BELGIUM: Stella Artois fails to halt InBev FY performance

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InBev has posted a strong increase in sales and profits for its full fiscal year.

The global brewer said today (28 February) that net profit for the year to the end of December leapt by 22.4% on 2006, coming in at EUR1.86bn (US$2.81bn).

Non-recurring items resulted in a net non-recurring gain to profit from operations of EUR374m. This gain was mainly due to the sale of Belgian and Dutch real estate assets, which resulted in a gain before taxes of EUR357m, the company said.

Sales, meanwhile, also headed north, rising by 7.2% to EUR14.43bn. The sales lift was driven by a rise in volumes, up 5.2% in organic terms to 270.6m hectolitres.

Volumes in Western Europe, however, slid by 4.9%, with North America seeing volumes slip by 0.5%.

"Three main issues diluted our overall volume performance in 2007," the company said. "Our market share performances in China and the UK (the only Western European market where we lost share) and industry contraction in Western Europe.

Central & Eastern Europe was the star performer in volume terms, climbing by 13.7% to 40.1m hectolitres.

Turning to InBev's global brands, Brahma volumes rose 4.9% due primarily to good volumes in Brazil. While Stella Artois volumes declined by 2.4%, this was entirely due to lower volumes in the UK, partly offset by strong volume growth in the US, Eastern Europe and Latin America. Beck's delivered 4.3% volume growth, with significant contributions from the UK and Central & Eastern Europe. Continued growth in Western Europe and North America led to 10.2% higher volumes of Leffe.

"In summary, 2007 was a good year for our company," said InBev's CEO, Carlos Brito. "We know we still have much to do to deliver on our dream of being the best beer company in a better world.

"Going forward into 2008, we at InBev are excited by and committed to the prospect of realising another step in pursuit of our dream."

Separately, the brewer said today that it has proposed a series of measures designed to "significantly enhance the company's capital structure". InBev's board is proposing to pay a dividend of EUR2.44. The current dividend policy allows for the payment of, on average, between 25% and 33% of the previous fiscal year's net profit.  Going forward, the board said it will implement "a more progressive dividend approach" in which the 33% maximum payout is removed.  In addition, the share buy-back program for up to EUR300m of InBev shares, announced in January, has been concluded, with a total amount of EUR207m purchased. InBev has subsequently initiated a new buy-back programme of shares for an amount up to EUR500m, for a period of 12 months.

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