AB InBev Financial Results
to realize proceeds from asset sales when needed, would have a material adverse effect on its financial condition and
results of operations.
AB InBev's results could be negatively affected by increasing interest rates. Although AB InBev enters into interest rate
swap agreements to manage its interest rate risk and also enters into cross-currency interest rate swap agreements to
manage both its foreign currency risk and interest-rate risk on interest-bearing financial liabilities, there can be no
assurance that such instruments will be successful in reducing the risks inherent in exposures to interest rate fluctuations.
The ability of AB InBev's subsidiaries to distribute cash upstream may be subject to various conditions and limitations,
including, but not limited to, currency controls and restrictions, accounting principles and illiquidity, inconvertibility or non-
transferability of a specified currency. The inability to obtain sufficient cash flows from its domestic and foreign subsidiaries
and affiliated companies could adversely impact AB InBev's ability to pay dividends and otherwise negatively impact its
business, results of operations and financial condition.
Changes in the availability or price of raw materials, commodities, energy and water, including as a result of geopolitical
instability, inflationary pressures, currency fluctuations, the COVID-19 pandemic, constraints on sourcing and unexpected
increases in tariffs on such raw materials and commodities, like aluminum, could have an adverse effect on AB InBev's
results of operations to the extent that AB InBev fails to adequately manage the risks inherent in such volatility, including
if AB InBev's hedging and derivative arrangements do not effectively or completely hedge against foreign currency risks
and changes in commodity prices. AB InBev experienced higher commodity, raw materials and logistics costs during 2022,
which may continue. Energy prices have been subject to significant price volatility in the recent past, including as a result
of the ongoing conflict between Russia and Ukraine, and may be again in the future. High energy prices over an extended
period of time and disruptions or constraints in the availability of transportation services may affect the price or availability
of raw materials or commodities required for AB InBev's products, and may adversely affect AB InBev's operations. AB
InBev may not be able to increase its prices to offset these increased costs or increase its prices without suffering reduced
volume, revenue and operating income.
Certain of AB InBev's operations depend on effective distribution networks to deliver its products to consumers, and
distributors play an important role in distributing a significant proportion of beer and other beverages. Generally, distributors
purchase AB InBev's products from AB InBev and then sell them either to other distributors or points of sale. Such
distributors are either government-controlled or privately owned but independent wholesale distributors, and there can be
no assurance that such distributors will not give priority to AB InBev's competitors. Further, any inability of AB InBev to
replace unproductive or inefficient distributors, or any limitations imposed on AB InBev to purchase or own any interest in
distributors or wholesalers as a result of contractual restrictions, regulatory changes, changes in legislation or the
interpretations of legislation by regulators or courts could adversely impact AB InBev's business, results of operations and
financial condition.
The continued consolidation of retailers in markets in which AB InBev operates could result in reduced profitability for the
beer industry as a whole and indirectly adversely affect AB InBev's financial results.
AB InBev relies on key third parties, including key suppliers, for a range of raw materials for its beer, alcoholic beverages
and soft drinks, and for packaging material. The termination of or any material change to arrangements with certain key
suppliers or the failure of a key supplier to meet its contractual obligations could have a material impact on AB InBev's
production, distribution and sale of beer, alcoholic beverages and soft drinks and have a material adverse effect on AB
InBev's business, results of operations, cash flows or financial condition. Certain of AB InBev's subsidiaries may purchase
nearly all of their key packaging materials from sole suppliers under multi-year contracts. The loss of or temporary
discontinuity of supply from any of these suppliers without sufficient time to develop an alternative source could cause AB
InBev to spend increased amounts on such supplies in the future.
Negative publicity surrounding the company, its activities, its personnel or its business partners, consumer perception of
the company's response to political and social issues or catastrophic events, and campaigns by activists, whether or not
warranted, connecting the company, its personnel, its supply chain or its business partners with a failure to maintain high
ethical, business and environmental, social and governance practices or workplace and human rights issues, whether
actual or perceived, could adversely impact the company's brand image and reputation and may decrease demand for its
products, thereby adversely affecting its business. AB InBev has made a number of commitments to respect human rights,
including its commitment to the principles and guidance contained in the UN Guiding Principles on Business and Human
Rights, through its policies. Allegations, even if untrue, that the company is not respecting its commitments or actual or
perceived failure by its suppliers or other business partners to comply with applicable laws or regulations, workplace and
labor laws, including child labor laws, or their actual or perceived abuse or misuse of migrant workers could negatively
affect AB InBev's overall reputation and brand image. Activities by the company's promotional partners that harm their
public image or reputation could also have an adverse effect on AB InBev's reputation or brand image, and may decrease
demand for AB InBev's products, thereby adversely affecting its business.
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