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 7%

LAGER BEER

• SBs declined by 11%

SOFT DRINKS

• Declined by 3%

SORGHUM BEER

• 1. Calendar 2016 most challenging year since dollarisation.
• limited payment platforms.
• cash withdrawal limits.
• bond note introduction had limited impact on cash shortages.
• delays in foreign payments.
• 2. Numerous fiscal and monetary policy interventions which made the operating environment

increasingly uncertain.

• 3. Aggressive Zimra collection measures and numerous police roadblocks.
• 4. Heavy rains – damages to road infrastructure, reduced access to markets and consumption
• ccasions.
• 5. Generally stretched consumers and traders; increased credit risk.

TRADING ENVIRONMENT-MOSTLY HEADENDS

VOLUME PERFORMANCE SUMMARY

Category Actual Volume 000hl % Change on Prior Year

• 1. BEVERAGES (HLS 000)

1.1 Clear Beer 1.2 Sorghum Beer 1.3 Sparkling Beverages 1.4 Alternative Beverages 1 214 3 488 1 237 160 (7) (3) (11) (16) Total Excluding Associates 6 099 (6)

• 2. Malt Tonnage

27 560 (21)

VOLUME BY PROVINCE

Lager Beer Sorghum Beer Soft Drinks

F17 F16 F17 F16 F17 F16 Bulawayo

11 11 10 6 13 12

Harare

45 46 33 32 47 46

Manicaland

11 11 12 13 3 3

Mashonaland Central

1 1 2 3 2 2

Mashonaland East

2 3 1 1 1 3

Mashonaland West

9 9 16 16 10 9

Masvingo Province

7 7 11 13 7 8

Matabeleland North

2 2 1 2 2 2

Matabeleland South

1 1 2 2 2 2

Midlands Province

11 9 12 12 12 11

Grand Total

100 100 100 100 100 100

QUARTERLY VOLUME & REVENUE PERFORMANCE

$136 $151 $155 $121 $152 $163 $174 $143

$- $20 $40 $60 $80 $100 $120 $140 $160 $180 $200

• 200

400 600 800 1,000 1,200 1,400 1,600 1,800 Q1 Q2 Q3 Q4

Gross Sales $million Volume Hl '000 Volumes F17 Gross sales F16 Gross sales

Significant revenue loss in second half

LAGER BEER VOLUME & REVENUE PERFORMANCE

LAGER BEER FULL YEAR VOLUME PERFORMANCE F13 TO F17

2 060 1 697 1 414 1 307 1 214 $352 $316 $278 $235 $215 $0 $50 $100 $150 $200 $250 $300 $350 $400 500 1 000 1 500 2 000 2 500 F13 F14 F15 F16 F17

Gross sales $million Volume Hl '000

Volume Gross Sales

LAGER BEER VOLUME & REVENUE PERFORMANCE

LAGER BEER VOLUME & GROSS SALES BY QUARTER

290 318 331 275 $52 $57 $59 $48

$0 $10 $20 $30 $40 $50 $60 $70 50 100 150 200 250 300 350 Q1 Q2 Q3 Q4 Gross sales $million Volume Hl '000 Volume Gross Sales

TRADING REVIEW- LAGER BEER MIX

HLs ‘000

• 200

400 600 800 1,000 1,200 1,400 F16 F17 14% 15% 59% 59% 27% 26% Premium

• Slower decline in volume – stabilised mix.
• Market share remained steady.
• Mainstream contribution anchored by 750ml pack.

LAGER BEER

SORGHUM BEER VOLUME & REVENUE PERFORMANCE

3,080 3,442 3,716 3,587 3,488 $118 $146 $176 $193 $179 $0 $50 $100 $150 $200 $250

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 F13 F14 F15 F16 F17 Gross sales $million Volume Hl '000 Volume Gross Sales

LAGER BEER VOLUME & REVENUE PERFORMANCE

SORGHUM BEER VOLUME & GROSS SALES BY QUARTER

936 967 842 743 $46 $51 $45 $38 $0 $10 $20 $30 $40 $50 $60 200 400 600 800 1 000 1 200 Q1 Q2 Q3 Q4 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

F16 F17 44% 40% 56% 60% Chibuku Chibuku Super

SORGHUM BEER

• Chibuku Super growth constrained by capacity limitations and

water shortages up to December 2016.

• Masvingo and Kwekwe breweries commissioned in last quarter.
• Scud resilient as a value pack.
• Market access affected by damages to road infrastructure.
• Cash shortages restricted consumption particularly in rural

areas.

SPARKLING BEVERAGES VOLUME & REVENUE PERFORMANCE

1,615 1,589 1,472 1,385 1,237 $231 $225 $204 $183 $154 $0 $50 $100 $150 $200 $250

• 200

400 600 800 1,000 1,200 1,400 1,600 1,800

F13 F14 F15 F16 F17

Gross sales $million Volume Hl '000

Voulme Gross Sales

LAGER BEER VOLUME & REVENUE PERFORMANCE

SOFT DRINKS VOLUME & GROSS SALES BY QUARTER

293 362 441 301 $37 $43 $51 $35 $0 $10 $20 $30 $40 $50 $60 50 100 150 200 250 300 350 400 450 500 Q1 Q2 Q3 Q4 Gross sales $million Volume Hl '000 Volume Gross Sales

TRADING REVIEW- SPARKLING BEVERAGES MIX

HLs ‘000

100 400 700 1 000 1 300 1 600

F16 F17 58% 60% 42% 40%

Convenience pack RGB

SPARKLING BEVERAGES

• Increased imports – traders exploiting COMESA

protocol (Zambia and Mozambique).

• Growth in value packs.
• Overall franchise brands at over 90% market

share shored up by parallel imports.

BEVERAGE VOLUME CONTRIBUTION

F16 F17

Lagers 20% SBs 21% Sorghum 56% Maheu 3% Lagers 20% SBs 20% Sorghum 57% Maheu 3%

VOLUME CONTRIBUTION BEER CATEGORY F16 F17

Lagers 27% Sorghum 73% Lagers 26% Sorghum 74%

AFDIS

• Stable volume and revenue performance.
• Factory throughput constrained by delayed foreign payments.

SCHWEPPES ZIMBABWE LIMITED

• Steady volume performance in core beverages.
• Financial performance weighed down by agri-processing units; Best

Fruit Processors and Beit Bridge Juicing Company. NAMPAK ZIMBABWE * Expected to publish half year results in May 2017.

• Challenges with foreign payments.

ASSOCIATES

OTHER DEVELOPMENTS

• 2. The Coca-Cola Company issued a notice of intention

to terminate the Bottler Agreements with Delta and its associate SZL. TCCC and AB InBev intention to restructure interests. Negotiations are underway with TCCC and AB InBev. There is no position yet on Zimbabwe.

• 1. Change in major shareholder following combination
• f AB InBev and SABMiller as of 10 October, 2016.

Trigger for Bottling franchise issues.

AGENDA

• 1. FINANCIAL HIGHLIGHTS
• 2. FINANCIAL STATEMENTS

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

• Lager Beer

(7%) (8%)

• Sorghum beer

(3%) (6%)

• Soft Drinks

(11%) (15%) Total (6%) (10%)

VOLUME & REVENUE PERFORMANCE ENDING 31 MARCH 2017

FINANCIAL HIGHLIGHTS

REVENUE

Declined by 10% to $483 million (Turnover - $563m)

OPERATING MARGIN %

Down from 20% to 19,07%

EBIT

Down by 15% to $82 million

FINANCIAL HIGHLIGHTS

EBITDA

Down by 13% to $112,8 million

ATTRIBUTABLE INCOME

Declined by 13% to $69,9 million

DIVIDEND PER SHARE DIVIDEND PER SHARE

Up 16% on prior year Interim dividends paid per share- US 3,00cents Final dividend proposed per share- US 2,45 cents

Cont….

EARNINGS PER SHARE

Decreased by 12% to US5,70 cents

STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD

MARCH 2017 US$000’s MARCH 2016 US$000’s REVENUE 482 968 538 198 Operating income 82 044 96 072 Net finance expense 4 539 5 895 Share of associates profit 1 834 3 944 PROFIT BEFORE TAX 88 417 105 911 Taxation ( 18 532) (25 822) PROFIT FOR THE YEAR- CONTINUING OPERATIONS 69 885 80 089 Profit for the year from discontinued operations

• TOTAL COMPREHENSIVE INCOME FOR THE

YEAR 69 885 80 089

EARNINGS PER SHARE

MARCH 2017 MARCH 2016 % Change Normal EPS (from Continuing

• perations) – Cents

5,70 6,49 (12) Fully Diluted EPS (from Continuing operations) Cents 5,69 6,48 (12) Dividend per share - Cents 5,45 4,70 16

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

SEGMENT OPERATING INCOME

MARCH 2017 US$’ 000 MARCH 2016 US$’ 000 LAGER BEER 22 866 25 575 SPARKLING BEVERAGES 14 295 22 525 SORGHUM BEER 34 986 39 108 TOTAL REPORTABLE SEGMENTS 72 147 87 208 ALL OTHER SEGMENTS 9 897 8 864 TOTAL OPERATING INCOME 82 044 96 072

ASSETS 2017 US$000’s 2016 US$000’s Non-current assets Property, plant and equipment 354 947 345 332 Investments, loans and trademarks 56 124 54 776 TOTAL NON-CURRENT ASSETS 411 071 400 108 CURRENT ASSETS Inventories 77 753 86 431 Trade and other receivables 41 931 43 683 Cash and cash equivalents 173 334 166 016 TOTAL CURRENT ASSETS 293 018 296 130 TOTAL ASSETS 704 089 696 238

STATEMENT OF FINANCIAL POSITION MARCH

STATEMENT OF FINANCIAL POSITION MARCH

EQUITY AND LIABILITIES 2017 US$000’s 2016 US$000’s Share Capital 12 301 12 310 Share Premium 32 044 33 074 Reserves 7 389 5 985 Retained Earnings 452 128 436 530 Shareholder’s equity 503 862 487 899 Long- term borrowings

• 65 000

Deferred taxation 50 022 48 833 50 0222 113 833 CURRENT LIABILITIES Short term borrowings 60 000

• Interest free liabilities

90 205 94 506 TOTAL CURRENT LIABILITIES 150 205 94 506 TOTAL EQUITY AND LIABILITES 704 089 696 238

cont…

CASH FLOW

2017 US$000’s 2016 US$000’s Cash flow from operating activities 108 344 137 463 Net cash invested (40 460) (49 426) Net funding 113 334 101 016

SHARE CAPITAL MOVEMENTS

Shares in Issue as at 31 March 2016 1 244 313 975 Share Options Exercised 1 198 225 Cancelled shares (2 108 076) Shares in Issue as at 31 March 2017 1 243 404 124 Shares held in treasury 21 218 614

FOCUS AREAS FOR F18

• 1. Resolving the bottling franchise matter.
• 2. Driving top-line given the projected improved agricultural and

mining output.

• 3. Managing value chain costs against unsustainable pricing of cereals.
• 4. Intensifying market facing activities.
• 5. Maintain sound industrial relations in an environment of focused

cost control.

• 6. No major capex projects - prioritising replacements.

CHEERS CHEERS