Eastern Europe strategy pays off for Inbev

Inbev have reported strong third quarter results with revenues up 11 per cent to €3.54bn, led by strong sales in Central and Eastern Europe and Latin America.

The international brewing company, which manufactures brands such as Beck's and Stella Artois, saw its net income rise from €358m for the same period 2005 to €479m. Profit margins also grew to 34.1 per cent from 30.2 per cent the year before.

"With the exception of Asia Pacific, all zones expanded revenue per H1 ahead of volume. Latin America and central and Eastern Europe had very good volume performances," said Carlos Brito, CEO at InBev.

Inbev has managed to increase both profit margins and operating profits, which is up by 19 per cent to €966m, whilst also cutting costs in order to curb expenses such as the cost of raw materials and commodities. Cost savings in the third quarter were €26m, which takes the five year figure to €75m, said Felipe Dutra, chief financial officer at InBev.

The company's growth was driven by sales in Central and Eastern Europe, where sales in Russia and the Ukraine were particularly strong, at 26 per cent and Latin America at 21 per cent.

In Western Europe drink sales volume fell by 2.3 per cent, the UK market taking the most substantial dip at 12 per cent. Sales volume in North America fell by 2.5 per cent.

"We will continue to implement our best practices in the commercial and cost management area's, with a clear focus to overcome the top-line challenges in Western Europe" said Brito.

The company said that strong sales in Eastern and central Europe more than off-set poorer sales in other zones such as North America where revenue declined 2 per cent and Western Europe where it fell by 2.7 per cent.