Revenue in three months ended March 31 gained 6.2 percent, excluding acquisitions, disposals and currency fluctuations, the Leuven, Belgium-based company said in a statement. The median estimate of eight analysts was for a 6.6 percent increase, and represented a 1.8 percent advance in the volume of beer sold.
Earnings per share, excluding some items, rose to $1.05 from 73 cents in the same period a year earlier. The company reported an effective tax rate of 17.3 percent in the quarter, lower than 23.9 percent a year earlier due to “shifts in profit mix to countries with lower marginal tax rates, as well as incremental tax benefits in Brazil.”
Sales were “slightly light compared with consensus, but there was a significant below-the-line beat,” aided by the lower tax rate, Anthony Bucalo, an analyst at Banco Santander SA in London, wrote today, citing the company’s consensus for earnings per share on the same basis of 88 cents. “There is a lot to like in this press release.” Bucalo has a buy rating on the stock.
AB InBev shares slid 1.3 percent to 54.37 euros at 9:17 a.m. in Brussels, paring their advance to 15 percent this year.
Lower Tax Rate
AB InBev also adjusted its guidance for its full-year tax rate, saying it expects it to be in the range of 19 percent to 21 percent, compared with previous forecasts of 21 percent to 23 percent.
The brewer sells the majority of its beers, including Budweiser, in North America and northern Latin America. Sales to retailers by volume rose 1 percent in the U.S., helped by purchases of the newly released Bud Light Platinum beer and Stella Artois, even as its Budweiser brand declined 4.3 percent. In Brazil, another key market, volumes rose 4 percent even as heavy rains restrained sales in January.
AB InBev is focusing on sales of more profitable beers in the U.S., and narrowing the price gap between its so-called sub- premium brands and premium brands, Chief Financial Officer Felipe Dutra said today.
“Our goal is not to lose market share, but we’ve set a clear strategy,” he said. “We’re willing to take some short- term pain.” U.S. market share slid 14 basis points, the slowest pace since 2009, he said.
Sales in China, the world’s biggest beer market, were affected by “poor weather conditions” in the first quarter, although “early indications are that we gained market share,” the company said. Rival SABMiller Plc (SAB), the second-biggest global brewer, reported volume growth at its Asia-Pacific unit that missed estimates as rain in March cut volume sales in China.
AB InBev said today it will focus on expanding in China through “selective acquisitions and greenfield developments.”
So-called normalized earnings before interest, tax, amortization and depreciation totaled $3.55 billion, compared with the median estimate of $3.6 billion. That’s an organic increase of 7.4 percent, smaller than an anticipated 8.9 percent gain. Total revenue rose to $9.3 billion.
Ebitda margin, a measure of profitability, slid 55 basis points in Latin America North, the brewer’s second most profitable region, as tax increases in Brazil held back revenue growth and transport costs and sales and marketing expenses increased.
The company said today it expects second-quarter U.S. shipments to be “softer” as it adjusts sales patterns, restraining Ebitda growth. Brazilian beer volumes should increase this year, it said.
AB InBev, formed through the $52 billion takeover of Anheuser Busch Cos. by InBev NV in 2008, agreed to buy control of Dominican brewer Cerveceria Nacional Dominicana for $1.24 billion this month to expand in the Caribbean. The company said today it is fully committed to cutting debt.
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