Brewer hops to it

When you produce a third of the world’s beer, you carry a weighty responsibility in terms of planetary festivity — something that appeared to be a concern for AB Inbev in the third quarter. Sales suffered from a touch of brewer’s droop as the punters turned from the dubious delights of Budweiser to brews with a bit more bite, and the craft sector continued to shine against global mega-brands. However, the company came back strongly in the fourth quarter, and revenues are heading back in the right direction.

Sabmiller was a mighty large mouthful to swallow — possibly one of the largest down-in-ones of all time — but AB Inbev’s full-year results announcement is positively crowing about the success of the merger. This has clearly been a transformative year for the company, and the gentle downward slide of the share price seems at odds with the message it is trying to send to the market. It is talking about the merger as its most successful business integration ever — and it’s certainly had a few points of comparison.

Cost synergies are greater than expected and coming faster than predicted, and revenue synergies are following suit by launching the company’s global brands into new territories.

SAB’S footprint has pushed AB Inbev towards higher-growth markets, and Africa outside SA put in a stellar performance, quenching the continent’s thirst with double-digit growth rates in most of the countries in which it operates. It is focusing on tackling demand for premium products without neglecting core lager, and if this performance carries on, the share price should rebound.

AB Inbev sales suffered from a touch of brewer’s droop as punters turned from Budweiser to brews with a bit more bite