AB InBev - Q3 2015 Results


• Largest global beer company with annual sales of more than USD40bn.
• Dominant position in two of the world's most profitable beer markets: Brazil and the US.
• Total debt to EBITDA has been cut down from a five-year high of 7.8 to 2.9 in its last financial year, following InBev's USD52bn acquisition of Anheuser-Busch in 2008.
• By far the most profitable of the big three beer companies; the other two are SABMiller and Heineken.


• While group margins are extremely strong, higher exposure to developed markets compared with SABMiller in particular means organic growth is harder to come by.
• Limited exposure to Asia and in Africa, where beer is growing strongly.
• Expected slowdown in Brazilian beer on the back of anticipated rise in excise tax rates a concern given Brazil's importance to group growth.


• Increasing investment into fast growing craft beer in the US.
• Having significantly lowered its debt over the past two years, AB InBev could be ready to make more acquisitions as it looks to re-weight its portfolio more towards growth markets.
• Could eventually make another huge acquisition, possibly involving SABMiller.


• Another slowdown in the US in particular where the company has a lot exposure and where per capita beer consumption is declining.
• More tax rises in Brazil.
• Increase in key input costs associated with producing beer, including malt, wheat and barley.

Company Overview

AB InBev (ABI) is the world's largest beer company by annual sales (USD43bn in 2013) and controls around half of the US beer market. Brands include the flagship Budweiser, which is the world's bestselling beer brand; Bud Light, the world's best-selling light beer; and the Michelob and Natural ranges. The company's US beers are brewed in 10 countries, with Canada being its largest market outside the US. InBev acquired Anheuser-Busch in August 2008 for USD52bn.


ABI is phenomenally profitable. By way of comparison, in its last financial year to December 31 2013, its operating margin was 68% higher than SABMiller's and 168% higher than Heineken's; these two companies represent its core peer group. The driving factor behind this level of margin outperformance is ABI's dominant market position in the US and Brazil, where the structure of the beer industry works very much in its favour.