Anheuser-busch Inbev Sa/nv · EURONEXT:ABI
Anheuser-busch Inbev Sa/nv — SABMiller — FY2011 Earnings Presentation
51 slides from Anheuser-busch Inbev Sa/nv's earnings presentation, May 19, 2011
Slide 1: SABMiller plc Full year results
SABMiller plc Full year results Twelve months ended 31 March 2011 Graham Mackay, Chief Executive Malcolm Wyman, CFO 19 May 2011
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: Excellent financial results
Overview Excellent financial results 1 Excellent 12% underlying EBITA growth delivery – Adjusted EPS up 19% Solid revenue performance driven by volume and price growth – Revenue/hl up 3% Fixed cost savings funded increased marketing investment and drove higher margins 2 – 120bps margin expansion to
Slide 4: Overview: Improved volume and revenue growth
Overview Improved volume and revenue growth Improved volume performance through the year Lager volume growth – Lager volumes up 2%, accelerating in H2 – Growth led by frontier markets Moderate price increases and positive portfolio mix in most markets •Africa excluding Zimbabwe volumes. ©With Zimbab
Slide 5: Latin America: ongoing margin improvement
Divisional highlights Latin America: ongoing margin improvement Continued margin expansion – Selective price increases Latin America margin expansion – Lower raw material input costs 28% – Sustained focus on fixed cost +210bps 26% productivity +210bps 24% 22% +100bps 25.6% Volume and share growth in
Slide 6: Latin America: revenue growth management
Divisional highlights Latin America: revenue growth management Premium extensions Price index 120-135 Price index 110-120 © SABMiller plc 2011 Prelims May 2011
Slide 7: Europe: maintaining price discipline
Divisional highlights Europe: maintaining price discipline Slow, sporadic consumer recovery Strong cost management driving improved profitability – Cost restructuring in Romania, Netherlands, Italy, Canaries Managing for long term value in the face of competitor price weakness – Strong UK and Italia
Slide 8: North America: focus brand execution
Divisional highlights North America: focus brand execution In soft environment, gaining market Premium Lights segment share* share in premium lights F10 Q4 F11 Q1 F11 Q2 F11 Q3 F11 Q4 – Coors Light continued strength 0.5 – Miller Lite recovery 0.4 Premium Lights share change 0.3 Miller Lite Coors Li
Slide 9: North America: focus brand execution
Divisional highlights North America: focus brand execution In soft environment, gaining market share in premium lights – Coors Light continued strength +25% – Miller Lite recovery Improved execution driving marketplace wins – Chain relationships and category management – C-store execution – Hispanic
Slide 10: Africa: investments delivering
Divisional highlights Africa: investments delivering Accelerated strong growth – Double digit lager volume growth* in every quarter – 9% lager growth ex-Zimbabwe 2011 Africa lager volume growth* Fuller portfolios enhancing the category and gross margins Capacity and capability expansion delivering v
Slide 11: Africa: investments delivering
Divisional highlights Africa: investments delivering Accelerated strong growth – Double digit lager volume growth* in every quarter – 9% lager growth ex-Zimbabwe Fuller portfolios enhancing the category and gross margins Capacity and capability expansion delivering volume growth Recovery in Zimbabwe
Slide 12: Africa: investments delivering
Divisional highlights Africa: investments delivering Accelerated strong growth – Double digit lager volume growth* in every quarter – 9% lager growth ex-Zimbabwe Fuller portfolios enhancing the category and gross margins New footprint Capacity and capability since F09 expansion delivering volume F11
Slide 13: South Africa: execution driving growth
Divisional highlights South Africa: execution driving growth Excellent operational performance Castle Lite growth resulting in market share stabilisation 2,500 38% 37% – Rising premium segment share for 2,000 Castle Lite, the segment leader 36% % share of premium 1,500 35% – Strong mainstream brand
Slide 14: Asia: continued expansion
Divisional highlights Asia: continued expansion CRSnow market share up to 21% – Extended Snow brand leadership with market share now over 19% Revenue management – Price increase to cover costs – Success of premium Snow variants – Margin in double digits in certain areas India growth in ‘less constra
Slide 15: Four strategic priorities
Four strategic priorities Creating a Developing strong, Constantly raising balanced and relevant brand the profitability Leveraging our attractive portfolios that win of local businesses, skills and global global spread of in the local sustainably scale businesses market © SABMiller plc 2011 Prelims
Slide 16: Strong, relevant local portfolios: capturing new consumers
Strong, relevant local portfolios Capturing new consumers in Latin America Persuading alcohol consumers Persuading beer consumers to to prefer beer drink beer on more occasions …from traditional products On the go…in small bottles With meals…in and out of home …from expensive spirits At events… © SA
Slide 17: Building differentiated premium portfolios
Strong, relevant local portfolios Building differentiated premium portfolios United States of America United Kingdom + 15%1 +23%3 Seasonal craft variants Beers of the world Latin America +20%2 Mozambique +46%4 Upper mainstream and local premium Laurentina Preta dark lager 1. MillerCoors craft portfo
Slide 18: Strengthening mainstream brands
Strong, relevant local portfolios Strengthening mainstream brands United States Italy Miller Lite +0.5pts PL share trend1 Peroni (original) + 4% revenue/Hl3 Tanzania South Africa 2 Kilimanjaro +8% Castle Lager +14%4 1. AC Nielsen Premium Light combined channel share for 52 week periods ended 26/03/2
Slide 19: Continue to improve commercial capabilities
Strong, relevant local portfolios Continue to improve commercial capabilities Trade terms management in Czech Profitable revenue management in the Republic Czech republic From To – Maximising long-term category value Transactional Strategic – Brand/pack/channel price architecture Pay for importance
Slide 20: Raising the profitability of businesses sustainably
Raising the profitability of businesses sustainably Efficiency and supply chain management in Colombia – Productivity savings, brewery closure EBITA margin growth in Colombia – Sales and distribution efficiencies 1,000 +240bps – Headcount productivity 800 BPS EBITA Margin 600 +365bps 400 Regionalise
Slide 21: Developing local supply chains
Raising the profitability of businesses sustainably Developing local supply chains Local barley self-sufficiency In Africa, reducing reliance on imports 100% – Historically, >80% imported F10 grains 80% F11 F12e 60% Cost savings through local raw 40% material substitution – Local farm communities 20
Slide 22: Business capability programme progress
Leveraging our skills and global scale Business capability programme progress Procurement Brewing raw materials Malt & Barley Hops Maize Global organisation in place Packaging materials Glass & Crowns US$2 billion in expenditure Paper & Labels centrally managed Plastic crates Direct financial and wo
Slide 23: Business capability programme progress: milestones
Leveraging our skills and global scale Business capability programme progress Milestones Sales & distribution system implemented in Peru and Colombia Back office platform: – Global application in place in South Africa and corporate HQ – Finance transaction outsourcing continues – Treasury Working ca
Slide 24: Strong growth in EPS and dividends
Strong growth in EPS and dividends Adjusted EPS – US $ +19% – Sterling +23% – Rand +9% – Euro +28% Annual Dividend: 81 US cents per share – Up 19% © SABMiller plc 2011 Prelims May 2011
Slide 25: Very strong full year financial performance
Very strong full year financial performance Total volumes of 270.1 mhl * +3.3% – Organic * +2.6% Lager organic volumes * +2.0% Organic group revenue * +7.1% – Constant currency * +5.2% Organic EBITA * +15.1% – Constant currency * +12.4% EBITA margin * +120 bps – Constant currency * +110 bps Adjusted
Slide 26: Revenue benefits from good volume growth and pricing
Revenue benefits from good volume growth and pricing Group Revenue (including associates and joint ventures) components of performance, US$m 1.9% 7.1% 0.3% 28,311 2.6% 2.6% 26,350 Mar '10 Volume Price/mix Currency Mar '11 Acquisitions Mar '11 Organic © SABMiller plc 2011 Prelims May 2011
Slide 27: Strong underlying EBITA growth
Strong underlying EBITA growth EBITA (including associates and joint ventures) components of performance, US$m 2.7% 15.1% 0.0% 5,044 12.4% 4,381 Mar '10 Underlying Currency Mar '11 Acquisitions Mar '11 Organic © SABMiller plc 2011 Prelims May 2011
Slide 28: Latin America
Latin America Good EBITA growth from pricing and lower raw material and fixed costs Strong Peru volumes largely offset Colombia decline Increased market-facing investment supports brand portfolio development US$m Mar 11 Mar 10 Change % Organic, constant currency Group revenue 6,022 5,905 2 EBITA * 1
Slide 29: Europe
Europe Difficult trading conditions characterised by continued downtrading and competitor discounting Improved second half volume performance moderates first half declines Lower raw material input costs and production efficiencies drive EBITA growth US$m Mar 11 Mar 10 Change % Organic, constant curr
Slide 30: North America
North America Significant synergies and cost savings deliver strong EBITA growth Volumes continue to be impacted by a difficult trading environment Continued momentum behind craft and import segment US$m Mar 11 Mar 10 Change % Organic, constant currency Group revenue 5,222 5,228 - EBITA * 741 619 20
Slide 31: Africa
Africa Good volume growth underpinned by additional capacity and strong economic environment Firm pricing together with volume growth drives significant revenue and EBITA growth Second half margin improvement US$m Mar 11 Mar 10 Change % Organic, constant currency Group revenue 3,361 2,716 24 EBITA *
Slide 32: Asia
Asia Strong volume growth in China and India EBITA growth assisted by good India performance Increased marketing investment behind Snow brand in China leads to further market share gains US$m Mar 11 Mar 10 Change % Organic, constant currency Group revenue 1,990 1,741 14 EBITA 94 71 33 EBITA margin (
Slide 33: South Africa Beverages
South Africa Beverages Beer market share stabilises in second half Firm pricing and lower brewing raw material costs offset higher market facing investments Full year EBITA margin returns to growth US$m Mar 11 Mar 10 Change % Organic, constant currency Group revenue 5,143 4,777 8 EBITA * 981 885 11
Slide 34: Lower full year input costs
Lower full year input costs Full year constant currency decrease per hl – Total raw materials - Down 1% – Total COGS - Down 1% Lower barley prices, particularly in the first half, drive brewing raw material costs down Strength of key local currencies benefits input costs Distribution costs rise foll
Slide 35: Exceptional items
Exceptional items US$m Mar 11 Business capability programme costs: - included in operating profit (296) Broad-Based Economic Empowerment scheme South Africa: - included in operating profit (IFRS2) (149) Integration and restructuring costs: - subsidiaries (52) - share of associates and joint ventures
Slide 36: Business capability programme
Business capability programme Continuing progress with implementation – Trinity Procurement now handles: – most packaging requirements (H2); – brewing raw materials (H1); – some non-production spend. – European manufacturing organisation – Sales and distribution system roll out continues in Latam –
Slide 37: Cash flow and taxation
Cash flow and taxation Adjusted EBITDA* up 12% to US$5,617m from US$5,020m Adjusted EBITDA* margin 120 basis points higher than prior year Working capital inflow US$66m Capex** down US$213m to US$1,315m Free cash flow*** improved by US$460m to US$2,488m Effective tax rate 28.2% * EBITDA before cash
Slide 38: Net debt
Net debt US$m Mar 11 Mar 10 Non-current borrowings 7,115 7,809 Current borrowings 1,345 1,605 Cash and cash equivalents (1,071) (779) Borrowing related derivative financial instruments (298) (237) Net debt 7,091 8,398 Adjusted net finance costs * 518 538 Gearing (%) 31.2 40.8 Adjusted EBITDA Interes
Slide 39: Net debt profile and maturity
Net debt profile and maturity Debt profile Debt Maturity 17% 0 – 1 Year US$ 287m 37% Dollars Euros Rand 16% 1 – 2 Years US$ 590m Peso Other 2 – 5 Years US$ 4,383m 9% 21% Over 5 Years US$ 1,831m © SABMiller plc 2011 Prelims May 2011
Slide 40: Financial outlook – current financial year
Financial outlook – current financial year Continued growth in consumer demand across most emerging markets – But the outlook in Europe and the US remains uncertain Raw material input costs expected to rise moderately – Total raw materials per hl* Up low single digits – Total COGS per hl* Focus on c
Slide 41: Conclusion
Conclusion Growth continuing in most developing markets; recovery sporadic in developed economies Selective price increases to continue, tempered by competitive pressure and our focus on affordability Our organic growth strategies remain consistent, developing the beer category and our leading local
Slide 42: SABMiller F11 results Q&A
SABMiller F11 results Q&A © SABMiller plc 2011 Prelims May 2011
Slide 43: Supplementary information
Supplementary information
Slide 44: Reported EBITA contribution
Reported EBITA contribution EBITA contribution* March 2010 March 2011 Latin America 3% 3% Europe 19% 20% 31% 31% North America Africa 2% 2% Asia 12% South Africa 13% Beverages Hotels & Gaming 19% 17% 14% 14% * Before corporate costs © SABMiller plc 2011 Prelims May 2011
Slide 45: Financial results
Financial results US$m Mar 11 Mar 10 Change % Reported currency Group revenue 28,311 26,350 7 EBITA 5,044 4,381 15 EBITA margin (%) 17.8 16.6 120 bps Sales volumes (hl’000) Total 270,099 261,447 3 Lager 217,659 212,576 2 Soft drinks 45,875 43,509 5 Other alcoholic beverages 6,565 5,361 22 © SABMille
Slide 46: Reported EBITA margin performance
Reported EBITA margin performance March 10 March 11 25.6% 23.5% 20.8% 19.9% 19.1% 18.5% 17.8% 16.4% 16.6% 15.6% 14.2% 11.8% 4.1% 4.6% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2011 Prelims May 2011
Slide 47: EBITA margin performance
EBITA margin performance Organic, constant currency basis March 10 March 11 25.6% 23.5% 20.8% 20.2% 19.1% 18.5% 17.7% 16.3% 16.6% 15.6% 14.2% 11.8% 4.1% 4.6% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2011 Prelims May 2011
Slide 48: Reported volumes
Reported volumes* Reported Domestic Lager volumes Mar 11 Change % by country hl ‘000 South Africa 26,302 2 Colombia 18,018 (6) Poland 14,082 (4) Peru 11,272 10 Czech 6,935 (6) Russia 5,605 - Ecuador 5,193 1 Romania 4,885 (8) India 4,460 10 Italy 3,380 (4) Tanzania 2,749 5 China * 46,352 11 * equity
Slide 49: Net debt
Net debt Mar 11 Mar 10 Average interest rate (gross debt) – % 5.9% 5.7% Net debt currency profile* US dollars 37% 31% Euro 21% 23% SA rand 9% 9% Colombian peso 16% 21% Other 17% 16% 100% 100% * Including the effect of derivatives © SABMiller plc 2011 Prelims May 2011
Slide 50: Exchange rates
Exchange rates Closing rates currency vs US$ 31 Mar 11 30 Sep 10 31 Mar 10 Colombia 1,879 1,800 1,929 Peru 2.80 2.79 2.84 Honduras 18.90 18.90 18.90 Euro 0.71 0.73 0.74 Poland 2.84 2.91 2.86 Czech Republic 17.27 18.03 18.87 Russia 28.43 30.40 29.36 Romania 2.91 3.13 3.03 Hungary 187.69 202.57 196.88
Slide 51: Balance sheet
Balance sheet US$m Mar 11 Mar 10* Goodwill and Intangibles assets 16,313 15,933 Property, plant and equipment 9,330 8,915 Investment in joint ventures and associates 8,532 8,035 Other non-current assets 689 721 Current assets excluding cash 3,111 3,116 Cash and cash equivalents 1,067 779 Assets of d