Slide 1: 2016 Results
2016 Results f \ ole... u| ZAMBEEF |5 Products PLC ” iain acl ia
Slide 2: Disclaimer
Disclaimer THIS DOCUMENT (“DOCUMENT”) IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR GENERAL BACKROUND INFORMATION. THE DISTRIBUTION OF THIS DOCUMENT MAY BE RESTRICTED BY LAW. ACCORDINGLY, THIS DOCUMENT MAY NOT BE DISTRIBUTED IN ANY JURISDICTION EXCEPT IN ACCORDANCE WITH THE L
Slide 3: Contents
CONTENTS 1. Highlights 2. Strategy a) Identifying Our Core Strengths b) Retail Driving Growth c) Growing Regional Demand d) Managing the Balance Sheet 3. 2016 Financials a) Abridged Income Statement b) Abridged Balance Sheet c) Abridged Cash Flow Statement d) Segmental Summary e) Retailing Results f
Slide 4: Highlights (USD)
HIGHLIGHTS (USD) EBITDA Debt-to-EBITDA 2016: USD 29.2m 2015: USD 21.2m 38 % 2016: 1.9 2015: 2.7 30 % Profit after tax Cost/Income Ratio 2016: USD 14.5m 2015: USD (7.7)m 22 USD m 2016: 25.7% 2015: 28.2% 9% Gearing Current ratio 2016: 25.7% 2015: 60.3% 57 % 2016: 1.6 2015: 1.0 60 % 4
Slide 5: Strategy
STRATEGY 5
Slide 6: Identifying Our Core Strengths
IDENTIFYING OUR CORE STRENGTHS Four best-in-class strategic pillars • Business built on four best-in-class market leading operations creating a strong integrated group • Retail and Distribution • Cold Chain Food Production • Arable Farming • Stockfeed • Deliver high quality, good value fresh food to
Slide 7: Retail Driving Growth
RETAIL DRIVING GROWTH • USD124m of sales driven from our network of 171 stores • Targeting growth of: • 10 new macro-stores and 10 Novatek Outlets pa for next 4 years • 8 Shoprite stores to be opened in 2017 • Retail floor capacity increase by 7,000 sqm pa • Focus on larger, more efficient macro for
Slide 8: Retail Driving Growth
RETAIL DRIVING GROWTH 2017 (projected) 2016 2015 (projected) Zambia Zambeef Outlets 83 83 86 Zambeef Macros 20 10 7 Zamchick Inns 4 4 6 Novatek 20 10 5 Zamshu Outlets 4 2 0 131 109 104 Shoprite Butcheries 34 31 26 165 140 130 Nigeria Shoprite Butcheries 24 20 14 Master Meats Outlets 6 6 6 30 26 20 G
Slide 9: Growing Regional Demand
GROWING REGIONAL DEMAND • Zambian Population growth one of the highest in the world, estimated at around 2.94% per annum* • Zambian rate of urbanisation one of the highest in the region, estimated at around 3.96% per annum* • Zambeef increasing market share with around 7,000m2 of additional retail f
Slide 10: Managing the Balance Sheet
MANAGING THE BALANCE SHEET • Focus on cash conversion • Growth of business to be driven by its retail operations; • Targeted Capex in Cold Chain Food Production divisions to sustain growth with higher return hurdles and clear managerial responsibility of delivering anticipated RoCE; • Return to divi
Slide 11: 2016 Financials
2016 FINANCIALS 11 11
Slide 12: Abridged Income Statement
ABRIDGED INCOME STATEMENT 30 September 2016 30 September 2015 USD'000 USD'000 % Change Revenue 219 404 220 237 -0.4% Cost Of Sales (138 523) (125 801) -10.1% Gross Profit 80 881 94 436 -14.4% Other Income 156 100 56.0% Administrative Expenses (63 716) (71 578) 11.0% Administrative Expenses (excludin
Slide 13: Abridged Balance Sheet
ABRIDGED BALANCE SHEET 30 September 30 September 2016 2015 USD'000 USD'000 Non-Current Assets 209 694 165 515 Current Assets 92 110 65 818 Total Assets 301 804 231 333 Capital and Reserves 212 623 122 736 Non-Current Liabilities 30 738 42 952 Current Liabilities 58 443 65 645 Total Equity and Liabil
Slide 14: Abridged Cash Flow
ABRIDGED CASH FLOW 30 September 30 September 2016 2015 USD'000 USD'000 Profit Before Taxation 12 427 (5 038) EBITDA 29 228 21 176 Movement in Working Capital (17 119) 16 165 Cash inflow/(outflow) from Operating Activities 12 109 37 341 Cash inflow/(outflow) from/(on) investment activities 24 600 (4
Slide 15: Segmental Summary % of Group Gross Profit
SEGMENTAL SUMMARY % OF GROUP GROSS PROFIT 2016 Others, 3.6% Retailing - Zambia, 15.2% Retailing - West Africa, 5.6% Crop - Row Crops, 28.8% Cold Chain Food Products, 30.4% Stock Feed, 16.4% 15
Slide 16: Divisional 2016 & 2015 Gross Profit Summary (USD'000)
DIVISIONAL 2016 & 2015 GROSS PROFIT SUMMARY (USD’000) 2016 2015 ZMW/USD ZMW/USD Average rate for year 10.83 7.06 35 882 40 000 35 000 2016 27 688 2015 24 567 30 000 23 256 25 000 18 048 16 778 20 000 13 289 10 456 15 000 9 144 10 000 2 991 5 000 - Retailing Cold Chain Food Products Stock Feed Row Cr
Slide 17: Divisional 2016 & 2015 Gross Profit Summary (ZMW'000)
Divisional 2016 & 2015 Gross Profit Summary (ZMW’000) GROSS PROFIT (ZMW’000) 2016 2015 266 080 253 326 251 860 300 000 250 000 195 487 181 699 200 000 143 916 127 423 150 000 73 821 64 555 100 000 32 391 50 000 - Retailing Cold Chain Food Products Stock Feed Row Crops Others 42.6% 36.1% 95.0% 0.6% 4
Slide 18: Retailing Results
RETAILING RESULTS • Retail network has significantly grown • Expanded from 154 to 171 stores • Volumes grew by around 11% • Gross profit margins increasing from 13.1% to 13.5% • One of the fastest growing retailers in the region 568% 2015: ZMW (21.7)m 18
Slide 19: Cold Chain Food Production
COLD CHAIN FOOD PRODUCTION • One of the largest meat processors in the region • Focused on value addition, branding and retailing • Significant volume increases: • Beef, pork, chicken and fish + 8% • Dairy products + 19% • Eggs + 2.2% 568% 2015: ZMW (21.7)m • Margins increased with Gross Profit perc
Slide 20: Stockfeed (Novatek) Results
STOCKFEED (NOVATEK) RESULTS • The market leader in Stockfeed in Zambia with volumes increasing 15.3% to 150,280t (2015: 130,280t) • Operating at full capacity in second half of the year • New stockfeed plant to come on line in February 2017 • increasing capacity from 14,000t to 25,000t per month • G
Slide 21: Cropping
CROPPING • One of the largest row cropping operations in Africa • 7,971 hectares under irrigation and planted twice a year with a further 8,623 hectares of rain fed cropping making a total of 24,564 hectares planted per annum • 113,617t of grain harvested during the year up from 107,985 in 2015 as w
Slide 22: Non-Financial Highlights
NON-FINANCIAL HIGHLIGHTS • Raising of USD65m of capital from CDC • Zamhatch/ZamChick become 100% owned • Retail Expansion • World-class operations • Novatek ISO9000 compliant • Zamleather ISO20345 certification for mining boots; • FSSC 22000 on-going for pork, dairy and beef operations 568% 2015: ZM
Slide 23: Sustainability Through Inclusive Growth
SUSTAINABILITY THROUGH INCLUSIVE GROWTH 23
Slide 24: Sustainability
SUSTAINABILITY + Social Impact Zambeef Products takes a ‘triple bottom line’ approach to its sustainability and is committed to ensuring a positive social, economic and environmental impact. Zambeef continues to invest in; • Education • Social amenities: water, electricity etc. • Poverty eradication
Slide 25: Economic Contribution
ECONOMIC CONTRIBUTION • US$8.6 million of exports income generated for the nation • More than US$150 million investment in the last six years • One of the largest employers in Zambia with over 6,000 staff employed with total emoluments of ZMW307m (USD28.3m) • ZMW144m (US$13.3 million) of tax, duty a
Slide 26: Outlook
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Slide 27: Outlook
OUTLOOK • Driving sustainable revenue growth through: • Expansion of retail network • Increasing capacity throughout operations • Increasing exports into SADC/COMESA region • De risking the business through: • Reduced gearing and dollar debt • E&S/Food safety strategy • Sustainability and economic i
Slide 28: Dividend Policy
DIVIDEND POLICY Payment of a sustainable progressive dividend • There continues to be exciting growth opportunities and the Company will invest to capture this growth • At the same time the Board’s intention is to manage the business in a way that allows the payment of a sustainable progressive divi
Slide 29: Summary
SUMMARY 29
Slide 30: Summary
SUMMARY • This year Zambeef has delivered strong growth and record profits in a very volatile and challenging macro environment • Our business models is robust with volumes having increasing by around 11% and margins being maintained. We believed steady growth will continue • There are still operati
Slide 31: Thank You
THANK YOU 31
Slide 32: Appendices
APPENDICES 32
Slide 33: Appendix: Detailed Divisional 2016 & 2015 Gross Profit (USD'000)
APPENDIX: DETAILED DIVISIONAL 2016 & 2015 GROSS PROFIT (USD’000) Retailing Cold Chain Food Products Other 2016: 16 778 2016: 24 567 2016 2016: 2 991 2015: 18 048 2015: 27 688 2015 2014: 9 143 35 882 40 000 35 000 30 000 23 256 25 000 20 000 13 640 13 289 12 269 11 799 10 456 15 000 8 967 6 532 5 820
Slide 34: Divisional 2016 & 2015 Gross Profit (ZMW'000)
DIVISIONAL 2016 & 2015 GROSS PROFIT (ZMW’000) Retailing Cold Chain Food Products Other 2016: 181 699 2016: 266 080 2016 2016: 32 391 2015: 127 423 2015: 195 487 2014: 64 555 2015 253 326 251 860 300 000 250 000 200 000 143 916 132 872 150 000 97 130 96 299 83 302 73 821 63 028 100 000 55 538 48 827
Slide 35: Segmental Revenue and Gross Profit (USD'000)
Segmental Revenue and Gross Profit (USD’000) Segment 2016 Revenue 2015 Revenue % change 2016 Gross Profit 2015 Gross Profit % change USD ’000 USD ’000 USD ’000 USD ’000 Retailing - Zambia 104 481 119 443 -12.5% 12 269 13 640 -10.1% Master Meats Nigeria 16 881 15 448 9.3% 3 640 3 759 -3.2% Master Mea
Slide 36: Segmental Revenue and Gross Profit (ZMW'000)
Segmental Revenue and Gross Profit (ZMW’000) Segment 2016 Revenue 2015 Revenue % change 2016 Gross Profit 2015 Gross Profit % change ZMW ‘000 ZMW ‘000 ZMW ‘000 ZMW ‘000 Retailing - Zambia 1 131 524 843 269 34.2% 132 872 96 299 38.0% Master Meats Nigeria 182 825 109 064 67.6% 39 421 26 536 48.6% Mast
Slide 37: Contact
CONTACT Products PLC Private Bag 17, Woodlands Plot 4970, Manda Road Industrial Area, Lusaka, Zambia Tel: +260 211369000 Fax: +260211 369050 www.zambeefplc.com 37