AGENDA 1. WELCOME AND TRADING REVIEW PEARSON GOWERO MATTS VALELA - - PowerPoint PPT Presentation

AGENDA

1. WELCOME AND TRADING REVIEW PEARSON GOWERO

• 2. FINANCIALS

MATTS VALELA

• 3. UPDATE ON ASSOCIATES & F16 FOCUS

AREAS PEARSON GOWERO

• 4. DISCUSSION/QUESTIONS

ALL

• 5. REFRESHMENTS

ALL

VOLUME BY BEVERAGE CATEGORY

• Declined by 2%

LAGER BEER

• SBs declined by 15%
• Alt Bev declined by 4%

SOFT DRINKS

• Declined by 12%

CHIBUKU

• 1. Stressed consumers – fewer people on regular income. Accelerated job

losses post court ruling.

• 2. Tightening liquidity – traders destocking due to cashflow constraints;

also evidence of overtrading.

• 3. Strong US Dollar – increase in imports from regional markets. Need for

price corrections.

• 4. Underperforming key sectors of the economy – agriculture, mining,

tourism and informal sector.

• 5. Escalation in power cuts - disruptions in production and restricted cold

availability.

TRADING ENVIRONMENT

VOLUME PERFORMANCE SUMMARY – H1

Category Actual Volume 000hl % Change

• n Prior

Year

• 1. BEVERAGES (HLS 000)

1.1 Clear Beer 1.2 Sorghum Beer 1.3 Sparkling Beverages 1.4 Alternative Beverages 682 1 789 605 89 (2) (12) (15) (4) Total Beverages 3 165 (10)

• 2. Malt Tonnage

19 514 18

LAGER BEER VOLUME & REVENUE PERFORMANCE

945 1 027 925 695 682 154 170 164 139 126

• 20

40 60 80 100 120 140 160 180 200 400 600 800 1 000 1 200 F12 F13 F14 F15 F16 Gross sales $million Volume Hl '000

Volume Gross Sales

TRADING REVIEW - LAGER BEER MIX

HLs ‘000

100 200 300 400 500 600 700 F15 F16 6% 14% 68% 60% 26% 26% Premium Main Stream Economy

• Slower decline in Q2.
• Eagle lager sustaining volume.
• Premium segment holding.
• Core lager remains in decline hence price rollbacks in

October.

• Expansion into new beer styles (Flying Fish, Castle Lite Lime

& Castle Draught).

LAGER BEER

648 720 776 708 605 83 103 110 99 82

• 20

40 60 80 100 120 100 200 300 400 500 600 700 800 900 F12 F13 F14 F15 F16 Gross sales $million Volume Hl '000 Volume Gross Sales

SPARKLING BEVERAGES VOLUME & REVENUE PERFORMANCE

TRADING REVIEW - SPARKLING BEVERAGES MIX

HLs ‘000

100 200 300 400 500 600 700 800 F15 F16 59% 55% 41% 45% Convenience pack RGB

SPARKLING BEVERAGES

• Growth in value packs (2L PET).
• Loss of market share to value brands; affordability issues.
• Major raw materials remain relatively expensive.
• Reduced discretionary income – a key driver of consumption for

soft drinks.

• Competition largely in flavours and one way packs.
• Proliferation of alternative beverages.

SORGHUM BEER VOLUME & REVENUE PERFORMANCE

1 784 1 639 1 794 2 037 1 789 54 61 75 94 95

• 10

20 30 40 50 60 70 80 90 100 500 1 000 1 500 2 000 2 500 F12 F13 F14 F15 F16 Gross Sales $million Volume Hl '000 Volume Gross Sales

9% 24% 49% 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% F14 F15 F16 OCTOBER 2015 % CONTRIBUTION

Accelerated switch to Chibuku Super

CHIBUKU SUPER CONTRIBUTION

SORGHUM BEER

• Growth in Chibuku Super but curtailed by disruptions to supply and limited

capacity.

• Extended logistics due to freighting of product from one site.
• Overall volume affected by poor performance in agriculture; reduced

consumption in rural areas.

• Impact of lower transaction volume (1.25 litre Chibuku Super v 2 litre

scud).

BEVERAGE VOLUME CONTRIBUTION

F15 F16

19% 58% 20% 3% Lagers Sorghum SBs Alternative beverages 22% 57% 19% 2% Lagers Sorghum SBs Alternative beverages

VOLUME CONTRIBUTION BEER CATEGORY

F15 F16

25% 75% Lagers Sorghum 28% 72% Lagers Sorghum

MARKET SHARE

Lager Beer Sorghum Beer Sparkling Beverages F16 98% 86% 93% F15 98% 86% 96%

Competitors challenging SBs space.

OTHER HIGHLIGHTS

• 1. Fairbridge Brewery commissioned. Capacity fully utilised by October

2015.

• 2. Renewed focus on value chain costs and localising inputs where

possible.

• 3. Refreshing of beer brands and introduction of new beer styles.
• 4. Increased focus on distribution; injected additional vehicles to increase

insourcing of logistics.

• 5. Retail prices remain a focus across the entire business.

AGENDA

1.

FINANCIAL HIGHLIGHTS

2.

FINANCIAL STATEMENTS

% CHANGE VS PR. YR VOLUME REVENUE Volumes (000hls)

• Lager Beer

(2%) (9%)

• Sorghum beer

(12%) 1%

• Soft Drinks

(13%) (18%) Total (10%) (8%)

VOLUME & REVENUE PERFORMANCE ENDING 30 SEPTEMBER 2015

SEGMENT OPERATING INCOME

September 2015

US$’ 000

September 2014

US$’ 000 LAGER BEER 12 862 12 354 SPARKLING BEVERAGES 7 850 15 008 SORGHUM BEER 18 367 24 227 TOTAL REPORTABLE SEGMENTS 39 079 51 589 ALL OTHER SEGMENTS 4 388 2 833 TOTAL OPERATING INCOME 43 467 54 422

F16 F15 BEVERAGE CATEGORY $/HL $/HL

• Lager Beer

116 118

• Sorghum beer

45 39

• Soft Drinks

114 117

NPR $ PER HECTOLITRE BY BEVERAGE TYPE

FINANCIAL HIGHLIGHTS

REVENUE

Decline by 8% to $269 million (Turnover - $315m)

EBIT

Down by 20% to $43,5 million

OPERATING MARGIN %

Down from 21,47% to 18,21%

FINANCIAL HIGHLIGHTS

cont…

EBITDA Down by 16% to $59,4 million ATTRIBUTABLE INCOME Declined by 19% to $35,7 million INTERIM DIVIDEND Up by 4% to US1,40cents ($17,3 million)

STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD

SEPT 2015 US$000’s SEPT 2014 US$000’s REVENUE 269 021 291 471 Operating income 43 467 54 422 Net finance income 2 688 2 459 Share of associates profit 1 463 1 064 PROFIT BEFORE TAX 47 618 57 945 Taxation (11 885) (14 647) TOTAL COMPREHENSIVE INCOME 35 733 45 007

ANALYSIS OF ATTRIBUTABLE INCOME

2015 US$000’s 2014 US$000’s Profit for the half year from

• perations attributable to:

Owners of the parent 35 733 44 090 Non-controlling interests

• 917

35 733 45 007

EARNINGS PER SHARE

SEPT 2015 SEPT 2014 % Change Normal EPS - Cents 2,89 3,55 (19) Fully Diluted EPS - Cents 2,87 3,53 (19) Dividend per share - Cents 1,40 1,35 4

ASSETS 2015 US$000’s 2014 US$000’s Non-current assets Property, plant and equipment 338 182 338 592 Investments in associates 36 065 22 552 Investments, loans and trademarks 11 900 12 139 TOTAL NON-CURRENT ASSETS 386 147 373 283 CURRENT ASSETS Inventories 96 779 104 401 Trade and other receivables 56 498 47 399 Cash and cash equivalents 135 864 129 446 Assets classified as held for sale

• 26 272

TOTAL CURRENT ASSETS 289 141 307 518 TOTAL ASSETS 675 288 680 801

STATEMENT OF FINANCIAL POSITION SEPTEMBER

STATEMENT OF FINANCIAL POSITION SEPTEMBER

EQUITY AND LIABILITIES 2015 US$000’s 2014 US$000’s Share Capital 12 443 12 358 Share Premium 30 134 30 066 Share Option Reserve 5 341 4 727 Retained Earnings 415 227 377 544 Equity attributable to equity holders of the parent 463 145 424 695 Non-controlling Interests

• 9 225

Shareholder’s equity 463 145 433 920 Long- term borrowings 70 000 40 000 Deferred tax liabilities 45 068 36 520 115 068 76 520 CURRENT LIABILITIES Short term borrowings

• 60 520

Interest free liabilities 97 075 109 841 TOTAL CURRENT LIABILITIES 97 075 170 361 TOTAL EQUITY AND LIABILITES 675 288 680 801

cont…

CASH FLOW

2015 US$000’s 2014 US$000’s Cash generated from

• perations

58 888 58 776 Net cash invested (14 584) (13 317) Net funding 65 864 29 610

SHARE CAPITAL MOVEMENTS

Shares in Issue as at 31 March 2015 1 242 568 675 Share Options Exercised 1 745 300 Shares in Issue at 30 September 2015 1 244 313 975

AFDIS

• Growth in volume, revenue and profitability.
• Growth in ready to drink (ciders) and brown spirits.
• Competitive pressures – grey imports and white spirits.

SCHWEPPES ZIMBABWE LIMITED

• Volume and revenue under pressure.
• Improvement in financial performance.
• Beitbridge Juice resumed supplies of juice concentrates to bottlers.
• Launch of Bonaqua water brand at competitive prices.

NAMPAK ZIMBABWE

• Listed entity – still to report full year results

F16 FOCUS AREAS

• 2. Affordability / Competitiveness
• Lager beer prices reduced in October.
• Phased roll back on soft drinks in progress.
• 3. Cost efficiency
• Working with value chain partners to correct input costs.
• Progress on engagement with our people on cost containment.
• Cost of services and utilities difficult to contain – largely from local authorities & govt.
• 1. Accelerating additional investments in Chibuku Super, next two plants will go up

simultaneously.

• 4. Managing headwinds
• Strong dollar continues to encourage imports.
• Water and power shortages likely to worsen during balance of year.
• License to trade issues – regulatory and operating environment increasingly onerous.

THANK YOU

Thank You