Anheuser-Busch InBev SA/NV — 2021 Form 20-F
Reporting period: Fiscal year ended December 31, 2021. This is an annual report, not a standalone fourth-quarter filing; it does not provide a clear, complete set of consolidated Q4-only financial results. Financial statements are audited and prepared under IFRS.
Business context
AB InBev is a global brewer and beverage company operating across five geographic regions, with more than 500 brands and approximately 169,000 employees. It reported 582 million hectoliters of volume in 2021. The year reflected a recovery from pandemic-related disruption in 2020, including renewed on-premise sales in many markets, partly offset by continuing restrictions and supply-chain pressures.
Financial and operating performance
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| Revenue | $54.304 billion | $46.881 billion | +15.8% |
| Volume | 581.7 million hl | 530.6 million hl | +9.6% |
| Gross profit | $31.207 billion | $27.247 billion | +14.5% |
| Profit from operations | $13.824 billion | $9.620 billion | +43.7% |
| Normalized EBITDA | $19.209 billion | $17.321 billion | +10.9% |
| Profit for the year | $6.114 billion | $2.202 billion | — |
| Profit attributable to AB InBev equity holders | $4.670 billion | $1.405 billion | — |
| Cash flow from operating activities | $14.799 billion | $10.891 billion | +35.9% |
| Net capital expenditure | $5.498 billion | $3.687 billion | — |
| Net debt at year-end | $76.162 billion | $82.722 billion | Down $6.560 billion |
Margins: Calculated from reported amounts, gross margin was approximately 57.5%, operating margin 25.5%, and Normalized EBITDA margin 35.4%. Normalized EBITDA and related adjusted earnings measures are non-IFRS measures; the company cautions that they exclude financing, tax, depreciation and other items and are not substitutes for IFRS results or cash flow.
Per-share results: Basic EPS was $2.33, versus $0.70 in 2020; diluted EPS was $2.28, versus $0.69. Underlying EPS, a non-IFRS measure, was $2.88, versus $2.51.
Cash generation and liquidity: Operating cash flow benefited from higher profit and a $2.459 billion working-capital inflow. Net capital expenditure was $5.498 billion; operating cash flow less that spending was approximately $9.301 billion, a simple calculation rather than a company-reported free-cash-flow measure. Year-end cash and cash equivalents, net of overdrafts, plus short-term debt securities were about $12.0 billion; total stated liquidity was $22.2 billion, including an undrawn $10.1 billion committed revolving facility.
Debt: Interest-bearing loans and borrowings, including lease liabilities, totaled $88.777 billion. Net debt was $76.162 billion. Management’s stated optimal net debt/Normalized EBITDA level is around 2x; the ratio calculated from year-end net debt and reported 2021 Normalized EBITDA is approximately 4.0x. The filing reports 93.1% of interest-bearing financial liabilities as fixed-rate and 6.9% as variable-rate after hedging and fair-value adjustments. S&P rated long-term debt BBB+ and Moody’s Baa1, both with stable outlooks.
Material changes versus 2020
- Revenue rose 15.8%; excluding acquisitions, disposals and currency translation, management reported revenue growth of 15.6% and revenue per hectoliter growth of 5.5%, attributing the latter to premiumization and revenue management.
- Volume increased 9.6%, with the largest regional growth in Middle Americas (+17.1%) and EMEA (+13.8%); North America was nearly flat (+0.1%).
- Cost of sales rose 17.6%, faster than revenue. Management cited higher volumes, commodity and logistics costs, and transactional foreign-exchange headwinds. Cost of sales per hectoliter increased 7.2% excluding specified structural and currency effects.
- Operating profit improved partly because 2020 included $2.5 billion of goodwill impairment. Exceptional items were $614 million of expense in 2021, compared with $3.103 billion in 2020.
- Net finance cost declined to $5.609 billion from $7.697 billion, chiefly reflecting much smaller mark-to-market losses on share-related hedges. The 2021 result also included $226 million of Brazilian tax-credit income in other operating income and $118 million of related interest income; the comparable 2020 credits and interest income were $481 million and $315 million.
- Operating cash flow increased, while investing cash flow shifted to a $5.878 billion outflow from a $6.336 billion inflow in 2020, which included $10.838 billion of proceeds from the Australian business sale.
Outlook, risks and unusual items
- 2022 outlook: Management expected Normalized EBITDA growth in line with its medium-term range of 4%–8%, excluding currency translation, and revenue growth ahead of EBITDA from a combination of volume and price. Expected 2022 net capex was $4.5–$5.0 billion; average gross debt coupon was approximately 4.0%. The outlook depends on the company’s evolving assessment of COVID-19.
- Costs and execution: Higher commodity, packaging, energy, transport and logistics costs could pressure margins if price increases do not offset them or reduce demand. Supply constraints, including beverage containers and transport, were reported. Management also cited elevated supply-chain costs and higher variable compensation.
- COVID-19 and markets: Restrictions continued to affect on-premise channels and could return; economic weakness, inflation, consumer shifts and currency volatility may affect demand, costs, liquidity and reported results. Argentina is accounted for as a hyperinflationary economy.
- Russia/Ukraine subsequent event: After year-end, on March 11, 2022, AB InBev said it would forfeit financial benefits from its 50% non-controlling associate AB InBev Efes and requested suspension of the Bud license in Russia. The stake had a $1.1 billion book value at year-end; a separate 24% stake in Anadolu Efes had a $201 million book value. The conflict triggered impairment testing; management expected a non-cash Q1 2022 impairment but could not quantify it.
- Other unusual items: 2021 exceptional charges included $105 million of COVID-related costs, $172 million of restructuring, $247 million net expense on disposals and impairments, and $72 million of Zenzele Kabili costs. The $247 million included a $258 million non-cash impairment related to Bedford Systems following the announced cessation of that business.
- Contingencies: The filing describes numerous tax, labor and other proceedings. Ambev reported material possible Brazilian tax losses, including approximately $1.9 billion related to InBev Holding goodwill amortization and $1.5 billion related to ICMS-ST; management had not recorded provisions for these matters because it assessed the losses as possible rather than probable. The filing also describes the Belgian excess-profit ruling dispute and other litigation. Amounts and outcomes remain subject to legal and tax processes.
- Capital allocation: The Board proposed a 2021 dividend of €0.50 per share, subject to shareholder approval. Deleveraging remains a priority and may constrain future dividends. The company reported no issuer share repurchases during 2021.
- Audit and controls: PwC issued an unqualified opinion on the consolidated financial statements and concluded internal control over financial reporting was effective as of December 31, 2021.
Most important facts for investors to verify
- Reconcile reported and adjusted earnings, especially the 2020 goodwill impairment, 2021 tax credits, and share-hedge mark-to-market effects.
- Assess whether growth in volume and pricing can offset cost inflation, and whether the 2021 working-capital cash inflow is sustainable.
- Track net debt reduction against management’s approximately 2x target, refinancing needs, interest costs and the availability of committed liquidity.
- Review the status and potential cash impact of major tax and legal contingencies, particularly the Brazilian tax matters and Belgian state-aid proceedings.
- Monitor the Russia/Ukraine-related associate impairment and any effects on supply, currencies, commodity prices or the company’s 2022 guidance.
- Compare 2022 performance with the stated 4%–8% EBITDA-growth outlook, its currency exclusion, and planned $4.5–$5.0 billion capital expenditure.