Ab INBEV Fia Consulting Alex Nicholas Rodrigo Vanessa

Agenda Executive Summary Analyses of Market AB Inbev Scenario Key Issues Alternatives Financial Conclusion

Market analysis shows Alcohol and taxation restrictions increased in the last years Global Premium weight increasing: From 11% to 15% in the last 5 years Beer In home consumption trend: From 35% to 40% in the last 10 years Research shows people are spent more time at their home: Netflix effect Home delivery: Amazon and grocery store

AB Inbev growth history M&A Brahma and Skol Quilmes Labatt Interbrew Budweiser Modelo SAB Miller Business model: Strong brands – leader in big markets Price increase Aggressive cost reduction

Current scenario Highly leveraged (100Bi) Top Line growth below market expectation Poor EBITDA performance M&A: Is not an option anymore Price Stock: Decreased 50% in the last two years

Key issue Maintain AB Inbev as leader of beer industry increasing organic topline to boost stock prices

Alternatives to change the current situation Maintain current strategy: Build a stronger portfolio Price war: Price reduction to boost volumes Disrupt your own business model

Building a stronger portfolio Pros Cons S&M investment Product development Know-how Scale up Global brands

Price war Pros Cons Margin reduction Economy of scale Stock price impact Competitor can follow Margin reduction Volumes Economy of scale

Disrupt your own business model Beer on capsules for in home use sold directly to consumer Pros Cons Lead the industry Reduce intermediates Financial impact Timing

Features of the new Business Model Exclusive machine designed for Home and Commercial segment Direct Sales – New Commercial Model No Intermediates Higher Margin Higher Value Product from Customer Perception Fidelity Program Craft and Local options Branding Strengthen

Features of the new Business Model From the Operational Perspective Lower Logistic Cost for Transport and Storage Higher Shelf Life (Less Discards of Raw Material) Lower manufacturing costs through higher production rate – Encapsulant machine faster than filling machine Environment friendly Capsules

Risks Another company can develop a similar model and product faster than us Probability: Low – Heineken Impact: High Patent registrations, faster development, differentiate in commercial models Market acceptance to the new concept Probability: Unknown Impact: High Target early adopters and premium consumers first, before a full lineup of offers

Financial impacts: Revenue impact: If we maintain the current strategy we will loose 2.2Bi USD due to market share loss per year Potential market: Additional 15Bi USD per year until 2023 Investments: 2 Bi USD to develop capability and start selling Margin impact: Potential gains: 600 Mio USD Cost per liter will reduce Distribution Expenses Reduce intermediates such as Wal-Mart

Conclusion Never believe that what you have will remains to you forever Be faster to be the first, even when you are giant Disrupt your business before someone does it for you