Shares in JSE-listed Anheuser-Busch InBev (AB InBev) surged yesterday after the global beer behemoth posted a revenue surge of 7.2% per hectolitre in the 2023 second quarter, boosted by its brands outside of its respective home markets.
This was despite the drop in sales of Bud Light in the US, which were severely knocked due to a consumer boycott of Budweiser following a controversial marketing campaign in which the beer maker had hired transgender influencer Dylan Mulvaney as a spokesperson.
By 3pm the share price was up 4.71% at R48.49 on the JSE.
The group, which manufactures Budweiser, Stella Artois and Corona, among others, reported an 18.4% increase in combined revenues of its global brands, Budweiser, Stella Artois, and Corona.
Normalised earnings before interest tax depreciation and amortisation (Ebitda) increased 5% to $4.9 million (R88m). Underlying earnings per share was $0.72, a decrease from $0.73 in the second quarter of last year.
The Ebitda was in line with market expectations as management had previously said it was is expected to grow in line with its medium-term target range of between 4% and 8%.
In the second quarter of 2023, total volumes declined by 1.4%, with own-beer volumes down by 1.8% and non-beer volumes up by 0.5%.
“In the half year of 2023, total volumes declined by 0.3%, with own beer volumes down by 0.8% and non-beer volumes up by 2.1%,” the group said.
In South Africa, the group said volumes grew by mid-single digits.
“We continue to see strong consumer demand for our portfolio, gaining a share of beer and total alcohol according to our estimates.
“Carling Black Label, the #1 beer brand in the country, led our performance in the first six months of 2023, with low-teens volume growth and our global brands grew volumes by more than 40%, driven by Corona,” it said.
In the US, its sales-to-wholesalers declined by 8.6%, and its sales-to-retailers declined by 9.2%, under-performing the industry, primarily due to the volume decline of Bud Light.
Mexico and Brazil volumes were flat, while in Europe its volumes declined by low-single digits.
AB InBev said its business, financial condition, and operating results had been and might continue to be negatively impacted by risks associated with global, regional and local economic weakness and uncertainty, including those resulting from an economic downturn, inflation, geopolitical instability, such as the ongoing conflict between Russia and Ukraine, increases in energy prices, the Covid-19 pandemic, changes in government policies and/or increased interest rates.
“A credit rating downgrade could have a material adverse effect on AB InBev’s ability to finance its ongoing operations or to refinance its existing indebtedness.
“In addition, a failure of AB InBev to refinance all or a substantial amount of its debt obligations when they become due, or more generally a failure to raise additional equity capital or debt financing or to realize proceeds from asset sales when needed, would have a material adverse effect on its financial condition and results of operations. AB InBev’s results could be negatively affected by increasing interest rates,” the group said.
Looking ahead, the group said in overall performance it expected its Ebitda to grow in line with its medium-term outlook of between 4-8% and its revenue to grow ahead of Ebitda from a healthy combination of volume and price.
“The outlook for the 2023 financial year reflects our current assessment of inflation and other macroeconomic conditions,” it said.