Letter to Shareholders

2007 has been the third full year of InBev. In 2007 we grew EBITDA by 16.5%, and delivered an EBITDA margin of 34.6%, an increase of 274 basis points on an organic basis compared to 31.9% in the previous year.

During the first three years of InBev, our EBITDA margin has demonstrated consistent evolution from 24.7% in 2004, 25.6% in 2005, 31.9% in 2006, to 34.6% in 2007. Our EBITDA grew at a compounded annual growth rate of 16.2% for these first years.

In 2007, our EBITDA margin grew in five out of six Zones:

North America: up to 38.2% or 173 bps organically.
Latin America North: up to 47.3% or 344 bps organically.
Latin America South: up to 40.3% or 244 bps organically.
Central & Eastern Europe: up to 23.6% or 173 bps organically.
Asia Pacific: up to 26.5% or 88 bps organically.
Western Europe: down to 22.3% or -9 bps organically.

Consolidated volumes grew by 5.2% in 2007, with growth of 4.7% for beer, and 8.6% for soft drinks. However our own beer volumes increased by 5% as a result of our strategy to focus on building branded volumes, while reducing private labels and other, lower margin beer volumes. Our volumes in Latin America North, Latin America South, and Central & Eastern Europe were strong, and above our overall average. Three main issues diluted our overall volume performance in 2007: our market share performances in China and the UK (the only Western European market where we lost share) and industry contraction in Western Europe.

With respect to costs, cost of sales per hectoliter grew by 2% versus average infl ation of 4%, as effective productivity programs enabled us to partially offset commodity and general infl ationary pressures.

Operating expenses decreased by 2.1%, which once again confirms the power of our Zero-Based Budgeting cost management approach, a way of life prevalent throughout the company. In terms of cash from operations, 2007 saw growth of 777 mio euro and our working capital decreased by 270 mio euro.

Priorities for 2008

For 2008, we will continue to work on the hallmarks of our business model: our Dream/People/Culture platform, market execution capabilities, brand building skills, and strict cost control.

Dream/People/Culture

Our dream is to become ‘the best beer company in a better world’. We use the term ‘better world’ to articulate our belief that if we are to become the best beer company measured by profitability, we must work hard internally as well as externally.

Internally, our aim is to continue to build and grow our brands whilst becoming more efficient in everything we do-year in, and year out.

Externally, we are committed to working with all relevant stakeholders to ensure our company and industry supports and promotes responsible drinking and environmental initiatives.

Talented people continue to represent our most important, and indeed only, sustainable competitive advantage. Our ownership culture unites our people providing the necessary energy, commitment and alignment to support the pursuit of our dream.

Market execution

In our industry, execution is what differentiates great companies from good companies, and we will continue to build these skills in order to differentiate ourselves in the market place. We still have opportunities in some of our Zones to enhance our in-market discipline.

Brand building capabilities

Brand building provides the content for market execution. The commercial section of this report features examples of brand development success stories from 2007. Beck’s Vier in the U.K., Bohemia in Brazil, Cass in South Korea, Sedrin in China, Chernigivske in the Ukraine, Quilmes Stout in Argentina, and Stella Artois in the U.S. are just some examples of positive brand development. We are committed to learn from these successes and replicate best practices throughout our company.

Strict cost control

Cost control remains an essential pillar of our business, and could make an even bigger difference going forward in an environment in which commodity prices are on the rise and inflation is predicted to increase.

In summary, 2007 was a good year for our company. We know we still have much to do to deliver on our dream of being the best beer company in a better world. Going forward into 2008, we at InBev, are excited by and committed to the prospect of realizing another step in pursuit of our dream.