Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Anheuser-Busch InBev SA/NV (BUD, Financial) reported a 7.1% growth in EBITDA with a margin expansion of 169 basis points.
- The company announced a USD 2 billion share buyback program to be executed within the next 12 months.
- Revenue growth was achieved in more than 60% of their markets, with significant contributions from premium and super premium brands.
- In the US, the company gained volume share in the beer industry, driven by brands like Michelob ULTRA and Busch Light.
- The company is expanding its digital ecosystem, with a 14% increase in gross merchandising value and improved customer satisfaction scores.
Negative Points
- Overall volume declined by 2.4% due to a soft consumer environment in China and Argentina.
- Revenue in China declined by 16.1% this quarter, impacted by a weak consumer environment and on-premise channel challenges.
- In Mexico, volumes declined due to adverse weather and a slower economic environment.
- The company faces competitive pressures in Europe, with increased promotional activities by competitors.
- There are ongoing challenges in the low-end market segment in Brazil, where competitors are actively trading share.
Q & A Highlights
Q: Michel, it looks like your market share in the US is stabilizing, maybe even improving. Could you assess your thinking about the progress of the US business and any strategy changes for 2025?
A: Michel Doukeris, CEO: The US market remains resilient, and our strategy focuses on rebalancing our portfolio towards growing segments while stabilizing mainstream brands. Michelob ULTRA and Busch Light are driving growth. We will continue to invest in these brands and introduce Michelob ULTRA Zero to further accelerate momentum.
Q: Can you unpack what's happening in China this quarter? Is it cyclical or structural, and what signs would indicate recovery?
A: Michel Doukeris, CEO: The soft consumer environment in China is impacting performance, particularly in the on-premise channel. We are focusing on long-term brand health and market control. While short-term improvements are unlikely, we remain optimistic about long-term growth opportunities.
Q: Can you discuss the Middle Americas region's consumer landscape and your outlook for 2025?
A: Michel Doukeris, CEO: Middle Americas showed strong demand for our brands despite short-term challenges like adverse weather and election impacts. Fundamentals remain strong with healthy brand performance and improving purchasing power, suggesting continued strength into 2025.
Q: With the $2 billion share buyback announcement, how are you balancing dividends versus buybacks?
A: Fernando Tennenbaum, CFO: Our capital allocation aims to maximize value creation. The $2 billion buyback reflects added flexibility from deleveraging. We remain disciplined and dynamic in our capital allocation, balancing between deleveraging, buybacks, and dividends.
Q: Can you provide more color on the success of Busch Light and the spirits-based RTD segment in the US?
A: Michel Doukeris, CEO: Busch Light is gaining momentum, especially among younger consumers, with significant growth potential outside its core states. The spirits-based RTD segment, led by Cutwater and NÄTRL, is growing rapidly, with significant distribution opportunities and no production constraints.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
