Anheuser-busch Inbev ((BUD)) has held its Q4 earnings call. Read on for the main highlights of the call.
Anheuser-Busch InBev Earnings Call: Record Revenues Amid Global Challenges
The recent earnings call for Anheuser-Busch InBev (AB InBev) painted a predominantly positive picture, underscored by record revenues and significant digital growth. The company showcased strategic advancements in deleveraging and dividend increases, contributing to an overall upbeat sentiment. However, the narrative was tempered by challenges in China and Argentina, as well as anticipated constraints in the first quarter of 2025.
Record High U.S. Dollar Revenues
AB InBev achieved an all-time high in U.S. dollar revenues, with growth recorded in 75% of its markets. This success was attributed to strategic investments and strong brand momentum, highlighting the company’s robust market presence and effective growth strategies.
BEES Marketplace Growth
The BEES marketplace demonstrated remarkable growth, achieving $2.5 billion in gross merchandise value (GMV), which marks a 57% increase compared to the previous year. This growth underscores the success of AB InBev’s digital initiatives and its ability to capitalize on e-commerce trends.
EBITDA and Margin Expansion
EBITDA reached nearly $21 billion, with margin expansion observed across all five operating regions. This performance was at the top end of the company’s outlook for the year, reflecting strong operational efficiency and profitability.
Deleveraging Milestone
A significant milestone was achieved in AB InBev’s deleveraging efforts, with the net debt-to-EBITDA ratio dropping to 2.89x. This is the first time since 2015 that the ratio has been below 3x, providing the company with increased flexibility in capital allocation.
Dividend Increase
The Board of AB InBev proposed a full-year dividend of EUR 1 per share, representing a 22% increase from the previous year. This move signals confidence in the company’s financial health and commitment to returning value to shareholders.
Strong Performance in Key Regions
AB InBev reported record high volumes and market share gains in regions such as Mexico, Colombia, and South Africa. Europe also showed a mid-teens increase in EBITDA, highlighting the company’s strength in diverse markets.
Digital Transformation
Digital transformation efforts continued to pay off, with BEES capturing $49 billion in gross merchandising value, a 19% increase. The number of orders transacted reached 124 million, and digital channel transactions rose significantly from 50% to 75%.
Volume Decline in China and Argentina
The company faced challenges in China and Argentina, where a soft consumer environment led to a total volume decline of 1.4%. These markets underperformed, impacting overall volume performance.
Underperformance in China
AB InBev’s performance in China lagged behind the industry due to a challenging consumer environment and difficulties in the on-premise channel, highlighting the need for strategic adjustments in this key market.
Q1 2025 Challenges
Looking ahead, AB InBev anticipates challenges in the first quarter of 2025 due to technical factors such as fewer selling days, Easter timing, and shipment phasing comparables in the U.S. and China.
Forward-Looking Guidance
AB InBev’s forward-looking guidance indicates continued growth, with an expected EBITDA increase of 4% to 8% on an organic basis. The company plans to invest between $3.5 billion and $4 billion in net capital expenditures, reflecting its commitment to sustaining growth and addressing market challenges.
In summary, AB InBev’s earnings call highlighted a strong performance with record revenues and strategic advancements, despite facing challenges in certain markets. The company’s focus on digital transformation and strategic investments positions it well for future growth, although it remains vigilant of potential hurdles in the coming quarters.