AB-InBev “not satisfied” with Full Year 2019 results

Belgium | You don’t often get AB-InBev’s CEO Carlos Brito sounding contrite. 2019 was a challenging year for the brewer. “Our performance was below our expectations, and we are not satisfied with the results,” he said on 27 February 2020. This year doesn’t look much better.

Announcing Full Year 2019 results, the brewer reported a turnover of USD 52.3 billion, down from USD 53 billion in 2018, which somehow managed to translate into an organic growth of 4.2 percent.

EBITDA dropped to USD 21 billion from USD 21.7 billion (organically up 2.4 percent), while EBIT declined to USD 16.4 billion from USD 17.1 billion (organically up 1.7 percent).

The performance was even more dismal in the 4th quarter, when despite massaging the numbers, EBITDA was still down 5.5 percent and EBIT down 8.6 percent organically.

Some self-criticism

AB-InBev blamed rising costs, which were none of their fault. What they did do wrong was to raise prices in Brazil and South Korea as their competitors lowered theirs. In Korea, AB-InBev’s unit had to roll back the price increases in October last year, or their negative impact on the brewer’s figures would have been far greater.

Self-critically, Mr Brito added that they should have launched their own hard seltzers in the US sooner than they did.

But apart from these two admissions, Mr Brito sounded as bullish as ever.

Tepid outlook

In its outlook, AB-InBev forecasts that group profit for the full year 2020 should rise between 2 percent to 5 percent, with most of the growth probably achieved in the second half of the year.

Nevertheless, because of the poor results, Mr Brito will forego his bonus for the second half of the year, it was reported.

On 27 February 2020, AB-InBev’s share price was down by approximately 10 percent on Euronext.