Preview: A-B InBev to produce strong cost savings in Q2 - analysts
Analysts expect Anheuser-Busch InBev to announce further healthy progress on cost savings in its second quarter results this week, although the group is expected to follow other brewers in reporting a slowdown in beer sales.
Anheuser-Busch InBev, which reports its half-year results on Thursday (13 August), is likely to deliver "very positive news" on synergies from InBev's US$52bn takeover of A-B, according to analyst group ING.
The brewer, which has already delivered cost savings on the deal more rapidly than expected, "will be very agressive" in cutting second quarter costs, said ING.
Analyst group Sanford C Bernstein is also expecting positive news on cost savings and reports that A-B InBev has cleared a target of net debt/ebitda ratio of 5.2%, set by banks for 30 June.
Bernstein added that the brewer will have little difficulty in meeting a $7bn bridge loan repayment due in November and taken out to fund InBev's acquisition of A-B. The group has raised $3.4bn via assets disposals so far this year.
One analyst, who wished to remain anonymous, told just-drinks today (11 August) that A-B InBev's statement will likely be similar to Carlsberg's last week, with a weak top-line and strong progress on margin expansion due to synergies.
On second quarter sales, the analyst said: "Volumes in the sector continue to be morose. We expect a decline in organic volumes of 2.4%, but thanks to strong pricing, organic revenues will be down only slightly (0.3%)."
Bernstein predicted organic net sales growth of 1% for the second quarter, with higher prices helping to boost weaker volumes in the US.
Western Europe beer markets remain weak, Bernstein said, adding: "In Central & Eastern Europe we expect the combination of weak markets and share losses to lead to a -20% fall in volume."
ING said that it believes A-B InBev has lost market share to MillerCoors in the US, but remains "resilient" in a tough market and has shifted its focus to lower end beer brands.
Trade unions in Belgium claimed victory last night as they agreed to end worker blockades of Anheuser-Busch InBev breweries in return for talks with the group on alternatives to its proposed job cuts ...
Carlsberg has secured a swift end to a strike by workers in its native Denmark....
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