FDBusiness.com

Anheuser-Busch InBev, the world’s largest brewer, has increased revenue by 7.2% to $39.76 billion and EBITDA by 7.7% to $15.5 billion. Total volumes in 2012 grew by 0.3%, with own beer volumes increasing by 0.1%, while non-beer volumes increased by 2.2%. The EBITDA margin improved by 18 bps to 39.0% and normalized profit grew by 12.9% to $7.28 billion.

The revenue growth was chiefly due to favorable brand mix and revenue management initiatives. Cost of sales was up 5.4%, with the group’s continuous drive to maximize operating efficiency and productivity partially offsetting a rise in commodity prices. Sales and marketing expenses were up 6.8% as Anheuser-Busch InBev continued to invest to grow its brands.

The group’s focus brands, which account for 70% of total group volume, grew by 1.5% in 2012, with the three global brands, Budweiser, StellaArtois and Beck’s, growing by 4.1%.

Budweiser sold outside the US now represents over 51% of global Budweiser volume, driven by strong growth in China, a sharp volume increase in Bud sales in Russia, and gains in the premium segment in Brazil. Stella Artois delivered double-digit growth in the US, increased volume by almost 50% in Brazil, and made solid gains in Russia. Beck’s performed well in Germanyand China. Strong performances by other Focus Brands included the Bud Light family in the US and Canada, Michelob Ultra in the US, Antarctica  in Brazil, Harbin in China and Hasseröder in Germany.

In June 2012, Anheuser-Busch InBev agreed to acquire the remaining stake in Mexico’s Grupo Modelo which it does not already own, for approximately $20.1 billion. The combined company would lead the industry with annual beer volume of about 400 million hls. It would also be the leading brewer in Mexico, the beer industry’s fourth largest profit pool and the second largest economy in Latin America. Corona would become one of Anheuser-Busch InBev’s global flagship brands. Anheuser-Busch InBev anticipates $1 billion in annual cost synergies to be phased in over four years, as well as one-time cash flow synergies of $500 million, primarily from working capital, delivered over two years.

In addition, in February 2013, Anheuser-Busch InBev announced a revised transaction with Constellation Brands, in which Constellation Brands will acquire Grupo Modelo’s Piedras Negras brewery in Mexico, and Crown Imports will be granted a perpetual and exclusive license for the Grupo Modelo brands produced in Mexico and distributed by Crown in the US, for $2.9 billion.

The combination with Grupo Modelo remains subject to the existing challenge by the US Department of Justice. The revised agreement with Constellation remains conditioned on the completion of the Modelo transaction, as well as regulatory approvals in the US and Mexico and other customary closing conditions.