Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — SABMiller — FY2010 Earnings Presentation
49 slides from Anheuser-Busch InBev SA/NV's earnings presentation, May 20, 2010
Slide 1: SABMiller plc F10 annual results
SABMiller plc F10 annual results Twelve months ended 31 March 2010 20 May 2010 Graham Mackay, Chief Executive Malcolm Wyman, CFO
Slide 2: Forward looking statements
Forward looking statements This presentation includes ‘forward-looking statements’ with respect to certain of SABMiller plc’s plans, current goals and expectations relating to its future financial condition, performance and results. These statements contain the words “anticipate”, “believe”, “intend
Slide 3: Overview
Overview Strong SABMiller performance amidst weak economies – 6% EBITA growth*; tight grip on revenues and costs – Adjusted eps growth of 17%; free cash flow up strongly to over $2 billion Capitalising on SABMiller’s local power brands – 4% revenue/hl growth* despite moderating pricing – Growing
Slide 4: Overview
Overview Strong SABMiller performance amidst weak economies – Lager volumes level, improving trend, ahead of the beverage alcohol peer group Year-over-year organic volume growth Our medium-term growth prospects remain excellent © SABMiller plc 2009 F10 full year results
Slide 5: Divisional highlights: Latin America
Divisional highlights: Latin America Signs of economic recovery Lager volume growth of 3% – Competitive success in Peru – Despite increased Colombian beer taxes Volume growth in Honduras despite turmoil Improving sales mix – Premium brands are now 9% of mix, almost double F07 – Broadening br
Slide 6: Divisional highlights: North America
Divisional highlights: North America Tough trading conditions driven by unemployment; pricing remains firm JV integration progressing well – Synergies and cost reductions on track for a total of $750m for JV Good market share performance from focus brands – Coors Light gaining segment share, e
Slide 7: Divisional highlights: Europe
Divisional highlights: Europe Economic weakness persists with consumer debt overhang Widening lead versus competition in Poland and Romania Held share in Czech despite negative channel and segment mix in the market Initial success behind more focussed gross margin and profit improvement stra
Slide 8: Divisional highlights: Africa
Divisional highlights: Africa Broadly resilient markets Investment in capacity and marketing Mozambique up to 11% lager growth, driven by new brewery and local premium brand Strength in Uganda: 24% growth, leading market share Strong Castel lager volume growth of 11% Taxation effects: Za
Slide 9: Divisional highlights: Asia
Divisional highlights: Asia Continued volume and share growth in China Organic profit improvement diluted by expansion Particular success in central provinces, led by Anhui and Zhejiang Central region Zhejiang Anhui India challenges persist Australia volumes up 32%; Peroni Nastro Azzurro s
Slide 10: Divisional highlights: South Africa
Divisional highlights: South Africa Increasing brand investment Improved retail execution – widening lead versus competition Partly funded by internal cost saving BBBEE transaction welcomed by stakeholders and policy makers Strong volume performance by Distell © SABMiller plc 2009 F10 full
Slide 11: Consistent strategic priorities driving value growth
Consistent strategic priorities driving value growth Creating an attractive global spread of businesses Developing strong, relevant brand portfolios that win in local markets Constantly raising the profitability of local businesses sustainably Leveraging our skills and global scale © SABMill
Slide 12: Attractive global spread of businesses
Attractive global spread of businesses Leading volume growth exposure Projected lager volume growth rate % share of volume 2008 CAGR 2009-15 14 High growth markets: >5% 20 28 21 31 Medium growth markets: 2-5% 28 65 Low growth markets: <2% 49 44 SABMiller Peer #1 Peer #2 Source: “Strategic plan
Slide 13: Attractive global spread of businesses: Expanding Africa footprint
Attractive global spread of businesses Expanding Africa footprint Mwanzaa Arusha Dar es Salaam Organic growth investment S. Sudan Mbeya Expanding our lager footprint Nigeria +500khl in existing markets Uganda – Tanzania, Mozambique, Tanzania Angola, Uganda Angola Mozambique Nampula – Opening new s
Slide 14: Attractive global spread of businesses: Expanding Africa footprint
Attractive global spread of businesses Expanding Africa footprint Selected acquisitions Wider beverage portfolio improves scale and margins Water acquisitions enhancing our platform – Voltic Water in Ghana and Nigeria – Rwenzori in Uganda – Ambo Water in Ethiopia as an entry point Super Maheu
Slide 15: Strong, relevant brand portfolios
Strong, relevant brand portfolios Local premium development © SABMiller plc 2009 F10 full year results
Slide 16: Strong, relevant brand portfolios
Strong, relevant brand portfolios Local premium development Pilsner Urquell in Czech and Lech in Poland Local premium % of portfolio growing in tough conditions LatAm focus on local premium packaging innovation has driven 17% 3-year CAGR Castle Lite in South Africa up 8% in F10 recovering lost
Slide 17: Strong, relevant brand portfolios: Latin America
Strong, relevant brand portfolios Latin America Light beers Non-alcoholic malt beverages Small bottles Multi packs Flavoured beers © SABMiller plc 2009 F10 full year results
Slide 18: Raising the profitability of local businesses sustainably
Raising the profitability of local businesses sustainably Americas LatAm EBITA and EBITA margin North America synergies & cost savings F06*-F10 EBITA CAGR of 16%, Synergy and cost savings enhancing margins up 320 bps margins; of $750m total for JV, $340m remains to be realised by end of 2012 N
Slide 19: Raising the profitability of local businesses sustainably
Raising the profitability of local businesses sustainably China Snow brand growth continues. CRSnow share exceeding 20% Improvement in revenue management using Snow premium variants; portfolios tailored by channel Cost control and working capital management driving strong cashflows Enabling
Slide 20: Leveraging our skills and global scale
Leveraging our skills and global scale Business capability programme highlights Objectives – Reduce local complexity by standardising back office – Lower costs with global procurement and back-office systems – Undivided in-country commercial focus Progress to date – Global procurement office est
Slide 21: Strong EPS growth
Strong EPS growth Adjusted EPS – US $ +17% – Sterling +26% – Rand +3% – Euro +19% Annual Dividend 68 US cents per share – Up 17% © SABMiller plc 2009 F10 full year results
Slide 22: Good performance despite tough economic environment
Good performance despite tough economic environment Total volumes of 261.4 mhl * +0.5% – Organic * +0.3% Lager organic volumes * – Level with prior year Organic group revenue * +3.9% – Constant currency * +4.2% Organic EBITA * +6.5% – Constant currency * +6.3% EBITA margin * +30 bps – Cons
Slide 23: Revenue benefits from solid pricing
Revenue benefits from solid pricing Group Revenue (including associates and joint ventures) components of performance, US$m 3.9% (0.3)% 3.9% 0.6% 26,350 25,203 0.3% Mar '09* Volume Price/mix Currency Mar '10 Acquisitions Mar '10 * Adjusted for disposals Organic © SABMiller plc 2009 F10 full year res
Slide 24: Strong EBITA growth
Strong EBITA growth EBITA (including associates and joint ventures) components of performance, US$m 6.3% 0.2% 6.5% (0.1)% 4,381 4,119 Mar '09 * Underlying Currency Mar '10 Acquisitions Mar '10 * Adjusted for disposals Organic © SABMiller plc 2009 F10 full year results
Slide 25: Latin America
Latin America Stronger second half volumes Firm pricing, mix benefits & cost controls deliver double digit EBITA growth Enhanced sales execution & brand portfolio development US$m Mar 10 Mar 09 Change % Organic constant currency Group revenue 5,824 5,395 8 EBITA * 1,367 1,164 17 EBITA margin *
Slide 26: Europe
Europe Volumes impacted by ongoing downturn in consumer spending EBITA growth from robust pricing and cost rationalisation Market share gains reflect brand portfolio strength US$m Mar 10 Mar 09 Change % Organic constant currency Group revenue 6,163 6,145 - EBITA * 986 944 4 EBITA margin * (%)
Slide 27: North America
North America Volumes impacted by adverse economic conditions and high unemployment Down-trading trend continues Network optimisation and marketing synergies deliver considerable savings US$m Mar 10 Mar 09 Change % Organic constant currency Group revenue 5,227 5,227 - EBITA * 619 581 7 EBITA m
Slide 28: Africa
Africa Volume growth supported by capacity expansions Weaker currencies & higher costs impact second half margins Continued development of our full beverage and brand portfolio US$m Mar 10 Mar 09 Change % Organic constant currency Group revenue 2,792 2,567 9 EBITA * 587 562 4 EBITA margin * (%
Slide 29: Asia
Asia Further share gains in China supported by the Snow brand Volume and EBITA growth held back by trading difficulties in India US$m Mar 10 Mar 09 Change % Organic constant currency Group revenue 1,716 1,565 10 EBITA 80 80 - EBITA margin (%) 4.7 5.1 (40) bps Organic volumes (hl’000) Lager 44,81
Slide 30: South Africa Beverages
South Africa Beverages Mainstream brands strengthened Higher raw material costs offset by firm pricing Significant investment behind key brands and customer service US$m Mar 10 Mar 09 Change % Organic constant currency Group revenue 4,194 3,955 6 EBITA * 779 764 2 EBITA margin * (%) 18.6 19.3
Slide 31: Input cost pressures ease in the second half
Input cost pressures ease in the second half Full year constant currency increase per hl – Total raw materials up 4% – Total COGS up 3% Lower brewing raw material costs offset by higher sugar and packaging costs Local raw material costs impacted by adverse currency hedges Lower distribution
Slide 32: Exceptional items
Exceptional items US$m Mar 10 Business capability programme costs: - included in operating profit (325) - included in net finance costs (17) Integration and restructuring costs: - subsidiaries (78) - share of associates and joint ventures (14) Impairments: - subsidiaries (45) Other: - subsidiaries (
Slide 33: Business capability programme
Business capability programme Key deliverables on track – New systems platforms – Global procurement pilot – Selective outsourcing – Processes tightened and aligned Strong working capital inflow US$333m – Benefits in inventory; payables and receivables – Some further opportunities, but rate will
Slide 34: Cash Flow and Taxation
Cash Flow and Taxation Normalised EBITDA* up 1% to US$4,681m from US$4,618m Normalised EBITDA* margin 40 basis points lower than prior year Working capital inflow US$563m Capex** down US$619m to US$1,528m Free cash flow*** improved by US$1,913 to US$2,010m Effective tax rate 28.5% * EBIT
Slide 35: Net debt
Net debt US$m Mar 10 Mar 09* Non-current borrowings 7,809 7,470 Current borrowings 1,605 2,148 Cash and cash equivalents (779) (422) Borrowing related derivative financial instruments (237) (487) Net debt 8,398 8,709 Adjusted net finance costs ** 538 699 Gearing (%) 40.8 54.0 Normalised EBITDA Inter
Slide 36: Net debt profile and maturity
Net debt profile and maturity Debt Maturity Debt profile 0 – 1 Year US$ 942m 16% 31% Dollars Euros 1 – 2 Years US$ 1,052m Rand Peso 21% Other 2 – 5 Years US$ 4,561m 9% 23% Over 5 Years US$ 1,843m © SABMiller plc 2009 F10 full year results
Slide 37: Financial outlook – current financial year
Financial outlook – current financial year Signs of economic conditions improving in some markets Raw material input costs expected to benefit from firmer local currencies – Total raw materials per hl* – Total COGS per hl* Flat to marginally down Continued focus on cash generation – Improvemen
Slide 38: Conclusion
Conclusion Economic headwinds are continuing – Beer consumer indicators lagging GDP stabilisation Past the commodity cost peak, with more benign trend looking ahead Continuing rigorous cost management SABMiller’s local brand equities and portfolios remain strong © SABMiller plc 2009 F10 full
Slide 39: Q&A
SABMiller plc Q&A F10 annual results 20 May 2010
Slide 40: Supplementary information
MILLER Supplementary information
Slide 41: Reported EBITA contribution
Reported EBITA contribution EBITA contribution* March 2009 March 2010 3% Latin America 3% 18% Europe 28% 19% 31% North America 2% Africa 2% Asia 13% 12% South Africa Beverages Hotels & Gaming 22% 14% 19% 14% * Before corporate costs © SABMiller plc 2009 F10 full year results
Slide 42: Financial results
Financial results US$m Mar 10 Mar 09 Change % Reported currency Group revenue 26,350 25,302 4 EBITA 4,381 4,129 6 EBITA margin (%) 16.6 16.3 30 bps Sales volumes (hl’000) Total 261,447 260,139 1 Lager 212,576 210,393 1 Soft drinks 43,509 44,328 (2) Other alcoholic beverages 5,361 5,418 (1) © SABMill
Slide 43: EBITA margin performance
EBITA margin performance Organic constant currency basis March 09 March 10 23.5% 21.6% 21.9% 21.0% 19.3% 18.6% 16.3% 16.7% 15.4% 16.0% 11.1% 11.8% 5.1% 4.7% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2009 F10 full year results
Slide 44: Reported EBITA margin performance
Reported EBITA margin performance March 09 March 10 23.5% 21.4% 21.9% 20.8% 19.3% 18.5% 16.3% 16.6% 15.4% 15.6% 11.1% 11.8% 5.1% 4.1% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2009 F10 full year results
Slide 45: Reported Volumes
Reported Volumes* Reported Domestic Lager volumes Mar 10 Change % by country hl ‘000 South Africa 25,721 (1) Colombia 19,192 3 Poland 14,653 (2) Peru 10,213 (0) Czech 7,398 (5) Russia 5,470 (3) Ecuador 5,144 9 Romania 5,118 (10) India 4,039 (14) Italy 3,507 (7) Tanzania 2,616 (4) China ** 41,821 13
Slide 46: Net debt
Net debt Mar 10 Mar 09 Average interest rate (gross debt) – % 5.7% 7.1% Net debt currency profile* US dollars 31% 33% Euro 23% 21% SA rand 9% 10% Colombian peso 21% 19% Other 16% 17% 100% 100% * Including the effect of derivatives © SABMiller plc 2009 F10 full year results
Slide 47: Financial & commercial rand / US$ : rate
Financial & commercial rand / US$ : rate (CPI differentials) month-on-month basis 1.6 Base 1 = 1990 1.4 1.2 1.0 0.8 0.6 0.4 90 92 94 96 98 00 02 04 06 08 10 Source: Bloomberg, JP Morgan © SABMiller plc 2009 F10 full year results
Slide 48: Exchange rates
Exchange rates Closing rates currency vs US$ 31 Mar 10 30 Sep 09 31 Mar 09 Colombia 1,929 1,922 2,561 Peru 2.84 2.88 3.15 Honduras 18.90 18.90 18.90 Euro 0.74 0.68 0.75 Poland 2.86 2.88 3.52 Czech Republic 18.87 17.18 20.57 Russia 29.36 30.09 34.01 Romania 3.03 2.88 3.20 Hungary 196.88 184.09 232.79
Slide 49: Balance Sheet
Balance Sheet US$m Mar 10 Mar 09 Goodwill and Intangibles assets 15,938 12,458 Property, plant and equipment 8,915 7,406 Investment in joint ventures and associates 8,035 7,282 Other non-current assets 721 1,010 Current assets excluding cash 3,116 3,050 Cash and cash equivalents 779 422 Borrowings (