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Anheuser-Busch InBev takes US$2.5bn South Africa Q2 write-down - results

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  • Q2 organic sales fall 18%
  • June volumes slip 1%
  • South Africa takes US$2.5bn write-down

Anheuser-Busch InBev has said improved volumes across Q2 gives it confidence for global beer despite a US$2.5bn write-down in South Africa. 

A-B InBevs volumes improved across Q2 and were down just 1% in June

A-B InBev's volumes improved across Q2 and were down just 1% in June

Announcing first half results today, the Budweiser brewer said performance improved sequentially during a tumultuous Q2 in which April volumes plummeted by 34% compared to last year. Volumes plunged 21% in May before sliding by just 1% in June.

Overall, Q2 volumes fell by 17%, with H1 volumes down 13%. Organic sales in Q2 were down 18% and H1 organic sales slipped by 12%.

A-B InBev said that the volumes improvement towards the end of Q2 has given it "reinforced confidence" in the resilience of the global beer business and that the company is "well-positioned for a strong recovery".

However, the company announced a heavy impairment charge in South Africa, where alcohol sales have been banned during some of the virus outbreak. A-B InBev said the write-down was because of a 30% chance of a "worst-case scenario" in South Africa, based on a company review of markets. A-B InBev sales and volumes in South Africa fell by more than 60% in Q2.

A-B InBev did not give a full-year outlook but said its "fundamental strengths" remain unchanged. Across its markets, performance varied in the second quarter. Sales fell by 6% in the US but by 36% in Mexico. Brazil sales also declined by 6% while in Europe both sales and volumes fell by mid-teens.

In China, which emerged from its lockdown ahead of other countries, volumes in May and June were up mid-single digits. Overall in Q2, China sales declined by 5%.

Combined sales of A-B InBev's global brands - Budweiser, Stella Artois and Corona - dropped  by17% globally.

Here come the numbers, there goes sustainability and where is South Africa's alcohol industry? - The just-drinks Analyst


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