Anheuser-Busch InBev (BUD 1.10%) announced second-quarter 2017 results on Wednesday after the market closed, highlighting the growing popularity of its biggest brands around the world.
Let's have a closer look at what drove AB InBev's business as it capped the first half of the year, and at what investors can expect from the brewing titan in the coming quarters.
Image source: Anheuser-Busch InBev.
Anheuser-Busch InBev results: The raw numbers
| Metric |
Q2 2017 |
Q2 2016 |
Year-Over-Year Growth |
|---|---|---|---|
|
Revenue |
$14.182 billion |
$13.453 billion* |
5.4% |
|
Normalized profit (attributable to shareholders of AB InBev) |
$1.872 billion |
$1.727 billion** |
8.4% |
|
Normalized earnings per share |
$0.95 |
$1.06** |
(10.4%) |
Data source: Anheuser-Busch InBev. *Reference base, which includes the results of SABMiller as if the combination had taken place at the beginning of Q4 2015, and excludes results of businesses sold since the combination was completed. **As reported.
What happened with Anheuser-Busch InBev this quarter?
- These results were mixed relative to investors' expectations for earnings of $0.97 per share on roughly the same revenue.
- Organic revenue growth was 5%.
- Revenue per hectoliter grew 3.2%, or 3.6% on a constant-geographic basis, driven by ongoing revenue management and "premiumization" initiatives.
- Normalized earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 11.8% year over year to $5.354 billoin.
- Total volumes increased 1% year over year, including own-beer volumes growth of 2.1%.
- Revenue from Global Brands rose 8.9% year over year, including:
- 5.7% growth from Budweiser, with an 11.7% increase in revenue outside the U.S.
- 6.6% growth from Stella Artois, driven by strength in both Argentina and South Korea.
- 16.6% growth from Corona, including 26.2% growth outside of Mexico with particular strength in the U.K., Australia, and China.
- The integration of SAB Miller is "progressing well." The company captured another $335 million in synergies and cost savings related to the merger.
What management had to say
AB InBev management noted in a prepared statement that growth accelerated as promised in the second quarter, with premiumization efforts helping to drive growth in both emerging and developed markets alike.
"2017 has been off to a good start and we will continue to push ourselves to deliver good results throughout the balance of the year," management added. "While the second half of the year looks promising, our focus remains on growing the global beer category as well as generating top-line growth in a sustainable way to position ourselves for long term success."
Looking forward
With the usual caveat that certain key markets remain volatile, AB InBev reaffirmed both its expectation for total revenue growth to accelerate this fiscal year, and its goal for achieving total cost synergies from the merger of $2.8 billion. AB InBev also repeated its promise to increase its dividend payout over time, "although growth is expected to be modest given the importance of deleveraging."
All things considered, apart from AB InBev's slight bottom-line shortfall relative to expectations, there were no surprising negative revelations in this report. Rather AB InBev continues to successfully implement its plans for sustained, profitable growth across the globe, and the company is rightly content with its results.
