Anheuser-Busch InBev SA/NV (BUD) Q4 2024 Earnings Conference Call February 26, 2025 7:00 AM ET Company Participants Michel Doukeris - Chief Executive Officer Fernando Tennenbaum - Chief Financial Officer Conference Call Participants Edward Mundy - Jefferies Simon Hales - Citi James Edwardes-Jones - RBC Capital Markets Sanjeet Aujla - UBS Robert Ottenstein - Evercore ISI Trevor Stirling - Bernstein Gen Cross - BNP Paribas Exane Operator Welcome to AB InBev's Full Year 2024 Earnings Conference Call and Webcas ...

Key TakeawaysNorth American sales helped Anheuser-Busch InBev beat analysts' estimates for quarterly earnings and revenue.The beer giant's U.S. sales were boosted by demand for Michelob Ultra and Busch Light brands.AB InBev's board proposed a 22% increase in the annual dividend. U.S.-listed shares of Anheuser-Busch InBev (BUD) surged 8% Wednesday when the world's biggest beermaker posted better-than-expected results and planned to raise its dividend as demand grew in North America. The brewer of Budweiser a ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

For the quarter ended December 2024, Anheuser-Busch Inbev (BUD) reported revenue of $14.84 billion, up 2.5% over the same period last year. EPS came in at $0.88, compared to $0.82 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $14.04 billion, representing a surprise of +5.68%. The company delivered an EPS surprise of +22.22%, with the consensus EPS estimate being $0.72.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings - ...

Core Insights - The beverage industry is currently experiencing a mixed earnings outlook as companies prepare to report their fourth-quarter 2024 results, with the sector ranking among the bottom 38% of Zacks classified sectors [1] Group 1: Earnings Performance - Approximately 80.6% of Consumer Staples companies have reported earnings, showing a year-over-year earnings improvement of 3.6% alongside a 0.8% revenue increase [2] - The December-quarter earnings for the Consumer Staples sector are projected to grow by 2.8% year over year, with revenues expected to rise by 0.9% [3] Group 2: Factors Influencing Earnings - The beverage industry is anticipated to benefit from strong brand performance, pricing strategies, and innovative product launches, particularly in energy and sports hydration segments [4] - Soft drink companies are focusing on health-conscious products, including beverages with natural ingredients and lower sugar content, as well as plant-based and functional beverages [5] - Alcohol companies are seeing increased demand for premium products and craft spirits with low or no alcohol content [6] - Investments in digital capabilities and technology are expected to enhance marketing and distribution, positively impacting company performance [7] Group 3: Challenges Faced - The beverage industry is facing challenges from commodity cost inflation, increased operating costs, and supply chain issues, which may reduce profit margins [8] - Other challenges include evolving consumer health concerns and global market complexities, such as adverse currency translations [8] Group 4: Company-Specific Insights - Keurig Dr Pepper Inc. (KDP) is expected to report a revenue increase of 4.2% year over year, with a consensus estimate of $4.03 billion for fourth-quarter revenues [10][11] - The Boston Beer Company Inc. (SAM) is projected to report a revenue drop of nearly 1% year over year, with a consensus estimate of $389.6 million [13] - Anheuser-Busch InBev SA/NV (BUD) anticipates a slight revenue decline of 0.2% year over year, with a consensus estimate of $14.4 billion [15] - Monster Beverage Corporation (MNST) is expected to report a revenue growth of 3.6% year over year, with a consensus estimate of $1.79 billion [17][18] - Fomento Economico Mexicano S.A.B. de C.V. (FMX) is focusing on long-term value creation through its core businesses and digital initiatives, despite facing a soft consumer environment in Mexico [20][21]

Core Viewpoint - AB InBev is expected to report declines in both revenue and earnings for the fourth quarter of 2024, influenced by challenging macroeconomic conditions and rising costs [1][4][5]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for AB InBev's quarterly revenues is $14.4 billion, reflecting a 0.2% decrease from the previous year [2]. - The consensus estimate for earnings per share is 72 cents, indicating a 12.2% decline from the prior-year figure [2]. Recent Performance - In the last reported quarter, AB InBev's earnings per share exceeded the Zacks Consensus Estimate by 8.9%, with a trailing four-quarter average earnings surprise of 8.2% [3]. Factors Impacting Q4 Results - The upcoming quarterly results are likely to be affected by a soft consumer environment in China and Argentina, as well as currency and interest rate fluctuations [4]. - Commodity cost inflation and increased supply-chain expenses are expected to contribute to higher costs, with a projected 5.7% rise in the cost of sales and an 8.9% increase in SG&A costs year over year [5]. Strategic Initiatives - AB InBev's focus on premium beer offerings and the expansion of its Beyond Beer portfolio are seen as positive factors that may cushion performance [6]. - Investments in B2B platforms, e-commerce, and digital marketing are also expected to support the company's growth strategy [6]. Valuation and Stock Performance - The stock has a forward 12-month price-to-earnings ratio of 14.65X, compared to a five-year high of 25.58X and the industry average of 14.07X [8]. - Over the past six months, AB InBev shares have declined by 12.8%, which is better than the industry's 18.6% decline [8].

Core Viewpoint - Analysts forecast that Anheuser-Busch Inbev (BUD) will report quarterly earnings of $0.72 per share, reflecting a year-over-year decline of 12.2%, with revenues expected to be $14.44 billion, a decrease of 0.2% compared to the previous year [1]. Revenue Estimates - The consensus estimate for 'Revenue- South America' is projected to reach $3.69 billion, indicating a year-over-year increase of 19.8% [4]. - 'Revenue- Middle Americas' is expected to be $4.31 billion, showing a decline of 2.9% year-over-year [5]. - 'Revenue- North America' is estimated at $3.45 billion, reflecting a growth of 5.2% from the prior year [5]. - 'Revenue- Asia Pacific' is projected to be $1.28 billion, indicating a year-over-year increase of 1.3% [5]. - The estimate for 'Revenue- Global Export & Holding Companies' stands at $144.62 million, showing a decline of 3.6% year-over-year [6]. Volume Estimates - 'Volume in Hectoliters - Middle America' is expected to be 38,613.75 KhL, slightly down from 38,635 KhL reported in the same quarter last year [6]. - 'Volume in Hectoliters - South America' is projected to reach 45,210.35 KhL, down from 46,704 KhL in the previous year [7]. - 'Volume in Hectoliters - Asia Pacific' is estimated at 16,042.21 KhL, up from 15,465 KhL reported last year [7]. - 'Volume in Hectoliters - North America' is expected to be 20,327.48 KhL, an increase from 19,738 KhL in the prior year [8]. - 'Volume in Hectoliters - Global Export and Holding Companies' is projected at 173.67 KhL, down from 200 KhL reported in the same quarter last year [8]. Market Performance - Over the past month, Anheuser-Busch Inbev shares have recorded returns of +10.3%, outperforming the Zacks S&P 500 composite's +2.2% change [8].

Core Insights - The article discusses the investment potential in companies with sustainable long-term competitive advantages, particularly in the technology, telecom, and banking sectors [1]. Group 1: Company Insights - The focus is on identifying reasonably priced businesses that possess sustainable long-term competitive advantages [1]. - The author has experience working with some of the largest global brands in the technology, telecom, and banking sectors, indicating a strong understanding of these industries [1]. Group 2: Industry Insights - The technology, telecom, and banking sectors are highlighted as key areas for investment opportunities due to their global brand presence and potential for growth [1].

Core Viewpoint - Anheuser-Busch InBev (BUD) is considered a better investment option compared to Diageo (DEO) due to its lower valuation and potential for growth in the coming years [1][12]. Group 1: Stock Performance Comparison - Both DEO and BUD have underperformed the broader markets, with DEO declining 15% from $145 to $120 and BUD declining 25% from $65 to $50 since early January 2021, while the S&P 500 has increased by 60% during the same period [3]. - The returns for DEO and BUD have fluctuated inconsistently, with DEO showing returns of 42% in 2021, -17% in 2022, -16% in 2023, and -10% in 2024, while BUD had returns of -13%, 0%, 9%, and -21% respectively [4]. Group 2: Revenue Growth Analysis - Anheuser-Busch InBev has experienced an average annual revenue growth rate of 8.3%, increasing from $46.9 billion in 2020 to $59.4 billion in 2023, while Diageo's growth rate is 6.1%, rising from $17.6 billion in fiscal 2021 to $20.3 billion in fiscal 2024 [6]. - BUD's revenue growth is attributed to a rebound in consumer demand post-pandemic, although it faced a 12% year-over-year decline in North America revenue in 2023 due to lower Bud Light sales [7]. - Diageo's revenue growth has been impacted by high inflation and weakening consumer spending, leading to a decline in volumes, particularly in North America [8]. Group 3: Profitability and Financial Risk - Diageo is more profitable, with an operating margin of around 30% compared to BUD's 25%, which has decreased from 26.9% in 2020 to 24.0% in 2023 [10]. - Diageo has a lower financial risk profile, with 32% debt as a percentage of equity compared to BUD's 82% [11]. Group 4: Valuation and Future Prospects - BUD is currently trading at 1.6x trailing revenues, lower than its average P/S ratio of 2.2x, suggesting a potential growth of over 35% if it returns to historical valuation multiples, while DEO is trading at 3.3x trailing revenues with a potential growth of around 25% [12].

Core Insights - Anheuser-Busch is increasing its investment in Super Bowl LIX, planning to air five ads totaling three minutes of national advertising time and 45 seconds of regional advertising time, showcasing its iconic beer brands for the upcoming year [1][6] Group 1: Advertising Strategy - The new creative campaigns will target a broad audience through national and regional efforts, including Spanish language and streaming broadcasts, as well as pre-and post-game activations [2] - Anheuser-Busch aims to engage 21+ fans by sponsoring flagship events, leagues, teams, and athletes, while also investing in community initiatives [3] Group 2: Brand Highlights - Michelob ULTRA, the fastest-growing brand, will launch its "Play For An ULTRA" campaign during Super Bowl LIX, promoting an active lifestyle [6] - Busch Light will continue its humorous "The Busch Guide by Busch Guy" series, with a new ad airing in Florida on game day before national release [6] - Budweiser will feature a heartfelt commercial highlighting its legacy and resilience, airing on digital channels and select markets [6] - Bud Light will leverage celebrity partnerships to emphasize enjoyment among friends, reinforcing its position as the top-selling beer in the country [6] - Stella Artois will return to Super Bowl after five years with a new campaign focusing on meaningful connections over its beer [6]