Nigerian Breweries Plc · NSENG:NB
Nigerian Breweries — 2019 Financial Market Forum
36 slides from Nigerian Breweries's conference presentation, September 2019
Slide 1: 2019 Financial Market Forum
MARKET FORUM September 2019 : 2019 FINANCIAL
Slide 2: Forward-looking statements
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 the forward-l
Slide 3: Agenda
Agenda "2. Nigerian Breweries «Market overview ¢Our strategy to win ¢Half Year performance
Slide 4: Company history and milestones
Nigerian Breweries enters into a franchise Acquired brewery agreement with assets and brands Heineken & Co. to from the Sona brew the Heineken Group bringing lager locally in brand portfolio to Nigeria 11 1949 1965 2003 2011 2014 First bottle of Star President Nigerian Lager beer rolls Obasanjo Brew
Slide 5: Our Management Team
Our Management Team Gs3
Slide 6: Breweries and malting plants across Nigeria
North Sokoto Katsina Jigawa Yobe Zamfara Borno Kano Kebbi Kudenda Kaduna Bauchi Gombe Niger Adamawa Abuja Plateau Kwara Nasarawa Oyo Ibadan Ota Taraba West Ekiti Kogi Osun Benue Ogun Ondo Enugu Lagos Edo Ebonyi Lagos Ibadan Anambra Abia Cross Delta Imo East River Rivers Akwa Bayelsa Ibom NB Brewerie
Slide 7: Brand portfolio
Brand portfolio
Slide 8: Agenda
Agenda *Nigerian Breweries or Market overview ¢Our strategy to win ¢Half Year performance
Slide 9: Naira exchange rate
16.1 15.1 355 Naira/ $ 344 11.4 11.2 Nafex 90 80 70 60 50 40 https://www.cbn.gov.ng/rates/inflrates.asp 9
Slide 10: GDP by sector and government revenue
GDP (Sectors) in Naira Trillion Government Revenue (in Naira Trillion) 80.00 9.00 70.00 8.00 7.00 60.00 6.00 50.00 5.00 40.00 4.00 30.00 3.00 20.00 2.00 10.00 1.00 0.00 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014
Slide 11: Population of Nigeria (2001 – 2019)
Population of Nigeria (2001 – 2019) (million people) 476 439 401 365 329 295 263 233 206 191 196 201 186 172 176 181 167 154 159 163 146 150 129 132 135 139 143 125 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025 2030 2035 2040 2045 2050 2055
Slide 12: Generational Split of Economically Active Adults
Generational Split of Economically Active Adults (20 – 55), The Evolution 2001 28% 72% 2004 16% 60% 24% 2007 16% 60% 24% 2010 7% 50% 43% 2013 58% 42% 2016 42% 58% 2019 28% 49% 22% Generation (broadly accepted definition): Source: United Nations, World Population Prospects (UN-WPP), 2019 Baby Boom in
Slide 13: Mobile, internet and urbanization statistics
+25% 51% from 2014 +3.8% YoY Adults own smartphones 259M 200M 173.9M mobile connections 50% Est. 54% Active Mobile Urbanization Population penetration Subscribers +15% +9% +9.8% YoY YoY From January 2018 122M 128B 24M 53% Active Internet 43% Online Transactions Active Social Media Internet Users 11%
Slide 14: Total Beer Market in Nigeria in volumes
Total Beer Market in Nigeria in volumes 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Global Data 14
Slide 15: 70,000 60,000 • 50,000 • • 40,000 • 30,000 • 20,000 10,000 - -10,000
70,000 60,000 • 50,000 • • 40,000 • 30,000 • 20,000 10,000 - -10,000 15
Slide 16: Source: NB Continuous Retail Audit Measurement (CRAM)
80 100 120 150 200 250 300 350 2013 2019 16 Source: NB Continuous Retail Audit Measurement (CRAM)
Slide 17: Nigerian Breweries market share
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1 2019 Nigerian Breweries MS (%) Others MS (%) Nigerian Breweries Share of profit (%) 17
Slide 18: Agenda
Agenda *Nigerian Breweries ¢ Market overview i *Our strategy to win ¢Half Year performance
Slide 19: Strategy to keep Winning with Nigeria
Strategy to keep Winning with Nigeria! Expand Leadership in Build Scale in e Malt Growth Premium Mainstream Accelerate Heineken® growth Re-boost leadership in Drive profitability by Core Lager leveraging on innovation Continue Tiger rollout GrowrenarelonStone Winning Route-to-Market de n Point of Sa
Slide 20: ® ® 2016 2017 2018 H1 2019
® ® 2016 2017 2018 H1 2019
Slide 21: Expand leadership in premium lager
Expand leadership in premium lager What we will do Key initiatives Innovation and activation v Excite the lager space with our v Tiger Thematic Campaign diverse international premium portfolio v Differentiated permanent visibility Y National product availability in key channels v The Tiger Uncaged S
Slide 22: Re-boost leadership in Core Lager
Re-boost leadership in Core Lager What we will do Key initiatives Innovation and activation v Excite Nigerians with a strong Y European Club Experience, Star national premium brand Fan Parks and Starnivals etc. Y Build on true Nigerian passions: v Leverage NFF sponsorship Sports, Music, others with
Slide 23: Leverage innovation on non-alcoholics to shape and grow category
Leverage innovation on non-alcoholics to shape and grow category What we will do Key initiatives Innovation and activation v Excite the market with our Maltina strong portfolio of malt brands New Maltina Thematic Campaign 9P Maltina-Nickfest Sponsorship em ») » va Y Maltina #1,000 Smiles campaign y
Slide 24: Challenge market leader and grow market share in Stout
Challenge market leader and grow market share in Stout v Excite the category to better v Refresh brand connect and recruit the communications and exploit ever-evolving Nigerian brand platforms, activations millennial and sponsorships. v Leveraging price-pack Y Increase distribution of architecture a
Slide 25: Increase proximity to consumers, build strong partnerships
INCREASE PROXIMITY TO BUILD STRONG ENSURE WIN-WIN CONSUMERS PARTNERSHIPS INCENTIVES 93% Distributors Sub Distributors 25 Outlets
Slide 26: Cost savings delivered and focus continues
delivered and focus continues • Promotion optimisation • Packaging optimisation • Brewery footprint and fleet management • Discount and trade terms • Trade Marketing / POS rationalisation • Financing / funding strategy • Brand portfolio and mix management • ICT cost license and infrastructure 26
Slide 27: Sustainability at the heart of our Company
Advocating responsible consumption @) Se Sourcing sustainably Growing with communities Sustainability at the heart of our Company Promoting health and safety ‘Every drop’: protecting water resources ‘Drop the C: reducing CO, emissions
Slide 28: Brewing for a sustainable future
Brewing for a sustainable future PROMOTING HEALTH AND SAFETY FOR EMPLOYEES Life Saving Rules Life Saving Rules * Compliance Compliance Production Commercial HEINEKEN ruven HALPYEAR ruven | HALFYEAR 91% 96% 82% 85% ‘EVERY DROP’: PROTECTING WATER RESOURCES Water Consumption (hi/hl) Engagement with Gov
Slide 29: Brewing for a sustainable future
Brewing for a sustainable future SOURCING SUSTAINABLY Local Sourcing (Raw materials) rN 2ors target 100% 10% y ne A TPF err | 2019 taret 2010FY | 2019aret 2008 FY 100% 98% |100% 8% GROWING WITH COMMUNITIES NB ETF School Projects) (Maltina Teacher of the Year ) (tar Projects QD | 328,256,880 invested
Slide 30: Enhance work climate, drive performance
Enhance Work Climate Drive and Steer Performance Reward Top Performers 30
Slide 31: Agenda
Agenda *Nigerian Breweries ¢ Market overview ¢Our strategy to win cr Half Year performance
Slide 32: Financial Overview HY 2019
Financial Overview HY 2019 P&L Key financials itn Non) sts Revenue 170.2 172.7 14 Cost of Goods Sold 98.5 96.6 2.0 Gross Profit 71.7 76.1 -5.8 Result from Operating activities 24.5 31.6 -22.6 Operating Profit Margin 14.4% 18.3% -394bps Net Finance Expenses 5.1 41 24.1 Net Profit 13.3 18.4 -27.8 EPS
Slide 33: Key balance sheet items
Key balance sheet items Property, Plant & Equipment Inventories Accounts Receivable Cash Other Assets TOTAL ASSETS Non Current Liabilities Borrowings Trade and Other Payables Other Liabilities Equity TOTAL EQUITY AND LIABILITIES Financial Overview HY 2019 HY 2019 (N’ billion) 191.1 35.9 37.4 12.9 11
Slide 34: Interest coverage
* Note: interest coverage is calculated as operating profit over interest expense. 34
Slide 35: Summary and conclusions
• The Nigerian beer market fundamentals are very attractive with a high growth potential • Nigerian market trends are starting to show encouraging signs with premiumisation and macroeconomic indicator trends stabilising • NB remains committed to long term value creation for shareholder and have the
Slide 36: Winning with Nigeria – Q&A
Q&A Winning with Nigeria