Anheuser-Busch InBev (AB InBev) reported a 5% increase in revenue for the third quarter of 2023, despite a 3.4% decline in total volumes, according to CEO Michel Doukeris during the company's earnings conference call. The company also announced a $1 billion share buyback program and a $3 billion bond tender. Doukeris attributed the revenue growth to pricing actions, premiumization, and other revenue management initiatives.
Key takeaways from the call:
- AB InBev experienced a 3.4% decline in total volumes due to performance in the U.S. and a soft industry in Europe.
- EBITDA increased by 4.1% to reach $5.4 billion.
- The company announced a $3 billion bond tender and a $1 billion share buyback program.
- The company is focusing on sustainability initiatives, including climate action, smart agriculture, water stewardship, and circular packaging.
- AB InBev is investing in its brands in the U.S., showing confidence in its strategy despite the Bud Light crisis.
- The company is focusing on digital initiatives, including expanding coverage with the BEES marketplace.
During the call, Doukeris discussed the company's performance, market share, and brand performance. He acknowledged fluctuations in market share, with a 10-15 basis point decline every two weeks, but remained optimistic about the brands' recovery to their pre-April trajectory. He also highlighted the success of Michelob ULTRA, which aligns with the global trend of healthier lifestyles, showing strong growth in the U.S., Canada, Mexico, and plans to expand to other markets in Latin America and the Caribbean.
CFO Fernando Tennenbaum addressed questions about the announced share buyback, stating that it can be executed almost immediately after announcing it. He also discussed the drivers of EBITDA margin expansion in South America, particularly Brazil, attributing the expansion to the performance of mega brands, operating efficiencies, and normalized commodities and foreign exchange rates.
Regarding business performance in different regions, the company reported weather-related challenges in Europe and China but noted overall resilience in the consumer environment. In Latin America, the company saw strength in most markets, despite some impacts from the El Nino climate. The company also confirmed continued investment in marketing and media spending in the U.S., managing overheads tightly.
AB InBev emphasized its focus on digital products and capabilities, particularly through its BEES marketplace. The company also stated that it needs around $5-6 billion in cash to operate. Despite speculation about the potential impact of GLP-1 drugs, AB InBev confirmed that the beer category remains vibrant, announcing a partnership with the UFC.
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