08 March 2024

AB-InBev: Record turnover in 2023 but US sales decline

Belgium | AB-InBev’s Full Year 2023 results beat sales estimates. It raised its annual dividend by 9 percent on 29 February, but its shares slipped as investors digested the news of poor US sales, the impact of hyperinflation in Argentina and the absence of another share buy-back, Reuters said on 28 February.

Investors are hungry for returns after years of focus on debt reduction while AB InBev tried to pay off an acquisition spree. AB-InBev managed to lower its debt pile by USD 1.8 billion to USD 78.1 billion in 2023, from USD 103 billion in 2019. Net debt now stands at a multiple of 3.38 times EBITDA.

The Bud Light boycott hurt

The world’s major brewer may have lost as much as USD 1.4 billion in sales last year because of the backlash to its brief partnership with a transgender influencer to promote Bud Light beer. In North America (USA and Canada), revenue declined 8.3 percent to USD 15 billion, with EBITDA decreasing by 21 percent to USD 4.7 billion, the firm reported.

On the investor call, AB InBev’s CEO, Michel Doukeris, acknowledged this, saying that it was a challenging year for the US business. He said that it continued to improve gradually from May to the most recent weeks in February. And they ended 2023 with their market share at 38.3 percent in the United States.

Strike in US possibly averted

AB-InBev reported record revenues for 2023, up 7.8 percent to USD 59.4 billion on volume sales which dropped 1.7 percent to 585 million hl over 2022, when they jumped 2.3 percent. Its own beer sales were down 2.3 percent last year.

Normalised EBITDA was up 7 percent to reach USD 19.9 billion, while normalised EBIT increased 6.4 percent to reach USD 14.6 billion.

In 2024, AB-InBev expects its EBITDA to grow in line with its medium-term outlook of between 4 percent and 8 percent.

There was some good news for shareholders. The previous day, the company had reached a tentative agreement with the Teamsters union in the US, averting a strike of 5,000 workers, who had been prepared to walk out on 29 February. The union still needs to vote on the agreement.

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