A-B InBev reports third quarter and nine months 2014 results

31 October, 2014

Anheuser-Busch InBev has just reported its results for the third quarter and the first nine months of 2014.

Revenue grew by 2.3% in 3Q14 and by 5.3% in 9M14, with revenue per hectolitre growth of 5.0% in 3Q14 and 4.5% in 9M14. On a constant geographic basis, revenue per hl grew by 4.9% in 3Q14 and by 5.2% in 9M14

- Total volumes in 3Q14 declined by 2.6%, with its beer volumes decreasing by 2.7%, while non-beer volumes declined by 0.9%;

- US beer sales-to-wholesalers (STWs) declined by 3.7%, with selling-day adjusted sales-to-retailers (STRs) declining by 1.9%;

- Volumes in Mexico grew by 2.9%, with strong performances by Corona, Bud Light and Victoria;

- Beer volumes in Brazil grew by 0.2%, being impacted by a soft consumer environment;

- Volumes in China declined by 4.9%, mainly due to cold temperatures in August and September.

In the nine months 2014, total volumes grew by 0.8%, with its beer volumes up 0.6% and non-beer volumes up 2.6%.

Volumes of its global brands grew by 3.1% in 3Q14, led by global Corona which grew by 6.7%, and global Budweiser which grew by 2.8%. Total ‘Focus Brands’ volumes declined by 1.0% in the quarter.

The report concludes: “We believe that the third quarter was a one-off in terms of EBITDA (earnings before interest, taxes, depreciation, and amortisation) performance, and is not reflective of expected future trends for the business. We have a clear strategy built around long term sustainable top- line growth, and are pleased with the direction in which we are heading.

“We gained market share at the consolidated level, both in the quarter and in the nine months, with strong performances in Brazil and China, in particular, as well as improved share trends in the US, based on our estimates.

“Our own beer volumes declined by 2.7% in the quarter, with Europe accounting for over 40% of this decline driven by Russia and Ukraine. However, we saw good progress in all four of our top markets:

"In the US, our market share showed good improvement, declining by 30 bps compared to 65 bps in the second quarter, with good performances from Bud Light, Michelob Ultra, and our high end brands. We are also pleased that our investments in the On-premise are starting to deliver results

“Our beer volumes in Mexico grew by 2.9%, the best volume performance since the closing of the combination with Grupo Modelo, with growth being driven by Corona, Bud Light and Victoria

“We gained 100 bps of market share in Brazil, reaching 69%, with our beer volumes marginally ahead of the same period last year, despite a soft consumer environment. We continue to benefit from the momentum built by our mainstream brands during the FIFA World Cup, as well as strong volume growth from our premium brand portfolio, especially Budweiser

“In China, our Focus Brands continue to perform well. Our market share increased organically by 70 bps to 15.7% in the first nine months of the year, and to 16.5% when including our recent acquisitions, based on our estimates. Industry beer volumes in China were impacted significantly by record cold temperatures in August and September, in contrast to record high temperatures last year. 
“We are continuing to invest behind our brands, with our Global and Focus brands performing ahead of the total portfolio. Volumes of our Global Brands grew by 3.1%, with particularly strong performances from Corona and Budweiser.

The outlook for full year 2014, according to A-B InBev, is as follows: “We expect an improvement in the trend of US industry volumes compared to 2013, driven by a stronger economy, partly offset by challenging winter weather in 1Q14. We expect the Mexican beer industry to return to growth in FY14, driven by a stronger economy, as well as our own commercial programs. We expect Brazil beer industry volumes to resume growth in FY14, helped by the 2014 FIFA World Cup. We expect a year of solid volume growth in China.”

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