November 6, 2026/Cordros Report
This note provides an updated 2026E view on International Breweries Plc (INTBREW) following its 9M-26 earnings release. The company delivered a mixed performance during the period, with revenue growth of 2.1% y/y and a 429bps y/y expansion in EBITDA margin to 28.9%, while EPS declined by 5.7% y/y to NGN0.32 on a higher effective tax rate. Accordingly, we retain our 2026E revenue growth forecast of 6.0% y/y, underpinned by an improving industry volume backdrop and festive demand in Q4-26.
However, we raise our OPEX growth assumption to 24.8% y/y (Prev.: +11.0% y/y), resulting in a lower EBITDA margin forecast of 29.2% (Prev.: 31.6%). This is offset by higher net finance income and a lower effective tax rate assumption of 40.0% (Prev.: 45.0%), resulting in a marginal upward revision to our EPS forecast to NGN0.46 (Prev.: NGN0.45).
Reflecting this upgrade, we revise our year-end target price to NGN7.33/s (Prev.: NGN7.14/s), implying a 19.0% downside from the current market price of NGN9.05/s, and maintain our “SELL” rating. On shareholder returns, following the elimination of accumulated losses, we forecast a 2026E DPS of NGN0.16 (Prev.: nil), implying a 1.8% dividend yield. Based on our revised 2026E estimates, INTBREW trades at 19.6x P/E and 7.2x EV/EBITDA, vs. MEA peer averages of 18.7x and 8.1x, respectively.
Topline outlook intact; Higher OPEX tempers margins: We maintain our 2026E revenue growth forecast at 6.0% y/y, underpinned by the carry-over benefit of earlier price increases and a continued volume recovery, with festive demand expected to lift Q4-26 sales. On costs, we retain our forecast of a 5.5% y/y decline in cost of sales, reflecting lower materials costs and a stable exchange rate. However, we raise our OPEX growth forecast to 24.8% y/y (Prev.: +11.0% y/y), driven by higher projected marketing and promotion expenses (+30.4% y/y | 67.6% of OPEX). Consequently, we lower our EBITDA margin forecast to 29.2% (Prev.: 31.6%), still implying a 665bps y/y expansion. Below the operating line, net finance income is forecast to rise to NGN14.80 billion (Prev.: NGN5.05 billion), supported by higher finance income (+35.2% y/y) and lower finance costs (-19.0% y/y). Accordingly, we raise our EPS growth forecast to 52.5% y/y to NGN0.46 (Prev.: +47.9% y/y to NGN0.45), further supported by a lower effective tax rate assumption of 40.0% (Prev.: 45.0%).
Capital reconstruction clears the path to dividends: Following the completion of its capital reconstruction in September 2026, we believe INTBREW is now positioned to resume dividend payments. The company applied NGN191.03 billion of share premium to eliminate accumulated losses and returned NGN84.00 billion (NGN0.50/share) to shareholders, with retained earnings standing at NGN54.51 billion as of 9M-26. Consequently, we forecast DPS of NGN0.16 in 2026E (Prev.: nil), its first dividend since 2016FY and implying a dividend yield of 1.8%. In 2027E, we expect DPS to rise to NGN0.37 (Prev.: nil), translating to a dividend yield of 4.1%.
Valuation: Our target price is NGN7.33/s, derived from a 50/50 blend of DCF and sector-relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN5.47/s) and FCFE (NGN5.42/s) estimates, assuming a 22.0% WACC, 22.7% CoE, and 4.0% terminal growth rate. We utilised the EV/EBITDA and PE multiples for our multiple-based FV and derived fair values of NGN9.83/s and NGN8.62/s, based on MEA peer averages of 8.1x and 18.7x, respectively.