E-Malt.com News article: 1534

Belgian beer giant Interbrew, has posted on September 9 strong growth in underlying profits for the first half of 2003 thanks to Europe's hot summer. Interbrew sold 45 million hl of production during the first half, 7.1% up versus 42 million hl produced in the first half of 2002. Company’s net profit grew 3.6% up to EUR 171 million versus the same period last year. Interbrew's pre-tax profits (EBITDA) rose 8.6% to EUR 622 million. Commenting on the results, John Brock, Interbrew’s Chief Executive Officer said: “Our half-year results confirm the success of Interbrew’s focus on overall operating performance and particularly on volume growth. Currency effects have been significant, but do not detract from the underlying strength of our business. Further, as we increase our strategic focus on brand building, operational excellence and selective acquisitions, we anticipate strong continued growth.”
“Western Europe continued to deliver solid growth in the first half of the year, driving market share growth in Interbrew’s most important Western European markets. EBITDA was up +11.0%, and EBIT +30.5%,” Interbrew said. Despite an estimated -4.8% decline of the German beer market—the result of the new deposit tax on non-returnable packaging—Interbrew’s market share improved to 7.4%. Market share grew in the UK to approximately 18.4%. In Belgium, Interbrew’s market share remained stable.

In Canada, volume was up and market share rose to 42.8%, driven by the continued success of Interbrew’s premium and speciality beer portfolio. Oland Specialty Beer Company’s volume grew organically by +23.0%. The estimated cost of the strike at Interbrew’s Montreal brewery for the first six months of 2003 is 10 million euro. Currently, discussions are taking place with the unions to achieve an acceptable resolution. Overall, industry volumes in the US import segment declined by -1.4%. Volumes of Interbrew’s Canadian and Mexican import brands were down.

In Eastern Europe, volume was up +25.5%, and EBITDA +37.0%, versus the overall market, which grew at only 4% to 5%. In Russia, market share grew to 14.4%. In the Ukraine, market share grew to 34.0%.

In Central Europe, volume grew +8.0% and EBITDA +11.2%. Market share increased in each of the markets, except for Hungary and Croatia, where it remained stable.
In South Korea, market share has been stable since year-end 2002. The relaunch of the OB® brand in April 2003 has brought indications of renewed brand health and improved market-share performance, but it is too early to make an overall assessment. The +6% price increase across the board early in the year led to margin improvement.

Interbrew expects that, excluding currency impact, it will achieve organic volume and organic EBIT growth for 2003 broadly in line with that achieved at the half year. If exchange rates were to remain at current levels, Interbrew would expect earnings per share 2003 to be only slightly lower than earnings per share 2002, pre-restructuring, of 1.51 euro.


09 September, 2003