ABInBev(US:BUD)2024-02-29 19:07Financial Data and Key Metrics Changes - The company achieved record revenue of approximately USD 59.4 billion, representing a 7.8% growth year-over-year [8][46] - Net revenue per hectoliter increased by 9.9% due to pricing actions and ongoing premiumization initiatives [8] - Total volumes declined by 1.7%, primarily due to performance in the U.S. and a soft industry in Europe [8] - EBITDA grew by 7%, reaching nearly USD 20 billion, in line with the company's medium-term growth ambition [27][42] - Free cash flow generated was approximately USD 8.8 billion, a $300 million increase from 2022 [24] Business Line Data and Key Metrics Changes - In Colombia, the business delivered record high volumes with double-digit top line growth and high single-digit bottom line growth [11] - In the Asia Pacific region, particularly China, the business achieved double-digit top and bottom line growth, with premium and super premium brands driving overall market share gains [12] - The U.S. business saw a revenue decline of 9.5% with STW volumes down by 12.7%, primarily due to Bud Light's volume decline [43] - In Brazil, high single-digit top line and double-digit bottom line growth were reported, led by premium and super premium brands [45] Market Data and Key Metrics Changes - The beer category gained 260 basis points of share of total alcohol by volume globally over the last five years [46] - The company's market share improved gradually, reaching 38.3% in 2023 [17] - Premium beer brands are growing faster than premium offers in hard liquor and wine [3] Company Strategy and Development Direction - The company continues to focus on premiumization as a strong trend, with both premium and super premium brands growing double digits [1] - Investment in sales and marketing reached $7.2 billion in 2023, with an average of over $7 billion annually over the last five years [20] - The company is optimizing its business by focusing on resource allocation, robust risk management, and efficient capital structure [49] - The company aims to maximize long-term value creation through dynamic capital allocation, including deleveraging and selective M&A [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the execution of their strategy and the momentum seen globally, with revenue growth in 85% of markets [31] - The outlook for 2024 is set at 4% to 8% organic EBITDA growth, reflecting a more ambitious target due to the capping of price growth in Argentina [30][52] - Management highlighted the importance of upcoming major sports events for brand activation and consumer engagement [68][90] Other Important Information - The company completed nearly 90% of its $1 billion share buyback program [16][25] - The Board proposed a dividend of EUR 0.82 per share, a 9% increase compared to 2022 [25][42] - The company is focusing on sustainability goals, achieving a 44% reduction in absolute emissions and improving water efficiency by 18% [49] Q&A Session Summary Question: What is driving the increased confidence in the organic EBITDA growth guidance? - Management indicated that the confidence stems from the execution of their strategy and the positive momentum observed globally, with revenue growth in 85% of markets [31] Question: What is the base case assumption for Bud Light's share recovery? - Management noted that while recovery is ongoing, it is not at the pace initially expected, but progress is being made with a recovery of approximately 120 basis points of market share [86] Question: How is the marketing spend phased this year? - Management stated that marketing spend will be balanced throughout the year, focusing on major sports sponsorships and events to engage consumers [90] Question: Should we expect a reversal in net working capital in 2024? - Management confirmed that the negative working capital effects from 2023 should reverse in 2024, leading to improved cash flow [62] Question: What is the outlook for the effective tax rate? - Management provided an expected normalized effective tax rate range of 27% to 29% for 2024, indicating it is a stable outlook without significant one-off impacts [73][74]