Best quarterly volume performance this year driven by accelerated digital transformation and continued consumer demand for our brand portfolio
BRUSSELS -- (BUSINESS WIRE) --
Anheuser-Busch InBev (Brussel:ABI) (BMV:ANB) (JSE:ANH) (NYSE:BUD):
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Regulated and inside information1
“We delivered broad-based volume growth of 3.7% this quarter resulting in an accelerated increase in revenue of 12.1%. We continue to see strong consumer demand for our portfolio and a resilient beer category as we navigate the dynamic operating environment. As a result of our performance and continued momentum, we are raising the bottom-end of our FY22 EBITDA outlook.” – Michel Doukeris, CEO, AB InBev
Total Revenue
+ 12.1%
Revenue increased by 12.1% in 3Q22 with revenue per hl growth of 8.0% and by 11.5% in 9M22 with revenue per hl growth of 7.8%.
12.7% increase in combined revenues of our global brands, Budweiser, Stella Artois and Corona, outside of their respective home markets in 3Q22, and 9.6% in 9M22.
Approximately 57% of our revenue now through B2B digital platforms with the monthly active user base of BEES reaching 3.1 million users as of 30 September 2022.
Over 385 million USD of revenue and approximately 17 million ecommerce orders generated by our direct-to-consumer ecosystem in 3Q22.
Total Volume
+3.7%
In 3Q22, total volumes grew by 3.7% , with own beer volumes up by 3.4% and non-beer volumes up by 5.2% . In 9M22, total volumes grew by 3.3% with own beer volumes up by 2.8% and non-beer volumes up by 6.5%.
Normalized EBITDA
+ 6.5%
In 3Q22 normalized EBITDA of 5 313 million USD represents an increase of 6.5% with normalized EBITDA margin contraction of 183 bps to 35.2% . In 9M22, normalized EBITDA increased by 7.0% to 14 896 million USD and normalized EBITDA margin contracted by 143 bps to 34.5%. Normalized EBITDA figures of 9M22 and 9M21 include an impact of 201 million USD and 226 million USD from tax credits in Brazil that were recorded in 2Q22 and 2Q21 respectively. For more details, please see page 10.
Underlying Profit
1 682 million USD
Underlying profit (normalized profit attributable to equity holders of AB InBev excluding mark-to-market gains and losses linked to the hedging of our share-based payment programs and the impact of hyperinflation) was 1 682 million USD in 3Q22 compared to 1 699 million USD in 3Q21 and was 4 354 million USD in 9M22 compared to 4 290 million USD in 9M21.
Underlying EPS
0.84 USD
Underlying EPS was 0.84 USD in 3Q22, a decrease from 0.85 USD in 3Q21 and was 2.16 USD in 9M22, an increase from 2.14 USD in 9M21.
1The enclosed information constitutes inside information as defined in Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, and regulated information as defined in the Belgian Royal Decree of 14 November 2007 regarding the duties of issuers of financial instruments which have been admitted for trading on a regulated market. For important disclaimers and notes on the basis of preparation, please refer to page 14.
Management comments
Best quarterly volume performance this year driven by accelerated digital transformation and continued consumer demand for our brand portfolio
Our volume momentum accelerated this quarter as we delivered 3.7% growth, even in the context of the ongoing dynamic operating environment. Top-line grew by 12.1% with 8.0% revenue per hl growth, driven by revenue management initiatives and continued premiumization across most of our markets. EBITDA increased by 6.5% as our top-line growth was partially offset by anticipated transactional FX and commodity cost headwinds and increased sales and marketing investments in our brands.
Following the recognition of our brand building and creative marketing capabilities at the Cannes Lions International Festival of Creativity, we were honored to be named the World’s Most Effective Marketer in the Global Effie Effectiveness Index for the first time in our company history.
As we continue on our deleveraging path, our bond portfolio maintains a very manageable weighted average pre-tax coupon rate of approximately 4% with 94% of the portfolio fixed rate. The weighted average maturity remains more than 16 years with no near- or medium-term refinancing requirements.
Consistent execution of our strategy
We continue to execute on and invest in three key strategic pillars to deliver consistent growth and long-term value creation.
See Image 1.
1. Lead and grow the category:
This quarter we delivered a broad-based total volume increase of 3.7% with growth in more than 60% of our markets.
2. Digitize and monetize our ecosystem:
BEES is now live in 19 markets and has reached 3.1 million monthly active users as of 30 September 2022, a 7% increase versus 2Q22. BEES Marketplace is now live in 14 markets with 44% of BEES customers now also Marketplace buyers.
3. Optimize our business:
In 9M22, our EBITDA grew by 7.0% and, as a result of deleveraging, our net interest expense decreased by approximately 200 million USD versus 9M21.
1. Lead and grow the category:
We are executing on five proven and scalable levers to drive category expansion:
2. Digitize and monetize our ecosystem
3. Optimize our business
In 9M22, we continued to focus on disciplined resource allocation and delivered 7.0% EBITDA growth. Our bond portfolio maintains a very manageable weighted average pre-tax coupon rate of approximately 4% with 94% of the portfolio fixed rate. Our net interest expense for 9M22 decreased by approximately 200 million USD versus 9M21, principally as a result of our gross debt reduction efforts.
Advancing our ESG priorities
As we continue to advance our sustainability agenda, we were proud to recently be included on Fortune’s Change the World List in recognition of our global initiatives in water stewardship. We are also making progress towards our ambition to achieve net zero by 2040, reaching carbon neutrality at five facilities in Brazil and one in Argentina in 9M22.
Creating a future with more cheers
Through the implementation of our category expansion levers, we continue to lead and grow the beer category resulting in broad-based volume growth of 3.7% this quarter. We are digitizing and monetizing our ecosystem with 57% of our revenue now through digital channels and we continue to optimize our business through efficient resource allocation and dynamically balancing our capital allocation priorities to drive long-term value creation. We remain focused on the consistent execution of our strategy and ESG priorities to generate value for our stakeholders and deliver on our purpose to create a future with more cheers.
2022 Outlook
Figure 1. Consolidated performance (million USD) |
|||
3Q21 |
3Q22 |
Organic |
|
growth |
|||
Total Volumes (thousand hls) |
151 629 |
157 284 |
3.7% |
AB InBev own beer |
131 354 |
137 796 |
3.4% |
Non-beer volumes |
19 308 |
18 332 |
5.2% |
Third party products |
968 |
1 156 |
19.4% |
Revenue |
14 274 |
15 091 |
12.1% |
Gross profit |
8 236 |
8 232 |
6.2% |
Gross margin |
57.7% |
54.5% |
-300 bps |
Normalized EBITDA |
5 214 |
5 313 |
6.5% |
Normalized EBITDA margin |
36.5% |
35.2% |
-183 bps |
Normalized EBIT |
4 020 |
4 055 |
4.4% |
Normalized EBIT margin |
28.2% |
26.9% |
-195 bps |
|
|||
Profit attributable to equity holders of AB InBev |
250 |
1 433 |
|
Normalized profit attributable to equity holders of AB InBev |
1 002 |
1 629 |
|
Underlying profit attributable to equity holders of AB InBev |
1 699 |
1 682 |
|
|
|||
Earnings per share (USD) |
0.12 |
0.71 |
|
Normalized earnings per share (USD) |
0.50 |
0.81 |
|
Underlying earnings per share (USD) |
0.85 |
0.84 |
|
. |
|||
. |
|||
9M21 |
9M22 |
Organic |
|
growth |
|||
Total Volumes (thousand hls) |
432 027 |
446 358 |
3.3% |
AB InBev own beer |
378 989 |
389 488 |
2.8% |
Non-beer volumes |
50 551 |
53 820 |
6.5% |
Third party products |
2 487 |
3 050 |
22.6% |
Revenue |
40 106 |
43 118 |
11.5% |
Gross profit |
23 105 |
23 475 |
5.9% |
Gross margin |
57.6% |
54.4% |
-286 bps |
Normalized EBITDA |
14 327 |
14 896 |
7.0% |
Normalized EBITDA margin |
35.7% |
34.5% |
-143 bps |
Normalized EBIT |
10 788 |
11 160 |
5.9% |
Normalized EBIT margin |
26.9% |
25.9% |
-134 bps |
|
|||
Profit attributable to equity holders of AB InBev |
2 708 |
3 126 |
|
Normalized profit attributable to equity holders of AB InBev |
3 926 |
4 489 |
|
Underlying profit attributable to equity holders of AB InBev |
4 290 |
4 354 |
|
|
|||
Earnings per share (USD) |
1.35 |
1.55 |
|
Normalized earnings per share (USD) |
1.96 |
2.23 |
|
Underlying earnings per share (USD) |
2.14 |
2.16 |
|
Figure 2. Volumes (thousand hls) |
||||||
3Q21 |
Scope |
Organic |
3Q22 |
Organic growth |
||
growth |
Total Volume |
Own beer volume |
||||
North America |
28 137 |
1 |
-362 |
27 775 |
-1.3% |
-1.7% |
Middle Americas |
35 591 |
19 |
1 705 |
37 314 |
4.8% |
6.0% |
South America |
39 399 |
106 |
1 140 |
40 644 |
2.9% |
0.4% |
EMEA |
22 124 |
24 |
1 576 |
23 724 |
7.1% |
7.3% |
Asia Pacific |
26 020 |
1 |
1 589 |
27 610 |
6.1% |
6.1% |
Global Export and Holding Companies |
360 |
-150 |
8 |
217 |
3.7% |
-0.1% |
AB InBev Worldwide |
151 629 |
- |
5 655 |
157 284 |
3.7% |
3.4% |
. |
||||||
9M21 |
Scope |
Organic |
9M22 |
Organic growth |
||
growth |
Total Volume |
Own beer volume |
||||
North America |
81 389 |
1 |
-2 166 |
79 223 |
-2.7% |
-2.6% |
Middle Americas |
103 570 |
41 |
5 727 |
109 338 |
5.5% |
6.6% |
South America |
111 327 |
257 |
5 875 |
117 459 |
5.3% |
2.5% |
EMEA |
62 665 |
53 |
3 968 |
66 686 |
6.3% |
6.3% |
Asia Pacific |
72 101 |
2 |
891 |
72 995 |
1.2% |
1.3% |
Global Export and Holding Companies |
975 |
-354 |
36 |
657 |
5.8% |
4.2% |
AB InBev Worldwide |
432 027 |
- |
14 331 |
446 358 |
3.3% |
2.8% |
Key Market Performances
United States: Continued top-line growth driven by our above core portfolio
Mexico: Double-digit top- and bottom-line growth with accelerated market share gain
Colombia: Double-digit top-line growth with record high per capita consumption
Brazil: Double-digit top- and bottom-line growth with margin expansion
Europe: Double-digit top-line growth offset by elevated cost pressures
South Africa: Double-digit top- and bottom-line growth and additional investment in capacity to support growth
China: Underlying consumer demand remains consistent, though industry impacted by continued COVID-19 restrictions
Highlights from our other markets
Consolidated Income Statement |
|
||
Figure 3. Consolidated income statement (million USD) |
|||
3Q21 |
3Q22 |
Organic |
|
growth |
|||
Revenue |
14 274 |
15 091 |
12.1% |
Cost of sales |
-6 039 |
-6 860 |
-20.0% |
Gross profit |
8 236 |
8 232 |
6.2% |
SG&A |
-4 379 |
-4 347 |
-8.0% |
Other operating income/(expenses) |
163 |
170 |
8.1% |
Normalized profit from operations (normalized EBIT) |
4 020 |
4 055 |
4.4% |
Non-underlying items above EBIT |
-73 |
-165 |
|
Net finance income/(cost) |
-1 900 |
-1 392 |
|
Non-underlying net finance income/(cost) |
-747 |
-65 |
|
Share of results of associates |
73 |
81 |
|
Income tax expense |
-679 |
-688 |
|
Profit |
695 |
1 825 |
|
Profit attributable to non-controlling interest |
444 |
392 |
|
Profit attributable to equity holders of AB InBev |
250 |
1 433 |
|
|
|||
Normalized EBITDA |
5 214 |
5 313 |
6.5% |
Normalized profit attributable to equity holders of AB InBev |
1 002 |
1 629 |
|
. |
|||
9M21 |
9M22 |
Organic |
|
growth |
|||
Revenue |
40 106 |
43 118 |
11.5% |
Cost of sales |
-17 001 |
-19 644 |
-19.0% |
Gross profit |
23 105 |
23 475 |
5.9% |
SG&A |
-12 950 |
-12 963 |
-6.1% |
Other operating income/(expenses) |
633 |
648 |
9.9% |
Normalized profit from operations (normalized EBIT) |
10 788 |
11 160 |
5.9% |
Non-underlying items above EBIT |
-290 |
-270 |
|
Net finance income/(cost) |
-3 948 |
-3 674 |
|
Non-underlying net finance income/(cost) |
-1 046 |
-51 |
|
Share of results of associates |
174 |
210 |
|
Non-underlying share of results of associates |
- |
-1 143 |
|
Income tax expense |
-1 910 |
-1 933 |
|
Profit |
3 768 |
4 299 |
|
Profit attributable to non-controlling interest |
1 061 |
1 174 |
|
Profit attributable to equity holders of AB InBev |
2 708 |
3 126 |
|
|
|||
Normalized EBITDA |
14 327 |
14 896 |
7.0% |
Normalized profit attributable to equity holders of AB InBev |
3 926 |
4 489 |
Consolidated other operating income/(expenses) in 9M22 increased by 9.9% primarily driven by higher government grants. In 9M22, Ambev recognized 201 million USD income in other operating income related to tax credits (9M21: 226 million USD). The net impact is presented as a scope change and does not affect the presented organic growth rates.
Non-underlying items above EBIT & Non-underlying share of results of associates |
||||
Figure 4. Non-underlying items above EBIT & Non-underlying share of results of associates (million USD) |
||||
3Q21 |
3Q22 |
9M21 |
9M22 |
|
COVID-19 costs |
-30 |
-2 |
-84 |
-16 |
Restructuring |
-38 |
-13 |
-135 |
-63 |
Business and asset disposal (incl. impairment losses) |
- |
-149 |
14 |
-143 |
AB InBev Efes related costs |
- |
-1 |
- |
-48 |
Acquisition costs / Business combinations |
-5 |
- |
-12 |
- |
SAB Zenzele Kabili costs |
- |
- |
-73 |
- |
Non-underlying items in EBIT |
-73 |
-165 |
-290 |
-270 |
Non-underlying share of results of associates |
- |
- |
- |
-1 143 |
EBIT excludes negative non-underlying items of 165 million USD in 3Q22 and 270 million USD in 9M22. Business and asset disposals in 3Q22 comprise mainly impairment of intangible assets and other non-core assets sold in the period.
Non-underlying share of results of associates includes the non-cash impairment of 1 143 million USD the company recorded on its investment in AB InBev Efes in 1Q22.
Net finance income/(cost) |
|
|||
Figure 5. Net finance income/(cost) (million USD) |
||||
3Q21 |
3Q22 |
9M21 |
9M22 |
|
Net interest expense |
-880 |
-826 |
-2 709 |
-2 509 |
Net interest on net defined benefit liabilities |
-18 |
-18 |
-55 |
-55 |
Accretion expense |
-161 |
-215 |
-427 |
-551 |
Mark-to-market |
-683 |
-79 |
-335 |
83 |
Net interest income on Brazilian tax credits |
14 |
34 |
102 |
146 |
Other financial results |
-171 |
-287 |
-524 |
-788 |
Net finance income/(cost) |
-1 900 |
-1 392 |
-3 948 |
-3 674 |
Net finance costs in 9M22 were positively impacted by the mark-to-market gain on the hedging of our share-based payment programs. The number of shares covered by the hedging of our share-based payment programs, and the opening and closing share prices, are shown in figure 6 below.
Figure 6. Share-based payment hedge |
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