International brewing giant AB InBev paid a huge premium for SA Breweries in 2016 in a massive $122-billion takeover of what was the second-largest international brewing company at the time. 

It has been heavy sledding from there, and the share price is still down by almost half. But the company is starting to show signs of emerging from under its debt mountain, and its results for the financial year to March are looking stronger. 

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International revenue is growing and trends in the African and South African business are helping that along.

SAB has seen double-digit top- and bottom-line growth, with record-high full-year volumes despite capacity constraints in the fourth quarter, when revenue grew by mid-single digits.

Volumes were “flattish” due to production constraints relating to flooding at its Prospecton brewery in Durban earlier in the year, which limited its ability to meet peak season consumer demand.

Earnings are still under pressure, with top-line earnings declining to mid-single digits mainly because of hikes in commodity prices. Momentum continued in FY22, delivering all-time-high total volumes with beer market share above pre-pandemic levels. 

At a premium

Carling Black Label, South Africa’s leading core brand, grew by mid-teens and premium, super premium and “Beyond Beer” portfolios (hard seltzers and ready-to-drink products) all delivered a double-digit increase in volume.

Brutal Fruit and Flying Fish delivered 18% revenue growth. Premium products remain a key driver for growth, the company says. 

Internationally, the company’s revenue growth was 11.2% and it hit a record for full-year volumes: an increase of almost 6% since 2019.

Its biggest beer brand, Corona, has grown by an astounding 42.2% over the past four years, despite the unfortunate name association with the Covid pandemic.

Corona is also the world’s most valuable beer brand, valued at about $7-billion, according to leading brand valuation consultancy Brand Finance. It grew 18.6% in the FY2022.

AB INBev’s total volumes grew by 2.3% in FY22, with own beer volumes up by 1.8% and non-beer volumes up by 5.2%. 

Corona, with revenue from Budweiser and Stella Artois, led an 8.9% increase in combined revenues in the year under review and a 6.6% improvement in the fourth quarter of 2022, outside their respective home markets.

The beer sector, AB InBev says, remains fundamentally attractive as it is “big, profitable and growing”.

No-alcohol beer has delivered another year of double-digit revenue growth, driven by Budweiser Zero, the top-selling no-alcohol beer by volume in the US in the fourth quarter, and the expansion of Corona Cero throughout Europe.

Commenting on the results, SAB CEO Richard Rivett-Carnac said: “The consistent execution of our strategy and the strength of the beer category delivered another year of broad-based growth…

“A highlight for us is that the momentum of our business continued in FY22, delivering all-time high total volumes with beer market share ahead of FY19 pre-pandemic levels, according to our estimates. 

“Through focused commercial investment and the consistent execution of our strategy, we increased the overall brand power of both our beer and Beyond Beer portfolios,” he said. BM/DM