AB InBev beats expectations as beer sales growth hits five-year high
Brussels — Anheuser-Busch InBev (AB InBev), the world’s largest brewer, beat earnings expectations in the second quarter after beer sales grew at their fastest pace in over five years, helped by increases in Latin America, Europe and Africa.
The maker of Budweiser, Corona and Stella Artois said on Thursday that beer volumes rose 2.1% year on year in the April-June period, a rate unmatched for five years and in keeping with its strategy to focus on the top line.
Price rises and consumers shifting to higher-priced beers saw revenue and profits increase by even more.
The Belgium-based brewer said a number of its markets benefited from the later timing of Easter in 2019, pushing more beer sales into the second quarter from the first. However, unlike 2018, it did not get a boost from sales linked to the Soccer World Cup.
It said volumes rose in Mexico, Brazil, Europe, SA, Nigeria, Australia and Colombia.
AB InBev said it continued to expect strong revenue and core profit growth in 2019 and that revenue per hectolitre would be ahead of inflation.
The company is still weighed down by debt after its 2016 purchase of nearest rival SABMiller and has made deleveraging a priority.
However, it had to shelve a planned flotation of a stake in its Asian operations, only to follow that up a week later with the sale of its Australia business to Japan’s Asahi for $11.3bn (R156.8bn).
The company said its net debt was $104.2bn at the end of June, unchanged from the close of 2018, and its net debt to earnings before interest, taxes, depreciation and amortisation (ebitda) ratio dipped to 4.58 from 4.61.
It aims to bring this ratio down to below four by the end of 2020. Its ultimate goal is a multiple of around two.
For the second quarter, ebitda rose 9.4% on a like-for-like basis to $5.86bn, compared with the $5.73bn average of analysts’ estimates based on Refinitiv data.