just The Preview - Anheuser-Busch InBev H1 & Q2
Anheuser-Busch InBev prepares to report H1 results
Anheuser-Busch InBev will report its second-quarter and first-half results on Thursday (11 August). Here, just-drinks takes a look at the highs and lows for the company in the three months to the end of June.
- At the start of the quarter, Anheuser-Busch InBev renewed Bud Light's sponsorship of the Ultimate Fighting Championship in the US.
- The Stella Artois brewer reported a solid financial performance for the first quarter of the year, despite weak demand for beer in both North America and Brazil. Prices rises lifted net sales by 5.6%, to US$9bn, while net profits doubled to $964m for the three months.
- On a subsequent results conference call with analysts, the brewer said that it would continue with its plan to raise beer prices in the US, in spite of the country's fragile economy.
- In mid-May, A-B InBev announced that Paul Chibe will head up its US marketing department from 1 June. Chibe, who joined from Wrigley Jr Co, has replaced Frank Abenante, global VP of brands and insights at A-B Inbev, who held the US marketing post on an interim basis.
- Over the in the UK, and continuing the marketing theme, the group launched its 'Le Apart-O-Matic' advert for Stella Artois.
- Also in May, A-B InBev renewed its activity in the debt market. It said that it would redeem US$1.25bn of debt that had been due in 2014. Shortly after this, the brewer announced the launch of a EUR750m (US$1bn), ten-year bond in order to raise finance for "general corporate purposes". At the end of 2010, A-B InBev's net debt to EBITDA ratio was 2.9 and the group wants a ratio of two by 2012.
- Late in the month, research by IEG showed that A-B InBev was the second biggest spender on commercial sponsorships in the US in 2010. It overtook Nike, which held second in 2009, by spending between $220m and $225m, IEG said. PepsiCo claimed top spot, while MillerCoors was seventh, on a spend of up to $160m.
- Right at the end of May, A-B InBev expressed concern at accusations levelled at one of its largest global sponsorsip partners, world football body FIFA.
- On the supply side, A-B InBev confirmed that it has delayed the closure of its Stag brewery in the UK until at least 2014. The brewery, it said, is brewing too much Budweiser to close.
- In emerging markets, the group's CEO, Carlos Brito, was reported to have said that A-B InBev would spend "hundreds of millions of dollars" in China in 2011. Earlier in the year, its China business confirmed the acquisitions of Weixue Beer Group Co and Liaoning Dalian Daxue Brewery Co in the country.
- In June, A-B InBev became unexpectedly embroiled in the Foster's Group takeover saga. Grupo Modelo, in which A-B InBev has a 50% non-controlling stake, has been mooted as a potential bidder for Foster's. Initially, Modelo was linked to a joint bid with Molson Coors, though the speculation has since focused on a Modelo solo bid. In any case, analysts have said that a move by the Mexican brewer would require A-B InBev's blessing, according to their shareholder charter.
- Back in the UK, A-B InBev confirmed that Budweiser will sponsor the FA Cup football tournament in the UK, expanding the beer brand's links to sport in one of its fastest-growing markets. It's a three-year deal.
- The brewer also announced that it would launch Leffe and Hoegaarden in Turkey after signing an import deal with Turk Tuborg Bira & Malt Sanayii in the country.
- In June, just-drinks published a two-part interview with A-B InBev's global chief marketing officer, Chris Burggraeve. Covering everything from global brands to China to CSR, you can read the first part here and the second part here.
- In late June, and in a sign that US beer sales are not improving as anticipated, Stifel Nicolaus analysts said that A-B InBev is likely to suffer worse beer sales declines in the US than anticipated for at least the next two years. It predicted that the Budweiser brewer's US volume sales will decline by 2% in the second half of 2011, versus its previous prediction of a 1% drop.
- At the end of the reporting period, A-B InBev announced that it would lower the abv of the draught version of Budweiser in the UK, from 5% to 4.3%. The group cited consumer research as the reason for the move.
- Also in the UK, the brewer warned that warned that it was struggling to satisfy demand for its recently-launched Stella Artois Cidre. "We are working with our retail partners to manage stocks carefully," it said.
- Last, but not least, A-B InBev announced that it would expand the presence of Stella Artois in China. Speaking exclusively to just-drinks, group CMO Burggraeve said that the roll-out of Stella Artois would be very concentrated. “You'll see Stella Artois (in very selected places) in Beijing, Shanghai and Guangzhou,” he said.
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