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Delta Corporation 2011 results presentation

Delta Corporation 2011 results presentation

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Delta Corporation 2011 results presentation Presentation Transcript

  • 1. 1. INTRODUCTION JOE MUTIZWA2. FULL YEAR FINANCIALS ROB MAUNSELL MATTS VALELA3. DETAILED REVIEW OF VOLUMES AND OPERATIONAL ISSUES JOE MUTIZWA4. DISCUSSION/QUESTIONS ALL5. REFRESHMENTS AND CLOSE
  • 2. INTRODUCTIONBUSINESS UNITS INCLUDED IN F11 RESULTSCONTINUING CORE BEVERAGE CONTINUING NON COREBUSINESSES• DELTA BEVERAGES (100%) • MEGAPAK (51%)• MALTINGS (100%) • FOOD AND INDUSTRIAL (49%)• SCHWEPPES ZIMBABWE LIMITED (SZL) (49%) • MANDEL TRAINING CENTRE (26%)• AFDIS (30%)
  • 3. 1. The Volume Momentum we saw in F10. Continued into F11 for all products except sorghum beer.2. Registered Market Share Gains against all competition in the Beverage Sector – Brand Building Initiatives Accelerated3. Significantly Expanded the Beverage Product Portfolio through the launch of new brands and packs4. Made further progress on Recapitalization of the Beverages Business5. The Skills Pipeline was aggressively replenished and succession plans entrenched6. Fixed Costs were well controlled and Plant Efficiencies improved significantly with revenues growing well ahead of overheads7. Operating Margins expanded appreciably; Strong Profitability and Cash Generation allowed a return to payment of dividends to shareholders
  • 4. VOLUME PERFORMANCE SUMMARYCATEGORY ACTUAL % GROWTH ON VOLUMES PRIOR YEAR1. BEVERAGES (Hls) 1.1 Clear Beer 1 608 000 +40% 1.2 Sorghum Beer 2 908 000 -7% 1.3 Sparkling Beverages 1 175 000 +53% 1.4 Maheu 89 000 - Total (excl. Associates) 5 781 000 +15%2. Plastic Tonnages 5 796 +27%3. Malt Tonnages 23 082 +29%
  • 5. REVENUEIncreased by 45% to $408 million (Turnover - $481m) EBITDA Up by 67% to $81,7 million OPERATING INCOME Grew by 76% to $68,2 million
  • 6. ATTRIBUTABLE INCOME Increased by 47% to $53,0 million EARNINGS PER SHARE Increased by 42% to 4,50 cents DIVIDENDS PER SHARE Interim dividend paid per share – 0,50 centFinal dividend proposed per share – 1,00 cent
  • 7. 3500300025002000 F091500 F10 F111000500 0 Lagers Sparkling Beverages Sorghum
  • 8. 500450 $m 49% growth vs vol 15%400350 61% growth vs vol 40%300250 63% growth F10 vs vol 53%200 6% growth vs F11 7% vol decline150100 50 0 Lager Sparkling Sorghum Total Beverages Beverages
  • 9. $160140120100 80 F10 60 F11 40 20 0 Lagers Sparkling Sorghum Beverages
  • 10. MARCH 2011 MARCH2010 US$000’s US$000’sREVENUE 408 001 281 291Operating Income – Continuing Operations 68 236 38 824Net Finance expense (1 981) (785)Gain on Acquisition of Associates 2 896 4 453Associates – Share of Profit / (loss) 903 (617)PROFIT BEFORE TAX FROM CONTINUED 70 054 41 875OPERATIONSTax (15 940) (2 191)Profit from continuing operations 54 114 39 684Loss from discontinued Operations - (4 151)TOTAL COMPREHENSIVE INCOME 54 114 35 533
  • 11. 2011 2010 US$000’s US$000’sProfit for the year from continuingoperationsAtrributable To:Owners of the parent 53 012 38 963Non-controlling interests 1 102 721 54 114 39 684Profit for the year from bothcontinuing & non-continuedoperationsAttributable To:Owners of the parent 53 012 35 952Non-controlling interests 1 102 (419) 54 114 35 533
  • 12. MARCH 2011 2010Operating income to 19.5% 15.8%net sales fromcontinuing operations
  • 13. MAR 2011 MAR 2010From continuing anddiscontinued operationsNormal EPS – Cents 4,50 3,16Fully Diluted EPS - Cents 4,35 2,99From continuing operationsNormal EPS - Cents 4,50 3,42Fully Diluted EPS - Cents 4,35 3,24Dividend per share - Cents 1,50 -
  • 14. 2011 2010ASSETS US$000’s US$000’sNon-current assetsProperty, plant and equipment 226 969 162 368Investments, loans and 20 726 11 018trademarksTOTAL NON-CURRENT ASSETS 247 695 173 386CURRENT ASSETSInventories 67 877 51 420Trade and other receivables 26 376 22 882Cash and cash equivalents 5 159 7 311TOTAL CURRENT ASSETS 99 412 81 613TOTAL ASSETS 347 107 254 999
  • 15. 2011 2010EQUITY AND LIABILITIES US$000’s US$000’sShare Capital 11 816 -Share Premium 17 755 29 375Reserves 2 240 1 546Non-controlling Interests 3 767 2 733Shareholder’s equity 211 617 161 939Deferred taxation 22 811 22 720CURRENT LIABILITIESShort-term borrowings 24 175 15 000Interest free liabilities 88 504 55 340TOTAL CURRENT LIABILITIES 112 679 70 340TOTAL EQUITY AND LIABILITES 347 107 254 999
  • 16. Current Assets 99 412Current Liabilities 112 679Less : Container Market (22 193)Absorption 90 486
  • 17. 2011 2010 US$000’s US$000’sCash flow from 81 287 21 683operationsNet cash invested (86 842) (44 098)Net funding (19 016) (7 689)
  • 18. Shares in Issue as 31 March 1 158 876 0152010Share Options Exercised 22 735 000Shares in Issue at 31 March 1 181 611 0152011
  • 19. Value growthOptimum Capital Fundingfor growthMitigate high import costsShareholder distribution
  • 20. 1. VOLUME AND MARKETING HIGHLIGHTS2. CAPITAL INVESTMENTS/CAPACITY UTILIZATION3. INVESTMENT IN PEOPLE/TALENT4. FUTURE PROSPECTS – F125. CONCLUSION
  • 21. VOLUME ANALYSIS
  • 22. VOLUME CONTRIBUTION BY BEVERAGE CATEGORY EXCLUDING ASSOCIATES: F98 VS. F11 F98 F11 20% 2% 28 24% 20% 50% 56% Lagers Sorghum Lagers Sorghum SBs SBs Maheu/Others SOME SHIFT TO LAGER BEER BUT SORGHUM WILL REBOUND
  • 23. BEVERAGE VOLUME SHIFT IN CONTRIBUTION: F98-F12 TRENDSCATEGORY F98 F05 F11 F12 BUDGETLager Beer 20% 21% 28% 27%Sorghum 56% 53% 50% 47%SBs 24% 24% 20% 24%Maheu/Other 0% 2% 2% 2%Total 100% 100% 100% 100%
  • 24. LAGER BEER VOLUMES: SALIENT FEATURESBarley Malt +45% F11 – 1608 k New Initiatives in F11Eagle -21% vs. 1. Successful Re-launch of GoldenCategory Growth +40% F98 – 1620 K Pilsener as a Premium Brand at 15% 99% price premium 2. Launch of Castle Lite 3. Castle Brand Focus Brand Shares & Growth - Aggressive Brand Building Share Growth - PSL Sponsorship Castle 39% 83% - Castle Tankard Lion 33% 27% 4. Commissioning of Lager Line in CBL 12% 55% Bulawayo in December improved Pilsener 10% 1% supplies Eagle 5% -21% 5. Launch of 440ml pack in cans – Other 1% Castle; Lion; CBL 6. 2 500 Coolers placed in the Market Pack Shares • RGB – 91% • Cans – 9% OVERALL MARKET SHARE – 96%
  • 25. SORGHUM BEER VOLUMES: SALIENT FEATURES Overall Volumes -7% Pr. Yr. 63% of F98 Peak of 4,58m hls Market Share 92% Northern Region -13% Pack Shares Southern Region +4% Scud – 2 litre 90% • This indicates that the decline was more an operational issue 1 Litre Shake Shake 4% rather than general Market Decline Draught 6% • There has been some shift from sorghum to clear beer
  • 26. SPARKLING BEVERAGES VOLUMES: SALIENT FEATURESVolumes• Up 53% on Prior Year Market Share 97%• 59% of F98 of peak 2m hlsPack Shares Market Activation• Returnable Glass 80%• PET 8%• Cans 12% • 4 000 new coolers placed in the tradeNew Products Launched • RED programme• PET – Mainstream Brands accelerated (Right Execution• PET – Sparkling Water Daily)• Coke Zero – Local Production in cans and PET Market Undersupplied for• New Light Weight Glass 300 ml RGB introduced
  • 27. MAHEU BUSINESS VOLUME HIGHLIGHTS• Launched 6 New Products (All Imports)• Commenced work on Production Localization – To be commissioned by September• This NEW Business Unit contributed 2% of total beverage volumes in F11 and contributed to operating profits
  • 28. CAPEX SPEND F09-F12$M $200m F09-F12 Capacity Utilization 829080 67 Lager (2m hls) 80%70 50 Sparkling (1,4m hls) 84%*6050 Sorghum (5,1m hls) 59%4030 * Before New Capacity20 1 comes on stream in August.10 0 Total Installed Capacity 8.5m F09 F10 F11 F12 hls (68% - utilization) Budget
  • 29. Some Notable Achievements in the Year Under Review • 377 apprentices were enrolled at the Delta Technical Institute at the end of March 2011 • 31 Graduate Management Trainees in the system up from 9 in F09 • 17 executives participated in the Executive Development Programme at Mandel – run jointly with Gordon Institute of Business Science (GIBS) • 2 Senior Executives attended the Global International Executives programme at GIBS • 2 Senior Executives attended the Senior Executive Programme at London Business School • A Company Wide “Back to Basics” Training programme was rolled out in F11. • 3 800 participant training days were recorded during the year • Staff turnover reduced to only 2% in F11 from around 6% in F08 • Aggressive Management Renewal exercise is underway with implementation of Succession Plans proceeding as per plan
  • 30. FUTURE PROSPECTS
  • 31. • Sources of Volume Growth• Prospects for Earnings and Dividend Growth• April Update
  • 32. VOLUME GROWTH IMPERATIVES – DRIVEN BY • Expected GDP recovery – assumed 8-9% for F12 • Relatively Low Beverage Per Capitas – Plenty of Headroom for growth • Full Market Supply yet to be achieved for Lagers and Sparkling Beverages – New Plant will achieve this • Market Activation still at relatively early stages of implementation • New Business - Maheu New plant will be commissioned by September • Recovery of Chibuku Volumes driven by Better Execution and Exciting New Product Development.
  • 33. Litres p/capita 10 20 30 50 60 40 0 Cameroon South Africa Zimbabwe Namibia Angola Botswana Tunisia Kenya Cote d’Ivoire Zambia Uganda Tanzania Mozambique Nigeria Ghana MadagascarPopulation DRC Africa PCC 7L Morocco Guinea Senegal Chad Ethiopia Malawi Algeria Egypt Outside of South Africa per capita Beer consumption is low BEER PER CAPITA CONSUMPTION Niger Mali Zim PCC 14 L Somalia Sudan 1bn 7L
  • 34. Litres Per Capita0 10 20 30 40 50 60 80 90 70 100 Mauritius S. Africa Namibia Botswana Angola Swaziland Zimbabwe Zim PCC 11 L Tanzania Lesotho Kenya Malawi Zambia SPARKLING BEVERAGES PER CAPITAS - AFRICA Uganda
  • 35. EARNINGS AND DIVIDENDS GROWTH – DRIVEN BY• Declining Capex Burden – Improved Free Cash Flows• Expanding Operating Margins as plant efficiencies improve• Growth of the Premium Segment – for both Lagers and Sorghum beer – launch in June of a new exciting Premium Lager Beer Pack.
  • 36. DECLINING: CAPEX /TURNOVER RATIO PROJECTED %Turnover $M 481500450400 334350 F12: 12% F13 – 14: Av. 7%300 17%250 15%200150 104100 1% 50 0 F09 F10 F11
  • 37. F12 BUDGET PROJECTIONS• Overall Volume Growth 10-15% range ( F11 : 15%)• Capex US$67m (F11: US$82m)• EBIT Margins 21% Target (F11: 19,5%)• EBIT Growth 25% - 30% range (F11: 76%)
  • 38. APRIL 2011 UPDATECATEGORY GROWTH % VS. F11 VS. BUDGET1. Volumes Lagers +19% +12% Sorghum +2% +5% Sparkling Beverages +40% - Maheu +96% -3% Total +14% +5%2. Turnover ($50m) +36% +8% THE YEAR HAS STARTED WITH STRONG VOLUME MOMENTUM; CHIBUKU VOLUMES ARE REBOUNDING; EBIT AND EBIT MARGINS ARE SIGNIFICANTLY AHEAD OF PRIOR YEAR AND BUDGET
  • 39. THANK YOU
  • 40. Emaild.mange@delta.co.zw