Slide 1: Full Year 2018 Presentation
Full Year 2018 Presentation 21 February 2019 1
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements with regard to the financial position and results of Nigerian Breweries activities. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in th
Slide 3: Agenda
Agenda •Nigerian Breweries •Market overview •Our strategy to win •FY 2018 performance 3
Slide 4: Our New Management Team
Our New Management Team Jordi Borrut Bel Managing Director/CEO (Board Member) 1 year/21 years Rob Kleinjan Emmanuel Grace Omo-Lamai Martin Kochl Finance Director Oriakhi Human Resource Supply Chain (Board Member) Marketing Director Director Director 6 months/22 years 6 months/15 years 1 year/1 year
Slide 5: Nationwide Brewery Footprint
Nationwide Brewery Footprint Unparalleled access to consumers across Nigeria 5
Slide 6: Leading Brand Portfolio
Leading Brand Portfolio 6
Slide 7: Challenging Environment Gradually Improving
Challenging Environment Gradually Improving Inflation (%) Exchange Rate Exchange rate(Naira/$) ($/N) 20 400 368 19 17 366 375 16 364 Naira / $ 14 350 362 13 11 360 325 10 358 8 356 300 354 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 NAFEX Nafex Brent crude (USD/bl) GDP Growth (%) 90 25% 80 20% 15% 70
Slide 8: Nigeria Remains an Attractive Market
Nigeria Remains an Attractive Market Favourable population dynamics CAGR CAGR Increasing urbanization (11–17) (17–23E) Under 29 70%* 2.6% 2.5% 52% 49% 30 -49 3.0% 2.7% 43% 50 -69 70+ Male Female *Percentage of total population. 2010 2017 2020E Per Capita Consumption in Africa Final consumption expen
Slide 9: Strategy to Winning with Nigeria!
Strategy to Winning with Nigeria! Must Win Priorities Expand Leadership in Build Scale in Drive Malt Growth Premium Mainstream Accelerate Re-boost leadership in Drive profitability by Heineken® expansion Core Lager leveraging on innovation Continue Tiger rollout Grow share of Stout Winning RTM Leade
Slide 10: Exciting Activations in 2018 Across the Portfolio
Exciting Activations in 2018 Across the Portfolio 10
Slide 11: Premium, led by Heineken, up double-digit
Premium, led by Heineken®, up double-digit 11
Slide 12: Sustainability at the Heart of our Company
Sustainability at the Heart of our Company 12
Slide 13: Sustainability: Our 2018 Scorecard
Sustainability: Our 2018 Scorecard Advocating Responsible Consumption • When you drive, Never Drink • 4 mega city rallies were held in 2018 to promote message • Impacting over 20,000 drivers since inception of the campaign in 2008. Winning with Nigeria through Education • Maltina Teacher of the Year
Slide 14: Financial Overview FY 2018
Financial Overview FY 2018 FY 2018 FY 2017 Change P&L Key financials (N’ billion) (N’ billion) (%) Revenue 324.4 344.5 -5.8 Cost of Goods Sold 197.5 201.0 -1.8 Gross Profit 126.9 143.5 -11.6 Result from Operating activities 37.0 57.1 -35.3 Operating Profit Margin 11.4% 16.6% -519bps Net Finance Expe
Slide 15: Declining Revenue, Moderating in Q4
Declining Revenue, Moderating in Q4 Revenue (₦ bn) Net revenue declined 5.8%, impacted by: 400 • Increased excise duty paid, now 7.5% of 350 gross revenue(+150bps), 300 (+150bps),reflecting 7 months of 250 higher excise, 200 • Mid single digit volume decline, with an 150 improvement in Q4, 100 • Cha
Slide 16: Efficiencies Partially Offset Down-trading Impact
Efficiencies Partially Offset Down-trading Impact Operating profit bridge (N’ billion) Operating profit 2017 57.1 Decrease in gross profit -16.6 Increase in marketing & distribution expenses -3.2 Decrease in administrative expenses 0.9 Decrease in other income -1.3 Operating profit 2018 36.9 16
Slide 17: Finance & Tax Partially Offset Non-recurring Items
Finance & Tax Partially Offset Non-recurring Items Net profit bridge (N’ billion) Net profit 2017 33.0 Increase in expenses from rightsizing exercise -1.6 Non-recurring one-offs in 2017 -3.0 Increase in excise tax in 2018 -4.6 Decrease in net finance expense 2.9 Decrease in income tax expense 3.6 Ot
Slide 18: Despite Reduced Cash Flow, Balance Sheet is Strong
Despite Reduced Cash Flow, Balance Sheet is Strong (N’ billion unless otherwise stated) FY 2018 FY 2017 Change Cash flow from operations 68.3 88.0 -19.7 (before changes in working capital) Changes in Inventories 10.2 -11.5 21.7 Changes in Accounts Receivable -14.9 -0.3 -14.6 Changes in Accounts Paya
Slide 19: Another Year with 100% Payout
Another Year with 100% Payout Proposed Dividend for 2018: • 100% payout ratio, cash only • Total dividend ₦19.4 bn (2017: ₦33.0bn) • Interim dividend paid: ₦0.60 per share (₦4.7bn) • Proposed final dividend: ₦1.83 per share (₦14.6bn) • Total proposed dividend: ₦2.43 per share (2017: ₦4.13) • Earning
Slide 20: Outlook for 2019
Outlook for 2019 In 2018, the results of Nigerian Breweries were adversely impacted by the increased excise duty rates which came into effect during the year coupled with a challenging operating environment. For 2019 we expect a continued challenging operating environment. The changes we have in the
Slide 21: Q&A
Q&A HERE'S TO A i BRIGHTER / —