Zambeef Products Plc · LSE:ZAM
Zambeef Products — FY2020 Earnings Presentation
20 slides from Zambeef Products's earnings presentation, September 2020
Slide 1: Financial Results for the Year ended 30 September 2020
Financial Results For the Year ended 30 September 2020 Zambeef at a Glance 2 Retail Channel Analysis 11 Highlights 3-5 Segmented P&L 12-15 Divisional Analysis 6 Balance Sheet 16-17 Headline & Profit Analysis 7-9 Cashflow 18 Income Statement 10 Outlook & COVID Response 19-20
Slide 2: Zambeef at a glance
Zambeef at a glance Zambeef Brands A farm to fork verticaly integrated business Cropping One of the largest row cropping operations in Zambia; Double cropping of irrigated land means Zambeef Network Zambeef plants 20,930 ha p.a. Stockfeed The leading stockfeed producer in Zambia, operating two feed
Slide 3: Operating Environment
Operating Environment ECONOMY INPUTS PRODUCTS Average Maize ($) Beef (All) ZMW / USD 32% 8% 2020: 232 /ton 11% 2020: K27.6 /Kg 2020: 16.17 2019: 215 /ton 2019: K24.8 /Kg 2019: 12.32 Average Inflation Soya Cake ($) Chicken IQF 56% 2020:14% 6% 2020: 377 /ton 17% 2020: K26.4 /Kg 2019: 9% 2019: 401 /ton
Slide 4: Macro-Economic Highlights
Macro-Economic Highlights Weak Sovereign Balance Sheet, Constrained FX liquidity and a Pandemic USD Mid-Rate (in ZMW) 20.02 Depreciation of the Kwacha +54% • The Zambian Kwacha depreciated by 54% in 2020 driven by constrained USD supply. • Inflation remained above target range for the whole year, pe
Slide 5: Financial Highlights
Financial Highlights Operating Profit Growth Driven by Management efficiencies ZMW ‘000 USD ‘000 +24% -6% Revenue • Combined Retail & CCFP and Stockfeed revenue on prior year were principle 3,875,104 254,462 239,648 drivers for the observed 24% revenue increase. Combined, they contributed to 3,134,9
Slide 6: Divisional Analysis – Revenue
Divisional Analysis – Revenue Retail & CCFP Stockfeed Cropping Other Businesses • Zambian Retail revenue • The large and growing • Maize prices experienced a • Flour sales volumes for the increased 17%. poultry sector in Zambia significant increase in year declined 25% due to • West Africa Revenues
Slide 7: Group Profit Analysis (ZMW'000)
Group Profit Analysis (ZMW’000) Others Others Retail & 48,676 39,261 CCFP 4% 3% Retail & Cropping 644,653 CCFP 266,405 53% Gross Profit 22% Cropping 270,116 581,159 54% YoY Growth 25% Retail & CCFP 10.9% Stockfeed 34.0% 2020 2019 Cropping -1.4% 1,215,622 1,081,547 Others 24.0% Total 12.4% Stockfeed
Slide 8: Group Profit Analysis (USD'000)
Group Profit Analysis (USD’000) Others Others Retail & 3,010 3,187 CCFP 4% 3% Retail & Cropping 39,868 CCFP 16,476 53% Gross Profit 22% Cropping 21,925 47,173 54% YoY Growth 25% Retail & CCFP -15.5% 2019 Stockfeed 2.1% 2020 Cropping -24.9% 75,178 87,788 Others -5.5% Total -14.4% Stockfeed Stockfeed
Slide 9: Headline Earnings Waterfall (ZMW'000)
Headline Earnings Waterfall (ZMW’000) (141,408) 429,574 2020 (32,245) (186,272) (92,322) 33,435 (102,195) (112,957) EBITDA Depreciation and Other Net Unrealised Finance Costs Taxation Charge Profit from Total loss for the Amortisation Adjustments Exchange losses discontinued Period operations 2019 2
Slide 10: Financial Overview – P&L
Financial Overview – P&L 2020 2019 2020 2019 ZMW’000 ZMW’000 %∆ USD’000 USD’000 %∆ Revenue 3,875,104 3,134,967 23.6% 239,648 254,462 -5.8% Cost of Sales (2,659,482) (2,053,420) 29.5% (164,470) (166,674) -1.3% Gross profit 1,215,622 1,081,547 12.4% 75,178 87,788 -14.4% Overheads (848,702) (784,268) 8
Slide 11: Retailing Revenue Channel Analysis-Zambia (ZMW'000)
Retailing Revenue Channel Analysis-Zambia (ZMW’000) -2% +27% 614,106 601,663 591,240 2020 2019 465,381 +36% +28% 373,019 353,235 +6% 291,557 259,229 237,543 225,243 Zambeef Outlets Zambeef Macros Novatek Shoprite Other 2020 2019 Other Other 11% 12% Zambeef Outlets Zambeef 28% Outlets Shoprite Shopri
Slide 12: Retail & Cold Chain Food Products P&L
Retail & Cold Chain Food Products P&L 2020 2019 2020 2019 ZMW'000 ZMW'000 USD'000 USD'000 Highlights Retail & CCFP 2,512,758 2,123,648 18.3% 155,396 172,374 -9.8% ❑ Favourable beef prices resulted in Gross Profit 644,653 581,159 10.9% 39,867 47,172 -15.5% increased revenue for the beef Overheads (53
Slide 13: Stockfeed P&L
Stockfeed P&L 2020 2019 2020 2019 Highlights ZMW'000 ZMW'000 USD'000 USD'000 ❑ The division recorded an Revenue 1,331,965 986,075 35.1% 82,373 80,039 2.9% impressive 45% increase in export Gross Profit 255,888 191,011 34.0% 15,825 15,504 2.1% sales despite the sales lost due to Overheads (129,539) (
Slide 14: Cropping P&L
Cropping P&L 2020 2019 2020 2019 ZMW'000 ZMW'000 USD'000 USD'000 Highlights Revenue 651,560 474,202 37.4% 40,294 38,490 4.7% ❑ Cropping revenue increased on Gross Profit 266,405 270,116 -1.4% 16,475 21,925 -24.9% the back of improved soya bean Overheads (160,618) (169,034) -5.0% (9,933) (13,720) -27
Slide 15: Other divisions P&L
Other divisions P&L 2020 2019 2020 2019 ZMW'000 ZMW'000 USD'000 USD'000 Highlights Revenue 203,609 210,348 -3.2% 12,592 17,074 -26.3% ❑ Shoe sales grew by 7% to 84,718 Gross Profit 48,676 39,261 24.0% 3,010 3,187 -5.5% pairs compared to the 79,396 Overheads (23,450) (23,900) -1.9% (1,450) (1,940) -2
Slide 16: Abridged Balance Sheet
Abridged Balance Sheet FY 20 HY 20 FY 19 FY 20 HY 20 FY 19 ZMW'000s ZMW'000s ZMW'000s USD '000s USD '000s USD '000s Non – current assets 3,484,684 3,550,005 3,077,526 173,023 196,567 233,146 Current assets 1,710,524 1,479,447 1,446,032 84,932 81,918 109,547 Total assets 5,195,208 5,029,452 4,523,558
Slide 17: Group Debt Analysis
Group Debt Analysis -10% -41% 2020 Loan Repayments 886,350 ZMW 121,480,536 67,148 USD 7,512,711 39,575 797,035 ZMW:USD Average FX rate Closing rate FY 2019 12.32 13.2 HY 2020 13.91 18.06 FY-20 FY-19 FY-20 FY-19 FY 2020 16.17 20.14 Debt Profile Source Breakdown Leases Long Term 5% 23% Overdrafts 30%
Slide 18: Abridged Cashflow Statement
Abridged Cashflow Statement FY 20 HY 20 FY 19 FY 20 HY 20 FY 19 ZMW'000s ZMW'000s ZMW'000s USD '000s USD '000s USD '000s Profit/(Loss) before taxation (22,673) 12,490 38,653 (1,402) 898 3,138 EBITDA, Fair value adjustments and Forex 429,574 160,951 224,904 26,541 11,566 18,255 Net cash (outflow)/inf
Slide 19: Operating Environment | Outlook
Operating Environment | Outlook Indicators 2018 2019 2020 Plan 2020 Actual 2020 Forecast 2021 2022 2023 GDP Growth % 3.7 2.0 2.3 -4.2 -4.2 1.5 1.9 2.1 MPC % 9.75 11..5 11.5 8 8 8 8 10 Inflation % 7.9 10.8 9.8 15.7 16 16.5 15 10.4 ZMW per $ 10.45 15 15 20.0 22 24 20 19.5 • The Global economy is expec
Slide 20: Ensuring business Continuity during COVID-19
Ensuring business Continuity during COVID-19 Zambeef remains committed, together with the rest of the nation, to ensuring that we beat COVID-19 Donations • Hygiene stations, bulk hand sanitizers, thermometers and masks to Chisamba, Chibombo and Lusaka City Councils. • Over K50,000 worth of cleaning