Uac Of Nigeria Plc · NSENG:UACN
Uac Of Nigeria — FY2020 Earnings Presentation
35 slides from Uac Of Nigeria's earnings presentation, Apr 1, 2021
Slide 1: UAC of Nigeria PLC FY 2020 Results
UAC of Nigeria PLC FY 2020 Results 1 April 2021 Fola Aiyesimoju – Group Managing Director Funke Ijaiya-Oladipo – Group Chief Financial Officer
Slide 2: Disclaimer
Disclaimer 2 This presentation contains forward-looking statements which reflect management's expectations regarding UAC of Nigeria PLC's (“UAC”, the “Company” or “HoldCo”) future growth, results of operations, performance, business prospects, operating markets and opportunities. Wherever possible,
Slide 3: Contents
Contents 3 Overview 4 FY 2020 highlights 11 Compelling growth outlook 19 Corporate actions 22 Appendix 24
Slide 4: Overview
Overview
Slide 5: Holding company with some of Nigeria's most admired brands
Holding company with some of Nigeria’s most admired brands 5 Brands Reach/ Monthly Sales • 5 production facilities providing national coverage Agro-Allied • 30 thousand metric tonnes output Packaged • National distribution coverage Food and Beverages • 35 million units of snacks, water and dairy sol
Slide 6: We are presently organized around 4 key verticals
We are presently organized around 4 key verticals 6 HoldCo • N14.8 billion in Cash • N2.2 billion in Eurobonds • N2.3 billion in Investment Property Assets Agro Allied Packaged Food Chemicals and Quick Service Non-Controlling and Beverages Paints Restaurants Interests FY 2020 Revenue Breakdown1 FY 2
Slide 7: Meaningful domestic manufacturing presence across Nigeria
Meaningful domestic manufacturing presence… 7 11 factories across Nigeria Sokoto Katsina 6 South West • • Food Chemicals Yobe • Agro Allied Zamfara Jigawa Factories Kebbi Kano Borno Kaduna Bauchi 2 South East • Agro Allied Gombe Niger Factories Adamawa Kwara FCT 2 Plateau Nasarawa North Central Oyo
Slide 8: Supporting nationwide distribution
… supporting nationwide distribution 8 Logistics – Warehouse Footprint Quick Service Restaurants (QSR) Outlets 35 warehouses across 29 states 56 restaurants across 13 states Paint Retail Stores Food and Agro-Allied Distributors 94 paint retail stores across 33 states 1,091 distributors across 32 sta
Slide 9: HoldCo management focused on value creation
HoldCo management focused on value creation 9 Nkem Agboti Fola Aiyesimoju Vitus Ezinwa Company Secretary Group Managing Director Chief Operating Officer and General Counsel • Experienced finance professional and investor • Experienced executive and HR professional • Regulatory compliance expert and
Slide 10: And key operating segments
…and key operating segments 10 Mr. Alex Goma Mr. Gboye Adedeji Dr. Dele Ajayi Mr. David Wright Mr. Debola Badejo MD, Grand Cereals Limited MD, Livestock Feeds PLC MD, UAC Foods Limited MD, CAP PLC MD, UAC Restaurants Limited • Seasoned business • Seasoned executive with • Experienced business • Expe
Slide 11: FY 2020 highlights
FY 2020 highlights
Slide 12: Revamped and exited UPDC
Revamped and exited UPDC 12 Loss Before Tax (₦ mn) Interest Expense (₦ mn) Net Debt (₦ mn) 2018 2020 2018 2020 2018 2020 (263) (2,667) (1,513) (4,799) (20,288) (13,244) Background • In 2018, UAC prioritized addressing the challenges with UACN Property Development Company PLC (“UPDC”) • UPDC’s challe
Slide 13: Progressed merger of CAP and Portland Paints
Progressed merger of CAP and Portland Paints 13 ▪ On 26 October 2020, Chemical and Allied Products PLC (“CAP”) and Portland Paints and Products Nigeria PLC (“Portland 1 Paints”) announced their intention to merge their respective businesses ▪ The proposed merger is another milestone aligned with UAC
Slide 14: Macroeconomic review
Macroeconomic review 14 Real GDP Growth (%) Exchange Rate ₦:$ 2.3% 2.6% 600 2.1% 2.1% 1.9% CBN Parallel 500 0.1% 400 300 200 (3.6%) 100 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Jan-21 Oct-20 Jan-20 Apr-20 Nov-20 Dec-20 Feb-20 May-20 Sep-20 Feb-21 Mar-20 Jun-20 Jul-20 Aug-20 (6.1%) Q1
Slide 15: 2020 Full year results
2020 Full year results 15 Operating Free Cash Return on Revenue EPS Profit Flow Invested Capital1 FY FY FY FY FY ₦81.4bn ₦3.6bn 92 kobo ₦(3.0)bn 5.9% +2.7% (36.6%) +275 kobo +₦2.6bn (103 bps) vs FY 2019 vs FY 2019 vs FY 2019 vs FY 2019 vs FY 2019 (1) Invested capital used for ROIC calculation exclud
Slide 16: Clear inflection point in Group underlying performance
Clear inflection point in Group underlying performance 16 Profit for the year, in ₦ mn (FY 2016 to FY 2020) 5,667 3,928 963 (9,530) (9,256) 2016 2017 2018 2019 2020
Slide 17: Segment performance highlights
Segment performance highlights 17 Animal Feeds • Classified as “essential” so revenues least impacted by the stringent, COVID-19 related restrictions & Other Edibles • Price increases across major categories to offset input cost escalation 45% of Group EBIT • Focus on rationalising excess capacity,
Slide 18: Balance sheet and liquidity
Balance sheet and liquidity 18 Net Assets Net Cash Net Capex Cash Cycle ₦61.4bn ₦20bn (₦4.4bn) 102 days +₦0.8bn +₦2.6bn (₦1.8bn) +27 days vs Dec 2019 vs Dec 2019 vs Dec 2019 vs Dec 2019
Slide 19: Compelling growth outlook
Compelling growth outlook
Slide 20: Potential for significant value uplift with negative value attributed to operating platform
Potential for significant value uplift with negative value attributed to 20 operating platform Market Capitalisation Bridge, in ₦ mn • Cash & cash equivalents: N14.8bn • Eurobond investment: N2.2bn • Investment properties: N2.3bn • Market value of listed UPDC REIT units: N3.6bn 8 companies • N81.4 b
Slide 21: With clear value creation plans focused on three levers
With clear value creation plans focused on three levers 21 Value created 3 Acquisitions ▪ Selective M&A and bolt-ons Consolidate overlapping subsidiaries 2 ▪ ▪ Divest underperforming businesses Grow operating platforms ▪ Aggressive growth plans for 1 core platforms Return of capital ▪ Stable dividen
Slide 22: Corporate actions
\ \ Corporate acti \ | i t ge
Slide 23: Corporate actions: N7.1 billion distribution to UAC shareholders
Corporate actions: N7.1 billion distribution to UAC shareholders 23 1 ▪ Total dividend of 120 kobo per share (₦3.5 billion) comprised ▪ an ordinary dividend of 65 kobo per share; and ▪ a special dividend of 55 kobo per share. FY 2020 ▪ Implied dividend yield of 13.8% Dividend ▪ Qualification date: J
Slide 24: Appendix: Operating segment overview
Appendix 1 Operating segment overview
Slide 25: Snapshot of the animal feeds segment
Snapshot of the animal feeds segment 25 Overview Value creation Grand Cereals Limited • Expansion of oil capacity (higher margin product) • Private company; 71% ownership Margins • Improve procurement processes to leverage • Produces animal feed, cereals, oils and dogfood combined scale for direct s
Slide 26: Snapshot of the paints segment
Snapshot of the paints segment 26 Overview Value creation Chemical and Allied Products PLC • Public company listed on The NSE; 52% ownership • Aggressive footprint expansion Expand • Expand mid-tier offering • Produces decorative paint; sells via dedicated distribution network Range • Grow industria
Slide 27: Snapshot of the packaged food & beverages segment
Snapshot of the packaged food & beverages segment 27 Overview Value creation • UAC Foods is a leading packaged food and beverages • Invest in greenfield state of the art factory company • Implement plans to optimise snacks margins Grow • UAC Foods manages a family of brands across several product •
Slide 28: Snapshot of the restaurants segment
Snapshot of the restaurants segment 28 Overview Value Creation • UAC Restaurants (UACR) pioneered QSR in Nigeria with the launch of Mr Bigg’s in 1986 • Piloted 5 company-owned stores earning annualised ROI of 39% (ahead of plan) • In addition to the Mr Bigg’s chain, UACR also operates the Debonairs
Slide 29: Appendix: Additional Financial Information
Appendix 3 Additional Financial Information
Slide 30: Income Statement – FY 2020
Income Statement – FY 2020 30 Summary Income Statement ₦ mn, unless otherwise stated FY 2020 FY 2019 D% Revenue 81,358 79,202 2.7% Gross Profit 15,990 16,627 (3.8%) Gross Profit Margin (%) 19.7% 21.0% (134 bps) Operating Profit 3,597 5,666 (36.5%) Operating Profit Margin (%) 4.4% 7.2% (273 bps) Net
Slide 31: Performance Snapshot – FY 2020
Performance Snapshot – FY 2020 31 Revenue Profit Before Tax N mn D% N mn D% FY 2020 FY 2019 FY 2020 FY 2019 Animal Feeds & Other Edibles 54,224 51,818 4.6% Animal Feeds & Other Edibles 1,747 990 76.6% Paints 10,425 11,021 (5.4%) Paints 1,470 2,673 (45.0%) Packaged Food & Beverages 17,853 17,545 1.8%
Slide 32: Financial Position – 31 December 2020
Financial Position – 31 December 2020 32 Summary Balance Sheet Working Capital N mn Dec-20 Dec-19 D% N mn Dec-20 Dec-19 D% Non current Assets 40,986 26,019 57.5% Inventory 20,124 16,290 23.5% Current Assets 50,912 45,204 12.6% 2,701 1,896 42.5% Trade Receivables Other Assets 269 36,372 (99.3%) Trade
Slide 33: Cash Flow – FY 2020
Cash Flow – FY 2020 33 PBT to Free Cash Flow ₦ mn, unless otherwise stated FY 2020 FY 2019 D% Profit Before Tax from continuing operations 5,121 7,456 (31.3%) Profit/ (Loss) before tax from discontinued operations 544 (14,696) (103.7%) Non-Cash charges & other (1,636) (1,117) 46.5% Changes in workin
Slide 34: Appendix: UAC portfolio overview
Appendix 3 UAC portfolio overview
Slide 35: Overview of UAC's portfolio
Overview of UAC’s portfolio 35 Animal Feeds & Other Edibles Quick Service Restaurants (44% of Group EBIT) (0.2% of Group EBIT) • 71.43% held in Grand Cereals Ltd (79% of segment revenue) • 51.00% held in UAC Restaurants Ltd in a partnership with • 73.29% held in Livestock Feeds PLC (21% of segment r