East African Breweries – Analysis of It’s Business & Financial Performance

Brief federation overview Established in 1922 and with its headquarters in Nairobi- Kenya, East African Breweries Ltd. (EABL) is aleading branded alcoholic drink manufacturing phoner in the East African region engaged in the marketing,brewing and marketing of alcoholic and non- alcoholic drinks as rise as the manufacturing of glass containers. Majority possess by Diageo, it consists of a number of subsidiaries. 1 1. 2. Research rationale.Comp ard to their counterparts in the developed world, gnomish research has been carried out on organizationsthat hold out in African countries as these argon seen as lacking the management potentiality or pecuniary resourceseither to compete with big organizations in the developed world or to interest international investors. However the events of the exit two divisions, which have seen investors lose millions of dollars in theirinvestments due to the collapse of the international pecuniary markets, have increased the need forinternati onal investors to vary their portfolios into regions hitherto considered unimportant.By carryingout a critical commerce and pecuniary evaluation of the exertion of a typical large African organization, thisreport attempts to spotlight the missed opportunities that may remain untapped in emerging markets. With yearbook revenues of KES 21 billion (US$ 285 million), KES 26 billion (US$ 367 million) and KES 32 1The subsidiaries include Kenya Breweries Ltd. , Uganda Breweries Ltd. , Kenya Maltings, UDV Kenya and CentralGlass Industries. The guild also holds a 20% stake in Tanzania Breweries Ltd. (EABL, 2008a p. 5) 2 2009 PK Mwangi Global Consultingbillion (US$ 479 million)2in FY06, FY07 and FY08 respectively and an adherence to internationalaccounting and examine standards i. e. IFRSs and ISAs respectively, thiscompany3may represent a well managed company with growing profitability and investment potential. Thisreport attempts to leave this by analyzing its contrast and fin ancial performance over a three year period. To assist in the analysis of EABLs performance the average exchange vagabond prevalent in the three years understudy are as follows hedge 1 Foreign exchange rates.Average annual exchange rate Calendar YearUS Dollars (USD) Kenya Shillings (KES)2006 1 73. 738702007 1 70. 8073320081 66. 83044 Source Oanda (2009) 1. 3. Research verifiable and question. This research delves into both the business and financial performance of EABL with an aim to identify themajor business elements that are key to its performance. It goes further to tone of voice at how these business factorshave impacted on the financial performance of the company. It is difficult to assort the financial performance of a company from its wider business environment andhence the business and financial performance of a company are closely interlinked.Decisions made at thecorporate and/ or business level impact straight on companys financial performance. Where corporatestrat egy aims to grow the company through acquirement of competitor firms, this leave behind have a direct impact onprofitability and profitability indicators. change magnitude sales in new markets will lead to bigger profits andmargins where be are well managed. 1. 4. Research approach. swig primarily on secondary sources of selective information (accounting books, annual reports, academicjournals, newspaper articles, etc) this research desire to analyze both quantitative information and qualitative