By Emma Rumney
LONDON (Reuters) -Anheuser-Busch InBev on Thursday announced a $6 billion share buyback, its largest in years, as the Belgian brewer cuts debt and grows profits even as sales fall. But some were hoping for more.
The world’s biggest brewer by market value reported a 3.3% rise in underlying operating profit in the third quarter, well ahead of expectations for a 0.9% rise, citing cost management.
But it was still the lowest quarterly profit growth since 2021 for the maker of Stella Artois and Corona as the entire industry grapples with weak demand and currency volatility.
“Our business delivered continued top- and bottom-line growth even as we navigated a dynamic consumer environment,” CEO Michel Doukeris said.
The company’s shares rose almost 4% in early trade, before dropping back to stand 0.26% lower by 0814 GMT.
BUYBACK BEHIND HOPES?
AB InBev also pointed to solid performance in the once-difficult U.S. where its Michelob Ultra label has become the industry leader by volume so far this year, helping replace share lost by key brand Bud Light after a boycott.
Expectations of higher returns have been building from AB InBev shareholders as the company cuts debt, accumulated over years of acquisitions, and racks up cash.
The $6 billion buyback will be spread over two years. The company was on average expected to deliver a year-long $2 billion buyback, analysts said in notes ahead of the results, though some had forecast a much larger programme.
Barclays analyst Laurence Whyatt said the two-year timeframe “makes it disappointing”.
“We had expected further increases to the buyback next year too,” he wrote in a note.
However, analysts also said the 15 cents per share interim dividend was a pleasant surprise, marking the company’s first since 2019.
BRAZIL, CHINA WEAK
AB InBev’s results come during a difficult quarter for beer and liquor makers, with weak demand in key markets compounding years of low sales.
No.2 brewer Heineken warned this month it would sell less beer again in 2025 and expected profits in the lower end of its anticipated range as economic challenges worsened.
Like Heineken, AB InBev also endured volume declines and a poor showing in Latin America, a key beer region. In China, its sales underperformed rivals again, it said.
Its volumes fell 3.7%, slightly worse than anticipated, with revenue up 0.9%, but also behind expectations for 1.2% growth.
(Reporting by Emma Rumney; Editing by Jamie Freed and Mark Potter)
