Revenue growth: Revenue grew by 2.3% in 3Q14 and by 5.3% in 9M14, with revenue per hl growth of 5.0% in 3Q14 and 4.5% in 9M14. On a constant geographic basis, revenue per hl grew by 4.9% in 3Q14 and by 5.2% in 9M14.
Total volumes in 3Q14 declined by 2.6%, with own beer volumes decreasing by 2.7%, while non-beer volumes declined by 0.9%.
US beer sales-to-wholesalers (STWs) declined by 3.7%, with selling-day adjusted sales-toretailers (STRs) declining by 1.9%.
Volumes in Mexico grew by 2.9%, with strong performances by Corona, Bud Light and Victoria. Beer volumes in Brazil grew by 0.2%, being impacted by a soft consumer environment. Volumes in China declined by 4.9%, mainly due to cold temperatures in August and September.
In 9M14, total volumes grew by 0.8%, with own beer volumes up 0.6% and non-beer volumes up 2.6%.
Focus Brands: Volumes of our global brands grew by 3.1% in 3Q14, led by global Corona which grew by 6.7%, and global Budweiser which grew by 2.8%. Our total Focus Brands volumes declined by 1.0% in the quarter.
Cost of Sales: Cost of Sales (CoS) increased by 2.9% in 3Q14, and by 5.6% on a per hl basis, driven by higher depreciation charges related to recent investments in Brazil, and additional packaging costs in Mexico related to higher than expected demand for Corona. In 9M14, CoS grew by 1.8%, and by 1.0% on a per hl basis. On a constant geographic basis, CoS per hl increased by 6.7% in 3Q14 and by 2.6% in 9M14.
EBITDA: EBITDA grew by 1.3% in 3Q14 to 4 745 million USD, with a margin contraction of 37 bps to 38.8%. A strong revenue per hl performance in the quarter was partly offset by the difference between STWs and STRs in the US, the phasing of our revenue management initiatives in Brazil, and a very tough comparable in Mexico cost synergies. In 9M14, EBITDA grew by 6.9% to 13 476 million USD with a margin of 38.5%, an improvement of 59 bps.
Net finance costs: Net finance costs (excl. non-recurring net finance costs) were 366 million USD in the quarter, compared to 562 million USD in 3Q13, driven by lower interest expense and currency gains, while 3Q13 net finance costs included negative currency results.
Income taxes: Income tax expense in 3Q14 was 684 million USD, with a normalized effective tax rate (ETR) of 19.7%, compared to an income tax expense of 699 million USD in 3Q13 and a normalized ETR of 21.3%. The normalized ETR in 9M14 was 18.9% compared to 18.1% in 9M13.
Profit: Normalized profit attributable to equity holders of AB InBev increased in nominal terms to 2 315 million USD in 3Q14 from 2 205 million USD in 3Q13. Normalized profit attributable to equity holders of AB InBev increased in nominal terms to 6 345 million USD in 9M14 from 5 562 million USD in 9M13.
Earnings per share (EPS): Normalized EPS increased to 1.42 USD in 3Q14 from 1.36 USD in 3Q13. Normalized EPS increased to 3.89 USD in 9M14 compared with 3.45 USD in 9M13.
Interim Dividend: The AB InBev Board has approved an interim dividend of 1.00 EUR per share for the fiscal year 2014. The shares will trade ex-coupon as of 12 November 2014, and dividends will be payable as from 14 November 2014. The record date will be 13 November 2014.
This quarter was marked by a solid underlying commercial performance in our top markets, with revenues growing by 2.3%, and revenue per hl growing by 4.9%, on a constant geographic basis. However, EBITDA grew by only 1.3%, as a result primarily of: the difference between STWs (-3.7%) and STRs (-1.9%) in the US; the phasing of our revenue management initiatives in Brazil (beer net revenue per hl growing by only 1.2%); and a very tough comparable in Mexico cost synergies which represents approximately four percentage points of organic EBITDA growth at the consolidated level.
We believe that the third quarter was a one-off in terms of EBITDA performance, and is not reflective of expected future trends for the business. We have a clear strategy built around long term sustainable topline growth, and are pleased with the direction in which we are heading. We gained market share at the consolidated level, both in the quarter and in the nine months, with strong performances in Brazil and China, in particular, as well as improved share trends in the US, based on our estimates.
Our own beer volumes declined by 2.7% in the quarter, with Europe accounting for over 40% of this decline driven by Russia and Ukraine. However, we saw good progress in all four of our top markets:
? In the US, our market share showed good improvement, declining by 30 bps compared to 65 bps in the second quarter, with good performances from Bud Light, Michelob Ultra, and our high end brands. We are also pleased that our investments in the On-premise are starting to deliver results
? Our beer volumes in Mexico grew by 2.9%, the best volume performance since the closing of the combination with Grupo Modelo, with growth being driven by Corona, Bud Light and Victoria
? We gained 100 bps of market share in Brazil, reaching 69.0%, with our beer volumes marginally ahead of the same period last year, despite a soft consumer environment. We continue to benefit from the momentum built by our mainstream brands during the FIFA World Cup, as well as strong volume growth from our premium brand portfolio, especially Budweiser
? In China, our Focus Brands continue to perform well. Our market share increased organically by 70 bps to 15.7% in the first nine months of the year, and to 16.5% when including our recent acquisitions, based on our estimates. Industry beer volumes in China were impacted significantly by record cold temperatures in August and September, in contrast to record high temperatures last year. We are continuing to invest behind our brands, with our Global and Focus brands performing ahead of the total portfolio. Volumes of our Global Brands grew by 3.1%, with particularly strong performances from Corona and Budweiser.
