AB InBev sustains growth in half-year

Anheuser-Busch InBev on Thursday reported a 4.7% revenue growth for the second quarter of 2018 and half-year respectively. The growth was driven by strong performance of its global premium brands and revenue management initiatives.

The company said that total beer volumes grew by 0.8% in Q2 and by 0.3% in half-year.

Combined revenues of its three global premium brands – Budweiser Stella Artois and Corona grew by 10.1% in Q2 and by 9.1% in half-year. Corona outperformed the other two global premium brands with a revenue growth of 21.9%, while Stella Artois grew 9% and Budweiser by 4.1%.

The company notes that its integration with SABMiller continues to progress with synergy capture and cost savings of $199 million in the second quarter.

Normalised profit for second quarter was $2.1bn versus $1.8bn in the previous year and $3.6bn in half-year as against $3.3bn in 2017.

Looking at the company’s performance by region, AB InBev said that revenue declined by 3.1% in the United States in the second quarter, and by 2.8% in half year, driven by a weaker industry and partly due to the timing of Easter and the fourth of July independence holiday. However, the company notes that it wasn’t all gloom in the U.S as its above premium brands saw accelerated growth with such brands as Michelob Ultra, Michelob Ultra-Pure Gold, Bud Light Orange and the Budweiser Reserve series.

On the other hand, Mexico delivered another quarter and half-year of very strong results with double digit revenue growth despite a tough year comparable due to timing of Easter, supported by revenue management initiatives.

Brazil, AB InBev’s second largest market behind the United States saw revenue growth of 9.4%, driven by annualization of third quarter 2017 price increases.

South Africa, another major market for the brewer suffered revenue decline by the mid-single digits, with beer volumes down by mid-teens due to cycling a tough comparable. The company notes that VAT increase as of April 2018 and numerous petrol price increases in the country had a negative impact on consumer disposable income.

In the rest of Africa, the company said that its own beer volumes grew by high single digits with double-digit growth in key markets of Nigeria, Zambia and Mozambique, which partially offset declines in Tanzania and Uganda. Both countries suffered heavy floods in the period.

In continental Europe, Western Europe saw revenue growth in the mid-single digits, outperforming the industry with a strong execution associated with the 2018 FIFA World Cup in Russia.

China, a major market for AB InBev grew revenue by 6.8% in Q2 and by 5.7% in half-year.

Looking forward to the rest of 2018, the company said it expects to deliver strong revenue growth, driven by solid performance of its brand portfolio and strong commercial plans.

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