BELGIUM – World largest brewer, AB InBeV reported a 2.7% growth in revenue during the third quarter ending 30th September helped by a 4% increase in non-beer volumes which offset a 0.9% decline in beer volumes.
During the period, the combined revenues of the brewer’s three global brands, Budweiser, Stella Artois and Corona, grew by 4.1% globally and 5.2% outside their respective home markets.
Solid growth was witnessed in markets such as Mexico, South Africa and Colombia, which was more than offset by declines in China and the US, both primarily driven by shipment phasing impacts.
Cost of sales increased by 6.9% driven by significant commodity and transactional currency headwinds. The company reported weak sales in the Asia Pacific region and North America which declined by 6.7% and 3.4% respectively.
However, the Belgian brewer saw its earnings per share increase to US$1.51 during the third quarter from US$0.49 posted in a similar period last year and a 0.1% increase in organic growth.
AB InBev also managed to create a superior regional champion in the fast growing APAC region following the successful listing of a minority state of our Asia Pacific business (Budweiser APAC) on the Hong Kong Stock Exchange for US$5.75 billion.
AB InBeV said that the listing will enable the company to expand across the market and provides an attractive platform for potential mergers and acquisitions in the region.
The brewer said that listing of Budweiser APAC and accounting for the proceeds expected to be received from the divestment of the Australian operations will improve its debt to EBITDA ratio by four times by the end of 2019, one year earlier than the prior guidance.
AB InBeV also recently celebrated another major milestone – the three-year anniversary of the acquisition of South African Breweries (SAB), a move that significantly diversified its geographic footprint and provided the company with a much stronger presence in emerging markets.
The company said that it has so far completed the delivery of cost synergies target of US$3.2 billion, one year ahead of the initial schedule and with US$750 million more savings than originally planned.
According to the brewer, a smart affordability strategy is a vital component to reaching new consumers and introducing beer to new occasions.
The company has therefore been expanding its portfolio to offer more accessible price points to more consumers through initiatives such as new packaging formats and new beers brewed with local crops.
AB InBev said that it expects to deliver strong revenue growth in its 2019 overall performance, driven by the solid performance of its brand portfolio and strong commercial plans.