BELGIUM – Anheuser-Busch InBev, the world’s largest brewer, has announced its fourth-quarter and full-year financial results, revealing a robust performance despite challenges in global beer volumes.
In the fourth quarter, AB InBev reported a 7 percent increase in operating earnings, reaching US$19.98 billion or 82 cents per share, surpassing expectations.
However, the revenue of US$14.5 billion fell short of the US$15.5 billion forecasted by analysts, reflecting a nearly 4 percent decline in beer volumes globally. Notably, non-beer sales experienced a positive increase of 3 percent.
The company’s flagship global brands, including Budweiser, Corona, Stella Artois, and Michelob Ultra, demonstrated resilience, marking a collective 24.6 percent year-over-year growth outside their home markets during the fourth quarter.
While the U.S. market posed challenges with a 17.3 percent decline in revenue for Q4 and 9.5 percent for the entire year, CEO Michel Doukeris attributed the setbacks faced by Bud Light.
The brand faced a conservative backlash following a commemorative can sent to transgender activist Dylan Mulvaney. Doukeris reported that Bud Light has been gradually regaining its market share since May, with a strategic refocus on advertising during sporting events and concerts.
“I think that we are making progress. It’s not at the fast pace that we were expecting or that we’ve been working for. But nevertheless, progress is in place,” Doukeris commented.
The normalization of earnings before interest, taxes, depreciation, and amortization (EBITDA) for AB InBev stood at US$4.9 billion, showcasing a 1.4 percent year-over-year improvement on a reported basis and 6.2 percent on an organic basis.
However, the organic EBITDA margin experienced a slight decline, attributed to ongoing commodity cost challenges and increased sales and marketing investments.
In contrast, Europe proved to be a stronghold for the company, witnessing increased revenue despite declining volumes and a growth in operating profit. Similarly, China exhibited a remarkable 11 percent surge in revenue, attributed to strong sales in premium and super-premium brands.
AB InBev’s digital transformation initiatives, including platforms like BEES and Zé Delivery, continued to show promise.
B2B digital platforms contributed approximately 70 percent to its revenues in Q4, with BEES boasting a monthly active user base of 3.7 million users as of December 31, 2023. The omni-channel, direct-to-consumer ecosystem generated US$1.5 billion in revenues in 2023.
Looking forward, AB InBev anticipates a 4-8 percent year-over-year EBITDA growth in 2024, in line with its medium-term outlook.
The company expects challenges in net pension interest expenses and accretion expenses, projecting US$220-$250 million based on currency and interest rate fluctuations.
Furthermore, the company foresees an average gross debt coupon of 4 percent for 2024 and aims for a normalized effective tax rate of 27-29 percent.
Net capital expenditure is projected to be US$4-$4.5 billion for 2024, driven by increased investments in innovation and other consumer-centric initiatives to sustain the ongoing positive momentum.
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