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Agenda
1 2 3 FMN in H1’2020 Financial Results Business Outlook
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H1 2019/20 Analyst Presentation October 2019 Agenda FMN in H12020 - - PowerPoint PPT Presentation
H1 2019/20 Analyst Presentation October 2019 Agenda FMN in H12020 - - PowerPoint PPT Presentation
Flour Mills of Nigeria Plc H1 2019/20 Analyst Presentation October 2019 Agenda FMN in H12020 1 Financial Results 2 Business Outlook 3 2 FMN in H12020 1 3 H119/20 Overall Highlights H1 19/20 Key Highlights Overall volume and
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FMN in H1‘2020
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Golden Penny – An Iconic food brand in Nigeria Diverse portfolio
- over 28 products
serving businesses and consumers
Overall volume and profit growth behind strong Agro-Allied and Sugar performance in an overall flat market
H1 19/20 Key Highlights H1’19/20 Overall Highlights
- 1.9% overall GDP growth in Q2 2019 with manufacturing sector declining
by -0.1%
- 6% overall year to date volume growth vs last year for the FMN Group
- Agro-Allied turn around continues with strong improvements in Animal
Feed and Fertilizer
- Sugar continues to deliver solid results
- Bread flour and Ball foods continues to be under pressure whereas Pasta
and Noodles showed double digit volume growth in Q2
- Stable currency around N362/$1 and availability of USDs
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Providing high-quality and affordable products which meet the needs and preferences of our consumers every day remains our priority
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Product Mix
Products introduced in H1 2020
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Financial Results
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Golden Penny – An Iconic food brand in Nigeria Diverse portfolio
- over 28 products
serving businesses and consumers
Improvement in PBT due to strong performance in the Sugar and Agro- Allied segments plus reduced financing costs
H1 19/20 Key Highlights H1’19/20 Financial Highlights
- PBT grows to N8.6bn in H1’19/20
- H1’19/20 revenue remains flat vs last year at N270.8bn with Sugar, Agro-
allied and Pasta offsetting a challenging Bread flour market ➢ 6% volume growth vs last year ➢ Gross margin of 11.7%, broadly in line with last year
- Lower interest rates result in 21% drop in finance costs compared to
H1’18/19
- Improvements in the Agro-Allied Division continues with PBT at break-even
(compared to N2.9bn loss last year)
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Golden Penny – An Iconic food brand in Nigeria Diverse portfolio
- over 28 products
serving businesses and consumers
16% improvement in after tax results
H1 19/20 Key Highlights Financial Performance snapshot
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Revenue 270.8 269.7 Cost of sales (239.0) (237.6) 1 Gross profit 31.8 32.1 (1) Operating expenses (15.0) (14.0) 7 Net operating gains / (losses) 0.0 1.1 (96) Operating profit 16.8 19.2 (13) Investment income 0.7 0.3 126 Finance cost (8.8) (11.2) (21) Profit before tax 8.6 8.3 4 Income tax expense (2.7) (3.2) (16) Profit for the period 5.9 5.1 16 H1'18/19 % Change
Statement of Profit or Loss (₦ Billions)
H1'19/20
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Golden Penny – An Iconic food brand in Nigeria Diverse portfolio
- over 28 products
serving businesses and consumers
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Agro-Allied restructuring and continued growth in Sugar drives overall profit growth
H1 19/20 Key Highlights Segment Financials
- Food revenues impacted by lower volumes in Bread flour and Ball foods; whereas
Pasta and Noodles are growing in base products and behind value brands
- Agro-Allied segment driven by strong performance in Animal feed and Fertilizer
plus stabilization of the Farms behind the new strategy
- Sugar business continues to show strong results behind volume growth
- Support Services (primarily packaging business) shows resilient margins with
lower material costs
Food 170.0 173.5 (2) 4.7 8.8 (47) Agro Allied 49.4 47.0 5 (0.1) (2.9) 95 Sugar Value chain 44.9 39.0 15 3.5 2.4 48 Support services 6.4 10.2 (37) 0.6 0.0 Total 270.8 269.7 8.6 8.3 % Change H1'19/20 H1'18/19 % Change
Segment Revenue (₦ Billions) Segment Profit before Tax (₦ Billions)
H1'19/20 H1'18/19
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Reduced finance costs and strengthened earnings per share
H1 19/20 Key Highlights Financial Performance
Returns to shareholders Earnings per share (Kobo) Interest coverage
- Group PAT grows to N5.9bn from N5.1bn in previous year.
- Stable return on equity coupled with improved return on assets in H1’19/20.
- Balance sheet optimization results in a 21% decrease in finance costs, relative to
H1’18/19.
11.2 8.8 1.7x 1.9x
H1'18/19 H1'19/20
Finance cost Interest coverage ratio
125K 153K
H1'18/19 H1'19/20
10 1.2% 1.5% 3.9% 3.9%
H1'18/19 H1'19/20
ROA ROE
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More efficient capital structure resulting in improved leverage ratios
H1 19/20 Key Highlights Leverage position
Borrowing mix (%) Leverage Ratios (x)
68% 51% 32% 49%
H1'18/19 H1'19/20 Short term debt Long term debt
0.8 0.7 2.7 2.6 H1'18/19 H1'19/20 Net debt to Equity Total Assets to Equity
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Golden Penny – An Iconic food brand in Nigeria
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13bn of cash generated in the year with a closing cash balance of 20bn
H1 19/20 Key Highlights Cash Flow
Net cash from operating activities 29.0 39.7 (10.8) Capex (8.7) (8.9) 0.2 Other investing activities 1.4 0.4 0.9 Net cash from investing activities (7.3) (8.5) 1.2 Net borrowings 5.2 7.1 (1.9) Other financing activities (13.8) (15.3) 1.6 Net cash from financing activities (8.5) (8.2) (0.3) Net cash flow for the period 13.1 23.1 (9.9) Cash at beginning of the period 7.6 2.3 5.2 Cash at end of the period 20.7 25.4 (4.7)
Statement of Cash Flow (₦ Billions)
H1'19/20 H1'18/19 Change - ₦ bn
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Business Outlook
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Golden Penny – An Iconic food brand in Nigeria
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H1 19/20 Key Highlights Outlook
- Food segment will continue to focus on quality, the B2C channels and
product offerings at the right price points. Moderation in material costs is expected to continue until the end of the year.
- Growth in the key Agro-Allied segments (animal feed, fertilizer and
cassava) is foreseen to continue
- Overall focus on operational efficiencies and cost optimization across the
Group will continue throughout the year and beyond
- Active balance sheet management will continue, with the objective of
reducing financing costs during the year
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Golden Penny – An Iconic food brand in Nigeria
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H1 19/20 Key Highlights Disclaimer
This presentation contains forward-looking statements with regard to the financial position and results of the activities of Flour Mills of Nigeria Plc (“FMN Plc”). These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond FMN Plc’s ability to control or estimate precisely, such as future market and economic conditions, the behaviour of other market participants, changes in consumer preferences, costs of raw materials, interest rate and foreign exchange fluctuations, change in tax rates, changes in law, changes in pension costs, the actions of government regulators and weather conditions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as
- f the date of this presentation. FMN Plc does not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances after the date of these materials. Market share estimates contained in this presentation are based on outside sources in combination with management estimates.
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Golden Penny – An Iconic food brand in Nigeria
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H1 19/20 Key Highlights
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Golden Penny – An Iconic food brand in Nigeria
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