He continued: “The integration of Anheuser-Busch continues to run in line with or ahead of plan. We delivered $315m of synergies in the second quarter 2009, bringing our first-half 2009 total to $610m. Our sales and marketing teams have done a very good job throughout this period and continue to show market share gains. Importantly, all zones performed well and each delivered substantial operating improvements while gaining or maintaining share in most key markets.
“In summary, we have strong operating momentum going into the second half of 2009, but recognise that many challenges remain. The beer industry, while resilient in most of our key markets, isn’t immune to economic pressures. We continue to be focused on de-leveraging the company by executing on our synergy and cash flow goals, and pursuing a disciplined disposal process. At the same time, we will continue to invest significant sales and marketing resources in our focus brands, building the foundation for many years of profitable growth.”
Felipe Dutra, CFO, added: “Consolidated volumes were essentially flat. However, we gained or maintained market share in eight of our key markets, and our focus brands grew 1.5% in the second quarter 2009.
“Ebitda increased 18.5% in the second quarter, with margin gains in all operating zones. Cash flow generated in HY09 available for debt paydown approximated $4.7bn driven by strong Ebitda performance, the Tsingtao disposal and improved capital expenditure discipline. This solid free cash flow, coupled with over $13bn of bond issuances, provides significant financial flexibility. We have cash and cash equivalents, plus committed credit lines, of $10.9bn as of 30 June and expect strong additional free cash flow generation in the second half of the year. This compares with debt maturing in the next 12 months, including acquisition debt, of $3.9bn.
“We continue to make progress towards our post-combination goal to execute at least $7bn from divestitures, with the announcement of the sale of four of our packaging plants to Ball Corporation for $577m. The divestiture of our 27% stake in Tsingtao for approximately $900m closed in the second quarter 2009, and the disposal of our South Korean beer business for $1.8bn closed on 24 July 2009.
“In addition, we have executed almost $280m of smaller asset disposals, including Labatt USA, and real estate and land assets in western Europe and other zones. In total, we achieved $3.56bn of our disposal programme in HY09. With the net proceeds from completed asset disposals and the strong cash flow generation in the first half 2009, we were able to repay the $7bn Facility ‘B’ in the beginning of August, three months ahead of maturity in November 2009. Our focus is now to repay the remaining $3.53bn of the $12bn Facility ‘A’, maturing in November 2010.
“Looking forward, while we expect a solid second-half performance, as previously indicated, our year-over-year Ebitda gains will be significantly below the 18.5% achieved in 2Q09, primarily due to more difficult comparisons.”
Source: Anheuser-Busch InBev
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