AB InBev has started the year strongly, selling more beer than expected and managing to pass most of the increase in costs on to its customers. Still, margins are slightly under pressure.
In the first quarter of this year, AB InBev sold 2.8 % more beverages, which is better than analysts had expected. Sales even increased by 11.1 %, thanks in part to higher prices as the brewer passes on rising costs to customers and increases its focus on more expensive premium brands. Per hectolitre, the company earned 7.8 % more. Global brands Budweiser, Stella Artois and Corona did 6 % better.
Yet there are also concerns: the margin fell from 34.7 % to 33.9 %, the net profit fell from 842 to 471 million euros. Moreover, the planned withdrawal from Russia will require write-offs of up to a billion euros. Still, AB InBev expects operating cash flow (EBITDA) to grow by 4 – 8 % this year. One of the levers for growth is digitisation, with both business-to-business platforms and direct-to-consumer sales.
In Belgium, AB InBev saw its market share in the retail channel increase, while the on-trade showed a strong recovery: in March, sales already reached 2019 levels. The brewer therefore expects a full recovery of on-trade activity this year. The launch of the two new beers Kwak Rouge and Kwak Blonde was well received. Moreover, the brewer expects a lot from the festival summer: Jupiler and Stella Artois will be present at 125 festivals.