Consumers buying more beer as Budweiser maker AB InBev reiterates growth outlook
Budweiser maker Anheuser-Busch InBev (AB InBev) said drinkers are swallowing higher prices and bought more beer in the first quarter.
After posting higher than expected earnings, the Belgian brewer reiterated an EBITDA growth outlook of between four and eight per cent for the full year.
Consumers had bought 2.8 more drinks by volume in the first quarter, versus the same period a year ago, driven by increases in Latin America and Europe.
Revenue increased 11.1 per cent, while EBITDA grew 7.4 per cent to $4.49bn, surpassing company expectations.
While revenue was boosted by the company raising prices, profit was restrained by skyrocketing commodity and logistics costs.
“The outlook for [the 2022 financial year] reflects our current assessment of the scale and magnitude of the Covid-19 pandemic, which is subject to change as we continue to monitor ongoing developments,” the brewer added on Thursday.
“We are meeting the moment in 2022,” Brian Perkins, Budweiser Brewing Group president for UK & Ireland, said.
“Looking ahead, we are fully invested in realising our ambitious future growth plans, as we continue to invest in our people, innovation pipeline, customer service and portfolio,” he added.
Earlier this year, AB InBev said it would depart Russia by selling its interest in a joint venture with Turkish brewer Anadolu Efes. It announced it was expecting $1.1bn charge as a result of this exit.
In Europe, revenue grew “by high-teens”, with mid-single digit growth in volumes, as pubs and restaurants reopened across different countries after a winter Covid surge.
EBITDA grew by more than 30 per cent in Europe, with the brewer saying it was focusing on “premium and super premium” brands which make up more than 50 per cent of revenue.
While momentum in China had continued into the start of the year, the introduction of Covid lockdown rules in March “led to a total industry decline of low-single digits in the quarter, according to our estimates.
Restrictions led to a 4.3 per cent volume decline while EBITDA was “flattish” after premiumisation and revenue management initiatives.
AB InBev’s share price was lifted by 1.3 per cent on Wednesday morning in early trading.
It comes as analysts speculated yesterday that budget pub operator JD Wetherspoon was well placed to reap the benefits of pub goers trading down, after the company’s results.