UAC of Nigeria PLC H1 2018 Earnings Mr Abdul Bello (Group CEO) Mrs - PowerPoint PPT Presentation

UAC of Nigeria PLC – H1 2018 Earnings Mr Abdul Bello (Group CEO) Mrs Adeniun Taiwo (CFO) 7 August 2018

DISCLAIMER This presentation contains 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 reflect 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 Plc 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 filed 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.

Table of Contents H1 2018 Highlights 4 H1 2018 Financial Review 8 Outlook 15 Appendix 17

H1 2018 Highlights Mr Abdul Bello (Group CEO)

Improving Macro Economic Environment but Caution Persists Sustained GDP growth driven by higher oil revenues Foreign-currency reserves impacted by increase in oil output USD b mbpd GDP Growth (YoY) 2.08 1.89 100.0 2.00 1.67 1.59 1.60 3.0% 1.49 1.49 80.0 1.43 69.7 1.39 2.0% 1.9% 9% 66.1 1.50 61.4 1.21 2.0% 1.4% 4% 54.7 51.2 52.0 60.0 50.6 47.6 46.6 47.6 46.2 0.7% 7% 1.0% 1.00 35.2 34.8 32.5 40.0 29.5 30.2 27.5 26.6 24.8 24.5 0.0% 0.50 20.0 -1.0% -0.7% 7% -0.9% 9% 0.0 0.00 -2.0% -1.5 .5% -1.7 .7% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2 '18 -2.3% 3% -3.0% Gross external reserves (USDbillion) Crude oil price (USD/pb) Crude oil production (mbpd) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Currency stability as government initiatives pay off Improving sentiment resulting in disinflation NIFEX & NAFEX ₦ / USD Inflation Growth (YoY) 20.0% 400.0 18.6% 380.0 17.9% 17.3% 15.0% 16.5% 16.1% 16.0% 15.4% 360.0 13.3% 12.8% 10.0% 11.2% 340.0 320.0 5.0% 300.0 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 0.0% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 NAFEX NIFEX H1 2018 Financial Review Sources: OPEC, Platts, CBN, National Bureau of Statistics, FMDO 5

Key Highlights for H1 2018 Financial Highlights Strategic Update • Turnover decline driven mainly by Animal Feeds and other Edibles • UAC of Nigeria to operate as a simpler and leaner “HoldCo”, with increased accountability at subsidiary level - Partially offset by double digit revenue growth in Paints, Packaged Foods • HoldCo activities to revolve around: and Logistics - Strengthening corporate governance and driving talent acquisition and • Reduced EBIT due to lower revenue, higher OPEX and despite efficiency gains management - OPEX increase driven primarily by Packaged Foods and Animal Feeds & - Empowering subsidiaries to execute strategy other Edibles - Allocating capital with focus on value creation for shareholders - Efficiency gains in Paints, Packaged Foods and Logistics - Providing limited shared services to achieve cost savings without • 15% growth in Profit before Tax, driven by efficiency gains and healthier financial disruption to portfolio operations structure • First tangible benefits of actions taken by management, as illustrated by the Management and Board Changes sequential improvement in Q2 2018 performance • Positive outlook for 2018; Management is committed to: • Dr. Oladele Ajayi appointed MD of UAC Foods Ltd, effective 2 July 2018 • - Sustaining improved performance in Paints, Logistics and Packaged Foods Reconstitution of the UPDC Board, as part of a strategic repositioning and to strengthen governance - Stabilising loss-making activities by improving efficiency of operations and optimising capital structure H1 2018 Highlights 6

Efficiencies & lower finance costs offsetting revenue decline • Group revenue down 21.9% YoY in H1 ‘ 18 to ₦ 37.0 billion H1 2018 Financial Performance - Decline primarily driven by a drop in the Animal Feeds & Other Edibles segment, due to challenging market dynamics ₦37.0b 20.5% 7.3% - Negative impact partially offset by growth in Paints (+16.6%), Packaged Foods (17.6%) and Logistics (19.1%) segments Reported revenue down 22% Gross Profit Margin, Operating Profit Margin, YoY up 403 bps YoY down 91 bps YoY • Gross profit margin up 403 bps YoY to 20.5% in H1 ’ 18 - Gross margin up 403 bps YoY, on the back of improving operational performance and efficiency gains in Paints, Logistics and Packaged -57.1% +182bps 67k Foods • Operating expenses up 11.0% to ₦ 5.7 billion in H1 ’ 18 YoY decline in net finance Growth in PBT margin YoY, to Annualised Earnings per share costs in H1 2018 5.7% in H1 2018 (Kobo), down 46% YoY - 15.3% of sales compared to 10.8% in H1 2017. Increase driven mainly by marketing and distribution investments in Packaged Foods and Animal Feeds Cash & Capital • Healthier balance sheet , leading to lower net interest expenses (-57.1% YoY) and Profit before Tax margin accretion in H1 2018 (+182 bps YoY to 5.7%) (₦5.6b) 26% 4.2% • Negative Free Cash flow in H1 2018, primarily due to a cash outflow from Free Cash Flow in H1 2018 Return on Invested Capital, working capital in Animal Feeds & Other Edibles and Packaged Foods Gearing at end June 2018, up down 321bps YoY 60 bps since end March 2018 H1 2018 Highlights Please see Appendix for definition of terms used in this presentation 7

H1 2018 Financial Review Mrs Adeniun Taiwo (CFO)

Drop in Revenue Offset by Reduction in Cost of Sales and Finance Cost • Revenue down 21.9% mainly on account of decline in sales in the Animal Feeds & other Edibles and Real Estate H1 2018 H1 2017 Var Continuing Operations (in N’Million) segments, which was only partially offset by a positive 36,982 47,337 performance in the Paints, Packaged Foods and Logistics -22% Revenue segments (29,417) (39,564) -26% Cost of sales Gross profit -3% 7,565 7,774 • Gross profit down 2.7% YoY in H1 ’ 18 - Decline in revenue partly mitigated by a more Selling and distribution expenses (2,443) (2,007) 22% significant decrease in cost of sales , due to lower (3,211) (3,087) 4% Administrative expenses input prices in the Animal Feeds & Other Edibles as Other gains 811 1,342 -40% well as operational efficiencies in Paints, Packaged Foods and Logistics Other losses (4) (112) -97% EBIT 2,718 3,910 -30% • Operating expenses up 11.0% YoY in H1 ’ 18, leading to -57% lower EBIT YoY (-30.5%) Net finance cost (1,077) (2,509) - Selling & Distribution expenses (6.6% of revenue) 7% Share of profit of equity accounted associate 461 430 up 21.7% YoY due to increased market Profit before tax 2,103 1,831 15% development and distribution expenses Taxation (513) (436) 18% • EBIT down 30.5% YoY primarily driven by Animal Feeds & Profit from continuing operations 1,589 1,395 14% other Edibles, whilst Paints, Packaged Foods & Logistics Loss from discontinuedOperations (223) (200) 11% delivered double digit EBIT growth 14% Profit for the period 1,366 1,195 • 31.2% decrease in gross finance cost from ₦ 3.5bn (2017) -25% Profit attributable to Parent 736 984 to ₦ 2.4bn (2018) on account of a reduction in the average Profit attributable to NCI 630 210 200% cost of borrowing and repayment of loans - As a result, Profit before Tax was up 15.0% YoY in H1 ’ 18 H1 2018 Financial Review 9