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Carlos Brito, who transformed Anheuser-Busch InBev
BUD,
into the world’s largest brewer through a series of high-profile deals, is to step down as chief executive of the group, ending an almost two-decade reign at the company.
The brewer of Budweiser, Stella Artois and Corona said on Thursday that the board had unanimously elected Michel Doukeris, president of the group’s North America business, to take over from Brito on July 1. Brito leaves after 15 years as chief executive of the group and 32 years with the company.
Investors sent AB InBev
ABI,
shares up more than 4.63% in early European trading. The stock has risen 7.68% in the year to date, according to FactSet.
Doukeris joined AB InBev in 1996 and rose through the ranks to head up the brewer’s business in both China and Asia-Pacific, before taking the helm of the North American division, which contributes almost a third of group sales.
In February, AB InBev announced plans to invest more than $1 billion in its U.S. manufacturing facilities to raise production of hard seltzers — an alcoholic drink containing sparkling water and fruit flavors — which are growing in popularity, especially among younger consumers.
AB InBev chairman Martin Barrington said in a statement that Doukeris was “uniquely suited” to accelerate the company’s next phase of growth, with his record in innovation, consumers and expanding the premium brands in both emerging and developed markets.
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The news was welcomed by analysts, with the equity research team at Citi
C,
saying that they see the change of leadership and “associated smooth succession” as a strategic positive for the stock over the medium term.
Analysts at Jefferies
JEF,
noted that Doukeris brings strong premium focus, having implemented the ‘High End’ division in China, as well as on digital with the company’s first direct-to-consumer e-commerce platform. “Clarity on management succession should be well-received,” they added.
Brito, a 60-year-old Brazilian, oversaw the integration of U.S. brewer Anheuser-Busch with the Belgian-Brazilian conglomerate InBev. More recently, he engineered the $100-billion plus takeover of rival SABMiller in 2016, which left the company saddled with a heavy debt load.
Separately on Thursday, AB InBev reported first-quarter earnings ahead of expectations, despite COVID-19 pandemic-related lockdowns closing bars and restaurants across several key markets, including Europe, and a one-month ban on the sale of alcohol in South Africa.
“Our business is off to a very strong start in 2021,” Brito said.
Revenues grew 17.2% to $12.3 billion, on a 13.3% increase in beer volumes sold, as consumers returned to drinking and socializing following the gradual lifting of COVID-19 restrictions.
The company recorded a profit of $595 million in the quarter, up from a loss of $2.25 billion for the same period in 2020. Meanwhile, underlying attributable profit was $1.1 billion, up more than 8% year-over-year.
The group expects normalized earnings before interest, taxes, depreciation and amortization to grow between 8% and 12% this year, and revenue to grow ahead of Ebitda from a combination of volume and price.
AB InBev said it delivered top- and bottom-line growth in the U.S., as it continues to refocus on faster-growing core segments. The company said Michelob Ultra and its craft brands grew strongly in the first quarter in the U.S.
In China, the company’s revenue grew more than 90%, surpassing pre-pandemic levels. But in Europe, sales of its own beers were flat.
“Results are starting to look up at AB InBev, and both revenue and underlying operating profits grew well during the first quarter of 2021,” said William Ryder, an equity analyst at Hargreaves Lansdown.
“But as the headline figures may flatter, it’ll be important to keep an eye on brand strength metrics and cost discipline over this period as well. Remember, beer consumption had been slowing before the pandemic, so there are headwinds too and AB InBev might not have everything its way,” he added.
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