Flour Mills of Nigeria Plc Nine-month 2012/13 Results Presentation

Transcription

1 Flour Mills of Nigeria Plc Nine-month 2012/13 Results Presentation

2 A Related Portfolio of Vertically Integrated Activities Food Agro-allied Logistics & Support Other Subsidiaries Products & services Branded consumer goods: Pasta Noodles Semovita Goldenvita Sugar Rice Edible oils Snacks Branded intermediate products: Flour Soft flour Confectionery flour Sugar Edible oils Fertilizer blending and distribution Domestic Cultivation of Sugarcane Soybean Maize Rice Oil Palm Processing of Sugarcane Soybean Maize Rice Oil Palm Cassava Oil seed crushing and refining BAGCO packaging Flexible packaging Woven polypropylene Transportation Golden transport fleet of 600+ owned trucks Logistics Power generation 100 MW capacity Port operations 5 dedicated berths in Apapa UNICEM cement: 2.5 million MT integrated cement plant Animal feeds 2

3 Group Structure Niger Mills Co. Ltd and Nigerian Bag Manufacturing Co. Plc to merge into Flour Mills of Nigeria Plc (Parent Co), subject to EGMs Flour Mills of Nigeria Plc (Parent Co) UNICEM 28.15% Northern Nigeria Flour Mills Plc 52.6% Niger Mills Company 98.9% Golden Noodles Company Premier Feed Mills Company 62% Nigerian Bag Manufacturing Company Plc 70% Golden Transport Company Nigerian Eagle Flour Mills 51% Golden Pasta Division Golden Sugar Company Kaboji Farms Apapa Bulk Terminal Golden Shipping Company Nig. Rom Oil Mills Pty Ltd 90% Flour Mills Registrars Food businesses Agro-allied businesses Logistics & Support Thai Farms International Other Subsidiaries 9 Flour Mills of Nigeria Plc

4 Recent Developments Niger Mills Co. Ltd and Nigerian Bag Manufacturing Co. Plc to merge into Flour Mills of Nigeria Plc (subject to EGMs this month) Will generate internal operational efficiencies and reduced administration costs Construction of Golden Sugar refinery completed and in process of commissioning First commercial production planned in February Commissioning of acqua feed factory in Ibadan

5 9M 2012/13 Results Nine Months (Naira M) % Change Revenue 205, , Gross Profit 26,078 29, Profit before Tax 11,533 11, Profit after Tax* *before minorities 8,167 8, Slowdown attributable to several factors: Recent flooding in the country The challenging business environment in the North of the country Seasonal supply of alternatives to flour-based products (e.g. cassava) Growth in administration costs lower due to implementation of benchmarking and best practice Nine-month PBT margin stable y/y (5.6%)

6 Q3 2012/13 Revenues by Segment Three Months (Naira M) % Change Food 53,019 50, Fertilizer 907 1, Packaging 4,697 4, Livestock Feeds 7,165 5, Port Operations/Other 2,138 3, Cement - 9, TOTAL 67,926 74, The sale of imported cement has now ceased completely Excluding cement, Q3 revenues grew 4.5% y/y Q3 food sales up 5.7% y/y, although the rate of growth slowed Livestock Feed volumes continue to benefit from capacity expansion

7 Q3 2012/13 Revenues by Segment 0% 3% 11% 1% 7% Food business increasingly dominant in overall mix (Q3 2012/13: 78% of revenues) 78% Food Fertiliser Packaging Livestock Feeds Port Operations/Other Cement

8 Q3 2012/13 Gross Profit by Segment Three Months (Naira M) % Change Food 5,552 6, Fertilizer n/a Packaging Livestock Feeds Port Operations/Other n/a Cement ,096 n/a TOTAL 5,976 10, Excluding cement, Q3 gross profit down 17% y/y Margins in the food business came under pressure during the quarter Livestock feeds performed well on the back of increased capacity Weakness in packaging attributable to change in product mix

9 Q3 2012/13 Gross Profit and Margins by Segment Cement Port Ops/Other Livestock Feeds Packaging Fertiliser Food Food division increasingly dominant (93% of gross profit in Q3 2012/13) Food also highest gross margin division in Q3 2012/13 (10.5%) Cement import operations lose money as wound down % of total gross profit Q3 12/13 % of total gross profit Q3 11/ Food Fertiliser Packaging Livestock Feeds Port Ops/Other Cement Q3 2012/13 Gross margin % Q3 2011/12 Gross margin %

10 Q3 2012/13 Balance Sheet (Naira M) Non-Current Assets 162,694, ,061,916 88,724,955 Current Assets 113,995, ,795,454 74,607,101 Total Assets 276,689, ,857, ,332,056 Non-Current Liabilities 79,190,403 75,856,365 51,383,133 Current Liabilities 111,252,094 74,823,639 61,169,579 Shareholder s Equity 86,247,128 82,177,365 50,779,343 Balance sheet growing as investment made in productive assets Working capital has risen as a result of buying-in stocks of raw sugar ahead of refinery start-up

11 9M 2012/13 Cash Flow Nine Months (Naira M) Net Cash from Operating Activities 15,086 (3,881) Net Cash used in Investing Activities (33,897) (24,337) Net Cash used in Financing Activities (12,754) (11,286) Net Cash Flow (31,566) (39,504) Investment in sugar, new mills in Apapa and pasta factory in Agbara undertaken during the period

12 2012/13 Strategic Developments Food Leveraging synergy by merging of subsidiaries into parent company Moving up the value chain with focus on introducing higher margin retail products, e.g. snacks Commissioning of three new flour mills in Apapa, Lagos Commissioning of new 350,000 MT pasta factory in Ogun State Commissioning of new state-of-the-art 750,000MT sugar refinery in Apapa, Lagos (underway) Remodeling route to market to deliver better customer and consumer focus Agro Allied Rapid scale-up of the edible oils business Expanded capacity at Premier Feed Mills: Acqua feed in Ibadan being commissioned New factory in Calabar under construction Ramp-up cultivation of domestically grown sugarcane, oil palm, maize, soy beans, rice Other Subsidiaries Focus on local manufacturing

13 Conclusion Q3 saw slower growth mostly as a result of one-off events Ongoing and relentless focus on cost control and margins Commissioning of new facilities generates new opportunities Good progress on strategic objectives

14 DISCLAIMER This document is being issued by Flour Mills of Nigeria Plc ( FMN ) and is for private circulation only. The information contained herein does not constitute an offer to sell or the solicitation of any offer to buy any securities and or derivatives and may not be reproduced, distributed or published by any recipient for any purpose without the prior written consent of FMN. The information and opinions contained in this document are for background purposes only, and do not purport to be full or complete, nor does this document constitute investment advice.