Anheuser-busch Inbev Sa/nv · EURONEXT:ABI
Anheuser-busch Inbev Sa/nv — Investor Day (2018)
35 slides from Anheuser-busch Inbev Sa/nv's investor day presentation, 2018
Slide 1: AB InBev Investor Seminar 2018
ABInBev INVESTOR SEMINAR 2018
Slide 2: Legal Disclaimers
Legal Disclaimers Certain statements contained in these presentations 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
Slide 3: Felipe Dutra, Chief Finance & Solutions Officer
Born in Rio de Janeiro 28 Years in our company FELIPE Favorite beer: Michelob Ultra DUTRA I’m most proud of: Being part Chief Finance & of the team that made Solutions Officer AB InBev happen
Slide 4: Slide 4
Slide 5: Our financial position today is far stronger than during the Anheuser-Busch combination
Our financial position today is far stronger than it was during the Anheuser-Busch combination 2008 2018 $37B Market capitalization $198B $12.1B EBITDA1 $22.3B 4.70x Net debt to EBITDA 4.87x $3.9B Liquidity (cash & cash equivalents + revolving credit facility) $16.9B 4.2%/3 years Weighted average co
Slide 6: We have dramatically enhanced our global scale and diversification
We have dramatically enhanced our global scale and diversification 2008 2017 Other Other CAD AUD 18% 17% 3% USD 5% 28% Revenue ARS USD USD & BRL CAD 3% USD & BRL by 3% 43% 62% ARS 4% 43% EUR of revenues of revenues Currency 9% COP 4% BRL 15% BRL ZAR CNH 6% CNH 19% 4% 8% EUR 6% MXN 7% Operations Oper
Slide 7: The economic outlook for the world was more bearish in 2008 than today
The economic outlook for the world was more bearish in 2008 than it is today World GDP Growth Outlook 2008 2018 4,1% 3,0% 3,1% 3,0% 2,9% 2,5% 1,5% 0,9% 2008 2009 2010 2018 2019 2020 -2,3% Forecast Actual Forecast Source: World Bank 5
Slide 8: The path to deleveraging is different today than in 2008
Given this backdrop, the path to deleveraging is different today than it was in 2008 Macro Backdrop Financing Operating Flexibility Path to Deleveraging • Significant divestitures Extremely Expensive limited flexibility, • Dividend cut Global short and no room to pursue • Bare bones CapEx financial
Slide 9: Deleveraging occurs primarily in the second half due to cash flow seasonality
Deleveraging occurs primarily in the second half of the year due to the seasonality of our cash flows Our Net Debt/EBITDA ratio We have historically generated We expect this to be toward the high end of the range in as of 30 June 2018 is 4.87x, up from 4.80x as of 31 ~65-75% of our annual 2018 given
Slide 10: Debt portfolio and liquidity position provide operating and financial flexibility
Debt portfolio and liquidity position provide our business with operating and financial flexibility Addressed large near-term maturities to significantly reduce $16.9B liquidity far exceeds debt maturities in any given year Diverse currency mix provides access to liquid debt markets ~93% refinancing
Slide 11: Our risk management framework addresses embedded volatility from our global footprint
Our risk management framework is designed to address embedded volatility associated with our global footprint Net Debt should be Risk management focuses on debt higher when FX is composition to counterbalance Net Debt favorable, lower when EBITDA FX volatility, given the FX is a headwind footprint w
Slide 12: Practical limitations rule out debt funding in emerging markets
Practical limitations rule out debt funding in emerging markets Practical Constraints On an unconstrained basis, optimal portfolios Market Tenors Cost Capacity Available Interest consist of high proportions Comparable Deductibility of debt in EM currencies to ≥ $2B per ≥ 10 years to USD issuer match
Slide 13: Emerging and Other Financing Markets
A perfect FX match between our EBITDA and Debt profile is constrained by market depth, tenors and benchmark costs to USD % of AB InBev % of AB InBev Estimated Market Tenors Yield Differential Market 2017 EBITDA 2017 Debt Capacity (USD) Available vs. USD United States 27.8% 58.3% Financing Markets Cu
Slide 14: AB InBev's Risk Management Principles
AB InBev’s Risk Management Principles Key objectives Efficient Frontier Framework Maximize • Updated our risk management methodology over the last returns 10+ years as business expanded • Today, we employ a sophisticated efficient frontier model to manage our net debt mix with the goal of optimizing
Slide 15: Our debt efficient frontiers
Our debt efficient frontiers - Lowest cost, highest volatility INTEREST EXPENSE Unconstrained Efficient Frontier Current Debt Portfolio Lowest volatility, highest cost + - NET DEBT / EBITDA RATIO VOLATILITY + 13
Slide 16: Shifting our portfolio toward an optimal point on the constrained efficient frontier
We continue to shift our portfolio toward an optimal point on the constrained efficient frontier, which involves more EUR, CAD, GBP and AUD debt - AB InBev’s Optimal Range While all portfolios on the efficient frontier are optimal in theory, we target this area because diminishing risk is not worth
Slide 17: The biggest FX mismatch is BRL and EUR, but EUR debt remains a good offset
The biggest FX mismatch between our EBITDA and Debt profile is BRL and EUR, but given interest rate differentials, EUR debt continues to be a good offset for BRL exposure Over any 3-year rolling period, with a brief exception toward the end of 2011, EUR funding has provided lower overall costs and e
Slide 18: Digital Transformation Solutions
Digital Transformation Solutions
Slide 19: Digital Transformation
Digital Transformation We defined 5 major digital transformations to enable our future growth 1 Customer 2 Consumer 3 Supply Chain of the Future 4 Operations 5 Data & Analytics 40% digital sales 8% earned media CoS efficiency Global 0% critical data PRESENT (EDI, Telesales, through technology Capabi
Slide 20: Customer Contact Model
Customer Contact Model 1 We are fundamentally changing how we interact with our customers Full Service Model Sales Organisation 2.0 Our Contact Model Dream TELESALES MARKET SHARE from People traditional, face-to-face Different set of capabilities B2B order-taking sales model Process to Systems & Rou
Slide 21: Moving over 70% of revenue to non-traditional formats by 2021
Customer Contact Model # 1 We are moving over 70% of revenue to non-traditional formats by 2021 Effectiveness Cost to Sell Service Level B2B Total Revenue Frontline Cost Reduction $/hl B2B Users Evolution TELESALES Non-traditional EDI TRADITIONAL 2,500K -3% -8% 850K -20% 450K 190K 40% 33% 27% 71% 20
Slide 22: Contact Model - Connected POC platform
Contact Model - Connected POC 1 The platform allows us to analyze consumer behavior at the POC and provide valuable insights and recommendations to our customers Beer loses its share of alcohol Beer Share Beer, Alcohol, Total Alcohol Revenues leadership, primarily to whiskey of Alcohol $ 100% 13% 18
Slide 23: Contact Model - Connected POC activations
Contact Model - Connected POC 1 We can then create activations together with our customers to improve their revenues at very precise and tailored occasions Example hypothesis: In order to test this possible solution, an activation was created and a sample of POCs in our test market was selected base
Slide 24: Measuring results together with POC owners
Contact Model - Connected POC # 1 We continuously measure results together, with the POC owners, and adjust if needed Results: Beer Share of Revenue by Hour BEFORE AFTER In the 20 test POCs, 55% % Share of Alcohol AB InBev Share of Alcohol 50% Revenue post-10pm grew 45% +2.3% 40% 35% 30% 22 23 0 1 2
Slide 25: Know our Consumers
Know our Consumers 2 In order to increase our direct interactions with consumers we use our Data Platform to recognize behaviors of consumers visiting AB InBev & other websites To start with we have We are complying strictly to all EU GDPR guidelines very little information and are now moving all re
Slide 26: Know our Consumers
Know our Consumers 2 With the help of the first basic information we can better tailor the offering based on what we learned about our consumer We create an audience based on: This ad will appear for A036A18799605C A036A18799605C on the next website he visits 26 24
Slide 27: Know our Consumers: Consumer Data Platform
Know our Consumers 2 Meet A036A18799605, better known as Miguel Santos. Through our Consumer Data Platform we will collect and enrich the data about Miguel and present him with tailored content, promotions and relevant offers. I’m Miguel Santos, I live in Barranquilla, I like Budweiser, love footbal
Slide 28: Using consumer data to deliver a better experience
Know our Consumers 2 This data can be used in different ways to deliver a better consumer experience and allow us to grow efficiently Insights Media Efficiency B2C Sales Brand Building Topline Complement existing 10% efficiencies 20 countries Tailored content Growth survey-based insights 26
Slide 29: Supply Chain of the Future
Supply Chain of the Future 3 We started to transform our supply chain to make greater use of technology to drive significant savings opportunities Platforms Clusters Modules Scope • Top ~50 breweries 3 • Fully interconnected, automated and data-driven centralized control tower Smart Brewery Optimize
Slide 30: Streamlining Operations
Streamlining Operations 4 We are re-organizing our back office operations to capture sizable opportunities through simplification and automation driven by technology End-to-end / Penetration Harmonization Better, faster, cheaper, Drive to best-in-class simpler processes and level of process policies
Slide 31: Streamlining Operations: automating transactional services
Streamling Operations 4 Our dream is to fully automate the transactional services and focus our capability centers on value-adding activities Business Industrial Process Digital Data driven Automation Automation Transformation Enterprises We are replacing transactional PRODUCTIVITY High Value Tasks
Slide 32: Data and Analytics
Data and Analytics 5 We have significantly improved our data and analytics capabilities, but we have much greater ambitions 2018 Built Analytics Center of Opened Analytics Excellence in India Incubation center at the 2017 People Analytics University of Illinois Finance & Procurement 2016 Marketing M
Slide 33: Constantly innovating
Constantly innovating Investing in innovation through our footprint in Silicon Valley, Israel and Bangalore EMERGING SCALING Examples • Innovate from without Exponential • Voice & NLP thinking • Smart Packaging • Partnerships Incremental & Assets tracking • Non-consensus thinking • Blockchain • 2 pi
Slide 34: Constantly innovating: big bets on a few trends
Constantly innovating Big bets on a few trends we believe will have large opportunities for growth and efficiencies Smart packaging A Voice & NLP B & asset tracking C Blockchain AB InBev applicability: AB InBev applicability: AB InBev applicability: Connected Home pilot to create a Pilots currently
Slide 35: Thank you
Thank you