The Covid-19 pandemic dents AB InBev’s performance as revenue declines 5.8%

BELGIUM – AB InBev has reported a 5.8% slide in revenue and a 13.7% decline in EBITDA to US$3.949 billion during its first quarter 2020, largely due to lower sales volume resulting from the Covid-19 pandemic.

The world’s leading brewer saw its total volumes decline by9.3%, with own beer volumes down 10.5% and non-beer volumes down 0.2%.

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Excluding China, AB InBev’s volumes declined by 3.6% in 1Q20 despite initial growth of 1.9% in January and February.

The brewer’s April 2020 global volumes further declined by approximately 32%, primarily driven by the closure of the on-premise channel in most markets and government restrictions imposed on certain company operations in connection with the COVID-19 pandemic.

Combined revenues of the company’s three global brands, Budweiser, Stella Artois and Corona, declined by 11% globally and by 17.5% outside of their respective home markets.

AB InBev said that growth across the majority of its markets was more than offset by declines in China, which is the largest market for both Budweiser and Corona outside of their respective home markets.

However, the brewer observed that its diverse geographic footprint allows it to apply best practices from experiences in China and South Korea to the rest of our markets, as they move through different stages of the crisis and into eventual recovery.

Over the years, the company has been investing in new capabilities to better connect with customers and consumers by leveraging technology, such as B2B sales and e-commerce platforms.

AB InBev said that this will provide the brewer with a structural advantage in these unique circumstances.

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“These initiatives are more relevant now than ever before. Growing trends, such as digital sales, e-commerce and online marketing, have accelerated dramatically in recent months,” the company said in a statement.

Going forward, the company remarked that the full impact of the Covid-19 pandemic on its future results remains uncertain, the brewer noted that it expects the impact on 2Q20 results to be materially worse than in 1Q20.

AB InBev has hence withdrawn its entire 2020 outlook given the uncertainty, volatility and fast-moving developments of the pandemic in the markets in which it operate.

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