AB-InBev’s first quarter beer volumes outshine SABMiller’s

The brewer of Stella Artois said its so-called organic EBITDA grew 5.6 percent, even though in North America, the company’s biggest market region, beer sales fell 3.4 percent. Volume had dropped 6.1 percent in the region in the first quarter. The decline in sales to retailers in the U.S. slowed to 1.7 percent compared with 4.4 percent in the first three months of the year.

Beer sales in what AB-InBev calls “Latin America North”, the company’s second-biggest region, jumped 12 percent, driven by a growing economy in Brazil.

The group said volumes in the UK jumped 18.6 percent in the quarter and 11.4 percent over the first half, outstripping a more sluggish 2.6 percent rise in other western European markets.

If Belgium proved tough going – AB-InBev’s sales were down 4 percent in the first half - Germany proved a thorough disappointment. First-half volumes fell as much as 9.8 percent. INSIDE, a German trade publication, estimates that sales of Beck’s alone dropped 6.5 percent during the first six months of this year – in a market that went down by only 0.7 percent.

Further to the east, beer sales were slightly better. In Russia, beer volumes fell 1.1 percent in the period, an improvement from the first quarter, AB-InBev said.

You have to give it to AB-InBev: cost-cutting measures have resulted in stellar margins across the board. The company has met its goal of 30 percent EBITDA for the quarter. But with economies of scale largely completed and organic growth slowing in some markets, costs to increase market share and penetration in declining markets may rise.