Shares of AB InBev fell as much as 11% in early trading on Friday erasing more than USD 20 billion in market value after the company published its third quarter results which were below analysts’ expectations.
The reported revenue was USD 13.17 billion versus USD 13.61 billion expected, the reported adjusted earnings per share were USD 1.22 versus USD 1.27 expected, the reported adjusted Ebitda was USD 5.29 billion versus USD 5.52 billion expected and organic sales growth stood at 2.7 percent versus 4.7 percent expected. The company also lowered its earnings forecast for the full-year saying Ebitda growth would be “moderate” instead of the previous “strong”.
Beer sales fell on an organic basis by 0.5 percent to 143.4 million hectoliters. Strong beer sales in Mexico, South Africa and Colombia were offset by lackluster sales in the United States, Brazil and China which are traditional high volume markets for AB InBev.
In North America, where the company recorded market share losses for mainstream beers Bud Light and Budweiser, beer sales fell by 3.4 percent to 29.0 million hectoliters. The company also lost out on booming demand for hard seltzer, or carbonated alcoholic drinks that come in cans.
In Brazil, AB InBev’s second-biggest market after the U.S., beer volume declined in the low single digits range following a price increase in line with inflation.
China, which is now part of the newly listed unit Budweiser APAC (inside.beer, 29.9.2019), also published its maiden results and recorded volume declines by 6 percent.
“Overall the third quarter was challenging due to some material headwinds that were flagged in the second quarter. Nevertheless we are not satisfied with the results,” Felipe Dutra, AB InBev’s Chief Financial Officer was quoted by the Financial Times.