Uac Of Nigeria Plc · NSENG:UACN
Uac Of Nigeria — FY2021 Earnings Presentation
37 slides from Uac Of Nigeria's earnings presentation, Apr 6, 2022
Slide 1: UAC of Nigeria PLC FY 2021 Results
UAC of Nigeria PLC FY 2021 Results 6 April 2022 Fola Aiyesimoju – Group Managing Director Funke Ijaiya-Oladipo – Group Finance Director
Slide 2: Disclaimer
Disclaimer 2 This presentation contains forward-looking statements which reflect management's expectations regarding UAC of Nigeria PLC, its subsidiaries and associate businesses (“UAC”, the “Company” or “Group”) future growth, results of operations, performance, business prospects, operating market
Slide 3: Contents
Contents 3 Operating context 4 Strategic initiatives 8 2021 financial highlights 13 Operating segment overview 21 Outlook 29 Appendix 32
Slide 4: Operating Context
Operating Context
Slide 5: Low growth, high inflation, currency under pressure, higher interest rates
Low growth, high inflation, currency under pressure, higher interest rates 5 Real GDP Growth (%) Exchange Rate ₦:$ CBN rates Parallel 5.0% 4.0% 4.0% 600 1.9% 0.1% 0.5% 450 300 150 (3.6%) 0 (6.1%) Q1 2020 Q2 2020 Q3 2020 Q4 2024 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Inflation (%) Secondary Market Bond Yiel
Slide 6: Escalation of key production input costs
Escalation of key production input costs 6 Animal Feed Paints Maize Soya Bean Resin Titanium Dioxide Food 208 216 151 151 100 100 100 100 2020 2021 2020 2021 2020 2021 2020 2021 Flour Vegetable Oil Skimmed Milk Sugar 261 210 105 161 100 100 100 100 2020 2021 2020 2021 2020 2021 2020 2021
Slide 7: Impact on gross margin partially offset by operational efficiency
Impact on gross margin partially offset by operational efficiency 7 Gross Profit Margin (%) for Operating Segments FY 2020 vs FY 2021 FY 2020 FY 2021 39.9% 39.4% 32.3% 24.6% 21.1% 12.1% 11.3% 12.6% Animal feeds & Paints Packaged food & beverages QSR other edibles Operating Expenses Trend for Operati
Slide 8: Strategic Initiatives
Strategic Initiatives
Slide 9: We have simplified UACN's structure
We have simplified UACN’s structure 9 ▪ Our initial efforts to simplify our structure entailed the following ― Selling control of MDS Logistics Limited to Imperial Logistics ― Selling control of UPDC PLC, the real estate development company, to Custodian Investment PLC ▪ We completed the following s
Slide 10: We have also invested N2.3 billion in technology infrastructure
We have also invested N2.3 billion in technology infrastructure 10 ▪ Invested in our core information technology infrastructure and productivity tools and completed transition from on- premise, Office 2016 application, to Microsoft 365, an enterprise productivity tool ▪ Objective was to improve oper
Slide 11: Digital investments
Digital investments 11 UAC invested in technology and technology enabled businesses in 2021 ▪ Fund targeting US$30m to invest in 40-45 new investments (pre-seed and seed). Aim to invest in the best founders of Tech companies with potential to generate US$1m to US$3m in annual run rate revenue within
Slide 12: Focus on aligning management and shareholder interests
Focus on aligning management and shareholder interests 12 ▪ Our long-term growth and sustainable success hinges on our ability to attract and retain talent 1 ▪ In 2021, we changed our remuneration structure to link employee reward to long-term value creation HoldCo ▪ Key elements of the plan include
Slide 13: 2021 financial highlights
PN sh 2021 financial highlights \ Ww
Slide 14: Holding company presently organized around 4 key verticals
Holding company presently organized around 4 key verticals 14 HoldCo* • N4.3 billion in Cash2 • N2.3 billion in Eurobonds2 • N3.5 billion in Investment Property Assets2 Agro Allied Packaged Food Paints Quick Service and Beverages Restaurants Operating Core * * ▪ Non-controlling interests in two comp
Slide 15: Our primary focus is on trending above historical revenue growth
Our primary focus is on trending above historical revenue growth 15 Consolidated Group revenue in N billions (2016 – 2021) 101 CAGR: 2.72% 81 81 79 73 70 2016 2017 2018 2019 2020 2021 CAGR – Compound annual growth rate
Slide 16: Focusing on our core platforms and investing for the future
Focusing on our core platforms and investing for the future 16 Core operating Digital platform Subsidiaries in the Packaged Food and Recent investments in Beverages, Paints, Quick Service − A venture capital fund Restaurants, and Animal Feeds and − Kandua Edible Oils sectors − Touch and Pay Technolo
Slide 17: We have recorded growth in our core platforms
We have recorded growth in our core platforms 17 Animal Feeds & Other Edibles Packaged Food & Beverages 33.03% 21.95% 21.04% 16.26% 15.69% 4.64% FY16-21 Average 9% 12.68% 8.29% 8.29% FY16-21 1.76% Average 9% -23.72% -8.74% FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2016 FY 2017 FY 2018 FY 20
Slide 18: 2021 financial highlights
2021 financial highlights 18 Operating Free Cash Return on Revenue EPS1 Profit Flow Invested Capital2 FY FY FY FY FY ₦101bn ₦4.9bn 63 kobo (₦18.9bn) 7.8% +24.6% +50.3% (9.4)% (₦15.9bn) +243 bps vs FY 2020 vs FY 2020 vs FY 2020 vs FY 2020 vs FY 2020 (1) Earnings per share from continuing operations (
Slide 19: Key factors impacting Group operating profit
Key factors impacting Group operating profit 19 Operating Profit Bridge, in ₦ mn (FY 2020 to FY 2021) • Dividend income from UPDC REIT – N245mn • Fair value gain unbundling UPDC REIT – N325mn Increase in selling & distribution in • Net fair value gain on investment properties – N905mn Paints and Pac
Slide 20: Balance sheet and liquidity
Balance sheet and liquidity 20 Net Assets Net Debt Net Capex Cash Cycle ₦50.8bn ₦8.5bn ₦3.3bn 136 days (₦9.8bn) (₦28.5bn) (₦1.0bn) +34 days vs Dec 2020 vs Dec 2020 vs Dec 2020 vs Dec 2020
Slide 21: Operating segment overview
Operating segment overview Enjoy Lip Smacking
Slide 22: Packaged food and beverages segment
Packaged food and beverages segment 22 Overview FY 2021 financial highlights (in N million) ▪ UAC Foods is a leading packaged food and beverages company Revenue Gross Profit ▪ UAC Foods manages a family of brands across several product Water categories 21% Water 28% ▪ Snacks: Gala and Funtime ▪ Dair
Slide 23: Packaged food and beverages: Growth strategy
Packaged food and beverages: Growth strategy 23 Historical revenue (N billion) ▪ Approaching capacity, current factory cannot support future growth. Advanced stages of exploring new plant 23.8 ▪ Biggest strategic question relates to profitability at N50 Snacks price point ▪ The new variant launched
Slide 24: Paints segment
Paints segment 24 Overview Value creation Chemical and Allied Products PLC ▪ Expand mid-tier offering ▪ #1 player by market share ▪ Grow industrial category ▪ Public company listed on the NGX; 56.5% UACN ownership Expand Range ▪ Expand in-store tinting thus increasing the ▪ Produces decorative and i
Slide 25: Paints segment: Colour centre evolution
Paints segment: Colour centre evolution 25 Old colour centre New colour centre Number of colour centres (2016 – 2021) 39 30 26 21 21 22 2016 2017 2018 2019 2020 2021 As at 31 March 2022, CAP PLC had 101 retail outlets categorized as follows: 40 Dulux colour centres, 16 Sandtex stores, 45 Dulux colou
Slide 26: Quick services restaurants segment
Quick services restaurants segment 26 Overview Value creation ▪ UAC Restaurants (UACR) pioneered QSR in Nigeria with the launch of Mr Bigg’s in 1986 ▪ Piloted 5 company-owned stores earning annualised ROI of 39% (ahead of plan) ▪ In addition to the Mr Bigg’s chain, UACR also operates the Debonairs ▪
Slide 27: Quick services restaurants segment
Quick services restaurants segment 27 Growth strategy Company owned stores ▪ Ramp up store footprint (Traditional and Express) for Mr. Bigg’s and Debonairs Pizza. 50 ▪ Develop digital and omni-channel capabilities through online delivery ▪ Develop additional retail channels for bread, pastries and m
Slide 28: Animal feeds and other edibles segment
Animal feeds and other edibles segment 28 Overview Value creation Grand Cereals Limited ▪ Expansion of oil capacity (higher margin product) ▪ Private company; 71% ownership Margins ▪ Improve procurement processes to leverage ▪ Produces animal feed, cereals, oils and dog food combined scale for direc
Slide 29: Outlook
Outlook
Slide 30: Corporate action: N1.9 billion dividend to UAC shareholders
Corporate action: N1.9 billion dividend to UAC shareholders 30 ▪ Total ordinary dividend of 65 kobo per share (₦1.9 billion) FY 2021 ▪ Qualification date: June 7, 2022 Dividend ▪ Register of shareholders will be closed from June 8, 2022 to June 14, 2022 (both dates inclusive) (N1.9bn) ▪ Election for
Slide 31: Outlook
Outlook 31 ▪ Continued focus on simplicity ▪ Complete implementation of SAP S/4 Hana ▪ Drive profitable growth ▪ Learn from digital investments ▪ Execute new snacks factory
Slide 32: Appendix
Appendix 1 Additional financial information
Slide 33: Income statement
Income statement 33 ₦ mn, unless otherwise stated FY 2021 FY 2020 D% Revenue 101,377 81,358 24.6% Gross Profit 17,540 15,990 9.7% Gross Profit Margin (%) 17.3% 19.7% (235 bps) Operating Profit 4,922 3,274 50.3% Operating Profit Margin (%) 4.9% 4.0% 83 bps Net Finance Income 82 837 (90.2%) Share of P
Slide 34: Performance Snapshot – FY 2021
Performance Snapshot – FY 2021 34 Revenue Profit Before Tax N mn FY 2021 FY 2020 D% N mn FY 2021 FY 2020 D% Group 101,377 81,358 24.6% Animal Feeds & Other Edibles 1,195 1,712 (30.2%) Animal Feeds & Other Edibles 62,711 54,224 15.7% Paints 1,693 1,470 15.2% Paints 15,355 10,425 47.3% Packaged Food &
Slide 35: Financial Position – 31 December 2021
Financial Position – 31 December 2021 35 Summary Balance Sheet Working Capital N mn Dec-21 Dec-20 D% N mn Dec-21 Dec-20 D% Non current Assets 42,029 41,002 2.5% Inventory 36,214 20,123 80.0% Current Assets 55,885 50,427 10.8% Trade Receivables 11,103 6,064 83.1% Other Assets 550 269 104.1% Trade Pay
Slide 36: Net Debt Position
Net Debt Position 36 Net (Debt)/Cash Position as at 31 Dec 2021 (in ₦ mn) Net Intra-Group (Debt)/Cash Cash & Cash Short-Term Long-Term Net Debt (excl. Receivable / (incl. Intra- Equivalents Debt Debt Intra-Group) (Payable) Group) UAC Company 4,304 - - 4,304 2,278 6,582 Other Operating Segments 6,864
Slide 37: Cash Flow
Cash Flow 37 PBT to Free Cash Flow ₦ mn, unless otherwise stated FY 2021 FY 2020 Profit Before Tax from continuing operations 4,108 5,085 Profit/ (Loss) before tax from discontinued operations (2) 544 Non-Cash charges 1,981 (1,730) Changes in working capital (20,334) (5,029) of which receivables (5,