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The world’s largest brewer AB InBev has posted first quarter growth of 11.1% driven by price increases and volume recovery.

Total revenues in the first three months of 2022 were up 11.1% to US$12.3bn, boosted by revenue per hectalitre growth of 7.8%.

The group saw a 6% increase in sales of its key global brands Budweiser, Stella Artois and Corona, outside their respective home markets.

Total volumes grew by 2.8%, with own beer volumes up by 2.2% and non-beer volumes up by 6.0%.

Normalized EBITDA in the quarer was up 7.5% to US$4.5bn, albeit this representing an EBITDA margin contraction of 115 bps to 33.9%.

Underlying profit was US$1.2bn compared to US$1.1bn a year ago.

CEO Michel Doukeris commented: “Relentless execution of our strategy and accelerated digital transformation drove continued momentum in the first quarter, delivering an 11.1% increase in the top-line through a combination of both volume and revenue per hl growth.

“Our teams continued to meet the moment in this dynamic operating environment to deliver 7.4% EBITDA growth.”

Looking forward, the group said it expects EBITDA to grow in-line with its medium-term outlook of between 4-8% and revenues to growth ahead of EBITDA from a combination of both volume and price.

It cautioned this outlook for 2022 reflects its current assessment of the scale and magnitude of the COVID-19 pandemic, which is subject to change as its continues to monitor ongoing developments.

AB InBev shares are up 1.5% to €54.64 so far this morning.

Morning update

Ahead of its AGM, Domino’s Pizza Group has told the market that trading has started strongly in 2022.

It said its first quarter trading has been aided by its first national price campaign for several years. Excluding the impact of the increase in the VAT rate, like-for-like system sales, excluding splits, grew by 3.9%.

Total orders grew 5.5% in the quarter despite a strong comparative quarter last year when there were strict lockdown restrictions in the UK. Collections have continued their recovery and grew 45.4% in the quarter, and across the quarter were at 95% of 2019 levels.

As expected, given the lockdown comparator, delivery orders were 4.5% lower than the prior year. Active customer growth continued its momentum and increased 4% compared to the same period last year.

As a result of the higher rate of VAT in the quarter, UK & Ireland system sales were £365.9m, down 1.5% on the first quarter of last year. Excluding the impact of the increase in the VAT rate, system sales increased 4.9% in the quarter.

Reflecting this strong start to the year, the group continues to expect 2022 underlying EBITDA to be in line with current market expectations.

CEO Dominic Paul said: “We have momentum in the business with growth in order count and customer numbers, and are continuing to work closely with our Franchisees following our resolution late last year. Our first national price campaign in a number of years has been a great example of what we can achieve when we work together.

“Our ambition is to consolidate our position as the nation’s favourite pizza brand and believe the time is now right to see whether we can reach an even broader customer base. On this basis, we have also commenced a trial which will enable customers in a small number of locations across the UK and Ireland to order Domino’s via the Just Eat platform but delivered by Domino’s drivers, making the most of our unrivalled network of best-in-class delivery drivers.

“It’s no secret that inflation is a key challenge for everyone at the moment and the current consumer environment is challenging, but our scale and integrated supply chain, as demonstrated in the covid downturn, mean Domino’s is well-placed to navigate the current conditions. What’s more, at a time when family budgets are under pressure, Domino’s remains an affordable treat everyone can enjoy, and we’re redoubling our focus on offering our customers the best possible value this year.”

Finally, 2021 listed premium beverages brand East Imperial posted growth of 62% as it recovered from the impact of Covid to post revenues of £2.8m.

It said revenue improvement has come as a result of widening its channel extension strategy in New Zealand and its efforts to extend its presence in retail. It also said it has seen key customers in the US market return to more normalised trading patterns, which will become a key element of our 2022 growth.

The 2021 gross margin of 21.4% reflects a drop compared to 29.4% in 2020. It said both years reflect the industry-wide challenges of the supply chain through this period. Continued issues with shipping availability, in addition to the escalating costs, meant it had to move and hold additional product in the US market, which added additional costs due to the elevated warehousing capacity required.

The group said pressure on margins will be addressed as volume grows and as it moves to bottle products closer to key markets in 2022.

Partly due to continued investment in the brand and growth, the group generated an operating loss before exceptional costs of £2.2m, up from £1.0m last year, which was in line with expectations.

Tony Burt, founder and CEO, commented: “I’m delighted with the progress that we made last year and in particular the popularity of our premium product range among existing and new customers.

“Clearly the pandemic created some exceptional challenges with much of the on-trade market still shut for large parts of last year. However, we experienced strong growth in the off-trade market, benefitting from a number of new supply agreements with major retailers, and as the on-trade market began to open up, we’ve been very encouraged by the level of sales.

“We raised a further £3.4m at the start of this year to increase the pace of expansion, particularly in the US where we see the fastest growth opportunity. Our recent distribution agreement with RNDC, a major US distributor, was a huge step forward in our US strategy and we’re excited about the opportunity to make a step-change in sales as a result.

“We have been encouraged by trading so far this year and the progress we are making against our strategy. Like every company in our industry, we are having to manage supply chain headwinds which are impacting costs. However, we do expect to mitigate this impact through greater operational efficiency this year.

“Today, the demand for ‘premiumisation’ by consumers continues unabated and underpins our strategy and the long-term opportunity for East Imperial. I am confident we have the platform, the team and the resources to become the most admired premium band of mixers and create a highly valued company for our shareholders.”

On the markets this morning, the FTSE 100 has bounced back 1.3% to 7,594.1pts.

Risers include THG, up 4.1% to 112.3p, Nichols, up 4% to 1,393.7p and McBride, up 3.2% to 35.2p.

Fallers include Devro, down 3% to 203.7p, Virgin Wines, down 1.7% to 113p and Domino’s Pizza Group, down 1.4% to 327.8p.

Yesterday in the City

The FTSE 100 slumped 0.9% yesterday back to 7,493.4pts amid intensifying concerns over the global energy market.

Just Eat dropped 9.4% back to 2,025p after the under-fire group lost its chairman and COO yesterday.

Other online specialists were also caught in a sell-off, with Deliveroo falling 7.8% to 103.7p, Parsley Box down 7.1% to 19.5p, THG, down 4.9% to 107.9p and Ocado, down 3% to 891p.

Other fallers included Nichols, down 4.3% to 1,340p, FeverTree, down 4.1% to 1,726p, Greggs, down 3.8% to 2,208p, Sainsbury’s, down 3% to 233.7p, Coca-Cola Europacific Partners, down 3% to €47.25, Virgin Wines, down 3% to 115p and B&M European Value Retail, down 2.9% to 488p.

The day’s few risers included a small rebound for McColl’s, which rose by a third back to 1.24p, while Kerry Group was up 0.8% to €104.00, Devro rose 0.5% to 210p and SSP Group was up 0.5% to 239.5p.