AB-InBev sell less beer but earn more money
Where were all those costs hidden that the previous owners of Modelo did not find them? AB-InBev said on 31 October 2013 that they had “found” USD 250 million of savings just four months after taking full control of the Corona Extra brewer Grupo Modelo in Mexico.
AB-InBev reported lower volumes in all regions in the third quarter except Asia and western Europe. In western Europe, a short but hot summer proved ideal drinking weather.
AB-InBev said they were not satisfied with their performance, particularly in Brazil, where volumes dropped 5 percent in the third quarter and by 4.7 percent in the January-to-September period as high food price inflation sapped disposable income. That made AB-InBev revise their annual volume forecasts for Brazil downwards. “In the short-term we have challenges,” Chief Financial Officer Felipe Dutra was quoted as saying. Longer term, he said AB-InBev were upbeat on Brazil, given economic growth prospects, an expanding population and the country's hosting of the World Cup in 2014 and the Olympics in 2016.
Volumes were also lower in Mexico due to weak economic growth and severe hurricanes in September.
Beer sales dipped too in the United States, but new high-end products, such as Bud Light Lime Straw-Ber-Rita, helped expand profit margins by 0.8 percentage points.
The company said total global volumes in the third quarter slipped by 1.3 percent. However, the company earned 4.2 percent more per litre because they sold more premium lagers and benefited from increasing their own distribution in Brazil.
Revenue rose 3.0 percent on a like-for-like basis to USD 11.7 billion, while EBITDA increased 10.5 percent to USD 4.66 billion in the third quarter.
AB-InBev reiterated their forecast of USD 1.0 billion of synergy gains from Modelo before the end of 2016, although they expect to achieve most of that a year earlier.
