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(Courtesy AB InBev)
Anheuser-Busch recently released its 3Q results and in spite of the impact of COVID-19, the company comfortably topped analysts’ expectations.
Even with the mass restaurant and restaurant shutdowns brought on by the coronavirus, the world’s largest brewer said that consumers “quickly adjusted to the new reality” imposed by the pandemic. And as a result Anheuser-Busch InBev saw market growth in most of its regions.
In North America, volumes rose 1.5%. Michelob Ultra and Bud Light Seltzer both sold well in the states, while Budweiser and Bud Light continued their now long-running market-share decline. But overall revenue grew 4.7% in the US for the quarter.
Still the higher costs of addressing consumers shifting from drinking out to stocking their home pantries, led to unexpected supply chain adjustments, emphasis on aluminum cans and increased shipping costs, all of which cut into the company’s profits.
And taking a defensive strategy the company announced that it would not (at least for the short term) be paying an interim dividend to investors.
AB InBev third quarter growth in Europe, was more restrained, with positive volume remaining in the single digits.
Volume grew 3.1% in China, with COVID-19 largely in retreat and most bars and restaurants now open. But earnings in the Asia Pacific region as a whole, increased by just 0.5%, weighed down by other Asian countries still struggling with the virus.
But thanks to South American consumers who delivered a 20% jump in beer volumes in the region for the quarter, AB InBev’s worldwide beer volumes grew 2.6%.
According to Morningstar, the company did especially well in Brazil thanks to a new malt beer Brahma Duplo Malt, and government subsidies which helped propped up spending there.
The October 29 results were a sharp improvement from the second quarter, which felt the initial impact of government stay-at-home orders around the world.
And although AB InBev does project that the second half of the year to deliver healthier results than the first, the Leuven, Belgium-headquartered company expects the “uncertainty and volatility” brought on by the pandemic to continue.
