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Anheuser-Busch InBev delivers Q1 results
Anheuser-Busch InBev’s profit nearly doubled in the first quarter of 2009, and the company reached a deal to sell a Korean brewery.
Highlights of AB InBev’s first-quarter results:
- Volume performance: Total Q1 09 volumes increased 0.9%, with own beer volumes up 0.5%, led by a 3.5% increase in Focus Brands with strong performances from Brahma, Skol, Bud Light and Harbin. Soft drinks volumes grew 5.8%.
- Market share gains: YTD, the company gained market share in seven key markets, namely Argentina, Belgium, Germany, UK, US, South Korea and Ukraine.
- Revenue growth: Revenues grew 4.7% led by Latin America North up 10.4%, central and eastern Europe up 11%, and Latin America South up 21.1%. Revenue per hl (excluding US entertainment and packaging activities) grew 5.9% as a result of effective revenue management and continued focus on premium brands, despite difficult economic conditions.
- Cost of sales: Overall CoS for Q1 09 decreased 0.2%, but CoS per hl increased 2.5%. Although CoS remain under pressure, best practices and brewery productivity enhancements offset some of the general inflation.
- Operating expenses under control: Operating expenses declined 6.5% as the company’s synergy programme in the US gained traction.
- Ebitda: Normalised Ebitda for Q1 09 of $2,786m grew 25.9%, and normalised Ebitda margin for Q1 09 was 34% compared to 28.6% in Q1 08, up 577bp on an organic basis (ie after eliminating the effects of currency translation and scope changes). All operating zones delivered organic Ebitda margin expansion, led by North America where margins increased from pro forma 29.9% to 37.3%. The remaining quarters of the year shouldn’t show similar organic Ebitda growth due to more difficult comparisons.
- Profit: Normalised profit attributable to equity holders of AB InBev came in at $783m, compared to $398m in Q1 08 on a reported basis.
- Cash flow: Benefited from 25.9% normalised Ebitda growth and improved capital expenditure discipline. Cash flow available for debt pay down approximated $1.1bn, which coupled with successful bond issuances, provides significant financial flexibility.
- Disposals: The company announced, in a separate press release, that it had entered into an agreement with Kohlberg Kravis Roberts & Co LP (KKR) for the sale of its South Korean beer business for $1.8bn (equivalent to approximately 2.3 trillion KRW converted at the current spot rate of 1272.6).
“We appreciate all the hard work of our 120,000 colleagues around the world, which has led to strong results in a difficult environment,” said Carlos Brito, CEO. “I’m especially encouraged by our progress in integrating Anheuser-Busch. We’re moving quickly to capture our synergy goals, and achieved $295m of synergies in Q1. Importantly, we continue to gain market share in the US.
“2009 is off to a good start, but we recognise that many challenges remain. While our business continues to show resilience in a tough global, macroeconomic environment, we recognise the challenging operating landscape for the rest of the year. We continue to be very focused on integrating the Anheuser-Busch business and de-leveraging the company by delivering on our synergy and cash flow goals. At the same time, we remain committed to investing significant financial and marketing resources on our Focus Brands to drive sustained profitable growth.”
Source: Anheuser-Busch InBev
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