BELGIUM: Anheuser-Busch InBev's FY profits fall, Brazil drives sales
- Profits fall against disposal gains in '09
- Brazil propels like-for-like beer sales
- Hints at exceeding synergies target
Anheuser-Busch InBev thanks Brazil for higher beer sales
Anheuser-Busch InBev has reported a drop in full-year profits, but a rise in like-for-like beer sales thanks to strong demand in Brazil.
Net profits for the 12 months of 2010 fell by 12.7% to US$4bn, Anheuser-Busch InBev said today (3 March). It blamed the drop on a tough comparative figure in 2009, when the Budweiser brewer benefited from one-off gains related to assets disposals.
The group's net sales also dipped, by 1% to $36.3bn, due to the lack of contribution from businesses divested during 2009, such as the bulk of A-B InBev's Eastern Europe brewing assets and Oriental Brewery in South Korea.
Excluding those businesses, A-B InBev's net sales for 2010 rose by 4.4% versus 2009 on an organic basis, to $36.76bn. Underlying net profits, meanwhile, rose by 28% for the year if one-off items are excluded, to $5bn.
"Our financial results for 2010 showed very good progress in spite of the persistent challenging economic environment in several of our markets," said the Belgium-based brewer. "It is important to emphasise that brand health and topline growth are, and will remain, our top priorities," it added.
Strong demand for beer in Brazil helped A-B InBev to forget about weak beer sales in much of North America and Western Europe during 2010. Group beer volumes rose by 2% for the year, with volumes up by 10.5% in its Latin America North business. By contrast, volume sales fell by 3% in North America and by 1.6% in Western Europe.
However, there are signs that the general beer market decline in North America has slowed, with A-B InBev's volume sales slipping by just 1% in the fourth quarter of 2010.
The group's share price rose by 3% following its results announcement and the firm hinted that it may exceed its synergies target following InBev's $52bn takeover of A-B in late 2008.
"In terms of Anheuser-Busch integration synergies, in 2011, we are expecting to deliver at least the additional $270m bringing total synergies to our commitment of $2.25bn," the brewer said.
Looking to the future, A-B InBev said that it only expects low single-digit rises in sales costs in 2011, adding that it is well-hedged against commodity cost increases. The company plans to increase capital expenditure to between $2.7bn and $2.9bn in 2011, up from $2.1bn in 2010, as it seeks to expand capacity in emerging markets.
The group remains committed to reaching a net debt to EBITDA ratio of two by 2012. The ratio was 2.9 at the end of 2010.
For the full announcement, click here.
A ruling on Kronenbourg 1664 by the UK's advertising watchdog has the potential to set a precedent for marketeers of home-brewed 'foreign' beers....
Craft Brewers Alliance has continued to see stronger demand for its beers in the first half of 2011, but profits only rose thanks to the sale of its Fulton Street Brewery....
- What Brexit means for drinks industry? - Analysis
- Is there a future for the global beer brand?
- What does Brexit mean for AB InBev's SAB deal?
- Can fruit cider survive UK slowdown? - Focus
- How soft drinks can win big with adult consumers
- The UK Referendum - just-drinks Live Blog
- Aldi dealt alcohol sales blow in Australia
- Maxxium eyes US$1.4bn opportunity in UK spirits
- Ex-William Grant CEO Stella David re-joins Bacardi
- Beam Suntory rolls out Larios gin range to UK
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Spirits and Wine: Corporate Overview
- Global RTD insights - market forecasts, product innovation and consumer trends
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends