World: AB InBev reports 0.9 decline in volume beer sales last year

Anheuser-Busch InBev reported falling drinks sales for the first time since the onset of the Covid-19 pandemic, but the volume decline was offset by price increases and consumers switching to premium products.

The world’s largest brewer said on March 2 that drinks volumes fell 0.6 per cent in the last quarter of 2022, dragged down by a 0.9 per cent decline in volume beer sales. Beer sales fell sharpest in North America and Asia. Analysts had predicted volume growth of 2.1 per cent.

But the Belgium-based brewer, which manufactures Budweiser, Stella Artois and Corona, said earnings before interest, tax, depreciation and amortisation grew 7.6 per cent on a like-for-like basis in the last three months of 2022 to $4.9bn, outpacing analyst estimates of 7.1 per cent growth.

Michel Doukeris, AB InBev chief executive, blamed the falling volumes on “really tough” trading in China, Budweiser’s biggest market, due to rolling Covid lockdowns, as well as “abnormally bad” winter weather in the US hitting trading. But he stressed these were “two one-offs”, adding that “China’s back, the US is back”.

Last month, other leading European brewers Carlsberg and Heineken reported slowing volume sales growth as the rebound from the pandemic tapered off and cost-of-living concerns began to take hold.

Carlsberg warned that planned price rises for 2023 might have a “negative impact” on beer sales in some markets. Carling brewer Molson Coors reported a 6.9 per cent decline in global sales volume for its fourth quarter.

Full-year revenues at AB InBev grew 11.2 per cent, while annual volume sales were up 2.3 per cent year on year. AB InBev said revenue per hectolitre was “accelerating” in the second half of the year “driven by revenue management initiatives and continued premiumisation”.

Doukeris said a consumer slowdown had not had a “meaningful” effect on sales at AB InBev, which pushed through a series of price increases in the fourth quarter.

He said consumers often opted to drink at home rather than in restaurants and bars, or swapped buying booze from medium-size supermarkets with major discounters, instead of cutting back. “We always say that beer is resilient but beer is not immune to inflation, recession and everything that is out there,” he added.

The company said that “while 2022 was not without its challenges, including economic uncertainties, elevated input costs and supply chain disruptions”, ebitda growth was at the upper end of its medium-term ambitions.

AB InBev raised its dividend to 75 cents per share, up from 50 cents last year. The group said it expected ebitda to grow in line with its medium-term outlook of between 4 and 8 per cent next financial year, and revenue to grow even faster driven by “a healthy combination of volume and price”.

Trevor Stirling, an analyst at Bernstein, said AB InBev’s fourth quarter trading performance was “weaker than the other European [brewers] but they all saw a deceleration”. However, he said “given the scale of the price increases they have pushed through” a 0.6 per cent volume decline was “not bad”.

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