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Anheuser-Busch Restoring Sales and Earnings Momentum

Posted on: Thursday, 23 February 2006, 18:01 CST

SCOTTSDALE, Ariz., Feb. 23 /PRNewswire-FirstCall/ -- Anheuser-Busch executives expressed confidence in the improving outlook for the company in a presentation given at the Consumer Analyst Group of New York Conference today. "We have restored the volume growth momentum of our domestic beer company. We are in the process of restoring revenue per barrel growth through the implementation of our 2006 price plan, and are working to restore cost stability through a number of cost reduction programs. With our substantial leadership position and competitive advantages in domestic beer and our important strategic positions in key high growth markets internationally, we are confident we will restore our profit growth in 2006(1) and beyond," Patrick Stokes, president and chief executive officer, Anheuser- Busch Cos. Inc., told investors and analysts at the conference.

Through a number of new sales initiatives, the company restored its domestic beer volume and market share growth in the second half of 2005. Anheuser-Busch's wholesalers' sales-to-retailers increased 0.8 percent in the second half and grew 2.7 percent in the fourth quarter (both on a comparable selling day adjusted basis). Anheuser-Busch brands gained six-tenths of a share point at the consumer level in both the third and fourth quarters, according to IRI supermarket data. The company's sales momentum has carried over into 2006, with wholesalers' sales-to-retailers up 2.9 percent through mid-February.

For 2006, Anheuser-Busch's objective is to achieve a balance between volume and revenue per barrel growth in what is expected to be a more favorable pricing environment, said Stokes. The domestic beer company successfully implemented moderate price increases and discount reductions in a few markets late last year and more broadly in January and February of this year. In total, the company's pricing actions cover over one-half of Anheuser-Busch's volume and price increases are typically in the 2 to 3 percent range.

Restoring cost stability is expected to take longer than restoring volume and pricing. Over the last three years, the domestic beer company has experienced substantial increases in commodity costs, most recently from aluminum, glass and energy. Commodity cost pressures continue in 2006. Commodity costs tend to be cyclical over the long-term and the company is actively working on a number of productivity initiatives to improve the cost outlook.

Meanwhile, the company's international beer segment continues to make substantial contributions to the company's earnings growth and is strategically well-positioned for long-term growth with its key investments in Mexico and China.

W. Randolph Baker, vice president and chief financial officer, also addressed the group, providing an update of the company's long-term earnings growth model, which targets average annual earnings per share growth in the 7 to 10 percent range. The company did not give specific earnings per share guidance for 2006 other than reiterating its expectation that earnings per share would increase this year versus normalized 2005 results.(1)

Other Matters

As previously announced, Anheuser-Busch's Consumer Analyst Group of New York presentation is being broadcast live over the Internet today beginning at 4:30 p.m. Eastern Time. A replay of the webcast will be available on the company's Web site for approximately one week. For details, visit the company's site on the Internet at http://www.anheuser-busch.com/ .

This release contains forward-looking statements regarding the company's expectations concerning its future operations, earnings and prospects. On the date the forward-looking statements are made, the statements represent the company's expectations, but the company's expectations concerning its future operations, earnings and prospects may change. The company's expectations involve risks and uncertainties (both favorable and unfavorable) and are based on many assumptions that the company believes to be reasonable, but such assumptions may ultimately prove to be inaccurate or incomplete, in whole or in part. Accordingly, there can be no assurances that the company's expectations and the forward-looking statements will be correct. Important factors that could cause actual results to differ (favorably or unfavorably) from the expectations stated in this release include, among others, changes in the pricing environment for the company's products; changes in U.S. demand for malt beverage products, including changes in U.S. demand for other alcohol beverages; changes in consumer preference for the company's malt beverage products; changes in the cost of marketing the company's malt beverage products; regulatory or legislative changes, including changes in beer excise taxes at either the federal or state level and changes in income taxes; changes in the litigation to which the company is a party; changes in raw materials prices; changes in packaging materials costs; changes in energy costs; changes in interest rates; changes in foreign currency exchange rates; unusual weather conditions that could impact beer consumption in the U.S.; changes in attendance and consumer spending patterns for the company's theme park operations; changes in demand for aluminum beverage containers; changes in the company's international beer business or in the beer business of the company's international equity partners; changes in the economies of the countries in which the company's international beer business or its international equity partners operate; changes in the company's credit rating resulting from future acquisitions or divestitures; and the effect of stock market conditions on the company's share repurchase program. Anheuser-Busch disclaims any obligation to update or revise any of these forward-looking statements.

Notes (1) Calculation of 2005 Earnings Per Share for 2006 Comparison Purposes The table below sets forth the assumptions used in comparing 2006 earnings per share expectations to 2005 results. Earnings per Share Reported $2.35 Gain on Sale of Spanish Theme Park (.024) Favorable Chile Income Tax Settlement on CCU Sale (.009) Deferred Income Tax Benefit from Favorable Ohio Tax Legislation (.009) Litigation Settlement .118 Excluding One-Time Items $2.43 Pro Forma Stock Option Expense (.12) 2005 Including Pro Forma Stock Option Expense $2.31

First Call Analyst: David Sauerhoff, 314-577-9009FCMN Contact:

Anheuser-Busch Cos. Inc

CONTACT: Loren Wassell of Anheuser-Busch Companies, Inc.,+1-314-577-0733

Web site: http://www.anheuser-busch.com/

Source: PRNewswire-FirstCall

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