In the fourth quarter of 2020, AB InBev’s revenue grew by 4.5%, positively impacted by a continued volume recovery and revenue per hl growth of 2.7%. In FY20, revenue declined by 3.7% with revenue per hl growth of 2.1%.
The global brewing giant’s total volumes grew by 1.6%, with own beer volumes up by 1.8% and non-beer volumes up by 1.7%.
In FY20, total volumes declined by 5.7%, with own beer volumes down by 5.8% and non-beer volumes down by 3.8%. The decline was primarily driven by the impact of the COVID-19 pandemic.
KEY PERFORMANCES ACROSS AFRICA MARKETS
In Africa excluding South Africa, the brewer’s business was negatively impacted by the COVID-19 pandemic but it saw resilient consumer demand in many of its markets as restrictions began to ease.
AB InBev delivered healthy volume growth in Mozambique and Zambia this year. Volumes declined in Tanzania and Uganda, as both markets were impacted by an ongoing challenging economic environment.
In Nigeria, AB InBev delivered low single-digit volume growth in FY20 and high single-digit volume growth in 4Q20, driven by successful investments in developing its brand portfolio and enhancing our route-to-market capabilities.
Carlos Brito, CEO Commented,
“In an extremely challenging year, our teams rose to the occasion. We finished the year with momentum in our key markets by leveraging our fundamental strengths as a company and capturing the benefits of investments we have been making for several years in our portfolio and rapidly growing platforms, such as BEES and Zé Delivery.
We are now more closely connected than ever to the 6 million+ customers and 2 billion+ consumers we serve worldwide through our clear commercial strategy, revamped innovation process, digital platforms and ongoing operational excellence.”
- Global Brands: In 4Q20, combined revenues of our global brands increased by 1.5% globally and by 1.3% outside of their respective home markets. In FY20, the combined revenues of our global brands Budweiser, Stella Artois and Corona decreased by 5.0% globally and by 5.3% outside of their respective home markets.
- Cost of Sales (CoS): In 4Q20, CoS increased by 7.9% and increased by 6.4% on a per hl basis. In FY20, CoS increased by 3.1% and increased by 9.8% on a per hl basis, driven primarily by operational deleveraging resulting from the impact of COVID-19 on our volumes and by supply chain adjustments implemented to meet evolving demand.
- EBITDA: In 4Q20, EBITDA of 5 066 million USD represents a decrease of 2.4% with an EBITDA margin contraction of 261 bps to 39.7%. In FY20, EBITDA declined by 12.9% to 17 321 million USD and EBITDA margin contracted by 382 bps to 36.9%.
- Net finance results: Net finance costs (excluding non-recurring net finance results) were 422 million USD in 4Q20, compared to 2 309 million USD in 4Q19. Net finance costs (excluding non-recurring net finance results) were 5 959 million USD in FY20 compared to 4 355 million USD in FY19. The increase in FY20 was primarily driven by a mark-to-market loss of 1 211 million USD linked to the hedging of our share-based payment programs compared to a gain of 898 million USD in FY19, resulting in a swing of 2 109 million USD.
- Income taxes: In 4Q20, our normalized effective tax rate (ETR) increased from 24.5% in 4Q19 to 24.8%. Excluding the impact of gains and losses relating to the hedging of our share-based payment programs, our normalized ETR was 29.4% in 4Q20, compared to 17.2% in 4Q19. Normalized ETR increased from 23.0% in FY19 to 30.9% in FY20 and, excluding the impact of gains and losses relating to the hedging of our share-based payment programs, normalized ETR increased from 24.9% in FY19 to 26.2% in FY20.
- Non-recurring items: Normalized EBIT excludes negative non-recurring items of 215 million USD in 4Q20 and 1 184 million USD in FY20.
- Profit: Normalized profit attributable to equity holders of AB InBev was 2 154 million USD in 4Q20, compared to 962 million USD in 4Q19 and 3 807 million USD in FY20 versus 8 086 million USD in FY19. Underlying profit (normalized profit attributable to equity holders of AB InBev excluding mark-to-market gains and losses linked to the hedging of our share-based payment programs and the impact of hyperinflation) was 1 616 million USD in 4Q20, compared to 1 729 million USD in 4Q19 and was 5 022 million USD in FY20 compared to 7 196 million USD in FY19.
- Earnings per share (EPS): Normalized EPS in 4Q20, was 1.08 USD, an increase from 0.48 USD in 4Q19. Normalized EPS in FY20 was 1.91 USD, a decrease from 4.08 USD in FY19. Underlying EPS (normalized EPS excluding mark-to-market gains and losses linked to the hedging of our share-based payment programs and the impact of hyperinflation) was 0.81 USD in 4Q20, a decrease from 0.87 USD in 4Q19 and was 2.51 USD in FY20, a decrease from 3.63 USD in FY19.
- Dividend: The AB InBev Board proposes the full year 2020 dividend of 0.50 EUR per share, subject to shareholder approval at the AGM on 28 April 2021. A timeline showing the ex-coupon dates, the record dates and the payment dates can be found on page 21.
- Deleveraging: Net debt to normalized EBITDA was 4.8x for the 12-month period ending 31 December 2020, as our results were substantially impacted by the COVID-19 pandemic.
Multiple alcohol bans impacted performance, though underlying consumer demand remains strong
Our business in South Africa was significantly impacted by three outright government-mandated bans on the sale of alcohol over the course of 2020, which resulted in double-digit volume, revenue and EBITDA declines, and significant EBITDA margin contraction.
Outside of these bans, we saw solid underlying consumer demand for our portfolio throughout the year, resulting in estimated market share gains in both beer and total alcohol.
In 4Q20, we delivered low single-digit top and bottom-line growth with EBITDA margin expansion. Volumes declined slightly in the quarter, as the government instituted a third alcohol ban on 29 December 2020, affecting a key selling week for beer.
Revenue per hl grew by low single digits in both FY20 and 4Q20, driven primarily by revenue management initiatives. This was partially offset by the brand mix as consumers shifted to more affordable brands and bulk returnable packages, particularly benefitting our core brands, such as Carling Black Label.
Our flavoured alcohol beverages, Brutal Fruit and Flying Fish, outperformed this year, reinforcing the advantages of a diverse brand portfolio to meet consumer needs across styles and price points.