UAC of Nigeria PLC ($UACN)

Good morning, and good afternoon, ladies and gentlemen. Welcome to UAC of Nigeria PLC Full Year 2025 Results Conference Call. Please note that this call is being recorded. This conference call will be hosted by Fola Aiyesimoju, the Group Managing Director of UAC of Nigeria PLC; and Funke Ijaiya-Oladipo, the Group Finance Director. Following prepared remarks by UAC's management team, there will be an interactive Q&A session. I will now hand the call over to Fola Aiyesimoju. Please go ahead.

Thank you, Cynthia. Good day, and thank you for joining UAC's results call for the 2025 financial year. Funke and I will go through our prepared remarks, after which we will leave ample time for Q&A. Today, we will cover the 2025 operating environment, key initiatives we executed during the year, including the acquisition of CHI, financial performance, our dividend proposal and our outlook for the business. We wouldn't go through each slide verbatim, but we will reference slide numbers, which you can find at the top right of each page for ease of reference. Please turn to Slide 5. UAC is a house of scalable quality brands with a clear emphasis on packaged food and beverages as a core growth pillar. In October 2025, we bolstered our position in this key segment with the acquisition of CHI Limited. This was an important transaction, providing us exposure to large growing markets, quality talent, excellent brands with very strong market positions. CHI is market leader in Nigeria's drinking yogurt space, a Top 2 player in juices, nectars and still drinks, and it's home to iconic brands like Chivita and Hollandia. The business is the #2 player in the Sausage roll category with the SuperBite and Beefie brands, which complements UAC's Gala and Kingsway brands. Our combined Food and Beverage businesses, CHI and UAC Foods, now command meaningful leadership positions across multiple attractive categories with scale and portfolio depth to effectively compete. The acquisition impacted UAC's reported numbers for 2025, with CHI's performance consolidated from the fourth quarter. There were also one-off costs and gains related to the acquisition that were captured in our audited results for the year. In 2025, we reported profit before tax of NGN 16.4 billion, 36% lower than our profit before tax reported in 2024. This was, however, impacted by almost NGN 11 billion in net one-off items related to the acquisition. Stripping this out, underlying profit before tax was NGN 27.3 billion, almost 70% higher than levels recorded in 2024, and is a true reflection of our underlying operating performance. Revenues grew 73% to NGN 340 billion, and this growth reflects 3 months of contributions from CHI plus very strong continued performance from our existing businesses, particularly our package within Beverage and Paints businesses, which performed strongly. Overall, in 2025, it was a year in which we experienced a meaningful increase in scale of our business, and our focus going forward will be to integrate CHI on the UAC's ownership, continue our work to drive margin expansion and accelerate cash generation. And our success in doing so will impact the next chapter of UAC's growth. We will now take you through the operating context and key highlights from the year before handing over to Funke to go through the financials in a bit more detail. Please turn to Slide 7. On this slide, we outlined the macroeconomic backdrop against which we have created in 2025. Overall, this was a year of meaningful improvement relative to 2024. Inflation, which had peaked above 35%, moderated progressively across the year. [ Dinara ] stabilized and actually appreciated, a sharp contrast to the recent severe devaluation we had to navigate. Real GDP growth has continued to strengthen, reaching just above 4% in the fourth quarter, and bond yields trended lower, reflecting an easing monetary environment, which positively benefited our borrowing costs. These are genuine improvements that created a more constructive backdrop for our businesses and at the fruit of difficult reforms enacted by the government. On Slide 18 (sic) [ 8 ], we show the movement in our key input costs. And here, we saw input prices moderating across almost all of the categories we track, maize, soya beans in the agricultural space, resins, titanium dioxide for our paints businesses and flour, vegetable oil, milk, sugar for our packaged food and beverage segment. We also saw petrol prices decline from highs reached in 2024, which positively impacted our distribution expenses. These tailwinds benefited us, and we capture them as is evidenced by the growing -- by the margin expansion you see in our businesses, most notably, food and beverages and paints. On Slide 9, we showed a sharp decline in agricultural commodity prices, which actually created a challenge in our feeds businesses. And the reason for this is in this -- in these businesses, we typically stockpile agricultural raw materials in the fourth quarter of each preceding year to cover a meaningful portion of the succeeding year, and so we entered 2025 with maize and soya bean inventory procured in 2024. You would see on this chart that prices meaningfully declined over the course of the year, which impacted us twofold. One was constant pressure on selling prices as the replacement cost declined. And in the fourth quarter, we had to take a one-off charge to bring current value of agricultural raw material inventory in line with net realizable value, and this was a NGN 4.1 billion charge recorded in the fourth quarter. Next, we'll go over the highlights for 2025, and this starts on Slide 11. On this slide, we touch on the CHI acquisition, and I won't spend too much time here as we had a call to go over this in November last year, and the presentation is on our website. Just a few highlights. CHI, with just under [ NGN 500 billion ] in revenues for the full year 2025, adds meaningful scale to our business. It contributes excellent manufacturing capabilities and bolsters our house of scalable quality brands. We paid a consideration of just over NGN 180 billion for the asset, with total transaction costs of NGN 8.5 billion. And because the initial consideration was denominated in dollars, we hedged, and as the naira appreciated, that hedge cost was just under NGN 7 billion in hedging costs. As mentioned, the net impact of these costs, plus a bargain purchase gain was NGN 11 billion in our 2025 income statement. Work to integrate CHI with UAC's ownership is underway, and the focus here is the governance model, financial controls, technology and people. These are top priorities. And we are fortunate to be implementing these alongside this team we inherited at CHI, and are happy with our progress thus far. Slide 12 covers other initiatives we walked across the group in 2025, and we can summarize these in 4 areas. The first and by far the most important continues to be talent. And here, we continue to work to fill executive roles across the group. I should add that we benefited from prior investments in talent, with certain roles being filled internally. We focused on the leadership development through our UAC Academy, which continues to grow, and through advanced programs in partnership with Oxford University and the Nigerian University of Technology and Management. And we also continue to work on designing incentive schemes to align our employees with long-term value creation. We continue to focus on growth. And here, we deepened our retail footprint, particularly in our paint segment with 136 new stores and retail touch points. And there are product launches in our foods and paint segments to offer the consumer a broader range of offerings. In technology, you may recall that we transitioned to SAP S/4 HANA in 2022. That system was due for an upgrade last year, and we successfully executed an upgrade and now run on a more up-to-date version of the SAP S/4 HANA system with meaningful cost savings in our cloud infrastructure and better data quality across the group. We have also discussed in the past that we have a technology hub that continue to develop and fine-tune proprietary tools used to digitize and automate our core business processes. When talking about the hedging cost, I mentioned that we financed the CHI acquisition initially with the U.S. dollar bridge loan. And we had mentioned in November that the plan was to refinance that loan in naira within a 3-month time frame, which have been sometime in April. And I think Funke and team deserves special commendation for executing this in record time with the naira refinancing done by December of last year. And so the short-term U.S. dollar bridge has been turned out into 7-year naira financing. I will now hand over to Funke to walk us through the financial performance in detail.

Thank you, Fola, and good afternoon, everyone. Please turn to Page 15, which provides an overview of the group's financial performance comparing 2025 results with 2024. UAC Group recorded consolidated revenue of NGN 340 billion in 2025. This was 73% higher than the prior year. When you strip out the one-off acquisition-related costs as well as the bargain purchase gain recognized because of the CHI acquisition, our underlying performance is strong. Underlying operating profit of NGN 33 billion was recorded. This is 73% higher. Our underlying profit before tax was NGN 27 billion, 68% higher. Our reported earnings per share was 362 kobo. However, on an underlying basis, when we adjust for acquisition-related costs, it was 734 kobo, 1.5x higher than the 497 kobo recorded in 2024. We generated free cash flow of NGN 14 billion compared to NGN 2 billion in 2024. That's a sevenfold improvement and reflects the addition of CHI to our group and the cash-generative nature of UAC Group. We recorded a 6.8% return on invested capital. Please turn to Page 16, which shows the revenue contribution per segment. The key factor as you'll see on this slide that impacts the year-on-year comparison is the acquisition of CHI. The 73% increase in revenue from the NGN 197 billion recorded in 2024 to the NGN 340 billion recorded in 2025 reflects the consolidation of CHI's performance from the fourth quarter of the year. Our revenue growth was also supported by strong performance from our Paints business, which grew top line 24% higher year-on-year, and our existing Packaged Food and Beverage business, which was up 28% year-on-year, and that more than offset the sales decline in the Animal Feeds segment. Please turn to Page 17, which shows a summary of the income statement. I've spoken to our top line, so I'll start with the gross profit, which improved 69% year-on-year. Our gross profit margin, however, contracted by 51 basis points to 23%, and this reflects the impact of the inventory write-down in our edible and feeds businesses. We recorded operating expenses of NGN 58 billion. However, underlying operating expenses was roughly NGN 50 billion, 69% higher year-on-year. Again, driven by the inclusion of CHI, so this impacts year-on-year comparison. It's worth highlighting that despite inflationary pressure and the higher absolute value of expenses, our underlying operating expenses to sales ratio improved by over 100 basis points to 14% from 16% in 2024, and this reflects our [Audio Gap] The next line item I will speak of is the net finance cost. We recorded NGN 15.5 billion in 2025, and this reflects the higher borrowing and one-off hedge costs incurred as part of the acquisition of CHI Limited. The share of profit from associated companies was NGN 3.4 billion compared to NGN 723 million in 2024, and this was supported by improved profitability at UPDC Plc and MDS Logistics as well as the sale of non-core property assets at MDS Logistics. Please turn to Page 18, which shows an overview of the group's financial position as at 31st of December 2025. We have roughly NGN 70 billion in net assets. Our net debt increased to NGN 294 billion on account of the inclusion of CHI Limited. Following the acquisition, the group's long-term debt-to-EBITDA ratio is 3.2x. And as part of the value creation plan, we are focused on cash generation and expect leverage to moderate over the medium term. Capital expenditure of NGN 7.3 billion was incurred across the group. This spend is roughly 2% of group revenues and focused on maintenance CapEx, replacing and upgrading assets to support operations. The group cash cycle increased by 5 days to 111 days from 106 days in 2024, reflecting the higher inventory days at CHI Limited. Please turn to Page 19, which shows an overview of the group's net debt profile. The key takeaways are that 54% of the group's debt is short-term in nature, and this is working capital financing, while the balance, 46%, is long-term debt attributable to the addition of CHI Limited to the group. The HoldCo's total debt of NGN 107 billion, which is roughly 30% of the group debt, reflects our group treasury structure, whereby UAC and the holding company raises debt centrally and on the subsidiary companies. And this is part of our strategy to optimize our finance costs as it gives us flexibility to access a broader range of sources. At the end of 2025, our weighted average cost of borrowing was 16.3%, which is below the monetary policy rate, and we're able to achieve it because UAC carries an investment-grade credit profile. We are A and A-rated by DataPro and Agusto, which gives us access to the capital market at competitive rates. And in 2025, UAC issued commercial papers as well as a 7-year callable bond to refinance debt, and this is in line with our focus on securing the best possible priced financing. This is the end of the financial highlights. So I will now hand the call back to Fola to take us through the next section of the presentation.

Thank you, Funke. And please turn to Slide 21. Here, we set out our plans for the current year. Our priorities are clear. The first being to continue to focus on integrating CHI under UAC ownership. The second being to continue our journey of improving our margins and finally, ensuring that we convert profitability to cash. The work to integrate CHI with operating model, as I mentioned, is underway, and we're quite pleased with progress. Around the governance, the controls, the deployment of our technology tools and ensuring that we have the right people in the right roles of a detailed road map, and we're executing against this. We are benefiting from the improved scale of the business along -- across procurement, manufacturing efficiency and spreading our overheads across a much larger revenue base. And we think that these are going to support improvement in overall profitability and margin profile. One of our core focus areas and value creation levers is capital allocation. And then we aim to utilize this focus on enhancing our cash generation via working capital optimization, being very disciplined and rigorous in capital expenditure assessment, and continue to seek financing at the most effective possible terms and importantly, divesting non-core assets. And then in addition to generating capital from divesting non-core assets is also frees up meaningful government and management bandwidth to focus on our core. We made good progress in 2025 with free cash flow going from NGN 2.1 billion in the preceding year to just about NGN 14 billion. And for the full year 2025, we plan to continue this trajectory in 2026. The Board of UAC has proposed a dividend of NGN 1 per share, which we put to shareholders at our Annual General Meeting in June. The qualification date for that dividend is on the 11th of June, and subject to shareholder approval, will be paid the day after the AGM on the 26th of June. This brings us to the end of the prepared remarks. I'll just touch briefly though, on the external environment. And it is dynamic. We had a strong beneficial year in 2025 with tailwinds, which the conditions were on balance more supportive than in 2024. We went into 2026 cautiously optimistic about continued improvement with inflation moderating, the currency being stable, and there have been growth momentum. However, we have been watching the developments in the Middle East carefully, and we have begun to see headwinds creeping into the environment, with elevated shipping costs, rising prices of certain imported raw materials and delays in shipping times. So we're monitoring this very, very closely, actively managing our procurement and in certain instances, seeking avenues to sort of lock in prices and hedge to mitigate against this risk. It's an area we'll continue to focus on over the course of the year and work very hard and do our best to ensure that we navigate these challenges effectively. Overall, we feel that we're a stronger, larger and better positioned business than we were 12 months ago. We feel we have strong foundations in brands, people and technology, and this gives us confidence as we navigate the current environment. So thank you, and we'll now take questions.

It is now time for the Q&A session. [Operator Instructions] Your first question is from [ Olaso Kome ] from Leadway Asset Management. He wrote, can management provide more detail on performance across key business segments and which segments contributed most to revenue growth versus margin pressure? He also asks, following the CHI Limited acquisition, what are the key integration risks and expected synergies? And when should investors begin to see benefits reflected in earnings? Lastly, the company proposed a dividend of NGN 1 per share, significantly higher than prior year despite a decline in earnings. Can management explain the rationale behind this increase and how it aligns with earnings and cash flow?

Thank you, [ Olaso Kome ]. I think I jotted down 3 questions. One was segmental contribution; second, integration and risk; and the third was our thinking around dividends. On Slide 27, we, I think, break down our performance by segment, and you would see that the big drivers of the group's performance were Packaged Food and Beverage and Paints businesses. So those are the big drivers of revenue and margin. And our Feeds businesses, which is the other meaningful sized part of our business, struggled on account of the sharp decline in agricultural raw material price -- of agricultural raw material inputs. So we have that outlined on Slide 27, but just to recap Packaged Food and Beverage and Paints, which contribute probably 70%, 80% of revenues and maybe 90% of profitability were the key drivers of our business last year. Integration risk, we're now 6 months into our ownership of CHI, and I would say it's been hard work, but we've been supported by a strong team we inherited at CHI. And I'd say we're quite pleased with where we are. If I was going to flag one thing that I would say is -- remains a big risk is that CHI operates on a Microsoft ERP system. The rest of our group is on SAP S/4 HANA, and we're going to have to harmonize this platform. We've done it before, now twice, and it went very well, but it's not an initiative to be underestimated. So it's one that we're going to approach with then great care and consideration. As regards to dividend, those who followed us for a while know that we try to maintain a fixed dividend, which was 22 kobo in recent times -- we change. And the most recent change was a reduction. For those again who remember, as we built our capital base, which led us to a position where we made this acquisition. We have assessed where things are. We've assessed our view of the future. We feel that the current level propose is one that fits well with our plans. And although the profitability decline, as I mentioned, the underlying profit increased quite meaningfully when you strip out the one-off costs related to the acquisition.

[Operator Instructions] Your next question is from Uthman.

Fola, so I have 2 questions for you. The first question is regarding the revenue that was presented. Last year in November, we had a meeting, and it was poised that we were expecting at least NGN 400 billion from the CHI acquisition. But I've seen for the 2025 what it said, we got about NGN 127 million thereabout from CHI. So could you please just explain what happened? Or maybe I didn't -- just provide some clarity regarding that. And then with regards to the dividend policy, is it safe to assume that the NGN 1 per share is the new dividend floor for the company? Or should we expect any variability in the future?

Thank you very much, Uthman. I think -- I'll clarify the revenue point. So yes, we indicated -- I think you are right, about NGN 400-or-so billion revenues from CHI. The company actually did much better and delivered revenues of about NGN 500 billion for the full year. But only the fourth quarter was consolidated. So what you see is one quarter of the full year performance, and 2026 is going to be the first year in which CHI's 4 revenues and operations are consolidated for a full year with the rest of UAC Group. So I hope that clarifies that. So full year numbers for CHI last year were just under NGN 500 billion, but what we've consolidated is just a quarter. Our dividend approach has not changed in that we will maintain a number until we change that number. So yes, there should be no expectation of variability, unless something changes. What changed the last time our dividend numbers changed were preserving capital, that allowed us to make this big acquisition. Where we are now is that we felt we could release some of that capital, given where we see things currently. And if something changes, we'll communicate again to the market. But this is -- this represents our view as of now.

[Operator Instructions] Your next question is from [ Guchi ].

Fola, I actually listening to your presentation, and you talked about one-off payment. Now going forward in 2026, is there any way this one-off payment could affect the financial statement in 2026?

[ Guchi, ] short answer is no. The one-off costs were related to the acquisition of CHI. So that's done, dusted. That deal was done in October of last year. So there is no way that those numbers will affect our financials for this year. So I think I said 2026, that was done in 2025 October. So there's no way those things would affect performance for 2026.

Your next question is from Uthman.

Fola, so I just wanted to ask again, with regards to the Paints segment this time, could you provide any kind of update with regards to the penetration in West Africa and the niche segment that you guys plan to operate in as well? Is there any update in terms of market penetration and then revenue generation as well?

I think a very timely question. So we set out to do, I think, 3 things, maybe 4 with the Paint segment. The first, you may recall was, I think what you call niche was deepening our product offering. We were extremely strong in the premium decorative space, and we wanted to deepen our offering in the mid-tier and also in the marine and protective. So we've launched, together with Akzo Nobel in new range called Spruce, and we launched that late last year into this year. And early reaction has been very strong, and we're quite excited about the potential for this space because it opens up an entirely new segment to us that is at least as big as the segment in which we are very, very strong. So that's one. The second is that to deepen our presence in the marine and protective, we've now opened 2 points of presence in the south, south of the country, in the oil and gas region, and we expect to benefit from the reform and growth we're seeing in the oil and gas sector. The third was our desire to expand regionally. We have opened presence in Cameroon, but we concluded that the price of securing a meaningful position in the mid-tier and frankly, value segments of Nigeria was far greater than anything we would get regionally. So we have -- it received a lot less priority than the 2 other initiatives that I've alluded to. And then we also rolled out a meaningful -- of additional retail points of presence, about 160 in total, have about 50 of which were dedicated to our brands and the rest are sort of multi-brand retail business. So I would say, 4 different things that we implemented in the paint space that we expect to drive meaningful growth going forward.

Your next question is from [ Williams ].

All right. My first question is relating to your comments regarding divesting non-core assets. I just wanted to get a color in terms of how you're looking at it. Are you looking at it from fixed assets, from perhaps CHI or any of the legacy US businesses? Or are you looking at business segment? My second question is on the QSR business segment. That business segment has struggled for a while. How are you thinking about that business segment going forward? And then my third question is on the launch -- on your last call, you did mention that a bigger pack of Gala was launched. I can't remember -- call perhaps [indiscernible] there's a popular name, but I consciously try to look for it on the street, and I don't think it's out there. Perhaps just to give an update in terms of the market penetration for that product?

Thank you. So I have 3 questions, and one was just color on our non-core asset sales, thoughts around QSR and Gala [ odugu ]. So just to address, by non-core asset sales, we mean both fixed assets and business segments, so both, not one or the other. But selling up from CHI, from CHI, we actually see -- we are assessing the need for further investment in capacity. It's going very, very, very fast. And the way we think about this is the first one is return on invested capital. So where an asset is not generating sufficient return on investment capital with that asset, and we've done quite a lot of non-core estate divestments over time because the returns on those assets were low single digits. The second is, we periodically would assess the potential for an asset relative to the overall scale of the group, unless we -- does it have the potential to move the needle of the group. So I'd say those are the 2 lenses through which we would look at asset. I'm sorry, for the fixed assets, we also think about future need. So whilst we may not -- whilst we have a currently low generating asset, say, a piece of land, we think that it's strategically located and will be -- could be the future site of a factory, we'll keep that kind of asset, but where do we need those tests, we divest. Similarly, for our portfolio, we have said repeatedly that we think any one of the segments UAC is exposed to either as a controlling or minority shareholders, a very, very attractive segment. But we have sought to allocate our time and capital to ensure we get the maximum return. And so we divested out of logistics a few years ago, out of real estate few years ago, combined our paint business, and then the online assessment of the portfolio to ensure that we're maximizing our talent and capital on the highest opportunity where we can win is something that we'll continue to do. QSR has struggled and frankly, did a bit worse in 2025 than it did in 2024. But quite a talented team was -- started with the business in January of last year, and we have seen meaningful progress to the underline of the business, which we expect to continue over the course of this year. It's fair to acknowledge that it's quite a small contributor to the group. I think last year, it did revenues of about NGN 2.5 billion in a group that recorded NGN 340 billion, and that delta will be bigger this year. So it's one that we're going to continue to think through how do we support this talented management team in a framework that ensures that a business that is not as big as its sister companies has the best opportunity to drive. And Gala [ odugu ], this is one that we should -- it's doing very well actually. When we launch a new product, one of the health markets we check is can this thing get to 5% of total segment sales. They short-pass that very, very quickly. So happy to chat with you offline about the challenges you found with availability. But from what -- where we see, it's doing well financially, but happy to chat offline about the challenges you found with availability of this product.

You have some questions in the chat box. The first is from Oluwakemi of CardinalStone. All right. The current working capital for the group seems really high. Have there any strategies to lower it? Secondly, would there be any CapEx plan we would expect in full year 2026? Thirdly, the U.S.-Iran war, how much does it affect your input costs? And lastly, should we see new products or any new innovations in the pipeline that should come out this year?

Very clear. Thank you, Oluwakemi, for the questions. First thing I would say is that the working capital balances you see, as you know, are spot. So the working capital balances have been a snapshot as of the 31st of December, whereas the revenue numbers that you see or the -- would be UAC, 12 months; CHI, 3 months. So again, as we begin to see a fully -- a full annual consolidation of CHI, those numbers would make a lot more sense and to you. So we're not comparing apples with apples in this particular case. That said, you may recall that one of the things we have focused on doing and have been quite successful at as the UAC Group is making sure that we have the optimal level of working capital. So whilst we think the working capital balances although they're much bigger, on account of a group that has increased almost 3x in size. Part of our core job is making sure that those levels are optimal, so we unlock capital. As regards CapEx, we constantly spend to -- on maintenance and the capacity expansions and small capacity expansions, but nothing noteworthy, nothing -- I would say nothing -- nothing but a historical trend for the business. And U.S.-Iran, the challenges in the Middle East, we've seen small pricing so far, 2%, 3% here. We've seen diesel prices almost doubled in Nigeria. And I'll say, perhaps most concerningly, is we've seen our planning be impacted. So an item should have been shipped to Nigeria with estimated 2-week sailing time, we're now seeing those extend meaningfully. We've mapped every single SKU and every single location that is impacted. We have, in certain instances, identified alternative supply and shipping routes that are not affected by the Strait of Hormuz and have begun to implement those plans. But yes, we've seen those headwinds begin to come through. We're, I guess, constantly looking for ways to innovate. So there are small innovations in ice cream business, there are innovations in our paint business and CHI, we're also looking at innovation. So yes, we are constantly looking to -- to look for ways to provide a broader range of product offer to our customers.

Your next question is from Shruti Patel. All right. Thank you for this call and the clarity provided. This management team has taken UAC further than probably anyone on this call imagined possible. Congratulations. What's your vision for UAC post-CHI? And what is the North Star that will consistently guides your journey?

Shruti, thank you very much. You're very kind. You've been a supporter and pusher of us every step of the way. So thank you for driving and inspiring us. I will start with the North Star. I think my colleagues and I have a purpose. Our purpose is to see whether we can use the work we're doing to build an example of excellence and prosperity out of this country underpinned by integrity. So that's the North Star, and it reflects itself whether it's in juice, in sausage rolls or in bucket of paint. We want to see if we can create an example of excellence and prosperity underpinned by integrity. And by prosperity, we mean shared prosperity. So we pay a lot of attention to the welfare and benefits of everyone from the most generous staff and, of course, to our shareholders. Near-term for the group post-CHI is, I think crystal clear to us, we are -- we have to -- we had a value creation plan for this asset. So we need to work very, very hard on delivering on that value creation plan. We have -- we are off to a good start, but there's still a lot of work to do. So that's crystal clear to us. We have additional work to do to simplify the group, which would unlock capital and streamline management focus. We have interesting growth levers for our existing businesses. And should we succeed in those 3 steps, we would, I guess, take -- look up again and see what next. But we think our hands are going to be quite full over the next sort of 12 to 24 months.

Your next question is from Segun from CSL Stockbrokers. All right. Towards the end of the presentation, you mentioned current headwinds being spotted with regards to the war in the Middle East and how it is currently impacting shipping costs and delays in your supplies. Can you please give insights to which segments of your business that's currently impacted most by this? And so what extent is this expected to affect bottom line in the coming quarters? Secondly, regarding the divestment you mentioned, is it safe to assume that this might be mainly in the QSR segments as a segment has -- as a segment have largely underperformed in recent times?

Okay. So I would say in terms of the impact of the challenges in the Middle East, I would split them into maybe 2, which is planning and delivery of imported materials, and those will be largely in the packaged food and beverage and the paints space. And the second will be inflationary, and that will be across the board. If diesel prices double, that affects all our businesses. So that -- those are the 2 buckets I'll split them in. Will it affect our performance in the next few quarters? Yes. Well, maybe not in the way you see because what we're doing is we're adjusting. So we see -- we anticipate the headwind that we adjust. So what we are doing is adjusting to ensure that we're not negatively impacted by these headwinds that we see. In terms of possible portfolio realignment and exits, all I can say is our framework and to stress that it's not an event. It's something that I think we've done consistently over the last sort of 5 years, including acquiring. You may also recall that we bought out our partners in our food business to own 100%, and we've discussed an acquisition. So it's something that is part of our core sort of management process at UAC. And as soon as we reach a conclusion on the topic, we will for sure to communicate that to you, our investors.

Your next question is from Onome from [ Greenticker ] who asks, there's a bit of overlap in some CHI and UAC brands in the sausage roll segments. Any plans to pause some of them?

Short answer and long answer is a resounding no. We think we're very fortunate to have amazing brands in the snack space, and the respective teams have deep pride in their products and they compete. And I think the benefit of that is that the consumer wins. So we're very, very happy with our positions in that segment.

Your next question is from Kemi from CardinalStone who asks, with CHI's acquisition, what's the amount of foreign imports to [indiscernible]?

I would have to do a very rough math, but CHI has a meaningful degree of exposure to foreign imports, I would say, north of 75%, maybe 80%. And again, we need to slice this actually because there is the upstream import and -- so we import directly equipment, laminates for packaging and milk powder and concentrate with the direct import. So let's call that 50%, 60%. And then there's also the indirect imports. So things like flour and refined sugar, for which the upstream materials been raw wheat and raw sugar are imported. CAP also, with titanium dioxide, calcium carbonate and resins also has meaningful high import, I would say, again, 75%, 80%. And then the Feeds businesses, where the biggest input there will be maize and soya would be the ones that have the biggest domestic. So the numbers by segment are not clear to me, what it comes to on a consolidated basis, we can share with you off-line. But it will be packaged, it will be CHI and Paints, 75%, 80%, UAC Foods roughly 50%-50%, and the Animal Feeds and edibles more than 75% will be domestic.

Your next question is from Isaac Osaro. He asks, post acquisition, what are your projections for revenue in full year 2026?

I think we -- for those who followed us well, while we unfortunately don't give forward guidance, good news is that in about 3 weeks, we'll publish our Q1 numbers, which would have a full consolidation of CHI and would give a sense of our steady state. And for -- correct me if I'm wrong, there are no one-offs or exception was in that. So I would say, please just be patient with us and look out for the Q1 numbers.

Your next question is from Uthman. He asks, also riding on the projection for -- of revenue for full year 2026, considering it's an election year, what is the trend regarding demand you've witnessed in the past election years? Does it have significant impacts on the revenue?

Uthman, it's a very difficult question to answer because -- I guess, fortunately or unfortunately, in an election year, there's not only one thing happening, if that makes any sense. So in the most recent election year, Nigeria was going through extremely difficult macroeconomic conditions. So whether the market was slow because of the elections or the macro with inflation, multiple exchange rates and so on, we don't know. But going into this year, we're seeing tailwinds. I mean, let's ignore the last few weeks, with what we've seen with the challenges in the Middle East, we're seeing a stronger consumer. We're seeing strong demand. But whether that's on account of an election or because GDP has gone from sort of 2% to north of 4%, inflation from 35% to about 15%, is difficult to isolate. So we're happy with market conditions, but I think it's very, very difficult to isolate exactly what is election versus broader macro conditions in any particular election year.

[Operator Instructions] There are no more questions. I will now hand the call back to Fola Aiyesimoju for his closing remarks. Before that, there is one question that just came in from Charles of [ Kari ] Assets. He asks, given your diversified structure, are there any plans to restructure or spin off any need units to unlock shareholder value?

Thank you, Charles. I will maybe point you -- I'll point you to -- just trying to find the slides, if Cynthia can move that to Slide 14. So Charles, look, we don't view ourselves as diversified. We view ourselves as just a business with scalable quality brands. And if you look at the way we shape the business, we exited our logistics business because it doesn't fit with the house of scalable quality brands into real estate. Now even within this house of scalable quality brands, as I've mentioned, where things don't have the potential to move the needle or do not generate returns that are in line with our expectations, we may exit them. And crucially, this is part of our ongoing work. It's not an event. And when we reach conclusions, we take action and communicate to the market.

There are no more questions. I will now hand the call back to Fola Aiyesimoju for his closing remarks.

Thank you, Cynthia, and thank you, everyone, for participating in our results presentation, and we appreciate your continued support, and I wish everyone a wonderful rest of the day. Thank you.

That concludes the UAC of Nigeria PLC Full Year 2025 Results Conference Call. Thank you for your participation. You may now hang up.