Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — SABMiller — Investor Presentation (September 2013)
62 slides from Anheuser-Busch InBev SA/NV's investor presentation, Sep 16, 2013
Slide 1: SABMiller plc Quarterly investor seminar series
SABMiller plc Quarterly investor seminar series Alan Clark Jamie Wilson Chief Executive Chief Financial Officer 16 September 2013 1
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 – a balanced global beer business
SABMiller – a balanced global beer business World’s 2nd largest brewer, with superior long-term revenue and profit growth F13 organic, cc revenues +7%, EBITA +9%, and adjusted eps +11% #1 or 2 position in > 90% of markets Leading brands and portfolios, shaped by deep local insights, building
Slide 4: A decade of sustained growth
A decade of sustained growth F04 index = 100 F04-F13 CAGR 340 300 Organic Lager Volume 13.3% Group Revenue 260 EBITA 9.7% 220 EPS adjusted 7.4% 180 140 3.7% 100 F'04 F'05 F'06 F'07 F'08 F' 09 F'10 F' 11 F' 12 F'13 Source: SABMiller results F04 = 100, growth – organic constant currency 4
Slide 5: Four consistent strategic priorities
Four consistent strategic priorities Constantly raising the profitability of local businesses, sustainably Creating a balanced and attractive global spread of businesses Developing strong, relevant brand portfolios that win in Leveraging our skills the local market and global scale 5
Slide 6: A historically decentralised approach
A historically decentralised approach Decentralised industry dynamics, brand portfolios, operations, and local accountability, bound by: Common culture Global performance and talent management SABMiller Ways to drive growth and efficiency Singular approach to business/M&A turnarounds © SABMi
Slide 7: Beer has always been passionately local…
Beer has always been passionately local… 7
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Slide 9: Who produces the best beer in the world?
Who produces the best beer in the world? Netherlands 42% El Salvador 39% Mozambique 42% Belgium 31% Germany 34% Germany 11% Germany 17% USA 8% Italy 7% Emotional engagement is honed locally Czech 92% Poland 56% Germany 51% Germany 3% Czech 14% Italy 12% Belgium 1% Germany 12% Ireland 7% Source: Inte
Slide 10: Replicable successes across markets
Replicable successes across markets Past and present 10
Slide 11: Brand renovation, building national icons
REPLICABLE SUCCESSES Brand renovation, building national icons 11 11
Slide 12: Brand portfolio construction
REPLICABLE SUCCESSES Brand portfolio construction Business objectives Goals To achieve objectives Where to play Opportunity assessment How to win strategy 1 Brand Brand & Portfolio positioning channel strategy & BTF strategy 2 3 4 How to win in market Activation planning & Execution development 5 6
Slide 13: Brand portfolio construction
REPLICABLE SUCCESSES Brand portfolio construction EGO/ME Example: Style Contemporary Colombia Craft Making it compass and Tradition and positioning integrity territories Rhythm of the Ice age Strength of spirit night Takes me away Knowing REPRESSIVE mockery EXPRESSIVE Effervescence Natural Reward fo
Slide 14: Sales and channel execution improvement
REPLICABLE SUCCESSES Sales and channel execution improvement US: selected chain retailers’ beer category revenue 3-yr CAGR, based on Across choice of category captain marketplaces, 4 3.4 from 3 MillerCoors sophisticated Competitor 2 to rudimentary 1 0 -1 -1.3 BRAND SERVICE TRADING CONSUMER R2M VISIB
Slide 15: Sales and channel execution improvement
REPLICABLE SUCCESSES Sales and channel execution improvement Bitterness: Sweetness: Body: Objectives: Excite and educate Conversion to purchase Optimal store layout Range & SKU efficiency 15
Slide 16: Improved market penetration
REPLICABLE SUCCESSES Improved market penetration Africa: increasing outlet penetration Colombia: service model evolution % outlets served 18% Rural complementary Van sales 11% Rural pre-sales 10% 9% Urban complementary Urban pre-sales F10 F11 F12 F13 F07 F11 F13 Future 16
Slide 17: Improved market penetration
REPLICABLE SUCCESSES Improved market penetration Targeted distribution: better independent off-premise penetration Segment outlets to Identify gaps in key Target new brands Build automated identify optimal SKUs and packages tools for expansion SKUs by store North Carolina pilot SKU placements +7.9%
Slide 18: Stakeholder relations
REPLICABLE SUCCESSES Stakeholder relations Excise – 2013: engagement with governments in Tanzania, Italy, UK, avoiding unfavourable rate or formula changes – Ecuador (2012): favourable shift from ad valorem to linear; improved spirit/beer ratio LatAm: led industry/government collaboration on ill
Slide 19: Sustainable development
REPLICABLE SUCCESSES Sustainable development Water efficiency: ↑8% On-site carbon emission/hl: ↓10% Annual savings of $90m Source over 50% of African raw materials Across Africa, we employ 24k locally and indirectly support > 1m jobs through our value chain Global alcohol industry action plan in pla
Slide 20: Growth opportunities ahead
Growth opportunities ahead 20
Slide 21: Beer per capita consumption
GROWTH OPPORTUNITIES AHEAD Beer per capita consumption 120 2012 90 60 30 0 21
Slide 22: Beer’s share of alcohol
GROWTH OPPORTUNITIES AHEAD Beer’s share of alcohol Share of alcohol, indicative estimates Beer share of alcohol 100% 70% 60% 80% 50% 60% 40% 40% 30% 20% 20% 10% 0% 0% North SABM C&E China South Africa Poland Peru China America LatAm Europe Africa 2000 2010 Clear Beer Sorghum Beer Wine Spirits Estima
Slide 23: Beer: the natural and moderate choice
GROWTH OPPORTUNITIES AHEAD Beer: the natural and moderate choice Beer as a… Beer as a … Beer as a… Natural Product Social Contributor Sensorial Experience Natural ingredients (cereal, Brings consumers together Rich, refreshing tastes, hops and water), no rework or At the heart of social trad
Slide 24: Unit revenue
GROWTH OPPORTUNITIES AHEAD Unit revenue Beer industry volume, by segment 100% 80% 60% 40% 20% 0% W USA Australia C & E LatAm Africa Asia Europe Europe Economy Mainstream Premium Superpremium Source: Canadean 24
Slide 25: Driving SABMiller’s future success
Driving SABMiller’s future success 25
Slide 26: Evolving industry dynamics
DRIVING SABMILLER’S FUTURE SUCCESS Evolving industry dynamics Successful track record Building the beer category and driving growth Evolving industry dynamics Emerging Resource Changing Customer Competitive Licence Technology markets pressure consumer trends dynamics to trade 26
Slide 27: Focus on further beer category growth
DRIVING SABMILLER’S FUTURE SUCCESS Focus on further beer category growth Refresh and romance core lager across Lead the development of markets the beer category Increase premium mix Innovate across a vibrant Accelerate global brands spectrum of beer styles Access more consumer needs and occasions Se
Slide 28: Premiumisation
DRIVING SABMILLER’S FUTURE SUCCESS Premiumisation 110-150 price index opportunity Craft and Imports 150+ Only 66% of Opportunity consumer Opportunity demand is met by the market 110-150 Mainstream 100-110 28
Slide 29: Premiumisation
DRIVING SABMILLER’S FUTURE SUCCESS Premiumisation LatAm premium volumes* (khl) 3,670 Stretching the category price points 150 - 200 3,170 650 Regional premium to 120 - 150 470 leverage scale 260 270 F10 F13 Local pride at a 110 - 125 Local premium premium price Regional premium International premium
Slide 30: Premiumisation
DRIVING SABMILLER’S FUTURE SUCCESS Premiumisation 4 year Our Powerhouse CAGR brand in Africa +20% 4 year Castle Lite MAT volume (khl) 700 Redefine the CAGR 600 stout category +6% 500 400 4 year 300 Silver Bullet for CAGR 200 premium growth +193% 100 0 Jul '12 Oct '12 Jan '13 Apr '13 Jul '13 30
Slide 31: Premiumisation
DRIVING SABMILLER’S FUTURE SUCCESS Premiumisation China: Snow range by price/channel segment Restaurants Night outlets Off trade Snow variant Price 500ml bottle 330ml bottle 330ml cans (% of franchise total) Crystal Draft ¥15 US$2.44 Super Premium (1%) Snow Draft ¥10 US$1.63 Premium (4%) Brave the W
Slide 32: Affordability
DRIVING SABMILLER’S FUTURE SUCCESS Affordability Africa Enablers of beer price reductions Hours worked for a versus mainstream mainstream beer 5.0 -10% -20% -30% -50% 4.4 2.8 2.4 2.4 1.1 1.1 0.3 Pricing Transaction Local grains Opaque RSP packs Sorghum, beers compliance, Draught, cassava, deeper rur
Slide 33: Affordability
DRIVING SABMILLER’S FUTURE SUCCESS Affordability Price Small packs Original revenue Large packs Volume Affordability options Colombia Per pack Per ml RB 225 ml 77% 113% RB 330 ml 100% 100% RB 750 ml 176% 72% 33
Slide 34: Innovation
DRIVING SABMILLER’S FUTURE SUCCESS Innovation 34
Slide 35: Castle Lite (Tanzania)
CONSUMER INSIGHTS DRIVE BRAND POSITIONINGS Castle Lite (Tanzania) Addresses: Consumers’ functional needs: • Refreshment • Low carb, lower ABV: moderation to stay in control • Beer consistent with a modern/fit lifestyle Emotional needs: • Sophisticated image with premium cues – sign of success • Be s
Slide 36: Club Colombia Roja
CONSUMER INSIGHTS DRIVE BRAND POSITIONINGS Club Colombia Roja Addresses: Consumers’ functional needs: • Refreshing, full flavour, extra dry • Sophisticated, moderate taste intensity Emotional needs: • Reward of an award winning beer that reflects Colombians’ collective success • Recognition of perso
Slide 37: Ksiazece (Poland)
CONSUMER INSIGHTS DRIVE BRAND POSITIONINGS Ksiazece (Poland) Addresses: Consumers’ functional needs: • Experimentation • Quirky, more local “crafted” beers • A taste journey, particularly for nicer evenings out Emotional needs: • Fulfillment from expanding horizons with more sophisticated beers • Be
Slide 38: Redd’s Apple Ale (US)
CONSUMER INSIGHTS DRIVE BRAND POSITIONINGS Redd’s Apple Ale (US) Addresses: Consumers’ functional needs: • Expanding their horizons beyond beer • Want something a bit sweeter, but not too sweet • Different but familiar, right for step up occasions (dates, nights out) Emotional needs: • Feel a bit mo
Slide 39: Fat Yak (Australia)
CONSUMER INSIGHTS DRIVE BRAND POSITIONINGS Fat Yak (Australia) Addresses: Consumers’ functional needs: • Discovery, inclusivity • Matilda Bay overall: a rich diversity of tastes and aromas • Fat Yak: hop driven, golden pale ale with fruit characteristics (melon and passionfruit) and a clean finish E
Slide 40: Leveraging scale with non-alcoholic drinks
DRIVING SABMILLER’S FUTURE SUCCESS Leveraging scale with non-alcoholic drinks Across Africa, Central America, Central Asia (CCI) – Coca Cola bottlers (subs & assoc.) in 32 markets Broader beverage scale advantages – Operations – Distribution – Outlet relationships and space F13 soft drinks EBITA
Slide 41: Revenue management
DRIVING SABMILLER’S FUTURE SUCCESS Revenue management Clear US local market strategy Price promotion effectiveness Reallocate to stronger High promotion events Planning unit Eliminate Drive share Expected profit Excellent Good Fair Poor pool growth ROI Drive both margin/share Drive margin Low Share
Slide 42: Revenue management
DRIVING SABMILLER’S FUTURE SUCCESS Revenue management Broad price/pack portfolio management: Mozambique 42
Slide 43: Sustainable development
DRIVING SABMILLER’S FUTURE SUCCESS Sustainable development WEF identified water supply New brewery water risk assessments as a top five global risk to secure future supply in likelihood and impact Multi-stakeholder partnerships, e.g. Water Futures to mitigate risk Tenderos retailer programme,
Slide 44: Geographic expansion
DRIVING SABMILLER’S FUTURE SUCCESS Geographic expansion Organic capacity investment to meet demand A watching M&A brief, particularly across emerging markets Clear, bespoke financial hurdles 44
Slide 45: SABMiller plc Quarterly investor seminar series
SABMiller plc Quarterly investor seminar series Alan Clark Jamie Wilson Chief Executive Chief Financial Officer 16 September 2013 45
Slide 46: Lager volume growth (organic)
Lager volume growth (organic) Medium Term Volume growth drivers Guidance SABMiller Group 3.0% Expanded reach & Latam 3.0% +4 – 6% economic fundamentals Category excitement, Europe 6.0% consumer appeal North America -2.0% Level – +1% Premium and craft evolution Africa 6.0% + high single digits Capaci
Slide 47: Revenue per hl growth
Revenue per hl growth Medium Term Revenue per hl growth drivers Guidance SABMiller Group 3.0% Latam 4.0% +3 – 5% Pricing and benefits from premiumisation Europe -1.0% Structural market challenges North America 4.0% +2 – 4% Premium and craft segment growth Africa 10.0% + mid single digits Inflationar
Slide 48: EBITA margin growth outlook
EBITA margin growth outlook Medium Term Margin drivers Guidance SABMiller Group 18.6% Latam 27.0% +60 – 80 bps Scale leverage Europe 13.6% Innovation & category development Increased category appeal North America 14.4% +30 – 60 bps and premiumisation Africa 21.7% +50 – 80 bps Leverage from volume gr
Slide 49: Latin America
Latin America Establishing beer as the preferred Miller Lite complementing MGD in Panama alcohol choice Super premium segment Enhancing beer’s appeal across 100% consumer occasions 75% MGD Making beer more affordable 50% Other Meeting the aspirations of our 25% Corona premium consumers Heine
Slide 50: Europe
Europe Drive revenue and margin growth through enhanced perceptions of beer Drive differentiation amid structural market challenges through innovation – product, packaging and dispense systems Leverage scale, cost advantage and focus 50
Slide 51: North America
North America Win in premium lights Expand MillerCoors position in above premium with big new innovations Create value through strong revenue and category management Support and develop the three-tier distribution system to drive effectiveness and value 51
Slide 52: Africa
Africa Drive growth in beer and soft drinks through full brand portfolios, wider price ranges and expansion into adjacent categories Step up investment behind our mainstream brands and differentiated premium portfolio Increase share of alcohol Further develop sales and distribution to extend
Slide 53: Asia Pacific – Australia
Asia Pacific – Australia Reinvigorate our Carlton & United Breweries (CUB) brands and commercial functions while delivering cost synergies and savings Category strategy Category growth drivers Winning portfolio Restore the core Immediate growth Future growth Innovation pipeline Channel management
Slide 54: Asia Pacific – Asia
Asia Pacific – Asia Further build market leadership in China while enhancing profitability Drive Snow to grow both market share and revenue per hl Pursue market liberalisation in India and focus investment on growth and profitability in selected states CRSB: US$1.2bn Investment by SABMiller, r
Slide 55: South Africa
South Africa Create growth by further developing our beer and soft drinks portfolios Share of premium* beer Leverage scale to drive productivity 12 month moving and reinvest savings 65% Engage the competition in all SAB alcohol categories 55% Shape a culture of partnership in all classes of
Slide 56: Business Capability Programme
Business Capability Programme Net operating benefits expected to be $450m by March 2014 Scope of central procurement increasing to indirect spend, following significant benefits 450 400 delivered to date in direct categories 321 Regional manufacturing continues to support world class brewing ope
Slide 57: Global Business Services (GBS)
Global Business Services (GBS) GBS will leverage scale and skill transactional and specialist activities GBS will drive benefits through: – Focus country management on the market place: de-clutter operational agendas – Global scale efficiency – Higher quality data and information – Access to spe
Slide 58: Capital expenditure
Capital expenditure Investment will continue to support growth Capital expenditure will continue to reflect 6–8% of revenue 2% Developing market growth supported by capacity expansions LatAm 15% Europe Investment in new product and packaging capabilities 36% 6% Africa Continued investment to
Slide 59: Cash and net debt
Cash and net debt Continued focus on cash generation and debt paydown 3,048 3,230 Continued growth in free cash flow 2,488 2,010 driven by strong EBITDA growth and Foster’s acquisition 2010 2011 2012 2013 Working capital will remain a focus Free cash flow ($m) Net debt reducing – Finance costs
Slide 60: Debt capital structure and maturity profile
Debt capital structure and maturity profile Stable capital structure Average maturity of gross committed debt portfolio is 6.7 years Ample committed liquidity Access to diversified funding sources; August 2013 bond issue 3.5x over-subscribed 56% of gross debt in fixed rates Bond maturity pro
Slide 61: Treasury and tax
Treasury and tax Financial risk management Hedging layered in over time Conservative approach to financial risk 100% % management % Max FX and commodity transaction risk 50% Min managed within guardrails – layered approach 0% Time Borrowings denominated in our main F13 debt currency profile* o
Slide 62: Conclusion
Conclusion • SABMiller’s consistent strategy is delivering replicable successes • We see substantial revenue and margin growth opportunities ahead • We are increasingly leveraging our global skills and scale • Refreshing and romancing core lager is at the heart of the business • Our insights into co