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Double-digit beer volume growth in SA helped Anheuser-Busch InBev offset declines in the US, Brazil and Columbia.
Double-digit beer volume growth in SA helped Anheuser-Busch InBev offset declines in the US, Brazil and Columbia.

Growth in SA helped AB InBev overcome declines in Americas


By Robert Laing and Thomas Buckley - Jul 27th 2017, 08:58

Double-digit beer volume growth in SA helped Anheuser-Busch InBev offset declines in the US, Brazil, and Columbia, SAB’s owner said in its first-half results statement on Thursday morning. 

The world’s biggest brewer posted second-quarter earnings growth far ahead of expectations, as it benefited from higher prices and cost savings after the acquisition of SABMiller.

Earnings rose 11.8% to $5.35bn on an adjusted basis before interest, taxes, depreciation and amortization, the maker of Stella Artois said in a statement on Thursday. Analysts expected 7.9% growth.

In SA, the company said, “Our beer revenues grew by 13.4% in the June quarter, driven by revenue per hectolitre growth of 2.4% and beer volume growth of 10.8% benefiting from the timing of Easter."

“In the first half of the 2017 financial year, revenue grew 9.7% with revenue per hectolitre growth of 5.1% and beer volume growth of 4.4%."

“The newly launched high-end unit recorded promising growth in Stella Artois and Corona.",

“Castle Lite continues its multiyear trend of strong growth in the core plus segment, while Carling Black Label has responded well to core plus pricing and consistent ‘champion’ positioning with impactful multimedia soccer activation."

“Lion Lager’s return to the portfolio in the value segment is making good progress at winning back share from inexpensive wines and spirits."

“In near beer, Flying Fish, an apple-flavoured malt beverage, has performed very well during the quarter and has helped to win back category market share previously lost to ciders.”

Global performance

AB InBev’s acquisition of SABMiller in August 2016 distorts the comparison of the six months ended June with the matching period in the prior year.

The group said its first half revenue grew 5% to $14.2bn while its earnings per share fell to $0.95 from $1.06.

“The integration with SAB continues to go as planned, with additional synergy capture this quarter of $335m coming primarily from all of our new markets. We are also well under way sharing best practices, with intellectual synergies driving a new approach to category growth,” the statement said.

AB InBev said its best-performing brand was Corona, with global growth of 16.6% and 26.2% growth outside Mexico.

The company said the second half looked "promising".

AB InBev is seeking growth from new markets such as Africa, which it bolstered with the SABMiller takeover.

In its home market of the US, the Budweiser maker will devote $2bn to boost top brands and improve distribution.

The money also will help support the company’s forays into "near beer", alcoholic sparkling water and other products — such as tea — that are far afield from its original business.

Earlier this month, the company agreed to acquire Hiball, a San Francisco-based maker of energy drinks and cold-brew coffees.

The company is cutting more than 5,500 jobs as it aims to capture $2.8bn in cost savings from its acquisition of SABMiller in the next three to four years.

AB InBev reaped $335m worth of savings from overlaps in the second quarter.
© BusinessLIVE MMXVII 

Read more about: sabmiller | budweiser | ab inbev

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