AGENDA 1. WELCOME AND TRADING REVIEW PEARSON GOWERO MATTS VALELA - PowerPoint PPT Presentation

AGENDA 1. WELCOME AND TRADING REVIEW PEARSON GOWERO MATTS VALELA 2. FINANCIALS 3. UPDATE ON ASSOCIATES & F16 FOCUS PEARSON GOWERO AREAS 4. DISCUSSION/QUESTIONS ALL 5. REFRESHMENTS ALL

VOLUME BY BEVERAGE CATEGORY • Declined by 2% LAGER BEER • SBs declined by 15% SOFT DRINKS • Alt Bev declined by 4% • Declined by 12% CHIBUKU

TRADING ENVIRONMENT 1. Stressed consumers – fewer people on regular income. Accelerated job losses post court ruling. 2. Tightening liquidity – traders destocking due to cashflow constraints; also evidence of overtrading. 3. Strong US Dollar – increase in imports from regional markets. Need for price corrections. 4. Underperforming key sectors of the economy – agriculture, mining, tourism and informal sector. 5. Escalation in power cuts - disruptions in production and restricted cold availability.

VOLUME PERFORMANCE SUMMARY – H1 Category Actual % Change Volume on Prior 000hl Year 1. BEVERAGES (HLS 000) 1.1 Clear Beer 682 (2) 1.2 Sorghum Beer 1 789 (12) 1.3 Sparkling Beverages 605 (15) 1.4 Alternative Beverages 89 (4) Total Beverages 3 165 (10) 2. Malt Tonnage 19 514 18

LAGER BEER VOLUME & REVENUE PERFORMANCE 1 200 180 154 170 160 164 1 000 1 027 140 945 139 925 800 120 Gross sales $million Volume Hl '000 126 100 695 600 682 80 400 60 40 200 20 0 - F12 F13 F14 F15 F16 Volume Gross Sales

TRADING REVIEW - LAGER BEER MIX HLs ‘000 700 26% 26% 600 500 Premium 400 Main Stream 60% Economy 300 68% 200 100 14% 6% 0 F15 F16

LAGER BEER • Slower decline in Q2. • Eagle lager sustaining volume. • Premium segment holding. • Core lager remains in decline hence price rollbacks in October. • Expansion into new beer styles (Flying Fish, Castle Lite Lime & Castle Draught).

SPARKLING BEVERAGES VOLUME & REVENUE PERFORMANCE 900 120 110 103 99 800 100 776 700 83 82 Gross sales $million 720 600 80 Volume Hl '000 648 708 605 500 60 400 300 40 200 20 100 0 - F12 F13 F14 F15 F16 Volume Gross Sales

TRADING REVIEW - SPARKLING BEVERAGES MIX HLs ‘000 800 700 41% 600 45% 500 Convenience pack 400 RGB 300 59% 55% 200 100 0 F15 F16

SPARKLING BEVERAGES • Growth in value packs (2L PET). • Loss of market share to value brands; affordability issues. • Major raw materials remain relatively expensive. • Reduced discretionary income – a key driver of consumption for soft drinks. • Competition largely in flavours and one way packs. • Proliferation of alternative beverages.

SORGHUM BEER VOLUME & REVENUE PERFORMANCE 2 500 100 90 95 94 2 000 80 1 784 Gross Sales $million 70 1 639 75 Volume Hl '000 2 037 1 500 60 1 789 61 50 54 1 000 40 1 794 30 500 20 10 0 - F12 F13 F14 F15 F16 Volume Gross Sales

CHIBUKU SUPER CONTRIBUTION 80% % CONTRIBUTION 70% 67% 60% 49% 50% 40% 30% 24% 20% 9% 10% 0% F14 F15 F16 OCTOBER 2015 Accelerated switch to Chibuku Super

SORGHUM BEER • Growth in Chibuku Super but curtailed by disruptions to supply and limited capacity. • Extended logistics due to freighting of product from one site. • Overall volume affected by poor performance in agriculture; reduced consumption in rural areas. • Impact of lower transaction volume (1.25 litre Chibuku Super v 2 litre scud).

BEVERAGE VOLUME CONTRIBUTION F16 F15 3% 2% 19% 22% 19% 20% 57% 58% Lagers Lagers Sorghum Sorghum SBs SBs Alternative beverages Alternative beverages

VOLUME CONTRIBUTION BEER CATEGORY F16 F15 25% 28% 75% 72% Lagers Sorghum Lagers Sorghum

MARKET SHARE Sparkling Lager Beer Sorghum Beer Beverages F16 98% 86% 93% F15 98% 86% 96%  Competitors challenging SBs space.

OTHER HIGHLIGHTS 1. Fairbridge Brewery commissioned. Capacity fully utilised by October 2015. 2. Renewed focus on value chain costs and localising inputs where possible. 3. Refreshing of beer brands and introduction of new beer styles. 4. Increased focus on distribution; injected additional vehicles to increase insourcing of logistics. 5. Retail prices remain a focus across the entire business.

AGENDA FINANCIAL HIGHLIGHTS 1. FINANCIAL STATEMENTS 2.

VOLUME & REVENUE PERFORMANCE ENDING 30 SEPTEMBER 2015 % CHANGE VS PR. YR VOLUME REVENUE Volumes (000hls) • Lager Beer (2%) (9%) • Sorghum beer (12%) 1% • Soft Drinks (13%) (18%) Total (10%) (8%)

SEGMENT OPERATING INCOME September September 2015 2014 US$’ 000 US$’ 000 LAGER BEER 12 862 12 354 SPARKLING BEVERAGES 7 850 15 008 SORGHUM BEER 18 367 24 227 TOTAL REPORTABLE SEGMENTS 39 079 51 589 ALL OTHER SEGMENTS 4 388 2 833 TOTAL OPERATING INCOME 43 467 54 422

NPR $ PER HECTOLITRE BY BEVERAGE TYPE F16 F15 BEVERAGE CATEGORY $/HL $/HL • Lager Beer 116 118 • Sorghum beer 45 39 • Soft Drinks 114 117

FINANCIAL HIGHLIGHTS REVENUE Decline by 8% to $269 million (Turnover - $315m) EBIT Down by 20% to $43,5 million OPERATING MARGIN % Down from 21,47% to 18,21%

cont … FINANCIAL HIGHLIGHTS EBITDA Down by 16% to $59,4 million ATTRIBUTABLE INCOME Declined by 19% to $35,7 million INTERIM DIVIDEND Up by 4% to US1,40cents ($17,3 million)

STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD SEPT 2015 SEPT 2014 US$000’s US$000’s REVENUE 269 021 291 471 Operating income 43 467 54 422 Net finance income 2 688 2 459 Share of associates profit 1 463 1 064 PROFIT BEFORE TAX 47 618 57 945 Taxation (11 885) (14 647) TOTAL COMPREHENSIVE INCOME 35 733 45 007

ANALYSIS OF ATTRIBUTABLE INCOME 2015 2014 US$000’s US$000’s Profit for the half year from operations attributable to: Owners of the parent 35 733 44 090 Non-controlling interests 917 - 35 733 45 007

EARNINGS PER SHARE SEPT SEPT % 2015 2014 Change Normal EPS - Cents 2,89 3,55 (19) Fully Diluted EPS - Cents 2,87 3,53 (19) Dividend per share - Cents 1,40 1,35 4

STATEMENT OF FINANCIAL POSITION SEPTEMBER 2015 2014 ASSETS US$000’s US$000’s Non-current assets Property, plant and equipment 338 182 338 592 Investments in associates 36 065 22 552 Investments, loans and trademarks 11 900 12 139 TOTAL NON-CURRENT ASSETS 386 147 373 283 CURRENT ASSETS Inventories 96 779 104 401 Trade and other receivables 56 498 47 399 Cash and cash equivalents 135 864 129 446 Assets classified as held for sale 26 272 - TOTAL CURRENT ASSETS 289 141 307 518 TOTAL ASSETS 675 288 680 801

STATEMENT OF FINANCIAL POSITION cont… SEPTEMBER 2015 2014 EQUITY AND LIABILITIES US$000’s US$000’s Share Capital 12 443 12 358 Share Premium 30 134 30 066 Share Option Reserve 5 341 4 727 Retained Earnings 415 227 377 544 Equity attributable to equity holders of 463 145 424 695 the parent Non-controlling Interests - 9 225 Shareholder’s equity 463 145 433 920 Long- term borrowings 70 000 40 000 Deferred tax liabilities 45 068 36 520 115 068 76 520 CURRENT LIABILITIES Short term borrowings - 60 520 Interest free liabilities 97 075 109 841 TOTAL CURRENT LIABILITIES 97 075 170 361 TOTAL EQUITY AND LIABILITES 675 288 680 801

CASH FLOW 2015 2014 US$000’s US$000’s Cash generated from 58 888 58 776 operations Net cash invested (14 584) (13 317) Net funding 65 864 29 610

SHARE CAPITAL MOVEMENTS Shares in Issue as at 31 March 2015 1 242 568 675 Share Options Exercised 1 745 300 Shares in Issue at 1 244 313 975 30 September 2015

AFDIS • Growth in volume, revenue and profitability. • Growth in ready to drink (ciders) and brown spirits. • Competitive pressures – grey imports and white spirits. SCHWEPPES ZIMBABWE LIMITED • Volume and revenue under pressure. • 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 – still to report full year results

F16 FOCUS AREAS 1. Accelerating additional investments in Chibuku Super, next two plants will go up simultaneously. 2. Affordability / Competitiveness • Lager beer prices reduced in October. • Phased roll back on soft drinks in progress. 3. Cost efficiency • Working with value chain partners to correct input costs. • Progress on engagement with our people on cost containment. • Cost of services and utilities difficult to contain – largely from local authorities & govt. 4. Managing headwinds • Strong dollar continues to encourage imports. • Water and power shortages likely to worsen during balance of year. • License to trade issues – regulatory and operating environment increasingly onerous.

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