E-Malt.com News article: 2228

USA: Anheuser-Busch has considerable competitive advantages that enable the company to meet challenges, while continuing to achieve its financial objectives, company executives told investors and analysts at the Consumer Analyst Group of New York Conference on February 19. The company achieved significant growth in market share and revenue per barrel, and recorded a 12.7 percent increase in earnings per share in 2003.

“Anheuser-Busch has a long track record of adjusting to changing conditions and successfully meeting challenges,” Patrick Stokes, president and chief executive officer, Anheuser-Busch Cos., Inc., told the investors. “We have substantial competitive advantages that we continue to enhance and the proven ability to leverage these strengths to achieve consistently strong results.”
Addressing industry fundamentals, Stokes reported that the pricing environment in the U.S. beer market remains very favorable with 2003 marking the 10 th straight year of consumers trading up to premium and above beer brands. Anheuser-Busch, in turn, has achieved 21 consecutive quarters of revenue per barrel increases of 2 percent or more on a year-over-year basis.

“In addition, while a number of short-term factors negatively impacted industry volume in 2003, our outlook for industry volume growth remains positive,” Stokes added. The company's wholesaler sales-to-retailers showed significant improvement in the second half of 2003 vs. the first half, and this improvement in volume growth has carried over into 2004.

Stokes noted that the company's low carbohydrate, super-premium Michelob ULTRA brand has become the most successful new brand introduction in the beer industry in many years. The brand contributed not only to the company's excellent market share performance in 2003, but provided a favorable portfolio mix benefit enhancing the company's revenue per barrel results. Stokes added that the company's Bud Light brand, the largest-selling beer brand in the United States, generated more barrels of growth in 2003 than any other beer brand besides Michelob ULTRA and it continued to increase its share of the premium light segment.

In discussing the company's international growth strategy, Stokes said the company's Budweiser business in China has been a key driver of the accelerated volume and profit growth of Anheuser-Busch's international beer operations. Looking to capitalize more fully on the significant growth opportunities in China, the company expanded its alliance and investment in Tsingtao, China's largest brewer, last year. Anheuser-Busch also has a 50 percent equity investment in Modelo, Mexico's largest brewer. Mexico is the second-largest beer profit pool in the world behind the United States and also continues to have high growth potential.

“Between our enviable positions in the world's two largest beer profit pools and the expansion of our participation in China, the world's largest growth market for beer, Anheuser-Busch's strategic positioning is unparalleled in the global beer industry,” said Stokes.
W. Randolph Baker, vice president and chief financial officer, also addressed the group, highlighting the company's strong earnings performance and favorable outlook.
“We have achieved five consecutive years of solid double-digit earnings per share growth, averaging 14 percent per year,” reported Baker. “Over this period, we have delivered strong growth in profit margins and free cash flow. Return on capital employed has increased on average 100 basis points per year. During the last two years, Anheuser-Busch has returned over $3 per share annually to shareholders in dividends and share repurchase.”

“We continue to target earnings per share growth of 12 percent for 2004, and we remain confident in our ability to consistently achieve double-digit EPS growth over the long-term, along with continued improvements in return on capital employed,” said Baker.


20 February, 2004