East African Breweries Plc · NSEKE:EABL
East African Breweries — FY2013 Earnings Presentation
29 slides from East African Breweries's earnings presentation, Aug 23, 2013
Slide 1: EABL F13 Full Year Results Investor Briefing
DIAGEO EABL F13 Full Year Results Investor Briefing 23rd August 2013
Slide 2: Outline of the Full Year Results Briefing
DIAGEO Outline of the Full Year Results Briefing • F13 Full Year Review Charles Ireland • Financial Performance Tracey Barnes • Summary and Outlook Charles Ireland • Q&A 2
Slide 3: F'13 Full Year Review
DIAGEO F’13 Full Year Review Charles Ireland Group Managing Director & CEO
Slide 4: EABL's Ambition
DIAGEO EABL has an exciting ambition… EABL’s Ambition To create the best performing, most trusted and respected consumer products company in East Africa • Market-leading brands in beer and spirits • History in this region since 1922 • Strategy of investing for future growth • Strong values • Global
Slide 5: Our Organic Net Sales performance was robust, but held back in Uganda
DIAGEO Our Organic Net Sales performance was robust, but held back in Uganda... Kenya Uganda Tanzania EABLi 67% of NSV 16% of NSV 12% of NSV 5% of NSV 10% 0% 10% 20% 5 ORGANIC NET SALES GROWTH IN F13 VS F12.
Slide 6: EABL delivered Net Sales growth across most categories
DIAGEO EABL delivered Net Sales growth across most categories, especially at the premium end... Premium Beer RTDs Mainstream Beer Emerging Beer Tanzania 18% 47% 3% 12% Reserve Spirits Premium Spirits Mainstream Spirits Emerging Spirits 18% 18% 18% 276% 22% -6% 32% 6 ORGANIC NET SALES GROWTH IN F13 V
Slide 7: Kenya market highlights
DIAGEO Kenya market highlights: strong growth led by Tusker and premium spirits... • Premium beer growth driven by Guinness and White Cap • Mainstream beer performance led by Tusker with launch of “It’s Our Time” campaign • Senator and Balozi led growth of Emerging Beer • Launch of full Reserve port
Slide 8: Uganda market highlights
Uganda market highlights: Tusker Malt Lager and premium DIAGEO spirits performed well for us in a tough market... • Strong performance of Tusker portfolio led by Tusker Malt Lager with the Tusker Malt Lager 100 Club • Launch of “Bell Nation” • Quality awards won for Tusker, Tusker Malt Lager and Tus
Slide 9: Tanzania market highlights
Tanzania market highlights: growth led by the success of DIAGEO the premium sector and regional innovations... • “Made of More” campaign drove Guinness performance • Launch of Tusker Lite brand at the premium end • Quality awards won on Serengeti Premium Lager, supported by Under the Cap promotion •
Slide 10: EABLi market highlights
DIAGEO EABLi market highlights: continued strong growth in our export markets... • Premium beer driven by investment on Tusker Malt Lager • Strong performance of Tusker following cans launch • Strong growth of Senator due to increased Route to Market • Strong performance of premium and mainstream sp
Slide 11: Significant investments in Supply Chain and Route to Market
DIAGEO We have made significant investments in Supply Chain and Route to Market... • 6bn Kshs net capital expenditure • Salesforce headcount increased by 20% • Direct outlet coverage increased by 30% • 88% of our distributors in Kenya have signed up to ‘M- PESA Distributor Cashless Solution’ 11
Slide 12: Progress with local raw materials sourcing programme
DIAGEO We have made good progress with our local raw materials sourcing programme... • 26,000 local partners across the value chain • 10,000 metric tonnes of sorghum sourced in Kenya • Two new varieties of high- yielding barley seed launched 12
Slide 13: Investing in our People and Communities
Investing in our People and Communities continues to be DIAGEO a priority… • 108 employees on Diageo Africa accelerated development programmes • ‘Best Place to Work’ award for EABL Kenya • Redeploying business resources closer to the markets • 1 million people impacted by our Water of Life initiativ
Slide 14: Reported Net Sales growth of 6%
DIAGEO Reported Net Sales growth of 6%... F13 FY P&L vs F12 Kshs m Net Sales 59,062 +6% Cost of Sales +10% Gross Profit +2% Selling & Distribution Costs +11% Operating Profit 14,999 +0.2% 14 YEAR ENDED 30 JUNE 2013 VS PRIOR YEAR
Slide 15: F'13 Full Year Financial Update
DIAGEO F’13 Full Year Financial Update Tracey Barnes, Group Finance Director
Slide 16: Operating Profit Causal for F13
DIAGEO Operating Profit Causal for F13 +6% +10% 2.91 3.54 +11% 0.50 +1% -7% 0.10 0.01 +0.2% 14.98 15.00 F12 OP NSV COGs S&D Admin OIE F13 OP 16 YEAR ENDED 30 JUNE 2013; FIGURES SHOWN IN KSHS BN. GROWTH SHOWN VS F12
Slide 17: Growth in net sales
DIAGEO Growth in net sales Financial Report for the year ended 30th June 2013 EABL Consolidated Income Statement 30-Jun-13 30-Jun-12 Kshs M Kshs M Growth % Net Revenue 59,062 55,522 6% Cost of Sales (31,563) (28,657) 10% Gross Profit 27,499 26,865 2% Selling and Distribution costs (5,085) (4,589) 11
Slide 18: Cost of sales increased slightly ahead of net sales
DIAGEO Cost of sales increased slightly ahead of net sales Financial Report for the year ended 30th June 2013 EABL Consolidated Income Statement 30-Jun-13 30-Jun-12 Kshs M Kshs M Growth % Net Revenue 59,062 55,522 6% Cost of Sales (31,563) (28,657) 10% Gross Profit 27,499 26,865 2% Selling and Distr
Slide 19: Other costs
DIAGEO Other costs Financial Report for the year ended 30th June 2013 EABL Consolidated Income Statement 30-Jun-13 30-Jun-12 Kshs M Kshs M Growth % Net Revenue 59,062 55,522 6% Cost of Sales (31,563) (28,657) 10% Gross Profit 27,499 26,865 2% Selling and Distribution costs (5,085) (4,589) 11% Admini
Slide 20: Movements in non-operating costs
DIAGEO Movements in non-operating costs Financial Report for the year ended 30th June 2013 EABL Consolidated Income Statement 30-Jun-13 30-Jun-12 Kshs M Kshs M Growth % Net Revenue 59,062 55,522 6% (31,563) (28,657) • 12 months of loan Cost of Sales 10% repayments compared Gross Profit 27,499 26,865
Slide 21: Effective corporate tax rate has increased
DIAGEO Effective corporate tax rate has increased Effective Tax Rate F12-F13 40% 38% • Non-recurrence of impact 35% of one-off gain on sale of 35% EABL shares in TBL 30% 27% 25% • Timing differences on tax deductions on capital 20% expenditure 15% 10% • Increase in disallowable expenditure 5% 0% F12
Slide 22: Cashflow causal for F13
DIAGEO Cashflow causal for F13 F13 F12 Net debt to EBITDA 1.65 1.15 1.5 2.9 4.5 11.1 6.0 1.8 -0.19 6.9 -0.2 -0.2 -0.3 -4.89 22 YEAR ENDED 30 JUNE 2013; FIGURES SHOWN IN KSHS BN
Slide 23: Proposed dividends
DIAGEO Proposed dividends Interim Final Total Dividend Dividend Dividend Dividend per Kshs 1.50 Kshs 4.00 Kshs 5.50 share Total dividend Kshs 4.3bn payout % of PAT 63% 23
Slide 24: Summary & Outlook
DIAGEO Summary & Outlook Charles Ireland Group Managing Director & CEO
Slide 25: Summary
DIAGEO Summary • EABL has a proven strategy which is to win in beer and transform spirits across East Africa • Our F13 performance was robust at the topline in spite of market softness in Tanzania, Uganda and South Sudan • We have continued to invest for future growth: • Investment behind our brands
Slide 26: Outlook
DIAGEO Outlook • The outlook for consumer economies in East Africa is positive • We have priorities around: – Accelerating our Local Raw Material sourcing – Spirits Transformation – Talent Development • We will continue to invest in: – Brand development – Supply Chain – Route to Market – Our communi
Slide 27: Q & A Session
DIAGEO eabl nn Q&A Session
Slide 28: DIAGEO
DIAGEO
Slide 29: Cautionary statement concerning forward-looking statements
DIAGEO Cautionary statement concerning forward-looking statements This presentation contains ‘forward-looking’ statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, forward- looking statements include al
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