Anheuser-Busch Inbev SA (NYSE:BUD) reported fourth-quarter financial results on Thursday. The transcript from the company’s earnings call has been provided below.
- Anheuser-Busch InBev stock is challenging resistance. Why is BUD stock breaking out?
This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.
Operator
Welcome to Anheuser-Busch InBev’s full year 2025 earnings conference call and Webcast. Hosting the call today from AB InBev are Mr. Michel Ducaris, Chief Executive Officer and Mr. Fernando Tenenbaum, Chief Financial Officer. To access the slides accompanying today’s call, Please visit Anheuser-Busch InBev’s website at www.ab-inbev.com and click on the Investors tab in the Reports and Results center page. Today’s webcast will be available for on demand playback later today. At this time, all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press Star one on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star then. 2. If you should require operator assistance, please press star zero. Some of the information provided during the conference call may contain statements of future expectations and other forward looking statements. These expectations are based on management’s current views and assumptions and involve known and unknown risks and uncertainties. It is possible that Anheuser-Busch InBev’s actual results and financial condition may differ possibly materially from the anticipated results and financial condition indicated in these forward looking statements. For a discussion of some of the risks and important factors that could affect Anheuser-Busch InBev’s future results, see Risk Factors in the Company’s latest Annual report on Form 20F filed with the securities and Exchange Commission on March 12, 2025. AB InBev assumes no obligation to update or revise any forward looking information provided during the conference call and shall not be liable for any action taken of reliance upon such information. It is now my pleasure to turn the floor over to Mr. Michelle Jacaris. Sir, you may begin.
Thank you and welcome everyone to our full year 2025 earnings call. It is a great pleasure to be speaking with you all today. Today, Fernando and I will take you through our operating highlights and provide you with an update on the progress we have made in executing our strategic priorities. After that, we’ll be happy to answer your questions. Let’s start with the key highlights for the year. In 2025 we executed our strategy with discipline, delivering another year of dollar based EPS growth, continued margin expansion and solid free cash flow generation even as we navigated a dynamic consumer environment. As we reflect on the year, we are encouraged with the consistency of our financial performance, the durability of our strategy and the resilience of our business. While near term demand across many CPG categories was impacted by a constrained consumer environment and unseasonable weather. We continue to invest in our strategic priorities. We remain disciplined in our revenue management choices and delivered EBITDA growth within our outlook. We continue to make progress. This year we strengthened our operating model and increased our portfolio brand power. We also formed new long term partnerships to extend the reach of our brands and deepen the connection to our customers. The momentum of our growth priorities continued. Our mega brand and premium portfolio grew ahead of our overall business. The growth of our Beyond Beer and non Alcohol beer portfolios accelerated, increasing revenue by 23 and 34% respectively and this marketplace GMZ increased by 61% to now reach $3.5 billion. Solid free cash flow generation enabled us to increase the size of our share buyback program, pay an interim dividend and propose a final dividend that combined represents a 15% increase versus last year and further strengthen our balance sheet. We exited 2025 with improved momentum across many of our key markets and we entered 2026 well positioned to engage consumers and accelerate growth. Turning to our operating performance while our overall volumes for the year were below potential, momentum across many of our key markets accelerated through the fourth quarter with improved volume performance. In December. The combination of our disciplined revenue management and portfolio of mega brands that command the premium price drove a revenue per utility increase of 4.4% this year resulting in top line growth of 2%. Our productivity initiatives more than offset transactional FX headwinds to drive an EBITDA increase of 4.9% with margin expansion of 101 basis points. The strength of our diversified geographic footprint enables us to navigate the current environment and deliver consistent profitable growth. Revenue increased in 65% of our market this year and we delivered EBITDA growth in four of our five operating regions. Our footprint also positions us well to capture a disproportionate share of future industry growth with a diversified mix of currencies. Around 70% of our EBITDA is generated in emerging and developing markets that are projected to account for more than 80% of the beer category volume growth through 2029. Now I will take a few minutes to walk you through the operational highlights for the year from our key regions starting with North America. In the US Our business continues to build momentum and we gained its share in both beer and spirit in 2025. Our beer performance was led by Michaela Boutra and Buschlight, which were the top two volume share gainers in the industry. In the overall beer, our portfolio growth accelerated. Revenue increased in the high 30s led by Cutwater which grew revenue in the triple digits while industry volumes were below trend in 2025. We are encouraged by the start to 2026. Beer industry volumes and revenues grew in January and later this year. We look forward to celebrating the 150 years anniversary of Budweiser and activating the category at the FIFA World Cup. This past weekend also provided us a good opportunity to engage with our consumers in one of the most watched live sporting events in the U.S. the Super Bowl. We continue to invest behind our brands to fuel momentum and decree. A physic and and effectiveness of our marketing was once again recognized by consumers. Budweiser, Michelob Ultra and Bud Light were named as three of the top 10 ads according to the USA Today Ad Meter with Budweiser taking the top spot for the second year in a row. Now let’s turn to Middle Americas. In Mexico, our business momentum continued delivering a mid single digit top and bottom line increase with our above Corbia portfolio leading order growth. In Colombia, record high volumes and margin expansion drove double digit EBITDA growth with revenue increasing across all price segments of our portfolio. In Brazil, our momentum improved in the fourth quarter as we gained market share and our volumes returned to growth in December as weather normalized our premium and super premium beer brands delivered high teens volume growth in 2025 and gained share to now lead the premium segment. In Europe, market share gains and premiumization partially offset the soft industry with performance driven by our mega brands and nonalcohol beer. In South Africa, our momentum continues with market share gains in beer and beyond beer and disciplined revenue and cost management driving mid single digit top and bottom line growth now moving to apex. In China, revenue declined by low teens with our volumes underperforming a more stable industry as we adjusted inventory levels and focus areas to better reflect the channel and geographic shift. In Q4, our market share trend improved to be flat versus last year driven by improvements in Budweiser brand power and our in home channel performance. As we move forward, we continue to focus on rebuilding momentum and reigniting growth. Now I would like to take a few minutes to reflect on the beer category and progress we have made in executing our strategy. Let’s start with the category Beer plays an important role in bringing people together and creating moments of celebration and we believe beer has a long Runway for future volume growth across our footprint supported by favorable demographics, economic growth and opportunities to increase category penetration. According to iwsr, the Beer and beyond beer category is forecast to continue to gain share of alcohol beverages in 2025 and has now gained more than 200 basis points since 2021 and looking ahead, Deere is expected to grow volumes globally and continue to gain share of alcohol beverages. In 2025 we invested $7.4 billion in sales and marketing and have averaged more than $7 billion per year to since 2021. Our marketing effectiveness continues to strengthen and our Mega brand and Mega platform approach were key contributors to the brand power of our portfolio reaching a record high in 2025. Our mega brands led our growth and have increased revenue at a CAGR of 10% since2021 and now represents 57% of our total revenues. We are the leader in the premium beer segment globally and see significant red room for category to continue to premiumize Premium beer is forecast to grow volumes across all geographic clusters and at more than double the rate of the category overall and the best example of premium execution in our portfolio is Corona in 2025. Corona celebrated 100 years since its original launch and 2026 is off to a fast start with the brand cheering the golden moment at the Milan Cortina Winter Olympics. Since 2018 the volumes of Corona have doubled and in 2025 volume increased by double digits in 30 markets. The quality, brand power and consumer preference for Corona has earned the right for a premium price point. Corona sells on average at a 20% premium to the nearest competitor and in 2025 was again ranked as the most valuable beer brand in the world. We continue to lead the development of the category and expand occasions to meet consumer trends. Our balanced choice portfolio includes options for consumers seeking low carb, low calories, sugar free, gluten free and non alcohol alternatives. This portfolio is growing ahead of the overall beer category and Momentum continued in 2025 led by Corona Sero globally and Metalab Ultra Zero in the US. Our nonalcohol beer portfolio delivered a 34% revenue increase and we estimate to gain its share in 70% of our top 14 non alcohol beer markets. While nonalcohol beer is currently a relatively small portion of our global beer volume, it is a key opportunity to develop new consumption occasions and increased participation and we are investing and innovating to lead the growth in beyond beer. The growth of our portfolio accelerated, increasing revenue by 23% in 2025. Our performance was led by Cutwater in the US which grew revenue in the triple digits and was the number one shard gaining brand in the total spirits industry in the fourth quarter. After the successful rollout in Africa, our flavored beer Flying Fish is now expanding to Europe and the Americas beyond beer now accounts for 3% of the total revenue of our business and the category is projected to grow volumes that double the rate of the overall beer category. The strength for brands raw to market capabilities and innovation pipeline gives us a strong right to win in this segment. Discipline and incremental innovation is a key enabler of our growth. In 2025, our innovations across packaging, brands and liquids contributed 11% of our total revenue. In the US we led the industry innovation with three of the top five innovations of the year with Michelob Ultra Zero and Busch Light Apple the top two. In China, we launched a 1 liter can for Budweiser and a Corona full open lid can to bring the iconic lime ritual into the in home channel. In South Korea, we launched the country’s first four zero beer with great taste, zero alcohol, zero sugar, zero calories and zero gluten. And in beyond beer, we are expanding our winning propositions globally and innovating with flavor varieties to provide consumers with choice. Let’s now turn to our second strategic pillar, digitize and monetize our ecosystem. In 2025, Beef captured $53 billion in gross merchandising value, a 12% increase versus last year. The growth of Biz Marketplace accelerated and delivered 3.5 billion of Gen Z this year, a 61% increase versus last year. The marketplace on Biz has grown rapidly since we initially started developing the platform in 2021. We recognized early that many of our customers could benefit from a one stop shop for their business and similarly that many consumer goods partners could benefit from leveraging the breadth and efficiency of the digital connection we have with our customers. The marketplace has grown to $3.5 billion in ZiPS from a standing start five years ago and we continue to explore the opportunities to scale and enhance profitability. We are still early in the marketplace journey, but we are encouraged by the progress we have made and see a clear opportunity to continue the growth momentum while solving a pain point for our customers and partners. In B2C. Our digital platforms continue to enable a one to one connection with our consumers in developing new consumption occasions. In 2025, we continue to grow our consumer base, now serving 12.3 million consumers, an 11% increase versus 2024. With that, I would like to hand it over to Fernando to to discuss the third pillar of our strategy optimize our business.
Fernando Tennenbaum (Chief Financial Officer)
Thank you Michel. Good morning. Good afternoon everyone. I will take a few minutes to discuss the progress we have made on four key areas of focus in optimizing our business. Improving margins compounding EPS and free cash flow growth, making disciplined capital allocation choices and advancing our sustainability priorities. Our EBITDA margin improved by 101 basis points this year with margin expansion across four of our five operating regions. While each year has unique dynamics, we are confident that the combination of our leadership advantages, disciplined revenue management, continued premiumization and efficient operating model create an opportunity for further margin expansion over time. Moving on to EPS this year we delivered underlying profit growth of $350 million. Underlying EPS was $3.73 per share, a 6% increase versus last year’s in dollars and a 9.4% increase in constant currency. Dollar based EPS has now grown at a CAGR of 6.7% since 2021. EBITDA growth accounted for a 46 cents per share, increased this year. Lower net interest expense from active debt management and continued deleveraging contributed $0.09 per share but was partially offset by a higher cost of hedging and FX movements. Next, let’s take a look at free cash flow. In 2024 we made a step change in our free cash flow to $11.3 billion and in 2025 we maintained this level through a combination of EBITDA growth and margin expansion, reducing …