Guinness Nigeria Plc 3Q 2013 financial results presentation

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Guinness Nigeria Plc 3Q 2013 financial results presentation

  1. 1. DIAGEO
  2. 2. DIAGEO Outline of Q3 F13 Performance Briefing 2 Slide Contents Presenter 3 Strategic overview Seni Adetu 8 Performance summary Seni Adetu 11 Highlights of the year so far Seni Adetu 18 Q3 F13 financial results Lisa Nichols 23 Conclusions / outlook Seni Adetu 26 Q&A Sesan Sobowale
  3. 3. DIAGEO Strategic overview 3
  4. 4. DIAGEO 4 Our Company  Strong portfolio diversity including alcoholic and non-alcoholic beverages covering a wide range of consumer segments  Commitment to significant investment to deliver long-term growth  Major investments in capacity expansion  Business doubled in the past 4 years  Largest Guinness market in the world in net sales to be sustained  Strong values: Performance culture, developing talent, positively impacting the communities in which we operate, strong governance and ethical standards  General consumer trends in our favour: Premiumisation, Emerging Sector, Female opportunity
  5. 5. DIAGEO Our growing and diverse portfolio covers a wide range of consumer segments Beer RTD Malt Premium Mainstream Emerging 5
  6. 6. DIAGEO Guinness Nigeria will have the no. 1 brand in every segment in which we compete supported by an advantaged Route to Consumer Guinness Nigeria Plc is the most iconic and admired consumer goods company in Nigeria Employer of Choice Superior Total Shareholder Returns Most reputable in the Community Our Vision 6
  7. 7. DIAGEO Long term strategic intent “We have the most adored adult drink brands for every occasion’’Consumer Customer Competitors Capability Community Capacity “We are the preferred partner to our customers delivering profitable arms-reach availability” “Our people are capable and inspired to deliver exceptional performance everyday” “Our seamless supply chain guarantees our brands are available everywhere, everyday at competitive costs” “We are the undisputed leader wherever we choose to compete” “We enrich the lives of our communities through our connection to their aspirations and dreams’’ “We have embedded controls, compliance and ethics culture internally and embodied this externally” Compliance 7
  8. 8. DIAGEO Performance Summary 8
  9. 9. DIAGEO Current market / structural context 9 Economic environment  Macro economic environment relatively stable  Inflationary pressure  Some interest rate reduction, but levels still high  Increasing tax burden Consumer trends  Reducing discretionary income  Prioritising spend on essential items  Security concerns impacting drinking patterns Beer / Malt markets / share  Market softness due to declining discretionary income  Our brand shares holding up well  Under-indexing of market share in specific locations Our key challenges  RtC especially rural coverage and off-trade / wholesale channels  Logistics / distribution efficiency
  10. 10. DIAGEO Q3 F13: Performance overview 10 Q3 F13 YTD F13 Growth % Growth % Net Revenue 1% 4% Operating Profit -7% -4% PBT -25% -17%
  11. 11. DIAGEO Brands Innovation Route to Consumer Highlights of the year so far Supply People CSR 11
  12. 12. DIAGEO Highlights - Brands Guinness Harp Malta Guinness Smirnoff Ice  AFCON Campaign and Jersey Tour  EPL broadcast Sponsorship  Fly With The Eagles Campaign  Made of More campaign  Improved media and OOH visibility  In bar branding  Distribution drives  ‘Smirnoff Midnight Circus’ events  Bus branding  New OOH  Competitive pricing  Distribution drive 12
  13. 13. DIAGEO Highlights - Innovation H1 Snapp  Launched in Lagos and 4 other cities – Abuja, Benin, Port Harcourt and Calabar  Focus on advertising, sampling and distribution build  Snapp sleek cans launched in Dec 2012 H2 Snapp  Rolled out nationally  Refreshed advertising Dubic • New green bottle • Regional expansion Top Malt • Pack redesign for national re- launch 13
  14. 14. DIAGEO Cold & Events GDC Branding  Investments in project cold  Special events supporting social events driving convenience & visibility  Guinness Distribution Centres (GDC) driving rural re-distribution  Roll out progressing well  Distributor and wholesaler warehouse branding • Flagship outlet branding Sales coverage  Increased sales areas  Additional van sales staff  Wholesaler management  New sales and customer incentive schemes Highlights - Route to Consumer 14
  15. 15. DIAGEO 15 Highlights - Supply Warehousing & Loading capacity Bottle sorting and packaging
  16. 16. DIAGEO Highlights - People 16  Significant progress in employee engagement with improved communications and increased leadership team engagements  Vibrant employee awards scheme  Development / career plans and moves are also key to engagement Exceptional Performance Culture Talent Development Employee Engagement  GN Leadership team strengthened with addition of local external hires and internal moves  Several internal promotions to senior leadership levels  Gender diversity of leadership population improving  Investment in enhanced resourcing capability paying off  Development interventions identified and underway for key talent including assignments in Diageo businesses outside Nigeria  Development programmes in place for all levels from Graduate Management Trainees, Future Leaders, Growing Leaders to the Diageo Leadership Performance Programme for senior leaders  Improved performance monitoring driving visibility of outcomes  More effective incentive programmes for Sales  Improved disciplinary process  Continued focus and investment in Controls, Compliance & Ethics Seni Adetu Managing Director Austin Ufomba Marketing & Innovation Director Lisa Nichols Finance & Strategy Director Sesan Sobowale Corporate Relations Director Wale Adediran Human Resources Director Cephas Afebuameh Supply Chain Director
  17. 17. DIAGEO Highlights - CSR Responsible Drinking & Community Investments •Won award as the Best Private Sector company supporting the water sector (Min of Water Res) •Water sensitization walk in Abuja •Clean water provided at Oza Nogogo, Delta state •Responsible Drinking campaign partnering with Journalists and Actors •Technical education scholarships to students •Ikeja Golf Tournament 2013 Sponsorship in March bringing c 300 golfers Pan Nigeria together •250 children in 3 orphanages impacted during the Easter season (Love home Orphanage Magodo, St. Mary Immaculate Orphanage Home, Ikhueniro and Omosefe Orphanage Homes in Benin) 17
  18. 18. DIAGEO Q3 F13 Financial results 18
  19. 19. DIAGEO GN Plc Q3 F13 results - Comprehensive Income Q3 F13 Growth YTD F13 Growth Nbn % Nbn % Gross Revenue 29.2 0% 94.9 3% Net Revenue 27.3 1% 88.4 4% Cost of Sales (15.6) 1% (48.2) 7% Gross Profit 11.7 0% 40.3 1% Marketing & Distrib'n (6.6) 0% (19.4) 2% Admin Costs (2.4) -2% (7.4) 3% Operating Profit 2.6 -7% 13.8 -4% 19
  20. 20. DIAGEO GN Plc Q3 F13 results - Comprehensive Income Q3 F13 Growth YTD F13 Growth Nbn % Nbn % Operating Profit 2.6 -7% 13.8 -4% Financing costs (0.8) 101% (2.6) 210% PBT 1.8 -25% 11.2 -17% Tax (0.6) -24% (3.6) -17% PAT 1.2 -26% 7.6 -18% N N EPS 0.8 -27% 5.1 -19% 20
  21. 21. DIAGEO 21 YTD F13 vs. YTD F12 (Nbillion) Drivers of Profit before tax 11.2 1.7 0.50.20.3 3.16.5 13.6 3.0 COGSVolumePriceYTD F12 PBT YTD F13 PBT FinancingOther Income Admin Costs Mktg & Distn 21
  22. 22. DIAGEO GN Plc Q3 F13 results - Financial Position Q3 F13 YTD F13 Mvt Nbn Nbn Nbn Non-Current Assets 89.0 68.0 21.0 Inventories 16.8 16.8 (0.0) Receivables 23.0 16.7 6.3 Cash 3.0 3.7 (0.7) Total Assets 131.9 105.3 26.6 Current Liabilites (66.4) (52.7) (13.7) Non-Current Liabilities (23.6) (18.4) (5.2) Equity (41.9) (34.2) (7.7) Net Equity & Liabilities (131.9) (105.3) (26.6) 22
  23. 23. DIAGEO Conclusions / outlook 23
  24. 24. DIAGEO Conclusion 24 Market has been challenging, but we are holding our own in market share terms We remain confident in our business strategy:  Upweight investment in core brands to outperform competition  Innovate/renovate profitably and sustainably  Transform our Route to Consumer  Optimize our secondary supply chain to moderate cost  Strengthen our talent bench strength  Partnership with government to maintain a balanced tax environment
  25. 25. DIAGEO We feel very positive about the future of GN 25  Encouraging long-term prospects for the consumer economy  We have strong consumer brands with strong brand equities  We still have significant share growth potential  We have a proven business model which is highly cash generative  We are investing ahead for future growth  We have a highly motivated team who are committed to delivering strong growth  Our partnership with Diageo gives us access to expertise and support
  26. 26. DIAGEO Q & A

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