Core Viewpoint - Budweiser APAC reported a significant decline in performance for 2025, with total sales down 6.0% to 79.658 million hectoliters, revenue falling 6.1% to $5.764 billion, and net profit attributable to shareholders plummeting 32.6% to $489 million, indicating unprecedented growth pressures on the company [2][17]. Financial Performance - The company has experienced a continuous decline in net profit for four consecutive years, with revenue decreasing for two years despite growth potential in the Asia-Pacific beer market [2][17]. - Normalized EBITDA for 2025 was $1.588 billion, a decrease of 9.8%, with the corresponding profit margin dropping 113 basis points to 27.6% [2][17]. - Basic earnings per share fell from 5.51 cents to 3.70 cents, reflecting a weakening profitability that has eroded investor confidence [2][17]. Market Dynamics - The Chinese market, once a core growth engine, saw sales drop 8.6% and revenue decline 11.3% in 2025, significantly underperforming compared to overall company metrics [4][19]. - The company’s reliance on immediate consumption channels has been detrimental, as foot traffic in these areas has decreased, directly impacting sales [21]. - Despite efforts to expand non-immediate consumption channels and O2O strategies, these investments have temporarily reduced profitability [22][23]. Regional Performance - The western Asia-Pacific region, including China and India, reported a 6.7% decline in sales and an 8.2% drop in revenue, while the eastern markets achieved a slight revenue increase of 1.3% but experienced a minor sales decline [10][25]. - The strong performance in the Indian market, which contributed over 20% revenue growth, was insufficient to offset declines in the Chinese and Korean markets, highlighting a lack of regional synergy [10][25]. Internal and External Challenges - Internal issues include mismatches in channels, products, and organizational structure, with a high dependency on immediate consumption channels and slow responses to changing consumer trends [26]. - Externally, increasing competition from local brands and macroeconomic fluctuations have further pressured the company’s market position [26][27]. Strategic Adjustments - Budweiser APAC aims to regain growth momentum by focusing on market share recovery in China, enhancing product innovation in core and premium segments, and accelerating digital transformation through the BEES platform [28]. - The company plans to invest in the Korean market for profit margin expansion and target India as a key growth driver, while also exploring acquisition opportunities in Southeast Asia [28][29]. - The board has proposed maintaining a stable dividend of 5.66 cents per share, reflecting confidence in long-term growth despite current performance challenges [29].

Financial Data and Key Metrics Changes - In Q1 2025, total volumes and revenue decreased by 6.1% and 7.5% respectively, with revenue per hectoliter declining by 1.5% due to negative geographic and channel mix [7][8] - Normalized EBITDA decreased by 11.2%, and the normalized EBITDA margin contracted by 140 basis points [7] - In APAC West, volumes and revenue decreased by 8.6% and 11.7% respectively, with normalized EBITDA decreasing by 17.6% [7][8] Business Line Data and Key Metrics Changes - In China, volumes declined by 9.2%, with revenue declining by 12.7% and revenue per hectoliter down by 3.9% [8] - The in-home channel saw increased volume and revenue contributions, indicating a shift towards premiumization in this segment [9] - In APAC East, volumes and revenues increased by 11.9% and 11.7% respectively, with normalized EBITDA increasing by 24.4% [11] Market Data and Key Metrics Changes - In South Korea, volume increased by double digits, supported by shipment phasing ahead of a price increase announced in April [12] - The company reported strong performance in the in-home channel, with a focus on expanding distribution and market share [30] Company Strategy and Development Direction - The company aims to adapt to evolving market conditions and execute with discipline to capture growth, focusing on market share, in-home channels, and mega brands like Budweiser and Harbin [5][20] - The strategy emphasizes premiumization and a digitalized ecosystem, with a commitment to optimizing business operations [20][76] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence in China remains low, impacting sales, particularly in Guangdong, but sees potential for improvement during holiday periods [17][56] - The company is focused on executing its strategy effectively, with an emphasis on enhancing distribution and expanding the in-home channel [49] Other Important Information - The company has increased marketing investments for Budweiser and Harbin to connect with consumers and drive market share [10] - The usage and reach of the BEES platform for B2B wholesaler and customer engagement continued to expand, indicating a focus on technology and commercial capabilities [11] Q&A Session Summary Question: Update on Q2 performance in China - Management indicated that consumer confidence remains low, particularly in key regions, but sees potential for improvement during holiday periods [17] Question: Competition in Guangdong province - Management acknowledged the competitive landscape in Guangdong and emphasized the importance of expanding in-home coverage and distribution to maintain market share [30] Question: Core plus plus strategy and trade-up volume - Management explained that the core plus plus segment serves as an accessible upgrade for consumers, with a focus on superior product offerings to drive growth [39] Question: Impact of tariffs in Guangdong - Management stated it is too early to quantify the impact of tariffs on consumer behavior but emphasized focusing on execution and adapting strategies as needed [46] Question: On-trade recovery in China - Management remains conservative about on-trade recovery, noting that consumer confidence is a key factor and that in-home consumption continues to grow [56] Question: Cooperation with Swire - Management highlighted successful trials in Hubei and Anhui provinces and expressed optimism about future collaboration opportunities [86] Question: Future of Harbin Beer - Management emphasized Harbin's unique position as a national brand with a strong heritage and commitment to premiumization, aiming to leverage its brand power for growth [92]