Anheuser-Busch Executives Express Confidence in Outlook
23 May 2007 - 1:26AM
UK Regulatory
Anheuser-Busch Executives Express Confidence in Outlook for Growth
ST. LOUIS, May 22 -- Anheuser-Busch (NYSE: BUD) executives expressed
confidence in the company's growth outlook during presentations given today at
the company's BUD Investor Conference held in St. Louis.
"By strategically broadening our U.S. beer portfolio to access high-margin
growth opportunities, Anheuser-Busch is much better positioned for growth than
we were just eight months ago," August A. Busch IV, president and chief
executive officer of the company, said to investors and analysts. Busch
proceeded to outline management's vision of building Anheuser-Busch into the
leading global beer and specialty beverage company. At the core of this vision
is producing and marketing the highest quality premium beer and select
non-beer beverages in profitable and growing markets, where the company's
competitive advantages can drive sustainable long-term growth and enhance
shareholder value.
Senior managers from Anheuser-Busch's U.S. beer company presented their
plans to grow the company's core trademark brands and actively pursue high-end
growth opportunities. The company is making good progress in digesting the
series of new growth initiatives recently undertaken and managing the added
complexity associated with an expanded portfolio. In citing incremental
revenue growth as a key objective, the executives stated that the pricing
environment in the U.S. beer industry is favorable. In addition,
sales-to-retailers in May have rebounded after a disappointing April and are
now up 1 percent quarter to date.(1)
The world beer market also plays an increasingly important role in the
company's global vision. In their presentations, the senior managers of the
company's international beer business reported that international net income
has grown an average of 20 percent per year since 1999. While the company's
investment in Grupo Modelo currently provides the vast majority of
international profits, the company also is building an important leadership
position in China, the largest and fastest-growing beer market in the world.
Elsewhere in the world, the company has recently announced ventures to pursue
new growth opportunities in emerging markets, such as India, Russia, Colombia
and Panama.
The strategies of Anheuser-Busch's successful packaging and entertainment
businesses, which complement the company's beer operations and contribute more
than $375 million in operating profits annually, also were highlighted at the
meeting.
Restoring profit margin growth is a key element of the company's vision.
The company's long-term earnings model continues to target earnings per share
growth in the 7 to 10 percent range. Management expects the company's 2007
earnings per share increase to exceed its long-term model's range. The
company's second quarter increase in earnings per share, however, is expected
to be below this range with earnings growth accelerating in the second half of
the year.(2)
Other Matters
As previously announced, Anheuser-Busch Companies' 2007 BUD Investor
Conference is being broadcast live over the Internet today beginning at 9:30
a.m. ET. A replay of the webcast will be available on the company's Web site.
For details visit the company's site on the Internet at
http://www.anheuser-busch.com.
Notes
1. Sales-to-retailers results are on a comparable selling day adjusted
basis and include the contribution of newly acquired and alliance
brands. Core brand sales-to-retailers are down 1 percent quarter to
date.
2. Calculation of 2006 Earnings per Share for 2007 Comparison Purposes
The table below sets forth the assumption used in comparing 2007
earnings per share expectations to 2006 results.
2006 Earnings Per Share 2nd Quarter Full Year
Reported $0.82 $2.53
Texas Income Tax Legislation Benefit (0.01) (0.01)
Excluding One-Time Benefit $0.81 $2.52
In accompanying presentations, the following terms are used:
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. Return on capital employed on a consolidated basis is computed as 12
months of net income plus after-tax net interest (interest expense
less interest capitalized) divided by net investment. Net investment
is defined as total assets less non-debt current liabilities. The
company does not allocate interest expense to subsidiaries, so this
is not a factor in computing return on capital employed on a
business segment basis.
5. 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's international beer business or its international equity
partners operate; future acquisitions or divestitures; 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
-0- 05/22/2007
CONTACT: Kelli Powers of Anheuser-Busch, +1-314-577-9618, or Investor
Relations, +1-314-577-7772
(BUD)
END
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