AB InBev reports 11% loss of shares in third-quarter sales of 2018

USA – AB InBev, a multinational drink and brewing holdings company, has reported a 11% loss in shares in third quarter sales results 2018, with 50% dividend cuts as it pays down 2016 SABMiller acquisition.

The world’s largest brewer Anheuser-Busch InBev has cut its dividend in half and reported weak third-quarter profits hit by slower sales in key markets including Brazil, the US and South Africa.

According to Financial Times, the shares in the maker of Budweiser were down by 11%, as the company cast the dividend cut as needed to pay down its US$108 billion in debt from the 2016 SABMiller acquisition.

“A 50 per cent dividend cut is not a great surprise,” wrote RBC analyst James Edwardes Jones in a note.

“A significant and widespread shortfall against company compiled expectations is. This is not AB InBev’s finest hour.”

The company also reported a revenue growth of 4.5% in the quarter, with revenue per hl growth of 4.2%.

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On a constant geographic basis, revenue per hl grew by 4.4%, driven by revenue management initiatives and continued strong premium brand performances.

In 9M18, revenue grew by 4.6% with revenue per hl growth of 4.3%, and on a constant geographic basis, revenue per hl grew by 4.6%.

Total volumes grew 0.2% in the quarter, as own beer volumes grew by 0.5% and non-beer volumes were down by 2.4%.

Good growth in own beer volumes achieved in Europe, Mexico and many African markets was partially offset by Brazil and Argentina.

In 9M18, total volumes were up 0.3% with own beer volumes up 0.6% and non-beer volumes down 3.1%.

“Combined revenues of our global brands, Budweiser, Stella Artois and Corona, continued to grow this quarter, with revenues up 7.7% globally and 10.6% outside of their home markets.

In 9M18, the combined revenues grew by 8.7% globally and by 13.3% outside of their home markets,” the company said in a statement.

CoS increased by 6.3% in 3Q18 and by 5.9% on a per hl basis, while on a constant geographic basis, CoS per hl increased by 5.9%, driven primarily by an increase in year-over-year commodity prices and partially offset by synergy capture.

In 9M18, CoS grew by 4.1% and by 3.8% on a per hl basis, while on a constant geographic basis CoS per hl increased by 4.2%.

The company reported that EBITDA grew by 7.5% in 3Q18 with margin expansion of 116 bps to 40.3% as a result of   top-line growth and aided by synergies and cost savings, partially offset by increased commodity prices.

In 9M18, EBITDA grew by 7.1% and EBITDA margin expanded by 92 bps to 39.4%.

Net finance costs (excluding non-recurring net finance costs) were US$1,787 million in 3Q18 as compared to US$1,135 million in 3Q17.

The increase was predominantly due to a mark-to-market loss of US$616 million in 3Q18 linked to the hedging of our share-based payment programs, compared to a gain of US$240 million in 3Q17, resulting in a swing of US$856 million.

 

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