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Belgian brewery group AB InBev did achieve volume growth in 2019, but its profit was lower than expected. The world’s biggest brewery group is worried about the consequences of the corona crisis during the coming months.
Disappointing profit
AB InBev achieved a total turnover of 52.33 billion dollars (47.7 billion euros), which was a like-for-like increase of 4.3 %. The Belgian brewery group sold 561 million hectolitre of beer last year: with an internal growth of 1.1 % that beat analysts’ expectations of 0.7 %, as Belgian newspaper De Tijd writes.
Profit growth, however, did disappoint: at 2.7 % internal growth, it fell way short of forecasts of 3.5 %. A better sign was the fact that the company lowered its debt from 4.6 times its EBITDA last year to 4.0 times now.
Pessimism
The brewery group is not optimistic about the coming months, forecasting a 10 % EBITDA drop as the coronavirus wreaks havoc in China and the high base for comparison in Brazil. The owner of the Corona beer estimates the impact of the coronavirus crisis in China on its turnover to be already near the 285 million dollar (260 million euro) mark.
For the full year 2020, the company still expects EBITDA still to grow with between 2 and 5 %. Growth will be most prevalent in the second half of the year – if the coronavirus can be contained. But even that growth expectation was not welcomed in the Brussels stock exchange, where stocks dropped 11 % in one day to the lowest price in seven year.
Position CEO under fire?
The disappointing results, low forecasts and dropping share price obviously also weakens the position of CEO Carlos Brito, who earlier this month already lost his CFO Felipe Dutra.
When Belgian business newspaper De Tijd asked him if he still is the right man to lead AB InBev, Brito answered that “it is not up to him, but the board to decide. We have a solid base, with 70,000 people who are owners as well. The circumstances in China are difficult, but we are returning into shape. We work to recover from the crisis.”
