WELCOME AND INTRODUCTION JOE MUTIZWA 1. SIX MONTHS VOLUMES AND - - PowerPoint PPT Presentation

1.

WELCOME AND INTRODUCTION

2.

SIX MONTHS VOLUMES AND FINANCIALS

3.

BUSINESS REVIEW 6 MONTHS TO 30 SEPTEMBER 2010

4.

DISCUSSION/QUESTIONS

5.

REFRESHMENTS JOE MUTIZWA ROB MAUNSELL MATTS VALELA JOE MUTIZWA ALL ALL

INCREASE INCREASE Vs SEPTEMBER Vs SEPTEMBER 2009 2009 Lager Beer Sorghum Beer Sparkling Beverages Total Beverages 47% (4%) 63% 16% Plastic 33%

STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS SEPTEMBER 2010 US$000s SEPTEMBER 2009 US$000s Turnover 214 498 142 510 Operating Income Continuing Operations 2 7 195 15 048 Loss on disposal of discontinued operations

• (111)

Net Finance expense (1 198) (160) Gain on Acquisition of Associates 1 325

• Associates Share of Loss

(366) (115) Profit Before Tax from continued operations 26 954 14 662 Tax (6 488) (4 566) Profit from continuing operations 20 466 10 096 Loss from discontinued Operations

• (617)

Total comprehensive Income 20 466 9 479

SEPTEMBER 2010 2009 Operating income to net sales from continuing operations Operating Income to net sales from all operations 17,6% 17,6% 14,3% 13,6%

SEP 2010 SEP 2009 From continuing and discontinued

• perations

Normal EPS Cents 1,71 0,83 Fully Diluted EPS Cents 1,65 0,78 From continuing operations EPS - Cents 1,71 0,89 Fully Diluted EPS Cents 1,65 0,83 Dividend per share cents 0,50

ASSETS 2010 US$000s 2009 US$000s Non-current assets Property, plant and equipment 186 956 133 924 Investments, loans and trademarks 12 276 5 819 199 232 139 742 CURRENT ASSETS Inventories 54 550 40 393 Trade and other receivables 38 224 23 209 Discontinued Operations

• 4 000

Bank balances and cash 6 129 4 901 TOTAL CURRENT ASSETS 98 903 72 503 TOTAL ASSETS 298 135 212 246

EQUITY AND LIABILITIES 2010 US$000s 2009 US$000s Share Capital 11 802

• Share Premium

17 707 29 364 Reserves 150 521 97 660 Non-controlling Interests 3 184 5 993 Shareholders equity 183 214 133 017 Deferred taxation 23 898 32 409 CURRENT LIABILITIES Short-term borrowings 23 000 5 315 Interest free liabilities 68 023 41 505 TOTAL CURRENT LIABILITIES 91 023 46 820 TOTAL EQUITY AND LIABILITES 298 135 212 246

1. VOLUME PERFORMANCE REVIEW BY PRODUCT CATEGORY

• 1. Significant Market Share Growth across all beverages
• 2. Strong Demand for Lagers and Soft Drinks for the Six Months and

Continuing to third quarter

• 4. Sorghum beer volumes decline as consumers switch to lagers. The

loss slowed down in the second quarter as the Shake Shake pack recovered.

• 3. Under supply for both beer and Soft Drinks due to capacity

constraints

668 618 550 574 274 491 724 100 200 300 400 500 600 700 800 F05 F06 F07 F08 F09 F10 F11

000 hls The highest Half Year Volume since 1998

1747 1698 1537 1388 881 1616 1547 500 1000 1500 2000 F05 F06 F07 F08 F09 F10 F11

000 hls

651 558 322 326 157 299 488 100 200 300 400 500 600 700 F05 F06 F07 F08 F09 F10 F11

000 hls

2398 2536 1923 1451 930 2133 2834 500 1000 1500 2000 2500 3000 F05 F06 F07 F08 F09 F10 F11

Tonnes

Best Ever

20% 67% 13%

Sep-09

Lager Sorghum Soft Drinks 23% 56% 18%

Sep-10

Lager Sorghum Soft Drinks

SHIFT IN BEVERAGES VOLUME CONTRIBUTION SIX MONTHS TO SEP 09 VS. SIX MONTHS TO SEPT 10

23% 77%

Sep-09

Lager Sorghum 32% 68%

Sep-10

Lager Sorghum

VOLUME CONTRIBUTION BEER CATEGORY

• 2. THE DRIVE FOR MARGIN EXPANSION

+16% +51% +82% +115% 20 40 60 80 100 120 140 Beverage Volumes Turnover EBIT Att.Income % Growth

Key Drivers

• 1. Disposal of loss making businesses
• 2. Product mix - - shift to higher margin products
• 3. Reduction in maintenance costs as new capacity kicks in
• 4. Supply Chain Savings
• 5. Improved Efficiencies - still to play out

LEVERAGING OUR GROWTH: 6 MONTHS TO SEPTEMBER VS. PRIOR YEAR

13.6% 15.3% 17.6% 21% 5 10 15 20 25 Hl F10 FY F10 Hl F11 FY F11

September 2010

EBIT MARGIN EXPANSION

L.T goal 23-25% Range 400 Basis Points Gain since September 2009

• 2. UPDATE ON RECAPITALIZATION

SINCE DOLLARIZATION

CAPITAL INVESTMENT PROGRAMME F10 AND F11

F10 ACTUAL SPEND F11 CAPEX TWO YEARS COMBINED TOTAL: $47,6m H1: $35,2m F.Yr $72,7m $120,3m 1. Plant & Equipment: $34.5m Plant & Equipment: $47.4m $81,9m

• 2. Containers: $13,1m

Containers: $25,3m $38,4m KEY PROJECTS Southerton Lager Beer Packaging Line KEY PROJECTS PET packaging line at Graniteside Lager Beer Packaging Line at Belmont in Byo C02 Plant in Bulawayo IMPACTS Lager Beer Capacity adequate until F14. Soft Drinks Capacity still needs upgrading in F12 Investment in Containers will continue

N

HECTOLITRES RELIABLE CAPACITY ANNUAL VOLUMES CAPACITY UTILIZATION

LAGER BEER SOFT DRINKS CHIBUKU/SORGHUM TOTAL 2,000,000 1,400,000 5,500,000 1,553,000 1, 143 000 3 250 000 78% 82% 59% 8 900,000 5,946,000

Soft Drinks RGB packaging lines not entirely reliable. New USD12m line planned for Graniteside by July/August 2011

67%

• 4. NEW PRODUCT LAUNCHES

• 1. BEER

1.1 Golden Pilsener Relaunched Golden Pilsener in the green 340 ml bottle and repositioned it as a Local Worthmore offering with higher price and higher margins Hugely successful 1.2 Castle Light Launched Castle Light using the 330ml one way imported bottle to counter Competition Since September launch this brand has now climbed to 2% of total lager beer volumes.

• 2. SPARKLING BEVERAGES

2.1 PET Range Launched In July in 500ml and 2 litre for all core brands Recently launched full range of mixers in PET Shortly launching Sparkling flavoured waters PET Contributed 11% to soft drink volumes in October 2.2 Launch of Burn Launched the energy drink in the imported 250ml can in October

• 5. SUPPLY CHAIN UPDATE

• 1. Barley

20 000 tonnes delivered to date. We expect +/- 28 000 tonnes. Full cover in hand with room for barley malt exports

• 2. Maize

Secure to end January. Thereafter we import

• 3. Carbon Dioxide
• Secure. Vast improvement as suppliers compete
• 4. Returnable Glass Bottles

Secure on 100% imports

• 5. Sugar

Will rely largely on imports. Global prices rising. Now at a 30 year high.

• 6. Utilities

Remains our greatest risk

• 6. UPDATE ON ASSOCIATES

6.1 Schweppes Zimbabwe Limited Volumes for nine months to September 65% higher than prior year Market Share around 65-70% of the cordials and squashes sector Profitability in line with expectations. For full year to December the business should make $5,5m EBIT 6.2 African Distillers The business is in recovery mode following positive changes to the excise regime in the July Mid Term Fiscal Statement. The playing field has been levelled as of September 2010. A restructuring has taken place with the head count reduced by 35% and payroll slashed by 45% Volumes in October were 3% ahead of prior year and above break even point. The business will return to profitability in the 2011 financial year.

• 7. OUTLOOK FOR BALANCE OF YEAR

Lager Volumes very strong : 54% ahead of Prior Year and 3% ahead of plan. Market under supplied in Southern Region Decline in Sorghum Volumes slowed down. Only 2% below prior year. Good recovery in one litre Shake Shake volumes. This has better margins than the two litre scud Sparkling Beverages volumes very strong: 41% ahead of Prior year and ahead of plan, Operating Margins improved to 19.2% Profitability in line with plan

OCTOBER UPDATE

Generating sufficient cash to fund dividends to share holders Beverage Volumes of 6m hectolitres Beverage market shares between 90 and 97% in the core businesses EBIT of $74m EBIT Margin (i.e., Operating Income to net sales) of 21%

We are on track to achieving all our key deliverables for F11

THANK YOU