SAB’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) grew by mid-single digits, as top-line growth was partially offset by anticipated transactional foreign exchange (FX) and commodity cost headwinds. File
The South African alcohol industry was experiencing a tough year of falling sales and Finance Minister Enoch Godongwana would hopefully “stick to policy” and keep customs and excise duty increases on alcohol products in line with inflation, SAB CEO Richard Rivett-Carnac said yesterday.
Godongwana would announce his Medium-Term Budget Policy Statement (MTBPS) today, an event that often highlights planned changes to taxes. Customs and excise duties on alcohol products are routinely increased every year in the government’s Budget, but “to their credit”, over the past few years the increases had been much in line with inflation, Rivett-Carnac said yesterday in an interview at the release of SAB’s third-quarter results.
SAB’s results formed part of the results of its parent, the beer multinational Anheuser-Busch InBev, for the three months to September 30. Rivett-Carnac said SAB had spent R12 billion over the past two years on major capital projects, which had included expanding their brewery in Prospecton, Durban, and expansion at the Ibhayi brewery in Port Elizabeth.
“These increases in customs and excise in line with inflation have given us policy certainty in that we have been able to plan our cash flows for the years ahead so that we are able to fund our capital investment plans,” he said.
He said SAB’s sales increase in the high single digits during the three months was a good result given that South African beer market sales were predicted to be flat this year, and overall alcohol product market sales were expected to droop 5%.
He said SAB had been fortunate in the quarter as their leading brand Carling saw good growth in the high teens through the quarter, while the overseas brands Corona and Stella Artois had grown sales by a combined 35%.
“Carling has always done well. It has been our leading brand for some time. It has great brand power behind it, it enjoys the trust of its consumers, it provides value and its quality is undisputed,” he replied when asked why Carling sales were outperforming.
He sad Stella Artois was also, in particular, increasingly finding a place among consumers at mealtimes in South Africa.
SAB’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) grew by mid-single digits, as top-line growth was partially offset by anticipated transactional foreign exchange (FX) and commodity cost headwinds, he said.
In the first nine months of the year, revenue grew by mid-teens with high-single digit revenue per hectolitre (hl) growth and a mid-single digit increase in volume. Ebitda grew by low-single digits.
Anheuser-Busch InBev said its total revenue increased 5% in the quarter while underlying earnings a share increased to $0.86 (R16.21) from $0.84 in the third quarter of the previous financial year.
Anheuser-Busch Inbev CEO Michel Doukeris said in the results that continued global momentum, partially offset by US performance, saw the group deliver mid single digit top- and bottom-line growth.
“The strength of our global footprint delivered another quarter of top- and bottom-line growth. Revenue increased by 5% with an Ebitda increase of 4.1%. We continue to invest in our strategic priorities for the long term,” he said.
There had been revenue growth in about 80% of the group’s markets, driven by a revenue per hl increase of 9% as a result of pricing actions, premiumization and other revenue management initiatives.
Volumes declined by 3.4%, as growth in the Middle Americas, Africa and APAC regions was primarily offset by performance in the US and a soft industry in Europe.
Ebitda increased by 4.1% with margin compression of 29 basis points, as overhead management and efficient resource allocation enabled increased sales and marketing investments, and partially offset anticipated commodity cost headwinds.
“We expect our Ebitda to grow in line with our medium-term outlook of between 4–8% and our revenue to grow ahead of Ebitda from a healthy combination of volume and price,” the group’s directors forecast.
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