Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — FY2016 Earnings Presentation
34 slides from Anheuser-Busch InBev SA/NV's earnings presentation, Mar 2, 2017
Slide 1: Full Year 2016 Results
Full Year 2016 Results 2 March 2017 © AB InBev 2017 – 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: Highlights of the year
Highlights of the year • Completion of milestone transaction • Solid performances from most of our markets in the context of a challenging year, especially in Brazil • Continued success of our global brands • Premiumization delivered revenue per hectoliter growth • Strengthening our better world ini
Slide 4: Successful completion of combination with SABMiller
Successful completion of combination with SABMiller • Creates the first truly global brewer and one of the world’s leading consumer products companies • Leadership position in eight of the top ten world’s largest profit pools • Rich portfolio including seven of the top ten most valuable beer brands
Slide 5: Fast start to synergy delivery
Fast start to synergy delivery • Updating our total synergy guidance to 2,800m USD, with 1,971m USD remaining to be delivered (on a constant currency basis as of August 2016) over the next 3-4 years • Estimated one-off cash costs of ~900m USD over 3 years, of which 158m USD has been spent 2,800 547
Slide 6: FY16 Financial Summary
FY16 Financial Summary Solid results from most markets, but weak performance in Brazil Beer Volume Revenue EBITDA • Total Revenue +2.4% 6.4% 6.3% 4.0% • Revenue per hl +4.5%, +4.1% 2.4% 2.4% 0.2% on a constant geographic basis -0.1% -0.1% • Global Brands +6.5% -3.0% -2.0% -1.4% -3.6% • Total Volumes
Slide 7: Global Brand Revenues +6.5% in FY16
Global Brand Revenues +6.5% in FY16 Budweiser Corona +2.8% +14.3% • Ranked as the most valuable • Revenue grew by 21%, alcohol brand in the world1 excluding Mexico, with double • Double or triple digit growth in digit growth in 23 countries more than 15 countries • Successful worldwide launch of “Th
Slide 8: Consistent global commercial priorities tailored to local markets
Consistent global commercial priorities tailored to local markets Developing the Growing our Premiumizing and Elevating near beer global brands invigorating beer core lager segment Leveraging Creating more Raising the Our near beer the strength of excitement and perception and offerings are Budweise
Slide 9: North America - FY16 Summary
North America - FY16 Summary • Volumes -1.6%, -3.5% in 4Q16 • Revenue +0.1%, -1.9% in 4Q16 • Beer revenue per hectoliter +1.8%, due to revenue management initiatives and brand mix • EBITDA +2.0% with margin expansion of 76 bps to 39.8% © AB InBev 2017 – All rights reserved 9 Note: Share based on int
Slide 10: US - FY16 Summary
US - FY16 Summary • Industry STRs -1.0%, -1.6% in 4Q16 • ABI STRs -2.0%, -2.7% in 4Q16 • Market share decline of 50bp • ABI volumes (STWs) -1.7%, -3.6% in 4Q16 • Revenue 0.0%, -2.1% in 4Q16 • Revenue per hl growth of 1.8%, 1.6% in 4Q16 • Gross margin up 222 bps, a seventh straight year of gross marg
Slide 11: US: Commercial Priorities
US: Commercial Priorities Developing the Growing our Premiumizing and Elevating near beer global brands invigorating beer core lager segment Budweiser Craft Portfolio Bud Light Ritas • Share loss of 25 bps • Regional craft • STRs down mid- • Share trends in 2016, maintaining portfolio growing single
Slide 12: Latin America West - FY16 Summary
Latin America West - FY16 Summary • Volumes +6.0%, +2.2% in 4Q16 • Revenue +9.3%, +4.9% in 4Q16 • Beer revenue per hectoliter +3.1%, due to revenue management initiatives and premiumization • EBITDA +5.6% with margin contraction of 160 bps to 45.8% © AB InBev 2017 – All rights reserved 12
Slide 13: Mexico: Commercial Priorities
Mexico: Commercial Priorities Developing the Growing our Premiumizing and Elevating near beer global brands invigorating beer core lager segment Budweiser Modelo Family Corona Vickychelada • Accelerating growth, • Developing the • All-time high • Off to a fast start with especially in the family of
Slide 14: Colombia: Commercial Priorities
Colombia: Commercial Priorities Developing the Growing our Premiumizing and Elevating near beer global brands invigorating beer core lager segment Budweiser Club Colombia Aguila Redd’s Apple • Media & experiential • Launched Club • Execution of equity • Launched in October “holiday” campaign Colombi
Slide 15: Latin America North - FY16 Summary
Latin America North - FY16 Summary • Volumes -5.9%, -6.6% in 4Q16 • Revenue -3.9%, -9.2% in 4Q16 • Beer revenue per hectoliter +2.0%, due to revenue management initiatives offsetting a tough comparable base • EBITDA -16.7% with margin contraction of 686 bps to 44.3% © AB InBev 2017 – All rights rese
Slide 16: Brazil - FY16 Summary
Brazil - FY16 Summary • Industry beer volumes -5.3%, -6.2% in 4Q16 • ABI volumes -6.5%, -7.1% in 4Q16 • Beer volumes –6.6%, non-beer volumes –6.0% • Beer market share of 66.3%, based on Nielsen • Revenue -5.3%, -11.3% in 4Q16 • EBITDA -19.9% with margin contraction of 827 bps to 45.3% © AB InBev 201
Slide 17: Brazil: Commercial Priorities
Brazil: Commercial Priorities Developing the Growing our Premiumizing and Elevating near beer global brands invigorating beer core lager segment Budweiser Our premium Skol Skol Beats Family • Double digit growth portfolio • New campaign and • Launch of Skol Beats (>20%) for the fifth continues to gr
Slide 18: Latin America South - FY16 Summary
Latin America South - FY16 Summary • Volumes -5.6%, -2.0% in 4Q16 • Revenue +16.9%, +21.8% in 4Q16 • Beer revenue per hectoliter +23.8%, due to price increases in line with inflation and revenue management initiatives • EBITDA +23.4% with margin expansion of 263 bps to 50.2% © AB InBev 2017 – All ri
Slide 19: Europe, Middle East & Africa - FY16 Summary
Europe, Middle East & Africa - FY16 Summary • Volumes -2.4%, -4.1% in 4Q16 • Revenue +4.2%, +3.8% in 4Q16 • Western European revenues up mid-single digits, with market share gains in 6 out of 7 markets • Revenue per hectoliter +6.8%, due to premiumization and country mix • EBITDA +3.7% with margin c
Slide 20: South Africa: Commercial Priorities
South Africa: Commercial Priorities Developing the Growing our Premiumizing and Elevating near beer global brands invigorating beer core lager segment Stella Artois and Castle Lite Carling Black Label Brutal Fruit Corona have been • Launched Quick Chill • “Here’s to You” • Cranberry-Rosé launched, a
Slide 21: Asia Pacific - FY16 Summary
Asia Pacific - FY16 Summary • Volumes -1.2%, -4.7% in 4Q16 • Revenue +1.5%, -5.0% in 4Q16 • Beer revenue per hectoliter +2.7%, due primarily to brand mix • EBITDA +5.4% with margin expansion of 99 bps to 27.1% © AB InBev 2017 – All rights reserved 21
Slide 22: China: Commercial Priorities
China: Commercial Priorities Developing the Growing our Premiumizing and Elevating near beer global brands invigorating beer core lager segment Budweiser Stella Artois Harbin Mixxtail • Continued volume • Increasing awareness • Launched Harbin • Further innovation to growth through our by owning foo
Slide 23: A Growing World: 2016 highlights
A Growing World: 2016 highlights • 4e small retail program, helping over 20,000 shopkeepers develop skills to improve their business sustainability and quality of life • SmartBarley program, to cultivate the highest quality barley with the best yields and lowest cost • In Africa, brewing beer from l
Slide 24: A Cleaner World: 2016 highlights
A Cleaner World: 2016 highlights • Stella Artois’ Buy a Lady a Drink program with Water.org aims to tackle the global water crisis and has helped provide clean water to nearly 800,000 people in the developing world • Scaling water stewardship efforts by engaging in watershed protection partnerships
Slide 25: A Healthier World: 2016 highlights
A Healthier World: 2016 highlights • Continued progress on our Global Smart Drinking Goals, empowering consumers to make smart drinking choices • Goal to have low and no-alcohol beer products represent 20% of our global beer volumes by 2025. This year we launched two 0.0% ABV global brands: Budweise
Slide 26: Normalized EPS down from $5.20 to $2.83 in FY16
Normalized EPS down from $5.20 to $2.83 in FY16, largely due to unusual items 21% of the decline 79% of the decline -2.37 -45.6% -0.50 0.52 0.29 5.20 0.24 -1.87 0.60 0.11 4.70 USD per share 0.74 0.39 0.74 2.83 Changes in ordinary course of business Changes in unusual items FY15 as Change in Post-clo
Slide 27: Increase in Net Finance Costs driven mainly by interest expense
Increase in Net Finance Costs driven mainly by interest expense resulting from bond issuances Interest expense MTM - Share Currency including funding Net interest on based and other Bank fees, of SABMiller net defined Accretion payment hedging transaction FY15 purchase price benefit liabilities expe
Slide 28: Non-recurring net finance costs of 3,356 million USD
Non-recurring net finance costs of 3,356 million USD driven by FX hedging of SABMiller purchase price MTM - Grupo MTM - FX hedging of Modelo deferred the purchase price of Other MTM FY15 share instrument SABMiller adjustments Other fees FY16 -214 815 USD millions FY15 511 FY16 (304) Swing (815) 2,00
Slide 29: Normalized Effective Tax Rate (ETR)
Normalized Effective Tax Rate (ETR) 24-26% Guidance 20.9% 19.1% 2015 2016 2017 Normalized ETR in FY16 impacted by: • Mark-to-market losses linked to the hedging of our share-based payment programs • Change in country profit mix following the combination with SABMiller • Offset by reporting in 3Q16 o
Slide 30: Favorable debt maturity profile
Favorable debt maturity profile Debt maturity profile is staggered to ensure that cash flow from operations is sufficient to cover annual maturities 2016 Capital Raises • 47.5 billion USD bonds: Average tenor 14.7 years, average coupon 3.8% • 13.25 billion EUR bonds: Average tenor 10.4 years, averag
Slide 31: Continued improvement in Core Working Capital
Continued improvement in Core Working Capital Core Working Capital (CWC) as a % of Net Revenues (1) 4.0% 2.1% 2.0% 0.0% -0.6% -2.0% -4.0% -6.0% -5.4% -8.0% -7.4% -8.5% -10.0% -10.0% -12.0% -11.0% -12.5% -14.0% -16.0% -15.2% 2008 2009 2010 2011 2012 2013 2014 2015 2016 1) Yearly average (on a rolling
Slide 32: Final proposed dividend of €2.00 per share
Final proposed dividend of €2.00 per share Dividend per share (EUR) 3.60 3.60 3.00 2.00 2.00 Final 2.05 1.70 2.00 1.20 1.45 0.80 0.38 1.60 1.60 Interim 0.28 1.00 0.60 2008 2009 2010 2011 2012 2013 2014 2015 2016 © AB InBev 2017 – All rights reserved 32
Slide 33: 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 remains our commitmen
Slide 34: Q&A
Q&A © AB InBev 2017 – All rights reserved