It appears the Bud Light boycott has caused long-term damage to AB InBev. Sales volumes were also well below targets in the fourth quarter. In the last quarter, AB InBev sold 16 percent less beer under its own brand in the US than the previous year. Slightly less bad than in the previous quarter, when 18 percent fewer sales were made. AB InBev had hoped to limit the damage with a renewed marketing offensive, but the effect has remained limited.
In the fourth quarter of 2023, the brewer earned about a third less in the US than in 2022. For the entire year, this represents a profit decline of 23 percent. The annual report shows that AB InBev lost $1.6 billion in operating profit in North America last year.
Boycott
As a reminder, right-wing influencers called for a boycott of AB InBev’s largest US brand, Bud Light, in April. They were annoyed that Anheuser Busch, the American branch of the brewer, had sent a personalized promotional can to transgender Dylan Mulvaney. She reported on her life as a woman on social media.
Because AB InBev is such a large group, the impact of the poor results in the US on the international whole is diluted. But global net profit also rose only very slightly, and profit per share even declined. Nevertheless, the dividend is being increased significantly. It increases by 9 percent to 82 cents.
Increase in turnover
AB InBev mainly highlighted its increase in turnover. Last year, sales increased by 7.8 percent. Sales per hectoliter increased by 9.9 percent. The brewer’s top brands, Budweiser, Stella Artois, Corona and Michelob Ultra, increased sales outside their respective home markets by 18.2 percent. The company also managed to reduce its debt ratio. In 2022, debts were still 3.51 times the core profit (EBITDA), a year later this was 3.38 times.
Shareholders did not react enthusiastically to the figures. The share had lost 1.49 percent of its value after a few hours of trading. They mainly responded to the fourth quarter figures. “Group turnover fell 1 percent due to the Bud Light crisis to 14.47 billion dollars, far below the 15.66 billion expected by analysts,” KBC noted. “The forecast for 2024 implies 4 to 8 percent growth in core profit, which is more or less in line with the medium-term growth ambition. However, analysts hoped for 9 percent growth.”
