RESULTS PRESENTATION Creating a Future, Enhancing Life
PRESENTATION AGENDA MILESTONES FOR 2017 Wessie van der Westhuizen VISION 2019 Wessie van der Westhuizen FINANCIAL RESULTS 2017 Graeme Mouton OUTLOOK Wessie van der Westhuizen QUESTIONS All 2
MILESTONES FOR 2017 3
MILESTONES FOR 2017 Everyone purposefully producing breakthrough everywhere NBL maintained its strong market position despite a strained local economy 46% increase in beer volumes produced for South Africa 3% decrease in Namibian beer volumes 8% overall increase in volume growth 2% increase in export beer volumes 12% increase in revenue 13% increase in operating profit 4
EXPORT MARKETS PERFORMANCE UPDATE Focus markets* Botswana Tanzania Zambia Trading markets Swaziland Zimbabwe Lesotho St Helena Mozambique * Markets with high-growth potential and therefore earmarked for in-market presence and investment 5
SOUTH AFRICA UPDATE Increased volumes delivered to South Africa driven by additions to the SA portfolio and increased market share The Group s craft portfolio will be positioned within Heineken South Africa Soweto Gold now incorporated into Heineken South Africa Heineken South Africa announced its intention to acquire Stellenbosch-based craft brewery, Stellenbrau 6
MILESTONES FOR 2017 Amazing experiences, enduring impact Launched Tafel Lite as a lower-calorie alternative to Tafel Lager, with 27% less carbohydrates Introduced Code as a new mainstream soft drink, available in three flavours Relaunch of Camelthorn in Namibia and South Africa 7
MILESTONES FOR 2017 Amazing experiences, enduring impact Windhoek Lager, Windhoek Draught and Urbock won gold medals at the DLG Awards this was the 11th consecutive DLG gold medal won by Windhoek Lager Swakopmund Brewing Company was the first and only brewer in Africa to compete in the annual international Best Brew Challenge Tafel Lager relaunched in South Africa this includes the sponsorship agreement with Griquas Rugby Union 8
MILESTONES FOR 2017 Sustainable execution in everything Continued efforts and investments to reduce dependency on national water supply, as well as the reduction of overall water consumption Reduction in NBL s carbon footprint through the biomass boiler and improved performance of the rooftop solar plant Long-term success of NBL s home-grown barley project remains a priority; NBL continued to raise awareness of King Lager s role in the home-grown barley project The compounded annual growth rate in dividends paid increased, on average, by 9.2% over the past five years An total shareholder return of 34% for the year (an average of 26% over the past five years) 9
MILESTONES FOR 2017 Sustainable execution in everything Litres of water used per litre of beverage produced 4.9 4.8 4.5 4.4 4.3 4.3 2012 2013 2014 2015 2016 2017 10
VISION 2019 11
VISION 2019 Purpose Creating a Future, Enhancing Life Values Let s Talk Let s do it Hooked on Results We Grow People Vision To be the most Progressive and Inspiring Company O&L Group Vision for 2019 To achieve a N$2 billion EBIT target To reduce the Group s carbon footprint by 20% To be an Employer of Choice To create 4 000 additional job opportunities We All Serve Naturally Today for Tomorrow We do the Right Things Right 12
VISION 2019 O&L Group vision for 2019 NBL s contributions towards Vision 2019 Achieve a N$2 billion earnings before interest and tax (EBIT) target Financial results (+13% increase in EBIT) Reduce our carbon footprint by 20% Be an Employer of Choice Create 4 000 additional job opportunities Biomass boiler Rooftop solar plant Focused strategy to positively contribute to Great Place to Work Home-grown barley project Local procurement spend (2017: 41%, 2016: 38%) 13
FINANCIAL RESULTS 2017 14
FINANCIAL RESULTS 2017 Operating environment Economic environment: Higher unemployment rate Reduction in Government spend Increased interest rates Increased utility costs Challenges experienced in the agricultural sector and construction industry Low growth in large neighbouring countries 46% increase in the production volumes to South Africa 15
FINANCIAL RESULTS 2017 Salient features (% change 2017 vs 2016) Revenue 11.7% 23.6% 6.5% 11.8% Profit attributable to ordinary shareholders Earnings per ordinary share Headline earnings per ordinary share Dividend paid per ordinary share (14.5%)(14.5%) Net asset value per ordinary share (23.9%) Return on ordinary shareholders' fund 16
FINANCIAL RESULTS 2017 Volume contribution per category 61.0% Beer - Namibia 67.6% 28.3% Beer - South Africa 20.7% JUNE 2017 4.7% 0.0% Beer - Export RTDs 4.9% 0.7% JUNE 2016 6.0% Softs 6.1% An increasingly diversified portfolio of alcoholic and non-alcoholic products beer still dominant at 61.0% of overall volumes produced 17
FINANCIAL RESULTS 2017 Salient features: comprehensive income 30 June 2017 N$ 000s 30 June 2016 N$ 000s Turnover 2 708 978 2 425 885 Operating expenses (2 097 965) (1 885 211) Operating profit 611 013 540 674 Finance costs (50 923) (39 412) Finance income 18 304 18 315 Equity loss from joint venture (38 917) Equity (loss)/profit from associate (155 717) 27 453 Profit before income tax 422 677 508 113 Income tax expense (104 249) (135 643) Profit attributable to ordinary shareholders 318 428 372 470 18
FINANCIAL RESULTS 2017 Salient features: equity losses from associate and joint venture 30 June 2017 N$ 000s 30 June 2016 N$ 000s Equity accounted losses Equity loss from joint venture (38 917) Equity loss from associate (159 742) (61 759) Equity loss from ongoing operations (159 742) (100 676) Deferred tax asset recognition 58 829 89 212 2015 statutory audit adjustments by associate 13 721 Effect of impairment of assets and recognition of liabilities (68 525) Total equity accounted losses (155 717) (11 464) Increased shareholding Audit adjustment by associate Impact of the impairment of assets and recognition of liabilities Heineken South Africa (Proprietary) Limited fair valued the assets and liabilities on the amalgamation of Sedibeng Brewery (Proprietary) Limited s operations into Heineken South Africa (Proprietary) Limited and, as a result, recorded a bargain purchase for the net amount of N$435 million NBL have not accounted for the bargain purchase in line with its Group accounting policy 19
FINANCIAL RESULTS 2017 Salient features: financial position 30 June 2017 N$ 000s 30 June 2016 N$ 000s Property, plant and equipment 988 241 983 365 Investment in associate 438 265 610 526 Other non-current assets 41 888 25 530 Non-current assets held for sale 10 005 Current assets 1 016 774 850 796 Total assets 2 495 173 2 470 217 Issued capital 1 024 1 024 Non-distributable reserves 160 249 Retained income 1 405 101 1 256 521 Ordinary shareholders equity 1 406 285 1 257 794 Interest-bearing loans and borrowings (non-current) 384 379 479 739 Other non-current liabilities 217 011 212 949 Current liabilities 487 498 519 735 Total equity and liabilities 2 495 173 2 470 217 20
FINANCIAL RESULTS 2017 Salient features: cash flow N$ 000s 12 Months 30 June 2017 12 Months 30 June 2016 12 Months 30 June 2015 12 Months 30 June 2014 12 Months 30 June 2013 CONSOLIDATED STATEMENTS OF CASH FLOWS Cash generated by operations 695 841 654 065 736 481 502 637 706 084 Dividends paid (169 354) (159 027) (146 636) (134 244) (119 787) Taxation paid (128 762) (137 764) (123 516) (102 521) (105 696) Employer benefits payment on post employment benefits plans (935) Net cash flow from operating activities 396 790 357 274 466 329 265 872 481 293 Net cash flow applied to investing activities (142 842) (770 111) (253 872) (258 937) (287 402) Net cash flow from financing activities (99 602) 347 061 (4 179) (218 795) (17 989) Net (decrease)/ increase in cash and cash equivalents 154 346 (65 776) 208 278 (211 860) 175 902 21
FINANCIAL RESULTS 2017 Salient features: dividends Dividend paid per ordinary share (cents) 52 58 65 71 77 82 2012 52 2013 58 2014 65 2015 71 2016 77 2017 82 22
OUTLOOK 23
OUTLOOK Increased market share Namibian skills development Increase overall efficiencies New product development and portfolio extensions Track market and consumer insight Innovation Optimise NBL s supply footprint and route-tomarket Employment engagement initiatives and interventions to entrench NBL s purpose and breakthrough culture Succession planning, talent attraction and development of capabilities and skills remains a priority Particular focus on critical skills development International training, exchange programmes and import of technical specialists for transfer of skills Continue to invest in first-time-right initiatives Maximise scale efficiencies and capabilities in South Africa 24
OUTLOOK Create a responsible drinking culture Winning portfolio Actively promote responsible consumption and road safety initiatives e.g. Stay Cool, Enjoy Responsibility campaign 1 330 individuals received DRINKiQ training during the reporting period Continued implementation of winning strategies, innovation capabilities and breakthrough thinking Leverage NBL s unique value proposition as Africa s only independent brewer, supported by a purpose-driven ethos and quality credentials Leverage the Group s premium portfolio and further capitalise on opportunities in the growing craft beer segment 25
QUESTIONS 26