Anheuser-Busch InBev (NYSE:BUD) reported third-quarter results on Oct. 25. The beer giant is struggling with stagnating demand for beer in many areas of the world, as well as a challenging currency environment in several of its core markets.

Anheuser-Busch InBev results: The raw numbers


Q3 2018

Q3 2017

Year-Over-Year Change


$13.282 billion

$14.740 billion


Normalized profit*

$1.614 billion

$2.582 billion


Normalized EPS




Data source: Anheuser-Busch InBev Q3 2018 earnings release. Normalized profit adjusts for non-recurring items and discontinued operations.

What happened with Anheuser-Busch InBev this quarter? 

Revenue fell nearly 10% year over year to $13.3 billion, due in part to the sale of several businesses Anheuser-Busch InBev had acquired as part of its merger with SABMiller. On an organic basis, revenue rose 4.5%.

Revenue per hectoliter increased 4.2%, as AB InBev continues to prioritize the sale of its higher priced brands. But total volumes inched up only 0.2%. AB InBev's own beer volumes increased 0.5% (the company also markets and distributes some third-party beers), while its non-beer volumes fell 2.4%.

Moreover, a plunge in the value of multiple emerging-market currencies in relation to the U.S. dollar is pressuring profits. This has made it more difficult for AB InBev to service its more than $100 billion debt load, which is largely denominated in dollars.

An aluminum can, a partially crushed aluminum  can, and a fully crushed aluminum  can

Anheuser-Busch InBev's profits remained under pressure in the third quarter. Image source: Getty Images.

In turn, the company is choosing to cut its 2018 dividend in half, to 1.80 euros per share ($2.05 at current exchange rates). CFO Felipe Dutra said AB InBev intends to use the $4 billion it will save in dividend payments to reduce its debt. 

He also suggested that the dividend could be increased should conditions improve. "If the world proves we were too conservative, we can always accelerate the pace at which dividends are expected to grow," Dutra said during an interview with Bloomberg.

Looking forward

In response to its tepid volume growth, AB InBev is launching a series of lower-priced beverages to appeal to cash-strapped consumers.

"It is crucial to have a portfolio of affordable options to engage our consumers at accessible price points in many of our low- and middle-maturity markets," the company said in a press release.

This is in contrast to AB InBev's prior focus on its "premiumization" initiatives -- in which it has aggressively marketed its more expensive beers -- and appears to be an acknowledgment that it needs to do more to broaden its customer base to increase overall beer volumes.

Despite the challenges, management remains optimistic that it can right the ship.

"We believe we have the right people, portfolio, and strategy in place to deliver long-term, sustainable growth and expand the global beer category," the company said.

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