AB InBev makes more profit from less beer

AB InBev sold fewer drinks in the third quarter than in the same period last year. The Belgian-Brazilian beer giant with brands such as Stella Artois, Jupiler, Leffe and Corona could make more money from it, he announced on Thursday.

In total, AB InBev sold 148 million hectoliters of drinks last quarter, a decrease of 2.4 percent. Beer volumes fell by 3.1 percent to 128.1 million hectoliters.

The Chinese and Argentinian markets in particular weighed on volumes, with declines of around 14 and 15 percent respectively, AB InBev explains. “We estimate that we have maintained or gained market share in 60 percent of our markets, with volumes increasing in 50 percent of these markets.”

Despite lower sales, AB InBev managed to achieve organic revenue growth: at $15.05 billion, an increase of 2.1 percent. The brewer was able to increase revenue per hectoliter by 4.6 percent as a result of “yield management initiatives and continued premiumization”, or in other words: higher prices.

AB InBev points out, among other things, the success of Corona. The Mexican beer brand grew “by 10.2 percent outside the home market” in the third quarter.

The normalized operating cash flow (EBITDA) even shows organic growth of 7.1 percent to 5.4 billion dollars. Savings on production costs and “disciplined management of overhead costs” contributed to this. Net profit increased from 1.74 to 1.97 billion.

AB InBev also slightly boosted its profit growth prospects. While the group previously forecast an increase in operating cash flow of between 4 and 8 percent for the entire year, it now concerns a percentage of between 6 and 8 percent.

Finally, the beer giant announced that it will buy back $2 billion worth of shares in the coming year.

By Editor

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