diageo - guinness nigeria · diageo 4 our company strong portfolio diversity including alcoholic...
TRANSCRIPT
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
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
DIAGEO
Our growing and diverse portfolio covers a wide range of consumer
segments
Beer RTD Malt
Premium
Mainstream
Emerging
5
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
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
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
DIAGEO
Q3 F13: Performance overview
10
Q3 F13 YTD F13
Growth % Growth %
Net Revenue 1% 4%
Operating Profit -7% -4%
PBT -25% -17%
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
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
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
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
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
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
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
DIAGEO
21
YTD F13 vs. YTD F12 (Nbillion)
Drivers of Profit before tax
11.2
1.70.50.20.3
3.16.5
13.6
3.0
COGS Volume Price YTD F12
PBT
YTD F13
PBT
Financing Other
Income
Admin
Costs
Mktg &
Distn
21
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
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
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