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  • East African Breweries Limited

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    East African Breweries Limited - SWOT Profile Page 1

    East African Breweries Limited: SWOT

    Analysis & Company Profile

    Reference code: BRCP186CP10-Q4

    Published: Oct 2010

    Business Review

    John Carpenter House

    7 Carmelite Street

    London EC4Y 0BS

    United Kingdom

    Tel: +44 (0) 20 7936 6400

    Fax: +44 (0) 20 7336 6813

  • East African Breweries Limited

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    East African Breweries Limited - SWOT Profile Page 2

    East African Breweries Limited - Company Overview

    East African Breweries Limited (EABL) is one of East Africa’s leading branded alcohol manufacturing companies. It is a holding company engaged in the brewing/ manufacturing, marketing and selling of drinks, glass containers, malt and barley through its subsidiaries. The product portfolio of the company includes beer, spirits and non-alcoholic beverages. EABL offers beer under Tusker, Guinness, Tusker Malt, Pilsner, White Cap, Allsopps, and Bell brand names; spirits under Johnnie Walker, Smirnoff, Richot, Bond 7, and Waragi brands; and non-alcoholic drinks under Malta Guinness and Alvaro brands. The company exports its products to Burundi, Rwanda, Tanzania, Southern Sudan, Uganda, Eastern DRC Congo, Eritrea, Djibouti, Ethiopia, Mauritius, Malawi and Seychelles. It also exports its products to outside Africa, which include the US, Japan, Australia, Canada and the UK. EABL is a subsidiary of Diageo plc. The company is headquartered in Nairobi, Kenya.

    Financial Performance The company reported revenues of KES 37,965.33 million during the fiscal year ended June 2010. Its revenues grew at a compound annual growth rate (CAGR) of 3.97%, during the period, 2008-2010, and year-on-year (Y-o-Y) growth of 10.34% over the fiscal year 2009. During the fiscal year 2009, its operating margin was 33.10% as against an operating margin of 33.44% during the fiscal year 2008. Moreover, during the fiscal year 2009, the company’s net profit margin was 18.91% as against a net profit margin of 20.01% during the fiscal year 2008.

    East African Breweries Limited - Key Facts

    East African Breweries Limited, Key Facts

    Corporate Address:

    Coporate Centre, Nairobi, , ,

    Kenya

    Ticker Symbol, Stock Exchange

    EABL (Nairobi Stock Exchange)

    Telephone + 254 8644000 No. of Employees N/A

    Fax + 254 8563054 Financial Year End June

    URL www.eabl.com Revenue (in KES Million) 37,965.33

    Industry Consumer Packaged Goods Revenue (in USD Million) 474.86

    Locations Australia, Japan, United Kingdom, Kenya, Canada, United States

    Source: Annual Report, Company Website, Primary and Secondary Research

  • East African Breweries Limited

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    East African Breweries Limited - SWOT Profile Page 3

    East African Breweries Limited - Business Description

    East African Breweries Limited (EABL) operates as a subsidiary of Diageo plc. Diageo Kenya Limited holds 42.82% stake in the company while Diageo Holdings Netherlands B.V. holds another 4.60% stake. The company, along with its subsidiaries, is engaged in brewing, manufacturing, and marketing of branded alcoholic and non-alcoholic beverages. It employs 1,188 people. The company is one of the leading alcoholic beverage companies in Eastern Africa. Along with its breweries and distilleries, the company manufactures beers and spirits. The spirits category includes vodka, whisky, brandy and triple refined spirits. The company also manufactures non-alcoholic drinks. EABL markets its products under various brands, which include Tusker, Pilsner, White Cap, Allsopps, Senator Keg, Bell Lager and Guiness in the beer category. Under the Tusker brand, the company offers Tusker Lager and Tusker Malt Lager. Tusker Lager is one of the biggest brands in Kenya. The other markets in which Tusker is promoted include Tanzania, Canada, Japan, the UK and the US. Tusker Malt Lager brand is promoted as premium malt in Kenya while Pilsner brand of beer is positioned with emotional elements that show masculinity and authority. This brand is promoted in Kenya, Tanzania, Congo, Uganda, Sudan and Rwanda. The White Cap brand is targeted for the people in the age group of 28 to 45 years and positioned for dominant males and high ranking professionals in Kenya. Senator branded barley beer is targeted at accessible pricing markets and is promoted in Kenya. The Bell Lager brand is brewed at Uganda Breweries Ltd. It is positioned for urban males and marketed in Uganda, Rwanda, Congo, Sudan and the UK. The spirits category brands of the company include Johnnie Walker, Smirnoff, Richot, Bond 7 and Waragi. Johnnie Walker is a whiskey brand while Smirnoff is a premium vodka brand and Richot is a blended brandy. Waragi is a leading spirit brand in Uganda and is positioned for occasions with friends. The brand is promoted in Uganda, Rwanda, Congo, Sudan and the UK. In the non alcoholic category, the company manufactures malt based drinks. It promotes two brands in this category, namely, Malta Guinness and Alvaro. Malta Guinness drink is positioned for busy and active customer group. This brand is promoted in Cameroon, Nigeria, Ghana, Kenya and Tanzania. Alvaro is positioned for sophisticated broad minded adults. This brand is promoted in Kenyan markets. EABL distributes its products across Kenya through local distributors. It also exports these products to Tanzania, Djibouti, Uganda, Rwanda, Burundi, Southern Sudan, Ethiopia, Eastern DRC Congo, Eritrea, Malawi, Mauritius and Seychelles. In addition, it exports its products to outside Africa, which include Australia, Canada, Japan, the UK and the US. The operations are carried out through its subsidiaries such as Kenya Breweries, Uganda Breweries, International Distillers Uganda, East African Maltings, Central Glass Industries, EABLI, EABL Tanzania Limited and UDV Kenya. Geographically, the company operates in three segments, namely, Kenya, Uganda and Tanzania. During the fiscal year ended June 2010, the company generated 80.32% of its total net sales from Kenya, 17.78% from Uganda and 1.9% from Tanzania. Recently, the Tanzanian Fair Competition Commission approved the acquisition of a majority interest in Serengeti Breweries Limited (SBL) by EABL. SBL is Tanzania's second largest brewer and the producer of the Premium Serengeti Lager. In addition, EABL through its subsidiary, East African Maltings Ltd (EAML) started purchasing sorghum grown in various semi-arid areas across the country with a major focus in Eastern Province as part of its ongoing strategy to manufacture alcoholic beverages by using locally grown raw materials and developing technologies. Further, the company also opened a new Brew House and Bottling Line at Tusker Brewery, Nairobi.

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    East African Breweries Limited - SWOT Profile Page 4

    East African Breweries Limited - Major Products and Services

    East African Breweries Limited is one of the leading manufacturers of branded alcohol beverages in East Africa withan outstanding collection of beer and spirit brands. Its products include the following:

    East African Breweries Limited, Major Products and Services

    Products:

    Alcoholic Products:

    Beer

    Spirits

    Non-Alcoholic Products:

    Malt Based Drinks

    Brands:

    Beer Brands:

    Tusker

    Tusker Malt

    Pilsner

    White Cap

    Bell

    Allsopps

    Guinness

    Non-Alcoholic Drink Brands:

    Malt Guinness

    ALVARO

    Spirit Brands:

    Johnnie Walker

    Smirnoff

    Richot

    Bond 7

    Waragi

    V & A

    Source: Annual Report, Company Website, Primary and Secondary Research

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    East African Breweries Limited - SWOT Profile Page 5

    East African Breweries Limited - History

    East African Breweries Limited, History

    Year Event type Description

    2009

    New Products/Services

    The company launched a new bottle for its premium beer brand, Tusker Malt Lager.

    2009

    Contracts/Agreements

    The company and Diageo entered into a partnership with Serengeti Breweries Limited (SBL). Under which SBL took over the distributorship of all EABL/Diageo spirits brands in Tanzania.

    2008

    Contracts/Agreements

    The company signed Vehicle Lease Agreement with leading local motor