[ad_1]
Anheuser-Busch InBev
HER
BUD 0.04%
Divided its dividend Thursday with lower earnings and lower volumes in several key markets, highlighting the Budweiser manufacturer's struggle with the decline in beer consumption.
The Belgian company, which also owns Stella Artois in the world and Corona outside the United States, has halved its dividend, saying it's focused on repaying the debt and not on repaying liquidity to investors. shareholders. Equities fell sharply in reaction, with a drop of more than 9% in European trade.
"We can not remember the more disappointing figures from AB InBev," said RBC analyst James Edwardes Jones, noting that most regions had missed analysts' estimates of volume growth. .
In the third quarter, the world's largest brewer posted a profit of $ 956 million, against $ 2.06 billion for the same period last year. Results were dragged down by non-recurring items and losses related to certain hedges. Adjusting these costs, earnings were $ 2.23 billion, up from $ 2.34 billion a year earlier.
Sales rose from $ 14.74 billion to $ 13.28 billion, but increased 4.5% on an organic basis as the company sold more expensive brands. Organic volumes, which exclude the sale of the non-alcoholic beverages business in Africa, increased by 0.2%, a figure that Ab InBev reflected growth in Europe, Mexico and many African markets. partially offset by Brazil and Argentina.
In the United States, AB InBev's major brands continued to lose market share in the third quarter. Budweiser lost 0.35 percentage points and Bud Light lost 0.9 percentage point in the third quarter.
The brewer struggled to convince consumers to return to its traditional brands, despite new innovations such as Bud Light with orange flavor and Budweiser variants in limited edition and more expensive, which gave good results. Americans are increasingly opting for spirits and wine instead of beer. When they drink beer, hopped IPA and other craft beers are often the beverage of choice. Michelob Ultra is a recurring wind element for AB InBev. The latter addresses more health-conscious drinkers and increased again in the third quarter.
Overall, the Company's organic volumes in North America decreased by 0.5% during the quarter, while the US market share decreased by 0.5 percentage points.
In response, AB InBev has unearthed a series of craft beer brands in the United States. She said Thursday that, despite the reduction in dividends, she remained open to more mergers and acquisitions. It has also developed internationally, has launched premium versions of its beer in many markets and simultaneously launches more affordable lines in order to appeal to consumers while increasing their incomes.
In the third quarter, volumes in Brazil decreased 3.3%, while revenues increased 2.1% due to higher prices. AB InBev said the country's beer industry has generally suffered from marginal growth in disposable income and consumer confidence. The company has launched a new affordable brand, brewed with cassava – a woody shrub native to South America – produced by local farmers.
In South Africa, both volume and revenue declined, with the company stating that consumers were caught off guard by rising taxes and the price of gasoline. Again, AB InBev decided to make his beer more affordable. Last year, the launch of a one-liter glass bottle has gained popularity.
In China, Budweiser experienced strong growth, helping the Belgian brewer to record a 1% rise in volumes.
AB InBev's results contrast with those of its international competitors.
Heineken NV announced on Wednesday that its organic beer volumes had increased 4.6% in the third quarter, thanks to strong growth in America, Africa, the Middle East and Eastern Europe.
The same day,
Carlsberg
A / S surpassed its earnings guidance for the year, saying that a hot summer in Western Europe and that progress made in achieving its cost savings plan had resulted in a third quarter stronger than expected.
AB InBev reduced its interim dividend to 1.60 euro (1.83 dollar) per share and brought it down to 80 eurocents. It intends to propose a final dividend of 1 euro for the 2018 financial year, which would give a total dividend of 1.80 euro for the year.
"Clearly, dividend cuts are not positive signs," said Liberum analyst Nico von Stackelberg. However, he said the move would help the company's balance sheet and boost confidence in the debt market, positioning AB InBev for another major acquisition.
The Budweiser brewer is built on a series of huge deals, the latest being the 2016 acquisition of more than $ 100 billion of global product no. 2 SABMiller PLC brewers.
Once the market has exceeded its initial response, the reduction in the dividend could have a positive effect on the security, potentially reversing the reduction at which it is trading, said Bernstein analyst Trevor Stirling.
– Maryam Cockar contributed to this article
Write to Saabira Chaudhuri at [email protected]
Source link
