East African Breweries Plc · NSEKE:EABL
East African Breweries — FY2014 Earnings Presentation
32 slides from East African Breweries's earnings presentation, Aug 7, 2014
Slide 1: EABL F14 Full Year Results Media Briefing
EABL F14 Full Year Results Media Briefing 7th August 2014
Slide 2: Outline of the Full Year Results Briefing
Outline of the Full Year Results Briefing • F14 Full Year Review Charles Ireland • Financial Performance Tracey Barnes • Summary and Outlook Charles Ireland • Q&A 2
Slide 3: F14 Full Year Review
F14 Full 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 • In this region since 1922 • Strategy of investing for future growth • Strong values • Glob
Slide 5: We achieved Net Sales growth of 4%
We achieved Net Sales growth of 4%... Kshs M Net Sales 61,292 +4% Cost of Sales -1% Gross Profit +10% Profit After Tax 6,859 +5% 5 SOURCE: EABL STATUTORY ACCOUNTS F14 vs F13
Slide 6: EABL delivered strong growth across the Group which mitigated the decline of Senator Keg
EABL delivered strong growth across the Group which mitigated the decline of Senator Keg… Key wins Key challenges faced • Premium and mainstream • Excise tax on Senator Keg beer performance • Tanzania business • Growth of spirits performance • Supply chain efficiencies • Political instability in Sou
Slide 7: Impact of those Key challenges
Impact of those Key challenges… Senator Tanzania South Sudan F14 Monthly volumes of Tanzania NSV vs F13 % NSV Δ vs F13 Senator Keg 15% 150% 10% 125% 5% 100% % Δ vs F13 % Δ vs F13 75% 0% H1 H2 50% -5% 25% -10% 0% -15% Q1 Q2 Q3 Q4 SOURCE: EABL MANAGEMENT ACCOUNTS F14 vs F13
Slide 8: Senator excise duty increase has also impacted Government revenue collections
Senator excise duty increase has also impacted Government revenue collections… Actual tax remittances on Senator vs Govt. targets 600 500 Excise Remittances (Kes' m) 400 Actual Tax Remittances 300 Monthly Government Tax Revenue target 200 100 - Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14
Slide 9: Growth in NSV in Uganda and EABLi
Growth in NSV in Uganda and EABLi... Kenya Uganda Tanzania EABLi 64% of NSV 18% of NSV 11% of NSV 7% of NSV (1%) 13% (1%) 50% Excluding Senator +18.2% SOURCE: EABL STATUTORY ACCOUNTS; NET SALES GROWTH F14 vs F13 9
Slide 10: Premium and mainstream sectors performed strongly in the year
Premium and mainstream sectors performed strongly in the year... Premium Beer RTDs Mainstream Beer Emerging Beer Tanzania 16% -24% Reserve Spirits Premium Spirits Mainstream Spirits Emerging Spirits 18% 18% 18% 10 ORGANIC NET SALES GROWTH IN F14 vs. F13.
Slide 11: Kenya delivered flat performance at NSV
Kenya delivered flat performance at NSV… • Senator volumes collapsed Q2,3, 4 • Actions taken to strengthen Tusker, Guinness, Baileys, overall packaged beer and overall Spirits • Strong Innovation programme • Significant actions taken to optimise cost base • Route to Consumer Project underway • Actio
Slide 12: Uganda delivered good performance with 13% Net Sales growth
Uganda delivered good performance with 13% Net Sales growth... • Pricing interventions and new campaign on Bell • Premium beer drives improved mix • Strong performance on Waragi Gin • Successful launch of Reserve portfolio • Route to Consumer project underway • Strengthened management team 13% SOURC
Slide 13: Tanzania performance was impacted by short-term effect of Route to Consumer changes
Tanzania performance was impacted by the short-term effect of our Route to Consumer changes… • Significant changes made to our Route to Consumer which resulted in short-term destocking • Premium Serengeti Lager delivering year on year volume growth • Growth in Q4 with the Launch of Serengeti Platinu
Slide 14: Strong performance in EABLi despite the political unrest
Strong performance in EABLi despite the political unrest… • New depot launched in Juba • Premium beer drives improved mix • Successful roll-out of cans • Poor duty free performance 50% SOURCE: EABL STATUTORY ACCOUNTS; NET SALES GROWTH F14 vs F13 14
Slide 15: 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 in June • Kenya warehouse opened in March • Tanzania mash cookers installed in March • KBL Capacity expansion completed in November Driving out Costs • Supply Chain efficiencies delivered Kshs1.6b sav
Slide 16: We are optimising our Route to Consumer
We are optimising our Route to Consumer... • Route to Consumer restructuring projects underway in all EABL markets • New Route to Market (RTM) launched in Tanzania • New depot opened in Juba • KasKazi pilot launched in Kenya 16
Slide 17: Our investment in people and communities underpins our business objectives
Our investment in people and communities underpins our business objectives… • Skills for Life programme • 100+ EABL employees on accelerated development programmes at entry, mid career and senior leadership levels • Amazing line manager programme for our top 100 people managers • Implemented our int
Slide 18: Thank You
Thank You Please Hold the questions to the end 18
Slide 19: F14 Full Year Review - Financial Performance
F14 Full Year Review Tracey Barnes, Group Finance Director
Slide 20: EABL Profit from operations declined by 2%
EABL Profit from operations declined by 2%… -1% +13% +4% +8% -401% -2% 20 SOURCE: EABL STATUTORY ACCOUNTS F14 vs F13; Kshs Bn
Slide 21: Priority brands drove growth in Revenue
Priority brands drove growth in Revenue… Financial Report FY 30th June 2014 EABL Consolidated Income Statement 30/06/2014 30/06/2013 Kshs M Kshs M Growth % Net Revenue 61,292 59,062 4% Cost of Sales (31,099) (31,563) -1% Gross Profit 30,194 27,499 10% Selling and Distribution costs (5,761) (5,085) 1
Slide 22: Cost of sales improved by 1% driven by supply chain efficiencies
Cost of sales improved by 1% driven by supply chain efficiencies… Financial Report FY 30th June 2014 EABL Consolidated Income Statement 30/06/2014 30/06/2013 Kshs M Kshs M Growth % Net Revenue 61,292 59,062 4% Cost of Sales (31,099) (31,563) -1% Gross Profit 30,194 27,499 10% Selling and Distributio
Slide 23: Continued investment in Selling & Distribution
Continued investment in Selling & Distribution… Financial Report FY 30th June 2014 EABL Consolidated Income Statement 30/06/2014 30/06/2013 Kshs M Kshs M Growth % Net Revenue 61,292 59,062 4% Cost of Sales (31,099) (31,563) -1% Gross Profit 30,194 27,499 10% Selling and Distribution costs (5,761) (5
Slide 24: Increased finance costs driven by higher borrowings
Increased finance costs driven by higher borrowings . . . Financial Report FY 30th June 2014 EABL Consolidated Income Statement 30/06/2014 30/06/2013 Kshs M Kshs M Growth % Net Revenue 61,292 59,062 4% Cost of Sales (31,099) (31,563) -1% Gross Profit 30,194 27,499 10% Selling and Distribution costs
Slide 25: The effective tax rate has improved to 34% this year
The effective tax rate has improved to 34% this year... Financial Report FY 30th June 2014 EABL Consolidated Income Statement 30/06/2014 30/06/2013 Kshs M Kshs M Growth % Net Revenue 61,292 59,062 4% Cost of Sales (31,099) (31,563) -1% Gross Profit 30,194 27,499 10% Selling and Distribution costs (5
Slide 26: We improved our Cash position in the year
We improved our Cash position in the year… 3.2 3.2 4.7 10.6 0.6 0.5 -0.7 F14 Opening Profit Non-Cash Working Corp tax Capex Dividends Borrowings Loan Others F14 Closing Cash Before Tax adj (Depn) Capital Repayments Cash -4.9 changes 6.8 10.6 5.3 26 SOURCE: EABL STATUTORY ACCOUNTS F14 vs F13; Kshs Bn
Slide 27: Proposed dividends
Proposed dividends Proposed Dividends - KES Interim Dividend 1.50 Final Dividend 4.00 Total Dividend 5.50 27
Slide 28: Summary & Outlook
Summary & Outlook Charles Ireland Group Managing Director
Slide 29: In summary, our performance was positive in spite of some headwinds
In summary, our performance was positive in spite of some headwinds…. • EABL delivered +4% Net Sales and +5% Profit After Tax growth • Our overall FY performance was impacted by: – Implementation of duty on Senator Keg – Route to Consumer changes in Tanzania – Political Instability in South Sudan •
Slide 30: Q & A Session
DIAGEO cab! O &A Session
Slide 31: - END -
Celebrating Life
Slide 32: 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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