A-B InBev posts strong results
Anheuser-Busch InBev on Thursday posted first-quarter sales and profits that handily beat analysts’ expectations and sent its European-traded stock flying on the steepest climb since last fall.
The bottom line: The world’s biggest brewer is selling more beer in a variety of key markets, tamping down costs, selling off its Korean beer business, looking to mesh St. Louis-based Anheuser-Busch more completely into the global corporation, slashing spending on big projects and planning to make its stock available in the U.S.
Here are some key numbers:
ABI’s total beer volumes rose 0.9 percent. Not too shabby. So far this year, ABI has gained market share in seven key markets: Argentina, Belgium, Germany, the U.K., South Korea, Ukraine and the U.S.
Revenue was up 4.7 percent. The Belgian brewer continued to focus on premium brands, "despite difficult economic conditions."
"Normalized" profit for shareholders nearly doubled, to $783 million.
ABI wants to capture $1 billion of "synergies" from Anheuser-Busch this year. That’s drastic cost-cutting, roughly equal to half of Anheuser-Busch profits in 2007 ($2.12 billion).
ABI also wants to reduce capital expenditures — spending on big projects, such as brewery upgrades — by at least $1 billion.
As part of a plan to sell off $7 billion in assets to pay down debt, the company said it would sell its South Korean beer business to private equity group Kohlberg Kravis Roberts for $1.8 billion.
The U low fee cash advance.S. was a stalwart market for ABI. The company’s shipments to wholesalers grew by half a percentage point here. One link down the distribution ladder, sales to retailers rose by a solid 2 percent, which may indicate nice demand for ABI’s beer on the retail level.
ABI’s European brands did well in the U.S., outrunning the weakness of the overall imported beer category.
Stella Artois volumes grew almost 37 percent.
The first quarter showed "strong results in a difficult environment," chief executive Carlos Brito said in a statement. "I am especially encouraged by our progress in integrating Anheuser-Busch."
ABI TO ‘FACILITATE OWNERSHIP’ OF ITS STOCK IN THE U.S.
For all you investors out there: Anheuser-Busch InBev’s board has commanded executives to start a program to let U.S. stockholders easily buy ABI stock, which now trades on the Euronext Brussels stock exchange. It’s called an "American depositary receipt."
ADRs allow non-U.S. companies to trade on U.S. stock exchanges. Investors can buy shares in foreign companies without undertaking cross-border transactions, which helps reduce administration and duty fees that would otherwise be levied on each transaction.
ADRs can be traded like the shares of U.S.-based companies. There’s no word yet on when the program might be up and running, but we’ll keep you updated.
Filed under: money by Fred