London - Anheuser-Busch InBev, the world’s largest
brewer, and Danish rival Carlsberg reported first-quarter revenue growth that
beat estimates as demand for mainstream brands such as Stella Artois and Tuborg
rose, helped by an improving European beer market.
AB InBev’s first-quarter revenue rose 3.7 percent on an
organic basis to $12.9 billion, the Leuven, Belgium-based company said
Thursday. Adjusted sales growth at Carlsberg was 4 percent. Analysts
expected a 2.8 percent increase for both companies. AB InBev shares rose as
much as 5.1 percent, while Carlsberg gained as much as 0.9 percent.
The brewers join Heineken in surprising the market with
accelerating growth after struggling against headwinds in Brazil and
Russia. Sales growth of AB InBev’s Stella Artois and Corona brands reached
21 percent and 18 percent, respectively. Revenue at Carlsberg’s Eastern Europe
division, which is mainly Russia, rose 10 percent, helped by more expensive
beers.
“Europe is definitely picking up for all the beverage
alcohol companies as consumer spending is starting to rise in most of the
region,” said Trevor Stirling, an analyst at Sanford C. Bernstein.
AB InBev’s adjusted earnings before interest, tax,
depreciation and amortisation rose 5.8 percent to $4.81 billion in the first
quarter. Analysts expected 3.8 percent growth. Earnings growth excluding Brazil
was 12 percent.
Read also: Africa the new frontier for AB InBev
The US beer industry is “progressing towards a better
place” and Brazil should pick up this year, CEO Felipe Dutra said on a call
with reporters.
The maker of Budweiser is cutting more than 5 500 jobs as
it aims to capture $2 billion in cost savings from its acquisition of SABMiller
in the next three to four years. The company has already stripped $829 million
worth of costs last year after the purchase, which was the brewing industry’s
largest ever deal.
The company reiterated its forecast that total revenue
growth will accelerate in 2017. Sales rose 2.4 percent last year, held back by
a slowdown in Brazil, which suffered its worst recession in decades.