Fri, May 05, 2017 - Page 10 News List

Big beer is back as AB InBev, Carlsberg sales heat up

Bloomberg

Anheuser-Busch InBev NV (AB InBev), the world’s largest brewer, and Danish rival Carlsberg A/S reported first-quarter revenue growth that beat estimates as demand for mainstream brands such as Stella Artois and Tuborg rose, helped by an improving European beer market.

AB InBev’s first-quarter revenue rose 3.7 percent on an organic basis to US$12.9 billion, the Leuven, Belgium-based company said yesterday, while Carlsberg’s adjusted sales growth was 4 percent.

Analysts expected a 2.8 percent increase for both companies.

AB InBev shares rose as much as 5.1 percent, while Carlsberg gained as much as 0.9 percent.

The brewers join Heineken in surprising the market with accelerating growth after struggling against headwinds in Brazil and Russia.

Sales growth of AB InBev’s Stella Artois and Corona brands reached 21 percent and 18 percent, respectively.

Revenue at Carlsberg’s eastern Europe division — which mainly comprises Russia — rose 10 percent, helped by more expensive beers.

“Europe is definitely picking up for all the beverage alcohol companies as consumer spending is starting to rise in most of the region,” Sanford C. Bernstein analyst Trevor Stirling said.

AB InBev’s adjusted earnings before interest, tax, depreciation and amortization rose 5.8 percent to US$4.81 billion in the first quarter.

Analysts expected 3.8 percent growth. Earnings growth excluding Brazil was 12 percent.

The US beer industry is “progressing towards a better place” and Brazil should pick up this year, AB InBev chief financial officer Felipe Dutra said on a conference call with reporters.

The maker of Budweiser is cutting more than 5,500 jobs as it aims to capture US$2 billion in cost savings from its acquisition of SABMiller in the next three to four years.

The company had already stripped US$829 million worth of costs last year after the purchase, which was the brewing industry’s largest ever deal.

The company reiterated its forecast that total revenue growth would accelerate this year. Sales rose 2.4 percent last year, held back by a slowdown in Brazil, which suffered its worst recession in decades.

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