Global Brands Drive Anheuser-Busch InBev
Anheuser-Busch InBev increased revenue by 3.3% to $43.2 billion in 2013 due mainly to a good performance by its Global Brands, which grew by 4.7%, and revenue management initiatives that drove higher revenue per hl. The Budweiser brand saw excellent growth, rising by 6.4% due to its strong appeal in China, Brazil, Russia and the UK, while Corona grew by 3.9%, with a strong performance in Mexico and other key export markets.
Cost of sales per hl increased by 4.3%, primarily reflecting global commodity cost increases and transactional currency impact, partially offset by cost synergies in Mexico and tight cost management. Sales and marketing expenses increased by 4.5%, as the global brewing group actively invested to grow its brands.
EBITDA grew 8.1%, while EBITDA margin expanded by 179 bps to 39.8%, benefiting from revenue per hl growth, tight cost discipline, and the synergies derived from the Grupo Modelo combination. Normalized profit was up 10.2% to $7.9 billion, or $4.91 per share.
In June 2013, AB InBev successfully completed its combination with Grupo Modelo and is already beginning to realize the benefits, realising cost synergies to date of approximately $460 million. AB InBev expects to deliver $1 billion in cost synergies by the end of 2016, with the majority of that by the end of 2015.
The addition of Mexico gives AB InBev a solid position in the world’s fourth largest beer profit pool, a market with very attractive growth potential. With the addition of Coronaas its newest global brand, AB InBev plan to take full advantage of opportunities to introduce the brand to more consumers around the world. Furthermore, there is great potential to introduce and grow other AB InBev brands through the combined distribution network in Mexico.
In Western Europe, group beer volumes declined by 4.3% in 2013. In Belgium, own beer volumes declined 3.0% in FY13, mainly driven by a weak weather–related industry performance in the first half of the year. In Germany, own beer volumes decreased 7.1% in 2013, as a result of a weak industry and market share decline due to a challenging pricing environment.
In the United Kingdom, own product volumes decreased by 3.0% in 2013. Budweiser performed well in 2013, with volumes increasing by 3.0%.
Western European zone EBITDA decreased 5.0% to $1.125 million in 2013 with an EBITDA margin decline of 86 bps to 31.1%, mainly due to the volume decline.
In Central & Eastern Europe (CEE), beer volumes in CEE decreased by 15.8% in 2013. In Russia, own beer volumes declined 13.6% during the year, driven by industry weakness following significant regulatory changes, and market share loss in the value segment in line with AB InBev’s premiumization strategy. In Ukraine, own beer volumes declined 18.9% in 2013, impacted by a volume decline of 41.3% in the fourth quarter, with the instability in the country significantly impacting beer consumption.
CEE EBITDA declined 11.1% to $225 million in 2013 mainly due to the weak industry performance during the year.
AB InBev has now combined its Western Europe and Central & Eastern Europe units into a single Europe Zone, with effect from January 2014.
