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AB InBev beats expectations as beer sales growth hits 5-year high
[BRUSSELS] Anheuser-Busch InBev, the world's largest brewer, beat earnings expectations in the second quarter after beer sales grew at their fastest pace in over five years, helped by increases in Latin America, Europe and Africa.
The maker of Budweiser, Corona and Stella Artois said on Thursday that beer volumes rose by 2.1 per cent year on year in the April-June period, a rate unmatched for five years and in keeping with its strategy to focus much more on the top line.
Price rises and consumers shifting to higher-priced beers saw revenue and profits increase by even more.
The Belgium-based brewer said a number of its markets benefited from the later timing of Easter this year, pushing more beer sales into the second quarter from the first. However, unlike 2018, it did not get a boost from sales linked to the soccer World Cup.
Volumes, it said, rose in Mexico, Brazil, Europe, South Africa, Nigeria, Australia and Colombia.
AB InBev said it continued to expect strong revenue and core profit growth this year and that revenue per hectolitre would be ahead of inflation.
It is still weighed down by debt after its 2016 purchase of nearest rival SABMiller and has made deleveraging a priority.
However, it had to shelve a planned flotation of a stake in its Asian operations, only to follow that up a week later with the sale of its Australia business to Japan's Asahi for US$11.3 billion.
The company said that its net debt was US$104.2 billion at the end of June, unchanged from the close of 2018, and that its net debt to EBITDA ratio dipped to 4.58 from 4.61.
It aims to bring this ratio down to below four by the end of 2020. Its ultimate goal is a multiple of around two.
For the second quarter, earnings before interest, tax, depreciation and amortisation (Ebitda) rose by 9.4 per cent on a like-for-like basis to US$5.86 billion, compared with the US$5.73 billion average of analysts based on Refinitiv data.