerian Breweries — Capital Market Conference Call: 2023 FY Performance
29 slides from Nigerian Breweries's conference presentation, February 2024
Slide 1: Capital Market Conference Call: 2023 FY Performance
Capital Market Conference Call: 2023 FY Performance Fe b r u a r y 2 0 2 4
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: Capital Market Conference Call: 2023 Full Year Financial Performance Review
2023 Full Year Review Nigerian Breweries at a Glance Operating Environment Our Strategy to Win Capital Market Conference Call: 2023 Full Year Financial Performance Review Financial Results 2023 FY Summary Performance 2024 Outlook Fundamentals for transformational growth Q&A
Slide 4: 2023 Full Year Review
2023 Full Year Review Hans Essaadi Managing Director
Slide 5: Nigerian Breweries at a Glance
Nigerian Breweries at a Glance #1 in Lager, #1 in Malt, #2 in Stout 12 Sales regions 9 Breweries 21 Depots with National Coverage 1 Malting Plant ₦599.5bn ₦213.3bn 2,438 Net revenue Net assets Employees ₦44.5bn 7.5x Operating profit Net debt/EBITDA NB Breweries Market Capitalisation Market Capitalis
Slide 6: 2023 External Environment: headwinds, a few tailwinds, and more headwinds
2023 External Environment | A tale of headwinds, a few tailwinds, and more headwinds Oil production Dangote receives 1st Indefinite excise hits 1.35m bpd, batch of crude oil increase suspension highest in 2023 for local refining Q1 2023 Apr 2023 June 2023 July 2023 Aug 2023 Oct 2023 Nov 2023 Dec 202
Slide 7: Increases in input costs impacting consumer disposable income
Increases in input costs, driven by fuel hike and FX, impacting consumer disposable income at an accelerated rate NAFEX vs Parallel rate for USD Food Inflation % & Sorghum per ton in Naira Average price of Fuel in Naira Transportation costs (Naira) 100 60,000 Sorgum Price 55,500 Petrol Inter-city Fo
Slide 8: Our strategy to win
Our strategy to win Lead and Accelerate Premium led by Heineken®, Tiger, and Legend Grow Value and Protect Volume in Mainstream Lager Grow value with our Premium Malt brands Unapologetically Expand Beyond Beer with Desperados and Zagg Leverage Route To Consumer whilst improving Customer Experience
Slide 9: Lead and Accelerate Premium led by Heineken, Tiger, and Legend
Lead and Accelerate Premium led by Heineken®, Tiger, and Legend Driving meaningfulness and exciting consumers through the Heineken @ 150 and Lagos Fashion week experiences 9
Slide 10: Grow value and protect volume in Mainstream Lager
Grow value and protect volume in Mainstream Lager leveraging our strong national and regional assets Hi Life Fest ‘23 Nation Football Team Sponsorship
Slide 11: Grow value with our Premium Malt brands
Grow value with our Premium Malt brands driving cultural relevance by dialing up religious and lifestyle cues Driving high quality consumer experiences and partnerships through relevant sponsorships Creating a sense of community and belonging by providing consumers with opportunities to connect with
Slide 12: Our flavoured beer brands continue to offer unique experiences
Our flavoured beer brands continue to offer unique and engaging experiences that tap into new consumer interests and passions
Slide 13: Targeting underserved consumer groups with our beyond beer portfolio
We continue to target underserved consumer groups with our beyond beer portfolio Driving Zagg brand awareness while energizing consumers through meaningful associations as the Official Energy Drink of the Super Eagles and as the Headline Sponsor of the AMVCA
Slide 14: Expanded portfolio with value for money propositions
We expanded our portfolio with value for money propositions to adjust to current economic realities and pressure on disposable income Affordable Malt 45cl RGB to drive Relaunch of 100% Proposition affordability Sorghum beer
Slide 15: We continue to engage, equip and motivate our employees
We continue to engage, equip and motivate our employees We focused on fostering a conducive, We strived to alleviate safe and caring work the economic hardship culture/environment on our employees occasioned by inflation We ensured our Talent & Female retention despite the rising “Japa” syndrome and
Slide 16: Omni channel coverage and improved transaction capture
We continue to drive our omni channel coverage and improve transaction capture 509k Outlets Covered Enablers Net Promoter Score 137K (*27%) B2B Platform NPS = % of Promoters – Detractors NPS = 85 (+6 vs LY) 201K (*40%) Front Line Sales 171K (*34%) Customer Service NPS % of Revenue = 58% / Telesales
Slide 17: Sustainability is at the Heart of our Business
Sustainability is at the Heart of our Business Environmental Social Responsible >N3.6 billion N100million N58million Spent on addressing harmful We continue to raise the bar on our Invested to empower 1000 youths Investment in Decarbonisation use of alcohol by Brew a Better World agenda with of our
Slide 18: Modernizing our footprint – Breweries upgrade to be finalized in 2024
Modernizing our footprint – Breweries upgrade to be finalized in 2024 • Ama expansion is operational and online. Kudenda expansion operational in 2024 • Main objectives: – Replacement of older equipment – Key enabler to drive our Premium agenda – Increase capacity ahead of future market growth • Imp
Slide 19: 2023 Full Year Financial Performance
2023 Full Year Financial Performance Ben Wessels Boer Review Finance Director
Slide 20: Operating Profit strong despite headwinds; negative net profit driven by FX
Operating Profit strong taking into account significant headwinds. Negative net profit driven by FX debt revaluation Revenue Growth Gross and Operating Profit almost Flat Negative NP due to FX loss +9% 0% 2022 -15% -860% 2023 Revenue Gross Profit Operating Profit Net Profit Revenue by quarter strong
Slide 21: Revenue growth impacted by lower volume, higher input costs and redundancy
Revenue growth impacted by lower volume does not fully compensate higher input costs and redundancy one-off Operating profit bridge (₦ billion) -15.3% 49.0 39.3 Summary of Profit or Loss 2023 2022 Change % (₦’Billions) Revenue 599.5 550.5 9 Cost of Sales (387.0) (337.3) (15) 5.7 4.3 Gross Profit 212
Slide 22: FX debt and exposure to devaluation losses
Nigerian Breweries FX debt and exposure to devaluation losses are driven by FX shortages in recent years Yearly Central Bank FX Sales (USD bn) NB FX Debt and WC Payables Development (EURm) 60 42 39 211 40 34 FX shortage in the 29 22 22 official window has 187 17 17 resulted in high FX 20 debt for Ni
Slide 23: Impact of Naira devaluation pressuring Net Profit
Impact of Naira devaluation pressuring Net Profit Net profit bridge (₦ billion) -859.6% 13.9 8.1 27.9 127.0 43.1 0.2 -105.8 Net profit 2022 Decrease in Increase in Impacted of FX Decrease in Other income Net profit 2023 Operating Profit Interest Costs losses (revaluation Income tax of FX debt offset
Slide 24: Financial Position
Financial Position Summary of Financial Position (₦’Billions) Dec-23 Dec-22 Change in % Property, Plant & Equipment 440.8 357.9 23 Inventories 121.9 83.3 46 Trade and Other Receivables 51.2 44.9 14 Cash 39.5 22.2 78 Other Assets 144.0 113.0 27 TOTAL ASSETS 797.3 621.3 28 Non Current Liabilities 11.8
Slide 25: 2023 Financial Summary
2023 Financial Summary • Lower disposable income and high input costs as a result of inflation and naira devaluation continue to put volumes and margins under pressure. • Despite these significant headwinds we were able to grow our revenue by 9% compared to the previous year aided by positive price
Slide 26: 2024 Outlook
2024 Outlook Hans Essaadi Managing Director
Slide 27: 2024: Fundamentals for transformational growth
2024: Fundamentals for transformational growth Winning in the market leveraging our strong portfolio, exciting innovations & route to consumer Continued strong cost management and further optimalization of our operational footprint Accelerate our Beyond Beer strategy with Distell Fostering Employee
Slide 28: Q&A
Q&A Sade Morgan Corporate Affairs Director
Slide 29: Thank you!
PAGE 29 Thank you!
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