Anheuser-busch Inbev Sa/nv · EURONEXT:ABI
Anheuser-busch Inbev Sa/nv — Q3 2016 Earnings Presentation
26 slides from Anheuser-busch Inbev Sa/nv's earnings presentation, Oct 28, 2016
Slide 1: Third Quarter 2016 Results
Third Quarter 2016 Results 28 October 2016 © AB InBev 2016 – All rights reserved PRESENTATION TITLE GOES HERE 1 2016
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: Successful completion of combination with SABMiller
Successful completion of combination with SABMiller • Creates the first truly global brewer and one of the world’s leading consumer products companies • Leadership position in most of the world’s largest profit pools • Rich portfolio including seven of the top ten most valuable beer brands in the wo
Slide 4: 3Q16 Summary
3Q16 Summary Solid results from most markets, but weak performance in Brazil • Total Revenue +2.8% Beer Volume Revenue EBITDA • Revenue per hl +3.8%, +3.7% on a 8% 6.6% constant geographic basis 6.3% 6% 4.7% 4.7% • Global Brands +8.7% 4% 2.8% 3.3% • Total Volumes -0.9% 1.5% 2% 0.7% 0.6% 0% • Own bee
Slide 5: Global Brand Revenues +8.7%
Global Brand Revenues +8.7% Corona Budweiser +14.8% +4.8% • Accelerated new global • Budweiser Red Light app campaign “This is Living” fastest growing mobile • 360º winter campaign in beer app in Canada Chile • Record digital • Activation with global performance for partner World Surf Budweiser Made
Slide 6: Tomorrowland – Activating a global partnership
Tomorrowland – Activating a global partnership Tomorrowland is the largest global electronic music festival in the world, taking place each year over 3 days in Boom, Belgium, bringing over 180,000 people together from around the world. 28 11 1,300 Countries Brands Consumers Activated & Influencers G
Slide 7: US - 3Q16 Summary
US - 3Q16 Summary Industry Industry STRs • Industry weakness driven by July 4th 0.7% 1.0% holiday timing and slowdown in craft 0.0% 0.1% 0.0% 0.0% • STRs -2.6% -1.0% -0.5% -0.8% -1.0% -2.0% AB InBev -3.0% -2.6% • STRs -3.8% -4.0% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 9M16 • Market share decline of 55 b
Slide 8: Bud Light below expectations
Bud Light below expectations • STRs down mid-single digits for 3Q16 and low single digits for 9M16 • Market share -65bps in 3Q16 & -50bps in 9M16 • Continue to invest behind the biggest beer brand in the US • Transitioning from Bud Light Party to NFL and other football campaigns Note: Share based on
Slide 9: Budweiser maintains trends
Budweiser maintains trends • STRs down mid-single digits for 3Q16 • Market share -20bps in 3Q16 & 9M16 • Consistent messaging and tone of voice • “America” packaging and campaign • Responsible consumption programs © AB InBev 2016 – All rights reserved 9 Note: Share based on internal estimates © AB I
Slide 10: Above Premium gaining share
Above Premium gaining share • Michelob ULTRA #1 share gainer for 6 quarters • Stella Artois, Goose Island and craft partners growing by double digits • Estrella Jalisco, Best Damn, Stella Artois and Michelob ULTRA top 10 share-gaining brands in the US1 • Gaining share in US High End segment • Drivin
Slide 11: Mexico - 3Q16 Summary
Mexico - 3Q16 Summary AB InBev • Revenue +12.0% • Volume +9.6% driven by our Focus Brands • Revenue per hectoliter growth of +2.2% • EBITDA growth of +5.8% • EBITDA margin down 263 bps to 43.9% due to our commercial investments AB InBev Mexico - Organic Volume Change (YoY %) 15% 13.0% 11.5% 12% 9.6%
Slide 12: Mexico - Successful commercial initiatives
Mexico - Successful commercial initiatives • “Miercolesdefut” – new consumption occasion in the point of sale • 360º summer campaign with increased brand visibility targeting LDAs Bud Light • Tactical location-based marketing to increase brand awareness Victoria • Continued activation of Corona “Epi
Slide 13: Brazil - 3Q16 Summary
Brazil - 3Q16 Summary Industry Real Disposable Income Growth • Industry volumes declined 3% in 3Q16 AB InBev • Revenue -6.8% • Total volumes -5.1% Source: Pnad/IBGE • Beer volumes -4.1% • Non-beer volumes -8.1% • Improved beer market share versus 2Q16 • Beer revenue per hectoliter decline of -1.2% •
Slide 14: Unfavorable FX hedges driving over half of Brazil EBITDA decline
Unfavorable FX hedges in Cost of Sales driving over half of the decline in Brazil EBITDA 935 -6.7pp -3.4pp -16.7pp -6.2pp USD millions 626 647 Organic -33.0% 3Q15 Reported Volume Revenue/hL Cost of Other 3Q16 Currency 3Q16 Reported EBITDA Sales/hL Operating EBITDA EBITDA Expenses excluding and OOIE
Slide 15: Growth of Returnable Glass Bottles (RGBs)
Growth of Returnable Glass Bottles (RGBs) • Attractive price point with positive impact on RGB - per hl impact profitability Net Revenue • Volumes of 1L RGBs in on-trade up mid-single digits year-to-date Cost of Sales • RGBs now account for 25% of our volume in Gross Profit supermarkets Distribution
Slide 16: China - 3Q16 Summary
China - 3Q16 Summary Volume Change (YoY %) Industry 5% 4.7% 1.6% • Beer industry volumes were 0% -0.2% -0.2% -0.3% essentially flat in 3Q16 -2.0% -1.3% -1.1% -2.3% -5% -4.0% -6.5% AB InBev -10% -7.0% -8.0% -8.0% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 • Revenue +6.3% Industry AB InBev • Volume +1.6% Volu
Slide 17: Premiumization continues in China
Premiumization continues in China Budweiser • Budweiser volumes up high single digits in 3Q16 • Continued improvement • Super premium segment led by Corona in the south and east following a and Stella Artois weak first quarter • Development of the segment driven • Major summer campaign, by Urban Cen
Slide 18: Highlights from other markets
Highlights from other markets • In Canada, revenue and market share were essentially flat, although volumes declined by 1.3% due to industry weakness • In Europe, own beer volumes declined 2.6% (Western Europe +3%) but revenue grew by 3.1%, driven by growth of our premium brands • Good results from
Slide 19: Total AB InBev - Positive trends in our business
Total AB InBev - Positive trends in our business EBITDA Growth (YoY %) 8.0% 6.1% 6.0% 6.6% 6.3% 4.3% 4.0% 2.5% 1.5% 0.0% -4.0% -2.0% 1Q16 2Q16 3Q16 9M16 Total AB InBev AB InBev excluding Brazil • US: Positive brand mix evolution and net revenue per hl growth • Mexico: Continued volume growth • Brazi
Slide 20: Normalized EPS down $0.19 to $0.83 in 3Q16
Normalized EPS down $0.19 to $0.83 in 3Q16 1.02 0.32 0.22 (0.06) 0.83 USD per share (0.06) (0.28) (0.33) 3Q15 as Variance of Net costs of MTM - Share- Variance in Variance of Currency 3Q16 as reported Normalized the pre- based foreign income tax translation reported EBIT funding of the payment excha
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 including pre- MTM - Share Currency funding of Net interest on based and other Bank fees, SABMiller net defined Accretion payment hedging transaction 3Q15 purchase price benefit liabilities
Slide 22: Non-recurring net finance costs driven by FX hedging of SABMiller purchase price
Non-recurring net finance costs of 678 million USD, driven by FX hedging of SABMiller purchase price MTM - Grupo MTM - FX hedging of Modelo deferred the purchase price of Other MTM 3Q15 share instrument SABMiller adjustments Other fees 3Q16 305 USD millions (327) 3Q15 (327) (594) 3Q16 (22) (17) (45)
Slide 23: Normalized Effective Tax Rate (ETR)
Normalized Effective Tax Rate (ETR) 26.8% 24% 20.5% 22% 19.1% 18.2% 11.7% 2015 3Q15 3Q16 9M15 9M16 Normalized ETR in 3Q16 favorably impacted by : • Reporting of previously unrecognized deferred tax assets on carried forward losses and the reversal of deferred tax liabilities following a change in ta
Slide 24: Interim dividend of €1.60 per share
Interim dividend of €1.60 per share Dividend per share (EUR) 3.60 3.00 2.00 Final 2.05 1.70 2.00 1.20 0.80 1.45 0.38 1.60 1.60 Interim 0.28 1.45 0.60 2008 2009 2010 2011 2012 2013 2014 2015 2016 Payout ratio (%) 76.0% 65.0% 58.0% 49.3% 38.5% 33.8% 26.3% 21.3% 2008 2009 2010 2011 2012 2013 2014 2015
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 2016 – All rights reserved 26