USA: Anheuser-Busch highlights progress to investors
“Anheuser-Busch’s top priority in 2005 has been to restore volume and market share growth momentum. We implemented a number of domestic beer initiatives to accomplish this objective and we are seeing progress,” W. Randolph Baker told investors and analysts at a presentation in New York on November 29.
The company’s market share results in supermarkets have improved significantly, gaining six-tenths of a share point in the third quarter and seven-tenths of a share point in the fourth quarter-to-date, according to IRI scanner data. The BUD family is growing and gaining share. Anheuser-Busch sales-to-retailers are now up seven-tenths of one percent in the second half of 2005-to-date (on a selling day adjusted basis).
Financial results have been impacted by significant commodity cost pressures, higher investment in marketing, and the company’s initiative to reduce promotional price premiums to competition as part of its strategy to restore its volume and market share momentum. The company continues to expect earnings per share for the full year 2005 to be down approximately 10 to 11 percent, excluding one-time items. 1/
“With market share and volume trends now improving, our objectives for 2006 include achieving balanced volume and revenue per barrel growth and stimulating category growth,” said Baker. The company has announced plans to implement price increases and discount reductions on the majority of volume in early 2006 and considers the domestic beer pricing outlook to be favorable for next year. “While cost pressures are expected to continue, we expect to return to earnings per share growth in 2006,” Baker continued. “Clearly, Anheuser-Busch has experienced significant challenges in 2005, but the company’s substantial competitive advantages in domestic beer provide a strong foundation for long-term success and the company is well positioned in international beer for long-term growth through our important positions in China and Mexico.”
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