An investor in shares of Anheuser-Busch InBev SA/NV (NYSE: BUD) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Anheuser-Busch InBev SA/NV in connection with certain allegedly false and misleading statements made between March 1, 2018 and October 24, 2018.
Belgium based Anheuser-Busch InBev SA/NV, a brewing company, engages in the production, distribution, and sale of beer, alcoholic beverages, and soft drinks. On March 19, 2018, Anheuser-Busch InBev SA/NV reported its financial results for its fiscal year 2017. Anheuser-Busch InBev SA/NV reported that its annual Total Revenue rose from over $45.51 billion in 2016 to over $56.44 billion in 2017 and that its Net Income increased from over $1.24 billion in 2017 to over $7.99 billion in 2018.
On October 25, 2018, Anheuser-Busch InBev SA/NV reported its financial results for the quarter and nine-month periods ended September 30, 2018, announcing that it had cut its dividend by 50% to “accelerate deleveraging toward our optimal capital structure of around 2x net debt to EBITDA ratio.”
Shares of Anheuser-Busch InBev SA/NV (NYSE: BUD) declined to as low as $64.55 per share in late December 2018.
On March 22, 2019, Anheuser-Busch InBev SA/NV reported its annual report for its financial year ended December 31, 2018. Anheuser-Busch InBev SA/NV reported that its annual Total Revenue declined from over $56.44 billion in 2017 to over $54.61 billion in 2018 and that its Net Income declined from $7.99 billion in 2017 to $4.36 billion in 2018.
According to the complaint the plaintiff alleges on behalf of purchasers of Anheuser-Busch InBev SA/NV (NYSE: BUD) common shares between March 1, 2018 and October 24, 2018, that the defendants violated Federal Securities Laws.
More specifically, the plaintiff claims that between March 1, 2018 and October 24, 2018, the defendants failed to disclose, among other things, that cost-cutting measures the Company had put in place had run their course; the devaluation of key emerging market currencies and input cost inflation was having a material adverse effect on the Company’s margins, EBITDA and profitability; Anheuser-Busch had been experiencing less than expected growth and profits in certain key markets; Anheuser-Busch was not going to be able to maintain its then current dividend and still meet its deleveraging targets; and Anheuser-Busch was at risk of having its credit ratings downgraded.