AB InBev has cut its dividend in half as the company’s third-quarter results missed expectations, due in part to slower beer sales in some major markets.
The company, which owns brands such as Beck’s, Budweiser and Stella Artois, recorded sales of $13.28 billion in the three months to 30 September, a 4.5% organic increase, though this figure fell short of the $13.97 billion figure anticipated by the market.
AB InBev said that it will now pay a total dividend of $1.80 per share for 2018, the first time that it has cut its dividend since 2015.
AB InBev says that this move will save the company approximately $4 billion, which it will use to pay off debt.
Sales to retailers in North America fell 0.5% in the quarter, as US consumers in particular are drinking less beer or moving towards craft beer or spirits.
However, in the US the company said its Budweiser and Bud Light beers performed better than earlier in the year.
AB InBev drew particular attention to the strong performance of its above-premium portfolio in the US and the continued growth of Michelob Ultra and the launch of Michelob Ultra Pure Gold earlier this year.
The company also highlighted its positive performance in China, the world’s largest beer market, with third-quarter volume up by 1%. The growth was said to be partly by fuelled by successful brand activations over the summer and ongoing premiumisation. In September, the company formed a distribution partnership in China with Japanese brewer Sapporo.
During the quarter, AB InBev’s venture capital division ZX Ventures expanded in the online alcohol retail sector with the purchase of Australia’s BoozeBud.
AB InBev also revealed plans to construct a new brewery in Mozambique which will be capable of producing 2 million hectolitres of beer annually.
In August, the company launched a green innovation accelerator in a move to tackle some of the most pressing sustainability issues.
Called 100+ Accelerator, the initiative will support, mentor and fund ten successful applicants so they can incubate, experiment and amplify their solutions at scale. AB InBev said it wants to mobilise the world’s brightest minds –entrepreneurs, academics, scientists and technologists – to solve global sustainability issues and contribute to the UN’s Sustainable Development Goals.
© FoodBev Media Ltd 2024