East African Breweries Plc · NSEKE:EABL
East African Breweries — H1 FY2020 Earnings Presentation
35 slides from East African Breweries's earnings presentation, 2020
Slide 1: EABL 2020 Half-Year Results
ees | EABL 2020 infer) HALF-YEAR RESULTS
Slide 2: Half-Year Results Briefing
F20 H1 Commercial Review Andrew Cowan HALF-YEAR F20 H1 Financial Performance RESULTS Gyuri Geiszl BRIEFING F20 H2 Priorities Andrew Cowan Q&A
Slide 3: F20 Half Year Review
F20 HALF YEAR REVIEW Andrew Cowan Group Managing Director
Slide 4: We are clear on our ambition
We are clear To create the best on our performing, most trusted ambition and respected consumer products company in Africa Vibrant mainstream beer Explode mainstream spirits Win in premium Shape new frontiers Aspirational and accessible innovations Route to consumer Reputation Since 19
Slide 5: Double digit growth for four consecutive halves
DOUBLE DIGIT GROWTH FOR FOUR CONSECUTIVE HALVES Volume +5% Net sales +10% Gross profit +14% Profit after tax +9% Operating Cash Conversion 102% Interim dividend KES 3/share
Slide 6: Consistent growth across our markets
CONSISTENT GROWTH ACROSS OUR MARKETS Contribution to Net sales Key brands overall EABL growth (KES) KENYA 71% +8% UGANDA 16% +10% TANZANIA 13% +19% Total EABL 100% +10%
Slide 7: Broad-based growth across all categories
BROAD-BASED GROWTH ACROSS ALL CATEGORIES Premium Mainstream Value RTDs +8% +10% +11% +3% Beer Reserve Premium Mainstream Value +13% +14% +9% +12% Spirits
Slide 8: Innovation continues to contribute to business growth
INNOVATION CONTINUES TO CONTRIBUTE TO BUSINESS GROWTH KENYA UGANDA TANZANIA 50% 16% 25%
Slide 9: Kenya: double digit Senator Keg and spirits growth
Kenya DOUBLE DIGIT SENATOR KEG AND +8%* SPIRITS GROWTH Bottled beer in 1% decline due to Mainstream spirits grew excise driven price 17% increase Scotch grew 23% 50% growth in innovation brands Senator 21% Spirits in 11% growth supported growth constrained by RTC initiatives by border delays * Net s
Slide 10: Uganda: premium and mainstream beer drive growth
Uganda PREMIUM AND MAINSTREAM BEER +10%* DRIVE GROWTH Tusker Lite and Guinness Reserve grew delivered 27% growth in 65% Premium beer Innovation driven by Black & White Mainstream beer grew Spirits in growth 1% 14% driven by Pilsner despite sachet ban * Net sales growth
Slide 11: Tanzania: sustained growth of Serengeti family
Tanzania SUSTAINED GROWTH OF SERENGETI +19%* FAMILY Guinness delivered Serengeti 42% growth in Family grew Premium beer 27% Pilsner grew 14% Mainstream spirits grew 42% driven by Smirnoff X1 * Net sales growth
Slide 12: New Logo
NEW LOGO • East Africa-wide competition “Got Skillz” for young creatives aged between 21-25y • 385 submissions • Top 20 selected for hackathon • Refined submissions with guidance from judges • Elvis Otieno Atieno, 22-year-old, won Kshs 1m and an agency mentorship
Slide 13: Office Opening
OFFICE OPENING
Slide 14: New environmental investment program
New environmental investment program A switch to renewable energy in Kenya and Uganda. New biomass boilers will replace heavy fuel oil using sustainable fuel alternatives aimed at reducing carbon emissions by 42,000 tonnes New water recovery and reuse facilities for sites in Kenya and Uganda, sa
Slide 15: Investing to grow and develop our people
INVESTING TO GROW AND DEVELOP OUR PEOPLE Continuous Learning with launch of My Learning Hub Organizational Efficiency: simplicity and speed in decision making Inclusion and Diversity: create a more inclusive and diverse culture Disruptive approach to talent Fulfilling Employee Experiences
Slide 16: Excellence Awards
EXCELLENCE AWARDS 2nd Best Employer brand, Learning & Development and Corporate Performance – Federation of Kenya Employers 2019 Employer of the Year Awards. Highest absolute sales growth, Plant of the Year, Team of the year – President's Award in F19 – Diageo ‘Pride of Africa’ Awards Tusker r
Slide 17: Positively impacting communities
POSITIVELY IMPACTING COMMUNITIES Community Investments KBL staff planted over 100,000 tree seedlings in Mt Kenya and Aberdares water towers through Kijani Programme Water of Life projects completed in Kakamega, Kikuyu and Kitui with close to 30,000 beneficiaries. Six-day blood donation drive
Slide 18: Positively impacting communities
POSITIVELY IMPACTING COMMUNITIES Project Heshima: recruited 1,000 people to vocational training that targets youth and women who are susceptible to the production and consumption of illicit brews Pioneer grain to glass Mtama ni Mali Programme offering support to local farmers through extension
Slide 19: Thank You
Thank You Please hold the questions to the end
Slide 20: F20 H1 Financial Performance
F20 H1 FINANCIAL PERFORMANCE Gyuri Geiszl Group Finance and Strategy Director
Slide 21: Financial Highlights
Financial Highlights H1 F20 vs LY Volume +5% Net sales KES 45.9bn +10% Operating profit KES 12.4bn +9% Profit after tax KES 7.2bn +9% Operating cash conversion 102% -16ppt Net debt KES 26.2bn +10% Interim dividend KES 3/share
Slide 22: Strong volume growth across categories
Strong volume growth across categories H1 F20 H1 F19 vs LY KES bn KES bn Volume growth driven by Volume (mEU) 7.5 7.1 +5% Senator Keg and mainstream spirits in Kenya, continued growth Gross sales 81.9 76.4 +7% of Serengeti in Tanzania Excise duties (36.0) (34.8) -4% Net sales growth attributed t
Slide 23: Strong growth across the business
Strong growth across the business Movements in net sales (KES bn) 46 0.9 45 0.7 44 1.4 43 45.9 42 1.5 0.1 41 41.6 40 F19 H1 Kenya Senator Kenya Uganda Tanzania F20 H1 Bottled Beer Spirits • Decline of bottled beer in Kenya due to excise driven price increase • Growth of Senator in Kenya due to impro
Slide 24: Additional CoGS savings delivered
Additional CoGS savings delivered Cost of sales increase H1 F20 H1 F19 +7% driven by volume vs LY KES bn KES bn growth +5%, CoGS/case up +2% due Volume (mEU) 7.5 7.1 +5% to incremental Kisumu depreciation costs Gross sales 81.9 76.4 +7% Additional productivity savings of KES 1.5bn in Excise du
Slide 25: Re-investment of productivity savings continues
Re-investment of productivity savings continues Selling and H1 F20 H1 F19 vs LY distribution grew by KES bn KES bn +7% driven by investment behind our Gross profit 21.8 19.2 +14% brands to accelerate growth, in line with Selling & distribution (3.9) (3.6) -7% strategy Administrative costs (4.5) (4
Slide 26: Net borrowings and interest charges
Net borrowings and interest charges H1 F20 FY F19 Higher net borrowings vs LY KES bn KES bn due to continued investment in capex and leases (IFRS 16) Net borrowings (26.2) (23.9) -10% Higher finance costs due to expensing of Kisumu loan interest but effective H1 F20 H1 F19 vs LY interest rate do
Slide 27: Growth in Profit after tax
Growth in Profit after tax H1 H1 F20 F19 vs LY KES bn KES bn Operating profit 12.4 11.4 +9% Finance costs, net (1.9) (1.7) -9% Profit before tax 10.6 9.7 +9% Income tax expense (3.4) (3.1) -9% Profit after tax 7.2 6.6 +9% EPS (KES/share) 7.0 6.5 +7% Interim dividend 3.0 2.5 +20% (KES/share)
Slide 28: Consistently strong cash performance
Consistently strong cash performance H1 F20 H1 F19 vs KES bn KES bn LY Operating profit 12.5 11.4 1.1 Efficient working Depreciation and amortization 2.4 2.0 0.4 capital management continues Working capital movements Inventory 0.1 0.5 (0.4) Debtors (3.0) (1.5) (1.4) Creditors 3.1 3.3 (0.2) Cash ge
Slide 29: We continue to invest in our future growth
We continue to invest in our future growth CAPEX Kisumu Breweries Total F20 H1 investment of KES 4.4bn (F19 H1 KES 4.8bn) • Construction of new brewery in Kisumu now in finalization • Beer and Spirits upgrade in Uganda • SBL capacity expansion: brewing and fermentation in Dar • New modern office (le
Slide 30: Thank You
Thank You Please hold the questions to the end
Slide 31: F20 H2 Priorities
F20 H2 PRIORITIES Andrew Cowan Group Managing Director
Slide 32: Priorities going forward
Priorities going forward Opportunities for further growth Bottled beer back to growth in Kenya Maintain mainstream spirits growth despite higher excise in Kenya, recover sachet volume in Uganda Deliver capacity expansion projects in Uganda and Tanzania Win in premium leading with Scotch De
Slide 33: Q & A Session
Q & A Session
Slide 34: www.jointhepact.com
www.jointhepact.com @EABL_PLC East African Breweries Ltd @Kenya Breweries Ltd @KenyaBreweries
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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