UAC OF NIGERIA PLC UAC OF NIGERIA PLC UAC OF NIGERIA PLC

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1 UAC OF NIGERIA PLC UAC OF NIGERIA PLC UAC OF NIGERIA PLC H1 9M Results Results Presentation

2 Important Notice This presentation contains or will contain forward-looking statements which reflect management's expectations regarding the Company's future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as "anticipate", "believe", "expects", "intend" "estimate", "project", "target", "risks", "goals" and similar terms and phrases have been used to identify the forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking statements. These factors or assumptions are subject to inherent risks and uncertainties surrounding future expectations generally. UAC of Nigeria cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and undue reliance should not be placed on the forward-looking statements. For additional information with respect to certain of these risks or factors, reference should be made to the Company s disclosure materials filed from time to time with Securities & Exchange Commission in Nigeria. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

VISION To be number one in our chosen markets, providing exceptional value to our

blended EBIT profitability of 15% OUR VALUES 1. Our Customers are our Focus 2.

Team spirit will give us good success 5.

3 VISION To be number one in our chosen markets, providing exceptional value to our customers MISSION To grow our top-line at twice the rate of GDP growth in Nigeria at a blended EBIT profitability of 15% OUR VALUES 1. Our Customers are our Focus 2. We act with Respect for the Individual 3. We act with Integrity in everything we do 4. Team spirit will give us good success 5. Innovation for business sustenance and value creation 6. We are Open and Communicate with our people DESIRED OUTCOME Adding value to the lives of our stakeholders 3

Contents 1 Overview of the business in h1 2014 Larry Ettah GMD/CEO 2 2

4 Contents 1 Overview of the business in h Larry Ettah GMD/CEO 2 2 Financial Performance review Abdul Bello CFO 3 3 Summary & outlook Larry Ettah GMD/CEO 4

5 Contents 1 Overview of the business in h Larry Ettah GMD/CEO 2 2 FINANCIAL Performance review Abdul Bello CFO 3 3 Summary & outlook Larry Ettah GMD/CEO 5

6 Kingsway Chilli Beef Sausage Roll -110g

7 Operations Summary.these are challenging times Security concerns continue to pose a challenge in key markets constraining trade execution. The national commercial map has shrunk and activities are tepid as consumer confidence ebbs Competition intensifies across all categories over a redrawn economic map 7

8 UAC Shareholding Structure UAC has interests in 10 subsidiaries spanning 4 key verticals, plus a closed pension fund administrator 64.7% 64.9% 76.0% 87.0% 46.0% 50.1% 51.0% 51.0% 51.0% 51.0% UPDC CAP UFL UACR LSF MDS PPPN GCL WSWNL UNICO Uacn property devt company plc. Chemical & allied products plc. Uac foods ltd. Uac restaurants ltd. Livestock feeds plc. Mds logistics ltd. Portland paints & products nigeria plc. Grand cereals ltd. Warm spring waters nigeria ltd. Unico (cpfa) ltd 8

9 Business Review UACN PLC UAC s holding company structure consists of a Corporate Centre overseeing a portfolio of interests across 4 key verticals Food & Beverage Real Estate Paints Logistics Others Grand Cereals Ltd Grand Oil, Vital Feeds, Grand Maize Flour, Grand Maize Grits, Rich Fill UAC Foods Ltd Gala, Funtime Cake, Funtime Coconut Chips, Snaps Puffed Maize, Delite Fruit Juice, SWAN Water UPDC PLC Property Development Facility Management Property Sales Property Lease CAP PLC Dulux Paints Caplux Paints Portland Paints & Products Nigeria PLC MDS Logistics Ltd Warehousing Haulage Redistribution UNICO CPFA Ltd Closed Pension Fund Administrator UAC Restaurants Ltd Mr Bigg s Livestock Feeds PLC Animal Feeds Sandtex Decorative Paints Hempel Marine Paints Warm Spring Waters Nig. Ltd Gossy Water 9

10 Operations Review UAC FOODS LTD GRAND CEREALS LTD UAC RESTAURANTS LTD Turnover up 10% Launch of new variants (Kingsway beef roll and Gala Chicken sausage roll) Security challenges have impacted on sales execution Increased volume in Bottled Water and Dairies segments Turnover up 3% Endorsement of Fish Feed by Cat Fish Farmers Association of Nigeria Elevated input costs/scarcity of raw materials impacted margins Egg glut, lack of access to border markets and insecurity impacted volumes Turnover down 19% Manufacturing plant upgrade progressing satisfactorily Business restructuring continues

Operations Review UPDC PLC MDS LOGISTICS LTD CAP PLC Turnover down 6% Completed Vintage Gardens Phase 1

Unfavourable portfolio mix impacting margins Rising finance costs due to pricing, delayed debt refinancing

Completed and commissioned new Haulage workshop Security challenges in the north impacting clients volume

11 Operations Review UPDC PLC MDS LOGISTICS LTD CAP PLC Turnover down 6% Completed Vintage Gardens Phase 1 Mobilised to site on Olive Court Phase 1 (Ibadan), Metro City Phase 2 (Abuja), Pineville Phase 1 (Asaba) Unfavourable portfolio mix impacting margins Rising finance costs due to pricing, delayed debt refinancing and delayed take-off of projects Security challenges and uncertainty impacting performance Turnover up 4% Completed and commissioned new Haulage workshop Security challenges in the north impacting clients volume throughput Turnover up 16% Opened 3 Dulux Colour Shops and 1 Colour Centre Installed modern effluent treatment plant

12 Operations Review LIVESTOCK FEEDS PLC PORTLAND PAINTS PLC Turnover up 24% Ikeja Factory upgrade completed Improved collaboration with Grand Cereals Egg glut and insecurity impacting volumes Turnover up 6% Execution of new sales model nearing completion Restructuring and alignment progressing satisfactorily

13 Gala Chicken Sausage Roll N70 13

14 Contents 1 Overview of the business in h Larry Ettah GMD/CEO 2 2 FINANCIAL Performance review Abdul Bello CFO 3 3 Summary & outlook Larry Ettah GMD/CEO 14

15 Review of Financial Performance Turnover up 8%; key drivers UAC Foods, Grand Cereals and CAP as well as Portland Paints consolidation Gross Profit down 3% on the back of input cost pressures in certain categories Selling and distribution expenses up as a result of increased spend on sales/marketing activities and the execution of a new sales model by Portland Paints Finance costs up mainly on account of increased cost of borrowing in UPDC due to delayed refinancing of its debt PBT reduction is mainly on account of margin pressures and elevated financing costs in UPDC 15

16 Summary of Financial Performance 30 June June 13 N'000 N'000 Revenue 40,255,798 37,345,063 Cost of sales (31,083,616) (27,916,295) Gross profit 9,172,183 9,428,768 Selling and distribution expenses (1,585,009) (907,186) Administrative expenses (3,790,332) (3,965,576) Other gains 2,288,624 1,362,416 Operating profit 6,085,466 5,918,422 Finance income 673, ,002 Finance cost (1,697,782) (1,348,452) Net finance income / (cost) (1,023,792) (805,450) Profit before taxation 5,061,674 5,112,973 Taxation (1,580,294) (1,739,173) Profit from continuing operations 3,481,380 3,373,800 Profit from discontinued operations 8,654 53,288 Profit attributable to: Equity holders of the parent 1,977,379 1,619,782 Non controlling interest 1,512,655 1,807,306 Total comprehensive income for the period 3,490,034 3,427,088 16

17 Other Gains 30 Jun June 13 N'000 N'000 (Loss)/Profit on sale of PPE (34,934) 146,529 REIT income 1,474,955 - Profit on disposal of investment properties 94, ,203 Realisation on GM liquidation 203,040 - Other trading income 550, ,684 Total Other Gains 2,288,622 1,362,416 17

18 Review of Financial Performance (N Billion) turnover gross profit PBT 18

19 YOY Margins Analysis Gross Margin EBIT Margin 25% 23% 16% 15% Gross Margin down due to input cost pressures; concerted efforts to contain trend 19

20 Capital Structure Debt to Equity (x) Interest Cover (x) Debt to Equity Ratio flat due to delayed refinancing of UPDC debt; Interest cover down on the back of increasing interest cost 20

21 ROE/ROA ROE ROA 9.61% 9.93% 8.18% 8.23%

22 Summary of Financial Position 31 Dec Dec 13 N'000 N'000 Non-current assets 74,232,004 73,712,234 Current assets Cash and short-term deposits 8,720,252 8,893,801 Others 40,089,172 42,409,459 Total 48,809,425 51,303,260 Total assets 123,041, ,015,494 Non-current liabilities Borrowings 9,577,622 5,909,680 Others 4,064,811 5,055,243 Total 13,642,433 10,964,923 Current liabilities Short-Term Bank Facilities 16,534,568 20,285,954 Others 22,558,665 22,444,798 Total 39,093,233 42,730,752 Total liabilities 52,735,666 53,695,674 Equity Ordinary share capital 960, ,432 Reserves 40,927,673 41,975,656 Equity attributable to Parent 41,888,105 42,936,088 Non controlling interest 28,417,657 28,383,732 Total equity 70,305,762 71,319,819 Net Equity & Liabilities 123,041, ,015,494 22

23 Summary of Financial Position (N Billion) Non current assets Current assets Current liabilities Non current liabilities Net assets 23

24 Segment Analysis - Turnover H H Logistics 6% Real Estate 15% Real Estate 18% Logistics 7% Paints 12% Food & Bev 67% Paints 8% Food & Bev. 67% Turnover for Paints category is boosted by the consolidation of Portland Paints 24

25 Segment Analysis PBT H H Logistics 13% Real Estate 17% Food & Bev. 43% Real Estate 31% Others 3% Food & Bev. 35% Paints 26% Logistics 13% Paints 18% Portland Paints consolidation boosts paints category contribution; UPDC margin pressures and elevated finance costs impact Real Estate category 25

26 Performance of Key Subsidiaries UAC Foods (N Million) 7,080 7, ,081 Grand Cereals (N Million) 16, ,161 Turnover PBT Turnover PBT UPDC (N Million) CAP (N Million) 6,319 5, ,883 3, , ,095 Turnover PBT Turnover PBT 26

27 Performance of Key Subsidiaries MDS Logistics (N Million) 2,267 2, UAC Restaurants (N Million) Turnover PBT Turnover PBT Livestock Feeds (N Million) 2,702 3, ,354 Portland Paints (N Million) 1, Turnover PBT Turnover PBT 27

28 Marketing Managers Quarterly Meeting 28

29 Contents 1 Overview of the business in h Larry Ettah GMD/CEO 2 2 FINANCIAL Performance review Abdul Bello CFO 3 3 Summary & outlook Larry Ettah GMD/CEO 29

30 Summary Social and Economic dislocations tempered performance in the first half of the year The business continues to face headwinds of rising input costs and intense competition Volumes and margins have come under severe pressure Innovative actions and retail execution strategies launched in H1 and pursuit of cost efficiencies should sustain returns in H2 30

31 2014 Priorities Grow volumes Tackle margin challenges across key subsidiaries Upskill people; leverage technology Conclude integration process for new acquisitions Manage enterprise risks Innovation 31

32 New Workshop for MDS Haulage Operations

Contents. Overview of the business in performance review (FY 2012 & Q1 2013) Update on strategic thrusts. outlook. Larry Ettah GMD/CEO

Contents. Overview of the business in performance review (FY 2012 & Q1 2013) Update on strategic thrusts. outlook. Larry Ettah GMD/CEO UAC OF NIGERIA PLC Important Notice Contents 1 Overview of the business in 2012 Larry Ettah GMD/CEO 2 performance review (FY 2012 & Q1 2013) Abdul Bello CFO 2 Update on strategic thrusts Joe Dada ED Corp.