InBev reports second quarter revenue growth
The world's biggest brewer, InBev, reported revenue growth of 4.5 per cent to €3.71 billion during the second quarter of 2008, but admitted that it was "far from satisfied" with the company's performance.
The brewing giant had profits (EDITDA) of €1.24 billion during the second quarter, compared to €1.232 billion a year ago, although it claims in its financial report today that this represents "organic growth" of 4.7 per cent.
In a statement, management said: "While we are far from satisfied with our performance year to date, 2Q08 results already show an improvement versus our first quarter. With respect to the top line, in 2Q08 own beer volumes were 0.9 per cent higher than last year (1Q08: -0.7 per cent), and revenue per Hl grew 3.7 per cent (1Q08: +5.2 per cent), as we made some selected price adjustments and achieved further improvements in our product mix."
The company claims that the underlying strength of its brand portfolio, coupled with continued strong investments behind those brands, led to market share being maintained or increased in eight of its top 10 markets, including its three key Western European markets, which presumably include the UK.
The financial report shows that InBev's own beer volumes in the UK were down by 4.1 per cent compared to last year, but it claims that is still ahead of the industry, resulting in higher market share.
One of the significant factors in the company's strategy for this year is its on cost prioritization and efficiencies, which led savings of 11.3 per cent in overhead expenses. That, in turn, allowed InBev to free up more resources for its brand building, innovation and sales programs, with a 6.9 per cent increase in sales and marketing expenses.
"Our 2Q results were better than 1Q, as anticipated, but still below our aspirations", admitted InBev CEO Carlos Brito. "Although industry growth in some key markets is below last year, we delivered market share results in the majority of our markets.
"Our overall pricing is healthy, but rising costs continue to put pressure on our margins."
Brito added, "On July 13th we announced the proposed combination of our company with Anheuser-Busch. Our team however remains focused on driving our organic business. As we look to the second half, we continue to expect an improved performance and the return to EBITDA margin expansion."
