N T AND INDEPENDENTUNITED WE STAND FO R

BREWED

IN ELLONANNUALREPORT
ER

BE

ER

F

C
R
IE

EF

BE

TT

FOR THE YEARENDING 2022

IA

AND ACCOUNTS

Y
L
E

D

2

“BrewDog
has maintained its position
as the most valuable UK beer brand.
BrewDog is also the most valuable
independent beer brand in the world. “– Brand Finance 2022

CONTENTS

3

2022 in Numbers

04

A Letter from the Chair

07

Captain’s Update

08

Our Mission

10

BrewDog’s History

122022 at a Glance

14

Lost Lager

16

BrewDog Distilling Co

17

Planet Focus

18

New Beer Releases

19

People Focus

20

BrewDog Community

22

Governance23
BrewDog Tomorrow

24

Lost Forest26

Our Bars

28

Hero Venues

30

Our Breweries

32

BrewDog Around the World

34International Partners

37

Financial Review

38

Financial Performance

39

BrewDog Board of Directors

40

Financial Report

42

Independent Auditor’s Report

71

Directors’ Report

73

Directors’ Statement of Responsibility

76

Company Information

80

PUNK IPA IS THE
NO.1 CRAFT BEER
IN THE UK

4

BREWDOGPUNK IPA

BREWDOG
HAZY JANE

BREWDOG
LOST LAGER

BREWDOG
MIXED PACK

BREWDOGELVIS JUICEBREWDOGPUNK AF

Value Sales (‘M)£53.28£27.22£24.71£12.39

£7.00

£6.14

Value % Share

16.39

8.37

7.60

3.81

2.15

1.89

*Source - Nielsen Scantrack- UK Off Trade- Total Coverage W/E 28.01.23

2,600 PEOPLE

BREWDOG
VALUE SHAREOUR CORE 4 ARE
RESPONSIBLE
FOR 89% OF ALL
DRAUGHT VALUEOF SUPERMARKET CRAFT
BEER SALES
PUNK
IPA

16.4%

PUNK IPA, LOST LAGER,
HAZY JANE & PLANETPALE OUR CORE 4
HAVE GROWN

30%OVER THE PAST 3 YEARS

HAZY
JANE

50%

PLANET
PALE

BREWDOG

50%

REST OF CRAFT
TRADINGCOMPANIES
SHARE

8.3%

1.9%
LOST
*Source - Nielsen Scantrack- UK Off TradeTotal Coverage W/E 28.01.23

23%

PUNK
IPA

PLANET PA
LE 4%

5%
PUNK AF
5%
ICE
U
IS J
ELV

41%

HAZY
JANE
13%

2.2%

7.6%
Source - CGA OMPS P13 MAT 31.12.2022 Vs 3YA

OTHER

ELVIS
JUICE
PLANET
PALE

EASY PALE
ALE

BEST SELLING
BEERS 2022

9%

GLOBALLY, WE NOW EMPLOY OVER

LO
ST
LA
GE
R

REVENUE GREW 13% IN 2022

ON TRADEGROWTH

6 OF TPRODUHE TOP 10CS U P E R TS I N U K
CR AF T MARKETB R E W R A N G ES A
DR
( W E’R E O G P R O D U C E
TS# 1, #2 A
N D #3!
)

£321m
2022

£286m
2021

£238m
2020

2019

£172m
2018

£111m
2017

£72m
2016

£45m
2015

£30m
2014

2013

£18m

GROUP
REVENUE£215m

2022 IN NUMBERS

5

BREWDOG HAS GROWN
109% IN THE UK OFF TRADE SINCE
PRE-COVID, DESPITE THE MARKETONLY GROWING 4%.
49% OF THAT GROWTH CAN BE
ATTRIBUTED TO LOST LAGER!

67

A LETTER FROMTHE CHAIR
All businesses across the world are facing
challenging economic headwinds, and theseare set against a backdrop of incredible
suffering in Ukraine. Combined with theresulting cost of living crisis, it makes for avery difficult time for our teams, but I’ve beenenergised by the determination, resilience anddrive of BrewDog’s crew.
One of the priorities for the past year was to see BrewDog
continue with the improvements made for crew wellbeing– from the appointment of a dedicated mental health &wellbeing lead, to training over 200 Mental Health First Aiders,and investing in menopause and neurodiversity support, there
has been ongoing progress on this front. The participationand engagement from the team has been excellent, andthere is a really uplifting culture of support for one anotherbusiness-wide. This hard work has been recognised with
BrewDog being awarded a top place in The Sunday Times Best
Places to Work 2023, which is a great testament to the crew
and leadership team.
BrewDog’s beer business continues to thrive even in uncertain
times. Investments in people, the brand, the infrastructure
together with significant impact cost headwinds have had
a detrimental effect on the financial performance of thecompany in 2022 resulting in an operating loss before tax of£24m and adjusted EBITDA of £600k. However the growthof key brands continues. 2022 delivered market leading beer
volume growth of 66% versus pre-pandemic, reflecting thestrength of the brand. Lost Lager is our fastest growing brandin UK supermarkets, and it’s also delivering benefits for the
category, with 31% of drinkers being new to craft beer andgoing on to try more beers in the craft aisle. Extensive work in
2022 was also undertaken to prepare for the launch of Black
Heart, BrewDog’s major play in the stout market. The results
will be seen in next year’s report, but initial sales and consumer
reaction has been incredibly positive, with rate of sale in Tesco
outperforming forecasts.
The appointment of an additional independent Non-Executive
Director in Giny Boer adds a new and fresh perspective tothe board. Giny adds further balance to the board, and herexperience and expertise in global consumer brands willoffer James and the leadership team an abundance of energy
and ideas outside of the beer category to inspire our next
phase of growth.

BrewDog’s commitment to the environment is resolute, and weare proud of the leading position we take here. The progressat the Lost Forest is very impressive; there are extensive
approval processes to adhere to with a project of this nature,and the BrewDog team along with their partners at Scottish
Woodlands have shown exemplary adherence to requirements
whilst managing to achieve rapid sign off at every step. The
result is 400,000 trees already having been planted to date
– outstanding progress towards our afforestation goals of
more than 1 million native broadleaf trees to be planted in total.
Furthermore, the team have worked incredibly hard on a very
complex and instrumental sustainability project at the brewery,which will achieve significant benefits from the bio-energy
facility at the brewery’s HQ, along with a range of other initiatives.
It is the responsibility of all businesses of all sizes to recognise
their impact on the planet, and represent the change required inorder to protect our future. I am proud of the ongoingcommitment to sustainability shown at all levels of thebusiness, and look forward to seeing this continue. The
achievement of being awarded the Positive Planet Carbon
Negative certification in 2022, with the logo displayed on
packaging, was an important milestone.

I’d like to thank all of the crew for their continued
hard work and passion for BrewDog and I lookforward to seeing what the next 12 months
brings, as the company continues to invest in its
people, its beer, and our planet.
ALLAN LEIGHTON
CHAIR

8

9

CAPTAIN’S
UPDATE

Elsewhere in the world, India is a really exciting market for us,
and one which I firmly believe will become one of our mostimportant international markets in the next five years. We’ve
found an amazing partner to work with locally, and opened
three venues with a series of more stunning craft beer bars
planned for the coming years.

HI EVERYONE,
We should be very proud of our growth in 2022
but at the same time it proved a very challenging
year, not just for BrewDog but for all businesses.
In the wake of the pandemic, we were looking forward toa new normal – revitalised consumer spending and more
opportunities to meet friends, gather, and work collaboratively
in office spaces. However, the catastrophic and devastating
invasion of Ukraine stopped us all in our tracks as we witnessed
the evolving humanitarian crisis. Our thoughts are with thosefamilies affected and displaced by the war in Ukraine.

The invasion and the consequential impact onenergy costs set in motion a vicious cycle ofinflation, the likes of which have not been seenby this generation, and an economic crisis that
has impacted all our lives.
In 2022, we saw energy bills for our brewery increase a
staggering threefold, and with price increases affecting nearly
every element of our supply chain, the cost of producing
Punk IPA increased by an eye-watering 34% year on year. We
worked closely with our customers to implement modest andmanageable price increases, effective from early 2023, and weare pleased that the response to this has been positive despite
the difficult landscape.
Furthermore, we recognise that as consumers, the cost of living
crisis has a significant impact on where people spend their hardearned money. We value our community and their loyalty, which
is why it always has been the case that every decision we makeis for the good of the beer. We will never undermine our beers by
cutting corners or reducing quality – our community trusts us to
produce a premium product range, and this is something we will
always uphold.
Whilst growing revenue by 13% was a good achievement, weare all disappointed by the increase in operating loss to £24m
and adjusted EBITDA of £600k. Much of this loss is due to thecontinued investments in our people, the brand, our breweries
and our bars, alongside the devastating increase in input costs,
together with significant investment in capacity and new bars.

Despite increasing costs, and a very challenging economic
outlook, we have an unshakeable confidence in the future of
BrewDog. The growth we have seen over the past 16 years isundeniable, with our own business growing from two men anda dog to the world’s biggest craft brewer by revenue. This is
no mean feat, and it’s a trend we absolutely believe is destined
to continue. That’s why, in 2022, we invested heavily in new
locations including our two biggest craft beer venues globally,
Waterloo and Las Vegas.
Waterloo is located in the heart of London, and features a mindblowing, multi-level craft beer paradise. With two impressive
bars, as well as a coffee bar, a secret cocktail speakeasy,
podcast studio, ice cream van, florist and a slide (yes, a slide!),it’s a statement of intent for the future of craft beer, and thevenue has been outperforming forecasts since it opened
its doors. As I mentioned, people are watching the pennies
more than ever before, and as a result, they need to know thatwhen they do indulge in a visit to a hospitality venue, they can
expect next-level service, outstanding beer and food, and an
experience to remember. Waterloo delivers on all fronts, andthis has been recognised in the numerous industry awards thevenue and team have won.

The opening of the phenomenal Las Vegas bar
is one of our boldest moves yet. The rooftop
venue has the best view of the strip and offers
the premium craft beer experience that sin city
was crying out for. The venue’s amped up foodmenu and on-site brewery offer somethingunique in Vegas, and again – we have beenblown away by the support and trade to date at
this landmark, hero venue.
We also opened new locations in Atlanta, Brisbane, and anumber of sites in the UK. We are also working closely with agrowing number of amazing franchise partners, including thelargest hospitality business in Australia where we’ve opened
two phenomenal landmark bars in Sydney and Melbourne. It isabsolutely in our plans to open more of these statement sites
in the coming years, with a pipeline of venues around the worldcontinuing to progress.

With fantastic joint ventures in place, we are now brewing beers
locally in both Japan and China and we have rock solid sales
and distribution channels ready to go in these key beer markets.
Closer to home, in Ellon, Aberdeenshire we invested heavily
in growing our capacity at the heart of our HQ. We now haveenough headroom for the growth anticipated in the next 10
years with the ability to meet the increasing demand we haveforecasted. We have also commissioned a brand-new distillery,located in a larger space on our footprint in Ellon, allowing us
to meet the massive potential in gin, vodka, rum and whisky
production. Our new packaging will be released this year, giving
us a greater opportunity within a very competitive category.

In 2022, one of the highlights was taking 100
Equity Punk investors to the Lost Forest, our
9,308 acre site in Aviemore, for a mountainbike trail before we planted the very firsttrees in the ground. This site will eventually
remove huge volumes of carbon from the air,as we plant one million trees and extensively
restore peatland across the plot. Being able toshow our community first-hand what we aredoing to protect and future-proof our planet
was incredible. We were also delighted toachieve the Positive Planet Carbon Negative
accreditation in 2022. A further testament
to our commitment to the environment.

Being named as one of the Sunday Times Best Places To Work
was a massive moment for us, and is proof that our people
are at the very heart of our company. Appearing on this list issomething we are incredibly proud of, and shows that we havea wealth of incredible people in our ranks, and as a company
we’re committed to giving them the best possible opportunities
in their career. We continue to strengthen the executive
management team, with both internal promotions such as
CEO Bars, Chief Marketing Officer and Chief Digital Officer andexternal hires such as a new US CEO and Group Chief Supply
Chain Officer.
2022 was not without its challenges and we are proud tohave delivered 13% topline growth in a difficult operating
environment. I am very confident in our team’s ability to rise to
the occasion and continue to grow, continue to take market
share and continue to grow our community despite the everevolving series of headwinds all businesses are currently facing.
And as we have proven with Waterloo and Las Vegas, we havesuch a bright future ahead of us, and one that we will continue toback and invest in today, to ensure we realise it tomorrow.

HOLD FASTJAMESFOR BET TER
BEER
FOR A BETTER
PLANET
POWERED
PEOPLE BY

FOR US ALLWE BLEED
CR AF T
BEER

MAKE EARTH
GREAT AGAIN

Our business lives and dies by the qualityof the beer in every can, bottle or glass of
BrewDog beer, everywhere around theworld. We are laser focused on ensuringthat those experiences are always bestin class, and have invested heavily in themost technologically advanced beer
brewery campus in Europe.

We announced in 2020 that we had
become the world’s first carbon negative
brewery, and we continue to uphold thatstandard across our business. We work
closely with Professor Mike Berners-Lee
and his team to accurately calculate ourcarbon footprint each year, and remove
more carbon from the atmosphere than
we emit.

We work hard to ensure that every
ingredient we buy, every experience weoffer in our bars, and every packaging
decision we make are rooted in what isbest for the beer, never compromisingon that for the customer. It’s also why
we train all our staff to Certified Beer
Server standard under the Cicerone
qualification programme.

We’ve invested over £12 million in ouranaerobic digester facility at our breweryin Aberdeenshire, enabling us to convert
our waste into usable gas and water, andgiving back to the grid when we makemore than we need.
Our Lost Forest project continues apace,
as we look to plant 1 million trees inbeautiful Aviemore.

PEOPLE

BREWDOG IS ON
A MISSION TO
MAKE OTHERPEOPLE AS
PASSIONATEABOUT GREATCRAFT BEER
AS WE ARE

PLANET

11

BEER

10

WITHOUT U S, W
NOTHIN E ARE
G

We want to be the best company towork for. Ever. We have invested heavily
in mental health support programmes
over the past few years, offering ourteams a raft of support including
training over 200 of our staff asaccredited Mental Health First Aiders.
We also offer a gold-standard benefits
package to our crew, including bumper
pensioncontributions,healthcare
packages, the Unicorn Fund profit
sharing programme whereby wegive 10% of our profits to our crew,
hopstock whereby we are distributing
shares in our business evenly among
all our salaried team members, training
programmes in a variety of fields, ‘crew
treats’ offers and deals, and enhanced
maternity and paternity leave and pay.
Oh, and a week off if you get a new
dog! Woof!

WE HAVE HUGE AMBITIONS TO BE THE BEST COMPANY TO WORK FOR
IN THE WORLD, TO MAINTAIN OUR POSITION AS THE WORLD’S MOSTSUSTAINABLE BEER BUSINESS, AND TO BECOME THE WORLD’S MOST
SUCCESSFUL BREWERY

12

13

BREWDOG’SHISTORY

2007

2008

2009

2010

2011

2012

BrewDog was born. BrewDog was started by two
men and a dog in a ramshackle outfit in rugged
North East Scotland. James Watt & Martin Dickie
set out with a desire to change the way people seebeer in the UK.

BrewDog releases Tokyo, the world’s
strongest beer at the time, and press
accuse BrewDog of being responsiblefor ‘the downfall of Western
civilisation’. The brewery starts export
into Sweden, Japan and America.

Having exhausted traditional financing options,
BrewDog was on the brink of incredible growth, butlacked the investment to achieve it. So, they turned totheir community, raising £750,000 from 1,329 people,
and the brewer’s crowdfunding journey began. By theend of the year, the business had grown 200%.

BrewDog Aberdeen opens its doors as the firstcraft beer bar under the BrewDog banner. Hardcore
IPA wins gold at the World Beer Cup, and BrewDog
released the new world’s strongest beer - The End
of History – a 55% ice-distilled Belgian-style beer
brewed with nettles and juniper.

Bars open in Edinburgh, Glasgow and London,
Sunk Punk – a beer brewed at the bottom of theocean – is released, the business grows 200%
again, and £2.2 million is raised via Equity for
Punks II, with 5,000 new shareholders joining
the ranks.

6 new venues are added to theroster of BrewDog bars, Dead PonyClub is launched, and BrewDog
moves its brewing operations to abrand new purpose-built facility in
Ellon, Aberdeenshire.

2018

2017

2016

2015

2014

2013

BrewDog opens The DogHouse – theworld’s first hotel inside a brewery – inColumbus Ohio, and Equity for Punks V
closes on a world record £22.6 million.

The Unicorn Fund is launched– our pledge to give 10% of our
profits to our teams every year.
Equity for Punks V launches.

The first edition of DIY
Dog is released – unveilingthe recipes to all our beers
for anyone to try at home.

The first canning line is installed in
BrewDog’s brewery in Aberdeenshire,
our US facility is announced, and 17
BrewDog bars arrive on the scene.

12 new BrewDog bars open their doors as
far afield as Shepherd’s Bush and Tokyo,
as well as a taproom at BrewDog HQ.

10,000 investors buy in to Equity for
Punks III from 22 countries, and the
Brew Dogs TV show airs in the USA. A
new look was unveiled for BrewDog.

2019

2020

2021

2022

2023

We launch breweries in Berlin
and Brisbane, shortening the
distance our beer travels to reachcraft beer fans around the world.

A rebrand kicked off 2020, before COVID-19 took hold in one of the most challenging
years in living memory. We found ways to support our community by pivoting our distillery
to produce hand sanitiser, donating hundreds of thousands of bottles to key workers andthe NHS. We also became the world’s first carbon negative brewery.

Our crowdfunding round focused on sustainability initiatives
breaks our own world record, achieving £30.2 million from73,000 people, bringing our total shareholder community tomore than 200,000 people worldwide!

We opened major landmark venues
in Waterloo, London and Las Vegas,
Nevada, and started planting trees inthe Lost Forest.

We are and always will be the mostsustainable beer business on Planet Earth,bringing great craft beer to the people on
every continent.

14

15

2022 AT A GLANCELOST FOR

EST

15 YEARS OF
BREWDOG

Planted the first tre
es in the9,308 ac
Lost Forere site inst, ourAvie
more, an
190ha ofd restore
peatlandd over, helping
to removfrom oure carbonatmosphere.

We celebrated 15 years of BrewDog with special
release beers commemorating our first
decade and a half.

BREWDOG CREW
GAIN A STAKELAUNCHED SAD AF

We released Sad AF, in conjunction with I Am
Whole,
supporting a campaign with Rizzle Kicks’ Jorda
n Stephensto encourage more people to have conversatio
ns about theirmental health.

LOST IN GROWTH

Lost Lager won Best International Lager at theWorld Beer Awards.

Co-founder James Watt donated a 5% stake in thebusiness to BrewDog’s 750 salaried crew members,
representing a fifth of his personal stake in the business.

CAPACITYINVESTMENT

We increased our brewery capacity by installinga new 500hl brewhouse, as well as a brand newcanning line enabling us to package our beers assustainably as possible.

OPENED WAT

ERLOO

Our biggest site
outside the US
A, featuring a
cocktail speakeasy, coffee shop
, microbrewery,
podcast studio, ice cream truck, bowling alley, aslide and a florist (all essentials!)

FIGHTING HUMAN
RIGHTS ABUSE

Challenged human rights violations in Qatar with all profits
from our Lost Lager sold during the World Cup tournament
going to fight human rights abuse.

BRAND STRENGTH
Brand Finance named us “the most valuable
independent beer brand in the world”.

VIVA LAS VEGAS

Launched BrewDog Las Vegas, our rooft
op venueat the heart of the strip in sin city, and cele
brated bygiving away a $1million bar tab on open
ing night!

ONndSAtlanta.
C
I
L
A
B
O
L
G Sydney, Melbourne a
rs inOpened ba

BREWDOG PLUS
Released BrewDog Plus, our loyalty
programme giving our best customers
free online shop delivery, free coffee,and £150 credit for our bars.

16

17

LOST
LAGER
IS THE UK’S FASTEST GROWINGCRAFT BEER BRAND*

THE NEW FACE
 OF DISTILLING
IN 2023, THE NEXT CHAPTER OF BREWDOG DISTILLING COMPANY WILL BE
UNVEILED. WE’VE BEEN WORKING HARD BEHIND THE SCENES OVER THE PAST FEWMONTHS TO REVAMP AND OVERHAUL OUR SPIRITS PORTFOLIO TO CREATE A TRIO
OF NEW BRANDS THAT WILL DISRUPT THE GIN, VODKA AND RUM CATEGORIES.

LONEWOLF GIN THE WOLF IS BACKLOST IS ALSOGROWING FASTER IN
THE ON-TRADE THAN
MOST MAINSTREAM
BEERS.**OUR HERO LAGER IS
PLAYING A HUGE PARTIN BRINGING NEWPEOPLE INTO CRAFT
BEER; 31% OF NEWLOST LAGER DRINKERS
GO ON TO BUY MORE
CRAFT BEER HAVING
NEVER PURCHASEDIT BEFORE!****Nielsen 30 largest (vol or value). MAT data to end of Feb 2023** CGA OMPS P13 MAT 31.12.22 Vs MAT PY*** BrewDog Bespoke research- Dunnhumby- Cross Shop L 52 Wks to 12.02.23- (including new to craft panel & no craft in previous 52 wk panel)

The truth is, we missed the wolf illustration. So,
we’ve bought it back, softened the features andmanoeuvred to purple – the colour of juniper
berries, our main botanical. Housed in a bespokebottle with a new stopper and debossing
designed to mirror the bark of a juniper tree,
we’ve tied the story of our gin together in one
pristine and soon-to-be-iconic bottle.

DUO RUM – UNITED IN
CRAFTSMANSHIPThe final piece of the puzzle was our rum. We
blend the rum we make at our Ellon distillery
with authentically crafted Caribbean rum. This
union of craftsmanship represents a meetingof two worlds: from the sun-drenched tropics
with its rich heritage of rum production, to our
Scottish homeland where distilling traditions
run deep in our DNA.

FURTHER DEVELOPMENTS
ABSTRAKT VODKA – EXPRESSYOURSELF
Abstrakt is a name we owned from ourlegendary beer range of days gone by. We
love the name and the creativity it lends to thedesign concept, giving us a bit of freedom tocraft something with a nod to the art world. The
result is a beautiful bespoke bottle with uniquegeometric glass detailing, supported by an
abstract art label that wouldn’t look out of place
in a London gallery.

To support our wild ambitions, we’ve also
moved our distillery into a new, purpose-built
site, increasing our capacity by 300%. We’ll belaying down over 300 casks of whisky by thetime 2024 rolls around, investing significantly inthe next 18 months to build our brands.
This year we’ll also be releasing some brandnew products including a Tequila made from
100% agave, a new canned cocktail range, and,of course, whisky.

18

PL ANET

BEER

19

NEW
RELEASESWE RELEASEDBIOPLANT FACILITY

THE LOST FOREST

In 2022, we worked hard to ensure that our anaerobic digester
operates effectively to recycle waste from the brewing process,enabling us to repurpose effluent across our operations. Here are
the latest stats!

Our plot of 9,308 acres of land in Aviemore has passed all regulatory
checks and approvals, and we have started planting trees andrestoring peatland, sequestering CO2 from the atmosphere.
Our investment will also regenerate landscapes for improved
biodiversity too. In 2022, we hosted our first bike ride in the forest,
welcoming 100 Equity Punk investors to see the work we’reundertaking first hand.

GAS GENERATED:

1,357KWh

REVERSE OSMOSISGREENGAS CERTIFICATES:

OVER
100
BEERS
IN 2022 - HERE ARESOME OF THE
HIGHLIGHTSSHANDY SHACKLORD OF THE RINGSKING KÖLSCH

EASY PUNKIT’S A BEAUT

GLUTEN FREE PUNKCOLD BEER

SILK ROAD

We have implemented a new process at our water treatment facility
that removes heavy materials from water, cleaning up the waterfrom our effluent treatment plant to be reused in the brewery. This isdesigned to reduce our water consumption by over 30%!

397,241KWh

Equal to heating 250
homes in 2022!

CO2 EQUIVALENT:

397TONNES

SOLAR POWER GENERATED:

13,126KWh

wer 4
That’d be enough to po
r!
yea
a
for
s
use
average ho

ELECTRICVEHICLESBIOGASTRUCKSWIND
POWER

Our electric truck in London has now beenon the road since 2021, and avoids us
adding harmful emissions to the capital’s
air or the atmosphere.

These trucks travelled over 8,000km
in 2022, and used a total of 13,509kg of
biogas in the process!

All of our UK business are now windpowered and our other businesses globally
also purchase green electricity supplies.

20

P EO P L E
In 2022, we continued our commitment
to our teams following the independent
review in 2021. We took time to continue
to reflect and re-evaluate what’s mostimportant to our crew, and madeadjustments and improvements acrossthe business accordingly.
James Watt gave away 5% of BrewDog to
our team. All of these shares came directlyfrom James’ shareholding, representing
around a fifth of his shares.
We were also recently named as one of
The Sunday Times’ Best Places to Work!

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2022.

21

PAWTERN
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LEAVE

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Dog team member gets
adopts a doa puppy org, they receiv
e a paid weto help theirek off work
new family
member settle in.

SALARY CAP

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We introduced a salaryn7
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cannot hire any new sta
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lowest-paid member
times the salary of the

INDEPENDENTLY MANAGED

ETHICS HOTLINEEMPLOYEE REPRESENTATIVE GROUPSTO GIVE OUR CREWA TEAM OF

A DIRECT SAYAVAILABLE FOR ALL CREWCONSIDERABLE INVESTMENT
INTO OUR L&D AND

MENTAL HEALTHFIRST AIDERSACCESS TOEMPLOYEEASSISTANCEPROGRAMMESIN THE DIRECTION OF THE COMPANY

CAREER DEV
PROGRAMMEOUTLINING WHAT WE EXPECT FROM ALL OUR
CREW AND HOW TO ACCESS SUPPORTGender diversity is a key prio
rity for us as a business, andwe areconscious we need to focu
s on balance here. Althoug
h our balance iscurrently not where we wou
ld like, we are committed toinspiring andsupporting the next generat
ion of women leaders.

86%

CREW REVIEWS

Women

INCLUSION
FORUM

32%

22%

14%

Men

Director
Level

DIVERSITY AND

78%
68%

6 MONTHLY

FOR ALL CREW

A WORKPLACE
CODE

GENDER
DIVERSITY

Women

Men

Senior Team
Level

Women

Men

Across The
Board

BrewDog now employs 2,649 people
worldwide. Since the pandemic started inearly 2020, we have grown our workforce
by 60% and we continue to hire into an
expanding business both on the retail side
as well as in our breweries and operations
around the world.

22

23

BREWDOG’S COMMUNITY

GOVERNANCEAt BrewDog, we are tight-knit with our communities, and we recognise that we represent a numberof groups and people. Be it our HQ & brewing staff, our frontline hospitality teams across our venues,
our 200,000-strong Equity Punk investor base, or our millions of customers who choose our beers
every day of the week, it is important that we recognise the impact we have on them and their lives,
livelihoods, and happiness. These are just some of the ways in which we consider BrewDog’s placein the world.

As our business grows, we continue toadapt our governance approach as per thegroup’s complexity and structure. As a very
fast-growing company, in recent years wehave stepped-up the attention we pay tocorporate disciplines and the responsibility of
our company.

ALTH
E
H
L
A
T
N
E
M
S
FIRST AIDER

to
our businesspeople across
0
20
The
).
er
FA
ov
H
d
ne
Aiders (MWe have trail Health First
ta
for
en
t
M
in
d
po
t
ite
ed
contacbecome accrs an available
ay
g,
w
in
al
st
is
e
po
er
gn
th
t and si
result is that
health suppor
l
y
ta
an
en
g
m
tin
of
or
ed
r suppanyone in ne
tra training fo
ex
ith
ve
w
ha
t
s
or
am
pp
ing suand our bar tesigns of needhho may showwsarded throug
er
gu
fe
om
sa
st
cu
staff are
d
se
an
he
T
ns
.
io
th
ss
al
se
he
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their mental
gs
tin
ee
m
h a monthly
ents, monthly
r work througeithrisk assessmeisgn, and we reco
heque.
wellbeing labs
d to their payc
payment adde

I AM WHOLE

We launched the SAD
AF and I A
with our ch
M WHOLEarity partn
beers
e
r
to get more
about menpeople talktal health.
ing
It
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an incredib
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beer is annte
xcellent lu
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bricant foron. The alcohol-free beewith a spo
rs launche
ken-worddpiece by R
izzle Kicks’
Jordan Ste
phens.

SE
U
A
P
O
N
E
M
ION
T
A
T
I
D
E
R
ACC

ited
e an accred
3, we will b2
02
towards
f
g
o
in
d
n
rk
By the e
We’re wo
r.
ye
lo
p
m
an inclusive-friendly ethat fostersegmenopausenahctrue selves.
sustainable
their best,ebnlong-termacydoere everyb
culture wh

NEUROD

IVERSITY

We are aware that the ass
diagnosis
essment
for many
journey aneurodiv
long andnderse condifficult,ditions c
so we hafunded re
a
n be
v
e
b
egun off
ferral, scering a fu
reening a
externalllyndassessm
clinical p
ent with
artner fo
diagnosisarnA
DHD and, for any/or Autis
staff whomhave bee
NHS waitn on aning list fo
r six
months or more.

The appointment of Allan Leighton as our Independent Chair
was a major step forward for us in 2021 and his impact todate has helped shape the BrewDog of tomorrow. We’ve also
appointed Giny Boer as Non-Executive Director, adding a
fresh new perspective to our board. This follows an extensive
search for new board members, and after listening to feedback
from our teams who wanted to see greater representation on
our board.
Our people are central to our strategy, being one of the threepillars of our business. As such, we commit to including their
voice in major business decisions that will impact them. Our
Employee Representation Group (ERG) meets every quarter,and they are consulted on upcoming changes and concepts
that might impact their colleagues. Their feedback is thenshared with senior teams to influence the path forward, andwe have made significant changes to our plans as a result of
their comments. Nominated team members are also able tofield requests from the teams they represent to raise further
questions and discussion topics at the regular ERG meetings.
Listening to our teams who are the front line of our business has
always been critical to the success of BrewDog, and the ERG
is enabling us to reach all corners of the company as we grow.
Since our inception, we’ve always promoted ‘Dogs on Deck’
shifts whereby team members of all levels undertake shifts to
get a first-hand experience of what it’s like to work alongside ourteams on the ground, and also speak directly to our customers
and understand what is important to them. These continue tobe required of our senior team, enabling us to gain feedback
from all angles.

Since 2019, we have maintained a salary cap, meaning no newteam members can join with a salary more than seven x thelowest paid staff member in the business. This remains in place,and allows us to offer a fair package to all staff, regardless ofseniority. It also encourages internal promotion, and we weredelighted to make a series of senior appointments in 2022
from internal candidates. Lauren Carrol was appointed CMO,James Brown was promoted to CEO of BrewDog bars, and Tom
Reding became Chief Digital Officer. All three had been with thebusiness since pre-pandemic, and have shaped the business intheir respective tenures.
Across the business, we have implemented a number of robust
improvements that protect and futureproof our business,
including the following:•Group Sanctions Policy – this year we formalised our Group
Sanction Policy to codify our approach to compliance with
global sanctions laws.

•

Ethical Marketing Policy – we codified our ethical marketing
approach in a formal policy doc, proving our commitment tofair and honest communications as a brand.

•

Food Safety Management System – we expanded our Food
Safety Management Group and built a robust Food Safety
Risk Analysis tool. This group reports to management, andmeets at least quarterly to review the risk profile and develop
approaches to risk mitigation.

•

Property Database – we have consolidated our property
databases,
improvingknowledge
sharingacrossthe business.

At the end of 2021, we introduced the Workplace Code,establishing a new set of expectations and standards for us andour team. 2022 saw the first full year’s implementation of thecode, and the feedback was that it not only provided clarity ofwhat to do in almost any situation for staff across the company,
but it also fast-tracked issues quickly.

24

25

LET’S ENSURE WE
HAVE A PLANET TO
BREW BEER ON
BREWDOG HAS
COME A LONG WAY.
We’ve grown, andwe’ve grown up.
We have always believed thatbusiness should be a force forgood and that brave thinking andbold actions are the only way tomake real impact.
Today, we are in the middle of aclimate crisis. It is a crisis of ourown design, driven by big business.
We recognise our contribution andthe limitations of our industry.

CHANGE ISN’T
HAPPENING FASTENOUGH.

NOW IS THE
TIME TO BE RADICALIN EVERYTHING
WE DO.
Climate change is close
to a tipping point.
We created this problem, and now,
it is time for us to solve it.

ACTIONS NOTPROMISES.
Our mission has evolved to provide
a blueprint for modern business;
one which puts the planet first in
every decision we make.

BREWDOG TOMORROW

IN 2020, WE ADJUSTED OUR
FOCUS TO GIVE OUR WORLD A
BETTER CHANCE OF SURVIVALBY AIMING TO BE THE MOSTSUSTAINABLE BEER BUSINESSON THE PLANET. SINCE THEN,
THERE HAVE BEEN COUNTLESSPROMISES, CONCEPTS AND
MOON SHOOT IDEAS FLOATEDBY P R I VAT E B U S I N E S S E SAND GOVERNMENTS ALIKE.
HOWEVER, THE UNFORTUNATEREALITY IS THAT VERY LITTLE
H AS ACT UA L LY C H A N G E D.

countries whose communities are mostdisadvantaged by the effects of climatechange.

Despite rallying cries from teenagers
and a disrupted world, as society’s mostserious activists superglued themselvesto roads and catapulted soup at famous
artworks, there has actually been aminiscule shift in the effort contributed bythose who can really make a difference.

BREWDOG BEER IS
BEER FOR EVERYONE.
AFTER ALL, WHATGOOD IS BEER, IF WE
DON’T HAVE A PLANETTO DRINK IT ON?

Multinational conglomerates , thewealthiest of society, and governments
at the helm of the world’s richest countries
all have the power to affect change. They
have the power to implement limits towaste, maintain and nurture our wildlife
and our environment, and support the

Ultimately, at BrewDog, we stand firm inour belief that we are out of time. And it
is our responsibility to show a steadfast,
serious commitment towards cutting
emissions, and removing carbon from ouratmosphere.

26

27

LOST FOREST

RECLAIMING THE STUNNING SCOTTISH LANDSCAPE FOR FUTURE
GENERATIONS IS AT THE HEART OF OUR DECISION TO ACQUIRE LAND IN
AVIEMORE FOR REFORESTATION AND PEATLAND RESTORATION. WORK HAS
BEEN PROGRESSING REALLY WELL.

PEATLANDRESTORATION
Peatland restoration commenced in Autumn
2021, and work has been hitting all target
dates so far.

WOODLAND CREATION
Following the extensive survey andconsultation work completed over the past
two years, an afforestation scheme wasdesigned specifically for the 9,308 acres ofland we have acquired in Aviemore. This was
split into two phases for implementation,and the planting, natural regenerationand maintenance will take many years
to implement.
Phase one was approved by Scottish
Forestry in June 2022. This was for a total of
426ha of new woodland creation, including
102ha through natural regeneration.
Tree planting commenced on schedule inMarch 2023 and will be completed by theend of June with 400,000 trees having
been planted.

190ha of peatland restoration has been
completed to date, and over the next 2-3
years there is a further 300ha of potential
peatland to restore, all of which will
effectively sequester carbon from ouratmosphere.

The areas identified for new woodlandthrough natural regeneration have been
based on soil types and proximity to potential
seed source.
Phase two was submitted to Scottish
Forestry in February 2023, and it isanticipated that works will commence
Summer 2023, after completion of
Phase one. This is a total of 434ha of
new woodland creation, including 34ha
through natural regeneration. The naturalregeneration component is smaller, as
the existing trees are more sparse. The
initial planting work will be split over two
years to be completed Spring 2025.

TIMESCALE(INDICATIVE)D
PEATLANN
IO
TA
RESTORWOODLANDCREATION

APR 2021 —MAR 2022

PHASE 1

APR 2022 —JUN 2023

JUL 2023 —MAR 2024

PHASE 2PHASE
3IN PROGRESSPHASE 1PHASE
2IN PROGRESSAPR 2024 —MAR 2025

PHASE 4

Our projects will be registered on the UK Land Carbon Registry. Jointly they are estimated to sequester 308,122 t CO2e
(Woodland Pending Issuance Units in total over 100-year period).

28

29

OUR BARS
BrewDog now has more than 100 bars globally, places where you can indulge in everything that isgreat about craft beer. Our amazing staff are knowledgeable and passionately evangelical whenit comes to craft beers and we pride ourselves on showcasing only the best, most exciting andflavoursome craft beers that we can get our paws on from all over the planet. Our bars serve as key
focal points in the craft beer revolution as we continue our mission to share the passion we have foreverything craft beer.

UPCOMING
SITES

We have plans to open more venues
around the world in the next few years
including the below…

INDIA

We have set an
ambitious go
al of opening
beer bars acro
100 craft
ss India in thenext 10 years. T
really exciting
his is aregion for us,
and we’re thril
joining this bu
led to be
stling craft beer scene. Fivesites arealready planne
d to open in 20
23.

TOWER HILL OUTPOSTREADINGCANARY WHARFUK

SHEPHERD’S BUSHDOGHOUSE EDINBURGH

Our homeland is wh
ere you’ll find the majority of our bars
globally, but we’ve
identified plenty offurther potential to
add to this thriving
network of hop havens.

SHORT NORTHGURUGRAMLOTHIAN ROADSEVEN DIALSFRANKLINTONPENTRIDGEDUBLIN OUTPOSTEUROPEWith brewer
ies in Scotlan
d and Germ
placed to seany, we’re w
rve craft bee
ellr venues acro
we have iden
ss Europe, antified sites indItaly and theNetherlands
imminent laforunches.

D…

ON
Y
E
B
D
AN

e
a and thAustrali
in
s
ll
e
e
it
w
s
r, as
rtlist ofthis yea
ot a shopeningsod.
rWe’ve g
a
fo
il
d
a
Th n
rmarkevenue inev
USA eatice
sp
as a pro

SHANGHAIEXETER

MANCHESTER OUTPOST

30

31

S
E
U
N
E
V
O
HER
S
EGaA
LADSogV
Las Veg s is an

LOOstorey
WATerEloR
o is a multi-

BrewDog Wat
e heart of London,craft beer haven in theviously used byadopting the space pr
Featuring a cocktail
the Eurostar station.
ley, microbrewery,speakeasy, bowling al
D coffee shop, ice
podcast studio, GRIN
working area, slide
cream truck, remote
t comprehensive
and florist, it’s our mosd sees over 15,000
venue in the world anek.
people visit every weBreweftop venue at thimpressive roo
W
.
p ith
the famous stri
f
o
e
tr
n
e
c
ry
ve
r,
dible craft bee
96 taps of increethsive brews from g
lu
xc
e
g
in
d
lu
c
in
tatin
rewery and a ro
on-site microb
emerican gu st
line-up of top Adaquickly acquire
breweries, it’ssininas the top spot
lf
se
it
r
fo
e
m
a
n
enu
er. The food mcity for craft bean tureeights with sig
h
w
e
n
s
e
h
c
a
’
re
g lobster mac ’ndishes includin.
rse
gyu beef burg
cheese and wa

THE UNPRECEDENTED SUCCESS OF THESE MONUMENTALHOPPY PARADISES MARKS A NEW ERA FOR CRAFT BEERDESTINATIONS AROUND THE WORLD, AND BREWDOG IS
FIRMLY AT THE FOREFRONT OF THAT WAVE.

32

33

OUR

ELLON

BREWERIESBRISBANE

Located in our hom
eland of Scotland,
our Ellon HQ contin
ues to be one of
the most technolo
gically-advanced
brewing sites in Eu
rope. The global
headquarters for ou
r business, thissite also employs
more than 250
people in Scotland.

COLUMBUSesy now distribut
er
ew
br
s
bu
um
Our Colaway asstates as far
S
U
35
to
ket.
beer
S craft beer mar
U
t
es
rg
la
e
th
—
California
siest bar in
our largest and bu
to
e
m
ho
is
A
ip;
S
U
The
ous Las Vegas Str
am
-f
ld
or
w
e
th
on
the world
tlanta andseven venues in A
to
n
tio
di
ad
in
is
craft
this
to the world’s first
e
m
ho
so
al
is
ch
Ohio, whis.
brewery’s campu
beer hotel on ourOur brewery in Australia is now joinedby three incredible craft beer bars in
the country’s major cities. We produce
all our beers for the market in Brisbane,
along with local favourite, Brown Snake
Ginger Beer. Annual output surpassed
the 500,000L mark for the first time in thepast 12 months.

BERLINal of
in the capit d
y
it
il
c
fa
g
ainlanThis brewins a site on m ibute
u
rs
e
ff
o
y
n
distr
Germa
which to
m
o
fr
ite
e
p
ro
Eu
er. The s
e
b
d
e
w
re
ation
BrewDog-b
to a destin
e
m
o
h
o
e
ls
itself is ational centr
a
c
u
d
e
d
n
a
ar
craft beer bwers.
refor homeb

34

35

UNITED STATES OF AMERICA - 8

BREWDOG AROUND
THE WORLDBREWDOG ELLONBREWDOG COLUMBUS

LOTHIAN ROAD, EDINBURGH

BREWDOG COLUMBUS

KEY:
BREWDOG BARS

BREWDOG HOTELSSEVEN DIALS, LONDONUNITED KINGDOMBREWDOG COLUMBUS

BREWDOG ELLONBREWDOG BREWERIESEUROPE

SWEDEN - 4

BREWDOG COLUMBUS

INTERNATIONALASIA - 6

SCOTLAND - 15
BREWDOG ELLON

AUSTRALIA - 4

BREWDOG BERLIN

BREWDOG BERLIN

BREWDOG BRISBANE

BREWDOG BRISBANE

BREWDOG BRISBANEENGLAND - 50
WALES - 1

REST OF EUROPE - 10

GERMANY - 6

TOTAL:

104

BREWDOG BARS

4BREWDOG BREWERIES

5

BREWDOG HOTELS

36

r

37

INTERNATIONALPARTNERSOUR MISSION HAS ALWAYS
BEEN TO MAKE OTHERPEOPLE AS PASSIONATEABOUT GREAT CRAFT
BEER AS WE ARE.
And that mission involves ensuring we get ourbeer into as many people’s hands as possible all
around the world.

is drunk in China, and yet the country accounts
for less than one percent of our global sales –this is something we are determined to change.

Going global as an independent business, in
an industry dominated by giants, is incredibly
tough yet we have managed to do this andretain our independence which is massively
important to us.

We have been in the market since 2015 andwe opened our bar in Shanghai in 2020. But
to say we’ve barely scratched the surface of
this dynamic and fast-growing market would
be a massive understatement. China is oneof those markets where you really need towork with an established partner who has asales and distribution infrastructure in place
and local market knowledge. That’s why we’rereally pleased to have signed a partnershipagreement with Bud APAC to enable us to fast
track our Chinese business.

One of our strategies which enables us to dojust that is to work with larger beer companies
as partners in key geographies. We havelongstanding partnerships in place with global
partners such as Molson Coors, Heineken,
Estrella Galicia, Warsteiner and Swinkels.
These partnerships enable us to get our beer
into more people’s hands, and in some cases
brew our beer far closer to the end consumer
which is great for beer quality and importantly
lower impact for our planet.
In 2023, we announced a brand new partnershipwith Bud APAC. About a fifth of the world’s beer

We also launched a JV with Asahi in 2021,
enabling us to reach a much larger audiencein Japan than we were ever capable of on ourown. This partnership has performed reallywell already, and we have established a close,
dynamic relationship with our team on the
ground.

38

39

FINANCIALREVIEW

FINANCIALPERFORMANCEFor year ended 31 December 2022

Revenue growth of 13% in 2022 from 2021 was delivered with growthin the retail sector with a return to more normal trading following the
pandemic.

2022

2021

Revenue

321,206

285,602

Duty(68,110)(66,276)

Net revenue

253,096219,326

Gross Profit

110,088

116,491

Operating loss

(24,024)(5,461)

Adjustments:
Share based payment charge(2,273)

Non cash FX(4,482)573

Depreciation

15,37913,470IFRS 16 amortisation

11,871

9,538(3,529)20,440

5,201

1,738

0

274

Closed sites

3,572

0

Gain on disposal (note 14)(1,764)0Gain on acquisition (note 16)

EBITDA
Pre-opening costs of new retail locations
COVID 19 related

2,320(2,289)0(Loss)/gain on disposal of fixed assets

(552)

1,292

Adjusted EBITDA

639

23,744(24,836)(10,598)

Loss for the year after tax

The financial highlights above give an overview of the year which demonstrate another year ofstrong revenue growth for the Group. The Group invested significantly in brand building activity,
people development, new retail locations and brewing capacity whilst being severely impacted by
exceptionally high input prices in both brewing and retail activities. The loss in the year reflects
the impact of the significant investment together with the input prices which were not passed onto
consumers during the year. The investments made during 2022 result in an excellent platform forcontinued growth.

The 2022 volume of around 1m hl was broadly flat on 2021 volumes,
which reflects the impact of the channel switch seen during the year
as the pandemic restrictions were gradually eased across the globe.
The off trade and ecomm channels were impacted, where we are clear
market leaders across Europe, as the on trade channels re-opened,
where we have a lower market share. During 2022 we did not passon any significant price increases to customers or consumers, which
impacted the overall revenue performance in brewing.
Global bars achieved revenue growth of 69% in 2022 from 2021,
reflecting the strong return of the hospitality sector bounce-back,despite continued pandemic restrictions in place in Europe and the Far
East for much of the year.
Gross margins were impacted in 2022 due to the widely publicised
inflationary pressures resulting in significant cost increases across all
key inputs due to the supply chain pressures of post pandemic and theconflict in Ukraine. We were impacted by previously unprecedented
increases in hops, malt, Co2, cans, bottles, packaging, food ingredientsand utilities. Significant work was undertaken to mitigate the impactof these increases, with rationalisation and competitive tendering of
suppliers, efficiency improvements in production and menu engineering
in retail, which mitigated the impact of these increases to an extent.
These efficiency improvements will continue into 2023 and beyond.
The Group has continued to heavily invest in our crew and haveincreased headcount from 2,346 to 2,649 to further support thecontinued growth and scale of the Group operations. The Group
continues to monitor mechanisms to improve the wellbeing of ourpeople through crew ownership and benefits.
BrewDog continued to invest in considerable brand building activity,
at higher levels than in previous years. This included two mainstream
television campaigns and continued ground breaking out of home
advertising campaigns, together with the investment in continued
social media activity to build the brand.
The Group has invested significantly in 2022 with the launch of twoof our largest ever sites in Waterloo and Las Vegas, together with newsites in Atlanta, Brisbane and a number of smaller locations in the UK.
Significant investment was also undertaken in the largest brewing
facility in Ellon, with a new brewhouse and additional canning line which
has more than doubled capacity in order to meet forthcoming demandand future proof the UK operations.
Sustainability activity and investments have continued at pace with
continued investment in the Anaerobic Digestor facility in Ellon, tree
planting commenced on our 9,308 acre site at the Lost Forest alongsidepeatland restoration work.
The resultant operating loss of £24m in 2022 is disappointing, but reflects
the significant investment in people, beer and the planet together with theimpact of the unprecedented supply chain and input costs. Huge focus
continues on growing the business, whilst also increasing efficiencies toimprove the financial operating performance of the Group.

Adjusted EBITDA
This is a financial measure which is not defined under IFRS andaccordingly is an Alternative Performance Measure (APMs). The Group
believe this APM provides a measure of determining the underlying
performance of the business when adjusting for either non-recurringor items of an exceptional nature. This is also consistent with how thebusiness is monitored internally by the directors.

40

41

BREWDOG BOARD
OF DIRECTORSJAMES WATT

Co-founder & CEOJames was a fully qualified deep sea Captain,
having earlier completed an honours degreein Law and Economics. He traded in beinga salty sea dog to become a BrewDog in
2007, pursuing his passion for great craft
beer by setting up the company with Martin
Dickie. James was awarded Great British
Entrepreneur of the Year in 2014, and is oneof Europe’s only holders of the title of Master
Cicerone. He was awarded an MBE in the2016 Queen’s birthday honours list.

MARTIN DICKIE
Co-founder & Board Member
Martin Dickie has a first class honours degreein Brewing & Distilling from Herriot Watt
University. He is a renegade artist on a mission
to change people’s perceptions about beer
and challenge their taste buds. Along withJames, Martin hosted the hit international TV
show Brew Dogs. He was awarded an MBE
in the 2016 Queen’s birthday honours list.

ALLAN LEIGHTON
Executive Chair of BrewDog PLC
Allan has had an extensive and variedbusiness career holding a series of highprofile roles for major corporations in retail,
FMCG and communication sectors including
Chief Executive of Asda and Non Executive
Chair of the Royal Mail. In addition to his roleon the Board of BrewDog, Allan is currently
Chair of Pizza Express, Non Executive
Chair of the Co-Operative Group, Chair of
Element Materials Technology, Chair of theCanal & River Trust, Chairman of Allbright,
Chairman of C&A AG and Non Executive
Chairman of Simba Sleep. Allan holds anhonorary degree from Cranfield University,
an honorary fellowship from the Universityof Lancaster and a Doctorate in Business
Administration from York St John University.

NIALL MCCALLUMBLYTHE JACKALEXANDER GILMORE

Non-Executive Director& Deputy Chairperson

Non-Executive Director

Blythe is Managing Director at TSG
Consumer. She joined TSG with extensive
private equity and branded consumer
experience, having spent over 10 years at
Rosewood Capital and having served as
CEO of a high-growth consumer products
company. She has also served as a National
Judge for Ernst & Young’s acclaimed
Entrepreneur of the Year® program. Blythereceived a BA, with honors, in Communication
Studiesfrom
Vanderbilt
University.

JAMIE O’HARA
Non-Executive Director
Jamie’s experience includes business
unit strategy, facility rationalization andnew business development for consumer
and household products companies.
Jamie is a former practicing corporate
and securities attorney and a former
consultant at Bain & Company. He holds
a BA in Economics and Philosophy anda JD, both from Georgetown University.

GINY BOER

Non-Executive Director

CFO

Niall joined BrewDog in October 2020,
bringing significant financial leadershipexpertise. Niall has over 26 years’ experience
as an adviser, investor, and CFO across a
range of global industries and is responsible
for all aspects of finance and IT, including
procurement and legal matters, as we scale
the systems and processes across thegroup. Niall is a chartered accountant with
the Institute of Chartered Accountants in
Scotland, where he is a member of its council.

NEIL SIMPSONBusiness Development Director
Neil Simpson joined BrewDog in August 2012
bringing with him over 20 years’ experience(10 of those at partner level) advising andacting for a wide variety of businesses
through the Ritson Smith accountancy
practice. Neil is responsible for all growth
activities including significant CAPEX
projects and joint ventures. Neil is a qualified
chartered accountant with the Instituteof Chartered Accountants in Scotland.

Giny joins the BrewDog board with a wealthof retail experience, having held extensive
tenures at IKEA on an international scale andholding a board position at the brand, before
moving into the role of CEO at fashion retail
pioneer business, C&A Europe. She brings
extensive leadership experience and bold,creative perspective to our senior team.

ERIK JOHNSON
Non-Executive Director
Erik is a Managing Director at TSG Consumer
Partners. He focuses on originating,structuring, and due diligence for new
investment opportunities across consumer
sectors. He works closely with TSG’s partnercompanies on their growth strategies andinitiatives. Erik joined TSG in 2011 andhas worked with BrewDog since TSG’s
investment in 2017. Before joining TSG,
Erik was an investment banker where headvised consumer businesses on mergers
and acquisitions. Erik received a BA, withhonours, in Economics and Corporate
Strategy from Vanderbilt University.

Alex is a Vice President at TSG Consumer
Partners, where he works on new investment
opportunities and supports TSG’s partnercompanies in Europe. Alex is a former
consultant at Boston Consulting Group(BCG) where he advised clients across a
range of industries, including travel andhospitality. Alex received a Bachelor of Arts
in Physics, from The University of Oxford.

42

43

GROUP STATEMENT OFCOMPREHENSIVE INCOMEGROUP STATEMENT OFFINANCIAL POSITION

For the year ended 31 December 2022

As at 31 December 2022
NOTES

2022
£000

2021
£000

Property, plant and equipment

12

225,955

174,932

Right-of-use asset

25

145,280

111,625

Intangible assets

13

20,89020,851Other non-current financial assets

14

157

157

Investment in a joint venture

15

2,952

-

Deferred tax assets

11

2,269

-

397,503

307,565

Continuing operations
NOTES

2022
£000

2021
£000

4

321,206

285,602

Duty(68,110)(66,276)

Net revenue

253,096219,326

Cost of sales(143,008)(102,835)

Gross Profit

110,088

116,491

Operating expenses(137,662)(122,558)

Loss on disposal of property, plant and equipment(1,849)(1,292)Gain on acquisition of German subsidiary

2,289

-

Gain on disposal of subsidiary

1,764

-

Gross Revenue

Other operating income

5

1,346

1,898

Operating Loss

6(24,024)(5,461)

Finance income

9

252

177

Finance costs

10(6,754)(4,121)(30,526)(9,405)5,690(1,193)(24,836)(10,598)

Loss before taxation
Income tax credit/(expense)
Loss for the year

11

Attributable to:Equity holders of the parent(23,843)(10,417)

Non-controlling interests

(993)

(181)

(24,836)(10,598)

Non-current assets

Current assets
Trade and other receivables

18

62,174

61,425Inventory

19

26,574

20,160-602

Corporation tax receivable
Cash and cash equivalents

20

Total assets

10,33645,274

99,084

127,461496,587

435,026

Current liabilities
Trade and other payables

21

110,887

60,403Financial liabilities

22

42,80914,305

88-

153,784

74,708

Corporation tax payableNon-current liabilities

Other comprehensive income

Deferred tax liabilities

11

-

3,963

Exchange differences on translation of foreign operations(1,523)

97

Financial liabilities

22

185,224

170,737

Other comprehensive income for the year, net of tax(1,523)

97

Government grants

29

Total comprehensive income for the year, net of tax(26,359)(10,501)

Attributable to:Equity holders of the parent(25,366)(10,320)

Non-controlling interests

(993)

(181)

(26,359)(10,501)

3,240

3,118

188,464

177,818

Total liabilities

342,248

252,526

Net Assets

154,339

182,500

EquityCalled up share capital

27

75

75

Share premium account27

183,679

183,679

Treasury shares

28(1,857)(1,857)

Foreign currency translation reserve28(1,217)

306

1,861

4,134

Share based payment reserve
Retained earnings(29,581)(5,794)Equity attributable to equity holders of the parent

152,960

180,543

Non-controlling interests
Total Equity
Signed on behalf of the Board of Directors on on 31 May 2023.	J B Watt
Director

1,379

1,957

154,339

182,500
N J McCallum
Director

44

45

12

103,993

87,589Right-of-use assets

25

10,2686,226

Intangible assets

13

1,294

1,294

Other non-current financial assets

14

33,44430,786

Investment in a joint venture

15

2,952

-

151,951

125,895

Current assets
Trade and other receivables

18

186,315

147,544

Inventory

19

18,391

14,426-800

Corporation tax receivable
Cash and cash equivalents

20

Total assets

694

37,808205,400

200,578

357,351

326,473

Trade and other payables

21

67,40535,556

Financial liabilities

22

31,516

6,374

98,921

41,930Non-current liabilities
Deferred tax liabilities

11

3,703

4,819

Financial liabilities

22

38,826

62,232Government grants

29

1,784

1,899

44,313

68,950Total liabilities

143,234

110,880

Net assets

214,117215,593

27

75

75

Share premium account27

183,679

183,679

Treasury shares

28(1,857)(1,857)

1,687

4,134

Retained earnings

30,53329,562

Total Equity

214,117215,593

EquityShare based payment reserve

The group has elected to take the exemption under section 408 of the Companies Act 2006 not to present the company income statement. The profit after tax recorded by the company for the year was £971,000 (2021: profit of £9,141,000).

Signed on behalf of the Board of Directors on on 31 May 2023.	J B Watt
Director

N J McCallum
Director(1,857)

209

1,814

Share capital£000

74 168,585

4,063 172,888(87)

172,801

Loss for the year

-

-

-

-

-

(10,417)(10,417)(181)(10,598)

Other comprehensive income

-

-

-

97

-

-

97

-

97

Issue of share capital

1

19,736----

19,737-

19,737

Issue of share capital in subsidiary

-

-

-

-

2,320

560
-

560
2,320

12
-

572
2,320

-

-

-

-

-

-

-

2,213

2,213

-

(4,642)

-

-

-

-

(4,642)-(4,642)75 183,679(1,857)

306

4,134

(5,794) 180,543

1,957

182,500(993)(24,836)

Share options granted
Non-controlling interests arisingon establishment of subsidiary
Transaction costs
At 1 January 2022

Current liabilities

Called up share capital

At 1 January 2021

Total equity£000

Property, plant and equipment

Non-current assets

Non-controllinginterests
£000

2021
£000

Total
£000

2022
£000

Retained
Earnings
£000

NOTES

Share based
payment reserve£000

For the year ended 31 December 2022
Foreign currencytranslation reserve£000

As at 31 December 2022

Treasuryshares£000

GROUP STATEMENT OFCHANGES IN EQUITY

Sharepremium£000

COMPANY STATEMENT OFFINANCIAL POSITION

Loss for the year

-

-

-

-

-

(23,843) (23,843)

Other comprehensive income

-

-

-

(1,523)--(1,523)-(1,523)Issue of share capital in subsidiaries

-

-

-

-

-

56

56

373
42

373
98

Share options granted

-

-

-

-

(2,447)-(2,447)-(2,447)

-

-

-

-

174

-

174

-

174

75 183,679(1,857)(1,217)

1,861(29,581) 152,960

1,379

154,339

Non-controlling interests arisingon subsidiary

Share options granted through EBT
At 31 December 2022

46

47

COMPANY STATEMENT OFCHANGES IN EQUITYGROUP STATEMENT OF
CASH FLOWSFor the year ended 31 December 2022

For the year ended 31 December 2022

2022
£000
30,6052021£000
10,921(61,557)(36,867)

Proceeds from sale of property, plant and equipment

802

3,302

Purchase of intangible assets

(9)

(69)

Acquisition of subsidiaries (net of cash)

45-

Net cash flow from operating activities

Total
equity£000

At 1 January 2022

Retainedearnings£000

Transaction costs

Share based
payment reserve£000

Share options granted

Treasuryshares£000

Issue of share capital

1,814

20,421

189,037

-

-

9,141

9,141

-

-

-

19,737

Issue of ordinary share capital

-

-

2,320

-

2,320

(4,642)---(4,642)(1,857)

4,134

29,562

215,593

Sharepremium£000

Profit for the year

Investing activities(1,857)

Share capital£000
At 1 January 2021

74

168,585--1

19,73675

183,679

NOTES
32

Purchase of property, plant and equipment

Profit for the year

-

-

-

-

971

971

Share options granted

-

-

-

(2,447)-(2,447)

At 31 December 2022

75

183,679(1,857)

1,687

30,533214,117

Disposal of subsidiaries (net of cash)
Net cash flow used in investing activities

(58)

-

(60,777)(33,634)-

20,308Transaction costs of issue of shares-(4,642)

Proceeds from government grant219-

Proceeds from landlord contributions

7,120

4,077

Proceeds from joint venture partner

373

2,213

-

(9,999)Financing activities

Repayment of bonds
Repayment of borrowings

(510)

(201)

Principle elements of lease payments(9,516)(7,442)

Hire purchase receipts

2,907

10,406Hire purchase payments
Net cash flow from financing activities(5,204)(1,604)(4,611)

13,116

Net decrease in cash and cash equivalents(34,783)(9,597)

Net foreign exchange differences
Cash and cash equivalents at beginning of year(155)
45,27454,871

Cash and cash equivalents at end of year

10,33645,274

48

49

NOTES TO THE
FINANCIAL STATEMENTS
As at 31 December 2022
1.

GENERAL INFORMATION
The financial statements of BrewDog PLC (the company) and its subsidiaries(collectively, the group) for the year ended 31 December 2022 wereauthorised for issue by the Board of Directors on 31 May 2023. The company
is incorporated in the United Kingdom under the Companies Act 2006.

2.

BASIS OF PREPARATIONStatement of compliance
The consolidated financial statements, which have been prepared under
the historical cost convention, in accordance with UK adopted international
accounting standards and incorporate the financial statements of theCompany and its subsidiaries, joint ventures and associates from theeffective date of acquisition or to the date of deemed disposal.

The consolidated financial statements are presented in sterling, which isthe company’s functional currency and all values are rounded to the nearest
thousand (£000), except as otherwise indicated.

The company has taken advantage of the following disclosure exemptions
under FRS 101:(i) The requirement of IFRS 7 ‘Financial Instruments: Disclosures’ relating
to the disclosure of financial instruments and the nature and extent ofrisks arising from such instruments;(ii) The requirement of IFRS 13 ‘Fair Value Measurement’ paragraphs 91
to 99 relating to the fair value measurement disclosures of financial
assets and financial liabilities that are measured at fair value, such as theavailable for sale investments and derivative financial instruments;(iii) The applicable requirements of IAS 36 ‘Impairment of Assets’ relating to
the disclosures of estimates used to measure recoverable amounts;(iv) The requirement of IAS 1 ‘Presentation of Financial Statements’paragraphs 134 to 136 relating to the disclosure of capital management
policies and objectives;(v) The requirements of IAS 7 ‘Statement of Cash Flows’ and IAS 1‘Presentation of Financial Statements’ paragraph 10(d), 111 relating to thepresentation of a Cash Flow Statement;(vi) The requirements of IAS 8 ‘Accounting Policies, Changes in Accounting
Estimates and Errors’ paragraphs 30 and 31 relating to the disclosureof standards, amendments and interpretations in issue but not yet
effective; and(vii) The requirements of IAS 24 ‘Related Party Disclosures’ relating to thedisclosure of key management personnel compensation and relating
to the disclosure of related party transactions entered into between the
Company and other wholly-owned subsidiaries of the group.
(viii) The requirements of the second sentence of paragraph 110 andparagraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15
Revenue from Contracts with Customers.
(ix) The requirements of paragraph 52, the second sentence of paragraph89, and paragraphs 90, 91 and 93 of IFRS 16 Leases. The requirementsof paragraph 58 of IFRS 16, provided that the disclosure of details
of indebtedness required by paragraph 61(1) of Schedule 1 to theRegulations is presented separately for lease liabilities and otherliabilities, and in total.

The consolidated financial statements comprise the financial statementsof the Company and its subsidiaries as at 31 December 2022. Control isachieved when the Group is exposed, or has rights, to variable returns fromits involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an
investee if, and only if, the Group has:
• Power over the investee (i.e., existing rights that give it the current ability todirect the relevant activities of the investee)• Exposure, or rights, to variable returns from its involvement with the investee• The ability to use its power over the investee to affect its returns
The Group re-assesses whether or not it controls an investee if facts andcircumstances indicate that there are changes to one or more of the threeelements of control. Consolidation of a subsidiary begins when the Groupobtains control over the subsidiary and ceases when the Group loses controlof the subsidiary. Assets, liabilities, income and expenses of a subsidiaryacquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date theGroup ceases to control the subsidiary.
Profit or loss and each component of OCI are attributed to the equity
holders of the parent of the Group and to the non-controlling interests, even
if this results in the non-controlling interests having a deficit balance. Whennecessary, adjustments are made to the financial statements of subsidiaries
to bring their accounting policies in line with the Group’s accounting policies.
All intra-group assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated in fullon consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, isaccounted for as an equity transaction. If the Group disposes of a subsidiary,
it derecognises the related assets (including goodwill), liabilities, noncontrolling interest and other components of equity, while any resultant gainor loss is recognised in profit or loss. Any investment retained is recognised atfair value.

The directors have a reasonable expectation that the Group as a whole has
adequate resources to continue its operational existence for the foreseeable
future and until 31 May 2024. For this reason, they continue to adopt the going
concern basis in the accounts. The Group’s activities, together with factors
likely to affect its future development, performance and position are consideredby the Directors on an on-going basis. In addition, notes 22, 23 and 26 include
details of the Group’s treasury activities, long term funding arrangements,
financial instruments and financial risk management activities.

Cash and cash equivalents in the balance sheet comprise cash atbank and in hand and short-term deposits with an original maturity of
three months or less. For the purpose of the cash flow statement, cash
and cash equivalents are as defined above.
Property, plant and equipment
Tangible fixed assets, other than land, are stated at cost lessdepreciation. Depreciation is provided at rates calculated to write off
the cost less estimated residual value of each asset over its expected
useful life, as follows:
Land 				not depreciated
Buildings 			2% on cost

Long-term leasehold property

over lease term

Plant and machinery						

10 - 25% on reducing balanceand 33 - 50% on cost

Computer equipment		

33% on cost

Fixtures and fittings		

20 - 50% on cost

Motor vehicles 			

25% on reducing balance

Assets under construction 		not depreciated

3. ACCOUNTING POLICIESNew standards and interpretations

Basis of consolidation
The parent company financial statements have been prepared in accordancewith Financial Reporting Standard 101 - Reduced Disclosure Framework(“FRS 101”) and using the historical cost convention. In preparing thesefinancial statements, the company applies the recognition, measurementand disclosure requirements of International Financial Reporting Standards(“IFRS”) issued by the International Accounting Standards Board (IASB),
but makes amendments where necessary in order to comply with theCompanies Act and has set out below where advantage of the FRS 101
disclosure exemptions have been taken.

Cash and cash equivalents

The directors have performed stress testing of cash flow forecasts to takeaccount of events which could impact the financial position of the Group.
The range of stress tests included a reduction in demand for its products andrelated impacts on working capital along with a range of extreme but plausible
downsides. These stress tests demonstrate that the group has access to
sufficient liquidity through the going concern period to 31 May 2024. As
such, the directors have a reasonable expectation that the Company and theGroup have adequate resources to continue in operational existence for theforeseeable future. Accordingly, they continue to adopt the going concern
basis in preparing the annual report and accounts.

Transition to FRS 101
These financial statements, for the year ended 31 December 2022, are thefirst the parent company has prepared in accordance with FRS 101, theparent company previously prepared its financial statements in accordancewith UK adopted international accounting standards. Accordingly the parent
company has prepared financial statements that comply with FRS 101
applicable as at 31 December 2022, together with the comparative period forthe year ended 31 December 2021 as described in the summary of significant
accounting policies. In performing the transition to FRS 101 there were no
adjustments required to the parent company financial statements.

Going concern

The company has considered all new and amended IFRSs issued by theInternational Accounting Standards Board (IASB) that are mandatorily
effective for the year ended 31 December 2022. Where the changes affectthe company, the relevant application and disclosure has been made during
the year to 31 December 2022. The new and amended IFRSs during the year
are as detailed below:
•
•
•
•
•
•

Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37.
Reference to the Conceptual Framework – Amendments to IFRS 3.
Property, Plant and Equipment: Proceeds before Intended Use –Amendments to IAS 16 Leases.
IFRS 1 First-time Adoption of International Financial Reporting Standards –Subsidiary as a first-time adopter.
IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognitionof financial liabilities.
IAS 41 Agriculture – Taxation in fair value measurements.
These amendments had no impact on the consolidated financial statementsof the Group.
The company has not early adopted any standards, interpretations oramendments that have been issued, but are not yet effective.

New standards and interpretations - not yet adopted
The following standards, amendments and interpretations to existing
standards have been published and are mandatory for the company’s
accounting period beginning on or after 1 January 2023 or later
periods, but the company has not early adopted them:• Classification of Liabilities as Current or Non-Current (Amendments
to IAS 1) (1 January 2023);• Definition of Accounting Estimates (Amendments to IAS 8) (1January 2023);• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS 2
Practice Statement 2) (1 January 2023);• Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12).
It is not anticipated that the application of the above standards andamendments will have any material impact on the group’s financial
statements.

Certain brewing equipment, included within plant and machinery,
is depreciated at 10% on reducing balance method and has been
allocated a residual value of between 10% and 55% of cost, dependanton the equipment’s use.
Intangible assets
Intangible assets acquired separately are measured on initialrecognition at cost. The cost of intangible assets acquired in abusiness combination is the fair value as at the date of acquisition.
Following initial recognition, intangible assets are carried at cost lessaccumulated amortisation and accumulated impairment losses, if any.
Internally generated intangible assets, excluding capitalised
development costs, are not capitalised and expenditure is recognisedin the statement of profit or loss when it is incurred.
Intangible assets with indefinite useful lives are not amortised, but
are tested for impairment annually, either individually or at the cashgenerating unit level. The assessment of indefinite life is reviewed
annually to determine whether the indefinite life continues to besupportable. If not, the change in useful life from indefinite to finite ismade on a prospective basis. Intangible assets with indefinite useful
lives consist of distribution rights and goodwill.
Gains or losses arising from derecognition of an intangible asset aremeasured as the difference between the net disposal proceeds andthe carrying amount of the asset and are recognised in the statementof profit or loss when the asset is derecognised.
Interest in equity accounted investments
The Group applies the equity method to investments where it haseither joint control or significant influence. Under the equity method,
the investment is initially recognised at cost (which in the case ofinvestees which were previously consolidated subsidiaries, is basedon their fair value on the date control was lost). Subsequently, thecarrying amount of the investment is adjusted to recognise changes in
the Group’s share of net assets of the associate or joint venture since
the acquisition date. Goodwill relating to the associate or joint venture
is included in the carrying amount of the investment and is not tested
for impairment separately.

50

51

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
The statement of profit or loss reflects the Group’s share of the resultsof operations of the associate or joint venture. Any change in OCI of
those investees is presented as part of the Group’s OCI. In addition,
when there has been a change recognised directly in the equity of
the associate or joint venture, the Group recognises its share of any
changes, when applicable, in the statement of changes in equity.
After application of the equity method, the Group determines whether
it is necessary to recognise an impairment loss on its investment
in its associate or joint venture. At each reporting date, the Group
determines whether there is objective evidence that the investmentin the associate or joint venture is impaired. If there is such evidence,
the Group calculates the amount of impairment as the difference
between the recoverable amount of the associate or joint venture andits carrying value.
Non-current financial assets
Non-current financial assets comprise investments in unlisted equity
securities. The investments are measured at fair value, with changes infair value recognised in profit or loss.
Impairment of non-financial assets
The group assesses, at each reporting date, whether there is anindication that an asset may be impaired. If any indication exists, orwhen annual impairment testing for an asset is required, the group
estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or cash generating unit’s (CGU)
fair value less costs of disposal and its value in use. The recoverable
amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those fromother assets or groups of assets. When the carrying amount of anasset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate thatreflects current market assessments of the time value of money andthe risks specific to the asset. In determining fair value less costs ofdisposal, recent market transactions are taken into account. If no suchtransactions can be identified, an appropriate valuation model is used.
These calculations are corroborated by valuation multiples, quoted
share prices for publicly traded companies or other available fair value
indicators. The group bases its impairment calculation on most recent
budgets and forecast calculations, which are prepared separately foreach of the group’s CGUs to which the individual assets are allocated.
These budgets and forecast calculations generally cover a periodof three years. A long-term growth rate is calculated and applied toproject future cash flows after the fifth year.
Impairment losses of continuing operations are recognised in thestatement of comprehensive income in expense categories consistent
with the function of the impaired asset. For assets excluding goodwill,
an assessment is made at each reporting date to determine whether
there is an indication that previously recognised impairment losses
no longer exist or have decreased. If such indication exists, the group
estimates the asset’s or CGU’s recoverable amount. A previously
recognised impairment loss is reversed only if there has been achange in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The reversal
is limited so that the carrying amount of the asset does not exceed its
recoverable amount, nor exceed the carrying amount that would havebeen determined, net of depreciation, had no impairment loss beenrecognised for the asset in prior years. Such reversal is recognised in
the statement of profit or loss.

Goodwill is tested for impairment annually and when circumstancesindicate that the carrying value may be impaired. Impairment isdetermined for goodwill by assessing the recoverable amount ofeach CGU (or group of CGUs) to which the goodwill relates. When therecoverable amount of the CGU is less than its carrying amount, an
impairment loss is recognised. Impairment losses relating to goodwill
cannot be reversed in future periods.
Intangible assets with indefinite useful lives are tested for impairment
annually at the CGU level, as appropriate, and when circumstancesindicate that the carrying value may be impaired.
Business combinations and goodwill
Business combinations are accounted for using the acquisition
method. The cost of an acquisition is measured as the aggregateof the consideration transferred, which is measured at acquisition
date fair value, and the amount of any non-controlling interests in theacquiree. For each business combination, the group elects whether
to measure the non-controlling interests in the acquiree at fair value
or at the proportionate share of the acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred and included inoperating expenses.
When the group acquires a business, it assesses the financial assets
and liabilities assumed for appropriate classification and designationin accordance with the contractual terms, economic circumstancesand pertinent conditions as at the acquisition date.
Goodwill is initially measured at cost (being the excess of the aggregateof the consideration transferred and the amount recognised for
non-controlling interests and any previous interest held over the net
identifiable assets acquired and liabilities assumed). If the fair valueof the net assets acquired is in excess of the aggregate considerationtransferred, the group re-assesses whether it has correctly identified
all of the assets acquired and all of the liabilities assumed and reviews
the procedures used to measure the amounts to be recognised at theacquisition date. If the reassessment still results in an excess of thefair value of net assets acquired over the aggregate considerationtransferred, then the gain is recognised in profit or loss.
Goodwill is allocated to each of the Groups cash generating units thatare expected to benefit from the combination, irrespective of whether
other assets or liabilities of the acquiree are assigned to those units.
Where goodwill has been allocated to a CGU and part of the operation
within that unit is disposed of, the goodwill associated with thedisposed operation is included in the carrying amount of the operation
when determining the gain or loss on disposal. Goodwill disposedin these circumstances is measured based on the relative values ofthe disposed operation and the portion of the cash-generating unit
retained.
Revenue recognition
Revenue comprises revenue recognised by the group in respect ofgoods supplied during the year, exclusive of value added tax and trade
discounts but inclusive of excise duty. Revenue is recognised in thefinancial statements when goods are shipped to customers and theentity has satisfied its performance obligations under the contract.
Revenue comprises the fair value of the consideration received or
receivable for the sale of goods in the ordinary course of business.

Cost of sales
Cost of sales comprises brewery, warehouse maintenance costs,
ingredients, packaging and direct staff costs.
Operating expenses
Operating expenses comprises indirect staff costs, advertising,marketing, distribution and other expenditure which is indirect innature.

•••How the asset will generate future economic benefits
The availability of resources to complete the asset
The ability to measure reliably the expenditure during development

Following initial recognition of the development expenditure as an
asset, the asset is carried at cost less any accumulated amortisation
and accumulated impairment losses. Amortisation of the asset begins
when development is complete, and the asset is available for use. It isamortised over the period of expected future benefit. Amortisation isrecorded in cost of sales. During the period of development, the asset
is tested for impairment annually.

Taxation
Government grants
Current income tax
Current tax assets and liabilities are measured at the amount expected
to be recovered from or paid to the taxation authorities, based on
tax rates and laws that are enacted or substantively enacted at thebalance sheet date.
Income tax is charged or credited directly to equity if it relates toitems that are credited or charged to equity. Otherwise income tax isrecognised in the statement of comprehensive income.
Deferred income tax
Deferred income tax is recognised on all temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, with the following exception:• Deferred income tax assets are recognised only to the extent that
it is probable that taxable profits will be available against which the
deductible temporary differences, carried forward tax credits or
tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an
undiscounted basis at the tax rates that are expected to apply when
the related asset is realised, or liability is settled, based on tax rates andlaws enacted or substantively enacted at the balance sheet date.
Foreign currency translation

Government grants are recognised where there is reasonableassurance that the grant will be received, and all attached conditions
will be complied with. When the grant relates to an expense item, it isrecognised as income on a systematic basis over the periods that thecosts, which it is intended to compensate, are expensed. Government
grants that are receivable as compensation for expenses or losses
already incurred or for the purpose of giving immediate financial
support to the Group with no future related costs are recognised in
profit or loss in the period in which they become receivable. Where theincome relates to a distinct identifiable expense, the income is offset
against the relevant expenses for example, income received under theCoronavirus Job Retention Scheme (CJRS) has been offset against
staff costs. When the grant relates to an asset, it is recognised asincome in equal amounts over the expected useful life of the related
asset.
LeasesThe group assesses at contract inception whether a contract is, or
contains, a lease. That is, if the contract conveys the right to control
the use of an identified asset for a period of time in exchange forconsideration.
The group applies a single recognition and measurement approach for
all leases, except for short-term leases and leases of low-value assets.
The group recognises lease liabilities to make lease payments andright-of-use assets representing the right to use the underlying assets.

Transactions and balances
Right-of-use assets
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date of thetransactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at period
end exchange rates of monetary assets and liabilities denominated inforeign currency are recognized in the statement of comprehensive
income. The principal foreign currencies used by the group are US
dollars ($), Euro (€) and Australian dollars (AUS $).
Group companies
The assets and liabilities of foreign operations are translated into
sterling at the rate of exchange ruling at the balance sheet date.
Income and expenses are translated at weighted average exchange
rates for the year. The resulting exchange differences are recognisedin other comprehensive income.
Research and development
Research costs are expensed as incurred. Development expenditureson an individual project are recognised as an intangible asset when theGroup can demonstrate:••

 he technical feasibility of completing the intangible asset so thatT
the asset will be available for use or sale
Its intention to complete and its ability and intention to use or sell
the asset

The group recognises right-of-use assets at the commencement dateof the lease (i.e., the date the underlying asset is available for use). Rightof-use assets are measured at cost, less any accumulated depreciationand impairment losses, and adjusted for any remeasurement of leaseliabilities. The cost of right-of-use assets includes the amount of leaseliabilities recognised, initial direct costs incurred, and lease payments
made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis
over the shorter of the lease term and the estimated useful lives of theassets.
Lease liabilities
At the commencement date of the lease, the group recognises leaseliabilities measured at the present value of lease payments to be madeover the lease term. The lease payments include fixed payments(including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate,
and amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the group and paymentsof penalties for terminating the lease, if the lease term reflects thegroup exercising the option to terminate. Variable lease paymentsthat do not depend on an index or a rate are recognised as expenses(unless they are incurred to produce inventories) in the period in which
the event or condition that triggers the payment occurs.

52

53

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
In calculating the present value of lease payments, the group uses its
incremental borrowing rate at the lease commencement date because
the interest rate implicit in the lease is not readily determinable. Afterthe commencement date, the amount of lease liabilities is increased
to reflect the accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a change in thelease payments (e.g., changes to future payments resulting from achange in an index or rate used to determine such lease payments) ora change in the assessment of an option to purchase the underlying
asset.
Short-term leases and leases of low-value assets
The group applies the short-term lease recognition exemption toits short-term leases of machinery and equipment (i.e., those leases
that have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the lease of
low-value assets recognition exemption to leases of office equipmentthat are considered to be low value. Lease payments on short-termleases and leases of low-value assets are recognised as expense on
a straight-line basis over the lease term.

that case, the company also recognises an associated liability. The
transferred asset and the associated liability are measured on a basisthat reflects the rights and obligations that the company has retained.
Impairment of financial assets
The group recognises an allowance for expected credit losses (ECLs)
for all debt instruments not held at fair value through profit or loss. ECLs
are based on the difference between the contractual cash flows duein accordance with the contract and all the cash flows that the groupexpects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are
integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which
there has not been a significant increase in credit risk since initialrecognition, ECLs are provided for credit losses that result fromdefault events that are possible within the next 12-months (a 12-month
ECL). For those credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss allowance isrequired for credit losses expected over the remaining life of the
exposure, irrespective of the timing of the default (a lifetime ECL).

Financial assets
Financial assets are recognised when the company becomes party
to the contracts that give rise to them and are classified as financial
assets at fair value through profit or loss or loans and receivables, as
appropriate. The company determines the classification of its financial
assets at initial recognition and, where allowed and appropriate, reevaluates this designation at each financial year-end.
When financial assets are recognised initially, they are measured
at fair value, being the transaction price plus, in the case of financial
asset not at fair value through profit or loss, directly attributabletransaction costs.

For trade receivables and contract assets, the group applies a
simplified approach in calculating ECLs. Therefore, the groupdoes not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date. The grouphas established a provision matrix that is based on its historical credit
loss experience, adjusted for forward-looking factors specific to thedebtors and the economic environment.
Financial liabilities
All financial liabilities are recognised initially at fair value and in the caseof loans and borrowings, plus directly attributable transaction costs.

Trade and other receivables

Trade and other payables

Trade receivables, which generally have 60-90 day terms, arerecognised and carried at the lower of their original invoiced value
and recoverable amount. Where the time value of money is material,receivables are carried at amortised cost.

Trade payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.

De-recognition of financial assets

Loans are initially recognised at cost, being the fair value of theconsideration received net of issue costs associated with theborrowing. Loans are subsequently measured at their amortised cost
applying the effective interest rate method.

A financial asset (or, where applicable a part of a financial asset or partof a group of similar financial assets) is derecognised when:• the rights to receive cash flows from the asset have expired; or• the company has transferred its rights to receive cash flows fromthe asset or has assumed an obligation to pay the received cash
flows in full without material delay to a third party under a ‘passthrough’ arrangement; and either:• The company has neither transferred nor retained substantially all
the risks and rewards of the asset, but had transferred control of
the asset, or• The company has transferred substantially all the risks andrewards of the asset.
When the company has transferred its rights to receive cash flows
from an asset or has entered into a pass-through arrangement, and hasneither transferred nor retained substantially all the risks and rewardsof the asset nor transferred of the asset, the asset is recognised tothe extent of the company’s continuing involvement in the asset. In

Loans and borrowings

Share-based payments

Site pre-opening costs

The group operates three equity-settled, share based compensationplans. The fair value of the employee services received in exchange
for the grant of the options is recognised as an expense over thevesting period. The total amount expensed over the vesting period isdetermined by reference to the fair value of the options at the date on
which they were granted.

Site pre-opening costs refer to costs incurred in getting new sites fully
operational and primarily include costs incurred before opening and in
preparing for launch. These costs are disclosed separately to provide
a more accurate indication of the Group’s underlying performance.

Fair value is determined at the date when the grant is made using anappropriate valuation model, further details are included in note 30.
Non-market performance vesting and service conditions are included
in assumptions about the number of options that are expected to vest.
At each balance sheet date, the company revises its estimates of thenumber of options that are expected to vest.

Site closing costs refer to costs incurred in sites which have beenclosed in the year and exited. These primarily include costs of disposalof assets, trading losses and removal of stocks. These costs aredisclosed separately to provide a more accurate indication of theGroup’s underlying performance.

Site closing costs

Significant judgements and estimates
The company recognises the impact of the revision to original
estimates, if any, in the income statement, with corresponding
adjustment to equity. No expense is recognised for awards that do not
ultimately vest.
The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share based
payment reserve when the options are exercised and new shares areissued.

The preparation of the Group’s financial statements requires
management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts within thefinancial statements. However, the nature of estimation means that
actual outcomes may differ from those estimates. The following
judgements have had the most significant effect on the amounts
recognised in the financial statements:
Judgements

Treasury shares
BrewDog PLC shares held by the group are deducted from equity
as “treasury shares” and are recognised at cost. Consideration
received for the sale of such shares is also recognised in equity, withany difference between the proceeds from sale and the original cost
being taken to reserves. No gain or loss is recognised in the income
statement on the purchase, sale, issue or cancellation of equity shares.
Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location andcondition are accounted for, as follows:
Raw materials - Purchase cost on a first-in, first-out basis.
Finished goods and work in progress - Cost of direct materials andlabour and a proportion of manufacturing overheads based on normal
operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary courseof business, less estimated costs of completion and the estimatedcosts to sell.

In the process of applying the Group’s accounting policies,
management has made the following judgements, which have had themost significant effect on the amounts recognised in the consolidated
financial statements.
Determining the lease term of contracts with renewal and termination
options
The Group determines the lease term as the non-cancellable term of
the lease, together with any periods covered by an option to extend
the lease if it is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is reasonably certain
not to be exercised.
The Group has several lease contracts that include extension andtermination options. The Group applies judgement in evaluating
whether it is reasonably certain whether or not to exercise the option
to renew or terminate the lease. That is, it considers all relevant factorsthat create an economic incentive for it to exercise either the renewal
or termination. After the commencement date, the Group reassesses
the lease term if there is a significant event or change in circumstancesthat is within its control and affects its ability to exercise or not toexercise the option to renew or to terminate (e.g., construction ofsignificant leasehold improvements or significant customisation to theleased asset).

Pensions
Estimates and assumptions

Finance charges on the loans are recognised as finance costs in thestatement of comprehensive income using the effective interest rate
method.

The pension plan in place is a defined contribution plan. Pension
contributions are charged to the income statement as an expense in
the period to which the contributions relate. Once the contributions
have been paid, there are no further payment obligations.

Derecognition of financial liabilities

Alternative performance measures (APMs)

A financial liability is derecognised when the obligation under theliability is discharged or cancelled or expires. Where an existing
financial liability is replaced by another from the same lender onsubstantially different terms, or the terms of an existing liability aresubstantially modified, such an exchange or modification is treatedas a derecognition of the original liability and the recognition of a
new liability, and the difference in the respective carrying amounts is
recognised in the income statement.

Management exercises judgement in determining adjustments which
are applied to IFRS measurements to derive suitable APMs. APMs areused where management believe the measures provide additional
meaningful information on the underlying business performanceand these measures are used when assessing performance of thebusiness. APMs are not defined by IFRS and may not be directlycomparable with other companies and they are not intended to be a
substitute to IFRS measures.

The key assumptions concerning the future and other key sourcesof estimation uncertainty at the reporting date, that have a significant
risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year, are described below. The
Group based its assumptions and estimates on parameters available
when the consolidated financial statements were prepared. Existing
circumstances and assumptions about future developments, however,may change due to market changes or circumstances arising that are
beyond the control of the Group. Such changes are reflected in theassumptions when they occur.

54

55

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which
depends on the terms and conditions of the grant. This estimate also
requires determination of the most appropriate inputs to the valuation
model including the expected life of the share option or appreciationright, volatility and dividend yield and making assumptions about them.
The Group initially measures the cost of cash-settled transactions
with employees using the Black-Scholes-Merton (“BSM”) pricing
model to determine the fair value of the liability incurred. For cashsettled share-based payment transactions, the liability needs tobe remeasured at the end of each reporting period up to the date ofsettlement, with any changes in fair value recognised in profit or loss.
This requires a reassessment of the estimates used at the end of eachreporting period. The assumptions used for estimating fair value forshare-based payment transactions are disclosed in note 30. A 5%change in the estimate regarding marketability discount results in a
£29,000 change in the charge for the year.
4. REVENUE

The analysis by geographical area of the group’s revenue is set out as
below:
2022

Europe£000£000
217,999

40,11735,315

USA and Canada

31,505

21,258Rest of the world

14,667

11,030321,206

285,602

There were no customers which contributed more than 10% of grouprevenue for the year. In 2021, one major customer contributed 14.7%(£41.9 million) of the company’s revenue.
5. OTHER OPERATING INCOME

Other income

Group

No.

No.

a) Income tax on loss for the year

66Administration

185

162

2022

2021

£000

£000

UK corporation tax on the loss for the year

-

-

479

(445)

2021

Production

240

168

Amounts under/(over) provided in previous
years

£000

£000

Selling and distribution

121

119

Foreign taxes

83

50

Depreciation of tangible assets (note 12)15,653

13,470Bar staff

1,973

1,426

Total current income tax

562

(395)

Amortisation of right-of-use assets (note 25)

11,942

9,479

2,525

1,881

Deferred income tax:-

(3,854)

Origination and reversal of temporary
differences(3,630)787

Auditors remuneration (note 7)

548

531

Adjustments in respect of prior periods(1,475)124

Research and development

1,400

1,700

677

(3,275)

573

Deferred tax adjustments in previous
periods(1,147)(Gain)/Loss on foreign exchange
Share based payment expense (note 30)(2,273)2,320

CJRS grant income

Pre-opening costs

5,201

1,738

Site closing costs

3,572

-

-

274

During the prior year the Covid 19 related costs are in respect of thewrite off of food and drink inventory resulting from forced closures
alongside additional costs for COVID safety measures within the bars.
7.

AUDITORS’ REMUNERATION

b. Director’s remuneration

2022

2021

£000

£000

Director’s remuneration

1,545

1,381

Pension contributions

53

99

Total deferred income tax (credit)/charge(6,252)

1,588(2,729)2,554(5,690)1,193(1,131)

4,034

Income tax (credit)/charge in the groupstatement of comprehensive income

Share based payment expense

Directors’ remuneration also represents key management personnel
compensation.

2022

Audit of the financial statements

£000

548

505

-

26

548

531

Tax advisory services

2021

£000

£000

60,22048,185Pension costs

3,110

2,075

Wages and salaries

2022

2021

Social security costs

6,457

4,372

£000

£000

Share based payment expense

456

(234)

1,346

1,898

CJRS

-

(3,854)70,24350,544

The above excludes directors’ remuneration. The company makes
contributions to a defined contribution scheme for all eligible
employees up to a maximum of 10% of salary. Contributions arecharged to the income statement as incurred.

£000

£000

Loss from continuing operations(30,526)(9,405)(5,800)(1,787)493

60(1,620)

105

83

50

(996)

(321)

-

631

£000

Aggregate remuneration

577

412

Tax calculated at UK standard rate ofcorporation tax of 19% (2021: 19%)

Pension contributions

930

Expenses not deductible for tax purposes

586

442

Other fixed asset related movements
Foreign tax
Tax over provided in previous years

Number of directors who received shareoptions during the year.

8. STAFF COSTS AND DIRECTOR’S EMOLUMENTS
2022

2021

£000

Highest paid director:

2022

2021

Tax losses utilised

£000

£000

Change in tax laws and rate

(1,147)889

3

Deferred tax not recognised

(6)

21

Chargeable gains

16-

Other differences25-

Non-taxable income

(22)

(24)

-

9. FINANCE INCOME

a. Staff Costs

2022

2021

2021

£000

b) R
 econciliation of the total
income tax charge

2022

The group paid the following amounts to its auditors in respect of theaudit of the financial statements and for other services provided to thegroup:

2021

234,917

2021

2022

Covid related

Revenue represents the invoiced amount of goods supplied, inclusiveof excise duty, in respect of the production and sale of beer, which is
the group’s principal activity. Revenue is recognised in the financial
statements when goods are transferred to customers and the entity
has satisfied its performance obligations under the contract. Revenue
comprises the fair value of the consideration received or receivablefor the sale of goods in the ordinary course of business. All items arestated net of value added tax and trade discounts.

UK

This is stated after charging/(crediting)

11. INCOME TAX

2022

Directors

6. OPERATING LOSS

Share-based payments

Geographical segment

The average monthly number of employees during the year was madeup as follows:

2022

2021

Unrecognised tax losses in other jurisdictions

3,284

1,569

£000

£000

Income tax (credit)/charge in the groupstatement of comprehensive income(5,690)1,193

Bank interest received

92

7

Capital grant release (note 29)

160

170

Total finance income

252

177

10. FINANCE COST
2022

2021

£000

£000

Bank loans and overdrafts

1,286

770

Lease liability interest (note 25)

4,569

2,747

692

322

Hire purchase interest
Bond interest

207

282

Total finance costs

6,754

4,121

The income tax expense above is computed at loss before taxation
multiplied by the effective rate of corporation tax in the UK of 19%(2021: 19%).

56

57

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...

12. PROPERTY, PLANT AND EQUIPMENT
Group

Land andbuildings

Leaseholdimprovements

Fixtures andfittings

MotorvehiclesPlant andmachineryComputerequipment

Assetsunderconstruction

Total

£000

£000

£000

£000

£000

£000

£000

£000

56,38135,51433,869410

61,991

3,205

8,315

199,685

Additions

440

8,949

5,597

39

6,746

2,585

13,08637,442

Disposals(1,331)

(20)

(144)

(35)

(4,113)--(5,643)

Transfers

-

113

(113)

-

7,753

-

(7,753)-c) Deferred income tax
The deferred income tax included in the statement of financial positionis as follows:
Group
2022

Group
2021

Company2022

Company
2021

£000

£000

£000

£000

12,971

8,962

11,440

8,426

1,711

-

1,711

-

14,682

8,962

13,151

8,426

Deferred tax liability
Temporary differences
relating to property,
plant and equipment
Capital gains

Short term temporary
differences
Net deferred tax(asset)/liability

At 1 January 2021

Exchange differences

144

(720)

(190)

-

(563)

4

-

(1,325)

At 31 December 2021

55,634

43,83639,019414

71,814

5,794

13,648230,159355

30,709

7,449

7

2,194

789

20,05461,557

-

1,654

-

-

398

-

-

2,052

Disposals(652)(2,370)(1,834)

(11)

(148)

(39)

(556)

(5,610)Transfers

393

-

-

-

1,862

430

(2,685)-AdditionsDeferred tax asset
Tax losses carriedforwardCost:(16,353)(3,930)(8,969)(2,538)(598)(1,069)(479)(1,069)(2,269)

3,963

3,703

4,819

Deferred tax in theincome statement

Acquisition of subsidiaries

Exchange differences

1,724

2,962

642

13

2,240

66

34

7,681

At 31 December 2022

57,454

76,79145,276423

78,3607,040

30,495295,839

At 1 January 2021

2,852

6,882

18,689228

11,9282,468-

43,047

Charge for the year

785

2,862

5,549

118

3,508

648

-

13,470On disposals

Depreciation:

(20)

-

(62)

(11)

(976)

-

-

(1,069)Exchange differences

5

(128)

(75)

-

(25)

2

-

(221)

At 31 December 2021

3,622

9,616

24,101335

14,435

3,118-

55,227

Charge for the year

797

3,896

6,179

22

3,554

1,205

-

15,653On disposals

(30)

(746)

(1,377)

(8)

(137)

(18)

-

(2,316)

Deferred tax assets have been recognised in respect of tax losses
and other temporary differences giving rise to deferred tax assets
where the directors believe these assets will be recovered based uponbusiness forecasts. Where losses have arisen in previous years as
a result of COVID, this is not expected to re-occur and a deferred tax
asset has been recognised where relevant.

Transfers

(14)

-

-

-

14

-

The Group has tax losses of £49,751,000 (2021 - £34,932,000) arisingin a number of locations, all amounts are available indefinitely foroffsetting against future taxable profits of the companies in which thelosses arose, with the exception of £12,973,000 (2021 - £11,609,000)
which expire in 2037. Deferred tax assets have not been recognised
in respect of these losses as they may not be used to offset taxable
profits elsewhere in the Group, they have arisen in subsidiaries thathave been loss-making for the last few years due to difficult trading
conditions, and there are no other tax planning opportunities or otherevidence of recoverability in the near future.

Temporary differences
relating to property,
plant and equipment(6,252)(6,252)

1,588

1,588

(1,115)(1,115)

1,936

1,936

-

Exchange differences

142

276

334

11

509

48

-

1,320

At 31 December 2022

4,517

13,042

29,237360

18,375

4,353-

69,884

At 31 December 2022

52,937

63,74916,03963

59,9852,687

30,495225,955

At 31 December 2021

52,012

34,22014,91879

57,3792,676

13,648

174,932

Net book value:

Land and buildings have been pledged as security (note 22).
Included above are assets held underhire purchase contracts as follows:
Plant andmachinery£000

Net book value:
At 31 December 2022

23,442

At 31 December 2021

27,188Depreciation charge for the year:
31 December 2022

1,666

31 December 2021

1,877

The Group have financing arrangements whereby assets are secured
against borrowings from a commercial bank. The legal form of thesetransaction is a sale and leaseback. IFRS 16 requires consideration
to be given over whether the control of the assets in such transaction
have been passed to the buyer-lessor. The control of assets placed
under these arrangements remain with the Group, therefore theconditions for recognising a sale under IFRS 15 are not met. As such,these transactions are accounted for as financing transactions (andnot as a sale and leaseback under IFRS 16). All assets secured insuch arrangements are recognised as property, plant, and equipment
within the balance sheet, initially measured at cost, in accordance with
IAS 16. A financial liability is recognised on the balance sheet for the
borrowings received, initially measured at fair value of consideration
received and subsequently measured at their amortised cost applying
the effective interest rate method, in accordance with IFRS 9.
The nature of assets secured in these arrangements are those used in
the production line of the Group’s brewing activities.

58

59

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
Company

Land andbuildings£000

Leaseholdimprovements£000

Fixtures andfittings
£000

Motor
vehicles£000

Plant andmachinery£000

Computerequipment£000

13. INTANGIBLE FIXED ASSETSGroup

Assetsunderconstruction

Total

£000

£000

Cost:
At 1 January 2021

32,928

197

8,450

306

37,814

2,568

8,315

90,578Additions

258

-

152

-

5,875

2,328

12,80021,413

Disposals

-

-

(36)

-

(4,093)--(4,129)Transfers

-

-

-

7,753

-

(7,753)-

Exchange differences

-

-

-

-

(89)

-

-

(89)

At 31 December 2021

33,186

197

8,566

306

47,2604,896

13,362

107,773

-

96

337

-

936

453

19,98921,811

Disposals

(9)

-

(36)

-

(94)

(12)

(556)

(707)

Transfers

393

-

-

-

1,862

430

(2,685)-33,570

293

8,867

306

49,964

5,767

30,110128,877

Additions

At 31 December 2022
Depreciation:-

At 1 January 2021

1,848

154

4,601

188

7,933

1,969

-

16,693Charge for the year

451

40

1,103

48

2,314

526

-

4,482

Disposals

14. OTHER NON-CURRENT FINANCIAL ASSETS

Other

Goodwill

Distribution
Rights

Total

£000

£000

£000

£000

At 1 January 2021

307

19,643

1,294

21,244

Additions

44

-

25

Exchange differences

(5)

(27)

At 31 December 2021

346

Additions

Cost:

-

(32)

At 31 December 2022

157

19,616

1,319

21,2819--9Disposals

(1)

-

-

(1)

Exchange differences

15

16

-

31

At 31 December 2022

369

19,632

1,319

21,320

Impairment:
At 1 January 2021

115

315

-

430

At 31 December 2021

115

315

-

430

At 31 December 2022

115

315

-

430

Net book value:

(21)

-

(970)

-

-

(991)

5,683

236

9,277

2,495

-

20,184Charge for the year

457

7

1,007

18

2,290

1,058

-

4,837

At 31 December 2022

254

19,317

1,319

20,890

Disposals

(9)

-

(28)

-

(92)

(8)

-

(137)

At 31 December 2021

231

19,301

1,319

20,851

Transfers

(14)

-

-

-

14

-

-

-

2,733

201

6,662

254

11,4893,545-

24,884

At 31 December 2022

30,837

92

2,205

52

38,475

2,222

30,110103,993

At 31 December 2021

30,887

3

2,883

70

37,9832,401

13,36287,589During the year to 31 December 2022, Goodwill was impaired by £nil
(2021: £nil). Further details can be found at note 17.
Company

Distribution
Rights

Total

£000

£000

At 1 January 2021

1,294

1,294

At 31 December 2021

1,294

1,294

At 31 December 2022

1,294

1,294

Cost:

Plant andmachinery£000

Net book value:
At 31 December 2022

23,442

At 31 December 2021

27,188Depreciation charge for the year:
31 December 2022

1,666

31 December 2021

1,877

The nature of assets secured in these arrangements are those used in
the production line of the Group’s brewing activities.

Cost
At 1 January 2021
Additions-

The Group have financing arrangements whereby assets are secured
against borrowings from a commercial bank. The legal form of thesetransaction is a sale and leaseback. IFRS 16 requires consideration
to be given over whether the control of the assets in such transaction
have been passed to the buyer-lessor. The control of assets placed
under these arrangements remain with the Group, therefore theconditions for recognising a sale under IFRS 15 are not met. As such,these transactions are accounted for as financing transactions (andnot as a sale and leaseback under IFRS 16). All assets secured insuch arrangements are recognised as property, plant, and equipment
within the balance sheet, initially measured at cost, in accordance with
IAS 16. A financial liability is recognised on the balance sheet for the
borrowings received, initially measured at fair value of consideration
received and subsequently measured at their amortised cost applying
the effective interest rate method, in accordance with IFRS 9.

Company

At 31 December 2021

194

Included above are assets held underhire purchase contracts as follows:

Fair value

69-

Land and buildings have been pledged as security (note 22).

£000

157

2,299

Net book value:

Unlisted investments

At 1 January 2021 &31 December 2021 &31 December 2022

At 31 December 2021

At 31 December 2022

Group

Amortisation:
At 1 January 2021--

At 31 December 2021--

At 31 December 2022--

At 31 December 2022

1,294

1,294

At 31 December 2021

1,294

1,294

Net book value:

Additions

Unlisted
investments

Sharesin group
undertakings

Total

£000

£000

£000

157

33,34533,509

-

3,710

3,710

157

37,05537,212

-

2,658

2,658

157

39,71339,870

£000

£000

£000

At 1 January 2021

-

6,426

6,426

At 31 December 2021

-

6,426

6,426

At 31 December 2022

-

6,426

6,426

At 31 December 2022

157

33,28733,444

At 31 December 2021

157

30,62930,786

At 31 December 2022

Impairment

Net book value:

For the year ended 31 December 2022, the following subsidiaries
are entitled to an exemption from audit under section 479A of theCompanies Act 2006 relating to subsidiary companies; BrewDog
International Limited and Lost Forest Limited.
During the previous year, the Group established a subsidiary with a
non-controlling interest of 40%, the activity during the year was not
significant. During the year a further investment was made in thissubsidiary.
During the year the Group entered into an agreement to transfer 51%
shareholding of BrewDog Group HK Ltd to another party, as such thecompany and its subsidiary BrewDog Shanghai is no longer controlled
by the BrewDog group and has been deconsolidated from 18 August2022. A gain of £1,764,000 arose on loss of control. The retainedinterest is accounted for as an equity accounted investment. See Note
15 for further information.

60

61

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
Details of the investments in which the company holds 20% or more of
the nominal value of any class of share capital are as follows:
Name of company

Holdings

Country ofregistration orincorporation

Proportion of
voting rights
and shares
held

Nature ofbusiness

Subsidiary
undertakings:
BrewDog Retail
Limited (1)Ordinary

Scotland100%

Bar
operator

Lone Wolf Spirits
Limited (1)Ordinary

Scotland100%

Dormant

Lost Forest
Limited (1)Ordinary

Scotland

100%

Land
owner

Overworks
Limited (1)Ordinary

Scotland100%

Dormant

BrewDog
International
Limited (1)Ordinary

Scotland100%

Holdingcompany

Draft House
Holding Limited(2)

Ordinary

England100%

Bar
operator

Hawkes Cider
Limited (3)BrewDog GmbH
(4)

Ordinary
Ordinary

BrewDog Group
Australia Ltd (5)Ordinary

BrewDog do
Brasil Comerciode Alimentos e
Bebidas Ltda (6)Ordinary

BrewDog
Belgium SPRL (7)Ordinary

BrewDog GroupHK Ltd (10)Ordinary

EnglandGermany

Australia

BrazilBelgium
Hong
Kong

100%

Dormant

100%

Bar
operator &brewery

100%

100%

100%

Holdingcompany

Dormant

Bar
operator

49%

Holdingcompany

BD Casanova
SL (11)

Ordinary

Spain

100%

Bar
operator

BrewDog USA
Inc (14)

Ordinary

USA

97%

Holdingcompany

BrewDog
Sweden AB (19)

Ordinary

Sweden100%

Holdingcompany

BrewDog Holding
Company Japan
Ltd (20)
BrewDog
Employee
BenefitTrust
Limited (1)Ordinary

Ordinary

Japan

Scotland60%

Holdingcompany

100%

Employee
Trust

Indirectly held:
Draft House TB Limited (2)Ordinary

England100%

Draft House NC Limited (2)Ordinary

England100%

BrewDog Brewing Australia Pty Ltd(5)Ordinary

Australia

100%

BrewDog Canada Ltd (8)Ordinary

Canada100%

BrewDog Bars France SAS (9)Ordinary

France100%

Bryggmester Bob AS (12)Ordinary

Norway100%

BrewDog Brewing Company LLC (14)Ordinary

USA

100%

BrewDog Franchising LLC (14)Ordinary

USA

100%

BrewDog Dogtap LLC (14)Ordinary

USA

100%

BrewDog Las Vegas LLC (14)Ordinary

USA

100%

BrewDog San Francisco LLC (14)Ordinary

USA

100%

BrewDog Licensing LLC (14)Ordinary

USA

100%

BrewDog Pittsburgh LLC (14)Ordinary

USA

100%

BrewDog Indianapolis LLC (14) USA

Ordinary

USA

100%

BrewDog Columbus LLC (15)

Ordinary

USA

100%

BrewDog Ireland Ltd (16)

Ordinary

Ireland100%

Kabushi Kaisha BrewDog Japan (17)OrdinaryJapan

BrewDog Italy S.R.L (18)

Ordinary

BruDog Malmo AB (19)(13) Registered office address; Unit 107 & 108, 1F, South Building, China
Merchants Plaza, No333 North Chengdu Road, Jing’an District,
Shanghai(14) Registered office address; 96 Gender Rd, Canal Winchester, OH
43110(15) Registered office address; PO Box 361715, Columbus, OH 43236(16) Registered office address; 2 Grand Canal Square, Dublin, Ireland, D02
A342(17) Registered office address; Saitoh Building 1F, 5-3-2, Roppongi,
Minato-ku, Tokyo(18) Registered office address; Corso Vercelli 40, 20145, Milan(19) Registered office address; Baltzarsgatan 25 211 36 MALMÖ(20) Registered office address; 4-31, Minami Aoyama 5-chome,
Minato-ku, Tokyo
15. INTEREST IN A JOINT VENTURE
The Group has a 49% interest in BrewDog Group HK Ltd, a joint
venture which holds a 100% investment in BrewDog Shanghai in
China. The Group’s interest in BrewDog Group HK Ltd is accounted
for using the equity method in the consolidated financial statements.
Summarised financial information of the joint venture, based on its
IFRS financial statements, and reconciliation with the carrying amountof the investment in the consolidated financial statements have notbeen shown as the amounts are immaterial to the Group.

17. GOODWILL AND INTANGIBLES ASSETS WITH INDEFINITEUSEFUL LIVESGroup		Goodwill

2022
£000

2021
£000

Draft House
HawkesSwedenBelgium
FranceNorwayOther

10,680
3,716
3,637
646
356
165
117

10,680
3,716
3,639
646
338
165
117

Distribution rights
Other

1,319
254

1,319
231

20,89020,851		Acquisition of Bruton Hospitality GmBH

The Group performed its annual impairment test in December 2022
and 2021 over goodwill. The recoverable amount of goodwill has been
determined by a value in use calculation using cash flow projections
from financial budgets approved by senior management covering athree-year period. The pre-tax discount rate applied to cashflow is
15.5% (2021 – 14.9%) and cash flows beyond the three-year period use
a growth rate of 5% (2021 – 5%). It was concluded that the value in use
exceeded the fair value. As a result, management has recognised an
impairment charge of £nil (2021 - £nil) against goodwill.

On 16 September 2022, BrewDog GmBH acquired 100% of the voting
shares of Bruton Hospitality GmBH, now known as BrewDog Retail
Germany GmBH.

The distribution rights and other intangible assets have been included
within value in use calculations for the US business and have been
considered within the overall calculation for that area

100%

Assets acquired and liabilities assumed

Italy

100%

Ordinary

Sweden100%

The fair values of the identifiable assets and liabilities of Bruton
Hospitality GmBH as at the date of acquisition were:

Key assumptions used in value in use calculations and sensitivity tochanges in assumptions

BruDog Bar GBG AB (19)

Ordinary

Sweden100%

BruDog Sodermalm AB (19)

Ordinary

Sweden100%

BruDog Bar St Eriksgatan AB (19)

Ordinary

Sweden100%

BrewDog Shanghai (13)Ordinary

China

100%

BrewDog Company Japan Ltd (20)

Ordinary

Japan

100%

BrewDog Retail Germany GmBH (4)Ordinary

Germany

100%

16. BUSINESS COMBINATIONS

Company

Fair value recognised on
acquisition

Assets€000

Property, plant & equipment

2,316

Inventory

69

Financial assets

718

Operating cash flows – The main assumptions within forecast
operating cash flows include the achievement of future growth,volume and cost structures in line with the financial budgets.

-

Discount rates - Discount rates represent the current market
assessment of the risks specific to each CGU, taking into consideration
the time value of money and individual risks of the underlying assetsthat have not been incorporated in the cash flow estimates. The
discount rate calculation is based on the specific circumstances of
the Group and is derived from its weighted average cost of capital(WACC). The WACC takes into account both debt and equity. The
cost of equity is derived from the expected return on investment by theGroup’s investors. The cost of debt is based on the interest-bearing
borrowings the Group is obliged to service.

The net assets recognised at 31 December 2022 are draft subject tofinalisation of completion accounting.

Management have considered whether there are any sensitivities
in the assumptions which could give rise to an impairment howeverthese would need to be severe and therefore not considered further.

3,103
Liabilities(1) 	 Registered office address; Balmacassie Commercial Park, Ellon,
Aberdeenshire, AB41 8BX(2) Registered office address; 3rd and 4th Floor, Fergusson House, 124128 City Road, London, EC1V 2NJ(3) Registered office address; 92 and 96 Druid Street, London, SE1 2HQ(4) Registered office address; IM Marienpark 23, 12107, Berlin, Germany(5) Registered office address; Level 29/12 Creek Street, Brisbane City,QLD 4000(6) Registered office address; 41 Rua Corope’s – Pinheiros, Sao Paulo-SP,
05426-010, Brazil(7) Registered office address; Putterie 20, 1000 Brussels, Belgium(8) Registered office address; 2800 Park Place, 666 Burrard Street,
Vancouver, BC V6C 2Z7(9) Registered office address; 1 rue Favart, 75002 Paris(10) Registered office address; 5/F Manulife Place, 348 Kwun Tong Road,
Kowloon, Hong Kong
(11) Registered office address; Calle Casanova 69, 08011, Barcelona,Spain(12) Registered office address; Markveien 57, 0505 OsloThe calculation of value in use for cash generating units (CGUs) ismost sensitive to the following assumptions:Operating cash flows
Discount rates

Financial liabilities(407)

Total identifiable net assets at fair value

2,696

Gain on acquisition

2,696

Purchase consideration

The total consideration paid for the acquisition was £nil.
The Group measured the acquired lease liabilities using the present
value of the remaining lease payments at the date of acquisition.
The revenue included in the consolidated income statement since 16
September 2022 contributed by Bruton Hospitality was £833,000.
Bruton Hospitality incurred a pre-tax loss of £477,000 over the same
period.

62

63

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
Company

The carrying value of financial assets approximates fair value. The
carrying amount of these items represents the maximum credit
exposure.
2022

2021

£000

£000

Trade receivables

39,67037,507

Prepayments and other receivables

22,50423,91862,174

61,425Trade and other receivables due after one year amounted to£1,701,000 (2021: £2,147,000).
Company

Group

Bank loans
2022

2021

£000

£000

£1,820,000 bank loan

171

113

£2,000,000 bank loan

188

119

£5,000,000 bank loan

500

375

£25,000,000 bank loan

25,000-

3

1

Obligations under hire purchasecontacts

4,808

4,926

Lease liabilities

12,1398,771

42,80914,305Current:

18. TRADE AND OTHER RECEIVABLES

Group

22. FINANCIAL LIABILITIES

2022

2021

£000

£000

Trade receivables

37,01435,629Prepayments and other receivables

3,841

9,609

Receivable from group undertakings

145,460

102,306

186,315

147,544

Amounts receivable from group undertakings are repayable on
demand as there are no extended contractual terms agreed. Amounts
will be repaid dependant on results within the relevant company andassociated local requirements regarding repayment of funds.

2022

2021

£000

£000

Raw materials

10,8694,705Work in progress

1,096

2,524

Finished goods and goods for resale

6,426

7,197

18,391

14,426

20. CASH AND CASH EQUIVALENTS

Other loans

2022

2021

Total current borrowings

£000

£000

Non-current:

Cash at bank and in hand

10,33645,274£1,820,000 bank loan

539

724

Company

2022

2021

£2,000,000 bank loan

890

1,097

£5,000,000 bank loan

4,000

4,500

£000

£000

694

37,808£25,000,000 bank loan-

25,000138

117

6% non-convertible bonds

3,303

3,303

Obligations under hire purchase
contracts

13,812

15,991

Lease liabilities

162,542

120,005

Total non-current borrowings

185,224

170,737

Group

Cash at bank and in hand

Cash at bank earns interest at floating rates based on daily bankdeposit rates. The carrying value of financial instruments approximatesfair value. The carrying amount of the above items represents the
maximum credit exposure.
21. TRADE AND OTHER PAYABLES

Other loans

The carrying value of financial instruments approximates fair value.

£1,820,000 bank loan
This loan is in the name of the parent company, originally for a maximumof £1,820,000 and is repayable by monthly instalments until October
2027 and bears interest at 1.4% over the base rate.
£2,000,000 bank loan
This loan is in the name of the parent company, originally for a
maximum of £2,000,000 and is repayable by monthly instalments until
May 2029 and bears interest at 1.4% over the base rate. This loan issecured by a mortgage over the land and buildings.
£5,000,000 bank loan
This loan is in the name of the parent company, originally for a
maximum of £5,000,000 and is repayable by quarterly instalments of£125,000 until January 2025 and a single balancing instalment in April
2025. It bears interest at 2.1% over the base rate. This loan is secured
by a mortgage over the land and buildings.
£25,000,000 bank loan
This loan is in the name of the parent company, originally for a
maximum of £25,000,000 under the CLBILS coronavirus supportand is repayable in a single instalment in August 2023. It bears interest
at 2.1% over the base rate. This loan is secured by a mortgage over theland and buildings with a 80% government guarantee.
6% non-convertible bonds
In January 2020, the group issued £3,309,000 non-convertible bonds
with a maturity in January 2024. The purpose of the bond was tofinance expansion. The bonds were issued with an interest rate of 6%.
Interest is paid bi-annually with subsequent repayment of £3,303,000
in January 2024.
The bank loans are secured by standing and floating charges over theassets of the group. In addition, there is an unlimited cross guarantee
between BrewDog PLC and BrewDog Retail Limited.
The carrying value of financial instruments approximates fair value.

Group

Neither past due
nor impaired

Group

Past due but not
impaired

Total

< 30
days

30-60
days

60-90
days

60-90
days

Over 90
days

£000

£000

£000

£000

£000

£000

2022

39,67038,875

156

199

7

433

2021

37,50735,726

924

188

107

562

Company

Neither past due
nor impaired

Past due but not
impaired

Total

< 30
days

30-60
days

60-90
days

60-90
days

Over 90
days

£000

£000

£000

£000

£000

£000

2022

37,01436,933

-

74

7

-

2021

35,62934,716

634

32

95

152

19. INVENTORY

2022

2021

£000

£000

Trade payables

41,372

19,501

Accruals and other payables

63,16334,252Current:

Taxes and social security

6,352

6,650

£1,820,000 bank loan

110,80760,403£2,000,000 bank loan

188

119

£5,000,000 bank loan

500

375

2021

£25,000,000 bank loan

25,000

-

4,808

4,926

849

841

31,516

6,374£1,820,000 bank loan

539

724

£2,000,000 bank loan

890

1,097

Company

Company

2022
£000

£000

Trade payables

17,356

9,233

Obligations under hire purchasecontacts

Accruals and other payables

46,614

21,456

Lease liabilities

Taxes and social security

3,435

4,867

Total current borrowings

67,40535,556

Non-current:

2022

2021

£000

£000

171

113

2022

2021

£5,000,000 bank loan

4,000

4,500

£000

£000

£25,000,000 bank loan-

25,000Raw materials

13,5267,018

6% non-convertible bonds

3,303

3,303

Work in progress

1,509

2,761

13,812

15,991Finished goods and goods for resale

11,53910,381

Obligations under hire purchase
contracts
Lease liabilities

16,282

11,617

26,574

20,160Total non-current borrowings

38,826

62,232Group

Other loans
The other loans are in the name of Brewdog Brewing Company LLC.
There is £110,000 which is repayable in monthly instalments until May
2051 and bears interest at 3.75%.

64

65

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...

23. CAPITAL MANAGEMENT
For the purpose of the Group’s capital management, capital includes
issued share capital, share premium and all other equity reserves
attributable to the equity holders of the Group. The primary objectiveof the Group’s capital management is to maximise the shareholder
value.

Maturity profile

Total
£000

The Group manages its capital structure and makes adjustments inlight of changes in economic conditions and the financial outlook.
To maintain or adjust the capital structure, the Group may adjust its
approach to equity capital raises, review the dividend policy whenappropriate and review its borrowing facilities.
>5 years£000

1-5 years£000

3 to 12 months£000

Less than 3 months£000

On demand£000

The tables below summarises the maturity profile of financial liabilities based on contractual undiscounted payments:

Group
Year ended
31 December 2022
Interest bearing
loans and borrowings
Leaseliabilities

-

1,896

30,15923,401

268

55,724-

3,793

11,30360,643

145,140

220,879

Trade and other payables-

110,887---

110,887-

116,576

41,462

84,044145,408

385,117

Year ended
31 December 2021
Interest bearing loans and borrowings

-

289

5,245

48,7172,015

56,266

Lease liabilities

-

3,022

9,097

44,381

100,788

157,288

Trade and other payables-

60,403---60,403-63,714

14,342

93,098102,803

273,957

The Group monitors its capital on a liquidity basis and a gearing ratio,
which is net debt divided by total capital plus net debt. The Group
includes within net debt, interest bearing loans, borrowings, trade andother payables less cash and short-term deposits. The Group’s policy
is to ensure we have sufficient liquidity to fund the day to day cash
requirements of the Group and also ensure the Group can fund its longterm strategic investments.
Group

1 January2022

Cashflows

Other

New leases

31 December
2022

£000

£000

£000

£000

£000

Year ended
31 December 2022

(515)

(72)

(9,538)As at 31 December 2021

110,995

495

135

111,625

Additions

49,12436-

49,160Remeasurements(1,432)--(1,432)

Terminations(4,734)--(4,734)

Depreciation expense(11,614)

(262)

(66)

(11,942)

Exchange differences

2,586

11

6

2,603

As at 31 December 2022

144,925280

75

145,280

Set out below are the carrying amounts of lease liabilities and the
movements during the period:

180,543

Lease liabilities

Capital and net debt

481,544

380,714

As at 1 January

128,776

106,41568%53%

Additions55,223

26,343Remeasurements

2,085

3,777

Terminations(4,969)(318)

Exchange differences

3,082

-

Accretion of interest

4,569

2,747

Payments(14,085)(10,188)

As at 31 December

174,681

128,776

Current

12,1398,771

162,542

120,005

174,681

128,776

52,339228,033Group

1 January2021

Cashflows

Other

New leases

31 December
2021

£000

£000

£000

£000

£000

The ‘Other’ column includes the effect of reclassification of non-current portion of interest bearing loans and borrowings, including
lease liabilities to current due to the passage of time and interest accrued using the effective interest rate method.

(8,951)

152,960(4,174)

185,042

Depreciation expense

Total equity (excluding NCI)

(5,174)29,788(318)

180,543

185,042(1,242)-

152,960

Total liabilities arising from financing activites(8,928)-

Total equity

162,542

165,424

(318)

2021

48,850Total liabilities arising from financing activites

Terminations£000(6,313)120,005

3,777

2022

-

25,1798£000

120,005(3,444)150£000

Non-current lease liabilities

-

3,619

£000

22,682

98,270Remeasurements

2021

-

Non-current lease liabilities

21,181

2022(28,050)

50,732

6

200,171--622

328,584

50,732

7,350

20,553Net debt

Non-current interest bearings and borrowings-

Additions(45,274)

Group

43,382

96,523(10,336)

12,139Non-current interest bearings and borrowings

193

Less: cash and cash equivalents

3,489

8,771

238

60,403

2,246

4,609

96,092

110,887(2,367)3,444

As at 1 January 2021

Trade and other payables (Note 21)

8,771(7,427)£000

170,737

Current lease liabilities

8,145

£000

185,224

24. CAPITAL COMMITMENTS

Current lease liabilities£000

Total non-current borrowings (Note 22)

30,670

5,534

£000

14,305

-

-

Total

42,80927,943(8,695)Equipment

Total current borrowings (Note 22)(2,807)(1,398)

Vehicles

£000

5,534

15,627

Buildings£000

Current interest bearing loans and borrowings

Current interest bearing loans and borrowings

Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:

2021

Gearing ratio

Year ended
31 December 2021

Group

2022

Change in liabilities arising from financing activites
Groupunderlying asset is low. The group applies the “short-term lease” and“leases of low-value assets” recognition exemptions for these leases.

2022

2021

£000

£000

Contracted for but not provided in the financial
statements

5,601

5,350

Company

2022

2021

Contracted for but not provided in the financial
statements

£000

£000

5,601

5,350

25. LEASES
Lease agreements where the group is lessee
The group has entered into commercial leases on certain land,buildings and equipment. These leases have an average duration of
between 3 and 25 years. There are no restrictions placed upon thelessee by entering into these leases. The group’s obligations under its
leases are secured by the lessor’s title to the leased assets.
The group also has certain leases of property, plant and equipmentwith lease terms of 12 months or less or where the value of theNon-current

66

67

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
The following are the amounts recognised in profit or loss:

Set out below are the carrying amounts of lease liabilities and the
movements during the period:

2022

2021

2022

2021

£000

£000

£000

£000

Depreciation expense of right-of-use assets

11,9429,479

Lease liabilities

Interest expense on lease liabilities

4,569

2,761

As at 1 January

12,458

12,612

Expense related to short-term leases

1,347

950

Additions

5,138

529

Expense relating to leases of low-value assets

449

317

Remeasurements-

159

Accretion of interest

711

471

Payments(1,176)(1,313)As at 31 December

17,131

12,458Current

849

841

16,282

11,617

17,131

12,458

Total amount recognised in profit or loss

18,307

13,507

The group had total cash outflows for leases of £14,085,000 (2021:£10,188,000). The future cash outflows relating to leases that have notyet commenced were £nil (2021: £nil). The cash equivalent of lease
concessions relating to Covid-19 obtained in the year was £nil (2021:£784,000).

The following are the amounts recognised in profit or loss:
2022

2021

£000

£000

Depreciation expense of right-of-use
assets

1,096

1,121

Interest expense on lease liabilities

711

471

Expense related to short-term leases

92

-

31

-

6,659

Expense relating to leases of low-value
assetsTotal amount recognised in profit or loss

1,930

Company
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:

As at 1 January 2021

Buildings

VehiclesEquipment

Total

£000

£000

£000

£000

6,367

198

124

Additions

-

523

6

529

Remeasurements

-

150

9

159

Depreciation expense

(595)

(473)

(53)

(1,121)As at 31 December 2021

5,742

398

86

6,226

Additions

5,102

36

-

5,138

Depreciation expense

(818)

(225)

(53)

(1,096)As at 31 December 2022

10,026209

33

10,268Market risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices. Market
risk to the Group comprises of currency risk. Financial instruments
affected by market risk include loans and borrowings, deposits, debt
and equity investments. The sensitivity analyses in the following
sections relate to the position as at 31 December in 2022 and 2021.

Beer sales are concentrated towards a number of key customers.
Credit risk is managed through maintaining good customer
relationships and the monitoring of credit levels and settlement
periods.
The credit risk on liquid funds is limited because the counter party is abank with an investment grade credit rating assigned by international
credit rating agencies.

Foreign currency risk
Interest rate risk
Foreign currency risk is the risk that the fair value or future cash flowsof an exposure will fluctuate because of changes in foreign exchange
rates. The Group’s exposure to the risk of changes in foreign exchange
rates relates primarily to the Group’s operating activities (when revenue
or expense is denominated in a foreign currency) and the Group’s net
investments in foreign subsidiaries.

Interest rates are based on a fixed rate over the base rate. The groupconsiders its exposure to be limited as changes in the rate, based on
the long term view, are expected to be minimal. There would need to bea significant movement in the base rate to create a material risk.
27. SHARE CAPITAL

Non-current
The group has certain property lease agreements that include an
option for renewal, with such options being exercisable three months
before the expiry of the lease term at rents based on market prices at
the time of exercise. Management exercises judgement in determining
whether these renewal options are reasonably certain to be exercised.

Market risk

Foreign currency sensitivity
The following table demonstrates the sensitivity to a reasonably
possible change in Sterling against the US dollar and Euro exchange
rates with all other variables held constant, of the group’s profit before
tax (due to foreign exchange translation of intercompany balances).
The impact of translating the net assets of foreign operations into
sterling is excluded from the sensitivity analysis. There are no effects
on equity beyond those on profit before tax.
Change in Sterling vs
US Dollar / Euro rate

Effect on profit
before tax £000

US Dollar/Sterling

1,592

+10%

(5,796)

-10%

5,796

+10%

(2,263)

-10%

2,263

2021

The company has certain property lease agreements that include an
option for renewal, with such options being exercisable three months
before the expiry of the lease term at rents based on market prices at
the time of exercise. Management exercises judgement in determining
whether these renewal options are reasonably certain to be exercised.
26. FINANCIAL INSTRUMENTS RISK MANAGEMENT OBJECTIVESAND POLICIESThe Group’s principal financial liabilities comprise loans andborrowings, and trade and other payables. The main purpose of thesefinancial liabilities is to finance the Group’s operations. The Group’s
principal financial assets include trade receivables, and cash andshort-term deposits that derive directly from its operations.
The Group is exposed to market risk and this is overseen by the senior
management of the Group.

2022

2022

2021

2021

No. 000£000

No. 000£000

At 1 January and
31 December

43,79143

43,791

43

Group and company

2022

2022

2021

2021

No. 000£000

No. 000£000

14,37415

13,801

14

-

-

573

1

At 31 December

14,37415

14,37415

Group and company

2022

2022

2021

2021

No. 000£000

No. 000£000

16,161

17

16,161

17

74,32675

74,32675

Allotted called up andfully paid Ordinary A shares

2022

Euro/Sterling

The company had total cash outflows for leases of £1,176,000 (2021:£1,313,000). The future cash outflows relating to leases that have notyet commenced were £nil (2021: £nil).

Group and company

US Dollar/Sterling

Euro/Sterling+10%(3,417)

-10%

3,417

+10%

(1,903)

-10%

1,903

Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available
for ongoing operations and future developments, the group uses a
mixture of long, medium and short-term debt finance. Forecasts areproduced to assist management in identifying liquidity requirements
and maintaining adequate reserves.
Credit risk
The group’s financial assets are cash and cash equivalents and tradeand other receivables.
The group’s credit risk is primarily attributable to its trade receivables
for beer sales. The amounts presented in the balance sheet are net ofan allowance for the expected credit loss. An allowance for impairment
is made where there is an identified loss event which is evidence of areduction in the recoverability of cash flows.

Allotted called up andfully paid Ordinary B shares
At 1 January
Issued through Equity
for Punks

Allotted called up and fully paid
Preferred C Ordinary shares
At 1 January and
31 December

Total

During the previous year the company issued 573,000 Ordinary B
shares to the public under its Equity for Punks Tomorrow crowdfunding
initiatives with an issue price of £25.15 per share. This created additional
share premium of £19,736,000 in the year.
All classes of shares rank equally in terms of rights to receive dividends,
rights to participate in a distribution of the assets of the company andvoting at general meetings, except that Preferred C shares have an 18%
compounding liquidation preference in the event of certain conditions.

68

69

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
Equity for Punks members are entitled to certain additional rights inrelation to product purchases and other membership benefits.
At the year-end £nil (2021: £nil) of share capital and share premium
remains unpaid.
At the year-end there were 1,030,700 (2021: 3,791,864) share options
granted and not exercised.
Group and company

2022

2021

Current
Non-current

Company

2022

2021

£000

£000

160

158

3,080

2,960

3,240

3,118

2022

2021

£000

£000

At 1 January

1,899

2,025

Share premium
account£000

Share premium
account£000

183,679

168,585

Released to the statement ofcomprehensive income

(115)

(126)

Issued through Equity for Punks-

19,736

At 31 December

1,784

1,899

Transaction costs-(4,642)

183,679

183,679

At 1 January

At 31 December
28. RESERVES

Current
Non-current

Treasury shares
Treasury shares represent the cost of BrewDog PLC sharespurchased in the market and held by BrewDog PLC.

Group and company

2022

2022

2021

2021

No. 000£000

No. 000£000

Allotted called up andfully paid Treasury shares
Treasury shares
At 1 January & 31
December

137

1,857

137

1,857

Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange
differences arising from the translation of the financial statements offoreign subsidiaries.
29. GOVERNMENT GRANTS
Group

2022

2021

£000

£000

At 1 January

3,118

3,172

Received during the year

219-

Translation of grants denominated inforeign currency

63

116

Released to the statement ofcomprehensive income

(160)

(170)

At 31 December

3,240

2021

£000

£000

115

115

1,669

1,784

1,784

1,899

Government grants have been received for the purchase of certain
items of land, property, plant and equipment.
30. SHARE BASED PAYMENTS
During the year ended 31 December 2022, the BrewDog Groupinitiated and BrewDog Employee Benefit Trust Limited (EBT), theentity holds shares gifted by James Watt which are granted to
employees at set time periods.
Options granted under the EBT are exercisable upon an exit event
which is determined as either i) when BrewDog PLC goes to an IPO(Initial Public Offering) or, ii) a majority of its shares are sold by thecurrent shareholders, subject to service vesting conditions.
The fair value of the options is estimated at the grant date using theBlack-Scholes-Merton (“BSM”) pricing model, taking into account theterms and conditions on which the share options were granted.
The following table details the number, weighted average exercise
price (WAEP) and weighted average contractual life (WACL) of shareoptions for the approved and unapproved schemes as at the balance
sheet date:
Employee Benefit Trust
Number

WAEP
£

WACL
Years

-

-

-

Granted during the year

937,528-

2.42

Lapsed during the year

(68,971)--

Outstanding at 31 December
2022

868,557-

2.42

Exercisable at 31 December
2022-

Outstanding at 1 January 2022

3,118

2022

Company
The company operates three share-based payment schemes for the benefit of senior management.
EMI, Approved and Unapproved Company Share Option Plans (CSOPs)
Options granted under the EMI plan are exercisable four to ten years following the date of grant. One award under this scheme has both service
vesting conditions, and a non-market performance vesting condition attached to their exercise: annual net profit target of 10%. If not met in any year
then an average can be applied over the term to meet target.
Options granted under the approved CSOP are exercisable four to nine years following the date of grant, subject to service vesting conditions.
Options granted under the unapproved CSOP are generally exercisable between two and five years, with three awards made under this scheme being
exercisable on grant. Three awards only have service vesting conditions, the remaining have non market performance vesting conditions attached totheir exercise, including achievement of a strong individual performance rating, and sales exceeding, or no less than 10% below, the target for the mostrecent financial year ending prior to the relevant vesting date. The share options granted will not vest if the vesting conditions have not been met.
The fair value of the options is estimated at the grant date using the Black-Scholes-Merton (“BSM”) pricing model, taking into account the terms andconditions on which the share options were granted.
The following table details the number, weighted average exercise price (WAEP) and weighted average contractual life (WACL) of share options forthe approved and unapproved schemes as at the balance sheet date:
EMI
NumberApproved CSOP

WAEP

WACL

£

Years

WAEP

WACL

WAEP

WACL

£

Years

P

Years

391,300

0.14

6.88

33,2701.33

6.16

2,735,098

1.01

3.01

Granted during the year

-

-

-

-

-

-

632,166

1.00

2.88

Lapsed during the year

-

-

-

-

-

-

-

-

-

(391,300)

0.14

6.88

33,2701.33

6.16

3,367,294

1.01

3.02

Granted during the year

-

-

-

-

-

-

90,0001.00

2.40

Lapsed during the year

(391,300)(0.14)(6.88)(27,270)(4.99)(27.26)(2,432,594)

1.00

0.44

Outstanding at 31 December 2022

-

-

-

6,000

2.38

6.92

1,024,700

1.00

2.67

Exercisable at 31 December 2022

-

-

1,200

2.38

266,500

1.00

Exercisable at 31 December 2021

-

-

-

-

478,832

1.03

Outstanding at 1 January 2021

Outstanding at 31 December 2021

NumberUnapproved CSOP
Number

70

71

NOTES TO THE FINANCIAL
STATEMENTS CONTINUED...
The following table lists the inputs to the BSM pricing model todetermine the fair value of all awards granted in the year:
2022

2021

Weighted average fair values at themeasurement date (£)

2.50

7.28

Dividend yield (%)

0%0%

Expected volatility (%)

35%

35%

Risk-free interest rate (%)

3.28%

0.90%

3

3

Marketability discount (%)

25%

25%

Weighted average price (£)

1.88

5.46

Expected life of share options (years)

The expected life of the share options is based on historical dataand current expectations and is not necessarily indicative of
exercise patterns that may occur. The expected volatility reflects theassumption that the historical volatility over a period similar to the lifeof the options is indicative of future trends, which may not necessarilybe the actual outcome.
31. RELATED PARTY TRANSACTIONSGroup
The financial statements include the financial statements of the groupand the subsidiaries listed in note 14. The directors are the only key
management personnel and information can be found in note 8.
Sales and purchases between related parties are made at normal
market prices. Outstanding balances are unsecured and cash
settlement terms vary. The company has provided guarantees for anumber of related party payables. The company has not made any
provision for doubtful debts relating to amounts owed by relatedparties.
Company
During the year the company entered into transactions, in the ordinary
course of business, with related parties. The company has taken
advantage of the exemption under paragraph 8(k) of FRS 101 not todisclose transactions with fellow wholly owned subsidiaries.
Amounts owed byrelated parties

Amounts owed torelated parties

£000

£000

Directors’ loans

INDEPENDENTAUDITOR’S REPORT

During 2022, purchases at normal market prices were made bygroup companies from Steadman Partners, Pie & Mouse Limited and
JBW(77) Limited, companies controlled by the directors.
During 2021, purchases at normal market prices were made by groupcompanies from Pie & Mouse Limited and 63DCMH LLC, companies
controlled by one of the directors.
32. NOTES TO THE CASHFLOW
Group

2022

2021

£000

£000

(30,526)(9,405)

Cashflows from operating activities:
Loss before tax
Adjustments to reconcile profit before
tax to net cash flows:
Loss on disposal of property, plant andequipment

1,292

Gain on acquisition of German
subsidiary(2,289)-Gain on disposal of subsidiary(1,764)-

Depreciation

15,653

13,470Depreciation of ROU assets

11,942

9,538

Grant amortisation

(160)

(170)

Foreign exchange(4,482)

573

Finance income

( 92)

(7)

Finance charges

6,754

4,121

Share based payment expense(2,273)

2,320(6,414)(4,947)

Increase in trade and other receivables(749)(12,074)

Increase in trade and other payables

49,275

9,928

92

7

Interest paid

(6,384)(3,999)Taxation paid

(127)

-

Taxation refunded

300

274

30,605

10,921

Net cash flow from operating activities
33. POST BALANCE SHEET EVENTS

2022

-

-

2021

23

-

Subsequent to the year end, the Group has secured an extension tothe £25,000,000 bank loan, originally repayable in a single instalment
in August 2023, the extension has been granted to August 2026.

Director’s loan
Amounts due from directors are non-interest bearing and are
repayable on demand. Directors’ loans were repaid during the year.
Other directors’ interests
During the year, James Watt, a director, gifted 20% of his shareholding
to the BrewDog Employee Benefit Trust Limited, refer to note 30 for
further details.

We have audited the financial statements of BrewDog PLC (‘the parent
company’) and its subsidiaries (the ‘group’) for the year ended 31
December 2022 which comprise Group Statement of Comprehensive
Income, the Group and Parent company Balance Sheet, Group Statementof Cash Flows, the Group and Parent statement of changes in equity andthe related notes 1 to 33, including a summary of significant accounting
policies. The financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law and UK
adopted international accounting standards. The financial reporting
framework that has been applied in the preparation of the parent company
financial statements is applicable law and United Kingdom AccountingStandards, including FRS 101 “Reduced Disclosure Framework” (United
Kingdom Generally Accepted Accounting Practice).

••

Working capital adjustments:

Interest received

OpinionIn our opinion:
1,849

Increase in inventory

To the members of BrewDog PLC

Between the end of the financial year and the date of this reportno item, transaction or event of a material nature has occurred, inthe opinion of the Directors, that is likely to significantly affect theoperations of the Group, the results of those operations or the state ofaffairs of the Group in future financial years.

••

The financial statements give a true and fair view of the group’s and of
the parent company’s affairs as at 31 December 2022 and of the group’s
loss for the year then ended.
The group financial statements have been properly prepared inaccordance with UK adopted International Accounting Standards.
The parent company financial statements have been properly preparedin accordance with United Kingdom Generally Accepted Accounting
Practice.
The financial statements have been prepared in accordance with therequirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities underthose standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We are
independent of the group in accordance with the ethical requirementsthat are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard and we have fulfilled our other ethicalresponsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’
use of the going concern basis of accounting in the preparation of thefinancial statements is appropriate.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually orcollectively, may cast significant doubt on the group and parent company’s
ability to continue as a going concern for a period to 31 May 2024.
Our responsibilities and the responsibilities of the directors with respect
to going concern are described in the relevant sections of this report.
However, because not all future events or conditions can be predicted, thisstatement is not a guarantee as to the group’s ability to continue as a going
concern.

Other information

The other information comprises the information included in the annual
report, other than the financial statements and our auditor’s report thereon.
The directors are responsible for the other information contained within
the annual report.
Our opinion on the financial statements does not cover the otherinformation and, except to the extent otherwise explicitly stated in thisreport, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained in the course of theaudit or otherwise appears to be materially misstated. If we identify suchmaterial inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material misstatementin the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of the otherinformation, we are required to report that fact.
We have nothing to report in this regard.

Opinions on other matters prescribed by theCompanies Act 2006

In our opinion, based on the work undertaken in the course of the audit:••

The information given in the strategic report and the directors’ reportfor the financial year for which the financial statements are prepared isconsistent with the financial statements.
The strategic report and directors’ report have been prepared inaccordance with applicable legal requirements.

Matters on which we are required to report by
exception

In the light of the knowledge and understanding of the group and theparent company and its environment obtained in the course of the audit,
we have not identified material misstatements in the strategic report or
directors’ report.
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in our
opinion:••••Adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us.
The parent company financial statements are not in agreement with theaccounting records and returns.
Certain disclosures of directors’ remuneration specified by law are notmade.
We have not received all the information and explanations we require
for our audit.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set
out on page 76, the directors are responsible for the preparation of thefinancial statements and for being satisfied that they give a true and fairview, and for such internal control as the directors determine is necessary
to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

72

73

INDEPENDENT AUDITOR’SREPORT CONTINUED...
In preparing the financial statements, the directors are responsible forassessing the group’s and the parent company’s ability to continue as agoing concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to cease operations,or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of thefinancial statements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is nota guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable ofdetecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect irregularities, including fraud. The risk of notdetecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberateconcealment by, for example, forgery or intentional misrepresentations,or through collusion. The extent to which our procedures are capable ofdetecting irregularities, including fraud is detailed below. However, theprimary responsibility for the prevention and detection of fraud rests withboth those charged with governance of the entity and management.
Our approach was as follows:
•

•

•

•

We obtained an understanding of the legal and regulatory frameworks
that are applicable to the company and determined that the mostsignificant are those that relate to the reporting framework (UK adopted
international accounting standards and United Kingdom Generally
Accepted Accounting Practice), the Companies Act 2006, and therelevant tax compliance regulations in the UK.
We understood how BrewDog PLC is complying with those frameworks
by making enquiries of management, those charged with governance,
and those responsible for legal and compliance procedures. We
corroborated our enquiries through the review of board minutes andany correspondence with relevant counterparties and noted that there
was no contradictory evidence.
We assessed the susceptibility of the Company’s financial statements
to material misstatement, including how fraud might occur by making
enquiries of management from various parts of the business andperforming a walkthrough of the financial statement close process.
We also considered the risk of management override and assumed
revenue to be a fraud risk. We incorporated data analytics into our
testing of revenue recognition and tested specific transactions back tosource documentation.
Based on this understanding we designed our audit procedures to
identify noncompliance with such laws and regulations. Our procedures,in addition to those set out above, included a review of board minutes
to identify any non-compliance with laws and regulations. In addition,
we completed procedures to conclude on the compliance of thedisclosures in the financial statements with all applicable requirements.
We also utilised data analytical tools to review for potential noncompliance with laws and regulations and tested manual journal entries
to supporting evidence.

A further description of our responsibilities for the audit of the financial
statements is located on the
Financial Reporting Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’sreport and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the company
and the company’s members as a body, for our audit work, for this report, orfor the opinions we have formed.

Kevin Weston (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
Aberdeen

31 May 2023

DIRECTORS’ REPORT
Registered No. SC311560
The Directors present their report and financial statements for the year
ended 31 December 2022. The group financial statements have been
prepared under UK adopted international accounts standards (“IFRSs”)
and the parent company financial statements prepared under United
Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law), including Financial ReportingStandard 101 Reduced Disclosure Framework (“FRS 101”).

Results and dividends

The loss after taxation for the year amounted to £24,836,000 (2021 loss:£10,598,000). No dividend has been paid or proposed (2021: £nil).

Review of the business

The principal activity of the group continues to be that of brewing beer
and operating bars. The results of the group show a pre-tax loss of£30,526,000 (2021 pre-tax loss: £9,405,000) for the year and turnover of£321,206,000 (2021: £285,602,000).

Future developments

We are in business to make other people as passionate about great
craft beer as we are. We will continue to invest in our people, our beer,
our infrastructure and our breweries. We are significantly focused on
improving sustainability and transparency, to ensure that we make greatbeer and have a planet to drink it on.

Directors

The directors who served the company during the year, and up to the dateof signing, were as follows:
The directors who served the company during the year, and up to the dateof signing, were as follows:
N A Simpson
A M Dickie
J B Watt
D McDowall (resigned 21 December 2022)
J L O’Hara
F B JackN J McCallum
A Leighton
A R J Gilmore (appointed 30 January 2023)
E Johnson (appointed 30 January 2023)
G Boer (appointed 31 May 2023)

Going concern

The directors have a reasonable expectation that the Group as a wholehas adequate resources to continue its operational existence for theforeseeable future and until 31 May 2024. For this reason, they continue
to adopt the going concern basis in the accounts. The Group’s activities,
together with factors likely to affect its future development, performanceand position are considered by the Directors on an on-going basis. In
addition, notes 22, 23 and 26 include details of the Group’s treasury
activities, long term funding arrangements, financial instruments andfinancial risk management activities.
The directors have performed stress testing of cash flow forecasts totake account of events which could impact the financial position of theGroup. The range of stress tests included a reduction in demand for its
products and related impacts on working capital along with a range of
extreme but plausible downsides. These stress tests demonstrate that thegroup has access to sufficient liquidity through the going concern period
to 31 May 2024. As such, the directors have a reasonable expectationthat the Company and the Group have adequate resources to continue
in operational existence for the foreseeable future. Accordingly, they

continue to adopt the going concern basis in preparing the annual reportand accounts.

Events since the balance sheet date

Subsequent to the year end, the Group has secured an extension to the£25,000,000 bank loan, originally repayable in a single instalment inAugust 2023, the extension has been granted to August 2026.
Between the end of the financial year and the date of this report no item,
transaction or event of a material nature has occurred, in the opinion of the
Directors, that is likely to significantly affect the operations of the Group,
the results of those operations or the state of affairs of the Group in futurefinancial years.

Principal risks and uncertainties

We consider the key risks and uncertainties affecting the group to be
the availability and cost of ingredients for our beers and the growing
prominence of the craft beer market bringing with it more competition.
In order to mitigate these risks and uncertainties, we continue to source
quality hops and malt to brew our innovative beers and continue to look foropportunities to bring our beers to the wider public.

Financial risk management objectives
and policies

The group’s activities expose it to a number of financial risks including
liquidity and credit risk.
Liquidity risk
In order to maintain liquidity to ensure that sufficient funds are available for
ongoing operations and future developments, the group uses a mixtureof long, medium and short-term debt finance. Forecasts are produced toassist management in identifying liquidity requirements and maintaining
adequate reserves.
Credit risk
The group’s financial assets are cash and cash equivalents and trade andother receivables.
The group’s credit risk is primarily attributable to its trade receivables
for beer sales. The amounts presented in the balance sheet are net ofan allowance for the expected credit loss. An allowance for impairment
is made where there is an identified loss event which is evidence of areduction in the recoverability of cash flows.
Beer sales are concentrated towards a number of key customers. Credit
risk is managed through maintaining good customer relationships and themonitoring of credit levels and settlement periods.
The credit risk on liquid funds is limited because the counter party is a bankwith an investment grade credit rating assigned by international credit
rating agencies.

Disabled persons

The group’s policy is to recruit disabled workers for those vacancies thatthey are able to fill. All necessary assistance with initial training courses isgiven. Once employed, a career plan is developed so as to ensure suitable
opportunities for each disabled person. Arrangements are made, wherever
possible, for retraining employees who become disabled, to enable themto perform work identified as appropriate to their aptitudes and abilities.

Employee involvement

The group’s policy is to consult and discuss with employees at meetings
any matters likely to affect their interests. Information on matters of concern
to employees is given through information bulletins and communications,through Huddle, which seek to achieve a common awareness on thepart of all employees of the financial and economic factors affecting thegroup’s performance.

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DIRECTORS’ REPORTCONTINUED...
Research and development

During the year the group continued to undertake research anddevelopment which is aimed at improving processes, creating new
brewing methods and techniques and continued expansion of our productrange. Further detail can be found within note 3 to the financial statements.

Directors’ liability

The company has granted an indemnity to one or more of its directors
against liability in respect of proceedings brought by third parties, subject
to the conditions set out in the Companies Act 2006. Such qualifying thirdparty indemnity provision remains in force as at the date of approving thedirectors’ report.

Disclosure of information to the auditors

So far as the directors are aware, there is no relevant audit information ofwhich the group’s auditors are unaware. Additionally, the directors havetaken all the necessary steps that they ought to have taken as directors
in order to make themselves aware of all relevant audit information and toestablish that the group’s auditors are aware of that information.

Section 172 of the UK Companies Act 2006
Statement and our commitment to transparent
and constructive dialogue with all of our
stakeholders
The UK Corporate Governance Code (the Code) requires the Board
to understand the views of the Company’s other key stakeholders andreport how their interests and the matters set out in Section 172 of the UK
Companies Act 2006 have been considered in Board discussions anddecision making.
During the year, the Directors believe that they have acted in a way, andhave made decisions that would, most likely promote the success of theGroup for the benefit of its members as a whole, with particular regard forthe following key stakeholders:
Our Customers
Our mission is to make people as passionate about great beer as we are,so our customers are at the heart of the business. We achieve this throughensuring our products are of the highest quality and staying ahead of theconsumer trends. We operate across an increasing range of channels toreach the end consumer, including grocery, impulse, wholesale, e-comm,on trade and our own bars. We are continually engaging with consumers
and the channel partners to ensure we are delivering incredible beer andbrand experiences.
Our People
BrewDog is built on a commitment to its people, who are essential to our
success and growth. We continue to focus on key matters for our crew
including being paid a Real Living Wage, charitable giving, and learningand development, and which are detailed in the ‘People’ section. Regular
updates are provided by the Chief Executive Officer for all our crew,which are in addition to regular ‘all hands meetings’ hosted by a director
where employees can either attend in person or watch on demand. Thesesessions cover trading, strategic priorities and new initiatives, with time for
Q&A.
Our Equity For Punks And Other Investors
We actively engage with our EFPs and other investors to support anunderstanding of our business, progress against strategic priorities andto address any concerns. Our EFP team has the primary responsibility
for managing and developing our relationship with EFPs. In addition

to help build our EFP community the forum facilitates communication
between our investors and the business, including directors. The AGM isan opportunity for shareholders to hear from the founders on the Group’s
performance and strategic direction and to ask questions – in addition
to tasting our fantastic range of beers and spirits with other likemindedpeople. BrewDog’s shareholder base is managed by the EFP team withsupport from the Company’s registrars, Computershare.
Our Communities
Our belief is that business should be a force for good. We are committed
to ensuring that we set a new blueprint for business, supporting ourcommunity wherever possible. Our planet needs us more than ever before,
and we have dedicated investment and resources to projects such as our
bio-energy facility, our Lost Forest tree planting & peatland restoration
programme, and a consistent effort to reduce our emissions across ouroperations. This year, we also invited our Equity Punk community to join
us at The Lost Forest to support the first tree-planting effort, and see ourinvestment first-hand. Our Positive Planet accreditation, granted in 2022,
is evidence of our commitment to sustainability. We also seek to benefit
the communities in which we work, whether it is those surrounding ourfour Breweries or our 100+ bars. This includes community events, suchas Christmas parties, charitable giving of both time and resources, andworking closely with local businesses. We’ve also trained a network of over
200 staff who hold the Mental Health First Aider qualification, enabling
us to better support the wellbeing of our teams across every corner ofour business, as well as assist our customers as needed. Our businessis on track to become an accredited Menopause friendly employer,
and we’ve also dedicated resources to supporting our teams throughneurodivergence assessments and diagnoses.
Our suppliers
To allow us to make great beer, our suppliers are fundamental to the qualityof our products. To ensure we obtain quality raw materials, we partner
closely with key suppliers. This includes providing support for researchand development, providing updates on our business, strategic priorities
and new product development.

Make Earth Great Again

•

•
•

•

•

•

by improving gas, electricity and water use. This includes installingnew, more efficient boilers, a larger brewhouse to improve efficiency,
a reverse osmosis plant to clean our waste water for use on site,a nitrogen generation system to reduce CO2 consumption, and abrand new ammonia chiller to help reduce electricity consumption
during processing.
Invested in a range of low carbon vehicles for deliveries anddistribution – this includes an electric delivery truck and gas powered
distribution trucks.
Working with all our bars, supply chain and operational partners to
cut the carbon impact as fast as possible.
Continuing to create innovative products focused on minimising thecarbon footprint, including Bad Beer Vodka and Planet First Locals. In
addition, we launched the Buy One Get One Tree campaign, planting
a tree for every redeemed pack of Lost lager purchased.
The Lost Forest tree-planting programme commenced in 2022, withthe first trees going in the ground as per plans created with Scottish
Woodlands, our afforestation and peatland restoration partner.
Working with a legitimate carbon removal partner until the Lost
Forest starts sequestering carbon, Natural Conservancy of Canada
which sustains and restores one of the largest forests in the world.
We achieved Positive Planet Carbon Negative accreditation in 2022,
validating our commitment to sustainability and our efforts to reduce
emissions.

Scope 1, 2 and 3 Tonnes of CO2e

2022

2021

T C02eT C02eScope 1

3,331

4,646

Scope 2

2,929

5,169

Scope 3102,887

69,379Total

109,147

79,194

2022

2021

The Group announced that it had become a carbon negative businessin August 2020. The Group offsets the scope 1, 2 and upstream scope
3 carbon emissions to achieve this whilst working with a lead scientificadviser, Professor Mike Berners-Lee, to drive emissions to zero.

Output hectolitres

957,891

1,071,865

Total TCO2e per hL

0.11

0.07

We are working on a range of initiatives to reduce the UK carbon footprint
per HL of beer by 35% within the next twelve months. This is alongside acomplimentary carbon removal plan for all our remaining emissions. In
addition, we are working to improve the efficiency of energy intensity andwater use which have successfully been reduced in onsite operations year
on year.

Energy intensity and Water Use

2022

2021

Electricity (MJ per hL)

32.3

31.6

Gas (MJ per hL)

66.5

66.9

Water (hL per hL of beer)

3.0

3.0

There are a range of initiatives underway to reduce the carbon footprint
further which include:
•

•

•
•

Investing in an anaerobic digestor plant in the Ellon brewery, whichturns our waste water and spent hops/yeast into clean water, green
gas, and organic fertiliser. The green gas and clear water produced
will be reused in our Ellon brewery, and any excess gas is pumped
back into the UK’s gas supply grid.
Working to install a CO2 recovery system which will capture all
operational CO2 and use it downstream in our beers, reducing
material requirements.
Ensure that wind turbines provide the majority of the power in the
Ellon brewery.
Working with all teams in production to reduce operational impact

For further detail on the energy and carbon reporting, please see the
MEGA report on the Group’s website.
The Directors Report and Strategic Report on pages 7-9, 38-39, 73-75
was approved by the Board of Directors on 29 May 2023 and signed on
its behalf below.
On behalf of the BoardJ B Watt					N J McCallum
Director					Director
31 May 2023				
31 May 2023

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STATEMENT OF DIRECTORS’RESPONSIBILITIESThe directors are responsible for preparing the Annual Report and the financial statements inaccordance with applicable United Kingdom law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under
that law the directors have elected to prepare the group financial statements in accordance with UK
adopted international accounts standards (“IFRSs”) and the parent company financial statementsin accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards and applicable law), including Financial Reporting Standard 101 Reduced
Disclosure Framework (“FRS 101”).
Under Company Law the directors must not approve the financial statements unlessthey are satisfied that they give a true and fair view of the state of affairs of the groupand the company and of the profit or loss of the group and the company for that period.
In preparing those financial statements the directors are required to:
•

•
•

•

•

•

•

select suitable accounting policies in accordance with IAS 8:
Accounting Policies, Changes in Accounting Estimates and Errors andthen apply them consistently;
make judgements and estimates that are reasonable and prudent.
present information, including accounting policies, in a mannerthat provides relevant, reliable, comparable and understandable
information;
provide additional disclosures when compliance with the specificrequirements in IFRSs (and in respect of the parent company financial
statements, FRS 101) is insufficient to enable users to understand theimpact of particular transactions, other events and conditions on thegroup and the company’s financial position and financial performance;in respect of group financial statements, state whether UK adopted
international accounts standards have been followed, subject to any
material departures disclosed and explained in the financial statements;
in respect of the parent company financial statements, state whether
applicable UK Accounting Standards, including FRS 101, have been
followed, subject to any material departures disclosed and explained in
the financial statements; andprepare the financial statements on the going concern basis unless it isinappropriate to presume that the company and/or group will continue
in business.

The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the group’s and company’stransactions and disclose with reasonable accuracy at any time thefinancial position of the group and company and enable them to ensurethat the group and company financial statements comply with theCompanies Act 2006. They are also responsible for safeguarding theassets of the group and company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the directors are also responsible forpreparing a strategic report and directors’ report, that comply with that law
and those regulations. The directors are responsible for the maintenanceand integrity of the corporate and financial information included on thecompany’s website.

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COMPANY INFORMATION
AND ADVISORSDIRECTORSSECRETARY

AUDITORS

BANKERSN A Simpson
A M Dickie
J B Watt
J L O’Hara
F B JackN J McCallum
A Leighton
A R J Gilmore
E Johnson
G BoerA M Dickie

Ernst & Young LLP
4th Floor,
2 Marischal Square
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Aberdeen
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HSBC
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Aberdeen
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OFFICE
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