East African Breweries Plc · NSEKE:EABL
East African Breweries — H1 FY2009 Earnings Presentation
36 slides from East African Breweries's earnings presentation, 2009
Slide 1: Growth in extraordinary times
Growth in extraordinary times East Africa Breweries Limited 2009 Half Year Results
Slide 2: The past 6 months have seen…
EABL The past 6 months have seen… ¾ Challenging environment - - Slow down in economies, cost inflationary pressures, continued impact of PEV. ¾ Taxation - - Excise duty on spirits in Kenya(up 300% in December),two tax increases on barley beers translating to 70% increase in six months ¾ Evolving lan
Slide 3: In spite of the difficult times we are operating in…
EABL In spite of the difficult times we are operating in… EABL continues to have major strengths based on: ¾ Strong Regional presence ¾ Broad range across brand categories ¾ Strong route to market ¾ Great marketing capabilities ¾ Deep understanding of consumer trends 3
Slide 4: Continued growth across key financial measures
EABL Continued growth across key financial measures versus H1 F08 Volume 8% Net Sales Value [NSV] 12% Gross Profit 4% Profit Before Tax [PBT] 5% Earnings Per Share [EPS] 5% 4
Slide 5: Our markets… Positive performance in all regions (Kenya, Uganda)
EABL Our markets… Positive performance in all regions Volumes Kenya +4% Kenya F06 F07 F08 F09 V o lu m e s Uganda + 20% Uganda F06 F07 F08 F09 5
Slide 6: Our markets… Positive performance in all regions (Tanzania, GLR)
EABL Our markets… Positive performance in all regions Volumes Tanzania +17% Tanzania F06 F07 F08 F09 V o lu m e s GLR + 39% GLR (Exports) F06 F07 F08 F09 6
Slide 7: Category performance
EABL Category performance Volumes Senator Keg Beer Total Spirit Total Actual LY Senator keg Beer Spirits Vs. LY = +18% Vs. LY = +7% Vs. LY = +9% 7
Slide 8: First half performance highlighted EABL's strengths…
EABL First half performance highlighted EABL’s strengths… ¾ Geographic reach ¾ Brand range ¾ Experienced regional management team ¾ Ability to drive value from brand additions ¾ Financial strength 8
Slide 9: Supported by an exceptional portfolio of brands…
EABL Supported by an exceptional portfolio of brands… 9
Slide 10: Understanding consumer trends
EABL Understanding consumer trends …continued demand for affordable drinks ¾Continuous focus around our brands ¾Ensure our marketing resonates with the consumer in today's environment ¾Our deep understanding of all consumer categories ¾Continued focus on sales execution ¾ Route to market capability
Slide 11: Kenyan scene…
EABL Kenyan scene… Optimizing consumer experience through different initiatives. ¾ Tusker Milli Na Marafiki promotion driving visibility and consumption ¾ Pilsner Mfalme Campaign ¾ Guinness on the back of the premier league activation ¾ White cap – focus on quality 11
Slide 12: Ugandan scene…
EABL Ugandan scene… Growth in a very competitive landscape ¾ Bell – focus on quality ¾UG Waragi – up 7% off a strong consumer campaign ¾ Guinness +29% on sound Football activations. ¾ Tusker Malt up 7% ¾Pilsner up +28% riding on Pasa Pasa promotion 12
Slide 13: Tanzania scene…
EABL Tanzania scene… Strong growth momentum sustained… ¾ Tusker was up +12% ¾ Guinness did exceptionally well at +126% ¾ Malta was +67%. ¾ But Pilsner was down –51% 13
Slide 14: Backed by an aggressive innovation agenda
EABL Backed by an aggressive innovation agenda 14
Slide 15: And growing strong presence within E.A
EABL And growing strong presence within E.A Sudan Eritrea Ethiopia Uganda Kenya DRC Tanzania Rwanda Indian Ocean Burundi Islands EABL current markets EABL target markets F’09 15
Slide 16: Key indicators
EABL Key indicators ¾ Good history of GDP for most markets ¾ Large pool of purchasing power ¾ Strong population growth Y-o-Y ¾ Further regional integration ¾ Relatively decent GDP forecast despite global downturn 16
Slide 17: Our communities - Kenya
EABL Our communities - Kenya Project Mazingira - rehabilitation and Blocks of H20pe : 18 facilities across sustainable development (Ruaraka) Kenya worth 16m Water of life Recycling aluminum cans 17
Slide 18: Our communities - Uganda
EABL Our communities - Uganda E-GREEN tree planting (Kasubi) Shaggy - Kampala Dispensary water project 18
Slide 19: Responsible Drinking
EABL Responsible Drinking Phase 2 launched, coast & western Kenya; Uganda rolling out soon A Caltex-EABL partnership 140 taxis branded 19
Slide 20: A chance to make a difference…
EABL A chance to make a difference… Senator Fund launch in March 2009 20
Slide 21: Our focus for Half 2 will be…
EABL Our focus for Half 2 will be………….. ¾ Continued focus on beer, adult soft drinks and spirits ¾ Expanding Brand Footprint - - Regional, African, Global ¾ Continuous Innovation ¾ An aggressive cost management agenda ¾ Further improving our route to market ¾ Building capacity, capability & relation
Slide 22: Our focus for Half 2 will be…
EABL Our focus for Half 2 will be………….. 22
Slide 23: So despite challenging times
EABL So despite challenging times ¾Strong business ¾Delivering growth and value in all the markets ¾Building and investing behind brands and markets ¾Innovating ¾Capex investments ¾Seeking out new opportunities.e.g.entry into the duty free market 23
Slide 24: … to ensure EABL emerges from this slowdown as a stronger business
EABL … to ensure EABL emerges from this slowdown as a stronger business….. 24
Slide 25: Financial Report
Financial Report R Wb N° Natural. \" unique. | alvaro.: The nor-olcohokc, natural alternative.
Slide 26: Growth of our financials under adverse macro's
EABL Growth of our financials under adverse macro’s Net sales EPS growth of 5% 12% increased by Marketing spend Operating 5.7Bn Ksh 5% cash flow of increased by Returning cash to Delivering profit 5% 4.4Bn Ksh shareholders of before tax growth of 4% + 4% 26
Slide 27: Delivering a broadly spread net sales growth
EABL Delivering a broadly spread net sales growth Contribution to net sales value By business unit By category 1% 11% 6% 2% 3% 5% Beer Kenya 20% Uganda CSD Glass Malting RTD Exports 70% 82% Spirits 27
Slide 28: The past 6 months have seen…
EABL The past 6 months have seen… Cost Of Inputs Cereals, power, fuel Distributors management Capability, financing Supply S&OP Taxation Excise on Beer & spirits 28
Slide 29: Kenya
EABL Kenya Growth in a very soft market ¾ Sales growth driven by Senator Keg, Guinness and Whitecap ¾ Selective pricing review led to improved sales value to offset against rising costs ¾ Significant cost pressure mostly caused by higher raw material cost, energy & currency depreciation ¾ Driving pr
Slide 30: Uganda
EABL Uganda Growth in a very competitive environment ¾ Heightened competitive activity ¾ Holding market share and growing volumes ¾ Impact of Kenya’s economy down turn expected to slow growth. Volume growth 20% Net sales value 3% Marketing spend 42% Operating profit 15% 30
Slide 31: Exports & Great Lakes
EABL Exports & Great Lakes South Sudan On track with our geographic Eastern expansion DRC ¾ Enhanced product distribution Rwanda ¾ Improved operating Burindi business model in place ¾ Building relationships with key customers in the new markets Volume growth 40% Net sales value 70% Marketing spend 1
Slide 32: Operations
EABL Operations South Sudan Increasing cost pressures and inflation Democratic Republic of Uganda Congo ¾ Raw material cost pressures(both local & imported) -Malt, Barley, Hops and utilities. Kenya Lake Victoria ¾ Production process re-engineering to drive efficiencies & optimise Rwanda utilisation.
Slide 33: Income statement Ksh (m)
EABL Income statement Ksh (m) East African Breweries Limited Interim Financial Report for six months period ended 31 December 2008 (UNAUDITED) Consolidated Profit and Loss Account Six months to Six months to 31-Dec-08 31-Dec-07 Kshs M Kshs M Change % Net Revenue 18,096 16,089 12% Cost of Sales (8,94
Slide 34: Our growth trajectory…
EABL Our growth trajectory… Net revenue of 18.1Bn growing 12% PBT of 6.8 Bn growing 5% EPS of Ksh 5.13 growing 5% DPS of Ksh 2.50 growing 4% 34
Slide 35: Our dividend proposal…
EABL Our dividend proposal… ¾ Interim dividend proposal of Ksh 2.50 /share = +4% in line with our dividend policy ¾ Cash dividend of 2Bn Ksh = +4% 35
Slide 36: We will continue to manage growth in these challenging times…
EABL We will continue to manage growth in these challenging times… ...to ensure EABL emerges from this slowdown as a stronger business 36
East African Breweries — H1 FY2009 Earnings Presentation on 6ix