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London - Anheuser-Busch InBev [JSE:ANB] and Danish rival Carlsberg reported first-quarter revenue growth that beat estimates as demand for mainstream brands such as Stella Artois and Tuborg rose, helped by an improving European beer market.
AB InBev’s first-quarter revenue rose 3.7% on an organic basis to $12.9bn, the Leuven, Belgium-based company said on Thursday. Adjusted sales growth at Carlsberg was 4%. Analysts expected a 2.8% increase for both companies. AB InBev shares rose as much as 5.1%, while Carlsberg gained as much as 0.9%.
The brewers join Heineken in surprising the market with accelerating growth after struggling against headwinds in Brazil and Russia. Sales growth of AB InBev’s Stella Artois and Corona brands reached 21% and 18%, respectively. Revenue at Carlsberg’s eastern Europe division, which is mainly Russia, rose 10%, helped by more expensive beers.
“Europe is definitely picking up for all the beverage alcohol companies as consumer spending is starting to rise in most of the region,” said Trevor Stirling, an analyst at Sanford C. Bernstein.
AB InBev’s adjusted earnings before interest, tax, depreciation and amortization rose 5.8% to $4.81bn in the first quarter. Analysts expected 3.8% growth. Earnings growth excluding Brazil was 12%.
The US beer industry is “progressing towards a better place” and Brazil should pick up this year, chief financial officer Felipe Dutra said on a call with reporters.
The maker of Budweiser is cutting more than 5 500 jobs as it aims to capture $2bn in cost savings from its acquisition of SABMiller [JSE:SAB] in the next three to four years. The company has already stripped $829m worth of costs last year after the purchase, which was the brewing industry’s largest ever deal.
The company reiterated its forecast that total revenue growth will accelerate in 2017. Sales rose 2.4% last year, held back by a slowdown in Brazil, which suffered its worst recession in decades.
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