Brewer AB InBev hikes annual dividend after Q4 sales estimate beat By Reuters

LONDON (Reuters) – Anheuser-Busch InBev raised its annual dividend by 9% on Thursday after the brewer beat fourth-quarter sales estimates, a move likely to cheer investors hungry for returns after years of focus on debt reduction.

AB InBev built itself into the world’s largest brewer via a series of blockbuster acquisitions, which saw several major brewers internationally merged into one global giant.

But the acquisition spree also left AB InBev with a debt overhang of more than $100 billion that it struggled to pay down as quickly as previously expected, limiting its ability to return cash to shareholders via dividends and buybacks.

AB InBev said in a statement that it had reduced its gross debt by a further $1.8 billion, to stand at $78.1 billion at the end of the year.

“As a result, we have additional flexibility in our capital allocation choices.”

The decision comes after AB InBev announced a rare share buyback plan in October, boosting its shares.

The brewer also reported a 6.2% rise in fourth-quarter sales on Thursday, just ahead of analysts’ expectations of 6.1%, according to consensus estimate provided by the company.

AB InBev said its performance over the year had been constrained by its hefty U.S. business, which was hit by a conservative backlash over a Bud Light social media promotion with transgender influencer Dylan Mulvaney.

The backlash resulted in a boycott, knocking Bud Light off its top spot as the best-selling U.S. beer. As a result, AB InBev’s U.S. sales slumped by 17.3% in the fourth quarter.

The impact of the boycott, however, should begin to recede now, analysts say. From April, it will be included in AB InBev’s previous results, making for easier comparisons between the company’s current and past performance.

The company forecast its 2024 core earnings to grow in line with its medium-term outlook of 4%-8%.