Anheuser-busch Inbev Sa/nv · EURONEXT:ABI
Anheuser-busch Inbev Sa/nv — FY2018 Earnings Presentation
36 slides from Anheuser-busch Inbev Sa/nv's earnings presentation, Feb 28, 2019
Slide 1: Full Year and Fourth Quarter 2018 Results
Full Year and Fourth Quarter 2018 Results 28 February 2019 © AB InBev 2019 – All rights reserved
Slide 2: Legal Disclaimers
Legal Disclaimers Certain statements contained in this report that are not statements of historical fact constitute forward-looking statements, notwithstanding that such statements are not specifically identified. In addition, certain statements may be contained in the future filings of the Company
Slide 3: Agenda
➢ 2018 Results ➢ Premiumization Strategy ➢ Better World Update ➢ Financials ➢ Q&A © AB InBev 2019 – All rights reserved 3 © AB InBev 2019©–ABAllInBev rights2019 – All rights reserved 3 reserved
Slide 4: 2018 Key Takeaways
2018 Key Takeaways HIGHLIGHTS HEADWINDS • Healthy volume, revenue and market share • Challenging macroeconomic environments growth achieved in many important markets in Argentina, Brazil and South Africa • Best market share trend performance in the US • Unfavorable currency movements in since 2012 e
Slide 5: FY18 Financial Summary
FY18 Financial Summary Total Revenue +4.8% • Revenue per hl +4.5%, +4.7% on a constant geographic basis • Global Brands 9.0%, 13.1% outside of their home markets Total Volumes +0.3% • Own beer +0.8%, non-beer -3.6% EBITDA +7.9% and EBITDA margin expanded by 118 bps to 40.4% Normalized EPS decreased
Slide 6: 4Q18 Financial Summary
4Q18 Financial Summary Total Revenue +5.3% • Revenue per hl +4.9%, +4.6% on a constant geographic basis • Global Brands +9.8%, +12.6% outside of their home markets Total Volumes +0.3% • Own beer +1.2%, non-beer -4.9% EBITDA +10.0% and EBITDA margin expanded by 190 bps to 43.3% Normalized EPS decreas
Slide 7: Major country highlights
Major country highlights US: Best annual market share trend since 2012 Mexico: Market share gains with growth in every region across all major brands Colombia: Global brands growing double-digits, led by Budweiser Brazil: Further premiumization and successful affordability initiatives South Africa:
Slide 8: Premiumization Strategy
Premiumization Strategy © AB InBev 2019 – All rights reserved 8
Slide 9: Premiumization plays a key role in expanding the beer category
Premiumization plays a key role in expanding the beer category PREMIUMIZATION LAGER OTHER FLAVORED EASY BEER CLASSIC BEER DRINKING STYLES AFFORDABILITY © AB InBev 2019 – All rights reserved 9
Slide 10: Disposable income is growing, and expected to nearly double in the next 13 years
Disposable income is growing, and expected to nearly double in the next 13 years $43 TRILLION GDP PER CAPITA 2030 Upper middle/high income segment 50,000 45,000 +83% 40,000 35,000 30,000 25,000 $24 TRILLION 2002 2017 2017 Source: WorldBank OpenData , Euromonitor Discretionary Income, World (Disposab
Slide 11: The beer category has a significant opportunity for premiumization
The beer category has a significant opportunity for premiumization versus other categories % of category volume priced >1.6x the largest brand in the market Beer Spirits Wine Early Maturity Markets 0% 7% 18% Mid-Maturity Markets 3% 17% 70% Late Maturity Markets 6% 30% 85% Source: GlobalData, PlatoLo
Slide 12: Premiumization is a portfolio game, especially as markets mature
Premiumization is a portfolio game, especially as markets mature Average # of Premium beer brands in each market, by market maturity 214 38 9 Early maturity market Mid-maturity market Late maturity market Source: Canadean 2018 Data © AB InBev 2019 – All rights reserved 12
Slide 13: Unparalleled portfolio of Premium brands
Unparalleled portfolio of Premium brands, comprised of our global, international, craft and specialty brands
Slide 14: Global Brand Portfolio
Global Brand Portfolio FY18 Revenue +9.0% +13.1% outside of home markets 20.8% of total AB InBev revenue Top-line grew +10.0% Grew top-line by double Top-line grew +28.5% outside of the US digits in >25 countries outside of Mexico © AB InBev 2019 – All rights reserved 14
Slide 15: We have expanded our portfolio to >35 craft brands
We have expanded our portfolio to >35 craft brands in 30 countries © AB InBev 2019 – All rights reserved 15
Slide 16: Craft & Specialties brands earned unprecedented recognition in 2018
Our Craft & Specialties brands earned unprecedented recognition in 2018, with 363 awards at the world’s top 15 most prestigious competitions 60 58 48 25 172 © AB InBev 2019 – All rights reserved 16
Slide 17: Execution of our premium portfolio is led by the High End Company
Execution of our premium portfolio is led by the High End Company, a specialized structure with a highly focused approach Super Premium POCs Focus Targeting 22 Urban Centers Premium POCs Countries Maintream POCs © AB InBev 2019 – All rights reserved 17 © AB InBev 2019 – All rights reserved
Slide 18: The High End Company
THE HIGH END COMPANY #1 GROWTH ENGINE OF AB INBEV of Global of Global 10% Revenue 30% Revenue Growth © AB InBev 2019 – All rights reserved 18
Slide 19: Premiumization represents our single biggest opportunity for profitable growth
Premiumization represents our single biggest opportunity for profitable growth 220M hl Faster Growth Premium Industry 2020 (Estimation) 5x faster than Core 185M hl 2016 More Profitable 2x more profitable than Core Source: PlatoLogic. Release Jun ‘16 & extrapolation based on Zones Subm. 1YP ‘17 on No
Slide 20: Better World FY18 Results
Better World FY18 Results © AB InBev 2019 – All rights reserved 20
Slide 21: 2025 Sustainability Goals
2025 Sustainability Goals Smart Water Circular Climate Agriculture Stewardship Packaging Action 100% of our direct 100% of our 100% of our products 100% of our purchased farmers are skilled, communities in high will be in packaging that electricity comes from connected and stress areas have is retur
Slide 22: Our 100+ Accelerator puts us at the forefront of sustainable innovation
Our 100+ Accelerator puts us at the forefront of sustainable innovation Close Gaps Widen Network Scale Solutions We will leverage new Introduces new Identify scalable partners & technologies to suppliers & new solutions to the reach our 2025 voices, bringing world’s most Sustainability Goals fresh i
Slide 23: Global brands paving a sustainable path with Better World campaigns
Our global brands continued to pave a sustainable path with their Better World campaigns Budweiser US took wind power to Stella Artois achieved 1.6 million Corona became the first global beer the Super Bowl, with markets people provided with clean water brand to pilot plastic-free rings on its aroun
Slide 24: Smart Drinking: 8% of global beer volumes are no- and low-alcohol
Smart Drinking: 8% of our global beer volumes are from no- and low-alcohol beers and we aim to reach 20% by 2025 No- and low-alcohol beers In 2018, we launched already make up 12 >20 >20% no- and low-alcohol beers for a no-alcohol of our beer volume in total of beer brands across many key markets 6
Slide 25: Earnings, cash flow and capital allocation
Earnings, cash flow and capital allocation © AB InBev 2019 – All rights reserved 25 25
Slide 26: Synergy capture continues
Synergy capture continues • Continue to expect estimated incremental pre-tax synergies of 3.2 billion USD per annum (on a constant currency basis as of August 2016), including the 1.05 billion USD cost and efficiency savings identified by SAB, to be delivered by the end of 2019. These figures do not
Slide 27: Increase in Net Finance Costs driven by MTM on share-based payment programs
Increase in Net Finance Costs driven primarily by the swing in MTM on the share-based payment programs Interest expense Net interest on MTM - share Currency and Bank fees, Hyperinflation including net defined Accretion based payment other hedging transaction monetary FY17 borrowing cost benefit liab
Slide 28: Normalized Effective Tax Rate (ETR)
Normalized Effective Tax Rate (ETR) 32.1% 32.9% 28.8% 27.8% 25.1% 27% 24.0% 25% 22.9% 22.4% 4Q17 4Q17 4Q18 4Q18 FY17 FY17 FY18 FY18 FY19 Guidance* excluding MTM excluding MTM excluding MTM excluding MTM *Reflects our normalized ETR guidance, excluding any gains and losses relating to the hedging of
Slide 29: Underlying EPS increased from $4.19 to $4.38 in FY18
Underlying EPS increased from $4.19 to $4.38 in FY18 4.38 0.16 0.04 0.28 0.04 0.10 0.12 4.19 USD FY17 Normalized Hyperinflation Net Finance Income Tax Associates and Net Hyperinflation FY18 EBIT impact at Costs Expense Non-Controlling Impact in EPS EBIT level Interest Notes: (1) Underlying EPS refer
Slide 30: Cash Flow from Operations as % of Sales
Our margins and cash generation remain best-in-class = Cash flow from operations (USD Billions)* Cash Flow from Operations as % of Sales * 35% ABI 30% Diageo Heineken Procter & Gamble 4.5 14.7 25% 6.3 15.1 7.3 Carlsberg Reckitt Benckiser 20% 6.0 1.8 3.2 Coca-Cola L'Oreal 10.3 1.8 Mondelez Unilever 1
Slide 31: Core Working Capital remains strong and improving
Core Working Capital remains strong and improving, although impacted by country mix following combination with SAB Core Working Capital (CWC) as a % of Net Revenue (1) 4.0% 2.1% 2.0% 0.0% -2.0% -0.6% -4.0% -6.0% -5.4% -8.0% -7.4% -8.5% -10.0% -10.0% -12.0% -11.0% -12.5% -14.0% -13.4% -13.6% -16.0% -
Slide 32: Replaced near term bond maturities with longer-dated debt
We replaced a significant portion of our near term bond maturities with longer-dated debt, eliminating any refinancing pressure AB InBev Bond Maturity Profile Pro forma for 1Q19 USD Offering and Tender $9B RCF Capacity + $7B Cash & Cash Equivalents = $16B Total Liquidity, far exceeding debt maturiti
Slide 33: Resulting debt profile protects against interest rate and currency risk
Our resulting debt profile continues to protect us against interest rate and currency risk, with longer average weighted maturity Addressed near Diverse currency Very manageable ~94% of our debt is term maturities to mix of our debt pre-tax gross debt fixed rate reduce refinancing reduces risk coupo
Slide 34: Capital Allocation Objectives
Capital Allocation Objectives Our optimal capital structure is a Net Debt/EBITDA ratio of approximately 2x. The priorities for the use of cash are as follows: 1. Organic growth: Investing in the organic growth of our business 2. Deleveraging: Deleveraging to around the 2x level remains our commitmen
Slide 35: We have published a reference base for 2018
We have published a reference base for 2018 The reference base published on pages 28-29 of our FY18 earnings press release reflects the EMEA following changes: North America APAC 1. 1 New regional results presentation Middle Americas JVs & 2. 2 Impact of hyperinflation accounting Associates South 3.
Slide 36: Q&A
Q&A © AB InBev 2019 – All rights reserved 36