AB InBev Sales Beat Estimates on Emerging-Market Gains

Updated on
Anheuser-Busch InBev NV Products
Cases of Anheuser-Busch beer are loaded into a delivery truck at Brewers Distributing Co. in Peoria, Illinois, U.S. Photographer: Daniel Acker/Bloomberg

Anheuser-Busch InBev NV, the world’s biggest brewer, reported revenue that topped analysts’ estimates as sales of more expensive beers in emerging markets like China and Brazil offset a decline in the U.S.

Revenue rose 6.2 percent in the first quarter, excluding the impact of currency shifts and acquisitions, the Leuven, Belgium-based company said Wednesday. Analysts anticipated a 3.6 percent advance. Earnings before interest, tax, depreciation and amortization rose 11 percent to $3.97 billion on the same basis.

The brewer is expanding in emerging markets to offset market-share declines at its flagship Budweiser brand in the U.S., where craft beers continue to lure drinkers away from mainstream suds. AB InBev also faces weakening consumer sentiment and tough year-over-year comparisons in Brazil, which hosted soccer’s World Cup last year. Sales in that market and China were “impressive,” Philip Gorham, an analyst at Morningstar Inc., said.

“These are both premiumizing markets that should continue to drive growth for them,” he said by e-mail.

AB InBev rose 3.2 percent to 108.2 euros at 9:09 a.m. in Brussels, pushing its gain this year to 15 percent.

Solid Beer

The company’s global brands, which also include Corona and Stella Artois, reported “solid” volume growth of 4.6 percent, AB InBev said, driven by Budweiser sales in China and Brazil. Beer volumes in China rose 4.7 percent, countering a broader decline in the nation’s beer market, thanks to a “very successful” Chinese New Year campaign, it said.

Brazilian volumes rose 0.4 percent, with sales rising more than 10 percent thanks to price increases. The introduction of Corona to Brazil, along with new lower-alcohol beverages, also boosted sales there, Chief Financial Officer Felipe Dutra said in an interview.

“We’re very pleased with our performance in Brazil,” he said. “The beer market is very resilient, even as people are under pressure in the short term.”

Globally, the volume of beverages sold declined 1.2 percent in the quarter, hurt by a build-up of U.S. inventory in the same period last year in advance of labor negotiations. Sales to wholesalers declined 6 percent in that market, as both Budweiser and Bud Light lost market share. Marketing spending rose by about $500 million in the U.S. and Canada in the quarter, Dutra said.

“We feel we are going in the right direction” with Budweiser, as the brand’s U.S. market-share losses have eased over the past year, Dutra said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE