On Wednesday, shares of Anheuser-Busch InBev (AB InBev), the largest brewer in the world, experienced a remarkable surge, climbing nearly 9%. This uptick came after the company disclosed fourth-quarter sales figures that surpassed analyst expectations, despite experiencing an overall decline in sales volume. The brewer, recognized for its global brands such as Budweiser, Corona, and Stella Artois, reported a 3.4% increase in fourth-quarter revenue, reaching $14.84 billion. In contrast, analysts from LSEG had projected a 2.9% drop in revenue, forecasting a total of $14.05 billion for the same period. Consequently, AB InBev’s shares closed 8.5% higher following the announcement, reflecting renewed investor confidence.
Despite the impressive quarterly figures, AB InBev’s full-year performance tells a more nuanced story. The company reported a 2.7% increase in annual sales, totaling $59.77 billion, which slightly outperformed analysts’ expectations of $59.3 billion. However, the total sales volume saw a decline of 1.9% in the fourth quarter and 1.4% throughout the entire year. This downward trend was largely attributed to sluggish demand in significant markets such as China and Argentina, prompting CEO Michel Doukeris to express concerns over industrial weaknesses impacting consumer sentiment in these regions.
Doukeris characterized the situation in China and Argentina as “very abnormal” and indicated that these markets were not reflective of the broader business environment. He expressed optimism about a potential recovery in the demand landscape throughout the upcoming year, signaling a cautious yet hopeful outlook for the company’s performance.
AB InBev’s revenue growth was notably driven by the company’s non-beer product lines, such as its cocktail brands Cutwater Spirits and Brutal Fruit Spritzer, rather than its core beer offerings. Consumer preferences are evolving, with a notable shift toward lower alcohol consumption becoming a global trend. This change poses both challenges and opportunities for major players in the beverage market.
Doukeris acknowledged the ongoing transition toward moderation in alcohol consumption but emphasized the strong resilience of global beer demand. He described the beer category as “vibrant” and indicated that the market momentum continues to be favorable. The increase in non-alcoholic beverages has opened up new drinking occasions for a broader array of consumers, allowing traditional breweries to cater to health-conscious market segments more effectively than ever before.
Looking ahead to the future, Doukeris highlighted foreign exchange (FX) rates as a primary concern for 2025, especially with the U.S. dollar’s strong performance influencing operational costs. However, he downplayed the risks associated with potential tariffs on the business, reassuring stakeholders that he did not foresee significant tariffs impacting AB InBev’s operations in the near term. He stated that the company is well-prepared to utilize various strategies to mitigate possible cost increases.
Additionally, AB InBev aims for steady earnings before interest, taxes, depreciation, and amortization (EBITDA) growth, targeting a performance growth rate between 4% to 8% in line with its medium-term projections. This ambition follows a robust 10.1% increase in EBITDA during the fourth quarter and an 8.2% rise across the full year.
AB InBev’s latest financial report showcases a company trying to navigate the complexities of changing consumer habits while maintaining its stronghold in the beer market. As the brewing landscape evolves, marked by a growing inclination towards non-alcoholic options, AB InBev remains committed to embracing this trend and adapting its product offerings. The brewer faces considerable challenges ahead, yet its disciplined approach to managing costs and its strategic focus on both traditional and innovative beverages suggests it is poised to remain a key player in the global drinks industry. Through a combination of robust sales figures and strategic foresight, AB InBev is positioning itself for continued success in an ever-changing market.
