Anheuser-Busch InBev reports fourth quarter and full year 2019 results
27-02-2020 17:24:00 | Editor: Bob Koigi | hits: 2454 | Tags:

Below are the highlights from Anheuser-Busch InBev announcement of Fourth Quarter and Full Year 2019 Results.

Our performance in 2019 was below our initial expectations, and we are not satisfied with the results. Throughout the year, we enhanced our focus on top-line growth and value creation while adopting a more balanced strategy between volume and revenue per hl growth. However, we faced some challenges, including headwinds in our cost base driven primarily by the highest annual increase in commodity and transactional currency costs in the past decade. We also faced challenging macroeconomic environments in many of our markets and our performance in the second half was impacted by softness in the nightlife channel in China.

Revenue grew by 4.3% with revenues per hl growth of 3.1%. Volumes grew by more than one percent, our third consecutive year of volume growth with the rate of growth accelerating each year. EBITDA grew by 2.7% with margin contraction of 65 bps.

Growing the Category: We remain focused on driving the beer category by leveraging the interlocking frameworks of the market maturity model, category expansion framework and growth champions. Our category expansion framework provides a roadmap for growing the category by offering a full portfolio of options spanning different styles and price points to reach more consumers in more occasions.

Premiumization: Across the world, the beer category is premiumizing and is a critical growth driver. Our High End Company is leading the way with double-digit top and bottom-line growth in 2019. Our global brands – Budweiser, Stella and Corona – are at the forefront of our premiumization strategy and had a very strong year, growing revenue by 8.0% outside of their home markets where they command a premium.

Smart Affordability: Our smart affordability strategy allows us to reach new consumers and introduce our brands in new occasions.  We have been expanding our portfolio to offer more accessible price points, through initiatives such as new packaging formats and new brands, including our affordable beers brewed with local crops.  These innovations are driving meaningful incremental profitability in key markets, but generally have a dilutive effect on revenue per hl.

NABLAB: We want all of our consumers’ experiences with beer to be positive. We believe that promoting smart drinking and positively impacting drinking behavior benefits the communities where we operate and positions us to lead the category for the long term. In 2019, approximately 7% of our global beer volume was from no and low alcohol beers. A key to expanding this part of our portfolio is innovation. As such, we have launched more than 14 new products this year, resulting in 86 NABLAB brands globally.

Better World: We are determined to build a company to last and, through our 2025 Sustainability Goals, we are committed to creating a better world for all of our stakeholders while also creating value for our business. In 2019, we continued to support our farmers through agricultural development, working with over 20 000 farmers in 13 countries. Today, 50% of our direct farmers are skilled, 45% are connected and 35% are financially empowered. Climate change impacts our business and the communities in which we live and work. Today, 61% of our purchased electricity volume is under contract from renewable sources.

Reimagining our Company: While we have made significant strides in our transformation, we need to move faster. In 2020 and beyond, we will move with greater speed and agility to develop new capabilities and ways of thinking. We are positioning our company for greater success by scaling up our growth platforms:

Becoming an even better beer company – We will continue delivering results while also transforming our core business. We will continue to innovate and brew superior beers so we can address more consumers needs on more occasions. As consumers interact with each other in new ways, especially through technology, we need to engage with them where they are, in the formats they want and in ways that are convenient for them while also offering more experiences. We will use technology to better engage with our customers as a gateway to our consumers.

Accelerating our premiumization strategy - Across the world and especially in mature markets, consumers are looking for affordable luxuries in all consumer goods categories, including beer. We will leverage our unparalleled portfolio of premium beers and innovation capabilities to capitalize on our leadership position in the premium category.

Expanding beyond beer - As consumer tastes fragment, we need a broader portfolio of offerings for more consumers on more occasions, including beverages other than beer to address their needs. We need to become the company that brings all people, not just “beer people”, together.

Embarking on new ventures and offering new solutions to our customers and consumers - We will leverage the unmatched platform and rights of way we have built over the years to create new businesses that will create incremental value. We can help our customers become more efficient and profitable. We can provide convenience to customers and consumers by delivering more products and services to more places by leveraging our existing assets and capabilities.

We believe these platforms will strengthen our core while adding new muscles to help us deliver our long-term growth aspirations. We are leveraging technology to transform ways of working to be more agile so we can create better solutions and value for our customers and our consumers around the world. Our talented people and our commitment to innovation will help us deliver growth.