Emerging StrongerA better Future 2021 INTEGRATED REPORT AND FINANCIAL STATEMENTS About this Report The Integrated Report for the year ended 30 June 2021 provides a holistic view of East African Breweries Limited’s (EABL) business model. It comprises information about activities, strategy, approach to operating responsibly, financial, and non-financial results. The aim is to comprehensively report to our existing and prospective investors in an integrated way to reflect how the organization operates. Framework Our Integrated Report is prepared in accordance with the International Integrated Reporting Council’s Integrated Reporting Framework, adhering to the fundamental concepts. The Annual Financial Statements were prepared in accordance with the International Financial Reporting Standards (IFRS). The report is part of our commitment to be transparent and accountable to our stakeholders. The Group constantly considers whether there are additional reporting frameworks or metrics we could use to enhance our disclosures. Assurance To enhance the integrity of our report, the financial statements were audited by PricewaterhouseCoopers LLP. Their independent report in relation to the financial statements of the Group is set out on pages 125 to 128 of this report. CONTENTS Our Business Model 4 Our Value Creation Process 6 Stakeholder Engagement 8 Our Strategy 10 Financial Highlights 12 Executive Summary 14 EABL Overview Chairman’s Statement 16 East African Breweries Limited (EABL) is the leading branded alcohol beverage business Group Managing Director’s Statement 20 in East Africa, with an outstanding collection of brands that range from beer and spirits to Sustainability 25 adult non-alcoholic drinks (ANADs), reaffirming Commercial Update 40 our standing as a total adult beverage (TAB) company. Our extensive network of breweries, Our Brands 50 distilleries, and distribution facilities spans across the six markets within which we operate Our People 68 in East Africa, especially concentrated in the Compliance and Risk Management 76 three core markets of Kenya, Uganda and Tanzania. Despite operating in East Africa, our Board of Directors 84 unique products can be found in more than 10 Senior Management 88 countries across Africa and beyond. The Group’s diversity is an important factor in delivering Notice of Annual General Meeting 90 the highest quality brands to East African consumers and long-term value to investors. Corporate Governance Statement 94 Our brands are an outstanding combination Annual Report and Financial Statements 109 of local beers and spirits together with international premium spirits. These include: Corporate Information 110 Tusker, Guinness, Bell Lager, Serengeti Lager, Directors’ Report 112 Kenya Cane, Uganda Waragi, Smirnoff and Johnnie Walker. We are proud of the brands Directors’ Remuneration Report 118 we make and the positive impact they have Statement of Directors’ Responsibilities 124 in bringing people together, to celebrate life everyday everywhere. We are passionate about Report of the Independent Auditor 125 alcohol playing a positive role in society as part of a balanced lifestyle. Financial Statements 129 Principal Shareholders and Share Distribution 197 Proxy Form 198 Electronic Communications Consent Form 199 Our Business Model ur business operates with the price points to suit our consumers’ changing simple purpose of supporting our lifestyles. We continuously invest in building We are proud of our long Oconsumers in ‘Celebrating life every strong brands that play a positive role in day, everywhere’. The consumer is thus at society. heritage of investing in the heart of our business. Our performance Our business model is centered on country- individual markets within ambition ‘to create the best performing, most specific strategies, which allow us the agility trusted and respected consumer products to identify and shape consumer trends, the region and enriching company in Africa’, coupled with our vision as well as respond to market dynamics the community; as well ‘to be the most celebrated business in every to support growth. We are a proud grain- market in Eastern Africa’, guide how we to-glass business and remain steadfastly as building brands that operate and every decision we make. focused on: continue to meet consumer EABL operates across East Africa through • Producing quality beer, spirits, and adult the following subsidiaries: Kenya Breweries non-alcoholic beverages (ANADs). needs and bring joy to Limited (KBL), Uganda Breweries Limited • Investing in responsible marketing to build millions. (UBL), Serengeti Breweries Limited (SBL) in aspiration for high quality brands. Tanzania, UDV (Kenya) Limited, East African Beverages (South Sudan) Limited and East • Continuously innovating to unlock new African Maltings Limited (EAML) in Kenya. opportunities and deliver new offerings Although our business is concentrated in that meet changing consumer demands. these markets, our brands are sold in more • Transforming sales execution and than 10 countries across Africa and beyond. extending our reach to ensure our The Group’s diversity is an important factor consumers can access and enjoy our in delivering the highest quality brands brands every day, everywhere. to East African consumers and long-term • Sourcing and producing locally where value to East African investors. Our portfolio viable to support local communities. and geographic reach enable us to deliver • Playing a positive role in society and sustainable performance and create value for delivering value to our stakeholders and our shareholders. shareholders. We are proud of our long heritage of investing in individual markets within the region and enriching the community; as well as building brands that continue to meet consumer needs and bring joy to millions. We have a broad portfolio across categories and 4 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS PAMOJA Milele 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 5 Our Value Creation Process Business Inputs Activities Financial Capital Includes shareholders’ equity and debt. It is a critical input in executing our business activities and in generating, accessing and deploying other forms of Consumer insights Sourcing Marketing capital. We have well- We work with our We invest in world- Read more on page 132 established suppliers to procure class marketing to proprietary data high quality raw responsibly build Manufactured Capital tools used to materials and vibrant brands that We have a regional network of sites devoted to generate insights, services. resonate with our research and development, distillation, maturation, understand consumers. brewing, warehousing and packaging of spirits and and respond to beer. consumer interests Read more on page 44 and preferences. Our investment in property, plant and machinery are a source of competitive differentiation. Read more on page 170 Human and Intellectual Capital Innovation Distilling and Brewing `We partner with We are proud of our people, whose passion, Using our deep We distill, brew, our customers commitment and specialist skills make the insights of trends, bottle and distribute through our sales difference. Championing inclusion and diversity is we focus on our beer and spirits teams to reach our fundamental to driving engagement and achieving driving sustainable brands, working to consumers daily. the best possible outcomes for our business. innovations that the highest quality Read more on pages 69-75 provide new of manufacturing products and standards. Social and Relationship Capital experiences for We continue investing in communities where we consumers. live and work. We are committed to do our business the right way from grain to glass. Read more on pages 25-38 Natural Capital We recognize that the threats to our environment are urgent and growing, and we are committed to taking actions to preserve the scarce resources. Read more on pages 25-38 6 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS Our Value Creation Process Value Created Scale Global Giants: Johnnie Walker, Leading total adult Smirno, Baileys and Guinness are beverage company in among the global brands that we bring Eastern Africa to market with scale 99 years of Agility in innovation: Focused on growing 99 experience, share by innovating new oerings since 1922 that meet changing consumer needs Market Extensive footprint leadership in in supply and 2 key markets distribution +2 million people impacted Operating across 6 countries in directly or indirectly by our East Africa, with 6 breweries and water programmes 1 malting plant Strong Working with a network of iconic capable distribution partners and brands over 110,000 retailers A Winning Portfolio: Over 40 brands Partnering with within spirits and beer, making over 60,000 farmers to supply up East Africa’s largest and most our raw materials diverse portfolio of brands Powerful Local Jewels: Some of the most Investing in iconic and loved brands in East Africa – capacity building Tusker, Serengeti and Bell Lager from Grain to Glass 2021 INTEGRATED REPORT & FINANCIAL STATEMENTS 7 Stakeholder Engagement Our purpose and values help guide our engagement. Why we engage People Consumers Customers Our people are at the core Understanding our consumers Our customer partners are of our business. We aim to is key to growing our business experts in the products they build a trusting, respectful and sustainably for the long term. buy and sell, as well as in the inclusive culture so that every Consumer motivations, attitudes