Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — SABMiller — Investor Day (March 2012)
50 slides from Anheuser-Busch InBev SA/NV's investor day presentation, Mar 27, 2012
Slide 1: Australia Update
Australia Update 27 March 2012 © SABMiller plc 2012 Foster’s Seminar | March 2012 1
Slide 2: Forward looking statements
Forward looking statements This presentation includes ‘forward-looking statements’. These statements contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning. All statements other than statements of historical facts included in this presentation, inclu
Slide 3: Balanced portfolio of businesses
Balanced portfolio of businesses World’s 2nd largest brewer – # 1 or 2 position in > 90% of markets – F05 – F11 CAGR: volume 9%, revenue 12% and EBITA 13% – Leading local brands honed to local insights to build the category and local profit pool – The leading Coke bottler in Africa and Central Ame
Slide 4: Acquisition status
Acquisition status Implemented via Scheme of Arrangement on 16 December 2011 Foster’s Financed from existing resources and new debt acquired Transaction meets ROIC and EPS project thresholds without Corona Pacific Purchased the outstanding 50% of Pacific Beverages joint venture from Coca-Col
Slide 5: Foster's acquisition – a good strategic fit
Foster’s acquisition – a good strategic fit Balanced and Strong economic and demographic outlook attractive global Stable and profitable beer industry spread of Value creating transaction and highly cash generative businesses Low risk economy with growth Foster’s with strong market positio
Slide 6: Our Speakers today
Our Speakers today Ari Mervis: – Managing Director of SABMiller Asia Pacific and Chief Executive Officer of Foster’s since December 2011. – Managing Director of SABMiller Asia since October 2007. – Previously Managing Director in Swaziland, Appletiser, Russia and Australia – Joined SAB’s soft drin
Slide 7: Macro overview
Macro overview An urbanised developed nation… Population 22 million – Annual growth of c. 1.5% – 69% urbanised – Gini coefficient of 31 (USA 45, UK 34, RSA 65) GDP Total: USD 1,510 billion (global rank #13) – GDP per capita: USD 64k (global rank #5) Stable economic environment … exposed to e
Slide 8: A resilient economy
A resilient economy Real GDP growth and Unemployment Resilient through global financial 7% 6% crisis Unemployment 5% 4% GDP CAGR: 1.9% (3 yrs to 2011) 3% 2% 1% Real GDP – US 0.4%, UK (0.5)%, EU (1.4)% growth 0% Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Mar-07 Mar-08 M
Slide 9: Recent economic impacts
Recent economic impacts Domestic retail sales growth % Subdued consumer +8% Real Retail Sales 140 confidence – cyclical effects +7% Growth (LHS) 135 +6% 130 Increased household savings +5% Consumer 125 +4% Sentiment 120 +3% Index (RHS) 115 Discretionary segments +2% 110 +1% 105 weaker 0% 100 -
Slide 10: Long-term economic outlook remains attractive
Long-term economic outlook remains attractive Growing population Population growth in line or higher than BRICs Population growth (5 year forecast 2011-2016 CAGR) 1.5% 1.5% – 5 year forecast CAGR of +1.5% 0.9% 0.9% 0.6% 0.4% Strong real GDP growth -0.2% Western North Russia China Brazil India Au
Slide 11: Alcohol industry dynamics
Alcohol industry dynamics Share of throat Market volumes Alcohol LAE composition by country (2009) Beer Volume and Share of throat Share of throat (% LAE) 20 Volume (m HL) 70% 7 7 11 RTD 19 20 23 22 29 12 13 27 Spirits 60% 34 28 31 Wine 15 50% 16 14 32 29 Beer 7 15 36 17 32 40% 72 10 62 30% 79 60 59
Slide 12: Category and channel developments
Category and channel developments Sub-category mix trends Channel development % WAMP Cider 175% 100% International 135% Premise Premium 30% 30% 30% 29% 30% 30% 30% On- Domestic 130% 80% Premium New World 110% Regular 60% 35% 32% 30% 37% 45% 42% Traditional 95% Independents 49% Premise 40% Regular Of
Slide 13: Beer affordability
Beer affordability Minutes worked to afford 500ml of mainstream beer 18 16 15 14 12 11 8 5 5 Canada Czech Rep. Australia Germany Spain Poland Mexico UK US Retail price per standard drink ($) Off-premise - pack On-premise 5.6 2.6 1.9 3.5 1.6 1.6 1.4 RTD Cider Spirits Wine Beer Spirits* Beer Bottled S
Slide 14: CUB portfolio – presence in all segments
CUB portfolio – presence in all segments International Premium Craft Domestic Premium New World Traditional Regular Cider Mid-Strength Light © SABMiller plc 2012 Foster’s Seminar | March 2012 14
Slide 15: CUB manufacturing footprint
CUB manufacturing footprint Darwin Yatala (Brisbane) Warnervale (Central Coast) Brisbane Perth Sydney Cascade (Hobart) Adelaide Canberra Abbotsford (Melbourne) Melbourne Hobart © SABMiller plc 2012 Foster’s Seminar | March 2012 15
Slide 16: Integration mobilisation
Integration mobilisation Joint leadership workshop Broad organisation engagement Customers, suppliers and business partner introductions Structured integration program © SABMiller plc 2012 Foster’s Seminar | March 2012 16
Slide 17: Integration process
Integration process Nov ember December January February March April 2012 onwards 2011 2011 2012 2012 2012 Effective Date Completion Pacific Beverages deal completion Day 1 Readiness & pre-planning Integration Planning Phase A Phase B Phase C INTEGRATION “Scale of “Preferred “Implementation Integrati
Slide 18: Observations
Observations Lack of consistent strategic direction No leadership continuity, frequent churn Primary focus on wine development and execution; beer basics not at centre of organisation Diluted focus on the core brands Under-developed channel management practices Defensive culture and loss
Slide 19: Business priorities
Business priorities Back to beer basics Culture and Implement SABMiller systems, processes and tools Organisational Introduce performance and talent management Design Enhance licence to trade Brewing expertise Operational Optimise distribution and production grid Excellence Leverage gl
Slide 20: Culture and organisational design
Culture and organisational design Back to Beer Basics Systems, Processes and Tools SABMiller Ways Global Capabilities Marketing Way Re-focus on beer business 1 Build superior 2 Create winning Create 3 4 Build brands Global Brands portfolio management brand propo- sitions that tap consumer- preferr
Slide 21: Culture and organisational design
Culture and organisational design SABMiller Ways Marketing Way Performance Management Way Inp u t: G o a l s e tting : M o nito ring : Re v ie w s : O u tp u t: Global Brands Way Business, Goal setting for Performance Midyear and Performance regional teams and monitoring yearend data feeds into and
Slide 22: Business priorities
Business priorities Back to beer basics Culture and Implement SABMiller systems, processes and tools Organisational Introduce performance and talent management Design Enhance licence to trade Brewing expertise Operational Optimise distribution and production grid Excellence Leverage gl
Slide 23: Manufacturing Way
Manufacturing Way Brewery audits & benchmarking Improvement opportunities Implementation plan Macro extract loss -55% Introduce World Class Manufacturing Launch global KPI measurement and Current Target tracking Packaging efficiency +30% Brand Technical Footprints Current Target © SABMiller pl
Slide 24: Distribution and network
Distribution and network Manufacturing and warehouse network Integrate Pacific Beverages Optimise network and sourcing model Design for brand and capability requirements © SABMiller plc 2012 Foster’s Seminar | March 2012 24
Slide 25: Leverage global procurement
Leverage global procurement “Should cost” modelling Trinity global purchasing relationships and category knowledge Opportunity Optimise packaging specifications A global approach to underlying commodities Should Current cost Contract Price Significant opportunities identified beyond packagin
Slide 26: Business priorities
Business priorities Back to beer basics Culture and Implement SABMiller systems, processes and tools Organisational Introduce performance and talent management Design Enhance licence to trade Brewing expertise Operational Optimise distribution and production grid Excellence Leverage gl
Slide 27: Off-premise channel management
Off-premise channel management Drive profitable revenue management growth – Customer and shopper insights to drive new SABMiller segmentation – Brand/pack/channel pricing strategy Customer engagement model – Reorient relationship to positive category development – Joint business planning – Trade
Slide 28: On-premise channel management
On-premise channel management Prioritise channel to grow beer category – Generate excitement through brand-building experiences – Innovate to drive growth Portfolio execution – Consumer-led outlet classification and portfolio alignment – Drive premium brands & segments in appropriate venues – Pr
Slide 29: Commercial focus
Commercial focus Embrace the SABMiller Marketing Way Proudly focus on core brands with sharper, distinctive positionings Drive premium, cider and craft for growth Position innovation as a growth driver © SABMiller plc 2012 Foster’s Seminar | March 2012 29
Slide 30: Legacy portfolio positioning
Legacy portfolio positioning Progressive Younger Older LDA’s LDA’s Mainstream © SABMiller plc 2012 Foster’s Seminar | March 2012 30
Slide 31: Clearer portfolio roles
Clearer portfolio roles Progressive Younger Older LDA’s LDA’s Mainstream © SABMiller plc 2012 Foster’s Seminar | March 2012 31
Slide 32: Embrace SABMiller Marketing Way
Embrace SABMiller Marketing Way “How we make commercial choices” 1 2 3 4 Win the game Develop Build superior Create winning Create consumer- Build brands and Commercial differentiated brand portfolio management that brand propo-sitions that tap into deep preferred products that strengthen categori
Slide 33: Reposition and stabilise Victoria Bitter
Reposition and stabilise Victoria Bitter © SABMiller plc 2012 Foster’s Seminar | March 2012 33
Slide 34: Reposition and stabilise Victoria Bitter
Reposition and stabilise Victoria Bitter Video Video © SABMiller plc 2012 Foster’s Seminar | March 2012 34
Slide 35: Return VB to its former glory
Return VB to its former glory Develop an emotionally Build Respect For The motivating positioning BRAND and communications platform Bring to life via sponsorships Build Preference For Leverage established Best Cold Beer The BREW platform Develop programs with key customers to reward loyal co
Slide 36: Continue momentum of Carlton Draught
Continue momentum of Carlton Draught Lead with draught beer, follow with packaged beer Continue award-winning “Made from Beer” campaign to grow brand commitment Extend ownership of “Brewery Fresh” platform to drive draught quality perceptions Optimise relationship with Australian Football Le
Slide 37: Low carb leadership
Low carb leadership Establish Beyond Low Carb purity credentials Reinforce Premium Stylish new packaging Positioning Take the high ground with Build Emotional upcoming ‘Purer Way” campaign Connection © SABMiller plc 2012 Foster’s Seminar | March 2012 37
Slide 38: Crown Lager – Australia's finest
Crown Lager – Australia’s finest To get higher Weak historical price/discount positioning has undermined resolution image the brand Celebrating Australia’s Owning the Moments finest that Matter Reinforce Quality Focus on unique lagering process Credentials Time as the 5th ingredient Consiste
Slide 39: Optimise premium opportunities
Optimise premium opportunities More focused portfolio led by Peroni – Build on current growth of 25%* – Leverage global assets Expand Miller Genuine Draft – Position as the international beer of the night – Leverage global assets and experience Extend distribution of Miller Chill * 11 months t
Slide 40: Continue explosive growth in cider and craft
Continue explosive growth in cider and craft CIDER Category growth rate of 38% p.a. Opportunity to grow volume and incremental margin Use Strongbow to recruit new drinkers into the category Accelerate explosive Bulmers growth in premium international space CRAFT Category growth rate of 25%
Slide 41: Positioning innovation as a growth driver
Positioning innovation as a growth driver Insights Example: Great Northern Brewing Company – Portfolio strategy to identify market gaps – Distinct innovation routes to address the potential Establish SABMiller process Clearly prioritised pipeline Add ‘the beer from up here’ billboard © SABMill
Slide 42: Marketing spend effectiveness
Marketing spend effectiveness Simplify agency rosters Implement world class testing and tracking process Greater accountability around media buying and production Leverage Trinity to procure merchandise & POS Use efficiencies to re-invest in growth drivers – digital, packaging EFFECIENCY I
Slide 43: Integrated activity planning
Integrated activity planning Fewer, bigger, better execution of activities Alignment across channels, regions and through-the-line execution Clear picture of success with accountability Clearly defined activation by customer and outlet aligned to strategy Historical Activity Plan Moving to …
Slide 44: Revenue management – process
Revenue management – process Improve insights Develop overarching revenue management strategy Shift culture to Profitable Revenue Growth Management Improve the process Consumer Insights on Value Promotional Planning Price Sensitivity Measurement vs. Actual Market Pricing Illustrative Illustr
Slide 45: Financial update
Financial update – Acquisition debt cost lower than planned – Average US$7 b bond cost of c. 3.4%, well below expectation and Cost of Debt prevailing Group interest rate – Material fall in Australian RFR (100-150bps) – 1%+ reduction in Group ETR Tax impacts – Value specifically related to project –
Slide 46: Current performance update
Current performance update Change % Jul-Dec 11 vs prior year Volume (mhl) 4.965 -4.5% Revenue (AUD’m) 1782 -4.4% EBITA margin (%) 36.4% +10 bps - on net revenue excl. excise EBITA margin (%) 23.5% +11 bps - on Revenue incl. excise © SABMiller plc 2012 Foster’s Seminar | March 2012 46
Slide 47: Cost and best operating practice synergies
Cost and best operating practice synergies Cost synergies – year 4 annualised EBITA impact ($m) Better than pre-bid expectations Accelerated timeline 55 180 75 50 Supply Procurement Commercial Total & Back Office © SABMiller plc 2012 Foster’s Seminar | March 2012 47
Slide 48: Medium term outlook
Medium term outlook Volume growth of 1-3% p.a. NPR per hl growth of circa 120-150% of CPI supported by price, promotional management and mix improvement Margin expansion before synergies of 60-80 bps p.a. Cost synergies of A$180m by year 4 © SABMiller plc 2012 Foster’s Seminar | March 2012 4
Slide 49: Summary
Summary – Fundamentally attractive economy and beer industry – More positive opportunities to enhance the business than expected – Integration on track – Strengthen the core, complemented by distinctive premium portfolio – Revenue growth opportunities – Cost and best operating practice synergies of
Slide 50: Questions and Answers Thank you
Questions and Answers Thank you © SABMiller plc 2012 Foster’s Seminar | March 2012 50