AGENDA 1. WELCOME AND INTRODUCTION PEARSON GOWERO 2. TRADING - - PowerPoint PPT Presentation

AGENDA

• 1. WELCOME AND INTRODUCTION

PEARSON GOWERO

• 2. TRADING REVIEW

PEARSON GOWERO

• 3. FINANCIALS

MATTS VALELA

• 4. DISCUSSION/QUESTIONS

ALL

• 5. REFRESHMENTS

ALL

VOLUME BEVERAGE CATEGORY

• Declined by 8%

LAGER BEER

• SBs declined by 6%

SOFT DRINKS

• Declined by 3%

SORGHUM BEER

• 1. Underperforming economy – slump in commodity prices and poor agricultural output.
• 2. Cash shortages – impact on discretionary spending. Low consumer confidence.
• 3. Liquidity challenges – customer cash/debtors cycles.
• 4. Job losses and the inability of the economy to generate new jobs.
• 5. Strong US Dollar – increase in imports from regional markets as local products

become more expensive.

• 6. Delays or inability to meet wage/salary payments by local authorities, parastatals,

industry and central government.

• 7. Policy risk – discord in policy implementation discouraging FDI.

TRADING ENVIRONMENT

VOLUME PERFORMANCE SUMMARY

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 1 307 3 587 1 385 190 (8) (3) (6) (2) Total Excluding Associates 6 469 (5)

• 2. Malt Tonnage

24 391 11

QUARTERLY VOLUME & REVENUE PERFORMANCE

1 526 1 639 1 726 1 578 $150 $159 $173 $143

$100 $120 $140 $160 $180 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 Apr-Jun Jul-Sep Oct-Dec Jan-Mar Gross Sales $million Volume Hl '000 Volume Gross Sales

LAGER BEER VOLUME & REVENUE PERFORMANCE

1 981 2 060 1 697 1 414 1 307 $326 $352 $316 $278 $235

$0 $50 $100 $150 $200 $250 $300 $350 $400 500 1 000 1 500 2 000 2 500 F12 F13 F14 F15 F16 Gross sales $million Volume Hl '000 Volume Gross Sales

LAGER BEER FULL YEAR VOLUME PERFORMANCE F11 TO F16

TRADING REVIEW- LAGER BEER MIX

HLs ‘000

• 200

400 600 800 1,000 1,200 1,400 1,600 F15 F16 8% 14% 66% 59% 26% 27% Premium Main Stream Economy

• Increase in parallel imports.
• Market shares holding.
• Growth in value brands.
• Competition from other forms of alcohol increased.
• Leveraged association with SABMiller and

introduced a number of new products.

LAGER BEER

It all comes together with a CASTLE

1 480 1 615 1 589 1 472 1 385 $202 $231 $225 $204 $183

$0 $50 $100 $150 $200 $250 200 400 600 800 1 000 1 200 1 400 1 600 1 800 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

• 200

400 600 800 1,000 1,200 1,400 1,600 F15 F16

60% 58% 40% 42%

Convenience pack RGB

SPARKLING BEVERAGES

• Growth in value packs (2L PET) and 1L returnable glass bottle

pushed volume away from higher margin packs.

• Higher demand in December/January driven by heat wave.
• Slow down in imports of value brands following duty increases.
• Parallel imports from Botswana and Zambia benefitting from trade

agreements (lower duties) and stronger USD.

• Competition largely on flavours as brand Coke remains dominant.
• Leveraging TCCC franchise arrangements to engage competition.

SORGHUM BEER VOLUME & REVENUE PERFORMANCE

3 354 3 080 3 442 3 716 3 587 $103 $118 $146 $176 $193

$0 $50 $100 $150 $200 $250 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 F12 F13 F14 F15 F16 Gross Sales $million Volume Hl '000 Volume Gross Sales

TRADING REVIEW- SORGHUM BEER MIX

HLs ‘000

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 F15 F16 71% 44% 29% 56% Chibuku Super Chibuku

SORGHUM BEER

• Additional Chibuku Super capacity commissioned in

October at Fairbridge Bulawayo.

• Recovery in standard Chibuku volume following

price review.

• Gain in value and market share driven by Chibuku

Super.

• Chibuku products offering an accessible and

affordable entry into commercial alcohol.

BEVERAGE VOLUME CONTRIBUTION

F15 F16

20% 55% 22% 3%

Lagers Sorghum SBs Maheu

20% 56% 21% 3%

Lagers Sorghum SBs Maheu

VOLUME CONTRIBUTION BEER CATEGORY

F15 F16 28%

72%

Lagers Sorghum

27% 73%

Lagers Sorghum

UPDATE ON ASSOCIATES

AFDIS

• Soft Volume
• Affordability challenges

SCHWEPPES ZIMBABWE LIMITED

• Volume holding
• Volume and revenue pressure – new growth areas being explored while

sorting out supply chain bottlenecks

• 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 has reported steady increase in earnings in their

half year results to March 2016

AGENDA

• 1. FINANCIAL HIGHLIGHTS
• 2. FINANCIAL STATEMENTS

VOLUME PERFORMANCE SUMMARY

Category Actual Volume 000hl % Growth

• n Prior

Year

• 1. BEVERAGES (HLS 000)

1.1 Clear Beer 1.2 Sorghum Beer 1.3 Sparkling Beverages 1.4 Alternative Beverages 1 307 3 587 1 385 190 (8) (3) (6) (2) Total Excluding Associates 6 469 (5)

• 2. Malt Tonnage

24 391 11

GROSS SALES

• Down 15% to $235 million

LAGER BEER

• SBs down 10% to $183 million
• Alt.Bev down 17% to $14 million

SOFT DRINKS

• Up 10% to $193 million

SORGHUM BEER

FINANCIAL HIGHLIGHTS

REVENUE

Declined by 7% to $538,2 million (Turnover - $633m)

OPERATING MARGIN %

Down from 22,08% to 20%

EBIT

Down by 14% to $96,1 million

FINANCIAL HIGHLIGHTS

EBITDA

Down by 10% to $129 million

ATTRIBUTABLE INCOME

Declined by 13% to $80,1 million

DIVIDEND PER SHARE DIVIDEND PER SHARE

Up 3% on prior year Interim dividend paid per share- US 1,40 cents Final dividend proposed per share- US 2,35 cents

Cont….

EARNINGS PER SHARE

Decreased by 13% to US6,49 cents

Special Dividend Special dividend proposed per share – US 0,95 cents

STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD

MARCH 2016 US$000’s MARCH 2015 US$000’s REVENUE 538 198 576 552 Operating income 96 072 111 136 Net finance expense 5 895 7 362 Share of associates profit 3 944 3 265 PROFIT BEFORE TAX 105 911 121 763 Taxation (25 822) (29 809) PROFIT FOR THE YEAR- CONTINUING OPERATIONS 80 089 91 954 Profit for the year from discontinued operations

• 846

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 80 089 92 800

ANALYSIS OF ATTRIBUTABLE INCOME

2016 US$000’s 2015 US$000’s Profit for the half year from operations attributable to: Owners of the parent 80 089 91 943 Non-controlling interests

• 857

80 089 92 800

EARNINGS PER SHARE

MARCH 2016 MARCH 2015 % Change Normal EPS (from Continuing

• perations) – Cents

6,49 7,44 (13) Fully Diluted EPS (from Continuing operations) Cents 6,48 7,40 (12) Dividend per share - Cents 4,70 3,65 29

MARCH 2016 US$’ 000 25 575 22 525 39 108 87 208 8 864 96 072

SEGMENT OPERATING INCOME

MARCH 2016 US$’ 000 MARCH 2015 US$’ 000 LAGER BEER 25 575 28 136 SPARKLING BEVERAGES 22 525 32 583 SORGHUM BEER 39 108 41 277 TOTAL REPORTABLE SEGMENTS 87 208 101 996 ALL OTHER SEGMENTS 8 864 9 140 TOTAL OPERATING INCOME 96 072 111 136

ASSETS 2016 US$000’s 2015 US$000’s Non-current assets Property, plant and equipment 345 332 341 099 Investments, loans and trademarks 54 776 45 469 TOTAL NON-CURRENT ASSETS 400 108 386 568 CURRENT ASSETS Inventories 86 431 98 262 Trade and other receivables 43 683 45 224 Cash and cash equivalents 166 016 133 611 TOTAL CURRENT ASSETS 296 130 277 097 TOTAL ASSETS 696 238 663 665

STATEMENT OF FINANCIAL POSITION MARCH

STATEMENT OF FINANCIAL POSITION MARCH

EQUITY AND LIABILITIES 2016 US$000’s 2015 US$000’s Share Capital 12 310 12 366 Share Premium 33 074 32 234 Reserves 5 985 4 531 Retained Earnings 436 530 407 514 Non-controlling Interests

• Shareholder’s equity

487 899 456 645 Long- term borrowings 65 000 70 000 Deferred taxation 48 833 41 780 113 833 111 780 CURRENT LIABILITIES Short term borrowings

• Interest free liabilities

94 506 95 240 TOTAL CURRENT LIABILITIES 94 506 95 240 TOTAL EQUITY AND LIABILITES 696 238 663 665

cont…

CASH FLOW

2016 US$000’s 2015 US$000’s Cash flow from operating activities 137 463 131 690 Net cash invested (49 426) (41 908) Net funding 101 016 63 611

SHARE CAPITAL MOVEMENTS

Shares in Issue as at 31 March 2015 1 242 568 675 Share Options Exercised 1 745 300 Shares in Issue as at 31 March 2016 1 244 313 975

OUTLOOK

1. Trading conditions to remain difficult. 2. Business survival strategies to remain a priority.

• 3. Chibuku Super capacity increase. New plants to be

commissioned in Masvingo and Kwekwe by September 2016.

• 4. Target profitability, cash generation and dividend payout.
• 5. Optimise volume and spend on our products via innovative go to

market strategies.

• 6. People focus; to retain and refresh skills.

7. Transactional difficulties due to cash shortages pause a risk. 8. Perceived policy risk to remain.

THANK YOU

CHEERS CHEERS