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ANHEUSER-BUSCH INBEV SA/NV - Anheuser-Busch InBev reports Second Quarter and Half Year 2019 Results

Release Date: 25/07/2019 07:34
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Anheuser-Busch InBev reports Second Quarter and Half Year 2019 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: ANB
      NYSE ADS Code: BUD
      JSE Share Code: ANH
      ISIN: BE0974293251
      (“AB InBev” or the “Company”)
      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.
      Except where otherwise stated, the comments below are based on organic growth figures and refer to 2Q19 versus the same period of last year. For
      important disclaimers and more information on 2018 Restated and the Reference Base, please refer to pages 16 and 17.


      Anheuser-Busch InBev reports Second Quarter and Half Year 2019 Results
          HIGHLIGHTS
      •     Best quarterly volume performance in over five years with total growth of 2.1%, driven by strong
            performances in many of our key markets including Mexico, Brazil, Europe, South Africa, Nigeria,
            Australia and Colombia
      •     Top-line growth of 6.2% and EBITDA growth of 9.4% with margin expansion of 123 bps to 42.0%
      •     Continued success of our premiumization strategy supporting top and bottom line growth with global
            brand revenue growth of 8.0% (11.3% outside of the brands’ home markets) and High End Company
            revenue growth of nearly 20%
      •     Committed to a Better World – We are halfway to reaching our goal of securing 100% of our purchased
            electricity from renewable sources by 2025


          KEY FIGURES
      •     Revenue: Revenue grew by 6.2% in the quarter, with revenue per hl growth of 3.8%, driven by healthy
            volume growth, global premiumization and revenue management initiatives. In HY19, revenue grew by
            6.0%, with revenue per hl growth of 4.2%.
      •     Volume: Total volumes grew by 2.1% in 2Q19, with own beer volumes up 2.2% and non-beer volumes
            up 1.8%. In HY19, total volumes grew by 1.7%, with own beer volumes up 1.7% and non-beer volumes
            up 3.4%.
      •     Global Brands: Combined revenues of our three global brands, Budweiser, Stella Artois and Corona,
            grew by 8.0% globally, and by 11.3% outside of their respective home markets. In HY19, the combined
            revenues of our global brands grew by 8.2% globally and by 12.4% outside of their home markets.
      •     Cost of Sales (CoS): CoS increased by 7.2% in 2Q19 and by 4.4% on a per hl basis. In HY19, CoS
            increased by 6.6% and by 4.5% on a per hl basis.
      •     EBITDA: EBITDA grew by 9.4% in the quarter, with EBITDA margin expansion of 123 bps to 42.0%,
            as a result of top-line growth and enhanced by premiumization and ongoing cost discipline. In HY19,
            EBITDA grew by 8.8% and EBITDA margin expanded by 104 bps to 40.9%.
      •     Net finance results: Net finance costs (excluding non-recurring net finance results) were 1 004 million
            USD in 2Q19 compared to 1 301 million USD in 2Q18. The improvement was primarily due to a mark-


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           to-market gain of 173 million USD in 2Q19 linked to the hedging of our share-based payment programs,
           compared to a loss of 16 million USD in 2Q18, resulting in a swing of 189 million USD. Net finance
           costs were 1 365 million USD in HY19 as compared to 2 878 million USD in HY18.
      •    Income taxes: Normalized effective tax rate (ETR) increased from 24.7% in 2Q18 to 25.9% in 2Q19.
           Excluding the impact of gains relating to the hedging of our share-based payment programs, our
           normalized ETR was 27.2% in 2Q19 as compared to 24.6% in 2Q18. Normalized ETR decreased from
           26.1% in HY18 to 23.1% in HY19 and, excluding the impact of gains relating to the hedging of our
           share-based payment programs, our normalized ETR increased from 25.0% in HY18 to 27.4% in HY19.
      •    Profit: Normalized profit attributable to equity holders of AB InBev was 2 470 million USD in 2Q19
           versus 2 159 million USD in 2Q18 and was 4 986 million USD in HY19 versus 3 602 million USD in
           HY18. Underlying profit (normalized profit attributable to equity holders of AB InBev excluding mark-to-
           market gains linked to the hedging of our share-based payment programs and the impact of
           hyperinflation) was 2 295 million USD in 2Q19 as compared to 2 175 million USD in 2Q18 and was
           3 866 million USD in HY19 as compared to 3 860 million USD in HY18.
      •    Earnings per share (EPS): Normalized EPS in 2Q19 was 1.25 USD, an increase from 1.09 USD in
           2Q18, positively impacted by mark-to-market gains linked to the hedging of our share-based payment
           programs. Normalized EPS in HY19 was 2.52 USD, an increase from 1.82 USD in HY18. Underlying
           EPS (normalized EPS excluding mark-to-market gains linked to the hedging of our share-based
           payment programs and the impact of hyperinflation) was 1.16 USD in 2Q19, an increase from 1.10
           USD in 2Q18 and was 1.95 USD in HY19, unchanged from 1.95 USD in HY18.
      •    Combination with SAB: The business integration resulted in synergies and cost savings of 113 million
           USD in 2Q19. We have now delivered 3 151 million USD of the expected 3.2 billion USD synergies and
           cost savings on a constant currency basis as of August 2016.
      •    Deleveraging: Net debt to normalized EBITDA decreased to 4.58x at 30 June 2019 from 4.61x at 31
           December 2018. We expect our net debt to EBITDA ratio to be below 4x by the end of 2020.
      •    2019 Half Year Financial Report: The report is available on our website at www.ab-inbev.com.


      Figure 1. Consolidated performance (million USD)
                                                                                    2Q18              2Q18      2Q19    Organic
                                                                                 Restated   Reference Base              growth
      Total Volumes (thousand hls)                                                143 685          143 685    146 120       2.1%
                                                           AB InBev own beer      127 632          127 632    130 465       2.2%
                                                            Non-beer volumes       14 733           14 733     14 558       1.8%
                                                          Third party products      1 320             1 320     1 097      -6.6%
      Revenue                                                                      13 992           13 764     13 963       6.2%
      Gross profit                                                                  8 828             8 672     8 700       5.5%
      Gross margin                                                                 63.1%             63.0%     62.3%     -36 bps
      Normalized EBITDA                                                             5 694             5 582     5 862       9.4%
      Normalized EBITDA margin                                                     40.7%             40.6%     42.0%    123 bps
      Normalized EBIT                                                               4 525             4 428     4 713     12.2%
      Normalized EBIT margin                                                       32.3%             32.2%     33.8%    179 bps

      Profit attributable to equity holders of AB InBev                             1 935                       2 484
      Normalized profit attributable to equity holders of AB InBev                  2 159                       2 470
      Underlying profit attributable to equity holders of AB InBev                  2 175                       2 295

      Earnings per share (USD)                                                       0.98                        1.25
      Normalized earnings per share (USD)                                            1.09                        1.25
      Underlying earnings per share (USD)                                            1.10                        1.16




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                                                                                         HY18               HY18                HY19              Organic
                                                                                      Restated    Reference Base                                  growth
      Total Volumes (thousand hls)                                                     278 515           278 515              279 581                1.7%
                                                            AB InBev own beer          245 983           245 983              247 481                1.7%
                                                             Non-beer volumes           30 074            30 074               30 109                3.4%
                                                           Third party products          2 458              2 458               1 992              -13.5%
      Revenue                                                                           27 087            26 854               26 552                6.0%
      Gross profit                                                                      16 922            16 758               16 414                5.7%
      Gross margin                                                                      62.5%              62.4%               61.8%               -21 bps
      Normalized EBITDA                                                                 10 820            10 702               10 849                8.8%
      Normalized EBITDA margin                                                          39.9%              39.9%               40.9%              104 bps
      Normalized EBIT                                                                    8 485              8 383               8 549               10.6%
      Normalized EBIT margin                                                            31.3%              31.2%               32.2%              133 bps

      Profit attributable to equity holders of AB InBev                                   2 954                                 6 055
      Normalized profit attributable to equity holders of AB InBev                        3 602                                 4 986
      Underlying profit attributable to equity holders of AB InBev                        3 860                                 3 866

      Earnings per share (USD)                                                             1.50                                  3.06
      Normalized earnings per share (USD)                                                  1.82                                  2.52
      Underlying earnings per share (USD)                                                  1.95                                  1.95

      Figure 2. Volumes (thousand hls)
                                                                               2Q18    Scope        Organic           2Q19            Organic growth
                                                                     Reference Base                 growth                     Total Volume Own beer volume
      North America                                                          29 813        15         - 715          29 113           -2.4%           -2.5%
      Middle Americas                                                        32 212       - 55        2 051          34 208            6.4%            7.1%
      South America                                                          30 383         21          184          30 588            0.6%            0.3%
      EMEA                                                                   21 340     - 416         1 155          22 079            5.5%            6.2%
      Asia Pacific                                                           29 804       -32           333          30 105            1.1%            1.3%
      Global Export and Holding Companies                                       132     -132            26              26                -               -
      AB InBev Worldwide                                                    143 685     - 600         3 035         146 120            2.1%            2.2%


      Figure 2. Volumes (thousand hls)
                                                                               HY18   Scope        Organic            HY19            Organic growth
                                                                     Reference Base                growth                      Total Volume Own beer volume
      North America                                                          54 627        15       -1 007           53 635           -1.8%           -1.9%
      Middle Americas                                                        62 950     - 109        1 881           64 722            3.0%            3.1%
      South America                                                          64 471      188         2 198           66 856            3.4%            3.1%
      EMEA                                                                   41 889   -3,228         1 574           40 235            4.1%            4.5%
      Asia Pacific                                                           54 100       -32           23           54 092               -            0.6%
      Global Export and Holding Companies                                       478     -478            42               42               -               -
      AB InBev Worldwide                                                    278 515    -3 645        4 711          279 581            1.7%            1.7%



       MANAGEMENT COMMENTS

      In 2Q19, we achieved our best volume performance in more than five years, contributing to a strong top-
      line and EBITDA performance. Revenue grew by 6.2% driven by volume growth of 2.1% (own beer +2.2%,
      non-beer +1.8%) and revenue per hl growth of 3.8%, in line with our guidance for more balanced top-line
      growth.

      We delivered volume growth across most of our major markets, with especially strong results from Mexico,
      Brazil, Europe, South Africa, Nigeria, Australia and Colombia, with some of these markets also benefiting
      from the later timing of the Easter holiday. We achieved this broad-based growth despite a difficult
      comparable, as we were lapping the impact of our 2018 FIFA World Cup Russia TM sponsorship, our largest
      commercial activation in history. We saw healthy revenue growth across our key markets, led by Mexico,
      Brazil, China, Europe and the US.

      Premiumization remains a significant opportunity and a critical component of our strategy to deliver
      sustainable top and bottom-line growth. We continue to lead the way globally with our unparalleled portfolio
      of premium brands, as we believe premiumization requires a portfolio approach to meet consumer needs.
      Our High End Company continues to be a growth engine, growing revenues by 19.5% in the quarter. Our
      global brands grew revenues by 8.0% and by 11.3% outside of their home markets. Budweiser grew by
      5.6% outside of the US, Stella Artois increased by nearly 12% and Corona was up 23.7% outside of Mexico.




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      Budweiser, which drove extensive scale and reach with the Men’s 2018 FIFA World Cup RussiaTM,
      continued to support the world’s best football by leveraging the Women’s 2019 FIFA World Cup FranceTM
      in many of our markets. Additionally, Budweiser announced a multi-year sponsorship with two of the top
      international football leagues, the Premier League and LaLiga. These new sponsorships will activate across
      five continents and in more than 20 countries.

      As a long-time partner of the FIFA World Cup™ and supporter of football leagues and several national
      teams worldwide, Budweiser is expanding its support for the world’s game and continues to connect to
      more football fans. As a reminder, in FY18 our sales and marketing investments were weighted toward the
      first half of the year due to the 2018 FIFA World Cup RussiaTM activation. In FY19, we expect that our sales
      and marketing investments will be much more balanced throughout the year, resulting in a more difficult
      comparable in the second half of 2019, particularly in the third quarter.

      Stella Artois launched campaigns related to the passion point of food in markets around the world, including
      Canada, Brazil and Chile. Corona achieved its highest ever sales results in the major markets of Australia
      and Chile. It also launched its Better World platform globally and achieved its goal of cleaning up 100 islands
      one year ahead of schedule.
      EBITDA grew by 9.4% in 2Q19 with margin expansion of 123 bps to 42.0%. This was primarily due to the
      strong top-line performance, resulting from volume growth and favorable brand mix from premiumization,
      as well as ongoing cost discipline and synergies from the SAB combination, partially offset by significant
      commodity and transactional currency headwinds as a result of the timing of our hedges. We expect that
      these headwinds will pick-up in the third quarter before moderating in the fourth quarter, consistent with our
      full year guidance of CoS per hl growth of mid-single digits in FY19.

      In connection with our Better World platform, we reached another important milestone this quarter on our
      journey to achieve our ambitious 2025 sustainability goals. On World Environment Day, we announced that
      we are halfway to achieving our global commitment of sourcing 100% of our purchased electricity from
      renewable sources. We will continue to work towards achieving our climate action goal with increased
      renewable electricity usage, brewing efficiency, green logistics programs, and innovation to reduce our
      carbon footprint. We also launched the Road Safety Toolkit in partnership with the United Nations Institute
      for Training and Research (UNITAR), which provides governments with a proven methodology to design
      and implement local solutions to reduce traffic crashes. Our partnership with UNITAR and rollout of the
      Road Safety Toolkit reinforces our commitment to strengthening global partnerships between the public
      and private sector in support of the United Nations Sustainable Development Goals.

      Our net debt was 104.2 billion USD as of 30 June 2019, which was unchanged from 31 December 2018,
      after restatement for adoption of IFRS 16 on lease accounting and inclusion of the lease liability of
      approximately 1.8 billion USD. Our net debt to normalized EBITDA ratio decreased from 4.61x at 31
      December 2018 to 4.58x at 30 June 2019. This reduction was achieved despite the seasonality of our cash
      flows, which skews toward the second half of the year, typically resulting in an increased net debt to EBITDA
      ratio at 30 June in comparison to 31 December of the prior year. We expect to deliver further progress on
      our deleveraging path by the end of 2019 as the majority of our cash flow is generated in the second half
      of the year. Our optimal capital structure is a net debt to EBITDA ratio of around 2x, and we remain
      committed to a net debt to EBITDA ratio below 4x by the end of 2020.

      Additionally, on 19 July 2019, we announced an agreement to divest our Australian business (Carlton &
      United Breweries) to Asahi Group Holdings, Ltd. (Asahi) for 16.0 billion AUD, equivalent to approximately
      11.3 billion USD, in enterprise value for an implied multiple of 14.9x 2018 normalized EBITDA. As part of
      this transaction, we will grant Asahi rights to commercialize our portfolio of global and international brands
      in Australia. This transaction is subject to customary closing conditions, including but not limited to
      regulatory approvals in Australia, and is expected to close by the first quarter of 2020. We continue to
      believe in the strategic rationale of a potential offering of a minority stake of Budweiser APAC, excluding
      Australia, provided that it can be completed at the right valuation.

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      We remain firmly committed to enhancing shareholder value, optimizing our business and driving long-
      term, sustainable growth. Our strong commercial plans, unparalleled portfolio, diverse geographic footprint,
      best-in-class operating efficiency, and, most importantly, our incredibly talented people position us well to
      shape the global beer category in 2019 and beyond.




       2019 OUTLOOK

          (i)    Overall Performance: In FY19, we continue to expect to deliver strong revenue and EBITDA
                 growth, driven by the solid performance of our brand portfolio and strong commercial plans. Our
                 growth model is even more focused on category expansion, targeting a more balanced top-line
                 growth between volume and revenue per hl. We expect to deliver revenue per hl growth ahead of
                 inflation based on premiumization and revenue management initiatives, while keeping costs (sum
                 of CoS plus SG&A) below inflation.

          (ii)   Cost of Sales: We continue to expect CoS per hl to increase by mid-single digits, with currency
                 and commodity headwinds to be offset by cost management initiatives.

          (iii) Synergies: We maintain our 3.2 billion USD synergy and cost savings expectation on a constant
                currency basis as of August 2016. From this total, 547 million USD was reported by former SAB
                as of 31 March 2016, and 2 604 million USD was captured between 1 April 2016 and 30 June
                2019. The balance of roughly 50 million USD is expected to be captured by the end of 2019.

          (iv) Net Finance Costs: We expect the average gross debt coupon in FY19 to be between 3.75-
               4.00%. Net pension interest expenses and accretion expenses including IFRS 16 adjustments
               (lease reporting) are expected to be approximately 160 million USD per quarter. Net finance costs
               will continue to be impacted by any gains and losses related to the hedging of our share-based
               payment programs.

          (v)    Effective Tax Rate (ETR): We expect the normalized ETR in FY19 to be in the range of 25% to
                 27%, excluding any gains and losses relating to the hedging of our share-based payment
                 programs.

          (vi) Net Capital Expenditure: We expect net capital expenditure of between 4.0 and 4.5 billion USD
               in FY19.

          (vii) Debt: Approximately 40% of our 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. We expect our net debt to EBITDA ratio to be below 4x by the end of 2020.

          (viii) Dividends: We expect dividends to be a growing flow over time, although growth in the short term
                 is expected to be modest given our deleveraging commitments.


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       BUSINESS REVIEW

      United States

      In the US, we saw another quarter of top-line growth with revenue growth of 1.8%, leading to revenue
      growth of 1.7% for HY19. This was led by revenue per hl growth of 4.2% in 2Q19 and 3.4% in HY19, driven
      by the continued premiumization of our portfolio and our revenue management initiatives, including a price
      increase in April that was earlier than in prior years. We estimate that industry sales-to-retailers (STRs)
      declined by 2.8% in 2Q19, driven primarily by unfavorable weather conditions, while our own STRs were
      down by 4.0% and our sales-to-wholesalers (STWs) were down 2.3%. In HY19, our STRs declined by 3.0%
      and our STWs declined by 1.7%. We estimate a decline in total market share of 55 bps in 2Q19, driven by
      ongoing segment mix shift and the timing of our price increase. In HY19, we estimate a decline in total
      market share of 40 bps with estimated industry STRs declining by 2.2%.

      Our above core portfolio outperformed the industry once again, gaining 80 bps of market share as per our
      estimates, led by the Michelob Ultra family, our regional craft portfolio, Bon & Viv Spiked Seltzer and our
      innovations in the segment. Michelob Ultra accelerated its share performance this quarter, reporting its best
      quarterly share gain in over two years, with the brand family maintaining its position as the top share gainer.
      Our regional craft portfolio grew double digits in 2Q19, gaining share within the segment.

      We continued to achieve strong performances from our innovation pipeline across all price segments. We
      contributed 57% of the innovation volume within the category so far this year, led by Michelob Ultra
      Infusions, Naturdays, and Bud Light Lemon Tea.

      The mainstream segment remains under pressure as consumers trade up to higher price tiers. Our
      mainstream portfolio market share contracted by an estimated 135 bps in 2Q19, partially affected by the
      timing of our price increase. Within the mainstream segment, our market share declined by 20 bps in 2Q19,
      bringing our HY19 share of segment performance to a decline of 10 bps.

      EBITDA grew by 2.8% in 2Q19, as we continue to accelerate the momentum of our premiumization strategy
      and focus our resources on our commercial priorities, leading to margin expansion of 40 bps to 40.7%. In
      HY19, we grew EBITDA by 2.7%, with margin expansion of 38 bps to 40.2%.


      Mexico



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      Our business in Mexico delivered a very strong quarter with both revenue and volume growing by double
      digits with low single digit revenue per hl expansion and accelerated market share gains. The top-line result
      was supported by the later timing of the Easter holiday and delivered despite a challenging comparable. In
      HY19, revenue grew by high single digits as a result of revenue per hl growth of mid-single digits and
      volume growth of mid-single digits.

      Ongoing execution of the category expansion framework has enabled our portfolio to continue delivering
      growth across our core and premium portfolios. In classic lagers, Victoria benefits from increased
      consumption during the weekdays thanks to growing relevance in the meal occasion and Corona creates
      meaningful connections with consumers as it demonstrates its ongoing commitment to our environment
      through its efforts to clean up the beaches of Mexico. Our premium portfolio also continues to meaningfully
      contribute to our results, with Modelo Especial, Stella Artois and Michelob Ultra growing above 20% in the
      quarter. Our brands across the portfolio have leveraged digital communication to activate key cultural
      moments, such as Stella Artois’ Father’s Day.

      During the quarter we successfully executed the first waves of our full portfolio availability in OXXO, the
      largest c-store chain in Mexico, where our beers were previously unavailable. The first wave was in
      Guadalajara in April and the second in Mexico City in June. Today, our beers are available in over 4 000
      OXXO stores and will progressively become available in all 17 000+ OXXO stores across the country by
      the end of 2022. The next wave will begin in early 2020.

      EBITDA grew by more than 30% with significant margin expansion, primarily driven by solid top-line growth,
      a reduction in distribution expenses as a result of footprint optimization following the opening of the Centro
      brewery earlier this year, and the phasing of sales and marketing investments following last year’s
      activations relating to 2018 FIFA World Cup RussiaTM. In HY19, EBITDA grew by more than 20% with
      consistent margin expansion.


      Colombia

      Our business in Colombia delivered another strong quarter with revenue growth of mid-single digits and
      revenue per hl growth of low single digits. Volume growth accelerated from the first quarter with total
      volumes up mid-single digits, driven by beer volume growth of more than 3% and non-beer volume growth
      of high single digits. We estimate that our beer portfolio gained 30 bps of share of total alcohol in 2Q19. In
      HY19, revenue grew by mid-single digits with revenue per hl growth of mid-single digits and volume growth
      of low single digits (beer up low single digits, non-beer up mid-single digits).

      Premiumization remains a major opportunity in Colombia and we are leading the way in growing the
      segment through our global brand portfolio. The brands were up by more than 50% driven by continued
      expansion and successful activations, led by Corona and Budweiser which have become the number one
      and number two brands, respectively, by volume share in the international premium segment. Aguila also
      continues to perform very well, growing by mid-teens this quarter as it continues to leverage consumers’
      football passion point with a successful Copa América campaign.

      In addition to the solid performance in our beer business, our non-alcohol malt beverages Pony Malta and
      Malta Leona continued to deliver on their proposition as a better alternative in this space.

      Our EBITDA grew by low double digits with almost 400 bps of margin expansion. This was driven by the
      strong top-line performance, further synergy delivery and ongoing cost discipline. In HY19, EBITDA grew
      by low double digits with margin expansion of over 300 bps.


      Brazil

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      In Brazil, our revenues grew by 7.3%, with revenue per hl growth of 3.7% in 2Q19 and total volumes up by
      3.5%. Beer volume growth of 2.8% outperformed an industry that was roughly flat, and non-beer volume
      growth of 5.6% was also ahead of an industry that was up by low single digits. Brand mix from our ongoing
      premiumization strategy was partially offset by geographic mix, as we continue to grow faster in the North
      and Northeast regions. In HY19, revenue grew by 12.3% with revenue per hl growth of 4.0% and volume
      growth of 8.0% (beer +7.1%, non-beer +10.9%), outperforming both industries that grew by low single digits.

      Our premium brands, led by our global brand portfolio and our local premium brands, grew by double digits
      in 2Q19, outpacing the industry and gaining share within the growing premium segment. Our global brand
      portfolio grew by double digits in 2Q19, led by Corona and Stella Artois. Our local premium brands also had
      a strong quarter, led by double digit growth of Antarctica Original and enhanced by the continued scale-up
      of our craft portfolio. In the core plus segment, Bohemia continues to grow rapidly off a meaningful base
      with triple digit growth. Within the core segment, our Skol Puro Malte innovation was rolled out nationally
      this quarter following its successful launch. Our smart affordability strategy continues to gain traction, led
      by the success of Nossa and Magnífica, our affordable brands brewed with ingredients grown by local
      farmers. In June, we launched another brand under this initiative, Legítima, in the state of Ceará, as we
      find new opportunities to increase our presence in the value segment in relevant states at comparable
      margins to our core portfolio.

      EBITDA declined by 4.4% with margin compression of 476 bps to 38.9% in 2Q19, as healthy top-line growth
      was more than offset by higher cost of sales, driven by higher commodity prices (aluminum and barley) and
      the devaluation of transactional currency. This result was in line with our guidance of cost of sales per hl
      growth of mid-teens in Brazil in 2019, which should be weighted toward the first three quarters of the year.
      In HY19, EBITDA grew by 2.5% with margin compression of 383 bps to 39.9%, driven again by higher
      commodity prices and the devaluation of transactional currency.


      South Africa

      Our South African business grew revenue by high single digits, led by mid-single digit volume growth
      benefitting from the timing of Easter and despite a continued challenging macroeconomic environment. We
      estimate that we continued to gain share of total alcohol in the quarter. Revenue per hl increased low single
      digits driven by favorable brand and pack mix, due to the faster growth of the premium portfolio and
      convenience packs, coupled with revenue management initiatives. In HY19, revenue, volumes and revenue
      per hl grew by low single digits.

      The premium segment, where we under-index, continues to grow faster than the total industry, and our
      brands in the segment continue to grow rapidly, led by Corona which delivered triple-digit growth. We also
      grew strongly in the near beer segment with Brutal Fruit doubling its quarterly volume.

      Additionally, we recently were awarded a Broad-Based Black Economic Empowerment (BBBEE) Level 3
      Contributor Status for the first time in the company’s history. Today, we source over 97% of our packaging
      and raw materials such as barley, hops and maize from local suppliers. We believe that small businesses
      are critical drivers of the economic growth and transformation, and that empowerment of communities is
      key to the growth and success of our business in South Africa.

      EBITDA was down by mid-single digits with margin compression of more than 700 bps, driven by the timing
      of commodity and transactional currency hedges as well as increased investments in sales and marketing
      to grow our global brands in the premium segment. In HY19, EBITDA was down by low double digits with
      margin contraction of approximately 670 bps.



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      China

      Our Chinese business grew revenue by 7.1% in 2Q19. Volume grew 0.6% led by our ongoing
      premiumization efforts and shipment phasing ahead of summer activations, despite a softer industry and
      challenging comparable as we cycled our best quarter in more than three years. We drove revenue per hl
      growth of 6.5%, driven primarily by premiumization and supported by revenue management initiatives. In
      HY19, revenue grew 7.4% driven by revenue per hl growth of 7.6% and a slight volume decline of 0.2%.

      Our super premium portfolio continues to outperform with double digit growth, led by Corona and
      Hoegaarden. Budweiser grew by mid-single digits fueled by its activations surrounding passion points such
      as sports and meals. In the core plus segment, our recent innovation Harbin Crystal delivered strong growth
      as consumers continue to trade-up from the core and value segments. Our portfolio also grew double digits
      in the e-commerce channel once again.

      EBITDA grew by 24.4% with margin expansion of 583 bps as our portfolio premiumization trend continues,
      and we delivered strong operational leverage driven by cost discipline and the phasing of sales and
      marketing initiatives. In HY19, EBITDA grew by 21.6% with margin expansion of 477 bps.


      Highlights from our other markets

      Canada top-line declined by low single digits in 2Q19, as volumes declined primarily due to a weak beer
      industry, and revenue per hl grew by low single digits. We estimate we gained market share this quarter,
      driven by gains across the premium, core plus, and core segments, partially offset by ongoing competitive
      pressure in the value segment. Our High End Company in Canada continues to outpace the industry and
      is gaining share of the premium segment, led by the double digit volume growth of our premium import
      brands, including Corona, Stella Artois and Hoegaarden. Share gains in the core and core plus segments
      were led by Bud Light and Michelob Ultra, the fastest-growing brand in Canada.

      In Peru, we grew revenue by high single digits as a result of healthy brand mix and revenue management
      initiatives, including a price increase to offset excise tax increases, though volumes declined by low single
      digits as a result of the challenging macroeconomic environment. Our global brands continue to lead the
      way and grew by more than 50%, led by Corona and Budweiser. Cristal, our largest core brand, also
      performed well as a result of a successful Copa América campaign. Our business in Ecuador grew revenue
      by mid-single digits and volume by low single digits in 2Q19. Premiumization continues to be a meaningful
      driver for our portfolio, with both our global brands and local premium brands growing double digits.

      In Argentina, the macroeconomic environment remains extremely challenging, driving a volume decline of
      low teens in 2Q19, while our revenues and revenue per hl grew by double digits as a result of our revenue
      management initiatives. We remain focused on investing behind our strong portfolio to offer the right brands
      to meet consumer needs across a variety of occasions. Our above core brands are performing well, led by
      our global brands and local champions. We continue to execute our affordability strategy in light of the
      difficult macroeconomic conditions with the launch of packs that minimize out-of-pocket expenditure.

      Within EMEA, Europe delivered a strong quarter and grew both revenue and volume by mid-single digits
      with EBITDA growth of high single digits. This strong result was fueled by market share gains in all of our
      major markets and underpinned by continued expansion in the premium segment, despite a challenging
      comparable as we cycled the 2018 FIFA World Cup Russia™. The UK continues to grow volumes both in
      on- and off-premise channels, with Corona and Bud Light volumes up double digits. Belgium continues to
      grow volumes with Jupiler posting healthy gains and strong growth from Stella Artois, underpinned by the
      new “Home of Beer” campaign. Additionally, both France and the Netherlands posted strong revenue
      growth with double digit volume growth, enhanced by a successful launch of Budweiser in France. In Africa

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      excluding South Africa, Nigeria continues to lead the way with double digit revenue and volume growth
      fueled by our core portfolio as well as Budweiser in the premium segment. Our beer volumes in Tanzania
      returned to growth this quarter with good performances across our portfolio. Volumes in Mozambique
      declined by mid-teens following the effects of a devastating tropical cyclone earlier in the year.

      In Australia, double digit revenue and volume growth in 2Q19 was driven by the later timing of the Easter
      holiday and inventory phasing ahead of a scheduled price increase in August. Great Northern remains a
      key growth engine with continued double digit growth, and our premium portfolio is performing well, led by
      Corona and our local craft brands. Our first non-alcohol beer, Carlton Zero, continues to strengthen our
      NABLAB portfolio.




       CONSOLIDATED INCOME STATEMENT

      Figure 3. Consolidated income statement (million USD)
                                                                        2Q18            2Q18        2Q19     Organic
                                                                     Restated Reference Base                  growth
      Revenue                                                          13 992          13 764      13 963       6.2%
      Cost of sales                                                    -5 163          -5 092      -5 263      -7.2%
      Gross profit                                                      8 828           8 672       8 700       5.5%
      SG&A                                                             -4 519          -4 455      -4 220       0.4%
      Other operating income/(expenses)                                    216            211         233      18.0%
      Normalized profit from operations (normalized EBIT)               4 525           4 428       4 713      12.2%
      Non-recurring items above EBIT                                     - 100                        - 59
      Net finance income/(cost)                                        -1 301                      -1 004
      Non-recurring net finance income/(cost)                            - 164                          44
      Share of results of associates                                        36                           9
      Income tax expense                                                 - 754                      - 943
      Profit                                                            2 244                       2 760
      Profit attributable to non-controlling interest                      309                        276
      Profit attributable to equity holders of AB InBev                 1 935                       2 484

      Normalized EBITDA                                                 5 694             5 582     5 862      9.4%
      Normalized profit attributable to equity holders of AB InBev      2 159                       2 470

                                                                        HY18               HY18     HY19     Organic
                                                                     Restated    Reference Base              growth
      Revenue                                                          27 087             26 854    26 552      6.0%
      Cost of sales                                                   -10 165            -10 096   -10 138     -6.6%
      Gross profit                                                     16 922             16 758    16 414      5.7%
      SG&A                                                             -8 839             -8 774    -8 258     -1.1%
      Other operating income/(expenses)                                   402                397       393      7.0%
      Normalized profit from operations (normalized EBIT)               8 485              8 383     8 549    10.6%
      Non-recurring items above EBIT                                    - 196                        - 104
      Net finance income/(cost)                                        -2 878                       -1 365
      Non-recurring net finance income/(cost)                           - 494                        1 166
      Share of results of associates                                       93                           62
      Income tax expense                                               -1 420                       -1 666
      Profit                                                            3 590                        6 642
      Profit attributable to non-controlling interest                     636                          587
      Profit attributable to equity holders of AB InBev                 2 954                        6 055

      Normalized EBITDA                                                 10 820           10 702    10 849       8.8%
      Normalized profit attributable to equity holders of AB InBev       3 602                      4 986




      Non-recurring items above EBIT

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      Figure 4. Non-recurring items above EBIT (million USD)
                                                                                     2Q18        2Q19         HY18      HY19
      Restructuring                                                                    - 83       - 30        - 137       - 58
      Acquisition costs / Business combinations                                        - 23       - 16          - 38      - 23
      Business and asset disposal (including impairment losses)                           6       - 14          - 21      - 24
      Impact on profit from operations                                               - 100        - 59        - 196     - 104


      Normalized profit from operations excludes negative non-recurring items of 59 million USD in 2Q19,
      primarily related to the one-off costs linked to the SAB integration.




      Net finance income/(cost)

      Figure 5. Net finance income/(cost) (million USD)
                                                                                       2Q18       2Q19        HY18      HY19
                                                                                    Restated               Restated
      Net interest expense                                                              - 986     - 973      -1 955     -1 946
      Net interest on net defined benefit liabilities                                     - 24      - 23         - 48      - 48
      Accretion expense                                                                 - 127     - 146        - 239     - 290
      Mark-to-market                                                                      - 16      173        - 258     1 124
      Other financial results                                                           - 148       - 35       - 378     - 205
      Net finance income/(cost)                                                       -1 301     -1 004      -2 878     -1 365


      Net finance cost was positively impacted by the mark-to-market gains on the hedging of our share-based
      payment programs. 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 6 below.

      Figure 6. Share-based payment hedge
                                                                                     2Q18        2Q19         HY18      HY19
      Share price at the start of the period (Euro)                                  89.28       74.76        93.13     57.70
      Share price at the end of the period (Euro)                                    86.50       77.84        86.50     77.84
      Number of equity derivative instruments at the end of the period (millions)     46.9        46.9         46.9      46.9



      Non-recurring net finance income/(cost)

      Figure 7. Non-recurring net finance income/(cost) (million USD)
                                                                                     2Q18        2Q19         HY18      HY19
      Mark-to-market (Grupo Modelo deferred share instrument)                          - 10         88        - 127       556
      Other mark-to-market                                                               -9         87        - 123       542
      Early termination fee of Bonds and Other                                       - 146       - 131        - 244        68
      Non-recurring net finance income/(cost)                                        - 164          44        - 494     1 166


      Non-recurring net finance income includes mark-to-market gains on derivative instruments entered into to
      hedge the shares issued in relation to the Grupo Modelo and SAB combinations.

      The number of shares covered by the hedging of the deferred share instrument and the restricted shares
      are shown in figure 8, together with the opening and closing share prices.




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      Figure 8. Non-recurring equity derivative instruments
                                                                                        2Q18     2Q19        HY18     HY19
      Share price at the start of the period (Euro)                                     89.28    74.76       93.13    57.70
      Share price at the end of the period (Euro)                                       86.50    77.84       86.50    77.84
      Number of equity derivative instruments at the end of the period (millions)        45.5     45.5        45.5     45.5




      Income tax expense

      Figure 9. Income tax expense (million USD)
                                                                                       2Q18      2Q19        HY18     HY19
                                                                                    Restated              Restated
      Income tax expense                                                                 754       943       1 420     1 666
      Effective tax rate                                                              25.5%      25.5%      28.9%     20.2%
      Normalized effective tax rate                                                   24.7%      25.9%      26.1%     23.1%
      Normalized effective tax rate before MTM                                        24.6%      27.2%      25.0%     27.4%
      The increase in our normalized ETR excluding mark-to-market gains and losses linked to the hedging of
      our share-based payment programs is primarily driven by country mix.


      Profit, Normalized Profit and Underlying Profit

      Figure 10. Normalized Profit attribution to equity holders of AB InBev (million USD)
                                                                                        2Q18     2Q19        HY18     HY19
                                                                                    Restated              Restated
      Profit attributable to equity holders of AB InBev                                 1 935    2 484       2 954     6 055
      Non-recurring items, before taxes                                                   100        59        196       104
      Non-recurring finance (income)/cost, before taxes                                   164      - 44        494    -1 166
      Non-recurring taxes                                                                 - 43     - 19        - 45         5
      Non-recurring non-controlling interest                                                 4     - 10           3      - 12
      Normalized profit attributable to equity holders of AB InBev                      2 159    2 470       3 602     4 986
      Underlying profit attributable to equity holders of AB InBev                      2 175    2 295       3 860     3 866



      Basic, Normalized and Underlying EPS

      Figure 11. Earnings per share (USD)
                                                                                       2Q18      2Q19        HY18     HY19
                                                                                    Restated              Restated
      Basic earnings per share                                                           0.98     1.25         1.50     3.06
      Non-recurring items, before taxes                                                 0.05      0.03        0.10      0.05
      Non-recurring finance (income)/cost, before taxes                                  0.08    -0.02         0.25    -0.59
      Non-recurring taxes                                                               -0.02    -0.01        -0.02     -
      Normalized earnings per share                                                      1.09     1.25         1.82     2.52
      Underlying earnings per share                                                      1.10     1.16         1.95     1.95




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      Figure 12. Key components - Normalized Earnings per share in USD
                                                                                          2Q18           2Q19         HY18           HY19
                                                                                       Restated                    Restated
      Normalized EBIT before hyperinflation                                                2.29           2.38         4.30           4.34
      Hyperinflation impacts in normalized EBIT                                             -              -            -            -0.02
      Normalized EBIT                                                                      2.29           2.38         4.30           4.32
      Mark-to-market (share-based payment programs)                                       -0.01           0.09        -0.13           0.57
      Net finance cost                                                                    -0.65          -0.59        -1.33          -1.26
      Income tax expense                                                                  -0.40          -0.49        -0.74          -0.84
      Associates & non-controlling interest                                               -0.13          -0.14        -0.27          -0.27
      Normalized EPS                                                                       1.09           1.25         1.82           2.52
      Mark-to-market (share-based payment programs)                                        0.01          -0.09         0.13          -0.57
      Hyperinflation impacts in EPS                                                         -              -            -              -
      Normalized EPS before MTM and hyperinflation                                         1.10           1.16         1.95           1.95



      Adoption of hyperinflation accounting in Argentina

      After reaching a three-year cumulative inflation rate greater than 100%, we are reporting the results from
      Argentina applying hyperinflation accounting, starting from the 3Q18 results release in which we accounted
      for the hyperinflation impact for the first nine months of 2018.

      We have updated the 2018 Reference Base (up to Normalized EBIT) for the impact of hyperinflation
      accounting in Argentina as if we had applied hyperinflation accounting as of 1 January 2018.
      The impact of hyperinflation in 2Q18 and 2Q19, as well as HY18 and HY19, on our Revenue and
      Normalized EBITDA were as follows:

      Figure 13. Impact of hyperinflation
                                                                                         2Q18           2Q19          HY18            HY19
      Revenue                                                                       Reference                    Reference
                                                                                         Base                         Base
      Indexation(1)                                                                         41             45             55                59
      Currency (2)                                                                       - 269             16          - 288           - 31
      Total impact                                                                       - 228             61          - 233             28

                                                                                         2Q18           2Q19          HY18            HY19
      Normalized EBITDA                                                             Reference                    Reference
                                                                                         Base                         Base
      Indexation(1)                                                                         13             20             17                24
      Currency (2)                                                                       - 117             13          - 125           - 14
      Total impact                                                                       - 104             33          - 108             10

      USDARS average rate                                                                                           20.3037        40.2779
      USDARS closing rate                                                                                           28.8620        42.4489

      (1) Indexation calculated at closing rate
      (2) Currency impact from hyperinflation calculated as the difference between converting the Argentinean peso (ARS) reported amounts
      at the closing exchange rate compared to the average exchange rate of each period


      Furthermore, IAS 29 requires us to restate the non-monetary assets and liabilities stated at historical cost
      on the balance sheet of our operations in hyperinflation economies using inflation indices and to report the
      resulting hyperinflation through the income statement on a dedicated account for hyperinflation monetary
      adjustments in the finance line and report deferred taxes on such adjustments, when applicable.




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      In HY19, we reported 48 million USD monetary adjustment in the finance line, a negative impact on the
      profit attributable to equity holders of AB InBev of 4 million USD. This had no impact on normalized EPS in
      2Q19 or HY19.

      The 2018 Restated financials that consider the new rules on lease accounting were not restated for
      hyperinflation accounting for the periods ending 31 March 2018 and 30 June 2018. As a consequence, the
      2Q18 Restated results do not include any impact of hyperinflation accounting. Please refer to the 2Q18
      Reference Base for the results including the impact of hyperinflation accounting as well as the new rules
      on lease accounting for results up to Normalized EBIT.


      Reconciliation between profit attributable to equity holders and normalized EBITDA

      Figure 14. Reconciliation of normalized EBITDA to profit attributable to equity holders of AB InBev (million USD)
                                                                                             2Q18           2Q18          2Q19        HY18              HY18     HY19
                                                                                         Restated      Reference                   Restated    Reference base
                                                                                                            base
      Profit attributable to equity holders of AB InBev                                      1 935                        2 484       2 954                      6 055
      Non-controlling interests                                                                309                          276         636                        587
      Profit                                                                                 2 244                        2 760       3 590                      6 642
      Income tax expense                                                                       754                          943       1 420                      1 666
      Share of result of associates                                                            - 36                           -9        - 93                       - 62
      Net finance (income)/cost                                                              1 301                        1 004       2 878                      1 365
      Non-recurring net finance (income)/cost                                                  164                          - 44        494                     -1 166
      Non-recurring items above EBIT (incl. non-recurring impairment)                          100                            59        196                        104
      Normalized EBIT                                                                        4 525          4 428         4 713       8 485             8 383    8 549
      Depreciation, amortization and impairment                                              1 169          1 154         1 149       2 335             2 319    2 300
      Normalized EBITDA                                                                      5 694          5 582         5 862      10 820            10 702   10 849


      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




                                                                                                                                                                   14

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      Figure 15. Cash Flow Statement (million USD)
                                                                                                           HY18      HY19
                                                                                                        restated
      Operating activities
      Profit                                                                                              3 590      6 642
      Interest, taxes and non-cash items included in profit                                               7 022      4 147
      Cash flow from operating activities before changes in working capital and use of provisions        10 612     10 789

      Change in working capital                                                                           -2 298    -1 593
      Pension contributions and use of provisions                                                          - 282     - 279
      Interest and taxes (paid)/received                                                                  -4 645    -4 158
      Dividends received                                                                                      38       137
      Cash flow from operating activities                                                                  3 425     4 896

      Investing activities
      Net capex                                                                                           -1 972    -1 499
      Acquisition and sale of subsidiaries, net of cash acquired/disposed of                                 - 72    - 250
      Net of tax proceeds from SAB transaction-related divestitures                                        - 430         -
      Proceeds from the sale/(acquisition) of investment in short-term debt securities                     1 299        -1
      Other                                                                                                  - 75       -5
      Cash flow from investing activities                                                                 -1 250    -1 755

      Financing activities
      Dividends paid                                                                                      -5 132    -2 389
      Net (payments on)/proceeds from borrowings                                                           1 703     1 411
      Payments of lease liabilities                                                                        - 222     - 235
      Other (including net finance cost other than interest and purchase of non-controlling interest)     -1 192     - 784
      Cash flow from financing activities                                                                 -4 843    -1 997

      Net increase/(decrease) in cash and cash equivalents                                                -2 668     1 144

      HY19 recorded an increase in cash and cash equivalents of 1 144 million USD compared to a decrease
      of 2 668 million USD in HY18, with the following movements:

      •   Our cash flow from operating activities reached 4 896 million USD in the first half of 2019 compared to
          3 425 million USD in the first half of 2018. The increase mainly results from lower changes in working
          capital in 2019 compared to 2018 and lower income taxes paid in 2019. Taxes paid in 2018 included
          tax payments related to prior periods. Changes in working capital in the first half of 2019 and 2018
          reflect higher working capital levels at the end of June than at year-end as a result of seasonality.
      •   Net cash outflow from investing activities was 1 755 million USD in the first half of 2019 as compared
          to a net cash outflow of 1 250 million USD in the first half of 2018. The increase in the cash outflow
          from investing activities was mainly due to lower proceeds from the sale of short-term debt securities.
          The 2018 cash flow used in investing activities was negatively impacted by the payments related to the
          recovery of the Budweiser distribution rights in Argentina as well as payments on SAB-related
          divestitures which were not repeated in 2019.
      •   The cash outflow from financing activities amounted to 1 997 million USD in the first half of 2019 as
          compared to a cash outflow of 4 843 million USD in the first half of 2018.
      Our net debt was restated to reflect the impact of the adoption of IFRS 16 and amounted to 104.2 billion
      USD as of 30 June 2019 and 31 December 2018. Our net debt to Normalized EBITDA ratio was 4.61x as
      of 31 December 2018 on a Restated base and 4.58x as of 30 June 2019 on a Reference base. FY18 net
      debt to EBITDA calculation was restated considering the new rules on lease accounting (IFRS 16). HY19
      net debt to EBITDA calculation is done using the Reference base. The Reference base reflects the

                                                                                                                        15

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      restatement for the impact of hyperinflation accounting for the Argentinean operations as if the company
      had applied hyperinflation accounting as of 1 January 2018 and after restatement of the EBITDA and net
      debt considering the new rules on lease accounting. Our optimal capital structure is a net debt to EBITDA
      ratio of around 2x, and we remain committed to a net debt to EBITDA ratio below 4x by the end of 2020.

      We will continue to proactively manage our debt portfolio, of which 91% holds a fixed-interest rate, 40% is
      denominated in currencies other than USD, and maturities are well-distributed across the next several
      years.

      In addition to a very comfortable debt maturity profile and strong cash flow generation, as of 30 June 2019
      we had total liquidity of 17.1 billion USD, which consisted of 9.0 billion USD available under committed long-
      term credit facilities and 8.1 billion USD of cash, cash equivalents and short-term investments in debt
      securities less bank overdrafts. Although we may borrow such amounts to meet our liquidity needs, we
      principally rely on cash flows from operating activities to fund our continuing operations.

      Figure 16. Bond repayment schedule as of 30 June 2019 (million USD)

       14,000


       12,000


       10,000


        8,000


        6,000


        4,000


        2,000


           0
                2019




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       RECENT EVENTS

      Potential IPO of Budweiser APAC

      On 12 July 2019, we decided that we were not proceeding with the proposed public offering of a minority
      stake in our Asia Pacific subsidiary, Budweiser Brewing Company APAC Limited (Budweiser APAC), on
      the Hong Kong Stock Exchange at that time.


      Agreement to Sell Carlton & United Breweries to Asahi Group Holdings, Ltd. and Ongoing
      Evaluation of a Potential IPO of Budweiser APAC

      On 19 July 2019, we announced an agreement to divest our Australian business (Carlton & United
      Breweries) to Asahi Group Holdings, Ltd. (Asahi) for 16.0 billion AUD, equivalent to approximately 11.3
      billion USD, in enterprise value for an implied multiple of 14.9x 2018 normalized EBITDA. As part of this
      transaction, we will grant Asahi rights to commercialize our portfolio of global and international brands in


                                                                                                                                                                                                                                                                                                           16

ab-inbev.com
      Australia. This transaction is subject to customary closing conditions, including but not limited to regulatory
      approvals in Australia, and is expected to close by the first quarter of 2020.

      Additionally, we informed that we continue to believe in the strategic rationale of a potential offering of a
      minority stake of Budweiser APAC, excluding Australia, provided that it can be completed at the right
      valuation.

      This press release does not represent an offer to sell nor a solicitation to buy shares in Budweiser APAC.


       NOTES
      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.
      AB InBev has restated its 2018 results considering the new IFRS rules on lease accounting as if the company had applied the new standard
      as of 1 January 2018 and the new company organizational structure effective 1 January 2019 in line with IFRS rules. This presentation is
      referred to as “2018 Restated”.
      AB InBev has updated its 2018 segment reporting for purposes of result announcement. This presentation, referred to as the "2018 Reference
      Base", includes, for comparative purposes and to facilitate the understanding of AB InBev’s underlying performance, (i) the new company
      organizational structure effective 1 January 2019 (ii) the impact of hyperinflation accounting for the Argentinean operations as if the company
      had applied hyperinflation accounting as of 1 January 2018 and (iii) restated results considering the new IFRS rules on lease accounting as if
      the company had applied the new standard as of 1 January 2018.
      All references per hectoliter (per hl) exclude US non-beer activities. References to the High End Company refer to a business unit made up of
      a portfolio of global, specialty and craft brands across 22 countries.
      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 and discontinued operations. 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. On 30 March 2018 the 50:50 merger of AB InBev's and Anadolu Efes' existing Russia and Ukraine businesses was completed.
      The combined business is fully consolidated in the Anadolu Efes financial accounts. As a result of this transaction, AB InBev stopped
      consolidating its Russia and Ukraine businesses and accounts for its investment in AB InBev Efes under the equity method, as of that date.
      Values in the figures and annexes may not add up, due to rounding.
      2Q19 and HY19 EPS is based upon a weighted average of 1 980 million shares compared to a weighted average of 1 975 million shares for
      2Q18 and HY18.


      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 AB 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 AB InBev’s business combination with ABI SAB Group
      Holdings Limited 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 AB InBev, are subject to numerous risks and uncertainties
      about AB InBev and are dependent on many factors, some of which are outside of AB InBev’s control. There are important factors, risks and
      uncertainties that could cause actual outcomes and results to be materially different, including the ability to realize synergies from the business
      combination with ABI SAB Group Holdings Limited and an inability to complete any strategic options with respect to our Asia Pacific businesses
      and the risks and uncertainties relating to AB InBev described under Item 3.D of AB InBev’s Annual Report on Form 20-F (“Form 20-F”) filed
      with the US Securities and Exchange Commission (“SEC”) on 22 March 2019. Other unknown or unpredictable factors could cause actual
      results to differ materially from those in the forward-looking statements.
      The forward-looking statements should be read in conjunction with the other cautionary statements that are included elsewhere, including AB
      InBev’s most recent Form 20-F and other reports furnished on Form 6-K, and any other documents that AB InBev has 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 AB InBev will be realized or, even if substantially realized, that they will have




                                                                                                                                                     17

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      the expected consequences to, or effects on, AB InBev or its business or operations. Except as required by law, AB InBev undertakes no
      obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
      The half year 2019 (HY19) financial data set out in Figure 1 (except for the volume information), Figures 3 to 5, 7, 9, 10 and 14 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 2019, which have been reviewed by our statutory auditors PricewaterhouseCoopers Bedrijfsrevisoren/Réviseurs d’Entreprises
      CVBA/SCRL in accordance with the standards of the Public Company Accounting Oversight Board (United States), and in accordance with
      International Standard on Review Engagements 2410. 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 6, 8 and 11
      to 13 have been extracted from the underlying accounting records as of and for the six months ended 30 June 2019 (except for the volume
      information).




                                                                                                                                                 18

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       CONFERENCE CALL AND WEBCAST

      Investor Conference call and webcast on Thursday, July 25, 2019:
      3.00pm Brussels / 2.00pm London / 9.00am New York

      Registration details
      Webcast (listen-only mode):
      AB InBev 2Q19 Results Webcast
      Conference call (with interactive Q&A):
      AB InBev 2Q19 Conference Call (with interactive Q&A)


       ANHEUSER-BUSCH INBEV CONTACTS

      Investors                                                              Media
      Lauren Abbott                                                          Pablo Jimenez
      Tel: +1 212 573 9287                                                   Tel: +1 212 573 9289
      E-mail: lauren.abbott@ab-inbev.com                                     E-mail: pablo.jimenez@ab-inbev.com

      Mariusz Jamka                                                          Ingvild Van Lysebetten
      Tel: +32 16 276 888                                                    Tel: +32 16 276 608
      E-mail: mariusz.jamka@ab-inbev.com                                     E-mail: ingvild.vanlysebetten@ab-inbev.com

      Jency John                                                             Fallon Buckelew
      Tel: +1 646 746 9673                                                   Tel: +1 310 592 6319
      E-mail: jency.john@ab-inbev.com                                        E-mail: fallon.buckelew@ab-inbev.com

      About Anheuser-Busch InBev

      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). Our Dream is to bring people together for a better world. Beer, the original social network, has been bringing
      people together for thousands of years. We are committed to building great brands that stand the test of time and to brewing the best
      beers using the finest natural ingredients. Our diverse portfolio of well over 500 beer brands includes global brands Budweiser®,
      Corona® and Stella Artois®; multi-country brands Beck’s®, Castle®, Castle Lite®, Hoegaarden® and Leffe®; and local champions
      such as Aguila®, Antarctica®, Bud Light®, Brahma®, Cass®, Cristal®, Harbin®, Jupiler®, Michelob Ultra®, Modelo Especial®,
      Quilmes®, Victoria®, Sedrin®, and Skol®. Our brewing heritage dates back more than 600 years, spanning continents and
      generations. From our European roots at the Den Hoorn brewery in Leuven, Belgium. To the pioneering spirit of the Anheuser & Co
      brewery in St. Louis, US. To the creation of the Castle Brewery in South Africa during the Johannesburg gold rush. To Bohemia, the
      first brewery in Brazil. Geographically diversified with a balanced exposure to developed and developing markets, we leverage the
      collective strengths of approximately 175,000 employees based in nearly 50 countries worldwide. For 2018, AB InBev’s reported
      revenue was 54.6 billion USD (excluding JVs and associates).



      This document is also available on https://senspdf.jse.co.za/documents/2019/jse/isse/anhe/HY2019.pdf

      25 July 2019
      JSE Sponsor: Questco Corporate Advisory Proprietary Limited




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      Annex 1
      AB Inbev Worldwide                            2Q18
                                                                        Currency     Organic               Organic
                                               Reference    Scope                                  2Q19
                                                                      Translation    Growth                Growth
                                                    base
      Total volumes (thousand hls)               143 685     - 600               -     3 035     146 120      2.1%
                  of which AB InBev own beer     127 632       - 20              -     2 853     130 465      2.2%
      Revenue                                     13 764       - 20         - 624        843      13 963      6.2%
      Cost of sales                                -5 092      - 77           274      - 369      -5 263     -7.2%
      Gross profit                                  8 672      - 97         - 350        475       8 700      5.5%
      SG&A                                         -4 455        12           208         16      -4 220      0.4%
      Other operating income/(expenses)               211         1           - 16        38         233    18.0%
      Normalized EBIT                               4 428      - 82         - 158        528       4 713    12.2%
      Normalized EBITDA                             5 582      - 17         - 221        521       5 862      9.4%
      Normalized EBITDA margin                     40.6%                                          42.0%    123 bps

      North America                                 2Q18
                                                                        Currency     Organic               Organic
                                               Reference    Scope                                  2Q19
                                                                      Translation    Growth                Growth
                                                    base
      Total volumes (thousand hls)                29 813       15                -      - 715     29 113     -2.4%
      Revenue                                       4 181       7             - 24          59     4 224      1.4%
      Cost of sales                                -1 535      -5                8        - 10    -1 543     -0.7%
      Gross profit                                  2 647       2             - 17          49     2 681      1.8%
      SG&A                                         -1 179      -3                8        - 13    -1 186     -1.1%
      Other operating income/(expenses)                 1       -                -           7         8          -
      Normalized EBIT                               1 469      -1               -8          43     1 503      2.9%
      Normalized EBITDA                             1 673      -1               -9          35     1 698      2.1%
      Normalized EBITDA margin                     40.0%                                          40.2%     26 bps

      Middle Americas                               2Q18
                                                                        Currency     Organic               Organic
                                               Reference    Scope                                  2Q19
                                                                      Translation    Growth                Growth
                                                    base
      Total volumes (thousand hls)                32 212      - 55               -     2 051      34 208      6.4%
      Revenue                                       2 892     - 31          - 119        282       3 024      9.8%
      Cost of sales                                 - 851        5              33       - 74      - 887     -8.7%
      Gross profit                                  2 041     - 26            - 86       208       2 137    10.3%
      SG&A                                          - 827        4              31         55      - 736      6.7%
      Other operating income/(expenses)                21        3              -1         25         47   107.4%
      Normalized EBIT                               1 235     - 19            - 56       288       1 448    23.7%
      Normalized EBITDA                             1 448     - 33            - 65       320       1 670    22.6%
      Normalized EBITDA margin                     50.1%                                          55.2%    575 bps

      South America                                 2Q18
                                                                        Currency     Organic               Organic
                                               Reference    Scope                                  2Q19
                                                                      Translation    Growth                Growth
                                                    base
      Total volumes (thousand hls)                30 383        21               -       184     30 588        0.6%
      Revenue                                       2 101        2          - 110        159      2 152        7.6%
      Cost of sales                                 - 797     - 48              86     - 132      - 890      -15.6%
      Gross profit                                  1 304     - 46            - 24         27     1 262        2.2%
      SG&A                                          - 720       -5              50       - 18     - 693       -2.5%
      Other operating income/(expenses)                74       -3              -2       - 31        38      -43.3%
      Normalized EBIT                                 657     - 54              24       - 21       607       -3.5%
      Normalized EBITDA                               884       21               8       - 74       839       -8.2%
      Normalized EBITDA margin                     42.1%                                         39.0%     -632 bps




                                                                                                                20

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      EMEA                                     2Q18
                                                                    Currency     Organic               Organic
                                          Reference     Scope                                2Q19
                                                                  Translation    Growth                Growth
                                               base
      Total volumes (thousand hls)           21 340      - 416               -     1 155    22 079        5.5%
      Revenue                                  2 176       - 10         - 198        145     2 113        6.7%
      Cost of sales                            - 887          7             80     - 109     - 910     -12.6%
      Gross profit                             1 289         -3         - 118          35    1 203        2.8%
      SG&A                                     - 751         -2             66       - 23    - 711       -3.1%
      Other operating income/(expenses)           68          -             -4         -8       55     -11.3%
      Normalized EBIT                            606         -5           - 57          4      548        0.7%
      Normalized EBITDA                          847         -6           - 79         41      803        4.9%
      Normalized EBITDA margin                38.9%                                         38.0%      -68 bps

      Asia Pacific                             2Q18
                                                                    Currency     Organic               Organic
                                          Reference     Scope                                2Q19
                                                                  Translation    Growth                Growth
                                               base
      Total volumes (thousand hls)           29 804       - 32               -       333    30 105       1.1%
      Revenue                                  2 327      - 14          - 170        163     2 306       7.1%
      Cost of sales                            - 958        -2              64         1     - 895       0.1%
      Gross profit                             1 369      - 16          - 106        164     1 411      12.2%
      SG&A                                     - 741        19              47        33     - 642       4.6%
      Other operating income/(expenses)           43         -              -4        24        63      56.7%
      Normalized EBIT                            670         3            - 63       221       832      33.2%
      Normalized EBITDA                          870         3            - 76       200       998      23.1%
      Normalized EBITDA margin                37.4%                                         43.3%      564 bps

      Global Export and Holding                2Q18
                                                                    Currency     Organic               Organic
      Companies                           Reference     Scope                                2Q19
                                                                  Translation    Growth                Growth
                                               base
      Total volumes (thousand hls)               132     - 132             -          26          26         -
      Revenue                                      87        26           -2          36         145    32.3%
      Cost of sales                              - 65      - 34            3        - 44     -   138   -46.4%
      Gross profit                                 22        -8            1          -9           7   -64.1%
      SG&A                                     - 236         -1            5        - 19     -   251    -8.1%
      Other operating income/(expenses)             5         2           -4          20          21   322.6%
      Normalized EBIT                          - 209         -6            2          -8     -   224    -3.9%
      Normalized EBITDA                        - 141         -1           -1          -1     -   146    -0.4%




                                                                                                            21

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      Annex 2
      AB InBev Worldwide                               HY18
                                                                           Currency     Organic              Organic
                                                  Reference    Scope                                 HY19
                                                                         Translation    Growth               Growth
                                                       base
      Total volumes (thousand hls)                  278 515    -3 645               -     4 711    279 581      1.7%
                     of which AB InBev own beer     245 983    -2 539               -     4 037    247 481      1.7%
      Revenue                                        26 854     - 180         -1 724      1 603     26 552      6.0%
      Cost of sales                                 -10 096       - 30           653      - 666    -10 138     -6.6%
      Gross profit                                   16 758     - 210         -1 071        936     16 414      5.7%
      SG&A                                            -8 774        64           544        - 92    -8 258     -1.1%
      Other operating income/(expenses)                  397        -4           - 27         28       393      7.0%
      Normalized EBIT                                  8 383    - 150          - 554        872      8 549    10.6%
      Normalized EBITDA                              10 702       - 55         - 731        935     10 849      8.8%
      Normalized EBITDA margin                        39.9%                                         40.9%    104 bps

      North America                                    HY18
                                                                           Currency     Organic              Organic
                                                  Reference    Scope                                 HY19
                                                                         Translation    Growth               Growth
                                                       base
      Total volumes (thousand hls)                   54 627       15               -     -1 007     53 635     -1.8%
      Revenue                                          7 641       7            - 44          98     7 701      1.3%
      Cost of sales                                   -2 832      -7              14        - 42    -2 869     -1.5%
      Gross profit                                     4 808       1            - 31          55     4 833      1.2%
      SG&A                                            -2 228      -3              17          17    -2 197      0.7%
      Other operating income/(expenses)                    2       -               -          19        20          -
      Normalized EBIT                                  2 581      -2            - 13          91     2 656      3.5%
      Normalized EBITDA                                2 995      -2            - 15          67     3 045      2.3%
      Normalized EBITDA margin                        39.2%                                         39.5%     38 bps

      Middle Americas                                  HY18
                                                                           Currency     Organic              Organic
                                                  Reference    Scope                                 HY19
                                                                         Translation    Growth               Growth
                                                       base
      Total volumes (thousand hls)                   62 950     - 109               -     1 881     64 722      3.0%
      Revenue                                          5 597      - 59         - 210        407      5 735      7.3%
      Cost of sales                                   -1 662      - 17             60       - 92    -1 711     -5.5%
      Gross profit                                     3 935      - 76         - 150        315      4 024      8.2%
      SG&A                                            -1 625        12             56         74    -1 483      4.6%
      Other operating income/(expenses)                   27         4             -1         25        55    79.9%
      Normalized EBIT                                  2 337      - 60           - 95       414      2 595    18.2%
      Normalized EBITDA                                2 742      - 58         - 111        464      3 036    17.3%
      Normalized EBITDA margin                        49.0%                                         52.9%    449 bps

      South America                                    HY18
                                                                           Currency     Organic              Organic
                                                  Reference    Scope                                 HY19
                                                                         Translation    Growth               Growth
                                                       base
      Total volumes (thousand hls)                   64 471      188                -     2 198    66 856        3.4%
      Revenue                                          4 962       12          - 814        611     4 769       12.3%
      Cost of sales                                   -1 879     - 57            312      - 305    -1 928      -15.8%
      Gross profit                                     3 082     - 46          - 502        306     2 841       10.1%
      SG&A                                            -1 588     - 12            250        - 75   -1 427       -4.7%
      Other operating income/(expenses)                  156       -4            - 11       - 41      100      -27.0%
      Normalized EBIT                                  1 649     - 62          - 263        190     1 514       12.1%
      Normalized EBITDA                                2 141       35          - 350        149     1 976        6.9%
      Normalized EBITDA margin                        43.1%                                        41.4%     -213 bps




                                                                                                                  22

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      EMEA                                       HY18
                                                                     Currency     Organic               Organic
                                            Reference    Scope                                HY19
                                                                   Translation    Growth                Growth
                                                 base
      Total volumes (thousand hls)             41 889    -3 228               -     1 574    40 235         4.1%
      Revenue                                    4 095    - 147          - 348        187     3 786         4.8%
      Cost of sales                             -1 721        86           142      - 144    -1 637        -8.9%
      Gross profit                               2 374      - 61         - 207          42    2 149         1.8%
      SG&A                                      -1 473        51           122        - 59   -1 359        -4.2%
      Other operating income/(expenses)            117        -1             -7       - 11       98        -9.4%
      Normalized EBIT                            1 018      - 10           - 92       - 27      888        -2.7%
      Normalized EBITDA                          1 507      - 25         - 134          24    1 373         1.6%
      Normalized EBITDA margin                  36.8%                                        36.3%      -113 bps

      Asia Pacific                               HY18
                                                                     Currency     Organic               Organic
                                            Reference    Scope                                HY19
                                                                   Translation    Growth                Growth
                                                 base
      Total volumes (thousand hls)             54 100      - 32              -         23    54 092        0.0%
      Revenue                                    4 367     - 14          - 302       255      4 306        5.9%
      Cost of sales                             -1 828       -2            118       - 32    -1 743       -1.7%
      Gross profit                               2 539     - 16          - 184       224      2 563        8.9%
      SG&A                                      -1 363       19             85         22    -1 237        1.6%
      Other operating income/(expenses)             84        -             -6         13        91      16.1%
      Normalized EBIT                            1 259        3          - 105       259      1 417      20.6%
      Normalized EBITDA                          1 642        3          - 130       273      1 787      16.6%
      Normalized EBITDA margin                  37.6%                                        41.5%      384 bps

      Global Export and Holding Companies        HY18
                                                                     Currency     Organic               Organic
                                            Reference    Scope                                HY19
                                                                   Translation    Growth                Growth
                                                 base
      Total volumes (thousand hls)                 478    - 478              -         42          42         -
      Revenue                                      193        20            -5         46         254    23.7%
      Cost of sales                              - 173      - 33             7       - 52     -   249   -27.9%
      Gross profit                                  21      - 13             3         -6           5   -74.0%
      SG&A                                       - 496        -3            15       - 72     -   556   -14.4%
      Other operating income/(expenses)             13        -3            -2         22          29   233.8%
      Normalized EBIT                            - 462      - 19            16       - 56     -   522   -11.6%
      Normalized EBITDA                          - 325        -9             9       - 42     -   368   -12.4%




                                                                                                             23

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Date: 25/07/2019 07:34:00
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