Honeywell Flour Mills Plc · NSENG:HONYFLOUR
Honeywell Flour Mills — Investor Presentation (August 2011)
32 slides from Honeywell Flour Mills's investor presentation, Aug 17, 2011
Slide 1: Honeywell Flour Mills Plc: Facts Behind Figures
Honeywell Flour Mills Plc Facts Behind Figures Presented By Mr F. B. Odunayo Executive Vice Chairman/CEO Wednesday, 17th August, 2011
Slide 2: Content
2 Content 1. Opening 3-4 2. The Company Profile 5-9 3. Company Products 14-15 4. Financial Highlights 16-14 5. The Facts 15-20 6. The Good News 21-23 7. Dividend 24-26 8. Future Outlook 27 2
Slide 3: Opening
OPENING CEO of NSE, Management & Staff, Doyen of the Capital Market, Distinguished Stock Brokers & Dealers, Members of the Press, Ladies & Gentlemen. 3
Slide 4: Opening: presentation of facts behind financial performance
OPENING Presentation of facts behind our financial performance for; •the year ended March 31, 2011 and •the 1ST Quarter ended June 30, 2011 of the year ending March 31, 2012. 4
Slide 5: The Company Profile: Key Milestones
THE COMPANY PROFILE: Key Milestones 1998 1999 2001 2005 2009 2010 2012 200 MT/day Mills Business Commencement Milling capacity increased Milling to 360 capacity MT/day increased to Milling 610MT/day capacity increased to 1610 MT/day Listed at NSE Honeywell Launched ‘gggggggg Wheat gggggggg Meal Hone
Slide 6: Key Milestones: Production Capacity
THE COMPANY PROFILE Key Milestones 3000 HFMPlc has consistently 2610 expanded its production 2500 capacity in an effort to 2000 meet the increasing 1610 MT/per day 1500 demand for its quality 1000 products. 610 500 200 360 Production capacity is up 0 700% over 1998, and in 2012 capacity will be
Slide 7: Governance and Financial Reporting
THE COMPANY PROFILE: Governance and Financial Reporting The Company is committed to complying with the international standards in corporate governance. The Board of Directors consists of 8 members; the Non-Executive Chairman, 5 Non-Executive Directors and 2 Executive Directors. The Board meets q
Slide 8: Governance and Financial Reporting: Board and Management
THE COMPANY PROFILE: Governance and Financial Reporting Experienced , trusted and committed Board of Directors under the chairmanship of Dr. Oba Otudeko, former President of the Nigerian Stock Exchange. The Management is well respected and highly regarded in the flour milling industry as well as
Slide 9: Governance and Financial Reporting: IFRS Conversion
THE COMPANY PROFILE: Governance and Financial Reporting The Company is converting its financial reporting system to comply with the International Financial Reporting Standards (IFRS). The company is on track to meet the March 2012 deadline set by Securities and Exchange Commission(SEC) for IFRS
Slide 10: Company Products: Quality Products, Strong Brands
COMPANY PRODUCTS : Quality Products, Strong Brands The Company is a market leader in flour and wheat-based products ,and is renowned for its quality. Our consumer products can now be found in African stores in many parts of the UK and the USA. 10
Slide 11: Honeywell Superfine Flour and Semolina
COMPANY PRODUCTS : Quality Products, Strong Brands Honeywell Superfine Flour Bakers’ preference for baking bread, cakes, biscuits, pastries and other confectioneries. Honeywell Semolina Introduced in June 2006. Positioned in the market as a ready alternative to local ball foods. The leading Semolina
Slide 12: Honeywell Whole Wheat Meal and Brown Flour
COMPANY PRODUCTS : Quality Products, Strong Brands Honeywell Whole Wheat Meal *Introduced in June 2009. A healthier alternative to local ball foods. *Maintained its distant number one position in the market. Honeywell Brown Flour *Used in baking ‘whole wheat’ bread. A healthier alternative to regula
Slide 13: Honeywell Noodles, Spaghetti and Macaroni
COMPANY PRODUCTS : Quality Products, Strong Brands Honeywell Noodles Launched in November 2009 and noted for distinct and attractive packaging, superior quality and taste. Honeywell Spaghetti and Macaroni Launched in 2010. Attractively packed and preferred by consumers for superior quality. Most sou
Slide 14: Financial Highlights: Year Ended March 2011
FINANCIAL HIGHLIGHTS :- Financial Year Ended (12-Months) March March (Nb) Change 2011 2010 Turnover (Nb) 34.06 33.53 2% PBT(Nb) 3.51 2.33 51% Taxation (Nb) 1.02 1.15 PAT (Nb) 2.49 1.18 112% Dividend (Nb) 1.03 0.87 18% EPS (kobo) 31.43 14.83 112% Dividend Yield 3% 1% Earnings Yield 7% 2%
Slide 15: Financial Highlights: First Quarter Ended June 2011
FINANCIAL HIGHLIGHTS:- First Quarter Ended 30TH June 2011 (3-Months) June 30, June 30, (Nb) Change 2011 2010 Turnover (Nb) 9.32 9.16 2% PBT (Nb) 0.16 0.88 Taxation (Nb) 0.07 0.37 PAT (Nb) 0.09 0.50 15
Slide 16: The Facts: Earnings
THE FACTS:- Earnings First quarter Earnings were affected by the lost selling days during the election season, heavy rains and bad roads, and traffic congestion in Apapa. Delivery Trucks had great difficulty accessing factory facility. THE GOOD NEWS: Better road conditions, 16 earnings have been
Slide 17: Earnings Contribution Analysis, 12 Months
THE FACTS:- Earnings Contribution Analysis- (12months) 31st March,2011 31st March,2010 Pasta, Brown Pasta, Brown Wheat 3.59% Noodle, Flour, 10.47% Noodle, Flour, Meal, 10.39% 0.18% Wheat 7.59% 0.12% 0.59% Meal, 3.24% Flour, Flour, Semo, 74.72% 66.38% 10.52% Semo, 12.20% 17 Shift from Flour to higher
Slide 18: Earnings Contribution Analysis, 3 Months
THE FACTS:- Earnings Contribution Analysis- (3 months) First Quarter:30th June, 2011 First Quarter:30th June, 2010 Brown Pasta, Brown Pasta, Wheat 9.07% Noodle, Flour, 12.59% Noodle, Flour, Wheat 6.86% 0.07% Meal, 7.41% 0.20% Meal, 2.02% 3.80% Flour, Flour, 62.71% 71.34% Semo, Semo, 9.95% 13.98% Con
Slide 19: The Facts: Margins
THE FACTS:- Margins High Wheat price, almost a doubling, was experienced during the first quarter. Effect of the high wheat prices was the reduction in margins of the global flour milling industry. The flour milling industry was unable to pass all cost increases to the customers. THE GOOD NEWS:
Slide 20: The Facts: Treasury Performance
THE FACTS:- Treasury Performance The performance of FY2011 was positively and materially affected by the improved treasury management . 31st March 31st March 2011 2010 Nm Nm Net Interest Income 769 214 An even better treasury management outcome is expected in the second quarter. 20
Slide 21: The Facts: Factory Capacity
THE FACTS:- Factory Capacity Factory runs at close to full capacity. Industry average is 40% A factory capacity growth is inevitable. Expansion plans are underway and on track. A 62% capacity increase will take cumulative expansion from 1,610MT to N2,610MT/day. Factory capacity is 9% of industry
Slide 22: Factory Capacity: Planned Expansion and Market Share
THE FACTS:- Factory Capacity Planned expansion in capacity takes us to 11% of industry capacity and to about 20% of the market share, ceteris paribus. GOOD NEWS: 20% market share in a 22 population of N150million is a notable market position.
Slide 23: The Good News
THE GOOD NEWS: The price of wheat is already coming down. Margins are coming up. Consumer buying potential remains strong. Our products are in high demand. The company is creating additional milling capacity which will support earnings growth and reduce profit volatility. 23
Slide 24: US$65 Million Investment in Additional Milling Plant
THE GOOD NEWS: An investment of US $65 million in additional milling plant, storage and packing facilities is being implemented. 24
Slide 25: New Mills to Drive Higher Margin Products
THE GOOD NEWS: The new mills will allow the Company drive production capacity to higher margin products such as Wheat Meal and Semolina. 25
Slide 26: Better Matching of Product Prices to Input Costs
THE GOOD NEWS: This strategic move will enhance the Company’s ability to withstand the volatility of input costs, such as wheat, by better matching product prices to fluctuating input costs. 26
Slide 27: First Twin Mill Commissioning in 2012
THE GOOD NEWS: The first of the twin mills is expected to be completed and commissioned in the first half of 2012. 27
Slide 28: Dividend Policy
DIVIDEND:- Our policy: Provide Shareholders with sustainable dividend payout Maximize Shareholders’ value in the long term. 28
Slide 29: Recommended Dividend of 13 Kobo per Share
DIVIDEND:- Consequently, the Board has recommended a dividend of N1.031 billion, representing 13 kobo per share, subject to the approval of shareholders at the AGM on September 26, 2011. 29
Slide 30: Dividend Payment Date and Increase
DIVIDEND:- Dividend will be paid on September 27, 2011, net of appropriate withholding tax. Proposed dividend payment represents an increase of 18% when compared with 11 kobo for the year ended 31st march,2011. 30
Slide 31: Future Outlook
FUTURE OUTLOOK Distinguished market operators, Ladies and Gentlemen, the future Outlook is very bright. There is a strong growth potential. Significant earnings and profit growth are indicated. The second quarter will show a significant uplift in these parameters, whilst the planned expansion als
Slide 32: Conclusion: Many thanks for your kind attention
CONCLUSION Many thanks for your kind attention 32
Honeywell Flour Mills — Investor Presentation (August 2011) on 6ix