AB InBev said yesterday that it finished the last quarter of the 2020 financial year in a strong financial position and with “momentum in their key markets,” according to chief executive Carlos Brito. Photo: File
AB InBev said yesterday that it finished the last quarter of the 2020 financial year in a strong financial position and with “momentum in their key markets,” according to chief executive Carlos Brito. Photo: File

AB InBev’s strong quarter fails to lift its overall performance

By Sandile Mchunu Time of article published Feb 26, 2021

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DURBAN - ANHEUSERBUSCH InBev (AB InBev) said yesterday that it finished the last quarter of the 2020 financial year in a strong financial position and with “momentum in their key markets,” according to chief executive Carlos Brito.

AB InBev, which operates in more than 50 countries, serves key markets such as Brazil, Argentina, Colombia, Ecuador and South Africa.

Revenue was up by 4.5 percent compared to a 3.7 percent decline for the full-year.

Its total volumes for the fourth quarter to end December increased by 1.6 percent, with own beer volumes up by 1.8 percent and non-beer volumes up by 1.7 percent, but full-year total volumes declined by 5.7 percent, primarily driven by impact of the Covid19 pandemic.

In South Africa, the group, which owns brands such as Budweiser, Stella

Artois and Corona, said the multiple alcohol bans impacted its performance, though underlying consumer demand remained strong.

“Our business in South Africa was significantly impacted by three outright government-mandated bans on the sale of alcohol over the course of 2020, which resulted in double-digit volume, revenue and earnings before interest, tax, depreciation and amortisation (Ebitda) declines and significant

Ebitda margin contraction,” AB InBev said.

However, the ban of alcohol sales had since been lifted at the beginning of February.

However, AB InBev’s overall Ebitda was down by 12.9 percent to $17.32 billion (R251.83bn) while the fourth quarter declined by 2.4 percent to $5.07bn.

AB InBev saw its full-year normalised earnings per share falling to 1.91 US cents a share, down from 4.08 US cents compared to last year.

The board has proposed a full-year dividend of 0.50 euro cents (R8.83) a share, which is subject to shareholder approval during the annual general meeting scheduled for April 28.

The group finished the year with momentum in their key markets despite experiencing an extremely challenging year due to the Covid-19 outbreak.

“We are now more closely connected than ever to the 6 million-plus customers and 2 billion-plus consumers we serve worldwide through our clear commercial strategy, revamped innovation process, digital platforms and ongoing operational excellence,” Brito said.

Looking ahead, AB InBev said while the ongoing disruption caused by the Covid-19 pandemic continued to create uncertainty, it expected its top and bottom line results in financial year 2021 to improve meaningfully compared to financial year 2020.

“We expect topline growth from a healthy combination of volume and price, translating to bottom line growth.

“We will continue to efficiently utilise our resources while fuelling investments behind our brands,” the group said.

AB InBev also expected the adverse channel and packaging mix, coupled with transactional forex and commodity headwinds, to put pressure on its financial year 2021 Ebitda margin.

The share price closed 3.5 percent lower at R907.10 on the JSE yesterday.

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