Anheuser-busch Inbev Sa/nv · EURONEXT:ABI
Anheuser-busch Inbev Sa/nv — Q2 2018 Earnings Presentation
33 slides from Anheuser-busch Inbev Sa/nv's earnings presentation, Jul 26, 2018
Slide 1: Second Quarter 2018 Results
Second Quarter 2018 Results 26 July 2018 © AB InBev 2018 – 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: Highlights of the quarter
Highlights of the quarter • Beer volume growth driven by Mexico, China and Western Europe • Successful global activation of the 2018 FIFA World Cup Russia™ • Budweiser led the digital space, ahead of all brands during the tournament • Global brand revenue growth acceleration, especially outside of t
Slide 4: 2Q18 Financial Summary
2Q18 Financial Summary Total Revenue +4.7% • Revenue per hl +4.0%, +4.5% on a constant geographic basis • Global Brands +10.1%, +16.7% outside of their home markets Total Volumes +0.8% • Own beer +0.9%, non-beer +0.5% EBITDA +7.0%, and EBITDA margin expanded by 85 bps to 39.7% Normalized EPS increas
Slide 5: Global Brand revenues +10.1% in 2Q18 and +16.7% outside of their home markets
Global Brand revenues +10.1% in 2Q18 and +16.7% outside of their home markets Budweiser Corona +4.1% +21.9% • Accelerated topline growth to +10.1% outside • Revenue grew +42.6% outside of Mexico, of the US driven by further growth in China, Western • 50+ countries activated for the 2018 FIFA Europe
Slide 6: We won 23 awards at the Cannes Lions Festival of Creativity
We won 23 awards this year in the Cannes Lions International Festival of Creativity, including 2 Grand Prix Paula Lindenberg, VP Marketing – LAN (left) & Andrea Quaye, VP Marketing – Africa (right) © AB InBev 2018 – All rights reserved 6
Slide 7: © AB InBev 2018 – All rights reserved
© AB InBev 2018 – All rights reserved 7
Slide 8: Company's biggest campaign in our history
BIGGEST CAMPAIGN IN OUR As the global sponsor, Budweiser: COMPANY’S • Achieved 43% POC coverage HISTORY • globally Increased 2Q18 revenue +10.1% outside of the US © AB InBev 2018 – All rights reserved 8
Slide 9: We achieved our goal of being the most talked about brand
• #1 in share of conversation globally • 1.2 billion views of online content, of which 28% is earned • >10x the averaged earned rate WE ACHIEVED OUR GOAL OF BEING THE MOST TALKED ABOUT BRAND © AB © AB InBev InBev 2018 2018 – All – All rights rights reserved 9 9 reserved
Slide 10: Local brands maximized the World Cup sponsorship
LOCAL BRANDS MAXIMIZED THE WORLD CUP SPONSORSHIP © AB InBev 2018 – All rights reserved 10 10
Slide 11: Comradery among brands created buzz
& COMRADERIE AMONG BRANDS CREATED BUZZ © AB InBev 2018 – All rights reserved 11
Slide 12: Best ideas travelled quickly
BEST IDEAS TRAVELLED QUICKLY © AB InBev 2018 – All rights reserved 12 12
Slide 13: Organizing for Future Growth
Organizing for Future Growth PRIVILEGED © AB AND InBev 2018 CONFIDENTIAL – All rights reserved 13 13
Slide 14: Our new management zone structure
Our new management zone structure North America BU United States BU United States Craft BU Canada Europe BU North Europe (UK, Ireland) HQ GO BU West Europe (Germany, Belgium, Luxembourg, The GP APAC Netherlands) HQ GO BU South Europe (France, BU China Italy, Spain, Canaries) BU Australia & New Zeala
Slide 15: Bringing Marketing and ZX Ventures under a common global lead
We are bringing Marketing and ZX Ventures under a common global lead so we can anticipate the future. Get ahead of market and consumer trends Adopt ZX Ventures’ innovation approach Build on our industry-leading marketing capabilities Build on the success of our Global Brands ZX remains independent f
Slide 16: Adding two new leadership roles to capture opportunities for growth
We are adding two new leadership roles to capture opportunities for growth Chief Non-Alcohol Beverages Officer Chief Owned-Retail Officer • Supporting our existing non-alcohol • Managing our existing owned-retail business, which represents >10% of businesses our volume • Sharing best practices • Bui
Slide 17: Financials
Financials © AB InBev 2018 – All rights reserved 17 17
Slide 18: 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 October 2020, and does not include an
Slide 19: Decrease in Net Finance Costs driven by MTM swing
Decrease in Net Finance Costs driven primarily by the swing in MTM on the share-based payment programs Net interest on MTM - share Other financial results Interest expense including net defined Accretion based payment excluding MTM-share 2Q17 borrowing costs benefit liabilities expenses programs bas
Slide 20: Normalized Effective Tax Rate (ETR)
Normalized Effective Tax Rate (ETR) 26.3% 24.8% 26% 24% 21.3% 20.9% 2Q17 2Q18 HY17 HY18 FY18 Guidance © AB InBev 2018 – All rights reserved 20
Slide 21: Normalized EPS of $1.10, up from $0.95
Normalized EPS of $1.10, up from $0.95 in 2Q18 0.06 0.12 1.10 0.13 0.01 0.95 0.09 USD 2Q17 Normalized EBIT MTM (hedging Net finance cost Income tax Associates & 2Q18 of our share- expense non-controlling based payment interest programs) Note: 2Q18 and HY18 EPS is based upon a weighted average of 1,9
Slide 22: Seasonality of cash flows and Net Debt/EBITDA ratio
Due to the seasonality of our cash flows, our Net Debt/EBITDA ratio increased first half of the year as expected • Our Net Debt/EBITDA ratio as of 30 June 2018 is 4.87x, up from 4.80x at 31 December 2017 • We have historically generated ~65-75% of our annual cash flow from operating activities in th
Slide 23: 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 24: Q&A
Q&A PRESENTATION TITLE–GOES © AB InBev 2018 HERE All rights 2017 reserved 24 24
Slide 25: Appendix
Appendix © AB InBev 2018 – All rights reserved 25
Slide 26: North America – 2Q18 Summary
North America – 2Q18 Summary • Revenue -3.0% • Revenue per hl +2.0% as a result of premiumization and revenue management initiatives • Volumes -4.9% • EBITDA -7.0% with margin contraction of 172 bps to 39.7% © AB InBev 2018 – All rights reserved 26
Slide 27: US – 2Q18 Summary
US – 2Q18 Summary • Industry STRs -2.4% • ABI STRs -3.1% • Market share decline of 35 bps • ABI volumes (STWs) -5.1% • Revenue -3.1% • Revenue per hl growth of 2.1% • EBITDA -7.4% with margin contraction of 185 bps to 40.1% © AB InBev 2018 – All rights reserved 27
Slide 28: Latin America West – 2Q18 Summary
Latin America West – 2Q18 Summary • Revenue +9.1% • Revenue per hl +4.2% as a result of revenue management initiatives • Volumes +4.7% • EBITDA +14.7% with margin expansion of 245 bps to 49.7% © AB InBev 2018 – All rights reserved 28
Slide 29: Latin America North – 2Q18 Summary
Latin America North – 2Q18 Summary • Revenue +10.2% • Revenue per hl +8.0% as a result of annualization of price increases and premiumization • Volumes +2.0% • EBITDA +16.3% with margin expansion of 216 bps to 41.4% © AB InBev 2018 – All rights reserved 29
Slide 30: Brazil – 2Q18 Summary
Brazil – 2Q18 Summary • Revenue +9.4% • Industry beer volumes flattish • ABI volumes +1.5% • Beer volumes +1.7%, non-beer volumes +1.0% • EBITDA +16.1% with margin expansion of 238 bps to 41.3% © AB InBev 2018 – All rights reserved 30
Slide 31: Latin America South – 2Q18 Summary
Latin America South – 2Q18 Summary • Revenue +25.5% • Revenue per hl +19.8% due to price increases in line with inflation and premiumization • Volumes +4.8% • EBITDA +44.3% with margin expansion of 612 bps to 44.4% © AB InBev 2018 – All rights reserved 31
Slide 32: Europe, Middle East & Africa – 2Q18 Summary
Europe, Middle East & Africa – 2Q18 Summary • Revenue +2.3% • Revenue per hl +3.8%, due to brand mix driven by premiumization • Volumes -1.4% • Own beer volumes -1.2% • EBITDA +4.7% with margin expansion of 85 bps to 36.9% • Completed the 50:50 merger of our and Anadolu Efes' existing Russia and Ukr
Slide 33: Asia Pacific – 2Q18 Summary
Asia Pacific – 2Q18 Summary • Revenue +6.6% • Revenue per hl +3.5%, due to premiumization as well as an increased contribution from our core portfolio in China • Volumes +3.0% • EBITDA +6.6% with no change to margin of 36.8% © AB InBev 2018 – All rights reserved 33