Anheuser-Busch InBev SA (BUD) Q2 FY25 earnings call: guidance and Q&A

Given H1 volume decline and persistent headwinds, is FY25 volume growth unlikely? What about long-term volume growth into FY26? To what extent is Q2 margin improvement permanent, and how would EBITDA grow with better volumes?

Michel acknowledged H1 volume was below potential due to China and Brazil, but highlighted consistent revenue, EBITDA, and EPS growth. He emphasized the diversified footprint and long-term industry growth. Fernando stated that margin expansion was broad-based and that fundamental drivers remain intact, with opportunities for further improvement despite cost inflation.

“We still see a lot of opportunities to improve margins.”

asked by Mitch Collett · answered by Fernando Tennenbaum

What are the key learnings from the impressive U.S. turnaround, and can these be applied to other regions?

Michel attributed U.S. success to consistent long-term planning, intentional innovation (Michelob Ultra Zero, Busch Light Apple), and rebalancing the portfolio towards consumer trends. He noted that these learnings (megabrand choices, investment consistency, innovation for penetration) are already embedded in global plans.

“The learnings from this is consistency. We've been talking a lot about this. So a long-term plan, a very consistent view on the category on our portfolio choices and the investments we made for the long term.”

asked by Robert Ottenstein · answered by Michel Doukeris

Is there a consumer slowdown in Mexico impacting H2? For Brazil, beyond weather, what explains underperformance? Was pricing too aggressive, and will volumes bounce in H2?

Michel stated Mexico volumes grew low single digits, outperforming the industry, despite weather impacts in June. He noted general consumer confidence is not at 2022 levels, and value-seeking consumers are under pressure due to inflation, impacting quantities. For Brazil, adverse weather was a main factor, combined with strategic revenue management decisions that led to tough price relativity in H1, which is expected to adjust.

“More specifically, if you look at the different consumer cohorts by socioeconomic level, the more value-seeking consumers because of inflation we see are under pressure in some specific markets.”

asked by Olivier Nicolai · answered by Michel Doukeris

How is China's on-premise channel progressing given macro headwinds and anti-extravaganza campaign? For Brazil, with a peer taking price increases, has AB InBev seen market share improvement in Q3?

Michel confirmed China's on-trade remains very weak, with growth shifting to off-premise. He noted AB InBev is under-indexed in off-premise, presenting a growth opportunity requiring execution adjustments. For Brazil, he reiterated Q2 industry softness due to weather and the company's H1 revenue management calendar. He expects market adjustments and better price relativity moving forward but did not comment on specific Q3 market share trends.

“The on-trade channel which is an important component of that stubbornly continues to be very weak. So the on-trade is not rebounding.”

asked by Sanjeet Aujla · answered by Michel Doukeris

If the U.S. industry decline worsens, does AB InBev have levers to maintain/grow profit? Why not increase share buybacks earlier given strong FCF and attractive share price?

Michel stated that U.S. profit levers include premiumization (Michelob Ultra), innovation (Busch Light), productivity, and Beyond Beer growth. He cited Europe as an example where good conditions lead to industry growth in value. Fernando confirmed capital allocation plans are unchanged but increased cash generation and lower leverage provide increased flexibility. He reiterated that the main goal is shareholder value creation and that cash flow is weighted to H2, but made no specific announcement on buybacks.

“With the increased cash generation and the lower leverage, we have increased flexibility in our capital allocation choices.”

asked by Andrea Pistacchi · answered by Fernando Tennenbaum

Does U.S. and Europe outperformance give more reassurance for medium-term group volume growth despite Brazil/China issues? What is the opportunity for FIFA 2026 given learnings from FIFA Club World Cup?

Michel affirmed that developed markets (Canada, U.S., Europe) are building on full potential, supporting long-term group volume growth despite specific country challenges. He sees FIFA 2026 as a significant opportunity, expecting a volume bump, especially with the event spanning the Americas where AB InBev has a strong footprint. He also mentioned the Winter Olympics as another platform for brand activation.

“The long-term perspective is that we continue to focus on this optimized portfolio. We continue to focus on the advantages of our footprint for the long term, the growth that the developing and emerging countries can add to the category.”

asked by Edward Mundy · answered by Michel Doukeris