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AB InBev Q3 Earnings Beat Estimates, Organic Revenues Rise 2.1%
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Anheuser-Busch InBev SA/NV (BUD - Free Report) , aka AB InBev, reported solid results in third-quarter 2024. The company’s earnings beat the Zacks Consensus Estimate and improved year over year. Top and bottom-line growth reflected positive business momentum, owing to the strength of its diversified footprint and consumer demand for its megabrands.
AB InBev reported an underlying EPS (normalized EPS, excluding mark-to-market gains and losses related to the hedging of share-based payment programs, and the impacts of hyperinflation) of 98 cents, up 14% from the 86 cents in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 90 cents. Underlying EPS growth was driven by EBIT growth and optimization of its net finance costs.
Revenues of $15 billion missed the Zacks Consensus Estimate of $15.6 billion. The company registered organic revenue rise of 2.1%, led by the ongoing premiumization and higher revenue per hectoliter (hl), with revenue growth in over 60% of its markets. Volumes grew in 50% of its markets. Growth was offset by a soft consumer backdrop in China and Argentina leading to an overall volume dip of 2.4%.
Shares of the Zacks Rank #3 (Hold) company have gained 7.5% in the past year against the industry’s 19.7% decline.
BUD’s Q3 Details
Revenue per hl improved 4.6% year over year, backed by revenue-management initiatives. The total organic volume included a 3.1% decline in the own-beer volume, offset by 0.6% growth in the non-beer volume.
Revenues reflected strong performances of its megabrands — Budweiser, Corona, Stella Artois, and Michelob Ultra — which collectively advanced 3.1% year over year outside their home markets. This growth was led by a 10.2% rise in Corona outside of its home markets.
AB InBev has been keen on making investments in its portfolio over the years, as well as rapidly growing its digital platform, including BEES and Zé Delivery. Its digital transformation initiatives have been on track, with B2B digital platforms contributing about 72% to its revenues in the third quarter. The company noted that the monthly active user base of BEES reached 3.9 million users. Its omnichannel, direct-to-consumer ecosystem of digital and physical products generated $350 million in revenues.
Anheuser-Busch InBev SA/NV Price, Consensus and EPS Surprise
BUD has been focused on expanding its Beyond Beer portfolio, which has also been aiding the top line. Notably, the Beyond Beer portfolio contributed $365 million to the total revenues in the third quarter.
The cost of sales dipped 6.9% on a reported basis but rose 2% on an organic basis to $6.7 billion. SG&A expenses improved 2.2% year over year on a reported basis and 2.7% on an organic basis to $4.5 billion.
Our model had predicted the cost of sales to rise 0.7%, with a decline of 30 basis points (bps) in the cost-of-sales rate to 45.8%. The SG&A expense rate was flat year over year at 29.4%. In dollar terms, SG&A expenses were expected to rise 1.4% year over year.
The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $5.4 billion, which was flat year over year on a reported basis and 7.1% on an organic basis. The normalized EBITDA margin expanded 170 bps year over year on a reported basis and 183 bps organically to 55.6%. The organic EBITDA margin benefited from cost efficiencies and disciplined overhead management.
We anticipated normalized EBITDA to rise 1.2% year over year to $5.5 billion. Meanwhile, the normalized EBITDA margin was expected to contract 10 bps to 34.8%.
The company’s board has approved a 2 billion USD share buyback program, likely to be executed in the coming 12 months.
BUD’s 2024 Outlook
For 2024, AB InBev expects year-over-year EBITDA growth to be in the band of 6-8%. The company expects net pension interest expenses and accretion expenses to be in the range of $220-$250 million, based on currency and interest rate fluctuations. It anticipates an average gross debt coupon of 4% .
Management expects a normalized effective tax rate in the band of 27-29% for 2024. Net capital expenditure is projected to be in the range of $4-$4.5 billion , driven by higher investments in innovation and other consumer-centric initiatives to fuel the ongoing momentum.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and EPS indicates growth of 23.4% and 193.3%, respectively, from the prior-year levels.
Vital Farms (VITL - Free Report) , which provides pasture-raised products, currently sports a Zacks Rank of 1. The consensus estimate for Vital Farms’ current financial-year sales and EPS indicates growth of 31% and 40%, respectively, from the prior-year levels.
VITL has a trailing four-quarter average earnings surprise of 82.5%.
Nomad Foods Ltd. (NOMD - Free Report) , manufacturer and distributor of frozen foods, currently carries a Zacks Rank #2 (Buy). NOMD has a trailing four-quarter average earnings surprise of 3.1%.
The Zacks Consensus Estimate for NOMD’s current financial-year sales and EPS indicates growth of 4.9% and 25.5%, respectively, from the year-ago figures.
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AB InBev Q3 Earnings Beat Estimates, Organic Revenues Rise 2.1%
Anheuser-Busch InBev SA/NV (BUD - Free Report) , aka AB InBev, reported solid results in third-quarter 2024. The company’s earnings beat the Zacks Consensus Estimate and improved year over year. Top and bottom-line growth reflected positive business momentum, owing to the strength of its diversified footprint and consumer demand for its megabrands.
AB InBev reported an underlying EPS (normalized EPS, excluding mark-to-market gains and losses related to the hedging of share-based payment programs, and the impacts of hyperinflation) of 98 cents, up 14% from the 86 cents in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of 90 cents. Underlying EPS growth was driven by EBIT growth and optimization of its net finance costs.
Revenues of $15 billion missed the Zacks Consensus Estimate of $15.6 billion. The company registered organic revenue rise of 2.1%, led by the ongoing premiumization and higher revenue per hectoliter (hl), with revenue growth in over 60% of its markets. Volumes grew in 50% of its markets. Growth was offset by a soft consumer backdrop in China and Argentina leading to an overall volume dip of 2.4%.
Shares of the Zacks Rank #3 (Hold) company have gained 7.5% in the past year against the industry’s 19.7% decline.
BUD’s Q3 Details
Revenue per hl improved 4.6% year over year, backed by revenue-management initiatives. The total organic volume included a 3.1% decline in the own-beer volume, offset by 0.6% growth in the non-beer volume.
Revenues reflected strong performances of its megabrands — Budweiser, Corona, Stella Artois, and Michelob Ultra — which collectively advanced 3.1% year over year outside their home markets. This growth was led by a 10.2% rise in Corona outside of its home markets.
AB InBev has been keen on making investments in its portfolio over the years, as well as rapidly growing its digital platform, including BEES and Zé Delivery. Its digital transformation initiatives have been on track, with B2B digital platforms contributing about 72% to its revenues in the third quarter. The company noted that the monthly active user base of BEES reached 3.9 million users. Its omnichannel, direct-to-consumer ecosystem of digital and physical products generated $350 million in revenues.
Anheuser-Busch InBev SA/NV Price, Consensus and EPS Surprise
Anheuser-Busch InBev SA/NV price-consensus-eps-surprise-chart | Anheuser-Busch InBev SA/NV Quote
BUD has been focused on expanding its Beyond Beer portfolio, which has also been aiding the top line. Notably, the Beyond Beer portfolio contributed $365 million to the total revenues in the third quarter.
The cost of sales dipped 6.9% on a reported basis but rose 2% on an organic basis to $6.7 billion. SG&A expenses improved 2.2% year over year on a reported basis and 2.7% on an organic basis to $4.5 billion.
Our model had predicted the cost of sales to rise 0.7%, with a decline of 30 basis points (bps) in the cost-of-sales rate to 45.8%. The SG&A expense rate was flat year over year at 29.4%. In dollar terms, SG&A expenses were expected to rise 1.4% year over year.
The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $5.4 billion, which was flat year over year on a reported basis and 7.1% on an organic basis. The normalized EBITDA margin expanded 170 bps year over year on a reported basis and 183 bps organically to 55.6%. The organic EBITDA margin benefited from cost efficiencies and disciplined overhead management.
We anticipated normalized EBITDA to rise 1.2% year over year to $5.5 billion. Meanwhile, the normalized EBITDA margin was expected to contract 10 bps to 34.8%.
The company’s board has approved a 2 billion USD share buyback program, likely to be executed in the coming 12 months.
BUD’s 2024 Outlook
For 2024, AB InBev expects year-over-year EBITDA growth to be in the band of 6-8%. The company expects net pension interest expenses and accretion expenses to be in the range of $220-$250 million, based on currency and interest rate fluctuations. It anticipates an average gross debt coupon of 4% .
Management expects a normalized effective tax rate in the band of 27-29% for 2024. Net capital expenditure is projected to be in the range of $4-$4.5 billion , driven by higher investments in innovation and other consumer-centric initiatives to fuel the ongoing momentum.
Key Picks
Freshpet, Inc. (FRPT - Free Report) , a pet food company, has a trailing four-quarter average earnings surprise of 132.9%. FRPT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and EPS indicates growth of 23.4% and 193.3%, respectively, from the prior-year levels.
Vital Farms (VITL - Free Report) , which provides pasture-raised products, currently sports a Zacks Rank of 1. The consensus estimate for Vital Farms’ current financial-year sales and EPS indicates growth of 31% and 40%, respectively, from the prior-year levels.
VITL has a trailing four-quarter average earnings surprise of 82.5%.
Nomad Foods Ltd. (NOMD - Free Report) , manufacturer and distributor of frozen foods, currently carries a Zacks Rank #2 (Buy). NOMD has a trailing four-quarter average earnings surprise of 3.1%.
The Zacks Consensus Estimate for NOMD’s current financial-year sales and EPS indicates growth of 4.9% and 25.5%, respectively, from the year-ago figures.