2020 is shaping up to be a very challenging year for ABI. The outbreak of COVID-19 is affecting consumption in China (c. 9% of sales) and Q120 organic EBITDA is expected to fall 10% as Beer is a relatively high fixed cost industry that is sensitive to sharp volume declines. COGS/hl are still inflationary, albeit less dramatically than in 2019. The macro is weak in many markets. However, comps ease substantially for ABI in H2. We met with management on Friday. Despite the slightly slower-than-expected deleveraging in 2019 – due to cost inflation and macro worsening in H2, mainly – management does not feel under pressure to shed more assets. They are encouraged by trends in the US business, which is edging towards stabilisation after many years. To offset mid-teens COGS inflation in 2019, management took significant costs out during the year; once COGS eventually normalise this could deliver some margin benefits. Even though there are no more SAB synergies, management expects margins to expand over time due to product mix (and, presumably, continued tight cost control). Longer term, we see ABI as a continued consolidator in Beer and adjacent categories. There is more to do in Africa and Asia, and management confirmed again that the recently IPO’d Budweiser APAC is indeed a vehicle to enable M&A in the Asian region. With a market share almost 3x the size of the next largest company, and 57% of sales in the emerging markets, ABI is in a powerful position to capitalise on the ongoing development of the global Beer category. Once the proceeds from Australia come in, net debt should fall to around $84.6bn; annual FCF pre interest & dividend is $12bn+. On a PE basis, ABI is now 6% below its 20-year average; on EV/EBITDA, it is now below 10x, a level it has only (briefly) reached twice in the last 7 years.