AB InBev Q3 Net Down, While EBITDA And Sales Rise; Backs FY15 Outlook

(RTTNews) - Belgian brewer Anheuser-Busch InBev NV, or AB InBev (BUD, AHBIF.PK), which offered to acquire British brewer SABMiller Plc (SAB.L, SABMRY.PK), reported Friday a decline in the third-quarter net profit. However, EBITDA, a key earnings metric improved along with strong top line results and higher volume.

Looking ahead, the company continues to expect an increase in sales and marketing investments for full-year 2015 of mid to high single digits. For the second half, it expects sales to accelerate with an increase of 13.7 percent during the third quarter.

AB InBev now expects revenue per hectoliter will grow ahead of inflation due to higher-than-expected premium brand volumes while it had earlier expected that revenue per hectoliter would grow organically in line with inflation, on a constant geographic basis. For the quarter, profit attributable to equity holders declined to $1.38 billion from last year's $2.50 billion. Earnings per share were $0.84, down from $1.53 a year earlier.

Normalized attributable profit was $1.67 billion or $1.02 per share, compared to $2.32 billion or $1.42 per share last year. Earnings were hurt by unfavorable currency and higher net finance results.

Earnings before interest, tax, depreciation and amortization or EBITDA grew 9.6 percent year-over-year to $4.40 billion with a margin expansion of 58 basis points to 38.7 percent. Strong top line result, a good cost of sales performance, as well as the absence of last year's challenging one-off events benefited the results, the company said.

Revenue grew 7.9 percent from last year to $12.24 billion, with revenue per hl growth of 6.3 percent, driven by revenue management and premiumization initiatives. On a constant geographic basis, revenue per hl grew 7.8 percent. Global brand revenues grew 15.9 percent.

Total volumes increased 1.2 percent to 120.65 million hls with good volume growth in the US, Mexico, and Latin America North. AB InBev own beer volume grew 2.3 percent while that of non-beer volumes fell 6.1 percent.

Volumes of Focus Brands grew 2.9 percent, driven by strong performances in Mexico, Canada, China and the UK.

AB InBev's board has approved an interim dividend of 1.60 euros per share for the fiscal year 2015. Dividends will be payable from November 16 to shareholders of record on November 13.

Regarding its proposed combination with SABMiller, AB InBev has to confirm its intention by November 4. It was on October 13 that the boards of both companies announced their agreement in principle for a possible recommended offer for 44 pounds per share in cash.

In Belgium, AB InBev shares closed Thursday at 107.45 euros, down 0.14 percent.