US: Anheuser bullish on business outlook

Top executives at Anheuser-Busch were in bullish mood at the recent BUD Investor Conference held in St Louis, giving an optimistic outlook for the US brewing giant's future prospects, both in the US and internationally.

"By strategically broadening our US beer portfolio to access high-margin growth opportunities, Anheuser-Busch is much better positioned for growth than we were just eight months ago," president and CEO August A. Busch IV told the gathering of investors and analysts.

Busch took the opportunity of the conference to outline the management's vision for the company. He said that central to this vision was producing and marketing the highest quality premium beer and select non-beer beverages in profitable and growing markets, where the company's competitive advantages can drive sustainable long-term growth and enhance shareholder value.

Senior managers from Anheuser-Busch's US beer company also presented their business plans for the company's core trademark brands to investors.

A-B reported that it was making good progress in digesting the series of new growth initiatives recently undertaken and managing the added complexity associated with an expanded portfolio. It added that the pricing environment in the US beer industry is currently favourable, and sales-to-retailers in May have rebounded after a disappointing April.

In their presentations, senior managers of A-B's international beer business reported that international net income had grown by an average of 20% per year since 1999. While its investment in Grupo Modelo currently provides the vast majority of A-B's international profits, the brewer said it is also building an important leadership position in China, while pursuing new growth opportunities in emerging markets, such as India, Russia, Colombia and Panama.

Restoring profit margin growth is a key element in the company's vision, A-B said. The company's long-term earnings model continues to target earnings per share (EPS) growth in the 7% to 10% range, and management expects EPS growth for 2007 to exceed the long-term model's range. However, A-B said that second-quarter EPS growth is expected to be below this range with earnings growth accelerating in the second half of the year.