EABL Reports 5% Revenue Growth Thanks to Huge Uptake of Spirits and Beer

The East African Breweries Limited (EABL) has reported 5 percent revenue growth for the year ending June 2018.

The brewer has attributed the increase in revenue to the performance that significantly improved in the second half with net sales going up by 10 percent.

EABL’s spirits net sales increased by 8 percent in the full year, driven by a strong performance of the mainstream spirits portfolio which went up by 23 percent.

Beer increased 4 percent fueled by the growth of bottled beer and partially offset by a decline of Senator keg sales. Innovation delivered good performance – contributing 22 percent to EABL’s net sales – with brands like Serengeti Lite in Tanzania, Tusker Cider in Kenya and Uganda Waragi flavors in Uganda.

Gross margin improved by 4 percent as productivity savings and positive mix more than offset inflation on the cost of sales. EABL continued to invest behind our brands with marketing spend up 19 percent ahead of net sales growth to rejuvenate bottled beer, drive innovation and improve Senator keg’s performance.

Full-year profit from operations was up by 4 percent excluding the impact of provisions made for pending tax claims. In the second half of the year gross margin improved by 1.3 percentage points (ppts) and underlying operating margin by 0.7ppts.

Profit after tax declined by 15 percent as a result of the one-off tax provisions. The overall strong underlying performance with robust cash flow delivery ensured the necessary funding for the higher investment in the period.

EABL Group Managing Director, Andrew Cowan, said: “In the year we have continued to make progress on our performance ambition as we increased investments behind brands, capital expenditure and capability to sustain future growth momentum. In the year, we have spent 13 billion shillings in capital expenditure with 7.8 billion shillings of that being spent on the Kisumu brewery. All these efforts have supported the results with Kenya, Uganda, and Tanzania growing at 1%, 4%, and 41% respectively.”