* Q4 core profit $5.20 bln vs expected $4.94 bln
* Core profit included $143 mln one-off gain
* Sees return to volume growth in Brazil, Mexico
* Sees higher marketing spending, cost of sales
* Shares up 0.8 pct in flat food & drinks sector
By Philip Blenkinsop
BRUSSELS, Feb 26 Anheuser-Busch InBev,
the world's largest brewer, forecast the Brazilian and Mexican
beer markets would return to growth this year due to the soccer
World Cup and stronger economies, but cautioned about higher
input and marketing costs.
The maker of Budweiser, Stella Artois and Corona said the
World Cup would boost beer sales by 1 to 2 percentage points in
Brazil, its second-largest market which shrank last year due to
a wet summer and high inflation that sapped disposable income.
AB InBev also said on Wednesday stronger economic growth
would drive Mexico and its biggest market, the United States in
2014. The latter, though, would suffer in January and February
as exceptional cold weather and snow meant fewer people went out
"Where weather has been good, for example the west coast,
volumes have been fine," Chief Financial Officer Felipe Dutra
told a conference call.
However, there were notes of caution.
The firm said its cost of sales per volume would increase by
a low single-digit percentage as the effect of unfavourable
exchange rates, principally the Brazilian real's weakness to the
dollar, outweighed lower global commodity prices.
AB InBev also said it would be raising its spending on sales
and marketing by a low to mid-teen percentage, including World
Cup-related promotions and investment in its newer brands.
AB InBev, which sold more than one in five beers drunk
worldwide last year, said volumes slipped 1.7 percent in the
final quarter of 2013, but revenue rose 4.6 percent to $11.71
billion, a little below the average $11.77 billion expected in a
The company reported a 13 percent like-for-like rise in
fourth quarter earnings before interest, tax, depreciation and
amortisation (EBITDA) to $5.20 billion, higher than the $4.94
billion average in a Reuters poll.
The figure included a $143 million one-off gain related to
the recovery of funds from a pension plan in Brazil, although
even excluding that it was still above the market consensus.
The improvement came from price hikes and a shift to premium
lagers that meant higher revenue per litre, savings since taking
full control of Mexican brewer Modelo and general cost control.
AB InBev shares were up 0.8 percent at 74.85 euros at 0820
GMT, within a flat STOXX 600 food and beverage index.
"On the cost side they've got some both external and
self-imposed headwinds, which I would have thought people would
have to reflect in their forecasts," said Andrew Holland,
beverage analyst at Societe Generale.
The world's top brewers are relying on Latin America, Asia
and Africa for growth amid subdued consumer spending in
austerity-hit Europe and limited U.S. expansion. However, growth
in several developing countries, disappointed last year.
For AB InBev, a wet summer, an early Carnival and high
inflation depressed volumes in Brazil, where it has some
two-thirds of the market, second only to the United States in
terms of profit. Volumes also slipped in Mexico due to a softer
economy and harsh weather in September. The only region
registering growth for the company in 2013 was Asia.
AB InBev's view of the year ahead after soft spots in 2013
echoes those of its brewing peers.
World number three Heineken forecast a return to
revenue growth this year and Carlsberg, the world
number four, saw profit growth in the year ahead with higher
beer sales in emerging markets.
AB InBev stuck to its forecast of $1 billion of synergy
gains from Modelo before the end of 2016, although it expects to
achieve most of that a year earlier. Including savings found
before the deal closed in June, the Belgium-based company has
already achieved $460 million of its target.