Brewers down in the dumps – but Christmas sales beckon
AB-InBev did not give a figure for the year-ago profit, saying it could not compare numbers from Anheuser Busch and InBev before they combined. In the July-September 2008 period InBev made USD 690 million and Anheuser-Busch USD 666.1 million, it was reported.
The combined company sold 3.2 percent less beer in the three months ended 30 September 2009, hit by weak worldwide markets. Volumes were down 4.7 percent in the U.S. and Canada, which the company partly blamed on strong Anheuser-Busch growth a year ago and lower sales to retailers.
Western Europe’s beer volumes slipped 1.2 percent, down more sharply in Germany, where volumes dropped 7.1 percent. However, in Britain the company grew volumes 3.7 percent thanks to a branding push for its lacklustre Stella Artois brand.
When it comes to emerging markets, AB-InBev saw volumes fall everywhere except for Brazil, where volumes grew 12.3 percent. But even that could not offset a decline in volumes of 16.8 percent in central and eastern Europe –especially Russia and Ukraine. Volumes fell 3.2 percent in Asia and 5.6 percent in Argentina and Chile.
As concerns beer sales, AB-InBev was hit harder than SABMiller which reported a 1 percent decline in volumes for its half year to the end of September. But AB-InBev did not suffer as much as Heineken whose volumes were down 4.7 percent on a like-for-like basis in the third quarter, while fourth-largest brewer Carlsberg’s were off 5 percent.
AB-InBev’s CEO Carlos Brito argued that the brewer was now "a much stronger company". A year ago, shares of the new AB InBev sank to a five-year low of EUR 9.96 as it launched a USD 9.8 billion rights issue and investors expressed concern over its heavy debt.
The company has since raised a potential USD 9.4 billion (EUR 6.3 billion) from asset sales, of which only USD 7.4 billion are cash proceeds at closing. Moreover, it has issued nearly USD 20 billion (EUR 13.4 billion) in bonds and its share price has more than tripled.
Paying off debt is still a priority, the company said, warning that it is "selectively evaluating non-core assets" that could be sold.
But it said it was no longer actively seeking to offload units and would now focus all its efforts on growing its core business. This included new synergies not included in the USD 2.25 billion (EUR 1.5 billion) it plans to save from combining AB and InBev.
When InBev bought its U.S. rival for USD 52 billion last year, it announced USD 2.25 billion in synergy savings in three years. According to AB-InBev, the company remains on track to reach USD 1 billion this year, having hit USD 875 million in the year to date.
AB-InBev says it expects volume sales to lift in the final three months of the year. It is trying to boost U.S. sales by launching two new beers there – a low calorie beer Select 55 and a wheat beer aimed at older drinkers, Bud Light Golden Wheat.
