50.00 +0.43 (0.87%)
After hours: 7:59PM EDT
|Bid||49.58 x 900|
|Ask||50.30 x 1000|
|Day's range||48.89 - 50.15|
|52-week range||32.58 - 102.70|
|Beta (5Y monthly)||1.12|
|PE ratio (TTM)||29.97|
|Forward dividend & yield||1.44 (2.94%)|
|Ex-dividend date||09 Jun 2020|
|1y target est||60.85|
JAB Holding also owns Panera, Krispy Kreme, Dr. Pepper Snapple, and a number of other well-known brands.
The oil sector is still rife with risk. Four experts offer up these stocks outside the oil patch that look like far more profitable investments.
Are Mr. Carlos Brito, Chief Executive Officer; and Mr. Fernando Tennenbaum, Chief Financial Officer. To access the slides accompanying today's call, please visit AB InBev's website at www.ab-inbev.com and click on the Investors tab and the Reports and Results Center page. It is possible that AB InBev's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.
A federal appeals court overturned a previous ruling, allowing Bud Light to say whatever it likes, in advertising and on packaging, about corn syrup in its competitor’s beer.
(Bloomberg) -- Anheuser-Busch InBev NV warned that its biggest three beer brands -- Budweiser, Stella Artois and Corona -- are bearing the brunt of a collapse in sales caused by Covid-19.Revenue from those brands dropped 11% in the first quarter, about twice the rate of decline for the company’s overall portfolio of more than 500 labels. Shipments plunged the most in China, where the effect of Covid-19 lockdowns hit hardest because they started earlier than in the U.S. and Europe.As demand evaporates amid a global shutdown of bars and restaurants, AB InBev and rivals Heineken NV and Carlsberg A/S are racing to find ways to cut costs to reduce the effect on profit. So far AB InBev’s more expensive products are suffering less. Longer-term, as the pain from a pandemic-induced recession spreads from blue-collar to white-collar workers, that could also harm the collection of niche premium labels that AB InBev has built up in past years.“We do better when consumers feel good about the future,” Chief Executive Officer Carlos Brito said by phone. Sales of premium brands are slowly recovering in China after nightlife establishments there reopened, Brito said. Demand for more expensive beers “could have a couple of bumps, but it will remain in our view.”AB InBev is in more of a pinch than Heineken and Carlsberg, given that it’s also struggling to reduce its a pile of debt that stood at $96 billion at the end of 2019. The brewer said Thursday that shipments plunged 32% in April. Budweiser, Stella and Corona are in its mid-priced segment in the U.S. The company’s stock has lost almost half its value this year.Amsterdam TaxiCarlsberg said last week that it was already preparing for a new normal in which more profitable craft labels face more competition from cheaper alternatives. An eye-opening moment for Chief Executive Officer Cees ’t Hart was when he took a taxi to Amsterdam airport on April 26 on his way to Copenhagen: He was the driver’s first customer in a month, and the 60-euro fee his only income.“We need to cater to this with a slightly different portfolio -- it could be that for a while, we will have have a focus on economic brands,” the CEO said. “The aftermath will much longer and maybe quite a bit more painful, with people not having the money to spend.”Cut-price beer is performing well in some markets, such as South Africa. AB InBev was already seeing its inexpensive Lion Lager grow at a double-digit rate in the first quarter there before its production and distribution was halted to comply with a government mandate.China’s lockdowns were largely responsible for AB InBev’s 9.3% decline in total first-quarter shipments, and excluding that market, the decline was only 3.6%. That may bode badly for Europe and the U.S., which entered lockdowns later.While some craft breweries are seeing surging demand from drinkers looking to prop up local producers, catastrophic levels of unemployment in the U.S. in the longer term may eventually lead those consumers to switch to less glamorous labels such as Bud Light.In recent years, demand for craft has surged, and the industry will be keen to see if that can continue. In China, the market hardest-hit by Covid-19 restrictions in the first quarter, AB InBev’s super-premium offerings outperformed the rest.AB InBev, Carlsberg and Heineken, caught out by the trend in developed markets such as the U.S. and the U.K., have collectively spent billions of dollars acquiring popular small brands like Devil’s Backbone, Elysian Brewing, Lagunitas and London Fields.”There will be permanent economic damage and the shape of this recession is likely to impact low-income workers hardest, and we probably will see some down-trading as a result of this,” Trevor Stirling, an analyst at Sanford C. Bernstein, said by phone.(Updates with CEO comment in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Anheuser-Busch (NYSE: BUD) gave investors their first detailed glimpse into how the COVID-19 pandemic is impacting its business on Thursday. There were some bright spots in the report, including the successful launch of Bud Light Seltzer, InBev's answer to booming demand for hard seltzer products and dropping popularity of light beers.
(Bloomberg) -- Earnings season in Europe began winding down, with companies predicting that customers may not return to pre-pandemic levels of traveling and socializing any time soon.Air France-KLM said capacity will drop 95% in the second quarter and the impact of the outbreak could be felt for years, while British Airways owner IAG SA predicted air travel demand won’t return to pre-pandemic levels before 2023.Anheuser-Busch InBev NV, the last of the major brewers to report first-quarter results, said sales have been plagued by shut restaurants and bars and that the second quarter will only get worse. Sneaker-maker Puma SE had a similar message, with sales running about 50% lower this quarter.But customers are still shopping from home. German online fashion retailer Zalando SE said revenue may increase 10% to 20% this year as consumers buy more online.Two-thirds of European companies have reported first-quarter results, and profits are down 25%, JPMorgan Chase & Co. strategists said in a note published before Thursday’s earnings releases.Key Developments:European stocks rose, with the Stoxx Europe 600 Index up 0.6% on gains for retail, real estate and basic resources shares.AB InBev Warns Second Quarter Will Be Much Worst Than FirstBritish Airways Parent IAG Taps U.K. Funds to Survive Long SlumpFor more on dividends, click here. For the latest company guidance, click hereU.K. May Ease Lockdown Monday; Poland Delays Vote: Virus UpdateHere’s the top virus-related earnings news for today by sector.Food & BeverageProfit at AB InBev, the world’s largest brewer, fell by 14% in the first quarter because of bar and restaurant closures late in the period as lockdowns went into effect. The Budweiser maker expects performance in the second quarter to be “materially worse,” with global volumes in April having declined by almost a third compared with the same month last year. Jefferies said the quarter was broadly in line with expectations but weak in Asia. The shares jumped as much as 3.6%.Drinks bottler Coca-Cola HBC AG said March and April have been more difficult after a strong start to the year and that the impact of the virus on its business will be material. Citigroup said a deteriorating price and country mix is a concern and implied revenue per case is well below expectations. The shares fell as much as 1.4%.Travel & LeisureIAG, which also owns Spanish carrier Iberia, said it doesn’t anticipate air travel demand will return to 2019 levels before 2023 but said it’s planning a meaningful return to service in July. It will access the U.K. government’s Covid-19 funding program and will slash its capital spending plans for this year. The shares bounced but quickly reversed to fall as much as 3%. Analysts at Davy said the carrier has enough liquidity to see out the crisis.Air France-KLM warned demand for air travel will take several years to recover, scrapping its full-year outlook and forecasting a “significantly higher” loss in the second quarter than in the first three months of the year. The carrier expects capacity to remain skeletal, down 95% this quarter and 80% lower in the third quarter as travel slowly starts to resume during summer months. The shares fell as much as 4.8% but Bernstein said the group is reacting well to the crisis.Hotel operator InterContinental Hotels Group Plc said its comparable revenue per room for the first quarter fell by 25%, with a 55% drop in March and April expected to see a drop of about 80%. The company anticipates continued disruption to travel patterns in coming months and that visibility on its outlook is limited. The shares fell initially but reversed to rise as much as 3.2%. Citigroup said 2020 growth is likely to disappoint.Metals & MiningArcelorMittal SA pulled its forecasts and will suspend dividend payments as it said it expects steel shipments for 2020 to fall year-on-year. The steelmaker’s first-quarter sales slumped and missed consensus and the company reported an operating loss for the first three months. Earnings, cash flow and guidance all beat expectations, Citigroup said, and the shares bounced as much as 5.4%.IndustrialsRolls-Royce Holdings Plc slashed its forecast for wide-body engine production by 44% this year and pledged greater cost savings to cope with an effective grounding of the global airline industry. The British engine maker now plans to produce 250 wide-body power plants in 2020, while aircraft powered by its turbines logged a 90% drop in flying hours last month -- hurting maintenance revenue. Jefferies said the company can “ride it out” even if first-half cash flow may look “ghastly.” The shares dropped as much as 5.5%.Swedish appliances manufacturer Electrolux AB surprised the market with an operating profit in the first quarter, after analysts had predicted the home appliance maker would post a loss. April sales slumped about 30%, but are expected to gradually recover, though the group is facing a significant second-quarter loss. Citigroup said 2020 consensus is likely to fall. The shares reversed earlier losses to rise as much as 2.3%.Switches and sockets maker Legrand SA reported sales in April slumped by 41% and it expects a marked fall for the second quarter before an improvement in the second half. First-quarter operating profit and revenue declined for the French firm. The shares dipped as much as 2.5% and Citigroup said the quarter was a small miss, while April looks worse than expected.TMTBT Group Plc scrapped its dividend payouts for two years to free up funds for a national fiber network rollout under the cloud of the virus. The U.K. telecommunications group said it would suspend its final dividend for its 2020 fiscal year and said payouts will be reset at half their current level when they resume. The shares plunged as much as 12% and Berenberg said all the focus will be on the dividend.Telefonica SA withdrew financial guidance for 2020 and said it would offer to pay part of this year’s dividend in shares, as it balances uncertainty about the near-term circumstances with future growth potential. The Spanish phone carrier’s first-quarter sales were hit by currency depreciation in its sprawling Latin American operations. Telefonica also confirmed its O2 unit in the U.K. will merge with Liberty Global Plc’s Virgin Media business. The shares initially bounced but pared to be little changed and Bloomberg Intelligence said the Virgin deal will boost deleveraging.German broadcaster ProSiebenSat.1 Media SE said it can’t provide a reliable outlook for the year as it reported a small rise in first-quarter revenue. The group had already withdrawn its outlook and scrapped its 2019 dividend owing to the lack of visibility caused by the pandemic. The shares rose initially but reversed course to fall as much as 4.4%.RetailOnline clothing retailer Zalando said it anticipates its full-year revenue growth will outpace market expectations as it reported a first-quarter loss but said it has seen more new customers coming to its platform. It said demand started to recover in April. RBC said the update points to massive potential consensus upgrades. The shares bounced as much as 13%, hitting a record.German sportswear group Puma said the second quarter is going to be worse than the first as it said Covid-19 is crushing sales. The group said it’s generating around half of normal revenue and can’t provide an outlook for the rest of the year, though it does expect a return to growth in 2021. The shares rose as much as 6.7% as first-quarter revenue beat analyst estimates.Royal Ahold Delhaize NV said net sales for the first quarter rose 15%, boosted by stockpiling in Europe and the U.S., with the adjusted operating margin of 5.3% beating consensus analyst estimates. The food retailer kept its full-year outlook and commited to its dividend and buyback policies. Berenberg said the quarter was “substantially ahead” of expectations and the shares rose as much as 2.5%.German food wholesaler Metro AG said trading has been “significantly negatively affected” by the virus since mid-March, with stockpiling initially helping to offset a fall in sales from hotel, restaurant and catering companies. It expects every month of the lockdown will cause sales to fall by 2% compared to the year prior. The shares fell as much as 6.9%.BanksNatixis SA joined its French peers in reporting a heavy hit on equities trading revenue from market turmoil and canceled dividends. The lenders said its equities trading revenue was wiped out by payouts being pulled, but its debt trading revenue topped rivals BNP Paribas SA and Societe Generale SA. The shares rose as much as 4.4% but Bloomberg Intelligence said many questions were left unanswered.ChemicalsVitamin maker Royal DSM NV reported a small fall in first-quarter earnings. It still anticipates a rise in earnings for its nutrition arm in 2020 but said conditions for its materials business deteriorated rapidly at the end of the first quarter as demand for plastics as manufacturing came to a virtual standstill in Europe and North America. The shares rose as much as 4.4% and the firm is delivering nose swabs for Covid-19 testing in the Netherlands.Specialty chemicals firm Evonik Industries AG cut its full-year earnings forecast and reported a decline in first-quarter sales. The company said the economic impact of the Covid-19 epidemic has become clearer in the second quarter. Evonik is sticking to its plan to pay a dividend on 2019 earnings. The shares fell as much as 4.9%.ConstructionHeidelbergCement AG cut its 2019 dividend pledge by almost 75% and said construction halts to contain the coronavirus will have hurt full-year results. The German cement maker said it’s making good progress reducing costs to navigate the crisis, and is on track to hit a 1-billion-euro savings target. First-quarter sales fell 7.3%. The shares fell as much as 2.7%.InsuranceMunich Re AG’s first-quarter net dropped by 65% and it abandoned its full-year profit forecast. The reinsurer booked coronavirus-related losses of 800 million euros for the quarter. RBC said the group’s virus impact should be manageable and its balance sheet is strong. The shares rose as much as 1.7%.RSA Insurance Group Plc said any bad debt impact in April was not substantial and it anticipates a hit to written premium income for 2020. The shares bounced as much as 7.1% with Panmure Gordon saying the update was “upbeat.”Health CareResearch tools makers Qiagen NV’s first-quarter earnings rose and it anticipates a stronger second quarter based on current trends. It has benefited from significant demand for products used in Covid-19 testing, including viral RNA extraction kits, CEO Thierry Bernard said in a statement. The firm had already flagged expectations for second-quarter sales growth. The shares fell as much as 0.8% but Berenberg said the firm is performing well in the crisis.Genmab A/S said its earnings and sales slightly topped consensus for the first three months and confirmed its 2020 outlook. The biotechnology firm, which makes antibody therapies for cancer treatment, said net sales of its Darzalex product jumped 49% in the quarter. The shares rose as much as 6.3%, hitting a record high.EnergyEquinor ASA’s first-quarter profit fell by 63% amid the slump in oil prices, two weeks after it became the first European oil major to pull its dividend. The Norwegian firm pulled its 2020 production guidance amid the slump in crude demand caused by virus shutdowns. The shares gained as much as 3.7%.Liquefied petroleum gas distributor Rubis SCA said its first-quarter revenue rose by 19% but said Covid-19 had begun to hurt volumes toward the end of the period. It expects a fall in fuel product list prices to help margins, which should offset any near-term negative inventory effects. The shares bounced as much as 6.6%.UtilitiesItalian electricity and gas group Enel SpA posted first-quarter earnings ahead of expectations and confirmed its full-year targets, saying it does not anticipate a significant impact from Covid-19. The shares rose as much as 2.7% but Citigroup said the quarter was small miss and Enel is now immune to lower power prices.AutosContinental AG will slash investments by at least 20% this year as the German car-parts giant said it expects to post a loss for the second quarter. It said April was the “worst month” of the year, but tire demand has started to pick up again. The shares bounced as much as 4.3%.French motor homes and trailers manufacturer Trigano SA’s first-half profit missed expectations. It said productivity has been resuming gradually since mid-April, though the company expects to be hurt by the novel coronavirus crisis in the second part of the year. The shares fell as much as 4.3% and Portzamparc said first-half margins were “disappointing.”Market StrategyCyclical stocks could have further to fall against their defensive counterparts as any sustained improvement in the global economy seems “way off,” according to Citigroup strategists.Equity and bond markets are sending conflicting signals about the outlook for an economic recovery and stock investors may be wise to take note from their more cautious counterparts, according to Invesco’s global market strategist.The global recovery for stocks since March may fizzle out as investors become more realistic about the corporate earnings outlook and start to price in the permanent damage Covid-19 will do to the economy, according to Janus Henderson Group Plc.U.S. investors have been piling into cash amid the uncertainty about the virus impact but should consider diversifying into riskier assets like lower-quality stocks or credit, UBS Global Wealth Management says.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
AB InBev's (BUD) first-quarter 2020 results are expected to reflect significant impacts from manufacturing facility closures, social distancing and travel bans due to the coronavirus pandemic.
(Bloomberg) -- The coronavirus pandemic sharply cut into fund-raising for two committees that support President Donald Trump’s re-election campaign, filings at the Federal Election Commission show, although he still holds a significant advantage over Democrat Joe Biden.At $63 million, the March haul for Trump’s re-election effort was down 27% from February, and the two key groups also saw double-digit drops. Still, Trump Victory and Trump Make America Great Again brought in $136 million in the first quarter.Social distancing and stay-at-home orders may have slowed his fundraising juggernaut, which started kicking into high gear in January as the Senate considered and ultimately acquitted Trump in the impeachment trial.With the contributions for the two committees, the president and the Republican National Committee brought in $212 million in the first quarter.Trump’s re-election effort ended the quarter with $240 million cash on hand. That far outstrips the $26.2 million that the Democratic National Committee and Biden had at the end of February. The Democrats will report their first-quarter totals to the FEC on Monday.In the first three months of the year, Trump Victory, which courts wealthy donors at events attended by the president or his top surrogates, took in $64 million, significantly more than the $31.7 million it raised in the previous quarter. But it took in about $10 million less in March than it did in February after it canceled scheduled fundraisers in March because of the pandemic.Donors who’ve been hard-hit by coronavirus were among the group’s big givers. Casino mogul Sheldon Adelson and his wife, Miriam, each contributed $580,600 in February. Adelson’s seen a 26.6% decline in his net worth this year, according to the Bloomberg Billionaire’s Index.TD Ameritrade founder Joe Ricketts, whose net worth has dropped 23.4%, gave $500,000, while his wife, Marlene, gave $355,000. Billionaire Steve Wynn, who stepped down from his casino business in 2018 amid sexual harassment allegations in 2018, gave $468,500. He’s down 11.9% this year. Phil Ruffin, who co-owns Trump International Hotel Las Vegas, gave $500,000.Robert Mercer, former co-chief executive officer of hedge fund Renaissance Technologies, gave $355,200. In 2016, two key Trump campaign officials, Kellyanne Conway and Steve Bannon, had worked for a super-PAC Mercer funded. He was also an investor in Cambridge Analytica, the controversial data-mining and political consulting firm that harvested personal information of users of Facebook to use in its advocacy campaigns.Other big donors include former Anheuser-Busch Chairman August Busch III, who gave $500,000, billionaire Ira Rennert, chariman and chief executive officer of Renco Metals, who gave $450,000, and U.S. Senator Kelly Loeffler and her husband Jeffrey Sprecher, who each gave $290,300. The Loefflers’ quick sales of millions of dollars worth of stocks as the markets crashed when the pandemic began has become an issue for the Georgia Republican in her re-election campaign.Trump Make America Great Again, the campaign’s digital fundraising arm, brought in $72.9 million in the first quarter after raising $54.6 million in the last three months of 2019. The committee targets grassroots contributors with frequent emails and texts as well as promoting Trump merchandise, including the iconic “Make America Great Again” caps.Small-dollar donors, those whose aggregate contributions to the committee amount to $200 or less, supplied $50.8 million, or 70%, of the total. Contributions made through WinRed, the Republican version of ActBlue, dropped about 11% from February to March.America First Action, Trump’s designated super-PAC, reported raising $9.4 million in the first quarter, with about a third of that, $3 million, coming from Stephen Schwarzman of Blackstone Group Inc. Los Angeles-based developer Geoffrey Palmer gave $2 million and investment banker Warren Stephens gave $1 million.(Updates totals in second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- This is Bloomberg Opinion Today, an Articles of Confederation of Bloomberg Opinion’s opinions. Sign up here.Today’s AgendaTrump doesn’t have total authority over states, which are going their own way … for better or worse. Quarantine’s a mixed bag even for companies selling media or alcohol. Don’t kill the Postal Service.States’ Rights and WrongsSome day in, say, 2023, when California is an independent nation and New Yorkers are citizens of the Free Republic of Cuomostan, we might look back at this pandemic as the moment when the whole “United States” thing went kablooey.OK, probably not. But this is certainly a time to consider the tensile strength of the national fabric, with 50 different states mostly just doing their own thing on the pandemic. President Donald Trump insists he has “total” authority over all, despite contrary evidence and his own refusal to coordinate action so far. Oh, and the Constitution. Sure, predecessors such as FDR have taken the reins of national functions during crises, but only in concert with Congress, the judicial system and others to lay the groundwork and check that power, writes Jonathan Bernstein. That’s how the system was designed, because the founders had this weird thing about total authority being vested in one person.The kind of team-building skills and foresight needed to become the next FDR aren’t in this particular president’s toolkit, notes Ramesh Ponnuru. In fact, he hasn’t even managed to do replacement-level presidenting with the powers he does have: He doesn’t effectively run the bureaucracy, cut deals, push legislation or influence people. He’s got complaining on Twitter on lock, of course, but even Republicans generally ignore him.Meanwhile, absent strong federal leadership, states are giving new meaning to the phrase “laboratories of democracy,” writes Noah Smith. Governors are planning their own pandemic reopenings, some wisely and others not so much. Some, including California’s Gavin Newsom, New York’s Andrew Cuomo, Ohio’s Mike DeWine and Washington’s Jay Inslee, have handled the crisis better than Trump and their less-aggressive counterparts. Now they can test escape routes from this nightmare.A coordinated federal pandemic plan would be preferable, so coronavirus-skeptical governors don’t put their citizens and neighbors at risk, writes Max Nisen. In the meantime, we seem to be entering a new phase of federalism, one in which states increasingly go their own ways and butt heads, writes Tyler Cowen. It may not lead to the Free Republic of Cuomostan, but it could be a throwback to the pre-constitutional days of the Articles of Confederation.Further Economic-Reopening Reading:Basing reopening plans on virus data is dicey because the current tallies are so badly flawed. — Cathy O’Neil But we’ll have to reopen even without adequate data because people just won’t do this for 18 months. — Michael R. StrainThings Are Tough All Over: Corporate EditionYou’d think this would be a boom time for companies catering to a nation desperately craving distraction. But they’ve got problems, too. The media industry, for example, needs a steady flow of new content, which has dried up in the pandemic, along with amusement-park attendance and other lucrative business lines, writes Tara Lachapelle. Meanwhile, with unemployment possibly at 20%, people aren’t exactly rushing to pay for new streaming services, much less existing cable bills.Roku Inc., which makes little boxes that funnel content to people, relies on ad revenue that is being slashed in the crisis, writes Tae Kim.We may be drinking more at home to kill the time and the pain, but we’re drinking cheaper beer than when we go out with friends, notes Andrea Felsted. This is a problem for such brewers as Anheuser-Busch InBev.Even the roaring success of Netflix Inc. is not a great sign for the future, writes John Authers: It makes sense if we’re all going to be inside for months to come, but in that case maybe the stock market shouldn’t be quite so exuberant.And growing labor unrest at quarantine overlord Amazon.com Inc. is a hint the economic recovery could be profitless, as companies have to maintain a higher-paid staff but accept lower revenue, writes Conor Sen.Further Corporate Problem Reading: Companies aren’t being smart about layoffs. — Roy Bahat in conversation with Erik Brynjolfsson and Andrew McAfeeFree the Post OfficeThe U.S. Postal Service is something of a miracle. For just 55 cents, you can send a letter anywhere in the country in a reasonably short time, and mailing packages isn’t all that much more expensive. The service is critical for rural communities — especially now, when quarantined people need mail carriers to deliver prescription drugs and other necessities. Conservatives have spent decades tying its hands in Congress and trying to destroy it, and the pandemic may finally help them realize their dream. The service will go under in a matter of months without a government bailout Trump has refused to extend. There’s a better way, writes Tim O’Brien: Instead of killing the Postal Service, we should reinvent it and give it control of its own finances. It still has much more work to do.Telltale ChartsIt’s Zoom’s world now, writes Ben Schott. Skype and Google Hangouts just live in it.JPMorgan Chase & Co. recorded an eye-watering loan-loss provision in the latest quarter, but also showed signs it can withstand even a prolonged and deep downturn, writes Brian Chappatta.Further ReadingPutin had no choice but to join the OPEC+ deal; sticking to it won’t be easy or cost-free. — Clara Ferreira MarquesThere’s really no good reason for the Fed to buy junk-bond ETFs. — Brian ChappattaEurope needs more than just a shared pool of money; it needs shared health resources. — Lionel LaurentThis is the IMF’s chance to become the world’s lender of last resort. — Clive CrookThe IMF expects the worst global recession since the Depression; Bloomberg Opinion columnists are split on whether it’s too pessimistic or too optimistic. — Mohamed El-Erian, Bill Dudley, Narayana Kocherlakota, John Authers, Tim Duy, Conor Sen, Noah SmithICYMIHedge-fund managers are claiming small-business bailouts.Who knew? Americans are great at social distancing.Bad Bunny is the world’s biggest pop star.KickersDeclassified CIA documents apparently discuss Soviet paranormal experiments.For $100, you can have a goat bomb your next Zoom meeting. (h/t Scott Kominers for the first two kickers)William Gibson didn’t expect the Internet to turn out like this.At 20, “American Psycho” is timelier than ever.Note: Please send goats and complaints to Mark Gongloff at firstname.lastname@example.org.Sign up here and follow us on Twitter and Facebook.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Lockdowns around the world have stressed-out consumers reaching for their beer glasses. But a tipple after a hard day working from home isn’t enough to preserve the world’s big brewers from the ravages of the coronavirus. Social-distancing measures have decimated their most profitable market: selling beer in restaurants, pubs and clubs.Anheuser-Busch InBev NV underlined the pressures on Tuesday when it halved its proposed final dividend from 1 euro to 50 cents per share, saving about $1.1 billion. It's a sensible move, given that this crisis has hit the maker of Budweiser and Stella Artois particularly hard and at an especially difficult time. Its shares rose as much as 4.4%The company is facing challenges on several fronts, all of which are compounded by the hit from Covid-19. For a start, the $100 billion acquisition of SABMiller in 2016 left it with a mountain of debt. Before taking into account the dividend cut, Bernstein analyst Trevor Stirling estimates net debt of $86 billion will be 5.7 times Ebitda at the end of this year. Second, the company is highly dependent on emerging markets, where it gets about 60% of its profit. And yet important currencies including the Brazilian real and Mexican peso have fallen against the dollar, putting more pressure on earnings.This is the absolute worst time for any form of socializing to evaporate because it hurts sales of the more premium brands, such as AB InBev’s Michelob Ultra. It’s unlikely an upswing in drinking at home can compensate for a decline in sales at pubs and restaurants for any brewer. Beer in supermarkets tends to be bought when it is on special offer. And even at home, beer and alcohol consumption can be driven by sporting events, so decisions to postpone the European Football Championships and Olympics will hurt.Given this backdrop, AB InBev should have gone further and canceled its final dividend altogether. True, another $1 billion wouldn’t have made a huge difference, and may have irritated the group’s big shareholders, tobacco giant Altria Group Inc. and Colombia’s Santo Domingo family. But it should have erred on the side of caution anyway.It’s a choice the company has faced before, and now it’s clear that AB InBev should have been more radical when it decided in October 2018 to halve its annual payout, from 3.6 euros to 1.8 euros, saving about $4 billion. At the time, the company described this as steering a middle course between maintaining and shelving the dividend.But Covid-19 makes the middle an even more painful place to be. AB InBev should not lose this latest opportunity, when it announces interim results in July, or sooner, to reset its dividend policy, and cancel the payout altogether.While lockdowns should ease later in the year, there’s no guarantee that the things that drive beer consumption, from big concerts and sporting events to local pub life, will come back quickly. And when they do, people around the world may still be reluctant to visit crowded venues. And that’s before any impact from a broader economic downturn. Thrifty consumers may continue to trade down to cheaper brews.It’s this uncertain future that calls for caution. Yes, AB InBev is good at controlling spending. And things are looking up on its debt load. It recently raised about $11 billion of bonds to bolster liquidity. Debt has an average maturity of 14 years, so there shouldn’t be any immediate cash crunch. But the recent pressures on trading do raise questions about whether it should continue to have about $128 billion of goodwill on its balance sheet.When AB InBev bought SABMiller, rival brewers risked becoming Megbrew roadkill. Today, with stronger balance sheets, Heineken NV and Carlsberg A/S look better placed to weather the Covid-19 crisis. It’s time for AB InBev to make some hard choices.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
BetterUp, the market leader and pioneer of mobile, personalized coaching for professionals, announced today that it has partnered with AB InBev (Euronext: ABI) (NYSE: BUD) (MEXBOL: ANB) (JSE: ANH) to offer a new global pilot program to drive diversity, foster an inclusive work environment, and provide coaching and support in the midst of the COVID-19 crisis.
Yahoo Finance speaks with Kraft Heinz CEO Miguel Patricio on how the food giant is navigating the coronavirus pandemic.
To the annoyance of some shareholders, Anheuser-Busch InBev (EBR:ABI) shares are down a considerable 37% in the last...
(Bloomberg) -- Mexican President Andres Manuel Lopez Obrador’s relationship with the country’s business elite is rapidly deteriorating over the response to coronavirus and his decision to back a local referendum to shutter a partly built $1.5 billion beer plant just as the economy is on the edge of a precipice.On Monday, Lopez Obrador backed a weekend public consultation where the population of Mexicali, on Mexico’s northern border, voted to revoke operating licenses from a Constellation Brands Inc. brewery. The president justified the cancellation saying he needs to “listen to the people” even though participation was just under 5% of registered voters.Business leaders say it’s a self-inflicted wound that will deter investment into Mexico amid a global market rout that has sunk the peso to a record low. The Consejo Coordinador Empresarial, the country’s top business lobby group known as the CCE, slammed the government’s position in its harshest language used yet against the Lopez Obrador administration.“The signal that Mexico sends to the world is that the law is not respected here, and that there is no guarantee whatsoever for those seeking to invest, generate employment and development in our country,” the CCE said in a statement.Constellation Brands sells Corona and Modelo beer in the U.S. market. In the rest of the world, those brands are owned by Anheuser-Busch InBev NV. Criticism of the plant has centered around the use of water in the extremely arid region and the optics of using that resource for a product that’s then exported. Lopez Obrador’s top water official has said, however, there’s enough water to support the plant.MEXICO INSIGHT: Already Weak Economy Vulnerable to Virus ShockThe relationship between AMLO, as the president is known, and Mexico’s business community is complicated, even if both sides have generally strived for a conciliatory tone. A populist who spent all his political career decrying the rich and powerful, Lopez Obrador won in a landslide election on a promise to break up crony capitalism and put Mexico’s poor first while keeping the nation’s longstanding pro-business stance.The harsh rebuttal marks a potential fracture to the entente seen in the first 16 months of the new government. The CCE, led by Carlos Salazar, has become one of the main intermediaries between business leaders and Mexico’s president.In a video press conference on Wednesday, Salazar said there was no “rupture” with the government. The vote, however, had been a “totally mistaken exercise” and there were signs government officials had mobilized votes against the project, he said.‘Reputational Damage’“On all fronts, the vote was illegal,” Gustavo de Hoyos, head of another business group called Coparmex, said during the same conference. “The biggest damage is the reputational damage to the country.”The plant cancellation adds to the president’s pattern of putting political ends over property rights, even it there may be adverse economic effects. Lopez Obrador canceled a partly built $13 billion airport even before taking power in December 2018. He then challenged private sector gas pipeline projects, an issue that was later settled after negotiations with companies. His government has also said it could cut subsidies from private solar and wind parks, an issue that remains outstanding.“Just when you think the Mexican president is ready to make the right decisions for the long-term prosperity of the Mexican people, he shows you how incredibly stubborn he can be,” said Duncan Wood, director of the Wilson Center’s Mexico Institute in Washington.“The spillover effect of the Constellation Brands project is going to be huge,” Wood said. “This is just gonna frighten investors even more than they have been already.”Lopez Obrador’s press office didn’t respond to a request for comment. Earlier Wednesday, Lopez Obrador suggested there may have been wrongdoing involved in the beer factory’s permits, adding that he was not concerned about driving off investment.Constellation Brands CEO Bill Newlands said in a statement on Tuesday that the company “will continue working with local authorities, government officials and members of the community on next steps related to our brewery construction project in Mexicali and options elsewhere in Mexico.”No StimulusLopez Obrador has also been criticized recently by business leaders over his handling of the coronavirus crisis and his refusal to implement stimulus plans to boost a plunging economy. This is a departure from other governments around the world that are rushing to shore up confidence as the virus has killed thousands and disrupted daily life for billions of people.Mexico is facing widespread bankruptcies amid small- and medium-sized firms if it doesn’t offer a more robust plan to support them as parts of the economy shut down, said a former top government official from the previous administration who now represents the private sector. He requested anonymity in order not to disrupt talks with the government.The economy is now seen shrinking 3% this year after a small contraction in 2019, with some analysts warning that the slump could mirror that of the so-called Tequila crisis in the mid-90s, when a currency devaluation sparked capital flight, tanking the nation’s economy and wiping out savings.Carlos Serrano, chief economist for BBVA Mexico, said the Constellation Brands vote was a “worse sign for investment than the cancellation of the airport itself.” Serrano said in a video conference on Wednesday a poor response by the government could deepen the coming recession.Business leaders have become increasingly concerned by the president’s tone in recent days. Instead of a coordinated response from Lopez Obrador’s government -- as seen in Latin American peers like Chile -- they received a lecture earlier this week from Mexico’s president about how there would be no bailouts or tax forgiveness for the private sector during this crisis, as Mexico’s previous “neoliberal” governments had done.“They want us to throw around spending like in the past. Every time there was an emergency: throw money. No, we have to take care of the budget,” Lopez Obrador said Wednesday, repeating his austerity stance. He did say he would offer low or no-interest loans to small businesses.Read More: Mexico President Rules Out Company Bailouts, Requesting IMF Line“We need coordination from authorities,” said Carlos Gonzalez, head of research at Mexican brokerage Monex. “What we have are disjointed actions.”(Adds comments from business leaders in paragraph 7, Constellation Brands statement in paragraph 12 and economist’s comment in paragraph 17)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The world's largest brewer AB InBev has scrapped its 2020 outlook as the scale of the coronavirus crisis has increased. The Belgium-based maker of Budweiser, Stella Artois and Corona had forecast at the end of February that core profit would fall by 10% in the first quarter. At the time, the coronavirus crisis was largely confined to China. But as the scale of COVID-19 has increased, so too have the restrictions imposed on many customers, including social distancing measures in scores of countries and the closure of bars and restaurants. It's not the only drinks group under pressure. French spirits maker Pernod Ricard also warned on Tuesday of a hit of around 20% to its current operating profit. Pernod is the biggest international spirits maker in China, and the world's second-biggest behind Diageo. It had already cut its full-year outlook, but says it is in a solid financial position to be able to cope with the impact of the outbreak - with 3.7 billion dollars available in credit lines.
(Bloomberg) -- Lobbying groups that represent companies including Target Corp., The Clorox Co., and Anheuser-Busch InBev NV, are pushing for an exemption from local gathering bans and curfews in the U.S. so that stores can replenish products that are rapidly disappearing from store shelves.More than four dozen industry groups representing sectors ranging from household products, food and beverages to transportation, are pressing the Trump administration, lawmakers and state and local officials to set a clear framework for consumer goods makers, food processors, distributors and their workers to prevent shortages.The groups -- which include the Consumer Brands Association, the National Milk Producers Federation, the American Bakers Association, the Pet Food Institute, the Beer Institute, the National Council of Farmer Cooperatives and the American Frozen Food Institute -- sent a letter to federal, state and local officials asking for clarity on the types of businesses that are exempt from gathering bans and curfews enacted to slow the spread of COVID-19, the respiratory illness caused by the coronavirus.Some state and local measures are stricter than guidelines issued by the Centers for Disease Control and Prevention (CDC) guidelines, causing confusion among businesses and workers, the letter said.“Some states have clearly exempted food, beverage, and consumer packaged goods manufacturing facilities,” while others have not, the letter reads. “This lack of uniformity is leading to significant confusion and could further deteriorate if a level of consistency across states and municipalities is not achieved quickly.”The letter also requests exemptions for related industries, including transportation, warehousing, distribution centers, and other parts of the supply chain such as grocery and pet-supply stores, as Americans empty shelves of key items like household cleaners, toilet paper and canned foods in fear of the spreading virus.Geoff Freeman, chief executive officer of the Consumer Brands Association, which is leading the effort, said in an interview Tuesday his organization is working with the White House and the Transportation Department, in addition to governors, mayors and county officials.“I haven’t seen an unwillingness to deal with these issues, it’s just the flood of new issues that is so challenging,” he said.Freeman was on a call over the weekend with chief executives from Costco Wholesale Corp., Walmart Inc., Tyson Foods Inc., Cargill Inc., Target and General Mills Inc. and the White House to urge consumers to refrain from panic buying items in mass quantities.The president echoed that message in a press conference Sunday.“There’s no need for anybody in the country to hoard essential food supplies,” Trump said, cautioning against mass grocery store runs “because it’s hard to refill the stores on a basis as rapid as they’re refilling them.”On Monday, Trump tweeted about the call with the grocers, saying, “These beacons of our community will remain open for you, no matter what. We are working hard to remove any barriers to that effort!”After the Sunday call, Freeman sent a letter to the White House with a number of other proposals, including forming a federal Office of Supply Chain to coordinate across agencies “to ensure the movement of essential goods as this crisis evolves,” and temporarily adding personal care, hygiene, cleaning, disinfecting, and sterilization products to low-income assistance programs such as Temporary Assistance for Needy Families (TANF).The Consumer Brands Association is also pressing the State Department and the U.S. Trade Representative to address export restrictions some countries are placing on key ingredients that go into products.One association member, Procter & Gamble Co., which owns labels like Charmin toilet paper, Tide detergent and Swiffer cleaning products, sources thousands of ingredients from 387 suppliers in China alone that end up in 17,600 different products worldwide, according to a company executive.India, which is the leading exporter of generic drugs in the world, has placed export restrictions on 26 active pharmaceutical ingredients, including acetaminophen, the active ingredient in Tylenol. The letter from the group also points to Germany, France, the Czech Republic, Turkey and Russia as countries that have prohibited or limited exports of protective medical gear, including masks.Hospital workers in Washington state -- one of the first areas affected by the outbreak in the U.S. -- are confronting shortages of safety equipment and are crafting their own masks, Bloomberg has reported. Shortages are expected to grow around the country as cases rise.“It would only require a handful of countries taking a similar approach to quickly result in long-term, critical ingredient shortages, which would increase prices and severely limit consumer access to products essential to human health and the response to COVID-19,” wrote Bryan Zumwalt, the Consumer Brand Association’s executive vice president for public affairs, in a letter dated March 15.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Demand for U.S. dollars is so high that now there’s a squeeze in credit markets. And the Federal Reserve knows it.Big corporations from beer brewer Anheuser-Busch InBev SA to Boeing Co. are drawing down billions from their credit lines. Fearful of margin calls and flash crashes, lenders are piling on reserves. Adding to the hair-raising market volatility, banks that typically provide short-term dollar loans are stepping back.To ease the strain in dollar borrowing, the Fed took action Tuesday, restarting a commercial paper funding facility for U.S. corporates. It also allowed banks and broker-dealers that trade directly with the Fed to borrow cash secured against some stocks and higher-rated bonds.But that doesn’t do much to ease funding tightness overseas. For evidence, look no further than currency swaps, which measure how expensive it is to borrow in dollars. If a Japanese bank wants to offer a dollar loan to a client, the bank, pocketful of yen deposits, would typically lend its yen in exchange for an American bank’s dollars using currency swaps. This practice is common across Asian markets — and the costs are soaring.Since the global financial crisis, foreign banks’ dollar lending has ballooned to $12 trillion from $10 trillion, the International Monetary Fund estimates. Lenders abroad like this business because dollar assets tend to offer higher returns and companies prefer to borrow in the currency.Now, this key corner of the funding market is in trouble. The three-month euro-dollar basis swap slumped to as much as negative 122 basis points Tuesday, the widest since December 2011. That’s despite the Fed promising to boost liquidity via its swap line with the European Central Bank just two days earlier. Stocks fell during European trading hours as investors feared a squeeze.If the euro swap’s explosion was just a blip, how about markets without a direct line to the Fed? Dollar liquidity conditions in Asia have been tightening recently, too. In South Korea, the one-year won basis swap widened to about negative 90 basis points, from negative 55 basis points only two weeks earlier. Meanwhile, in Hong Kong, dollar funding is as tight as the 2011 European financial crisis, going by data from cross-currency swaps.In the asset management world, the dollar is still the king. If it’s hard to get a hold of them, that doesn’t bode well for risk assets.Just look at the Korean won, which sank to a 10-year low Tuesday, even though Seoul has been doing a lot of the right things, accumulating its foreign currency reserves and reducing its reliance on short-term external debt. Meanwhile, some Korean stocks have become dirt cheap. The country’s banks, for instance, are trading at only 0.2 times book, data compiled by Bloomberg Intelligence show, making them almost as unloved as the industry’s basket case, Deutsche Bank AG.Then consider Hong Kong. In February, even with China in the throes of the virus outbreak, the dollar bond market stayed afloat, with mainland developers raising a whopping $6.4 billion. But the funding squeeze has changed the calculation entirely: The total value of Chinese dollar bonds yielding above 15% more than doubled from a week ago. That means China Inc.’s borrowers will have to pay a lot more — and, unfortunately, the offshore market is about the only place big enough to place the half-a-billion-dollar issues they rely on.While the Fed has taken action on American soil, it could expand its swap lines with more central banks. It’s understandable that the Fed doesn’t want to be the world’s lender of last resort, but it’s a little too late for that: The dollar greases the pipes of global finance. Funds can’t flow freely if things are clogged on the other side of the Pacific.In its latest financial stability report from October, the IMF worried about the role foreign banks serve in dollar funding. Currency swaps tend to be short-term, volatile and costly, it warned. The coronavirus is only drawing out that instability.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- European companies were running to stand still even before they started worrying about the impact of the coronavirus. If investors weren’t preoccupied with the disease, the corporate sector’s weak growth, poor profitability and tendency to do overpriced acquisitions would be front of mind. Ad group WPP Plc failed to grow underlying sales last year and was guiding for another flat performance in 2020 even before the coronavirus spread. Brewer Anheuser-Busch InBev SA made less profit in the last three months of 2019 than analysts expected. Reckitt Benckiser Group Plc’s new chief executive officer completed a kitchen sinking on Thursday by taking a 5 billion-pound ($6.5 billion) writedown on a $17 billion acquisition led by his predecessor. He also admitted that profit margins — fueled by one cost-cutting deal after another — were unsustainable. Investors are meanwhile being asked to bail out past mistakes. German pharma group Bayer AG cautioned that it may need to raise some equity to settle lawsuits relating to the Roundup glyphosate weedkiller inherited with its overpriced $66 billion acquisition of Monsanto Co. Aston Martin Lagonda Global Holdings Plc priced an emergency equity offering at 89% below the price of the luxury carmaker’s 2018 initial public offering, having failed to match its capital structure to its business plan.It’s tempting to dismiss each of these situations as company specific. But they collectively reinforce the impression that the corporate cycle has peaked, growth expectations are elevated, IPOs were done at undeserved prices and acquisitions made in the recent past may not deliver as promised. The owner of WeWork may have failed to list in New York last year, but attempting such an ambitious IPO still had a very top-of-the-market feel.The valuation of the European stock market, at about 14.5 times forward earnings, leaves little margin for error, say analysts at UBS Group AG. If this year’s earnings are 2% lower than expected, the market would be trading at its historical average, they say. The snag is that this is a small cushion given earnings expectations have been coming down in recent months. For their part, the UBS analysts caution that consensus earnings estimates are still too high.The immediate priority for European CEOs right now is to protect their workforces and defend their businesses while marshaling a proportionate and reasoned response to the threat of the coronavirus. When that challenge abates, they will have to return to addressing weak growth and pressure on profitability. That will in turn sustain the incentive to do M&A as a means of supporting earnings through cost-cutting, with all the risk of overpaying and writing down the acquisition years later. On the latest evidence, that cycle is hard to break out of.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The selloff isn't over. European shares fell again on Thursday (February 27). Governments around the world ramped up measures to battle the coronavirus as the number of infections outside China for the first time surpassed those within the country. Multiple blue-chip companies issued profit warnings, with Standard Chartered tumbling 3.4% The Asia-focused bank said that a key earnings target would now take longer to meet. Meanwhile the world's largest beer maker, AB InBev dropped 5.6% after forecasting muted growth in 2020 - due in part to the outbreak The pan-regional STOXX 600 index fell over 2% in early trade - bracing for its worst week in four years. Travel & leisure stocks slumped 3.3%, for a sixth straight session of losses, as airlines and hotel groups dropped on concerns over demand. Weak earnings reports also dampened the mood. Advertising major WPP slid 13.6% after saying it would target flat organic growth and profit margins in 2020. In Asia stocks in China and Hong Kong rose slightly as the country reported fewer deaths due to the virus. Beijing also continued to signal more support to underpin the domestic economy, But that didn't help the global fears over contagion, keeping any gains in check.