ANHEUSER-BUSCH INBEV SA/NV - Anheuser-Busch InBev reports First Quarter 2020 Results - Short Form Announcement

Anheuser-Busch InBev reports First Quarter 2020 Results - Short Form Announcement

Anheuser-Busch InBev SA/NV
(Incorporated in the Kingdom of Belgium)
Register of Companies Number: 0417.497.106
Euronext Brussels Share Code: ABI
Mexican Stock Exchange Share Code: ANB
NYSE ADS Code: BUD
JSE Share Code: ANH
ISIN: BE0974293251
(“AB InBev” or the “Company”)


Anheuser-Busch InBev reports First Quarter 2020 Results
Short Form Announcement

BUSINESS UPDATE IN LIGHT OF THE GLOBAL COVID-19 PANDEMIC


•     The COVID-19 pandemic presents unprecedented challenges for societies, governments and businesses across
      the world. The health and safety of our colleagues continues to be our first priority and we are doing our part globally
      to help our communities, support our partners and connect with our consumers in new ways.
•     Our business started the year with good momentum and delivered volume growth of 1.9% in the first two months of
      the year excluding China, where the COVID-19 outbreak began in late January.
•     The impact of COVID-19 on our global results increased significantly toward the end of the quarter. Consequently,
      in 1Q20 our total volume declined by 9.3% and by 3.6% excluding China. Revenue declined by 5.8% while revenue
      per hl grew by 3.9%. EBITDA of 3 949 million USD represents a decline of 13.7%, with margin contraction of 331
      bps to 35.9%.
•     We expect that the impact on our 2Q20 results will be materially worse than in 1Q20. This has already become
      evident in our April 2020 global volumes, which declined by approximately 32%, primarily driven by the closure of
      the on-premise channel in most markets and government restrictions imposed on certain operations of ours in
      connection with the COVID-19 pandemic.
•     Our diverse geographic footprint allows us to apply best practices from our experiences in China and South Korea
      to the rest of our markets, as they move through different stages of the crisis and into eventual recovery. For context,
      in China, our volumes declined by approximately 17% in April, an improvement from the 1Q20 decline of 46.5%.
•     We have been investing in new capabilities for several years to better connect with our customers and consumers
      by leveraging technology, such as B2B sales and e-commerce platforms, which provide us with a structural
      advantage in these unique circumstances.
•     We have exercised prudent financial discipline with several proactive measures, including optimizing our cost base,
      revising our final 2019 dividend proposal and maintaining a strong liquidity position.

KEY FIGURES


•     Revenue: Revenue declined by 5.8%, materially impacted by lower volumes resulting from the COVID-19 pandemic.
      Revenue per hl grew by 3.9%, driven by ongoing premiumization and revenue management initiatives.
•     Volume: Total volumes declined by 9.3%, with own beer volumes down 10.5% and non-beer volumes down 0.2%.
      Excluding China, our volumes declined by 3.6% in 1Q20 despite initial growth of 1.9% in January and February.
•     Global Brands: Combined revenues of our three global brands, Budweiser, Stella Artois and Corona, declined by
      11.0% globally and by 17.5% outside of their respective home markets. Growth across the majority of our markets
      was more than offset by declines in China, which is the largest market for both Budweiser and Corona outside of
      their respective home markets.
•     Cost of Sales (CoS): CoS was flat in 1Q20 and increased by 10.3% on a per hl basis, driven primarily by operational
      deleverage resulting from the impact of COVID-19 on our volumes and transactional currency headwinds.
•     EBITDA: EBITDA of 3 949 million USD represents a decrease of 13.7% in the quarter, with EBITDA margin
      contraction of 331 bps to 35.9%.
•     Net finance results: Net finance costs (excluding non-recurring net finance results) were 3 160 million USD in 1Q20
      compared to 366 million USD in 1Q19. The increase was predominantly due to a mark-to-market loss of 1 855
      million USD in 1Q20 linked to the hedging of our share-based payment programs, compared to a gain of 951 million
      USD in 1Q19, resulting in a swing of 2 806 million USD.
•    Income taxes: Normalized effective tax rate (ETR) decreased to -109.3% in 1Q20 from 19.6% in 1Q19, impacted
     by non-deductible mark-to-market losses linked to the hedging of our share-based payment programs. Excluding
     the mark-to-market impact linked to the hedging of our share-based payment programs, our normalized ETR was
     25.9% in 1Q20 as compared to 27.5% in 1Q19.
•    Profit: Normalized profit attributable to equity holders of AB InBev was -845 million USD in 1Q20 versus 2 395 million
     USD in 1Q19. Underlying profit (normalized profit attributable to equity holders of AB InBev excluding mark-to-
     market losses linked to the hedging of our share-based payment programs and the impact of hyperinflation) was 1
     015 million USD in 1Q20 as compared to 1 449 million USD in 1Q19.
•    Earnings per share (EPS): Normalized EPS in 1Q20 was -0.42 USD, a decrease from 1.21 USD in 1Q19, negatively
     impacted by a lower profit and mark-to-market losses linked to the hedging of our share-based payment programs.
     Underlying EPS (normalized EPS excluding mark-to-market losses linked to the hedging of our share-based
     payment programs and the impact of hyperinflation) was 0.51 USD in 1Q20, a decrease from 0.73 USD in 1Q19.


SHORT FORM ANNOUNCEMENT

This short-form announcement is the responsibility of the board of directors of AB InBev and is a summary of the
information in the detailed financial results announcement released on SENS on 7 May 2020 and does not contain full
or complete details. Any investment decision in relation to the Company’s shares should be based on the full
announcement.

The full announcement may be downloaded from
https://senspdf.jse.co.za/documents/2020/jse/isse/anhe/Q12020.pdf

or from the Company’s website at www.ab-inbev.com

Copies may be requested, at no charge, from the Company’s JSE Sponsor by calling +2711 011 9200 during business
hours for a period of 30 calendar days following the date of this announcement.

7 May 2020
JSE Sponsor: Questco Corporate Advisory Proprietary Limited

Anheuser-Busch InBev is a publicly traded company (Euronext: ABI) based in Leuven, Belgium, with secondary listings
on the Mexico (MEXBOL: ANB) and South Africa (JSE: ANH) stock exchanges and with American Depositary Receipts
on the New York Stock Exchange (NYSE: BUD).

Date: 07-05-2020 07:30:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.