Anheuser-Busch InBev SA/NV · EURONEXT:ABI

Anheuser-Busch InBev SA/NV — FY2013 Earnings Presentation

40 slides from Anheuser-Busch InBev SA/NV's earnings presentation, Feb 26, 2014

  1. Slide 1: Full Year 2013 Results

    Full Year 2013 Results 26 February 2014 © AB InBev 2013 2014 – All rights reserved

  2. 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

  3. Slide 3: FY13 Highlights

    FY13 Highlights • Solid revenue per hectoliter growth • Strong global volume growth from Budweiser and Corona • Synergy delivery in Grupo Modelo ahead of schedule • EBITDA margin expansion in most of our markets • Normalized profit growth of 10.2% • Final dividend of 1.45 EUR, total of 2.05 EUR for

  4. Slide 4: FY13 Financial Summary

    FY13 Financial Summary • Revenue +3.3% • Revenue per hl +5.8%, on a constant geographic basis US +3.1% Mexico +6.6% Brazil +9.3% China +8.2% • Total and own beer volumes -2.0%  Global Brands +4.7% and Focus Brands -0.9% • EBITDA +8.1%  EBITDA margin +179 bps to 39.8% • Normalized EPS of $4.91, gro

  5. Slide 5: EBITDA growth driven by developing countries with margin expansion in most of our markets

    EBITDA growth driven by developing countries with margin expansion in most of our markets 8,000 USD MM EBITDA contribution by Zone 7,000 6,728 6,000 5,819 5,000 4,000 3,000 2,000 1,491 1,281 1,125 1,000 546 225 - North Latin America Latin America Mexico Western Central & Asia Pacific America North S

  6. Slide 6: Focused on the world's most profitable beer markets

    Focused on the world’s most profitable beer markets Industry Volumes Industry EBIT AB InBev market (2013E) 1) (2013) 2) share (2013) 3) Million hl % Total Billion USD % Total US 242 12.4% 6.7 20.7% 47.2% Brazil 134 6.9% 4.7 14.5% 67.9% Mexico 68 3.5% 2.6 8.0% 58.4% China 516 26.5% 1.5 4.6% 14.1% 4)

  7. Slide 7: Healthy balance between developed and developing markets

    Healthy balance between developed and developing markets FY13 Volume FY13 Revenue FY13 EBITDA 63.6% 36.4% 52.5% 47.5% 54.4% 45.6% Contribution from Developing markets Contribution from Developed markets Note: NA and WE zones are included as Developed markets. LAN, LAS, Mexico, CEE and APAC zones are

  8. Slide 8: We are focused on the brands with the greatest growth potential

    We are focused on the brands with the greatest growth potential Our Focus Brands accounted for two-thirds of our volume and revenue in 2013 Focus Brands volumes as a % of Focus Brands revenue as a % of FY13 Volume FY13 Revenue Global Global brands, brands, 12.9% 12.4% All other All other brands, bra

  9. Slide 9: … led by Budweiser

    … led by Budweiser 2014 Super Bowl 2014 FIFA World Cup Chinese New Year © AB InBev 2014 – All rights reserved 8

  10. Slide 10: Increasing investment behind our brands, with a step-up planned for 2014

    We have been increasing investment behind our brands, with a step-up planned for 2014 Organic growth in Sales & Marketing Investments 7,000 USD MM 5,803 5,958 FY14 6,000 guidance for 5,143 +4.5% low to mid organic 5,000 4,712 growth teens +6.8% increase in 4,000 organic Sales & growth +4.1% Marketin

  11. Slide 11: Innovations accounted for nearly 8% of our volume in FY13

    Innovations accounted for nearly 8% of our volume in FY13 Major innovations in 2013 Coming in 2014 • Ritas • Skol Beats • Budweiser • World Cup limited edition packaging • Brahma Extreme Supreme • 16 oz. re-closeable aluminum bottle 0,0% © AB InBev 2014 – All rights reserved

  12. Slide 12: Combination with Grupo Modelo gives an unparalleled brand portfolio

    The combination with Grupo Modelo gives us an unparalleled portfolio of brands that compete on a global stage 90 80 Beck’s Foster’s 70 Stella Artois Tuborg 60 Guinness Millions of hectoliters 50 Corona ex US Amstel 40 Carlsberg 30 20 Budweiser 10 Heineken 0 ABInBev All others Chart represents the To

  13. Slide 13: US results – 2013 summary

    US results – 2013 summary Industry • STRs (Selling Day Adjusted) -1.8% in FY13 and -0.7% in 4Q13 • Industry trends improved throughout the year after a difficult first half AB InBev • STRs (Selling Day Adjusted) -2.9% in FY13 and -1.4% in 4Q13 • Shipments (STWs) -2.7% in FY13 and -2.0% in 4Q13 • Mar

  14. Slide 14: Liquid, packaging and marketing innovations driving Bud Light Family performance

    Liquid, packaging and marketing innovations are driving Bud Light Family performance • Bud Light family market share -15 bps in FY13 • Bud Light holding share in Premium Light • New creative for Bud Light: “The Perfect Beer for Whatever Happens” • Launch of re-closeable aluminum bottle • Ritas gaine

  15. Slide 15: Best Budweiser share performance in over a decade

    Best Budweiser share performance in over a decade • Budweiser family market share down 15 bps in FY13 • Improved trends in core Budweiser • Strong contribution from Budweiser Black Crown +20 bps market share • Great Super Bowl execution Note: Share based on internal estimates (STRs) © AB InBev 2014

  16. Slide 16: Michelob Ultra and High-end brands grew market share

    Michelob Ultra and High-end brands grew market share by more than 20 bps in FY13 • Focus on Michelob Ultra, Shock Top, Stella Artois and Goose Island • Goose Island volume growth of more than 70% • Proposed acquisition of Blue Point announced in February 2014 Note: Share based on internal estimates

  17. Slide 17: Mexico – 2013 summary

    Mexico – 2013 summary Industry • Volumes impacted by soft economy and severe weather in September AB InBev • Volume: -2.0% in FY13 • Good revenue per hectoliter growth of 6.6% • EBITDA growth of 54% driven by:  Revenue per hl growth  Cost synergies ahead of schedule • EBITDA margin expansion of al

  18. Slide 18: Cost synergies being delivered ahead of schedule

    Cost synergies being delivered ahead of schedule $1 billion to be captured by 2016, the majority of which will be delivered by the end of 2015 $1 billion 1,000 800 600 USD Millions 460 385 400 210 200 135 75 40 0 Prior to closing 2Q13 3Q13 4Q13 Since Cumulative Commitment combination Figures include

  19. Slide 19: A top priority for Mexico in 2014 is to grow the beer category

    A top priority for Mexico in 2014 is to grow the beer category © AB InBev 2014 – All rights reserved 18

  20. Slide 20: Beer Brazil results – 2013 summary

    Beer Brazil results –2013 summary Industry • Volumes -3.5% in FY13 and -2.8% in 4Q13 AB InBev • Beer volumes -4.3% in FY13 and -3.4% in 4Q13 • Beer market share -60bps to 67.9% • Beer revenue per hectoliter growth +9.3% in FY13 and +11.7% in 4Q13 (1) • Good growth in the premium segment • EBITDA gro

  21. Slide 21: 2014 FIFA World Cup excitement building

    2014 FIFA World Cup excitement building 2013 Confederations Cup Activations © AB InBev 2014 – All rights reserved 20

  22. Slide 22: China results – 2013 summary

    China results – 2013 summary • Beer Volume +8.9% in FY13, +9.8% in 4Q13 • Market share growth of 70 bps in FY13 driven by strong organic growth, geographic expansion and Focus Brand growth • Focus Brands +14.8% • Revenue per hectoliter +8.2%(2) driven by brand mix • EBITDA growth of 31.5%(2) to 546

  23. Slide 23: Focus Brands share of China portfolio rose from 60% to 73%

    Our three Focus Brands of Budweiser, Harbin and Sedrin have increased their share of our China portfolio from 60% in 2009 to 73% in 2013 Focus Brand CAGR +11% 85.0% Focus brand volumes as a % of total volumes 73.4% 75.0% 72.9% 69.5% 67.8% 65.0% 59.6% 55.0% 45.0% 35.0% 2009 2010 2011 2012 2013 © AB I

  24. Slide 24: 2014 Budweiser Chinese New Year campaign

    2014 Budweiser Chinese New Year campaign “The Year of the Horse” © AB InBev 2014 – All rights reserved

  25. Slide 25: Clear priorities for our key markets in 2014

    Looking forward, we have clear priorities for our key markets in 2014, designed to drive the top-line, and create long term value US Mexico Brazil China Invest behind our Grow the beer Increase demand Grow consumer Focus Brands category and consumption preference of our • Bud Light • Focus Brands oc

  26. Slide 26: Normalized EPS grew by 9.1% to 4.91 USD in FY13

    Normalized EPS grew by 9.1% to 4.91 USD in FY13 0.38 0.73 (0.03) USD per share (0.22) (0.20) (0.25) 4.50 +9.1% in FY13 4.91 EPS FY12 Scope and Modelo full Modelo 2012 organic EBIT Net Taxes and EPS FY13 currency consolidation results from growth Finance Costs others (excl. Modelo) associates © AB In

  27. Slide 27: Normalized Effective Tax Rate

    Normalized Effective Tax Rate (ETR) 2014 25.0% guidance range of 21-23% 20.0% Normalized Effective Tax Rate 17.4% 16.6% 16.1% 15.0% 13.3% 10.0% 5.0% 0.0% 1Q 2Q 3Q 4Q FY13 2012 2013  FY13 tax rate was stable at 16.6%. The result was better than our expectations, driven by: • Incremental Interest on

  28. Slide 28: Continued improvement in Core Working Capital

    Continued improvement in Core Working Capital 4.0% Average Core Working Capital 2.1% (CWC) % of Net Revenues 1) 2.0% 0.0% Average 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% -12.0% 2008 2009 2010 2011 2012 2013 1) Yearly average (on a rolling 12 month

  29. Slide 29: Robust Cash Flow generation

    Robust Cash Flow generation Over $56 billion of Free Cash Flow generated since the combination with Anheuser-Busch 16,000 13,864 14,000 13,268 12,486 12,429 11,372 12,157 12,000 10,297 10,312 9,905 10,000 9,124 USD millions 8,000 6,000 4,000 2,000 - 2009 2010 2011 2012 2013 Free Cash Flow Cash Flow

  30. Slide 30: Net debt/EBITDA reached 2.16x in 2013

    Net debt/EBITDA reached 2.16x in 2013* Net Debt (USD billions) 100 4.0 4.7x Net Debt/EBITDA 80 3.7x ratio 3.0 2.9x (2.26x as reported) 60 2.3x 2.16x 56.7 1.94x 2.0 40 45.2 39.7 38.8 34.7 30.1 1.0 20 0 0.0 2008 2009 2010 2011 2012 2013* Note: EBITDA is presented on a “normalized” basis before non-rec

  31. Slide 31: 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

  32. Slide 32: Growing dividends over time

    Growing dividends over time Dividend per share (EUR) 2.05 1.70 1.20 1.45 Final 0.80 0.28 0.38 0.60 Interim (Paid) 2008 2009 2010 2011 2012 2013 Payout ratio (%) 58.0% 49.3% 38.5% 33.8% 26.3% 21.3% 2008 2009 2010 2011 2012 2013 © AB InBev 2014 – All rights reserved 31

  33. Slide 33: Thank you

    Thank you © AB InBev 2014 – All rights reserved

  34. Slide 34: FY13 Results Supplementary Information

    FY13 Results Supplementary Information © AB InBev 2014 – All rights reserved 33

  35. Slide 35: Canada – 2013 Summary

    Canada – 2013 Summary • Beer volumes -2.3% in FY13 • 4Q13 volumes -0.3% • Strong volume and share performance by Bud Light • Estimated market share down 40 bps in FY13 © AB InBev 2014 – All rights reserved 34

  36. Slide 36: Latin America South – 2013 Summary

    Latin America South – 2013 Summary Quilmes Cristal • Total volumes -3.1% Rolling Stones– Limited Edition  Beer volumes -2.8%  Non-beer -3.5% • Argentina beer volumes -1.9% driven by weak consumer environment • Strong performance of Stella Artois and Brahma leading % organic growth FY13 4Q13 to mar

  37. Slide 37: Western Europe – 2013 Summary

    Western Europe – 2013 Summary Jupiler • Own beer volumes -4.3% Red Devils Party Bottle  Belgium -3.0% mainly New Hoegaarden driven by weak industry visual identity performance in the first half  Germany -7.1% with market share decline due to challenging price environment % organic growth FY13 4Q13

  38. Slide 38: Central & Eastern Europe – 2013 Summary

    Central & Eastern Europe – 2013 Summary • Total volumes -15.8% Chernigivske Osoblyve Bud  Russia -13.6% 0.75L King Size • Industry weakness due Bottle to regulatory changes • Bud 1.4% market share • Revenue/hl +4.7% • EBITDA -11.1% mainly % organic growth FY13 4Q13 due to the weak industry Volumes

  39. Slide 39: FY13 and 4Q13 Net Finance costs

    FY13 and 4Q13 Net Finance costs  Net finance costs (excluding non-recurring net finance costs) were 669 million USD in 4Q13 compared with 790 million USD in 4Q12 FY12 FY13 4Q12 4Q13 Drivers FY13 coupon of 4.6%, below guidance range Net interest expense -1 802 -1 719 - 453 - 389 of 4.8-5.3% Net inte

  40. Slide 40: South Korea

    South Korea • On 20 January 2014, ABI agreed to reacquire Oriental Brewery (OB), the leading brewer in South Korea, from KKR and Affinity • This agreement returns OB to the AB InBev portfolio after OB was sold in 2008 as part of the deleveraging process • Since KKR and Affinity entered into partners

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