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Anheuser-Busch Highlights Progress To Investors
Nov. 29, 2005
Domestic Beer Volume and Market Share Results Show Improvement
NEW YORK , November 29, 2005 – “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 today.
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.”
Other Matters
As previously announced, Anheuser-Busch Companies’ annual New York investor presentation is being broadcast live over the Internet today beginning at 8:00 a.m. Eastern Time. A replay of the webcast will be available on the company’s Web site for approximately one week. For details visit the company’s site on the Internet at www.anheuser-busch.com.
This release contains forward-looking statements regarding the company’s expectations concerning its future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent the company’s expectations, but the company’s expectations concerning its future operations, earnings and prospects may change. The company’s expectations involve risks and uncertainties (both favorable and unfavorable) and are based on many assumptions that the company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the company’s expectations and the forward-looking statements will be correct. Important factors that could cause actual results to differ (favorably or unfavorably) from the expectations stated in this release include, among others, changes in the pricing environment for the company’s products; changes in U.S. demand for malt beverage products, including changes in U.S. demand for other alcohol beverages; changes in consumer preference for the company’s malt beverage products; changes in the cost of marketing the company’s malt beverage products; regulatory or legislative changes, including changes in beer excise taxes at either the federal or state level and changes in income taxes; changes in the litigation to which the company is a party; changes in raw materials prices; changes in packaging materials costs; changes in energy costs; changes in interest rates; changes in foreign currency exchange rates; unusual weather conditions that could impact beer consumption in the U.S.; changes in attendance and consumer spending patterns for the company’s theme park operations; changes in demand for aluminum beverage containers; changes in the company’s international beer business or in the beer business of the company’s international equity partners; changes in the economies of the countries in which the company’s international beer business or its international equity partners operate; changes in the company’s credit rating resulting from future acquisitions or divestitures; and the effect of stock market conditions on the company’s share repurchase program. Anheuser-Busch disclaims any obligation to update or revise any of these forward-looking statements.
Nov. 29, 2005
Domestic Beer Volume and Market Share Results Show Improvement
NEW YORK , November 29, 2005 – “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 today.
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.”
Other Matters
As previously announced, Anheuser-Busch Companies’ annual New York investor presentation is being broadcast live over the Internet today beginning at 8:00 a.m. Eastern Time. A replay of the webcast will be available on the company’s Web site for approximately one week. For details visit the company’s site on the Internet at www.anheuser-busch.com.
| Notes: | |||||||
1. |
Reconciliation of Projected Full Year 2005 Earnings Per Share Change | ||||||
Earnings Per Share |
|||||||
2005 |
2004 |
Decrease |
|||||
| Projected / Reported | $2.34 - $2.37 |
$2.77 |
|||||
| Gain on Sale of Spanish Theme Park | (0.024) |
-- |
|||||
| Favorable Chile Income Tax Settlement on CCU Sale |
(0.009) |
-- |
|||||
| Deferred Income Tax Benefit from Favorable Ohio Tax Legislation |
(0.009) |
-- |
|||||
| Litigation Settlement | 0.118 |
-- |
|||||
| Commodity Hedge Gain | -- |
(0.015) |
|||||
| Gain on Sale of CCU | -- |
(0.018) |
|||||
| Deferred Income Tax Benefit From Mexican Income Tax Rate Reduction |
-- |
(0.012) |
|||||
| Excluding One-Time Items | $2.42 - $2.45 |
$2.73 |
-10% to -11% |
||||
This release contains forward-looking statements regarding the company’s expectations concerning its future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent the company’s expectations, but the company’s expectations concerning its future operations, earnings and prospects may change. The company’s expectations involve risks and uncertainties (both favorable and unfavorable) and are based on many assumptions that the company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the company’s expectations and the forward-looking statements will be correct. Important factors that could cause actual results to differ (favorably or unfavorably) from the expectations stated in this release include, among others, changes in the pricing environment for the company’s products; changes in U.S. demand for malt beverage products, including changes in U.S. demand for other alcohol beverages; changes in consumer preference for the company’s malt beverage products; changes in the cost of marketing the company’s malt beverage products; regulatory or legislative changes, including changes in beer excise taxes at either the federal or state level and changes in income taxes; changes in the litigation to which the company is a party; changes in raw materials prices; changes in packaging materials costs; changes in energy costs; changes in interest rates; changes in foreign currency exchange rates; unusual weather conditions that could impact beer consumption in the U.S.; changes in attendance and consumer spending patterns for the company’s theme park operations; changes in demand for aluminum beverage containers; changes in the company’s international beer business or in the beer business of the company’s international equity partners; changes in the economies of the countries in which the company’s international beer business or its international equity partners operate; changes in the company’s credit rating resulting from future acquisitions or divestitures; and the effect of stock market conditions on the company’s share repurchase program. Anheuser-Busch disclaims any obligation to update or revise any of these forward-looking statements.