Stocks in global beer company Anheuser-Busch InBev (AB InBev) rose on Thursday despite it scrapping payouts to shareholders, as it reported rising sales even as the pandemic hobbled venues worldwide.
The Budweiser, Stella Artois and Corona owner sold 14.7bn litres in its third quarter, up 1.9% year-on-year.
It said in its latest results revenues were up 4% and gross profits up 0.4%, though earnings before interest, depreciation, tax and amortisation (EBITDA) fell 0.8%.
Consumers “quickly adjusted to the new reality by shifting to in-home consumption occasions... finding new ways to connect with others,” it said amid closures and curbs on bars in many countries.
The company said Bud Light Seltzer and Michelob Ultra sales continued to grow in the US, helping boost AB InBev’s market share.
In the UK, home draught machine sales more than quadrupled as the company and its in-house agency draftLine “identified an opportunity to celebrate Oktoberfest at home” with a major ad campaign for its PerfectDraft appliance.
The company, which also owns Beck’s, Leffe, Corona, and Hoegarden, said European revenue growth had been in the “mid-single digits,” with more home drinking and gradual re-opening of premises boosting trade.
But AB InBev said it would be “prudent” to forgo its interim dividend payment this year amid coronavirus uncertainty and volatility, as well as efforts to de-leverage the company.
It said it was “cautious” about new restrictions across Europe. “Although sales in the on-premise channel have begun to improve as a result of the easing of social distancing and lock down measures in many of these markets, such improvements may be impacted by the implementation of restrictions in certain markets.”
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“Sales of our products in the on-premise channel have been significantly impacted by the implementation of social distancing and lockdown measures in most of our markets, including the closure of bars, clubs and restaurants and restrictions on sporting events, music festivals and similar events.”
It warned increased sales for consumption at home “may not continue in the longer term and may not offset the pressure we are experiencing in the on-premise channel.”
It also warned deteriorating economic conditions on top of virus curbs could hit sales, with alcoholic and non-alcoholic drink consumption “closely linked to economic conditions” and typically falling when income per head falls.
“Deteriorating economic and political conditions in many of our major markets affected by the COVID-19 pandemic, such as increased unemployment, decreases in disposable income, declines in consumer confidence, or economic slowdowns or recessions, could cause a further decrease in demand for our products.”
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