USA, New York: Anheuser-Busch expects to achieve its sixth consecutive year of double-digit earnings per share growth in 2004, company management told investors and analysts at a presentation in New York on November 9, 2004. In the presentation, management reaffirmed the company’s 10 to 11 percent 1/ earnings per share growth target for 2004. This includes dilution from the company’s acquisition of Harbin and excludes the benefit of a commodity hedge gain in the first quarter.

W. Randolph Baker, vice president and chief financial officer of Anheuser-Busch Companies, Inc., also reaffirmed an initial target range of 7 to 10 percent earnings per share growth on a reported basis in 2005, reflecting increased marketing investment and higher commodity costs anticipated next year. Baker added, “We remain confident in our ability to achieve our double-digit earnings per share growth objective over the longer term, with continued improvements in return on capital and a substantial amount of cash returned to shareholders in the form of consistent dividend growth and share repurchase.”

Baker told investors that the pricing environment in the domestic beer market remains very favorable and, importantly, is largely consumer driven. This is the eleventh straight year that beers priced below premium have lost share to premium and above priced brands, as consumers continue to trade up. Beginning in October, the company successfully initiated the first stage of its two-stage annual price increase plan. The second phase is expected to take place in the first quarter of 2005, with the two phases combined covering approximately two-thirds of the company’s volume.

“To enhance beer volume and market share growth, Anheuser-Busch is stepping up new product, packaging and other marketing initiatives,” Baker continued.

To expand beer-drinking occasions, Anheuser-Busch has introduced a distinctive new product called B-to-the-E (B e). B e is a beer-based product infused with caffeine, guarana and gingseng. At the same time, the company has added Bacardi Silver Low Carb Green Apple to its Bacardi Silver family of brands in the flavored alcohol beverage category. Yesterday, Anheuser-Busch also introduced into several test markets a new member of the Bud family, Budweiser Select. Using a long brew process, Budweiser Select has a unique, crisp taste that finishes clean, leaving no aftertaste. This new brand also is lower in carbs and calories than most premium brands.

The company is also further enhancing the image of its existing brands through packaging innovation. An important part of this strategy is the national rollout of applied plastic labels for Bud Light bottles, which has been very well received by consumers in its initial markets. In addition, the company recently began offering its Michelob and Michelob Light brands in a unique 16-ounce aluminum bottle package in select accounts.

The company has a number of new advertising and sales execution initiatives underway. For example, in an effort to strengthen beer’s positioning as a fun and social beverage, this fall Bud Light returned to the primarily humor-based advertising strategy that made it the number one beer brand in the nation. Improving retail execution, especially on-premise, is also a high priority. The company and its wholesalers are working to improve the presentation of draught beer, enhance on-premise point of sale, and increase on-premise promotions, including fresh beer sampling. Next year, Anheuser-Busch will more than double its manpower devoted to the on-premise channel.

Baker also commented on the company’s international beer business, with particular emphasis on the company’s expanded participation in the Chinese beer market.

“Anheuser-Busch is developing an important leadership position in China, the world’s largest beer market by volume. China is also the fastest growing global beer market in absolute terms, contributing one-third of worldwide beer industry growth over the past five years. With our company’s Budweiser operations, our Tsingtao strategic alliance, and our new Harbin acquisition, Anheuser-Busch is well positioned to capitalize on the substantial long-term growth opportunities in the Chinese beer market,” Baker reported.

“International beer segment profits have more than tripled over the past five years and will continue to be an important contributor to Anheuser-Busch’s earnings growth over the long term,” concluded Baker.

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