Anheuser-busch Inbev Sa/nv · EURONEXT:ABI
Anheuser-busch Inbev Sa/nv — SABMiller — H1 F2011 Earnings Presentation
46 slides from Anheuser-busch Inbev Sa/nv's earnings presentation, Nov 18, 2010
Slide 1: SABMiller plc F'11 first half results
SABMiller plc F’11 first half results Six months ended 30 September 2010 18 November 2010 Graham Mackay, Chief Executive Malcolm Wyman, Chief Financial Officer
Slide 2: Forward looking statements
Forward looking statements This presentation includes ‘forward-looking statements’ with respect to certain of SABMiller plc’s plans, current goals and expectations relating to its future financial condition, performance and results. These statements contain the words “anticipate”, “believe”, “intend
Slide 3: Overview
Overview Strong SABMiller financial performance Improving volume trends in some markets Favourable input costs in H1 Cost reductions across the group, enabling: – Margin growth in LatAm and US – Offset of volume de-leverage in Europe – Increased market investment, particularly in SA and Africa Group
Slide 4: Overview: improving volume performance in developing markets
Overview Improving volume performance in developing markets – Led by Africa, China and South Africa – Investment for growth: capacity, footprint, marketing and sales Quarterly MAT organic lager volume growth 12% 10% 8% MAT yoy organic growth (%) 6% Africa* 4% Asia LatAm 2% SA (beer) 0% Europe Q1 F'0
Slide 5: Divisional highlights: Latin America
Divisional highlights: Latin America Lager volumes marginally down – Impact of increased Colombian beer taxes – Category development and growth in Peru & Ecuador Central America - gaining share of alcohol and non alcoholic drinks – Despite challenging environment Improved profitability across the re
Slide 6: Divisional highlights: North America
Divisional highlights: North America Tough trading conditions driven by unemployment amongst key demographics Continued firm pricing and segment price gap management Synergies and cost reduction driving profit and margin growth – Synergies and cost reductions exceed $560 million – On track for a tot
Slide 7: Divisional highlights: Europe
Divisional highlights: Europe Softness across the region continues – Mitigated by favourable summer weather – Continued depressed consumer and occasion trends – Profit headwinds from reduced volumes, excise, downtrading and channel shifts Some positive signs in Russia Improved profitability from mor
Slide 8: Divisional highlights: South Africa
Divisional highlights: South Africa Economic upturn yielding category growth Beer brand enhancements, increased investment and strong execution stabilising market share – Trailing 3 month share improvement – Successful focus on Castle Lite, 22% growth – Mainstream portfolio gathering momentum Beer p
Slide 9: Divisional highlights: Africa
Divisional highlights: Africa Broad geographic footprint supporting growth – Strong volume growth in Uganda, Mozambique, Zambia – Good brand performance in Tanzania amidst loss of licensed brands – Continuing constraints in Angola and Botswana Improving beer brand portfolios, extended price ladders
Slide 10: Divisional highlights: Asia
Divisional highlights: Asia China Organic volumes up 9%; share growth – Led again by Central region and Northeast Marketing emphasis on premium Snow variants, growing premium segment share – Focused outdoor activity promotions for ‘Brave the World’ variant Pricing stagnant, rising marketing spend Le
Slide 11: Four strategic priorities
Four strategic priorities Creating a Developing balanced and strong, relevant attractive brand portfolios global spread of that win businesses in the local market Constantly raising Leveraging our the profitability skills and global of local scale businesses, sustainably © SABMiller plc 2010 F11 H1
Slide 12: Strong, relevant brand portfolios that win in the local market
Strong, relevant brand portfolios that win in the local market New consumer segments Differentiated and occasions premium portfolios Affordability in Africa MillerCoors: Tenth and Blake crafts & imports Accessing female consumers Tanzania: local, regional and Lighter beers, smaller packs in int’l br
Slide 13: Strong, relevant brand portfolios that win in the local market
Strong, relevant brand portfolios that win in the local market Continuous improvement in our commercial capabilities Profitable revenue management – Brand, pack and price architecture Differentiated and segmented execution – Winning across channels © SABMiller plc 2010 F11 H1 results 13
Slide 14: Raising the profitability of local businesses: Latin America
Raising the profitability of local businesses sustainably Cost reduction & margin growth in LatAm EBITA growth of 10%* and margin +210bps despite lower volumes (US$'m) 1,600 26% 1,400 25% 1,200 24% 1,000 800 23% 600 22% 400 21% 200 - 20% F08 F09 F10 H1 F11 MAT EBITA EBITA margin Creation of upper ma
Slide 15: Raising the profitability of local businesses: North America
Raising the profitability of local businesses sustainably North America Margin expansion in a tough economic Synergy and cost savings programs environment ahead of schedule (US$'m) – $564 million delivered thus far 800 16% 700 15% 600 14% Margin expansion in a tough 500 13% economic environment 400
Slide 16: Leveraging our skills and global scale: Business capability programme
Leveraging our skills and global scale Business capability programme Standardising support processes, manufacturing, front office systems Outsourcing some support processes Centralising specialist functions © SABMiller plc 2010 F11 H1 results 16
Slide 17: Business capability programme milestones
Leveraging our skills and global scale Business capability programme Milestones achieved: Sales and distribution system live in Peru New supply chain planning systems live in SA and Ecuador Finance, HR, Procurement and IT live in SA and Corporate HQ Finance and accounting processes selectively outso
Slide 18: Leveraging our skills and global scale
Leveraging our skills and global scale Enabling country managers to focus on local consumers, customers and other stakeholders Business capability projects to support commercial focus while reducing costs New SABMiller Europe “business model”: Country teams create and manage demand European Operatin
Slide 19: Good growth in EPS and dividends
Good growth in EPS and dividends Adjusted EPS – US $ +16% – Sterling +23% – Rand +6% – Euro +27% Interim Dividend 19.5 US cents per share – Up 15% © SABMiller plc 2010 F11 H1 results 19
Slide 20: Strong overall financial performance despite mixed trading conditions
Strong overall financial performance despite mixed trading conditions Total volumes of 143.4 mhl * +2.7% - Organic * +2.0% Lager organic volumes * +1.5% Organic group revenue * +6.3% - Constant currency * +4.5% Organic EBITA * +12.6% - Constant currency * +10.2% EBITA margin * +90 bps - Constant cur
Slide 21: Revenue benefits from firm pricing and volume growth
Revenue benefits from firm pricing and volume growth Group Revenue (including associates and joint ventures) components of performance, US$m 1.8% 6.3% 0.3% 14,236 2.5% 2.0% 13,355 Sep '09 Volume Price/mix Currency Sep '10 Acquisitions Sep '10 Organic © SABMiller plc 2010 F11 H1 results 21
Slide 22: Strong EBITA growth
Strong EBITA growth EBITA (including associates and joint ventures) components of performance, US$m 2.4% 12.6% 0.2% 2,466 10.2% 2,187 Sep '09 Underlying Currency Sep '10 Acquisitions Sep '10 Organic © SABMiller plc 2010 F11 H1 results 22
Slide 23: Latin America
Latin America Good EBITA growth from lower raw material and fixed costs Lager volumes down in Colombia Increased market-facing investment across all countries US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 2,771 2,746 1 EBITA * 625 566 10 EBITA margin * (%) 22.6 20.6 200 bps Or
Slide 24: Europe
Europe Tough economic conditions and down trading continue to impact volumes Investment in core brands increased Lower raw material costs and fixed cost control minimise margin decline US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 3,159 3,211 (2) EBITA * 568 590 (4) EBITA marg
Slide 25: North America
North America Strong EBITA growth from net pricing, synergies and cost savings Volumes impacted by weak US beer market Strong momentum behind craft and import segment US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 2,865 2,870 - EBITA * 480 379 27 EBITA margin * (%) 16.8 13.2 36
Slide 26: Africa
Africa Results include our share of our associate in Zimbabwe Multi-beverage portfolio delivers strong underlying volume growth Increased marketing and capacity-related costs impact margins US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 1,558 1,263 23 EBITA * 273 246 11 EBITA m
Slide 27: Asia
Asia Good second quarter volume growth in China India volumes grow, cycling a weak comparative period EBITA growth and margin improvement US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 1,168 1,021 14 EBITA* 109 90 22 EBITA margin* (%) 9.4 8.8 60 bps Organic volumes (hl’000) Lag
Slide 28: South Africa Beverages
South Africa Beverages Volumes benefit from increased marketing investments Firm pricing and volume growth deliver EBITA growth Increased marketing costs impacts EBITA margin US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 2,224 2,051 8 EBITA * 360 333 8 EBITA margin * (%) 16.2
Slide 29: Input costs reduce over the first half
Input costs reduce over the first half Half year constant currency decrease per hl – Total raw materials - Down mid-single digits – Total COGS - Down low-single digits Lower barley and hop prices drive down brewing raw material costs Stronger local currencies benefit input costs Higher distribution
Slide 30: Exceptional items
Exceptional items US$m Sep 10 Business capability programme costs: - included in operating profit (155) Broad-Based Black Economic Empowerment scheme South Africa: - included in operating profit (IFRS2 non-cash) (126) Restructuring costs: - share of associates’ and joint ventures’ (4) Total exceptio
Slide 31: Business capability programme
Business capability programme Important benefit drivers achieve significant milestones in first half – Trinity Procurement now leads brewing materials buying – European manufacturing organisation commences Process and systems changes advancing – Sales and distribution in Latin America; support syste
Slide 32: Cash flow, finance costs and taxation
Cash flow, finance costs and taxation Normalised EBITDA* up 12% to US$2,577m from US$2,292m Normalised EBITDA* margin is 130 basis points higher than prior year Working capital inflow US$90m Capex** down US$125m to US$614m Free cash flow*** improved by US$234m to US$1,244m Adjusted finance costs up
Slide 33: Net debt
Net debt US$m Sep 10 Mar 10 Non-current borrowings 7,235 7,809 Current borrowings 1,676 1,605 Cash and cash equivalents (478) (779) Borrowings-related derivative financial instruments (495) (237) Net debt 7,938 8,398 Gearing (%) 36.8 40.8 Normalised EBITDA Interest cover *(times) 9.1 8.7 Weighted av
Slide 34: Net debt profile and maturity
Net debt profile and maturity Debt Maturity Debt profile 16% 0 – 1 Year US$ 1,300m 32% Dollars Euros Rand 1 – 2 Years US$ 594m Peso 20% Other 2 – 5 Years US$ 4,619m 11% 21% Over 5 Years US$ 1,425m © SABMiller plc 2010 F11 H1 results 34
Slide 35: Financial outlook – current financial year
Financial outlook – current financial year Improvement in economic conditions in emerging markets – Mixed consumer spending patterns Raw material input cost benefits expected to reduce in the second half – Impacted by rising barley prices – Total raw materials per hl* Down low-single digits – Total
Slide 36: Conclusion
Conclusion Our medium term outlook for growth in volume, value and profitability remains strong Consumer market recovery is uneven, with incremental improvement in economic conditions across most of our emerging markets Continuing selective price increases, lower input costs, increased brand investm
Slide 37: Supplementary information
Supplementary information
Slide 38: Reported EBITA contribution
Reported EBITA contribution EBITA contribution* September 2010 September 2009 2% Latin America 2% 16% 15% 27% Europe 25% North America 4% 4% Africa 10% 11% Asia South Africa Beverages 22% Hotels & Gaming 19% 17% 26% South Africa * Before corporate costs © SABMiller plc 2010 F11 H1 results 38
Slide 39: Financial results
Financial results US$m Sep 10 Sep 09 Change % Reported currency Group revenue 14,236 13,355 7 EBITA 2,466 2,187 13 EBITA margin (%) 17.3 16.4 90 bps Sales volumes (hl’000) Total 143,404 139,648 3 Lager 118,988 116,887 2 Soft drinks 21,128 20,176 5 Other alcoholic beverages 3,288 2,585 27 © SABMiller
Slide 40: EBITA margin performance
EBITA margin performance Organic, constant currency basis Sep 09 Sep 10 22.6% 20.6% 19.5% 18.4% 18.0% 17.5% 17.3% 16.8% 16.3% 16.2% 16.4% 13.2% 8.8% 9.4% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2010 F11 H1 results 40
Slide 41: Reported EBITA margin performance
Reported EBITA margin performance Sep 09 Sep 10 22.7% 20.6% 19.5% 18.4% 18.0% 16.8% 17.2% 17.3% 16.3% 16.2% 16.4% 13.2% 8.8% 9.2% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2010 F11 H1 results 41
Slide 42: Reported volumes
Reported volumes* Reported domestic lager volumes Sep 10 Change % by country, hl ‘000 South Africa 12,262 3 Colombia 8,619 (7) Poland 8,115 (6) Peru 5,252 11 Czech 3,883 (9) Russia 3,155 (2) Romania 3,102 (11) Ecuador 2,500 4 India 2,487 32 Italy 2,158 (3) Tanzania 1,299 - China ** 29,814 10 * exclu
Slide 43: Net debt
Net debt Sep 10 Mar 10 Average interest rate (gross debt) – % 6.1% 5.7% Net debt currency profile* US dollars 32% 31% Euro 21% 23% SA rand 11% 9% Colombian peso 20% 21% Other 16% 16% 100% 100% * Including the effect of derivatives © SABMiller plc 2010 F11 H1 results 43
Slide 44: Financial & commercial rand / US$ rate
Financial & commercial rand / US$ : rate (CPI differentials) month-on-month basis 1.6 1.4 Base 1 = 1990 1.2 1.0 0.8 0.6 0.4 90 92 94 96 98 00 02 04 06 08 10 Source: Bloomberg, JP Morgan © SABMiller plc 2010 F11 H1 results 44
Slide 45: Exchange rates
Exchange rates Closing rates currency vs US$ 30 Sep 10 31 Mar 10 30 Sep 09 Colombia 1,800 1,929 1,922 Peru 2.79 2.84 2.88 Honduras 18.90 18.90 18.90 Euro 0.73 0.74 0.68 Poland 2.91 2.86 2.88 Czech Republic 18.03 18.87 17.18 Russia 30.40 29.36 30.09 Romania 3.13 3.03 2.88 Hungary 202.57 196.88 184.09
Slide 46: Balance sheet
Balance sheet US$m Sep 10 Mar 10 Goodwill and Intangible assets 16,431 15,932 Property, plant and equipment 9,122 8,916 Investment in joint ventures and associates 8,130 8,035 Other non-current assets 918 721 Current assets excluding cash 3,204 3,116 Cash and cash equivalents 478 779 Borrowings (8,9