Uac Of Nigeria Plc · NSENG:UACN
Uac Of Nigeria — FY2017 Earnings Presentation
29 slides from Uac Of Nigeria's earnings presentation, Apr 5, 2018
Slide 1: UAC of Nigeria – FY 2017 Earnings
UAC of Nigeria – FY 2017 Earnings Mr Abdul Bello (Group CEO) Mrs Adeniun Taiwo (CFO) 5 April 2018
Slide 2: Disclaimer
DISCLAIMER This presentation contains forward-looking statements which reflect management's expectations regarding the Company's future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as "anticipate", "believe", "expects", "intend" "est
Slide 3: Table of Contents
TABLE OF CONTENTS FY 2017 Highlights 4 FY 2017 Financial Review 7 FY 2017 Operational Review 16 Outlook 23 Appendix 26
Slide 4: FY 2017 Highlights
FY 2017 Highlights Mr Abdul Bello (Group CEO)
Slide 5: Key Highlights for Full Year 2017
Key Highlights for Full Year 2017 FINANCIAL HIGHLIGHTS • Weak revenue growth, margin compression and rising finance costs resulting in a 75% decline in earnings per share • Performance was negatively impacted primarily by Animal Feeds and the Real Estate segments • Fierce competition in Animal Feeds
Slide 6: Disappointing Performance with Significant Decline in EPS
Disappointing Performance with Significant Decline in EPS • Group revenue up 8.0% YoY to ₦ 89.2 billion Financial Performance • Driven primarily by Animal Feeds (+19.1%) and Decorative Paints (+8%) ₦89.2b 17.9% 7.9% • Gross profit down 5.8% to ₦ 16.0 billion Reported Sales growth Gross Profit Margin
Slide 7: FY 2017 Financial Review
FY 2017 Financial Review Mrs Adeniun Taiwo (CFO)
Slide 8: Improving Macro Economic Dynamics Through the Course of 2017
Improving Macro Economic Dynamics Through the Course of 2017 GDP momentum thanks to higher oil revenues Steadily climbing oil output boosted foreign-currency reserves GDP Growth (YoY) Gross external reserves (USDbillion) Crude oil price (USD/pb) Crude oil production (mbpd) USD b 3% 70.0 1.667 1.595
Slide 9: Increase in Revenue Offset by Higher Input & Finance costs
Increase in Revenue Offset by Higher Input & Finance costs • 8.0% revenue growth driven by price increase and volume growth from Animal Feeds and Decorative Paints Continuing Operations 2017 2016 Var Revenue 89,178 82,572 8.0% • Gross profit reduction of 5.8% on account of inability Cost of sales (7
Slide 10: Statement of Financial Position
Statement of Financial Position • Steady working capital management increased by 6% N’Million 2017 2016 from ₦ 9.9bn (2016) to ₦ 10.5bn (2017) PPE 21,538 35,271 Investment property 13,486 19,870 • 36% increase in Cash & Short-term deposits caused by disposal of investment property, debt recovery and
Slide 11: Cash Flow Statement
Cash Flow Statement • N7.3bn generated from operating cash flow mainly due to reduction in N’Million 2017 2016 inventory by 17% from N36.8bn (2016) to N30.4bn (2017) Net cash flow generated from/(used in) operating 7,319 (1,914) activities • 191% increase in cash flow used from investing activities
Slide 12: Breakdown of Revenue Dynamics
Breakdown of Revenue Dynamics • Real Estate declined by 20% mainly due to reduction in Revenue (₦m) housing inventory sales/collections 100,000 82,572 + 8% 89,178 90,000 3,880 80,000 4,842 4,119 • Logistics dropped by 11% mainly due to reduction of 70,000 4,651 8,763 Others 9,424 Real Estate 14,183
Slide 13: Breakdown of EBIT Dynamics
Breakdown of EBIT Dynamics • Packaged foods increased largely due to cost efficiencies EBIT (₦m) - 18.6% 8,640 7,031 10,000 • Paints dropped on account of input costs 1,480 Others 8,000 Real Estate 1,434 6,000 2,223 653 Quick Service Restaurants • Animal feeds dropped mainly on inability to pass inp
Slide 14: Breakdown of PBT Dynamics
Breakdown of PBT Dynamics • Logistics down 50% mainly due to 2016 one-off items PBT (₦m) 12,000 -61.2% 8,368 3,246 • Paints performance is flat yoy 10,000 1,286 Others 8,000 Real Estate 1,678 6,000 Quick Service Restaurants 2,300 649 • Packaged Foods increased by 19% due to controlled costs 4,000 1,
Slide 15: CAPEX Breakdown by Subsidiary
CAPEX Breakdown by Subsidiary 2016 2017 (Total Capex: ₦ 3.54 billion) (Total Capex: ₦ 2.36 billion) 9% 5% 5% 3% 22% 7% 1% 6% 24% 1% 9% 8% 59% 4% 8% 20% 6% 3% Grand Cereals Livestock Feeds Grand Cereals Livestock Feeds United Foods UAC Restaurants United Foods UAC Restaurants CAP Portland Paints CAP
Slide 16: FY 2017 Operational Review - Abdul Bello
FY 2017 Operational Review - Abdul Bello
Slide 17: Snapshot: Animal Feed & Edible Oil
Snapshot: Animal Feed & Edible Oil • Highly competitive market; competitive intensity heighted Operational Highlights by aggressive new entrants Factories Employees • In the near term the industry suffers from excess capacity on account of recent investment and decline in farm activities due to marg
Slide 18: Snapshot: Paints
Snapshot: Paints • UAC will focus on maintaining market share and aggressively Operational Highlights driving efficiencies Factories Employees • Declining purchasing power leading to market contraction 2 320 • Entry of international players heightening competition • Downturn in the real estate secto
Slide 19: Snapshot: Logistics
Snapshot: Logistics • Leading provider of integrated supply chain solutions to Operational Highlights manufacturers, importers and service providers Factories Employees • Recessionary pressures impacted volume throughput from certain clients 1 482 • Low truck availability resulting from poor road co
Slide 20: Snapshot: Packaged Foods
Snapshot: Packaged Foods • Highly competitive operating environment resulting from Operational Highlights aggressive new entrants with value-based offerings Factories Employees • Resistance to price increase of Gala Sausage roll 1 489 • Long-term growth supported by demographics and urban migration
Slide 21: Snapshot: Real Estate
Snapshot: Real Estate • Persisting harsh macro-economic headwinds Operational Highlights • High interest rate regime discouraging project development Factories Employees • Oversupply of products leading to glut and vacancies, fuelled 0 320 by purchasing power decline • Retail tenants enjoying retent
Slide 22: Snapshot: Quick Service Restaurant
Snapshot: Quick Service Restaurant • Highly competitive market impacted by declining purchasing Operational Highlights power Factories Employees • 12 stores closures as a result of non-performing franchisees 1 84 • Rising cost of operations relative to declining revenue UAC will undertake a review o
Slide 23: Outlook
Outlook Mr Abdul Bello (Group CEO)
Slide 24: Group Long-Term Trend
Group Long-Term Trend Revenue (₦m) Gross Profit (₦m) 89,178 85,654 82,572 73,771 19,183 16,809 16,932 15,957 FY 2014 FY 2015 FY 2016 FY 2017 FY 2014 FY 2015 FY 2016 FY 2017 Operating Profit (₦m) Profit Before Tax (₦m) 12,394 14,097 8,640 7,395 7,031 8,368 7,733 3,246 FY 2014 FY 2015 FY 2016 FY 2017
Slide 25: Holistic Business Review Underway to Reposition the Group
Holistic Business Review Underway to Reposition the Group Human Capital & Compensation Group Positioning Portfolio Review Review • In spite of recent headwinds, UAC • A rigorous review of the portfolio against • Talent infusion remains convinced of the three primary metrics: • Enhanced incentive sch
Slide 26: Appendix
Appendix
Slide 27: A Leading Nigerian Diversified Consumer Goods Company
A Leading Nigerian Diversified Consumer Goods Company Listed on the Nigerian Stock Exchange since 1977 (UACN NL) Market capitalization of ₦32.5 bn* Rich history and legacy dating back to 1879 Wide portfolio of historical leading brands ₦89.2 bn in revenue in 2017, 12.4% avg. operating margin (last 5
Slide 28: With over a hundred-year history, UACN is one of the most recognized companies in Nigeria
With over a hundred-year history, UACN is one of the most recognized companies in Nigeria 1879 - 1889 1900 – 1930s 1930 – 1980s 1990s Began operations following Miller Brothers Limited and the Incorporated in Lagos Acquired a 35.5% equity merger of four companies African Association merged t
Slide 29: Group structure of subsidiaries
Packaged Foods QSR Animal Feed Animal Feed Grand Livestock UAC Grand Cereals UAC Foods LTD Restaurants LTD Feeds PLC (51%) LTD(51%) (71.4%) (73%) Paints Real Estate Logistics Portland Paints and Products MDS Logistics CAP PLC UPDC PLC Nigeria PLC LTD (50.18 (64.2%) (85.5%) (51%) %)