Anheuser-Busch InBev SA/NV · EURONEXT:ABI
Anheuser-Busch InBev SA/NV — SABMiller — H1 F2010 Earnings Presentation
49 slides from Anheuser-Busch InBev SA/NV's earnings presentation, Nov 19, 2009
Slide 1: SABMiller plc First half results
SABMiller plc First half results Six months ended 30 September 2009 19 November 2009 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 performance amidst weak economic backdrop – Organic lager volume down 1%, well ahead of peer group performance – 11% underlying EBITA growth; tight grip on revenues and costs � SABMiller is capitalising on its strengths – Broad portfolio of leading local power brands � Our consiste
Slide 4: H1 business developments
H1 business developments � Latin America: further share gains, enhanced RTM � North America: MillerCoors synergies on track – Growth in key brands, premium light segment share gain – New price rises in 80% of markets in October � Europe: superior brand health; share and price leadership – Russian be
Slide 5: 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 6: Balanced spread of global businesses: leading GDP growth exposure
Creating a balanced and attractive spread of global businesses: leading GDP growth exposure Year-on-year real GDP growth, 2009-2015 5.1% 5.9% 5.7% (0.1)% 2009 2011 2013 2015 4.8% 5.3% 5.1% Peer #1 (1.2)% 2009 2011 2013 2015 4.5% 4.1% 2.8% Peer #2 (3.5)% 2009 2011 2013 2015 Source: “Strategic plannin
Slide 7: Balanced spread of global businesses: leading volume growth exposure
Creating a balanced and attractive spread of global businesses: leading volume growth exposure Projected market volume growth Share of volume 2008, percent rate, CAGR 2009-15 14 � High growth markets: >5% 20 28 19 31 � Medium growth markets: 2-5% 28 67 � Low growth markets: <2% 49 44 SABMiller Peer
Slide 8: Building market profitability
Creating a balanced and attractive spread of global businesses: building market profitability index Poland 170 45% Mkt vol & EBITA Volume share 160 150 40% 140 130 35% 120 110 100 30% CY04 CY05 CY06 CY07 CY08 SABM volume share Industry EBITA Industry volume index 170 Ecuador 100% Mkt vol & EBITA 160
Slide 9: Brand portfolios that win locally: Europe
Developing strong, relevant brand portfolios that win in the local market: Europe � Superior health of local brands enabling share gains and price leadership Country Market share* Growth* Poland 45% +280 bps Czech 48% -40 bps Romania: Timisoreana Romania 31% +140 bps Russia 5.3% -20bps Hungary 29% +
Slide 10: Brand portfolios that win locally: Africa
Developing strong, relevant brand portfolios that win in the local market: Africa � Creating and driving “Premium beer from here” across Africa � Common positionings and marketing scale benefits across countries � E.g. Mozambique: Laurentina Preta up >60%, up from 14% to 22% of volume Uganda Angola
Slide 11: Brand portfolios that win locally: advances in local selling
Developing strong, relevant brand portfolios that win in the local market: advances in local selling � Latin America: replacing van selling with pre-sales and telesales – Expanded outlet reach, outlet information and worthmore brand penetration – Better revenue management � Africa: optimising sales
Slide 12: Raising profitability sustainably: LatAm & Europe
Constantly raising the profitability of local business sustainably: LatAm & Europe Latin America Europe � Unit revenue growth of 7%* � Restructuring in Czech, Netherlands � Broad cost reduction in Colombia and Poland: upper-single digit percentage real reduction in fixed costs � Distribution cost im
Slide 13: Raising profitability sustainably: MillerCoors
Constantly raising the profitability of local business sustainably: MillerCoors � MillerCoors JV synergy programme on track � Significant financial benefit from synergy capture over last 12 months – $209m in synergies, enhancing EBITA margin by c. 230 bps* – EBITA growth of 28%*, EBITA margin up fro
Slide 14: Raising profitability sustainably: China
Constantly raising the profitability of local business sustainably: China 7,000 6,000 Snow � Snow brand growth of 19%, CR Snow Brand #2 5,000 Brand #3 share of over 20% 4,000 � Expanding into upper mainstream 3,000 l k 7 , 0 0 0 6 , 0 0 S 0 T N Y s O a i W n jg ti a n o g 0 0 4 5 , 0 0 0 '0 3 , 0 0
Slide 15: Leveraging our skills and global scale
Leveraging our skills and global scale � Rapid Group top-line growth We are developing more aligned systems and capabilities to… � Diversity of businesses – Dynamic growth in many markets � Better leverage our regional – New operations, e.g. Ukraine, and global scale Vietnam, Angola, Australia � Sus
Slide 16: Capability investments will deliver material benefits
Capability investments will deliver material benefits � Streamlined, simplified business management � Reduce demands on local management teams for non-strategic activities � Globally integrated procurement and back- office systems, enabling lower costs and better coordination � Common front-office a
Slide 17: First stages of capability investments
First stages of capability investments South Africa Latin America � Shared Service Centre outsourced � Integrated supply chain, sales and operations planning � Future CapEx and cost avoidance � Pilot stage benefits include: � Using global business process – 10-20 day reduction in key materials outso
Slide 18: First stages of capability investments: Procurement
First stages of capability investments Procurement � New procurement company; upfront investment of c. $40m � Strategic, scale-advantaged, low-cost country sourcing for the SABMiller group � Globally centralised purchasing for key costs – E.g. brewing materials, packaging, marketing, capital equipme
Slide 19: Financial and operating overview
Financial and operating overview Malcolm Wyman Chief Financial Officer
Slide 20: Good EPS growth in our major currencies
Good EPS growth in our major currencies � Adjusted EPS – US $ +6% – Sterling +28% – Rand +10% – Euro +17% � Interim dividend at 17 US cents per share – Increase of 6% © SABMiller plc 2009 F10 H1 results
Slide 21: Strong underlying performance under difficult economic conditions
Strong underlying performance under difficult economic conditions � Total volumes of 139.6 mhl -0.3% – Organic * -0.6% � Lager organic volumes -0.8% � Organic group revenue * -6.4% – Constant currency * +3.1% � Organic EBITA * -1.3% – Constant currency * +10.7% � EBITA margin * +80 bps – Constant cu
Slide 22: Revenue impacted by significant currency moves
Revenue impacted by significant currency moves Group Revenue (including associates and joint ventures) components of performance, US$m 3.7% (9.5)% 14,177 (0.6)% 0.6% 13,355 (6.4)% (5.8)% Sep '08* Volume Price/mix Currency Sep '09 Acquisitions Sep '09 * Adjusted for disposals Organic © SABMiller plc
Slide 23: Strong underlying EBITA growth, offset by currency
Strong underlying EBITA growth, offset by currency EBITA (including associates and joint ventures) components of performance, US$m 10.7% (12.0)% 2,221 (1.3)% (0.2)% 2,187 (1.5)% Sep '08 * Underlying Currency Sep '09 Acquisitions Sep '09 * Adjusted for disposals Organic © SABMiller plc 2009 F10 H1 re
Slide 24: Latin America
Latin America � Strong EBITA growth from pricing and cost efficiencies � Margin growth supported by optimised marketing spend � Market share gains achieved as we outperform markets US$m Sep 09 Sep 08 Change % Organic constant currency Group revenue 2,994 2,802 7 EBITA* 625 470 33 EBITA margin* (%) 2
Slide 25: Europe
Europe � Tough economic conditions impacted volumes � Strong brands drive market share gains in difficult markets � Solid pricing and cost efficiency drive EBITA growth US$m Sep 09 Sep 08 Change % Organic constant currency Group revenue 3,995 4,010 0 EBITA * 761 725 5 EBITA margin * (%) 19.0 18.1 90
Slide 26: North America
North America � Significant marketing and fixed cost synergies realised � Growth achieved in five of the six focus brands � Down trading evident US$m Sep 09 Sep 08 Change % Organic constant currency Group revenue 2,871 2,916 (2) EBITA * 379 355 7 EBITA * margin (%) 13.2 12.2 100 bps Sales volumes (h
Slide 27: Africa
Africa � Our diverse geographic footprint delivered growth despite challenges in key markets � Strategy continues to focus on offering a full beverage and brand portfolio � EBITA growth supported by robust pricing US$m Sep 09 Sep 08 Change % Organic constant currency Group revenue 1,397 1,350 3 EBIT
Slide 28: Asia
Asia � Volumes in China grew at more than double the market rate � Trading conditions in India severely impacted by regulatory issues � Strong EBITA growth supported by revenue management benefits in China US$m Sep 09 Sep 08 Change % Organic constant currency Group revenue 1,037 905 15 EBITA * 93 72
Slide 29: South Africa Beverages
South Africa Beverages � Adverse economic environment depressed volumes � Robust pricing countered higher input costs � Substantial market facing investments mainly funded by cost savings US$m Sep 09 Sep 08 Change % Organic constant currency Group revenue 2,136 2,007 6 EBITA * 347 332 4 EBITA margin
Slide 30: Input costs continue to rise, but at a slower rate
Input costs continue to rise, but at a slower rate � Total constant currency increase per hl – Total raw materials up mid single digits – Total COGS up mid single digits � Higher glass and sugar costs offset lower diesel and aluminium prices � Supplier contracts and hedging programmes limit the full
Slide 31: Exceptional items
Exceptional items US$m Sep 09 Business capability programme costs: - included in operating profit (170) - included in net finance costs (17) Integration and restructuring costs: - subsidiaries (41) - share of associates and joint ventures (7) Other: - subsidiaries - - share of associates and joint v
Slide 32: Business capability programme: Governance and risk management
Business capability programme Governance and risk management � Global programme oversight � Individual elements of the programme managed through regionally anchored projects � Project assurance by independent experts � Project management to ensure successful execution and delivery of benefits � Robu
Slide 33: Business capability programme: Financial headlines
Business capability programme Financial headlines � F’10 exceptional charge of approx. US$370m – declining by approx. 40% per annum from F’11 to F’13 � Expensed cost reported as exceptional – Includes design, implementation and reorganisation costs � Systems build and hardware costs capitalised – Re
Slide 34: Cash Flow and Taxation
Cash Flow and Taxation � Normalised EBITDA* down 6% to US$2,292m from US$2,436m � Normalised EBITDA* margin 30 basis points higher than prior year � Working capital inflow US$300m � Capex** down US$529m to US$739m � Free cash flow*** improved by US$1,124m to US$998m � Effective tax rate 29.4% * EBIT
Slide 35: Net debt
Net debt US$m Sep 09 Mar 09* Non-current borrowings 8,844 7,470 Current borrowings 1,172 2,148 Cash and cash equivalents (464) (422) Borrowing related derivative financial instruments (207) (487) Net debt 9,345 8,709 Gearing (%) 47.0 54.0 Normalised EBITDA Interest cover *** (times) 9.1 6.6 Weighted
Slide 36: Net debt profile and maturity
Net debt profile and maturity Debt profile Debt Maturity 16% 0 – 1 Year US$ 797m 30% Dollars Euros Rand Peso 1 – 2 Years US$ 540m 20% Other 2 – 5 Years US$ 4,242m 11% 23% Over 5 Years US$ 3,766m © SABMiller plc 2009 F10 H1 results
Slide 37: Financial outlook – current financial year
Financial outlook – current financial year � Price increases will moderate generally in current economic conditions � Reported results for H2 are expected to benefit from relatively stronger operating currencies versus US dollar � Maintaining momentum on improved cash generation – Continued focus on
Slide 38: Conclusion
Conclusion � Economic headwinds are continuing – Consumer indicators lagging GDP stabilisation � SABMiller’s local brand portfolios are performing in superior fashion � Our cost management is rigorous � Past the commodity cost peak, with favourable currency impact looking ahead © SABMiller plc 2009
Slide 39: Q&A
SABMiller plc Q&A F10 H1 results 19 November 2009
Slide 40: Supplementary information
Supplementary information
Slide 41: Reported EBITA contribution
Reported EBITA contribution EBITA contribution* September 2009 September 2008 2% Latin America 3% 15% 25% 14% 21% Europe North America 4% 3% Africa 11% 11% Asia South Africa Beverages 26% Hotels & Gaming 17% 32% 16% * Before corporate costs © SABMiller plc 2009 F10 H1 results
Slide 42: Financial results
Financial results US$m Sep 09 Sep 08 Change % Reported currency Group revenue 13,355 14,222 (6) EBITA 2,187 2,225 (2) EBITA margin (%) 16.4 15.6 80 bps Sales volumes (hl’000) Total 139,648 140,041 (0) Lager 116,887 116,318 (0) Soft drinks 20,176 21,060 (4) Other alcoholic beverages 2,585 2,663 (3) ©
Slide 43: Volumes
Volumes* Reported Domestic Lager volumes by country hl ‘000 Sep 09 Change % South Africa 11,947 (3) Colombia 9,288 (2) Poland 8,613 (3) Peru 4,716 (2) Czech Republic 4,254 (3) Romania 3,468 (9) Russia 3,216 (8) Ecuador 2,404 7 Italy 2,232 (9) India 1,879 (22) Tanzania 1,302 (5) China** 27,166 15 * e
Slide 44: Net debt
Net debt Sep 09 Mar 09 Average interest rate (gross debt) – % 6.0% 7.1% Net debt currency profile* US dollars 30% 33% Euro 23% 21% SA rand 11% 10% Colombian peso 20% 19% Other 16% 17% 100% 100% * Including the effect of derivatives © SABMiller plc 2009 F10 H1 results
Slide 45: Reported EBITA margin performance
Reported EBITA margin performance September 09 September 08 20.6% 19.5% 18.4% 18.1% 17.7% 16.6% 16.3% 16.5% 16.4% 15.6% 13.2% 12.2% 8.8% 8.0% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2009 F10 H1 results
Slide 46: EBITA margin performance
EBITA margin performance Organic constant currency basis September 09 September 08 20.9% 19.0% 19.6% 18.1% 17.7% 16.8% 16.8% 16.2% 16.5% 15.7% 13.2% 12.2% 9.0% 8.0% Latin America Europe North Africa Asia SA Group America Beverages © SABMiller plc 2009 F10 H1 results
Slide 47: Financial & commercial rand / US$ 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 Source: Bloomberg, JP Morgan 94 96 98 00 02 04 06 08 © SABMiller plc 2009 F10 H1 results
Slide 48: Exchange rates
Exchange rates Closing rates currency vs US$ Sep 09 Mar 09 Sep 08 Colombia 1,922 2,561 2,175 Peru 2.88 3.15 2.98 Honduras 18.90 18.90 18.88 Euro 0.683 0.755 0.709 Poland 2.88 3.52 2.41 Czech Republic 17.18 20.57 17.25 Russia 30.09 34.01 25.25 Romania 2.88 3.20 2.66 Hungary 184.09 232.79 171.85 Tanza
Slide 49: Balance Sheet
Balance Sheet US$m Sep 09 Mar 09 Goodwill and intangible assets 15,977 12,456 Property, plant and equipment 8,883 7,404 Investment in joint ventures and associates 7,774 7,282 Other non-current assets 777 1,010 Current assets excluding cash 3,290 3,050 Cash and cash equivalents 464 422 Borrowings (1