Motley Fool

Anheuser-Busch InBev Pops as Brazil Gains Steam

Steve Symington, The Motley Fool
Updated

In This Article:

Anheuser-Busch InBev (NYSE: BUD) announced fourth-quarter 2017 results on Thursday, detailing accelerated organic growth and incremental cost synergies from its megamerger with SABMiller just over a year ago.

With shares up more than 3% as the market digested the news, let's take a closer look at what AB InBev accomplished over the past few months, as well as what we can expect from the brewing titan in the coming quarters.

Person holding a bottle of Corona with feet hanging off the side of a hammock.
Person holding a bottle of Corona with feet hanging off the side of a hammock.

Image source: AB Inbev.

Anheuser-Busch InBev results: The raw numbers

Metric

Q4 2017

Q4 2016

Year-Over-Year Growth

Revenue

$14.600 billion

$14.202 billion

2.8%

Normalized profit (attributable to shareholders of AB InBev)

$2.054 billion

$919 million

99.8%

Normalized earnings per share

$1.04

$0.43

141.9%

Data source: AB InBev.

What happened with Anheuser-Busch InBev this quarter?

  • AB InBev doesn't provide specific revenue or earnings guidance. So, for perspective -- and while we don't usually pay close attention to Wall Street's expectations -- consensus estimates predicted lower earnings of $0.98 per share on revenue of $14.5 billion.

  • Organic revenue growth accelerated to 8.2%, up from 3.6% last quarter.

  • Revenue per hectoliter grew 6.7% at constant currency, driven by premiumization and revenue-management initiatives.

  • EBITDA increased 17.9% to $6.189 million, driven by revenue growth and synergies from the SABMiller merger.

  • Total volume grew 1.6%, including 2.3% growth in own-beer volume and a 3.6% decline in non-beer volume.

  • Revenue from AB InBev's three Global Brands -- Budweiser, Stella Artois, and Corona -- grew 17.8%, including 29% growth outside of their respective home markets.

    • Budweiser remains the world's most valuable beer brand, according to BrandZ, growing global revenue 4.1% this year.

    • Stella Artois delivered 12.8% revenue growth, thanks to growth in North America, repatriation in Australia, and its entry into new markets, including South Africa.

    • Corona revenue increased 19.9% this year, driven by gains in Mexico, China, Australia, and Argentina.

  • The United States remains a crowded market, and AB InBev admits it "has work to do" in balancing market share with profitability.

  • Business in Brazil rebounded nicely throughout the year after weakness that had persisted since late 2016, ending with its strongest results this quarter. Revenue in the country grew 13.3% in the fourth quarter, including revenue per hectoliter growth of 10.1%.

  • AB InBev captured $381 million of additional merger synergies in the fourth quarter, bringing its total fiscal 2017 synergies and cost savings to $1.304 billion.

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