Q3 Result 2025  – Strong Turnaround and Margin Recovery Anchored by Improved Cost Efficiency and Volume Growth

Executive Summary

International Breweries Plc delivered a remarkable turnaround in its financial performance for the nine months ended September 30, 2025, returning to profitability after consecutive loss-making periods. The brewer reported a Profit Before Tax (PBT) of ₦74.2 billion, compared to a loss before tax of ₦154.6 billion in the corresponding period of 2024, marking a dramatic improvement driven by stronger revenue growth, improved operational efficiency, and disciplined cost control. Revenue for the nine-month period grew by 37.6% year-on-year to ₦472.6 billion, reflecting improved pricing, higher sales volumes, and enhanced product mix. Cost of sales rose modestly by 25%, resulting in a 69.7% jump in gross profit to ₦160.9 billion. With total expenses and finance costs better managed, the company achieved a Profit After Tax (PAT) of ₦57.8 billion, compared to a loss of ₦112.8 billion in 9M 2024 — underscoring a full operational recovery and a return to sustainable profitability.

Financial Highlights

₦’000 Q3 2025 Q3 2024 % Δ YoY 9M 2025 9M 2024 % Δ YoY

Revenue 131,576,027 120,246,672 +9% 472,566,248 343,445,599 +38%

Cost of Sales (92,232,475) (87,992,999) +5% (311,644,952) (248,579,621) +25%

Gross Profit 39,343,553 32,253,673 +22% 160,921,296 94,865,978 +70%

Operating Expenses (32,821,800) (24,505,115) +34% (92,091,703) (72,681,495) +27%

Other Income / (Expense) 4,424,868 (13,578,699) +133% (1,783,954) (147,584,735) +99%

Finance Income 3,954,118 5,292,187 -25% 13,328,708 7,947,190 +68%

Finance Cost (2,227,681) (3,761,684) -41% (6,129,816) (37,098,061) -83%

Net Finance Income / (Cost) 1,726,436 1,530,503 +13% 7,198,892 (29,150,871) +125%

Profit / (Loss) Before Tax 12,686,275 (4,318,009) +394% 74,213,446 (154,552,767) +148%

Profit / (Loss) After Tax 16,537,568 (6,031,702) +374% 57,825,307 (112,814,810) +151%

EPS (₦) 0.10 (0.04) +350% 0.34 (0.67) +151%

Revenue Growth

Revenue for the period grew by 38% YoY to ₦472.6 billion, reflecting a recovery in consumer demand and stronger market penetration following aggressive brand repositioning and distribution efficiency. The 9% quarterly growth in Q3 2025 demonstrates sustained volume momentum, aided by improved affordability of select SKUs, enhanced trade execution, and the rollout of targeted promotional campaigns.

The Company’s diverse product portfolio — spanning beer, malt, and soft drinks — continued to deliver volume gains, with premium brands outperforming the value segment amid Nigeria’s evolving consumer preferences. Despite inflationary pressures, the brewer’s ability to pass on moderate price increases without losing volume underscores robust brand loyalty and competitive pricing advantage.

Profitability and Margins

• Gross Profit Margin improved to 34.1% in 9M 2025 from 27.6% in 9M 2024, buoyed by better raw material sourcing, local input substitution, and energy efficiency initiatives.
• Operating Expenses rose by 27% YoY due to inflation and marketing investments; however, the increase was well below the revenue growth rate, reflecting strong cost discipline.
• Operating Profit surged to ₦67.0 billion from a loss of ₦125.4 billion in the prior year period, driven by volume expansion, operational efficiency, and cost optimization.
• The Company also benefited from a significant reduction in finance costs (-83% YoY) to ₦6.1 billion, following debt restructuring and improved cash management.
• Consequently, PBT rebounded strongly to ₦74.2 billion, while PAT stood at ₦57.8 billion, translating to a net profit margin of 12.2%, compared to a net loss margin of -32.8% in 9M 2024.

This profitability rebound highlights management’s effective execution of its turnaround strategy and the restoration of healthy operating margins across the business.

Balance Sheet Overview

₦’000 30 Sept 2025 31 Dec 2024 % Change

Total Assets 713,194,597 727,872,297 -2%

Total Liabilities 206,455,214 278,958,220 -26%

Total Equity 506,739,383 448,914,077 +13%

Property, Plant & Equipment 331,298,032 287,581,286 +15%

Inventories 107,066,467 89,704,444 +19%

Cash & Cash Equivalents 87,934,526 109,038,307 -19%

Trade Payables 165,687,814 241,144,452 -31%

Interpretation:

• Total assets moderated slightly (-2%) as the Company optimized its working capital and restructured its investment portfolio.
• Equity increased 13% to ₦506.7 billion, driven by retained earnings following a profitable period.
• Liabilities declined 26%, reflecting deleveraging and improved liquidity management.
• Inventories rose 19% due to higher production volumes in anticipation of year-end demand.
• Trade payables declined sharply (-31%) as the Company improved payment discipline and reduced supplier liabilities.

Overall, the balance sheet depicts improved solvency, healthier leverage metrics, and a strong capital position to sustain growth momentum into FY2026.

Key Ratios

Ratio 9M 2025 9M 2024 Change

Gross Margin 34.1% 27.6% +6.5pp

Operating Margin 14.2% -36.5% +50.7pp

Net Margin 12.2% -32.8% +45.0pp

ROE 11.4% -25.1% +36.5pp

Debt-to-Equity Ratio 0.41x 0.62x -0.21x

Current Ratio 1.57x 1.32x +0.25x

Interpretation:

• The return to double-digit profitability highlights a substantial improvement in efficiency and financial health.
• Gross and operating margins expansion affirms improved cost control and favorable pricing strategies.
• Leverage reduction (Debt-to-Equity at 0.41x) provides greater financial flexibility.
• The current ratio improvement signifies stronger liquidity and short-term solvency.

Strategic Context

International Breweries’ performance recovery aligns with the broader rebound in Nigeria’s beverage industry, driven by resilient consumer demand and improved supply chain conditions. The Company continues to benefit from its integration within the AB InBev global network, leveraging economies of scale, innovation, and best-in-class operational practices.

Strategically, IB Plc remains focused on:

• Expanding its premium and value brand portfolio, including Trophy, Hero, Budweiser, and Beta Malt;
• Deepening route-to-market penetration through digital trade platforms;
• Driving cost efficiency via backward integration and local sourcing; and
• Enhancing energy efficiency and sustainability initiatives to reduce operating costs and environmental impact.

The improving macroeconomic outlook, alongside urban consumption growth, presents a favorable environment for sustained profitability in the coming quarters.

Industry Update – Nigerian Breweries’ Distell Integration

In parallel industry developments, Nigerian Breweries Plc (NB) completed the full integration of Distell Nigeria in March 2025, marking a major step in its ambition to become a “Total Beverage Company.” This strategic move expands NB’s portfolio to include wines, spirits, and ready-to-drink (RTD) products, thereby intensifying competition in the alcoholic beverage segment.

NB’s integration of a state-of-the-art production line at its Ibadan Brewery for Distell brands like Chamdor and 4th Street signals greater competition across beverage categories. For International Breweries, this evolving landscape underscores the need for continued innovation, brand differentiation, and enhanced customer engagement to sustain market share and protect margins.

Strengths

• Strong rebound in profitability after two years of losses.
• Solid balance sheet with improved leverage and liquidity.
• Effective cost management driving operating leverage.
• Support from AB InBev’s global expertise and supply chain network.
• Expanding product range catering to diverse consumer preferences.

Weaknesses

• High exposure to inflationary pressures impacting input costs.
• Relatively thin cash position due to working capital buildup.
• Competitive pressures from new entrants and portfolio expansions by peers (e.g., NB/Distell integration).

Outlook

The outlook for International Breweries Plc is positive, supported by improved consumer sentiment, cost optimization, and stable raw material sourcing. The brewer’s strategic focus on expanding capacity, local sourcing, and enhancing distribution efficiency positions it for sustained earnings growth.

Key catalysts for FY2026 include continued demand recovery, efficient price management, and a favorable macroeconomic climate. However, risks such as FX volatility, energy cost inflation, and intensified industry competition may temper margin expansion.

Analyst Commentary

“International Breweries’ Q3 2025 results mark a clear turning point in its recovery trajectory. The brewer’s return to profitability, margin expansion, and cost discipline reflect sound execution of its operational turnaround strategy. While competition is set to intensify with Nigerian Breweries’ portfolio diversification, IB Plc’s strong brand equity, strategic cost control, and global backing from AB InBev provide the resilience needed to sustain growth and profitability into FY2026.”

Conclusion

International Breweries Plc’s 9M 2025 results confirm a successful operational turnaround anchored by revenue growth, margin expansion, and efficient cost management. The Company’s strategic execution, coupled with its strengthened balance sheet, positions it well for continued growth amid evolving industry dynamics. With a focus on innovation, local sourcing, and brand-led expansion, International Breweries is poised to consolidate its position as one of Nigeria’s leading beverage companies, driving shareholder value in the years ahead.