ABInBev(US:BUD)2025-02-26 16:38Financial Data and Key Metrics Changes - The company achieved all-time high revenues of $59.8 billion, with total revenue growth of 2.7% and organic growth offsetting FX headwinds [11][9] - EBITDA reached nearly $21 billion, with a margin expansion across all operating regions, and an overall EBITDA growth of 10.1% in Q4 and 8.2% for the full year [7][9] - Underlying EPS increased by 15% to $3.53 per share, with a 7% CAGR since 2021 [35] - Free cash flow increased by $2.5 billion to reach $11.3 billion [36] Business Line Data and Key Metrics Changes - The BEES marketplace delivered $2.5 billion in GMV, a 57% increase year-over-year [7][31] - The U.S. business showed momentum with volume share gains driven by brands like Michelob Ultra and Busch Light [13] - In North America, the beer industry remained resilient, with volume growth in the majority of markets [10][12] - In Europe, EBITDA increased by mid-teens, with volumes growing slightly and outperforming the industry in 5 of 6 key markets [15] Market Data and Key Metrics Changes - The company gained or maintained market share in two-thirds of its markets, with volumes increasing by 0.9% in all other markets [10] - In China, the soft consumer environment impacted performance, but the company remains confident in long-term growth opportunities [16][23] - Developing markets accounted for 55% of volume and are expected to drive 34% of category volume growth over the next five years [20] Company Strategy and Development Direction - The company is focused on organic growth, premiumization, and optimizing capital allocation, with a disciplined approach to investments [51][39] - The strategy includes leveraging mega brands and platforms to drive growth, with significant investments in marketing and sales [24][98] - The company aims to enhance its digital capabilities and expand its ecosystem through platforms like BEES [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the beer category, despite challenges in specific markets [19][23] - The company is optimistic about regaining momentum in China and plans to increase investments in its mega brands [58][86] - The outlook for 2025 includes expected EBITDA growth of 4% to 8% on an organic basis, with a focus on maintaining financial discipline [39][110] Other Important Information - The Board proposed a full-year dividend of EUR 1 per share, a 22% increase from the previous year [8][39] - The net debt-to-EBITDA ratio improved to 2.89, providing increased flexibility in capital allocation [8][37] Q&A Session Summary Question: Free cash flow and capital allocation flexibility - Management highlighted that the increased free cash flow allows for a balance between deleveraging and returning capital to shareholders, with a focus on organic growth investments [47][50] Question: Margin outlook in the U.S. - Management noted that while margins are recovering, the priority is to invest in brand acceleration, with ongoing productivity improvements [61][65] Question: Marketing costs and digital capabilities - Management emphasized that while the ratio of marketing costs to sales fell, the effectiveness of marketing investments has improved due to better data utilization [69][72] Question: Raw material outlook and COGS - Management indicated that 2025 is expected to be a more normal year for raw material costs, with hedging policies in place to mitigate risks [77][78] Question: CapEx efficiencies and maintenance CapEx - Management discussed ongoing efforts to optimize CapEx through technology and capacity improvements, while maintaining healthy growth [81][84] Question: Strategy evolution in China - Management reiterated the focus on premiumization and better execution in China, with plans to leverage mega brands and improve market presence [86][88] Question: Cultural change and marketing balance - Management described a shift towards organic growth and a balance between centralized and local marketing decisions, leveraging data for better consumer engagement [91][96] Question: Factors influencing EBITDA growth range - Management stated that while the guidance range is solid, various factors could influence performance, and specifics will be clearer as the year progresses [103][110] Question: Future cash flow expectations - Management confirmed expectations for continued strong cash flow generation, driven by EBITDA growth and normalized working capital changes [104][112] Question: U.S. market sustainability - Management expressed cautious optimism about sustaining positive growth in the U.S. market, influenced by weather and economic conditions [116][120] Question: Consumer momentum in Mexico - Management noted improved consumer momentum in Mexico, driven by government spending and normalization of consumer behavior [118][126]