AB InBev results show China dominance

02 March, 2018

Global brewing giant AB InBev has reported revenue growth of +5.1% in FY17 and +8.2% in 4Q17, with revenue per hl growth of +5.1% in FY17 and +6.6% in 4Q17.

The company’s revenue in China grew by +7.3% which the brewing giant claims is due to continued premiumisation in the country. According to the results, premiumisation drove +6.2% of its revenue in China per hl growth and volume growth of +1.1%.

Inside the report, management comments said: “Our brand portfolio again benefited from strong consumer preference for premium brands. In the core plus segment, Harbin Ice outperformed the industry nationally, aided by the Baipi wheat extension.

“Budweiser also grew nationally in FY17 with some notable successes this year, including establishing itself as the leading beer brand in sales in e-commerce.

“Our super premium portfolio, led by Corona, Hoegaarden, and Franziskaner, accelerated its growth throughout the year, with volumes almost doubling versus last year, and we are now the market leader in all super premium beer styles in China.” 

Christopher Rossbach, chief investment officer at J. Stern & Co, said: “This was a good enough close to the year for the group, and the shares have continued to climb since it announced its results. Revenues during the fourth quarter were of particular note, ahead by +8.2%, well ahead of the consensus, with its global brands business a real highlight after showing growth +17.8%.

“The business also continues to deliver cost savings and synergies following the merger with SAB, delivering US$ 381m in the fourth quarter alone to take savings to US$ 1.3bn for 2017.

“Since the takeover it has achieved total cost savings of US$ 2.1bn. However, management indicated that they are determined to grow revenues not just keep on cutting costs, talking about category expansion and strategy.

“Looking ahead, the company is guiding for a slightly softer first quarter– quite conservative after the last quarter’s figures – which is likely to do with the timing of marketing expenses for the World Cup this year blamed. Nonetheless, they had a reasonable fourth quarter, and should have a few tailwinds at their back now enabling the business to press on in 2018.”

Keywords: ab inbev


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