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AB InBev (BUD) Q4 Sales & Earnings Beat on Business Momentum

·6 min read

Anheuser-Busch InBev SA/NV BUD, alias AB InBev, reported better-than-anticipated sales and earnings in fourth-quarter 2021. Its top line also improved on a year-over-year basis, while normalized earnings per share (“EPS”) declined. The company’s results reflected continued business momentum, owing to relentless execution, investment in its brands and accelerated digital transformation. Backed by the continued business momentum, it provided a robust view for 2022.

The results also demonstrated the company’s fundamental strength, as well as the continued resilience in the global beer category. Notably, organic revenues increased 15.6% in 2021. This included more than $5 billion of contribution from innovations.

AB InBev remains keen on making the most of investments in its portfolio over the years, as well as rapidly growing its digital platform, including BEES and Zé Delivery. More than 50% of the company’s revenues are now generated through B2B digital platforms, with the monthly user base of its proprietary B2B brand, BEES, reaching 2.5 million users. It also noted that it generated $1.5 billion of revenues from the direct-to-consumer ecosystem in 2021.

Overall, shares of the Zacks Rank #3 (Hold) company have risen 4.2% in the past year compared with the industry’s growth of 15.9%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Q4 Highlights

AB InBev reported normalized earnings per share of 90 cents, down from $1.08 in the year-ago quarter. However, the bottom line beat the Zacks Consensus Estimate of 77 cents.

Underlying earnings per share (normalized EPS, excluding mark-to-market gains and losses related to the hedging of share-based payment programs and the impacts of hyperinflation) were 74 cents in fourth-quarter 2021, down 8.6% from 81 cents earned in the year-ago quarter.

Revenues of $14,198 million improved 11.2% from the year-ago quarter and beat the Zacks Consensus Estimate of $13,570 million. It registered an organic revenue growth of 12.1%, primarily driven by robust volume and revenue per hectoliter (hl) growth. Revenues were driven by the strong performance of its three global brands — Budweiser, Corona and Stella Artois — which advanced 23.5% outside their respective home markets in the fourth quarter.

Revenues per hl were up 8.1% on an organic basis, backed by revenue management and premiumization efforts. The total organic volume grew 3.6%, with a 3.4% increase in the own-beer volume and 3.8% growth in the non-beer volume.

AnheuserBusch InBev SANV Price, Consensus and EPS Surprise

AnheuserBusch InBev SANV Price, Consensus and EPS Surprise
AnheuserBusch InBev SANV Price, Consensus and EPS Surprise

AnheuserBusch InBev SANV price-consensus-eps-surprise-chart | AnheuserBusch InBev SANV Quote

The company’s premium and super-premium portfolios continue to lead with 20% revenue growth in 2021, representing one-third of total revenues. The company remains focused on expanding its Beyond Beer portfolio, which has also been aiding the top line. Within the Beyond Beer portfolio, it reported revenue growth of more than 20% in 2021, contributing $1.6 billion to total revenues.

The cost of sales increased 15.4%, both on a reported and organic basis, to $6,096 million in the fourth quarter.

The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $4,882 million, which rose 3.6% year over year and 5% on an organic basis. However, the normalized EBITDA margin declined 530 basis points (bps) to 34.4% and dipped 231 bps organically. EBITDA margins were impacted by negative currency translations and commodity headwinds, as well as higher supply-chain costs in some markets. This more than offset the rise in revenues.

SG&A expenses increased 10.9% year over year to $4,624 million and 13.3% on an organic basis. Higher SG&A expenses can be attributed to increased variable compensation accruals and elevated supply-chain costs.


For 2022, AB InBev expects EBITDA growth in line with the medium-term outlook of 4-8%. It anticipates revenue growth to be higher than EBITDA growth, driven by strong volume and pricing.

The company expects net pension interest expenses and accretion expenses of $170-$200 million, based on currency and interest rate fluctuations. It anticipates an average gross debt coupon of 4% for 2022.

Management anticipates a normalized effective tax rate of 28-30% for 2022. Net capital expenditure is projected to be $4.5-$5 billion for 2022, driven by higher investments in innovation and other consumer-centric initiatives to fuel the ongoing momentum.

3 Better-Ranked Beverage Stocks

We have highlighted three better-ranked stocks in the Consumer Staples sector, namely Fomento Economico Mexicano FMX, Brown-Forman Corp. (BF.B) and Diageo DEO.

Fomento Economico Mexicano, alias FEMSA, has exposure in various industries, including beverage, beer and retail, which gives it an edge over its competitors. It currently sports a Zacks Rank #1 (Strong Buy). FMX has a trailing four-quarter earnings surprise of 51.2%, on average. Shares of FMX have rallied 12.8% in the past year.

You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FEMSA’s current financial-year sales suggests growth of 17.4% from the year-ago period's reported figures. FMX has an expected EPS growth rate of 14.8% for three-five years.

Brown-Forman, which manufactures, distills, bottles, imports, exports, markets and sells a wide variety of alcoholic beverages under recognized brands, currently has a Zacks Rank #2 (Buy). Shares of BF.B have declined 11.5% in the past year.

The Zacks Consensus Estimate for Brown-Forman's current financial-year sales and earnings per share suggests growth of 8.1% and 3.7%, respectively, from the year-ago period. BF.B has a trailing four-quarter negative earnings surprise of 5.3%, on average.

Diageo, involved in producing, distilling, brewing, bottling, packaging and distributing spirits, wine and beer, currently has a Zacks Rank #2. Shares of DEO have rallied 23.3% in the past year.

The Zacks Consensus Estimate for Diageo’s current financial-year sales and earnings per share suggests growth of 32.1% and 15.9%, respectively, from the year-ago period’s reported figures. DEO has an expected EPS growth rate of 9.2% for three-five years.

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BrownForman Corporation (BF.B) : Free Stock Analysis Report

Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report

Diageo plc (DEO) : Free Stock Analysis Report

AnheuserBusch InBev SANV (BUD) : Free Stock Analysis Report

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