Exchange rates hamper AB InBev's turnover

Exchange rates hamper AB InBev's turnover

In the third quarter, Belgian-Brazilian brewery group AB InBev sold 122 million hectoliters of beer, up 0.9 % compared to the same time frame in 2014. However, turnover did not grow as exchange rate fluctuations pushed down turnover from 12.239 to 11.376 billion dollars (10.393 billion euro).

Worldwide brands perform well

The brewery took full advantage of its three worldwide brands' excellent performance: Stella Artois' volume grew 12.9 % thanks to decent British and American sales; Budweiser's volume grew 11.5 % thanks to China, Russia and the United States and Corona's growth reached 11.1 % thanks to a sizeable jump forward in Mexico and the majority of its export markets.

 

These strong performances helped propel the brewer's gross margins up from 59.4 % to 60.9 % this year, partly because of the 6.3 % increased profit per hectoliter achieved once the company focused more on premium brands.

 

Exchange rates brings company down

Negative exchange rate fluctuations have impacted its turnover however as AB InBev does its accounting in US dollar. The result can most easily observed in Brazil where volumes increased from 26.792 to 27.364 million hectoliters while turnover slumped from 2.382 to 1.861 billion dollars (1.7 billion euro).

 

The biggest advances were made in Mexico where volumes sold grew 11.5 % and turnover 14.2 % thanks to excellent Corona, Bud Light and Victoria sales.

 

Growth in both home territories

European sales volumes grew 1.7 %: there was an "average single-digit growth" in its Belgian home territory because of advantageous weather and the company was even able to recover part of the market share it had lost earlier this year. "Our market share in the off-trade channel continues to grow thanks to the successful launch of our innovative products like Hoegaarden Radler and Cubanisto", the company said.

 

In its other home territory, Brazil (officially known as Latin America North), sales volumes increased 4.2 % while Latin America South (Argentina) grew 1.2 %. Asian sales volumes were the only one to actually drop, down 1.4 %.

 

Unfortunately, the excellent commercial results were not visible in the company's profits as its third quarter profit dropped from 2.499 to 1.375 billion dollars (1.25 billion euro). A 327 million dollar (300 million euro) fiscal devaluation, a consequence of the Grupo Modelo acquisition, was part of the profit drop.

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