Anheuser-Busch InBev’s third-quarter sales in North America missed forecasts, a sign of the continued impact of the Bud Light controversy earlier this year.
However, a surprise share buyback from the world’s largest brewer helped drive up the company’s share price in early trading today (31 October).
In the three months to the end of September, AB InBev’s volumes in North America fell by 17.1% on an organic basis. The consensus forecast among analysts was for a drop of 14.3%.
Third-quarter revenue was down 12.7% organically at $3.86bn versus the consensus forecast of a 10% decline.
In the US specifically, AB InBev’s third-quarter revenue declined 13.5%, although the Budweiser owner said revenue per hectolitre was up 4.9% “driven by revenue management initiatives”.
In the previous quarter – to the end of June – AB InBev’s revenue in the US dropped 10.5%. Revenue per hectolitre was up 5.2%.
Third-quarter sales-to-wholesalers declined by 17.6%. The fall was 10.5% in the second quarter. Sales-to-retailers were down by 16.6%, compared to a 14% drop in the second quarter.
The company said the third-quarter decreases were “primarily” due to lower Bud Light volumes and “shipment phasing ahead of our October price increase last year”.
The brewer said its market share in the US “has been stable since late April” since the row over Bud Light and transgender influencer Dylan Mulvaney.
AB InBev’s US EBITDA declined by 29.3%. It said around two-thirds of the decline was “attributable to market share performance”. Second-quarter EBITDA in the US was down more than 28%.
Group-wide revenue increased 5% on an organic basis in the third quarter to $15.57bn. The consensus forecast was for growth of 4.7%. Revenue per hectolitre was up 9%. AB InBev said revenues grew in around “80% of our markets”.
Volumes fell 3.4%. Growth in the brewer’s “Middle Americas”, Africa and APAC divisions was offset by its performance in the US and “a soft industry” in Europe.
AB InBev reported a “normalised” EBIT of $4.03bn, which amounted to a 2.7% rise organically although compared to $4.06bn a year earlier.
Profit attributable to equity holders stood at $1.47bn, against $1.43bn in the third quarter of 2022.
“The strength of our global footprint delivered another quarter of top- and bottom-line growth,” CEO Michel Doukeris said.
For 2023 as a whole, AB InBev is forecasting its EBITDA will grow “in line with our medium-term outlook of between 4-8%”. It predicts revenue will be “ahead of EBITDA from a healthy combination of volume and price”.
The AB InBev board has approved a share buyback programme worth $1bn, which will take place over the next 12 months.
“ABI has reported a strong Q3 and announced a $1bn buy-back which signals confidence in hitting its net debt/EBITDA target this year – ahead of expectations – although we are slightly disappointed in the lack of guidance narrowing; it has been maintained at 4-8% EBITDA growth,” analysts from Barclays wrote in a note to clients.
Shares in AB InBev were up 3.89% at €52.83bn at 12:50 CET today.
