AB Inbev

AB InBev posted the first annual decline in its key earnings measure since its formation more than a decade ago and said top executives including CFO Felipe Dutra would not receive bonuses for 2016 because of its “disappointing” performance.

For 2015, the members of AB InBev’s executive board of management received a total of $17.96 million in variable compensation, including $3.29 million for CEO Carlos Brito.

But on Thursday, the world’s largest brewer reported that core profit (EBITDA) fell 0.1% in 2016, to $16.7 billion, and net sales rose only 2.4%.

“We operate with an ownership mindset and believe management incentives must be aligned with shareholders’ interests,” AB InBev said in a news release. “When we do not meet our objectives, we take responsibility for it. Performance has been disappointing in FY16, and as a result, most of the executive board of management will not receive bonuses this year.”

For the fourth quarter, EBITDA fell 3.6% to $5.25 billion, well below the $5.58 billion expected in a Reuters poll of eight analysts. The results reflected in large part lower sales and increased costs in recession-plagued Brazil, AB InBev’s second-largest market.

Excluding Brazil, the company said core profit in the fourth quarter would have risen 6.4% and, for the year as a whole, beer sales would have fallen by 0.1%, rather than the 1.4 percent decline reported.

“We all knew that Brazil was going to be a basket case again because they told us so, [but] it’s still even more of a basket case than everyone was anticipating,” Andrew Holland, beverage analyst at Societe Generale, told Reuters.

AB InBev said “the challenging environment in Brazil has put pressure on the consumer and impacted our results,” adding that “Brazil beer volumes were down, revenues suffered and costs of sales rose compared with FY15 due to devaluation of the Brazilian real.”

The company cited “a number of silver linings,” including double-digit top-line growth in Mexico, 4.5% revenue growth in Europe, and EBITDA growth of 2.2% in the U.S. “Despite a decline in Chinese beer industry volumes, we continued to make gains in market share and profitability,” it added.

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