Despite splashing the cash on brand ambassadors like Burna Boy and spending billions on events and advertisement, Nigeria Breweries Plc is still finding it extremely difficult to get younger Nigerians to embrace its 21 flagship brands as seen in its financial report for 2019
Revenue has grown by over N100 billion since 2013 but it has come at a significant cost to the business. Last year (2019), the company reported that it had spent about N77.6 billion on marketing and distribution expenses, a whopping 24 per cent of revenue.
It spent 19.5 per cent of revenue on marketing and distribution expenses in 2016 and 15.9 per cent in 2013, its year of profits. Marketing and distribution expenses have almost doubled from N42.9bilion to N77.6 billion in 6 years.
About seven years ago, the firm was at the top, reporting a profit after tax of N43 billion and a return on equity of 41.9 per cent. That year, Nigeria Breweries also reported revenues of N268.6 billion and paid over N34 billion in dividends. Also, it had just N9 billion in external debts in 2013.
These days, however, the story is somewhat underwhelming and every year it gets worse. In 2019, the brewery giant reported a profit after tax of N16 billion from revenue of about N323 billion only. Return on equity is 11.54 per cent while dividends are just about N18 billion. It now has about N55 billion in total external debts in 2019.
The parent company with 55.9 per cent ownership of the company will get about N10 billion out of the dividend of N18 billion. In addition, it earns royalties and technical fees of N7.2 billion or 2.2 per cent of revenues but 45 per cent of profits as royalty and technical fees.
