MINDSPEAK FEBRUARY 22, 2014 Agenda • My background • Thoughts on what makes BUSINESS successful • Thoughts on what makes PEOPLE successful • Thoughts on EAST AFRICA • Thoughts on EABL • Q&A 2 My Background • British, 48 years of age • Married for 25 years, 3 kids • Hobbies: Golf and Football • Employers :- Nestle and Diageo 3 Thoughts on Success Business Success People Success • Focus • Intellect • Delivery • Experience • Improvement • Interpersonal • Team Work • Attitude 4 HARNESSING EAST AFRICA’S GROWTH POTENTIAL Presentation by Charles Ireland Group Managing Director and Chief Executive Officer, EABL Kenya | Uganda | Tanzania | S.Sudan |Rwanda | Burundi We see some positive trends in terms of underlying demographics... • 2m new consumers reach adulthood in East Africa every year Population Growth 2005-2030 • Generation Y (people born after 1980) are a demographic who are highly connected via technology, more environmentally- and health-conscious and keen to make their own choices • Females becoming more financially independent SOURCE: PROJECT RAMANI (TNS) JUL 2012; THE STATE OF EAST AFRICA 2012 6 The trend of urbanisation favours consumer products... Urbanisation 1990 - 2030 • Under 25% of East Africa’s population lives in urban areas (vs a global average of 50%) • East Africa has 5 of the Top 20 fastest growing cities in the world • Urban consumers spend twice as much on personal consumption as those in rural areas On vs Off Trade Value Growth MAT Dec 2012 60% • Rise of premiumisation and convenience as trends % annual 50% growth 40% On-Trade 30% Off-Trade 20% 10% 0% Beer Spirits SOURCE: AC NIELSEN MAT DEC 2012; PROJECT RAMANI JUL 2012 7 Likewise, as GDP grows, more consumers will trade out of the large informal sector... SOURCE: PROJECT RAMANI (TNS) JUL 2012 • Proportion of households with disposable income rising exponentially • Informal alcohol is same volume as total branded beer • Biggest categories are changaa (distilled), busaa (opaque maize beer) and mnazi (coconut wine) • Category dominated by older, rural men, C2DE 8 The key for these economies will be to allow wealth creation to trickle down to consumers.... • Ensure that the wealth from energy finds benefits the wider population • Opening up the EAC to reduce Non-Tariff Barriers which add to the costs that consumers pay 9 We need to improve the sustainability of agriculture… c. 25% of GDP Adding value to: Tea, coffee, cotton, pyrethrum, and horticultural products. Livestock & dairy products Irrigation projects - finding potential in arid and semi arid areas Provision of agricultural extension services. We need delivery on planned infrastructure improvements... A good example of public-private partnership is EABL’s work in agriculture.... EABL’s approach • 26,000 local partners across the value chain • 10,000 metric tonnes of sorghum sourced in Kenya • Two new varieties of highyielding barley seed launched 12 It’s important to invest in Innovation... We must invest in human capital..... Investment in human capital It’s important to have a positive impact in our Investment in human capital communities..... EABL has a stretching ambition and is wellpositioned to achieve it To create the best performing, most trusted and respected consumer products company in Africa • Market-leading brands in beer and spirits • History in this region since 1922 • Strategy of investing for future growth • Strong values • Global best practice 16 This led to total net sales growth of +4%... F14 H1 P&L vs F13 Kshs M Net Sales 31,858 +4% Cost of Sales -1% Gross Profit +9% Profit After Tax 4,161 +4% 17 HALF YEAR DEC 2013 VS PRIOR YEAR Good growth in Uganda led our business unit performance in F14 H1… Kenya Uganda Tanzania EABLi  66% of NSV  18% of NSV  11% of NSV  5% of NSV 6% NET SALES GROWTH IN FIRST SIX MONTHS OF F14 VS F13 17% (11%) 6% 18 Premium and mainstream sectors performed strongly in F14 H1... Premium Beer RTDs Mainstream Beer 16% Reserve Spirits Premium Spirits 18% ORGANIC NET SALES GROWTH IN H1 F14 vs. H1 F13. Emerging Beer Tanzania -24% Mainstream Spirits 18% Emerging Spirits 18% 19 EABL keeps walking…… MAKING THIS A REALITY… Q & A Session 21