Anheuser-Busch Better Positioned for Long-Term Growth
29 Noviembre 2007 - 7:05AM
UK Regulatory
Anheuser-Busch Better Positioned for Long-Term Growth
Strategies Capitalize on Changing Marketplace
NEW YORK, Nov. 29 -- Anheuser-Busch management reviewed the company's
strategies to adapt to the changing beer industry environment and reaffirmed the
company's expectation for earnings per share growth for the full year 2007 to
exceed its 7 to 10 percent long-term objective(1), in a presentation given to
investors and analysts in New York
today.
"The last two years have been a period of considerable change in the beer
industry and especially at Anheuser-Busch. Anheuser-Busch has taken
significant steps to adjust to the changing beer consumer. We have
substantially expanded our portfolio. To support this broadened portfolio, we
have transformed our selling system to make it both more personal and high
tech at the same time. We have also been making changes in marketing and
media, with more significant changes planned for next year. Anheuser-Busch is
clearly better positioned for long-term growth due to these changes than we
were two years ago," W. Randolph Baker, vice president and chief financial
officer of Anheuser-Busch Companies, told the investors.
Baker added that perhaps the most encouraging development in the U.S. beer
environment in the last two years has been the acceleration of growth in the
consumer demand for beer. Last year, beer industry shipment volume grew 2.1
percent, the best annual performance since 1990, and this year beer industry
growth has continued to exceed expectations, up 1.8 percent October
year-to-date.
In addition to the strong industry volume growth, the industry pricing
environment has been favorable the past two years. Consistent with the pattern
in recent years, Anheuser-Busch plans to implement price increases on the
majority of its U.S. beer volume in early 2008, with increases in several
states occurring in the fourth quarter 2007. As in the past, pricing
initiatives will be tailored to selected markets, brands and packages.
The commodity cost environment has not been favorable. Mitigating the
impact of commodity cost pressures is a high priority at Anheuser-Busch. The
company has a strong record of consistently delivering significant annual
productivity improvement savings, which management is confident will continue
given plans and programs already in place.
Baker also provided highlights of the company's international beer
business, which is an increasingly significant contributor to Anheuser-Busch's
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
Anheuser-Busch has a 27 percent equity stake in Tsingtao, China's leading
premium brewer.
Baker reviewed the company's long-term earnings model, which continues to
target growth in the 7 to 10 percent range. Anheuser-Busch also consistently
generates substantial cash flow, and cash returned to shareholders, including
dividends and share repurchase, has increased significantly this year. The
company increased its quarterly dividend by 11.9 percent in July. Share
repurchasing has also been enhanced as a result of the company's new, more
aggressive financial leverage policy. Management continues to expect to spend
$2.7 billion on share repurchasing this year.
Other Matters
As previously announced, Anheuser-Busch's annual regional investor
presentation is being broadcast live over the Internet today beginning at 8:00
a.m. ET. A replay will be available on the company's Web site. For details
visit http://www.anheuser-busch.com.
Notes
1. Calculation of 2006 Earnings per Share for 2007 Comparison Purposes
The table below sets forth the assumption used in comparing 2007
normalized earnings per share expectations to normalized 2006 results.
2006 Earnings Per Share Full Year
Reported $2.53
Texas Income Tax Legislation Benefit in 2Q (0.01)
Excluding One-Time Benefit $2.52
In the accompanying presentation, the following normalizations and terms
are used:
2. Reconciliation of Comparative Third Quarter and Nine Months Results
($ in millions, except per share)
International Diluted
Equity Beer Earnings
Third Quarter Income Net Income Per Share
2007
Reported $185.2 $204.3 $.95
Gain on Sale of Distribution
Rights -- -- (.02)
Modelo Restructuring 16.0 16.0 .02
Excluding Normalization items $201.2 $220.3 $.95
2006
Reported $156.5 $172.0 $.82
Percentage Change - 2007 vs. 2006
Reported 18.4% 18.8% 15.9%
Excluding Normalization items 28.6% 28.1% 15.9%
Nine Months
2007
Reported $539.3 $585.4 $2.49
Gain on Sale of Spanish
Theme Park -- -- (.01)
Gain on Sale of Distribution
Rights -- -- (.02)
Modelo Restructuring 16.0 16.0 .02
Excluding Normalization items $555.3 $601.4 $2.48
2006
Reported $449.3 $492.9 $2.28
Texas Income Tax Legislation
Benefit -- -- (.01)
Excluding One-Time Item $449.3 $492.9 $2.27
Percentage Change - 2007 vs. 2006
Reported 20.0% 18.8% 9.2%
Excluding Normalization items 23.6% 22.0% 9.3%
3. 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.
4. 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.
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- 11/29/2007
CONTACT: Brenda Williams of Anheuser-Busch Companies, +1-203-846-6636,
Brenda.williams@anheuser-busch.com; or Investors, +1-314-577-7772, for
Anheuser-Busch Companies
Web site: http://www.anheuser-busch.com
(BUD)
END
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