The world’s biggest brewer AB InBev produced mixed third quarter results on Thursday as a significant underperformance in volume sales was mitigated by finding an extra $400m of synergies from its SAB Miller acquisition.
Organic volumes fell back 1.2%, around two percentage points lower than consensus estimates of 0.7% growth. Volumes were weaker than forecast in North America, EMEA and Brazil, with a 5.3% decline in North America dragging back organic sales growth. EBITDA rose 13.8% to $5.73bn, but this was below market expectations and margins also missed forecasts amid slowing margin expansion in China.
The undoubted highlight of an otherwise downbeat quarter was the announcement AB InBev had increased its total synergy target from the SAB Miller merger from $2.8bn to $3.2bn. It had raised its savings expectation from the acquisition in March from an initial estimate of $2.45bn and has delivered $1.75bn already - though about $1bn was from pre-acquisition actions from SAB.
AB InBev’s shares dropped 0.6% in Brussels on Thursday morning, with the stock down by almost 3.9% since the start of trading on Monday.
Fellow global brewing giant Heineken saw its share fall back by 3.4% to €82.10 on Wednesday despite posting a 2.5% organic rise in beer sales in the third quarter. The market worried about its 2.8% volume decline in Western Europe - with UK volumes down by double digits.
Bernstein shrugged off the share price slump, pointing out: “To us at least, 2.5% organic volume is best-in-class in both global beer, and global staples.”
Elsewhere, Real Good Food hit a new multi-year share price low of just 18p on Monday after announcing yet another profit warning - this time revising its full-year profit forecast back from EBITDA of £6.5m to a pre-tax loss in the year to 31 March 2018 due to price hikes and productivity disruptions. Shares recovered to 25p by Thursday but remain almost 40% down year on year.
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