Core Viewpoint - Budweiser APAC reported a decline in total revenue and profit for the first three quarters, indicating challenges in the Chinese market while showing strength in the Indian market [1] Financial Performance - Total revenue for the first three quarters was $4.691 billion, a year-on-year decrease of 6.6% [1] - Profit attributable to equity holders was $594 million, down 19.95% year-on-year [1] - Total sales volume decreased by 7.0% in the first nine months of 2025, with a decline of 8.6% in the third quarter [1] Regional Performance - The Asia Pacific West region benefited from strong performance in the Indian market, while the Chinese market showed better-than-expected results [1] - The Asia Pacific East region's third-quarter revenue performance was stronger than anticipated [1] Management Insights - The CEO and Co-Chairman noted that the Chinese business continues to face challenges due to weak business layout and ready-to-drink channel performance [1] - In South Korea, gross margin expansion was observed, with all channels outperforming industry levels [1] - The company aims to focus on strengthening its core product portfolio, expanding non-ready-to-drink marketing, and enhancing execution capabilities to seize future growth opportunities [1]

Core Viewpoint - Budweiser APAC reported a decline in total revenue and profit for the first three quarters, indicating challenges in the market, particularly in China, despite strong performance in India and some regions in Asia [1]. Financial Performance - Total revenue for the first three quarters was $4.691 billion, a year-on-year decrease of 6.6% [1]. - Profit attributable to equity holders was $594 million, down 19.95% year-on-year [1]. - Total sales volume decreased by 7.0% in the first nine months of 2025, with a decline of 8.6% in the third quarter [1]. Regional Performance - The Asia Pacific West region benefited from strong performance in the Indian market, while the Chinese market showed better-than-expected results [1]. - The Asia Pacific East region's third-quarter revenue performance was stronger than anticipated [1]. Management Insights - The CEO and Co-Chairman noted that the business in China continues to face challenges due to weak performance in ready-to-drink channels and overall business layout [1]. - In South Korea, gross margin expansion was observed, with performance across various channels exceeding industry levels [1]. - The company aims to focus on strengthening its core product portfolio, expanding non-ready-to-drink marketing, and enhancing execution capabilities to seize future growth opportunities [1].

Financial Data and Key Metrics Changes - In the first nine months of 2025, total volumes decreased by 7%, revenue decreased by 6.6%, while revenue per hectoliter increased by 0.4% [6] - Normalized EBITDA decreased by 7.7%, and the normalized EBITDA margin contracted by 37 basis points [6] - In the third quarter, total volumes and revenue decreased by 8.6% and 8.4%, respectively, with normalized EBITDA decreasing by 6.9% but the normalized EBITDA margin expanding by 46 basis points [6][10] Business Line Data and Key Metrics Changes - In APAC West, volumes and revenue decreased by 7.9% and 8.7%, respectively, while normalized EBITDA decreased by 9.7% [7] - In China, volumes in the third quarter decreased by 11.4%, and revenue decreased by 15.1%, with a normalized EBITDA decrease of 17.4% [7] - In APAC East, volumes decreased by 0.5%, while revenue and revenue per hectoliter increased by 1.8% and 2.3%, respectively [11] Market Data and Key Metrics Changes - In India, the company delivered double-digit revenue growth in the third quarter, with the Budweiser brand growing ahead of the industry [10] - In South Korea, volumes were flattish, with revenue and revenue per hectoliter growing by mid-single digits [11] - The contribution of the in-home channel to total volumes and revenue has continued to increase, with premium and super premium segments outpacing traditional channels [35] Company Strategy and Development Direction - The company is focused on improving top-line performance by enhancing route-to-market strategies, increasing investments in mega brands, and leading innovation in packaging and product offerings [8][10] - There is a clear priority to reignite growth and rebuild market share momentum, particularly in China [4][5] - The company aims to expand its footprint through targeted geographic expansion and restore excellence in execution [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in China due to a soft economic cycle but emphasized opportunities for improvement in inventory management and resource allocation [4][29] - The company remains optimistic about growth in India and South Korea, with a focus on premiumization and innovation to capture market share [10][12] - Management highlighted the importance of maintaining investments in both on-trade and off-trade channels to support brand building and consumer engagement [46][68] Other Important Information - The company is actively managing inventory levels, with current inventories lower than the previous year, and is focused on optimizing its route-to-market [29] - The company is committed to upholding compliance standards amid ongoing customs disputes in South Korea and Taiwan [72][74] Q&A Session Summary Question: Brand performance in China and mega brands' trends - Management discussed the impact of in-home consumption trends and innovations in product offerings, particularly for Budweiser and Corona [16][17] Question: Demand trends in South Korea - Management noted that while the industry remains soft, there are pockets of growth in non-alcoholic and flavored beers, with a strong performance from the core portfolio [21][24] Question: Outlook for the China market - Management confirmed proactive inventory management and expressed cautious optimism for a rebound in selling performance [28][30] Question: In-home channel penetration and expansion plans - Management indicated that the in-home channel currently accounts for about 60% of the industry, with plans to increase penetration closer to industry averages [31][32] Question: Strategies for low alcohol beer market - Management highlighted ongoing innovations in non-alcoholic and low-alcohol products, particularly in South Korea, where consumer interest is growing [52][55] Question: Update on Korean customs tax dispute and Taiwan anti-dumping duties - Management provided updates on ongoing customs disputes and adjustments in tariff rates in Taiwan, emphasizing the importance of market access [72][74]

Financial Data and Key Metrics Changes - In the first nine months of 2025, total volumes decreased by 7%, revenue decreased by 6.6%, while revenue per hectoliter increased by 0.4% [7] - Normalized EBITDA decreased by 7.7%, and the normalized EBITDA margin contracted by 37 basis points [7] - In the third quarter, total volumes and revenue decreased by 8.6% and 8.4%, respectively, with normalized EBITDA decreasing by 6.9% but the normalized EBITDA margin expanding by 46 basis points [7] Business Line Data and Key Metrics Changes - In APAC West, volumes and revenue decreased by 7.9% and 8.7%, respectively, with normalized EBITDA decreasing by 9.7% [8] - In China, volumes in the third quarter decreased by 11.4%, revenue decreased by 15.1%, and revenue per hectoliter decreased by 4.1% [8] - In APAC East, volumes decreased by 0.5%, while revenue and revenue per hectoliter increased by 1.8% and 2.3%, respectively [12] Market Data and Key Metrics Changes - In India, the company delivered double-digit revenue growth in the third quarter, translating into strong EBITDA performance [11] - In South Korea, volumes were flattish, with revenue and revenue per hectoliter both growing by mid-single digits [12] Company Strategy and Development Direction - The company is focused on improving top-line performance by enhancing route-to-market strategies, increasing investment in mega brands, and leading innovation within the industry [9] - The strategy includes expanding the in-home channel and premiumizing the product offerings to capture growth opportunities [9][10] - The company aims to restore excellence in execution and improve market share momentum [4][5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in China due to a soft economic cycle but emphasized a clear view of improvement opportunities [4] - The company remains committed to operational excellence and is optimistic about long-term growth despite current market conditions [5][11] Other Important Information - The company continues to leverage technology to enhance commercial capabilities and optimize route-to-market strategies [11] - The performance in South Korea and India has been solid, with ongoing investments in marketing and product innovation [11][12] Q&A Session Summary Question: Insights on brand performance in China - Management highlighted the importance of aligning brand performance with channel strategies, particularly focusing on in-home consumption and innovations [18][20] Question: Demand trends in Korea - Management noted that while the overall industry remains soft, there are pockets of growth in non-alcoholic and flavored beers, and the company is well-positioned to capture these opportunities [25][27] Question: Outlook for the China market - Management confirmed proactive inventory management and a focus on maintaining healthy route-to-market strategies, with expectations for gradual improvements [30][31] Question: In-home channel penetration - Management indicated that the in-home channel currently accounts for over 50% of their mix, with plans to increase this closer to the industry average [32][34] Question: Branding strategy for Harbin - Management expressed confidence in the Harbin brand's ability to compete nationally, particularly in Guangdong, and emphasized the need for a diverse portfolio to meet local consumer needs [39][42] Question: Commercial investment allocation - Management stated that investments are being sustained in both on-trade and off-trade channels, with a shift towards in-home channels as consumer preferences evolve [66][68] Question: Updates on Korean customs tax dispute - Management confirmed that the dispute is ongoing, with non-underlying charges recorded, but emphasized that the potential penalty exposure is not expected to be material [72][74]

Financial Data and Key Metrics Changes - In the first nine months of 2025, total volumes decreased by 7%, revenue decreased by 6.6%, while revenue per hectoliter increased by 0.4% [8] - Normalized EBITDA decreased by 7.7%, and the normalized EBITDA margin contracted by 37 basis points [8] - In Q3 2025, total volumes and revenue decreased by 8.6% and 8.4%, respectively, with normalized EBITDA decreasing by 6.9% but the normalized EBITDA margin expanding by 46 basis points [8][9] Business Line Data and Key Metrics Changes - In APAC West, volumes and revenue decreased by 7.9% and 8.7%, respectively, with normalized EBITDA decreasing by 9.7% [10] - In China, volumes in Q3 decreased by 11.4%, revenue decreased by 15.1%, and revenue per hectoliter decreased by 4.1% [10] - In APAC East, volumes decreased by 0.5%, while revenue and revenue per hectoliter increased by 1.8% and 2.3%, respectively [14] Market Data and Key Metrics Changes - In India, the company delivered double-digit revenue growth in Q3, with the Budweiser brand growing ahead of the industry [13] - In South Korea, volumes were flattish, with revenue and revenue per hectoliter growing by mid-single digits [14] - The contribution of the in-home channel to total volume and revenue has continued to increase, with premium and super premium segments outpacing contributions from Chinese restaurants [42] Company Strategy and Development Direction - The company is focused on improving top-line performance through strengthening route-to-market, increasing investment in mega brands, leading innovation, and expanding geographic footprint [11] - The strategy includes enhancing the in-home channel and premiumizing the product offerings to capture growth opportunities [11][12] - The company is committed to leveraging technology to enhance commercial capabilities and optimize route-to-market [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in China due to a soft economic cycle but emphasized a clear view of improvement opportunities [6] - The company remains optimistic about growth in India and South Korea, with a focus on premiumization and innovation [13][30] - Management highlighted the importance of maintaining investments in both on-trade and off-trade channels despite current pressures [56] Other Important Information - The company is actively managing inventory levels, with current inventories lower than the previous year [35] - There are ongoing customs tax disputes in South Korea, with non-underlying charges related to these claims amounting to $84 million [82] - In Taiwan, a provisional tariff was slightly adjusted down to 31.3% [84] Q&A Session Summary Question: Can you provide more details on brand performance in China, particularly for mega brands? - Management discussed the impact of the in-home channel and innovations like larger packaging formats to improve brand performance [21][22] Question: What is the outlook for the South Korean market given the weak industry demand? - Management noted that while the industry remains soft, there are pockets of growth in non-alcoholic and flavored beers, and the company continues to gain market share [30][31] Question: What is the current penetration level of the in-home channel in China? - Management indicated that the in-home channel accounts for about 60% of the industry but only over 50% of the company's channel mix, highlighting significant growth opportunities [38] Question: How does the company allocate resources between on-trade and off-trade channels? - Management stated that while investments in on-trade channels are maintained for brand building, a larger proportion of spending is directed towards in-home channels [77] Question: What are the strategies for low alcohol beer products? - Management emphasized ongoing innovation in non-alcoholic and low-alcohol beers, with a focus on consumer needs and market maturity [64][66] Question: Can you provide updates on the Korean customs tax dispute and Taiwan's anti-dumping duties? - Management confirmed the ongoing customs tax dispute and the slight adjustment in Taiwan's tariff rate, emphasizing the importance of maintaining market access [82][84]

Core Insights - Budweiser APAC reported a total revenue of $4.691 billion for the first nine months of 2025, representing a year-on-year decline of 6.6% [1] - The gross profit for the same period was $2.412 billion, down 5.8% year-on-year [1] - The profit attributable to equity holders was $594 million, reflecting a significant decrease of 19.95% compared to the previous year [1] Sales Performance - Total sales volume decreased by 7.0% in the first nine months of 2025, with a more pronounced decline of 8.6% in the third quarter [1] - The decline in sales was primarily attributed to challenges faced in the Chinese market and distribution channels, although strong performance in India partially offset this impact [1]

Core Insights - Budweiser APAC reported a 7.0% year-on-year decline in total sales volume for the first nine months of 2025, reaching 661.4 million liters, primarily due to challenges in its business layout in China, partially offset by performance in India [1] - Revenue for the same period decreased by 6.6% year-on-year to $4.691 billion, while revenue per hectoliter increased by 0.4%, benefiting from positive regional mix in India and revenue management measures in Eastern Asia [1] - Normalized EBITDA for the first nine months of 2025 fell by 7.7% to $1.421 billion, influenced by revenue performance, with the normalized EBITDA margin decreasing by 37 basis points to 30.3% [1] Financial Performance - Normalized profit attributable to equity holders decreased from $777 million in the first nine months of 2024 to $678 million in the same period of 2025 [1] - Profit attributable to equity holders dropped from $742 million in the first nine months of 2024 to $594 million in the first nine months of 2025 [1] Regional Performance - The CEO highlighted ongoing challenges in China due to business layout and weak ready-to-drink channels, while noting margin expansion in South Korea with performance exceeding industry levels [2] - Strong growth momentum was maintained in India, with Budweiser brand growth leading the industry [2] - The company plans to focus on strengthening its core product portfolio, expanding non-ready-to-drink marketing, and enhancing execution capabilities to seize future growth opportunities [2]

Core Insights - Budweiser APAC reported a revenue of approximately $4.691 billion for the first nine months of 2025, representing a year-on-year decrease of 6.6% [1] - Gross profit for the same period was $2.412 billion, down 5.8% year-on-year [1] - Net profit attributable to equity holders was $594 million, a decline of 19.95% year-on-year, while normalized profit attributable to equity holders was $678 million, down 12.74% year-on-year [1] Revenue and Sales Performance - Total sales volume decreased by 7.0% in the first nine months of 2025, with a more significant decline of 8.6% in the third quarter of 2025, primarily due to the company's business layout and channel performance in China, although partially offset by strong performance in India [1] - Revenue for the first nine months of 2025 decreased by 6.6%, while revenue per hectoliter increased by 0.4% [1] - In the third quarter of 2025, revenue fell by 8.4%, with revenue per hectoliter increasing by 0.1%, driven by revenue management measures in Eastern Asia and a favorable product mix in India, but negatively impacted by performance in China [1]

Sales Performance - Total sales volume decreased by 7.0% to 66,140 million liters for the nine months ended September 30, 2025, primarily due to challenges in the Chinese market, partially offset by performance in India[5] - In Q3 2025, sales in China decreased by 11.4%, with revenue down 15.1% and revenue per hectoliter down 4.1% due to increased investment in innovative products and brand promotion[17] - The company’s total sales for Q3 2025 decreased by 8.6%, impacted by business layout and channel performance in China, partially offset by strong performance in India[24] - Total sales volume for the first nine months of 2025 decreased to 6,614 million liters, representing a decline of 7.0% compared to 2024[46] - In the third quarter of 2025, total sales volume was 2,251 million liters, down 8.6% year-over-year[46] Revenue and Profitability - Revenue for the nine months ended September 30, 2025, decreased by 6.6% to $4,691 million, with revenue per hectoliter increasing by 0.4% driven by positive regional mix in India and revenue management measures in Eastern Asia[8] - In the third quarter of 2025, total sales and revenue decreased by 8.6% and 8.4%, respectively, with continued challenges in the Chinese market, partially offset by performance in India[14] - For the first nine months of 2025, total sales decreased by 7.0% to 66,140 thousand hectoliters, while revenue fell by 6.6% to $4,691 million[22] - Normalized net profit attributable to equity holders decreased from $777 million in the first nine months of 2024 to $678 million in 2025[10] - The company reported a net profit of $622 million for the first nine months of 2025, down from $763 million in 2024[50] Earnings and Margins - Normalized EBITDA for the nine months ended September 30, 2025, decreased by 7.7% to $1,421 million, with a normalized EBITDA margin declining by 37 basis points to 30.3%[9] - The company’s normalized EBITDA for the first nine months of 2025 decreased by 8.6% to $965 million, reflecting weak revenue performance and operational deleveraging[22] - Normalized earnings per share decreased from 5.89 cents in the first nine months of 2024 to 5.13 cents in 2025[7] - Basic earnings per share for the nine months ended September 30, 2025, was 4.49 cents, down from 5.62 cents in 2024, reflecting a decline of 20.1%[34] - Diluted earnings per share for the nine months ended September 30, 2025, was 4.46 cents, compared to 5.58 cents in 2024, representing a decrease of 20.0%[34] Cost Management and Expenses - Sales and administrative expenses decreased by 4.2% in the first nine months of 2025, attributed to flexible cost management in response to weak sales[27] - Other operating income decreased by 11.0% in the first nine months of 2025, primarily due to the write-off of non-core assets[28] - The company recorded non-core expenses related to a customs audit claim amounting to $84 million, which includes $66 million recognized in 2023 and an additional $18 million expected by September 30, 2025[31] - The company is undergoing internal restructuring to enhance capital efficiency, resulting in non-core tax expenses recognized as part of income tax expenses[32] Market Strategy and Product Development - The company plans to continue focusing on strengthening its core product portfolio and expanding non-immediate consumption marketing efforts to capture future growth opportunities[5] - The company launched new products, including a one-liter can of Budweiser Black Gold and a zero-alcohol beer, Cass ALL Zero, to enhance market presence[21] - The company is committed to driving premiumization of its products in India, contributing to strong revenue growth in that market[12] - In South Korea, the company achieved margin expansion, outperforming the market across both immediate and non-immediate channels[12] Regional Performance - In India, the company achieved double-digit revenue growth in Q3 2025, benefiting from a favorable base effect due to prior year project costs related to digital integration[19] - In the Eastern Asia Pacific region, Q3 2025 sales decreased by 0.6%, while revenue increased by 3.9% and revenue per hectoliter increased by 4.5%[20] - In South Korea, sales remained stable, with mid-single-digit growth in revenue and revenue per hectoliter, supported by strong business performance and favorable commodity prices[21] Financial Outlook and Risks - Forward-looking statements reflect management's current expectations and are subject to uncertainties and risks that could lead to actual results differing materially[41] - The company anticipates that potential fines related to customs evasion allegations will not have a significant impact on overall operations[31] - Non-core items are defined as irregular income or expenses that are not part of the company's normal business activities, and their impact is significant for understanding sustainable performance[38] - The company emphasizes that normalized measures are additional metrics and should not replace IFRS-defined measures for assessing performance[39]

Investment Rating - The report provides various investment ratings for companies in the consumer staples sector, with "Outperform" ratings for companies like China Feihe, Haidilao, and China Resources Beer, while Budweiser APAC is rated as "Neutral" [1]. Core Insights - The report highlights a rise in packaging material prices and an increase in the beer spot cost index by 2.96% year-on-year, indicating upward pressure on costs in the consumer staples sector [1][35]. - The cost indices for six categories of consumer goods monitored by HTI mostly increased, with notable changes in spot and futures indices across beer, frozen food, soft drinks, instant noodles, dairy products, and condiments [35]. Summary by Category Beer - The beer spot cost index is at 116.32, down 0.06% from last week, while the futures index is at 115.68, up 1.2% [13]. - Year-to-date, the spot index has decreased by 0.86%, and the futures index has decreased by 7.13% [14]. Condiments - The condiments spot cost index is at 100.51, down 0.1%, and the futures index is at 101.3, up 1.55% [17]. - Year-to-date, the spot index has decreased by 2.66%, and the futures index has decreased by 7.47% [17]. Dairy Products - The dairy products spot cost index is at 101.25, down 0.13%, and the futures index is at 91.04, up 0.69% [20]. - Year-to-date, the spot index has decreased by 2.89%, and the futures index has decreased by 3.28% [20]. Instant Noodles - The instant noodles spot cost index is at 103.62, down 0.23%, and the futures index is at 102.53, up 0.88% [23]. - Year-to-date, the spot index has decreased by 2.29%, and the futures index has decreased by 5.47% [24]. Frozen Food - The frozen food spot cost index is at 120.39, up 1.02%, and the futures index is at 119.44, up 1.72% [28]. - Year-to-date, the spot index has decreased by 0.17%, and the futures index has decreased by 1.35% [28]. Soft Drinks - The soft drinks spot cost index is at 109.39, up 0.22%, and the futures index is at 109.26, up 0.72% [31]. - Year-to-date, the spot index has decreased by 3.04%, and the futures index has decreased by 9.54% [31].