# EABL H1 2025 Results

An episode of [The Mwango Capital Podcast](https://invisiblenetwork.ai/podcast/1583367792), 3 Mar 2025, 35 min.

Audio: https://api.substack.com/feed/podcast/158277124/eec411b9c932fb47c54e4b558d964d4f.mp3

In this episode recorded on 05.02.2025, we host EABL’s CFO, Risper Ohaga, as we unpack the firm’s half-year 2024/25 results in detail. We cover the impact of macroeconomic factors on the company’s operations, supply chain management, capital expenditure, and the focus in 2025. Subscribe to get notified when we make a new post. Show Notes 00:00:00 Introduction 00:01:20 Impact of Macroeconomic Factors 00:04:31 Top-Line Growth 00:08:47 Impact of Tax Changes 00:14:12 CAPEX 00:16:28 Dividends 00:18:40 Payables and Receivables 00:20:09 Supply Chain Management, Ethanol Sourcing, and Global Tariffs 00:25:38 Premium Brands and Consumer Spending 00:29:00 2025 Focus Areas 00:32:59 Reflections and Final Thoughts Get full access to The Mwango Weekly at mwangocapital.substack.com/subscribe

## Transcript

[0:00] SPEAKER_01: Welcome to Mongo Species.
[0:01] SPEAKER_01: This Wednesday evening, we'll get to dissect the EABL H1 results.
[0:05] SPEAKER_01: We have the CFO here to help us dissect the numbers.
[0:08] SPEAKER_01: So I start light.
[0:09] SPEAKER_01: Rispa, how are you?
[0:10] SPEAKER_00: I'm fine.
[0:11] SPEAKER_00: Thank you.
[0:12] SPEAKER_00: And thank you for having me.
[0:13] SPEAKER_01: Karim Boussana.
[0:15] So what do CFOs do after results are released for the past like three,
[0:19] four weeks?
[0:20] SPEAKER_00: I went on training, so I'm just back from training.
[0:23] SPEAKER_00: The show goes on.
[0:24] SPEAKER_00: It's already another month and we keep pushing.
[0:27] SPEAKER_01: The financial year keeps going.
[0:29] SPEAKER_00: It does.
[0:30] SPEAKER_00: People don't stop drinking.
[0:31] SPEAKER_00: We don't stop selling.
[0:33] SPEAKER_01: I used to listen to the Amazon CEO and he used to say,
[0:37] SPEAKER_01: if you're looking at results today,
[0:38] SPEAKER_01: they were made a couple of years ago.
[0:40] It's like you're always preparing for results almost three
[0:43] quarters ahead of time.
[0:44] SPEAKER_01: Is that the case for you also?
[0:46] SPEAKER_00: Yes, absolutely.
[0:47] SPEAKER_00: And that's why you have strategy, because it points to your true north.
[0:51] SPEAKER_00: And then you're able to stay on course.
[0:53] And the things you planted three,
[0:55] four years ago,
[0:56] you're only starting to realize them now.
[0:58] SPEAKER_00: So absolutely true.
[0:59] SPEAKER_00: Just like farming, you don't plant and harvest on the same day.
[1:02] SPEAKER_00: It takes time.
[1:04] SPEAKER_01: And I should say I've met a couple of investors this week,
[1:06] SPEAKER_01: especially in Europe,
[1:07] SPEAKER_01: who tell me they keep an eye on your results.
[1:09] SPEAKER_01: So really good job that you do.
[1:11] Other than that,
[1:11] I should say also that EABL is quite a well-followed company.
[1:14] SPEAKER_01: It's one of the biggest companies in Kenya in terms of results.
[1:17] SPEAKER_01: It's paint a good picture on what is happening in the economy.
[1:20] SPEAKER_01: So maybe we can start on the macro level.
[1:22] SPEAKER_01: You can tell us a bit about how the results are,
[1:24] SPEAKER_01: a bit of a reflection on what you're seeing on the macro,
[1:26] because there was a bit of commentary on how the macro has been
[1:29] progressing the
[1:29] SPEAKER_01: past half year.
[1:31] SPEAKER_00: I think the macros first,
[1:32] SPEAKER_00: when we report them,
[1:33] SPEAKER_00: and at half year,
[1:34] SPEAKER_00: it's against the backdrop of a similar period last year.
[1:37] SPEAKER_00: So the six months ended 31st December 2023,
[1:41] SPEAKER_00: which,
[1:41] SPEAKER_00: as you can all recall,
[1:42] SPEAKER_00: was extremely challenging.
[1:44] Whilst GDP has remained in growth across all the economies in
[1:48] the range of
[1:50] SPEAKER_00: 5% on average.
[1:51] SPEAKER_00: Inflation at that time was exceptionally high, particularly in Kenya.
[1:54] SPEAKER_00: We were heading towards a 6%.
[1:56] SPEAKER_00: Uganda and Tanzania have broadly remained about 3% or so,
[2:01] but we certainly were experiencing huge inflationary impacts on
[2:05] our inputs.
[2:06] SPEAKER_00: The other most challenging thing at that time was our currency.
[2:10] The Kenya shilling at that time was exchanging at about 160 to
[2:13] the dollar.
[2:14] SPEAKER_00: going up to almost 163 by January.
[2:17] SPEAKER_00: So it was at a really high level.
[2:19] SPEAKER_00: And if you look at where we are now, we are at about 129, 130.
[2:24] SPEAKER_00: So you do see that improvement in the environment.
[2:27] SPEAKER_00: In Uganda, the Uganda shilling has remained broadly stable.
[2:30] The Tanzanian shilling has had some turbulence as well in the
[2:34] last six to 12 months.
[2:35] SPEAKER_00: But by the end of the half,
[2:36] SPEAKER_00: it had gone to a stable level,
[2:38] SPEAKER_00: just about 3% depreciation as we speak.
[2:41] SPEAKER_00: And last year, at the same time, it was about 2.9.
[2:44] SPEAKER_00: Interest rates are a big pain for us.
[2:46] We were having an interest rate of about 16% was the benchmark
[2:50] T bill rate.
[2:51] SPEAKER_00: A lot of our facilities are marked on the 182-day Treasury bill,
[2:55] SPEAKER_00: and that was at about 16% in the same period last year.
[2:59] SPEAKER_00: You all have seen that come down to about 10%.
[3:02] SPEAKER_00: Towards the end of December,
[3:03] SPEAKER_00: we still experienced the 16% for much of the half,
[3:07] SPEAKER_00: but we are very appreciative of the reduction in interest rates,
[3:11] SPEAKER_00: which,
[3:11] SPEAKER_00: as you could see,
[3:12] SPEAKER_00: even last half really had a big impact on our performance.
[3:15] SPEAKER_00: In Uganda and Tanzania, rates have broadly remained the same.
[3:19] SPEAKER_00: particularly in Uganda.
[3:20] Tanzania have seen a slight increase,
[3:22] but broadly the same as it was last year,
[3:24] still under 10%.
[3:26] SPEAKER_00: The other thing, so those are the positives.
[3:27] So there's a lot of positive on some of the big things that
[3:30] impacted our performance last half.
[3:32] On the other hand,
[3:33] I think we all know we are all taking home a lot less money
[3:36] SPEAKER_00: And that has shown itself as consumers have low disposable income.
[3:40] We have seen higher taxes and levies and other charges which
[3:43] have come to reduce
[3:44] SPEAKER_00: people's disposable income.
[3:45] SPEAKER_00: And therefore, the spend levels have reduced.
[3:48] SPEAKER_00: And we've seen the alcohol share of wallet drop by about 0.2%.
[3:52] We've also seen people go for value hunting for smaller and
[3:55] smaller parks or
[3:56] SPEAKER_00: wherever there's a sale.
[3:58] SPEAKER_00: you will see that people are going for that.
[4:00] SPEAKER_00: Much as inflation has come down, the base has actually remained high.
[4:04] So things that,
[4:05] as we say,
[4:06] it's now at 2%,
[4:07] but it didn't go back to the previous price.
[4:09] SPEAKER_00: So people are feeling the impact of that.
[4:12] At the same time,
[4:12] what that has meant is that the premium end of consumers tends
[4:17] to hold.
[4:18] SPEAKER_00: The middle gets really squeezed.
[4:19] So we do see quite a bit of a shrinkage in the mainstream space
[4:23] and a lot of those
[4:24] SPEAKER_00: dropping into value products.
[4:26] SPEAKER_00: So you are seeing the bottom grow as well.
[4:29] SPEAKER_01: The macro side, obviously, as you say, a consumer has been impacted.
[4:31] SPEAKER_01: And that's why I think we see a bit of rapid growth on revenue side.
[4:35] So maybe you can give us a bit of a breakdown in terms of how
[4:38] that went organic
[4:39] SPEAKER_01: versus the pricing and volume,
[4:41] SPEAKER_01: how that may be on both the group level and on the regional level,
[4:45] SPEAKER_01: because there's a bit of variance.
[4:46] SPEAKER_01: I could tell from the numbers.
[4:48] So let me just start with another big factor that has shown up
[4:52] in our performance,
[4:53] SPEAKER_00: which you would have seen last year as well,
[4:55] SPEAKER_00: is the Kenya shilling strengthening against the regional currencies.
[4:58] SPEAKER_00: So against the Uganda shilling,
[4:59] SPEAKER_00: the Kenya shilling has strengthened above 13% compared to last year.
[5:03] SPEAKER_00: whilst against the Tanzanian shilling, it has strengthened by about 23%.
[5:08] SPEAKER_00: What that means is that in real terms,
[5:11] SPEAKER_00: in local currency,
[5:12] SPEAKER_00: those markets have grown,
[5:13] SPEAKER_00: but when converted into shillings,
[5:15] SPEAKER_00: they're showing decline.
[5:16] SPEAKER_00: So if I take market by market at an organic level,
[5:20] SPEAKER_00: Kenya will remain the same,
[5:21] SPEAKER_00: growing at 9%,
[5:22] SPEAKER_00: which is really strong.
[5:24] And we see that in the premium space,
[5:26] and again,
[5:27] in a lot of the innovations we put in place.
[5:29] SPEAKER_00: So we are seeing quite good growth in the premium space.
[5:32] SPEAKER_00: as well as on the lower end of things.
[5:35] SPEAKER_00: From a Uganda perspective, Uganda grew organically 3%.
[5:39] Again,
[5:39] premium beer doing very well and some struggle in the
[5:43] mainstream segment as well.
[5:45] And Tanzania growing very well across beer and spirits,
[5:48] coming in at 16% organically.
[5:51] SPEAKER_00: Therefore, at EABL, on organic level, we have grown 8%.
[5:55] SPEAKER_00: If I normalized last year,
[5:56] SPEAKER_00: where in the same period we reported 16% growth,
[5:59] SPEAKER_00: if I remove the effect of the decline in Kenya shilling,
[6:02] SPEAKER_00: then we'd have grown 9%.
[6:03] SPEAKER_00: So we have sustained our growth quite nicely.
[6:06] But on a reported level,
[6:07] because of the appreciation of the Kenya shilling,
[6:10] SPEAKER_00: Kenya grew 9%.
[6:11] SPEAKER_00: Uganda, because of that 13% appreciation, comes in at minus 9%.
[6:15] SPEAKER_00: And Tanzania, because of that 23% appreciation, comes in at minus 6%.
[6:19] SPEAKER_00: So you see our top line coming in at 2% because of that currency impact.
[6:25] SPEAKER_00: If we normalize across the same period last year,
[6:27] SPEAKER_00: you will see that our growth is actually quite well sustained.
[6:30] SPEAKER_00: At category level, beer grew just about 1%.
[6:34] And again,
[6:34] beer,
[6:35] as we have said before,
[6:36] has felt the impact of increasing excise.
[6:39] SPEAKER_00: It is the first year where excise has not increased.
[6:41] SPEAKER_00: So we've managed to get some volume growth coming in.
[6:44] SPEAKER_00: And that has been very positive for us.
[6:46] SPEAKER_00: Spirits have grown 7%.
[6:48] SPEAKER_00: And that is mostly on the premium side of things.
[6:51] SPEAKER_00: growing in high double digits.
[6:53] SPEAKER_00: And then a good thing to point out is also our innovation,
[6:56] SPEAKER_00: some of the new products you're seeing on the market.
[6:59] SPEAKER_00: Manyata,
[7:00] SPEAKER_00: we've seen Casamigos,
[7:01] SPEAKER_00: for those of you who take tequila,
[7:03] SPEAKER_00: we have a dry cider called Snap,
[7:06] SPEAKER_00: and we have Kenya Cane,
[7:07] SPEAKER_00: lemon and ginger,
[7:08] SPEAKER_00: Uganda,
[7:08] SPEAKER_00: Waradji,
[7:09] SPEAKER_00: lemon and ginger as well,
[7:10] SPEAKER_00: Serengeti lemon.
[7:11] SPEAKER_00: So we've done quite a lot on the innovation space,
[7:14] SPEAKER_00: largely around flavors,
[7:15] SPEAKER_00: and those have done very well,
[7:16] SPEAKER_00: growing at 39% year on year.
[7:19] SPEAKER_00: So overall,
[7:20] I think the shape of our top line from a price and volume
[7:23] perspective for the first
[7:25] SPEAKER_00: time this year,
[7:26] SPEAKER_00: we've got volume growth at about 1%.
[7:28] SPEAKER_00: We haven't had that in a while.
[7:30] SPEAKER_00: And as you will rightly point out during the inflationary periods,
[7:34] SPEAKER_00: we did take price and that's so volumes come down.
[7:37] SPEAKER_00: So volume coming at 1%, less impact on price.
[7:41] SPEAKER_00: That means we've seen volume growth coming to support our top line.
[7:45] SPEAKER_00: So overall,
[7:45] SPEAKER_00: a good story,
[7:46] SPEAKER_00: I think,
[7:47] SPEAKER_00: especially when you look at it organically,
[7:49] SPEAKER_00: it means that we are doing the right things to drive the top line.
[7:53] SPEAKER_01: I know you're always seeking that volume growth,
[7:55] but can that also come from maybe reduced prices in the coming
[7:58] year because
[7:59] SPEAKER_01: inflation is down a little bit?
[8:01] SPEAKER_01: Is that something you would consider?
[8:03] What I said earlier that whilst inflation goes down,
[8:06] the base doesn't go up.
[8:07] SPEAKER_00: So if it had risen to 40 shillings and it had been going up at 5%,
[8:11] SPEAKER_00: the fact that it goes up at 2% doesn't mean the 40 shillings goes to 38.
[8:15] SPEAKER_00: It just goes up to whatever, 42 or whatever it is.
[8:19] SPEAKER_00: So your base amount does not go down.
[8:22] SPEAKER_00: Your cost base is the same.
[8:23] You push hard on productivity and you will see that gross
[8:27] margins continue to be under pressure.
[8:28] Again,
[8:29] still feeling the impact of some of the inputs that are still
[8:32] impacted by inflation.
[8:34] SPEAKER_00: So I think nothing ever goes back downwards.
[8:36] SPEAKER_00: Everything, the only way is up, I think.
[8:38] SPEAKER_00: But having said that,
[8:39] SPEAKER_00: I think there's space for innovation in those different spaces,
[8:43] bringing different options for consumers to be able to tap into
[8:46] our products.
[8:47] SPEAKER_01: And because the XST was in touch last year,
[8:50] SPEAKER_01: you're praying hard that it's not touched again in the 2025 finance bill.
[8:54] SPEAKER_01: Is that the case?
[8:55] SPEAKER_00: Yeah,
[8:56] we did have some tax changes impacting beer coming in December
[9:00] and they were
[9:01] SPEAKER_00: effective the 27th December.
[9:03] And the effect of that was that the excise on beer was reduced
[9:07] to about 22.5 per centiliter.
[9:10] SPEAKER_00: And it was a change from an absolute excise amount per litre to an ABVB.
[9:15] SPEAKER_00: So depending on the strength of alcohol, then the tax is navid.
[9:19] So this is a shift from the previous excise regime whose impact
[9:22] is that excise is
[9:23] SPEAKER_00: down on beer while it is higher.
[9:25] SPEAKER_00: own spirits.
[9:27] So that means then boosting beer volumes going forward and a
[9:30] bit of challenge in
[9:31] SPEAKER_01: terms of spirits?
[9:32] SPEAKER_00: Yeah, the plan that we have is to do a lot more on the beer side.
[9:37] SPEAKER_00: I think you will see that is favorable for beer.
[9:40] SPEAKER_00: We have had huge excise increases, particularly in Kenya.
[9:43] What this does actually is to bring our excise rates closer to
[9:49] the other East African countries.
[9:50] SPEAKER_00: You will see that before this change, the excise rates were
[9:54] SPEAKER_00: two to three times higher than Uganda and Tanzania.
[9:57] This has brought them closer,
[9:58] not close enough,
[9:59] but closer to our neighboring countries.
[10:01] SPEAKER_00: And on the spirit side, a lot higher, just over 10, 12% higher.
[10:06] So there will be some work around the spirit to see that we
[10:09] continue to offer all
[10:10] SPEAKER_00: of the products.
[10:12] The other change that came in was around what we've really been
[10:15] encouraging the
[10:16] SPEAKER_00: government to look into,
[10:17] SPEAKER_00: which was the daily excise payments.
[10:19] SPEAKER_00: That has been changed now to monthly on the fifth day.
[10:23] SPEAKER_00: It isn't exactly what we wanted.
[10:24] We had benchmark with other markets and which typically pay
[10:28] around the 20th,
[10:29] SPEAKER_00: which allows you to close your books and fully reconcile.
[10:31] SPEAKER_00: However,
[10:32] the move to payment on the fifth of the subsequent month is an
[10:36] improvement on what
[10:36] SPEAKER_00: we were experiencing before and had a huge impact on our cash flows,
[10:41] SPEAKER_00: interest costs.
[10:42] SPEAKER_00: Those are a few of the changes.
[10:44] SPEAKER_00: There's a lot more in that that has come in.
[10:46] SPEAKER_00: But I think with these changes having come through so soon,
[10:49] SPEAKER_00: it would be unlikely that we'll see a massive change within six months.
[10:54] SPEAKER_01: Yes.
[10:54] SPEAKER_01: I remember at this exact period last year,
[10:56] you were having a lot of complaints about the 24-hour excess
[10:59] duty remittance rule
[11:00] SPEAKER_01: and how it was impacting especially short-term cash flows.
[11:03] SPEAKER_01: Is that one of the significant
[11:04] SPEAKER_01: things that has boosted your liquidity.
[11:06] SPEAKER_01: So cash and cash equal is around 30% up.
[11:09] Is that one of the things that may have boosted in terms of it
[11:12] being repealed?
[11:14] SPEAKER_00: Yeah, so it was repealed, but only took effect on the 27th of December.
[11:18] SPEAKER_00: So we haven't fully felt the impact in these accounts.
[11:20] SPEAKER_00: I think we will only feel that impact fully in the next year.
[11:25] What it does is you'll see a bit of a rise in our creditors and
[11:28] then we'll be
[11:29] holding a bit more cash because then we have some time before
[11:32] we need to pay them
[11:33] SPEAKER_00: and also reduces our overdraft.
[11:34] So you will see we had a bit of overdraft to fund that,
[11:37] but now we don't have so much of that.
[11:39] SPEAKER_01: And then in terms of borrowings, I see a substantial reduction.
[11:42] SPEAKER_01: I think by around 4.6 billion, my calculations are correct.
[11:46] SPEAKER_01: And then a lowering of finance costs.
[11:48] Could you take us through that thinking around the reduction of
[11:51] borrowings and then
[11:52] SPEAKER_01: just post that with the fact that rates are falling.
[11:55] SPEAKER_01: We thought you'd be going into the market to take a bit more debt.
[11:57] SPEAKER_01: Seems like you're doing the opposite of that.
[12:00] SPEAKER_01: Yeah.
[12:01] SPEAKER_00: I think last year,
[12:02] SPEAKER_00: if you remember when we presented our results,
[12:04] one of the things that caused investors a lot of concern was
[12:08] the impact of finance
[12:10] SPEAKER_00: costs on our income statement.
[12:11] That was because of the level of borrowing at variable rates
[12:14] when rates were rising rapidly.
[12:16] And again,
[12:17] the level of overdraft we needed to take to manage this excise issue.
[12:20] SPEAKER_00: So that was showing up in our net finance cost.
[12:23] And the view even from our sales was that our P&L was quite
[12:26] valuable to the changing rates.
[12:28] Because just because the rates are coming down today doesn't
[12:31] mean that it's
[12:31] SPEAKER_00: something that will be constant.
[12:33] SPEAKER_00: And secondly, you borrow because you need it.
[12:35] SPEAKER_00: And so last year, we took a tough decision.
[12:37] SPEAKER_00: You will have seen that we pay one shilling of dividend.
[12:40] SPEAKER_00: And the intention then was to go in and reduce our debt.
[12:44] SPEAKER_00: And we immediately started paying down.
[12:45] SPEAKER_00: In between January and June, we paid $11 billion.
[12:48] SPEAKER_00: And between June and December, we paid another $4.6 billion.
[12:53] So nearly $16 billion of debt paid down in order to insulate
[12:56] our balance sheet and
[12:57] SPEAKER_00: our income statement from the rising rates.
[12:59] SPEAKER_00: And actually not just the rising rates,
[13:01] SPEAKER_00: but the fluctuation in rates,
[13:02] SPEAKER_00: which makes your results unpredictable.
[13:05] SPEAKER_00: The rates for fixing were quite high, so we weren't going in to fix.
[13:08] We do have about $12 billion in the fixed rate bond that we
[13:12] have on the capital markets.
[13:13] SPEAKER_00: We intend to hold that and that has helped bring some stability.
[13:17] But I think the high amount of debt that was variable rate was
[13:19] creating a lot of
[13:21] SPEAKER_00: variability on our income statement.
[13:23] SPEAKER_00: So with that,
[13:24] SPEAKER_00: we've come down,
[13:25] paid quite a lot of the short-term debt and whatever we were
[13:28] able to pay with our
[13:29] SPEAKER_00: free cash flows.
[13:30] SPEAKER_00: We do think that we're at a very good level now.
[13:32] We measure ourselves by our net debt to EBITDA and we're at
[13:36] quite a comfortable level at 0.81%.
[13:39] We also expect that we'll continue to benefit from the reduced
[13:42] rates because the
[13:43] SPEAKER_00: rates are only marked on a quarterly basis.
[13:45] SPEAKER_00: So last quarter, the change in rates came quite late in December.
[13:49] SPEAKER_00: So we did not benefit yet from the reduced rate.
[13:51] SPEAKER_00: So we should see that taking effect in quarter three.
[13:54] SPEAKER_00: So I think from a strategy perspective,
[13:56] SPEAKER_00: we borrow because we need it,
[13:57] SPEAKER_00: because we're funding something.
[13:59] SPEAKER_00: In this period, we cut capex.
[14:00] SPEAKER_00: We reduced interim dividend last year.
[14:03] We did make up at the full year,
[14:04] but the intention was really to make sure that we are
[14:07] SPEAKER_00: sustaining, we are delivering sustainable results.
[14:10] SPEAKER_00: So I hope that's clear.
[14:12] SPEAKER_01: That's clear.
[14:12] SPEAKER_01: But then in terms of if you're cutting capex a bit,
[14:14] should investors be worried in five to 10 years in terms of the
[14:18] investment that
[14:18] SPEAKER_01: you're making?
[14:19] Is that just a temporal adjustment to make sure that you've set
[14:22] the debt and then
[14:23] SPEAKER_01: you're able to give yourself room for growth?
[14:25] SPEAKER_00: It's both.
[14:26] One,
[14:26] because if you look at before 2019,
[14:30] 2020,
[14:30] our CAPEX spend was always in the single digits.
[14:33] SPEAKER_00: 7% to 8% of NSV was in CAPEX.
[14:37] SPEAKER_00: Then after that, we went into some expansion.
[14:39] SPEAKER_00: We did a bit of expansion in Uganda.
[14:41] SPEAKER_00: We did quite some expansion in Tanzania.
[14:43] SPEAKER_00: And even in Kenya,
[14:44] SPEAKER_00: we did some expansion,
[14:46] SPEAKER_00: which saw our CAPEX to NSV rise to the double digits between 11% and 13%.
[14:53] What we have done in the last two years is normalize that
[14:55] because we've finished
[14:56] SPEAKER_00: our big projects.
[14:57] So we've normalized that to maintenance capex and capex that is
[15:01] needed for
[15:02] SPEAKER_00: returnable containers,
[15:03] SPEAKER_00: bottles and creeds.
[15:05] SPEAKER_00: And keeping that to a minimum in cash strap time is the right thing.
[15:08] SPEAKER_00: From a capacity perspective, we'd only invest if we needed it.
[15:11] SPEAKER_00: And at the moment, we have adequate capacity to see us through.
[15:15] And this is something we do every year through our capital
[15:17] structures we review.
[15:18] SPEAKER_00: And if we find that we are going to need capacity in three years,
[15:22] SPEAKER_00: then we start to plan for it now.
[15:24] SPEAKER_00: So I think we're not scrimping on maintenance that is necessary.
[15:27] SPEAKER_00: We're not scrimping on capex that is necessary to grow our top line.
[15:31] SPEAKER_00: And those of you who've come to our microbrewery,
[15:33] we put it up in the last two years and that required us to put
[15:36] some money behind that.
[15:38] SPEAKER_00: So I think we're very clear that we are smart around it.
[15:41] SPEAKER_00: We invest smartly.
[15:43] SPEAKER_00: And where we don't need it, then we don't.
[15:45] SPEAKER_00: And where we have an opportunity to insulate our P&L from volatility,
[15:49] SPEAKER_00: then we go in and do that,
[15:50] SPEAKER_00: which is exactly what we've done.
[15:52] SPEAKER_01: So something else that I noted,
[15:54] operating costs are almost at the same level as the HGY at the
[15:57] previous half year.
[15:58] Is that something that you're deliberately doing in terms of
[16:00] keeping costs low in a
[16:02] SPEAKER_01: kind of slow growth environment?
[16:05] SPEAKER_00: Yeah, we're working very hard on managing discretionary costs down.
[16:09] Again,
[16:10] the volatility in FX and interest rates was slightly out of
[16:13] your control.
[16:14] SPEAKER_00: So the things you can control, you have to do more with them.
[16:16] SPEAKER_00: So quite a lot of work around expenses and even cost of sale.
[16:22] SPEAKER_00: We have what we call end-to-end productivity.
[16:24] So we look at every line where we can save costs and we're
[16:27] going in and we optimize those.
[16:29] SPEAKER_00: So you do see that there is a small impact of FX from the other markets,
[16:33] SPEAKER_00: but on the whole,
[16:33] SPEAKER_00: we've worked really hard
[16:34] SPEAKER_00: don kipi ngakos lo.
[16:37] SPEAKER_01: That makes sense.
[16:38] SPEAKER_01: And then if you come down now,
[16:39] SPEAKER_01: the profitability was up and then you significantly ramped up a bit.
[16:43] SPEAKER_01: After cutting due then slightly the previous year,
[16:46] SPEAKER_01: you rewarded shareholders with 2.5 shilling per share.
[16:50] How's your thinking around like capital allocation in terms of
[16:53] giving back to the shareholder?
[16:55] SPEAKER_01: Is that something that you actively thinking about?
[16:58] SPEAKER_01: And can shareholders,
[16:59] SPEAKER_01: I know you can't speak going forward,
[17:01] but can shareholders be a bit more hopeful that there would be
[17:04] another increase
[17:05] SPEAKER_01: coming up soon?
[17:05] SPEAKER_01: I can't tell you that,
[17:07] but what I will say is that last year when we reduced the
[17:10] dividend to one shilling
[17:11] SPEAKER_00: per share,
[17:11] SPEAKER_00: we were very clear with shareholders that what we were going in for was
[17:15] SPEAKER_00: prioritizing debt repayment to insulate the income statement.
[17:19] And at that time,
[17:21] our interest cover was starting to look like it was coming
[17:24] under pressure.
[17:25] SPEAKER_00: So it was really important for us to bring that back in line.
[17:28] SPEAKER_00: And that's exactly what we did.
[17:30] SPEAKER_00: We at the year end, if you recall, give them six shillings per share.
[17:33] SPEAKER_00: So net net was seven shillings per share for the year.
[17:36] SPEAKER_00: And again, we are about being true to what we say.
[17:40] SPEAKER_00: Once we corrected that,
[17:41] SPEAKER_00: we're now back to where we think is a reasonable,
[17:44] SPEAKER_00: sustainable growth in dividend,
[17:46] SPEAKER_00: which is where we want to be.
[17:47] SPEAKER_00: We want to be able to grow dividend year on year at a sustainable level.
[17:51] SPEAKER_00: The last few years have been quite turbulent.
[17:53] And I think we've been quite communicative in saying exactly
[17:55] what we're doing to
[17:56] SPEAKER_00: bring back that stability in growth in dividends.
[18:00] SPEAKER_00: So that's what I can say.
[18:01] SPEAKER_00: I cannot tell you any more than that.
[18:04] SPEAKER_01: Now, what's your dividend policy?
[18:05] SPEAKER_01: Perhaps you can remind the shareholder here generally.
[18:08] We normally go with a 70% of profit after tax is what we intend
[18:12] to distribute.
[18:13] SPEAKER_00: However,
[18:14] that is on the back of us examining our cash flows to ensure we
[18:18] have adequate cash
[18:19] SPEAKER_00: flows to fund that.
[18:20] And also if we have major CAPEX that will grow the business,
[18:23] then we also look at that.
[18:25] SPEAKER_00: And there may be adjustments because of things like that.
[18:28] SPEAKER_00: But our principle always is to pay 70% of profit after tax.
[18:32] SPEAKER_00: And if we make sure that profit after tax is growing sustainably,
[18:35] SPEAKER_00: then that should see dividend growing sustainably.
[18:38] SPEAKER_00: And that's what we want to be able to do.
[18:40] SPEAKER_01: And you did comment about the payables,
[18:42] SPEAKER_01: which was significantly up,
[18:43] SPEAKER_01: but also the receivables were significantly up.
[18:46] SPEAKER_01: So by my calculations, that should be around 66% there.
[18:49] The reason as to why the receivables are a bit higher and how
[18:53] perhaps as a CFO,
[18:54] are you helping the company manage credit risk and collections
[18:57] in a business
[18:57] SPEAKER_01: environment such as this?
[18:59] SPEAKER_00: This is one where we pay a lot of attention,
[19:02] SPEAKER_00: I have to say,
[19:03] SPEAKER_00: and we really focus on managing our working capital.
[19:07] And when you see the debtors going up,
[19:09] we've been very deliberate around areas of growth.
[19:12] And as you see the mix of beer and spirits change,
[19:15] then beer has shorter credit period.
[19:18] SPEAKER_00: It does turn around a lot quicker.
[19:20] SPEAKER_00: Spirits, especially the premium spirits, take a lot longer to sell.
[19:23] SPEAKER_00: So you have longer credit periods for that.
[19:26] With that taking effect,
[19:27] you start to see that there is an increase in receivables.
[19:30] SPEAKER_00: But again,
[19:30] it is driving the double digit growth you're seeing in the
[19:33] premium spirits end of things.
[19:35] SPEAKER_00: So that's the shape that it's taking.
[19:36] SPEAKER_00: It's very prudent.
[19:37] SPEAKER_00: We barely have any bad debts and we barely have any overdues.
[19:42] SPEAKER_00: We collect that very quickly post year end.
[19:44] SPEAKER_00: And that's something we watch out for.
[19:46] Nothing of concern around how we're deploying our working
[19:49] capital to fund growth.
[19:51] SPEAKER_00: Similarly with the trade and other receivables, same thing.
[19:54] SPEAKER_00: We are seeing,
[19:55] I did mention that we've gotten some upside from excise tax
[19:59] payable with the change
[20:00] SPEAKER_00: to the five days after month.
[20:02] SPEAKER_00: And it was only a few days benefit, but that has come through as well.
[20:06] SPEAKER_00: So I think it's really just part of how we manage our working capital.
[20:09] SPEAKER_01: In terms of ethanol sourcing,
[20:11] I think you had highlighted in the previous half years being a
[20:14] point of...
[20:16] SPEAKER_01: of concern.
[20:16] SPEAKER_01: Has that been managed?
[20:17] Has that gotten better so that you could be able to manage cost pressures?
[20:21] SPEAKER_00: Yes, we've had quite some reprieve on the ethanol availability.
[20:25] SPEAKER_00: You will recall following the drought,
[20:28] SPEAKER_00: we had a lot of challenges accessing ethanol in the local market,
[20:32] which meant that we were importing at a time when exchange
[20:34] rates were also quite high,
[20:36] SPEAKER_00: was a very challenging choice.
[20:38] SPEAKER_00: In this year, we've seen improved availability.
[20:40] SPEAKER_00: of ethanol locally and at fairly good prices.
[20:44] And also we don't have the impact of FX because of the import
[20:48] factor that we had in there.
[20:49] SPEAKER_00: So we had good reprieve on that side.
[20:52] SPEAKER_00: However,
[20:52] there's still pressures coming through from areas like glass
[20:56] and where we're still
[20:57] SPEAKER_00: seeing some rising rates coming through.
[20:59] SPEAKER_00: So there's still cost pressures, but we push quite hard.
[21:03] SPEAKER_01: In terms of getting ethanol from abroad,
[21:05] that means that supply chains need to rely on cross-border kind
[21:09] of supply chains.
[21:09] SPEAKER_01: And one of the things we've noted,
[21:11] SPEAKER_01: at least on the global level,
[21:12] SPEAKER_01: I was checking out a parent company,
[21:14] SPEAKER_01: Giorgio,
[21:14] SPEAKER_01: I think they had that.
[21:15] Some commentary about the impact of tariffs that are being
[21:18] implemented globally.
[21:19] Is this something that you're thinking about that could be
[21:21] impacting locally in
[21:23] SPEAKER_01: terms of the East African market?
[21:24] SPEAKER_01: I know we don't do such drastic changes in terms of tariffs,
[21:27] SPEAKER_01: but is that something you're thinking about?
[21:29] SPEAKER_00: Definitely.
[21:30] SPEAKER_00: And I think there have been some changes.
[21:32] Some of those involve excise on inputs like glass from within
[21:36] the community.
[21:37] SPEAKER_00: We don't produce enough glass locally to supply our business.
[21:41] SPEAKER_00: So we do have to go beyond our markets to get that.
[21:44] SPEAKER_00: And the increase in rates around that is challenging.
[21:48] SPEAKER_00: Nothing in particular that we are sourcing that is impacting.
[21:51] I think Diageo's statement was more around the US and Canada
[21:55] and Mexico and the new
[21:56] SPEAKER_00: REITs and the new directives coming into that.
[21:59] SPEAKER_00: For us, it would be slightly different.
[22:01] But again,
[22:02] I think what we do say is tax policy consistency is very
[22:05] important to us.
[22:06] SPEAKER_00: And keeping that very much consistent is what helps us be able to plan,
[22:11] SPEAKER_00: to price and to know what to do for the long term.
[22:14] We're going to deal with a few more questions,
[22:16] and then we will be done as quickly as possible.
[22:18] One of the things that maybe people forget very quickly,
[22:21] it's about the shilling.
[22:21] SPEAKER_01: It was around 160 a year ago, and now we are at 120.
[22:26] SPEAKER_01: FX has been stable at around 129 for the past six months.
[22:29] SPEAKER_01: If I grasp anything from many of the things that you've spoken about,
[22:33] it says FX is a key ingredient in terms of not impacting
[22:36] revenues at the end of the day,
[22:37] SPEAKER_01: or at least the bottom line.
[22:38] SPEAKER_01: In terms of your observation across markets,
[22:40] SPEAKER_01: I know there are legal worries around Tanzania having FX issues.
[22:44] SPEAKER_01: What's your observation like in the market?
[22:47] Is there something that you noted that you want investors to
[22:49] take note of?
[22:50] SPEAKER_00: Not particularly.
[22:51] SPEAKER_00: Kenya has been pretty good, as you say.
[22:53] The last six months,
[22:55] once we've had stabilisation,
[22:56] there's also been liquidity.
[22:58] SPEAKER_00: So we're able to trade normally, which is always a good thing.
[23:01] I think the only concern is just how quickly these rises and
[23:04] drops happen.
[23:05] SPEAKER_00: They really create shocks in the system.
[23:07] SPEAKER_00: But hopefully we're going to have some period of stability,
[23:10] SPEAKER_00: at least all projections say that we should,
[23:12] SPEAKER_00: in the short term,
[23:13] SPEAKER_00: certainly expect stability in Kenya around the shilling.
[23:17] SPEAKER_00: Uganda has broadly remained stable.
[23:19] SPEAKER_00: No particular shocks to the Uganda shilling.
[23:22] SPEAKER_00: Tanzania has had some ups and downs.
[23:24] SPEAKER_00: We've had liquidity challenges through most of last year.
[23:28] And then we had quite some depreciation in the last six months
[23:31] before appreciating
[23:33] SPEAKER_00: towards the end of December.
[23:34] SPEAKER_00: And then again, some slight depreciation on the Tanzanian shilling.
[23:38] currency liquidity is still a challenge and also the access to
[23:42] different tools to
[23:43] SPEAKER_00: manage FX volatility is fairly limited.
[23:46] So I think we're still not out of the woods across all the
[23:49] three countries,
[23:50] SPEAKER_00: but we're definitely in a better place than we were last year,
[23:53] SPEAKER_00: like now.
[23:53] SPEAKER_00: And a lot of people have accused me of being optimistic, I think.
[23:57] If you're in business right now and with rates coming down 600
[24:01] bips and the
[24:02] SPEAKER_00: shilling strengthening 26%,
[24:05] SPEAKER_00: I think those are positive things.
[24:06] SPEAKER_00: There's many other things that we can work on,
[24:08] SPEAKER_00: but there are things that impact any ordinary business.
[24:11] SPEAKER_00: And we feel it very strongly when there's that level of volatility.
[24:16] SPEAKER_01: I agree on that, especially the optimism bit.
[24:18] SPEAKER_01: We need to be a bit more optimistic.
[24:20] SPEAKER_01: One thing though,
[24:20] SPEAKER_01: when you talk to consumers,
[24:22] SPEAKER_01: they do feel like the wallets are pinched,
[24:24] but then you look at the macro level and the government keeps
[24:27] saying that the macro
[24:28] SPEAKER_01: is getting better.
[24:29] How do you balance that out in terms of when you want to do
[24:31] pricing versus volume
[24:33] SPEAKER_01: growth in terms of your thinking around planning for the next year?
[24:37] SPEAKER_01: How do you balance that out given that the macro is improving,
[24:40] SPEAKER_01: but the consumer is saying they're a bit challenged?
[24:44] SPEAKER_00: I think you have to look at all those factors.
[24:45] SPEAKER_00: But for me,
[24:46] the way I think about it is that the first thing is that
[24:49] business needs environment
[24:51] SPEAKER_00: to operate in and to grow.
[24:53] SPEAKER_00: And the first thing is containing these fundamentals.
[24:55] SPEAKER_00: If rates are low and we can borrow,
[24:57] SPEAKER_00: we can invest,
[24:58] SPEAKER_00: we can produce,
[24:59] SPEAKER_00: we can create jobs which will put money in people's pockets.
[25:02] SPEAKER_00: And then the cycle continues in a positive direction.
[25:06] SPEAKER_00: So I think that's the first thing.
[25:07] SPEAKER_00: The second thing,
[25:08] SPEAKER_00: of course,
[25:08] SPEAKER_00: is just the level of deduction that we're having is having an impact.
[25:12] And again,
[25:13] as I said,
[25:13] whilst inflation is coming down,
[25:15] the base cost is still high.
[25:16] SPEAKER_00: So people are feeling that.
[25:17] SPEAKER_00: But I think the best thing that can be done is to generate jobs,
[25:21] SPEAKER_00: enable business to operate profitably,
[25:24] SPEAKER_00: to generate jobs,
[25:25] SPEAKER_00: and that will trickle down into people's pockets.
[25:28] SPEAKER_00: Of course, we can do with better policy that enables spend.
[25:31] SPEAKER_00: But again, we also know what kind of challenges we have as a country.
[25:35] SPEAKER_00: that put us between a rock and a hard place.
[25:38] You also discussed the trend in terms of premiumization and I
[25:41] see premium did grow substantially.
[25:44] What's your thinking around that and what's your observation
[25:46] around the premium brands?
[25:48] I think there's obviously across East Africa,
[25:51] our consumers are very informed.
[25:52] SPEAKER_00: So they are aware of global trends.
[25:55] So things like tequila have now become a global trend and have
[25:59] grown massively in
[26:00] SPEAKER_00: this part of the market.
[26:01] We've also seen that our whiskeys growing,
[26:04] our premium beers again doing very well.
[26:07] SPEAKER_00: So again,
[26:07] SPEAKER_00: I think our consumers are very savvy and it is not a premium consumer,
[26:11] SPEAKER_00: but a premium consumption.
[26:13] SPEAKER_00: So whereas I may be only having one drink a month,
[26:16] SPEAKER_00: but sometimes I just want that one drink to be a very good drink.
[26:19] SPEAKER_00: And then that's what I go after.
[26:21] SPEAKER_00: I think we still have,
[26:22] SPEAKER_00: given our populations,
[26:24] SPEAKER_00: given our demographic,
[26:25] SPEAKER_00: there is still quite a lot of room for premium growth.
[26:28] And we are making sure that we are taking our products to the
[26:31] consumers for that.
[26:33] SPEAKER_00: Also, flavor is a big thing.
[26:34] SPEAKER_00: And that's also really important.
[26:35] SPEAKER_00: developing and we're seeing again growth in those areas.
[26:38] SPEAKER_00: So I think the big thing is just being in touch with where consumers are,
[26:42] SPEAKER_00: what they're looking for,
[26:43] SPEAKER_00: what are the global trends and making sure that we capitalize on that.
[26:47] SPEAKER_01: For novices, what is a premium brand about them?
[26:50] SPEAKER_00: There's lots.
[26:51] SPEAKER_00: So White Cup is a premium brand.
[26:54] SPEAKER_00: Don Julio Tequila is a premium brand.
[26:56] SPEAKER_00: Johnny Walker is a premium brand.
[26:58] SPEAKER_00: So it is a brand that is just the way if you walk into a bank,
[27:02] you have a premium client and you will get either your prestige
[27:06] or your premier.
[27:07] SPEAKER_00: You do get a product that caters to that population.
[27:11] SPEAKER_00: For us, it's not just the population, it's the consumption.
[27:13] SPEAKER_00: As I said,
[27:14] SPEAKER_00: I may not have that much,
[27:16] SPEAKER_00: but if the one time I want to consume,
[27:18] SPEAKER_00: I want to consume Casamigos,
[27:20] SPEAKER_00: then I am in premium consumption.
[27:22] SPEAKER_01: Perfect.
[27:22] SPEAKER_01: And then since you're very close to the distributors,
[27:25] what's their assessment in terms of how the consumer is doing
[27:28] or they themselves
[27:29] SPEAKER_01: are doing in this kind of state of the economy?
[27:32] SPEAKER_00: Distributors are our partners.
[27:33] SPEAKER_00: We work very closely with them and through them.
[27:36] SPEAKER_00: And so for us to be able to deliver this means they're also selling,
[27:39] SPEAKER_00: which means consumers are consuming.
[27:42] SPEAKER_00: So I think, to be fair, the economy has been tough on all of us.
[27:45] SPEAKER_00: And again,
[27:46] SPEAKER_00: I go back to the taxes and levies,
[27:49] SPEAKER_00: the exchange rates,
[27:50] SPEAKER_00: the interest rates,
[27:51] SPEAKER_00: and particularly those last two have been quite tough on most businesses.
[27:55] SPEAKER_00: As I say, the path that we have to follow is to spar jobs.
[28:00] to spark consumption and that will help business grow and that
[28:02] will help our economy grow.
[28:04] SPEAKER_01: And in the past year,
[28:05] SPEAKER_01: maybe compared to the previous half year,
[28:07] have they seen a bit of maybe consumers coming back to increase
[28:10] demand for the beverages,
[28:12] SPEAKER_01: the inflation eases,
[28:14] SPEAKER_01: even though it's still at a higher level?
[28:15] SPEAKER_01: Have they seen that?
[28:17] SPEAKER_00: Yeah,
[28:17] and our results are a reflection of what's happening down there
[28:20] because otherwise
[28:21] SPEAKER_00: we'd be filling the market with product that's not moving.
[28:23] And that's something we watch very clearly to make sure that we
[28:26] are supplying them
[28:27] SPEAKER_00: with what they are selling.
[28:29] SPEAKER_00: And therefore that cycle is moving.
[28:30] SPEAKER_00: Definitely at the consumer level, there is some improvement.
[28:34] As I said,
[28:34] there's a marginal growth in volumes and that's really right
[28:38] down from the consumer.
[28:39] SPEAKER_00: So they are seeing some improvement in spend.
[28:42] SPEAKER_00: Because the reality is that whilst your salary takes time to catch up,
[28:46] SPEAKER_00: although this time as your salary has caught up,
[28:48] SPEAKER_00: it has been slashed,
[28:50] SPEAKER_00: it allows you to catch up with the higher cost of goods over time.
[28:54] So yeah,
[28:54] we are seeing improved spend,
[28:56] particularly around both beer and spirits,
[28:59] to be honest.
[29:00] SPEAKER_01: And perhaps in terms of focus, I know you don't need guidance per se.
[29:03] What are some of the key things that maybe EABL you're paying
[29:06] attention to in this 2025 year?
[29:09] SPEAKER_00: I think Jane called it out when we did our presentation.
[29:12] SPEAKER_00: And the first one is just what I've just said, focusing on the customers.
[29:16] SPEAKER_00: So wherever the customers are,
[29:18] SPEAKER_00: the consumers are making sure that we are providing products to them.
[29:22] We are exciting them and we are giving them what they need for
[29:24] the different occasions.
[29:26] SPEAKER_00: Secondly, we are investing smartly behind our brands, behind CapEx.
[29:30] So making sure that we continue to invest even though we are
[29:33] quite thoughtful around it.
[29:34] We're also very focused on productivity with the cost pressures
[29:38] and consumption pressures.
[29:39] We are also really always looking at our internal operations to
[29:43] see where we can
[29:44] SPEAKER_00: extract more efficiency.
[29:46] SPEAKER_00: The next one is around ESG.
[29:48] We've been quite active around the things we're doing around
[29:51] the pillars of our
[29:53] SPEAKER_00: sustainability strategy,
[29:54] SPEAKER_00: thinking about positive drinking,
[29:56] SPEAKER_00: thinking about green to glass sustainability and diversity and inclusion,
[30:00] SPEAKER_00: and really making sure we're focused in those areas.
[30:03] SPEAKER_00: And finally, around our people.
[30:05] SPEAKER_00: Without our people, we wouldn't be able to deliver
[30:07] SPEAKER_00: Such results are making sure that people are well taken care of,
[30:12] SPEAKER_00: they're growing,
[30:12] SPEAKER_00: they're straining,
[30:13] and that we implement a strong organizational culture that then
[30:17] helps us deliver
[30:18] SPEAKER_00: strong long-term results.
[30:20] And are there specific markets or products that you see as the
[30:24] next big growth
[30:25] SPEAKER_01: opportunities or you're working on everything?
[30:28] SPEAKER_00: I can't tell you that,
[30:29] but I'd say we stay close to the consumer and make big bets on
[30:32] where the consumer
[30:33] SPEAKER_00: is at.
[30:34] SPEAKER_00: So other than that, I can't tell you.
[30:35] So someone is asking about the,
[30:37] we talked about glass being a bit of a challenge.
[30:40] SPEAKER_01: He said EABL sold CGI a while back.
[30:42] He was wondering,
[30:43] with a shortage of glass bottles,
[30:46] why not set up a new plant?
[30:48] SPEAKER_00: I think we are good at our core business and that is what we focus on.
[30:52] SPEAKER_00: Of course,
[30:53] we still work very closely with the company that now provides
[30:56] glass to us and
[30:58] SPEAKER_00: across the whole market.
[30:59] I just think there's opportunity still for more investments in
[31:02] that space to be
[31:03] SPEAKER_00: able to spark growth.
[31:04] SPEAKER_00: But at the moment we are buying,
[31:06] SPEAKER_00: we are supplementing what is available locally with imports as well.
[31:10] SPEAKER_00: But I think it's a matter of time.
[31:13] SPEAKER_00: because the demand is there.
[31:14] SPEAKER_00: It's just a matter of time for that investment to come through.
[31:17] SPEAKER_00: And again,
[31:18] SPEAKER_00: like you're saying,
[31:19] the environment needs to be conducive for such investors to put
[31:22] money in the
[31:22] SPEAKER_00: economy for us to be able to cater to our owning.
[31:25] SPEAKER_01: Before I switch to a few questions about what you're reading currently,
[31:29] I just wanted you maybe to wrap up and give the listeners a bit
[31:33] of a breakdown in
[31:34] terms of the key things that you want them to pay attention to
[31:38] in the EABL H1 results.
[31:40] SPEAKER_00: I think the key things to pay attention to,
[31:43] SPEAKER_00: one is sales growth organically very strong at 8%,
[31:47] SPEAKER_00: more or less in line with last year.
[31:50] Whilst there's still pressures on inflation,
[31:53] I think that's something we can't get away from.
[31:55] SPEAKER_00: The inflation line is still giving us some pressure,
[31:58] which you will see that the gross profit and gross margin is
[32:01] slightly constrained.
[32:02] SPEAKER_00: However,
[32:02] SPEAKER_00: we are doing our best around managing costs,
[32:05] SPEAKER_00: reducing finance costs,
[32:06] and really just taking care of that FX volatility line as much
[32:12] as we can to make
[32:12] sure that we are delivering consistent and sustainable growth
[32:16] to our shareholders.
[32:17] In terms of the balance sheet,
[32:18] we continue to maintain a strong balance sheet.
[32:20] SPEAKER_00: Our key ratios are strong.
[32:22] SPEAKER_00: And again, I think we're in a good position to take on half two.
[32:26] Half two is normally slightly softer and comes with its own
[32:30] different elements.
[32:31] SPEAKER_00: But we are fairly positive that with some of the changes we've seen,
[32:34] SPEAKER_00: the daily exercise having been removed.
[32:37] SPEAKER_00: And again,
[32:37] the changes in beer exercise that we should be able to see some
[32:41] positivity in the industry.
[32:43] SPEAKER_00: But yeah, I think that's really the outcome.
[32:45] SPEAKER_00: Profit after tax 20% up is decent,
[32:48] but we still have quite a lot of work to continue doing to make
[32:51] sure that we are
[32:52] SPEAKER_00: delivering volume growth,
[32:53] SPEAKER_00: top line growth and sustainable growth over time.
[32:57] SPEAKER_01: I think that's a good summary of it.
[32:59] SPEAKER_01: So quick questions to you now, Rispa, on a personal level maybe.
[33:02] SPEAKER_01: What are you reading currently and what is inspiring you?
[33:05] SPEAKER_00: Okay, so I'm reading Range right now.
[33:08] It's a book about how generalists thrive compared to
[33:12] specialists and the views
[33:14] SPEAKER_00: around that,
[33:15] SPEAKER_00: but I am finding it quite interesting.
[33:18] SPEAKER_00: I think what inspires me is just a possibility.
[33:21] SPEAKER_00: I think whereas we are often caught up in what is wrong with the world,
[33:26] SPEAKER_00: there's still a lot that we can do with what we have.
[33:28] SPEAKER_00: I'm just inspired by possibility.
[33:31] SPEAKER_01: And finally,
[33:31] SPEAKER_01: what have you learned lately,
[33:33] SPEAKER_01: maybe in your work or personal life that you'd want to share with us?
[33:36] SPEAKER_00: In the last six months,
[33:37] my biggest reflection was I read a book called The Courage to
[33:40] be Disliked.
[33:41] And it was really about how we are brought up to seek
[33:44] affirmation and praise.
[33:46] SPEAKER_00: And really,
[33:47] we should really just be concerned about doing the right thing
[33:50] and doing what we
[33:51] SPEAKER_00: have been sent here to do.
[33:52] SPEAKER_00: And so consistently reminding myself that it's not about affirmation.
[33:56] SPEAKER_00: It's not about being liked.
[33:57] SPEAKER_00: It's about doing right and doing right by all our stakeholders,
[34:01] SPEAKER_00: be it our shareholders,
[34:03] SPEAKER_00: our employees,
[34:04] SPEAKER_00: our families.
[34:05] SPEAKER_00: So it just reminds me that,
[34:06] SPEAKER_00: you know what,
[34:07] being very clear about what you're there for and being unafraid
[34:12] to deliver it.
[34:13] SPEAKER_01: So it's an amazing book.
[34:14] SPEAKER_00: Mm-hmm.
[34:14] SPEAKER_01: Remarkable.
[34:15] SPEAKER_01: If you want to know more a bit about RISPA,
[34:17] SPEAKER_01: I know she wouldn't say it,
[34:18] SPEAKER_01: but you can find a few YouTube videos.
[34:20] SPEAKER_01: Just type in her name and then you'll find a few inspiring ones.
[34:23] SPEAKER_01: One of the latest one I was listening to is what the roles of CFOs are.
[34:27] SPEAKER_01: She had a very good analysis on that.
[34:29] SPEAKER_01: And I think that's a good one that we should all check out.
[34:32] I'll give you a minute maybe to give you closing thoughts and
[34:35] then we can close out.
[34:36] SPEAKER_00: No, I think, as I said, it's just to carry on.
[34:39] SPEAKER_00: There are a lot of things that don't work,
[34:41] SPEAKER_00: but there's also a lot of things that we can work with.
[34:44] And if you are of the variety that enjoys our products,
[34:49] please do continue.
[34:50] We are grateful for the support and we continue to work hard to
[34:55] build our economies.
[34:57] SPEAKER_00: I don't think anybody will do that for us.
[34:59] SPEAKER_00: We have to do it for ourselves.
[35:01] SPEAKER_01: Thank you so much for giving us your time.
[35:03] SPEAKER_01: Much appreciated.
[35:04] Hope to see you again in the full year so that we can be able
[35:07] to break down what's
[35:07] SPEAKER_01: happening in the next six months.
[35:09] SPEAKER_01: All the best as you prepare for that.
[35:10] SPEAKER_01: Thank you.
[35:11] SPEAKER_01: Thank you so much and goodbye.

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