AGENDA
1. WELCOME AND INTRODUCTION PEARSON GOWERO
2. TRADING REVIEW PEARSON GOWERO
3. FINANCIALS MATTS VALELA
4. DISCUSSION/QUESTIONS ALL
5. REFRESHMENTS ALL
VOLUME BEVERAGE CATEGORY
• Declined by 8% LAGER BEER
• SBs declined by 6%SOFT DRINKS
• Declined by 3% SORGHUM BEER
1. Underperforming economy – slump in commodity prices and poor agricultural output.
2. Cash shortages – impact on discretionary spending. Low consumer confidence.
3. Liquidity challenges – customer cash/debtors cycles.
4. Job losses and the inability of the economy to generate new jobs.
5. Strong US Dollar – increase in imports from regional markets as local products
become more expensive.
6. Delays or inability to meet wage/salary payments by local authorities, parastatals,
industry and central government.
7. Policy risk – discord in policy implementation discouraging FDI.
TRADING ENVIRONMENT
VOLUME PERFORMANCE SUMMARY
Category Actual
Volume
000hl
% Change
on Prior
Year
1. BEVERAGES (HLS 000)
1.1 Clear Beer
1.2 Sorghum Beer
1.3 Sparkling Beverages
1.4 Alternative Beverages
1 307
3 587
1 385
190
(8)
(3)
(6)
(2)
Total Excluding Associates 6 469 (5)
2. Malt Tonnage 24 391 11
QUARTERLY VOLUME & REVENUE PERFORMANCE
1 5261 639
1 726
1 578
$150
$159
$173
$143
$100
$120
$140
$160
$180
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
Apr-Jun Jul-Sep Oct-Dec Jan-Mar
Gro
ss S
ale
s $
mil
lio
n
Vo
lum
e H
l '0
00
Volume Gross Sales
LAGER BEER VOLUME & REVENUE PERFORMANCE
1 981 2 060
1 697
1 4141 307
$326$352
$316
$278
$235
$0
$50
$100
$150
$200
$250
$300
$350
$400
0
500
1 000
1 500
2 000
2 500
F12 F13 F14 F15 F16
Gro
ss s
ale
s $
mil
lio
n
Vo
lum
e H
l '0
00
Volume Gross Sales
LAGER BEER FULL YEAR VOLUME PERFORMANCE F11 TO F16
TRADING REVIEW- LAGER BEER MIX
HLs ‘000
-
200
400
600
800
1,000
1,200
1,400
1,600
F15 F16
8% 14%
66% 59%
26%27%
Premium
Main Stream
Economy
• Increase in parallel imports.
• Market shares holding.
• Growth in value brands.
• Competition from other forms of alcohol increased.
• Leveraged association with SABMiller and
introduced a number of new products.
LAGER BEER
It all comes together with a CASTLE
1 4801 615 1 589
1 4721 385
$202
$231$225
$204
$183
$0
$50
$100
$150
$200
$250
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
F12 F13 F14 F15 F16
Gro
ss s
ale
s $
mil
lio
n
Vo
lum
e H
l '0
00
Volume Gross Sales
SPARKLING BEVERAGES VOLUME & REVENUE PERFORMANCE
TRADING REVIEW- SPARKLING BEVERAGES MIX
HLs ‘000
-
200
400
600
800
1,000
1,200
1,400
1,600
F15 F16
60% 58%
40% 42%
Convenience pack
RGB
SPARKLING BEVERAGES
• Growth in value packs (2L PET) and 1L returnable glass bottle
pushed volume away from higher margin packs.
• Higher demand in December/January driven by heat wave.
• Slow down in imports of value brands following duty increases.
• Parallel imports from Botswana and Zambia benefitting from trade
agreements (lower duties) and stronger USD.
• Competition largely on flavours as brand Coke remains dominant.
• Leveraging TCCC franchise arrangements to engage competition.
SORGHUM BEER VOLUME & REVENUE PERFORMANCE
3 354
3 080
3 442
3 7163 587
$103$118
$146
$176$193
$0
$50
$100
$150
$200
$250
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
F12 F13 F14 F15 F16
Gro
ss S
ale
s $
mil
lio
n
Vo
lum
e H
l '0
00
Volume Gross Sales
TRADING REVIEW- SORGHUM BEER MIX
HLs ‘000
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
F15 F16
71% 44%
29% 56%
Chibuku Super
Chibuku
SORGHUM BEER
• Additional Chibuku Super capacity commissioned in
October at Fairbridge Bulawayo.
• Recovery in standard Chibuku volume following
price review.
• Gain in value and market share driven by Chibuku
Super.
• Chibuku products offering an accessible and
affordable entry into commercial alcohol.
BEVERAGE VOLUME CONTRIBUTION
F15 F16
20%
55%
22%
3%
Lagers
Sorghum
SBs
Maheu
20%
56%
21%
3%
Lagers
Sorghum
SBs
Maheu
VOLUME CONTRIBUTION BEER CATEGORY
F15 F16
28%
72%Lagers
Sorghum
27%
73%Lagers
Sorghum
UPDATE ON ASSOCIATES
AFDIS
• Soft Volume
• Affordability challenges
SCHWEPPES ZIMBABWE LIMITED
• Volume holding
• Volume and revenue pressure – new growth areas being explored while
sorting out supply chain bottlenecks
• Improvement in financial performance
• Beitbridge Juice resumed supplies of juice concentrates to bottlers
• Launch of Bonaqua water brand at competitive prices
NAMPAK ZIMBABWE
• Listed entity has reported steady increase in earnings in their
half year results to March 2016
AGENDA
1. FINANCIAL HIGHLIGHTS
2. FINANCIAL STATEMENTS
VOLUME PERFORMANCE SUMMARY
Category Actual
Volume
000hl
% Growth
on Prior
Year
1. BEVERAGES (HLS 000)
1.1 Clear Beer
1.2 Sorghum Beer
1.3 Sparkling
Beverages
1.4 Alternative
Beverages
1 307
3 587
1 385
190
(8)
(3)
(6)
(2)
Total Excluding Associates 6 469 (5)
2. Malt Tonnage 24 391 11
GROSS SALES
• Down 15% to $235 millionLAGER BEER
• SBs down 10% to $183 million
• Alt.Bev down 17% to $14 million SOFT DRINKS
• Up 10% to $193 millionSORGHUM BEER
FINANCIAL HIGHLIGHTS
REVENUE
Declined by 7% to $538,2 million (Turnover - $633m)
OPERATING MARGIN %
Down from 22,08% to 20%
EBIT
Down by 14% to $96,1 million
FINANCIAL HIGHLIGHTS
EBITDA
Down by 10% to $129 million
ATTRIBUTABLE INCOME
Declined by 13% to $80,1 million
DIVIDEND PER SHARE
DIVIDEND PER SHARE
Up 3% on prior year
Interim dividend paid per share- US 1,40 cents
Final dividend proposed per share- US 2,35 cents
Cont….
EARNINGS PER SHARE
Decreased by 13% to US6,49 cents
Special Dividend
Special dividend proposed per share – US 0,95 cents
STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD
MARCH 2016
US$000’s
MARCH 2015
US$000’s
REVENUE 538 198 576 552
Operating income 96 072 111 136
Net finance expense 5 895 7 362
Share of associates profit 3 944 3 265
PROFIT BEFORE TAX 105 911 121 763
Taxation (25 822) (29 809)
PROFIT FOR THE YEAR- CONTINUING
OPERATIONS80 089 91 954
Profit for the year from discontinued operations - 846
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR80 089 92 800
ANALYSIS OF ATTRIBUTABLE INCOME
2016
US$000’s
2015
US$000’s
Profit for the half year from operations attributable to:
Owners of the parent 80 089 91 943
Non-controlling interests - 857
80 089 92 800
EARNINGS PER SHARE
MARCH
2016
MARCH
2015
%
Change
Normal EPS (from Continuing
operations) – Cents6,49 7,44 (13)
Fully Diluted EPS (from
Continuing operations) Cents6,48 7,40 (12)
Dividend per share - Cents 4,70 3,65 29
MARCH
2016
US$’ 000
25 575
22 525
39 108
87 208
8 864
96 072
SEGMENT OPERATING INCOME
MARCH
2016
US$’ 000
MARCH
2015
US$’ 000
LAGER BEER 25 575 28 136
SPARKLING BEVERAGES 22 525 32 583
SORGHUM BEER 39 108 41 277
TOTAL REPORTABLE SEGMENTS 87 208 101 996
ALL OTHER SEGMENTS 8 864 9 140
TOTAL OPERATING INCOME 96 072 111 136
ASSETS2016
US$000’s
2015
US$000’s
Non-current assets
Property, plant and equipment 345 332 341 099
Investments, loans and trademarks 54 776 45 469
TOTAL NON-CURRENT ASSETS 400 108 386 568
CURRENT ASSETS
Inventories 86 431 98 262
Trade and other receivables 43 683 45 224
Cash and cash equivalents 166 016 133 611
TOTAL CURRENT ASSETS 296 130 277 097
TOTAL ASSETS 696 238 663 665
STATEMENT OF FINANCIAL POSITION MARCH
STATEMENT OF FINANCIAL POSITION MARCH
EQUITY AND LIABILITIES2016
US$000’s
2015
US$000’s
Share Capital 12 310 12 366
Share Premium 33 074 32 234
Reserves 5 985 4 531
Retained Earnings 436 530 407 514
Non-controlling Interests - -
Shareholder’s equity 487 899 456 645
Long- term borrowings 65 000 70 000
Deferred taxation 48 833 41 780
113 833 111 780
CURRENT LIABILITIES
Short term borrowings - -
Interest free liabilities 94 506 95 240
TOTAL CURRENT LIABILITIES 94 506 95 240
TOTAL EQUITY AND LIABILITES 696 238 663 665
cont…
CASH FLOW
2016
US$000’s
2015
US$000’s
Cash flow from operating
activities137 463 131 690
Net cash invested (49 426) (41 908)
Net funding 101 016 63 611
SHARE CAPITAL MOVEMENTS
Shares in Issue as at 31 March 2015 1 242 568 675
Share Options Exercised 1 745 300
Shares in Issue as at 31 March 2016 1 244 313 975
OUTLOOK
1. Trading conditions to remain difficult.
2. Business survival strategies to remain a priority.
3. Chibuku Super capacity increase. New plants to be
commissioned in Masvingo and Kwekwe by September 2016.
4. Target profitability, cash generation and dividend payout.
5. Optimise volume and spend on our products via innovative go to
market strategies.
6. People focus; to retain and refresh skills.
7. Transactional difficulties due to cash shortages pause a risk.
8. Perceived policy risk to remain.
THANK YOUCHEERS