BNPP Exane View
Q2 volumes (which appears to be the big focus for the market this earnings season) are materially below consensus (company compiled) expectation (-160bp miss). The volume miss was most driven by South America where Brazil beer vols declined -9.0% (ABI cites adverse weather and underperformance of a soft industry) but volumes were also below cons. expectation across all regions other than North America which itself arguably benefited from some phasing benefit in the US. Overall, with USD EBITDA only a modest (c.-1%) miss and EPS ahead, in a typical results seasons we would call the shares down c.-2 to -3%% but given the recent market reactions to even small Staples vol. misses we expect a meaningful decline this morning. We call down -MSD (could be even more).
Headline metrics
. LFL: +3.0% (co. cons: +3.2%)
. Vol: -1.9% (co. cons: -0.3%)
. Rev./HL: +4.9% (co. cons: +3.5%)
. Sales: USD15,004m (-1.7% vs. co. cons.)
. EBIT: USD4,013m (+1.3% vs. co. cons.)
. EBITDA: USD5,301m (-0.8% vs. co. cons.)
. LFL EBITDA: +6.5% (co. cons. +5.7%)
. EBITDA margin (%): 35.3% (co. cons. 35.0%)
. EPS (basic, underlying): USD0.98 (+2.8% vs. co. cons.)
Top-line drivers
Scanning the top-line drivers by region, we note that while LFL sales for Q2 came in broadly in-line with consensus expectations (+3.0% vs. co. cons. +3.2%), primarily driven by stronger growth in North America (+2.2% vs. co. cons. -1.5%), group Q2 volume growth came below consensus (-1.9% vs. co. cons -0.3%), led mainly by South America (-4.9% vs. co. cons. -0.2%). Q2 volumes also missed in EMEA (+0.9% vs. co. cons +2.7%), Asia Pacific (-6.6% vs. co. cons. -5.4%) and Middle Americas (+1.1% vs. co. cons. +1.7%). Volume in North America were materially (+0.3% vs. co. cons. -3.0%) ahead but appeared to benefit from some phasing in the US.
ABI comments on Q2 volume growth of +0.7% outside of China and Brazil.
Note: US LFL sales grew +2.1% (cf. Q1 -5.1%) and within this STWs grew +0.2% (Q1...
