The world’s biggest brewer succeeded in growing its Q1 topline to just over $9bn even though volume actually dipped slightly.
This was achieved thanks to a focus on prices and premium beers. In the US, for example, shipments of high end brands actually grew 26 per cent. And this growth was achieved in the context of a fall in overall volumes in the country.
AB Inbev blamed high levels of unemployment for the dip in US volume. And in other markets AB InBev also struggled to grow sales.
In the important Brazilian market, the brewer said volumes were ‘soft’ because of severe floods and price increases at the end of 2010 that brought its prices further away from rivals.
James Edwardes-Jones, an analyst at Espirito Santo Investment Bank, said it is not the first time that AB InBev has published weak volumes and made up for it elsewhere.
In an investor note, he said: “It’s hardly novel that ABI should have turned in a quarter of soggy volume, decent price/mix and cost savings. That’s what they do… that’s what they have done once more.”
Nevertheless, the analyst sees some positives in the results. “Price/mix rose by a phenomenal 6.1 per cent, way ahead of the 2.9 per cent we forecast or the 3.9 per cent consensus.”
And AB InBev grew its margins in Q1 despite high raw material costs – which Edwardes-Jones said the brewer is doing a comparatively good job of keeping under control.
And the margin growth came as sales and marketing costs as a percentage of sales increased. Edwardes-Jones said: “It’s a clear indicator that Anheuser-Busch InBev is not ‘buying’ margin growth at the expense of lower A&P.”