Anheuser-Busch InBev SA/NV BUD, aka AB InBev, reported first-quarter 2025 results. The company’s earnings per share (EPS) beat the Zacks Consensus Estimate and improved year over year. However, the top line declined and missed the Zacks Consensus Estimate. Bottom-line growth reflected positive business momentum, owing to the strength of its diversified footprint and consumer demand for its megabrands.
AB InBev reported an underlying EPS (normalized EPS, excluding mark-to-market gains and losses related to the hedging of share-based payment programs and the impacts of hyperinflation) of 81 cents, up 7.1% year over year. The rise was driven by 10.3% EBIT growth and the continued optimization of net finance costs. The bottom line beat the Zacks Consensus Estimate of 77 cents. On a constant-currency basis, underlying EPS improved 20.2%.
Revenues of $13.63 billion missed the Zacks Consensus Estimate of $13.85 billion and declined 6.3% year over year. The company registered organic revenue growth of 1.5%, led by revenue growth in 50% of its markets. Growth across markets was driven by a focus on ongoing premiumization and disciplined revenue management, contributing to higher revenue per hectoliter (hl).
Shares of this Zacks Rank #3 (Hold) company have rallied 33.1% in the past three months compared with the industry’s 19.3% growth.
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BUD’s Q1 Details
Revenue per hl improved 3.7% year over year in the quarter, backed by revenue-management initiatives. The total organic volume fell 2.2%, including a decline of 2.5% in the own-beer volume and 0.2% in the non-beer volume.
Revenues reflected the strong performances of its premium and super premium beer brands. The company’s above-core beer portfolio registered 1.8% year-over-year growth. Within the above-core brands, Corona led the performance with an 11.2% revenue increase outside of Mexico, including double-digit volume growth in more than 30 markets. Megabrands revenues increased 4.4%, again led by strong performance in the Corona brand.
AB InBev has been keen on making investments in its portfolio over the years, and rapidly growing its digital platform, including BEES and Zé Delivery. Its digital transformation initiatives have been on track, with B2B digital platforms contributing about 72% to its revenues in first-quarter 2025. Its omnichannel, direct-to-consumer ecosystem of digital and physical products generated $275 million in revenues in first-quarter 2025.
BUD has been focused on expanding its Beyond Beer portfolio, which has also been aiding the top line. Notably, the Beyond Beer portfolio recorded a 16.6% revenue rise, driven by double-digit growth in key brands such as Cutwater and Nütrl in the United States, and Beats in Brazil.
Anheuser-Busch InBev SA/NV Price, Consensus and EPS Surprise
Anheuser-Busch InBev SA/NV Price, Consensus and EPS Surprise
The cost of sales dipped 9.2% on a reported basis to $6.04 billion and was up 3.1% on an organic basis. SG&A expenses increased 5.6% year over year on a reported basis and 1.3% on an organic basis to $4.2 billion.
Our model had predicted the cost of sales to decline 6.4%, with a 160-basis-point (bps) decline in the cost-of-sales rate to 44.1%. We estimated a 30-bps year-over-year increase in the SG&A expense rate to 30.8%. In dollar terms, SG&A expenses were expected to decline 1.8% year over year.
The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $4.9 billion, which fell 2.6% year over year on a reported basis and improved 7.9% on an organic basis. The normalized EBITDA margin expanded 130 bps year over year on a reported basis and 218 bps organically to 35.6%. The organic EBITDA margin benefited from cost efficiencies and disciplined overhead management.
We anticipated normalized EBITDA to rise 2.2% year over year to $5.1 billion. Meanwhile, the normalized EBITDA margin was expected to expand 180 bps to 36.1%.
BUD’s 2025 Outlook
For 2025, AB InBev expects year-over-year EBITDA growth of 4-8%, in line with its medium-term outlook. The company expects net pension interest expenses and accretion expenses of $190-$220 million per quarter in 2025, based on currency and interest rate fluctuations. It anticipates an average gross debt coupon of 4% in 2025.
Management expects a normalized effective tax rate of 26-28% for 2024. Net capital expenditure is projected to be $3.5-$4 billion.
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