- Etienne Saada – Managing Director
- Mustapha Gammar – Finance Director
- Jessica Mwiseneza – Host, African Alliance Rwanda
START OF TRANSCRIPT
Ladies and Gentlemen welcome to Bralirwa Full year 2021 results conference call, hosted by African Alliance Rwanda. On what looks like a very good year, close to doubling the performance of last year; from Bralirwa we are joined by The Managing Director and the Finance Director who will take us through a presentation of the financial results of the brewery, for the period ended in December 2021. We will also get to hear about the outlook for the year 2022. At the end of the presentation, participants can always ask questions through the chat box, which I encourage you to do by typing your questions, you will also be given a chance to speak and ask your question. Welcome again, I am going to hand it over to the Managing Director of Bralirwa.
Thank you Jessica. Good afternoon everyone and thank you for joining us today for our 2021 full-year results conference call. Let me start if you allow me, by introducing myself, my name is Etienne Saada I am the new Managing Director of Bralirwa started in January
I have been working for Heineken since 26 years, mainly in Europe and France. Previously I was in Algeria and before in Burundi. So to remain consistent with the previous results call, I am joined today by our finance Director Mustapha Gammar.
Before opening the call to take your questions, we would like to take you through Bralirwa Full year results, released a few weeks ago. There are some slides accompanying this call which you will be able to access through our company website of course. With that, I would like to get immediately to slide two which is our disclaimer so I won’t spend much time, but ok, it is the usual one, so you have it. I propose not to spend much time on it and to turn to the third slide.
I will start by providing some context on the COVID 19 situation and the macroeconomic condition in Rwanda in 2021; in 2021 Rwanda’s economy has significantly recovered from the (inaudible) effect of the COVID 19 pandemic, Rwanda’s economy grew by 10.9% in 2021. At a contraction of 3.4% in 2020 this recovery was due to easing COVID 19 related restrictions, and thanks to an active vaccination campaign, I will give you some precisions later on, and improving global and regional economy as well as good weather conditions, we’ve to mention it; inflation decelerated to 0.8% on average from 7.7% recorded in 2020, this is a result of a good agricultural supply coupled with the best effect in transport, services, and food. The trade deficit rose by 3.7%, the Rwanda Franc depreciated by 3.8% versus the US Dollar, and depreciated by 4.4% versus the Euro as a result of steady economic recovery and significant improvement in foreign currency inflows.
If we move to the next slide, just to provide a bit of color on the Rwandan beer market in 2021, as explained the year was impacted by the restrictive measure against COVID, especially the two first months of the year when the country was still in lockdown, then we were in the partial lockdown when curfew was put in place. As was the case during the prior area, the beer market remained very very competitive in Rwanda with customers’ purchasing power still constrained. If we move to slide five, it is important to explain that we developed all our brands, our main brands in 2021, so we can say in Q4 immediately with easing of the restriction, our Primus brand was about to amplify key brand activities and to get closer to the consumers, it included action on our IWACU MUZIKA also Primus National League of Football and signing of local music artist Bruce Melody as our official Primus Brand ambassador; then with the real pinning also in Q4 our brand Mutziig was able to connect with consumer again with an exciting concert featuring Pan African Artist from Nigeria Adekunle Gold, in September 2021 Mutziig launched Live Bold “ Never stop Starting” Campaign Nationwide . Also, I have to mention that at the end of 2021 Amstel became our proud official sponsor of Tour du Rwanda cycling, a sport that captures the eyes and minds of Rwanda and just become a widely connected competition now with an international impact with cyclists coming from all corners of the world to participate. With that, I would like to hand over to Mustapha to take us through the 2021 financial results, Mustapha.
Thank you Etienne. So moving to slide 6 we have some of the key performance highlights from end year results; overall volume grew by 9.6 % versus 2020 despite the impact of the pandemic, and this growth was driven by both beers and soft drinks respectively 7.5 % growth and 17.7% growth as a result of the focus we put on off trade channels and the opening of trade channels; revenue of 123.6 billion Rwandan francs was higher than lastyear, mainly driven by volume growth, positive mix and price increase (inaudible) on four scales in September 2021. We registered a strong operating profit result at 97% growth, delivering 25.6 billion Rwandan francs compared to 20.9 billion Rwandan francs in 2020, mainly driven by top line increase and cost saving initiatives to mitigate the negative impacts of COVID 19. The net finance cost decreased by 18.2% to 5.5 billion Rwandan francs while profit and total comprehensive income increased by 94.6% to 17.5 billion coming from 9 billion in 2020; this resulted from better earnings per share of 17.03 billion Rwandan francs compared to 8.75 in 2020. So turning to slide 7 there are some moredetails on our financial results for the full year 2021 as I have told through the key driver of the improved operating results already, I won’t spend much time on this slide; I would like now to hand back the call to Etienne to take us through community support initiative and outlook for 2022.
Yes important one also, thank you Mustapha, when we say sustainability and responsibility at the heart of our business complete action in 2021; sustainability and responsibility are embedded in our company’s priorities, in fact in the top five: in 2021 we continued to extend our COVID 19 response support to the Government through WaterAid with 200,000 Euros to cater for Wash Programs, this fund was provided by our Heineken Africa Foundation, but also to our employees we, of course, we continuously provide masks and we encouraged vaccination reaching now an impressive score of 99% of our people are vaccinated with at least 2 shots.As I indicated, we are also cautious about the environment we operate in, on a yearly basis we contribute to water balancing by planting 20,000 fruit and agroforestry trees this is in partnership with the district of Rubavu where our brewery is located. We do so to promote environmental conservation, we contribute also in planting trees in hills to retain water and also to limit erosion.
As for local sourcing, in collaboration with Rwanda Agriculture Board (RAB), we took part in barley trials in Musanze District, Northern province. These barley trials will benefit farmers by providing them extra income and keep in mind that the barley is the key ingredient we use in our brewery, so we had a good start last year to develop the local resourcing.
Now in our last slide, some details on our outlook for the year 2022. So Rwanda’s economic recovery is expected to continue in 2022, supported by the ongoing Government programs such as manufacture and build to recover also, and the continuous vaccine campaign and the re-opening of economy because so far officially COVID is still there even if it is quite well monitored. While the market environment in Rwanda is expected to remain competitive, however always constrained by the consumer’s spending power and overall the beverage market is expected to be broadly positive; so Bralirwa will continue to invest in its brand, in our route-to-market and also in our people to drive performance. When we mention route-to-market, that is a special focus on digital. Of course, the cost question and the uncertain tax environment will likely continue to be challenging especially with the last development in the war in Europe. But further focus on cost management and reducing debt should enable margin improvement in 2022. With that we would like to hand back to the operator for