NBL financial results for the year ended 31 December 2021

MarcoandWaldemarFinacialresults2022

PERFORMANCE HIGHLIGHTS
• Revenue N$1.533 billion, up by 10.6%
• Operating profit N$358 million, up by 4.0%
• Profit after tax N$292 million, up by 42.8%
• Earnings per share 140 cents, up by 70.9%

Business Performance
Namibia Breweries Limited’s (NBL) – a subsidiary of the Ohlthaver & List (O&L) Group – overall volumes increased by 9.2%, predominantly due to production volumes sent to South Africa. Namibian beer volumes declined by 7.3% due to COVID-19 waves, which created a restricted trading environment during the period July/August 2021, while significant swings in volume demand were experienced towards the end of 2021. Festive season volumes were muted, with consumer trends still showing healthy demand for higher alcoholic beverages while the mainstream segment saw intense price competition in addition to pervasive economic pressures. South African beer volumes returned to pre-COVID levels, with lively demand for Windhoek and Heineken in the premium segment. Production volumes to South Africa were up by 99.9%. Tanzania remains NBL’s biggest export market, although as with most export markets, sales were challenged by logistical hurdles.

Net revenue increased by 10.6% to N$1 533 million mainly due to a 99.9% growth in NBL production volumes sent to South Africa and royalty income growth from Heineken SA.

NBL’s share of associate loss from associate turned positive, delivering N$31 million equity income for the period.

No interim dividend was declared which is in accordance with the conditions of the potential Heineken SA disposal transaction. In the event of this not being finally concluded, the Board would revisit this decision.

NBL Managing Director (MD), Marco Wenk: “Beer volumes in Namibia muted. 2022 beer volumes increased by 9.2% against 2021 with a 4.0% growth in operating profit. This is mainly attributed to our continued drive for cost effective sourcing, overall business cost management, flexible route-to-market and ongoing and innovative sales and consumer engagement initiatives which ensured resilient and improved earnings under continuous challenging market conditions. Our Windhoek Draught brand has shown exceptional growth within Namibia’s mainstream beer category.
Unfortunately, continued COVID-19 related alcohol bans in Namibia created a restricted trading environment during July/August 2021. South African (SA) beer volumes returned to pre-COVID levels, with the significant increase in South African volumes however affecting the mix of products sold, which thus resulted in a lower overall gross margin. Although COVID-19 did impact our export markets, favourable exchange rates allowed us to absorb this impact.

Given our strong and diverse brand portfolio, strong route to market, as well as world class execution, NBL is well positioned to defend and grow its market share while capitalising on any future growth opportunities.

Brands
Windhoek Draught remained the dominant brand in the local market, showing continued demand and growth while Heineken delivered good growth in the Namibian premium beer segment.

AquaSplash volumes made a good recovery during the period, whereas Fruitree juice experienced inventory challenges.

Awards
Windhoek Lager, Windhoek Draught and Tafel Lager received gold awards at the 2022 international Deutsche Landwirtschafts Gesellschaft (DLG) Quality Evaluation while Windhoek Non-Alcoholic and Windhoek Light were both awarded with silver awards.


Financial Performance
NBL Finance Director, Waldemar von Lieres: “Performance in Namibia for the 2022 half year period was very encouraging despite COVID-19 restrictions. Beer volumes in Namibia declined on the back of COVID-19 restrictions early in the financial period and changes in consumer behaviour towards the end of 2021. Overall margins percentages were lower due to the significant increase in South African volumes, which affected the mix of products sold. Heineken South Africa volumes returned to pre-COVID levels, which resulted in royalties for NBL increasing by 27.3% to N$71 million, while the equity loss from associate turned positive, delivering N$31 million equity income for the period.”

Outlook
Wenk concluded: “NBL is well-positioned to meet a volatile demand curve in production volumes for South Africa, where our Windhoek brand has significant opportunity for growth. NBL will continue to focus on further growing our brands both locally and beyond our borders while innovating into new liquids based on consumer preferences and demand. Trade execution and operational efficiencies will continue to be a core focus while the adherence to all regulations and directives to reduce the spread of the COVID-19 virus is ongoing.

Although trading conditions will continue to impact our business in F22, NBL continues to be resilient and we remain committed to finding every growth opportunity possible while appreciating our role as an industry leader towards responsible and safe behaviour.

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