AB InBev gets more profit out of less beer | RetailDetail

AB InBev gets more profit out of less beer

AB InBev gets more profit out of less beer

Belgian brewer AB InBev has sold 425.9 million hectolitres of beer in 2013, 2 % less than in 2012. Despite the lower volume, the group managed to get a ‘normalized’ 7.9 billion dollars (5.7 billion euro) group profit.

Only Asia had increased beer sales

The drop in volume was registered worldwide: Western Europe fell 4.3 %, North America 2.7 %, Latin America North 3.9 %, Latin American South 2.8 % and Eastern and Central Europe even dropped 15.8 %, due to the Ukrainian crisis and higher taxes. Asia was the only area with increased beer consumption, as volume there grew 9 %.

 

In its home market Belgium, the volumes of its own beers grew 3 %, mainly thanks to bad weather in the first part of the year. Its latest quarter saw a 0.4 % volume increase, thanks to a slightly bigger market share.

 

Turnover grew 3.3 %

AB InBev still managed to push its turnover up 3.3 %, despite the drop in volume sales, to 43.2 billion dollars (32.4 billion euro), thanks to initiatives to increase its profit per hectolitre, while the strong performance of several key brands (+ 4.7 %) also helped.

 

It still had to deal with a rise in cost for every hectolitre, as resources became more expensive and negative exchange rate fluctuations impacted its Brazilian activities alongside increased expenditure for sales and marketing costs (+ 4.5 %). Because volume sales dropped, the overall costs also dipped 0.9 % lower than in 2012.

 

Net profit up 10.2 %

Net profit even went up to 14.4 billion dollars (10.5 billion euro), thanks to a one-time 6.3 billion dollars (4.6 billion euro) accounting appreciation due to its participation in Grupo Modelo. If this is taken out of the equation, a ‘normalized’ 7.9 billion dollars net profit remained, still 10.2 % higher than in 2012.

 

A stronger Asian position is one of the key themes for 2014, with AB InBev announcing in January that it would buy back its former subsidiary Oriental Brewery (BO), South Korea’s most important brewery, worth 5.8 billion dollars (4.2 billion euro).

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