Anheuser-Busch Cos. Reports Improved Sales and Earnings Per Share for the First Quarter 2008

24/04/08 Anheuser-Busch Cos., Inc.reported improved sales and earnings for the first quarter 2008 at its annual meeting of shareholders held in Orlando, Fla. Consolidated net sales increased 6.2 percent in the first quarter 2008 and earnings per share increased 6.0 percent.

"Our operations achieved solid results in the quarter, growing sales and operating income six percent over the first quarter last year," said August A. Busch IV, president and chief executive officer of the company. "We have successfully implemented U.S. beer price increases and expect good revenue per barrel performance in 2008. Our cost reduction efforts are significantly mitigating the impact of industry-wide cost pressures. We are increasing marketing and sales support for our core beer brands, and, although U.S. beer sales-to-retailers results were below expectations, we are optimistic concerning the outlook for beer sales during the key summer selling season."

BEER SALES RESULTS

U.S. beer shipments-to-wholesalers increased 0.4 percent for the first quarter 2008, with import brands contributing 60 basis points to overall growth. First quarter 2008 sales-to-retailers were down 0.7 percent, and sales-to-retailers  for Anheuser-Busch produced brands, excluding imports, declined 1.4 percent. Sales-to-retailers trends have improved in April and for the first three weeks of the month are up 2 percent for Anheuser-Busch produced brands. Wholesaler inventories for Anheuser-Busch produced brands at the end of the first quarter were approximately the same as a year ago.

The company's estimated U.S. market share for the first quarter 2008 was 50.9 percent, compared to first quarter 2007 market share of 50.6  percent. Market share is based on estimated U.S. beer industry shipment volume using information provided by the Beer Institute and the U.S. Department of Commerce.

International volume, consisting of Anheuser-Busch brands produced overseas by company-owned breweries and under license and contract-brewing agreements, plus exports from the company's U.S. breweries, increased 3.1 percent for the first quarter 2008, driven primarily by sales in Canada, Mexico, Argentina and China.

Worldwide Anheuser-Busch beer sales volume for the first quarter 2008 increased 0.8 percent, to 31.2 million barrels. Worldwide beer volume is comprised of domestic volume plus international volume.

Equity partner brands volume, representing the company's share of its equity partners' volume reported on a one-month lag, increased 9.3 percent for the first quarter of 2008 due to increased volume for Modelo and Tsingtao.

Total brands volume increased 2.3 percent for the first quarter 2008.

FIRST QUARTER 2008 FINANCIAL RESULTS

*    Net sales increased 6.2 percent on increased sales from all business  segments.  U.S. beer sales were up due to increased volume and pricing, international beer net sales increased 20 percent from higher volume, packaging segment sales were up 8 percent due primarily to higher volume and entertainment sales increased 20 percent primarily from higher attendance.

U.S. beer segment sales increased 4 percent on improved revenue per barrel and increased sales volume. Revenue per barrel was up 2.3 percent primarily due to the implementation of price increases on a majority of the company's U.S. volume late last year and in the first quarter of 2008.

*    Operating income increased 6.2 percent due primarily to higher profits for U.S. beer and international beer operations and improved results from entertainment operations, partially offset by lower packaging segment results

Income before income taxes for U.S. beer was up $18 million, reflecting higher volume and pricing, partially offset by increased marketing expense for trademark brands.

International beer pretax income was up $18 million, primarily due to increased profits in China, Canada and improved results in the United Kingdom.

Packaging segment pretax income decreased $5 million primarily due to lower earnings from recycling operations.

Entertainment segment pretax results improved $12 million primarily from increased attendance due to the Easter holiday occurring in the first quarter in 2008 versus the second quarter last year.

*    Equity income decreased $33 million in the first quarter 2008,primarily due to a combination of higher materials and operating costs for Grupo Modelo partially offset by higher beer volume. Additionally, equity income for the first quarter 2007 included a $17 million benefit from the return of an advertising fund that was part of Modelo's former beer import contract.

*    Net income in the first quarter 2008 decreased 1.3 percent and diluted earnings per share were up 6.0 percent versus prior year.Earnings per share continue to benefit from the company's ongoing share repurchase program. The company repurchased over 9 million shares in the first quarter.