AB InBev records 5.8% decline in Q1 2020 revenue
AB InBev, the world’s Number 1 brewing giant released its reports for the first quarter of this year, recently.
The report, posted on its website, disclosed that the company’s total volume declined by 9.3% and by 3.6% excluding China; its revenue declined by 5.8%; revenue per hl grew by 3.9%; while EBITDA of 3 949 million USD represents a decline of 13.7%, with margin contraction of 331 bps to 35.9%.
The company stated that its business started the year with good momentum and delivered volume growth of 1.9% in the first two months of the year excluding China, where the COVID-19 outbreak had begun in late January, adding, however, that “the impact of COVID-19 on our global results increased significantly toward the end of the quarter”.
Sadly, too, ABInBev disclosed in the report that it expects that the impact on its second quarter (2Q20) results would be materially worse than in the first quarter, 1Q20.
This, it stated, “has already become evident in our April 2020 global volumes, which declined by approximately 32%, primarily driven by the closure of the on-premise channel in most markets and government restrictions imposed on certain operations of ours in connection with the COVID-19 pandemic.
It added, however, that its diverse geographic footprint allows it to apply best practices from its experiences in China and South Korea to the rest of its markets, as they move through different stages of the crisis and into eventual recovery.
Putting this in context, the company disclosed that in China, its volumes declined by approximately 17% in April, which was an improvement from the 1Q20 decline of 46.5%.
As stated in the report, the company’s key figures are as stated below:
Revenue: Revenue declined by 5.8%, materially impacted by lower volumes resulting from the COVID-19 pandemic. Revenue per hl grew by 3.9%, driven by ongoing premiumization and revenue management initiatives.
Volume: Total volumes declined by9.3%, with own beer volumes down 10.5% and non-beer volumes down 0.2%. Excluding China, our volumes declined by 3.6% in 1Q20 despite initial growth of 1.9% in January and February.
Global Brands: Combined revenues of our three global brands, Budweiser, Stella Artois and Corona, declined by 11.0% globally and by 17.5% outside of their respective home markets. Growth across the majority of our markets was more than offset by declines in China, which is the largest market for both Budweiser and Corona outside of their respective home markets.
Cost of Sales (CoS): CoS was flat in 1Q20 and increased by 10.3% on a per hl basis, driven primarily by operational deleverage resulting from the impact of COVID-19 on our volumes and transactional currency headwinds.
EBITDA: EBITDA of 3 949 million USD represents a decrease of 13.7% in the quarter, with EBITDA margin contraction of 331bps to 35.9%.
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