AB InBev predicts 2022 growth after beating Q4 expectations

Anheuser-Busch InBev has forecast that its profit would increase in 2022, after ending 2021 with stronger results than expected.

According to reports, the global brewer, responsible for brands including Budweiser, Corona and Stella Artois, said its earnings before interest, tax, depreciation and amortisation (EBITDA) would rise by between 4% and 8% this year, with revenue expanding by a higher percentage.

The Belgium-based brewer, which has a particularly large presence in the US, revealed that this would be based on a combination of both higher volumes and prices, telling Reuters that the forecast reflected its current view of the Covid-19 pandemic.

However, despite global fears that spiralling price hikes could have an effect on the beer industry, AB InBev’s forecast did not mention inflation, increased input costs or the rising costs of raw materials affecting its future.

For 2021 as a whole, EBITDA was reportedly up 11.8%, close to the company’s previous outlook of 10-12%. The strong results prediction is currently in line with the brewing giant’s medium-term growth forecast.

AB InBev CEO Michel Doukeris said: “This year was an important step in our journey to create a future with more cheers. Relentless execution of our strategy drove continued momentum to deliver over 15% top-line growth, EBITDA at the top-end of our outlook and another year of strong cash flow generation.” 

Jason Warner, zone president Europe for AB InBev additionally pointed out that in the off-trade channel, AB InBev gained an estimated +1.0pp of market share vs pre-pandemic levels, driven by the performance of its global brands, craft and specialities portfolio, noting that the company has also extended its “Beyond Beer portfolio in Europe, by launching Bud Light Seltzer in the UK, in addition to Mike’s Hard Seltzer”.

Warner revealed that, interestingly, digital sales now accounted for 75% of AB InBev’s top-line in the on-trade channel and also hinted how buying patterns were changing when he explained: “Our direct-to-consumer platform, led by PerfectDraft, now delivers the ultimate home beer experience to 55% more households than in FY20, and in FY21 grew 9x as fast as the online beer category in both France and the UK.”

Peter Ramshaw, consumer analyst at data and analytics company GlobalData, said: “Premium and super-premium products continue to gain relevance globally with these segments recording 20% revenue growth in FY21 and are now representing approximately one third of AB InBev’s total revenue.”

Ramshaw added: “A large portion of people appear to be happy to splash out on higher quality alcohol as a small self-reward after a difficult year. In fact, two in five (41%) of people globally surveyed by GlobalData during Q4 2021 described their purchasing habits in the alcoholic drinks space as leaning towards ‘high quality products/ingredients’ as better value, in contrast to 24% primarily seeking out ‘low price/cheap’ solutions.”