Anheuser-Busch Optimistic About US Sales, Profitability
22 Fevereiro 2008 - 4:00AM
UK Regulatory
Anheuser-Busch Optimistic About U.S. Beer Sales and Profitability
BOCA RATON, Fla., Feb. 22 -- Anheuser-Busch (NYSE: BUD) management reviewed
the company's strategies to accelerate U.S. beer sales and profitability, and
reaffirmed the company's 7 to 10 percent long-term earnings growth objective, in
a presentation given at the Consumer Analyst Group of New York Conference today.
"Over the past year, we have broadened our portfolio to enhance our
participation in faster-growing high-end categories and initiated a major
transformation of our selling system to better position our company for
long-term growth. Our top priority in 2008 is to accelerate core beer sales
and profitability," August A. Busch IV, president and chief executive officer
of the company, said to the investors and analysts.
There has been an acceleration in consumer demand for beer over the past
two years and the company aims to capitalize on the improved growth of the
U.S. beer industry. Based on an extensive consumer research effort, the
company has fine-tuned its marketing messages, and redirected and enhanced its
marketing and media resources to meet the demands of a changing marketplace.
The company plans to increase total media spending by 10 percent in 2008 and
will focus its national media spending on fewer brands, emphasizing those like
Budweiser and Bud Light that benefit the most from large scale media exposure.
This strategy includes more frequent updates of ad creative and increased
media weight, especially over the key summer selling months.
The company's consumer research efforts have also identified promising
opportunities for innovative new products, such as Bud and Bud Light Chelada,
and Landshark Lager, which have been rolled out nationally in the first
quarter, and Bud Light Lime, which will be launched nationally on May 5th.
The company is confident it will achieve improved performance for
Anheuser-Busch produced brands in 2008. Through mid-February, the company's
total wholesalers' sales-to-retailers increased 1.9 percent, with
Anheuser-Busch produced brands up 0.6 percent.
In addition to volume, effective revenue and cost management are also key
to accelerating U.S. beer company profit growth. Management views the U.S.
beer pricing environment as favorable and the company's price increase plans
for 2008 have now been largely implemented. A strong revenue per barrel
performance is expected in 2008, with the increase on core brands greater than
in 2007. Cost pressures continue, however, particularly for brewing
materials. Anheuser-Busch has a strong track record of consistently
generating significant annual productivity improvement savings. Productivity
improvement and supply chain savings to mitigate commodity cost pressures are
a very high priority for the company this year. The company has expanded its
"Blue Ocean" brewery cost reduction initiative to drive additional cost
savings and process improvements across all areas of the company.
Busch also provided highlights of the company's international beer
business, which is a significant contributor to Anheuser-Busch's consolidated
earnings growth. The majority of international beer profits are driven by the
company's 50 percent investment in Grupo Modelo, the leading brewer in Mexico
and the brewer of Corona, the leading U.S. import brand. The company is also
well established in China, the largest and fastest growing beer market in the
world, and particularly well-positioned in the country's most profitable beer
segments. Budweiser is by far the leading super-premium brand in China and
will be the official international beer sponsor of the 2008 Summer Olympics in
Beijing. Anheuser-Busch also has a 27 percent equity stake in Tsingtao,
China's leading premium brewer.
W. Randolph Baker, vice president and chief financial officer highlighted
the company's 2007 financial performance, utilization of cash flow and
long-term earnings growth outlook. Anheuser-Busch achieved double-digits
earnings per share growth in 2007, with a substantial increase in operating
cash flow and a 100 basis point improvement in return on capital. Under the
company's new more aggressive leverage target, Anheuser-Busch also
significantly increased cash payments to shareholders in 2007. Last year, the
company increased its quarterly dividend by 11.9 percent and repurchased
$2.7 billion of its stock. Management continues to expect to spend $2 billion
on share repurchasing this year, subject as always to potential acquisition
opportunities. Baker also reviewed the company's long-term growth model,
which continues to target earnings per share growth in the 7 to 10 percent
range.
Other Matters
As previously announced, Anheuser-Busch's Consumer Analyst Group of New
York presentation is being broadcast live over the Internet today beginning at
2:30 p.m. ET. A replay will be available on the company's Web site. For
details visit http://www.anheuser-busch.com.
Notes:
In the accompanying presentation, the following terms and normalizations
are used:
1. Domestic revenue per barrel is calculated as net sales generated by
the company's U.S. beer operations on barrels of beer sold, determined
on a U.S. GAAP basis, divided by the volume of beer shipped to U.S.
wholesalers.
2. The cash flow to total debt ratio is defined as: operating cash flow
before the change in working capital, adjusted for pension
contributions less service costs; divided by total debt, adjusted to
include the funded status of the company's single-employer defined
benefit pension plans.
3. Reconciliation of Comparative Full Year Results
($ in millions, except per share)
Income Provision
Before for Diluted
Operating Income Income Equity Net Earnings
Income Taxes Taxes Income Income Per Share
2007
Reported $2,894.0 $2,422.7 $(969.8) $662.4 $2,115.3 $2.79
Gain on Sale of
Spanish Theme Park -- (16.0) 6.1 -- (9.9) (.01)
Gain on Sale of
Distribution
Rights (26.5) (26.5) 10.2 -- (16.3) (.02)
Modelo Restructuring -- -- -- 16.0 16.0 .02
Excluding
Normalization
items $2,867.5 $2,380.2 $(953.5) $678.4 $2,105.1 $2.78
2006
Reported $2,719.6 $2,276.9 $(900.5) $588.8 $1,965.2 $2.53
Texas Income Tax
Legislation
Benefit -- -- (7.8) -- (7.8) (.01)
Excluding One-Time
Item $2,719.6 $2,276.9 $(908.3) $588.8 $1,957.4 $2.52
Percentage Change -
2007 vs. 2006
Reported 6.4% 6.4% 12.5% 7.6% 10.3%
Excluding
Normalization
items 5.4% 4.5% 15.2% 7.5% 10.3%
This release contains forward-looking statements regarding the company's
expectations concerning its future operations, earnings and prospects. On the
date the forward-looking statements are made, the statements represent the
company's expectations, but the company's expectations concerning its future
operations, earnings and prospects may change. The company's expectations
involve risks and uncertainties (both favorable and unfavorable) and are based
on many assumptions that the company believes to be reasonable, but such
assumptions may ultimately prove to be inaccurate or incomplete, in whole or
in part. Accordingly, there can be no assurances that the company's
expectations and the forward-looking statements will be correct. Important
factors that could cause actual results to differ (favorably or unfavorably)
from the expectations stated in this release include, among others, changes in
the pricing environment for the company's products; changes in U.S. demand for
malt beverage products, including changes in U.S. demand for other alcohol
beverages; changes in consumer preference for the company's malt beverage
products; changes in the distribution for the company's malt beverage
products; changes in the cost of marketing the company's malt beverage
products; regulatory or legislative changes, including changes in beer excise
taxes at either the federal or state level and changes in income taxes;
changes in the litigation to which the company is a party; changes in raw
materials prices; changes in packaging materials costs; changes in energy
costs; changes in the financial condition of the company's suppliers; changes
in interest rates; changes in foreign currency exchange rates; unusual weather
conditions that could impact beer consumption in the U.S.; changes in
attendance and consumer spending patterns for the company's theme park
operations; changes in demand for aluminum beverage containers; changes in the
company's international beer business or in the beer business of the company's
international equity partners; changes in the economies of the countries in
which the company, its international beer business or its international equity
partners operate; future acquisitions or divestitures by the company,
including effects on its credit rating; changes resulting from transactions
among the company's global or domestic competitors; and the effect of stock
market conditions on the company's share repurchase program. Anheuser-Busch
disclaims any obligation to update or revise any of these forward-looking
statements. Additional risk factors concerning the company can be found in
the company's most recent Form 10-K.
SOURCE Anheuser-Busch Companies
-0- 02/22/2008
CONTACT: Brenda Williams of Anheuser-Busch, +1-203-846-6636,
Brenda.williams@anheuser-busch.com
Web site: http://www.anheuser-busch.com
(BUD)
END
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