AB InBev Upbeat On 'Resilient' Beer, China Recovery

By Dave Simpson
AB InBev Upbeat On 'Resilient' Beer, China Recovery

Anheuser-Busch InBev, the world's largest brewer, expressed confidence in China's recovery and the willingness of drinkers to pay higher prices after reporting increased profit in the fourth quarter despite lower beer sales.


The maker of Budweiser, Corona and Stella Artois on Thursday 2 March registered record drinks volumes for the year, but they fell by 0.6% in the final quarter of 2022, compared with a rise expected by the market.

AB InBev's sales and earnings declined in China due to a strict zero COVID policy that was suddenly dropped in December.

The company's Asian subsidiary, which also released results on Thursday 2 March, said the restaurants and night life venues it supplies in China had almost fully re-opened by the end of February. It said it was optimistic for a recovery in 2023 after a transitional first quarter.

In the United States, AB InBev's largest market, profit and revenue increased, largely because of price increases, although those same increases, along with harsh winter weather in December, cut into beer sales in volume terms.


Chief executive Michel Doukeris said many retailers, aware of upcoming price hikes in October, stocked up in September. In the first six weeks of 2023, US volumes were only down about 1%, with revenue some 5% higher, he said.

"Beer is a very resilient category," Doukeris said, adding the trend towards more higher priced premium beers was continuing, notably for drinking occasions in people's homes.

Brewers have raised beer prices in response to higher energy and raw materials costs, and both Heineken and Carlsberg have warned of reduced beer consumption in Europe because of the increases.

AB InBev shares were down 1.3% at 1040 GMT on Thursday 2 March in a weaker overall market.

Bernstein Research analyst Trevor Stirling described the results as a "mixed bag" and said that some investors may have hoped for less conservative outlook, although an increased dividend was a positive sign.


The company's overall core profit - earnings before interest, tax, depreciation and amortisation (EBITDA) - rose 7.6% on a like-for-like basis in the fourth quarter to $4.95 billion, above the 7.1% gain expected by analysts in a company-compiled poll.

For the whole year, core profit growth was 7.2%.

The Belgium-based company forecast core profit would grow in 2023 in line with its medium-term outlook range of 4% to 8%, with revenue expanding at a higher rate than profit.

Full-Year Dividend

AB InBev also increased its full-year dividend to a proposed €0.75 from €0.50 in each of the past two years.

Read More: AB InBev Raises 2022 Outlook As Its Beer Sales Accelerate

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