Zambeef Products Plc · LSE:ZAM
Zambeef Products — H1 2017 Earnings Presentation
26 slides from Zambeef Products's earnings presentation, March 2017
Slide 1: Financial Results for the six months to 31 March 2017
ZAMBEEF PRODUCTS PLC Financial Results for the six months to 31 March 2017
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: Overview
Overview SUCCESSFUL RETAIL STABLE EXCHANGE RATE EXPANSION STRONG COST CONTROL VOLUME GROWTH Average H1/2017: 122 Zambeef outlets and ZMW9.81/USD 58 Shoprites Volumes up in stock Overheads increased by Average H1/2016: (H1/2016: 115 Zambeef feed, cropping & wheat only 1.8% (ZMW) & 17.7% ZMW11.35/USD
Slide 4: Financial Overview
Financial Overview Turnover Gross Profit H1/2017: ZMW 377.6m 3.5% H1/2017: ZMW 1.2bn 15.3% (ZMW) (ZMW) H1/2016: ZMW 445.9m H1/2016: ZMW 1.1bn 19.8% H1/2017: USD 118.4m H1/2017: USD 38.5m 2.0% (USD) H1/2016: USD 98.8m (USD) H1/2016: USD 39.3m EBITDA Adjusted Profit Before Tax H1/2017: ZMW 87.3m H1/20
Slide 5: Vision and Strategy: Strategic Focus
Strategic Focus Vision and Strategy: To be the most accessible and affordable quality protein provider in the Central African region, delivered through the Group’s extensive retail and distribution network. Strategic Focus in 4 key business areas in which we aim to be best-in-class: Retailing Co
Slide 6: Strategic Delivery during the period
Strategic Delivery during the period On track with expansion of retail footprint • Two Macro outlets, three Shoprites. • 3,700 m2 under construction at eight sites. Building processing and supply chain capacity in Cold Chain Food Products • New rotary milking parlour opened February 2017. • 120,
Slide 7: Retailing Network
Retailing Network Projected Actual Actual Actual Like-for-like revenue growth of 21%; H2 2017 H1 2017 2016 2015 revenue growth from new store openings Zambia of 10%. Zambeef Outlets 88 88 87 91 Retail network has grown from 115 Zambeef Macros 20 12 10 6 Novatek 18 12 10 5 Zambeef outlets and 52
Slide 8: Retailing Revenue Channel Analysis (ZMW’000)
Retailing Revenue Channel Analysis (ZMW’000) 419,215 450,000 400,000 314,330 350,000 2017 300,000 2016 250,000 127,952 121,963 121,188 200,000 150,000 75,257 37,589 100,000 16,854 50,000 - Outlets Macros Shoprite Novateks 33.37% 62.06% 5.29% 123.02% Novateks, 5.37% 2017 Novateks, 3.15% 2016 Shoprite
Slide 9: Retailing Revenue Channel Analysis (USD’000)
Retailing Revenue Channel Analysis (USD’000) 42,733 45,000 40,000 27,694 35,000 2017 30,000 2016 25,000 20,000 12,432 12,353 11,273 15,000 6,631 10,000 3,832 1,485 5,000 - Outlets Macros Shoprite Novateks 54.30% 87.50% 9.58% 158.03% Novateks, 5.37% 2017 Novateks, 3.15% 2016 Shoprite, Shoprite, 17.31
Slide 10: Cold Chain Food Products
Cold Chain Food Products Strong volume growth: • Beef 8.7% • Chicken 12.0% • Pork 19.7% • Dairy 42.9% • Fish 66.8% • Egg 94.0% Overall level of margins impacted by: • Problems in DRC. Eggs traditionally sold in DRC by Copperbelt egg producers dumped in Zambia. • Milk production at Kalundu Dairy
Slide 11: Retail & Cold Chain Food Production P&L
Retail & Cold Chain Food Production P&L 2017 2016 2017 2016 Customer acquisition to % Change % Change ZMW'000 ZMW'000 USD'000 USD'000 increase market share and Revenue Retail challenging macroeconomics 818 963 642 885 83 482 56 642 CCFP have resulted in lower 653 811 536 662 66 647 47 283 Less: In
Slide 12: Stock Feed
Stock Feed 2017 2016 % 2017 2016 % ZMW'000 ZMW'000 Change USD'000 USD'000 Change Revenue 324,701 364,169 -10.8% 33,099 32,085 3.2% Gross Profit 62,831 103,603 -39.4% 6,405 9,128 -29.8% Overheads (20,141) (28,269) -28.8% (2,053) (2,491) -17.6% EBITDA 42,690 75,334 -43.3% 4,352 6,637 -34.4% Volume (To
Slide 13: Cropping
Cropping 2017 2016 % 2017 2016 % ZMW'000 ZMW'000 Change USD'000 USD'000 Change Revenue 201,901 129,404 56.0% 20,581 11,401 80.5% Gross Profit 79,745 105,667 -24.5% 8,129 9,310 -2.0% Overheads (60,309) (56,597) 6.6% (6,148) (4,987) 23.3% EBITDA 19,436 49,070 -60.4% 1,981 4,323 -54.2% Cropping resul
Slide 14: Other Divisions
Other Divisions 2017 2016 % 2017 2016 % ZMW'000 ZMW'000 Change USD'000 USD'000 Change Revenue 79,009 107,364 -26.4% 8,054 9,459 -14.9% Gross Profit 12,868 15,737 -18.2% 1,312 1,386 -5.4% Overheads (10,612) (9,015) 17.7% (1,082) (794) 36.2% EBITDA 2,256 6,722 -66.4% 230 592 -61.2% Zamleather: • Dro
Slide 15: Abridged Balance Sheet
Abridged Balance Sheet 31-Mar-17 31-Mar-16 30-Sep-16 31-Mar-17 31-Mar-16 30-Sep-16 ZMW'000 ZMW'000 ZMW'000 USD'000 USD'000 USD'000 Non Current Assets 2 197 573 1 982 433 2 099 036 227 493 177 637 209 694 Current Assets 882 048 793 538 922 024 91 309 71 106 92 110 TOTAL ASSETS 3 079 621 2 775 971 3 0
Slide 16: Abridged Cash Flow Statement
Abridged Cash Flow Statement 31-Mar-17 31-Mar-16 31-Mar-17 31-Mar-16 ZMW'000 ZMW'000 USD'000 USD'000 Profit before taxation 5 780 110 546 590 9 740 EBITDA 87 284 175 365 8 898 15 451 Net cash inflow from operating activities (28 261) 87 857 (2 879) 7 741 Movement in Working Capital (115 545) (87 507
Slide 17: Capex
Capex Main Capital Expenditure during H1: USD 2.2m on rollout of new Zambeef Macro outlets; USD 1.8m on new Kalundu Dairy rotary milking parlour and upgrades to milk processing plant; USD 1.2m on new Mpongwe stock feed plant; USD 1.5m on expansion of Zamhatch hatchery and breeder farm; USD
Slide 18: Capex
Capex Key projects to be completed within the next six months: Continuing to grow retail network and drive retail sales to help grow CCFP and stock feed operations (Eight Zambeef Macros and four Shoprite stores to open before end of H2/2017); Commission new Copperbelt distribution hub which will
Slide 19: Summary/Outlook
Summary/Outlook H1/2017 performance characterised by a challenging economic environment. Despite this, the Group has delivered a strong operational performance: • Volumes have increased. • Margins in H1/2017 were down but are beginning to normalise. • Good operational cropping performance, but sha
Slide 20: Thank You! Questions?
Thank You! Questions?
Slide 21: Appendices
Appendices
Slide 22: Appendix 1: Abridged Income Statement
Appendix 1: Abridged Income Statement 31-Mar-17 31-Mar-16 % Change 31-Mar-17 31-Mar-16 % Change ZMW'000 ZMW'000 (ZMW) USD'000 USD'000 (USD) Revenue 1 161 318 1 121 605 3.5% 118 381 98 820 19.8% Cost of Sales (783 694) (675 693) -16.0% (79 887) (59 532) -34.2% Gross Profit 377 624 445 912 -15.3% 38 4
Slide 23: Appendix 2: Segmental Revenue and Gross Profit (ZMW’000)
Appendix 2: Segmental Revenue and Gross Profit (ZMW’000) Revenue Revenue Gross Profit Gross Profit Overheads Overheads EBITDA EBITDA Division 2017 2016 2017 2016 2017 2016 2017 2016 ZMW'000 ZMW'000 ZMW'000 ZMW'000 ZMW'000 ZMW'000 ZMW'000 ZMW'000 Retailing 818 963 642 885 Cold Chain Food Production 6
Slide 24: Appendix 3: Segmental Revenue and Gross Profit (USD’000)
Appendix 3: Segmental Revenue and Gross Profit (USD’000) Revenue Revenue Gross Profit Gross Profit Overheads Overheads EBITDA EBITDA Division 2017 2016 2017 2016 2017 2016 2017 2016 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 Retailing 83 482 56 642 Cold Chain Food Production 66
Slide 25: Appendix 4: Segmental Distribution of EBITDA
Appendix 4: Segmental Distribution of EBITDA 2017 2016 Other Other 1.6% 3.2% Cropping 14.2% Cropping 23.1% Retail & Cold Chain Food Production Retail & Cold Chain 38.2% Food Production 53.1% Stock Feed 31.1% Stock Feed 35.5% % of Group EBITDA 25
Slide 26: Appendix 5: CCFP Gross Profit, GP% and Volume
Appendix 5: CCFP Gross Profit, GP% and Volume Beef 2017 2016 % Change Milk 2017 2016 % Change GP Value (ZMW'000) 47 568 49 756 -4.4% GP Value (ZMW'000) 15 859 26 847 -40.9% GP Value (USD'000) 4 849 4 384 10.6% GP Value (USD'000) 1 617 2 365 -31.7% GP % 20.5% 22.3% GP % 18.4% 45.1% Volume (Kg million