📚 Earnings – Q3 2026
• 🔴 Net sales: $2,926.5 million, a decrease of 1.6% year-over-year (-1.2% at constant exchange rates).
• 🔴 Financial volume: down 3.0%. Brand volume declined by 4.9%, reflecting weaker demand in both geographic segments.
• 🟡 Price and mix: a positive contribution of 1.8% to sales, thanks to price increases in the Americas and the premium product mix in EMEA and APAC. Revenue per hectoliter increased by 1.8% at constant exchange rates.
• 🔴 Cost of sales: increased by 5.3% on a reported basis. The cost per hectoliter rose by 8.6%, due to inflation in raw materials, logistics, and manufacturing, as well as lower cost absorption resulting from declining volumes.
• 🟢 Marketing, general, and administrative expenses: decreased by 7.7%, thanks to cost-cutting and restructuring measures.
• 🔴 Underlying pre-tax profit: $349 million, a decrease of 17.4% at constant exchange rates.
• 🔴 Underlying diluted EPS: $1.46, compared to $1.67 in the same quarter of 2025, a decline of 12.6%.
• 🟢 GAAP net income attributable to shareholders: $271.5 million, equivalent to $1.45 per share. The strong improvement compared to the losses in 2025 is distorted by the extraordinary write-downs recorded at that time; therefore, it does not reflect an equivalent improvement in the underlying business.
• 🟢 Underlying free cash flow: $852 million in the first nine months, compared to $782.1 million in 2025.
• 🟡 Net debt: $5,393.6 million, with a net debt/underlying EBITDA ratio of 2.53 times, compared to 2.28 times a year earlier.
📌 Key Points
• 🔴 The main problem remains the decline in volumes. Brand volume fell 4.9% in the quarter, with declines of 5.3% in the Americas and 3.8% in EMEA & APAC.
• 🔴 The pressure is particularly evident in the United States, where brand volume fell 5.6%, impacted by weakness in core and value brands, as well as a challenging industry environment.
• 🔴 The pricing and premiumization strategy is helping to partially offset the loss in volume, but it is not enough to counteract rising costs. The cost per hectoliter rose 8.6%, well above the improvement in revenue per hectoliter.
• 🟡 The reduction in general and administrative and marketing expenses demonstrates that efficiency measures are making progress. However, the savings do not yet offset the combination of lower volumes and cost inflation.
• 🟢 EMEA & APAC show a somewhat more favorable trend in quarterly profitability: underlying pre-tax profit increased by 5.5% at constant exchange rates, supported by lower overhead costs. Nevertheless, sales fell by 2%, and the cumulative nine-month results continue to show weakness.
• 🟢 Cash generation remains a relatively strong point: underlying free cash flow reached $852 million in the first nine months, an increase of $69.9 million compared to the previous year.
• 🟡 Leverage remains manageable, although it has increased: net debt remains virtually stable compared to September 2025, but the net debt/EBITDA ratio has risen from 2.28x to 2.53x due to the decline in EBITDA.
• 🟡 The Horizon 2030 program aims to strengthen brands, simplify the cost structure, and improve commercial execution. Management believes the measures are heading in the right direction but acknowledges that they do not yet have sufficient scale to offset headwinds.
📊 Outlook for 2026
The company has revised its full-year forecasts downward:
• 🔴 Net sales: a decline of 1% to 2% at constant exchange rates, compared with the previous forecast of roughly flat (-1% to +1%).
• 🔴 Underlying pre-tax profit: a decline of 21% to 24% at constant exchange rates, compared to the previously forecast decline of 15% to 18%.
• 🔴 Underlying EPS: down 16% to 19%, compared to the previous range of 11% to 15%.
• 🟡 Underlying free cash flow: target of approximately $1,000 M, with a margin of ±10%, compared to the previously forecast $1,100 M.
• 🟡 Capital expenditures: around $650 million, with a margin of ±5%.
• 🔴 The company expects the weakness in the beer market observed during the second and third quarters to continue into the fourth quarter.
• 🔴 Raw material and logistics costs will remain high. The adverse impact of Midwest Premium is estimated at approximately $130 million for the full year.
💬 Management Comments
CEO Rahul Goyal noted that the Horizon 2030 initiatives are laying the groundwork to improve brand performance, transform the portfolio, and streamline the cost structure. However, he acknowledged that the results of these measures do not yet have sufficient scale to offset the challenges experienced during the third quarter.
CFO Tracey Joubert emphasized that macroeconomic pressures, cost inflation, and weaker consumer spending are likely to continue affecting the business in the short term. She also argued that the company’s financial strength and balance sheet allow it to maintain strategic investments while navigating this period.
Assessment:
Clearly weak results from an operational standpoint. Falling volumes, rising unit costs, and downward revisions to forecasts are signs that justify the market’s negative reaction. Cash generation and the ability to cut expenses offer some support, but they do not yet offset the deterioration of the business. The most concerning figure is not the 1.6% drop in sales, but rather that the cost per hectoliter rose 8.6% while branded volumes fell 4.9%. Furthermore, the downward revision of forecasts affects both earnings and free cash flow. This quarter weakens the case for a short-term recovery, although it does not in and of itself imply that the business has lost its ability to generate cash.
