Slide 1: Full Year and Fourth Quarter 2019 Results
Full Year and Fourth Quarter 2019 Results 27th February 2020 © AB InBev 2020 – 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: Agenda
AGENDA ➢ 2019 Takeaways ➢ Key Market Highlights ➢ Non-Alcohol and Direct to Consumer Update ➢ Better World Update ➢ Financials ➢ Q&A © AB InBev 2020 – All rights reserved 3
Slide 4: FY19 Key Takeaways
FY19 KEY TAKEAWAYS POSITIVES NEGATIVES • Strong and balanced top-line growth, with our • Highest cost of sales headwind in the past third consecutive year of volume growth decade • Improved performance in the US, our largest • Challenging macroeconomic environments in market many relevant markets •
Slide 5: FY19 Financial Summary
FY19 FINANCIAL SUMMARY Total Revenue +4.3% • Revenue per hl +3.1% Total Volumes +1.1% • Own beer +0.8%, non-beer +4.8% EBITDA +2.7% and EBITDA margin contracted by 65 bps to 40.3% Normalized EPS increased by $0.92 to $4.08 Underlying EPS decreased by $0.47 to $3.63 Net debt to EBITDA ratio of 4.0x a
Slide 6: 4Q19 Financial Summary
4Q19 FINANCIAL SUMMARY Total Revenue +2.5% • Revenue per hl +0.9% • Global Brands +2.1% and +3.9% outside of their home markets Total Volumes +1.6% • Own beer +0.8%, non-beer +8.0% EBITDA -5.5% and EBITDA margin contracted by 336 bps to 40.1% Normalized EPS decreased by $0.23 to $0.48 Underlying EPS
Slide 7: Global Brand Portfolio
Global Brand Portfolio FY19 Revenue +5.2% +8.0% outside of home markets +3.3% +6.5% +21.0% FY19 Revenue Growth FY19 Revenue Growth FY19 Revenue Growth outside of the US outside of Belgium outside of Mexico Fastest growing brand in Europe; Growth led by the Corona grew by double-digits in the challen
Slide 8: Key Market Highlights
KEY MARKET HIGHLIGHTS 8 © AB InBev 2020 – All rights reserved 8
Slide 9: US: Making Progress Against Our Five Commercial Priorities
US: MAKING PROGRESS AGAINST OUR FIVE COMMERCIAL PRIORITIES AMBITION PROGRESS SINCE 2017 Expand DOUBLE INDUSTRY SEGMENT MIX GREW FROM 6% IN 2017 TO 8% MIX IN 2019, WITH Core Plus CONTINUED MICHELOB ULTRA MOMENTUM Lead & Shape DOUBLE SHARE OF SEGMENT SHARE OF SEGMENT FLAT, WITH CRAFT Super Premium GRO
Slide 10: Mexico: Significant Opportunities for Continued Growth
MEXICO: SIGNIFICANT OPPORTUNITIES FOR CONTINUED GROWTH DEVELOP DRIVE EXPLORE EXPAND INDUSTRY PREMIUMIZATION WITH BEER ADJACENCIES, OUR PRESENCE PER CAPITA GLOBAL & LOCAL PREMIUM INCLUDING NABLAB AND IN NEW AND EXISTING CONSUMPTION BRANDS AND CRAFT NEW VENTURES CHANNELS • Drive frequency with • Premi
Slide 11: Colombia: Enhancing Our Portfolio to Reach New Consumers
COLOMBIA: ENHANCING OUR PORTFOLIO TO REACH NEW CONSUMERS RECORD HIGH SHARE OF PREMIUM SEGMENT, INNOVATIONS CONTRIBUTED OVER OUR PORTFOLIO GROWING DOUBLE DIGITS 30% OF OUR VOLUME GROWTH © AB InBev 2020 – All rights reserved 11
Slide 12: Brazil: Launched Successful Innovations Across the Price Spectrum
BRAZIL: LAUNCHED SUCCESSFUL INNOVATIONS ACROSS THE PRICE SPECTRUM, NOW MAKING UP 10% OF OUR REVENUE IN THE COUNTRY PREMIUM PORTFOLIO OF GLOBAL AND SKOL PURO MALTE – OUR LARGEST MAGNÍFICA IS NOW THE LEADING INTERNATIONAL BRANDS & CRAFT INNOVATION LAUNCH IN BRAZIL VALUE BRAND IN MARANHÃO © AB InBev 20
Slide 13: South Africa: +2pp Total Share of Alcohol in 2019
SOUTH AFRICA: +2PP TOTAL SHARE OF ALCOHOL IN 2019, BY IMPLEMENTING THE CATEGORY EXPANSION FRAMEWORK PREMIUMIZATION Corona grew triple-digits as we achieved our highest ever market share in the premium segment ADJACENCIES EASY DRINKING CLASSIC OTHER STYLES CORE LAGER Return to growth in Core bulk por
Slide 14: In China, Super Premium Portfolio Delivering Double-Digit Volume Growth
IN CHINA, OUR SUPER PREMIUM PORTFOLIO DELIVERING DOUBLE-DIGIT VOLUME GROWTH THROUGH THE HIGH END COMPANY BEST-IN-CLASS HIGH END DELIVERING SUSTAINABLE RESULTS SPECIALIZED SALES TEAM & PORTFOLIO & STRATEGIC APPROACH & FUTURE GROWTH ROUTE TO MARKET TO BRAND EXPANSION MARKET MID HIGH MATURITY MATURITY
Slide 15: Update on COVID-19
UPDATE ON COVID-19 • The health and safety of our community, our colleagues and business partners are our top priority • We support all the government’s measures and recommendations to contain the spread of the virus • As of today, we have re-opened more than half of our breweries and obtained licen
Slide 16: Update on Non-Alcohol Beverages & Direct to Consumer
UPDATE ON NON-ALCOHOL BEVERAGES & DIRECT TO CONSUMER © AB InBev 2020 – All rights reserved 16
Slide 17: 2019 Was a Transformational Year for Our Non-Alcohol Business
2019 WAS A TRANSFORMATIONAL YEAR FOR OUR NON-ALCOHOL BUSINESS PORTFOLIO OF OWNED & STRATEGY FOR GROWTH: $3B REVENUE BUSINESS PARTNER BRANDS OPTIMIZE, GROW & DISRUPT GROW & OPTIMIZE 10% 5.3% LEGACY BUSINESS of our 2019 Total Volume Volume Growth DISRUPT AND INNOVATE Top 6 Markets WITH HEALTH & WELLNE
Slide 18: Improving Experience Through Direct to Consumer
IMPROVING EXPERIENCE THROUGH DIRECT TO CONSUMER • Our DTC platform enables 250 million consumer connections annually • Now a $1B business, growing revenue by double-digits • 3,000 Modelorama redesigned stores in Mexico, with a focus on personalized data-driven digital experience • E-commerce venture
Slide 19: Better World FY19 Results
Better World FY19 Results 19 © AB InBev 2020 – All rights reserved
Slide 20: 2025 Sustainability Goals
2025 Sustainability Goals Smart Water Circular Climate Agriculture Stewardship Packaging Action 100% of our direct farmers 100% of our communities 100% of our products will 100% of our purchased are skilled, connected and in high stress areas have be in packaging that is electricity comes from finan
Slide 21: Smart Agriculture and Water Stewardship
We work with over 20,000 farmers in 13 countries, We are investing in impactful, providing training, information and resources, long-term solutions to protect watersheds in to create resilient supply chains 24 high-risk communities around the world Smart Agriculture Water Stewardship Through our 100
Slide 22: Circular Packaging and Climate Action
Over 40% of our volume is in returnable 61% of our global purchased electricity volume is under packaging, and we have achieved 42.3% recycled contract from renewable sources, and we’ve reduced content in our one-way glass bottles our operational carbon footprint by 19% in intensity* Circular Packag
Slide 23: Earnings, Cash Flow and Capital Allocation
Earnings, Cash Flow and Capital Allocation © AB InBev 2020 – All rights reserved
Slide 24: Decrease in Net Finance Costs Driven by Swing in MTM
DECREASE IN NET FINANCE COSTS DRIVEN PRIMARILY BY THE SWING IN MTM OF THE SHARE-BASED PAYMENT PROGRAMS USD millions FY18: -1 774 FY19: +898 Swing: +2 672 143 1 53 -4,355 2,672 46 1 139 -6,844 FY18 Interest Expense Net interest on Accretion MTM - share based Currency and other Bank fees, Hyperinflati
Slide 25: Normalized Effective Tax Rate (ETR)
NORMALIZED EFFECTIVE TAX RATE (ETR) 33.0% 27.5% 29.0% 24.7% 24.5% 24.9% 23.4% 23.0% 27.0% 17.2% 4Q18 4Q18 excluding 4Q19 4Q19 excluding FY18 FY18 excluding FY19 FY19 excluding FY20 Guidance* MTM MTM MTM MTM *Reflects our normalized ETR guidance, excluding any gains and losses relating to the hedging
Slide 26: Underlying EPS Decreased from $4.10 to $3.63 in FY19
UNDERLYING EPS DECREASED FROM $4.10 TO $3.63 IN FY19 4.10 -0.44 USD millions 0.05 -0.08 0.01 3.63 0.03 -0.04 FY18 Normalized EBIT Hyperinflation impact Net finance cost Income tax expense Associates & non- Net hyperinflation FY 2019 in normalized EBIT controlling interest impact in EPS Notes: (1) Un
Slide 27: Margin & Cash Generation Well Ahead of Most Peers
MARGIN & CASH GENERATION WELL AHEAD OF MOST OF OUR PEERS = Cash flow from operations 1 $ billions 35% Cash Flow from Operations as % of Sales 1 Coca-Cola 30% 15.6 ABI 10.5 Diageo Procter & Gamble 2 4.2 13.4 25% 16.2 Nestlé 6.8 Reckitt Benckiser Carlsberg 20% 16.2 L'Oreal 3.1 1.8 1.9 4.7 Mondelez Hei
Slide 28: Core Working Capital % of Net Revenue
CORE WORKING CAPITAL % OF NET REVENUE IN LINE WITH PRIOR YEAR, DESPITE COUNTRY MIX HEADWINDS Core Working Capital (CWC) as a % of Net Revenue (1) 2.1% -0.6% -5.4% -7.4% -8.5% -10.0% -11.0% -12.5% -13.4% -13.6% -13.4% -15.2% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1) Yearly averag
Slide 29: Proactively Managed Debt Profile, Extending Maturities
WE HAVE PROACTIVELY MANAGED OUR DEBT PROFILE, EXTENDING MATURITIES AND MITIGATING NEAR TERM REFINANCING PRESSURE AB InBev Bond Maturity Profile $9B RCF Capacity + $7B Cash & Cash Equivalents = $16B Total Liquidity, far exceeding debt maturities in any given year 16,000 14,000 12,000 10,000 8,000 6,0
Slide 30: Debt Profile Protected Against Interest Rate and Currency Risk
OUR DEBT PROFILE REMAINS PROTECTED AGAINST INTEREST RATE AND CURRENCY RISK, WITH LONG WEIGHTED AVERAGE MATURITY ~91% OF OUR DEBT DIVERSE CURRENCY MIX ADDRESSED NEAR TERM PRE-TAX GROSS IS FIXED RATE OF DEBT REDUCES RISK MATURITIES TO REDUCE DEBT COUPON REFINANCING PRESSURE Other CAD AUD 2% 3% Floatin
Slide 31: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Our optimal capital structure calls for a Net Debt/EBITDA ratio of approximately 2x. 1. Organic growth: Investing in the organic growth of our business 2. Deleveraging: Deleveraging to around the 2x level remains our commitment 3. Selective M&A: Non-organic, external gr
Slide 32: Q&A
Q&A © AB InBev 2020 – All rights reserved 32