Anheuser-Busch InBev SA/NV Q2 Earnings Call Highlights

Anheuser-Busch InBev SA/NV reported higher second-quarter revenue, earnings and free cash flow as beer volumes returned to growth and the brewer gained market share globally, while management said conditions remained challenging in China.

Chief Executive Officer Michel Doukeris said beer volumes increased 1.1% in the second quarter, supported by record second-quarter volumes in markets including Mexico, Colombia and Ecuador. Total volumes rose 0.9%, while revenue increased 5.6% and revenue per hectoliter advanced 4.2%, driven by mix and revenue-management actions intended to offset rising inflation and input costs.

Underlying earnings per share rose 23.4% to $1.21. First-half free cash flow increased by $2.5 billion to $3.9 billion, the company said.

Doukeris said the company’s mega brands, non-alcohol beer offerings and Beyond Beer portfolio contributed to growth. Revenue from mega brands increased 6.2%, while Corona revenue outside Mexico rose 17%. Corona posted double-digit volume gains in 37 markets, according to the company.

Non-alcohol beer revenue increased 27%, led by Corona Cero and Michelob ULTRA Zero. Management estimated that 60% of non-alcohol beer volume came from new occasions and new consumers.

In the U.S., Busch Light Apple, which returned in April, became the second-largest volume share gainer in the total industry during the quarter, Doukeris said. In North America, AB InBev said it gained share in beer and Beyond Beer. Michelob ULTRA, Busch Light and Busch Light Apple were the top three beer volume share gainers in the U.S. industry, according to management.

The company’s Beyond Beer revenue grew in the mid-70% range, led by Cutwater’s triple-digit revenue growth. Doukeris said Cutwater was the top share-gaining brand in the U.S. spirits industry during the quarter.

Mexico: Revenue grew in premium, mainstream, non-alcohol beer and Beyond Beer, producing mid-single-digit revenue growth and high-single-digit bottom-line growth, with market share gains. Colombia: Record second-quarter volumes supported double-digit top- and bottom-line growth. Management estimated its portfolio gained share of total alcohol. Brazil: Beer volumes increased as the company gained market share and industry conditions improved. Premium and super-premium brands grew volume in the mid-20% range. Europe and South Africa: European volumes rose by low single digits, while South Africa posted mid-single-digit top- and bottom-line growth. South African premium and super-premium beer volumes grew in the high-20% range.

China remained a weak spot. Revenue in the market declined 8.8% as AB InBev underperformed what Doukeris characterized as a soft industry affected by adverse weather.