Nigerian Breweries Plc recorded strong earnings growth in Q2 2022, on the back of effective product pricing and improved product mix. A very strong investment behind brands and strengthened route-to-market strategies also helped to deliver stellar performance.

Revenue grew by 32% YoY to N136.31bn, while gross profit grew by 47% YoY to N56.28bn. By implication, gross margin expanded by 600 basis points to 43% in Q2 2022. The Group’s revenue growth, however, came at a cost. Operating expenses increased significantly by 37% YoY to N45.31bn, with marketing-related costs accounting for 97% of the total increase. The increase in marketing spend reflected the Group’s brand investments.


We raised our valuation for the stock to reflect the higher-than-expected Q2 2022 performance. In our previous report, we stated our less optimism for effective pricing by the Group. However, the actual results in Q2 2022 proved otherwise. Therefore, we forecast a higher revenue level in the subsequent quarters, but we see growth moderating due to expectations that consumers could react to higher prices, especially in the light of persistent erosion of purchasing power amid heightened inflationary pressures.

Please follow the link “Nigerian Breweries H1 2022 – and The Momentum Continues”  to view the whole report.

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