Anheuser-Busch InBev SA/NV BUD, aka AB InBev, reported solid results for fourth-quarter 2024. The company’s revenues and earnings per share (EPS) beat the Zacks Consensus Estimate and improved year over year. Top and 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 88 cents, up 7.3% from 82 cents in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 72 cents.
Revenues of $14.84 billion surpassed the Zacks Consensus Estimate of $14.04 billion and improved 2.5% year over year. The company registered organic revenue growth of 3.4%, led by ongoing premiumization and higher revenue per hectoliter (hl), with revenue growth in 75% of its markets. Growth was partially offset by a soft consumer backdrop in China and Argentina, leading to an overall volume dip of 1.9%.
Shares of this Zacks Rank #3 (Hold) company have gained 8.5% in the past three months against the industry’s 9.2% decline.
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BUD’s Q4 Details
Revenue per hl improved 5.5% year over year in the quarter, backed by revenue-management initiatives. The total organic volume included a decline of 2.1% in the own-beer volume and 1.1% in the non-beer volume.
Revenues reflected strong performances of its premium and super premium beer brands in 2024. The company’s above-core beer portfolio represented 35% of total revenues, registering low single-digit growth. Within the above-core brands, Corona led the performance with a low-teens revenue growth outside of Mexico, including double-digit volume growth in more than 30 markets. In the United States, Michelob Ultra reported strong growth, being the leading volume share gainer in the industry in the second half of 2024. In Brazil, Budweiser was the leading volume share, gaining brand in the industry with volumes increasing by nearly 50%.
AB InBev has been keen on making investments in its portfolio over the years, as well as rapidly growing its digital platform, including BEES and Zé Delivery. Its digital transformation initiatives have been on track, with B2B digital platforms contributing about 75% to its revenues in 2024. Its omnichannel, direct-to-consumer ecosystem of digital and physical products generated $1.4 billion in revenues in 2024.
BUD has been focused on expanding its Beyond Beer portfolio, which has also been aiding the top line. Notably, the Beyond Beer portfolio contributed 2% to total revenues in 2024, recording a low single-digit growth, driven by double-digit growth in key brands such as Cutwater, Nütrl and Brutal Fruit.
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 0.5% on a reported basis to $6.6 billion and was flat on an organic basis. SG&A expenses increased 1.5% year over year on a reported basis and 1.7% on an organic basis to $4.6 billion.
Our model had predicted the cost of sales to rise 5.7%, with a decline of 90 basis points (bps) in the cost-of-sales rate to 45.2%. We estimated a 30-bps year-over-year increase in SG&A expense rate to 31.6%. In dollar terms, SG&A expenses were expected to rise 8.9% year over year.
The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $5.2 billion, which increased 7.5% year over year on a reported basis and 10.1% on an organic basis. The normalized EBITDA margin expanded 160 bps year over year on a reported basis and 216 bps organically to 35.3%. The organic EBITDA margin benefited from cost efficiencies and disciplined overhead management.
We anticipated normalized EBITDA to rise 11.4% year over year to $5.4 billion. Meanwhile, the normalized EBITDA margin was expected to expand 110 bps to 34.8%.
As of Feb. 21, 2025, the company repurchased about $750 million under its $2 billion share buyback program approved in October 2024. The company expects to complete the share repurchase program by October 2025.
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 to be $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 in the range of $3.5-$4 billion.
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