Anheuser-Busch InBev NV Q3 FY2026 earnings call

• Strategic Execution: Management highlighted consistent execution of their strategy, resulting in solid top- and bottom-line performance. The company continues to invest in brands and capabilities to fuel future growth.
• Mega Brands & Platforms: Net revenue from mega brands increased by 7.7%. Key platforms include partnerships with Live Nation and Netflix, placing brands at the center of culturally relevant moments. Corona grew revenue by 20% outside Mexico.
• Beyond Beer & Non-Alcohol Growth: The Beyond Beer portfolio delivered low-teens revenue growth led by Cutwater and Neutro. Non-alcohol beer outperformed the industry with a 35% revenue increase, driven by Corona Zero and Michelob Ultra Zero. This segment is approaching 2% of the business on a run rate.
• Digital Ecosystem: Biz marketplace captured $15.9 billion in GMV (up 12% YoY), with third-party product GMV increasing 45% to $1.4 billion. Digital D2C platforms served 13 million consumers and generated $158 million in revenue.
• Regional Highlights:
  • North America: Gained share of total alcohol for 10 consecutive quarters. Michelob Ultra and Bush Light were top volume shargainers.
  • Middle Americas: Record high volumes in Colombia drove double-digit growth. Brazil’s premium portfolio led with high-teens volume growth.
  • China: Industry decline impacted by abnormal weather and weak on-premise channels. While overall results underperformed, in-home channel share improved, and O2O channel showed momentum.
• Capital Allocation: The Board approved an interim dividend of €0.40 per share (up from €0.15 last year). The company continues its $6 billion share buyback program, having repurchased $2.6 billion to date.

AB InBev reported total revenue growth of 4.9% and underlying EPS increased by 22% to $1.21. Total volumes grew by 0.4%, driven primarily by the soft drinks business, while beer volumes remained flat due to offsetting performance between growing markets and a challenging industry in China. Revenue per hectolitre increased by 4.2%, supported by premiumization and mega-brand strength. EBITDA rose by 3.9% with flattish margins, as higher sales and marketing investments and commodity headwinds were partially offset by disciplined cost management. U.S. dollar EBITDA increased by 6.5%. Geographically, North America (specifically the U.S. and Mexico) and Middle Americas (Colombia, Brazil) delivered strong volume and profit growth. Europe saw flat volumes but top-line growth via premiumization. APEC experienced significant declines, with China reporting a 16.8% drop in both revenue and volumes.

• No Explicit 2027 Guidance: Management explicitly stated they are not providing specific guidance for 2027 during this call.
• 2026 Outlook Confidence: Management expressed confidence in delivering their 2026 outlook based on strong balance sheet, ownership culture, and year-to-date results.
• Cost Environment: For 2027, costs are expected to be more balanced between the first and second halves compared to the first half skew earlier in the year. The company is almost fully hedged for next year, suggesting a 'normal' cost year ahead.
• Dividend Policy: Reaffirmed ambition for a progressive dividend over time, evidenced by the significant increase in the interim dividend to €0.40 per share.

• China Market Challenges: Significant volume and revenue declines (16.8%) driven by abnormal weather, weakness in the on-premise channel, and inventory destocking issues. The industry declined significantly, impacting shipments.
• Commodity Headwinds: Input cost inflation and transportation costs (particularly diesel/oil driven) are pressuring margins, especially in the U.S., though partially managed through hedging and revenue management.
• Brazil Taxation & Gambling: Potential increases in taxation in February 2027 pose a risk to margins if not passed on to consumers. Historical impact of online gambling on disposable income was noted, though recent bans may have mitigated this.
• Execution Risk in Integrations: Integration of acquired brands like Bitbox carries execution risks in the first year, requiring careful management of commercial plans and distribution.

Q: Jefferies asked about the trajectory for volume, price, and mix into 2027 amidst commodity pressure, and why non-alcohol beer is accelerating relative to peers. / A: CEO Doukeris stated no 2027 guidance is provided yet but emphasized that healthy mix from premiumization, RTDs, and non-alcohol will drive momentum. He explained non-alcohol success stems from five years of investment in taste technology and platforms, attracting new consumers and occasions. CFO Tennenbaum added that investing in mega platforms and optimizing the P&L allows for margin maintenance despite higher S&M spend, driving solid EPS growth even without FX tailwinds.

Q: UBS sought details on China's industry decline (weather vs. consumer) and whether destocking would end by fiscal year-end, plus the drivers of Middle Americas' strength (World Cup vs. underlying demand). / A: CEO Doukeris clarified that most of China's decline was industry and inventory-driven due to extreme summer weather affecting wholesalers, not just consumer demand. He aims for normal inventories by year-end. Regarding Middle Americas, he attributed strong performance to consistent strategy execution, favorable weather comps, and inflation trends improving affordability, rather than just World Cup effects.

Q: Bank of America asked how ABI bridges the gap between sell-in and sell-out data in Brazil and what the consumer environment looks like post-elections, plus the rationale behind the significant interim dividend hike. / A: CFO Tennenbaum confirmed the dividend hike to €0.40 aligns with the progressive dividend ambition and reflects increased capital flexibility from strong free cash flow. CEO Doukeris explained the sell-in/sell-out mismatch in Brazil is due to inventory control mechanisms and timing differences in Nielsen data cuts. He anticipates Q4 improvement due to election-related economic injections and a shift to hotter summer weather.

Q: Evercore ISI inquired about the cost outlook for Q4/2027 given early-year pressures and the strategy behind making Michelob Ultra a global brand. / A: CFO Tennenbaum noted costs are now balanced between halves, and with near-full hedging for 2027, the outlook appears normal, allowing leverage through revenue/cost management. CEO Doukeris described Michelob Ultra as central to the 'balanced choices' trend. Its global expansion leverages mega-platforms like FIFA and NBA, offering incremental growth with premium positioning in markets like Brazil and Mexico.

Q: Deutsche Bank asked if the H1/H2 EBITDA balance holds for the full year and if pricing discipline remains intact despite competitors lowering prices below CPI. / A: CFO Tennenbaum affirmed the expectation of a balanced H1/H2 EBITDA growth, citing proactive revenue and cost management. CEO Doukeris reiterated ABI's policy to price in line with CPI, supported by best-in-class revenue management capabilities and strong brand equity. He argued that unlike competitors who may absorb costs, ABI earns premium pricing through quality and brand power, maintaining industry-wide pricing trends around inflation.