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Analyst presentation – February 2016
1
Strategy and Performance OverviewAnalyst PresentationFebruary 2016 Richard Rushton – Managing Director
Analyst presentation – February 2016
2
Key Performance Highlights
Analyst presentation – February 2016
3
SALIENT FEATURES AND KEY PERFORMANCE METRICS YTD DECEMBER 2015“We continue to drive strong top line growth, whilst navigating economic headwinds.”
Strong top line revenue growth achieved despite: Challenging and volatile global macro-economic
conditions
Slow-down in domestic economic growth
Changing competitive landscape in local market
Our solid performance is attributed to: Relentless focus on executing our key strategic initiatives
Improved service levels aided by good stock availability
Favourable weather conditions in South Africa
RSA trade buy-in ahead of earlier price increase
Foreign currency windfalls due to weaker Rand
397.7m Litres sold 7.7%
R12.2bn Revenue reported 11.2%
R1.9bn EBITDA 14.8%
R1.7bn Operating profit 16.5%
R1.2bn Headline earnings 17.8%
21% Growth in total assets
10.5% Return on shareholder equity
Analyst presentation – February 2016
4
VOLUMES AND REVENUE CONTRIBUTION PER REGION (YTD DEC 2015)“Top line revenue growth was achieved across all 3 Business Units.”
South Africa
Africa (incl BLNS)
International
Strong double digit growth Benefits realised from key
initiatives
Robust growth in most countries
Angolan slow-down affected overall performance
Improvement in margins
Headwinds in key markets Short term value accelerating Favourable mix and currency
movements
South AfrYTD 6 MTH Growth
Jul - Dec 2015% Contribution
Vol 13.3% 79.4%Rev 14.6% 74.6%
Africa (IncYTD 6 MTH Growth
Jul - Dec 2015 % ContributionVol -7.4% 15.7%Rev 2.4% 13.7%
InternatioYTD 6 MTH Growth
Jul - Dec 2015 % ContributionVol -16.5% 4.8%Rev 1.2% 11.1%
Analyst presentation – February 2016
5
Macro Overview
Analyst presentation – February 2016
6
GLOBAL ECONOMIC OUTLOOK BY REGION“The global outlook reflects volatile and diverging growth paths.”
Volatility levels globally are elevated with emerging markets (EM) most affected Africa region remains dynamic - higher growth prospects Short term SA outlook is poor – medium term recovery likely to lag rest of Africa Certain key Distell markets most affected
3.5%
1.5%
5.0%4.6%
2.2%
3.4%
2.1%
4.3% 4.0%
0.7%
3.9%
2.1%
5.1% 4.9%
2.4%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
World Advanced Economies Emerging Market andDeveloping Economies
Sub-Saharan Africa South Africa
Regional Economic Growth Performance(% Real GDP Growth)
2011-15 2016 2017-20
Source: IMF, Jan’16
Analyst presentation – February 2016
7
SOUTH AFRICA CONSUMPTION TRENDS“Distell delivered a stellar performance in SA notwithstanding economic headwinds.”
Distell’s double digit growth performance is well above food and beverage retail sales in SA Our diverse portfolio offers consumers accessible price points for various consumption
occasions
-10%
-5%
0%
5%
10%
-20
-10
0
10
20
2009 Q1 2010 Q2 2011 Q3 2012 Q4 2014 Q1 2015 Q2
South Africa: Consumer Confidence & Retail Sales
CCI (lhs)Total Retail Sales (y-o-y %)Food & Beverages Retail Sales (y-o-y %)
3.5%
2.8%
0.4%0.8%
1.6%
2.2%
0.3%0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2005-10 2011-15 2016 2017
SA Real Consumption Trends% Real Growth Household Expenditure
Total Non-durable
Sources: BER, StatsSA
Analyst presentation – February 2016
8
SOUTH AFRICA: DISTELL VALUE SHARE OF SA LIQUOR“Distell SA’s good performance also supported by market share gains.”
Continued market share gains bears testimony to our improved outlet reach and RTM capability in SA
Gains realised in all core categories supported by core brand innovation
Latest source: Nielsen, SALBA, SAWIS, Internal BW Sales & Competitor Financial StatementsLatest source: Nielsen, SALBA, SAWIS, Internal BW Sales & Competitor Financial Statements
12.1%
25.8%
37.0%
12.4%
25.3%
40.5%
13.1%
26.9%
41.5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
DISTELL RTD'S DISTELL SPIRITS DISTELL WINE
Distell: % Value share by SA liquor category
MAT JUNE 2014 MAT JUNE 2015 MAT DEC 2015
18.5%
19.1%
20.0%
18%
18%
19%
19%
20%
20%
21%
MAT JUNE 2014 MAT JUNE 2015 MAT DEC 2015
Distell: % Value share of Total SA liquor
Analyst presentation – February 2016
9
SUB-SAHARAN AFRICA: GROWTH PERFORMANCE 2005-2020“Our Africa business has been impacted by volatility in oil dependent economies.”
Southern and East Africa - generally less impacted by oil price declines; growth prospects remain favourable
Rebasing of economic growth in West Africa (notably Angola) - negatively impacted on our performance
Our local expansion programme for Africa and tailored portfolio offering aims to address many of these challenges
19%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Nigeria Angola Ghana Zambia Kenya Mozambique
SSA: Economic Growth Performance
2005-08 2010-15 2016 2017-20
Market rebasing
Source: IMF, 2016
Analyst presentation – February 2016
10
SUB-SAHARAN AFRICA: GROWTH PERFORMANCE vs LEADING COMPETITORS“Notwithstanding economic headwinds, Distell outperformed alcohol competitors in Africa.”
9
3
11
0 5 10 15
Leading beerplayer
Leading spiritsplayer
Distell
Africa: Revenue Growth% (Incl SA & BLNS) YTD Dec15
(Organic Constant Currency, Non-Duty Paid)
Source: Latest reported financial results for Africa region incl. SA, YTD Dec 2015
Distell has outpaced leading competitors’ revenue growth in Africa (incl. SA) due to: Strong and diverse brand
portfolio (product/category mix) Continued improvements in RTM Growth in core market
Analyst presentation – February 2016
11
DISTELL’S PERFORMANCE: KEY GLOBAL ALCOHOL CATEGORIES“Strong Ciders, Whisky and Cognac performances.”
Latest source: SAWIS, IWSR, Distell,
-0.2
-3.1
Distell Sales Global ScotchWhisky Sales
Scotch Whisky (Bottled & Bulk)
2015: % Global Volume Growth
Distell’s Scotch Whisky portfolio held its own against recent
category declines
9.08.5
Distell Sales Global CognacSales
Cognac (Bottled)
2015: % Global Volume Growth
Distell’s growth in Cognac is on par with category global sales
growth
Cider
8.7
4.1
Distell Cider Global Cider
Distell’s cider growth in 2015 exceeded global category
growth
2015: % Global Volume Growth
Analyst presentation – February 2016
12
DISTELL’S PERFORMANCE: KEY GLOBAL ALCOHOL CATEGORIES“Mixed performance in key export wines and cream liqueur categories.”
Latest source: SAWIS, IWSR, Distell,
SA Packaged Wine Exports
23.6
23.3
Distell
Distell % Volume Share
2014 2015
Distell’s share of packaged SA wine exports has declined
marginally, impacted by the product recall in the UK/Europe
-10.0
-0.9
Amarula Global CreamLiqueur
2015: % Global Volume Growth
Cream Liqueur
Amarula’s performance negatively impacted by
economic volatility in Brazil
Analyst presentation – February 2016
13
Recap our Strategy
Analyst presentation – February 2016
14
DISTELL’S STRATEGIC JOURNEY – “Our 1, Plus 1, Plus 1 Ambition!”“Our journey towards 2020, and a bold new Distell, started in 2014…”
LEADSELECTED
EMERGING MARKETS
OWN THE LAST MILE
SCALE UPEXCELLENCE
CARE AND CONTRIBUTESHAPE THE
FUTURE
CRAFT DISTINCTIVE & COMPELLING
BRANDS
Strategic Aspiration:Double revenue & profit by 2020!
Key initiatives: Grow and win in RSA
Expand into Africa and at least one major international market
Leverage core brand portfolio
Build scale positions in core markets and segments
Analyst presentation – February 2016
15
Lead in selected markets
Analyst presentation – February 2016
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SOUTH AFRICAN PERFORMANCE HIGHLIGHTS“Strong growth achieved in South Africa despite tough market conditions.”
Volume Revenue Revenue % DistellSouth Africa 13.3% 14.6% 74.6%
Volume growth in all core categories
Strong double-digit revenue growth ahead of the market
Revenue growth translated into improved gross income
Ciders- solid growth – core Hunter’s brand Double digit wine growth - 4th Street volumes
more than doubled! Whisky and gin grew volumes, while brandy
sustained its slow turnaround Strategic initiatives on track with benefits and
efficiencies realised Favorable weather and much improved supply
position over key festive period Trade buy-in due to earlier price increases, pulling
some volumes forward
Analyst presentation – February 2016
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AFRICA (INCL BLNS) PERFORMANCE HIGHLIGHTS“Mixed results impacted by challenging macro-economic conditions.”
Good performance in many priority markets despite market conditions
BLNS maintaining good growth
Nigeria, Central and SE Africa delivered very strong results Exceptional performance in Mozambique Good results in Zambia - excise reduction on locally produced beer
from 1 January 2016 could impact imports Angola’s performance reflecting strong headwinds in market
We continue to selectively invest in Angola Kenya – slow start but expected recovery during 2nd half
Increased support to KWAL coupled with RTM improvements
Volume Revenue Revenue % DistellAfrica (Incl BLNS) ‐7.4% 2.4% 13.7%
Revenue % AfricaBLNS 6.1% 11.8% 59.1%Angola ‐54.8% ‐50.5% 10.3%Mozambique 47.2% 50.5% 7.4%Zambia 13.8% 25.5% 6.8%Nigeria 55.8% 91.7% 3.5%Kenya ‐21.7% 5.8% 3.3%
Analyst presentation – February 2016
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INTERNATIONAL PERFORMANCE HIGHLIGHTS“Strong December offsetting earlier headwinds in international markets.”
Volume Revenue Revenue % DistellInternational ‐16.5% 1.2% 11.1%
Revenue % InternationalEurope ‐12.1% 3.4% 49.6%Asia pacific ‐26.3% 4.4% 24.5%North America ‐4.7% 14.6% 15.9%Travel Retail ‐28.6% ‐13.7% 5.9%Latin America ‐38.2% ‐22.4% 4.1%
Strong December with positive news flow expected
Favourable product mix and currency movements
Wine recall impacted on earlier months of the year
Moderate growth in Europe, Asia Pacific and North America UK integration under way – strong BSD EBITDA performance Slowdown in China Positive share gains and momentum in Taiwan USA: Partnership with Terlato wines will aid expansion of our footprint
Latin America and Travel retail performance reflecting difficult conditions in which they trade
New leaders in key regions settling in
Analyst presentation – February 2016
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INTERNATIONAL PERFORMANCE HIGHLIGHTS continued…“Stand out performances by several brands in key international markets.”
NordicsDrostdy-Hof:Value growth +18.2%
BSDPerforming well:Value growth +6.5%
GermanyNederburg:Value growth +9.1%
TaiwanScottish Leader:Value growth +18.4%
CanadaTwo Oceans: Value growth +1.3%
EuropeAmarula:Value growth +27.2%
Analyst presentation – February 2016
20
Craft distinctive and compelling brand portfolios
Analyst presentation – February 2016
21
POWER AND LUXURY BRANDS“We are building strong and differentiated ‘Power’ and ‘Luxury’ brand portfolios.”
“Globally, consumers are more open to trading up, or down; depending on the occasion and their circumstances and needs
Distell has structured its brand portfolio to address these overarching trends”
Our new ‘luxury’ mind- set and journey has recently commenced….
* Balance of contribution relates to non-branded business
6 MONTH VALUE
GROWTH
12 MONTH VALUE
GROWTHContribution to
Distell
Power Brands 12.0% 12.2% 87.1%
Luxury Brands 13.7% 15.4% 10.7%
Analyst presentation – February 2016
22
Ciders & RTD’s Brandy & Other Spirits
Wines
Value:+13.4%* Value +15.4%* Value +8.2%*
Strong growth in SA Growing African
footprint Sustain and leverage
regional/global scale
SA brandy volume stabilised, with value growth
Build momentum behind SA whisky and Scottish Leader
Pricing architecture defined
Achieved momentum through innovation
PB Contribution: 44% PB Contribution: 27% PB Contribution: 23%
Liqueurs
Value +2.5%*
Growth in core international markets
Core brand renovation underway
PB Contribution: 6%
*12 and 6 months Value growth to December 2015
6 month
12 month Value:+14.8%* Value +14.5%* Value +7.8%* Value +1.8%*
POWER BRAND PERFORMANCE: CATEGORY“Power Brands are building momentum and scale.”
Analyst presentation – February 2016
23
SA cider volume growth accelerated off a much higher base….
…year on year growth has increased due to pricing and packaging architecture and innovation
0
100
200
300
400
500
FY0 FY3 FY6 FY9 FY12 FY15
Cider volume indexed (FY0=100)
0
50
100
150
200
250
Jul Aug Sep Oct Nov Dec
FY 2015 FY 2016
9.1%
POWER BRANDS : CIDERS AND RTD’S“Ciders drive RTD performance, and brand momentum is achieved from innovation.”
Cider Volume indexed (FY0=100)
Cider Volume growth YOY
* Sources: Internal BW sales volumes. YTD Dec 2015
Analyst presentation – February 2016
24
0
5
10
15
20
25
30
35
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
FY 2014 FY 2015 FY 2016
145%
Driven by a single minded proposition
158%
POWER BRANDS: WINE“In SA 4th Street continues its growth success story in mainstream markets.”
* Sources: Internal BW sales volumes
4th Street volume growth YOY
Analyst presentation – February 2016
25
7.7%
20.5%
4.1%7.3%
19.2%
6.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Brandy Gin Whisky6 month growth % 12 month growth %
POWER BRANDS: BRANDY AND OTHER SPIRITS“Brandy & other spirits have shown strong value growth, and encouragingly, the brandy portfolio grew volumes.”
* Sources: Internal BW value
Power brands: Brandy & other spirits (Value) growth YOY
3.4%
1.5%
0.0%
1.0%
2.0%
3.0%
4.0%
Brandy
6 month growth % 12 month growth %
Power brands: BRANDY (Volume) growth YOY
Analyst presentation – February 2016
26
Greater focus on top performing brands
Simpler and single minded brand propositions developed
Focus on affordability and relevance
Crafting a winning Africa portfolio
Focussed global wine growth strategy to be implemented
KEY INITIATIVES: POWER BRANDS“‘We are providing step change programmes for Power Brands.”
Analyst presentation – February 2016
27
Premium WineWhisky, Cognac & Brandy
Value: +26%*Burn Stewart: +12%*
Value: +0%*
• Sustain momentum through selected market expansion
• Build ‘luxury’ adoption model
• Seed and incubate in South Africa
• Wine growth strategy defined
• Challenges encountered due to voluntary trade recall
• Nederburg and Drostdy-Hof performing well in continental Europe
Luxury Contribution: 58% Luxury Contribution: 42%
* Branded business only
LUXURY BRANDS“‘Luxury’ brands are focused on premiumisation and building our international footprint with an emphasis on value growth.”
Analyst presentation – February 2016
28
Clear differentiation between brands within categories
Simpler and single minded brand propositions Brand building – consumer and outlet focus
Delivering stronger core creative ideas “LUXURY” marketing capability building In-market execution capability build for
South Africa Roll-out to Africa and International
TO
Designed to build on and enhance the ‘Curiosity’ platform. It brings a positive tension between the complexity of the old & the vitality of the new”
KEY INITIATIVES: LUXURY BRANDS“‘We are building a strong marketing capability in luxury.”
“The Nederburg example…”
Analyst presentation – February 2016
29
WORLDWIDE DISTILLER OF THE YEAR FOR 2015: AWARD
Analyst presentation – February 2016
30
Own the last mile
Analyst presentation – February 2016
31
Effective Trade Terms
Clear Pack and Channel pricing & adherence
Wider Reach & influence
Focused Portfolio
Cold Space Penetration
Constant Activity & Execution
Revenue Management
Capability fully integrated into regional BAU processes
and decision support
Sales Force Effectiveness
Sales Excellence office created & second phase of
roll-out initiated
STRATEGIC INITIATIVES – OWN THE LAST MILE“Synergy between Revenue Management & Sales Excellence capabilities in Southern Africa.”
+20%Additional
outlet growth
targeted
+30%Cold spaceimplementation
+15%Price
adherence
Analyst presentation – February 2016
32
International AfricaIncreasing RTM capability & influence through
key partnerships…Shareholding in KWAL provides Distell with the ability to influence KWAL’s strategy and on-the-ground execution.
STRATEGIC INITIATIVES – OWN THE LAST MILE“‘…While select African & International partnerships will change our ability to influence the last mile..”
Analyst presentation – February 2016
33
Scale up excellence
Analyst presentation – February 2016
34
Production
Portfolio optimisation
Asset optimisation
Network optimisation
Portfolio optimisation & category growth recommendations being implemented
Fully integrated (end-to-end) cider production scheduled to come on stream by February 2016-Springs
Production network pilot positioned and detailed business case being developed
SA distribution network recommendations implemented in October
STRATEGIC INITIATIVES – SCALE UP EXCELLENCE“…aims to enhance our margins”
Asset base optimisation evaluations completed and opportunity assessments underway
Analyst presentation – February 2016
35
Shaping the future
Analyst presentation – February 2016
36
Global financial/ERP integration
People & Talent management system solution implemented
Improved operational & decision support ICT systems
End-to-End global Supply Chain MIS
Centralised procurement
Sales excellence success from Southern Africa being rolled out in key African and International focus markets
Revenue management practices replicated globally
Luxury brand marketing and RTM capability being developed
Systems Competencies
Embed and manage organization change effectively
Organisational Design
STRATEGIC INITIATIVES – SHAPING THE FUTURE“Organizational capabilities to support create & meet demand teams”
Analyst presentation – February 2016
37
Care and contribute
Analyst presentation – February 2016
38
SUSTAINABILITY SCORECARD“Driving sustainability and implementing an integrated BBBEE strategy.”
Strategic goal Base year FY 15 Targets FY 16 Actual HY 16 Target FY 20
Non-Financial Metrics
Reducing
Water usage 3.82 l/l 4% 14% 15%
Electricity usage 0.125 kWh/l 8% 18% 20%
On-site energy usage (from fossil fuel) 1.18 MJ/l 8% 29% 20%
Greenhouse Gas Emissions 0.247 CO2e/l 10% 17% 25%
Increasing
Drive transformation (improve BBBEE score)
Level 4(Old Codes)
Level 4 (New Codes)
Level 8 (New Codes)
Level 4 (New Codes)
Support local economies: Local sourcing across categories & geographies Be a leader in diversity and transformation: Integrated BBBEE strategy Nurture nature: Operate in a sustainable and ethical manner
Strategic focus areas
Analyst presentation – February 2016
39
Looking forward
Analyst presentation – February 2016
40
OUR FUTURE PATH OF SUCCESS – “Our 1, Plus 1, Plus 1 Ambition!”“Distell is well placed despite worsening short term domestic and global headwinds.”
Domestic: Strong position in core domestic market
Diversified brand portfolio with good pipeline of initiatives
Strong brands in higher growth segments
Internationally: Despite headwinds, we continue to integrate our European
structure, to drive core brand growth and improve efficiencies
We are prioritising our spend in Africa according to the new risks
We have a strong balance sheet to allow us to realize our 2020
aspirations beyond RSA
Analyst presentation – February 2016
41
“In any given moment, we have two options: to step forward into growth, …or to step back into safety.”
Abraham Maslow
Board presentation – February 2016
This presentation contains ‘forward-looking’ statements, including specifically all statements that express marketforecasts; Distell’s commentary on macro and industry related market trends; and projections related to Distell’sbusiness strategy.
All forward-looking statements contained in this presentation involve risk and uncertainty since they aredependent on assumptions of circumstances that will occur in the future. There are multiple variables whichcould cause actual results to differ from the forward-looking statements which are not within Distell’smanagement control. Such variables include, but are not limited to, political, macro and socio-economicchanges; legal and regulatory changes; litigation developments; technological changes; environmental risksand changes in consumer trends, among others. As such, Distell is not liable for any financial or other lossesincurred arising from investment decisions made on the basis of forward-looking statements contained in thispresentation.
All forward-looking statements made by Distell apply only as of the date they are made. There is no obligationon Distell in the future to provide updates on forward-looking statements contained in this presentation to reflectany changes in Distell’s projections with regard thereto or any changes in events or underlying assumptions onwhich any such statement is based.
Disclaimer
1
Financial Results – 31 December 2015
Financial Results31 December 2015Lucas Verwey – Financial Director
Analyst Presentation
2
Financial Results – 31 December 2015
Linking Strategy, Strategic Initiatives and Value Drivers
Lead selected emerging markets
1.Craft distinctive
& compelling brands
2.Own the last
mile
3.Scale up
excellence
4.Shape the future
5.
Care &contribute
6.
Revenue
1
Gross Profit
2
Operating Cost
3
Strategy for global cider
and wine growth
Financial Value Drivers
Selective premium through a
“luxury” play
Sales force effectiveness
Revenue Management
ProcurementProduction
Network Optimization
Cider Production Technology
Continued SA growth
Africa focus
Enterprise Development Projects for
supply
Enabling
Strategic
Initiatives
Strategic Themes
Distribution Network
Optimisation
•South Africa•Africa•One other
Innovation
Technology
People
3
Financial Results – 31 December 2015
Index
Salient featuresSalient features
Delivering valueDelivering value
MarginsMargins
Earnings and profit performanceEarnings and profit performance
Investment in assetsInvestment in assets
Cash flow and fundingCash flow and funding
A
B
C
D
E
F
Revenue growthRevenue growth
G
4
Financial Results – 31 December 2015
Salient features of performance
Salient features12 Summary
5
Financial Results – 31 December 2015
Normalised ReportedSales volumes up 7.7% 7.7%
Gross revenue up 11.2% 11.2%
EBITDA 14.2% 14.8%
Operating profit 15.8% 16.5%
Headline earnings 16.8% 17.8%
Headline earnings per share 16.8% 17.7%
Growth in total assets (since June 2015) 21.0%
Main difference between normalised and reported performance is R8,9m in 2014/15 due to additional IBC payment.
Salient features: upward trend to December 2015
6
Financial Results – 31 December 2015
Summary – YTD December 2015
Good overall gross revenue growth on history (11.2%):o Solid peak season performance with strong growth.
o Good in-market execution, favorable stock levels and focus on consistent service delivery.
o In South Africa, we delivered an excellent performance in December:
• Volume growth accelerating in all of our core categories.
• Strong double-digit gross revenue growth translated into pleasing growth in gross income.
• Trade buy-in due to price increases in January rather than in February, pulling volumes forward which impacts the YTD comparison on history.
o In Africa, many priority markets performed well, although overall performance was impacted by the challenging macro-economic conditions that Angola is facing.
o Internationally, we enjoyed a strong December and the news flow going into next year is more positive in many of our core markets, although China experienced a slowdown.
7
Financial Results – 31 December 2015
Summary – YTD December 2015 (continue)
There are many risks facing the domestic and global economy, uncertain and difficult ‘macros’ in some of our markets.
Gross margin improvement on history shows good progress. Positive impact reduced to a certain degree by:
o Mix effects as consumers trade down in SA
o Excise duty increases driven by mix
Operating margin performance – up on history due to focus on expenditure control.
Net operating assets grew 24,7% (15.7% excluding FX) compared to gross revenue growth of 11,2%:
o Investment in long term bulk inventory in maturation
o Investment in primary production and innovation
8
Financial Results – 31 December 2015
Summary – YTD December 2015 (continue)
The Rand has also been a key factor in our export competitiveness and also in the financial performance of the business in the short term, although a ‘weak Rand’ has more structural challenges for us as a country and as a company in the longer term.
Strong cash flow and sufficient headroom to fund expansion in the medium term.
9
Financial Results – 31 December 2015
Delivering value
Managing the underlying drivers of shareholder value1
10
Financial Results – 31 December 2015
Rm Rm Trend Trend2015/16 Report Normal2014/15 9.5% 9.0% 1,160 984 117.9 116.8
9.5% 9.0% 1,160 993
ReportedNormalised 5.4% 5.5% 12,223 10,997 111.2
5.4% 5.6%
0.57 0.62 21,556 17,851 120.8
10.5% 10.7%10.5% 10.8%
21,556 17,851 120.8
1.94 1.94
11,096 9,200 120.6
Equity and liabilities
Total equity
Return on equity (ROE)
Gross revenue
Net profit after Tax (NPAT)
Total assets
NPAT%
Return on assets (ROA)
Asset turn
Gearing
Managing the underlying drivers of shareholder value
11
Financial Results – 31 December 2015
Revenue growth
Contribution per region and category
Exchange rates
Drivers of revenue growth
1
2
3
12
Financial Results – 31 December 2015
Rm Rm Rm Rm Trend2015/16 Norm2014/15 12,223 10,997 111.2
4,418 3,794 Normalised 36.1% 34.5% 7,805 7,202 108.4
Rm Rm
1,160 993 82 81 100.5Finance cost, equity income
2,713 2,325 116.7
3,176 2,720
36.1% 34.5% 464 395 117.5
Gross revenue
Cost of goods sold
Net profit after tax (NPAT)
Expenses
Gross margin DP
Total expenses and tax
Taxation
Gross profit
Other items
Managing the underlying drivers of shareholder value
13
Financial Results – 31 December 2015
Contribution per region
14
Financial Results – 31 December 2015
Contribution per category
15
Financial Results – 31 December 2015
Drivers of gross revenue growth: Consumers trading down
16
Financial Results – 31 December 2015
Currency 2015/16 2014/15Change on history
GBP - 20.80 17.86 16.4%EUR - 14.97 14.14 5.9%USD - 13.56 10.98 23.6%CAD - 10.27 9.88 3.9%
YTD December 2015 average rates
Average exchange rate weakening 12.8% on history increasing short term exchange benefits
17
Financial Results – 31 December 2015
Drivers of margin1
2 Drivers of gross profit
Margins
18
Financial Results – 31 December 2015
Rm Rm Rm Rm Trend2015/16 Norm2014/15 12,223 10,997 111.2
4,418 3,794 Normalised 36.1% 34.5% 7,805 7,202 108.4
Rm Rm
1,160 993 82 81 100.5Finance cost, equity income
2,713 2,325 116.7
3,176 2,720
36.1% 34.5% 464 395 117.5
Expenses
Total expenses and tax
Gross margin DP Taxation
Gross revenue
Gross profitCost of goods sold
Net profit after tax (NPAT) Other items
Managing the underlying drivers of shareholder value
19
Financial Results – 31 December 2015
Drivers of margin: improvement through efficiencies
20
Financial Results – 31 December 2015
Drivers of gross profit: encouraging performance increase
21
Financial Results – 31 December 2015
Earnings and profit performance
Operating profit
Headline earnings
12
22
Financial Results – 31 December 2015Increase in operating profit; positively impacted by growth in gross revenue higher than opex growth
23
Financial Results – 31 December 2015
Headline earnings up on previous year
24
Financial Results – 31 December 2015
Investment in assets
Total assets vs. liabilities12
3
Net operating assets
Inventory
25
Financial Results – 31 December 2015
Rm Rm Rm Rm Trend2015/162014/15 13,342 10,973 121.6
Reported21,556 17,851 4,852 4,131 117.5
3,361 2,747 122.4
6,191 4,835 128.0
10,459 8,651
4,268 3,816 111.9
Total current assets
Total assets Fixed assets
Other Non-current assets
Current liabilities
Total liabilities
Non-current liabilities
Managing the underlying drivers of shareholder value
26
Financial Results – 31 December 2015Net operating assets up 24.7% compared to gross revenue growth of 11.2%, thereby lowering net asset turn
27
Financial Results – 31 December 2015Increase in inventory higher than gross revenue growth which slows asset turn
28
Financial Results – 31 December 2015
Increase in inventory (excluding excise duty) due to higher investment levels and forex
29
Financial Results – 31 December 2015
Cash flow and funding
Cash flow and funding
Net borrowing position, borrowing capacity and headroom to fund expansion
1
2
30
Financial Results – 31 December 2015
Rm Rm Rm Rm Trend2015/162014/15
Reported 6,191 4,835 128.0
10,459 8,651 Rm Rm
4,268 3,816 111.921,556 17,851
11,096 9,200 Total equity
Current liabilities
Total liabilities
Non-current liabilitiesEquity and liabilities
Managing the underlying drivers of shareholder value
31
Financial Results – 31 December 2015
Cash flow and funding: positive cash generation
32
Financial Results – 31 December 2015Net borrowing position, borrowing capacity and headroom to fund expansion
Financial Results – 31 December 2015
This presentation contains ‘forward-looking’ statements, including specifically all statements that express marketforecasts; Distell’s commentary on macro and industry related market trends; and projections related to Distell’sbusiness strategy.All forward-looking statements contained in this presentation involve risk and uncertainty since they are dependenton assumptions of circumstances that will occur in the future. There are multiple variables which could cause actualresults to differ from the forward-looking statements which are not within Distell’s management control. Suchvariables include, but are not limited to, political, macro and socio-economic changes; legal and regulatorychanges; litigation developments; technological changes; environmental risks and changes in consumer trends,among others. As such, Distell is not liable for any financial or other losses incurred arising from investment decisionsmade on the basis of forward-looking statements contained in this presentation.As such, you are cautioned not to place undue reliance on the forward-looking statements contained herein, asthey apply only as at the date of this presentation.All forward-looking statements made by Distell apply only as of the date they are made. There is no obligation onDistell in the future to provide updates on forward-looking statements contained in this presentation to reflect anychanges in Distell’s projections with regard thereto or any changes in events or underlying assumptions on whichany such statement is based.
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