Brewing giant AB InBev reveals cost-cutting drive after takeover deal
Budweiser brewing giant Anheuser-Busch InBev will ramp up cost savings from its £79 billion mammoth takeover of SABMiller.
AB InBev revealed aims to increase savings by 14% to 2.8 billion US dollars (£2.3 billion) in a move that will likely raise fears over further job cuts.
The group is already expected to axe around 5,500 jobs, around 3% of its combined workforce, as a result of the merger, which completed in September and made history as the UK's biggest ever corporate deal.
Details of the cost savings came as AB InBev announced annual results showing a slide in profits and a weak end to 2016 after tough trading in its second largest market, Brazil.
Underlying earnings fell 0.1% to 16.8 billion US dollars (£13.7 billion), dragged lower by a worse-than-expected 3.6% drop to 5.25 billion US dollars (£4.3 billion) in the final three months of last year.
ABInBev said it had no update on planned job cuts, saying the extra cost savings are expected to come from buying and other so-called synergies.
It confirmed the integration of Fosters and Peroni brewer SAMiller was already "well under way".
It added the new cost savings target included 1.05 billion US dollars (£854 million) that SABMiller had already announced.
The group said it had already made 829 million US dollars (£675 million) of savings, with the remainder expected to come in the next three to four years.
ABInBev is now more than double the size of its closest rival Heineken following the merger, with more than 500 beer brands.
But the annual figures took the shine off 2016 for the group, which ABInBev said was a "difficult year".
"A challenging environment in Brazil has put pressure on the consumer and impacted our results," it added.
It was hit by a downturn in Brazil, where sales of beer volumes dropped heavily, plunging by 17% quarter-on-quarter in the final three months, as the country suffers amid its worst recession in years.
Overall, group-wide beer sales by volume fell 2% after a 3.3% slide in the fourth quarter.
But ABInBev said it was "confident" over its future as a merged company.
It added: " In 2016, we laid a solid foundation, and now in 2017, our first full year as a new company, we will build a bridge from the old AB InBev to the company we aspire to be."