Group Results Presentation Half Year 2017

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1 Group Results Presentation Half Year

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 reflects 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 filled 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

3 Contents 1 2 Overview of the business in HY 2017 Financial Performance review Larry Ettah GMD/CEO Abdul Bello CFO 3 Summary & Outlook Larry Ettah GMD/CEO 3

4 Contents 1 Overview of the business in HY 2017 Larry Ettah GMD/CEO 4

5 Operating Environment of 2017 Nigeria s GDP contracted by 0.52% in Q (representing the fifth consecutive quarter of contractions since Q1 2016). Drop in output from national grid has increased production cost but this has been mitigated by the reduction in diesel prices to an average of N160 per litre from a high of N220 in Q CBN policies and interventions in the forex market are strengthening the value of Naira against the USD, ensuring liquidity in the forex market and supportive of improved economic activities High interest rates and naira illiquidity will continue to constrain commercial activities and profitability Cost-led increases in feed prices and relatively low market prices of eggs and poultry leading to closure of farms and would hurt sector Overall, the economy is in gradual recovery mode and we remain cautiously optimistic about the future prospects 5

VISION To be number one in our chosen markets, providing exceptional value to our customers MISSION DESIRED OUTCOME To grow our top-line at the rate of inflation in Nigeria at a blended EBIT

6 VISION To be number one in our chosen markets, providing exceptional value to our customers MISSION DESIRED OUTCOME To grow our top-line at the rate of inflation in Nigeria at a blended EBIT profitability of 15% Adding value to the lives of our stakeholders 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 6

9%) Livestock Feeds PLC (65%) Foods Paints Real Estate Logistics Pension

7 Snacks/Beverages QSR Animal Feed/Edible Oil/Maize Meal Animal Feed UAC Foods LTD (51%) UAC Restaurants LTD (51%) Grand Cereals LTD (64.9%) Livestock Feeds PLC (65%) Foods Paints Real Estate Logistics Pension Administrator CAP PLC (50.18%) Portland Paints and Products Nigeria PLC (85%) UPDC PLC (46%) MDS Logistics LTD (51%) UNICO CPFA (87%) 7

Operations Review Turnover up 72% High cost of inputs High finance costs resulting from expanded working capital requirement due to significant material price increases & High Interest Rates Turnover

8 Operations Review Turnover up 72% High cost of inputs High finance costs resulting from expanded working capital requirement due to significant material price increases & High Interest Rates Turnover down 15% Building back Gala volume lost in 2016 High input costs impacting profitability Credit squeeze and high finance costs limiting capacity of trade partners Turnover up 3% Rising input costs impacting margins Weak consumer purchasing power impacting footfall 8

Operations Review Turnover up 28% Elevated input costs impacting margins High Finance Costs Turnover flat Launched new colour shop in Lagos Commissioned automated in-plant

9 Operations Review Turnover up 28% Elevated input costs impacting margins High Finance Costs Turnover flat Launched new colour shop in Lagos Commissioned automated in-plant tinting machine Limited construction activities impacting volumes Turnover up 23% New product Sandtex screeding paint introduced Infrastructure challenges impacting operations 9

rates impacting profitability Turnover down 4% Signed 2 new

10 Operations Review Turnover up 71% from completed projects Macro challenges impacting planned volumes Significant rise in interest rates impacting profitability Turnover down 4% Signed 2 new clients Declining client volumes as a result of weak consumer demand 10

11 Performance of Key Subsidiaries Grand Cereals (N Million) 25,500 UAC Restaurants (N Million) , Turnover PBT Turnover PBT -4 UAC Foods (N Million) 8,375 7, Livestock Feeds (N Million) 5,839 4, Turnover PBT Turnover PBT

12 Performance of Key Subsidiaries CAP (N Million) Portland Paints (N Million) 3,447 3, , ,147 1, Turnover UPDC (N Million) PBT Turnover MDS (N Million) -66 PBT 2, ,605 2, , Turnover PBT ,020 Turnover PBT 12

Capital Raise Update N1.02 Billion Portland Paints Rights Issue concluded. 66% allotted in February 2017 N750 Million Livestock Feeds Rights Issue Concluded at 104% subscription.

13 Capital Raise Update N1.02 Billion Portland Paints Rights Issue concluded. 66% allotted in February 2017 N750 Million Livestock Feeds Rights Issue Concluded at 104% subscription. 100% allotted in April 2017 N5.1 Billion UPDC Rights Issue concluded at 51% subscription. Process for SEC approval of allotment ongoing. N15.4 Billion UAC Rights Issue approved by shareholders. Process for SEC/NSE approval ongoing. 13

14 Outline 2 Financial Performance review Abdul Bello CFO 14

15 Key Performance Highlights Key Performance Highlights Group Financial Performance Turnover (N'm) 48,448 36,803 Gross Profit (N'm) 7,654 8,164 EBIT (N'm) 3,701 3,329 PBT (N'm) 1,635 3, Financial Position Cash (N'm) 8,055 9,546 Borrowings (N'm) 29,540 29,796 Total Assets (N'm) 135, ,230 Total Liabilities (N'm) 60,923 61,764 Net Assets (N'm) 74,090 76, Performance Ratios Gross Margin 16% 22% EBIT Margin 8% 9% PBT Margin 3% 11% ROE 3% 7% Gearing 0.40x 0.39x EPS (kobo)

16 Statement of Profit or Loss Continuing Operations Group N'M N'M Revenue 48,448 36,803 Cost of sales 40,794 - (28,639) - Gross profit 7,654 8,164 Selling and distribution expenses (1,726) (1,759) Administrative expenses (3,470) (3,542) Other gains 1, Other losses (112) (48) Operating profit 3,701-3,329 - Net finance (cost) / income (2,496) (366) Share of profit of equity accounted associate Profit before taxation 1,635 3,933 Taxation (440) (1,306) Profit from continuing operations 1,195 2,627 Profit from discontinued Operations - - Profit for the period 1,195-2,627 - Profit attributable to Parent 999 1,495 Profit attributable to NCI 195 1,132 Comments Growth in revenue driven largely by the animal feeds and real estate categories Other gains boosted by disposal of investment properties in UPDC and recoveries Finance costs elevated by High Interest Rates Expanded bank facilities for significant price rises on grain and oil seeds procured Share of Profit in Associate down due to reduced earnings of UPDC REIT 16

17 Statement of Financial Position Statement of Financial Position Group N'M N'M PPE 34,498 35,270 Investment property 18,996 19,870 Investments in associates 19,483 19,696 Trade and other receivables 20,562 15,187 Cash and short-term deposits 8,055 9,546 Other Assets 33,421 38,661 Total Assets 135, ,230 Long-term borrowings 4,073 5,275 Short-term borrowings 25,467 24,521 Trade and other payables 17,713 17,919 Current income tax liabilities 3,736 4,886 Other liabilities 9,935 9,164 Total Liabilities 60,923 61,765 Equity - Parent 45,497 46,418 NCI 28,593 30,047 Total Equity 74,090 76,466 Total Equity & Liabilities 135, ,230 17

18 Group Trend Analysis Turnover (N M) Gross Profit (N M) 9,172 48,448 40,256 37,375 36,803 8,393 8,164 7, performance shows recovery in Turnover 18

19 Group Trend Analysis Operating Profit (N M) Profit Before Tax (N M) 4,611 3,329 3,701 5,062 3,933 1,649 2,146 1, The impact of elevated finance costs is apparent 19

20 Turnover by Segment Logistics 5% Paints 9% Real Estate 6% Real Estate Logistics 5% 7% Paints 12% Food & Bev 79% Food & Bev 76% Turnover contribution of F&B segment rises to 79% 20

21 PBT by Segment Paints 35% Logistics 15% Food & Bev 49% Logistics 17% Real Estate 3% Paints 32% Food & Bev 47% Paints segment contribution up 3% 21

22 Segment Analysis Turnover (N Bn) Foods Logistics Paints Real Estate 22

23 Segment Analysis PBT (N Bn) Foods Logistics Paints Real Estate

24 Segment Analysis PBT Margins 4% 6% 18% 24% 23% 25% 7% Foods Logistics Paints Real Estate -68% 24

25 3 Summary & outlook Larry Ettah GMD/CEO 25

26 Outlook FY 2017 Outlook FY 2017 Despite very high interest rate regime, outlook for H2 appears brighter following relative stability and declining inflation rate with positive impact on margins. Our businesses will replenish input materials at reduced costs as we expand distribution networks. UPDC will launch a corporate bond to refinance some short term facilities as its cash generation plan gathers momentum in H2. 26

27 Action Plans for H2 Outlook FY 2017 UAC Foods & UAC Restaurants Drive up Gala Mega and Funtime Coconut chips contribution to revenues and margins Deploy new Gala theme campaign Launch at least 2 new products Boost production capacity for selected lines Review RTM for Supreme Ice Cream Price review on selected lines Grand Cereals & Livestock Feeds Increase retail market visibility for Grand oil Further boost Quality of Vital fish feed Significantly grow Binggo Dog Food volumes Unlock finance tied in inventory to pay down facilities 27

28 Action Plans for H2 Outlook FY 2017 UPDC Paints MDS Cut UPDC Debt to reduce finance charges at least N5b from Investment Property Drive Real estate inventory sales and collections and other cash generation initiatives Launch Corporate Bond to refinance some short-term facilities, moderate interest rates and provide breather for macro-economic upside Deploy improved logistics plan for Q4 season Expand distribution network Conclude RFP process of new clients to boost revenues Review Haulage offering to reduce down-time and improve margins 28

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UAC of Nigeria PLC. Group Results Presentation Full Year 2015

UAC of Nigeria PLC. Group Results Presentation Full Year 2015 UAC of Nigeria PLC Group Results Presentation Full Year 2015 Important Notice This presentation contains or will contain forward-looking statements which reflect management's expectations regarding the