Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — Q1 2017 Earnings Presentation
26 slides from Anheuser-Busch InBev SA/NV's earnings presentation, May 4, 2017
Slide 1: First Quarter 2017 Results
First Quarter 2017 Results 4 May 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: 1Q17 Highlights
1Q17 Highlights • Strong regional performances • Fast start in China with great Chinese New Year activations • Continued premiumization in Europe driving revenue growth • Solid EBITDA margin expansion in Mexico and South Africa • Volume recovery in Brazil • Global brand volumes up double-digits • In
Slide 4: 1Q17 Financial Summary
1Q17 Financial Summary • Total Revenue +3.7% 14% Beer Volume Revenue EBITDA 12.3% • Revenue per hl +4.3%, 12% 10% +4.5% on a constant geographic basis 8% 5.8% • Global Brands +12.1% 6% 3.7% 4.2% 4% 2% 0% • Total Volumes -0.5% -2% -0.2% -0.9% • Own beer -0.2%, non-beer -2.7% Total AB InBev AB InBev e
Slide 5: Continued synergy delivery
Continued synergy delivery • Continue to expect total synergies of 2,800m USD, with 1,719m 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 318m USD has been spent to date 2,800 5
Slide 6: Global Brand Revenues +12.1% in 1Q17
Global Brand Revenues +12.1% in 1Q17 Budweiser Corona +7.3% +18.2% • Strong first quarter in China, • Revenue grew by 48.2% driven by powerful Chinese New excluding Mexico, driven by fast Year Campaign (all time high starts in China, UK, & Colombia brand health) • Launched new Coronita • Super Bowl
Slide 7: North America – 1Q17 Summary
North America – 1Q17 Summary • Volumes -4.4% • Revenue -2.1% • Beer revenue per hectoliter +2.4%, due to revenue management initiatives and brand mix • EBITDA -1.2% with margin expansion of 34 bps to 39.0% © AB InBev 2017 – All rights reserved 7
Slide 8: US – 1Q17 Summary
US – 1Q17 Summary • Industry STRs -1.6% • ABI STRs -2.9% • Market share decline of 60 bps • ABI volumes (STWs) -4.7% • Revenue -2.6% • Revenue per hl growth of 2.2% • EBITDA -1.6% with margin expansion of 41 bps to 40.2% Note: Share based on internal estimates © AB InBev 2017 – All rights reserved 8
Slide 9: US performance has varied by segment
US performance has varied by segment Imports Craft & • Stella Artois continued its impressive growth, with volumes growing by more than 30% • Regional craft portfolio gained share in a slowing segment • Michelob Ultra extends its run as the fastest share gainer in the US Core Plus for eight straight
Slide 10: Latin America West – 1Q17 Summary
Latin America West – 1Q17 Summary • Volumes -0.5% • Revenue +3.0% • Beer revenue per hectoliter +3.5%, due to revenue management initiatives and premiumization • EBITDA +8.1% with margin expansion of 216 bps to 46.6% © AB InBev 2017 – All rights reserved 10
Slide 11: There are opportunities to continue category expansion in Mexico
There are opportunities to continue category expansion in Mexico Grow Occasions • Corona driving new weekday consumption occasions with “Copa Corona Miércoles de Fut” • Stella Artois building the celebration occasion through High-End execution • Continuing to develop Budweiser, especially in the • C
Slide 12: Global brands expanding in Colombia
Global brands expanding in Colombia • Strong momentum behind our global brands, which are all experiencing double-digit growth • Established our High End structure to create a dedicated distribution network with a unique route-to-market targeting premium accounts • Investing behind the brands to gro
Slide 13: Latin America North – 1Q17 Summary
Latin America North – 1Q17 Summary • Volumes +2.3% • Revenue +2.0% • Beer revenue per hectoliter -0.3%, due to a tough comparable from tax increases in 1Q16 • EBITDA -19.0% with margin contraction of 996 bps to 38.6% © AB InBev 2017 – All rights reserved 13
Slide 14: Brazil – 1Q17 Summary
Brazil – 1Q17 Summary • Industry beer volumes declined by low-single digits • ABI volumes +2.5% • Beer volumes +3.4%, non-beer volumes -0.3% • Revenue +0.6% • EBITDA -23.3% with margin contraction of 1212 bps to 38.8% © AB InBev 2017 – All rights reserved 14
Slide 15: Strong Brazil Carnival activations showcased our brands
Strong Brazil Carnival activations showcased our brands throughout the country 2016 2017 PEOPLE 28m 43m IMPACTED # OF 24 >40 CITIES VOLUME 193 297 (K HL) STREET 9,600 37,000 VENDORS © AB InBev 2017 – All rights reserved 15
Slide 16: Latin America South – 1Q17 Summary
Latin America South – 1Q17 Summary • Volumes +3.1% • Revenue +27.4% • Beer revenue per hectoliter +23.6%, due to pricing in line with inflation and premiumization • EBITDA +16.4% with margin contraction of 433 bps to 45.7% © AB InBev 2017 – All rights reserved 16
Slide 17: Europe, Middle East & Africa – 1Q17 Summary
Europe, Middle East & Africa – 1Q17 Summary • Volumes -2.7% • Revenue +4.9% • Revenue per hectoliter +7.8%, due to brand mix and revenue management initiatives • EBITDA +18.6% with margin expansion of 358 bps to 28.4% © AB InBev 2017 – All rights reserved 17
Slide 18: Innovation in South Africa targeting new occasions and consumers
Innovation in South Africa aimed at targeting new occasions and consumers Upsize Packs Creating excitement around the in-home occasion, demand far exceeded our expectations On-Pack Campaign Targeting First of its kind on- Fridge Pack at-home pack mainstream consumption campaign applied while driving
Slide 19: Asia Pacific – 1Q17 Summary
Asia Pacific – 1Q17 Summary • Volumes +1.9% • Revenue +8.0% • Beer revenue per hectoliter +5.9%, due primarily to brand mix • EBITDA +25.2% with margin expansion of 497 bps to 36.3% © AB InBev 2017 – All rights reserved 19
Slide 20: Strong performance in China driven by Chinese New Year activations
Strong performance in China driven by Chinese New Year activations, led by Budweiser Budweiser “Celebration” campaign Full channel activations led to a made CNY more meaningful boost in consumption • Significant lifts in Budweiser brand health • 11% more POCs activated versus last metrics, with “Fav
Slide 21: 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 Net interest on MTM - Share Currency including funding net defined based and other Bank fees, of SAB benefit Accretion payment hedging transaction 1Q16 purchase price liabilities expenses p
Slide 22: Non-recurring net finance income
Non-recurring net finance income of 99 million USD, as certain 1Q16 costs were no longer applicable MTM - Grupo MTM - FX hedging Modelo deferred of the purchase Other MTM 1Q16 share instrument price of SAB adjustments Other fees 1Q17 99 80 126 USD millions 599 1Q16 (84) 1Q17 54 Swing 138 138 -684 1Q
Slide 23: Normalized Effective Tax Rate (ETR)
Normalized Effective Tax Rate (ETR) 24-26% 23.2% Guidance 20.9% 20.4% 2016 1Q16 1Q17 2017 Normalized ETR in 1Q17 impacted by: • Mark-to-market gains linked to the hedging of our share-based payment programs • Change in country profit mix following the combination with SAB Guidance for FY17 reflects
Slide 24: Normalized EPS of $0.74, up from $0.51 in 1Q16
Normalized EPS of $0.74, up from $0.51 in 1Q16 0.20 0.16 0.53 USD per share 0.07 0.01 0.63 0.15 0.74 0.51 1Q16 as Normalized Mark-to-market Pre-funding Net finance Income tax Associates & Share dilution 1Q17 as reported EBIT (hedging of our of SAB cost expense non-controlling reported share-based tr
Slide 25: 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 26: Q&A
Q&A © AB InBev 2017 – All rights reserved