BREWDOG REPORTS REVENUE RISE DESPITE RECENT LOSSES
BrewDog has reported a £5.5m operating loss for last year – although this was down from a £6.8m loss in 2020 – with the business blaming bar closures during the pandemic and increased internal investment.
The Ellon-based brewery invested £13m into its venue expansion, with seven new bars and two new hotels, alongside two new bars with its franchise partners in four different markets. It is still planning to open 30 new venues during 2022.
It also reported “significant investment on sustainability and cutting carbon emissions”, including the construction of an anaerobic digester plant, to recycle waste by-product from brewing to generate gas on-site, as well as the development of its Lost Forest tree-planting estate and expanding the electric vehicle fleet.
Results for the year ended 31 December 2021 also saw profit margins grow to 53%, up from 48% in 2020, with increased scale and operational efficiencies.
Total revenue was up 21% to £286m, as UK sales continued to grow, despite the pandemic. Adjusted earnings before tax rose by 79% to £14m, as improving margins were offset by investment in people and Covid-related losses from property.
During a year of complaints from former and current workers, BrewDog stated that it spent £9m more on its staff as it up-scaled resources, learning and development, rewards and culture.
The company made 839 new hires in 2021, bringing the total workforce to 2,346. Average salaries across the company also rose by 3% in 2021.
Chief executive James Watt said: “I’d like to thank all our crew for their commitment and dedication, and especially the 839 people who chose to join us last year to develop their careers with BrewDog.
Though challenges remained, not least the continued closure of much of our bar estate during the year, we delivered significant growth across the business.”
He added: “We are investing in our brand, sustainability, our operations, but most importantly, our people – being the best employer we can be, and offering brilliant careers, is the surest way to support our future growth.”
Watt reiterated the recently-announced Blueprint plan, which saw him giving away a 5% stake in the company – worth just under £100m – to salaried team members, along with BrewDog sharing 50% of bar profits evenly with staff.
“We believe we have a once in a generation opportunity to build a business and brand that has a positive impact on the world,” he commented.
Elsewhere, the results revealed that BrewDog invested £17m in advertising, including its first television advertising campaign for Lost Lager.
The chief executive’s statement noted that 2022 has started well, with the first period since the first quarter of 2020 broadly un-impacted by Covid restrictions, “albeit with a challenging off trade market”.
Total beer volumes were up 23% on 2020, largely driven by the UK, Germany and Australia. UK performance was strong in the grocery and impulse-buy channels, with increased points of distribution. The e-commerce channel continued to grow, with expanded operations across Europe, adding marketplace partners and launching a beer subscription model, BrewDog & Friends.
The gradual return of hospitality during 2021 benefitted bars, with revenue growth of 31% globally year on year.
Gross margins were partly offset by supply chain pressures during 2021, both with increasing costs of transportation and CO2 taking effect in the year. Watt added: “There will continue to be an internal focus on cost in the current inflationary environment.”
