East African Breweries Plc · NSEKE:EABL
East African Breweries — H1 F21 Earnings Presentation
35 slides from East African Breweries's earnings presentation, 2021
Slide 1: F21 Half Year Results
F21 HALF YEAR RESULTS
Slide 2: Agenda
AGENDA F21 HY Commercial Review Andrew Cowan F21 HY Financial Performance Risper Ohaga F21 H2 Priorities Jane Karuku Q&A
Slide 3: F21 HY Commercial Review
F21 HY COMMERCIAL REVIEW Andrew Cowan
Slide 4: The Operating Environment
THE OPERATING ENVIRONMENT Inflation increases Gross Domestic affecting Product (GDP) affordability Contraction Purchasing Managers Currency Index (PMI) steadily Depreciation improving
Slide 5: Our Strategy
OUR STRATEGY eabl eabl AMBITION To create the best performing, most trusted and respected consumer products company in Africa yoakTeR REERRS) Vibrant Mainstream Beer Explode Mainstream Winin Premium Shape new frontiers Spirits KEY ENABLERS. Aspirational and Accessible Innovations. Route to Consumer
Slide 6: Significant Shifts in Market Trends & Consumption
SIGNIFICANT SHIFTS IN MARKET TRENDS & CONSUMPTION E-Commerce Growing Illicit and Home deliveries and explosion Local brew market consumption Shift to Value Shift to familiar, Growing Off Trade categories and formats casual and special contribution moments
Slide 7: Our Response
OUR RESPONSE Winning in off trade th xan an| aaa” aad Format Expansion Yes we Can! ia Qe TY R CENTRAL eabl®
Slide 8: Resilient Recovery in Second Half of a Challenging Environment
RESILIENT RECOVERY IN SECOND HALF OF A CHALLENGING ENVIRONMENT Net Sales Kes’bn -3% 50 +53% 46 44 42 41 6 40 7 Tanzania 5 5 7 7 6 8 Uganda 30 29 5 5 20 30 30 33 29 Kenya 10 19 0 F19 H1 F19 H2 F20 H1 F20 H2 F21 H1 Vs SPLY +13% +12% +10% -29% -3%
Slide 9: Robust Growth in Uganda and Tanzania with Kenya on a Steady Recovery Path
ROBUST GROWTH IN UGANDA AND TANZANIA WITH KENYA ON A STEADY RECOVERY PATH Contribution Net sales Net sales to overall growth growth Key brands EABL vs SPLY vs F20 H2 KENYA 66% -10% +53% UGANDA 18% +13% +72% TANZANIA 16% +17% +33% TOTAL EABL 100% -3% +53%
Slide 10: Strong Recovery Across All Categories
STRONG RECOVERY ACROSS ALL CATEGORIES VIBRANT EXPLODE WIN IN SHAPE NEW MAINSTREAM MAINSTREAM PREMIUM FRONTIERS BEER SPIRITS Vs F20 H2 +46% +58% +75% +43% Vs SPLY +1% +12% -1% -21%
Slide 11: Kenya: Sustained Growth in Spirits
Kenya SUSTAINED GROWTH IN SPIRITS -10%* Bottled beer -14% Mainstream Spirits Premium Spirits +13% +13% Senator -29% Total Spirits +11% * Net sales HY growth
Slide 12: Uganda: All Categories in Growth
Uganda ALL CATEGORIES IN GROWTH +13%* Premium beer +13% Value beer +18% Mainstream Beer +25% Mainstream Spirits +5% * Net sales HY growth
Slide 13: Tanzania: Sustained Growth Across Categories
Tanzania SUSTAINED GROWTH ACROSS CATEGORIES +17%* Serengeti Family +16% Pilsner Guinness +30% +20% Spirits +13% * Net sales HY growth
Slide 14: Sustainability & Responsibility
SUSTAINABILITY & RESPONSIBILITY
Slide 15: Impacting Our Communities Positively
IMPACTING OUR COMMUNITIES POSITIVELY Farmer Engagements Water Projects Sanitizer Donations
Slide 16: Advocating for Responsible Drinking and Safe Outlet Reopening
ADVOCATING FOR RESPONSIBLE DRINKING AND SAFE OUTLET REOPENING PositiveDrinking Positive Drinking Raising the Bar Road Safety Partnerships
Slide 17: As We Celebrate Great Achievements
AS WE CELEBRATE GREAT ACHIEVEMENTS SDG Awards Social Investment Awards Marketing Awards * SDG – Sustainable Development Goals
Slide 18: Thank You
Thank You
Slide 19: F21 HY Financial Performance
Performance F21 HY Financial FINANCIAL PERFORMANCE Risper Ohaga F21 HY
Slide 20: Agenda
AGENDA FINANCIAL HIGHLIGHTS TOPLINE PERFORMANCE PROFITABILITY AND COST MANAGEMENT BALANCE SHEET HIGHLIGHTS CASH PERFORMANCE CAPEX
Slide 21: COVID-19 Interrupted Our Growth Trajectory, But We Are on a Recovery Path
COVID-19 INTERRUPTED OUR GROWTH TRAJECTORY, BUT WE ARE ON A RECOVERY PATH Net Sales Growth Gross Profit (Kes’bn) Gross Net Sales Margin +53% 24 +73% 22 50 46 44 150 21 19 19 19 45 42 41 40 18 100 35 15 29 30 12 11 25 50 20 13% 12% 9 46% 46% 48% 43% 10% 38% 15 -3% 6 0 10 -29% 5 3 0 -50 0 F19 H1 F19 H
Slide 22: Improved Performance Against the Previous Half
IMPROVED PERFORMANCE AGAINST THE PREVIOUS HALF H1 F21 H1 F20 Vs F20 H2 vs SPLY KES bn KES bn Volume (mEU) 7.1 7.5 +45% -5% Gross sales 78.2 81.9 +52% -5% Performance Excise duties (33.7) (36.0) 50% 6% Financial Net sales 44.5 45.9 +53% -3% Cost of sales (25.1) (24.0) 41% 5% Gross profit 19.3 21.8 +7
Slide 23: Senator Bearing Brunt of On-Trade Closure
SENATOR BEARING BRUNT OF ON-TRADE CLOSURE Net Sales Kes’bn -3% 46 45.9 0.0 2.6 44.5 44 1.2 42 40 F20 H1 Bottled Beer Senator Spirits F21 H1 Growth vs SPLY 0% -29% +10% Δ in contribution vs SPLY +2ppt -5ppt +4ppt
Slide 24: Margin Recovery Towards Pre-COVID Level
MARGIN RECOVERY TOWARDS PRE-COVID LEVEL Kes’bn -11% 21.8 1.4 0.3 0.6 0.8 19.3 GM GM 48% 43% F20 H2 GP Kes 11bn GM – 38% F20 H1 GP Volume Price Mix Cost F21 H1 GP
Slide 25: Rebound in Profitability Despite Headwinds
REBOUND IN PROFITABILITY DESPITE HEADWINDS Kes’bn 12 -45% 10.6 10 2.5 0.0 0.3 8 0.8 1.6 6 5.8 0.1 4 F20 H1 Gross Margin Selling & Administrative FX OIE Finance Costs F21 H1 Profit Before distribution expenses Profit Tax (PBT) costs Before Tax Vs F20 H2 +73% -43% -6% >100% -60% +3% >100%
Slide 26: Profit of KES 3.8bn Delivered Against a Challenging Operating Environment
PROFIT OF KES 3.8BN DELIVERED AGAINST A CHALLENGING OPERATING ENVIRONMENT H1 F21 H1 F20 vs F20 H2 vs SPLY KES bn KES bn (KES bn) (%) Profit before tax 5.8 10.6 +5.8 -45% Financial Performance Income tax expense (2.0) (3.4) -1.8 +40% Profit after tax 3.8 7.2 +4.0 -47% EPS (KES/share) 2.7 7.0 +4.5 -61
Slide 27: Business Recovery Driving Improvement in Leverage
BUSINESS RECOVERY DRIVING IMPROVEMENT IN LEVERAGE Vs June 2020 Vs Dec 2019 Non-current Assets 65 +4% +8% Current Assets 32 +21% -3% Current Liabilities -41 +33% +12% Non-current Liabilities -43 -0.4% +13% Total Equity -14% -33% -12 31-Dec-20
Slide 28: Lower Effective Cost of Debt
LOWER EFFECTIVE COST OF DEBT Kes’bn 50 22 45 20 41 40 8 18 37 4 16 5 14 30 12.3% 12 9.8% 9.7% 10 20 37 36 8 32 6 10 4 2 0 0 F20 H1 F20 H2 F21 H1 Effective cost of debt Short-term debt Long-term debt
Slide 29: Improved Cash Position Despite the Impact of COVID-19
IMPROVED CASH POSITION DESPITE THE IMPACT OF COVID-19 Cashflow Net cash generated from Kes’bn operations Kes 17.9bn 20 -1.9 -2.0 15 13.2 -9.0 10 -7.0 10.4 1.3 5 -3.7 Changes in working -0.5 2.5 1.7 capital Kes 7.5bn 0 As at start Cash from Trade and Inventories Trade and Net Interest Income Net cash
Slide 30: Capex Investments Remain a Priority
CAPEX INVESTMENTS REMAIN A PRIORITY Capacity expansions - KES1.6B Environmental Projects -KES 1.3B Returnables and Coolers – KES 1.3B Health and Safety Projects – KES 38M
Slide 31: Thank You
Thank You
Slide 32: Jane Karuku
Jane Karuku
Slide 33: Our H2 Priorities Will Enable Us to Continue to Emerge Stronger
OUR H2 PRIORITIES WILL ENABLE US TO CONTINUE TO EMERGE STRONGER 1 Business Recovery 2 Invest Smartly 3 People - Culture of Speed and Agility 4 Productivity 5 Enhance EABL’s Reputation
Slide 34: Q & A Session
Q & A Session
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 fo
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