Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — Interbrew — FY2001 Earnings Presentation
47 slides from Anheuser-Busch InBev SA/NV's earnings presentation, Mar 13, 2002
Slide 1: Analyst Presentation
Analyst Presentation Brussels, March 13th, 2002 1
Slide 2: Outstanding 2001 results
l Outstanding 2001 results l Superior execution of our strategy and focus on shareholder value creation l Increased focus on generating excellent organic growth l Continued commitment to EPS before goodwill targets irrespective of scope 2
Slide 3: 2001 headline results: EBITDA, EPS, dividend
(Before Exceptionals) BASS INCLUDED* 2001 (IAS) 2001 (IAS) 2001 (IAS) versus versus 2000 (IAS) 2000 (reported) EBITDA € 1,533m +33% (was € 1,156m) +28% (was € 1,198m) EPS before € 1.44 +38% (was € 1.04) +19% (was € 1.21) goodwill** € 0.29 +38% (was € 0.21) +38% (was € 0.21) Dividend * Including Bass
Slide 4: Our Vision and Strategy
1. Our Vision and Strategy 2. Strong 2001 Results 3. Focus Point – North America and Beck & Co Acquisition 4. Conclusion & Outlook 4
Slide 5: The World's Local Brewer: Four Strategic Themes
'The World's Local Brewer' Vision realised Through Parallel Execution of Four Strategic Themes Strategic themes Rationale Building and leveraging Local brands and access to economic scale in distribution 1 local platforms drive are key value drivers in most geographical markets profitable growth A b
Slide 6: Best Beer Brand Portfolio
Best Beer Brand Portfolio Offering Outstanding Choice and Quality International Premium Stella Artois Beck's lagers The European beer with noble Authentic freedom/German traditions provenance White Abbey Fruit-flavoured Ales beers beers beers International Hoegaarden Bass Leffe Belle-Vue Speciality
Slide 7: Volume growth of International Brands 1996-2001
Volume growth of International Brands 1996-2001, CAGR (%) Stella Artois 17.1 Hoegaarden 13.4 Leffe 9.1 Bass 7.3 Beck’s 4.2 Average Interbrew 12.1 Int’ls Budweiser* 6.3 Heineken* 5.1 Carlsberg* 0.7 * CAGR 1995-2000 used as 2001 data not available 7 Source: Canadean; Impact; Annual Reports; Interbrew
Slide 8: EBITDA and EBIT Growth 1990-2000
EBITDA Growth 1990-2000, CAGR EBIT Growth 1990-2000, CAGR 66% 33% 28.0% 22.0% 9.5% 9.1% 7.7% 7.6% -0.6% -0.7% Food * Alc.Bev.** Other Interbrew 2001 Food * Alc.Bev.** Other Interbrew 2001 Brewers*** Brewers*** * Average of Danone, Nestlé and Unilever ** Average of Allied Domecq and Diageo *** Averag
Slide 9: Blended acquisition multiple
Blended Million acquisition Hectolitres multiple* 2001 Labatt 5.9 9.1 Emerging Markets 6.0 31.3 United Kingdom** 8.8 10.9 * Purchase price divided by EBITDA in first full year after acquisition 9 ** UK position post Carling Brewers sale and including all the retained elements of the Bass Business
Slide 10: Strong 2001 Results
1. Our Vision and Strategy 2. Strong 2001 Results 3. Focus Point – North America and Beck & Co Acquisition 4. Conclusion & Outlook 10
Slide 11: Move to IAS reporting
• As part of our IPO commitment, Interbrew is one of less 400 European companies fully IAS compliant in 2001 • Impact of move to IAS – Non-recurring one-time charges are now in the EBIT line, not below – EPS before goodwill for 2000 is significantly reduced (from € 1.21 to € 1.04) due to IAS complia
Slide 12: Reporting basis and Bass UK treatment
• Consistent with previous reporting, our presentation excludes the Bass UK operations in 2001. As before, we do include the Bass Brewers Worldwide operations • The Bass positions in Scotland & Northern Ireland which we have retained will be accounted for as scope changes in 2002 • FEMSA Cerveza is
Slide 13: Net Turnover and Volume
BASS EXCLUDED* Organic Foreign 2000 Scope** 2001 Growth Exchange 389 501 (90) 5762 Net Turnover 4961 € million + 7.8% + 10.1% - 1.8% + 16.1% 8.8 0.0 73.1 Volume 63.3 1.0 Hl million + 1.6% + 13.9% + 15.5% Net Turnover/ Hl Hl € per Hl 78.4 78.8 * Excluding Bass UK operations and FEMSA Cerveza 13 ** Sc
Slide 14: EBITDA and EBIT
BASS EXCLUDED* Organic Foreign 2000 Scope** 2001 Growth Exchange 117 59 (22) 1193 EBITDA 1039 € million + 11.3*** % + 5.7 % - 2.2 % + 14.8 % EBIT 708 211 26 (12.1) € million 482 + 43.8% + 5.5% - 2.5% + 46.9% * Excluding Bass UK operations and FEMSA Cerveza ** Scope is acquisition and divestment 14 *
Slide 15: 2001 EBITDA split by region
BASS EXCLUDED* 2001 EBITDA** € million 2001 EBITDA split, % Western Europe* 413 36% North America*** 429 35% Emerging Markets 338 28% Parent / export 13 1% Subtotal 1,193 100% FEMSA Cerveza (30%)**** 198 Total 1,391 * Excluding Bass UK operations ** After allocation of service fees *** Excluding FEM
Slide 16: Western Europe results
BASS EXCLUDED* Organic Foreign 2000 Scope** 2001 Growth Exchange Volume 4.2 0.0 27.2 23.1 (0.1) Million Hl - 0.4% + 18 . 2 % - + 17.7% Net 287 (17) 2504 2131 104 Turnover € million + 4.9% + 13.4% - 0.8% + 17.5% 69 (36) (1) 413 381 EBITDA € million + 18.1% - 9.6% - 0.3% + 8.3% * Excluding Bass UK ope
Slide 17: Belgium highlights
• Scope change: Interbrew UK + Diebels • Price increases, market share improvement • Jupiler continued its growth 1.8% • Great growth of Stella Artois 14.2% • Further developed innovation programme (products and packaging) 17
Slide 18: Bass acquisition key events
Key Events Rationale / Reaction Bass acquisition blocked in the The UK government blocked Interbrew’s £ 2.3bn takeover of Bass UK, Jan 2001 Brewers, citing competition issues. Interbrew £ 750m non-cash Interbrew took a £ 750m (€1,235) non-cash charge as a prudent charge, Jan 2001 reaction, and initi
Slide 19: Reversal of Exceptional Write-Down of Goodwill
Reversal of Exceptional Write-Down of Goodwill (IAS Compliant) • Factors leading to a reversal - When the non-cash charge was taken in January 2001, Interbrew prudently assumed no synergies between Bass and Whitbread (since it was ordered to sell Bass) - The sale price of the Carling Brewers busines
Slide 20: UK platform and Whitbread acquisition
• Bought Whitbread for GBP 400 million 1999 EBIT of GBP 40 million, ROIC of 10% 2001 EBIT of GBP 63 million, ROIC of 16% • Acquired Scotland/Northern Ireland in 2002 Brings scale, distribution coverage, cash flow Gives Interbrew a UK market share of 16% No.1 in Scotland; No.2 in Northern Ireland Pre
Slide 21: Superior Growth
18 Superior Growth 16 14 5 Year Volume CAGR, % 12 10 8 Kronenbourg Carlsberg 6 Carling Fosters 4 2 Tetley John Smiths Guinness Budweiser 0 Heineken 500 1,000 1,500 -2 Net turnover in 2001, £m 21 Source: AC Nielsen
Slide 22: North America results
FEMSA Cerveza excluded* Organic Foreign 2000 Scope** 2001 Growth Exchange Volume 14.2 0.4 0.0 0.0 14.6 Million Hl + 2.8% - + 2.8% 1689 157 0 (16) 1830 Net Turnover € million + 9.3% - 1.0% + 8.3% EBITDA 35 (9) (4) 429 407 € million + 8.6% - 2.1% - 1.0% + 5.5% * Excluding FEMSA Cerveza (accounted for
Slide 23: Emerging Markets results
Organic Foreign 2000 Scope** 2001 Growth Exchange Volume 26.0 4.2 0.0 31.3 1.1 Million Hl + 4.2% + 16.2% - + 20.4% 129 95 (55) 1311 Net 1142 Turnover € million + 11.3% + 8 .3 % - 4.8% + 14.8% 76 (3) (17) 338 EBITDA 281 € million + 27 . 1 % - 1.0% - 5 .9 % + 20.2% 23 * Scope is acquisition, divestmen
Slide 24: Central Europe
• Volume: 32% of the Emerging Markets total • EBITDA: 31% of the Emerging Markets total • Focus on strong national brands • Market share increases in 6 of the 7 countries • Excellent performance in Croatia, Hungary and the Czech Republic 24
Slide 25: Eastern Europe
• Volume: 41% of the Emerging Markets total • EBITDA: 28% of the Emerging Markets total • 12.8% Russian market share • 34.6% Ukrainian market share • Mix improvement creates value growth - Russia € 35 per Hl - Ukraine € 22 per Hl so significant potential 25
Slide 26: Russia and Ukraine performance
• Outperform where we have a full portfolio in both brands & packaging • Important capex commitments already made – new packaging formats • Sybirskaya Korona repositioned to domestic premium (in Sep 2001) • Ukraine: Chernigivske volumes + 59% and market share doubled to 14% • Divestment of Krym and
Slide 27: Asia Pacific
• Volume: 27% of the Emerging Markets total • EBITDA: 41% of the Emerging Markets total • Strong growth Cass brand • Integration underway in South Korea leading to excellent financial results • South Korean market attractive (7% market growth); option agreement in place to acquire remainder of busin
Slide 28: Invested Capital and ROIC 2001
Invested Capital ROIC 2001** Basis Points Change € mio Percent 2001 vs 2000 - Western Europe* 1,093 20.5 565 - North America 1,212 25.8 521 - Emerging Markets 1,801 9.0 290 - Parent / Export 142 N/A *** Total (excl Bass UK) 4,248 16.7 133 Total incl FEMSA Cerveza (30%) 5,069 14.0 94 - Bass Brewers U
Slide 29: Net financial debt and coverage
BASS INCLUDED* 2000 2001 Net financial debt € 2,930m € 2,662m Net financial Debt / EBITDA 2.5 1.7 Cash interest coverage 2.8 5.4 29 * Includes Bass UK operations as the financial structure reflects the position of the entire group
Slide 30: Focus Point – North America and Beck & Co Acquisition
1. Our Vision and Strategy 2. Strong 2001 Results 3. Focus Point – North America and Beck & Co Acquisition 4. Conclusion & Outlook 30
Slide 31: Building Equity through Premium Brands in North America
Building Equity through the Growth of Premium Brands in North America Strategic themes Rationale l Labatt in Canada / Labatt USA 1 Local Platforms USA CANADA CUBA 2 Broad Brand Portfolio l Interbrew North America well positioned in most attractive segments for superior growth 3 Superior Risk/Growth
Slide 32: Interbrew North America Superior Track Record
Interbrew North America has a Superior Track Record EBITDA, CAD million Interbrew North America .5 % 8 550 AGR C 475 400 1 .8 % GR Molson CA 325 250 175 100 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Note: Interbrew 2001 is year-end December 2001; Molson 2001 is year-end March 2001 32 So
Slide 33: Labatt Canada premium brands
(est. 1997) • Focus on premium brands in Canada • OSBC brands and Stella Artois • Achieved strong market position • Canadian market share 2% by volume (3% by value) in first 5 years • Total 2001 volume 437,000 hls, 32% CAGR since 1997 33
Slide 34: Labatt USA import volume growth
Volume, indexed* 7000 Labatt USA 6000 20% Imports GR 5000 CA 4000 3000 10% US Import CAGR Segment 2000 1000 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Labatt USA share of imports : 1991 - 6.8 % (617,000 Hl) 2001 - 14.9 % (3.69m Hl) * Volumes for Labatt USA imports and US import segment
Slide 35: Reaching critical mass in US regional markets
Share of regional markets, % Labatt USA Beck’s New York 8 5 13 Chicago 9 6 15 l Reaching critical mass can Washington,DC 7 3 10 boost existing volumes Miami 4 9 13 Atlanta 8 3 11 l Geographic & brand complementarity San Diego 19 2 21 Los Angeles 24 1 25 Dallas 15 2 17 10% 10% critical critical mass
Slide 36: Volume sold since Labatt partnership
Volume sold, million Hl 1.62 1.52 % 1.31 1 4 .0 AGR C 1.1 0.9 CAGR 2.4% 0.74 0.58 0.61 0.62 0.55 0.53 0.49 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Pre-Labatt partnership Post-Labatt partnership 36
Slide 37: Beck's North America valuation and synergies
• Becks North America valuation was conservative – Confident of revitalised growth in the US under our stewardship • Working with Beck North America organisation and new global brand team to accelerate planned changes • Significant cost synergies expected – Large overlap between Becks USA and Labatt
Slide 38: Key features of Beck & Co
Key features of Beck l Leading domestic German beer and unrivalled international premium brand l 2H01 Net Sales 15.9% growth vs. 2.7% for German beer market l Integrated business including beer, container glass and non-alcoholic beverages l 20% volume growth in top margin segment in 2H01 l Brand equ
Slide 39: Beck & Co acquisition rationale
l Brand rationale - Second-to-none international premium brand - Differentiated price position compared to Stella Artois - Differentiated geographic markets from Stella Artois - 2 strong international brands covering 6 key markets l Attractive market - Strongest truly national brand in Germany - Pri
Slide 40: Conclusion & Outlook
1. Our Vision and Strategy 2. Strong 2001 Results 3. Focus Point – North America and Beck & Co Acquisition 4. Conclusion & Outlook 40
Slide 41: Targets for 2001 and 2000-2004
TARGET Organic EBITDA growth for 2001 8% ü EPS before goodwill for 2001 12% ü Average annual EPS before goodwill growth 2000 – 2004 (based on e1.21 in 2000) Double- On track irrespective of scope changes digit 41
Slide 42: Focus on operational excellence
• Decision to focus on operational excellence • Hired 167 middle and senior managers. (net 150) • Appointment of COO and delayering of some structure Continuous Shareholder value creation • Successful acquisition Op ex integration for Beck & Co (21 er cel a t le Teams dedicated) ion nc al e • We are
Slide 43: Operational excellence drivers
• Market share gains • Growth in the mix of International Speciality Brands • New Product Development and Innovation • Production efficiencies and Least Cost Producer Status • Standardisation of Operating Systems • Customer Service • Improved Return on Invested Capital • Investment in People • Organ
Slide 44: Sustained organic growth
• This renewed focus on operational excellence Sustained organic growth • Leads to a superior and sustainable organic performance Continuous Shareholder value creation • And the development of Op ex new competencies er cel a t le ion nc al e 44
Slide 45: Interbrew's virtuous circle
• Strong organic performance enables us to choose transactions wisely Sustained organic growth • To achieve faster integration, with higher synergies, because we bring new core competencies learned from our operational Continuous focus Shareholder ion value creation is it Op ex • Thereby assuring th
Slide 46: Double digit EPS before goodwill growth
Double digit, average annual EPS before goodwill growth, 2000-2004 46
Slide 47: Spirit of Interbrew
Together, we will live the Spirit of Interbrew. Our Passion for Knowledge Management and innovation leverages our global strengths to ensure that our individual operations outperform the best local competitor and that our international brands also outperform their peers in the local market. 47