InBev Reports “Difficult Start”
Despite revenue growth of 4.8% and further administrative expense reduction, normalized EBITDA was essentially flat for the quarter (+0.7%), as a result of a strong increase in cost of sales and phasing in commercial expenses.
08/05/08 InBev, the world’s leading brewer, has announced its results for the first quarter of 2008 (1Q08):
Total volumes declined by 0.4% in the quarter, while their own beer volumes were 0.7% below last year, driven primarily by weak industry performance in Brazil. Total revenue grew by a solid 4.8% during 1Q08, while revenue per Hl grew 5.2%.
Consolidated cost of sales (CoS) per Hl grew by 9.9% in 1Q08, reflecting the impact of higher input costs year-on-year (yoy) versus a very low base in 1Q07. Operating expenses rose modestly, as a result of anticipated sales and marketing expenses; while administrative expenses declined by 2.5%.
Despite revenue growth of 4.8% and further administrative expense reduction, normalized EBITDA was essentially flat for the quarter (+0.7%), as a result of a strong increase in cost of sales and phasing in commercial expenses. EBITDA margin ended the quarter at 30.7%, an organic decline of 124 basis points.
InBev returned a total of 518 million euro during the 1Q08, as a result of acquiring 322 million euro of InBev shares and 196 million euro of AmBev shares through share buyback programs. Shareholders approved the payment of a dividend of 2.44 euro per share (last year: 0.72 euro per share), in line with the company’s proactive approach to managing its capital structure. This amount translates into a dividend yield of 4.5% based on the closing price of 54.42 on April 29th.
InBev’s long term business model is based on driving volumes ahead of the industry and revenue ahead of volumes while keeping tight control of expenses. All of these are enabled by a unique Dream/People/Culture platform. The results achieved in 1Q08 do not represent any departure from this model, but merely reflect softer industry volumes predominantly in Brazil and an unfavorable cost of sales comparison with the first quarter of last year, the company said.
