I N V E S T O R P R E S E N TAT I O N

Transcription

1 I N V E S T O R P R E S E N TAT I O N I N T E R I M F I N A N C I A L R E S U LT S A S A T 3 1 D E C E M B E R R i c h a r d R u s h t o n G r o u p M a n a g i n g D i r e c t o r L u c a s V e r w e y F i n a n c i a l D i r e c t o r

2 S A L I E N T F E AT U R E S Demonstrating topline growth in the face of an increased competitive environment Sales volumes % 3.6% Revenue 13, % 9.1% EBITDA 2, % 7.0% Headline earnings 1, % 3.2% Headline earnings per share Net cash from operating activities REPORTED m REPORTED 509.2c -5.1% 3.2% 1, % NORMALISED FX Commendable top-line growth achieved o South Africa: Defended share and grew volumes in all three categories o Africa: KWAL integration, BGB contributing positively o International: Strong Wine and Amarula growth Focused Portfolio yielding results Strong revenue growth from 12 of 15 largest brands Double-digit volume and revenue growth from Savanna Additional normalised EBITDA of 3.5% achieved through inorganic growth Net cash generated from operating activities up 15.4% Non-core disposals improve ROIC and Net Debt/Ebitda Once-off 6.8% reported HLE loss through TDL associate Above global average excise pressure on margins Note: This presentation includes the discontinued operations of Bisquit.

3 OUR S T R A T E G I C A S P I R A T I O N S Double revenue growth & EBITDA By 2021 Grow and win In South Africa Expand into Africa & one major International market Leverage core Brand portfolio

4 K E Y S T R AT E G I C I N I T I AT I V E S TO D R I V E VA L U E Financial Value Drivers Lead selected emerging markets Craft distinctive & compelling brands Own the last mile Scale up excellence Shape the future Care & contribute 1 2 Revenue Gross Profit 3 Operating Cost Make clear, deliberate choices on which brands and markets where we have the right to win Defend and grow SA Accelerate our geographic diversification Invest in the front-end Own the relationship with the customer and the consumer Optimise our supply chain Invest in management systems Change our operating model Deepen our talent pipeline Shape our culture Build our corporate reputation Influence regulatory policy Transform and diversify our business Implement world class sustainability practices Empowered, high performance and agile organisation culture

5 S O U T H A F R I C A G R O W & W I N I N S A

6 S O U T H A F R I C A P E R F O R M A N C E H I G H L I G H T S Growth across all 3 categories despite economic and market challenges Top 5: Macro drivers of change SOUTH AFRICA VOLUME REVENUE 2.9% 8.2 % 75.3% REVENUE % DISTELL Sales volume growth in all 3 categories. 3.8% volume growth in RTDs Exceptional brandy volume growth continues at 14% YTD Gin continues run of strong double digit growth of 21% Whisky performance follows global trends, Bain's stable Mainstream wine growth muted from increased competition and trading up. Premium wine benefitting with 5 key brands showing strong growth. Shift in mix impacting gross profit margin negatively Challenging excise environment: Ability to balance margins and pricing effect for consumers under pressure

7 S O U T H A F R I C A P E R F O R M A N C E U P D AT E Strong performance saw RSA finish ahead of History YTD YTD Highlights to end Dec All three categories finished in growth for both volume and value : Category: H1 Vol. (vs. PY) H1 Val (vs. PY) RTDs % +6.7 % Wine +0.4 % +4.5 % Spirits +7.4 % % Our premium RTD range continues to perform very well (YTD): Outlook Re-establish premium credentials on full Hunter's range through Black Coffee collaboration with full through the line activation Savanna headliner promotion to drive volume and value in Q4 4 th Street collaboration with Project Runway to drive awareness and establish big brand status Aggressive revenue management through targeted drives by occasion, brand, pack and channel on key SKU s to drive volume Savanna +18% Volume / +20% Value Bernini +41% Volume / +55% Value Great performance by key brands in our core wine range: Nederburg +23% Volume/+24% Value Drostdy Hof +51% Volume/+52% Value

8 A F R I C A E X P A N D A N D G R O W I N T O A F R I C A

9 A F R I C A P E R F O R M A N C E O V E R V I E W Building a long-term platform to unlock growth AFRICA incl. BLNS VOLUME REVENUE 6.6% 18.5 % 13.7% BLNS 2.8% 4.2% 54.7% Zambia 31.4% 12.2% 6.1% Mozambique -19.2% -35.3% 3.8% Zimbabwe 22.6% 17.3% 2.3% Kenya 368.7% 560.2% 18.9% Nigeria -31.7% -35.3% 1.9% Ghana 22.4 % 22.7 % 3.0 % Angola % 20.1 % 3.6 % REVENUE % DISTELL REVENUE % AFRICA Long-term objective to build an effective, pan African platform Exceptional performance for KHEAL BGB producing annualised EBITDA in line with expectations Zimbabwe grew strongly driven by locally produced ciders Nederburg high double-digit growth across majority of key countries J.C. Le Roux and Amarula demonstrating growth in Angola Cellar Cask enjoying good growth in Zambia ZAR 85.9m negative impact from TDL associate Change in Ghana operating model to improve profitability Full scale RTD and wine production in West Africa Production delay in Angola as UTAIP still not forthcoming

10 A F R I C A : L E V E R A G E O F F A N G O L A A N D K E N YA P L AT F O R M S Acquire, integrate, grow and build value Best Global Brands (BGB) H1 sales volume & EBITDA above expectations Angola FY to reach 33m litres; Nigeria 10m litres and expanding into Kenya, Zambia and Mozambique Profit/EBITDA impact +R41.6 M Margin enhancing and accretive business FY results materially impacted by FX Now expanding brands and packs across continent to reduce dependence on Angola Ramping up production in Nigeria, Kenya and Angola LOCAL KPI s DEC 2017 YTD Gross Margin 39.3% Adjusted Gross Margin 35.6% EBITDA Margin 30.2% A&P as % of NSV 3.8% PLATFORM TO BUILD A SCALE PAN-AFRICAN BRAND KWA Holdings EA H1 volume, revenue and EBIT trends above targets and prior year, expected to continue in H2 Sales Volumes (ltrs) +14.4% Net Sales Revenue +10.3% EBIT +80.6% Excellent local brand momentum Building and ramping up capability Leverage existing RTM for BGB brands Significant margin improvement Culture change, quality management being embedded DEC 2016 YTD DEC 2017 YTD CASH OPEX % NSV 24.1% 24.1% EBITDA Margins 9.9% 15.1% EBIT Margins 7.5% 12.3% Average ZAR : KES = 1 : 7.69 BUILDING AND GROWING OUR EAST AFRICA PLATFORM

11 I N T E R N AT I O N A L E X PA N D I N T O O N E M A J O R I N T E R N AT I O N A L 1 4 M 0A3 R2 K0 1E 7 T

12 I N T E R N AT I O N A L P E R F O R M A N C E H I G H L I G H T S Premium Wine and Amarula enjoying healthy growth Top 5: Macro drivers of change VOLUME REVENUE REVENUE % DISTELL UK retail listings driving sales growth in wine International 6.0 % 7.7 % 10.9 % Europe 6.4% 16.3% 54.5% North America -17.8% -27.0% 8.2% Asia Pacific 7.8% -5.0% 23.1% Latin America 11.7% 20.5% 4.2 % REVENUE % INTERNATIONAL Amarula growing in top five markets Market share growth in 17 International markets for SA bottled export wine Taiwan market share increase in shrinking market Travel Retail grew sales by 43% Impact of strengthened ZAR/USD Slow recovery in Brazil Effect of SA drought and stronger ZAR to impact wine exports Travel retail 43.4% 43.2 % 9.9 %

13 O U R B R A N D S L E V E R A G E C O R E B R A N D P O R T F O L I O

14 M A R K E T I N G : E X P A N D I N G O U R I N F L U E N C E Our unique brand crafting capabilities position Distell to grow our consumer base Core brand extensions transcending traditional category boundaries Successfully expanding choice and building premium cues for our core brand assets CATEGORY EXPANSION BRAND RENOVATION Building brand equity to recruit new consumers to the category and our brands CONSUMER BASE EXPANSION OFFERING VALUE Deliver value at the right price point

15 B R A N D P O R T F O L I O : C I D E R & R T D s Savanna Double-digit volume and value growth Increased Brand health measures (incl PIM & Equity) Strong growth lead by Dry and Light 330ml & 500ml. Hunter s Volumes under pressure but brand health stabilised since Start Refreshed campaign in October 17 Showing early signs of volume recovery Remains world s 2 nd largest cider brand +3.3% volume +6.2% value Bernini SA s fastest growing grape RTD: 41% volume and 55% Value growth Still responding strongly to flavour trends Blush and Classic shows exceptional domestic volume growth of 126% and 144% YTD. New launch of Ruby Berry performing ahead of expectation Increased Brand health measures (incl PIM & Equity)

16 B R A N D P O R T F O L I O : S P I R I T S Amarula posted strong volume growth in all 6 leading markets. Continued momentum following new marketing mix (Made from Africa) and name them, save them campaign Argentina is performing well with new RTM +10% volume +14% value Global blended whisky volumes under pressure, impacting blended whisky performance Bain s brand health measures increasing (Incl PIM and Equity) and performing in line with single malt trends Taiwan market share increased despite volume pressures to reduce in market stock levels Whisky strategy refreshed to address blended Scotch category volume decline -8.6% volume* -0.5% value* Continued momentum in both volume and value improvement Recovery being led by Viceroy, with growth of Richelieu and Klipdrift supporting category turnaround Optimal pricing ladder and prudent pricing to improve margin +16% volume +23% value *excl. bulk

17 PALATE / PRICE Mainstream Premium B R A N D P O R T F O L I O : C O N S U M E R W I N E J O U R N E Y 4 TH STREET: Volume growth plateaued due to increased competition and consumer trading up DROSTDY HOF: Domestic consumer trading up, increased volumes by +51% and value by +52% TWO OCEANS: Consumer trading up with increased volumes of 20% and Value +14.3% in South Africa NEDERBURG: Overall domestic and International growth of 17.2% by Volume and 13.7% by Value DURBANVILLE HILLS: Double digit growth in Top 6 countries FLEUR DU CAP: Building brand appeal through new brand positioning ALTO: All leading markets showing double digit growth of 19% by Value and 19% by Volume MATURE ON MY WAY STEP UP STARTER

18 S U S TA I N A B I L I T Y

19 D R O U G H T R E S P O N S E ( W E S T E R N & E A S T E R N C A P E ) WATER USAGE REDUCTION ALREADY ACHIEVED: 29.2% REDUCTION ALL CITY OF CAPE TOWN SITES WESTERN CAPE SITES 23.1% REDUCTION LEGISLATED TARGET January % REDUCTION ON TRACK: CITY OF CAPE OWN We have sustained momentum on water saving in our business culture We are accelerating our water management programme through continued demand reduction management introducing new water saving initiatives. Redirecting capital expenditure to waste water treatment and reuse programmes (R22m) Phased in BCP for all affected sites; production, distribution, sales and admin offices including Shared Services Centre (HIVE) Relocation of water-intense production activities to areas with sufficient water supply Implement integrated employee response and care plan On Day Zero, our operations will be reliant on groundwater and transported water The drought poses real risk to the supply of grapes and wine in the medium term (2 3 years). We have secured sufficient supply for the current cycle.

20 B - B B B E E H I G H L I G H T S H Y 1 8 BBBEE: Strategic Achieved focus areas level 4 status Invested R120M in Transformation initiatives Created businesses in our value chain to support local economies: Local sourcing across categories & geographies Nurture our environment: Focussed initiatives to ensure we operate in a sustainable and ethical manner ENTERPRISE & SUPPLIER DEVELOPMENT 4 investments completed 2 Enterprise Development companies established 2 Supplier Development companies supported 7 Business signed on to E+scalator Program SKILLS DEVELOPMENT 10 ACI TOPP candidates 35 apprenticeships 53 interns 85 learners with disabilities on programme 243 learnerships SED Successful decentralisation of alcohol harm reduction projects (FAS) to South Africa Nordics: customer CSR marketing link Sustainable Return on Investment part of all new beneficiary contracts 10 NGO capacity building programmes Brands CSI: Amarula and Nederburg Distell presented on social compliance and CSR at the FIVS conference PREFRENTIAL PROCUREMENT Expenditure on Black-owned suppliers was in excess of half a billion rand for the period under review Expenditure on Black-women-owned suppliers amounted to R435 million for the period under review Development of Targeted Plan and Approach per procurement category Supplier Development Transformation Support On track to meet BBBEE target

21 F I N A N C I A L S U M M A RY D E C E M B E R L U C A S V E R W E Y

22 S A L I E N T F E AT U R E S Showing growth in the face of tough economic trading conditions REPORTED m REPORTED Sales volumes % 3.6% Revenue 13, % 9.1% NORMALISED FX Difference between reported EBITDA and Normalised FX EBITDA Gain on sale of investments (Lusan mostly) in current year Brand Phoenix and Angola land impairments in prior year Tanzania Distilleries Ltd (TDL) write-offs and impairments in current year (4.4%) (3.9%) (3.4%) 4.9% EBITDA 2, % 7.0% FX adjustment (2.0%) Headline earnings 1,117.3 (5.1%) 3.2% Headline earnings per share Net cash from operating activities 509.2c (5.1%) 3.2% 1, % Difference between reported HLE and normalised FX HLE Amarula interest accrual reversal in prior year 3.7% Tanzania Distilleries Ltd write-offs in current year 8.3% 6.8% Note: This presentation includes the discontinued operations of Bisquit. FX adjustment (2.2%)

23 K E Y TA K E - O U T S Top-line revenue growth achieved across reporting geographies Growth in 12 out of the top 15 largest brands by revenue with Savanna achieving double digit volume 12.1% and revenue 14.4% growth Double-digit volume and revenue growth achieved for Brandy Procurement and COGS efficiencies materialised; optimised returnable bottles Additional normalised EBITDA of 3.5% achieved through inorganic acquisitions (Kenya Wine Agencies Limited (KWAL), Cruz Vodka and Best Global Brands (BGB)) Tanzania Distilleries Ltd (TDL) (35% ownership) once-off write offs and impairment impact of R85.9m Inefficient assets rationalised; unwinding of LUSAN wine farms and disposal of Bisquit Network optimisation in process with closure of Bergkelder and the creation of a self-sufficient Northern region Back-office first phase consolidated into shared service centre in Bellville Portfolio optimisation in process (acceleration anticipated due to increasing water supply constraints and stronger ZAR)

24 D R I V E R S O F M A R G I N Maintained positive bottom line growth Rm Normalised FX = ,652 3,582 10,070 DP Revenue Excise NDP Revenue History Trends 5,543 4,527 Note: Rev enue after trade incentives and settlement discounts 2,765 COGS Gross Profit Expenses Trading Profit 1, ,862 Equity inc/other Normalised EBIT NDP%CY: NDP%PY: DP%CY: DP%PY:

25 C O N T R I B U T I O N P E R R E G I O N Volumes up 3.6% Revenue up 9.1% South Africa volumes up 2.9% leading to a revenue growth of 8.2% in a competitive market 6.6% 18.5% 6.1% 14.5% 7.7% 10.9% 13.7% International UK increased sales- and RTM capability resulting in revenue growth 6.0% 79.4% 2.9% Increase/decrease from prev ious year 75.3% 1South 4 0Africa International Africa (incl BLNS) 8.2% Sub-Sahara Africa (incl BLNS) KHEAL consolidation assists growth in a tough macroeconomic context Revenue on a NDP basis outside RSA comprises 15.5% of group revenue Note: Calculated excluding cash discounts and DVC where applicable

26 C O N T R I B U T I O N P E R C AT E G O R Y Volumes up 3.6% Revenue up 9.1% Volume and revenue growth across all categories 3.3% 10.2% 13.4% 6.2% 18.4% Excellent growth in spirits mainly driven by Viceroy and Amarula 53.9% 35.9% 1.7% Increase/decrease from previous year 36.8% 27.6% Note: Calculated excluding cash discounts and DVC where applicable 35.6% 5.8% Spirits Wine Cider/RTD Good double digit growth by Savanna, indicating a resilient recovery from a tough competitive environment Strong performance by Bernin Nederburg, Drostdy-Hof, Klipdrift and Richelieu

27 D R I V E R S O F R E V E N U E G R O W T H Healthy volume and price growth supporting overall revenue growth Index (0.1) 4.0 (0.1) Rm ,516 13, History Volume Sales Mix Currency Price New/Disc prod + Other 2017 Actual

28 D R I V E R S O F E X C I S E G R O W T H Full excise price increase not passed to customers Rm ,014 3, History Volume Mix Price New Business 2017 Actual

29 COMPARABLE EXPENSES Reported marketing spend & opex Actual History Trend 2, , Inorganic adjustments Shared Service Centre - HIVE E X P E N S E S Y T D D E C E M B E R New Business - M&A Legal fees Post-Retirement Medical Aid Site Services SETA Projects Information Technology Comparable opex 2, ,

30 H E A D L I N E E A R N I N G S Operating profit increased by 13.7% and includes adjustment for capital items below Normalised FX Headline earnings Rm 1,243 1, / /17 Trading profit Other gains and losses Operating profit Net finance cost & Div inc Associates (167) Taxation (465) Minority int Add back Capital & FX & Abnormal items (8) ,762 1, Net finance cost & dividend income of (R166.6m) (Dec16: (R98.2m)) Associates negatively impacted by once-off TDL items of R85.9m Effective tax rate 27.7% (Dec16: 28.5%) as the gain on the sale of Lusan is not taxable The movement in the Capital & Abnormal items is mainly due to profit on the sale of farms and other PPE as well as TDL once-off items in the current year History includes Angola industrial property rights impairments and the reversal of the interest accrual on the Amarula case. These are added back to normalised FX headline earnings

31 TA N Z A N I A D I S T I L L E R S LT D ( T D L ) Y T D D E C TDL volume, revenue and profitability below expectation, mainly due to sachet ban implemented since Mar 2017 Provided for 30% of excise duty dispute exposure. TDL management confident that settlement would be reached between 7.5% and 30%. DEC 2017 YTD DEC 2017 YTD Normal TDL DISTELL business IMPACT 13,883 (R m) TRENDS 63.1 Normal business profit 13, Excise duty dispute (Included by TDL) Excise duty dispute (Distell Additional) (7,499) (22,119) Legal case pending w.r.t. Tema (main customer) debt, recovery is unlikely. Forensic audit has been authorised by TDL board and expected to commence soon All sachet related bad debt is provided for Property, plant and equipment (PPE) impairment relates to sachet bottling line. Limited potential buyers with no offers to date. Outlook for TDL 2018 financial year (end Dec 2018) is positive with new product launches and the return to the previous export model for Kenya Staff retrenchment (375) Tema (main customer) write-off (25,328) Sachet Ban (30,550) - Stock (12,830) - Bad debt (3,958) - PPE impairment (7,410) - Excise (6,352) Net impact on Distell Group (71,988) (100.0) R85.9m write-offs and impairments

32 E X C H A N G E R AT E S ZAR remains volatile amid the changing political landscape and credit ratings uncertainty YTD December 2017 average rates Change on Currency 2017/ /17 History GBP % EUR % USD % CAD % Average exchange rate strengthening 0.6% on History

33 N E T O P E R AT I N G A S S E T S Up 11.8% (12.0% excl. FX) compared to revenue growth of 9.1%, thereby reducing net asset turnover Working capital cash flow improved to deliver a cash inflow of R60.5m (Dec16: R117.9m outflow). This represents a R178.4m positive swing Group Excluding exchange rate impact Net operating assets Rm 15, % 14, / / % Fixed and biological assets Rm 6,012 5, % Inventory Rm 7,421 7, % Accounts receivable Rm 4,203 3, % Accounts payable and prov Rm 4,705 4, % 17.0% 0.9% 9.4% 3.5% PPE increased by 16.4% (17.0% excl FX). Mainly due to investments in the shared service centre, cask and crates, effluent water treatment plants, cold space, network optimisation and KHEAL acquisition in April % increase (0.9% increase excl FX) in inventory mainly due increase in intrinsic consumables (flavours for Bernini, Hunter's Edge & Klipdrift Ngqo) and consolidation of KHEAL stock in current year. Accounts receivable increased by 9.5% (9.4% excl FX). Increased credit limits in SA for mainstream market with flexibility around peak periods. No significant increase in doubtful debts. SA debtor days remains at 30.1 (Dec16: 30.1). Int&Afr debtor days at 99.3 (Dec16: 97.1). Accounts payable increased by 3.1% (3.5% increase excl. FX). Intangibles and Investments Rm 2,940 2, % *Includes associates and JVs. Excludes deferred tax and retirement benefit assets & liabilities. 23.2% Intangibles assets include mainly: - Goodwill and trademarks - Investments in associates and JV's of which R726.5m relates to the new investment in BGB in the current year.

34 I N TA N G I B L E S A N D I N V E S T M E N T S The majority relates to Goodwill & Trademarks Intangibles and Investments R 2,940m Other Intangibles & Investments 8.4% 18.5 % of Net Operating assets GOODWILL & TRADEMARKS R m Distell Winemasters Limited 1.9 Distell (Hong Kong) Limited 7.5 Lusan Holdings 20.3 KWA Holdings E.A. Limited Imported Premium Vodka Company Limited Distell International Limited 1,371.6 Goodwill & Trademarks 59.0% Investment in Associates & JVs 32.5% INVESTMENT IN ASSOCIATES & JVs R m Tanzania Distillers Ltd 32.0 Grays Inc. Limited 36.7 Best Global Brands Tonnellerie Radoux 8.1 TD Spirits LLC 44.1 Afdis Holdings 52.3 Other 17.9 OTHER INTANGIBLES & INVESTMENTS R m Software and property rights Other loans & investments 64.0

35 Rm C A S H F L O W A N D F U N D I N G Gearing has increased marginally Net cash generated from operating 3,660 activities increased 15.4% 2, Net borrowing Operating profit Treasury shares Net cash Working capital position 30 June movement, net 2017 of borrowing Medium-term borrowings R4,375m: Euro, GBP and ZAR denominated Debt/equity ratio 32.5% (Dec16: 28.8%) Short-term net cash R640m: Variable rate 882 Distributions (fin cost, tax & dividend) 1,349 Capex and intangibles Best Global Brands investment: R726.5m 3,735 Net borrowing position 31 December 2017 FUNDING STRUCTURE Bank overdrafts and call accounts Cash and cash equivalents Medium-term bank loans Short-term bank loans DEBT MATURITY PROFILE Within one year Between one and two years Between two and five years DEC YTD R m 393 1,200 3,175 DEC YTD R m (70) 1,103 (4,375) (393) (3,735) RATE 1% 8.5% 8.5%

36 P R O G R E S S O N D I S P O S A L O F N O N - C O R E A S S E T S DISPOSAL RATIONALE Sale of Bisquit Unlock balance sheet: Reduction of assets and net debt Improvement in net debt : EBITDA ratio ROA improvement Increase Distell s ROIC Core focus assets: Durbanville Hills Nederburg Alto Plaisir de Merle Unwind of LUSAN Sale of other non-core assets Previously caused misalignment. Distell owned 5 farms at 50% each. Now own 2 farms at 100% each. This allows Distell the opportunity to focus on core assets

37 S A L E O F B I S Q U I T Rationale for sale: Cost to gain route-to-market access was unattractive in relation to the returns Focus on more asset-efficient opportunities and balance our portfolio better to improve our margin and return on investment Will ensure the assets within Distell's portfolio align with our strategy and generate long-term shareholder value Estimate impact on Distell: Will allow us to de-leverage our balance sheet as follows: Assets will reduce by R847.0m (3.8%) Net debt will reduce by R267.7m (7.2%) Therefore our Net debt : EBITDA ratio will improve from 1.3X to 1.0X on a full year basis ROA will improve from 7.6% to 7.9% on a full year basis Ultimately increasing Distell group ROIC by 0.5% The impact on the income statement is as follows: Revenue will reduce by 1.5% EBIT growth on History will improve by 0.8%

38 O U T LO O K

39 I N C O N C L U S I O N LOOKING AHEAD: South Africa: Defend and grow top-line growth through optimised brand portfolio and innovation Maintain recovery and lead in the brandy category Drive our wine strategy across the price continuum Maintain Savanna momentum and invest behind Hunter's brand renovation Africa: Continue to build Africa platform by leveraging KWAL Build scale for BGB brand in core markets Growth to be delivered via organic and inorganic initiatives with considered investments in route-to-market platforms International: Sustain gains made in Europe Build our wine business in key Emerging Markets Drive added focus in wine and maintain share momentum of core brands Continue on our journey to grow and build a leaner, focused and more agile organisation: Focused portfolio-tail brand, SKU and asset rationalisation Accelerate decentralisation Utilise and scale up shared services (HIVE) Optimised supply chain network-ensure low cost and consistent quality Decentralised, Agile and Empowered organisation Overarching focus on Sustainability Inorganic activity is critical to enhance existing markets and unlock new market Business model and portfolio to withstand short-term economic constraints to capture longer-term recovery

40 D I S C L A I M E R This presentation contains forward-looking statements, including specifically all statements that express market forecasts; Distell s commentary on macro and industry related market trends; and projections related to Distell s business strategy. All forward-looking statements contained in this presentation involve risk and uncertainty since they are dependent on assumptions of circumstances that will occur in the future. There are multiple variables which could cause actual results to differ from the forwardlooking statements which are not within Distell s management control. Such variables include, but are not limited to, political, macro and socio-economic changes; legal and regulatory changes; litigation developments; technological changes; environmental risks and changes in consumer trends, among others. As such, Distell is not liable for any financial or other losses incurred arising from investment decisions made on the basis of forward-looking statements contained in this presentation. As such, you are cautioned not to place undue reliance on the forward-looking statements contained herein, as they apply only as at the date of this presentation. All forward-looking statements made by Distell apply only as of the date they are made. There is no obligation on Distell in the future to provide updates on forward-looking statements contained in this presentation to reflect any changes in Distell s projections with regard thereto or any changes in events or underlying assumptions on which any such statement is based.