Nigerian Breweries Plc · NSENG:NB
Nigerian Breweries — Q3 2022 Earnings Presentation
26 slides from Nigerian Breweries's earnings presentation, November 2022
Slide 1: 2022 Investors' Forum
PAGE 1 2022 Investors’ Forum Sep/2022
Slide 2: Disclaimer
DISCLAIMER 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 th
Slide 3: Content
CONTENT 1. Nigerian Breweries Plc. 2. Market Overview 3. Our Strategy to Win 4. BaBW 5. Financial Results 6. Outlook for 2022
Slide 4: Nigerian Breweries Plc. at a glance
Nigerian Breweries Plc. at a glance NB Breweries 18 Sales regions 9 Breweries NB Malting Plants with National Coverage 1 Malting Plant #1 in Lager, #1 in Malt, #2 in Stout 2,797 Employees Market Capitalisation Market Capitalisation Number of Shareholders Heineken N.V. (Naira) (US Dollar) Shareholdin
Slide 5: Business continuity is impacted by social & economic headwinds
Business continuity is impacted by social & economic headwinds Forex scarcity Currency devaluation Volatile fiscal policies Continued insecurity Spiraling brain drain Supply chain disruption 5
Slide 6: Latest Business Continuity Challenges
Latest Business Continuity Challenges Flooding Energy Crisis Investor/ Regulatory Uncertainty Policies • . Over 600 killed and 2 million people • Global energy crisis resulting in • Revised excise duty roadmap may displaced across 27 states; this is escalating cost of operations lead to higher dutie
Slide 7: Despite the macro-economic challenges, there is still potential for growth
Despite the macro-economic challenges, there is still potential for growth Annual headline inflation Naira vs dollar devaluation in 2022 Nigerian Real GDP growth rate (y-o-y Percent) (Naira per 1 dollar) (q-o-q Percent) 830 6 23.34 5.01 22.95 4.03 3.98 4 3.54 20.77 3.11 19.56 18.17 2 17.60 17.13 0.5
Slide 8: Our strategy to win
Our strategy to win Lead and Accelerate Premium Lager led by Heineken® Create Value in Mainstream Lager with our Regional Brands Intentionally Expand Beyond Beer (NADs and Adjacencies) Enhance RtC whilst improving Customer Experience Build Compliant Value Creating Digital Eco-System
Slide 9: The Ama (Enugu) Brewery Expansion Project – Commissioned in April 2022
The Ama (Enugu) Brewery Expansion Project – Commissioned in April 2022 • Executed the AMA Brewery Expansion • Will improve our production capacity from 3million hectolitres to 4.8mhl • Expansion will increase revenue and improve economic activities to the state • Expansion work is in full compliance
Slide 10: Our Route to Consumer continues to expand
Our Route to Consumer continues to expand B2B (Quickdrinks) Telesales Presales (Sales Rep) Most of our digitally savvy customers Become modal touchpoint and Our front-line will become trusted will use B2B as their first point of provide full suite of issue management business advisors to drive custo
Slide 11: Our Premium offerings continue to explore relevant passion points
Our Premium offerings continue to explore relevant passion points Excite the youthful population by bringing beer and fashion Drive penetration in key premium outlets and premium occasions together with the launch of draught and 44CL Can
Slide 12: Our regional mainstream brands continue to explore cultural cues blended with modernity
Our regional mainstream brands continue to explore cultural cues blended with modernity Ariya Omoluabi ‘22 Hi Life Fest ‘22 Anikulapo Premiere’22 Brand Relaunch with new Liquid Goldberg Osun Osogbo Festival‘22
Slide 13: Beyond Beer, we continue to win At Scale With Diverse Tastes & Powerful Brands
Beyond Beer, we continue to win At Scale With Diverse Tastes & Powerful Brands that excite consumers
Slide 14: Our Non-Alcoholic portfolio remains vibrant with consumer connections and innovations
Our Non-Alcoholic portfolio remains vibrant with consumer connections and innovations Dialing up meaningfulness in the north with Leveraging global assets to drive Exciting consumers with the launch of a new Northern Specific TVC awareness for Amstel Ultra Zagg our new Energy Malt Drink
Slide 15: Brew a Better World Progress
PROGRESS EXAMPLES Brew a Better World Progress Carbon Water Gender Responsible 26 61,024 1 16,914 Carbon & NGX- listed trees planted Company with students educated Water-reducing in 2022 at highest number of against alcohol initiatives Olokemeji Forest female board abuse completed in We are making s
Slide 16: Unlocking the Full Potential of Our People
Unlocking the Full Potential of Our People We are investing in targeted capability building across different leadership categories and employee groups to guarantee business continuity. Performance Mgt. Leadership Functional (All Employees - Sales Health & Wellbeing (People Managers) & Supply Chain A
Slide 17: September 2022 Financial results
• September 2022 Financial results
Slide 18: Volume seasonality has returned after 2021
Volume seasonality has returned after 2021 Volume Development (mHL) 2018 2019 2020 2021 2022 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022
Slide 19: Key Financial Indicators
Key Financial Indicators Highlights Net Revenue (₦ Billions) Cost of Sales (₦ Billions) - Pricing strategy has moderated margin pressures from input costs 238.9 393.3 198.7 309.2 - Cost leadership strategy has secured 235.7 234.0 144.1 139.5 Cost of Sales growth below inflation Q3 2019 Q3 2020 Q3 20
Slide 20: Profit pool recovering, despite input cost pressure
Profit pool recovering, despite input cost pressure 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q3 YTD -10,000 2022 -20,000 Nigerian Breweries -30,000 Others -40,000 Euro Total mln 20
Slide 21: Financial Overview
Financial Overview Summary of Profit or Loss (₦ Billions) Q3 YTD 2022 Q3 YTD 2021 Change in % Revenue 393.3 309.2 27.2% Cost of Sales (238.9) (200.0) 19.5% Gross Profit 154.4 109.3 41.3% Operating Profit 35.9 25.0 43.6% Net financing expenses (16.3) (12.1) 35.4% Profit Before Tax 19.6 13.0 51.1% Tax
Slide 22: Pricing mitigating the increase in input costs
Pricing mitigating the increase in input costs Operating profit bridge (₦ billion) +43.6% 84.1 (30.5) (15.9) (20.4) (6.4) 35.9 25.0 Operating profit Increase in Increase in raw Increase in Increase in Others (net) Operating profit YTD Q3 2022 net revenue materials and advertisement transportation YT
Slide 23: Naira devaluation pressuring net profit
Naira devaluation pressuring net profit Net profit bridge (₦ billion) +81.2% 1.4 (5.8) 10.9 0.2 0.2 15.4 8.5 Net profit Increase in Descrease in Increase in foreign Descrease in Others (net) Net profit YTD Q3 2021 Operating Profit Interest Costs, exchange losses income tax YTD Q3 2022 incl. reclass
Slide 24: Financial Position
Financial Position Summary of Financial Position Sep-22 Sep-21 Change in % Property, Plant & Equipment 290.9 213.2 36.4% Right of Use Asset 9.6 39.2 -75.6% Inventories 94.1 57.5 63.8% Trade and Other Receivables 38.0 22.2 70.9% Cash 14.7 11.8 24.7% Other Assets 105.6 113.0 -6.5% TOTAL ASSETS 552.9 4
Slide 25: Key messages
Key messages • The Nigerian beer market fundamentals remain strong with a high growth potential. • Country volatility remains a high risk on macro-economic indicators, security and infrastructure. For the remaining of 2022, the impact increased activities during pre-elections is yet to be seen and t
Slide 26: Q&A
Q&A Gs bear eS (CS SR i! Dis