UACN FY 2025 Results Conference Call Transcript

UAC of Nigeria Plc: FY 2025 Results Conference Call Transcript Date: Wednesday, 8 April 2026 3:00 PM WAT

Presenters:

• Mr. Fola Aiyesimoju (Group Managing Director)

• Mrs. Funke Ijaiya-Oladipo (Group Finance Director)

  Moderator

• Mrs. Cynthia Ojugo (Vice President)

1. Presentation Moderator: Good morning and good afternoon, ladies and gentlemen. Welcome to UAC of Nigeria PLC Full Year 2025 Results Conference Call. Please note that this call is being recorded.

   This conference call will be hosted by Fola Aiyesimoju, the Group Managing Director of UAC of Nigeria PLC, and Funke Ijaiya-Oladipo, the Group Finance Director. Following prepared remarks by UAC's management team, there will be an interactive Q&A session.

   I will now hand the call over to Fola Aiyesimoju. Please go ahead.

   Fola Aiyesimoju (UAC Group Managing Director) Introductory remarks

   Thank you, Cynthia. Good day and thank you for joining UAC's results call for the 2025 financial year. Funke and I will go through our prepared remarks, after which we will leave ample time for Q&A.

   Today, we will cover the 2025 operating environment, key initiatives we executed during the year including the acquisition of C.H.I., financial performance, our dividend proposal and our outlook for the business. We would not go through each slide verbatim, but we would reference slide numbers, which you can find at the top right of each page for ease of reference. Please turn to Slide 5.

   UAC is a house of scalable quality brands with a clear emphasis on Packaged Food and Beverages as a core growth pillar. In October 2025, we bolstered our position in this key segment with the acquisition of C.H.I. Limited. This was an important transaction, providing us with exposure to large, growing markets, quality talent, and excellent brands with very strong market positions. C.H.I. is the market leader in Nigeria's drinking yoghurt space, a top 2 player in Juices, Nectars, and Still Drinks, and is home to iconic brands like Chivita and Hollandia. The business is the No. 2 player in the sausage roll category with the SuperBite and Beefie brands, which complement UAC's Gala and Kingsway brands.

   Our combined Food and Beverages businesses, C.H.I. and UAC Foods, now command meaningful leadership positions across multiple attractive categories with scale and portfolio depth to effectively compete. The acquisition impacted UAC's reported numbers for 2025, with

   C.H.I.'s performance consolidated from the fourth quarter. There were also one-off costs and gains related to the acquisition that were captured in our audited results for the year.

   In 2025, we reported a profit before tax of ₦16.4 billion, 36% lower than our profit before tax reported in 2024. This was, however, impacted by almost ₦11 billion in net one-off items related to the acquisition. Stripping this out, underlying profit before tax was ₦27.3 billion, almost 70% higher than levels recorded in 2024, and is a truer reflection of our underlying operating performance.

   Revenues grew 73% to ₦340 billion, and this growth reflects three months contributions from

   C.H.I. plus very strong continued performance from our existing businesses, particularly our Packaged Food and Beverages and Paints businesses, which performed strongly.

   Overall, 2025 was a year in which we experienced a meaningful increase in the scale of our business, and our focus going forward will be to integrate C.H.I. under UAC's ownership, continue our work to drive margin expansion and accelerate cash generation, and our success in doing so will impact the next chapter of UAC's growth.

   We will now take you through the operating context and key highlights from the year before handing over to Funke to go through the financials in a bit more detail. Please turn to Slide 7.

   Macroeconomic review

   On this slide, we outline the macroeconomic backdrop against which we operated in 2025. Overall, this was a year of meaningful improvement relative to 2024. Inflation, which had peaked above 35%, moderated progressively across the year. The Naira stabilised and actually appreciated - a sharp contrast to the recent severe devaluation we had to navigate.

   Real GDP growth continued to strengthen, reaching just above 4% in the fourth quarter, and bond yields trended lower, reflecting an easing monetary environment, which positively benefited our borrowing costs. These are genuine improvements that created a more constructive backdrop for our businesses, and are the fruit of difficult reforms enacted by the government.

   On Slide 8, we show the movement in our key input costs. And here, we saw input prices moderating across almost all of the categories we track: maize, soya beans in the agricultural space, resins and titanium dioxide for our Paints businesses, and flour, vegetable oil, milk, and sugar for our Packaged Food and Beverages segment. We also saw petrol prices decline from highs reached in 2024, which positively impacted our distribution expenses. These tailwinds benefited us, and we captured them as is evidenced by the margin expansion you see in our businesses, most notably, Food and Beverages and Paints.

   On Slide 9, we showed the sharp decline in agricultural commodity prices, which actually created a challenge in our Feeds businesses. The reason for this is that in these businesses, we typically stockpile agricultural raw materials in the fourth quarter of each preceding year to cover a meaningful portion of the succeeding year. So, we entered 2025 with maize and soya bean inventory procured in 2024.

   You would see on this chart that prices meaningfully declined over the course of the year, which impacted us twofold. One was constant pressure on selling prices as the replacement costs declined. And in the fourth quarter, we had to take a one-off charge to bring the carrying value of our agricultural raw material inventory in line with net realisable value, and this was a

   ₦4.1 billion charge recorded in the fourth quarter.

   Next, we will go over the highlights for 2025, and this starts on Slide 11.

   2025 Strategic highlights

   On this slide, we touch on the C.H.I. acquisition, and I will not spend too much time here, as we had a call to go over this in November last year, and the presentation is on our website. Just a few highlights. C.H.I., with just under ₦500 billion in revenues for the full year 2025, adds meaningful scale to our business. It contributes excellent manufacturing capabilities and bolsters our house of scalable quality brands.

   We paid a consideration of just over ₦180 billion for the asset, with total transaction costs of

   ₦8.5 billion. Because the initial consideration was denominated in dollars, we hedged, and as the Naira appreciated, the hedge cost us just under ₦7 billion. As mentioned, the net impact of these costs, plus a bargain purchase gain, was ₦11 billion in our 2025 income statement.

   Work to integrate C.H.I. with UAC's ownership is underway, and the focus here is the governance model, financial controls, technology and people. These are top priorities, and we are fortunate to be implementing these alongside the strong team we inherited at C.H.I. and are happy with our progress thus far.

   Slide 12 covers other initiatives we worked on across the Group in 2025, and we can summarise these in four areas. The first and by far the most important continues to be talent. Here, we continued to work to fill executive roles across the Group. I should add that we benefited from prior investments in talent, with certain roles being filled internally. We focused on leadership development through our UAC Academy, which continues to grow, and through advanced programs in partnership with Oxford University and the Nigeria University of Technology and Management. We also continued to work on designing incentive schemes to align our employees with long-term value creation.

   We continued to focus on growth. Here, we deepened our retail footprint, particularly in our Paints segment with 136 new stores and retail touchpoints. There were product launches in our Foods and Paints segments to offer the consumer a broader range of offerings.

   In technology, you may recall that we transitioned to SAP S/4 HANA in 2022. That system was due for an upgrade last year, and we successfully executed that upgrade and now run on a more up-to-date version of the SAP S/4 HANA system with meaningful cost savings in our cloud infrastructure and better data quality across the group. We have also discussed in the past that we have a technology hub that continued to develop and fine-tune proprietary tools used to digitise and automate our core business processes.

   When talking about the hedging cost, I mentioned that we financed the C.H.I. acquisition initially with the U.S. dollar bridge loan. We had mentioned in November that the plan was to refinance that loan in Naira within a 3-month timeframe, which would have been sometime in April. I think Funke and team deserve special commendation for executing this in record time, with the Naira refinancing done by December of last year. So, the short-term U.S. dollar bridge has been termed out into 7-year Naira financing.

   I will now hand over to Funke to walk us through the financial performance in detail.

   Funke Ijaiya-Oladipo (UAC Group Finance Director) Group financial performance

   Thank you, Fola, and good afternoon, everyone. Please turn to Page 15, which provides an overview of the Group's financial performance comparing 2025 results with 2024.

   UAC Group recorded consolidated revenue of ₦340 billion in 2025. This was 73% higher than the prior year. When you strip out the one-off acquisition-related costs as well as the bargain purchase gain recognised because of the C.H.I. acquisition, our underlying performance is strong. Underlying operating profit of ₦33 billion was recorded. This is 73% higher. Our underlying profit before tax was ₦27 billion, 68% higher.

   Our reported earnings per share was 362 kobo. However, on an underlying basis, when we adjust for acquisition-related costs, it was 734 kobo, 1.5x higher than the 497 kobo recorded in 2024. We generated free cash flow of ₦14 billion compared to ₦2 billion in 2024. That is a sevenfold improvement and reflects the addition of C.H.I. to our group and the cash generating nature of UAC Group. We recorded a 6.8% return on invested capital.

   Please turn to Page 16, which shows the revenue contribution per segment. The key factor as you will see on this slide that impacts the year-on-year comparison is the acquisition of C.H.I. The 73% increase in revenue from the ₦197 billion recorded in 2024 to the ₦340 billion recorded in 2025 reflects the consolidation of C.H.I.'s performance from the fourth quarter of the year. Our revenue growth was also supported by strong performance from our Paints business, which grew top line 24% higher year-on-year, and our existing Packaged Food and Beverages business, which was up 28% year-on-year, and that more than offset the sales decline in the Animal Feeds segment.

   Please turn to Page 17, which shows a summary of the income statement. I have spoken to our top line, so I will start with the gross profit, which improved 69% year-on-year. Our gross profit margin, however, contracted by 51 basis points to 23%, and this reflects the impact of the inventory write-down in our Edibles and Feed businesses. We recorded operating expenses of ₦58 billion. However, underlying operating expenses was roughly ₦50 billion, 69% higher year-on-year, again, driven by the inclusion of C.H.I., so this impacts year-on-year comparison. It is worth highlighting that despite inflationary pressure and the higher absolute value of expenses, our underlying operating expenses to sales ratio improved by over 100 basis points to 14% from 16% in 2024, and this reflects our ongoing focus on cost discipline and operational efficiency. The next line item I will speak on is the net finance cost. We recorded ₦15.5 billion in 2025, and this reflects the higher borrowing and one-off hedge costs incurred as part of the acquisition of C.H.I. Limited. The share of profit from associate companies was ₦3.4 billion compared to ₦723 million in 2024, and this was supported by improved profitability at UPDC PLC and MDS Logistics, as well as the sale of non-core property assets at MDS Logistics.

   Please turn to Page 18, which shows an overview of the Group's financial position as at 31st of December 2025.

   Group financial position

   We have roughly ₦70 billion in net assets. Our net debt increased to ₦294 billion on account of the inclusion of C.H.I. Limited. Following the acquisition, the Group's long-term debt-to-EBITDA ratio is 3.2x. And as part of the value creation plan, we are focused on cash generation and expect leverage to moderate over the medium term. Capital expenditure of ₦7.3 billion was incurred across the Group. This spend is roughly 2% of group revenues and focused on maintenance CAPEX, replacing and upgrading assets to support operations. The Group's cash cycle increased by 5 days to 111 days from 106 days in 2024, reflecting the higher inventory days at C.H.I. Limited.

   Please turn to Page 19, which shows an overview of the Group's net debt profile. The key takeaways are that 54% of the Group's debt is short-term in nature, and this is working capital financing, while the balance, 46%, is long-term debt attributable to the addition of C.H.I. Limited to the Group. The Holdco's total debt of ₦107 billion, which is roughly 30% of the Group debt, reflects our Group Treasury structure, whereby UAC, the holding company, raises

   debt centrally and on-lends to subsidiary companies. This is part of our strategy to optimise our finance costs as it gives us flexibility to access a broader range of sources. At the end of 2025, our weighted average cost of borrowing was 16.3%, which is below the monetary policy rate, and we were able to achieve it because UAC carries an investment-grade credit profile. We are "A" and "A-" rated by DataPro and Agusto, which gives us access to the capital market at competitive rates. In 2025, UAC issued commercial papers as well as a 7-year callable bond to refinance debt, and this is in line with our focus on securing the best possible priced financing.

   This is the end of the financial highlights, so I will now hand the call back to Fola to take us through the next section of the presentation.

   Fola Aiyesimoju (UAC Group Managing Director)

   Thank you, Funke. Please turn to Slide 21. Here, we set out our plans for the current year.

   Key priorities for 2026

   Our priorities are clear: the first being to continue to focus on integrating C.H.I. under UAC ownership, the second being to continue our journey of improving our margins, and finally, ensuring that we convert profitability to cash.

   The work to integrate C.H.I. with our operating model, as I mentioned, is underway, and we are quite pleased with progress around governance, controls, deployment of our technology tools and ensuring that we have the right people in the right roles. We have a detailed roadmap, and we are executing against this. We are benefiting from the improved scale of the business across procurement, manufacturing efficiency, and spreading our overhead across a much larger revenue base, and we think that these are going to support improvement in overall profitability and margin profile.

   One of our core focus areas and value creation levers is capital allocation. We aim to utilise this focus on enhancing our cash generation via working capital optimisation, being very disciplined and rigorous in capital expenditure assessment, and continuing to seek financing at the most effective possible terms and importantly, divesting non-core assets. In addition to generating capital from divesting non-core assets, it also frees up meaningful governance and management bandwidth to focus on our core. We made good progress in 2025 with free cash flow going from ₦2.1 billion in the preceding year to just about ₦14 billion for the full year 2025, and we plan to continue this trajectory in 2026.

   Corporate action

   The Board of UAC has proposed a dividend of ₦1 per share, which we will be put to shareholders at our Annual General Meeting in June. The qualification date for that dividend is on the 11th of June, and subject to shareholder approval, it will be paid the day after the AGM on the 26th of June. This brings us to the end of the prepared remarks. I will just touch briefly, though, on the external environment, which is dynamic.

   Risks in 2026

   We had a beneficial year in 2025 with tailwinds, which the conditions were on balance, more supportive than in 2024. We went into 2026 cautiously optimistic about continued improvement, with inflation moderating, the currency being stable, and there being growth momentum. However, we have been watching the developments in the Middle East carefully, and we have begun to see headwinds creeping into the environment, with elevated shipping costs, rising prices of certain imported raw materials and delays in shipping times. So, we are monitoring this very closely, actively managing our procurement and in certain instances,

   seeking avenues to sort of lock-in prices and hedge to mitigate against this risk. It is an area we will continue to focus on over the course of the year, and work very hard and do our best to ensure that we navigate these challenges effectively.

   Overall, we feel that we are a stronger, larger and better positioned business than we were 12 months ago. We feel we have strong foundations in brands, people and technology, and this gives us confidence as we navigate the current environment.

   So, thank you, and we will now take questions.

2. Questions and Answers

Your first question is from Olasunkanmi Ogundare from Leadway Asset Management.

He wrote, "Can management provide more detail on performance across key business segments and which segments contributed most to revenue growth versus margin pressure?" He also asks: "Following the C.H.I. Limited acquisition, what are the key integration risks and expected synergies? When should investors begin to see benefits reflected in earnings?" Lastly, "the company proposed a dividend of ₦1 per share, significantly higher than the prior year despite a decline in earnings. Can management explain the rationale behind this increase and how it aligns with earnings and cash flow?"

Thank you, Olasunkanmi. I jotted down 3 questions. One was segmental contribution; second, integration and risk; and the third was our thinking around dividends.

On Slide 27, we broke down our performance by segment, and you would see that the big drivers of the Group's performance were Packaged Food and Beverages and Paints businesses. So those are the big drivers of revenue and margin. Our Feeds businesses, which are the other meaningful-sized part of our business, struggled on account of the sharp decline in agricultural raw material inputs. So, we have that outlined on Slide 27, but just to recap, Packaged Food and Beverages and Paints, which contribute probably 70%-80% of revenues and maybe 90% of profitability, were the key drivers of our business last year.

On integration risk, we are now 6 months into our ownership of C.H.I., and I would say it has been hard work, but we have been supported by a strong team we inherited at C.H.I. I will say we are quite pleased with where we are. If I was going to flag, one thing that I would say remains a big risk is that C.H.I. operates on a Microsoft ERP system. The rest of our Group is on SAP S/4 HANA, and we are going to have to harmonise these platforms. We have done it before, now twice, and it went very well, but it is not an initiative to be underestimated. So, it is one that we are going to approach with great care and consideration.

As regards dividend, those who followed us for a while know that we tried to maintain a fixed dividend, which was 22 kobo in recent times, until we changed. The most recent change was a reduction, for those again who remember, as we built our capital base, which led us to a position where we made this large acquisition. We have assessed where things are, we have assessed our view of the future, and we feel that the current level proposed is one that fits well with our plans. Although the profitability declined, as I mentioned, the underlying profit increased quite meaningfully when you strip out the one-off costs related to the acquisition.

Uthman Yuguda (Stanbic IBTC Pension Managers)

Hi Fola, thank you so much for your presentation. I have 2 questions for you. The first question is regarding the revenue that was presented. Last year in November, we had a meeting, and it was poised that we were expecting at least ₦400 billion from the C.H.I. acquisition, but I have seen for 2025, we got about ₦127 billion thereabout from C.H.I. Could you please just explain what happened? Or just provide some clarity regarding that.

With regards to the dividend policy, is it safe to assume that the ₦1 per share is the new

dividend floor for the company? Or should we expect any variability in the future? Thank you.

Thank you very much, Uthman. I will clarify the revenue point. Yes, we indicated, I think you are right, about ₦400 billion or so in revenue from C.H.I. The company actually did much better and delivered revenues of about ₦500 billion for the full year. But only the fourth quarter was consolidated. So, what you see is one quarter of the full-year performance, and 2026 is going to be the first year in which C.H.I.'s full revenues and operations are consolidated for a full year with the rest of UAC Group. I hope that clarifies that. So, the full-year numbers for C.H.I. last year were just under ₦500 billion, but what we have consolidated is just a quarter.

Our dividend approach has not changed in that we will maintain a number until we change that number. So yes, there should be no expectation of variability, unless something changes. What changed the last time our dividend numbers changed was that we were preserving capital, which allowed us to make this big acquisition. Where we are now is that we felt we could release some of that capital, given where we see things currently. If something changes, we will communicate again with the market, but this represents our view as of now.

Uthman Yuguda (Stanbic IBTC Pension Managers) Thanks so much, Fola.

Hi, Fola. Thank you for your presentation. I have actually listened to your presentation, and you talked about a one-off payment. Now, going forward in 2026, is there any way these one-off payments could affect the financial statement in 2026? Thank you.

Fola Aiyesimoju (UAC Group Managing Director)

Good afternoon, Buchi. The short answer is no. The one-off costs were related to the acquisition of C.H.I. So that is done and dusted. That deal was done in October of last year (2025). So, there is no way that those numbers will affect our performance for this year (2026).

Hi, Fola. I just wanted to ask again, with regards to the Paints segment this time, could you provide any kind of update with regards to the penetration in West Africa, and the niche segment that you guys plan to operate in as well? Is there any update in terms of market penetration and revenue generation as well? Thank you.

Fola Aiyesimoju (UAC Group Managing Director)

Hi Uthman, very timely question. We set out to do three or four things with the Paints segment. The first, you may recall, was deepening our product offering. We were extremely strong in the premium decorative space, and we wanted to deepen our offering in the mid-tier and also in the marine and protective. So, we have launched, together with AkzoNobel, a new range called "Spruce", and we launched that late last year into this year and early reaction has been very strong and we are quite excited about the potential for this space because it opens up an entirely new segment to us that is at least as big as the segment in which we are very, very strong. So that is one.

The second is that to deepen our presence in the marine and protective, we have now opened two points of presence in the South-South of the country, in the oil and gas region and we expect to benefit from the reform and growth we are seeing in the oil and gas sector.

The third was our desire to expand regionally. We have open presence in Cameroon, but we concluded that the prize of securing a meaningful position in the mid-tier and, frankly, value segments of Nigeria was far greater than anything we would get regionally. So, it received a lot less priority than the two other initiatives that I have alluded to.

We also rolled out a meaningful number of additional retail points of presence, about 160 in total. About 50 of those were dedicated to our brands, and the rest are sort of multi-brand retail spaces. So, I would say four different things that we implemented in the Paints space that we expect to drive meaningful growth going forward.

Alright. Good afternoon, everyone. Thanks for the presentation. My first question relates to your comments regarding divesting non-core assets. I just want to get a sense of how you look at it. Are you looking at it from fixed assets from C.H.I., or any of the legacy UAC businesses, or are you looking at business segments?

My second question is on the QSR business segment. That business segment has struggled for a while. How are you thinking about that business segment going forward?

My third question is on product launch. On your last call, you mentioned that a bigger pack of Gala was launched, perhaps 'Odogwu'. I consciously tried to look for it on the streets, and I do not think it is out there. Perhaps, just to give an update in terms of the market penetration for that product.

Fola Aiyesimoju (UAC Group Managing Director)

Thank you. So, I have three questions. One was just colour around our non-core asset sales, thoughts around QSR and Gala Odogwu.

By non-core asset sales, we mean both fixed assets and business segments. So, both, not one or the other. But certainly not from C.H.I. From C.H.I., we are assessing the need for further investment in capacities, it is growing very fast.

The way we think about this is - the first one is return on invested capital. Where an asset is not generating sufficient return on investment capital, we divest that asset. We have done quite a lot of non-core real estate divestments over time because the returns on those assets were low single digits. The second is - we periodically assess the potential for an asset relative to the overall scale of the Group. Does it have the potential to move the needle of the Group? So, I will say those are the two lenses through which we would look at assets. For the fixed assets, we also think about future needs. Whilst we may have a currently low generating asset,

say a piece of land, we may think that it is strategically located and could be the future site of a factory. We will keep that kind of asset, but where it does not meet those tests, we divest.

Similarly, for our portfolio, we have said repeatedly that we think any one of the segments UAC is exposed to, either as the controlling or minority shareholder, is a very attractive segment, but we have sought to allocate our time and capital to ensure we get the maximum return. So, we divested out of logistics a few years ago, out of real estate a few years ago, and combined our Paints businesses. The ongoing assessment of the portfolio to ensure that we are maximising our talent and capital at the highest opportunity where we can win is something that we will continue to do.

QSR has struggled and, frankly, did a bit worse in 2025 than it did in 2024, but quite a talented team started with the business in January of last year, and we have seen meaningful progress to the bottom line of the business, which we expect to continue over the course of this year. It is fair to acknowledge that it is quite a small contributor to the Group. I think last year it did revenues of about two and a half billion Naira in a Group that recorded ₦340 billion, and that delta will be bigger this year. So, it is one that we are going to continue to think through, "how do we support this talented management team in a framework that ensures that a business that is not as big as some of its sister companies has the best opportunity to thrive''.

On Gala Odogwu, this is one that we should take offline. It is doing very well, actually. When we launch a new product, one of the health markers we check is, can the product get to 5% of total segment sales. This has shot past that very quickly. So, happy to chat with you offline about the challenges you found with the availability of this product. But from what we see, it is doing well financially.

Fola Aiyesimoju (UAC Group Managing Director)

Very clear. Thank you, Oluwakemi, for the questions. First thing I would say is that the working capital balances you see, as you know, are spot. So, the working capital balances have been a snapshot as of the 31st of December, whereas the revenue numbers that you see would be UAC 12 months, C.H.I. 3 months. Again, as we begin to see a full annual consolidation of C.H.I., those numbers would make a lot more sense to you. So, we are not comparing apples with apples in this particular case. That said, you may recall that one of the things we focused on doing and have been quite successful at, as UAC Group, is making sure that we have the optimal level of working capital. Whilst we think the working capital balances are bigger on account of a Group that has increased almost three times in size, part of our core job is making sure that those levels are optimal, so we unlock capital.

As regards CAPEX, we constantly spend on maintenance and small capacity expansions, but nothing noteworthy. I would say nothing out of historical trend for the business.

On US-Iran war, the challenges in the Middle East, we have seen small price increases so far - 2%, 3% here. We have seen diesel prices almost double in Nigeria, and I will say, perhaps most concerningly, is we have seen our planning be impacted. So, an item which should have been shipped to Nigeria with an estimated 2 weeks sailing time, we are now seeing those extend meaningfully. We have mapped every single SKU and every single location that is impacted. We have, in certain instances, identified alternative supply and shipping routes that

are not affected by the Strait of Hormuz and have begun to implement those plans. But yes, we have seen those headwinds begin to come through.

We are constantly looking for ways to innovate. There are small innovations in our Ice Cream business, Paints business, and at C.H.I., we are also looking at innovation. So yes, we are constantly looking for ways to provide a broader range of product offerings to our customers.

Fola Aiyesimoju (UAC Group Managing Director)

Sruti, thank you very much. You are very kind. You have been a supporter and pusher of us every step of the way. So, thank you for driving and inspiring us. I will start with the North Star. My colleagues and I have a purpose. Our purpose is to see whether we can use the work we are doing to build an example of excellence and prosperity out of this country, underpinned by integrity. So that is the North Star, and it reflects itself, whether it is in juice, in sausage rolls, or in buckets of paint. We want to see if we can create an example of excellence and prosperity underpinned by integrity. By prosperity, we mean shared prosperity. So, we pay a lot of attention to the welfare and benefits of everyone, from the most junior staff and, of course, to our shareholders.

Near term for the Group, post C.H.I. is crystal clear to us. We had a value creation plan for this asset. So, we need to work very hard on delivering on that value creation plan. We are off to a good start, but there is still a lot of work to do. So that is crystal clear to us. We have additional work to do to simplify the Group, which would unlock capital and streamline management focus. We have interesting growth levers for our existing businesses. Should we succeed in those three steps, we would look up again and see what is next, but we think our hands are going to be quite full over the next 12 to 24 months.

Fola Aiyesimoju (UAC Group Managing Director)

Okay. In terms of the impact of the challenges in the Middle East, I would split them into two, which are: planning and delivery of imported materials - those will be largely in the Packaged Food and Beverages and the Paints space. The second would be inflationary - that would be across the board. If diesel prices double, that affects all our businesses. So those are the two buckets I will split them into. Will it affect our performance in the next few quarters? Yes, but maybe not in the way you see it, because we are adjusting. We anticipate the headwinds, and we adjust. So, what we are doing is adjusting to ensure that we are not negatively impacted by these headwinds that we see.

In terms of possible portfolio realignment and exit. All I can share is our framework and to stress that it is not an event. It is something that I think we have done consistently over the last five years, including acquiring. You may also recall that we bought out our partners in our Foods business to own 100%, and we have discussed an acquisition. So, it is something that

is part of our core management process at UAC, and as soon as we reach a conclusion on the topic, we will be sure to communicate that to you, our investors.

Fola Aiyesimoju (UAC Group Managing Director)

Short and long answer are a resounding no. We think we are very fortunate to have amazing brands in the snack space. The respective teams have deep pride in their products, and they compete. I think the benefit of that is that the consumer wins. So, we are very happy with our positions in that segment.

"with C.H.I.'s acquisition, what is the amount of imports to total inputs?"

Fola Aiyesimoju (UAC Group Managing Director)

I would have to do very rough math, but C.H.I. has a meaningful degree of exposure to imports. I would say north of 75%, or maybe 80%. Again, we need to slice this actually, because there is the upstream import - we import directly equipment, laminates for packaging, and milk powder and concentrate to be the direct import. So let us call that 50% - 60%. Then, there is also the indirect import - things like flour and refined sugar, for which the upstream materials, being raw wheat and raw sugar, are imported. CAP also with titanium dioxide, calcium carbonate and resins, has a meaningful high import. I would say again, 75% - 80%. Then the Feed businesses where the biggest input, maize and soya, would be the ones that have the biggest domestic. So, the numbers by segment are a lot clearer to me. What it comes to on a consolidated basis, we can share with you offline, but it would be C.H.I. and Paints, 75 - 80%; UAC Foods, roughly 50-50%, and the Animal Feeds and Edibles, more than 75% would be domestic.

Fola Aiyesimoju (UAC Group Managing Director)

Isaac, we unfortunately do not give forward guidance. The good news is that in about 3 weeks, we will publish our Q1 numbers, which will have a full consolidation of C.H.I. and will give a sense of our steady state. Funke, correct me if I am wrong, there are no one-offs or exceptions in there. So, I would say please just be patient with us and look out for the Q1 numbers.

Fola Aiyesimoju (UAC Group Managing Director)

Uthman, it is a very difficult question to answer, because, fortunately or unfortunately, in an election year, there is not only one thing happening, if that makes any sense. So, in the most recent election year, Nigeria was going through extremely difficult macroeconomic conditions. Whether the market was slow because of the elections or the macro with inflation multiple, exchange rates and so on, we do not know. Going into this year, we are seeing tailwinds. Let us ignore, in the last few weeks, what we have seen with the challenge in the Middle East. We are seeing a stronger consumer; we are seeing strong demand. But whether that is on account

of an election or because GDP has gone from sort of 2% to north of 4%, inflation from 35% to about 15%, is difficult to isolate. So, we are happy with market conditions, but I think it is very difficult to isolate exactly what is election driven versus broader macro conditions in any particular election year.

Fola Aiyesimoju (UAC Group Managing Director)

Thank you, Charles. I will point you to slide 14. Charles, look, we do not view ourselves as diversified. We view ourselves as just a business with scalable quality brands, and if you look at the way we shaped the business, we exited our logistics business because it does not fit with the house of scalable quality brands, ditto real estate. Now, even within this house of scalable quality brands, as I have mentioned, where things do not have the potential to move the needle or do not generate returns that are in line with expectations, we may exit them. Crucially, this is part of our ongoing work; it is not an event, and when we reach conclusions, we take action and communicate to the market.

Fola Aiyesimoju (UAC Group Managing Director)

Thank you Cynthia, and thank you, everyone, for participating in our results presentation. We appreciate your continued support, and I wish everyone a wonderful rest of the day. Thank you.