Anheuser-Busch InBev NV Q4 FY2024 earnings call

• Consistent progress across 3 strategic pillars in 2024: global momentum, digitize and monetize ecosystem, optimize business.
• Global momentum: All-time high U.S. dollar revenues with growth in 75% of markets; BEES marketplace GMV $2.5 billion, a 57% increase vs 2023.
• EBITDA growth: Increased by 8.2% full year, with margin expansion across all 5 operating regions.
• Deleveraging: Net debt-to-EBITDA ratio reached 2.89x, below 3x since 2015.
• Dividend: Board proposed a 22% increase in full-year dividend to EUR 1 per share.
• Portfolio optimization: Focus on mega brands, which have increased revenue by nearly 40% since 2021 and represent 57% of total business.
• Corona brand: Volumes up 9.4% outside Mexico, named most valuable beer brand in 2024; in Mexico, it's the #1 brand with mid-single-digit volume growth.
• Non-alcohol and Beyond Beer: Non-alcohol beer growing, Beyond Beer brands like Brutal Fruit, Cutwater, and Nütrl showing growth.
• BEES and D2C: BEES GMV $49 billion, a 19% increase vs 2023; D2C revenue $560 million in 21 markets.

Total revenue for AB InBev reached an all-time high of $59.8 billion in 2024, with organic growth offsetting translational FX headwinds. EBITDA increased by 8.2% for the full year. In the U.S., the business is building momentum with portfolio inflection and increased brand investments. Mexico gained market share and delivered record volumes. Brazil saw a 1.5% total volume growth with double-digit bottom-line growth. Europe experienced mid-teens EBITDA growth through top-line growth and margin recovery. China faced volume decline due to a soft consumer environment, but long-term premiumization potential remains. Outside China and Argentina, the beer category globally was vibrant with volume growth in the majority of markets, and the company estimated gaining or maintaining market share in 2/3 of them, with volumes up 0.9% in other markets. The beer portfolio's mega brands increased revenue by nearly 40% since 2021 and now represent 57% of total business. Non-alcohol beer and Beyond Beer brands showed growth, with Corona Cero seeing triple-digit growth and Beyond Beer brands like Brutal Fruit, Cutwater, and Nütrl also growing.

• EBITDA: Expected to grow 4%-8% on an organic basis in 2025, in line with medium-term outlook.
• Net CapEx: Expected to be between $3.5 billion and $4 billion.
• Normalized effective tax rate: Expected to be between 26% to 28%.
• First quarter: Has a high comparison base due to technical factors like fewer selling days, Easter phasing, and shipment comparables in the U.S. and China.

• Soft consumer environment: In China and Argentina, impacted volumes in 2024.
• Currency fluctuations: Affected financial results due to translational FX headwinds.
• Raw material costs: Pressures, especially in Latin America, could impact results.
• Competitive landscape: Changing consumer preferences and intense competition in markets.

Q: Two questions, first on free cash flow and capital allocation, second on China.

A: Fernando discussed capital allocation focusing on organic growth, deleveraging, and return of capital to shareholders, while Michel talked about China's plan with increased investments, focus on mega brands, and the soft consumer environment impact with a plan to reignite growth.

Q: On US margins and Q1 volumes.

A: Michel said the U.S. portfolio has momentum, and Fernando discussed technical factors like a leap year, Easter phasing, and China comparables affecting Q1 volumes.

Q: On marketing and selling costs ratio, raw materials.

A: Michel discussed focus on effective marketing with data and mega brands, and Fernando talked about raw material costs being more normal in 2025.

Q: On CapEx efficiencies and China strategy.

A: Fernando discussed CapEx optimization with technology and capacity, and Michel talked about China's evolving strategy with focus on premiumization and execution.

Q: On cultural change and marketing balance.

A: Michel discussed shift to organic growth, focus on mega brands, and balance of local and global efforts in marketing.

Q: On organic EBITDA range and cash flow.

A: Michel and Fernando discussed EBITDA guidance range and cash flow drivers like EBIT growth, deleveraging, and working capital.

Q: On US volume sustainability and Mexico momentum.

A: Michel and Fernando discussed US volume outlook with factors like summer tailwinds and Mexico's phasing and weather impacts.