Anheuser-Busch InBev - 2Q16 preview: UBS and Consensus looking for 2Q organic EBITDA c6%
AB InBev reports 2Q earnings on 29th July at 6am UK/7am CET. We forecast Q2 organic sales +5.7%
(in line with consensus) and clean EBITDA of $4,057m (-1.3% below company compiled consensus
published today). At the normalized EPS line we forecast $1.07 (-9% yoy), in-line with consensus of
$1.08/share. See page 3 for our full detailed and divisional estimates vs consensus.
US vols & price/mix to improve sequentially, Mexico momentum to continue
We forecast US Shipments to Wholesalers flat in 2Q vs -1.2% in 1Q. For total North America,
consensus forecasts volumes -0.9% vs UBSe +1.2% driven by Canada. We expect US price/mix to
grow +1.9% organically, a 70bps acceleration on 1Q driven by positive mix (see our recent review of
the latest Nielsen data) and an easier comparative. For North America overall in 2Q, consensus
forecasts clean EBITDA +2.0% organically and reported margins +30bps yoy. We estimate North
America EBITDA to grow +4.4% organically yoy. In Mexico we forecast another strong quarter with
volume up 8%, in line with consensus. However we are below consensus on EBITDA given our
expectations of rising marketing costs as a % of sales and continued capacity constraints ahead of new
capacity coming in early 2017.
UBSe Brazil beer volumes +3% vs -10% in 1Q
We expect Brazil beer volumes to rebound to +3% vs -10% in 1Q, driven by an easier comparatives
and the absence of some technical which weighed on 1Q (weather, earlier Carnival). We note that
production data for Brazil shows industry volumes +3.2% in 2Q. See recent review of production and
weather trends by our LatAm team – better times are coming. For total LatAm North in 2Q, consensus
forecasts volumes +2.8%, price/mix +6.2% and organic EBITDA +9% (UBSe +6%).
Valuation: pro-forma P/E 19x 2018E, in line with Consumer Staples
AB InBev currently trades on a pro-forma PE of 19.3x 2018e, in line with the average of European
Consumer Staples.