Anheuser-busch Inbev Sa/nv · EURONEXT:ABI
Anheuser-busch Inbev Sa/nv — Q2 2016 Earnings Presentation
28 slides from Anheuser-busch Inbev Sa/nv's earnings presentation, Jul 29, 2016
Slide 1: Second Quarter 2016 Results
Second Quarter 2016 Results 29 July 2016 © AB InBev 2016 – 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: SABMiller: Revised and final offer
SABMiller: Revised and final offer • On July 26, 2016, we announced a revised and final offer to acquire the entire issued and to be issued share capital of SABMiller • Pursuant to the revised and final terms, each SABMiller Shareholder will now be entitled to receive: • For each SABMiller Share: £4
Slide 4: SABMiller: Status of regulatory clearances
SABMiller: Status of regulatory clearances Approvals in 23 jurisdictions Europe: Approval received May 24th • Binding offer from Asahi to acquire the Peroni, Grolsch & Meantime brands for €2.55 bn • Commitment to sell SABMiller’s Central & Eastern European businesses South Africa: Approval received
Slide 5: 2Q16 Highlights
2Q16 Highlights • US Consistent investment leading to improvements in market share trends • Mexico Continued growth driven by a healthy economy and our own commercial initiatives • Brazil Improvement in second quarter volumes and market share versus the first quarter, but not at the speed we had ant
Slide 6: 2Q16 Summary
2Q16 Summary • Total Revenue +4.0% – Revenue per hl +6.1% on a constant geographic basis – Global Brands +8.4% • Total Volumes -1.7% – Own beer -0.8% • EBITDA +4.3% – EBITDA margin increased marginally to 37.1% • Normalized EPS of $1.06 versus $1.21 in 2Q15 – Organic EBITDA growth more than offset b
Slide 7: Global Brand Revenues +8.4%
Global Brand Revenues +8.4% p Corona p Budweiser +13.0% +5.9% • Strong performances • Very good performances from Brazil & UK in Mexico, UK & China • Good contribution in • Brand expansion China after difficult 1Q16 continues p Stella Artois +9.1% • Solid performances in the US & Canada • Wimbledon
Slide 8: US – 2Q16 summary
US – 2Q16 summary Industry US Market Share trend shows consistent improvement • STRs flat in 2Q16 & +0.2% in HY16 AB InBev -0.35 -0.40 -0.45 -0.45 -0.55 -0.55 • STRs -0.9% -0.65 -0.90 • Market share decline of approximately -35bps in 2Q16 & -40bps in HY16 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 FY15 HY16 Sour
Slide 9: Bud Light heading in the right direction
Bud Light heading in the right direction • Full roll-out of new visual brand identity and continuation of Bud Light Party campaign • 100% Hispanic creative for Copa America • Big step-up in holiday sales execution • STRs down low single digits for 2Q16 and HY16; improvement in HY16 vs FY15 • Market
Slide 10: Budweiser trends showing consistent improvement
Budweiser trends showing consistent improvement • Consistent messaging / tone of voice • “America” campaign and packaging • “Most Patriotic Summer Ever” • Big step-up in holiday sales execution • STRs down low single digits for 2Q16 and HY16; improvement in HY16 vs FY15 • Market share -15bps in 2Q16
Slide 11: Michelob ULTRA continues to accelerate
Michelob ULTRA continues to accelerate • #1 share gainer for 5 straight quarters • Premium Active Lifestyle • Digital activations • Aluminum Bottles • STRs growing double digits • Share gains accelerating • +55bps in 2Q16 and HY16 11 © AB InBev 2016 – All rights reserved Note: Share figures based on
Slide 12: Other Above Premium brands driving share gains
Other Above Premium brands driving share gains • Gaining share within the US High End segment as Stella Artois, Goose Island and our Craft acquisitions grow double digits • Rita’s Family share trends improving behind new campaign, flavors (watermelon), and Splash • Best Damn Family also doing very w
Slide 13: Mexico – 2Q16 summary
Mexico – 2Q16 summary AB InBev • Revenue +9.5% • Volume +7.2% with strong contribution from our Focus Brands • Revenue per hectoliter growth of +2.1% • EBITDA growth of +6.6% • EBITDA margin declined -143 bps to 50.4%, given the timing of sales and marketing investments • Three years after closing t
Slide 14: Strong performance from domestic brands
Strong performance from domestic brands • Corona family up mid-single digits • Summer platform kicked off with a sold out Corona Sunsets festival in Playa del Carmen and a Corona cooler promotion • Victoria’s “The Mexican we all have inside” campaign continues to drive preference and share among LDA
Slide 15: Accelerating growth from our global and US brands
Accelerating growth from our global and US brands • Bud Light continued its strong performance in 2Q16 with double digit volume growth • Campaign continues to position the brand well among LDAs, especially in the North • Budweiser has accelerated its growth this year and more than doubled volumes in
Slide 16: Brazil – 2Q16 summary
Brazil – 2Q16 summary Total Real Disposable Income Growth Industry • Estimated industry volume decline of low to mid single digits in HY16 AB InBev • Revenue +2.0% • Total volumes -4.7% • Beer volumes -4.5% Source: Pnad/IBGE • Non-beer volumes -5.2% • Improved beer market share trend versus 1Q16 • B
Slide 17: Brazil – Focused on our commercial platforms
Brazil – Focused on our commercial platforms Concentrating our efforts on what we can impact and influence Elevating the Core: • Skol consumer preference on upward trend, significantly above market share • Festival activations Accelerating Premium: • Revenue and volumes up double digits versus HY15
Slide 18: Accelerating Premium and Near Beer
Accelerating Premium and Near Beer • Strategy of accelerating the growth of Premium and Near Beer • In the Premium segment, we continue to drive revenue through service execution and portfolio expansion • Budweiser is leading the Premium segment in Brazil and grew double digits this quarter, in part
Slide 19: Shaping In-Home Consumption
Shaping In-Home Consumption • Given the pressure on consumer disposable income, focus is on enhancing the shopper experience and driving affordability through returnable glass bottles (RGBs) • RGB volumes in supermarkets more than doubled in HY16, accelerating in 2Q16 • Launched a national TV and so
Slide 20: China – 2Q16 summary
China – 2Q16 summary Industry • Beer industry volumes down approximately -8% AB InBev • Revenue +3.9% • Beer volume -2.3% • Market share growth of approximately 110 bps to 19.1% • Revenue per hectoliter +6.3%, driven by favorable brand mix • EBITDA growth of +25.6% with margin up 553 bps to 32.1% ©
Slide 21: Budweiser - #1 Premium brand in China
Budweiser - #1 Premium brand in China • Budweiser grew high single digits in 2Q16 and mid single digits in HY16, and continues to be the #1 brand in the Premium segment • Budweiser returned to growth in 2016 in Guangdong, after a soft first quarter • Growth was driven by our Made for Music platform
Slide 22: Highlights from our other markets
Highlights from our other markets • In Canada, volumes were down low single digits due to industry weakness, although share was stable. Good top-line growth from Bud Light and our Above Premium portfolio • In Europe, own beer volumes essentially flat, with Western Europe up ~5% • Solid results from
Slide 23: Normalized EPS declined to $1.06 in 2Q16, driven by increased net finance costs
Normalized EPS declined to $1.06 in 2Q16, driven by increased net finance costs 0.04 0.08 1.29 1.21 1.10 0.27 1.06 USD per share (0.23) (0.04) 0.19 (0.27) Variance of Variance of 2Q16 EPS before Currency Net costs of the 2Q16 MTM - 2Q15 as 2Q15 MTM - 2Q15 EPS 2Q16 as Normalized EBIT income tax MTM,
Slide 24: Increase in Net Finance costs driven mainly by interest expense resulting from bond issuances
Increase in Net Finance costs driven mainly by interest expense resulting from bond issuances Interest expense including pre- funding of Net interest on MTM - Share Currency and Bank fees, SABMiller net defined Accretion based payment other hedging transaction 2Q15 purchase price benefit liabilities
Slide 25: Non-recurring net finance costs of ~1.5 billion USD, driven by FX hedging of SABMiller purchase price
Non-recurring net finance costs of ~1.5 billion USD, driven by FX hedging of SABMiller purchase price MTM - Grupo Modelo MTM - FX hedging of Other MTM Accelerated 2Q16 2Q15 deferred share the purchase price of adjustments accretion and other instrument SABMiller fees 290 (60) 2Q15 (60) USD millions
Slide 26: Normalized Effective Tax Rate (ETR)
Normalized Effective Tax Rate (ETR) 27% 25% 25% 24% 20.5% 23% 19.1% 22% 17.2% 2015 2Q15 2Q16 2016 Guidance 2017-2018 2019 Onward Guidance Guidance Normalized ETR in 2Q16 unfavorably impacted by : • Pre-funding of the purchase price of the proposed combination with SABMiller, for which no tax deducti
Slide 27: 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 will be a priority fo
Slide 28: Q&A
Q&A