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Has Anheuser-Busch InBev reached the limits of its M&A aspirations? - results data

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  • Third-quarter group sales rise by 4.5% to US$13.28bn
  • Volumes in three months to end of September come in flat
  • Nine-month sales increase 4.6% to $40.37bn
  • Volumes in year-to-date also stay flat
  • North American sales dip by 1.3%, LatAm South jumps 21%
  • All other regions grow top-line by single digits in 2018 so far

Anheuser-Busch InBev will focus on cutting its debt levels in the months ahead, suggesting a more conservative M&A approach going forward.

The third quarter of 2018 kicked off with the FIFA World Cup, which took place in Russia between 14 June and 15 July

The third quarter of 2018 kicked off with the FIFA World Cup, which took place in Russia between 14 June and 15 July

A marked reduction in the dividend paid to shareholders, announced today, is related to the brewer's intention to "accelerate deleveraging toward our optimal capital structure of around a 2x net debt to EBITDA", A-B InBev said. At the same time, the group noted it would "continue to consider suitable (M&A) opportunities when and if they arise", subject to its debt reduction priority.

Since closing its $103bn takeover of SABMiller two years ago, A-B InBev has limited its shopping activity to smaller, national craft brewers, predominantly through its The High End Co craft beer division and the ZX Ventures incubator unit. Recent purchases have included the UK-based global e-commerce platform Master of Malt and US beer ratings website RateBeer.

The news was included in today's third-quarter and year-to-date results for the brewer. The ongoing slide in sales in North America - down by 1.3% in the year so far compared to the 2.5% decline posted for the YTD in 2017 - was offset by increases in all other reporting regions, most notably in Latin America South, where nine-month sales jumped by just over 21%.

Anheuser-Busch InBev Year-to-Date 2018 - Sales by Region

North AmericaLatin America WestLatin America NorthLatin America SouthEurope Middle East & AfricaAsia-PacificTotal
YTD 2017119066660664122878022607741844
YTD 2018118037301629518036190667740369

Source: Company results

A-B InBev's flagship Budweiser brand reaped the rewards of its headline sponsorship of the FIFA World Cup this summer - its sales in Q3 increased by 6.4% globally and by 9.3% outside the less-football-driven US. The group's other global brands also did well in the three months: Stella Artois was up by almost 6%, thanks in part to the markets of Brazil, Canada and South Korea, while Corona posted a 10.6% sales rise - +18% outside its home market of Mexico.

Anheuser-Busch InBev Third-Quarter 2018 - Sales by Region

North AmericaLatin America WestLatin America NorthLatin America SouthEurope Middle East & AfricaAsia-PacificTotal
Q3 20174120240022767642876222114740
Q3 20184162247219601752095231013282

Source: Company results

Management Comments

"Our business delivered revenue growth of 4.5% (in Q3), driven by beer volume growth of 0.5% and enhanced by our revenue management and premiumisation initiatives across the globe. A diverse group of markets contributed to this growth, including China, Mexico, Western Europe and many of our African markets. At the same time, we faced macroeconomic challenges in relevant markets such as Brazil, Argentina and South Africa.

"We continue to employ the category expansion framework and market maturity model across our footprint, which allows us to develop differentiated portfolios and strategies to meet the diverse needs of consumers. These strategic frameworks enable us to share best practices across our markets to ensure that successes are amplified throughout our business.

"Premiumisation remains a growing trend across markets of varying levels of maturity. Our robust portfolio of brands positions us to capitalise on this growth especially through our High End Co, which continues to grow revenue by double-digits, and our global brand portfolio."

Anheuser-Busch InBev 2018 - Sales versus 2017

20172018
Fourth Quarter14600null
Third Quarter1474013282
Second Quarter1418214014
First Quarter1292213073

Source: Company results

(Figures in tables are in reported terms, which include the effects of ForEx fluctuations)

To read Anheuser-Busch InBev's official results statement, click here.


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