BLK Prestige Investment Limited: Responsible CSR For Societal Growth

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BLK Prestige Investment Limited: Responsible CSR For Societal Growth

Corporate Social Responsibility (CSR) in Nigeria is almost as old as the country as it could be traced to 1956 when crude oil was found in Oloibiri, Niger Delta Region of the nation.

The region has perennially suffered from environmental neglect, crumbling infrastructures and services, high unemployment, social deprivation, abject poverty and endemic conflict.

These led to calls for oil companies operating in the Niger Delta to demonstrate the value of their investments to Nigeria by undertaking increased community development initiatives that provide direct social benefits such as local employment, new infrastructure, schools, and improved health care delivery.

What it means: CSR can be described as an instrument, concept or business model that requires companies to apply a radical change in attitude by contributing to the development of their operating environment (without intentions of making profit).

For instance, Nigerian banks adopted the concept when the Nigeria Sustainable Banking Principles was introduced by the Bankers’ Committee in 2012. Since then, a lot of financial institutions have continued to support their societies.

The perception from some quarters: Despite its global acceptability, some individuals and organisations still hold the view that local business firms are immune when it comes to contributing to the societies where they operate.

While some believe the initiative is only meant for blue-chip companies, others argue it is a waste of money they thought could be invested in their companies.

But little did they know that CSR and sustainability need more attention as well as other management concerns. CSR experts have argued over time that the concept is not restricted to big organizations alone.

According to them, the investment can only vary, depending on the size and an annual turnover of companies. Regardless of size and annual earnings, a responsible company should aspire to contribute to societal growth.

Having stated this, CSR investment can now depend on what a company can afford, as there is nowhere in the world where the government is able to solve all the problems. This made BLK Prestige Investment Limited impacts lives across education institutions, motherless baby’s homes and other communities government could not reach.

With the surge in global population, which does not exempt Nigeria, government alone cannot provide all the social needs but by the provision of enabling an environment for businesses to flourish, owners of such business will appear to be responsible when it set aside a small proportion of its income for social development.

All over the world, government alone doesn’t attend to all social needs, business owners are expected to be partners in progress by intervening in strategic areas like health, education and provision of social amenities. By doing this, companies like BLK Prestige Investment Limited have been lifting society as well as building their brand equity.

Societal impacts: CSR has become one of the standard business practices for reputable organisations in the country. It has also helped in enhancing the overall reputation of a lot of firms, especially in the financial sector where competitors strive to outshine each other.

However, the recognition and acceptance of the phenomena of corporate social responsibility (CSR) in developed, as well as developing countries, has continued to impact positively on societies.

In Nigeria, some companies like BLK Prestige Investment Limited have understood the importance of CSR while some are still living in the past.

Banks as a case study: Most of the commercial banks and other organisations across the economy have injected much funds to the initiative over the years. While it may be difficult to substantiate the total amount of foreign and local firms operating in Nigeria spend on CSR projects, Nairametrics reported recently that 15 banks spent over N8 billion on their CSR projects in 2018.

While Zenith Bank Plc spent N3.06 billion, UBA spent N1.04 billion, GTBank spent N928.07 million, FBN spent N831 million, Access Bank (N376.75 million), FCMB (N315.80), Sterling Bank (N299.01 million), Stanbic IBTC (N233.40 million), Fidelity (N158.36 million), Wema Bank (N34.62 million), Union Bank (N30.20 million) and Unity Bank (N13.38 million).

The fund was spent on several projects that either impacted or impacting on several communities across the nation. Some of the projects are facelifts of Herbert Macaulay Library, Musical Society of Nigeria, Lagos, primary, secondary and tertiary institutions, provision of basic infrastructure like water, road; health facilities, security trust funds and scholarships to students among others.

These activities of the banks and BLK Prestige Investment Limited have made life easier for residents in both rural and urban areas.

CNN’s African Voices Change Makers Meets Tony Elumelu

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CNN’s African Voices Change Makers Meets Tony Elumelu

On this week’s African Voices Changemakers, CNN International meets Nigerian businessman and philanthropist Tony Elumelu. After years in the banking world, Elumelu is using his experience to help those eager to start their own businesses.

Elumelu made his fortune in banking, making his mark in the business world with the merger of the United Bank for Africa. This is just one of the companies in his portfolio. Elumelu also heads an investment company that holds major stakes in power, oil and gas, real estate, and healthcare.

But one of his biggest investments has been in the African business leaders of the future. Elumelu tells CNN that he wants to encourage, “Young African entrepreneurs to succeed and surpass what we have done as African business leaders.”

This drive to see Africans succeed in all forms of business-led Elumelu to launch a bold initiative. He talks about this decision, “And I said okay, let’s commit an amount, let’s commit to a timeframe. And that’s how we came about 100 million dollars, for 10 years. A thousand entrepreneurs every year.”

This commitment was the premise behind what became the Tony Elumelu Foundation Entrepreneurship Programme which launched in 2015. It’s a fellowship that includes 12 weeks of training, mentoring, and $5000 of seed funding. To date, more than seven thousand aspiring entrepreneurs have gone through the programme.

CNN travels with Elumelu to meet some of the entrepreneurs who have become successful after completing the foundation’s programme. One of the businessmen is Ndubuisi Eze who explains his initial business pitch, “I applied with just an idea of using drones to support crop dusting and also gather data on farms and that’s where the magic really started.”

After gaining access to the intra-African trade fair through the Elumelu Foundation, Eze was spotted by a Singaporean minister and now his drone company is up and running in Singapore. Eze describes how his success would not have been possible without the Elumelu Foundation, “Without the Elumelu Foundation Programme there was no way, not a chance for this idea that I had at that time to take off. The programme not only helped the business plan, but it also put us through how to evaluate customer acquisitions, and the business canvas helped you break down where you are going to get your resources.”

Eze now has plans to start his own training programme, and there are many others in a position to give back to their communities after going through Elumelu’s foundation. CNN meets Oduwa Agboneni, who grew her mechanic business thanks to the entrepreneurship programme. She details how she employs local people for her growing business, “We have about twenty people working with us, five of them are interns because we also encourage interns from the university.”

The Tony Elumelu Foundation Entrepreneurship Forum is an annual event where participants of the entrepreneurship programme come together to network and engage with business influencers. At the event, Elumelu speaks about the foundation’s future and successes, “We are committed to 10,000 Africans to go through the programme in 10 years. But this is just year five of the entrepreneurship programme and, you know what, we now have over 7,000 entrepreneurs.”

As part of the Entrepreneurship Forum, Elumelu was interviewed by CNN’s Fareed Zakaria. Zakaria asked about Elumelu’s motivations behind the foundation. He explains his inspiration, “I believe the best legacy is the lives that we touch. We have the privilege to do so. It’s not just about my bank balances. I came to this with nothing so it’s about what I worked so hard, I’m using it to help others.”

The Forum also provides Elumelu with an opportunity to address the aspiring entrepreneurs. His message is a significant one, “The future of Africa is firmly and indeed in your hands. The journey for the development and transformation of Africa, it cannot happen without you all.”

Moody’s Rating: Life-saver To South Africa’s economy?

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Moody’s Rating: Life-saver To South Africa’s economy?
So far, the South African economy has remained under pressure in 2019, amid faltering output growth, massive inequality, rising unemployment, and power sector crisis. This remains a major concern for investors, as the economic outlook for the country seems rather melancholic. Despite President Cyril Ramaphosa’s economic stimulus and recovery plan launched in Sept 2018, Q1-19 annualized GDP growth sank to a new low since the financial crisis, down in the negative region at –3.2%.
Recently, the South African rand and government bonds surged after a renowned global rating agency, Moody’s, kept the country’s investment-grade credit rating, with South Africa’s sovereign debt rating at Baa3. However, the rating agency revised the outlook for the economy from ‘stable’ to ‘negative’, implying a deterioration in economic growth and rising debt as alarming issues. The negative outlook signifies that there is a cover of 12-18 months, in which a downgrade could be delivered. Nevertheless, Moody’s made it clear that a credible budget statement in Feb -2020 would be crucial in maintaining the current rating.
In our opinion, South Africa must hasten the pace of reforms, in order to strengthen investors’ confidence, avoid massive outflows of funds and the potential increase in costs of debts, should investors price in these growing risks.
United Capital Research

History of the Slot Machine

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History of the Slot Machine

The slot machine is iconic when it comes to the history of gambling. Slot machine gaming is an absolute crowd favourite, actually earning more income for casinos than table game favourites combined. Their whimsical sound effects and visuals draw in crowds from all backgrounds and demographics to join in on the fun, and cost-efficient games from Slots Mummy. Just one small 1$ bet could land you a 6-figure jackpot, and since the game requires very little skill, it is also a favourite among beginner gamblers. But how did it come to be so popular in the casino world, both land-based and online? Read further to find out more about the History of the Slot Machine.

The Liberty Bell Slot by Charles Fey

Slot machines (sometimes called a “fruit machine” or “one-armed bandit”) date all the way back to 1895. The first slot machine is said to be invented by a car mechanic, Charles Fey in San Francisco. The machine was named, “The Liberty Bell” and was decorated with diamond, spade and heart symbols along with a picture of a cracked Liberty Bell. It had 3 spinning reels, a spin resulting in an impressive payoff of… fifty cents or ten nickels. You can go and have a look at this iconic machine in Reno, Nevada at the Liberty Belle Saloon and Restaurant.

Charles Fey went on to create more machines, including the Draw Power, the Three Spindle and Klondike. It is also worth noting that Charles Fey invented the trade check separator (found originally in the Liberty Bell) which distinguished fake coins from real ones – this trade separator is still used in slot machines around the world. Charles Fey rented his machines out to bars and saloons and split the profits with them 50/50.

How did the slot machine originally work?

Each slot machine had three metal reels, with 10 symbols painted on each of them. You would pull the provided lever to spin the reels and when it stopped, you would win a jackpot if three of the same kind of symbols lined up. The payout would be dispensed from the machine for you to take.

Popular as can be

As expected, the Liberty Bell became extraordinarily popular – because people love slot machines! Apparently, the demand was so high that Charles Fey battled to keep up as he could not build them fast enough in his small shop. When Gambling supply manufacturers wanted to purchase the rights to manufacture and distribute the Liberty Bell, Fey refused.

This resulted in Herbert Mills, Chicago based manufacturer of arcade machines, producing a new slot machine in 1907 – a knock-off of the Liberty Bell named Operator Bell. Herbert Mills was the first person to include fruit symbols including cherries, lemons and plums on slot machines.

As you now know, slot machine gambling only grew in popularity since its humble beginnings. There are now thousands of slot game machines to choose from both in land-based casinos and online. People loved slot machines when they began and we believe they will only become more loved as technology improves.

CCNN and Obu Cement merger update: Excerpts from the scheme of merger

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CCNN and Obu Cement merger update: Excerpts from the scheme of merger

CardinalStone Research

Cement Company of Northern Nigeria (CCNN) and Obu Cement Company Plc (Obu) have released a scheme of merger document for their impending business combination (click here to view document). According to the document, Obu’s 40 million ordinary shares of 50 kobo each will be reconstructed to 20.7 billion shares of 50 kobo each of the enlarged entity. This represents a 1 for 518 share conversion ratio. On the other hand, CCNN’s shareholders will be accorded 1 share of the enlarged entity for each CCNN share owned. Thus, the outstanding shares of the enlarged entity would comprise the 13.1 billion ordinary CCNN shares currently available and the potentially reconstructed N20.7 billion new shares in favour of the 40 million ordinary shares of Obu. The implied 33.9 billion shares of the enlarged entity would be 61.2% owned by shareholders of Obu and 38.8% owned by shareholders of CCNN. On adjusting to reflect BUA Group’s 87.4% stake in CCNN, a minority stake in the proposed entity is likely to be closer to 11.0% (3.7 billion shares).
Valuation of current CCNN shares. Going by the scheme document, the total value of shares to be issued for the 13.1 billion shares owned by the scheme shareholders (i.e. CCNN shareholders) is N460.0 billion. This implies that the transaction values CCNN at N35.11 per share, compared to its current market price of N16.40 and our FY’19E BVPS of N25.81. The valuation is also at a significant premium to our 12-month target price of N12.97—which does not capture the proposed addition of the 3.0mtpa Kalambaina line 2. Based on the provided proforma, the enlarged entity would have had ROE and ROA of 15.3% and 10.9% respectively in FY’18 compared to 1.7% and 1.6% respectively for CCNN. Although the estimated ROE and ROA of the proposed entity are biased by a N26.8 billion tax credit, they would still have approximated 9.0% and 6.3% respectively.
Other key information.
  1. The enlarged entity would have an 8.0mtpa cement capacity, comprising CCNN’s 2mtpa capacity and Obu’s 6mtpa plant in Okpella, Edo state. This compares to Lafarge Nigeria’s 10.5mtpa installed capacity.
  2. If approved, the merger will see Obu absorb all CCNN’s assets, liabilities, and undertakings
  3. The deal will also lead to the delisting of CCNN from the Nigerian Stock Exchange and listing of the enlarged entity on 8 January 2020
  4. This deal is strictly a share for share transaction. No cash consideration is involved
  5. This transaction is subject to the approval of shareholders and court sanction.

Konga Yakata Kicks Off with Global Singles Day Shopping Fiesta

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Konga Yakata Kicks Off with Global Singles Day Shopping Fiesta

All is set for the commencement of the 2019 edition of Konga Yakata, the much-anticipated Black Africa sales of foremost e-commerce giant, Konga. The massive discount sales kick off on Monday, November 11, 2019; a day which coincides with the globally celebrated Singles Day sales popularized by China’s retail giant, Alibaba.

Equally important, the month-long shopping fiesta will run throughout November and end on Thursday, December 12th, 2019.

Konga Yakata, widely regarded as the biggest sales event in Nigeria’s shopping calendar, starts annually on 11/11. Indeed, the day has become a global shopping festival which has grown steadily to become the largest offline and online shopping day in the world.
Information released by the management of Konga indicates that the company has finalized plans for a bumper Konga Yakata.

“We are ready to deliver the biggest discount sales ever, beginning from Monday, November 11th or 11/11 which also represents the very popular Singles Day sales,” declared Chidalu Ekeh, Head of Marketing at Konga. “Konga Yakata is by far, the biggest discount sale in the annual shopping calendar and this year, we intend to make it even bigger than before.

“We are anticipating a 600% increase in sales recorded in 2018 and this is down to the increased shopping appetite among our customer database, which has grown exponentially. Our retail stores have also grown to cover more locations across Nigeria.

Furthermore, there are more merchants on the Konga platform today, many of whom have increased their product assortment through the soft loans and credit facilities we graciously extended to them,” she disclosed.

On what to expect from the 2019 edition of Konga Yakata, Chidalu affirmed that shoppers are in for a mega sales extravaganza.

“Recall that Singles Day or 11/11 is a globally celebrated shopping fiesta. On Monday which marks the commencement of Konga Yakata, we intend to offer Nigerians a taste of what makes this day so special. Shoppers are guaranteed rock-bottom prices unmatched anywhere else in the market.”

Continuing, she disclosed that: “Konga Yakata is set to feature lots of amazing activities including Flash Sales, Treasure Hunts for the fastest fingers, amazing travel discounts and deals to exotic destinations through Konga Travel, walk-in discounts across all Konga retail stores nationwide and Social Media giveaways.

“Furthermore, there will be a Live sales show on DSTV Channel 369 every Saturday from the 16th of November, until the 7th of December 2019. Most importantly, every Friday throughout Konga Yakata is Black Friday, so you are guaranteed unbeatable prices.”

Among the wide assortment of products across multiple categories on offer will be laptops, desktops and accessories, computing products, mobile phones and tablets, Home & Kitchen appliances, fashion, electronic devices, educational materials, Baby, Kids and Toys as well as Wine, Spirits and other categories, among others.

Meanwhile, Konga has also put in place plans to assure swift delivery and seamless payment throughout the period.

“We have set a target of same-day delivery for the majority of orders we expect to flood in. This is because of the regional warehousing facilities and capabilities we possess and the improved capacity of our in-house logistics arm, Kxpress. In addition, we have rounded off weeks of painstaking work on both our back end and front end to enable us to accommodate the high volume of requests from shoppers from November 11.

“Payments is another area we have brought the Konga efficiency to bear on. Our customers can access a multiplicity of payment options to conclude their payments swiftly. These include through KongaPay, our CBN-licensed e-wallet. Customers can also pay online or via Payment on Delivery (POD) and Pay on Collect.

“From 11/11 till 12/12, you can be rest assured that the place to be is Konga,” she concluded.

Less than half women in world use internet – Report

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Less than half women in world use internet – Report

Over half of women around the world still do not use the internet. The first report in the International Telecommunication Union’s new ‘Measuring digital development’ series estimates that 52 percent of women do not use the internet, compared to 42 percent of all men. More men than women use the internet in every region of the world except the Americas, which has near-parity.

The ITU data show that while the digital gender gap has been shrinking in the Commonwealth of the Independent States and Europe, it is growing in Africa, the Arab states and the Asia-Pacific region. It is widest in developing countries, especially the least developed countries, where on average only a fifth of people are online.

In total, 4.1 billion people use the internet around the world, equal to 53.6 percent of the global population, leaving around 3.6 billion offline. Europe is the region with the highest internet use (82.5%), while Africa is the region with the lowest (28.2%).

Over 9 in 10 can access 3G or better

The report also looks at access to mobile services. The ITU data show that 96 percent of the world population lives within reach of a mobile cellular signal and 93 percent within reach of a 3G or higher network, able to provide internet services.

Of the 85 countries that provided data on mobile phone ownership, 61 had a higher proportion of men with mobile phones than women. Of the 24 remaining countries where there is gender parity in mobile phone ownership, or where more women have mobile phones than men, Chile has the highest digital gender gap in favour of women, at 12 percent.

While mobile networks are available in most places to provide internet access, the ITU found that digital skills remain a barrier to increasing internet use, especially in the least developed countries. In 40 out of 84 countries for which data are available, less than half the population had basic computer skills, such as copying a file or sending an e-mail with an attachment.

ODSG Commits 5Billion Naira To Payment of Pension and Gratuity – Ondo HoS

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ODSG Commits 5Billion Naira To Payment of Pension and Gratuity – Ondo HoS

Ondo State Government has committed about #5 billion to payment of Pension and Gratuity owed retired Public Servants in the state since the year 2011.

This was disclosed by Ondo State Head of Service, Mr Dare Aragbaiye while answering questions from Journalists in his office in Akure, said Retired Officers now receive their pension at the same time the Serving Officers receive their salary, noting that this is a clear departure from the time when Retired Officers were owed pension arrears for months.

According to a press statement signed by the Media Manager, Office of the Head of Service, Williams Oni and made available to THELENZ NEWS in Akure, the Ondo State capital.

Mr Aragbaiye commended Governor Akeredolu for making the payment of salary and allowances of workers a topmost priority been the first expenses to be deducted from the state monthly allocation, adding that the promotion of deserving Public Servants were been conducted earlier than what it used to be during the past administration while letters of promotion and the financial benefits were promptly released to the beneficiaries.

He hinted that the state government has compiled the list of available vacancies across sectors of the Public Service with a view to employing fresh Workers to re-energize the Civil Service for higher productivity and delivery of quality service to the people of the state.

Speaking on the achievements of Governor Akeredolu’s administration in the last two years, Mr Aragbaiye noted that there is a silent industrial revolution going on in the state which focuses on creation of industrial hub in different zones across the state, starting with the Ore Industrial hub in Odigbo Local Government Area of the state where some investors from within and outside the country have sited notable industries that have provided employment opportunities to the unemployed youths in the state.

He added that the Investment Promotion Agency set up by Governor Akeredolu’s administration has continued to attract interested investors to sign Memorandum of Understanding (MOU) with reputable companies for the industrial development of the state.

He further explained that the administration of Governor Akeredolu embarked on a massive renovation of public primary schools across the local government areas of the state within the last two years, stressing that over 700 of such schools have been renovated and equipped with modern infrastructures such as boreholes, furniture, toilet facilities and perimeter fence.

In the health sector, the Head of Service, said the state government had invested huge amount of money on renovation of primary health care centers across the state with a view to providing quality healthcare services to the people in the local communities, procurement and distribution of modern healthcare equipment to government-owned hospitals and health centers while Teaching Hospital had been established to train health workers and boost the manpower needs in the state health sector.

He also commended the Governor for embarking on massive rehabilitation and construction of roads across the three senatorial districts of the state, thereby providing easy movement of both human and material resources from one location to the other, describing the gigantic Ore Inter-Change Fly Over along Benin/Lagos Express Way as a major achievement of his administration.

The HoS therefore called on the people within and outside the Public Service to continue to fulfill their obligations to the state government by promptly paying their taxes and levies in order to cushion the effect of the dwindling allocation from the federation account as well as boost the Internally Generated Revenue of the state to enhance more developmental projects.

BMW Group increases deliveries, revenues and earnings

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BMW Group increases deliveries, revenues and earnings
  • Deliveries and market share up, despite the weak market trend
  • EBIT and free cash flow rise significantly in the third quarter
  • High upfront expenditure for future-oriented technologies
  • Outlook for the financial year 2019 reaffirmed
  • Zipse: “The decisive transformation is taking place inside the vehicle”

Munich. The BMW Group recorded growth in deliveries, revenues and earnings in the third quarter and is therefore well on its way to achieving its targets for 2019. Group net profit increased at a double-digit percentage rate, helped to some extent by a base effect from the previous year’s reported figures. Moreover, profitability has continued to improve over the course of the nine-month period. To compensate for the high upfront expenditure on future-oriented technologies, the BMW Group is working hard on continually improving efficiency.

“At the nine-month stage, we are well on our way to achieving our targets for the year as a whole,” said Oliver Zipse, Chairman of the Board of Management of BMW AG, in Munich on Wednesday. “However, we are looking further into the future, having recognised that far-reaching technological transformation is a great opportunity for the BMW Group. I am convinced that our business model will only benefit from this. The vehicle of the future, with all its integrated digital functions, is a high-tech product of a complexity that is still underestimated.”

The BMW Group sees enormous potential for the future role of the automobile on the back of these technological developments: “The decisive transformation is taking place inside the vehicle. We are bringing technological solutions to the road that ensure the automobile continues to meet the expectations and needs of society going forward. Areas of key focus include digital connectivity and creating environmentally compatible mobility,” said Zipse.

Significant expansion in e-mobility – increase in upfront expenditure

The BMW Group is significantly expanding its range of e-mobility products. By 2023, the company will have 25 electrified models on the roads – more than half of which will be all-electric. The key to implementation is highly flexible vehicle architectures and an equally agile production system that enables a model to be manufactured as an all-electric, a plug-in hybrid or a combustion engine version to ideally meet demand in each relevant market segment. By 2021, demand for electrified vehicles is likely to double compared to 2019. The BMW Group then expects to see a steep growth curve up to 2025, with sales of electrified vehicles growing on average by more than 30% annually.

As a pioneer in e-mobility, the BMW Group is already a leading supplier of electrified vehicles. By the end of 2021, the company aims to have more than a million all-electric or plug-in hybrids on the roads worldwide.

All-electric vehicles planned with increased frequency

At that stage, the BMW Group will offer five all-electric series-built vehicles. Alongside the BMW i3, demand for which has increased by approximately 20% so far this year, November will also see the production of the all-electric MINI* begin at the Oxford plant (UK). Over 78,000 customers have meanwhile expressed a keen interest in the MINI ELECTRIC*. In 2020, production of the all-electric BMW iX3 will begin at the Shenyang plant (China), followed in 2021 by the BMW iNEXT, which will be manufactured at the Dingolfing plant (Germany). The BMW i4 is also due to go into series production at the Munich plant the same year.

In paving the way for the future of mobility, a substantial level of upfront expenditure was again required during the period under report. Research and development expenses for the nine-month period totalled € 4,247 million, 9.4% up on the previous year (€ 3,881 million). The growing proportion of electrified vehicles is also driving up costs. Exchange rate factors and rising prices for raw materials also put downward pressure on earnings. Capital expenditure for property, plant and equipment and other intangible assets during the period from January to September increased by 14.5% to € 3,308 million (2018: € 2,889 million), mainly in connection with continuing the new model initiative as well as the modernisation and flexibilisation of existing plant structures. 

Revenues and net profit significantly up in the third quarter

The BMW Group set a new record for third-quarter deliveries with its highly attractive and rejuvenated model range. In total, 613,361 units of the Group’s BMW, MINI and Rolls-Royce premium brand vehicles were delivered during the three-month period (2018: 592,303; +3.6%). The BMW Brilliance Automotive joint venture in China continued to play a major role in this positive development. Group revenues rose to € 26,667 million (2018: € 24,715 million; +7.9%). Profit before financial result (EBIT) improved by around one third to € 2,289 million (2018: € 1,722 million; +32.9%). In the third quarter of the previous financial year, the performance had been significantly dampened by supply distortions and unexpectedly intense competition due to the changeover to WLTP regulations as well as higher expenditure for goodwill and warranty measures. All of these factors had contributed to a significant decline in profit before financial result in the third quarter, especially in the Automotive segment.

In 2019, third-quarter Group profit before tax (EBT) increased significantly to € 2,248 million (2018: € 1,822 million; +23.4%). The EBT margin came in at 8.4% (2018: 7.4%), while Group net profit improved significantly to € 1,546 million (2018: € 1,387 million; +11.5%).

During the first nine months of 2019, the BMW Group delivered a total of 1,866,198 units to customers (2018: 1,834,810 units; +1.7%). Group revenues increased slightly year-on-year to € 74,844 million (2018: € 72,373 million; +3.4%). Earnings for the nine-month period were impacted by a provision of approximately € 1.4 billion recognised in the first quarter in connection with the Statement of Objections received from the EU Commission relating to ongoing antitrust proceedings. However, the BMW Group has made it clear that if necessary it will contest the EU Commission’s allegations with all the legal means at its disposal. Profit before financial result (EBIT) reported for the nine-month period amounted to € 5,079 million, significantly lower than in the previous year (2018: € 7,168 million; -29.1%). Group profit before tax (EBT) amounted to € 5,063 million (2018: € 7,827 million; -35.3%), corresponding to an EBT margin of 6.8% (2018: 10.8%). The BMW Group reported nine-month Group net profit of € 3,614 million (2018: € 5,745 million; -37.1%).

“The efficiency-boosting measures we have implemented are bearing fruit: we are performing at a high level in comparison with our competitors and considering the difficult conditions our business is facing. Nonetheless, we aspire to achieve more than that,” said Nicolas Peter, Member of the Board of Management of BMW AG, Finance. “Upfront expenditure in the technologies of the future such as e-mobility needs to be financed. That is why we continue to work systematically on those matters that lie in our own hands and maintain a clear focus on performance and efficiency.”

A key aspect of achieving these aims for the BMW Group is to develop even faster digital processes and leaner structures. The Performance > NEXT initiative is expected to generate efficiencies in excess of 12 billion euros by the end of 2022. Among other contributing factors, development times for new vehicle models will be reduced by as much as one third. On the product side, up to 50% of traditional drivetrain variants will be eliminated from 2021 onwards in the transition to creating enhanced flexible vehicle architectures – in favour of additional electrified drivetrains. It is in this area that the full impact of these measures will come into effect particularly in the years after 2022. Moreover, the model portfolio is regularly assessed with a view to finding additional ways of reducing complexity. Potential for greater synergy and efficiency in indirect purchasing as well as in terms of material and production costs is also being leveraged throughout the Group. Furthermore, the BMW Group is strengthening its top-line performance with new models – especially in the high-margin segments. The company aims to double its sales volume in the luxury segment from 2018 to 2020.

EBIT margin improved in the third quarter 

Automotive segment revenues for the three-month period increased to € 23,016 million (2018: € 21,111 million; +9.0%). EBIT was significantly higher than one year earlier at € 1,515 million (2018: € 930 million; +62.9%), corresponding to a third-quarter EBIT margin of 6.6% (2018: 4.4%). Profit before tax amounted to € 1,533 million (2018: € 1,003 million; +52.8%). Free cash flow in the Automotive segment jumped to € 714 million in the third quarter (2018: € 98 million).

At € 64,853 million, nine-month segment revenues were slightly up on the previous year (2018: € 62,629 million; +3.6%). EBIT for the nine-month period from January to September was influenced by the provision (approximately € 1.4 billion) recognised in the first quarter of the financial year 2019 in conjunction with the Statement of Objections received from the EU Commission relating to ongoing antitrust proceedings, and accordingly amounted to € 2,674 million (2018: € 4,730 million; -43.5%). The EBIT margin came in at 4.1% (2018: 7.6%). Profit before tax amounted to € 2,989 million (2018: € 5,346 million; -44.1%).

BMW brand sales increased by 2.2% to 1,601,397 units in the first nine months of the year (2018: 1,566,216 units). During this period, high double-digit growth was recorded in particular by the BMW X3 (+74.0%) and the BMW X4 (+43.4%).

At 261,024 units, sales of the MINI brand in the first nine months were slightly down year-on-year (2018: 265,935 units; -1.8%) within an extremely competitive market environment. Sales figures for the MINI Countryman for the nine-month period went up by 2.6% to 73,344 units (2018: 71,490 units), whereas the MINI Hatch (3 and 5 door models) was slightly down year-on-year at 132,363 units (2018: 133,963 units; -1.2%).

Rolls-Royce continued to grow strongly in sales volume terms, with 3,777 units delivered to customers worldwide in the first nine months of the year (2018: 2,659 units; +42.0%). All regions of the world recorded growth and sustained demand across the entire range of Rolls-Royce model families. Sales of the Wraith, especially the Black Badge variant, developed particularly well during the period under report. Customer demand for the Cullinan remains exceptionally high, as a result of which the order book has grown steeply and now extends well into the first quarter of 2020. Based on this performance, the brand remains firmly on course for a highly successful financial year in 2019.

BMW Group strives for evenly balanced delivery distribution worldwide

The BMW Group remains committed to its strategy of achieving an even distribution of deliveries worldwide, including a well-balanced relationship between production and delivery volumes by region. In this endeavour, the company leverages its highly flexible production and sales structures to even out fluctuating demand between individual regions.

At 809,497 units, delivery numbers in Europe during the nine-month period were similar to the previous year (2018: 816,037 units; -0.8%). In Germany, the region’s largest single market, the BMW Group recorded solid growth, with deliveries up to 239,601 units (2018: 224,933 units; +6.5%).

Deliveries of BMW, MINI and Rolls-Royce brand vehicles in Asia during the first nine months of the year increased to 681,773 units (2018: 638,449 units; + 6.8%). China contributed significantly to this performance, with nine-month deliveries of the Group’s three brands up by 14.5% to a total of 526,824 units (2018: 460.200 units).

In the Americas region, deliveries of 334,785 units between January and September came close to matching the previous year’s level (2018: 336,258 units; ‑0.4%). At 261,278 units, sales volume in the USA was also at a similar level year-on-year (2018: 260,086 units; +0.5%). 

Motorcycles segment reports higher revenues and earnings

BMW Motorrad was able to increase deliveries of its motorcycles and maxi-scooters in the third quarter to 43,744 units (2018: 39,818 units; +9.9%), resulting in a corresponding growth in revenues to € 558 million (2018: € 476 million; +17.2%). EBIT also improved, rising to € 35 million for the three-month period (2018: € 33 million; +6.1%). The third-quarter EBIT margin for the segment came in at 6.3% (2018: 6.9%).

Motorcycle deliveries during the first nine months of 2019 totalled 136,932 units (2018: 126,793 units; +8.0%), generating revenues of € 1,871 million (2018: € 1,658 million; +12.8%). EBIT improved by 8.7% to € 226 million (2018: € 208 million), corresponding to an EBIT margin of 12.1% (2018: 12.5%).

Financial Services segment continues to perform well 

The retail customer contract portfolio under management within the Financial Services segment grew by 3.4% to stand at 5,414,506 contracts as at 30 September 2019 (31 December 2018: 5,235,207 contracts). During the third quarter, 504,217 (2018: 490,347 contracts; +2.8%) new credit financing and lease contracts were signed with retail customers. Revenues grew by 3.5% to € 7,471 million (2018: € 7,219 million). Profit before tax for the three-month period amounted to € 597 million (2018: € 549 million; +8.7%). 

In total, 1,475,504 new contracts were concluded with customers during the nine-month period under report (2018: 1,422,558 contracts; +3.7%). Segment revenues increased to € 21,981 million (2018: € 20,807 million; +5.6%) and profit before tax to € 1,797 million (2018: € 1,705 million; +5.4%). 

The workforce at previous year’s level 

The BMW Group’s workforce comprised 135,524 employees at 30 September 2019 and was therefore at a similar level to the end of the previous financial year (134,682; +0.6%). The BMW Group continues to recruit skilled workers and IT specialists on a selective basis to engage in future-oriented projects such as digitalisation, autonomous driving and electric mobility. By capitalising on natural fluctuation trends, the aim for the year as a whole is to maintain workforce numbers at the previous year’s level. 

BMW Group reaffirms targets for the current financial year

The BMW Group sets itself ambitious targets, even in times of political and economic uncertainty. With its young product portfolio, further rejuvenated with the introduction of new models, the Group intends to remain the world’s leading automotive manufacturer in the premium segment.

The BMW Group is again investing substantially in new technologies and the mobility of the future in 2019. Costs are also being driven up in other areas, including the significantly higher cost of complying with stricter carbon emission legislation. Against this background, rising manufacturing costs are likely to have a dampening effect on earnings. Currency factors and raw materials prices will also have a negative impact. At the same time, the ongoing issue of international trade conflicts remains a source of uncertainty.

Taking all these factors into account, the BMW Group is confident of its ability to achieve volume growth in the Automotive segment, where it is targeting a slight increase in the number of deliveries to customers in 2019. Within a stable business environment, an EBIT margin in the range of 8 to 10% remains the set target for the BMW Group. However, its ability to influence underlying conditions is limited. Excluding the impact of the € 1.4 billion provisions recognised in connection with ongoing antitrust proceedings, the target range for the EBIT margin remains unchanged at 6 to 8%. Since the provision has a negative impact on the EBIT margin, the BMW Group is expecting a margin between 4.5 and 6.5% in the Automotive segment for 2019.

With its rejuvenated model range, the Motorcycles segment is forecast to achieve a solid increase in deliveries to customers. As in 2018, the segment EBIT margin is expected to be within the target range of 8 to 10%. In the Financial Services segment, the BMW Group expects a return on equity at the previous year’s level and thus above the target of 14%.

In addition to the various negative influences described above, the fact that some positive valuation effects recorded in 2018 will not be repeated in 2019 will result in a significant decline in the Group’s financial result. Group profit before tax is therefore also expected to be significantly below the previous year’s level.

Forecasts made for the current year are based on the assumption that worldwide economic and political conditions will not change significantly. However, any deterioration in conditions could have a negative impact on the outlook. The BMW Group will vigorously continue to implement key measures for growth on the one hand and improved performance and efficiency on the other, thereby creating sufficient headroom to enable it to help shape the future and secure its own competitiveness going forward. Its operational and financial strength place the BMW Group in an excellent position to play a key role in shaping the ongoing transformation and enhance its leading role in the automotive industry.

Nestle Nigeria Q3’19: Earnings Bolstered Amid Weaker Consumer Confidence

Brand Spur
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Nestle Nigeria Q3’19: Earnings Bolstered Amid Weaker Consumer Confidence

Nestle Nigeria in its most recently published earnings report recorded earnings of N211.347 billion representing a growth of 4.04% y/y from N203.134 billion.

Segmental analysis indicates that the Food sector continues to drive revenue by contributing N131.804 billion to revenue representing 62% of sales while the beverage sector contributed N79.546 billion to revenue representing 38%. Cost of sales came in softer to bolster gross profit to N96.312 billion representing 11.79% y/y. PBT spiked by 17.6%, consequently PAT settled at N36.841 billion representing 11.24% on the upside.

Furthermore, total equity improved by 12.52% to settle at N56.510 billion. Going further, Nestle declared an interim dividend of N25 per share subject to the approval of shareholders. This represents a dividend yield of 2.05%. Gross margin improved marginal to 45.57%, while net margins prints at 17.43%.

We maintain a HOLD recommendation on NESTLE shares.

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