Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — FY2014 Earnings Presentation
38 slides from Anheuser-Busch InBev SA/NV's earnings presentation, Feb 26, 2015
Slide 1: Full Year 2014 Results
Full Year 2014 Results 26 February 2015 © AB InBev 2015 – All rights reserved 1
Slide 2: Forward looking statements
Forward looking statements 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
Slide 3: FY14 Highlights
FY14 Highlights • Solid financial performance • Strong commercial results in most of our top markets • Continuing growth of Focus and Global Brands • Very strong revenue and revenue per hectoliter growth • Volume and brand equity benefits from 2014 FIFA World Cup • Good EBITDA growth and margin impr
Slide 4: FY14 Financial Summary
FY14 Financial Summary • Total volumes +0.6% • Own beer +0.5% and non-beer +1.3% • Focus Brands +2.2% and Global Brands +5.4% • Total Revenue +5.9% • Revenue per hl +5.7% on a constant geographic basis • EBITDA +6.6% • EBITDA margin +25 bps to 39.4% • Normalized EPS of $5.43, up 10.6%, versus $4.91
Slide 5: Focused on brands with the greatest growth potential
Focused on brands with the greatest growth potential Our Focus Brands accounted for approx. two-thirds of our volume and revenue in 2014 Focus Brands Volumes as a % of FY14 Volume Focus Brands Revenues as a % of FY14 Revenue Global Global All Other Brands, Brands, Brands, 18.8% All Other 20.0% 31.9%
Slide 6: Global Brand Volumes +5.4%
Global Brand Volumes +5.4% Budweiser Corona Stella Artois +5.9% +5.8% +2.5% Good performances in Brazil, Driven by growth Good growth in Brazil, China, Canada & UK in Mexico and major export Canada, and US. Launched markets in Mexico © AB InBev 2015 – All rights reserved 6
Slide 7: Innovations accounted for approximately 8% of revenues in FY14
Innovations accounted for approximately 8% of revenues in FY14 New Ritas Flavors – Johnny Appleseed Cubanisto – Skol Beats Senses – MixxTail Mojito – US Cider – US UK and France Brazil Argentina 25 oz can – 550 ml can – 16 oz re-closeable US Brazil aluminum bottle – US © AB InBev 2015 – All rights r
Slide 8: US – FY14 summary
US – FY14 summary 0.5 % Industry US Industry Growth - Rolling 12M Trend 0.0 • STRs -0.6% in FY14. STRs flat in 4Q14, driven by improving macro -0.5 & lower oil prices -1.0 AB InBev -1.5 • STRs -1.7% in FY14 & -1.4% in 4Q14 -2.0 % Sep-13 Sep-14 Jul-13 Jul-14 Jun-13 Oct-13 Nov-13 Jun-14 Oct-14 Nov-14
Slide 9: Bud Light ended year with good momentum
Bud Light ended year with good momentum • The most important brand in our portfolio & our #1 focus • Bud Light is gaining share of premium lights. Bud Light total share down 20 bps in FY14 • “Up for Whatever” campaign was very successful and new packaging has delivered results • Ritas are performing
Slide 10: Budweiser - reinforcing quality credentials
Budweiser - reinforcing quality credentials • Budweiser share down in FY14 with momentum picking up in the fourth quarter • Aluminum bottle boosted the brand in 4Q14, holiday campaign resonated at retail • Exciting upcoming activations include food pairings, music platform, holiday, and quality mess
Slide 11: Above premium
Above premium • Michelob Ultra and High End share grew 40 bps in 4Q14 and FY14 • Montejo rollout going well • High End business unit in place and pursuing a portfolio approach – including M&A in Craft © AB InBev 2015 – All rights reserved Note: Share based on internal estimates (STRs) 11
Slide 12: Recent additions to our craft portfolio
Recent additions to our craft portfolio © AB InBev 2015 – All rights reserved 12
Slide 13: Mexico – FY14 summary
Mexico – FY14 summary Industry • Industry growth of +2.6% in FY14, driven by stronger economy AB InBev • Volume: +1.6% with strong contribution from Focus Brands particularly Corona, Bud Light and Victoria • Some share loss due to regional mix • Revenue per hectoliter growth of 3.7% • EBITDA growth
Slide 14: Focus Brand volumes +5.6% in FY14
Focus Brand volumes +5.6% in FY14 Corona +6.5%, Bud Light almost doubling and Victoria approx. +10% Bud Light 2015 Super Bowl Campaign Corona 2014 FIFA World Cup Campaign Bud Light “Since Today” Campaign Victoria New Can Bud Light Ritas Launch Campaign © AB InBev 2015 – All rights reserved 14
Slide 15: Modelorama renovation…
Modelorama renovation… Coronization is underway Significant increase From this… in volumes passing through Modelorama to this… as a result of renovations Outside Inside © AB InBev 2015 – All rights reserved 15
Slide 16: Grupo Modelo cost synergies being delivered ahead of schedule
Grupo Modelo cost synergies being delivered ahead of schedule 1 billion 270 USD 1,000 Over-delivered on +USD 500M of working capital savings 800 270 730 600 USD millions 385 400 200 75 0 Pre Close FY13 FY14 Cumulative To Go Total © AB InBev 2015 – All rights reserved 16
Slide 17: Brazil – FY14 summary
Brazil – FY14 summary Industry • Beer industry volumes +4.3% boosted by the World Cup AB InBev • Beer volumes +4.7%, non-beer volumes +1.4% • Beer market share increased 30 bps to 68.2% and up 50 bps in the quarter to 68.0% • Beer revenue per hectoliter growth +6.2% in FY14 • EBITDA growth of 5.7% •
Slide 18: Committed to leadership in Premium
Committed to leadership in Premium From core plus to specialties Premium Beer Weight Premium Beer Weight Brazil Industry 7.5% in other Markets 6.3% 5.6% 4.9% 4.9% 30.3% 18.4% 21.8% 23.5% 2010 2011 2012 2013 2014 Source: Industry estimates Source: Euromonitor (2013) Strong increase in premium volumes
Slide 19: Brazil – Confidence in the future
Brazil – Confidence in the future Beer per capita consumption (PCC) • Favorable Demographics vs. personal income (2013) PCC in Liters – growth in legal drinking 140 age (LDA) population for next 10 years Brazil Average 120 Brazilian States • Income disparity leads to 100 per capita consumption and r
Slide 20: China – FY14 summary
China – FY14 summary FY14 4Q14 Industry 1.6% 1.2% • Beer industry volumes down approx. 4% in FY14 and down approx. 10% in 4Q14 Approx. -4% AB InBev Approx. -10% • Beer volume +1.6% ABI Volumes Industry Volumes Source: Internal estimates • Strong growth of Focus Brands +7.8%, especially Budweiser and
Slide 21: China Focus Brands +7.8% in FY14
China Focus Brands +7.8% in FY14 • Budweiser grew double digits in FY14 • Harbin opened the largest and most interactive • Budweiser Supreme and aluminum bottle beer museum in China added to the portfolio • Successful NBA activations in 4Q14 • Chinese New Year celebrations • Harbin continues to ampl
Slide 22: Organic EBITDA increase of almost $1.2 bn (+6.6%) in FY14
Organic EBITDA increase of almost $1.2 bn (+6.6%) in FY14 USD millions 8,000 AB InBev margin 6,820 expansion of 25bps 7,000 to 39.4% in FY14 6,000 5,742 5,000 4,000 3,000 2,186 2,000 1,352 1,343 1,067 1,000 0 North America Latin America North Mexico Latin America South Europe Asia Pacific EBITDA 42.
Slide 23: Highlights from other top countries – FY14
Highlights from other top countries – FY14 • In Argentina, beer volumes were down 1.7%, with some market share loss. Successful launch of MixxTail Mojito • Own beer volumes in Belgium were essentially flat, benefitting from a strong FIFA World Cup activation. Market share stable • In Canada, our bee
Slide 24: Normalized EPS increased to $5.43 in FY14
Normalized EPS increased to $5.43 in FY14, driven by organic EBIT growth and lower Net Finance Costs +0.33 +0.34 5.43 (0.40) USD per share (0.09) +0.34 4.91 2013 Grupo Modelo EBIT Net finance costs Taxes & FX/Scope 2014 as reported Consolidation organic others (excl. as reported impact (1) growth (2
Slide 25: FY14 Net Finance Costs decreased to 1.8bn USD
FY14 Net Finance Costs decreased to 1.8bn USD Net interest on Hedge of share Currency and Bank fees, Interest net defined Accretion based payment other hedging transaction taxes, 2013 expense benefit liabilities expenses programs result other 2014 USD millions +374 -84 +255 -1,828 +85 +32 -4 -2,486
Slide 26: Normalized Effective Tax Rate (ETR)
Normalized Effective Tax Rate (ETR) 2015 2016-2018 guidance range of guidance range of 22-24% 22-25% 18.8% 16.6% 2013 2014 2015 2016-2018 Increase in normalized ETR in FY14 mainly due to: • Changes in country mix, including the impact resulting from the combinations with Grupo Modelo and Oriental Br
Slide 27: Continued improvement in Core Working Capital
Continued improvement in Core Working Capital 4.0% Core Working Capital (CWC) as a % of Net Revenues (1) 2.1% 2.0% 0.0% CWC/ Net Revenues (12 months) -0.6% -2.0% -4.0% -6.0% -5.4% -8.0% -7.4% -8.5% -10.0% -10.0% -11.0% -12.0% 2008 2009 2010 2011 2012 2013 2014 1) Yearly average (on a rolling 12 mont
Slide 28: Robust Cash Flow generation
Robust Cash Flow generation 16.0 Free Cash Flow Cash Flow from Operating Activities 14.1 13.9 14.0 13.3 12.5 12.2 12.1 12.2 12.0 11.5 10.5 10.6 9.9 10.0 9.1 8.0 USD millions 6.0 4.0 2.0 - 2009 2010 2011 2012 2013 2014 Definition: Note: Free Cash Flow (FCF) defined as Cash Flow from Operating Activit
Slide 29: Capital Allocation objectives
Capital Allocation objectives • Investment in organic growth of the business • Selective M&A, strict financial discipline • Dividend yield comparable with other consumer goods companies (3% - 4%) • Optimal capital structure of approximately 2x Net Debt/EBITDA • At a level of around 2x, the return of
Slide 30: Growing dividends over time
Growing dividends over time +46% in EUR Dividend per share (EUR) +26% in USD (1) 3.00 2.05 2.00 1.70 Final 1.20 1.45 0.80 0.28 0.38 Interim 1.00 0.60 (Paid) 2008 2009 2010 2011 2012 2013 2014 Payout ratio (%) 65.0% 58.0% 49.3% 38.5% 33.8% 26.3% 21.3% 2008 2009 2010 2011 2012 2013 2014 30 1) For purp
Slide 31: Share Buyback Program
Share Buyback Program • The Board has approved a share buyback program for an amount of $1 billion US dollars, which will be conducted during the course of this year • Our current intention is to use the shares acquired to fulfil our various share delivery commitments under the stock ownership plan
Slide 32: Q&A
Q&A Q&A © AB InBev 2015 – All rights reserved 32
Slide 33: FY14 Results Supplementary Information
FY14 Results Supplementary Information © AB InBev 2015 – All rights reserved 33
Slide 34: Canada – FY14 summary
Canada – FY14 summary • Beer volumes were down 0.7% in FY14, but +0.4% in 4Q14, on the back of a good industry performance in the quarter • We estimate that we grew market share in FY14 • Focus brands continue to lead the way, with estimated market share growth achieved by Budweiser, Bud Light, Coro
Slide 35: Latin America South – FY14 summary
Latin America South – FY14 summary • Total volumes -0.2% • Beer volumes flat • Non-beer -0.6% • Argentina beer volumes -1.7%, in FY14 • Some loss of market share due to competitive pressure • EBITDA +17.1% to a margin of 45.6% % organic growth FY14 Volumes -0.2% Revenue 17.9% Revenue/hl 18.2% EBITDA
Slide 36: Europe – FY14 summary
Europe – FY14 summary • Own beer volumes -6.1% % organic growth FY14 (+0.3% excluding Russia & Ukraine) Own beer volumes -6.1% • Belgium flat Revenue 0.1% • Germany -3.4% Revenue/hl on a constant • UK own products +1.5% geographic basis 4.3% • EBITDA +1.5% with margin expansion EBITDA 1.5% of 39 bps
Slide 37: South Korea – 4Q14 summary
South Korea – 4Q14 summary • Total volumes down -6.4% in 4Q14 • Weak industry, and some estimated share loss • New campaigns implemented for Cass and OB • Additional focus on premium brands to drive trial © AB InBev 2015 – All rights reserved Note: Share figures based on internal estimates 37
Slide 38: Net Finance Costs – 4Q14 detail
Net Finance Costs – 4Q14 detail 4Q14 press release – Figure 9 4Q13 4Q14 Drivers Net interest expense -389 -374 FY14 coupon guidance at lower end of 4.0 - 4.5% Net interest on net defined benefit liabilities -40 -29 Guidance of approx. 35m USD per quarter Accretion expense -124 -127 Guidance of appro