AB InBev off to a strong start in Q1 as revenue grows 4.7%

Anheuser-Busch InBev on Wednesday reported a 4.7% revenue growth for the first three months of 2018, driven by strong performance of its global premium brands and revenue management initiatives.

The company said that total volumes declined by 0.2%, while its own beer volumes rose by 0.5%.

Combined revenues of its three global premium brands – Budweiser, Stella Artois and Corona grew by 7.9%, with Corona outperforming other brands by 25.1% growth, followed by Stella Artois at 12.3% and Budweiser 2.5%.

The brewer said that its integration with SABMiller which it acquired in 2016 is progressing well, with synergy capture and cost savings of $160 million during Q1 2018.

Net profit for the period fell to $1.02bn from $1.45bn in the preceding year.

Looking at the performance of the company on a regional basis, the company said that revenue decreased by 2.5% in the United States due to a colder-than-average temperatures and declining beer trends that has remained unchanged. However, it notes that its above premium brands continue to perform well such as Michelob Ultra, Michelob Ultra-Pure Gold, Stella Artois and its regional craft portfolio.

Mexico delivered strong revenue growth in the high-teens, helped by volume growth in the mid-teens, which was driven by its commercial strategies and the timing of Easter. Its brands (Corona, Victoria and Bud Light) maintained a healthy momentum.

Brazil, AB InBev’s second largest market behind the United States experienced revenue decline of 1.8%, with beer volumes falling 8.1%, impacted by an earlier carnival and poor weather as well as cycling a tough comparable from last year.

In Africa, South Africa saw revenue growth in the mid-single digits, helped by launch of Budweiser in preparation for the upcoming FIFA World Cup. Its other global premium brands (Stella Artois and Corona) grew by more than 200%.

In the rest of Africa, Nigeria was the top performer, growing beer volumes in the high-teens. Budweiser was launched in April with strong early demand ahead of the FIFA World Cup. The company said that the launch will be supported by traditional and digital media aided by its global sponsorship.

China, another big market for the brewer grew by 4.4%, driven by volume growth of 1.6% and revenue per hectoliter growth of 2.7%. The Chinese New Year also offered an excellent opportunity to connect and celebrate with consumers. Budweiser remains a leading brand among high income consumers as well as Corona which became the number one imported beer in China. The brewer estimates its market share continued to rise above 20%.

In continental Europe, Western Europe grew revenue by low-single digits, driven by volume growth and outperforming a weak industry. The UK delivered double-digit revenue growth, while Eastern Europe experienced revenue contraction due to volume declines in Russia.

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

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