creating a future, enhancing life

RESULTS PRESENTATIONCreating a Future, Enhancing Life

PRESENTATION AGENDA

MILESTONES FOR 2017

Wessie van der Westhuizen

VISION 2019


FINANCIAL RESULTS 2017

Graeme Mouton

OUTLOOK


QUESTIONS

All

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MILESTONES FOR 2017

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MILESTONES FOR 2017

Everyone purposefully producing breakthrough everywhere

– NBL maintained its strong market position despite a strained local economy

• 46% increase in beer volumes produced for South Africa

• 3% decrease in Namibian beer volumes

• 8% overall increase in volume growth

• 2% increase in export beer volumes

• 12% increase in revenue

• 13% increase in operating profit

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EXPORT MARKETS PERFORMANCE UPDATE

Focus markets*

Botswana

Tanzania

Zambia

Trading markets

Swaziland

Zimbabwe

Lesotho

St Helena

Mozambique

* Markets with high-growth potential and therefore earmarked for in-market presence and investment

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SOUTH AFRICA UPDATE

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– Increased volumes delivered to South Africa driven by additions to the SA portfolio and increased market share

– The Group’s craft portfolio will be positioned within Heineken South Africa

• Soweto Gold now incorporated into Heineken South Africa

• Heineken South Africa announced its intention to acquire Stellenbosch-based craft brewery, Stellenbrau

MILESTONES FOR 2017

Amazing experiences, enduring impact

– Launched Tafel Lite as a lower-calorie alternative to Tafel Lager, with 27% less carbohydrates

– Introduced Code as a new mainstream soft drink, available in three flavours

– Relaunch of Camelthorn in Namibia and South Africa

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MILESTONES FOR 2017

Amazing experiences, enduring impact

– Windhoek Lager, Windhoek Draught and Urbock won gold medals at the DLG Awards – this was the 11th consecutive DLG gold medal won by Windhoek Lager

– Swakopmund Brewing Company was the first and only brewer in Africa to compete in the annual international ‘Best Brew Challenge’

– Tafel Lager relaunched in South Africa – this includes the sponsorship agreement with Griquas Rugby Union

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MILESTONES FOR 2017

Sustainable execution in everything

– Continued efforts and investments to reduce dependency on national water supply, as well as the reduction of overall water consumption

– Reduction in NBL’s carbon footprint through the biomass boiler and improved performance of the rooftop solar plant

– Long-term success of NBL’s home-grown barley project remains a priority; NBL continued to raise awareness of King Lager’s role in the home-grown barley project

– The compounded annual growth rate in dividends paid increased, on average, by 9.2% over the past five years

– An total shareholder return of 34% for the year

(an average of 26% over the past five years)

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MILESTONES FOR 2017

4.3

4.5

4.9

4.8

4.4

4.3

2012 2013 2014 2015 2016 2017

Litres of water used per litre of beverage produced

Sustainable execution in everything

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VISION 2019

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VISION 2019

Purpose

Creating a Future, Enhancing Life

Values

Vision

To be the most Progressive and

Inspiring Company

O&L Group Vision for 2019

Let’s Talk

Let’s do it

Hooked on Results

We Grow People

We All Serve

Naturally Today for Tomorrow

We do the Right Things Right

To achieve a N$2 billion EBIT target

To reduce the Group’s carbon footprint by 20%

To be an Employer of Choice

To create 4 000 additional job opportunities

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VISION 2019

– Achieve a N$2 billion earnings before interest and tax (EBIT) target • Financial results (+13% increase in EBIT)

– Reduce our carbon footprint by 20% • Biomass boiler• Rooftop solar plant

– Be an Employer of Choice • Focused strategy to positively contributeto ‘Great Place to Work’

– Create 4 000 additional job opportunities

• Home-grown barley project • Local procurement spend

(2017: 41%, 2016: 38%)

O&L Group vision for 2019 NBL’s contributions towards Vision 2019

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Operating environment

– Economic environment:

• Higher unemployment rate• Reduction in Government spend• Increased interest rates• Increased utility costs• Challenges experienced in the agricultural sector and

construction industry• Low growth in large neighbouring countries

– 46% increase in the production volumes to South Africa


11.7%

(14.5%)(14.5%)

23.6%

6.5%

11.8%

(23.9%)

Salient features (% change 2017 vs 2016)

Revenue

Profit attributable to ordinaryshareholders

Earnings per ordinary share

Headline earnings per ordinary share

Dividend paid per ordinary share

Net asset value per ordinary share

Return on ordinary shareholders'fund

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Volume contribution per category

Beer - Namibia

Beer - South Africa

Beer - Export

RTDs

Softs

JUNE 2017

61.0%

28.3%

4.7%

0.0%

6.0%

An increasingly diversified portfolio of alcoholic and non-alcoholic products –beer still dominant at 61.0% of overall volumes produced

JUNE 2016

67.6%

20.7%

4.9%

0.7%

6.1%

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30 June 2017N$’000s

30 June 2016N$’000s

Turnover 2 708 978 2 425 885

Operating expenses (2 097 965) (1 885 211)

Operating profit 611 013 540 674

Finance costs (50 923) (39 412)

Finance income 18 304 18 315

Equity loss from joint venture — (38 917)

Equity (loss)/profit from associate (155 717) 27 453

Profit before income tax 422 677 508 113

Income tax expense (104 249) (135 643)

Profit attributable to ordinary shareholders 318 428 372 470


Salient features: comprehensive income

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30 June 2017N$’000s

30 June 2016N$’000s

Equity accounted losses

Equity loss from joint venture — (38 917)

Equity loss from associate (159 742) (61 759)

Equity loss from ongoing operations (159 742) (100 676)

Deferred tax asset recognition 58 829 89 212

2015 statutory audit adjustments by associate 13 721 —

Effect of impairment of assets and recognition of liabilities (68 525) —

Total equity accounted losses (155 717) (11 464)

Salient features: equity losses from associate and joint venture

• Increased shareholding

• Audit adjustment by associate

• Impact of the impairment of assets and recognition of liabilities

• Heineken South Africa (Proprietary) Limited fair valued the assets and liabilities on the amalgamation of Sedibeng Brewery (Proprietary) Limited’s operations into Heineken South Africa (Proprietary) Limited and, as a result, recorded a bargain purchase for the net amount of N$435 million

• NBL have not accounted for the bargain purchase in line with its Group accounting policy

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30 June 2017N$’000s

30 June 2016N$’000s

Property, plant and equipment 988 241 983 365

Investment in associate 438 265 610 526

Other non-current assets 41 888 25 530

Non-current assets held for sale 10 005 —

Current assets 1 016 774 850 796

Total assets 2 495 173 2 470 217

Issued capital 1 024 1 024

Non-distributable reserves 160 249

Retained income 1 405 101 1 256 521

Ordinary shareholders’ equity 1 406 285 1 257 794

Interest-bearing loans and borrowings (non-current) 384 379 479 739

Other non-current liabilities 217 011 212 949

Current liabilities 487 498 519 735

Total equity and liabilities 2 495 173 2 470 217


Salient features: financial position

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Salient features: cash flowN$’000s

12 Months30 June

2017

12 Months30 June

2016

12 Months30 June

2015

12 Months30 June

2014

12 Months30 June

2013

CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash generated by operations 695 841 654 065 736 481 502 637 706 084

Dividends paid (169 354) (159 027) (146 636) (134 244) (119 787)

Taxation paid (128 762) (137 764) (123 516) (102 521) (105 696)

Employer benefits payment on post employment benefits plans (935) — — — —

Net cash flow from operating activities 396 790 357 274 466 329 265 872 481 293

Net cash flow applied to investing activities (142 842) (770 111) (253 872) (258 937) (287 402)

Net cash flow from financing activities (99 602) 347 061 (4 179) (218 795) (17 989)

Net (decrease)/ increase in cash and cash equivalents 154 346 (65 776) 208 278 (211 860) 175 902

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Salient features: dividends

5258

6571

7782

Dividend paid per ordinary share (cents)

2012

2013

2014

2015

2016

2017

52

58

65

71

77

82

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OUTLOOK

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OUTLOOK

– Increased market share

• New product development and portfolio extensions

• Track market and consumer insight• Innovation • Optimise NBL’s supply footprint and route-to-

market

– Namibian skills development

• Employment engagement initiatives and interventions to entrench NBL’s purpose and breakthrough culture

• Succession planning, talent attraction and development of capabilities and skills remains a priority

• Particular focus on critical skills development• International training, exchange programmes and

import of technical specialists for transfer of skills

– Increase overall efficiencies • Continue to invest in first-time-right initiatives • Maximise scale efficiencies and capabilities in

South Africa

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OUTLOOK

– Create a responsible drinking culture

• Actively promote responsible consumption and road safety initiatives e.g. Stay Cool, Enjoy Responsibility campaign

• 1 330 individuals received DRINKiQ training during the reporting period

– Winning portfolio

• Continued implementation of winning strategies, innovation capabilities and breakthrough thinking

• Leverage NBL’s unique value proposition as Africa’s only independent brewer, supported by a purpose-driven ethos and quality credentials

• Leverage the Group’s premium portfolio and further capitalise on opportunities in the growing craft beer segment

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QUESTIONS

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creating a future, enhancing life

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