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AB InBev sees profit growth, despite volume dip
AB InBev saw its profit increase 10.2% in the second quarter of 2024 despite total sales toppling 0.8% as beer volumes continued to tumble.
The brewing giant maintained that it had been affected by the bad weather in key parts of China which saw revenues plummet 15.2% and volumes drop 10.4%.
In the US, revenues dipped 0.6% and “sales to wholesalers declined by 2.7% and sales to retailers were down by 4.1%” where the boycott for Bud Light last year had already knocked the beer brand from its top spot. Added to this, data from the latest Beer Marketers; Insight (BMI) report identified how Americans are currently drinking the lowest amount of beer since the 1990s.
Meanwhile, in Argentina, AB InBev saw the effects of “inflationary pressures” on sales and reported sales volumes declining by more than 20% in the second quarter.
Despite some of the dips in volume, the message from AB InBev was overarchingly positive for the company in terms of fiscal growth with a nod to the company’s biggest brands, such as Budweiser, Corona and Stella Artois also assisting in its profit wins.
Speaking about the results, AB InBev CEO Michel Doukeris said: “Our global momentum continued this quarter. The strength of our diversified footprint and consumer demand for our megabrands delivered another quarter of broad-based top- and bottom-line growth.”
Taking its results into account, the Belgium-based company referred to its “consistent execution” of how its strategy “delivered double-digit EBITDA growth with margin expansion” with “a 25% increase in underlying earnings per share.”
It also noted that its “top-line increased by 2.7%” with revenue growth in approximately 65% of its markets that was “driven by a revenue per hectolitre increase of 3.6% as a result of revenue management initiatives”.
Additionally, it admitted that despite volume growth in the “Middle Americas, South America, Europe and Africa regions being primarily offset by performance in China and Argentina, resulting in an overall volume decline of 0.8%” the company’s “EBITDA increased by 10.2% with production cost efficiencies and disciplined overhead management” driving this.
In terms of its strategic priorities both current and ongoing, AB InBev also revealed plans “to execute on and invest in three key strategic pillars to deliver consistent growth and long-term value creation” these centred around goals to lead and grow the category, digitise and monetise its ecosystem and optimise its business.
Doukeris reiterated that the business was “encouraged” by the results and added that the company will “remain focused on consistent execution of our strategy”.
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