Big Brewers say second quarter 2020 results will be worse

Belgium | AB-InBev was the last of the European brewers to report first quarter results. On 7 May 2020 it said that it sold 10.5 percent less beer than a year ago.

But this decline worsened to 32 percent in April, as bars and restaurants were closed and production was halted in South Africa, Peru and Mexico.

Previously, Carlsberg had reported (30 April) that its beer sales dropped 8.1 percent in the quarter, while Heineken posted a decline of only 2.1 percent.

AB-InBev did say, however, there were early signs of recovery in China and South Korea, as restaurants were reopening from mid-March. The company’s drinks volumes in China were down 46.5 percent in January-March, but only 17 percent lower in April.

In terms of dollar sales, AB-InBev reported that the pandemic had wiped about USD 1.2 billion off its turnover, which was down to USD 11 billion in the quarter from USD 12.2 billion in 2019. Its profit (EBITDA) dropped to USD 3.95 billion, down 13.7 percent from a year earlier. But net profit came in red ink. AB-InBev had to register a loss of USD 2.3 billion.

Heineken still made a profit

Whether Carlsberg made a profit this quarter we don’t know because it did not disclose a full set of earnings figures. It only said that its turnover dropped 6.8 percent to DKK 12.9 billion (USD 1.9 billion) in the quarter.

Heineken also refrained from issuing a full list of financial figures. It said that net profit for the first three months was EUR 94 million (USD 102 million), compared with EUR 299 million in 2019, which can be seen as a subtle hint that it managed to best its rivals this quarter, despite all the odds.  

In the US, which is AB-InBev’s largest market, the company admitted to a loss in market share in the first quarter as the craze for hard seltzer accelerated, although the company is pushing more into this category.

In Brazil, the company’s second largest market, turnover fell 10 percent in the first three months, after many states forced the closure of bars and restaurants in March. The off-premise accounts for more than half of AB-InBev’s volume sales in the country.

The three brewers concur that second quarter results will be far worse than for the January-to-March period, given social distancing measures and government restrictions currently in place. Already, they have all scrapped their 2020 outlooks.  

AB-InBev will report second quarter results on 30 July, Heineken on 3 August, and Carlsberg on 13 August.