Guinness Nigeria Plc · NSENG:GUINNESS
Guinness Nigeria — FY2020 Earnings Presentation
23 slides from Guinness Nigeria's earnings presentation, August 2020
Slide 1: F20 GNL Full Year Results Investor's Call
F20 GNL Full Year Results Investor’s Call * Confidential *
Slide 2: Full Year Results Investors' Call agenda
F20 Strategic and Commercial Review Baker Magunda FULL YEAR F20 Financial Performance Review RESULTS Stanley Njoroge INVESTORS’ CALL F21 Priorities Baker Magunda Q&A Viola Graham-Douglas * Confidential *
Slide 3: F20 Strategic and Commercial Review
F20 Strategic and Commercial Review Baker Magunda Managing Director * Confidential *
Slide 4: Our Strategy Remains Clear
Our Strategy Remains Clear * Confidential *
Slide 5: Our Medium Term Participation Choices are clear to drive margins
Our Medium Term Participation Choices are clear to drive margins… Guinness Mainstream Spirits International Malts & RTDs Premium Spirits * Confidential *
Slide 6: COVID-19 has introduced significant macro-economic volatility
COVID-19 has introduced significant macro-economic volatility that remains to date… ❑ Economy is under pressure, GDP growth rate down to -6.1% from 1.87% in Q1. People are spending less and down trading. ❑ Shoppers are looking for offers and best buys. A disadvantage for a largely premium portfolio
Slide 7: In response we have embraced the new normal
…in response we have embraced the new normal Developed new channel initiatives driving penetration within high consumption Implemented the Brand occasions such as E-commerce deals, Purpose Media Campaign local travel retail activations and Meal (Enjoy Every Moment) Combo partnerships. across media c
Slide 8: We supported our people, partners and communities through the crisis
…and we supported our people, partners and communities through the crisis In the bid to protect Internally, employees are 56,991 cases of non-Alcoholic drinks employees from multiple actively engaged through donatedtoLagos,Edoand12otherstates contact with persons initiatives such as the weekly reach
Slide 9: We are continuing to add value to our communities
We are continuing to add value to our communities 1. WATER OF LIFE SCHEMES: 1 2 3 4 new WOL schemes opened in Edo, FCT, Kano, Kebbi 2. COMMUNITY CLEANUP: Employee volunteering 4 activity 3. WATER OF LIFE LAUNCH 4. DRINKiQ EDUCATION: Training with Lafarge Holcim fleet Drivers 4 5. F20 Sustainability
Slide 10: and continuing to grow our people.
and continuing to grow our people. * Confidential *
Slide 11: Significant decline in trading during the lockdown
We experienced significant decline in trading during the lockdown which slowly eased off towards June… DRIVERS OF PERFORMANCE ❑ Reduction in Stock in trade (SIT) ❑ Closure of On-Trade channel ❑ Aggressive debt collection ❑ Closure of Inter-state movement * Confidential *
Slide 12: In response we carried out
In response we carried out: • Significant de-stocking of our DBs – from 338k to 130k (excl MSS), stock evacuation • Instituted a strict credit policy in Q4 • Implemented Project Runway RTC transition Results • Credit policy impacted top line growth but set the business up for a great F21 start. Trad
Slide 13: These came as a challenge to our overall performance
These came as a challenge to our overall performance… Premium Spirits Brand Guinness Mainstream Spirits H1:-13% H2: -92% FY:- H1:+14% H2: -48% FY:-17% H1:+36% H2: -7% FY:+15% 146%% RTDs APNADs Lager H1:+7% H2: -43% FY:-26% H1:-13% H2: -37% FY:-25% H1:-41% H2: -70% FY:-45% * Confidential *
Slide 14: Strategy to grow Spirits contribution to TBA
However, we are still in line with our strategy to grow Spirits contribution to TBA. * Confidential *
Slide 15: F20 Financial Highlights
F20 Financial Highlights Stanley Njoroge Finance and Strategy Director * Confidential *
Slide 16: F20 performance heavily impacted by material one-off items
F20 performance heavily impacted by material one-off items… Asset Net Impairment COVID 19 Direct Guinness Nigeria Plc 2020 EEG CDL 2020 U/L 2019 Rep vs LY U/L vs LY Impairment of Receivables Impact N’m N’m N’m N’m N’m N’m N’m N’m Revenue 104,376 104,376 131,498 -21% -21% Cost of sales -71,046 1,994
Slide 17: Lower trade credit reducing trade receivables
…and delivered lower trade credit, reducing Trade receivables by c.68% at year end. Marginal movement in Total creditors’ balance is owing to NOTAP approvals required to enable TSF payments F20 N’m F19 N’m Vs LY Inventory 26,426 25,180 +5% Debtors* 18,719 26,019 -28% ➢ Net Trade 2,506 20,552 -88% De
Slide 18: Overall capital structure remains strong despite dip in EBITDA
..our overall capital structure remains strong despite dip in EBITDA N’ Bn 2020 2019 Δ% *EBITDA 14.6 19.1 (24%) NET INTEREST 3.5 2.0 (77%) EQUITY 73.1 89.1 (18%) NET DEBT 17.9 15.2 (18%) TARGET NET DEBT/EBITDA 1.23x 0.8x 0.5x – 1.0x NET DEBT/EQUITY 24.4% 17% 30% - 50% NET INTEREST COVER 4.11x 9.5x >
Slide 19: Cash and Deposit Position – 30 June 2020
CASH AND DEPOSIT POSITION – 30 June 2020 N’Bn 2020 2019 Δ% COMMENT Bullish cash collection resulting in overdues CASH 5.3 4.8 10% reduction; FCY cash is 42% (US$ 6 million) as of F20 N’Bn 2020 2019 Δ% COMMENT Increase in IFF by 44% (N 2.2 Bn) as a result of DEBT 23.2 20 (16%) FCY scarcity to paydown
Slide 20: F21 Priorities
F21 Priorities Baker Magunda Managing Director * Confidential *
Slide 21: F21 priorities by brand category
WITHIN STOUT MAINSTREAM PREMIUM SPIRITS MALTS & RTDS ✓ GROW SHARE SPIRIT ✓ GROW SHARE ✓ HOLD SHARE ✓ GROW EQUITY ✓ GROW SHARE ✓ HOLD EQUITY ✓ HOLD EQUITY ✓ EXPAND ✓ GROW EQUITY ✓ EXPAND ✓ EXPAND FOOTPRINT ✓ EXPAND FOOTPRINT FOOTPRINT ✓ PROTECT FOOTPRINT ✓ PROTECT ✓ COST MARGINS ✓ PROTECT MARGINS ABS
Slide 22: Q&A
Q&A Viola Graham-Douglas Corporate Relations Director * Confidential *
Slide 23: Cautionary Statement concerning forward-looking statements
Cautionary Statement concerning forward-looking statements • This presentation is based on Guinness Nigeria Plc’s audited financial results for full year period ended 30th June, 2020. Guinness Nigeria Plc (“GN” or the “Company”) has obtained some information in this presentation from sources it beli