East African Breweries PLC · NSEKE:EABL
East African Breweries — FY2010 Earnings Presentation
34 slides from East African Breweries's earnings presentation, Aug 26, 2010
Slide 1: EABL FY F10 Investor Group Briefing
EABL FY F10 Investor Group Briefing Seni Adetu – Group MD & CEO Peter Ndegwa – Group FD 26th August 2010 EABL FY‐‐F10 Investor Presentation
Slide 2: The Afternoon
The Afternoon Welcome & introduction – Group MD Business Update ‐ ‐ Group MD Financial Update ‐ ‐ Group FD Q&A EABL FY‐‐F10 Investor Presentation
Slide 3: Business Update
Business Update Group MD Mr. Seni Adetu EABL FY‐‐F10 Investor Presentation
Slide 4: Our vision and intent
Our vision … EABL is the most celebrated y market in business in every Eastern Africa Our Intent… Employer of choice Delivering superior shareholder returns Force for good in each of our markets EABL FY‐‐F10 Investor Presentation
Slide 5: Macro-economic and operating environments in the past year
Macro‐economic and operating environments in the past year A Tale of Two Halves … 1st Half Year 2nd Half Year > Global recession‐‐ Collapse in export and commodity > Economic recovery markets > Excise E i ttax iincrease on SSpirits i it > Spirits tax reversal > Water and energy pressures across the
Slide 6: After a slow start, performance improved significantly in H2
After a slow start, performance improved significantly in H2 F09 '000' eus F10 '000' eus 2,500 ‐18% vs. LY ‐4% vs. LY +8% vs. LY +21% vs. LY 2,000 1,500 1,000 500 0 Q1 Q2 Q3 Q4 Total volumes Senator keg and spirits upturn Strong (double‐digit) performance by mainstream Recovery (Tusker/Guinness)
Slide 7: Witnessed strong performance on our core brands
Witnessed strong performance on our core brands EABL FY‐‐F10 Investor Presentation
Slide 8: Resulting in positive growth across key financial metrics
Resulting in positive growth across key financial metrics Volume flat vs. LY NSV +10% vs. LY NSV growth Venture resulted from GLR 11% GLR 5% tactical pricing in 5% Venture 7% KE & UG as well Uganda Uganda Kenya as a strong mix 21% 63% Kenya 21% contributed by 67% Guinness & Tusker performance PBT +9
Slide 9: Key initiatives that spurred growth
Key initiatives that spurred growth Improved p supply pp y performance p Brand building & and innovation Market development in New Markets and on Sen. Keg Focus on distributor partnership and route‐to‐market Resourcing ‐ ‐ commercial teams in place across GLR markets EABL FY‐‐F10 Investor
Slide 10: F10 saw well executed activations
F10 saw well executed activations EABL FY‐‐F10 Investor Presentation
Slide 11: With a robust Supply optimization agenda
With a robust Supply optimization agenda > COGS focus (hedging on cereals) > Increased local barley contribution > New packaging line in Kenya – increasing OEE’ s* > Consolidated production capacity > Sorghum breakthrough in Kenya *Overall equipment effectiveness EABL FY‐‐F10 Investor Presentation
Slide 12: And growing investments in Capex
And growing investments in Capex CAPEX- Kes. Mns 3,240 3,200 2,148 1,472 1,134 F07 F08 F09 F10 F11 EABL FY‐‐F10 Investor Presentation
Slide 13: With increased focus on public policy and CSR activities
With increased focus on public policy and CSR activities Enhanced relationship on EAC integration Partnering with Government to fight illicits and promoting Senator Keg Conservation of environment and providing water and scholarships for needy students EABL FY‐‐F10 Investor Presentation
Slide 14: Leading the responsible drinking agenda
Leading the responsible drinking agenda EABL FY‐‐F10 Investor Presentation
Slide 15: Looking ahead
L ki ahead Looking h d EABL FY‐‐F10 Investor Presentation
Slide 16: Future more optimistic
Future more optimistic ‐‐ Upturn in activity in emerging economies & Sub Saharan Africa Closer Home Home--Sub S b Saharan 8.0 Yr 2009 Yr 2010 Yr 2011 7.0 6.0 5.0 4.0 3.0 2.0 10 1.0 0.0 Kenya Uganda Tanzania Sudan Burundi Rw anda Source:EIU– GDP Growth figures—09-11 • Investor confidence • FDI’ s inc
Slide 17: However, unlocking this value requires…
However, unlocking this value requires… Overcoming Challenges & Leveraging Opportunities Regulatory concerns Growing economies Fiscal pressures Increasing population, growing middle class & Growing competition affluence Increasing political/security concerns Increased integration (EAC) Cost
Slide 18: Our F'11 Mission is built on Six Strategic Pillars
Our F’11 Mission is built on Six Strategic Pillars Most celebrated business in Eastern Africa Total Supply Winning in Talent Adult Customer Optimization Enhanced Eastern People Beverage Partnerships & Cost Reputation Africa Safety (TAB) Leadership Excellent controls and compliance environment EABL F
Slide 19: In summary…
In summary… Strong financial performance in F10 with NSV, PBT and cash growth: All businesses recorded profits (Kenya +30% PBT growth vs. LY) Flagship brands in double‐digit growth coupled with improved brand equity Performance was driven by: Increased investment in A&P (+22% vs. LY) and C
Slide 20: Financial Update
Financial Update Group FD – Peter Ndegwa EABL FY‐‐F10 Investor Presentation
Slide 21: Performance Re-bound ..
Performance Re‐‐bound .. EABL FY‐‐F10 Investor Presentation
Slide 22: On the back of great beer performance in Kenya
On the back of great beer performance in Kenya +11% +14% vs. vs +18% vs. LY LY vs. LY F10: F10: F10: 1,249 503 173 Vs Vs Vs F09 F09 F09 1,126 441 146 Volume in ‘000 000 Eus EABL FY‐‐F10 Investor Presentation
Slide 23: With Senator back to growth
With Senator back to growth Senator: 678K Eus H2 Growth 15% +14% Senator: H1 10% Decline 5% 782K -18% 0% Eus 565k Eus -5% -10% 645K Eus -15% -20% EABL FY‐‐F10 Investor Presentation
Slide 24: And a recovering Spirits portfolio
And a recovering Spirits portfolio H2: 60% Growth 445K Eus 80% 60% H1: -53% 40% Decline 20% 646K 0% Eus 175K Eus -20% -40% -60% 305K -80% Eus -100% -120% 120% EABL FY‐‐F10 Investor Presentation
Slide 25: We managed costs despite a challenging environment..
We managed costs despite a challenging environment.. COGS - Growth 20,000 Good control of 19,500 19,000 18,823 +7% + costs in Kenya Kshs m iillions 18,500 18 000 18,000 17 561 17,561 17,500 Hedging inputs 17,000 costs 16,500 16,000 F10 F09 - COG/EU High forex losses 2,650 2,631 in Uganda 2 600
Slide 26: A Dive into the Markets
A Dive into the Markets EABL FY‐‐F10 Investor Presentation
Slide 27: Kenya: Solid performance
Kenya: Solid performance > Modest beer growth (2%) but better mix – Tusker up 11% – Guinness up by 14% > Spirits down by 9% - Recovery in H2 after a tough H1 > PBT: Overall impressive Volume flat +0.01% Net sales growth +12% > KBL +30% Cost of Good Sold +8% Operating profit +18% > UDV +6% > Overall
Slide 28: Uganda
Uganda A challenging year for Uganda > Intense competition > High input costs > A depreciating currency -1% Volume flat Net sales growth +9% Cost of Good Sold +11% Operating profit -51% EABL FY‐‐F10 Investor Presentation
Slide 29: At the GLR front.. despite some challenges we have established a presence
At the GLR front..despite some challenges we have established a presence In market commercial presence > Revamped product + distribution – new RTM > Resourced to win > Increased visibility & promotional activities Increased regulatory challenges Volume decline -14% - > Higher taxes > Ban sachet
Slide 30: Whilst in Tanzania….
Whilst in Tanzania…. > Strong g Share Of Associates (up by 13%) > EABL brands distributed SOA +13% through SBL EABL FY‐‐F10 Investor Presentation
Slide 31: Our summary results…
Our summary results… F10 F09 % Growth K hB Ksh Bn K hB Ksh Bn NSV 38.0 34.4 10% PBT 12.6 11.5 9% Cash 8.0 6.6 21% Net Assets 26.7 25.1 7% EABL FY‐‐F10 Investor Presentation
Slide 32: Detailed results…
Detailed results… East African Breweries Limited Financial Report for the year ended 30 June 2010 Consolidated Profit and Loss Account Year endedYear ended 30-Jun-10 30-Jun-09 Kshs M Kshs M Change % Net Revenue 37,965 34,408 10% Cost of Sales (18,823) (17,561) 7% Gross profit 19,142 16,846 14% Other
Slide 33: And the proposed dividends…
And the proposed dividends… > Final dividend proposal of Kes 6.25/share > Interim dividend paid of Kes 2.50/share >Taking full year dividend to Kes 8.75/share, 8 75/share 9% above LY > Final dividend payment of Kes 5Bn > Full year dividend payment of Kes 6.9Bn EABL FY‐‐F10 Investor Presentation
Slide 34: Q&A Session
Q&A Session EABL FY‐‐F10 Investor Presentation
East African Breweries — FY2010 Earnings Presentation on 6ix