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SABMiller plc
Consumer AnalystGroup of New York conference
Boca Raton, FloridaFebruary 19th, 2009
CAGNY February 2009© SABMiller plc 2005 2
Global review
Graham MackayCEO
CAGNY February 2009© SABMiller plc 2005 3
Forward looking statements
This presentation includes ‘forward-looking statements’. These statements contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company’s products and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in theCompany’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
All references to “EBIT” in this presentation refer to earnings before interest, tax, amortization of intangible assets and exceptional items. All references to “organic” mean as adjusted to exclude the impact of acquisitions, while all references to “constant currency” mean as adjusted to exclude the impact of movements in foreign currency exchange rates in the translation of our results.
CAGNY February 2009© SABMiller plc 2005 4
SABMiller key facts
# 1 or 2 position in > 90% of markets1
5 year revenue and EBIT CAGR of 22% and 27%A leading Coke bottler
0
1
2
3
4
5
F'04 F'05 F'06 F'07 F'080
5
10
15
20
25
30
F'04 F'05 F'06 F'07 F'08
1. Countries in which SABMiller plc has a brewing presence (including Castel)2. Market cap on February 17, 2009
Revenue $b, F04-F08 EBIT $b, F04-F08
Market equity capitalization $23.2 billion2
World’s 2nd largest brewer
CAGNY February 2009© SABMiller plc 2005 5
SABMiller key facts
Strong portfolio of leading local brands– Deep local heritage with leading
consumer equity– Leading market shares– Superior profitability
Differentiated portfolio of four international brands: Grolsch, Peroni, Pilsner Urquell, MGD
1SnowChina
1AguilaColombia1St. LouisBotswana12MMozambique1SafariTanzania1Carling Black LabelSouth Africa1PeroniItaly1TimisoreanaRomania
2Haywards 5000India
1PilsnerEcuador1CristalPeru
1GambrinusCzech1TyskiePoland
RankBrandCountry
CAGNY February 2009© SABMiller plc 2005 6
Tanzania 84%Mozambique 97%
One of the world’s leading brewers
North America 30%
Colombia 98%Peru 86%
China 19%India 34%
Russia 5%
South Africa 92%
Italy 22%Romania 29%
Czech 49%Poland 42%
Key country market shares
CAGNY February 2009© SABMiller plc 2005 7
Outperforming the global beer market
0%
2%
4%
6%
8%
10%
F'04 F'05 F'06 F'07 F'08 CAGR
Global beer market growth SABMiller organic lager growth
Source: Platologic
5.9%
SABMiller CAGR
CAGNY February 2009© SABMiller plc 2005 8
Beer’s increasing share of alcohol
Developed markets Emerging markets
Source: Datamonitor Jan 2009 share of liquid, converted at ABVs: beer 5%, wine 12%, spirits 40%Source: Plato Logic Jan 2009
2002-12e beer CAGR:
W. Europe-0.6%
N. America0.7%
E. Europe 5.2%
S. America3.8%
Africa/Asia6.0%
100%
80%
60%
40%
20%
0%201220112007 2008 2009 201020062005200420032002
Wine
Spirits
Beer
100%
80%
60%
40%
20%
0%201220112007 2008 2009 201020062005200420032002
Wine
Spirits
Beer
Alcohol share trends
CAGNY February 2009© SABMiller plc 2005 9
100
20
40
60
Local subsistence alcohol
140 Local premium beer
150-300300+
Economy beer
Imported spiritsImported beer
Mainstream beer
Leading emerging market alcohol growth
Typical alcohol pricing ladder
CAGNY February 2009© SABMiller plc 2005 10
Sector leading top line growth
-2%
0%
2%
4%
6%
8%
10%
12%
F'04 F'05 F'06 F'07 F'08 CAGR
Competitor 1 Competitor 2 Competitor 3 SABMiller
Organic constant currency revenue growth
CAGNY February 2009© SABMiller plc 2005 11
Superior growth through the income statement
100
120
140
160
180
F'04 F'05 F'06 F'07 F'08Lager volume Group revenue EBIT
F04 = 100, growth – organic volumes; organic constant currency
9.5% CAGR
8.5% CAGR
6% CAGR
Organic volume, constant currency revenue & EBIT growth
CAGNY February 2009© SABMiller plc 2005 12
Strong financial profile
Low gearing:– Net debt/EBITDA c. 2x
Significant undrawn committed borrowing facilities in placeLimited refinancing until 2011Strong interest coverStable Baa1/BBB+ ratings
16 %
3 2 %
2 2 %
2 0 %10 %
Peso Eur os Dol l ar s Other Rand
Net debt currency profile1
1. Figures as at 30 September 2008. These include the fair value of derivative assets or liabilities held to manage interest rate and foreign currency risk of borrowings.
CAGNY February 2009© SABMiller plc 2005 1313
Comparative resilience in tough times
Growth has slowed but volumes are stableAffordability is goodKey part of consumer lifestyle routinesPeaks and troughs less pronounced than other sectors
Beer is comparatively resilient
CAGNY February 2009© SABMiller plc 2005 14
Recent growth exceeded medium term guidance
-5%
0%
5%
10%
15%
20%
25%
30%
F06 F07 F08 medium term guidance*
Latin America Europe North America Africa & Asia South Africa Beer
LatAm F06 is South America pro forma vs. prior year
* Medium term guidance as at original publishing on respective divisional seminar dates
CAGNY February 2009© SABMiller plc 2005 15
Consolidating rapid recent industry growth
Source: Plato logic
Romania
Poland
Russia
Peru
China
Mozambique5 7
0
20
40
60
80
100
03 04 05 06 07 08e
Per capita consumption: litres per year
CAGNY February 2009© SABMiller plc 2005 16
Pricing has been robust
80
85
90
95
100
105
F07 F08 H1 F09
$ Revenue/hl
Increasing unit revenue growth
CAGNY February 2009© SABMiller plc 2005 1717
Comparative resilience in tough times
Growth has slowed but volumes are stableAffordability is goodKey part of consumer lifestyle routinesPeaks and troughs less pronounced than other sectors
Beer is comparatively resilient
CAGNY February 2009© SABMiller plc 2005 18
Comparative resilience amidst slowing economic growth
-2%
0%
2%
4%
6%
8%
10%
12%
China
Tanza
nia
Ugand
a
Peru
Colombia
Poland
South
Africa
Russia
Czech
USA
World
2007 2008E 2009F
Source: EIU January 2009
Our markets are predominantly in growth
CAGNY February 2009© SABMiller plc 2005 19
Consumption growth is forecast in our markets
95100
105110
115120125
130135
140145
2005 2006 2007 2008E 2009F
China Peru Russia Tanzania
Source: EIU updated forecast Jan 09
95100
105110
115120125
130135
140145
2005 2006 2007 2008E 2009F
South Africa Colombia Poland USA
Private consumption expenditure growth
Index, 2005 = 100
CAGNY February 2009© SABMiller plc 2005 20
Strategic priorities
Creating an attractive global spread of businessesDeveloping strong, relevant brand portfolios in local marketsConstantly raising the performance of local businessesLeveraging our global scale
CAGNY February 2009© SABMiller plc 2005 21
1. An attractive spread of global businesses
22%
25%
15%
18%
20%
Volume excludes contract brewing, includes soft drinks and other beveragesEBIT is Pre-goodwill amortization, excluding central admin and exceptional items
■ Latin America ■ Europe ■ North America
■ Africa & Asia ■ South Africa
22%
18%25%
17%
18%
25%
24%14%
25%
12%
Total volume Revenue EBIT
Twelve months to 30 September 2008
CAGNY February 2009© SABMiller plc 2005 22
200
150
100
80
Econ
omy
Mai
nstr
eam
Wor
thm
ore
ColombiaRomania
2. Strong, relevant brand portfolios
160
120
100
80
CAGNY February 2009© SABMiller plc 2005 23
Vol
ume
(mhl
)
Revenue per hl
Mainstream$846mSPP
Local worthmore$303m SPP
Int’l worthmore$61m SPP
I75
I100
I125
I150
0
5
15
20
25
Economy$54m SPP
SPP = segment profit pool= SABMiller segment
volume share
Brands in the highest value segments
F08. Source company internal estimates
Poland
CAGNY February 2009© SABMiller plc 2005 24
Strong marketing expertise
Deep consumer insights, aligned to profitable growth opportunitiesOccasion based marketing360° marketingChannel segmentation
CAGNY February 2009© SABMiller plc 2005 25
3. Constantly raising the performance of local businesses
Focus on in-trade executionOperational efficiencyScrutinizing costs and CapEx– Continued investment in
brands, packaging and innovation
– Cost productivity remains a focus
CAGNY February 2009© SABMiller plc 2005 26
CapEx expected to reduce relative to revenue
4%
6%
8%
10%
12%
F'04 F'05 F'06 F'07 F'08
SABMiller PLC Competitor 1 Competitor 2 Competitor 3
* Source: company published data, revenue excluding associates less excise taxes, net capital expenditure
Capital expenditure as a percent of net sales
CAGNY February 2009© SABMiller plc 2005 27
4. Leveraging SABMiller’s global scale
SABMiller WaysPrograms to enhance global business processesCentralized procurement to improve sourcing and supply chain efficiencyMore sophisticated systems supporting local sales and distributionGlobally standardized information platforms to leverage commercial insightsStandardized back office processes– reduce cost, enable outsourcing and
shared service centers
CAGNY February 2009© SABMiller plc 2005 28
Regional business review
CAGNY February 2009© SABMiller plc 2005 29
Europe: a disproportionate share of profit pools
Industry-leading value maximisationStrong brands in full portfolios supported by 360º marketingCommercial capability in on and off trade
8%
11%
4%
7%
Mainstream Premium
SABME Market
5-year CAGR by segment 2004-08
Current context: slowdown in consumer spending, beer industry consolidating recent rapid PCC growth
CAGNY February 2009© SABMiller plc 2005 30
South Africa: leveraging scale and broad brand portfolio
Healthy long term economic growthBroad beer brand range with diverse consumer appealContinuing growth in soft drinks, recent success of Coke ZeroStrengthening our route to marketIncreasing presence and investment at points of saleTargeting efficiencies, improving competitiveness
Current context: high inflation and slowing GDP growth flattened consumer spending
CAGNY February 2009© SABMiller plc 2005 31
Africa: great potential
Low but accelerating PCC levels Investment in capacity to support sales momentumBrands, affordability and reach supporting growthGrowth across lager, traditional beer and soft drinks
Current context: sustained growth momentum across Africa
CAGNY February 2009© SABMiller plc 2005 32
Asia: a longer term story
Leader in China with 18% shareLeveraging Snow, the first major national brand, with 15% share– Equity affords pricing power– Expanding into new territories
Robust pricing recently in ChinaIndia growing off a low baseCapturing growth with positions in Australia and Vietnam
0
10
20
30
40
50
60
70
2002 2003 2004 2005 2006 2007 2008Snow Tsingtao Yanjing
Volume growth (m hls)
Current context: slower volume growth in China, but healthier pricingand profit. Regulatory environment constraining growth in India.
CAGNY February 2009© SABMiller plc 2005 33
Latin America: enhancing category appeal
Consumers trading into beer from local spiritsEconomic growth driving PCC towards higher LatAm benchmarksBuilding premium segmentImproving beer’s range of occasionsRetail price managementBetter productivity and efficiency
63%
45%
67%
58%
Colombia
Peru
2005 2008
Growth in beer share of total alcohol
Source: Company internal sources
Current context: consumer spending constrained in Colombia,
growing in Peru and elsewhere
Brand development
CAGNY February 2009© SABMiller plc 2005 34
North America: stronger, more competitive, brand-led brewer
MillerCoors JV is now a much stronger #2 player– Broadest US beer brand portfolio– Strengthened position at retail– Highly experienced management, hand picked workforce
Strong focus on revenue managementStrengthened local general managersFostering an optimal, efficient, distribution networkOn track to deliver $500m synergies
Current context: Beer performing well despite US economic slowdown
CAGNY February 2009© SABMiller plc 2005 1
Tom LongPresident and Chief Commercial Officer
Driving profitable growth in beer
North America: stronger, more competitive, brand-led brewer
CAGNY February 2009© SABMiller plc 2005 2
• Attract, engage and retain people and teams who demonstrate:– Passion for beer – Connection with people– Commitment to customers – Pride and integrity– Bias for action – Thirst for learning
• Invest in people development• Create a customer-focused and learning organization• Grow and leverage diversity• Create a safe, flexible and productive work environment
• Win in premium lights, taking share and growing the segment• Win in above premium, growing share and profit• Bring our portfolio to life at the local level• Accelerate growth with multicultural consumers• Deliver innovation and quality that excites consumers
• Develop the best sales force in the industry• Drive national and regional chain growth• Build and motivate the most effective distributor network• Grow share and profit at the market level
• Deliver our synergy commitment• Maximize cash flow and capital investment returns• Reduce fixed costs to lower our break-even
• Promote responsible enjoyment of beer• Imbed environmental sustainability• Invest in our communities• Model ethical practices and transparency in reporting
CAGNY February 2009© SABMiller plc 2005 3
Win in premium lights, taking share and growing the segmentWin in above premium, growing share and profitBring our portfolio to life at the local levelAccelerate growth among multicultural consumersDeliver innovation and quality that excites consumers
CAGNY February 2009© SABMiller plc 2005 4
Winning in premium light
CAGNY February 2009© SABMiller plc 2005 5
Taste and refreshment
Key brand dimensionsCorrelation with loyalty
Source: Project Volume Consumer Research
Tast
e
Ref
resh
men
t
Soci
abili
ty
Rel
axin
g
Val
ue
Col
d
Con
trol
Adv
ertis
ing
Die
t
CAGNY February 2009© SABMiller plc 2005 6
Winning in premium light
0.2 points volume share
0.2 points dollar share
Source: ACNielsen – since July 1, 2008
CAGNY February 2009© SABMiller plc 2005 7
Winning in premium light
CAGNY February 2009© SABMiller plc 2005 8
Coors Light ad…
Winning in premium light
CAGNY February 2009© SABMiller plc 2005 9
Winning in premium light
CAGNY February 2009© SABMiller plc 2005 10
Winning in premium light
We took price up on Miller Lite in F09 Q3… more than Bud Light… which has contributed to volume softness
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
C07Q1 C07Q2 C07Q3 C07Q4 C08Q1 C08Q2 C08Q3 C08Q4
Miller Lite, Coors Light and Bud Light Actual Price Change
Act
ual p
rice
chan
ge v
sYA
Miller LiteCoors LightBud Light
Source: ACNielsen
CAGNY February 2009© SABMiller plc 2005 11
Winning in premium light
CAGNY February 2009© SABMiller plc 2005 12
Winning in premium light
CAGNY February 2009© SABMiller plc 2005 13
MGD64 ad…
Winning in premium light
CAGNY February 2009© SABMiller plc 2005 14
Winning in above premium
Crafts–29% of segment–45% of growth within segment
Imports– Peroni up double digits
CAGNY February 2009© SABMiller plc 2005 15
Winning in below premium
CAGNY February 2009© SABMiller plc 2005 16
Winning in below premium
Miller High Life ads…
CAGNY February 2009© SABMiller plc 2005 17
Net revenue management
Building premium brands
Prudent price increases to cover COGS
Promotional efficiency
Increasing presence in above premium
Driving profitable package mix
Driving geographic mix
CAGNY February 2009© SABMiller plc 2005 18
Develop the best sales force in the industryDrive national and regional chain growthBuild and motivate the most effective distributor networkGrow share and profit at the market level
CAGNY February 2009© SABMiller plc 2005 19
Winning in BEER
B E E R is about building a winning retail cultureBEER begins with a commitment to winning at retailBEER is designed to improve our presence at store-levelBEER requires mutually-held goals with distributors
CAGNY February 2009© SABMiller plc 2005 20
Deliver our synergy commitmentMaximize cash flow and capital investment returnsReduce fixed costs to lower our break-even
CAGNY February 2009© SABMiller plc 2005 21
A national brewery footprint
ID
Irwindale
Fort WorthFort Worth Albany
Eden
Milwaukee
Shenandoah
Golden
Trenton
Chippewa Falls
CAGNY February 2009© SABMiller plc 2005 22
Network transformation: where we’re headed…
Coors Miller
MillerCoors
CAGNY February 2009© SABMiller plc 2005 23
Capture synergies
Talent selection completed–Significant organizational synergiesBrewery optimization$500 million in cost synergies–Ahead of schedule–Expect to realize c.$68m by March 2009 (F09),
c.$300m by March 2010 (F10)
CAGNY February 2009© SABMiller plc 2005 24
MillerCoors six month financials (F09 Q2-Q3)
Total net sales
Underlying EBIT
Sales to retailers
Net revenue per barrel
2.6%
16.8%
0.7%
5.3%
CAGNY February 2009© SABMiller plc 2005 25
Where we expect to be …
Driving value and volume in premium lightDriving value and volume for High Life and Keystone LightDriving value and volume in above premiumStrong net revenue managementSuperior growth in chain salesAhead of synergy targets
CAGNY February 2009© SABMiller plc 2005 26
CAGNY February 2009© SABMiller plc 2005 2727
SABMiller conclusion
Economic volatility causing near term uncertaintyStrong revenue initiatives, control of costs and CapExNear term FX pressure; input costs to ease after calendar 2009Our businesses are resilient – strong brand portfolios with geographic diversificationOur strategic priorities are well-suited to current timesSABMiller remains a growth business – continued confidence in our medium-term growth prospects
SABMiller plc
Q&A
CAGNYBoca Raton, FloridaFebruary 19th, 2009
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