Nigerian Breweries Plc · NSENG:NB
Nigerian Breweries — 2020 Investors' Forum
43 slides from Nigerian Breweries's conference presentation, Nov 23, 2020
Slide 1: Facts Behind the Figures
Facts Behind the Figures PRESENTATION 2020
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. Financial Results 5. 2021 Outlook
Slide 4: Nigerian Breweries Plc at a glance
Nigerian Breweries Plc. at a glance NGN 234.0bn NGN 162.2bn Net revenue Net assets NGN 22.6bn 1.6x c. 3,100 Operating profit Net debt/EBITDA Employees Figures as of 30th September 2020
Slide 5: Listed on The Nigerian Stock Exchange, with strong Board and governance
...listed on The Nigerian Stock Exchange, with a strong Board and Corporate governance Key Numbers Market Capitalisation (Naira) Shareholders N391bn Market Capitalisation Audit Committee (US Dollar) $1bn Board of Directors Number of Shareholders 111,600 Heineken N.V. Independent Non- Non-Executive N
Slide 6: Well diversified footprint
Katsina Jigawa Yobe Zamfara Well diversified Kano Kebbi footprint Kaduna Bauchi Gombe Niger Adamawa Abuja Plateau Kwara Nasarawa Oyo Taraba 18 Sales regions Ekiti Kogi Osun Benue Ogun Ondo Enugu With National Coverage Edo Anambra Ebonyi Lagos Abia Cross Delta Imo River NB Breweries Rivers Akwa NB Ma
Slide 7: NB Management Team | Diverse Experiences and Rich Perspectives
NB Management Team | Diverse Experiences and Rich Perspectives Grace OMO- Martin KOCHL Sade MORGAN Uaboi AGBEBAKU LAMAI Supply Chain Corporate Affairs Director Company Secretary & HR Director Director Legal Director Jordi BORRUT BEL Managing Director/CEO Rob KLEINJAN Phil ANEKE Emmanuel ORIAKHI Uche
Slide 8: Nigeria, Africa's largest economy, is truly an attractive market
Nigeria, Africa’s largest economy, is truly an attractive market Population of Nigeria (2010 – 2020) Real GDP by Country (2009 – 2019) (million people) (Billion USD) Age <35 yrs 500 2020 206 77.4% Nigeria 2019 201 77.4% South Africa 2018 196 77.3% 400 2017 191 77.2% 2016 186 77.2% 300 2015 181 77.1%
Slide 9: A country not without its challenges…
A country not without its challenges… Country inflation has hit a 29-month all time Oil prices (9% of total GDP) on the decline, high of 14.23% in October 20, driven by food impacting GDP growth prices Oil price, GDP growth, exports and government revenues Annual headline inflation (Percent GDP) (y-
Slide 10: …with COVID-19 having far reaching effects
…with COVID-19 having far reaching effects As unemployment accelerates… … and population growth remains ahead of GDP growth rate Unemployment rate Nigerian Real GDP growth rate (y-o-y Percent) (y-o-y Percent) 27.1 24.8 23.1 +3.4% +4.5% Population 18.8 growth rate 14.2 9.9 2.7 2.6 6.4 2.2 1.9 2014 20
Slide 11: Beer sector profit pool under pressure
Beer sector profit pool under pressure Nigerian Beer Market Profit Pool ( Bln Naira) 70,000 60,000 50,000 Historically profit pool contracted due to: 40,000 • Higher taxes 30,000 • Currency devaluation 20,000 • Consumer down trading 10,000 • Material cost inflation - • Promotional intensity 2000 200
Slide 12: 2020: Driving growth amidst a pandemic
2020: Driving growth amidst a pandemic CREATE A WINNING CULTURE COMMERCIAL AGILITY • Stay safe; stay strong • Leverage our strong digital strategy • Workplace flexibility & adaptability • Optimized commercial spend • No redundancy • Flexible sales contact method POSITION FOR GROWTH • Drive Value gro
Slide 13: Our People: Poised to deliver now & in the future
Our People : Poised to deliver now & in the future Our employees display great resilience & remain high performing in the face of unique challenges Adapting seamlessly to new ways of working driven by safe best practices and technology Flexibility & Adaptability Our culture delivered great levels of
Slide 14: Organisational climate impacts positively on employee engagement
Organisational climate impacts positively on employee engagement As a company; our efforts to sustainably engage and motivate our people yield positive results Reward & Provision of Transparent Organisational Climate Recognition Resources Communication Engagement Performance L&D Union engagement My
Slide 15: An Inclusive & Diverse Workforce
An Inclusive & Diverse Workforce Reward & Recognition We recognise the impact of an inclusive & diverse workforce and continue to take steps in that direction
Slide 16: During COVID Lock down
During COVID Lock down, we inspired and uplifted our consumers and customers with relevant brand communication
Slide 17: We stayed connected, engaging our consumers through digital
We stayed connected, engaging our consumers through digital Leveraging strong brand platforms, brand Ambassadors and micro influencers #HeinekenDesignContest #UncageYourHome #ShineShineBobo #BeYourBest
Slide 18: Our strategy to win
Our strategy to win 1. Drive premium growth with Heineken and Tiger 2. Strengthen the core, our mainstream brands 3. Innovate in beer and beyond to drive penetration 4. Sustainability at the heart of our business
Slide 19: Drive value growth with Heineken & Tiger
Drive value growth with Heineken® & Tiger 1. Leverage global platforms to connect with young consumers 2. Engaging consumers with relevant content 3. Drive penetration with Gen Zs
Slide 20: Connecting with consumers through premium platforms…
Connecting with consumers through premium platforms…
Slide 21: And uncaging Gen Z with unconventional collaborations
And uncaging Gen Z with unconventional collaborations
Slide 22: Strengthen the core
Strengthen the core 1. Leverage regional strongholds with our mainstream brands 2. Rejuvenate Leading mainstream brands: Life and Goldberg 3. Supporting our customers with back to bar initiatives
Slide 23: We relaunched Life with an epic bridge light up ceremony
We relaunched Life with an epic bridge light up ceremony and community engagement…
Slide 24: …with recent relaunch of Goldberg consistently delivering growth
…with recent relaunch of Goldberg consistently delivering growth Double digit Organic growth Vs LY
Slide 25: Strong performance of stout brands in the midst of the pandemic
Strong performance of stout brands in the midst of the pandemic
Slide 26: Innovate for growth
Innovate for growth 1. Differentiate in the Malt Category 2. Innovate with new beer styles 3. Reinforce our status as a multi- category company
Slide 27: Sustain leadership in Malt
Sustain leadership in Malt Excite and disrupt the category with differentiated malt propositions to give consumers choice
Slide 28: Increase participation in Energy
Increase participation in Energy Play in high value category to protect profit pool
Slide 29: Creating & shaping the beer mixes/FAB category
Creating & shaping the beer mixes/FAB category Making beer cool again and addressing unmet consumer needs in beer
Slide 30: Brewing a Better World
Brewing a Better World Installation of telematics When You Drive, Never in all vehicles and driver Drink Campaign trainings 97% packaging materials Water treatment plants in and over 53% of raw 7 out of our 10 production materials sourced locally sites Significant CSR investment 70% thermal energy f
Slide 31: Winning With Nigeria Through Our COVID-19 CSR Interventions
Winning With Nigeria Through Our COVID-19 CSR Interventions In line with our corporate philosophy of Winning with Nigeria, we made a commitment to support the country in the effort to combat the spread of COVID-19. This we have done via: • Ensuring the safety and wellbeing of our employees, third pa
Slide 32: Growing with Communities – NB Empowerment Programme
Growing with Communities – NB Empowerment Programme Starting October 2020, we are empowering over 475 Women and Youth in five host communities through skill acquisition, entrepreneurship & empowerment opportunities: • Ama (Enugu State) • Awo-Omamma (Imo State) • Ijebu Ode(Ogun State) • Ota (Ogun sta
Slide 33: Financial results
Financial results
Slide 34: Financial Overview Q3 YTD 2020
Financial Overview Q3 YTD 2020 Q3 YTD 2020 Q3 YTD 2019 Change P&L Key financials (N’ billion) (N’ billion) (%) Revenue 234.0 235.7 -0.7 Cost of Goods Sold 144.1 139.5 -3.3 Gross Profit 89.9 96.2 -6.5 Result from Operating activities 22.6 25.2 -10.1 Operating Profit Margin 9.7% 10.7% -101bps Net Fina
Slide 35: Financial Overview Q3 2020
Financial Overview Q3 2020 Q3 YTD 2020 Q3 YTD 2019 Change P&L Key financials (N’ billion) (N’ billion) (%) Revenue 82.2 65.5 25.5 Cost of Goods Sold 51.4 41.0 25.5 Gross Profit 30.8 24.5 25.6 Result from Operating activities 7.5 0.7 954.9 Operating Profit Margin 9.1% 1.1% 804bps Net Finance Expenses
Slide 36: Cost leadership agenda mitigating the pressure on margins
Cost leadership agenda mitigating the pressure on margins Consumer Value Cost Revenue Management Engineering Optimisation • Promotion optimisation • Packaging optimisation • Raw material strategy and local sourcing • Discount and trade terms • Trade Marketing / POS rationalisation • Brewery footprin
Slide 37: Volume impact partially mitigated
Volume impact partially mitigated Operating profit bridge (₦’ billion) Operating profit 2019 25.2 Decrease in net revenue -1.7 Increase in cost of sales -4.6 Decrease in marketing & distribution expenses 5.3 Increase in administrative expenses -1.4 Net decrease in others -0.2 Operating profit 2020 2
Slide 38: Finance costs optimised, however impacted by FX and crisis
Finance costs optimised, however impacted by FX and crisis Net profit bridge (₦’ billion) Net profit 2019 12.2 Decrease in operating profit -2.5 Decrease in income tax expense 0.9 Increase in interest and fx losses -0.8 Shift from distribution to lease expense -2.7 Other -0.0 Net profit 2020 7.1
Slide 39: Financial Overview Q3 2020
Financial Overview Q3 2020 Q3 2020 Q3 2019 Change Key balance sheet items (N’ billion) (N’ billion) (%) Property, Plant & Equipment 198.7 193.8 2.5 Right of Use Assets 43.2 9.3 362.0 Inventories 42.8 41.6 3.0 Accounts Receivable 24.2 30.5 -20.6 Cash 53.7 2.0 2603.0 Other Assets 103.9 104.8 -0.9 TOTA
Slide 40: Cash Flow
Cash Flow (N’ billion unless otherwise stated) 2020 2019 Change Cash flow from operations 49.1 49.5 -0.5 (before changes in working capital) Cash generated from operating activities 54.6 19.5 35.1 Net cash from operating activities 36.4 1.0 35.5 Net cash used in investing activities -21.4 -23.6 2.2
Slide 41: Key Messages
Key Messages • The Nigerian beer market fundamentals are very attractive with a high growth potential. • The year started with a promising 1st quarter and heavily impacted in Q2. The Nigerian market has rebounded after the first impact of COVID, however the full sector still remains under pressure.
Slide 42: Outlook for 2021
Outlook for 2021 In 2020, the results of Nigerian Breweries, were adversely impacted by COVID, VAT increase, FX devaluation and scarcity of foreign exchange. Our position in the market enabled us to mitigate this impact in Q3 with growth versus last year For 2021, we will strive to sustain the perfo
Slide 43: Q&A
Q&A