Guinness Ghana Breweries Limited releases its 2022 Annual Report

Guinness Ghana Breweries Limited (GGBL.gh) 2022 Annual Report

CHAIRMAN’S STATEMENT

INTRODUCTION
Cherished shareholders, on behalf of the Board of Directors of this illustrious business, I wish to thank you charting another year with us. This year marks my 4th year of presenting the Annual report and financial statements to you.

As your Chairman, I’m committed to continuously working with the rest of the board to:

• Delivering on our strategic priorities
• Ensure that we maintain our best-in-class corporate governance structures and behaviors.
• Proactively engage our stakeholders, especially our communities, staff, distributors, and consumers.

Within the last 12 months, your company has seen a few monumental shifts and changes; changes in the composition of the executive leadership team, changes in the approach delivering our goals, changes to the way we work.

Global economic challenges: the Russia-Ukraine war which grossly distorted the supply chains of businesses worldwide, the depreciation of the cedi against global currencies of the rising cost of doing business in Ghana, among others, had an adverse impact on our performance over the finanial year. We, however, remain resolute in our resolve to maintain the course which we have set for ourselves; to be one of the best performing most trusted and respected consumer products companies in the world.

BOARD CHANGES
The last financial year has seen some changes in the composition of the Board. Finance Director, Teye Mkushi, has been appointed to the role of Global Finance ESG and Sustainability Director of Diageo from 1 March 2022. Teye was a rock for this Board and this company and at the heart of performance delivery and a core part of the leadership team. Her creativity, strength in strategic framing and resilience have seen us step up our local raw material sourcing and investing in a state-of-the-art energy efficient brewhouse. Our company recorded the best performance in decades during her final year in Ghana. Her replacement, Justin Mollel, was previously the Finance Director of Serengeti Breweries Limited (SBL). He has been connected to the Ghana business in various ways; in 2014 he was seconded to Kenya and worked in the Africa Business Shared Services Centre (ABSC) as OTC Manager supporting Ghana, Cameroon, Reunion, Ethiopia, and Tanzania markets.

Suzannè Butah, our Legal Director and Company Secretary was also appointed as Legal Counsel Procurement from 1st December 2021 and relocated to the UK in January. In her role as the Company Secretary, Suzannè oversaw a period of rapid change in the corporate governance sector with the introduction of the Companies Act 2019 and the 2020 SEC Code of Governance for Listed Companies requiring wholesale revisions to the company’s constitution board governing documents which has led to a refreshed relationship with the Board. Due to the Covid-19 restrictions, Suzannè had to show great adaptability in organizing Guinness Ghana’s first virtual AGM which was very successfully received.

Kelvin Koranteng Boateng, Suzanne’s replacement as Legal Director and Company Secretary, is an experienced senior executive lawyer with over 16 years legal professional experience as a litigator and advisor to government and large publicly listed multi-national corporations.

SUSTAINABLE PERFORMANCE AND VALUE CREATION
Distinguished shareholders, ladies and gentlemen, allow me to now share with you some key highlights of the performance of our company.

Macro-economic indicators
The last year has been challenging across every sector within the business space in Ghana. The COVID-19 pandemic and its subsequent disruptions of the social and economic fabric of the country continue to be felt today. The Russia-Ukraine war has disrupted shipping, grain and fertilizer supply across the world and its impact on our business cannot be overemphasized. The cedi has performed poorly against other trading currencies over the last year and its resultant impact is exemplified in the record number of times we have had to take price on several of our products. Other disruptions within the general economic space including the introduction of the E-Levy have had significant impact on the public and in turn our business.

Business Performance
Following an impressive Year F21, where we opened our ¢145 million state of the art brewhouse at our Achimota site, the focus was to push ahead and ‘take the lead’ in F23. Several situations scampered those plans. Firstly, sorghum harvest delivered minimal output and secondly, the business faced a shortage in bottles, due to suppliers delivering late and not enough returnable glass coming back from the market to cater for our growth.

Despite these challenges, we delivered growth in topline, in both volume and revenue, however, we were not able to fully compensate all cost increases and economic shocks. Despite four price increases in the last 14 months, we have not been able to cover fully the increased costs of running the business. You may have noticed that this situation led Guinness Ghana to post negative results for the last two quarters.

Dividends
The directors did not recommend the payment of a dividend for the year ended 30 June 2022.

ENSURING EXCELLENCE IN GOVERNANCE
Guinness Ghana is also committed to carrying out its business responsibly and in accordance with all laws and regulations which the business is subject to. All aspects of your company’s operations were conducted in compliance with applicable laws and regulations and the company’s code of business conduct and other related policies. Quarterly board meetings and audit meetings were held, and the nominations committee also met quarterly. I am also happy to inform you that the company satisfactorily underwent two internal audits, in addition to the external audit carried out by Deloitte.

ENGAGEMENT WITH OUR COMMUNITIES
Guinness Ghana continues to track positively and made significant strides in all areas of the Diageo 2030 Sustainability and ESG goals. Over the course of the year, in support of the broader Diageo grain to glass sustainability agenda, Ghana kicked off Recycled PET Transformation project, for which it was chosen as the only Africa Emerging Market (AEM) to pilot.

In order to ensure achievement of zero waste in our direct operations and zero waste to land fill throughout our supply chain by 2030, we partnered Coliba Ghana on a pilot collection scheme to set up 10 community collection centers. I am happy to inform you that five (5) of these centres are already operational in Kokrobite, Lapaz, Darkuman, Tema and Apam.

Additionally, in order to ensure 100% of our packaging is widely recyclable (or reusable/ compostable), we have phased out sachets from our Orijin bitters family. Furthermore, stopping sales of these sachets, which potentially are an accessible format for underage individuals, also ensures that we contribute towards the curbing of underage drinking.

As part of our grain to glass agenda, we held close engagements with aggregator and farmer communities during the year to bring in more sorghum short term and supporting them to deliver a better harvest in F23. We used the opportunity to commission WASH facilities in two (2) of our local souring communities in the Garu (Upper East) Jirapa (Upper West) regions.

Furthermore, in support of our agenda to promote positive drinking, we also rolled out the SMASHED underage drinking campaign in three regions and the interactive Wrong Side of the Road campaign to initiate conversations and attitudinal change on drink driving.

LOOKING FORWARD
Despite the challenges within the macro-economic environment, I am encouraged more than ever, about the prospects of the F23. I have been impressed by the resilience of the Executive and their renewed sense of commitment to turning things around.

I was at the team’s Staff Conference held in August and felt the energy and positivity that flowed from both management and staff. The Year’s mantra, Yes We Can, is apt and suited for journey ahead. I congratulate the entire management and staff for delivering a good performance despite the numerous macroeconomic challenges.

Your business is set on a positive track. It remains an employer of choice and commands the respect of the business community. It continues to challenge the status quo in its delivery of its ESG goals and ambitions. It continues to impact and transform lives and communities. It continues to champion inclusion and diversity in its partnerships and collaborations.

Yes We can.

Thank you.

• Guinness Ghana Breweries Limited (GGBL.gh) on Africanfinancials