ANHEUSER-BUSCH Reports Improved Sales & Earnings
April 23 2008 - 12:29PM
UK Regulatory
Anheuser-Busch Cos. Reports Improved Sales and Earnings Per Share for the
First Quarter 2008
ST. LOUIS, April 23 -- Anheuser-Busch Cos., Inc. (NYSE: BUD) reported
improved sales and earnings for the first quarter 2008 today at its annual
meeting of shareholders held in Orlando, Fla. Consolidated net sales
increased 6.2 percent in the first quarter 2008 and earnings per share
increased 6.0 percent.
"Our operations achieved solid results in the quarter, growing sales and
operating income six percent over the first quarter last year," said August A.
Busch IV, president and chief executive officer of the company. "We have
successfully implemented U.S. beer price increases and expect good revenue per
barrel performance in 2008. Our cost reduction efforts are significantly
mitigating the impact of industry-wide cost pressures. We are increasing
marketing and sales support for our core beer brands, and, although U.S. beer
sales-to-retailers results were below expectations, we are optimistic
concerning the outlook for beer sales during the key summer selling season."
BEER SALES RESULTS
The company's reported beer volume is summarized in the following table:
Beer Volume (millions of barrels)
First Quarter 2008 vs. 2007
2008 2007 Barrels %
U.S. 25.8 25.7 Up 0.1 Up 0.4%
International 5.4 5.2 Up 0.2 Up 3.1%
Worldwide A-B Brands 31.2 30.9 Up 0.3 Up 0.8%
Equity Partner Brands 7.3 6.7 Up 0.6 Up 9.3%
Total Brands 38.5 37.6 Up 0.9 Up 2.3%
U.S. beer shipments-to-wholesalers increased 0.4 percent for the first
quarter 2008, with import brands contributing 60 basis points to overall
growth. First quarter 2008 sales-to-retailers were down 0.7 percent, and
sales-to-retailers for Anheuser-Busch produced brands, excluding imports,
declined 1.4 percent. Sales-to-retailers trends have improved in April and for
the first three weeks of the month are up 2 percent for Anheuser-Busch
produced brands. Wholesaler inventories for Anheuser-Busch produced brands at
the end of the first quarter were approximately the same as a year ago.
The company's estimated U.S. market share for the first quarter 2008 was
50.9 percent, compared to first quarter 2007 market share of 50.6 percent.
Market share is based on estimated U.S. beer industry shipment volume using
information provided by the Beer Institute and the U.S. Department of
Commerce.
International volume, consisting of Anheuser-Busch brands produced
overseas by company-owned breweries and under license and contract-brewing
agreements, plus exports from the company's U.S. breweries, increased
3.1 percent for the first quarter 2008, driven primarily by sales in Canada,
Mexico, Argentina and China.
Worldwide Anheuser-Busch beer sales volume for the first quarter 2008
increased 0.8 percent, to 31.2 million barrels. Worldwide beer volume is
comprised of domestic volume plus international volume.
Equity partner brands volume, representing the company's share of its
equity partners' volume reported on a one-month lag, increased 9.3 percent for
the first quarter of 2008 due to increased volume for Modelo and Tsingtao.
Total brands volume increased 2.3 percent for the first quarter 2008.
FIRST QUARTER 2008 FINANCIAL RESULTS
Key operating results and a discussion of financial highlights for the
first quarter 2008 compared to the first quarter 2007 follow.
In millions, except
per share First Quarter 2008 vs. 2007
2008 2007 $ %
Gross Sales $4,655 $4,406 Up $249 Up 5.7%
Net Sales $4,099 $3,858 Up $241 Up 6.2%
Operating Income $763 $718 Up $45 Up 6.2%
Income Before Income Taxes $635 $596 Up $39 Up 6.5%
Equity Income $126 $159 Dn $33 Dn 21.0%
Net Income $511 $518 Dn $7 Dn 1.3%
Diluted Earnings per Share $.71 $.67 Up $.04 Up 6.0%
* Net sales increased 6.2 percent on increased sales from all business
segments. U.S. beer sales were up due to increased volume and
pricing, international beer net sales increased 20 percent from
higher volume, packaging segment sales were up 8 percent due
primarily to higher volume and entertainment sales increased
20 percent primarily from higher attendance.
U.S. beer segment sales increased 4 percent on improved revenue per
barrel and increased sales volume. Revenue per barrel(1) was up
2.3 percent primarily due to the implementation of price increases
on a majority of the company's U.S. volume late last year and in the
first quarter of 2008.
* Operating income increased 6.2 percent due primarily to higher
profits for U.S. beer and international beer operations and improved
results from entertainment operations, partially offset by lower
packaging segment results.
Income before income taxes for U.S. beer was up $18 million,
reflecting higher volume and pricing, partially offset by increased
marketing expense for trademark brands.
International beer pretax income was up $18 million, primarily due
to increased profits in China, Canada and improved results in the
United Kingdom.
Packaging segment pretax income decreased $5 million primarily due
to lower earnings from recycling operations.
Entertainment segment pretax results improved $12 million primarily
from increased attendance due to the Easter holiday occurring in the
first quarter in 2008 versus the second quarter last year.
* Equity income decreased $33 million in the first quarter 2008,
primarily due to a combination of higher materials and operating
costs for Grupo Modelo partially offset by higher beer volume.
Additionally, equity income for the first quarter 2007 included a
$17 million benefit from the return of an advertising fund that was
part of Modelo's former beer import contract.
* Net income in the first quarter 2008 decreased 1.3 percent and
diluted earnings per share were up 6.0 percent versus prior year.
Earnings per share continue to benefit from the company's ongoing
share repurchase program. The company repurchased over 9 million
shares in the first quarter.
Other Matters
Anheuser-Busch will conduct a conference call with investors to discuss
first quarter earnings results at 3 p.m. CDT today. The company will broadcast
the conference call live via the Internet. For details visit the company's
site on the Internet at http://www.anheuser-busch.com.
Note
1. 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.
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.
Anheuser-Busch Companies, Inc.
Comparative Consolidated Statement of Earnings (Unaudited)
(In Millions, Except Per Share)
First Quarter Change 2008 vs. 2007
Ended March 31, Fav./(Unfav.)
2008 2007 $ %
Gross sales $4,654.7 $4,405.6 $249.1 5.7%
Excise taxes (555.5) (547.2) (8.3) (1.5)%
Net Sales 4,099.2 3,858.4 240.8 6.2%
Cost of sales (2,630.1) (2,474.7) (155.4) (6.3)%
Marketing,
distribution and
administrative
expenses (706.3) (665.7) (40.6) (6.1)%
Operating income 762.8 718.0 44.8 6.2%
Interest expense (129.1) (119.9) (9.2) (7.7)%
Interest capitalized 4.9 3.5 1.4 40.0%
Interest income 1.1 0.5 0.6 N/M
Other expense, net (4.9) (5.9) 1.0 16.9%
Income before income
taxes 634.8 596.2 38.6 6.5%
Provision for income
taxes (249.9) (238.1) (11.8) (5.0)%
Equity income, net of
tax 126.0 159.4 (33.4) (21.0)%
Net income $510.9 $517.5 $(6.6) (1.3)%
Basic earnings per share $.71 $.68 $.03 4.4%
Diluted earnings per
share $.71 $.67 $.04 6.0%
Weighted Average Shares Decrease
Outstanding Shares %
Basic 716.7 763.5 (46.8) (6.1)%
Diluted 721.6 773.3 (51.7) (6.7)%
Anheuser-Busch Companies, Inc.
Business Segments (Unaudited)
First Quarter Ended March 31
(In Millions)
Inter-
U.S. national Enter- Corporate
Beer Beer Packaging tainment & Elims Consolidated
2008
Gross Sales $3,574.7 337.8 644.5 221.6 (123.9) $4,654.7
Net Sales:
- Intersegment $0.8 0.1 242.0 -- (242.9) --
- External $3,065.9 290.2 402.5 221.6 119.0 $4,099.2
Income Before
Income Taxes $775.5 37.5 39.9 (6.1) (212.0) $634.8
Equity Income $(0.4) 126.4 -- -- -- $126.0
Net Income $480.4 149.7 24.7 (3.8) (140.1) $510.9
2007
Gross Sales $3,457.4 285.6 604.5 185.0 (126.9) $4,405.6
Net Sales:
- Intersegment $0.8 0.3 232.0 -- (233.1) --
- External $2,953.3 241.4 372.5 185.0 106.2 $3,858.4
Income Before
Income Taxes $758.0 19.1 44.5 (18.5) (206.9) $596.2
Equity Income $0.1 159.3 -- -- -- $159.4
Net Income $470.1 171.1 27.6 (11.5) (139.8) $517.5
In 2008, the company changed reporting responsibility for beer sales in
the Caribbean region from U.S. Beer to International Beer and also reassigned
certain administrative and technology support costs between Corporate and U.S.
Beer. Segment results for 2007 have been updated to conform to the revised
reporting conventions.
Anheuser-Busch Companies, Inc.
Consolidated Balance Sheet (Unaudited)
(In Millions)
March 31, December 31,
2008 2007
Assets
Current Assets:
Cash $217.8 $283.2
Accounts receivable 1,001.6 805.2
Inventories 818.3 723.5
Other current assets 222.0 212.6
Total current assets 2,259.7 2,024.5
Investments in affiliated companies 4,231.4 4,019.5
Plant and equipment, net 8,765.1 8,833.5
Intangible assets, including goodwill
of $1,160.3 and $1,134.6 1,556.0 1,547.9
Other assets 739.0 729.6
Total Assets $17,551.2 $17,155.0
Liabilities and Shareholders Equity
Current Liabilities:
Accounts payable $1,405.6 $1,464.5
Accrued salaries, wages and benefits 313.3 374.3
Accrued taxes 387.9 106.2
Accrued interest 125.6 136.4
Other current liabilities 309.6 222.4
Total current liabilities 2,542.0 2,303.8
Retirement benefits 1,015.4 1,002.5
Debt 9,281.0 9,140.3
Deferred income taxes 1,323.1 1,314.6
Other long-term liabilities 241.1 242.2
Shareholders Equity:
Common stock 1,483.4 1,482.5
Capital in excess of par value 3,423.6 3,382.1
Retained earnings 18,198.5 17,923.9
Treasury stock, at cost (19,165.3) (18,714.7)
Accumulated non-owner changes in
equity (791.6) (922.2)
Total Shareholders Equity 3,148.6 3,151.6
Commitments and contingencies -- --
Total Liabilities and Shareholders
Equity $17,551.2 $17,155.0
Anheuser-Busch Companies, Inc.
Consolidated Statement of Cash Flows (Unaudited)
(In Millions)
Three Months
Ended March 31,
2008 2007
Cash flow from operating activities:
Net income $510.9 $517.5
Adjustments to reconcile net income
to cash provided by operating
activities:
Depreciation and amortization 253.3 246.0
Decrease in deferred income taxes (9.6) (21.9)
Stock-based compensation expense 14.4 15.1
Undistributed earnings of
affiliated companies (126.0) (159.4)
Other, net 12.6 (40.9)
Operating cash flow before the change
in working capital 655.6 556.4
Increase in working capital (44.9) (240.4)
Cash provided by operating activities 610.7 316.0
Cash flow from investing activities:
Capital expenditures (150.3) (154.4)
Acquisitions (1.5) (83.5)
Cash used for investing activities (151.8) (237.9)
Cash flow from financing activities:
Increase in debt 353.3 585.1
Decrease in debt (218.9) (0.7)
Dividends paid to shareholders (236.3) (225.5)
Acquisition of treasury stock (458.7) (477.4)
Shares issued under stock plans 36.3 95.3
Cash used for financing activities (524.3) (23.2)
Net increase / (decrease) in cash
during the period (65.4) 54.9
Cash, beginning of period 283.2 219.2
Cash, end of period $217.8 $274.1
SOURCE Anheuser-Busch Cos., Inc.
-0- 04/23/2008
/CONTACT: Brenda Williams of Anheuser-Busch Cos., Inc., +1-203-846-6636/
/Web site: http://www.anheuser-busch.com /
(BUD)
END
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