BUD APAC(HK:01876)2025-10-30 04:30Financial Data and Key Metrics Changes - In the first nine months of 2025, total volumes decreased by 7%, revenue decreased by 6.6%, while revenue per hectoliter increased by 0.4% [8] - Normalized EBITDA decreased by 7.7%, and the normalized EBITDA margin contracted by 37 basis points [8] - In Q3 2025, total volumes and revenue decreased by 8.6% and 8.4%, respectively, with normalized EBITDA decreasing by 6.9% but the normalized EBITDA margin expanding by 46 basis points [8][9] Business Line Data and Key Metrics Changes - In APAC West, volumes and revenue decreased by 7.9% and 8.7%, respectively, with normalized EBITDA decreasing by 9.7% [10] - In China, volumes in Q3 decreased by 11.4%, revenue decreased by 15.1%, and revenue per hectoliter decreased by 4.1% [10] - In APAC East, volumes decreased by 0.5%, while revenue and revenue per hectoliter increased by 1.8% and 2.3%, respectively [14] Market Data and Key Metrics Changes - In India, the company delivered double-digit revenue growth in Q3, with the Budweiser brand growing ahead of the industry [13] - In South Korea, volumes were flattish, with revenue and revenue per hectoliter growing by mid-single digits [14] - The contribution of the in-home channel to total volume and revenue has continued to increase, with premium and super premium segments outpacing contributions from Chinese restaurants [42] Company Strategy and Development Direction - The company is focused on improving top-line performance through strengthening route-to-market, increasing investment in mega brands, leading innovation, and expanding geographic footprint [11] - The strategy includes enhancing the in-home channel and premiumizing the product offerings to capture growth opportunities [11][12] - The company is committed to leveraging technology to enhance commercial capabilities and optimize route-to-market [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in China due to a soft economic cycle but emphasized a clear view of improvement opportunities [6] - The company remains optimistic about growth in India and South Korea, with a focus on premiumization and innovation [13][30] - Management highlighted the importance of maintaining investments in both on-trade and off-trade channels despite current pressures [56] Other Important Information - The company is actively managing inventory levels, with current inventories lower than the previous year [35] - There are ongoing customs tax disputes in South Korea, with non-underlying charges related to these claims amounting to $84 million [82] - In Taiwan, a provisional tariff was slightly adjusted down to 31.3% [84] Q&A Session Summary Question: Can you provide more details on brand performance in China, particularly for mega brands? - Management discussed the impact of the in-home channel and innovations like larger packaging formats to improve brand performance [21][22] Question: What is the outlook for the South Korean market given the weak industry demand? - Management noted that while the industry remains soft, there are pockets of growth in non-alcoholic and flavored beers, and the company continues to gain market share [30][31] Question: What is the current penetration level of the in-home channel in China? - Management indicated that the in-home channel accounts for about 60% of the industry but only over 50% of the company's channel mix, highlighting significant growth opportunities [38] Question: How does the company allocate resources between on-trade and off-trade channels? - Management stated that while investments in on-trade channels are maintained for brand building, a larger proportion of spending is directed towards in-home channels [77] Question: What are the strategies for low alcohol beer products? - Management emphasized ongoing innovation in non-alcoholic and low-alcohol beers, with a focus on consumer needs and market maturity [64][66] Question: Can you provide updates on the Korean customs tax dispute and Taiwan's anti-dumping duties? - Management confirmed the ongoing customs tax dispute and the slight adjustment in Taiwan's tariff rate, emphasizing the importance of maintaining market access [82][84]