Wrap Text
Anheuser-Busch InBev reports Second Quarter and Half Year 2016 Results
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: ABI
JSE Share Code: ANB
ISIN: BE0003793107
NYSE ADS Code: BUD
ISIN: US03524A1088
The enclosed information constitutes regulated information as defined in the Belgian Royal Decree of 14 November 2007
regarding the duties of issuers of financial instruments which have been admitted for trading on a regulated market.
Anheuser-Busch InBev reports Second Quarter and
Half Year 2016 Results
Highlights
Except where otherwise stated, the comments below are based on organic figures and refer to 2Q16 and HY16 versus
the same period of last year. For important notes and disclaimers please refer to page 17.
* Revenue: Revenue grew by 4.0% in the quarter, with strong revenue per hl growth of 5.9%. On a
constant geographic basis, revenue per hl grew by 6.1% driven by growth in our premium brands. In
HY16, revenue grew by 3.6% with revenue per hl growth of 5.4%. On a constant geographic basis
revenue per hl grew by 5.7%
* Volume: Total volumes declined by 1.7% in 2Q16, with our own beer volumes down by 0.8%. The
decline in own beer volumes was driven mainly by weak industry performances in Brazil and
Argentina, partly offset by good results in Mexico and the US. In HY16, total volumes declined by
1.7%, with own beer volumes down by 1.1%
* Global Brands: Combined revenues of our three global brands, Corona, Stella Artois and Budweiser,
grew by 8.4% in 2Q16. This result was led by Corona with growth of 13.0%, driven primarily by
Mexico, the UK, and China. Stella Artois revenues grew by over 9%, driven by the US and Canada.
Budweiser revenues grew by almost 6% with growth coming primarily from China, Brazil and the UK.
In HY16 the combined revenues of our global brands grew by 7.2%
* Cost of Sales (CoS): CoS increased by 0.8% in 2Q16 and by 2.5% on a per hl basis. On a constant
geographic basis, CoS per hl increased by 1.4%. In HY16 CoS grew by 1.3% and by 3.0% on a per hl
basis. On a constant geographic basis, CoS per hl increased by 2.7% in HY16
* EBITDA grew by 4.3% in 2Q16 to 4 011 million USD, with top-line growth being partly offset by
investments behind our brands which was weighted towards the first half of the year in line with our
guidance. EBITDA margin increased marginally to 37.1% in 2Q16. In HY16, EBITDA grew by 3.4%,
with EBITDA margin marginally down
* Net finance results: Net finance costs (excluding non-recurring net finance costs) were 726 million
USD in 2Q16 compared to 554 million USD in 2Q15. This increase was driven primarily by the
additional net interest expenses resulting from the bond issuances in 1Q16, related to the pre-funding
of the proposed SABMiller combination. This increase in net interest expenses was partly offset by
other financial results, which included a favorable mark-to-market adjustment of 444 million USD in
2Q16, linked to the hedging of our share-based payment programs, compared to a loss of 139 million
USD in 2Q15. Net finance costs were 1 945 million USD in HY16 compared to 463 million USD in HY15
* Income taxes: Income tax in 2Q16 was 497 million USD with a normalized effective tax rate (ETR) of
20.5%, compared to an income tax expense of 532 million USD in 2Q15 and a normalized ETR of
17.2%. The normalized ETR was 21.5% in HY16 compared to 17.6% in HY15
* Profit: Normalized profit attributable to equity holders of AB InBev was 1 727 million USD in 2Q16
compared to 1 984 million USD in 2Q15, with organic EBITDA growth more than offset by higher net
finance results and unfavorable currency translation. Normalized profit attributable to equity holders of
AB InBev was 2 571 million USD in HY16, compared to 4 278 million USD in HY15
* Earnings per share: Normalized earnings per share (EPS) decreased to 1.06 USD in 2Q16 from
1.21 USD in 2Q15, and decreased to 1.57 USD in HY16 from 2.61 USD in HY15
* Proposed combination with SABMiller: We have made significant
progress towards obtaining the necessary regulatory clearances for the proposed combination with
SABMiller, including recent approval in the US, and have announced a revised and final offer. It
remains our objective to close the transaction in 2016
* 2016 Half Year Financial Report: The report is available on our website at www.ab-inbev.com
Figure 1. Consolidated performance (million USD)
2Q15 2Q16 Organic
growth
Total Volumes (thousand hls) 116 799 114 908 -1.7%
AB InBev own beer 105 409 104 999 -0.8%
Non-beer volumes 10 521 9 044 -9.7%
Third party products 869 866 -22.2%
Revenue 11 052 10 806 4.0%
Gross profit 6 590 6 582 6.2%
Gross margin 59.6% 60.9% 126 bp
Normalized EBITDA 4 156 4 011 4.3%
Normalized EBITDA margin 37.6% 37.1% 8 bp
Normalized EBIT 3 382 3 222 2.9%
Normalized EBIT margin 30.6% 29.8% -35 bp
Profit attributable to equity holders of AB InBev 1 929 152
Normalized profit attributable to equity holders of AB 1 984 1 727
Earnings per share (USD) 1.18 0.09
Normalized earnings per share (USD) 1.21 1.06
HY15 HY16 Organic
growth
Total Volumes (thousand hls) 224 162 219 776 -1.7%
AB InBev own beer 200 498 198 880 -1.1%
Non-beer volumes 21 995 19 303 -7.6%
Third party products 1 669 1 594 -7.5%
Revenue 21 505 20 206 3.6%
Gross profit 12 843 12 204 5.1%
Gross margin 59.7% 60.4% 89 bp
Normalized EBITDA 8 123 7 474 3.4%
Normalized EBITDA margin 37.8% 37.0% -6 bp
Normalized EBIT 6 595 5 915 1.2%
Normalized EBIT margin 30.7% 29.3% -71 bp
Profit attributable to equity holders of AB InBev 4 610 285
Normalized profit attributable to equity holders of AB 4 278 2 571
Earnings per share (USD) 2.81 0.17
Normalized earnings per share (USD) 2.61 1.57
Figure 2. Volumes (thousand hls)
2Q15 Scope Organic 2Q16 Organic growth
growth Total Own beer
Volume volume
North America 31 089 325 112 31 526 0.4% 0.4%
Mexico 10 886 - 788 11 674 7.2% 7.2%
Latin America - North 27 478 436 -1 281 26 632 -4.6% -4.2%
Latin America - South 7 764 -485 -1 077 6 202 -14.8% -9.9%
Europe 12 361 -110 -98 12 153 -0.8% -0.1%
Asia Pacific 25 529 179 -441 25 267 -1.7% -1.6%
Global Export and Holding Companies 1 692 -249 10 1 454 0.7% 0.7%
AB InBev Worldwide 116 799 95 -1 986 114 908 -1.7% -0.8%
HY15 Scope Organic HY16 Organic growth
growth Total Own beer
Volume volume
North America 58 416 205 -182 58 439 -0.3% -0.3%
Mexico 19 991 - 1 971 21 961 9.9% 9.8%
Latin America - North 58 759 587 -3 574 55 772 -6.0% -6.8%
Latin America - South 17 857 -1 060 -1 578 15 219 -9.4% -5.5%
Europe 20 657 -166 51 20 542 0.2% 0.9%
Asia Pacific 45 286 303 -530 45 058 -1.2% -1.1%
Global Export and Holding Companies 3 197 -444 31 2 784 1.1% 1.1%
AB InBev Worldwide 224 162 -575 -3 811 219 776 -1.7% -1.1%
MANAGEMENT COMMENTS
The second quarter of 2016 saw another strong volume performance in Mexico and continued
improvement in our US results. However, our businesses in Brazil and Argentina remained under pressure
driven by unfavorable macroeconomic conditions.
Total revenues for the company grew by 4.0% in the quarter, with strong revenue per hl growth of 5.9%,
driven by our revenue management and premiumization initiatives. Revenues of our three global brands
grew by 8.4%.
Looking at our top four markets:
(i) US: In the US, selling day adjusted industry volumes were essentially flat in the quarter and up
0.2% in HY16, based on our estimates. Our own selling day adjusted sales-to-retailers (STRs)
were down 0.9% in the quarter and 0.7% in HY16. From a brand perspective, Michelob ULTRA
and our High End brands delivered double digit volume growth, Bud Light volume trends were
consistent with recent quarters, and Budweiser volume trends continue to improve. Net revenue
grew by 2.3%, with EBITDA growing by 4.8%.
(ii) Mexico: Mexico delivered strong volume growth of 7.2%, driven by good macroeconomic
fundamentals and successful commercial initiatives, leading to net revenue growth of 9.5%.
EBITDA grew by 6.6%, impacted by the weighting of sales and marketing investments towards
the first half of the year.
(iii) Brazil: The macroeconomic and political environment in Brazil remains volatile, with declining
consumer disposable income negatively impacting beer industry volumes. Our own beer volume
trends improved in the second quarter compared to the first quarter, but not at the speed that we
had anticipated. Our market share trend improved in the second quarter.
Net revenue in Brazil grew by 2.0% in 2Q16. However, given the results of the first six months,
we are amending our net revenue guidance for Brazil. Our previous guidance was for net revenue
to grow by mid to high single digits in FY16. We now expect net revenue in FY16 to be flat with
FY15, due to the weak consumer environment and the increased mix of returnable glass bottles,
which are accretive for EBITDA but which reduce net revenue on a per hectoliter basis.
(iv) China: Industry volumes in China remain under pressure, declining by approximately 8% in 2Q16
based on our estimates. However, our own volumes continue to perform ahead of the industry,
declining by 2.3% in the quarter, due to our focus on the Core Plus, Premium and Super Premium
segments. Net revenue grew by 3.9% with EBITDA up more than 25%.
Total company EBITDA grew by 4.3% in the second quarter, with top-line growth partly offset by an
increase of 18.8% in sales and marketing investments. This additional investment behind our brands is
consistent with our guidance of an increase of high single to low double digits in FY16, weighted towards
the first half of the year.
Proposed combination with SABMiller
We have made significant progress towards obtaining the necessary regulatory clearances for the
proposed combination with SABMiller. Approval in China is the only remaining pre-condition to launching
the formal offer to SABMiller shareholders. We have also announced a revised and final offer for the
proposed combination with SABMiller. It remains our objective to close the transaction in 2016.
2016 OUTLOOK
Unless otherwise stated, the 2016 outlook refers to AB InBev on a standalone basis, and excludes the
impact of the proposed combination with SABMiller.
(i) Top-line:
* Total AB InBev: We expect revenue per hl to grow organically ahead of inflation, on a constant
geographic basis, as a result of our revenue management initiatives and continued
improvements in mix
* In the US: We expect industry volumes to continue to improve in FY16. We expect our own
sales-to-wholesalers (STWs) and sales-to-retailers (STRs) to converge on a full year basis. We
expect further improvement in our net revenue per hectoliter performance, supported by
favorable brand mix
* In Mexico: We expect another year of solid growth in industry volumes, driven by a favorable
macro environment and our own commercial initiatives
* In Brazil: We are amending our guidance. Our previous guidance was for net revenue in Brazil to
grow by mid to high single digits in FY16. We now expect net revenue in FY16 to be flat with
FY15, due to the weak consumer environment and the increased mix of returnable glass bottles,
which are accretive for EBITDA but which reduce net revenue on a per hectoliter basis
* In China: We expect industry volumes to remain under pressure in FY16. We expect our own
volumes to perform better than the industry, driven by our premium and super premium brands.
(ii) Cost of Sales: We are amending our guidance. Our previous guidance was for CoS per hl to
increase by mid-single digits on a constant geographic basis. We now expect CoS per hl to grow by
low single digits due to procurement savings, efficiencies and an increased mix of returnable glass
bottles in Brazil.
(iii) Distribution expenses: We expect distribution expenses per hl to grow by high single digits, driven
by the growth in our premium brands, as well as an increase in own distribution in Brazil, both of
which we expect to be more than offset by the increase in net revenue.
(iv) Sales and Marketing investments: We continue to invest behind our brands and global platforms
for the long term. We expect sales and marketing investments to grow by high single to low double
digits in FY16, weighted towards the first half of the year. In the second half of the year, we expect
sales and marketing investments to grow mid to high single digits.
(v) Net Finance Costs: We expect the average rate of interest on net debt, excluding the impact of the
proposed combination with SABMiller, to be in the range of 3.5% to 4.0% in FY16. Net pension
interest expenses are expected to be approximately 30 million USD per quarter. We are amending
our guidance on accretion expenses. Our previous guidance was approximately 85 million USD per
quarter. We now expect approximately 120 million USD per quarter, due to increased accretion
expenses on bonds. Other financial results will continue to be impacted by any gains and losses
related to the hedging of our share-based payment programs. The net cost of the pre-funding of the
SABMiller purchase price, resulting from the bond issuances in 1Q16, will be accounted for in net
interest expense and is expected to amount to approximately 450 million USD in a full quarter.
(vi) Effective Tax Rate: We expect the normalized ETR in FY16 to be in the range of 22% to 24%. We
expect the normalized ETR to be in the range of 23% to 25% in the period 2017-2018, and in the
range of 25% to 27% thereafter. Our normalized ETR guidance continues to exclude the impact of
any future gains and losses related to the hedging of our share-based payment programs. For the
avoidance of doubt, our guidance on normalized ETR excludes the impact of the proposed
combination with SABMiller and the impact of the pre-funding of the purchase price, for which no tax
deduction is expected to be reported.
(vii) Net Capital Expenditure: We are amending our guidance on net capital expenditure. Our previous
guidance was for net capital expenditure of approximately 4.0 billion USD in FY16. We now expect
net capital expenditure to be approximately 3.7 billion USD this year.
(viii) Debt: Approximately one third of AB InBev’s gross debt is denominated in currencies other than the
US dollar, principally the Euro. Our optimal capital structure remains a net debt to EBITDA ratio of
around 2x. Following the completion of the combination with SABMiller, deleveraging to around this
level will be a priority.
BUSINESS REVIEW
United States
Key performance indicators
Figure 3. United States (million USD)
2Q15 2Q16 Organic
growth
Total volumes (thousand hls) 28 355 28 549 0.5%
Revenue 3 600 3 703 2.3%
Normalized EBITDA 1 450 1 516 4.8%
Normalized EBITDA margin 40.3% 40.9% 99 bp
HY15 HY16 Organic
growth
Total volumes (thousand hls) 53 860 53 535 -0.3%
Revenue 6 856 6 905 1.2%
Normalized EBITDA 2 738 2 806 3.6%
Normalized EBITDA margin 39.9% 40.6% 92 bp
We estimate that selling day adjusted industry STRs in the United States were essentially flat in 2Q16
and up 0.2% in HY16. Our own selling day adjusted STRs were down 0.9% in the quarter and 0.7% in
HY16, leading to an estimated decline in total market share of 35 bps for the quarter and 40 bps for HY16.
The HY16 market share result represents an improvement of approximately 25 bps over the FY15 trend.
Our sales to wholesalers (STWs) were up 0.5% in 2Q16 and down 0.3% in HY16. We continue to expect
our STRs and STWs to converge on a full year basis.
We continued to invest behind Bud Light, the largest beer brand in the US. The second quarter saw the
full rollout of the brand’s new visual brand identity and refreshed packaging, as well as the continuation of
the Bud Light Party campaign. Bud Light STRs declined by low single digits in the quarter, with an
estimated total market share loss of approximately 40 bps, in line with the trends in 1Q16 and FY15.
Our Budweiser marketing campaign, built around the brand’s quality and heritage credentials, was
supplemented in 2Q16 by the successful “America” packaging and additional media support. Budweiser
STRs declined by low single digits in the quarter, with market share down approximately 15 bps, based on
our estimates, further extending the brand's best trends in over a decade.
Our portfolio of Above Premium brands performed very well in 2Q16, gaining approximately 50 bps of
total market share in the quarter, based on our estimates. The strongest performance came from Michelob
ULTRA, with volumes up over 20% compared to 2Q15. Michelob ULTRA has now gained more market
share than any other brand in the beer industry for five straight quarters, based on our estimates. Stella
Artois and Goose Island also contributed to the success of our Above Premium portfolio, delivering double
digit volume growth. Estrella Jalisco, an imported Mexican beer, was launched at the beginning of 2Q16
and has performed very well. Within near beer, our market share trends are improving, helped by new
innovations and flavors within the Rita’s family, as well as volume growth from the Best Damn portfolio of
brands.
US beer-only revenue per hl grew by 1.8% in the quarter, driven primarily by our revenue management
initiatives and positive brand mix, and by 1.6% in HY16. US EBITDA increased by 4.8% to 1 516 million
USD in 2Q16. This increase was due to growth in revenue and an improvement in cost of sales, as a result
of favorable commodity prices and brewery efficiencies, being partly offset by an increase in sales and
marketing investments which were weighted toward the first half of the year. EBITDA grew by 3.6% in
HY16, to 2 806 million USD. EBITDA margin expanded by almost a full percentage point in both 2Q16 and
HY16, to 40.9% and 40.6% respectively.
Mexico
Key performance indicators
Figure 4. Mexico (million USD)
2Q15 2Q16 Organic
growth
Total volumes (thousand hls) 10 886 11 674 7.2%
Revenue 1 055 992 9.5%
Normalized EBITDA 569 500 6.6%
Normalized EBITDA margin 53.9% 50.4% -143 bp
HY15 HY16 Organic
growth
Total volumes (thousand hls) 19 991 21 961 9.9%
Revenue 1 948 1 847 12.6%
Normalized EBITDA 986 871 8.2%
Normalized EBITDA margin 50.6% 47.2% -197 bp
Mexico continues to deliver strong results. Our own volumes increased by 7.2% in 2Q16, supported by a
favorable consumer environment and our own commercial initiatives. We are continuing to invest behind
our brands and programs, which are creating new and exciting consumption occasions. Highlights in the
quarter included a sold out Corona Sunsets music festival in Playa del Carmen, a new “That’s Epic” Bud
Light campaign, and the continued evolution of Victoria’s Mexican Heritage programs.
Revenue per hl grew by 2.1% in 2Q16. Mexico EBITDA increased by 6.6% to 500 million USD in the
quarter, driven by the strong top-line result. EBITDA margin declined by 143 bps to 50.4%, given the
timing of our sales and marketing investments, which were weighted towards the first half of the year.
EBITDA increased by 8.2% in HY16 to 871 million USD, with EBITDA margin declining by 197 bps to
47.2%.
Brazil
Key performance indicators
Figure 5. Brazil (million USD)
2Q15 2Q16 Organic
growth
Total volumes (thousand hls) 25 317 24122 -4.7%
Beer volumes 18 501 17660 -4.5%
Non-beer volumes 6 817 6462 -5.2%
Revenue 1 759 1573 2.0%
Normalized EBITDA 818 710 -2.8%
Normalized EBITDA margin 46.5% 45.1% -217 bp
HY15 HY16 Organic
growth
Total volumes (thousand hls) 54 612 50 930 -6.7%
Beer volumes 40 580 37 527 -7.5%
Non-beer volumes 14 032 13 403 -4.5%
Revenue 4 030 3 149 -1.4%
Normalized EBITDA 2 007 1 519 -4.5%
Normalized EBITDA margin 49.8% 48.2% -155 bp
Our own beer volume trends improved in the second quarter compared to the first quarter, but not at the
speed that we had anticipated. Our total volumes declined by 4.7% in 2Q16, with beer volumes declining
by 4.5% compared to a decline of 10.0% in 1Q16, and soft drink volumes down 5.2%. Although the Brazil
beer market remains very competitive, our market share trend improved in the second quarter. Our
premium and near beer brands, which accounted for more than 10% of our total beer volumes in HY16,
continue to grow. Budweiser, the leading premium brand in the industry, grew volumes by double digits in
both 2Q16 and HY16.
Our top-line initiatives remain the priority in Brazil, with our focus
continuing to be on the execution of our affordability strategies, the elevation of our core brands and the
growth of our premium portfolio. Our initiatives also include activations around the Olympic Games during
3Q16.
Brazil beer revenue per hl increased by 6.9% in the quarter, reflecting our revenue management
initiatives, increased own distribution volumes and premium brand mix, partly offset by growth in our
returnable glass bottle mix. Growth of returnable glass bottles is an important component of our
affordability strategy, allowing us to achieve an attractive consumer price point and positively impacting
profitability.
Net revenue in Brazil grew by 2.0% in 2Q16. However, given the results of the first six months, we are
amending our net revenue guidance for Brazil. Our previous guidance was for net revenue to grow by mid
to high single digits in FY16. We now expect net revenue in FY16 to be flat with FY15, due to the weak
consumer environment and the increased mix of returnable glass bottles, which are accretive for EBITDA
but which reduce net revenue on a per hectoliter basis.
Brazil EBITDA declined by 2.8% in 2Q16 to 710 million USD, with a margin decrease of 217 bps to 45.1%,
and declined by 4.5% in HY16 to 1 519 million USD, with EBITDA margin down 155 bps to 48.2%, due to
the top-line result.
China
Key performance indicators
Figure 6. China (million USD)
2Q15 2Q16 Organic
growth
Total volumes (thousand hls) 21 952 21 512 -2.3%
Revenue 1 167 1 161 3.9%
Normalized EBITDA 309 373 25.6%
Normalized EBITDA margin 26.5% 32.1% 553 bp
HY15 HY16 Organic
growth
Total volumes (thousand hls) 38 745 38 142 -1.8%
Revenue 2 164 2 125 2.5%
Normalized EBITDA 568 632 15.7%
Normalized EBITDA margin 26.3% 29.7% 337 bp
We estimate that China beer industry volumes declined by approximately 8% in the quarter and by
approximately 6% in HY16, due to continuing economic headwinds, with most of the impact being felt in
the core and value segments. Our own beer volumes were down 2.3% in the quarter and 1.8% in HY16.
We estimate our market share increased by approximately 110 bps in the quarter, reaching an average of
19.1%.
We continue to believe the Core Plus, Premium and Super Premium segments have the greatest long-term
growth potential in the industry. Our Budweiser volumes recovered well after a difficult first quarter,
growing by high single digits in the second quarter, led by our Made for Music platform and successful
summer campaign.
Revenue per hl grew by 6.3% in the quarter, driven by a favorable brand mix, specifically through the
growth of Budweiser and our super premium portfolio, and improved regional mix.
China EBITDA grew by 25.6% in 2Q16 to 373 million USD, with EBITDA margin improving by 553 bps to
32.1%. China EBITDA grew by 15.7% in HY16 to 632 million USD, with margin expansion of 337 bps to
29.7%.
Highlights from our other markets
Our beer volumes in Canada were down low single digits in 2Q16, with a stable market share, based on
our estimates. We achieved consistent top-line growth from the performances of Bud Light and our Above
Premium portfolio.
Our own beer volumes in Europe were essentially flat in the quarter, with net revenue up 4.6%, driven
mainly by the growth of our premium brands. Own beer volumes in Western Europe were up almost 5% in
2Q16 driven mainly by our performances in France, the UK, Spain and the Netherlands. In the UK,
volumes of our own products grew by high single digits, driven by strong performances from our
Budweiser Euro Cup activations and the performance of Corona. Own beer volumes in Belgium were down
mid-single digits, due to an industry decline and some estimated market share loss. In Germany, own
beer volumes grew by low single digits driven by strong performances from Beck’s and Franziskaner. Beer
volumes in Russia were down mid-single digits in the quarter, driven by a soft industry and some market
share loss, partly offset by a strong performance from our premium brands.
Latin America South beer volumes were down high single digits, driven mainly by a weak consumer
environment in Argentina.
In South Korea, beer volumes were flat in the quarter, although we gained market share, based on our
estimates. This performance was driven mainly by our successful “Cass Freshness” campaign.
CONSOLIDATED INCOME STATEMENT
Figure 7. Consolidated income statement (million USD)
2Q15 2Q16 Organic
growth
Revenue 11 052 10 806 4.0%
Cost of sales -4 462 -4 225 -0.8%
Gross profit 6 590 6 582 6.2%
Distribution expenses -1 066 -1 025 -3.9%
Sales and marketing expenses -1 757 -1 970 -18.8%
Administrative expenses - 618 - 624 -4.5%
Other operating income/(expenses) 233 259 40.9%
Normalized profit from operations
(normalized EBIT) 3 382 3 222 2.9%
Non-recurring items above EBIT 20 -106
Net finance income/(cost) - 554 - 726
Non-recurring net finance income/(cost) -60 -1 484
Share of results of associates 7 1
Income tax expense - 532 - 497
Profit 2 263 410
Profit attributable to non-controlling interest 334 257
Profit attributable to equity holders of AB InBev 1 929 152
Normalized EBITDA 4 156 4 011 4.3%
Normalized profit attributable to equity
holders of AB InBev 1 984 1 727
HY15 HY16 Organic
growth
Revenue 21 505 20 206 3.6%
Cost of sales -8 662 -8 002 -1.3%
Gross profit 12 843 12 204 5.1%
Distribution expenses -2 125 -1 964 -4.7%
Sales and marketing expenses -3 343 -3 568 -16.3%
Administrative expenses -1 263 -1 179 0.1%
Other operating income/(expenses) 483 422 14.1%
Normalized profit from operations
(normalized EBIT) 6 595 5 915 1.2%
Non-recurring items above EBIT 11 -139
Net finance income/(cost) -463 -1 945
Non-recurring net finance income/(cost) 335 -2 168
Share of results of associates 8 3
Income tax expense -1 125 -835
Profit 5 361 829
Profit attributable to non-controlling interest 751 544
Profit attributable to equity holders of AB InBev 4 610 285
Normalized EBITDA 8 123 7 474 3.4%
Normalized profit attributable to equity
holders of AB InBev 4 278 2 571
Revenue
Consolidated revenue grew by 4.0% in 2Q16, with revenue per hl growth of 5.9%. This result was driven
by our revenue management and premiumization initiatives. On a constant geographic basis, revenue per
hl grew by 6.1%. In HY16, revenue grew by 3.6%, with revenue per hl growth of 5.4% on an organic
basis and 5.7% on a constant geographic basis.
Cost of Sales (CoS)
Total CoS increased by 0.8%, and by 2.5% on a per hl basis. This increase was driven primarily by
unfavorable foreign exchange transactional impacts and product mix, which were partly offset by
procurement savings, efficiencies and a greater mix of inputs from our vertical operations. On a constant
geographic basis, CoS per hl increased by 1.4% in 2Q16. In HY16, CoS increased by 1.3%, by 3.0% on a
per hl basis, and by 2.7% per hl on a constant geographic basis.
Distribution expenses
Distribution expenses grew by 3.9% and by 5.7% on a per hl basis. The increase compared to 2Q15 was
driven by increased own distribution in Brazil, which is more than offset by the increase in net revenues,
the growth of our premium and near beer brands, and inflationary increases in Latin America South. This
increase was partly offset by strong cost management and efficiencies.
Distribution expenses increased by 4.7% in HY16 and by 6.5% on a per hl basis.
Sales and marketing investments
Sales and marketing investments increased by 18.8% in 2Q16, driven by increased support for our
brands, our premiumization initiatives, and the expansion of the near beer category. Sales and Marketing
investments increased by 16.3% in HY16. We expect sales and marketing investments to grow by high
single to low double digits in FY16, and by mid to high single digits in the second half of the year.
Administrative expenses
Administrative expenses increased by 4.5% in the quarter and were essentially flat in HY16, mainly due to
the timing of variable compensation accruals.
Other operating income
Other operating income increased by 40.9% to 259 million USD in 2Q16 due to the timing of government
incentives in Asia Pacific. Other operating income increased by 14.1% to 422 million USD in HY16.
Non-recurring items above EBIT
Figure 8. Non-recurring items above EBIT (million USD)
2Q15 2Q16 HY15 HY16
Restructuring (including impairment losses) -37 -43 -55 -62
Judicial settlement -77 - -77 -
Acquisition costs / Business combinations -4 -60 -4 -79
Business and asset disposal (including impairment losses) 138 -2 147 2
Impact on profit from operations 20 -105 11 -139
Normalized profit from operations excludes negative non-recurring items of 105 million USD in 2Q16,
primarily due to acquisition costs related to the proposed combination with SABMiller, as well as
restructuring costs.
Net finance income/(cost)
Figure 9. Net finance income/(cost) (million USD)
2Q15 2Q16 HY15 HY16
Net interest expense -352 -866 -760 -1 547
Net interest on net defined benefit liabilities -30 -30 -60 -59
Accretion expense -73 -120 -149 -263
Other financial results -99 290 506 -76
Net finance income/(cost) -554 -726 -463 -1 945
Net finance costs (excluding non-recurring net finance costs) were 726 million USD in 2Q16 compared to
554 million USD in 2Q15. This increase was driven primarily by the additional net interest expenses
resulting from the bond issuances in 1Q16 related to the pre-funding of the proposed SABMiller
combination. Other financial results include a favorable mark-to-market adjustment of 444 million USD in
2Q16, linked to the hedging of our share-based payment programs, compared to a loss of 139 million USD
in 2Q15. Accretion expenses increased by 47 million USD in 2Q16, due to increased expenses on bonds.
Net finance costs in HY16 were 1 945 million USD compared to 463 million USD in HY15. This increase in
net finance costs was driven primarily by the additional net interest expenses resulting from the issuance
of bonds in 1Q16 related to the pre-funding of the proposed SABMiller combination. Other finance results
in HY16 includes a positive mark-to-market adjustment of 306 million USD, linked to the hedging of our
share-based payment programs, compared to a gain of 618 million USD in HY15. Other finance results in
HY16 also include net foreign exchange translation losses, compared to foreign exchange translation gains
in HY15.
The number of shares covered by the hedging of our share-based payment programs, and the opening and
closing share prices, are shown in figure 10 below.
Figure 10. Share-based payment hedge
2Q15 2Q16 HY15 HY16
Share price at the start of the period (Euro) 113.80 109.25 93.86 114.40
Share price at the end of the period (Euro) 107.50 117.60 107.50 117.60
Number of equity derivative instruments at the
35.5 44.2 35.5 44.2
end of the period (millions)
Non-recurring net finance income/(cost)
Figure 11. Non-recurring net finance income/(cost) (million USD)
2Q15 2Q16 HY15 HY16
Mark-to-market (Grupo Modelo deferred share instrument) - 60 230 335 146
Mark-to-market (FX hedging of the purchase price of the
proposed combination with SABMiller that does not qualify for - -1 766 - -2 365
hedge accounting)
Other mark-to-market (Restricted shares and euro bonds) - 168 - 293
Other - - 116 - - 242
Non-recurring net finance income/(cost) - 60 -1 484 335 -2 168
Non-recurring net finance costs were 1 484 million USD in 2Q16 compared to 60 million USD in 2Q15.
Non-recurring net finance costs in 2Q16 include a negative mark-to-market adjustment of 1 766 million
USD, related to the portion of the FX hedging of the purchase price of the proposed combination with
SABMiller that does not qualify for hedge accounting under IFRS rules. At the end of 2Q16, 46 billion GBP
of the purchase price of the proposed combination had been hedged at an average GBP/USD rate of
1.5276.
The 2Q16 result also includes a mark-to-market gain of 230 million USD resulting from the derivative
instruments entered into to hedge the deferred share instrument issued in a transaction related to the
combination with Grupo Modelo, and a mark-to-market gain of 168 million USD related to derivative
instruments entered into to hedge part of the restricted shares to be issued in relation to the proposed
combination with SABMiller. The number of shares covered by the hedging of the deferred share
instrument and the restricted shares are shown in figure 12, together with the opening and closing share
prices.
Other non-recurring net finance costs of 116 million USD in 2Q16 mainly relate to accelerated accretion
expenses following the cancellation, in April 2016, of 12.5 billion USD of the 2015 committed senior
facilities entered into in connection with the proposed combination with SABMiller, as well as commitment
fees for these facilities.
Figure 12. Deferred share instrument hedge & Restricted shares to be issued hedge
2Q15 2Q16 HY15 HY16
Share price at the start of the period (Euro) 113.80 109.25 93.86 114.40
Share price at the end of the period (Euro) 107.50 117.60 107.50 117.60
Number of equity derivative instruments at the
end of the period (millions) 23.1 38.1 23.1 38.1
Income tax expense
Figure 13. Income tax expense (million USD)
2Q15 2Q16 HY15 HY16
Income tax expense 532 497 1 125 835
Effective tax rate 19.1% 54.9% 17.4% 50.2%
Normalized effective tax rate 17.2% 20.5% 17.6% 21.5%
Income tax expense in 2Q16 was 497 million USD with a normalized effective tax rate (ETR) of 20.5%,
compared to an income tax expense of 532 million USD in 2Q15 and a normalized ETR of 17.2%. The
normalized ETR was impacted by the pre-funding of the purchase price of
the proposed combination with SABMiller, for which no tax deduction is reported.
The increase in the reported ETR from 19.1% in 2Q15 to 54.9% in 2Q16 is due to the unfavorable impact
on profit before tax of the negative mark-to-market adjustment related to the hedging of the purchase
price of the proposed combination with SABMiller.
Profit attributable to non-controlling interest
Profit attributable to non-controlling interest decreased from 334 million USD in 2Q15 to
257 million USD in 2Q16, due to currency translation effects and the unfavorable operating performance of
Ambev in the second quarter.
Normalized Profit and Profit
Figure 14. Normalized Profit attribution to equity holders of AB InBev (million USD)
2Q15 2Q16 HY15 HY16
Profit attributable to equity holders of AB InBev 1 929 152 4 610 285
Non-recurring items, after taxes, attributable to equity holders
of AB InBev - 5 90 3 119
Non-recurring finance (income)/cost, after taxes, attributable to 60 1 484 - 335 2 167
equity holders of AB InBev
Normalized profit attributable to equity holders of
AB InBev 1 984 1 727 4 278 2 571
Normalized profit attributable to equity holders of AB InBev decreased to 1 727 million USD in 2Q16 from
1 984 million USD in 2Q15, with organic EBITDA growth more than offset by higher net finance costs and
the impact of unfavorable currency translation. Normalized profit attributable to equity holders of AB InBev
was 2 571 million USD in HY16, compared to 4 278 million USD in HY15.
Profit attributable to equity holders of AB InBev decreased to 152 million USD in 2Q16, compared to
1 929 million USD in 2Q15.
Normalized and Basic EPS
Figure 15. Earnings per share (USD)
2Q15 2Q16 HY15 HY16
Basic earnings per share 1.18 0.09 2.81 0.17
Non-recurring items, after taxes, attributable to equity holder of
AB InBev, per share - 0.06 - 0.07
Non-recurring finance (income)/cost, after taxes, attributable to
equity holders of AB InBev, per share 0.03 0.90 -0.20 1.32
Normalized earnings per share 1.21 1.06 2.61 1.57
Normalized earnings per share (EPS) decreased to 1.06 USD in 2Q16 from 1.21 USD in 2Q15, mainly
driven by the net cost of the pre-funding of the SABMiller purchase price and other financial results.
Normalized EPS, excluding the impact of unfavorable currency translation, the mark-to-market adjustment
linked to the hedging of our share based compensation programs and the net cost of the pre-funding of
the SABMiller purchase price, decreased to 1.10 USD in 2Q16 from 1.29 USD in 2Q15.
Figure 16. Reconciliation - Normalized Earnings per share in USD
2Q15 2Q16 HY15 HY16
Normalized EBIT attributable to equity holders of AB InBev 1 1.81 1.85 3.41 3.44
Income tax expense 1 -0.29 -0.30 -0.57 -0.51
Other1 -0.23 -0.45 -0.61 -0.90
Normalized EPS before currency translation, mark-to-market and
1.29 1.10 2.23 2.03
prefunding of the proposed combination with SABMiller
Year over Year currency translation -0.04 -0.19
Net cost of the pre-funding of the SABMiller purchase price -0.27 -0.46
Mark-to-market (Hedging of our share-based payment programs) -0.08 0.27 0.38 0.19
Normalized EPS 1.21 1.06 2.61 1.57
1
at 2015 foreign exchange rate
Figure 17. Reconciliation - Basic Earnings per share in USD
2Q15 2Q16 HY15 HY16
EBIT attributable to equity holders of AB InBev 1 1.84 1.86 3.43 3.42
Income tax expense 1 -0.29 -0.26 -0.57 -0.47
Other1 -0.25 -0.52 -0.63 -0.95
Basic EPS before currency translation, mark-to-market and 1.30 1.08 2.23 2.00
prefunding of the proposed combination with SABMiller
Year over Year currency translation -0.05 -0.19
Net cost of the pre-funding of the SABMiller purchase price -0.27 -0.46
Mark-to-market (Hedging of our share-based payment programs) -0.08 0.27 0.38 0.19
Mark-to-market (Grupo Modelo deferred share instrument) -0.04 0.14 0.20 0.09
Mark-to-market (FX hedging of the purchase price of the proposed
-1.08 -1.44
combination with SABMiller that does not qualify for hedge accounting)
Other mark-to-market (derivative instruments entered into to hedge part of
the Restricted shares to be issued as well as to convert the 13.25 billion 0.10 0.18
euro bond issuance on 29 March 2016, into US dollars)
Accelerated accretion expenses following the cancellation of the 2015
-0.07 -0.15
committed senior acquisition facilities and other fees
Acquisition costs / Business combinations -0.04 -0.05
Basic EPS 1.18 0.09 2.81 0.17
1
at 2015 foreign exchange rate
Reconciliation between profit attributable to equity holders and normalized EBITDA
Figure 18. Reconciliation of normalized EBITDA to profit attributable to equity holders of AB InBev (million USD)
2Q15 2Q16 HY15 HY16
Profit attributable to equity holders of AB InBev 1 929 152 4 610 285
Non-controlling interests 334 257 751 544
Profit 2 263 410 5 361 829
Income tax expense 532 497 1 125 835
Share of result of associates - 7 - 1 - 8 - 3
Net finance (income)/cost 554 726 463 1 945
Non-recurring net finance (income)/cost 60 1 484 - 335 2 168
Non-recurring items above EBIT (incl. non-recurring impairment) - 20 106 - 11 139
Normalized EBIT 3 382 3 222 6 595 5 915
Depreciation, amortization and impairment 774 789 1 528 1 559
Normalized EBITDA 4 156 4 011 8 123 7 474
Normalized EBITDA and normalized EBIT are measures utilized by AB InBev to demonstrate the company’s
underlying performance.
Normalized EBITDA is calculated excluding the following effects from profit attributable to equity holders of
AB InBev: (i) non-controlling interest; (ii) income tax expense; (iii) share of results of associates; (iv) net
finance cost; (v) non-recurring net finance cost; (vi) non-recurring items above EBIT (including non-
recurring impairment); and (vii) depreciation, amortization and impairment.
Normalized EBITDA and normalized EBIT are not accounting measures under IFRS accounting and should
not be considered as an alternative to profit attributable to equity holders as a measure of operational
performance, or an alternative to cash flow as a measure of liquidity. Normalized EBITDA and normalized
EBIT do not have a standard calculation method and AB InBev’s definition of normalized EBITDA and
normalized EBIT may not be comparable to that of other companies.
FINANCIAL POSITION
Figure 19. Cash Flow Statement (million USD)
HY15 HY16
Operating activities
Profit 5 361 829
Interest, taxes and non-cash items included in profit 2 829 6 564
Cash flow from operating activities before changes in working capital 8 190 7 393
and use of provisions
Change in working capital - 965 -1 673
Pension contributions and use of provisions - 194 - 265
Interest and taxes (paid)/received -2 336 -3 008
Dividends received 19 6
Cash flow from operating activities 4 714 2 453
Investing activities
Net capex -1 609 -1 419
Acquisition and sale of subsidiaries, net of cash acquired/disposed of - 220 -1 035
Proceeds from the sale of/(investments in) short-term debt securities - 71 -55 905
Proceeds from the sale of assets held for sale 228 58
Other - 91 2
Cash flow from investing activities -1 763 -58 299
Financing activities
Dividends paid -4 556 -3 929
Net (payments on)/proceeds from borrowings 1 507 58 801
Net proceeds from the issue of share capital 3 -
Share buyback -1 000 -
Other (including net finance cost other than interest) - 377 75
Cash flow from financing activities -4 423 54 947
Net increase/(decrease) in cash and cash equivalents -1 472 - 899
HY16 recorded a decrease in cash and cash equivalents of 899 million USD compared to a decrease of
1 472 million USD in HY15, with the following movements:
• Cash flow from operating activities reached 2 453 million USD in HY16 compared to 4 714 million
USD in HY15, with the decrease mainly explained by unfavorable foreign exchange translational
impacts, higher taxes paid and a difficult comparable on working capital due to lower trade payables
as a result of reduced production volumes in Brazil.
• Cash Flow from investing activities was 58 299 million USD in HY16 as compared to 1 763 million
USD in HY15. In order to support the proposed combination with SABMiller, AB InBev issued a series
of bonds in 1Q16. The excess liquidity resulting from these issuances was invested primarily in US
Treasury Bills pending the closing of the combination.
AB InBev’s net capital expenditures amounted to 1 419 million USD in HY16 compared to 1 609
million USD in HY15. Approximately 49% of the gross capital expenditures in HY16 was used to
improve the company’s production facilities, approximately 36% was used for logistics and
commercial investments, and approximately 15% was used to improve administrative capabilities
and the purchase of hardware and software.
• The cash inflow from financing activities amounted to 54 947 million USD in HY16, as compared to a
cash outflow of 4 423 million USD in HY15, driven mainly by the cash inflow from issuance of bonds
in 1Q16 related to the pre-funding of the proposed combination with SABMiller.
AB InBev’s net debt as of 30 June 2016 was 44.9 billion USD, an increase from 42.2 billion USD as of
31 December 2015. The net debt to normalized EBITDA ratio increased from 2.51x as of 31 December
2015 to 2.77x as of 30 June 2016, both on a reported basis.
As of 30 June 2016, the company had total liquidity of 70 977 million USD, which consisted of 9 000
million USD available under committed long-term credit facilities and 61 977 million USD of cash, cash
equivalents and short-term investments in debt securities less bank overdrafts. Although AB InBev may
borrow such amounts to meet its liquidity needs, the company principally relies on cash flows from
operating activities to fund its continuing operations.
Figure 20. Terms and debt repayment schedule as of 30 June 2016 (billion USD)
67.3
Please refer to the company's website to view this graph
22.1
18.6
7.6 6.6 6.1 9.1 10.2
5.9 4.6
1 year or less 1-2 years 2-3 years 3-5 years More than 5 years
31 December 2015 30 June 2016
RECENT EVENTS
Approval of proposed combination with SABMiller by the United States Department of Justice
On 20 July 2016, AB InBev announced that it had entered into a consent decree with the United States
Department of Justice, which clears the way for U.S. approval of its proposed combination with SABMiller
plc.
As part of the consent decree and consistent with AB InBev’s approach to proactively address potential
regulatory concerns, the company agreed to divest SABMiller’s U.S. interest in MillerCoors to Molson
Coors. This divestiture, which was previously announced between AB InBev and Molson Coors, is
conditional upon the successful closing of the combination of AB InBev with SABMiller.
The terms of the consent decree formalize prior commitments made by the company’s U.S. entity
Anheuser-Busch (“AB”) including:
* AB will not acquire a distributor if doing so would result in more than 10% of its annual volume
being distributed through wholly-owned distributorships in the U.S.
* AB will not terminate any wholesalers as a result of the combination with SABMiller.
In addition, certain aspects of the company’s U.S. sales programs and policies will be reviewed and
modified to conform to the consent decree.
Revised and Final offer for SABMiller PLC
On 26 July we announced revised and final terms of our offer to acquire the entire issued and to be issued
share capital of SABMiller.
Pursuant to the revised and final terms, each SABMiller shareholder will now be entitled to receive £45.00
in cash for each SABMiller share. The revised Cash Consideration represents:
* An increase of £1.00 per SABMiller Share over the £44.00 Cash Consideration set out in the
11 November 2015 announcement
* A premium of approximately 53% to SABMiller’s closing share price of £29.34 on 14 September
2015 (being the last Business Day prior to renewed speculation of an approach from AB InBev)
* A premium of approximately 39% to SABMiller’s three month volume weighted average share price
of £32.31 to 14 September 2015
Pursuant to the revised and final terms of the Partial Share Alternative, SABMiller shareholders will now be
entitled to elect to receive £4.6588 in cash and 0.483969 Restricted Shares for each SABMiller share.
The revised Partial Share Alternative represents, as of 25 July 2016:
* A premium of approximately 74% to SABMiller’s closing share price of £29.34 on 14 September
2015 (being the last Business Day prior to renewed speculation of an approach from AB InBev)
* A premium of approximately 58% to SABMiller’s three-month volume weighted average share
price of £32.31 to 14 September 2015
We believe that the revised and final offer represents a compelling opportunity for all SABMiller
shareholders and hope to receive the recommendation of the SABMiller board for the cash consideration at
the appropriate time. SABMiller’s two largest shareholders have undertaken to vote in favor of the
transaction, as have the SABMiller directors with respect to their personal shareholdings.
Over the last 9 months, we have worked very closely and collaboratively with the SABMiller team. We
have made very good progress with them on the regulatory process around the world, and have also
worked with them on bond financing and the disposals in the US, China and Europe, as well as general
integration planning. It remains our objective to close the transaction in 2016.
NOTES
AB InBev’s 2Q16 and 2Q15 and HY16 and HY15 reported numbers are based on unaudited interim consolidated financial
statements prepared in accordance with IFRS. Unless otherwise indicated, amounts are presented in million USD.
To facilitate the understanding of AB InBev’s underlying performance, the analyses of growth, including all comments in
this press release, unless otherwise indicated, are based on organic growth and normalized numbers. In other words,
financials are analyzed eliminating the impact of changes in currencies on translation of foreign operations, and scope
changes. Scope changes represent the impact of acquisitions and divestitures, the start or termination of activities or
the transfer of activities between segments, curtailment gains and losses and year over year changes in accounting
estimates and other assumptions that management does not consider as part of the underlying performance of the
business.
All references per hectoliter (per hl) exclude US non-beer activities. To eliminate the effect of geography mix, i.e. the
impact of stronger volume growth coming from countries with lower revenue per hl, and lower Cost of Sales per hl, we
are also presenting, where specified, organic growth per hectoliter figures on a constant geographic basis. When we
make estimations on a constant geographic basis, we assume each country in which we operate accounts for the same
percentage of our global volume as in the same period of the previous year.
Whenever presented in this document, all performance measures (EBITDA, EBIT, profit, tax rate, EPS) are presented on
a “normalized” basis, which means they are presented before non-recurring items. Non-recurring items are either
income or expenses which do not occur regularly as part of the normal activities of the Company. They are presented
separately because they are important for the understanding of the underlying sustainable performance of the Company
due to their size or nature. Normalized measures are additional measures used by management, and should not replace
the measures determined in accordance with IFRS as an indicator of the Company’s performance. Values in the figures
and annexes may not add up, due to rounding.
2Q16 and HY16 EPS is based upon a weighted average of 1 641 million shares compared to 1 640 million shares for
2Q15 and HY15.
Legal Disclaimer
This release contains “forward-looking statements”. These statements are based on the current expectations and views
of future events and developments of the management of Anheuser-Busch InBev and are naturally subject to
uncertainty and changes in circumstances. The forward-looking statements contained in this release include, among
other things, statements relating to Anheuser-Busch InBev’s proposed business combination with SABMiller and other
statements other than historical facts. Forward-looking statements include statements typically containing words such
as “will”, “may”, “should”, “believe”, “intends”, “expects”, “anticipates”, “targets”, “estimates”, “likely”, “foresees” and
words of similar import. All statements other than statements of historical facts are forward-looking statements. You
should not place undue reliance on these forward-looking statements, which reflect the current views of the
management of Anheuser-Busch InBev, are subject to numerous risks and uncertainties about Anheuser-Busch InBev
and SABMiller and are dependent on many factors, some of which are outside of Anheuser-Busch InBev’s control. There
are important factors, risks and uncertainties that could cause actual outcomes and results to be materially different,
including the satisfaction of the pre-conditions and the conditions to the transactions described herein, the ability to
obtain the regulatory approvals related to the transactions and the ability to satisfy any conditions required to obtain
such approvals, and the risks and uncertainties relating to Anheuser-Busch InBev described under Item 3.D of
Anheuser-Busch InBev’s Annual Report on Form 20-F (“Form 20-F”) filed with the US Securities and Exchange
Commission (“SEC”) on 14 March 2016. Other unknown or unpredictable factors could cause actual results to differ
materially from those in the forward-looking statements. There can be no certainty that the proposed transactions will
be completed on the terms described herein or at all.
The forward-looking statements should be read in conjunction with the other cautionary statements that are included
elsewhere, including Anheuser-Busch InBev’s most recent Form 20-F and other reports furnished on Form 6-K, and any
other documents that Anheuser-Busch InBev or SABMiller have made public. Any forward-looking statements made in
this communication are qualified in their entirety by these cautionary statements and there can be no assurance that
the actual results or developments anticipated by Anheuser-Busch InBev will be realized or, even if substantially
realized, that they will have the expected consequences to, or effects on, Anheuser-Busch InBev or its business or
operations. Except as required by law, Anheuser-Busch InBev undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
Future SEC Filings and This Filing: Important Information
In the event that AB InBev and SABMiller implement a transaction relating to the proposed business combination
between AB InBev and SABMiller, AB InBev or Newbelco SA/NV (a Belgian limited liability company formed for the
purposes of such transaction) may be required to file relevant materials with the SEC. Such documents, however, are
not currently available. INVESTORS ARE URGED TO READ ANY DOCUMENTS REGARDING SUCH POTENTIAL
TRANSACTION IF AND WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain a free copy of such filings without charge, at the SEC’s website (http://www.sec.gov)
once such documents are filed with the SEC. Copies of such documents may also be obtained from AB InBev, without
charge, once they are filed with the SEC.
Notice to US investors
US holders of SABMiller shares should note that the steps of any transaction requiring approval by SABMiller
shareholders may be implemented under a UK scheme of arrangement provided for under English company law. If so,
it is expected that any shares to be issued under the transaction to SABMiller shareholders would be issued in reliance
upon the exemption from the registration requirements of the US Securities Act of 1933, provided by Section 3(a)(10)
thereof and would be subject to UK disclosure requirements (which are different from those of the United States). The
transaction may instead be implemented by way of a takeover offer under English law. If so, any securities to be issued
under the transaction to SABMiller shareholders will be registered under the US Securities Act, absent an applicable
exemption from registration. If the transaction is implemented by way of UK takeover offer, it will be done in
compliance with the applicable rules under the US Exchange Act of 1934, including any applicable exemptions provided
under Rule 14d-1(d) thereunder.
This filing shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
The second quarter 2016 (2Q16) and half year (HY16) financial data set out in Figure 1 (except for the volume
information), Figures 7 to 9, 11, 13 to 15 and 18 to 19 of this press release have been extracted from the group’s
unaudited condensed consolidated interim financial statements as of and for the six months ended 30 June 2016, which
have been reviewed by our statutory auditors Deloitte Bedrijfsrevisoren BCVBA in accordance with International
Standard on Review Engagements 2410, “Review of Interim Financial Information Performed by the Independent
Auditor of the Entity” and the standards of the Public Company Accounting Oversight Board (United States). The
auditors concluded that, based on their review, nothing had come to their attention that caused them to believe that
those interim financial statements were not presented fairly, in all material respects, in accordance with IAS 34 “Interim
Financial Reporting”, as issued by the IASB and as adopted by the European Union. Financial data included in Figures 3
to 6, 10, 12, 16 to 17 and 20 have been extracted from the underlying accounting records as of and for the six months
ended 30 June 2016 (except for the volume information).
CONFERENCE CALL AND WEBCAST
Investor Conference call and Webcast on Friday, July 29, 2016:
3.00pm Brussels / 2.00pm London / 9.00am New York
Registration details
Webcast (listen-only mode)
http://event.on24.com/r.htm?e=1117086&s=1&k=C2DC39A8AFD9465F463B7947C374431C
Conference call (with interactive Q&A)
http://www.directeventreg.com/registration/event/21564411
ANHEUSER-BUSCH INBEV CONTACTS
Media Investors
Marianne Amssoms Graham Staley
Tel: +1-212-573-9281 Tel: +1-212-573-4365
E-mail: marianne.amssoms@ab-inbev.com E-mail: graham.staley@ab-inbev.com
Karen Couck Lauren Abbott
Tel: +1-212-573-9283 Tel: +1-212-573-9287
E-mail: karen.couck@ab-inbev.com E-mail: lauren.abbott@ab-inbev.com
Kathleen Van Boxelaer Heiko Vulsieck
Tel: +32-16-27-68-23 Tel: +32-16-27-68-88
E-mail: kathleen.vanboxelaer@ab-inbev.com E-mail: heiko.vulsieck@ab-inbev.com
29 July 2016
JSE Sponsor: Deutsche Securities (SA) Proprietary Limited
About Anheuser-Busch InBev
Anheuser-Busch InBev is a publicly traded company (Euronext: ABI) based in Leuven, Belgium, with a secondary listing
on the Mexico (MEXBOL: ABI) and South Africa (JSE: ANB) stock exchanges and with American Depositary Receipts on
the New York Stock Exchange (NYSE: BUD). It is the leading global brewer and one of the world’s top five consumer
products companies. Beer, the original social network, has been bringing people together for thousands of years and
the company’s portfolio of well over 200 beer brands continues to forge strong connections with consumers. This
includes global brands Budweiser®, Corona® and Stella Artois®; international brands Beck’s®, Leffe® and
Hoegaarden®; and local champions Bud Light®, Skol®, Brahma®, Antarctica®, Quilmes®, Victoria®, Modelo
Especial®, Michelob Ultra®, Harbin®, Sedrin®, Klinskoye®, Sibirskaya Korona®, Chernigivske®, Cass® and Jupiler®.
Anheuser-Busch InBev’s dedication to quality goes back to a brewing tradition of more than 600 years and the Den
Hoorn brewery in Leuven, Belgium, as well as the pioneering spirit of the Anheuser & Co brewery, with origins in St.
Louis, USA since 1852. Geographically diversified with a balanced exposure to developed and developing markets,
Anheuser Busch InBev leverages the collective strengths of more than 150 000 employees based in 26 countries
worldwide. In 2015, AB InBev realized 43.6 billion US dollar revenue. The company strives to be the Best Beer
Company Bringing People Together For a Better World. For more information, please visit: www.ab-inbev.com.
Annex 1
AB InBev Worldwide 2Q15 Scope Currency Organic 2Q16 Organic
translation growth growth
Total volumes (thousand hls) 116 799 95 - -1 987 114 908 -1.7%
of which AB InBev own beer 105 409 406 - -817 104 999 -0.8%
Revenue 11 052 28 -716 443 10 806 4.0%
Cost of sales -4 462 1 270 -34 -4 225 -0.8%
Gross profit 6 590 28 -446 409 6 582 6.2%
Distribution expenses -1 066 -15 98 -42 -1 025 -3.9%
Sales and marketing expenses -1 757 -3 115 -327 -1 970 -18.8%
Administrative expenses - 618 -17 40 -28 - 624 -4.5%
Other operating income/(expenses) 233 -30 -25 83 259 40.9%
Normalized EBIT 3 382 -38 -217 95 3 222 2.9%
Normalized EBITDA 4 156 -35 -283 173 4 011 4.3%
Normalized EBITDA margin 37.6% 37.1% 8 bp
North America 2Q15 Scope Currency Organic 2Q16 Organic
translation growth growth
Total volumes (thousand hls) 31 090 324 - 112 31 526 0.4%
Revenue 4 118 70 -18 92 4 263 2.2%
Cost of sales -1 598 -35 4 83 -1 544 5.2%
Gross profit 2 520 37 -14 175 2 717 7.0%
Distribution expenses - 340 -12 3 15 - 335 4.3%
Sales and marketing expenses - 585 -10 2 -140 - 734 -24.1%
Administrative expenses - 128 -12 1 - - 139 0.4%
Other operating income/(expenses) 4 1 - 16 20 -
Normalized EBIT 1 471 2 -10 66 1 529 4.5%
Normalized EBITDA 1 657 5 -10 81 1 732 4.8%
Normalized EBITDA margin 40.2% 40.6% 103 bp
Mexico 2Q15 Scope Currency Organic 2Q16 Organic
translation growth growth
Total volumes (thousand hls) 10 886 - - 788 11 674 7.2%
Revenue 1 055 -7 -157 100 992 9.5%
Cost of sales - 264 -3 41 -33 - 261 -12.7%
Gross profit 791 -10 -116 67 732 8.5%
Distribution expenses - 100 -1 16 -17 - 102 -16.7%
Sales and marketing expenses - 171 10 26 -35 - 169 -21.5%
Administrative expenses - 93 - 12 -3 - 82 -2.2%
Other operating income/(expenses) 57 -25 -7 15 41 47.4%
Normalized EBIT 484 -24 -68 29 420 6.1%
Normalized EBITDA 569 -24 -80 36 500 6.6%
Normalized EBITDA margin 53.9% 50.4% -143 bp
Latin America - North 2Q15 Scope Currency Organic 2Q16 Organic
translation growth growth
Total volumes (thousand hls) 27 477 436 - -1 280 26 632 -4.6%
Revenue 1 995 60 -224 35 1 864 1.7%
Cost of sales - 754 -31 92 -17 - 711 -2.3%
Gross profit 1 241 29 -132 18 1 154 1.4%
Distribution expenses - 266 -4 35 -26 - 260 -9.7%
Sales and marketing expenses - 251 -5 32 -18 - 242 -7.4%
Administrative expenses - 112 -6 14 -1 - 105 -1.2%
Other operating income/(expenses) 106 1 -12 -5 91 -4.4%
Normalized EBIT 718 15 -64 -33 636 -4.6%
Normalized EBITDA 903 15 -89 -10 819 -1.1%
Normalized EBITDA margin 45.3% 43.9% -125 bp
Annex 1
Latin America - South 2Q15 Scope Currency Organic 2Q16 Organic
translation growth growth
Total volumes (thousand hls) 7 765 -485 - -1 077 6 202 -14.8%
Revenue 696 -16 -180 27 527 4.1%
Cost of sales - 288 12 66 10 - 200 3.4%
Gross profit 408 -4 -114 37 327 9.2%
Distribution expenses - 70 3 24 -13 - 56 -19.7%
Sales and marketing expenses - 93 1 29 -19 - 81 -20.4%
Administrative expenses - 34 1 10 -3 - 25 -7.5%
Other operating income/(expenses) 5 -8 -1 5 - -
Normalized EBIT 216 -7 -51 8 165 3.7%
Normalized EBITDA 264 -7 -71 28 216 11.1%
Normalized EBITDA margin 37.9% 41.0% 255 bp
Europe 2Q15 Scope Currency Organic 2Q16 Organic
translation growth growth
Total volumes (thousand hls) 12 361 -110 - -98 12 152 -0.8%
of which AB InBev own beer 11 931 -110 - -17 11 805 -0.1%
Revenue 1 147 -9 -33 52 1 156 4.6%
Cost of sales - 455 - 19 -21 - 457 -4.8%
Gross profit 692 -9 -14 31 699 4.5%
Distribution expenses - 117 -2 4 -2 - 116 -1.6%
Sales and marketing expenses - 245 1 7 -42 - 279 -17.3%
Administrative expenses - 74 - - 7 - 68 8.6%
Other operating income/(expenses) 4 2 -1 3 7 46%
Normalized EBIT 260 -8 -5 -5 243 -1.8%
Normalized EBITDA 345 -8 -7 - 331 0.1%
Normalized EBITDA margin 30.1% 28.6% -128 bp
Asia Pacific 2Q15 Scope Currency Organic 2Q16 Organic
translation growth growth
Total volumes (thousand hls) 25 529 179 - -441 25 266 -1.7%
Revenue 1 528 14 -79 63 1 526 4.1%
Cost of sales -741 -8 36 14 -698 1.9%
Gross profit 787 6 -42 77 828 9.7%
Distribution expenses -124 -2 6 1 -118 1.0%
Sales and marketing expenses -365 1 19 -30 -373 -8.3%
Administrative expenses -78 -1 4 - -74 -
Other operating income/(expenses) 54 - -4 39 87 74.5%
Normalized EBIT 274 5 -18 87 349 31.3%
Normalized EBITDA 422 5 -25 85 487 20.0%
Normalized EBITDA margin 27.6% 31.9% 423 bp
Global Export and Holding 2Q15 Scope Currency Organic 2Q16 Organic
Companies translation growth growth
Total volumes (thousand hls) 1 693 -248 - 10 1 454 0.7%
Revenue 514 -85 -26 75 478 17.4%
Cost of sales -363 64 15 -70 -353 -22.8%
Gross profit 151 -21 -12 5 125 4.0%
Distribution expenses -48 3 10 1 -35 0.9%
Sales and marketing expenses -47 -3 2 -43 -91 -86.4%
Administrative expenses -100 -1 -1 -29 -130 -29.5%
Other operating income/(expenses) 3 - - 9 12 -
Normalized EBIT -41 -22 -1 -57 -120 -83.8%
Normalized EBITDA -5 -21 - -46 -72 -
Annex 2
AB InBev Worldwide HY15 Scope Currency Organic HY16 Organic
translation growth growth
Total volumes (thousand hls) 224 162 - 575 - -3 811 219 776 -1.7%
of which AB InBev own beer 200 498 487 - -2 106 198 880 -1.1%
Revenue 21 505 - 33 -2 026 760 20 206 3.6%
Cost of sales -8 662 61 706 - 109 -8 002 -1.3%
Gross profit 12 843 28 -1 320 652 12 204 5.1%
Distribution expenses -2 125 -13 272 - 99 -1 964 -4.7%
Sales and marketing expenses -3 343 5 309 - 539 -3 568 -16.3%
Administrative expenses -1 263 - 28 111 1 -1 179 0.1%
Other operating income/(expenses) 483 - 51 - 70 61 422 14.1%
Normalized EBIT 6 595 - 60 - 697 76 5 915 1.2%
Normalized EBITDA 8 123 - 55 - 868 274 7 474 3.4%
Normalized EBITDA margin 37.8% 37.0% -6 bp
North America HY15 Scope Currency Organic HY16 Organic
translation growth growth
Total volumes (thousand hls) 58 416 205 - - 182 58 439 -0.3%
Revenue 7 719 32 -58 101 7 795 1.3%
Cost of sales -3 073 8 14 148 -2 902 4.9%
Gross profit 4 646 41 -44 249 4 892 5.4%
Distribution expenses - 656 -10 11 19 - 636 2.9%
Sales and marketing expenses -1 085 - 11 10 - 215 -1 302 -20.0%
Administrative expenses - 254 - 22 3 11 -262 4.2%
Other operating income/(expenses) 20 -9 - 21 31 -
Normalized EBIT 2 671 - 12 -21 85 2 723 3.2%
Normalized EBITDA 3 038 -8 -23 109 3 116 3.6%
Normalized EBITDA margin 39.4% 40.0% 89 bp
Mexico HY15 Scope Currency Organic HY16 Organic
translation growth growth
Total volumes (thousand hls) 19 991 - - 1 971 21 961 9.9%
Revenue 1 948 - 13 -333 244 1 847 12.6%
Cost of sales - 508 -4 91 - 82 - 504 -16.4%
Gross profit 1 440 - 17 -242 162 1 343 11.3%
Distribution expenses - 197 -2 36 - 35 - 198 -17.7%
Sales and marketing expenses - 342 20 62 - 86 - 345 -26.7%
Administrative expenses - 196 - 28 9 - 158 4.8%
Other operating income/(expenses) 109 - 39 -13 13 70 19.0%
Normalized EBIT 814 - 36 -128 64 712 8.1%
Normalized EBITDA 986 - 36 -157 79 871 8.2%
Normalized EBITDA margin 50.6% 47.2% -197 bp
Latin America - North HY15 Scope Currency Organic HY16 Organic
translation growth growth
Total volumes (thousand hls) 58 759 587 - -3 574 55 772 -6.0%
Revenue 4 484 73 - 834 - 13 3 709 -0.3%
Cost of sales -1 573 - 38 289 - 18 -1 340 -1.1%
Gross profit 2 911 35 - 545 - 31 2 370 -1.1%
Distribution expenses - 587 -5 119 - 32 - 504 -5.4%
Sales and marketing expenses - 547 -5 109 - 30 - 473 -5.5%
Administrative expenses - 241 -6 43 14 - 190 5.7%
Other operating income/(expenses) 274 1 -49 - 37 189 -13.5%
Normalized EBIT 1 810 20 - 324 - 116 1 391 -6.4%
Normalized EBITDA 2 170 20 - 402 - 53 1 735 -2.4%
Normalized EBITDA margin 48.4% 46.8% -104 bp
Annex 2
Latin America - South HY15 Scope Currency Organic HY16 Organic
translation growth growth
Total volumes (thousand hls) 17 857 -1 060 - -1 578 15 219 -9.4%
Revenue 1 614 -34 -485 181 1 276 11.5%
Cost of sales - 619 26 158 -8 - 443 -1.4%
Gross profit 995 -8 -327 173 833 17.6%
Distribution expenses - 153 6 59 -40 - 128 -27.2%
Sales and marketing expenses - 188 1 63 -47 - 171 -25.3%
Administrative expenses - 66 1 20 -6 - 50 -9.2%
Other operating income/(expenses) - -8 -2 13 2 -
Normalized EBIT 588 -8 -186 93 486 16.1%
Normalized EBITDA 681 -8 -223 129 580 19.2%
Normalized EBITDA margin 42.2% 45.5% 294 bp
Europe HY15 Scope Currency Organic HY16 Organic
translation growth growth
Total volumes (thousand hls) 20 657 - 166 - 51 20 542 0.2%
of which AB InBev own beer 19 898 - 166 - 183 19 916 0.9%
Revenue 1 922 - 14 - 98 87 1 896 4.6%
Cost of sales - 797 - 50 - 39 - 786 -5.0%
Gross profit 1 125 - 14 -48 48 1 110 4.3%
Distribution expenses - 203 -3 12 - 11 - 204 -5.4%
Sales and marketing expenses - 438 1 24 - 62 - 475 -14.2%
Administrative expenses - 154 - 6 13 - 136 8.1%
Other operating income/(expenses) 5 4 -1 -3 5 -35.1%
Normalized EBIT 335 - 12 -7 - 16 300 -4.8%
Normalized EBITDA 499 - 12 -16 -7 465 -1.4%
Normalized EBITDA margin 26.0% 24.5% -147 bp
Asia Pacific HY15 Scope Currency Organic HY16 Organic
translation growth growth
Total volumes (thousand hls) 45 286 303 - -530 45 058 -1.2%
Revenue 2 822 25 -152 88 2 784 3.1%
Cost of sales -1 391 - 14 73 -39 -1 370 -2.8%
Gross profit 1 431 11 -78 49 1 414 3.4%
Distribution expenses - 231 -3 12 1 - 220 0.6%
Sales and marketing expenses - 645 3 35 -35 - 641 -5.4%
Administrative expenses - 155 -1 8 1 - 146 0.9%
Other operating income/(expenses) 65 - -5 47 106 73.3%
Normalized EBIT 465 11 -29 64 512 13.6%
Normalized EBITDA 762 11 -45 96 825 12.5%
Normalized EBITDA margin 27.0% 29.6% 248 bp
Global Export and Holding HY15 Scope Currency Organic HY16 Organic
Companies translation growth growth
Total volumes (thousand hls) 3 197 - 444 - 31 2 784 1.1%
Revenue 997 - 103 -67 73 900 8.1%
Cost of sales - 702 82 32 -71 - 658 -11.1%
Gross profit 295 -21 -35 2 242 0.6%
Distribution expenses - 98 4 24 -1 - 72 -1.5%
Sales and marketing expenses - 98 -5 7 -65 - 161 -63.6%
Administrative expenses - 197 -1 3 -41 - 236 -21.1%
Other operating income/(expenses) 11 - - 7 19 63.4%
Normalized EBIT - 87 - 23 -1 -98 - 209 -79.5%
Normalized EBITDA - 15 - 22 -2 -79 - 118 -
Date: 29/07/2016 07:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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