BEL: InBev earnings rise on back of LatAm sales
InBev, the world's biggest brewer, saw growth in the emerging markets of Latin America and Central and Eastern Europe, drive rising sales and core earnings in 2005.
The Belgium-based brewing giant today (24 February) reported a 15.3% rise in EBITDA to EUR3.3bn (US$3.9bn) on the back of a 7.2% increase in revenues to EUR11.6bn.
Rising sales from its Latin American subsidiary AmBev and high volume growth from SUN Interbrew, its unit in Russia and the Ukraine, drove group revenues.
InBev's operations in Western Europe continued to disappoint, however, with volumes down 1.4% on an organic basis, thanks to falling sales in the UK and Germany.
The company, which late last year announced a series of cuts from its operations in Belgium and France, today said it would merge its finance, procurement and export functions in Europe at a cost of 360 jobs. InBev will also outsource a number of systems functions across the continent.
"(The moves) free us up to focus more on the sales and marketing side of the business, which is the key side of our business," said InBev CEO Carlos Brito.
In a separate move, InBev said that its Czech arm, Pivovary Staropramen, would consolidate its brewing operations with production at its Branik brewery stopping in the first quarter of next year.
InBev said it was "well-positioned" to achieve its target of an EBITDA margin of 30% by the end of 2007. However, Brito refused to give a precise figure for the cost cuts InBev hoped to achieve this year.
InBev CFO Felipe Dutra said the brewer would "continue to identify opportunities for greater efficiencies" across Western Europe, hinting that further cuts were to come.
Brito added that InBev, which is set to extend the Beck's family in the UK with the upcoming launch of Beck's Vier, believed innovation was vital in generating sales in the world's more stagnant beer markets.
"In Western Europe and North America, innovation will have to play a bigger role to get the top line back on track," he added.
InBev saw volumes rise 4.4% in Asia-Pacific, buoyed by rising sales of its more premium brands in China, where last month the company snapped up local brewer Fujian Sedrin.
Brito said InBev would look at further potential acquisitions "as opportunities come along" but stressed the company's focus was to grow organically.
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