World brewing giant, Anheuser-Busch Cos., Inc. reported record sales and earnings for the fourth quarter and full year 2003, led by continued growth in both its domestic and international beer operations in the fourth quarter, Patrick Stokes, president and chief executive officer announced on February 4. Fourth quarter and full year earnings per share increased 12.5 % and 12.7 %, respectively, vs. the same 2002 periods.

"Anheuser-Busch had another excellent year in 2003, selling 111 million barrels of its beer brands worldwide and achieving its 21 st consecutive quarter of solid double-digit earnings per share growth in the fourth quarter,” said Stokes. “The company's proven ability to leverage its substantial competitive strengths has led to these consistently strong results. The beer pricing environment remains favorable and the combination of revenue per barrel growth and volume increases has driven continued increases in profit margins and return on capital employed in 2003.”

Domestic revenue per barrel grew 2.7 % and 3.1 % in the fourth quarter and full year 2003, respectively, vs. the same periods in 2002. Consumers trading up to the super premium Michelob family enhanced the company's revenue per barrel results.

For the full year 2003, gross margin increased 20 basis points to 40.3 %, while operating margin increased 60 basis points to 22.6 %. Return on capital employed improved to 18.4 %, an increase of 90 basis points over the past 12 months.

Domestic beer sales-to-wholesalers volume increased 0.5 percent for the fourth quarter of 2003 vs. the fourth quarter 2002 and 0.8 percent for the full year 2003. These results are due to the outstanding success of the new Michelob ULTRA low-carbohydrate brand and increased Bud Light sales volume. Bud Light also continued to grow its share of the premium light beer category in 2003.

Wholesaler sales-to-retailers volume accelerated through the second half of 2003, increasing 1.7 % in the fourth quarter, and up 0.9 % for the year.

Consistent with the company's practice of implementing moderate annual price increases in two phases, Anheuser-Busch completed the first stage of its pricing plan for 2004 in October 2003 in markets representing approximately 40 percent of the company's domestic volume. These pricing actions were again very successful, as reflected in the company's strong fourth quarter revenue per barrel performance. As planned, the company began implementing the second stage of 2004 pricing initiatives on just over 25 percent of domestic volume earlier this week. As in the past, these revenue enhancement initiatives are being tailored to specific markets, brands and packages.

“With our outstanding brands, solid sales execution, a favorable industry pricing environment and a strong financial position, we look forward to 2004,” said Stokes. “We remain confident in our ability to consistently achieve our minimum double-digit earnings per share growth objective over the long-term and reiterate the company's previously stated 12 percent earnings per share growth target for 2004.”

In the fourth quarter 2003 net sales increased 3.8 % compared to the fourth quarter 2002, with a 3.3 % increase in domestic beer segment net sales, plus higher international beer and entertainment segment sales. Income before income taxes increased 13.7 percent vs. the fourth quarter 2002 on increased pretax results from domestic and international beer operations and improved operating results for the entertainment segment. Pretax income for the fourth quarter 2003, compared with 2002, includes the impact of lower administrative expenses due to decreased legal costs, reduced acquisition due diligence costs and a lower contribution to the company's charitable foundation. Fourth quarter 2003 marketing, distribution and administrative expenses decreased 1.8 percent vs. the fourth quarter 2002. This decrease compares to an 11.5 percent increase in the fourth quarter 2002 vs. the fourth quarter 2001. Pretax income for the domestic beer segment was up 5 percent for the quarter, reflecting higher revenue per barrel and increased beer sales volume. Domestic beer pretax income for the quarter includes a $7 million expense, reported in cost of sales, related to the signing bonus and accelerated merit increase paid to Teamsters-represented employees in connection with the ratification of the new five-year labor agreement in December. In addition, domestic beer results include a $6 million gain from the sale of a company-owned beer wholesalership in Washington state. On a consolidated basis, this gain is reported in other income/(expense), net.

International beer segment pretax income more than doubled in the quarter. This increase was primarily driven by higher volume in China and the United Kingdom. Net sales increased 16 percent in the quarter compared to the fourth quarter 2002. Packaging segment pretax profits declined by $9 million in the fourth quarter 2003 compared to the fourth quarter 2002. This decrease was primarily due to lower profits for the company's can manufacturing operations. Entertainment segment operating results improved by $12 million compared to the fourth quarter 2002, due to increased attendance, higher admissions pricing and increased in-park spending. Equity income increased 3.4 percent vs. the fourth quarter 2002, reflecting earnings growth by CCU. Net income increased 9.3 percent vs. fourth quarter 2002 and diluted earnings per share were $.36, an increase of 12.5 percent compared to the fourth quarter 2002. Earnings per share continue to benefit from the company's ongoing share repurchase program.

For full year 2003 net sales increased 4.3 % compared to 2002, reflecting a 3.9 % increase in domestic beer segment net sales and increased sales for the international beer, packaging and entertainment segments. Income before income taxes increased 7.7% vs. the full year 2002, due to increased domestic beer segment pretax income, along with improved profit contribution from all of the company's remaining business segments. Domestic beer segment pretax income was up 6.8 %, reflecting higher revenue per barrel and increased beer volume.International beer segment pretax income increased 19.3 percent, primarily due to volume and profit growth in China. Packaging segment pretax profits were up 1 percent for the full year 2003, primarily due to improved profits in the company's can, bottle and label manufacturing operations.

Entertainment segment operating profits for the full year increased 6.4 % compared to last year, primarily due to higher admissions pricing and increased in-park spending. Equity income decreased $7 million vs. the full year 2002, primarily due to the $17 million one-time deferred income tax benefit included in 2002 Modelo equity income, partially offset by a $6.5 million charge in 2002 related to the brewery operation restructuring. The tax benefit, which resulted from lower Mexican income tax rates enacted in the first quarter of 2002, was largely offset by higher U.S. deferred taxes included in the 2002 consolidated income tax provision. E quity income growth from Modelo for 2003 was also dampened by lower export volume growth and a weaker peso. Anheuser-Busch's equity share of CCU earnings for the full year benefited by a $5.5 million after tax gain from the sale of a brewery in Croatia.

Anheuser-Busch's effective tax rate for full year 2003 was 38.7 percent vs. 39.7 percent for 2002 and 38.7 percent in 2001. The effective tax rate in 2002 was unusually high due to the U.S. deferred income tax offset to the Mexican income tax rate benefit included in equity income.

Net income increased 7.4 percent vs. the full year 2002. Diluted earnings per share were $2.48, an increase of 12.7 percent compared to 2002. Earnings per share benefited from the company's repurchase of over 39 million shares during 2003, which totaled $2 billion.

Worldwide Anheuser-Busch beer sales volume increased 1.1 percent for both the fourth quarter and full year 2003 to 25.4 million and 111.0 million barrels, respectively. Worldwide beer volume is comprised of domestic volume and international volume. Domestic volume represents Anheuser-Busch beer produced and shipped within the United States. International volume represents exports from the company's U.S. breweries to markets around the world, plus Anheuser-Busch brands produced overseas by company-owned breweries and under license and contract brewing agreements.

Total volume, which combines worldwide Anheuser-Busch brand volume with equity volume (representing the company's share of its foreign equity partners' volume), was 30 million barrels in the fourth quarter 2003, up 600,000 barrels, or 2 percent vs. fourth quarter 2002. Total volume for the full year increased 1.5 percent, to 129.8 million barrels.

Anheuser-Busch reported domestic beer sales-to-wholesalers of 23.3 million barrels in the fourth quarter 2003 and 102.6 million barrels in the full year. This represents increases of 0.5 percent for the fourth quarter and 0.8 % for the full year, compared to 2002.

The company's domestic market share (excluding exports) for the full year 2003 was approximately 50 %, compared to 49 percent for the same period in 2002. Domestic market share is based on estimated beer industry sales using information provided by the Beer Institute and the U.S. Department of Commerce.

International Anheuser-Busch brand beer volume for the fourth quarter was 2.1 million barrels representing an increase of 7.3 % vs. the fourth quarter 2002. This increase is primarily attributable to higher beer sales volume in China. For the full year 2003, international Anheuser-Busch brand beer volume was 8.4 million barrels, up 5 percent vs. the comparable 2002 period.

E-malt.com, la fuente de información global para los profesionales de la industria cervecera y de malteado. Los boletines quincenales de E-malt.com incluyen las últimas noticias de la industria, estadísticas en gráficos y tablas, precios mundiales de cebada y malta, y otra información relevante. Haga clic aquí para obtener acceso completo a E-malt.com. Si usted es un cliente de Castle Malting, puede obtener acceso gratuito al sitio web y publicaciones de E-malt.com. Contáctenos para obtener más información en marketing@castlemalting.com.