AB InBev forecasts higher 2021 earnings but margin pressure

Key Points
  • Q4 core profit $5.07 billion versus consensus $4.80 billion
  • Forecasts 2021 revenue rise, assorted high costs     
  • Sells 11.9% more beer in Brazil in Q4

In this article

In this photo illustration, bottles of Miller Lite and Bud Light beer that are products of SABMiller and Anheuser-Busch InBev (respectively) are shown on September 15, 2014 in Chicago.
Scott Olson | Getty Images

Anheuser-Busch InBev on Thursday forecast "meaningfully" better 2021 earnings after Brazil and Mexico helped the world's largest brewer post higher-than-expected profit to end 2020.

The maker of Budweiser, Stella Artois and Corona lagers predicted increased drinking and higher prices as countries emerge from the COVID-19 pandemic, though higher commodities costs and a pandemic-driven shift to more consumption at home.

The Belgium-based brewer said earnings before interest, tax, depreciation and amortization fell 2.4% to $5.07 billion in the fourth quarter, above an average forecast of $4.80 billion in a company-compiled poll.

Overall, margins were squeezed due to a shift to higher-priced single-use cans for consumption at home from cheaper reusable kegs and returnable glass bottles used in bars and restaurants and, in some cases, due to tighter freight rates.

In Brazil, AB InBev's second largest market, the company sold 11.9% more beer in the fourth quarter than a year earlier with nearly a third of the population benefiting from the government's "corona voucher" payments.

In Mexico, AB InBev gained market share from rival Heineken as its brands became available in OXXO, the country's largest convenience store chain. Sales rose after a two-month government-enforced shutdown of brewing operations.

In Europe, the Middle East and Africa, beer volumes fell 6% due to lockdowns, although AB InBev said it did increase market share in France, Germany and the Netherlands.

In South Africa, earnings grew slightly, although the company warned that a third national alcohol ban that lasted a month from December 29 would hit first-quarter results.