By Matthew Dalton
BRUSSELS-- Anheuser-Busch InBev on Thursday said economic
recovery in the U.S. helped offset the impact of a stronger dollar
that hurt sales elsewhere in the company's global beer empire,
pushing up profits during the fourth quarter.
The results show that falling unemployment in the U.S., combined
with the company's efforts to sell more "premium" beers, is helping
turn around AB InBev's performance in its largest market. But
Budweiser, perhaps the brewer's most important brand, continued to
lose market share in the U.S. as the company still struggled to
attract younger drinkers to the beer.
"It isn't an easy challenge," Chief Financial Officer Felipe
Dutra told reporters on Thursday. "We don't expect to stabilize
Budweiser in the U.S. in the short term."
The world's largest brewer said net profit for the quarter was
$2.53 billion, up from $2.52 billion a year earlier. Revenue for
the quarter was $12.02 billion, up from $11.71 billion a year ago
and slightly topping analyst expectations of $11.86 billion.
The company also proposed to pay $3.52 per share in dividends
for 2014, a 26% increase over the year before. The company's shares
fell around 1.5% in early trading.
That drop may be explained by two factors, said Trevor Stirling,
an analyst at Sanford Bernstein in London. First, investors may be
worried by some underlying profit-margin weakness at the company
that was masked by an unusually low tax burden in 2014.
But the second factor may be intrigue surrounding the question
of whether AB InBev is preparing to buy SABMiller PLC, the world's
second-largest beer company. Some investors interpreted the big
increase in the dividend as a sign that the company may be
preparing to bid for the company, Mr. Stirling said, by returning
cash to shareholders for a later capital increase to fund the
acquisition.
SABMiller shares traded up over 1% on Thursday morning.
Ultimately, AB InBev's controlling shareholders--three Brazilian
multibillionaires and a group of five Belgian families--are
unlikely to support a bid for SABMiller right now, Mr. Stirling
said.
"We believe the controlling shareholders of AB InBev think at
the moment there are better alternative investments," he said.
AB InBev said sales volumes in the U.S. rose 0.2% in the quarter
compared with a year earlier, reversing a trend of falling volumes
in the U.S. That helped soften the impact of the stronger dollar,
which cost the company $848 million for the quarter in lost revenue
and $2.3 billion for all of last year.
"We have operations in markets like Brazil where the stronger
dollar puts pressure on transactional costs," Mr. Dutra said.
Nevertheless, revenue in Brazil rose slightly, mainly because of
the company's efforts to sell more premium beers, a company
priority, Mr. Dutra said.
Those efforts also helped boost sales during the quarter in
China, where sales of Budweiser, which sells at a premium overseas,
were strong despite weakness in the Chinese economy.
Developments in the quarter show how Budweiser is increasingly
becoming a non-American brand. More than 60% of Budweiser sales
volume occur in markets outside the U.S., such as China and
Brazil.
The company has been investing heavily in the U.S. to try to
stem the market-share losses there. It aired a commercial during
the Super Bowl that tried to double down on the brand's status as a
mass-market beer, showing bearded, bespectacled men drinking craft
brews, followed by the slogan: "There's only one Budweiser. It's
brewed for drinking not dissecting."
The spot raised eyebrows for making fun of the craft-brew scene,
a strongly growing market in the U.S. that AB InBev itself has
invested in with brands such as Goose Island.
"We appreciate the fact that the ad was somehow considered
controversial, " Mr. Dutra said, "but in the end it was all about
celebrating Budweiser."
Write to Matthew Dalton at Matthew.Dalton@wsj.com
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