East Africa Beverages Limited (EABL), parent company to Uganda Breweries Limited, has announced annual performance declines driven by COVID-19 impact that has hugely hit the global economy.
According to the annual performance results announced by EABL, the beer maker recorded a 9% decline in net sales for the financial year ended 30 June 2020, as first half growth of 10% was wiped by a 29% decline in the second half. This decline according to the brewer is attached to the impact of the Covid-19 pandemic which saw containment measures implemented across East Africa from late March 2020 to curb spread of the pandemic.
EABL, which operates in Kenya, Uganda and Tanzania says COVID-19 effect impacted business performance after three consecutive double-digit halves of growth, with profit after tax for the year ending June 2020 declining by 39% to KShs7.02 billion (UGX246 billion) from a year earlier.
EABL Group MD and CEO, Andrew Cowan, said EABL focused on managing working capital tightly in the last quarter, reducing discretionary expenditure and reallocating resources such as advertising and promotion (A&P) spend to new and emerging channels in order to serve our consumers safely
He said: “During this unwelcome pandemic, our top priority has been to safeguard the health and well-being of our people and support our communities, while taking necessary action to protect our business. Across the markets we have tracked changes in consumer behaviour and repurposed our execution plans in trade to continue serving our consumers where safe and possible to do so.”
East African Market Net Sales Highlights
EABL faced its greatest fall in net sales in Kenya by 14% versus prior year. First half growth of 8% was offset by second half decline of 37%, as the partial lockdown from March to June led to closure of bars and restaurants. However Mainstream and value spirits registered 2% growth versus prior year as the category benefitted from a shift of outlet consumption occasions to at-home consumption.
In Uganda, Net Sales declined 5%, as first half growth of 10% was wiped by the impact of a total lockdown from March to June that saw bars and clubs in Uganda closed resulting in a 21% decline in sales in the second half.
Meanwhile, in Tanzania, EABL posted a saving grace as Net Sales Grew 14% versus prior year, as first half growth of 19% slowed down to 10% in the second half as Government restrictions in response to Covid-19 were limited. Double-digit growth in premium and mainstream beer segments and improved spirits performance supported a strong delivery for the financial year.
Anastacia Tshesane to become PwC SA CEOEABL has made a significant contribution through trade and community initiatives across the region. To help East African communities emerge from the effects of the pandemic, EABL has funded provision of hand sanitizers distributed to frontline health workers and vulnerable communities to the tune of Kshs 70 million (UGX2.3 billion). Further, the company donated Kshs 50 million (UGX1.7 billion) to Kenya’s Covid-19 Emergency Fund, bringing the total contribution towards the pandemic to Kshs 120 million (UGX4.1 billion).
In Uganda, UBL donated hospital mattresses, hand-washing stations and fuel to enable frontline health Workers alleviate situation in healthcare centres. And in Tanzania, SBL delivered hygiene awareness programme and donated hand-sanitisers to help combat the spread of the pandemic.
In view of the pandemic’s impact on bar owners across East Africa, EABL is committing KShs500 million (UGX17.1 billion) to support the recovery of on-trade outlets in Nairobi, Kampala and Dar es Salam as part of Diageo’s $100 million ‘Raising the Bar’ global fund which will be used to support the implementation of hygiene measures, provision of practical equipment and provision of free digital support and training to enable outlets transform how consumers will be served when bars reopen.
EABL’s market teams have also put in place robust plans to help the brewer emerge stronger from the COVID-19 crisis once the measures are eased across markets.
‘’We will continue to execute with discipline and invest prudently to ensure we are strongly positioned for a recovery in consumer demand,” Mr. Cowan said.
Company reach
East African Breweries Limited (EABL) is a leading brewer with its headquarters in Kenya founded in 1922 with an exceptional collection of brands across beer and spirits. Although the brewer’s business is concentrated on three core markets of Kenya, Uganda and Tanzania, its products are sold in more than 10 countries across Africa and beyond.
EABL boasts of local jewels and international premium spirits including Tusker, Guinness, Bell Lager, Serengeti Lager, Kenya Cane, Chrome Vodka, Johnnie Walker, Captain Morgan and Smirnoff.
