Over and above recruiting again, AB InBev plans to build a new brewery in Nigeria in addition to expansion in other countries. Picture: FRANCOIS LENOIR/REUTERS
Over and above recruiting again, AB InBev plans to build a new brewery in Nigeria in addition to expansion in other countries. Picture: FRANCOIS LENOIR/REUTERS

Second-quarter results from Anheuser-Busch InBev (AB InBev) cut short the brewer’s latent JSE recovery, with stock down 3.7% on Thursday as its key US market posted weaker revenues and continued to lose market share.

This is the biggest drop since May 10.

But those incessant World Cup adverts featuring Budweiser beer drone deliveries appear to have paid off.

Describing it as “the best World Cup we’ve done this far”, CEO Carlos Brito said the campaign was used to introduce Budweiser into new markets such as Nigeria and SA and that it had lifted beer volumes by 45 basis points over the course of the tournament.

Still, AB InBev, which snaffled SABMiller in a $79bn buyout two years ago, posted overall volume growth of just 0.8% for the June quarter, as strong performances in China and Mexico were offset by volume declines in the US and SA.

Avior Research analyst Janine van Wyk said “a structural shift is taking place, with US consumers increasingly moving to no-or low-alcohol alternatives and craft beer options”, with the success of AB InBev’s efforts to mitigate volume declines “still in question”.

In SA, a VAT increase and a series of petrol price hikes have eaten into local beer budgets.

Locally, revenue fell by mid-single digits and beer volumes slumped by mid-teens, partly as the previous year period was flattered by double-digit volume growth and price increases.

For the first half, volumes inched up 0.3%, while non-beer volumes fell 3.4%.

AB InBev managed to grow revenues 4.7% for the quarter and half-year to $14.01bn, partly due to a big jump in sales of its three global brands, Budweiser, Stella Artois and Corona. Normalised earnings per share rose 15.8% to $1.10 as margins swelled by 85 basis points.

Before Thursday’s numbers, AB InBev shares had recovered about 14% since sliding to lows of about R1,166 a share in May, but Investec Asset Management analyst John Thompson said that “to keep that momentum you needed a near-perfect set of results and okay is just not good enough for this market”.

Thompson is cautious of what the market expects from AB InBev in the second half, but the management is banking on “strong” revenue and earnings growth for the full year.

He is also sceptical of a management rejig in which AB InBev will shrink its structure back to six “zones” across its markets, as well as bring its marketing and venture capital division ZX Ventures under one umbrella, with the aim of creating new markets, particularly its non-alcohol business. “In order to grow, we have to anticipate the future,” Brito said.

talevig@businesslive.co.za