delta corporation limited: the strategic priorities … · f17 f16 f17 f16 f17 f16 bulawayo 11 11...
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AGENDA
1. WELCOME AND INTRODUCTION PEARSON GOWERO
2. TRADING REVIEW PEARSON GOWERO
3. FINANCIALS MATTS VALELA
4. DISCUSSION/QUESTIONS ALL
5. REFRESHMENTS ALL
VOLUME BEVERAGE CATEGORY
• Declined by 7% LAGER BEER
• SBs declined by 11%SOFT DRINKS
• Declined by 3% SORGHUM BEER
1. Calendar 2016 most challenging year since dollarisation.
- limited payment platforms.
- cash withdrawal limits.
- bond note introduction had limited impact on cash shortages.
- delays in foreign payments.
2. Numerous fiscal and monetary policy interventions which made the operating environment
increasingly uncertain.
3. Aggressive Zimra collection measures and numerous police roadblocks.
4. Heavy rains – damages to road infrastructure, reduced access to markets and consumption
occasions.
5. Generally stretched consumers and traders; increased credit risk.
TRADING ENVIRONMENT-MOSTLY HEADENDS
VOLUME PERFORMANCE SUMMARY
Category Actual Volume
000hl
% Change on
Prior Year
1. BEVERAGES (HLS 000)
1.1 Clear Beer
1.2 Sorghum Beer
1.3 Sparkling Beverages
1.4 Alternative Beverages
1 214
3 488
1 237
160
(7)
(3)
(11)
(16)
Total Excluding Associates 6 099 (6)
2. Malt Tonnage 27 560 (21)
VOLUME BY PROVINCE
Lager Beer Sorghum Beer Soft Drinks
F17 F16 F17 F16 F17 F16
Bulawayo11 11 10 6 13 12
Harare45 46 33 32 47 46
Manicaland11 11 12 13 3 3
Mashonaland Central1 1 2 3 2 2
Mashonaland East2 3 1 1 1 3
Mashonaland West9 9 16 16 10 9
Masvingo Province7 7 11 13 7 8
Matabeleland North2 2 1 2 2 2
Matabeleland South1 1 2 2 2 2
Midlands Province11 9 12 12 12 11
Grand Total100 100 100 100 100 100
QUARTERLY VOLUME & REVENUE PERFORMANCE
$136 $151 $155
$121
$152 $163 $174
$143
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q1 Q2 Q3 Q4
Gro
ss S
ale
s $
mil
lion
Volu
me
Hl
'000
Volumes F17 Gross sales F16 Gross sales
Significant revenue loss in second half
LAGER BEER VOLUME & REVENUE PERFORMANCELAGER BEER FULL YEAR VOLUME PERFORMANCE F13 TO F17
2 060
1 697
1 4141 307
1 214
$352
$316
$278
$235 $215
$0
$50
$100
$150
$200
$250
$300
$350
$400
0
500
1 000
1 500
2 000
2 500
F13 F14 F15 F16 F17
Gro
ss s
ale
s $m
illi
on
Vo
lum
e H
l '0
00
Volume Gross Sales
LAGER BEER VOLUME & REVENUE PERFORMANCELAGER BEER VOLUME & GROSS SALES BY QUARTER
290318 331
275$52
$57 $59
$48
$0
$10
$20
$30
$40
$50
$60
$70
0
50
100
150
200
250
300
350
Q1 Q2 Q3 Q4
Gro
ss s
ale
s $m
illi
on
Vo
lum
e H
l '0
00
Volume Gross Sales
TRADING REVIEW- LAGER BEER MIX
HLs ‘000
-
200
400
600
800
1,000
1,200
1,400
F16 F17
14% 15%
59% 59%
27%26%
Premium
• Slower decline in volume – stabilised mix.
• Market share remained steady.
• Mainstream contribution anchored by 750ml pack.
LAGER BEER
SORGHUM BEER VOLUME & REVENUE PERFORMANCE
3,080
3,442 3,716
3,587 3,488
$118
$146$176
$193
$179
$0
$50
$100
$150
$200
$250
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
F13 F14 F15 F16 F17
Gro
ss s
ale
s $m
illi
on
Vo
lum
e H
l '0
00
Volume Gross Sales
LAGER BEER VOLUME & REVENUE PERFORMANCESORGHUM BEER VOLUME & GROSS SALES BY QUARTER
936
967
842
743
$46$51
$45
$38
$0
$10
$20
$30
$40
$50
$60
0
200
400
600
800
1 000
1 200
Q1 Q2 Q3 Q4
Gro
ss s
ale
s $m
illi
on
Vo
lum
e H
l '0
00
Volume Gross Sales
TRADING REVIEW- SORGHUM BEER MIX
HLs ‘000
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
F16 F17
44% 40%
56% 60%
Chibuku Chibuku Super
SORGHUM BEER
• Chibuku Super growth constrained by capacity limitations and
water shortages up to December 2016.
• Masvingo and Kwekwe breweries commissioned in last quarter.
• Scud resilient as a value pack.
• Market access affected by damages to road infrastructure.
• Cash shortages restricted consumption particularly in rural
areas.
SPARKLING BEVERAGES VOLUME & REVENUE PERFORMANCE
1,615 1,589
1,472 1,385
1,237
$231 $225$204
$183
$154
$0
$50
$100
$150
$200
$250
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
F13 F14 F15 F16 F17
Gro
ss s
ale
s $
mil
lio
n
Vo
lum
e H
l '0
00
Voulme Gross Sales
LAGER BEER VOLUME & REVENUE PERFORMANCESOFT DRINKS VOLUME & GROSS SALES BY QUARTER
293
362441
301
$37
$43
$51
$35
$0
$10
$20
$30
$40
$50
$60
0
50
100
150
200
250
300
350
400
450
500
Q1 Q2 Q3 Q4
Gro
ss s
ale
s $m
illi
on
Vo
lum
e H
l '0
00
Volume Gross Sales
TRADING REVIEW- SPARKLING BEVERAGES MIX
HLs ‘000
100
400
700
1 000
1 300
1 600
F16 F17
58% 60%
42%40%
Convenience pack
RGB
SPARKLING BEVERAGES
• Increased imports – traders exploiting COMESA
protocol (Zambia and Mozambique).
• Growth in value packs.
• Overall franchise brands at over 90% market
share shored up by parallel imports.
BEVERAGE VOLUME CONTRIBUTION
F16 F17
Lagers
20%
SBs
21%
Sorghum
56%
Maheu
3% Lagers
20%
SBs
20%
Sorghum
57%
Maheu
3%
VOLUME CONTRIBUTION BEER CATEGORY
F16 F17
Lagers27%
Sorghum73%
Lagers
26%
Sorghum
74%
AFDIS
• Stable volume and revenue performance.
• Factory throughput constrained by delayed foreign payments.
SCHWEPPES ZIMBABWE LIMITED
• Steady volume performance in core beverages.
• Financial performance weighed down by agri-processing units; Best
Fruit Processors and Beit Bridge Juicing Company.
NAMPAK ZIMBABWE
* Expected to publish half year results in May 2017.
• Challenges with foreign payments.
ASSOCIATES
OTHER DEVELOPMENTS
2. The Coca-Cola Company issued a notice of intention to terminate the Bottler Agreements with Delta and its associate SZL. TCCC and AB InBev intention to restructure interests. Negotiations are underway with TCCC and AB InBev. There is no position yet on Zimbabwe.
1. Change in major shareholder following combination of AB InBev and SABMiller as of 10 October, 2016. Trigger for Bottling franchise issues.
AGENDA
1. FINANCIAL HIGHLIGHTS
2. FINANCIAL STATEMENTS
% CHANGE VS PR. YR
VOLUME REVENUE
Volumes (000hls)
• Lager Beer (7%) (8%)
• Sorghum beer (3%) (6%)
• Soft Drinks (11%) (15%)
Total (6%) (10%)
VOLUME & REVENUE PERFORMANCE ENDING 31
MARCH 2017
FINANCIAL HIGHLIGHTS
REVENUE
Declined by 10% to $483 million (Turnover - $563m)
OPERATING MARGIN %
Down from 20% to 19,07%
EBIT
Down by 15% to $82 million
FINANCIAL HIGHLIGHTS
EBITDA
Down by 13% to $112,8 million
ATTRIBUTABLE INCOME
Declined by 13% to $69,9 million
DIVIDEND PER SHARE
DIVIDEND PER SHARE
Up 16% on prior year
Interim dividends paid per share- US 3,00cents
Final dividend proposed per share- US 2,45 cents
Cont….
EARNINGS PER SHARE
Decreased by 12% to US5,70 cents
STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD
MARCH 2017
US$000’s
MARCH 2016
US$000’s
REVENUE 482 968 538 198
Operating income 82 044 96 072
Net finance expense 4 539 5 895
Share of associates profit 1 834 3 944
PROFIT BEFORE TAX 88 417 105 911
Taxation ( 18 532) (25 822)
PROFIT FOR THE YEAR- CONTINUING
OPERATIONS69 885 80 089
Profit for the year from discontinued operations - -
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR69 885 80 089
EARNINGS PER SHARE
MARCH
2017
MARCH
2016
%
Change
Normal EPS (from Continuing
operations) – Cents5,70 6,49 (12)
Fully Diluted EPS (from
Continuing operations) Cents5,69 6,48 (12)
Dividend per share - Cents 5,45 4,70 16
MARCH
2016
US$’ 000
25 575
22 525
39 108
87 208
8 864
96 072
SEGMENT OPERATING INCOME
MARCH
2017
US$’ 000
MARCH
2016
US$’ 000
LAGER BEER 22 866 25 575
SPARKLING BEVERAGES 14 295 22 525
SORGHUM BEER 34 986 39 108
TOTAL REPORTABLE SEGMENTS 72 147 87 208
ALL OTHER SEGMENTS 9 897 8 864
TOTAL OPERATING INCOME 82 044 96 072
ASSETS2017
US$000’s
2016
US$000’s
Non-current assets
Property, plant and equipment 354 947 345 332
Investments, loans and trademarks 56 124 54 776
TOTAL NON-CURRENT ASSETS 411 071 400 108
CURRENT ASSETS
Inventories 77 753 86 431
Trade and other receivables 41 931 43 683
Cash and cash equivalents 173 334 166 016
TOTAL CURRENT ASSETS 293 018 296 130
TOTAL ASSETS 704 089 696 238
STATEMENT OF FINANCIAL POSITION MARCH
STATEMENT OF FINANCIAL POSITION MARCH
EQUITY AND LIABILITIES2017
US$000’s
2016
US$000’s
Share Capital 12 301 12 310
Share Premium 32 044 33 074
Reserves 7 389 5 985
Retained Earnings 452 128 436 530
Shareholder’s equity 503 862 487 899
Long- term borrowings - 65 000
Deferred taxation 50 022 48 833
50 0222 113 833
CURRENT LIABILITIES
Short term borrowings 60 000 -
Interest free liabilities 90 205 94 506
TOTAL CURRENT LIABILITIES 150 205 94 506
TOTAL EQUITY AND LIABILITES 704 089 696 238
cont…
CASH FLOW
2017
US$000’s
2016
US$000’s
Cash flow from operating
activities108 344 137 463
Net cash invested (40 460) (49 426)
Net funding 113 334 101 016
SHARE CAPITAL MOVEMENTS
Shares in Issue as at 31 March 2016 1 244 313 975
Share Options Exercised1 198 225
Cancelled shares (2 108 076)
Shares in Issue as at 31 March 2017 1 243 404 124
Shares held in treasury 21 218 614
FOCUS AREAS FOR F18
1. Resolving the bottling franchise matter.
2. Driving top-line given the projected improved agricultural and
mining output.
3. Managing value chain costs against unsustainable pricing of cereals.
4. Intensifying market facing activities.
5. Maintain sound industrial relations in an environment of focused
cost control.
6. No major capex projects - prioritising replacements.
CHEERS
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