East African Breweries Plc · NSEKE:EABL
East African Breweries — H1 F14 Earnings Presentation
30 slides from East African Breweries's earnings presentation, Feb 14, 2014
Slide 1: EABL F14 Half Year Results Investor Briefing
EABL F14 Half Year Results Investor Briefing 14th February 2014
Slide 2: Outline of the Half Year Results Briefing
Outline of the Half Year Results Briefing • F14 Half Year Review Charles Ireland • Financial Performance Tracey Barnes • Summary and Outlook Charles Ireland • Q&A 2
Slide 3: F14 Half Year Review
F14 Half Year Review Charles Ireland Group Managing Director
Slide 4: EABL has a stretching ambition and is well-positioned to achieve it
EABL has a stretching ambition and is well- positioned to achieve it To create the best performing, most trusted and respected consumer products company in Africa • Market-leading brands in beer and spirits • History in this region since 1922 • Strategy of investing for future growth • Strong values
Slide 5: EABL delivered strong growth across the Group
EABL delivered strong growth across the Group which mitigated a decline on Senator Keg… H1 Positives H1 Challenges • Premium and mainstream • Excise Duty on Senator beer performance Keg • Growth of spirits portfolio • Destocking in Tanzania • Uganda growth • Cost of sales efficiencies 4% NET SALES G
Slide 6: Good growth in Uganda led our business unit performance
Good growth in Uganda led our business unit performance... Kenya Uganda Tanzania EABLi 66% of NSV 18% of NSV 11% of NSV 5% of NSV 6% 17% (11%) 6% NET SALES GROWTH IN FIRST SIX MONTHS OF F14 VS F13 6
Slide 7: Premium and mainstream sectors performed strongly in H1
Premium and mainstream sectors performed strongly in H1... Premium Beer RTDs Mainstream Beer Emerging Beer Tanzania 16% -24% Reserve Spirits Premium Spirits Mainstream Spirits Emerging Spirits 18% 18% 18% 7 ORGANIC NET SALES GROWTH IN H1 F14 vs. H1 F13.
Slide 8: Innovation, premiumisation and pricing delivered +6% Net Sales growth in Kenya
Innovation, premiumisation and pricing delivered +6% Net Sales growth in Kenya… • Strong Q1,tough Q2 performance • Impact of the VAT Act • Implementation of excise Duty on Senator Keg on 1st October • Pricing initiatives and growth of premium beer drove Net Sales growth • Successful new Marketing ca
Slide 9: We delivered robust performance in Uganda with 17% Net Sales growth
We delivered robust performance in Uganda with 17% Net Sales growth... • Pricing interventions and new campaign on Bell • Improved mix into premium beer • Strong performance on Waragi Gin • Successful launch of Reserve portfolio 17% 9 NET SALES GROWTH IN H1 F14 VS H1 F13 (STATUTORY)
Slide 10: In Tanzania performance was impacted by Route to Consumer changes
In Tanzania our performance was impacted by the short-term effect of our Route to Consumer changes… • Improved beer market • Significant changes made to our Route to Consumer during Q1 leading to destocking in wholesaler channel • Kibo Gold relaunched in new bottle • Growth seen in Q2 as new Route t
Slide 11: Improving mix drove 6% Net Sales growth in EABLi markets
Improving our mix has driven 6% Net Sales growth in our EABLi markets… • All markets experienced consumer economy challenges during the first half • Subdued demand in Rwanda due to restrictions on donor funding • Unrest in South Sudan in December • New depot launched in Juba • Roll-out of cans • Imp
Slide 12: Our momentum continues on our Capex and Cost agenda
Our momentum continues on our Capex and Cost agenda… Capex • New spirits line commissioned in Kenya • Kenya warehousing project nearing completion • Tanzania mash cookers on track Driving out Costs • Supply Chain projects underway to deliver Kshs 800m savings in 2014 • Priority based budgeting in Ta
Slide 13: We are optimising our Route to Consumer
We are optimising our Route to Consumer... • Full Route to Consumer restructuring projects underway in all key EABL markets • Increased direct distribution launched in Tanzania • New depot installed in Juba • Continued development of alternative sales channels 13
Slide 14: Our investment in people and communities supports our business objectives
Our investment in people and communities supports our business objectives… • New Leadership training programme launched • 100+ EABL employees on accelerated development programmes • Award-winning Responsible Drinking initiative • Skills for Life programme • Nairobi Water Round Table discussions • Wa
Slide 15: This led to total net sales growth of +4%
This led to total net sales growth of +4%... F14 H1 P&L vs F13 Kshs M Net Sales 31,858 +4% Cost of Sales -1% Gross Profit +9% Profit After Tax 4,161 +4% 15 HALF YEAR DEC 2013 VS PRIOR YEAR
Slide 16: F14 Half Year Review - Financial Performance
F14 Half Year Review Tracey Barnes, Group Finance Director
Slide 17: Significant volume declines on Senator Keg
We have seen significant volume declines on Senator Keg… 2013 monthly volumes of Senator Keg • Volumes declined by 85% following the implementation of Duty on 1st October • 3,000 outlets have closed • 3,000 other outlets in danger of closing • We are working to improve performance • Innovation (Sena
Slide 18: EABL delivered Operating Profit growth of 3% in H1
EABL delivered Operating Profit growth of 3% in H1… +4% -1% +20% +26% -89% +3% 18 Source: EABL Statutory Accounts –KES Bn
Slide 19: Priority brands drove growth in Revenue
Priority brands drove growth in Revenue… Financial Report Half Ended 31st December 2013 EABL Consolidated Income Statement 31-Dec-13 31-Dec-12 Kshs M Kshs M Growth % Net Revenue 31,858 30,633 4% Cost of Sales (16,127) (16,234) -1% Gross Profit 15,731 14,399 9% Selling and Distribution costs (3,047)
Slide 20: Raw materials costs improved by 6% on an equivalent unit basis
Raw materials costs improved by 6% on an equivalent unit basis… Financial Report Half Ended 31st December 2013 EABL Consolidated Income Statement 31-Dec-13 31-Dec-12 Kshs M Kshs M Growth % Net Revenue 31,858 30,633 4% Cost of Sales (16,127) (16,234) -1% Gross Profit 15,731 14,399 9% Selling and Dist
Slide 21: Continued investment in Selling & Distribution
Continued investment in Selling & Distribution… Financial Report Half Ended 31st December 2013 EABL Consolidated Income Statement 31-Dec-13 31-Dec-12 Kshs M Kshs M Growth % Net Revenue 31,858 30,633 4% Cost of Sales (16,127) (16,234) -1% Gross Profit 15,731 14,399 9% Selling and Distribution costs (
Slide 22: Net Finance Costs were broadly flat
Net Finance Costs were broadly flat... Financial Report Half Ended 31st December 2013 EABL Consolidated Income Statement 31-Dec-13 31-Dec-12 Kshs M Kshs M Growth % Net Revenue 31,858 30,633 4% Cost of Sales (16,127) (16,234) -1% Gross Profit 15,731 14,399 9% Selling and Distribution costs (3,047) (2
Slide 23: We improved our Cash position in the half
We improved our Cash position in the half… 23 HALF YEAR ENDED 31 DECEMBER 2013; FIGURES SHOWN IN KSHS BN
Slide 24: Proposed dividends
Proposed dividends Proposed Dividends - KES Interim Dividend 1.50 24
Slide 25: Summary & Outlook
Summary & Outlook Charles Ireland Group Managing Director
Slide 26: First half performance was positive in spite of some headwinds
In summary, our first half performance was positive in spite of some headwinds…. • EABL delivered +4% Net Sales growth and +4% Profit After Tax growth • Our overall H1 performance was impacted by: – Implementation of duty on Senator Keg – Route to Consumer changes in Tanzania • We are confident in t
Slide 27: Overall outlook is optimistic
Overall outlook is optimistic... • Performance positives – Improving Net Sales in Uganda – Spirits growth across all sectors – Improved mix in beer – Sales focus benefits from new Route to Consumer in Tanzania – Lapping a quiet Q3 in Kenya (elections) – Supply Chain efficiency initiatives – Strong I
Slide 28: Q & A Session
DIAGEO cab! O &A Session
Slide 29: END
Celebrating Life
Slide 30: Cautionary statement concerning forward-looking statements
Cautionary statement concerning forward-looking statements This presentation contains ‘forward-looking’ statements. These forward-looking 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 state
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