WELCOME AND INTRODUCTION JOE MUTIZWA 1. SIX MONTHS VOLUMES AND ROB MAUNSELL 2. FINANCIALS MATTS VALELA BUSINESS REVIEW 6 MONTHS TO 3. JOE MUTIZWA 30 SEPTEMBER 2010 DISCUSSION/QUESTIONS 4. ALL REFRESHMENTS 5. ALL
INCREASE INCREASE Vs SEPTEMBER Vs SEPTEMBER 2009 2009 Lager Beer 47% Sorghum Beer (4%) Sparkling Beverages 63% Total Beverages 16% Plastic 33%
SEPTEMBER 2010 SEPTEMBER 2009 STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS US$000 � s US$000 � s Turnover 214 498 142 510 Operating Income � Continuing Operations 2 7 195 15 048 Loss on disposal of discontinued operations - (111) Net Finance expense (1 198) (160) Gain on Acquisition of Associates 1 325 - Associates � Share of Loss (366) (115) Profit Before Tax from continued operations 26 954 14 662 Tax (6 488) (4 566) Profit from continuing operations 20 466 10 096 Loss from discontinued Operations - (617) Total comprehensive Income 20 466 9 479
SEPTEMBER 2010 2009 17,6% 14,3% Operating income to net sales from continuing operations 17,6% 13,6% Operating Income to net sales from all operations
SEP 2010 SEP 2009 From continuing and discontinued operations Normal EPS � Cents 1,71 0,83 Fully Diluted EPS � Cents 1,65 0,78 From continuing operations EPS - Cents 1,71 0,89 Fully Diluted EPS Cents 1,65 0,83 Dividend per share � cents 0,50 -
2010 2009 ASSETS US$000 � s US$000 � s Non-current assets Property, plant and equipment 186 956 133 924 Investments, loans and trademarks 12 276 5 819 199 232 139 742 CURRENT ASSETS Inventories 54 550 40 393 Trade and other receivables 38 224 23 209 Discontinued Operations - 4 000 Bank balances and cash 6 129 4 901 TOTAL CURRENT ASSETS 98 903 72 503 TOTAL ASSETS 298 135 212 246
2010 2009 EQUITY AND LIABILITIES US$000 � s US$000 � s Share Capital 11 802 - Share Premium 17 707 29 364 Reserves 150 521 97 660 Non-controlling Interests 3 184 5 993 Shareholder � s equity 183 214 133 017 Deferred taxation 23 898 32 409 CURRENT LIABILITIES Short-term borrowings 23 000 5 315 Interest free liabilities 68 023 41 505 TOTAL CURRENT LIABILITIES 91 023 46 820 TOTAL EQUITY AND LIABILITES 298 135 212 246
1. VOLUME PERFORMANCE REVIEW BY PRODUCT CATEGORY
1. Significant Market Share Growth across all beverages 2. Strong Demand for Lagers and Soft Drinks for the Six Months and Continuing to third quarter 3. Under supply for both beer and Soft Drinks due to capacity constraints 4. Sorghum beer volumes decline as consumers switch to lagers. The loss slowed down in the second quarter as the Shake Shake pack recovered.
000 hls The highest Half Year Volume since 1998 800 724 668 700 618 574 550 600 491 500 400 274 300 200 100 0 F05 F06 F07 F08 F09 F10 F11
000 hls 2000 1747 1698 1616 1547 1537 1388 1500 881 1000 500 0 F05 F06 F07 F08 F09 F10 F11
000 hls 700 651 558 600 488 500 400 326 322 299 300 157 200 100 0 F05 F06 F07 F08 F09 F10 F11
Tonnes Best Ever 2834 3000 2536 2398 2500 2133 1923 2000 1451 1500 930 1000 500 0 F05 F06 F07 F08 F09 F10 F11
SHIFT IN BEVERAGES VOLUME CONTRIBUTION SIX MONTHS TO SEP � 09 VS. SIX MONTHS TO SEPT � 10 Sep-10 Sep-09 18% 13% 23% 20% 56% 67% Lager Sorghum Soft Drinks Lager Sorghum Soft Drinks
VOLUME CONTRIBUTION BEER CATEGORY Sep-09 Sep-10 23% 32% 77% 68% Lager Sorghum Lager Sorghum
2. THE DRIVE FOR MARGIN EXPANSION
LEVERAGING OUR GROWTH: 6 MONTHS TO SEPTEMBER VS. PRIOR YEAR % Growth 140 Key Drivers 1. Disposal of loss making businesses +115% 2. Product mix - - shift to higher margin products 120 3. Reduction in maintenance costs as new capacity kicks in 4. Supply Chain Savings 100 5. Improved Efficiencies - still to play out +82% 80 60 +51% 40 +16% 20 0 Beverage Volumes Turnover EBIT Att.Income
EBIT MARGIN EXPANSION L.T goal 23-25% Range 400 Basis Points Gain since September 2009 25 September 2010 21% 20 17.6% 15.3% 13.6% 15 10 5 0 Hl F10 FY F10 Hl F11 FY F11
2. UPDATE ON RECAPITALIZATION SINCE DOLLARIZATION
CAPITAL INVESTMENT PROGRAMME F10 AND F11 F11 CAPEX F10 ACTUAL SPEND TWO YEARS COMBINED H1: $35,2m F.Yr $72,7m TOTAL: $47,6m $120,3m Plant & Equipment: $47.4m 1. Plant & Equipment: $34.5m $81,9m Containers: $25,3m 2. Containers: $13,1m $38,4m KEY PROJECTS KEY PROJECTS IMPACTS � Lager Beer Capacity � PET packaging line at � Southerton Lager Beer adequate until F14. Graniteside � Soft Drinks Capacity Packaging Line � Lager Beer Packaging still needs upgrading Line at Belmont in Byo in F12 � C02 Plant in Bulawayo � Investment in Containers will continue
HECTOLITRES RELIABLE ANNUAL CAPACITY CAPACITY VOLUMES UTILIZATION LAGER BEER 2,000,000 1,553,000 78% SOFT DRINKS 1,400,000 1, 143 000 82% N CHIBUKU/SORGHUM 5,500,000 3 250 000 59% 8 900,000 5,946,000 67% TOTAL Soft Drinks RGB packaging lines not entirely reliable. New USD12m line planned for Graniteside by July/August 2011
4. NEW PRODUCT LAUNCHES
1. BEER 1.1 Golden Pilsener � Relaunched Golden Pilsener in the green 340 ml bottle and repositioned it as a Local Worthmore offering with higher price and higher margins � Hugely successful 1.2 Castle Light � Launched Castle Light using the 330ml one way imported bottle to counter Competition � Since September launch this brand has now climbed to 2% of total lager beer volumes.
2. SPARKLING BEVERAGES 2.1 PET Range � Launched In July in 500ml and 2 litre for all core brands � Recently launched full range of mixers in PET � Shortly launching Sparkling flavoured waters � PET Contributed 11% to soft drink volumes in October 2.2 Launch of Burn � Launched the energy drink in the imported 250ml can in October
5. SUPPLY CHAIN UPDATE
1. Barley 20 000 tonnes delivered to date. We expect +/- 28 000 tonnes. Full cover in hand with room for barley malt exports 2. Maize Secure to end January. Thereafter we import 3. Carbon Dioxide Secure. Vast improvement as suppliers compete 4. Returnable Glass Bottles Secure on 100% imports 5. Sugar Will rely largely on imports. Global prices rising. Now at a 30 year high. 6. Utilities Remains our greatest risk
6. UPDATE ON ASSOCIATES
6.1 Schweppes Zimbabwe Limited � Volumes for nine months to September 65% higher than prior year � Market Share around 65-70% of the cordials and squashes sector � Profitability in line with expectations. For full year to December the business should make $5,5m EBIT 6.2 African Distillers � The business is in recovery mode following positive changes to the excise regime in the July Mid Term Fiscal Statement. The playing field has been levelled as of September 2010. � A restructuring has taken place with the head count reduced by 35% and payroll slashed by 45% � Volumes in October were 3% ahead of prior year and above break even point. � The business will return to profitability in the 2011 financial year.
7. OUTLOOK FOR BALANCE OF YEAR
OCTOBER UPDATE � Lager Volumes very strong : 54% ahead of Prior Year and 3% ahead of plan. Market under supplied in Southern Region � Decline in Sorghum Volumes slowed down. Only 2% below prior year. Good recovery in one litre Shake Shake volumes. This has better margins than the two litre scud � Sparkling Beverages volumes very strong: 41% ahead of Prior year and ahead of plan, � Operating Margins improved to 19.2% � Profitability in line with plan
We are on track to achieving all our key deliverables for F11 � Beverage Volumes of 6m hectolitres � Beverage market shares between 90 and 97% in the core businesses � EBIT of $74m � EBIT Margin (i.e., Operating Income to net sales) of 21% � Generating sufficient cash to fund dividends to share holders
THANK YOU
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