---
title: "Budweiser APAC Releases 2019 Financial Report: Revenue $6.546 Billion, Losing Nearly 2 Billion Yuan Due to COVID-19"
description: "On February 27, Budweiser APAC released its 2019 financial report, its first since listing on the Hong Kong Stock Exchange. The report showed revenue of $6.546 billion, up 1.8%, missing market expectations, while sales volume and profit declined, partly due to the impact of COVID-19 in early 2020."
author: "鲸落"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2020-02-29"
categories: "Capital, Earnings & M&A"
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# Budweiser APAC Releases 2019 Financial Report: Revenue $6.546 Billion, Losing Nearly 2 Billion Yuan Due to COVID-19

> On February 27, Budweiser APAC released its 2019 financial report, its first since listing on the Hong Kong Stock Exchange. The report showed revenue of $6.546 billion, up 1.8%, missing market expectations, while sales volume and profit declined, partly due to the impact of COVID-19 in early 2020.

On February 27, Budweiser APAC released its 2019 financial report. According to Budweiser's own statement in the report, 2019 was a historically significant year for the company, as it successfully listed on the Hong Kong Stock Exchange, making this its first financial report since listing. However, the report clearly shows that Budweiser's performance last year was not ideal. According to the report, for the full year of 2019, Budweiser APAC achieved revenue of $6.546 billion, an increase of 1.8%, falling short of the market expectation of $6.638 billion. In terms of sales volume, the company's total sales volume was 9.317 billion liters, a year-on-year decrease of 3%. Profit attributable to equity holders decreased from $958 million in 2018 to $898 million, below the market expectation of $968 million.

**-01- Declining Profit and Sales**
Budweiser APAC's first post-listing financial report saw both profit and sales decline, making this Hong Kong-listed newcomer, which had a turbulent path to listing, seem "not living up to its valuation" compared to previous estimates. However, it can be seen that despite declines in net profit and sales volume, revenue increased. According to Budweiser, the main reasons for this result are: first, the decline in net profit was mainly due to the company's normalized EBITDA growth being insufficient to offset the increase in tax expenses and the negative impact of translation exchange rates. The decline in sales volume was mainly attributed to the impact of the Korean and Chinese markets. Due to the severe competitive environment in Korea and the continued weak performance of the nightlife channel in China (especially in the second half of 2019), total sales volume decreased by 3.0%. However, in fiscal year 2019, driven by the premiumization strategy implemented across various markets, revenue per hectoliter increased by 4.9%, and even in China, revenue per hectoliter grew by 6.4%. In other words, due to Budweiser's premiumization route, unit prices rose, so while profit and sales declined, revenue increased slightly. Moreover, Budweiser cited Nielsen data in the report: "In fiscal year 2019, we once again became the leader in the premium and super-premium categories in the retail channel, with market share growth faster than any other brewer."

**-02- Premium and Super-Premium Performance**
Although Budweiser believes its continued premiumization strategy is the right direction, it must be pointed out that in the Chinese market, the "premium portfolio" led by Budweiser recorded a low single-digit decline in sales volume in fiscal year 2019. Budweiser attributed this to the weak performance of the nightlife channel, where Budweiser is the leading brand, and stated that it has increased commercial investment to accelerate the brand's expansion into other channels. In contrast, the super-premium portfolio led by Corona, Blue Girl, and Hoegaarden achieved strong double-digit sales volume growth. It is understood that Corona became the number one super-premium brand in sales volume in 2019, while Blue Girl's sales volume exceeded 100 million liters that year. Budweiser APAC stated that Corona also launched a series of experiential marketing campaigns last year, such as the Tmall Double 11 "Island & Idol" event and the "Make Your Winter A Summer" national experience campaign. Blue Girl, on the other hand, supplemented its existing classic lager portfolio in the super-premium segment. With the market access of its super-premium portfolio and the exclusive sales and marketing resources owned by the premium company, Budweiser is very optimistic about Blue Girl's further development potential in China. Additionally, the company mentioned that China is Hoegaarden's largest market globally by revenue. The new Hoegaarden Rosé product launched in China last year was well received by female consumers and in mixed-gender social occasions, driving strong growth. The author also found in the financial report that despite the weak nightlife channel, Budweiser APAC performed quite well in the e-commerce channel, achieving double-digit sales volume growth. It should also be noted that during the Double 11 event, Budweiser was the number one beer brand in retail sales on Tmall and JD.com, and its brands Corona, Hoegaarden, and Harbin were among the top five beer brands with the highest sales on Tmall and JD.com.

**-03- Losing Nearly 2 Billion Yuan Due to COVID-19**
In the financial report, Budweiser also estimated for the first time the impact of the epidemic on its China business. "As far as we can see, the nightlife channel has almost ceased activity, and restaurant activity is also very limited. Secondly, we have also noticed a significant decrease in demand from retail channels (such as modern trade and traditional trade), but the e-commerce channel is an exception, with demand accelerating significantly," the company pointed out. According to institutional research reports, the impact of this epidemic on the beer industry mainly comes from the on-premise segment. Due to the epidemic, restaurants and nightlife venues are basically closed, and beer consumption in such scenarios is almost zero, which is the main impact on the industry. In the off-premise segment, household consumption demand may be stimulated, and it is expected that this part will be less affected. Budweiser APAC estimates that compared with the same period in 2019, China's revenue in the first two months of 2020 will naturally decrease by approximately $285 million (approximately RMB 1.997 billion), and normalized EBITDA will naturally decrease by approximately $170 million (approximately RMB 1.191 billion). However, Jan Craps, Co-Chairman and CEO of Budweiser APAC, said, "Since the future depends on the control of the epidemic and the speed at which customers resume operations, it is currently difficult to estimate the impact of the epidemic in the coming months. The duration of the negative impact depends on when our customers (including nightlife venues, bars, restaurants, and supermarket chains) resume operations." Fortunately, according to Budweiser, as of the release of the financial report, more than half of its breweries had been reopened, and all breweries except the Wuhan brewery had obtained permits.

**-04- Outlook**
In its outlook, Budweiser APAC revealed, "Revenue in the first half of 2020 will also be difficult to compare with the same period last year. We continue to increase commercial investment to support our brands, and we have seen results in certain channels (such as retail)." Budweiser will continue to increase its brand penetration online through unique e-commerce packaging. Through close partnerships with new retail and O2O platforms (including Hema, Ele.me, and Meituan), it aims to provide consumers with fast product delivery services. Additionally, the company stated, "Our employees are the owners of the company. During this difficult time, we have reallocated resources where possible to support our business partners and consumers, and to prepare for a strong market recovery afterward." The company remains committed to developing the Chinese market, and with its unique brand portfolio, excellent marketing channels, and adaptable team, Budweiser remains optimistic about business growth after the epidemic.


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## Citation metadata

- Publisher: New Distribution
- Author: 鲸落
- Published: 2020-02-29
- Canonical: https://xinjignxiao.com/en/articles/budweiser-apac-releases-2019-financial-report-revenue-6-546-billion-losi-07d357f3/
- Original source: https://mp.weixin.qq.com/s/xj4qkpJ8SBItGGYQVHdfWA

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