USA: Anheuser-Busch executives express confidence in outlook for growth

Anheuser-Busch executives expressed confidence in the company’s growth outlook during presentations given at the company’s BUD Investor Conference held in St. Louis, according to company’s press release, May 22.

“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.

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