Results Table of Content 01 - - PowerPoint PPT Presentation

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Results Table of Content 01 - - PowerPoint PPT Presentation

Aug 16, 2023 455 likes •719 views

Feeding the Nation, Everyday Q1 20/21 Results Table of Content 01 ______________________________________________ Operating Environment 02 ______________________________________________ FMN Overview of Q120/21 03

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Feeding the Nation, Everyday

Q1 20/21 Results

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01

______________________________________________

Operating Environment

Table of Content

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

02

______________________________________________

FMN Overview of Q1’20/21

03

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Financial Review

04

______________________________________________

Business Outlook

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3

Operating Environment

01

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

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4

Macroeconomic Performance

Real GDP Growth Rate Inflation External Reserves, Oil Production & Oil Price Exchange Rate (₦/$)

Source: CBN, NBS, FMDQ, National Bureau of Statistics, Bloomberg

Impact of Covid-19 on key economic indicators

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

▪ CBN adjusted the official exchange in March. The parallel rate continues to rise. ▪ Unification of the various exchange rates into a single rate has been hinted by the CBN governor. Impact on our business is primarily increase in our imported material costs including customs duties. ▪ YoY Inflation trended upwards during the review period to 12.6%. ▪ Crude oil price decreased steadily throughout most of the review period, increasing only in May and June. ▪ FGN reserves reduced to $36b by the end of June 2020 with import cover of about 9 months. ▪ GDP growth declined somewhat in Q1 2020 and expected to contract in the year with recovery in 2021.

8.0% 10.0% 12.0% 14.0% Inflation Core Inflation 250 300 350 400 450 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20

CBN Official Rate I&E Parallel

  • 1.0

2.0 3.0 0.0 20.0 40.0 60.0 80.0

Foreign Reserves (₦'bn) Oil Price ($) Crude Oil Production (mb/d)

2.0% 1.9% 2.3% 2.6% 1.9%

  • 3.4%

2.4%

Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 FY-20 (E) FY-21 (E)

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FMN Overview in Q1’20/21

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FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

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Key Messages

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

  • FMN remains resilient and continues to deliver shareholder value

in line with long term strategy

  • The business has been able to operate efficiently with current

challenges

  • Steady growth in the food business
  • Solid improvement in the agro allied businesses as the past years

investments yield positive results

  • Revenue up by 15% compared to previous year
  • After tax profit up 17% compared to previous year
  • Cash from operations up by 200% compared to the previous year
  • Continued focus towards attractive high-growth products
  • Proactive business response strategies to COVID-19
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Key Milestones and Achievements

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

Brands Select Awards and Accolades Key Milestones and Recent Developments

2019 SON Performance Award & Certification 2019 Sustainability, Enterprise & Responsibility Awards (SERAS) 2019 Global Food Safety Initiative Awards 2018 Lagos Vision Zero Awards 2018 Most recognized animal feeds brand Support Sugar Agro Allied Food Lagos, Agbara, Calabar, Ibadan, Kano Lagos, Ijebu Ode, Ibadan, Ilorin, Kaduna, Benin, Niger, Calabar, Ibadan Lagos, Kano Lagos, Niger ✓ Over 60 years leadership in the food manufacturing sector with a robust distribution network across the country ✓ Robust management team with +20 years experience ✓ Over 15,500 manpower across the country ✓ Over 28 products serving businesses and consumers ✓ Solid backward integration investment across our core value chains – grains, oils and fats, animal proteins, sweeteners and starches ✓ Successful turnaround of the Agro Allied business ✓ Protein business (consisting of animal and fish feed business) - largest in Sub-Saharan Africa ✓ About N2bn of donations towards COVID-19 relief

Locations Segments

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Product Offerings

Developing products to meet fast changing consumer needs

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

Agro Allied Segment Sugar Segment Support Segment Food Segment

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Financial Review

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FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

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6.5 5.5

Q1' 20/21 Q1' 19/20

16.5% 12.2%

Q1' 20/21 Q1' 19/20

3.1% 2.8%

Q1' 20/21 Q1' 19/20

5.0 4.2

Q1' 20/21 Q1' 19/20

Q1’20/21 Overview

Revenue Operating Profit Return On Equity

+15%

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

Profit After Tax

Strong organic revenue growth of 15% led by growth across the Food, Agro Allied and Sugar segments

10

+17%

154.6 134.7

Q1' 20/21 Q1' 19/20

+430bps

Gross Margin

11.0 9.9

Q1' 20/21 Q1' 19/20

+11% +30bps

Profit Before Tax

+17%

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Financial Performance

Gross Margin up by 430bps

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

CONSOLIDATED STATEMENT OF PROFIT & LOSS (N’B) Q1’20/21 Q1’19/20

%

Revenue 154.6 134.7 15 Cost of sales (129.0) (118.3) 9 Gross profit 25.5 16.5 55 Net operating gains and (losses) (7.6) 0.1

  • Operating expenses

(6.9) (6.7) 4 Operating profit 10.9 9.9 10 Investment income 0.3 0.2 103 Finance costs (4.9) (4.6) 7 Profit before taxation 6.4 5.5 16 Taxation (1.5) (1.3) 17 Profit for the year 4.9 4.2 17 Earnings Per Share (K) 107.0 103.0 4

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Financial Performance

Revenue Gross Profit Margin

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

Strongest quarter in revenue and GP margin over four years

149.0 133.0 134.7 154.6 Q1' 17/18 Q1' 18/19 Q1' 19/20 Q1' 20/21 11.6% 13.0% 12.2% 16.5% Q1' 17/18 Q1' 18/19 Q1' 19/20 Q1' 20/21

Operating ratio Net Finance costs

8.9 6.0 4.4 4.5 Q1' 17/18 Q1' 18/19 Q1' 19/20 Q1' 20/21

  • Solid revenue growth of 15% quarter on quarter largely driven by volume growth in the Agro Allied segment
  • N30bn CPs issued in April 2020 as part of risk management plan to cushion possible impact of COVID-19. Net

finance costs flat compared to previous year.

  • Lower operating ratio compared to the previous two years

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3.6% 5.0% 5.0% 4.5% Q1' 17/18 Q1' 18/19 Q1' 19/20 Q1' 20/21

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Financial Position

Continued strengthening of balance sheet and improved leverage ratios

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

4.9 5.7 0.5 0.5

Q1'20/21 Q1'19/20 Net debt to EBITDA Net debt to Equity

Leverage Ratios (x) Net Debt (N ’b) Debt Movement (N’ b)*

109.8 101.9 95.8 83.4 75.8

Q1'19/20 Q2'19/20 Q3'19/20 FY19/20 Q1'20/21

Summary Balance Sheet

All figures in N’b

Q1’20/21 Q1’19/20

%

Non-current assets

239.3 242.7

(1) Current assets

236.3 189.7

25 Total assets

475.7 432.5

10 Long term debt

73.1 80.7

(9) Short term debt

61.6 28.9

113 Other liabilities

180.2 167.1

8 Total Liabilities

314.9 276.7

14 Net Asset Value

159.6 155.8

2 * Please note that Cash and Cash Equivalent was N58.8b by Q1 20/21 vs N26.2b by FY20

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Financial Performance

Cash from operations up 200%; closing cash up by N51b

CONSOLIDATED STATEMENT CASH FLOWS (N’B) Q1’20/21 Q1’19/20 % Cash from Operating activities 16.7 5.7 193.0 CAPEX (3.1) (2.9) 6.9 Other Investing Activities 0.4 1.7 (76.5) Cash from Investing Activities (2.6) (1.2) 116.7 Net borrowings 23.2 4.3 439.5 Cash from Financing Activities 23.2 4.3 439.5 Net cash flow for the period 37.3 0.2 1,8550.0 Cash at beginning of the period 20.7 7.6 172.4 Cash at the end of the period 58.0 7.7 653.2

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

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Segment Performance

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FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

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Segment Revenue (N’b) Segment Profit before Tax (N’b) Q1’20/21 Q1’19/20 % Q1’20/21 Q1’19/20 % Food 91.0 81.6 12 3.7 3.2 18 Agro-Allied 33.1 25.6 29 2.1 (0.2) 929 Sugar 27.0 24.1 12 2.3 2.6 (11) Support * 3.4 3.5 (1.8) (1.6) 0.0 (7,499) Total 154.6 134.7 15 6.5 5.5 17

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Segment Performance

Agro Allied continues to be profitable following successful completion of the restructuring

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

Calabar

* Support Services reflecting IFRS16 ABTL lease, which is a pure timing impact

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Food Segment

Steady growth continues with continued focus on high margin products

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

FOOD SEGMENT (N’B)

Q1’20/21 Q1’19/20

Revenue 103.5 93.7 Profit before Tax 6.8 7.2

  • Strong revenue growth, largely driven by

mix and seasonal adjustments

  • Continued focus on route to market

strategy resulted in a 31% growth in revenue from B2C

  • Introduced value SKUs of some brands –

Golden Vita, Golden Penny Noodles, Auntie Pasta, Auntie B Spaghetti Slim, Semovita, etc. to ensure affordability and drive value in B2C.

  • Boarder closure impact also seen in

Pasta with volume growth

  • f

15% compared to previous year Value SKUs

65% 10% 20% 3%2% Flour Semovita Pasta Noodles Edible Oil & others

Volume Mix per category – Q1’20/21

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Sugar Segment

Resilient operating performance despite FX losses which impacted PBT

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

SUGAR SEGMENT (N’B)

Q1’20/21 Q1’19/20

Revenue 27.0 24.1 Profit before Tax 2.3 2.6

  • Resilient operating performance despite

increased material costs, increase in duty cost from 5 to 10% and foreign exchange losses compared to previous

  • year. Revenue growth of 14%
  • Continuous improvement in operational

efficiency in Sunti, driven by the investment in harvesting mechanization and sugar cane haulage

  • Key focus in Sunti is on increasing and

strengthening the dyke, routing maintenance, and relationship management with Hydro plant owners within the region

  • Plan to increase cultivated area for

sugarcane production from 2,800 to 3,500 hectares is ongoing

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Agro Allied Segment

Increased efficiency causes PBT growth to surpass strong revenue growth

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

AGRO-ALLIED SEGMENT (N’B)

Q1’20/21 Q1’19/20

Revenue 33.1 25.6 Profit before Tax 2.1 (0.2)

  • Revenue growth of 29% driven by solid

volume growth, primarily in by the Oils and Fats business (Premium Edible Oils).

  • Profit margins expand as the Animal

Feed business launches a new Aqua product to target toll millers and the Oils and Fats business increases export sales.

  • Continued focus on driving B2C portion
  • f the segment, through more focused

demand driven production. Also, expanding capacity

  • f

animal feed business to become one of the largest

  • n the continent.
  • Focus on local inputs continues through

both in-grower and

  • ut-grower

programs to purchase directly from farmers under the commodity aggregation programme.

41.8% 24.4% 32.8% 1.0% Premier Feed Premium Edible Oil Ltd Golden Fertilizer Ltd Farms

Volume Mix per category Q1’20/21

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Support Segment

PBT (excluding FX loss) increases despite stagnant revenue

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

  • Improved gross profit in Bagco, as

volumes increase in the business’ largest

  • market. Showing that the business can

meet local demand in a competitive market.

  • To improve sales, marketing expenses

increased in Bagco compared to last

  • year. The business is positioned to take

advantage of local input and is focusing more on quality delivery.

  • The segment’s PBT loss is driven by the

IFRS16 revaluation

  • f

the USD denominated port concession, which is a timing difference with the impact being recognized upfront.

SUPPORT SEGMENT (N’B)

Q1’20/21 Q1’19/20

Revenue 3.4 3.5 Profit before Tax (1.6) 0.0

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Responding to COVID-19

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

Key priorities Safeguarding employee’s health; highest safety and health standards in place to ensure guaranteed production and supply of safe and nutritious food products Business continuity plan in place to mitigate disruptions to operations Continue to support communities via CSR initiatives and COVID-19 relief measures Farms, processing factories and distribution channels open and operating safely

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Business Outlook

05

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

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Outlook

  • Continue to ‘Feed the Nation Everyday’ through our 5 core value chains –

grains, oils and fats, animal proteins, sweeteners and starches by executing our

  • verall long-term strategy and focusing on local content and value add
  • Continue the execution of the Agro-Allied strategy with the aim of ensuring

profitability and improving local content in the group’s product portfolio

  • Expand capability of the edible oil refinery to meet up with new products

development in line with our long-term strategy to stimulate organic growth and grow the reach of our animal feed products

  • Accelerate expansion in B2C segment with multiple product offerings across the

group and continued focus on our route to market strategy

  • Remain focused on increasing operational efficiency with accelerated plans for

cost optimizations across the group to ensure profitability in the new operating environment

  • Continue to assess portfolio and growth drivers

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

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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

  • r 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

  • nly as of 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.

FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

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FLOUR MILLS OF NIGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST

& INVESTORS

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