Guinness Nigeria PLC · NSENG:GUINNESS
Guinness Nigeria — FY2014 Earnings Presentation
24 slides from Guinness Nigeria's earnings presentation, Sep 9, 2014
Slide 1: Guinness Nigeria Plc F14 Full-Year Results Investor Briefing
Guinness Nigeria Plc F14 Full-Year Results Investor Briefing 9 September 2014
Slide 2: Agenda
Agenda Introduction & Performance Review Seni Adetu, Managing Director/Chief Executive Officer Financial Performance Iqbal Mohammad Ag Finance and Strategy Director Strategic Priorities and Outlook Seni Adetu, Managing Director/Chief Executive Officer Questions & Answers Sesan Sobowale, Company Secr
Slide 3: Introduction & Performance Overview
Introduction & Performance Overview
Slide 4: Our Company, Our Ambition
OUR COMPANY Guinness Nigeria is a part of Diageo Plc – the world’s leading premium alcoholic drinks company. We were established in Nigeria in 1950 and have a strong pedigree operating from four sites - 2 in Lagos (Ogba & Ikeja), Benin and Aba. We have a strong portfolio of alcoholic and non-alcohol
Slide 5: Our Portfolio
Our Portfolio Stout Lager Ready To Drink (RTD) Non Alcoholic Spirits
Slide 6: Nigeria economy remains resilient
Nigeria economy remains resilient GDP growth continues to hover around 6% to 7% with government spending growing in line with GDP while private consumption remains constrained Inflation and interest rate were relatively stable over the course of the year Nigeria remains a choice destination in
Slide 7: Marginal improvement in Q4, FY performance was soft
While we saw a marginal improvement in Q4, FY performance was soft Naira (Billions) Q3 YTD % CHG Q4 % CHG FY % CHG Net Sales 78.0 (11%) 31.2 (9%) 109.2 (11%) Cost of Sales (41.7) (13%) (16.2) (11%) (57.9) (13%) Gross Profit 36.3 (9%) 15.0 (7%) 51.3 (8%) Profit After Tax 5.9 (22%) 3.6 (14%) 9.6 (19%)
Slide 8: Drivers of soft performance
This was driven by Pricing disadvantage Growth in value segment where we were not strong Distribution challenges early in the year Increased Finance costs
Slide 9: Despite challenges, the company progressed in key areas
Despite challenges, the company progressed in key areas Growth in Guinness brand in H2 Successful innovation with the new Orijin brands Improved cost efficiencies Upgrade in our Route-to-Consumer
Slide 10: Full Year Financial Performance
Full Year Financial Performance
Slide 11: Income Statement
Income Statement F14 F13 Variance Growth Nbillion Nbillion Nbillion % Comprehensive Income Net Revenue 109.2 122.5 (13.3) -11% Cost of sales (57.9) (66.4) 8.5 -13% Gross profit 51.3 56.1 (4.7) -8% Marketing, Distr. & Admin costs (35.2) (35.1) (0.1) 0% Operating profit 16.1 21.0 (4.9) -23% Finance ch
Slide 12: A large part of our profit decline was due to volume
A large part of our profit decline was due to volume Drivers of PAT F14 vs. LY (=N= billion) 5.1 11.9 10.5 9.6 3.0 0.5 3.1 3.7 F13 PAT Price Volume Mix Marktg, Finance Cost Tax F14 PAT distrbn & admin exp
Slide 13: Financial Position
Financial Position F14 F13 Movt Nbillion Nbillion Nbillion Non-current assets 91.5 88.8 2.7 Inventories 13.5 12.4 1.1 Receivables 21.1 16.6 4.4 Cash 6.3 3.2 3.1 Total assets 132.3 121.1 11.3 Equity (45.1) (46.0) 1.0 Non-current liabilities (43.0) (23.7) (19.3) Current liabilities (44.2) (51.3) 7.0 T
Slide 14: Strategic Priorities & Outlook
Strategic Priorities & Outlook
Slide 15: Confident in our strategic priorities to turn the business around
We remain confident in our strategic priorities to turn the business around Strengthen and accelerate our premium core brands Innovate at scale to meet new consumer needs Build and then constantly extend our advantage in Route to Consumer (RtC) Drive out cost to invest in growth Guarantee our plans
Slide 16: Increased investment in our premium core brands
This would be led by increased investment in our premium core brands Guinness Harp Malta Guinness • Re-launch of the Guinness • Investment to enhance the • Associate sponsor of brand with “Made of Black” brand proposition Nigeria’s Got Talent campaign • Sponsorship of 5 football reality show • Guinn
Slide 17: Leveraging the successful introduction of our innovation brands
While leveraging the successful introduction of our innovation brands Orijin RTD Orijin Bitters Orijin – A bittersweet blend with the flavors of Orijin Bitters – Locally produced premium spirit with African herbs and fruits. Available in 30cl, 60cl herbal extract from African origin. Available in 20
Slide 18: Transforming our Route-to-Consumer
We are transforming our Route-to-Consumer and have started to see the benefits of this Expanding outlet coverage Driving routing efficiency and retail supervision Better channel management Targeted sales call based on census data
Slide 19: Investing in people and capability
We continue to invest in people and capability in the organization Expanded Leadership Team Focused capability development activities in our Sales Academy Retention and engagement of our key employees Building succession planning across all levels in the organization
Slide 20: Corporate social responsibility activities in Nigeria
We continue to support our business ambitions with corporate social responsibility activities in Nigeria Safe Water for Africa Skills for Life Scholarship Completed and commissioned the first Safe Water 17 students have received scholarships to study in for Africa project to serve the Ijebu Ode Comm
Slide 21: Corporate social responsibility
Corporate social responsibility Launch of Guinness Nigeria Foundation Partnering with the FRSC to promote road safety
Slide 22: Going forward
Going forward We remain confident in our strategy to turn the business around through: • Increased investment at retail • New campaign for Guinness • Upweighted marketing activities on Harp, Malta Guinness and Innovation • Continued efforts behind our RtC transformation project. We will continue
Slide 23: Thank You.... Q&A?
Thank You.... Q&A?
Slide 24: Important Notice
Important Notice This presentation is based on Guinness Nigeria Plc’s audited financial results for the full year period ended 30th June 2014. Guinness Nigeria Plc (“GN” or the “Company”) has obtained some information in this presentation from sources it believes to be reliable. Although GN has take