AB InBev posts annual sales rise as drinkers swallow higher prices
The world’s largest brewer Anheuser-Busch InBev grew sales by more than 15 per cent last year as drinkers emerging from pandemic restrictions reached for more expensive beers. The maker of Budweiser, Stella Artois and Corona said organic sales growth was 15.6 per cent, on revenues of $54.3bn for the year, exceeding analysts’ expectations, as consumers switched to premium brands and accepted rising drinks prices resulting from commodity price inflation. Chief executive Michel Doukeris said input cost inflation had reached about 7 per cent last year. He said the return of large-scale events such as sports tournaments following pandemic cancellations was an “incredible opportunity . . . we believe we have momentum and are well-positioned to meet the moment”. He declined to comment on whether the group’s breweries in Chernihiv, Kharkiv and Mykolayiv in Ukraine were still operating on Thursday. They are run by a joint venture with Turkish brewer Anadolu Efes covering both Russia and Ukraine, which employs about 7,000 people.
“Our number one priority for the JV now is the safety of our people. We have in place contingencies for this scenario,” Doukeris said. The group sold 9.6 per cent more beer during the year by volume, reaching 582mn hectolitres, and pushed up revenue per hectolitre by 5.5 per cent, accelerating to 8.1 per cent in the fourth quarter. Normalised profit — a measure that excludes the impact of some of the group’s hedging strategies, as well as hyperinflation — was $5.7bn, up from $3.8bn a year earlier. The positive figures helped AB InBev to cut its borrowing by $9.8bn from a year earlier to $88.8bn, reducing a debt hangover dating from the group’s 2016 acquisition of SABMiller. Debt moved slightly below 4 times earnings before interest, tax, depreciation and amortisation, down from 4.8 times a year earlier. Ebitda grew 11.8 per cent to $19.2bn, as sales growth was partly offset by rising commodity prices and “elevated supply chain costs”, the brewer said, adding that the figure was expected to rise 4 to 8 per cent in 2022. Rivals Heineken and Carlsberg have in recent weeks sounded the alarm over the impact of cost inflation, with Heineken chief executive Dolf van den Brink saying it was impossible to predict how “off the charts” cost inflation would affect consumer purchasing. But Doukeris downplayed such concerns. “It’s about inflation and purchasing power but also about the opportunity to put our brands to work and activate the opportunities we have to sell more beer,” he said. Trevor Stirling, analyst at Bernstein, said AB InBev’s outlook was “more positive than other players in the sector”, although he added that margins were “slightly weaker than expected”. Shares in the group were down 3 per cent by midday to €53.52, outperforming the Euro Stoxx 50 index, which dropped 4.5 per cent on news of the Russian invasion of Ukraine.