Anheuser-Busch InBev NV (NYSE:BUD) reported a 4Q revenue and EBITDA beat and missed on EPS due to noncash financing costs. Anheuser-Busch InBev NV (NYSE:BUD) also announced a 42% dividend increase, or 2.4% yield, a soft start to 2013, and drivers of its 2013 outlook while reiterating status of its proposed Modelo transactions.

Anheuser-Busch InBev NV

Anheuser-Busch InBev NV.

  • Revenue $10,287 mil, consensus/$10,235 mil
  • EBITDA $4,388 mil, consensus/$4,368 mil
  • Normalized EPS $1.12, consensus/$1.18

Anheuser-Busch InBev NV highlights.


2.9% volume growth in Brazil beer, 9.6% Brazil beer rev/hl growth; sales to retailers up 0.9% in the U.S. (slightly up share), 4.8% U.S. beer rev/hl growth; 8.1% decline in China volume attributed to cold, wet weather (industry estimated down 12%). Performance by region in the body of this note.

Modelo. No update from Anheuser-Busch InBev NV on U.S. settlement talks, as expected. Investors expect an update by March 19. US District Judge Richard Roberts has agreed to administratively close the case until then while all parties discuss a settlement.

Brazil. Region cost of sales expected up high single/low double-digits, partly reflecting FX transaction costs. Timing of Carnival is also cited as a reason for soft 1Q volumes.


Better Q4 organic growth on both sales (+8.8%) and EBITDA (+9.9%) highlight a strong finish to the year for Anheuser-Busch InBev NV (NYSE:BUD). Always lots of moving parts, but LATAM North and South were strong, helping offset weaker performances from CEE and Asia Pac. N-America margins still soft, but expect a stronger 2013. Dividend up 42% to €1.70 (cons €1.50). Plenty to cheer about.

Q4 organic rev growth of 8.8% was ahead of consensus on 7.6% as stronger performances from N-America (+6.4% vs cons +5.0%), LATAM North (14.2% vs cons 11.1%) and South (20.5% vs cons 16.9%) helped offset weakness in CEE and Asia Pacific. Group volumes of -0.1% in Q4 were light on cons (+1.1%) but were held back by Asia Pac (-8%), CEE (-9%) and W-Europe (-4%) – volumes were actually better in LATAM North and N-America (the two most important and profitable segs).

Q4 organic EBITDA growth of 9.9% was ahead of cons on 7.6% as LATAM and Weurope performed better than expected, helping offset a slower N-America (+2.7% vs cons +4.8%) and weak Asia Pac (-33%) and CEE (-26%). EPS of €1.12 in Q4 was 9% below due to unfavorable “other financial results” which is non-cash and hugely lumpy/unpredictable and is thus unlikely to cause concern.

Divi up 42% to €1.70 which is 13% ahead of consensus (€1.50) as management make good on their strategy to raise the dividend yield to the 3-4% range medium term. Dividends will also now be paid half-yearly going forward.

Outlook: Management flagging Q1 as lapping tough comps in the US and Brazil.

Encouragingly, outlook is for volume growth of low to MSD in Brazil in 2013 and 2013 should see a return to better volume growth in China following a weak (weather-impacted) Q4. As expected price/mix to increase ahead of inflation and COGS/hl expected to be up MSD in 2013. This is higher than the guidance for the other European brewers (low single digit) and reflects the unfavorable translational FX impact (BRL/USD) on raw materials. Tax rate in 2013 expected to be between 20-22% (cons 22%) and interest coupon expected between 4.8% and 5.3% (assuming Modelo deal closes in H1-13).

Overall a strong finish to the year despite weak performances from CEE and Asia Pac.

Encouragingly Brazil had a strong Q4 on both the top and bottom line and volume outlook is confident going into 2013. North American margins were down another 150bps in Q4 and this is likely to be a focus on the call later today. Q4 was impacted by the lapping of a bonus accrual reversal in Q4-11. Management remain confident of further margin expansion in N-America.