GAB 2014 Annual Report
Total Page:16
File Type:pdf, Size:1020Kb
CONTENTS 02 About GAB 04 Group Financial Highlights 08 06 5 Years Financial Highlights 08 Chairman Says... 12 Managing Director Says... 16 Operational Overview 19 Growing Brands 40 Perfecting Brews 44 Strengthening Partnerships 48 Community Outreach 52 Corporate Information 54 Board of Directors 56 Directors’ Profi le 60 Management Team 19 62 Management Team Profi le 66 Statement on Corporate Governance 83 Audit Committee Report 89 Statement on Risk Management and Internal Control 95 Financial Statements 143 Analysis of Stockholdings 40 146 Other Information 147 Properties Owned by the Group 148 Notice of Annual General Meeting Form of Proxy 154 Group Directory 44 48 ABOUT GAB Listed on the Main Market of Bursa Malaysia, GAB’s principal shareholder is GAPL Pte Ltd based in Singapore. GAPL Pte Ltd is a joint venture company whose ultimate owners are Diageo Plc, a company incorporated in England and Wales, and Heineken Asia Pacifi c Pte Ltd (HAPPL) (formerly known as Asia Pacifi c Breweries Limited), a company incorporated in Singapore. HAPPL is 100% owned by Heineken NV through its subsidiary, Heineken International BV. Vision To be Malaysia’s most celebrated drinks company Mission Brewing great moments with great drinks Guinness Malaysia Sungei Way Brewery The brewery receives Bhd incorporated offi cially launched ISO 9002 certifi cation 1964 1965 1966 1989 1995 2002 The Sungei Way Brewery, Guinness Malaysia Bhd The brewery is the fi rst which sits on 23.72 acres and Malayan Breweries in Malaysia to receive of land, starts operations (Malaya) Sdn Bhd MS 1480:2007 Hazard merge to form Analysis Critical Guinness Anchor Bhd Control Point (HACCP) Certifi cation from Ministry of Health 2 GUINNESS ANCHOR BERHAD (5350-X) GAB wins its fi rst 3 Putra Brand Awards – Receives the most Tiger (Gold), Heineken number of wins in the (Silver) and Guinness Beverage (Alcoholic) (Bronze) category of Putra Brand Awards. Tiger and Another 3 wins at the Brewery’s ISO Heineken (Gold), Putra Brand Awards, certifi cation upgraded Anchor (Silver) and making it 16 wins in to MS ISO 9001:2008 Guinness (Bronze) 5 years 2010 2011 2012 2013 2014 Wins Silver at the Malaysia Wins for the third time at the HR Awards for second year Malaysian Dutch Business Council in a row (MDBC) Sustainability Awards for Best Sustainable Supply Chain Wins Distinction Award Management or Logistics Project at Malaysia Corporate Governance Index Awards Wins ACCA Malaysia Sustainability Reporting Awards 3 GUINNESS ANCHOR BERHAD (5350-X) GROUP FINANCIAL HIGHLIGHTS Key Figures for Financial Year Ended 30 June Key Financial Ratios for Financial Year Ended 30 June 2013 2014 Change % Revenue in RM’000 1,676,348 1,610,587 (3.9) EBITDA margin % 19.9 19.4 (2.5) PBIT in RM’000 292,746 270,609 (7.6) Total equity in RM’000 365,540 356,809 (2.4) Market capitalisation in RM’000 5,757,988 3,969,568 (31.1) Earnings per share in sen 72.0 65.6 (8.9) Net dividend per 50 sen stock unit 68.5 64.5 (5.8) Dividend yield % 3.6 4.9 36.1 Operating working capital % of revenue 11.4 13.0 14.0 Net cash from operating activities in RM’000 225,608 236,225 4.7 Capital expenditures in RM’000 45,555 39,280 (13.8) PBIT/Total equity % 80.1 75.8 (5.4) PAT/Revenue % 13.0 12.3 (5.4) EBITDA : Earnings before interest, tax, depreciation and amortisation PBIT : Profi t before interest and tax PAT : Profi t after tax 4 Analysis of Group Revenue for financial year ended 30 June 2014 4.20% Taxation Depreciation & Raw Materials & 2.56% Amortisation Packaging Costs 8.50% Distribution, 19.45% Sales & Admin Costs Excise, Profit Custom Duties & 12.31% After Taxation Sales Tax 47.76% 5.22% Staff Costs 5 GUINNESS ANCHOR BERHAD (5350-X) 5 YEARS FINANCIAL HIGHLIGHTS Key Figures for Financial Year Ended 30 June Revenue Financial Year Ended 30 June (RM’000) 2010 2011 2012 2013 2014 RM’000 RM’000 RM’000 RM’000 RM’000 FY14 1,610,587 FY13 1,676,348 Revenue 1,358,633 1,488,720 1,623,687 1,676,348 1,610,587 FY12 1,623,687 Profi t before tax 204,991 242,883 276,981 288,736 265,787 FY11 1,488,720 Tax expense (52,300) (61,505) (69,582) (71,132) (67,581) FY10 1,358,633 Profi t after tax 152,691 181,378 207,399 217,604 198,206 Profit before tax (RM’000) Dividends 135,944 163,133 377,623# 206,937 194,853 FY14 265,787 Net 45.0 54.0 125.0# 68.5 64.5 FY13 288,736 dividends FY12 276,981 per 50 sen FY11 242,883 stock unit (sen) FY10 204,991 Earnings 50.5 60.0 68.7 72.0 65.6 Profit after tax per 50 sen (RM’000) stock unit FY14 198,206 (sen) FY13 217,604 Reserves 319,879 365,567 228,654 214,491 205,760 FY12 207,399 Total equity 470,928 516,616 379,703 365,540 356,809 FY11 181,378 FY10 152,691 Net assets 155.9 171.0 126.0 121.0 118.0 per 50 sen Earnings per 50 sen stock unit stock unit (sen) (sen) FY14 65.6 # Includes special dividend FY13 72.0 FY12 68.7 FY11 60.0 FY10 50.5 Net dividends per 50 sen stock unit (sen) FY14 64.5 FY13 68.5 FY12 125.0 FY11 54.0 FY10 45.0 6 “Investing for the long term” Dato’ Saw Choo Boon Chairman CHAIRMAN SAYS... A key strategic focus for the Company is to continuously improve our product mix to respond to the evolving demands of our consumers. Dear Respected Shareholders, Secondly, the Company faced increased cost pressures due to the weakening of the Ringgit which led to a rise This marks the second year that I am updating you on in cost for raw material purchases from foreign vendors. Guinness Anchor Berhad’s (GAB) performance. The Company also had to pay more for imported Financial Year 2014 (FY14) has been particularly products in our portfolio which are billed in foreign challenging. Over the course of the year, your Board currency. worked very closely with Managing Director Hans Essaadi and his Management Team to map out and execute strategies and actions to see the As market trends change, the business Company through the tough market conditions with must also evolve and the management focus on long term success. together with the Board have a sound strategy to maneuver through the For FY14, GAB achieved total revenue of challenges so that we may be in the RM1.6 billion, a decline of 3.9% compared to the best shape to celebrate GAB’s 50 years preceding fi nancial year. As for profi t before tax, of brewing excellence in FY16. it also slipped 7.9% to RM265.8 million from RM288.7 million in the previous fi nancial year. We have Another key challenge was the visible increase in the declared an interim dividend of 20 sen which was paid availability of contraband beers. These contraband in April 2014, and proposed a fi nal dividend of 44.5 sen, beers, which pay no duties, pose an unfair competition which will be tabled at the Annual General Meeting to our business as they are priced signifi cantly lower, scheduled for 28 November 2014 for approval by by up to 60%. We believe our high excise duty rates, shareholders. highest in Asia and the second highest in the world, is a main factor behind the increase in contraband Operating Under Challenging goods. On that front, we are engaging with the Circumstances relevant government bodies to urge them to step up There were several key factors that contributed to our enforcement, and maintain current excise duty levels FY14 performance. whilst taking a longer term view of reviewing and revising the current alcohol tax structure so that The fi rst was weak domestic consumption as Malaysian it is more in line with global best practices. consumers adopted a more cautious attitude towards their spending due to infl ationary pressures and other economic challenges. 9 GUINNESS ANCHOR BERHAD (5350-X) CHAIRMAN SAYS... Moreover, last fi nancial year, from 1 November 2013, the Fresh Insights and Advice Royal Malaysian Customs introduced a new method of New brands were not the only additions; the Company valuation of our products for the purpose of determining also welcomed several new members to the GAB excise duty and sales tax, which included advertising Board. Apurvi Sheth and Alvaro Cardenas both joined and promotion expenditure. This has resulted in higher the Board on 1 July 2014 replacing Siobhan Hamilton duty payment for the Group and despite the diffi cult and Edward McShane who resigned from the Board. market circumstance, the Company decided not to On behalf of the Board, I would like to thank Siobhan pass on the increase to consumers as this would affect and Edward for their contribution and dedication to the the competitiveness of our brands, particularly against Company. imported beer products which are not affected by this change. The new valuation method has negatively Both Apurvi and Alvaro have extensive experience in impacted the Group’s profi t by approximately the beer business as well as the fast moving consumer RM18 million or 80% of the 7.6% decline in profi t goods industry. Hence, I am sure they will both provide from operations for FY14. valuable insights and advice to the Company.