ABInBev(US:BUD)2025-07-31 14:02Financial Data and Key Metrics Changes - EBITDA increased by 6.5% with continued margin expansion [6][10] - Revenue per hectoliter growth accelerated by 4.9% [6] - Underlying EPS grew by 8.7% in U.S. Dollar terms and 17.4% in constant currency [10][25] - Free cash flow increased by $5 billion compared to last year [26] Business Line Data and Key Metrics Changes - Non-alcohol beer portfolio revenues increased by 33% [8] - In the U.S., volumes grew by low teens in spirits-based drinks, led by Cutwater and Neutrol [12] - In Brazil, revenue declined by 1.9% due to volume performance, while EBITDA increased by 5.3% [13] - In Europe, volumes were flat, but revenue and EBITDA grew by mid-single digits [14] Market Data and Key Metrics Changes - In China, revenue declined by 6.2% with underperformance in volumes [16] - In Mexico, volumes grew by low single digits, outperforming the industry [12] - Revenue increased in 70% of markets, with top and bottom line growth across four of five operating regions [11] Company Strategy and Development Direction - The company continues to invest in mega brands and platforms, with $3.6 billion spent on sales and marketing in the first half of the year [18] - Focus on premiumization and innovation to drive growth in the beer category [20] - The company aims to optimize its business through disciplined revenue management and operational efficiency [25] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the long-term growth of the industry despite short-term volume challenges [37][90] - The company is focused on improving execution in China and leveraging opportunities in the off-premise channel [66] - Management anticipates a recovery in consumer confidence and purchasing power, which could positively impact volumes [56] Other Important Information - The company has a diversified geographic footprint, which has proven to be a strength in delivering consistent results [11] - The net debt to EBITDA ratio improved to 3.27 times, reflecting progress in deleveraging [27] Q&A Session Summary Question: Concerns about volume growth in fiscal 2025 - Management acknowledged the volume decline but emphasized confidence in long-term growth potential and the ability to navigate challenges [35][37] Question: Margin improvement sustainability - Management indicated that margin improvements are expected to be sustainable, driven by disciplined revenue management and operational efficiencies [39][40] Question: Key learnings from U.S. market performance - Management highlighted the importance of consistent long-term planning and investment in brands that align with consumer trends [46][48] Question: Consumer slowdown in Mexico and Brazil's volume decline - Management noted that while Mexico outperformed the industry, consumer confidence is lower than historical levels, impacting overall performance [55][56][68] Question: On-premise channel progress in China - Management reported that the on-premise channel remains weak, but there is growth in the off-premise channel, presenting opportunities for improvement [64][66] Question: Plans for category activation around FIFA 2026 - Management sees significant opportunities for category activation during major events like FIFA 2026 and the Winter Olympics, leveraging past experiences for better ROI [91][93]