Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — SABMiller — H1 F2011 Earnings Presentation
38 slides from Anheuser-Busch InBev SA/NV's earnings presentation, Nov 18, 2010
Slide 1: SABMiller plc F'11 first half results
SABMiller plc F’11 first half results Six months ended September 30, 2010 November 18, 2010 Malcolm Wyman, Chief Financial Officer Gary Leibowitz, Senior Vice President, Investor Relations
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: Overview
Overview Strong SABMiller financial performance Improving volume trends in some markets Favourable input costs in H1 Cost reductions across the group, enabling: – Margin growth in LatAm and US – Offset of volume de-leverage in Europe – Increased market investment, particularly in SA and Africa Group
Slide 4: Overview: improving volume performance in developing markets
Overview Improving volume performance in developing markets – Led by Africa, China and South Africa – Investment for growth: capacity, footprint, marketing and sales Quarterly MAT organic lager volume growth 12% 10% 8% MAT yoy organic growth (%) 6% Africa* 4% Asia LatAm 2% SA (beer) 0% Europe Q1 F'0
Slide 5: Divisional highlights: Latin America
Divisional highlights: Latin America EBITA growth of 10%* and margin Lager volumes marginally down +210bps despite lower volumes (US$'m) – Impact of increased Colombian beer taxes 1,600 26% 1,400 25% – Category development and growth in Peru 1,200 24% & Ecuador 1,000 800 23% 600 22% 400 Central Amer
Slide 6: Divisional highlights: North America
Divisional highlights: North America Tough trading conditions driven by unemployment amongst key demographics Continued firm pricing and segment price gap management Synergies and cost reduction driving profit and margin growth – Synergies and cost reductions exceed $560 million – On track for a tot
Slide 7: Divisional highlights: Europe
Divisional highlights: Europe Softness across the region continues – Mitigated by favourable summer weather – Continued depressed consumer and occasion trends – Profit headwinds from reduced volumes, excise, downtrading and channel shifts Some positive signs in Russia Improved profitability from mor
Slide 8: Divisional highlights: South Africa
Divisional highlights: South Africa Economic upturn yielding category growth Beer brand enhancements, increased investment and strong execution stabilising market share – Trailing 3 month share improvement – Successful focus on Castle Lite, 22% growth – Mainstream portfolio gathering momentum Beer p
Slide 9: Divisional highlights: Africa
Divisional highlights: Africa Broad geographic footprint supporting growth – Strong volume growth in Uganda, Mozambique, Zambia – Good brand performance in Tanzania amidst loss of licensed brands – Continuing constraints in Angola and Botswana Improving beer brand portfolios, extended price ladders
Slide 10: Divisional highlights: Asia
Divisional highlights: Asia China Organic volumes up 9%; share growth – Led again by Central region and Northeast Marketing emphasis on premium Snow variants, growing premium segment share – Focused outdoor activity promotions for ‘Brave the World’ variant Pricing stagnant, rising marketing spend Le
Slide 11: Good growth in EPS and dividends
Good growth in EPS and dividends Adjusted EPS – US $ +16% – Sterling +23% – Rand +6% – Euro +27% Interim Dividend 19.5 US cents per share – Up 15% © SABMiller plc 2010 F11 H1 results 11
Slide 12: Strong overall financial performance despite mixed trading conditions
Strong overall financial performance despite mixed trading conditions Total volumes of 143.4 mhl * +2.7% - Organic * +2.0% Lager organic volumes * +1.5% Organic group revenue * +6.3% - Constant currency * +4.5% Organic EBITA * +12.6% - Constant currency * +10.2% EBITA margin * +90 bps - Constant cur
Slide 13: Revenue benefits from firm pricing and volume growth
Revenue benefits from firm pricing and volume growth Group Revenue (including associates and joint ventures) components of performance, US$m 1.8% 6.3% 0.3% 14,236 2.5% 2.0% 13,355 Sep '09 Volume Price/mix Currency Sep '10 Acquisitions Sep '10 Organic © SABMiller plc 2010 F11 H1 results 13
Slide 14: Strong EBITA growth
Strong EBITA growth EBITA (including associates and joint ventures) components of performance, US$m 2.4% 12.6% 0.2% 2,466 10.2% 2,187 Sep '09 Underlying Currency Sep '10 Acquisitions Sep '10 Organic © SABMiller plc 2010 F11 H1 results 14
Slide 15: Input costs reduce over the first half
Input costs reduce over the first half Half year constant currency decrease per hl – Total raw materials - Down mid-single digits – Total COGS - Down low-single digits Lower barley and hop prices drive down brewing raw material costs Stronger local currencies benefit input costs Higher distribution
Slide 16: Exceptional items
Exceptional items US$m Sep 10 Business capability programme costs: - included in operating profit (155) Broad-Based Black Economic Empowerment scheme South Africa: - included in operating profit (IFRS2 non-cash) (126) Restructuring costs: - share of associates’ and joint ventures’ (4) Total exceptio
Slide 17: Business capability programme
Business capability programme Important benefit drivers achieve significant milestones in first half – Trinity Procurement now leads brewing materials buying – European manufacturing organisation commences Process and systems changes advancing – Sales and distribution in Latin America; support syste
Slide 18: Cash flow, finance costs and taxation
Cash flow, finance costs and taxation Normalised EBITDA* up 12% to US$2,577m from US$2,292m Normalised EBITDA* margin is 130 basis points higher than prior year Working capital inflow US$90m Capex** down US$125m to US$614m Free cash flow*** improved by US$234m to US$1,244m Adjusted finance costs up
Slide 19: Net debt
Net debt US$m Sep 10 Mar 10 Non-current borrowings 7,235 7,809 Current borrowings 1,676 1,605 Cash and cash equivalents (478) (779) Borrowings-related derivative financial instruments (495) (237) Net debt 7,938 8,398 Gearing (%) 36.8 40.8 Normalised EBITDA Interest cover *(times) 9.1 8.7 Weighted av
Slide 20: Net debt profile and maturity
Net debt profile and maturity Debt Maturity Debt profile 16% 0 – 1 Year US$ 1,300m 32% Dollars Euros Rand 1 – 2 Years US$ 594m Peso 20% Other 2 – 5 Years US$ 4,619m 11% 21% Over 5 Years US$ 1,425m © SABMiller plc 2010 F11 H1 results 20
Slide 21: Financial outlook – current financial year
Financial outlook – current financial year Improvement in economic conditions in emerging markets – Mixed consumer spending patterns Raw material input cost benefits expected to reduce in the second half – Impacted by rising barley prices – Total raw materials per hl* Down low-single digits – Total
Slide 22: Conclusion
Conclusion Our medium term outlook for growth in volume, value and profitability remains strong Consumer market recovery is uneven, with incremental improvement in economic conditions across most of our emerging markets Continuing selective price increases, lower input costs, increased brand investm
Slide 23: Supplementary information
Supplementary information MILLER
Slide 24: Reported EBITA contribution
Reported EBITA contribution EBITA contribution* September 2010 September 2009 2% Latin America 2% 16% 15% 27% Europe 25% North America 4% 4% Africa 10% 11% Asia South Africa Beverages 22% Hotels & Gaming 19% 17% 26% South Africa * Before corporate costs © SABMiller plc 2010 F11 H1 results 24
Slide 25: Latin America
Latin America Good EBITA growth from lower raw material and fixed costs Lager volumes down in Colombia Increased market-facing investment across all countries US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 2,771 2,746 1 EBITA * 625 566 10 EBITA margin * (%) 22.6 20.6 200 bps Or
Slide 26: Europe
Europe Tough economic conditions and down trading continue to impact volumes Investment in core brands increased Lower raw material costs and fixed cost control minimise margin decline US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 3,159 3,211 (2) EBITA * 568 590 (4) EBITA marg
Slide 27: North America
North America Strong EBITA growth from net pricing, synergies and cost savings Volumes impacted by weak US beer market Strong momentum behind craft and import segment US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 2,865 2,870 - EBITA * 480 379 27 EBITA margin * (%) 16.8 13.2 36
Slide 28: Africa
Africa Results include our share of our associate in Zimbabwe Multi-beverage portfolio delivers strong underlying volume growth Increased marketing and capacity-related costs impact margins US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 1,558 1,263 23 EBITA * 273 246 11 EBITA m
Slide 29: Asia
Asia Good second quarter volume growth in China India volumes grow, cycling a weak comparative period EBITA growth and margin improvement US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 1,168 1,021 14 EBITA* 109 90 22 EBITA margin* (%) 9.4 8.8 60 bps Organic volumes (hl’000) Lag
Slide 30: South Africa Beverages
South Africa Beverages Volumes benefit from increased marketing investments Firm pricing and volume growth deliver EBITA growth Increased marketing costs impacts EBITA margin US$m Sep 10 Sep 09 Change % Organic, constant currency Group revenue 2,224 2,051 8 EBITA * 360 333 8 EBITA margin * (%) 16.2
Slide 31: Financial results
Financial results US$m Sep 10 Sep 09 Change % Reported currency Group revenue 14,236 13,355 7 EBITA 2,466 2,187 13 EBITA margin (%) 17.3 16.4 90 bps Sales volumes (hl’000) Total 143,404 139,648 3 Lager 118,988 116,887 2 Soft drinks 21,128 20,176 5 Other alcoholic beverages 3,288 2,585 27 © SABMiller
Slide 32: EBITA margin performance
EBITA margin performance Organic, constant currency basis Sep 09 Sep 10 22.6% 20.6% 19.5% 18.4% 18.0% 17.5% 17.3% 16.8% 16.3% 16.2% 16.4% 13.2% 8.8% 9.4% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2010 F11 H1 results 32
Slide 33: Reported EBITA margin performance
Reported EBITA margin performance Sep 09 Sep 10 22.7% 20.6% 19.5% 18.4% 18.0% 16.8% 17.2% 17.3% 16.3% 16.2% 16.4% 13.2% 8.8% 9.2% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2010 F11 H1 results 33
Slide 34: Reported volumes
Reported volumes* Reported domestic lager volumes Sep 10 Change % by country, hl ‘000 South Africa 12,262 3 Colombia 8,619 (7) Poland 8,115 (6) Peru 5,252 11 Czech 3,883 (9) Russia 3,155 (2) Romania 3,102 (11) Ecuador 2,500 4 India 2,487 32 Italy 2,158 (3) Tanzania 1,299 - China ** 29,814 10 * exclu
Slide 35: Net debt
Net debt Sep 10 Mar 10 Average interest rate (gross debt) – % 6.1% 5.7% Net debt currency profile* US dollars 32% 31% Euro 21% 23% SA rand 11% 9% Colombian peso 20% 21% Other 16% 16% 100% 100% * Including the effect of derivatives © SABMiller plc 2010 F11 H1 results 35
Slide 36: Financial & commercial rand / US$ : rate
Financial & commercial rand / US$ : rate (CPI differentials) month-on-month basis 1.6 1.4 Base 1 = 1990 1.2 1.0 0.8 0.6 0.4 90 92 94 96 98 00 02 04 06 08 10 Source: Bloomberg, JP Morgan © SABMiller plc 2010 F11 H1 results 36
Slide 37: Exchange rates
Exchange rates Closing rates currency vs US$ 30 Sep 10 31 Mar 10 30 Sep 09 Colombia 1,800 1,929 1,922 Peru 2.79 2.84 2.88 Honduras 18.90 18.90 18.90 Euro 0.73 0.74 0.68 Poland 2.91 2.86 2.88 Czech Republic 18.03 18.87 17.18 Russia 30.40 29.36 30.09 Romania 3.13 3.03 2.88 Hungary 202.57 196.88 184.09
Slide 38: Balance sheet
Balance sheet US$m Sep 10 Mar 10 Goodwill and Intangible assets 16,431 15,932 Property, plant and equipment 9,122 8,916 Investment in joint ventures and associates 8,130 8,035 Other non-current assets 918 721 Current assets excluding cash 3,204 3,116 Cash and cash equivalents 478 779 Borrowings (8,9