Financial Data and Key Metrics Changes - The company reported a high single-digit organic EBITDA increase with a margin expansion of 110 basis points despite soft interest volumes in several markets due to adverse weather conditions [5][6] - EBITDA grew double digits with a margin expansion of 160 basis points, while EPS increased by 6.5% and cash flow from operating activities grew by 4% [6][20] - The Board of Directors approved an intermediary dividend payout of BRL2 billion, totaling BRL6 billion declared this year [6] Business Line Data and Key Metrics Changes - Premium and super premium brands delivered low teens growth, expanding in seven out of the top 10 markets, while the balanced choice portfolio grew in the low 20s [7][15] - In Brazil, beer volumes declined by 9% primarily due to unfavorable weather, but premium and super premium brands grew mid-teens, gaining market share [14][15] - The core segment volumes declined by low teens, reflecting higher sensitivity to industry performance and revenue management decisions [15][40] Market Data and Key Metrics Changes - In Brazil, the beer industry experienced a mid single-digit sellout decline, largely attributed to adverse weather conditions, with 70% of the decline explained by weather [36][39] - Argentina saw a sequential improvement in beer volumes, returning to growth after seven quarters, while the premium segment grew double digits [16][17] - In Canada, volumes grew by 0.8%, offsetting a soft industry affected by colder temperatures [18] Company Strategy and Development Direction - The company is focused on executing a disciplined growth strategy with an emphasis on revenue and cost management [5][6] - The digital ecosystem is seen as a bridge between core business and new revenue streams, with significant growth in the marketplace GMV [9][65] - The company aims to optimize its business through cost efficiency, with a disciplined focus on reducing non-commodity cost inflation [13][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current challenges, citing improved brand equity and a strong portfolio [29][30] - The company anticipates a significant improvement in performance in the second half of the year, driven by better weather conditions and easing consumer price relativity [42][80] - Management emphasized that there is no structural change in consumer demand in Brazil, and they remain optimistic about future growth opportunities [36][42] Other Important Information - The company has reduced the number of SKUs by around 10% to increase productivity and manage costs effectively [23][92] - The effective tax rate for the quarter was 18.4%, a decrease from 28.6% in the previous year, driven by non-recurrent events and favorable court rulings [25][26] Q&A Session Summary Question: Concerns about volume performance in Brazil - Management explained that the volume decline was primarily due to adverse weather, with 70% of the decline attributed to this factor, and expressed confidence in recovery in the second half of the year [36][42] Question: Insights on cost management and future initiatives - Management highlighted ongoing efforts in cost optimization and SKU rationalization, indicating that there is still room for further efficiency improvements [43][44] Question: Dynamics between on-trade and off-trade channels - Management noted that revenue management initiatives were implemented across all segments, with a focus on maintaining pricing aligned with inflation while managing cost inflation [55][56] Question: Digital marketplace performance - The company reported a 90% growth in marketplace GMV, driven by partnerships and an increase in customer engagement [64][65] Question: Update on brand equity and Skol strategy - Management provided insights into brand equity improvements based on tracking metrics and discussed ongoing efforts to revamp the Skol brand, indicating positive trends in distribution and support [99][102]

Core Viewpoint - The State-owned Assets Supervision and Administration Commission (SASAC) issued guidelines aimed at enhancing the brand value of central enterprises significantly by 2030 and establishing globally recognized brands by 2035 [1] Group 1: Brand Strategy - The guidelines emphasize the need to integrate brand strategy deeply into corporate development, ensuring that brand strategy is aligned with overall business strategy [1] - There is a focus on fostering core capabilities for brand value enhancement, including innovation, quality, and cultural depth [1][2] Group 2: Process Management - The guidelines call for strengthening the management of brand value through six key areas: brand concept, structure, protection, reputation, communication, and experience [2] - A robust mechanism for brand protection is to be established, including monitoring and penalizing misuse of brand assets [2] Group 3: Asset Management - The guidelines advocate for systematic enhancement of overall brand value through effective identification and evaluation of brand assets [2] - There is an emphasis on maintaining and inheriting quality brand assets during mergers and acquisitions [2] Group 4: Internationalization - The guidelines propose a structured approach to internationalizing brands, particularly through high-quality initiatives related to the Belt and Road Initiative [2] - The focus is on leveraging competitive advantages to extend into international supply chains and enhance global brand competitiveness [2] Group 5: Organizational Support - Central enterprises are encouraged to increase investment in brand building and establish a mechanism linking brand investment to business performance [3] - There is a call for strengthening the talent pool dedicated to brand management, including recruitment, training, and evaluation processes [3]

Group 1: Production and Capacity - The Morocco smart factory is currently in a ramp-up phase and is expected to achieve large-scale production in 2025, with an estimated output of 6-8 million high-end, high-performance semi-steel tires [2][3][5][7] - The company has a global production layout in China, Thailand, and Morocco, referred to as the "Golden Triangle," which provides strong support for participating in global competition [3][6][11] Group 2: Market Strategy and Sales - The company aims to continuously expand its non-U.S. overseas sales share and capture global market share through refined management and brand value enhancement [3][6][9][11] - The company is currently selling tires primarily from its Thailand and Morocco factories to the U.S. market, with strong demand observed in May [7][11][21] Group 3: Financial Performance and Shareholder Returns - The company has proposed a mid-term cash dividend for 2025 to enhance shareholder returns, amidst concerns about its stock price performance since listing [9][13] - The company has issued a three-year shareholder return plan (2023-2025) and has implemented share buybacks and cancellations for two consecutive years [9][13] Group 4: Challenges and Responses - The company is closely monitoring the impact of tariff increases on its operations and is prepared to share the tariff burden among various stakeholders [8][21] - The fluctuation in raw material prices has affected the company's cash flow and profit margins, with a reported 17.19% year-on-year decline in cash flow from operating activities in 2024 [10][20]

Industry and Company Outlook - The macro environment and high-end liquor industry are expected to benefit from government initiatives aimed at boosting domestic consumption, with a focus on structural optimization and transformation of the liquor industry [2][3] - The company aims for steady development in 2025, focusing on enhancing brand value and improving product sales, channel construction, and service capabilities [3] Brand Promotion and Cultural Initiatives - In 2025, the company emphasizes a "marketing execution enhancement year," linking brand activities to market sales, achieving over 100 million exposures in the first quarter [4] - The brand value has seen a continuous double-digit growth for seven years, reaching 449.8 billion yuan [4] Production and Technological Advancements - The company has discovered new microbial strains that enhance the production of liquor, with the core microbial strains now in industrial production [6] - In 2024, the company plans to invest 405 million yuan in R&D, a 25.85% increase, focusing on raw grain breeding and fermentation mechanisms [6] Sales Strategies - The company targets major markets like Chengdu, Beijing, Shanghai, and Shenzhen, enhancing customer service and maintaining price resilience [7][10] - The direct sales model is growing faster than the distribution model due to strategic adjustments and increased support for exclusive stores [10] Investor Returns - The company plans to increase the dividend payout ratio to 70% in 2024, with a total cash dividend of 22.3 billion yuan, marking a 10% increase from the previous year [13] - The company has consistently ranked first in cash dividends among liquor companies in the Shenzhen market, with a total dividend payout of 116.4 billion yuan since its listing [13] Financial Performance - The company reported a significant increase in net cash flow from operating activities in Q1 2025, attributed to a higher cash collection ratio [15] - The company aims to optimize the use of idle funds to enhance operational efficiency and shareholder returns [15] Green Development Initiatives - The company is committed to green development, implementing strategies for carbon reduction, pollution control, and energy conservation [17][18] - Investments include a 1.2 billion yuan wastewater treatment facility and a 1.7 billion yuan project for energy-efficient upgrades [17][18]

Core Insights - Wuliangye reported a revenue of 89.175 billion yuan for 2024, a year-on-year increase of 7.09%, and a net profit of 31.853 billion yuan, up 5.44% year-on-year, marking ten consecutive years of steady growth in revenue and net profit [1] - The company achieved a record high gross margin of over 77% in 2024, reflecting its resilience in a challenging industry environment [5] - Wuliangye's marketing strategy for 2025 focuses on enhancing brand value and market share, with significant restructuring of its marketing system and channel innovations [9] Financial Performance - In Q1 2025, Wuliangye achieved a revenue of 36.94 billion yuan, a 6.05% increase year-on-year, and a net profit of 14.86 billion yuan, up 5.8% year-on-year [2] - For 2024, the main brand generated revenue of 67.875 billion yuan, an 8.07% increase, while the Wuliang fragrant series and other products contributed 15.251 billion yuan, up 11.79% [3] - The direct sales channel saw a revenue increase of 12.89%, reaching 34.389 billion yuan, with its share of total revenue exceeding 41% [3] Channel Development - Wuliangye expanded its distribution network significantly, adding 16,000 core terminals and enhancing its direct sales channel with new stores and upgraded outlets [4] - The company’s revenue from traditional channels grew by nearly 6%, with the eastern and southern regions being the main contributors [3] Strategic Initiatives - Wuliangye emphasized a balanced approach to volume and price, launching new products and enhancing its product matrix to maintain its leading position in the premium price segment [6] - The company’s marketing activities included participation in major events and collaborations with popular media, significantly increasing brand exposure [7] Management and Governance - Wuliangye's management team is undergoing a youth-oriented transformation, with new appointments aimed at enhancing cohesion and operational effectiveness [8] - The company plans to implement a deep transformation of its sales system to improve decision-making efficiency and market responsiveness [9] Shareholder Returns - Wuliangye announced a record dividend of 22.3 billion yuan for 2024, with a payout ratio increasing to 70%, reflecting its commitment to shareholder returns [11] - The company’s major shareholder plans to increase its stake by investing an additional 500 million to 1 billion yuan, signaling confidence in Wuliangye's investment value [12]