Q4 slowdown exacerbated by rising costs Q419 organic EBITDA -5.5% is worse than consensus of -1.9%, with organic sales in-line at +2.5% (consensus +2.6%), as costs accelerated in the final quarter. Commodity costs and transactional FX headwinds were the highest they have been for ABI in a decade. As flagged earlier in the year, multiple markets slowed in Q4 which made it harder to recover that cost inflation. FY19 normalized EPS of $4.08 compared to consensus of $4.47, implying a c. 9% miss (underlying EPS also missed by a similar amount, due to the margin contraction and mark to market. Management states (over several pages) that they are not pleased with the results, which were below their expectations, and that actions will be taken to improve performance. The FY20 outlook for 2-5% organic EBITDA growth – which includes the estimated impact of coronavirus – is slightly below consensus of +5.7%, but we believe the market is already expecting consensus to come down further given the company’s exposure to China. In Q120, EBITDA is expected to be down around 10%. Top-line over FY20 is guided to be more balanced between volume & rev/hl (FY19 was more rev/hl weighted), and cost of sales/hl is expected to be up mid-single digits (it was +5.9% in FY19). The conference call is at 2pm UK time, as usual. US remains subdued The US market, ABI’s largest, remains under pressure. In Q4, sales to retailers were flat while sales to wholesalers were 2.6%. Hard seltzer continues to take share from Beer. Other key markets Volumes in China were -6.6% in Q4, with EBITDA +10.1%. The weak volume performance was due to the clampdown on the nightlife channel, while brand mix and cost discipline drove margins. In the first 2 months of Q1, $285m sales and $170m of EBITDA has been lost in China due to the coronavirus outbreak. The Brazilian beer market continues to rebound, but cost inflation caused EBITDA there to fall by 6.3% in Q4. Balance sheet Net debt/EBITDA fell to 4.0x after accounting for the sale of the Australian operations, which was announced last year. The dividend was maintained at €1.80/share.