Deutsche Bank Global Consumer & Food Retail Conference Paris, 9 June 2009
Felipe Dutra Chief Finance Officer Introduction
AB InBev brings together seven centuries of brewing history and value-creating consolidation 1987 1995 2002 2004 2000 2002 2004 2008 3
We have leading positions in the world s most important beer markets #1 position #2 position Strong presence Associate 4
With 14 billion-dollar-brands, we are among the world s leading consumer products companies 5
One company one culture one common set of business practices What defines us Ownership culture Cost-connect-win Group-wide best practices Topline programs: WCCP Sales and Marketing Distribution execution excellence Cost efficiency programs: Zero Based Budgeting (ZBB) Voyager Plant Optimization (VPO) 6
Increased scale and common business practices have driven steady margin expansion Margin drivers Mutual exchanging of best practices Increasing scale reinforced by financial discipline Global Sales and Marketing capabilities with regional impact Margin evolution +840 bps (a) (b) (c) (a) Interbrew standalone (b) 2007 figures are presented on a consolidated pro-forma basis which includes pro-forma financials of Anheuser- Busch for the last six weeks of 2007 to facilitate like-for-like comparisons with the financials in FY 2008 (c) Pro forma EBITDA margin (including 12 months of A-B) was 30.8% 7
2.25 billion USD of synergies not including topline opportunities US$1.0bn US$2.25bn US$1.0bn initial synergy projections US $1.5bn US$0.25bn 295m in 1Q09 Synergies realized in 2008 Synergies expected in 2009 Synergies expected 2010-2011 Total 8
ZBB is key synergy driver in 2009 US$1.0bn 295m USD delivered in 1Q09 60% ZBB 17% Manufacturing (VPO) 11% Procurement 12% Other (incl. UK and China) Total 9
Chris Burggraeve Chief Marketing Officer Marketing @ AB InBev
Connect Capability: Key in Our Sustainable Growth Model 11
Marketing @ AB InBev 3 Strategic Changes Towards World Class (Re-)define Marketing Capability for a Top 21st century FMCG Create a Focus Brands discipline that Drives Sustainable Growth Be THE Ambassadors for Zythology (Beer culture) around the world
Marketing @ AB InBev 3 Strategic Changes Towards World Class (Re-)define Marketing Capability for a Top 21st century FMCG
Becoming Resourceful Brand Builders + < 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 InBev WCCP Mktg 1.0 ABI WCCP Mktng 1.0 Best Beer Company in a Better World Resourceful Brand Builders World s local brewer 14 14
Proprietory, Disciplined, Quantitative. Values based brand ONE Marketing language globally 1 Brand Positioning Framework 1 Business Planning Framework 1 Consumer Connection Framework LONG TERM YEAR PLAN RENOVATION & INNOVATION
Stepped up Renovation and Innovation Capability to help drive topline growth in next years 16
Disciplined co-creation with Consumers yields rich pipelines Global Initiatives Local Initiatives Anheuser-Busch InBev
Link to ABI s Performance Culture (market results, personal rewards) Results 1. 2. 3. 4. Brand Health Market share Volumes Sustainable CORES Management Means Brands Brands Insights Insights Renovation and Renovation & Innovation Innovation People People 18
Marketing @ AB InBev 3 Strategic Changes Towards World Class Create a Focus Brands discipline that Drives Sustainable Growth
Focus within 300+ brands portfolio Company Confidential
Strengthening our strongest Brands first AB InBev s Portfolio: 14 Brands 1Bn+ Euro-USD exchange rate = 1.3 21
UK: Market share gain in 2008 after 5 years of consistent UK decline Reverted past 5 year trend +0,60% Total UK Stella Artois Family +0,27% 22 Source: BBPA (SVS) Domestic volume only, excl LBS, ROI, CITR
Make hard Portfolio Bets 2007 Priority shift OB -> CASS when Hite Brand Health indexes 165 versus CASS End Q3 08 CASS overtakes Hite as Korea s Favourite Brand and achieves record shares month after month Anheuser-Busch InBev
UK: Market share gain in 2008 after 5 years of consistent Expanding decline... But only with discipline 24
2008 Focus Brand Innovation Examples Anheuser-Busch InBev
4 AB InBev Brands in Global Top 10 2007 2008 2009 1 2 3 4 5 6 7 8 9 Source: BrandZ Report Milward Brown 10
Marketing @ AB InBev 3 Strategic Changes Towards World Class Be THE Ambassadors for Zythology (Beer culture) around the world
Beer,... part of Life since ever...
Beer needs to learn from successful Wine category marketing of last decade Share of throat
Zythology : learn from Oenology
Beer is more complex than wine in many ways beer wine Raw materials different Major production steps 4 to 9 Water, hop, malt, yeast, cereals, bacteria, other yeast, spices, fruits 2 to 3 Grape, yeast, bacteria 11 4 Press, ferment, mature, filter Germinate, kiln, grind, mashing, lauter, boil, clarify, ferment, mature, filter, pasteurize Different type of steps 2 4 enzymatic, cold, warm, fermentation cold and fermentation Wort Sugar 6 Glucose / maltose / fructose / maltotriose / maltotetraose / dextrins Composition 2 grape juice is 50% fructose & 50% glucose Main classes of compound in final product 5 9 Carbohydrates, Fibers, Antioxidants, Alcohol, Proteins, Carbon Dioxide, Flavors, Minerals, Vitamins Carbohydrates, Alcohol, Flavors, Antioxidants, Vitamins Number of different Molecules identified 1200 400 Variety >10 Kriek, Lambic, Lager, Stout, Wheat, Abbaye, Pale Ale, 5 red, white, rose, dessert, sparkling
Beer perfectly fits the all important food occasion great for food pairing Anheuser-Busch InBev
Understand and leverage heritage of each AB InBev Focus Brand 1366 1873 1888 1967 1981 1988 1876 1888 1900 1982 > 7 centuries of brewing heritage...
Stella Artois: The 9 Step Pouring Ritual Stella Artois 9-step pouring ritual
Stella Artois USA: nr 1 US Ambassador of Zythology Stella Artois 1st time at legendary James Beard Awards (Oscars of Food) "beer is the new wine (Jim Koch of Boston Beer Co) 35
USA: Wine lovers love Stella Artois Sophistication Imagery Wine Stella Artois Hard Liquor Beer In sophistication, Stella Artois is closer to wine than to beer Past Week Consumption Stella Artois Heineken Beer Stella Artois drinkers consume wine twice as often as beer drinkers Company Confidential 36
Connect Capability: Key in Our Sustainable Growth Model 37
Felipe Dutra Chief Finance Officer Summary 38
Summary Leading global beer company with strong leadership positions in the two largest margin pools Premium growth record through organic growth, market share gains, effective revenue management High performance culture emphasizing ownership, meritocracy, and individual accountability Track-record of consistent margin enhancement driven by scale economies, global business processes and financial discipline Unique opportunity to replicate commercial best practices on a global scale to drive sustainable topline growth Rapid de-leveraging and balance sheet improvement: successfully raised almost $25B since the AB transaction closed 39
Q&A Anheuser-Busch InBev