BELGIUM: Price rises lift Anheuser-Busch InBev's Q1
- Q1 net profits double to US$964m
- EBITDA excluding one-off items up by 6.5% to $3.4bn
- Net sales rise by 5.6% to $9bn
- Beer volumes slip on weak demand in North America
Anheuser-Busch InBev's net sales rise by 5.6%, but volumes slip
Higher beer prices have boosted Anheuser-Busch InBev's net sales in the first quarter of 2011, despite weak consumer demand in North America, the brewer has said today (4 May).
The Budweiser brewer's share price sank by 3% in early trading after it reported that a 3.5% drop in volume sales in North America offset rises in all other regions, including Western Europe. Group volumes fell by 0.4% for the three months to the end of March, compared to the same period of 2010.
However, higher beer prices lifted A-B InBev's net sales for the quarter, with revenue per hectolitre up by 6%. Meanwhile, favourable currency and a strong financial performance from AmBev boosted profits, said the group. Lower financial costs, including lower net interest charges, also lifted net profits.
"Brand health and topline organic growth remain our priorities," said the brewer, adding that it remains committed to increasing sales and marketing spend by mid to high single digits in 2011.
The weak US market is a key focus this year and was largely responsible for a 2.3% drop in global Budweiser sales volumes during the quarter. "High levels of unemployment, especially amongst core consumers, continue to affect overall beer industry volumes," said A-B InBev. However, it said: "We continue to believe that a recovery in the US economy is a question of when and not if."
In 2010, Brazil helped the group to make up for lost ground in North America, but the country could not do so again in the first quarter of 2011. A-B InBev's volume sales in Brazil only increased by 0.2% over the three months, hit by poor weather.
"Beer volumes in Brazil were soft in the quarter as anticipated, driven by the severe floods and the expected market share losses following our price adjustments at the end of 2010, which increased the gap to our competitors," said the brewer. "We remain confident about the Brazilian industry," it added.
For the full announcement, click here.
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