Uac Of Nigeria Plc · NSENG:UACN
Uac Of Nigeria — 2021 Standard Bank Africa Investor Conference
31 slides from Uac Of Nigeria's conference presentation, June 2021
Slide 1: UAC of Nigeria PLC Investor Presentation
UAC of Nigeria PLC Investor Presentation June 2021 Fola Aiyesimoju – Group Managing Director Funke Ijaiya-Oladipo – Group Chief Financial Officer
Slide 2: Disclaimer
Disclaimer 2 This presentation contains forward-looking statements which reflect management's expectations regarding UAC of Nigeria PLC's (“UAC”, the “Company” or “HoldCo”) future growth, results of operations, performance, business prospects, operating markets and opportunities. Wherever possible,
Slide 3: Contents
Contents 3 Overview 4 Operating context 9 Strategic focus 12 Outlook 18 Appendix 20
Slide 4: Overview
Overview
Slide 5: Holding company with some of Nigeria's most admired brands
Holding company with some of Nigeria’s most admired brands 5 Brands Reach/ Monthly Sales • 5 production facilities providing national coverage Agro-Allied • 30 thousand metric tonnes output Packaged • National distribution coverage Food and Beverages • 35 million units of snacks, water and dairy sol
Slide 6: We are presently organized around 4 key verticals
We are presently organized around 4 key verticals 6 HoldCo • N14.1 billion in Cash • N2.1 billion in Eurobonds • N2.3 billion in Investment Property Assets Agro Allied Packaged Food Chemicals and Quick Service Non-Controlling and Beverages Paints Restaurants Interests Q1 2021 Revenue Breakdown1 Q1 2
Slide 7: Meaningful domestic manufacturing presence
Meaningful domestic manufacturing presence… 7 11 factories across Nigeria Sokoto Katsina 6 South West • • Food Chemicals Yobe • Agro Allied Zamfara Jigawa Factories Kebbi Kano Borno Kaduna Bauchi 2 South East • Agro Allied Gombe Niger Factories Adamawa Kwara FCT 2 Plateau Nasarawa North Central Oyo
Slide 8: Supporting nationwide distribution
… supporting nationwide distribution 8 Logistics – Warehouse Footprint Quick Service Restaurants (QSR) Outlets 35 warehouses across 29 states 58 counters across 13 states Paint Retail Stores Food and Agro-Allied Distributors 94 paint retail stores across 33 states 1,091 distributors across 32 states
Slide 9: Operating context
Operating context
Slide 10: Low growth, rising inflation, and currency under pressure
Low growth, rising inflation, and currency under pressure… 10 Real GDP Growth (%) Exchange Rate ₦:$ 2.3% 2.6% 600 2.1% 2.1% 1.9% CBN Parallel 500 0.5% 0.1% 400 300 200 (3.6%) 100 - Jan-20 Oct-20 Dec-20 Jan-21 Apr-21 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Feb-20 Apr-20 May-20 Sep-20 N
Slide 11: Impact on gross margin partially offset by operational efficiency
…impact on gross margin partially offset by operational efficiency 11 Gross Profit Margin (%) for Operating Segments Q1 2020 vs Q1 2021 Q1 2020 Q1 2021 48.1% 33.5% 31.4% 22.8% 23.0% 17.1% 10.5% 11.8% Animal Feeds & Other Edibles Paints Packaged Food & Beverages Quick Service Restaurants Operating Ex
Slide 12: Strategic focus
Strategic focus
Slide 13: We have identified three clear levers for value creation
We have identified three clear levers for value creation 13 Value created 3 Acquisitions ▪ Selective M&A and bolt-ons Consolidate overlapping subsidiaries 2 ▪ ▪ Divest underperforming businesses Grow operating platforms ▪ Aggressive growth plans for 1 core platforms Return of capital ▪ Stable divide
Slide 14: Recently executed strategic initiatives
..and recently executed the following strategic initiatives 14 • IN7.1 billion in dividend and capital return planned for 2021 representing 34% of UAC’s market capitalisation 1 at the beginning of the year Return of Capital • Combination of ordinary dividend, special dividend, and unbundling of unit
Slide 15: We are gaining traction in our focus on growth
We are gaining traction in our focus on growth 15 Animal Feeds & Other Edibles 1 Packaged Food & Beverages 1 16% 13% 25% 5% FY18-20 13% Average -1% FY18-20 8% Average 8% 2% -24% FY 2018 FY 2019 FY 2020 Q1 2021 FY 2018 FY 2019 FY 2020 Q1 2021 Quick Service Restaurants 1 Paints1 21% 10% 17% 6% FY18-20
Slide 16: Streamline our balance sheet to drive ROIC
..and will work to streamline our balance sheet to drive ROIC 16 ▪ UAC (the HoldCo) has N46.7 billion in total assets of which N14.6 billion1 (31%) relate to our subsidiary holdings Investment in subsidiaries ▪ These businesses generated N4.6 billion2 of attributable EBIT in FY 2020 ▪ Allocating cap
Slide 17: Focus areas to drive earnings growth and shareholder value
Focus on these areas will drive earnings growth and shareholder value 17 ▪ Poor performance in Q1 2021 on account of supply chain disruptions (Resins, Dulux Trade inventory, and Packaging) limiting ability to meet demand Paints ▪ Action to offset 51% increase in weighted average raw material cost on
Slide 18: Outlook
Outlook Enjoy Lip Smacking
Slide 19: Outlook
Outlook 19 • We will continue to focus on driving growth in our core operating platforms ➢ Animal Feeds and Edible Oils: Investing in higher margin oil and dog food segments. Driving capacity utilisation ➢ Paints: Aggressive colour centre roll out ➢ Packaged Food and Beverages: Expand water capacity
Slide 20: Appendix: Operating segment overview
Appendix 1 Operating segment overview
Slide 21: Snapshot of the animal feeds segment
Snapshot of the animal feeds segment 21 Overview Value creation Grand Cereals Limited • Expansion of oil capacity (higher margin product) • Private company; 71% ownership Margins • Improve procurement processes to leverage • Produces animal feed, cereals, oils and dogfood combined scale for direct s
Slide 22: Snapshot of the paints segment
Snapshot of the paints segment 22 Overview Value creation Chemical and Allied Products PLC • Public company listed on The NSE; 52% ownership • Aggressive footprint expansion Expand • Expand mid-tier offering • Produces decorative paint; sells via dedicated distribution network Range • Grow industria
Slide 23: Snapshot of the packaged food & beverages segment
Snapshot of the packaged food & beverages segment 23 Overview Value creation • UAC Foods is a leading packaged food and beverages • Invest in greenfield state of the art factory company • Implement plans to optimise snacks margins Grow • UAC Foods manages a family of brands across several product •
Slide 24: Snapshot of the restaurants segment
Snapshot of the restaurants segment 24 Overview Value Creation • UAC Restaurants (UACR) pioneered QSR in Nigeria with the launch of Mr Bigg’s in 1986 • Piloted 5 company-owned stores earning annualised ROI of 39% (ahead of plan) • In addition to the Mr Bigg’s chain, UACR also operates the Debonairs
Slide 25: Appendix: Financial information
Appendix 2 Financial information
Slide 26: Income statement
Income statement 26 ₦ mn, unless otherwise stated Q1 20212 Q1 20201 D% FY 20203 FY 20193 D% Revenue 22,022 19,549 12.7% 81,358 79,202 2.7% Gross Profit 4,012 4,234 (5.2%) 15,990 16,627 (3.8%) Gross Profit Margin (%) 18.2% 21.7% (344 bps) 19.7% 21.0% (134 bps) Operating Profit 1,138 1,128 0.8% 3,597
Slide 27: Financial Position – 31 March 2021
Financial Position – 31 March 2021 27 Summary Balance Sheet Working Capital N mn Mar-21 Dec-20 D% N mn Mar-21 Dec-20 D% Non current Assets 37,651 40,986 (8.1%) Inventory 33,977 20,123 68.8% Current Assets 66,032 50,912 29.7% Trade Receivables 1,011 2,701 (62.6%) Other Assets 3,839 269 1,325.1% Trade
Slide 28: Cash Flow
Cash Flow 28 PBT to Free Cash Flow ₦ mn, unless otherwise stated Q1 2021 FY 2020 FY 20191 Profit Before Tax from continuing operations 1,028 5,121 7,456 2 Profit/ (Loss) before tax from discontinued operations - 544 (14,696) Non-Cash charges & other 689 (1,636) (1,117) Changes in working capital (13
Slide 29: Appendix 3
Append 3 UAC’s ooo ove 50 ROW k quae : io \
Slide 30: HoldCo management focused on value creation
HoldCo management focused on value creation 30 Nkem Agboti Fola Aiyesimoju Vitus Ezinwa Company Secretary Group Managing Director Chief Operating Officer and General Counsel • Experienced finance professional and investor • Experienced executive and HR professional • Regulatory compliance expert and
Slide 31: Management of key operating segments
Management of key operating segments 31 Mr. Alex Goma Mr. Gboye Adedeji Dr. Dele Ajayi Mr. David Wright Mr. Debola Badejo MD, Grand Cereals Limited MD, Livestock Feeds PLC MD, UAC Foods Limited MD, CAP PLC MD, UAC Restaurants Limited • Seasoned business • Seasoned executive with • Experienced busine
UAC of Nigeria — 2021 Standard Bank Africa Investor Conference on 6ix