AB InBev Profits from Brazil Prices as U.S. Sales Drop

Revenue growth: Revenue grew by 6.2% in the quarter, with revenue per hl growth of 7.5% on both a reported and constant geographic mix basis, driven by our revenue management and premiumization initiatives

Volume performance: Total volumes declined by 1.2%, with our own beer volumes down by 1.0%. The decline in own beer volumes was driven mainly by a decline of 6.0% in sales to wholesalers (STWs) in the US which, as expected, faced a difficult comparable following the build-up of wholesaler inventories in 1Q14 ahead of union negotiations. Selling day adjusted sales–to-retailers (STRs) in the US decreased by 1.5%

Focus Brands: Volumes of our Focus Brands declined by 0.3% in the quarter, being impacted by the difficult STW comparable in the US. Volumes of our global brands grew by 4.6%, with Budweiser up 6.2%, Corona up 2.7% and Stella Artois up 1.2%

Cost of Sales (CoS): CoS increased by 4.8% in 1Q15 and by 6.1% on a per hl basis. On a constant geographic basis, CoS per hl increased by 6.4%

EBITDA grew by 11.1% to 3 967 million USD with a margin expansion of 170 bps, driven mainly by strong top line growth

Net finance results: Net finance income (excluding non-recurring net finance results) was 91 million USD in 1Q15 compared to net finance costs of 866 million USD in 1Q14. This variance of 957 million USD was driven primarily by a positive 757 million USD mark-to-market adjustment in 1Q15 linked to the hedging of our share-based payment programs, compared to a loss of 52 million USD in 1Q14

Income taxes: Income tax in 1Q15 was 593 million USD with a normalized effective tax rate (ETR) of 18.0%, compared to an income tax expense of 419 million USD in 1Q14 and a normalized ETR of 18.8%. The normalized ETR was favorably impacted by the 757 million USD gain linked to the hedging of our share-based payment programs

Profit: Normalized profit attributable to equity holders of AB InBev was 2 294 million USD in 1Q15 compared to 1 416 million USD in 1Q14, driven by strong top line growth and favorable net finance results

Earnings per share: Normalized earnings per share (EPS) increased to 1.40 USD in 1Q15 from 0.87 USD in 1Q14

Share Buyback Program: As reported in our FY14 results release, the Board has approved a share buyback program for an amount of one billion USD. It remains our intention to use the shares acquired to fulfil our various share delivery commitments under the stock ownership plan. The buyback program began on 18 March 2015 and as of 1 May 2015, the company had acquired approximately 3.8 million shares for a total consideration of approximately 467 million USD.

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