Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — SABMiller — Investor Day (March 2015)
54 slides from Anheuser-Busch InBev SA/NV's investor day presentation, March 2015
Slide 1: SABMiller plc Quarterly divisional seminar series: Africa
SABMiller plc Investor relations Quarterly divisional seminar series Africa March 2015
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: SABMiller – who we are
SABMiller – who we are One of the world‟s largest brewers, with total beverage volumes of 321 mHL Group net producers revenue* of $27 billion EBITA* of $6.5 billion 72% of EBITA from developing economies** 95% of lager volumes from No. 1 or 2 market share positions Strategic partnerships
Slide 4: Africa is an important contributor to the SABMiller Group
Africa is an important contributor to the SABMiller Group Key metrics Africa (ex. SA) growth, % (reported basis) Lager vol. Revenue EBITA Total volumes 22% Africa & SA 20% (318 mHL)*1 Latin America 13% 15% 15% Europe 13% 14% 13% 27% 13% 12% North America* 18% Asia Pacific 19% 6% 6% 5% 5% Group NPR 1
Slide 5: Our speakers today
Our speakers today Jonathan Kirby (1992) 2011 Financial Director – SABMiller Africa 1998 Financial Director – SABMiller A&A 1995 Financial Director – KBL Botswana 1992 Joined SABMiller Africa Mark Bowman (1993) 2007 Managing Director – SABMiller Africa 2006 Managing Director – SABMiller Poland 2003
Slide 6: Jonathan Kirby
Jonathan Kirby SABMiller Africa Financial Director 6
Slide 7: Experience in managing short-term volatility in Africa
Experience in managing short-term volatility in Africa Oil price movements have positive and negative impacts GDP maintains momentum – Evidence of diversifying economies Strong US$ remains a high probability © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 7
Slide 8: The Africa growth fundamentals are compelling
The Africa growth fundamentals are compelling 2015 Annual growth A young and fast growing consumer base % Number of people, millions Male 9.6 70+ 7.4 Female 6.8 65-69 5.8 2.6% Population growth 8.9 60-64 7.9 11.3 55-59 10.2 13.6 50-54 12.8 16.3 45-49 16.0 GDP/capita growth (a 5.4% 20.3 40-44 20.4 de
Slide 9: An African brewer built on local insights…
An African brewer built on local insights… © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 9
Slide 10: … nurturing powerful local and regional brands
… nurturing powerful local and regional brands Regional brands © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 10
Slide 11: With Castel, we are strongly positioned across Africa
With Castel, we are strongly positioned across Africa Market position …with our multi-beverage portfolio Beer volume share… 90 mHL, % 2% 6% 38% 53% #1 player #2 player Beer Opaque beer #3 player Soft drinks Spirits © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 11
Slide 12: Investing significantly in capacity
Investing significantly in capacity Nigeria expansion Namibia greenfield Zambia opaque Require image Pics – Simon Thomas Expansion underway Commissioned Sept 2014 Commissioning now Mbarara greenfield Ghana upgrade Alrode Maltings Pics – Simon Thomas Pics – Simon Thomas Commissioned 2013 Commissioned
Slide 13: Transformative beer growth in key markets…
Transformative beer growth in key markets… Mozambique Tanzania Uganda Zambia 2000: 5 litres per capita 2000: 6 litres per capita 2000: 5 litres per capita 2000: 5 litres per capita 2014: 10 litres per capita 2014: 9 litres per capita 2014: 11 litres per capita 2014: 9 litres per capita +92% +61% +11
Slide 14: …to deliver value
…to deliver value Africa growth (key metrics) F10 – F14 F10 index = 100, Constant currency CAGR 170 13.2% 160 150 140 9.0% 130 120 4.5% 110 100 F10 F11 F12 F13 F14 Lager volume Net Producer‟s Revenue EBITA © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 14
Slide 15: SABMiller Group strategic choices
SABMiller Group strategic choices 1. Drive topline growth 2. Liberate resources to win in market and reduce costs in an integrated organisation 3. Shape global footprint to contribute to growth © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 15
Slide 16: Castel – a partnership for Africa
CASTEL Castel – a partnership for Africa Shape footprint to contribute to growth SABMiller and Castel footprint in Africa Collectively in 38 markets More than $200m incremental EBITA post alignment of Nigeria and Angola operations Enduring partnership SABMiller Castel SABMiller associate SABMi
Slide 17: Coca-Cola Beverages Africa
COCA-COLA BEVERAGES AFRICA Creating the largest African Coke bottler Shape footprint to contribute to growth Coca-Cola Beverages Africa (CCBA) overview Investment to accelerate 40% CSD growth Coke volumes in Africa Close alignment with The Coca-Cola Company 10th largest bottler, Castel are Coc
Slide 18: We believe mainstream spirits present an opportunity
SPIRITS We believe mainstream spirits present an opportunity Shape footprint to contribute to growth Mainstream spirits expansion Fast growing Price index Premium >300 category spirits SABMiller Participate in Focus formalising the Mainstream spirits 100 spirits industry – Also beneficial for th
Slide 19: Konyagi: building a mainstream spirits brand
SPIRITS Konyagi: building a mainstream spirits brand Shape footprint to contribute to growth Annual volume, million unit cases Recognised as the truly Tanzanian spirit, „The Spirit of the Nation‟ 3.0 Exported to 5 countries 2.5 +25% 2.0 1.5 1.0 0.5 F10 F11 F12 F13 F14 F15e © SABMiller 2014 Quart
Slide 20: Integration of Africa and South Africa
AFRICA AND SOUTH AFRICA INTEGRATION Integration of Africa and South Africa Liberate resources and reduce costs Leveraging SA scale for Africa‟s benefit Cost synergies © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 20
Slide 21: Castle brands: a regional approach to drive growth
AFRICA AND SOUTH AFRICA INTEGRATION Castle brands: a regional approach to drive growth Liberate resources and reduce costs Castle brands Innovating with Castle % of beer portfolio Recent innovations Rest of Portfolio Castle brands 30% 22% 70% Growing 78% ~1.2 x F10 F14 faster © SABMiller 2014 Quarte
Slide 22: Creating value through integration
AFRICA AND SOUTH AFRICA INTEGRATION Creating value through integration Liberate resources and reduce costs Integrated Maltings & agriculture programmes Southern African grid opportunity $120m Investment in Zambia and SA Maltings expansion ~75% Local sourcing of grains and adjuncts Local maltings B
Slide 23: Focusing on efficiency gains
EFFICIENCIES Focusing on efficiency gains Liberate resources and reduce costs Total costs % NPR 78% 77% Global Business Services 75% End-to-end Supply Chain 73% 72% Regional procurement centre Integrated Africa/South Africa synergies F10 F11 F12 F13 F14 © SABMiller 2014 Quarterly Divisional
Slide 24: People: building capability, operating at global standards
DEVELOPING OUR PEOPLE People: building capability, operating at global standards Mbeya Brewery, Tanzania Commissioned in 2012, situated in a remote location in rural Tanzania Local staff recruited and trained as artisans and managers Implementation of „SABMiller Ways‟ Robust performance mana
Slide 25: Prosper: improving livelihoods and building communities
PROSPER Prosper: improving livelihoods and building communities Enterprise development Alcohol Water partnerships Recycling of post- Farming responsibility consumer waste Small-holder “Kickstart” programmes Barley farming Retailer development © SABMiller 2014 Quarterly Divisional Seminar Ser
Slide 26: Progress in farming
FARMING Progress in farming Development of economically viable small-holder farmers On-going development of sorghum and maize Innovation in use of cassava in beer Extension services to fund inputs and improve yields Partnering with NGOs and local farmer cooperatives 80,000 Farmers within o
Slide 27: A diverse and growing portfolio
OUR PORTFOLIO A diverse and growing portfolio Drive topline growth Extending refreshment Latin America occasions Ensuring Improving affordability ‘Romancing’ core lager South Africapremium mix Africa © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 27
Slide 28: Mark Bowman
Mark Bowman SABMiller Africa Managing Director © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 28
Slide 29: Growth levers to address consumer needs
Growth levers to address consumer needs 1 Increasing access to formal alcoholic beverages 2 Tapping into local pride 3 Unlocking aspirations of the middle class © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 29
Slide 30: Film: Understanding local consumers in Africa
Film: Understanding local consumers in Africa © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 30
Slide 31: Our portfolio of products is designed to meet consumer needs
Our portfolio of products is designed to meet consumer needs Unlocking aspirations of the Premium beer >$1.20 middle class Mainstream beer Tapping into local pride and spirits $1.00 Affordable & Increasing access to formal commercial $0.75 alcoholic beverages opaque beer Homemade brews and local spi
Slide 32: Opportunity to increase beer share of total alcohol
Opportunity to increase beer share of total alcohol Clear beer PCC (total population), l Litres of pure alcohol (LPA)*, l Global 45 2.5 3.7 6.2 Beer Other alcohol Uganda 11 0.9 8.9 9.8 Tanzania 9 0.8 6.9 7.7 Nigeria 8 0.8 9.3 10.1 Africa average 9 0.6 5.6 6.2 5x *WHO Global status report on alcohol
Slide 33: In Africa, the majority of alcohol is informal and untaxed
In Africa, the majority of alcohol is informal and untaxed Size of the alcohol market, est., % In Africa, beer is highly aspirational but relatively expensive Time taken to work for a beer in Africa 4 hours vs 8 min in Europe North America C&E Europe LatAm Africa Beer Wine Spirits Informal alcohol ©
Slide 34: © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015
© SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 34
Slide 35: Beer price moderation
Price moderation Beer price moderation Measured price increases and price-point targeting to make beer more affordable Mozambique Mozambique …the price of my beer [2M] has been …If I have 100 meticais I can buy 4 the same for some time now… Impalas to enjoy with my friends… © SABMiller 2014 Quarterl
Slide 36: Beer price moderation
Price moderation Beer price moderation Mozambique South Africa A shift to lower pricing regimes Accelerate opportunity for consumers to enter beer category Delivers incremental volume and NPR Holding attractive price points Entry price for consumers growth +17% ~110 Volume growth Profitability
Slide 37: Consumers are looking for local brands that meet their needs
Local pride Consumers are looking for local brands that meet their needs Nigeria Mozambique Tanzania Local brand – “Hero is a drink for the Local brand – “2M is Mozambican, no Local brand – “Balimi is for us here in Igbo” doubts on that” the Lake region” Connecting with others – “Every Igbo
Slide 38: 'Romancing' mainstream core lager to win in market
Local pride ‘Romancing’ mainstream core lager to win in market Hero lager, Nigeria Club lager, Ghana High quality at a fair price Pride in national identity – „Truly Ghanaian‟ Consumer insights to develop relevant local Creating consumer love for the brand (“Charlie”, positioning one of us)
Slide 39: Bringing consumers into the category
Access to formal alcohol Bringing consumers into the category Affordable alcohol alternatives: Opaque beer and clear beer from sorghum, cassava Zambia Tanzania …I can still manage to have a drink …I used to drink local brews and illicit because it‟s affordable… alcohol but now I drink Eagle… © SABMi
Slide 40: Creating a price ladder in opaque beer
Access to formal alcohol Creating a price ladder in opaque beer Chibuku footprint $ price per serve 0.80 0.50 0.30 Existing markets New markets 0.5l Chibuku draught 1l Chibuku carton 1l Super Available in 10 markets © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 40
Slide 41: Innovation to target new occasions and price points
Access to formal alcohol Innovation to target new occasions and price points Chibuku Super annual sales, kHL 1 000 800 600 400 200 0 Trading up – good quality at affordable price F12 F13 F14 F15e Take home opportunity with sealed container Margins double that of carton © SABMiller 2014 Quarter
Slide 42: Innovating in affordable clear beer
Access to formal alcohol Innovating in affordable clear beer Mozambique Impala annual sales, kHL 250 200 150 100 50 Pricing 75% of mainstream lager 0 Volume gains incremental to mainstream F12 F13 F14 F15e Margins maintained through negotiated lower excise 10% of mix Since launch in F12 © SABM
Slide 43: Cassava farming in Mozambique: a win-win-win
Access to formal alcohol Cassava farming in Mozambique: a win-win-win Farmers Government SABMiller 3,800 smallholder farmers Incremental revenue from Lower excise rate engaged to date excise through new category Goodwill generated with local Support of agricultural sector stakeholders and
Slide 44: Unlocking the aspirations of the middle class
Middle class aspirations Unlocking the aspirations of the middle class Building a premium brand Accessing mixed gender occasions Zambia South Africa Castle Lite – “is a benchmark.” Flying Fish – “is kind of like being a maverick and being out there” Status – “When someone is drinking a Castel
Slide 45: The emerging middle class are seeking premium brands
Middle class aspirations The emerging middle class are seeking premium brands Aspirations Growth of premium portfolio, % mix Premium Rest of portfolio We are a different kind of 23% couple, we love to travel, we‟ve got big dreams… 12% 31% 33% New occasions Changing lifestyles 77% Strong innova
Slide 46: Castle Lite: meeting the lifestyle needs of modern African consumers
Middle class aspirations Castle Lite: meeting the lifestyle needs of modern African consumers Castle Lite footprint Africa Castle Lite volume, mHL 6 5 +22% 4 3 2 1 Lower carb, lighter beer appealing to modern consumers 0 Powerful marketing and innovation mix developed F12 F13 F14 F15e in SA and
Slide 47: Appealing to women as well as men
Middle class aspirations Appealing to women as well as men Bringing women into the category… …through flavoured long alcoholic drinks Targeting women without alienating men …I think what‟s changed recently is the Opportunities through sweeter taste profiles stigma around females drinking beer…
Slide 48: Expanding our sales footprint
Route-to-market Expanding our sales footprint Expanding outlet reach - Kampala 2013 Systematic approach to extend outlet reach Doubling sales reach over 2 years with cost-effective local area sales representatives Integrating distributors into our systems to provide direct retail sales line of
Slide 49: Winning in outlet execution
Route-to-market Winning in outlet execution Volume uplift, % Coolers TVs Furniture and sound Emphasis on outlet investment to improve consumer experience 3-6% 11% 6% © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 49
Slide 50: Our core strategy is consistent and aligned to Group Strategic Choices
Our core strategy is consistent and aligned to Group Strategic Choices SABMiller Group strategic choices Africa growth levers 1. Drive topline growth 2. Liberate resources to win in market and 1 Increasing access to formal alcoholic beverages reduce costs in an integrated 2 Tapping into local pride
Slide 51: Our approach is centered on understanding consumers and their needs
Our approach is centered on understanding consumers and their needs © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 51
Slide 52: Medium term guidance
——————— | at i guidance -.
Slide 53: Africa medium-term guidance
Africa medium-term guidance NPR growth: targeting 10%+ (organic constant currency basis) – Volume growth: mid-single digits – NPR per HL: mid-single digits (organic constant currency basis) EBITA margin: 10 – 40 bps A strong growth-oriented, ROIC-enhancing strategy Profit to grow significantly a
Slide 54: Q&A
Q&A © SABMiller 2014 Quarterly Divisional Seminar Series | Africa | March 2015 54