The change of coach failed, and Budweiser Asia Pacific's quantity and price both decreased in the first quarter
On the evening of May 7th, Budweiser Asia Pacific (01876. HK) disclosed its first quarter report, with multiple core performance indicators showing a decline during the period.
During the reporting period, the company's sales volume was 1.974 billion liters, a year-on-year decrease of 6.1%; Revenue of 1.461 billion US dollars, a year-on-year decrease of 7.5%; The gross profit was 745 million US dollars, a year-on-year decrease of 11.94%; The net profit attributable to the parent company was 234 million US dollars, a year-on-year decrease of 18.47%.
The sustained downturn in the Chinese market is a key factor affecting performance.
At present, Budweiser's Asia Pacific business map is divided into two major regions: the eastern and western regions. The former focuses on the Korean market, while the latter covers important markets such as China and India.
By comparison, the East Asia Pacific region showed strong growth momentum in the first quarter, with sales and revenue increasing by 11.9% and 11.7% year-on-year, respectively. Normalized earnings before interest, tax, depreciation, and amortization increased by 24.4%. Among them, the sales and revenue in the Korean market have achieved double-digit growth.
On the other hand, in the western Asia Pacific region, there is a sharp contrast in performance.
In the first quarter, sales and revenue in the region decreased by 8.6% and 11.7% year-on-year, respectively; Revenue per 100 liters decreased by 3.4%, while normalized earnings before interest, tax, depreciation, and amortization decreased by 17.6%.
As a core market in the western Asia Pacific region, China's sales decreased by 9.2% due to the continued weak performance of business layout and ready to drink channels, as well as inventory management measures. Among them, inventory management measures account for about a quarter of the sales decline; Due to a high base and unfavorable regional and channel combinations, revenue sharply decreased by 12.7%, and revenue per 100 liters also decreased by 3.9%, resulting in a simultaneous decline in both quantity and price. This led to a 17.1% decrease in normalized earnings before interest, tax, depreciation, and amortization.
From the perspective of history and market size, China has long been an important market for AB InBev Asia, and poor performance in this market directly affects the performance of the western Asia Pacific region and even the entire company.
In fact, the downturn in the Chinese market did not last a day.
According to a research report by Haitong International, from 2018 to 2024, the compound annual growth rate (CAGR) of Budweiser Asia Pacific's sales in China was -2.6%. During the same period, the CAGR of beer production by enterprises above designated size disclosed by the National Bureau of Statistics was -1.3%, reflecting the declining market share of Budweiser Asia Pacific in the Chinese beer market.
In 2024, this decline will intensify, with Budweiser Asia Pacific's sales in the Chinese market plummeting by 11.8% and its market share shrinking by 1.49 percentage points; Revenue and revenue per 100 liters decreased by 13% and 1.4% respectively, directly putting pressure on the overall performance of the company.
The overall performance has declined, and Budweiser Asia Pacific has also launched personnel optimization measures. In 2024, the company will employ over 21000 employees, while in 2023, this number will remain at around 25000, a decrease of approximately 4000 employees. At the beginning of 2025, it was revealed that Budweiser Asia Pacific would lay off thousands of employees, but the company later denied the news.
In order to reverse the declining performance, Budweiser Asia Pacific has also taken consecutive measures at the management level.
According to a research report, Fabio Sala, the new president of Budweiser China, will take office on January 1, 2025. He is a Brazilian who has been working in the European market for a long time; The Chief Strategy Officer (CSO) has also been succeeded by the former head of the East China region.
On April 1st, Cheng Yanjun, a senior brewer with 29 years of experience at Budweiser and expertise in supply chain operations, was officially appointed as the CEO and Co Chairman of Budweiser Asia Pacific.
Behind this series of personnel adjustments, it reflects Budweiser Asia Pacific's determination to adjust its business in China. Former CEO and Co Chairman of the company, Yang Ke, also stated at the performance meeting that the top priority for the Chinese team in 2025 is to achieve market share growth.
Now, this' cold 'first quarter report has sounded the alarm for AB InBev Asia Pacific, as we enter the peak season for the sale of eoe beer, which is also a critical window for performance sprint. The outside world is curious whether the new management can lead the company to' turn the tide '?
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