EBITDA Growth: Increased by 7.9% with continued margin expansion. No-Alcohol Beer Revenue: Increased by 34% globally. GMV Increase: Grew by 53% to reach USD 645 million. Underlying EPS: Increased by 7% in US dollars and 20% in constant currency. Volume Decline: Decreased by 2.2% due to calendar-related factors. Revenue Growth: Increased by 1.5% with a revenue per liter increase of 3.7%. EBITDA Margin Improvement: Improved by 218 basis points. Corona Revenue Growth: Increased by 11.2% outside of Mexico. BEES GMV: Captured $11.6 billion, a 10% increase. Digital Platform Revenue: Increased by 12% to reach $117 million. Underlying EPS: $0.81 per share, a 7.1% increase in US dollars.

Warning! GuruFocus has detected 7 Warning Signs with BUD.

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Anheuser-Busch InBev SA/NV (NYSE:BUD) reported a 7.9% growth in EBITDA, reaching the top end of their outlook range with continued margin expansion. The no-alcohol beer portfolio outperformed globally, increasing revenues by 34%, led by the triple-digit growth of Corona Cero. The company's digital marketplace, BEES, captured $11.6 billion in GMV, a 10% increase versus last year, with 32 million orders transacted. In the US, Anheuser-Busch InBev SA/NV (NYSE:BUD) gained volume market share in both the beer industry and spirits-based ready-to-drink category. The company achieved double-digit bottom-line growth in Middle Americas, South America, Africa, and Europe, driven by premiumization and margin recovery.

Negative Points

Overall volume performance was impacted by calendar-related factors, resulting in a volume decline of 2.2%. Adverse weather and the later timing of Easter negatively impacted the overall industry performance in the first quarter. In China, Anheuser-Busch InBev SA/NV (NYSE:BUD) underperformed due to softness in key regions and the on-trade channel. The company faces ongoing macroeconomic challenges in markets like Argentina, impacting consumer purchasing power. Despite strong brands, the shift to off-trade in China requires adjustments in sales force and market execution.

Q & A Highlights

Q: Can you discuss your US strategy and the sustainability of your market share gains? Also, why continue investing in a mature market like the US? A: Michel Doukeris, CEO: The US is a key market, representing over 20% of our business. Our portfolio has reached an inflection point, gaining market share due to brands like Michelob Ultra and Busch Light. We are investing in the US because there is significant growth potential, and our multi-year investment strategy is designed to fuel this growth. The US market offers a lot of headroom for our portfolio, and we are committed to long-term growth.

Story Continues

Q: How is the beer industry in China performing, and what is your strategy for volume growth? A: Michel Doukeris, CEO: The industry in China is improving sequentially, with a stronger off-trade performance. We are focusing on strengthening our execution, increasing investments in mega brands, and expanding in the off-trade channel. Despite challenges, we are confident in our strategy and expect volume performance to improve as the year progresses.

Q: How do you view the broader consumer environment for the rest of 2025, and what innovations are you excited about in the US? A: Michel Doukeris, CEO: We are actively monitoring consumer sentiment and behavior. Beer remains resilient, and our brands are growing participation. Innovations like Michelob Ultra Zero, which is the number one innovation in the category, and Busch Light Apple are exciting developments for the US market. We expect these innovations to drive growth during the summer months.

Q: Can you explain the shift in focus from "occasions development" to "balanced choices" in your strategy? A: Michel Doukeris, CEO: The shift reflects our focus on meeting consumer demand for balanced choices, such as non-alcoholic, low-carb, and gluten-free options. This segment is a significant growth area, with our balanced choices portfolio now over $5 billion, growing high single digits in net revenue. We are investing in this area to drive category growth and meet consumer needs.

Q: What drove the acceleration in Beyond Beer growth, and can it be sustained? A: Michel Doukeris, CEO: Beyond Beer growth is driven by our streamlined portfolio and focus on brands like Nutrl and Cutwater. This segment is a growing opportunity, and we are well-positioned to continue driving growth with our strong brand portfolio. The intersection of hard liquor, wine, and beer offers significant incremental volume for the beer category.

Q: How is the market in Mexico performing, and what are your expectations? A: Michel Doukeris, CEO: The underlying trends in Mexico remain positive, despite calendar effects impacting Q1 volumes. We expect the shift of Easter to Q2 to add momentum. Consumer behavior remains strong, and we continue to activate our brands and monitor the market closely.

Q: What are the drivers behind the strong margin improvement in Q1, and will it continue? A: Fernando Tennenbaum, CFO: The margin improvement was driven by favorable hedging and cost visibility. While we expect some cost pressures in the second half of the year, our outlook remains unchanged. We anticipate continued margin expansion through disciplined revenue management and operational efficiencies.

Q: How are you addressing the shift in consumer behavior among younger demographics in emerging markets? A: Michel Doukeris, CEO: We are monitoring consumer behavior closely, especially among younger demographics. While participation is lower among younger cohorts, it normalizes as they age. We are focusing on balanced choices and innovations that resonate with younger consumers, ensuring our portfolio meets diverse consumer needs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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