Results Table of Content 01 - PowerPoint PPT Presentation

Feeding the Nation, Everyday Q1 20/21 Results

Table of Content 01 ______________________________________________ Operating Environment 02 ______________________________________________ FMN Overview of Q1’20/21 03 ______________________________________________ Financial Review 04 ______________________________________________ Business Outlook FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

01 Operating Environment 3 FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS

Macroeconomic Performance Impact of Covid-19 on key economic indicators ▪ CBN adjusted the official exchange Exchange Rate (₦/$) Inflation in March. The parallel rate continues to rise. 14.0% 450 ▪ Unification of the various exchange 400 12.0% rates into a single rate has been 350 10.0% hinted by the CBN governor. 300 Impact on our business is primarily 250 8.0% Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 increase in our imported material costs including customs duties. Inflation CBN Official Rate I&E Parallel Core Inflation ▪ YoY Inflation trended upwards during the review period to 12.6%. External Reserves, Oil Production Real GDP Growth Rate ▪ Crude oil price decreased steadily & Oil Price throughout most of the review 2.0% 1.9% 2.3% 2.6% 1.9% 2.4% period, increasing only in May and 80.0 3.0 June. 60.0 2.0 ▪ FGN reserves reduced to $36b by 40.0 1.0 20.0 the end of June 2020 with import 0.0 - cover of about 9 months. -3.4% ▪ GDP growth declined somewhat in Q1 2020 and expected to contract Foreign Reserves (₦'bn) Oil Price ($) Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 FY-20 FY-21 in the year with recovery in 2021. (E) (E) Crude Oil Production (mb/d) Source: CBN, NBS, FMDQ, National Bureau of Statistics, Bloomberg FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 4

02 FMN Overview in Q1’20/21 FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 5

Key Messages • FMN remains resilient and continues to deliver shareholder value in line with long term strategy • The business has been able to operate efficiently with current challenges • Steady growth in the food business • Solid improvement in the agro allied businesses as the past years investments yield positive results • Revenue up by 15% compared to previous year • After tax profit up 17% compared to previous year • Cash from operations up by 200% compared to the previous year • Continued focus towards attractive high-growth products • Proactive business response strategies to COVID-19 FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 6

Key Milestones and Achievements Select Awards and Accolades Key Milestones and Recent Developments ✓ Over 60 years leadership in the food manufacturing sector with a 2019 SON Performance Award & Certification robust distribution network across the country ✓ Robust management team with +20 years experience 2019 Sustainability, Enterprise & ✓ Over 15,500 manpower across the country Responsibility Awards (SERAS) ✓ Over 28 products serving businesses and consumers 2019 Global Food Safety Initiative Awards ✓ Solid backward integration investment across our core value 2018 Lagos Vision Zero Awards chains – grains, oils and fats, animal proteins, sweeteners and starches 2018 Most recognized animal feeds brand ✓ Successful turnaround of the Agro Allied business ✓ Protein business (consisting of animal and fish feed business) - largest in Sub-Saharan Africa ✓ About N2bn of donations towards COVID-19 relief Locations Brands Segments Lagos, Agbara, Calabar, Ibadan, Kano Food Agro Lagos, Ijebu Ode, Ibadan, Ilorin, Kaduna, Allied Benin, Niger, Calabar, Ibadan Sugar Lagos, Niger Lagos, Kano Support FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 7

Product Offerings Developing products to meet fast changing consumer needs Food Segment Support Segment Agro Allied Segment Sugar Segment FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 8

03 Financial Review FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 9

Q1 ’ 20/21 Overview Strong organic revenue growth of 15% led by growth across the Food, Agro Allied and Sugar segments Revenue Gross Margin Operating Profit 11.0 154.6 16.5% +11% 9.9 +430bps +15% 12.2% 134.7 Q1' 20/21 Q1' 19/20 Q1' 20/21 Q1' 19/20 Q1' 20/21 Q1' 19/20 Profit Before Tax Profit After Tax Return On Equity 5.0 +17% 3.1% +17% 6.5 +30bps 4.2 2.8% 5.5 Q1' 20/21 Q1' 19/20 Q1' 20/21 Q1' 19/20 Q1' 20/21 Q1' 19/20 FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 10

Financial Performance Gross Margin up by 430bps CONSOLIDATED STATEMENT OF PROFIT & LOSS (N’B) Q1’20/21 Q1’19/20 % Revenue 154.6 134.7 15 Cost of sales (129.0) (118.3) 9 Gross profit 25.5 16.5 55 Net operating gains and (losses) (7.6) 0.1 - Operating expenses (6.9) (6.7) 4 Operating profit 10.9 9.9 10 Investment income 0.3 0.2 103 Finance costs (4.9) (4.6) 7 Profit before taxation 6.4 5.5 16 Taxation (1.5) (1.3) 17 Profit for the year 4.9 4.2 17 Earnings Per Share (K) 107.0 103.0 4 FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 11

Financial Performance Strongest quarter in revenue and GP margin over four years Revenue Gross Profit Margin Operating ratio Net Finance costs 154.6 8.9 5.0% 16.5% 5.0% 149.0 4.5% 13.0% 12.2% 6.0 3.6% 134.7 11.6% 133.0 4.5 4.4 Q1' 17/18 Q1' 18/19 Q1' 19/20 Q1' 20/21 Q1' 17/18 Q1' 18/19 Q1' 19/20 Q1' 20/21 Q1' 17/18 Q1' 18/19 Q1' 19/20 Q1' 20/21 Q1' 17/18 Q1' 18/19 Q1' 19/20 Q1' 20/21 • Solid revenue growth of 15% quarter on quarter largely driven by volume growth in the Agro Allied segment • N30bn CPs issued in April 2020 as part of risk management plan to cushion possible impact of COVID-19. Net finance costs flat compared to previous year. • Lower operating ratio compared to the previous two years FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 12

Financial Position Continued strengthening of balance sheet and improved leverage ratios Summary Balance Sheet Leverage Ratios (x) Q1’20/21 Q1’19/20 All figures in N’b % 5.7 4.9 Non-current assets 239.3 242.7 (1) Current assets 236.3 189.7 25 Total assets 475.7 432.5 10 Long term debt 73.1 80.7 (9) 0.5 0.5 Short term debt 61.6 28.9 113 Q1'20/21 Q1'19/20 Other liabilities 180.2 167.1 8 Net debt to EBITDA Net debt to Equity Total Liabilities 314.9 276.7 14 Net Asset Value 159.6 155.8 2 Debt Movement (N’ b) * Net Debt (N ’b) 109.8 101.9 95.8 83.4 75.8 Q1'19/20 Q2'19/20 Q3'19/20 FY19/20 Q1'20/21 * Please note that Cash and Cash Equivalent was N58.8b by Q1 20/21 vs N26.2b by FY20 FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 13

Financial Performance Cash from operations up 200%; closing cash up by N51b CONSOLIDATED STATEMENT CASH FLOWS (N’B) Q1’20/21 Q1’19/20 % Cash from Operating activities 16.7 5.7 193.0 CAPEX (3.1) (2.9) 6.9 Other Investing Activities 0.4 1.7 (76.5) Cash from Investing Activities (2.6) (1.2) 116.7 Net borrowings 23.2 4.3 439.5 Cash from Financing Activities 23.2 4.3 439.5 Net cash flow for the period 37.3 0.2 1,8550.0 Cash at beginning of the period 20.7 7.6 172.4 Cash at the end of the period 58.0 7.7 653.2 FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 14

04 Segment Performance FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 15

Segment Performance Agro Allied continues to be profitable following successful completion of the restructuring Segment Revenue (N’b) Segment Profit before Tax (N’b) Q1’20/21 Q1’19/20 % Q1’20/21 Q1’19/20 % Food 91.0 81.6 12 3.7 3.2 18 Agro-Allied 33.1 25.6 29 2.1 (0.2) 929 Sugar 27.0 24.1 12 2.3 2.6 (11) Support * 3.4 3.5 (1.8) (1.6) 0.0 (7,499) Calabar Total 154.6 134.7 15 6.5 5.5 17 * Support Services reflecting IFRS16 ABTL lease, which is a pure timing impact FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 16

Food Segment Steady growth continues with continued focus on high margin products • Strong revenue growth, largely driven by FOOD SEGMENT (N’B) mix and seasonal adjustments Q1’20/21 Q1’19/20 • Continued focus on route to market strategy resulted in a 31% growth in Revenue 103.5 93.7 revenue from B2C Profit before Tax 6.8 7.2 • Introduced value SKUs of some brands – Golden Vita, Golden Penny Noodles, Volume Mix per category – Q1’20/21 Auntie Pasta, Auntie B Spaghetti Slim, Semovita, etc. to ensure affordability and drive value in B2C. 3% 2% • Boarder closure impact also seen in 20% Pasta with volume growth of 15% compared to previous year Value SKUs 10% 65% Flour Semovita Pasta Noodles Edible Oil & others FLOUR MILLS OF N IGERIA PLC | Q1’20/21 PRESENTATION TO ANALYST & INVESTORS 17