Top Takeaways
- Global momentum continues with revenue growth in 65% of markets and EBITDA growth of 10.2%.
- Megabrands lead growth, driving market share gains in the majority of markets.
- Digital transformation progresses with BEES platform reaching $11.7 billion in gross merchandising value.
- Margin expansion achieved in all five operating regions, with overall EBITDA margin improving by 236 basis points.
- U.S. business shows signs of stabilization with market share gains in May and June.
Anheuser-Busch InBev delivered a robust second quarter performance, showcasing resilience and strategic execution across its global operations.
Summary
AB InBev reported strong Q2 2024 results, with EBITDA growing 10.2% and margin expansion in all five operating regions. CEO Michel Doukeris highlighted the company’s continued global momentum:
“We are encouraged by the continued global momentum of our business and our performance in the first half of the year. Our megabrands continue to lead our growth this quarter and drove market share gains in the majority of our markets in the first half of the year.”
Main Themes
- Outlook: Reaffirmed 4-8% EBITDA growth guidance for 2024
- Competition: Increased activity in value segment in Brazil, but AB InBev maintains strong position in premium and super-premium categories
- Economy: Resilient beer industry performance, particularly in the U.S.
- Digital Transformation: BEES platform continues to expand, delivering $530 million in gross merchandising value of non-ABI products
- Market-moving information: Underlying EPS grew 25% to $0.90 per share
Insights
AB InBev’s digital transformation is yielding significant results. The BEES platform has become a crucial operating system, enabling personalized sales proposals and optimized promotional activities. This digital edge is enhancing the company’s ability to respond to market dynamics and consumer preferences swiftly.
Market Opportunity
The company is expanding its total addressable market through the BEES marketplace, which grew 55% year-over-year to $530 million in gross merchandising value of non-ABI products. This diversification strategy is creating new revenue streams and positioning AB InBev to capture growth beyond its traditional beer market.
Market Commentary
The global beer industry remains resilient, with AB InBev noting that beer is gaining share of total alcohol by value in the off-premise channel in the U.S. The company’s premium and super-premium portfolios are driving growth in multiple markets, indicating a continued premiumization trend in the beer industry.
Customer Behaviors
Consumer demand for premium and super-premium brands remains strong across markets. In Brazil, Colombia, and South Africa, AB InBev achieved record Q2 volumes, driven by the successful execution of its megabrand strategy and digital initiatives. The company is also seeing success in the ready-to-drink (RTD) category, with brands like Nutrl and Cutwater capturing growth primarily from spirits and wine consumers.
Economy Insights
Despite economic challenges in some markets, AB InBev reported resilient consumer demand across most of its operations. CFO Fernando Tennenbaum noted:
“Consumers continue to be in a good place. So we see continued momentum, which is kind of the majority of our markets.”
However, the company acknowledged ongoing macroeconomic challenges in China and Argentina.
Industry Insights
AB InBev’s performance suggests that the global beer industry is navigating inflationary pressures effectively through premiumization and digital initiatives. The company’s success in the RTD category indicates a broader trend of beer companies diversifying their portfolios to capture growth in adjacent categories.
Key Metrics
Financial Metrics
- Revenue growth: $15.33B (+2.7% Y/Y)
- EBITDA growth: 10.2%
- Underlying EPS growth: 25% to $0.90 per share
- Net leverage: Improved to 3.42x from 3.7x year-over-year
KPIs
- BEES gross merchandising value: $11.7 billion (20% increase YoY)
- BEES monthly active users: 3.8 million
- Direct-to-consumer unique orders: 19 million
“Our marketplace continues to expand, delivering $530 million in gross merchandising value of non-ABI products, a 55% increase versus last year.” – Michel Doukeris
Competitive Differentiators
- Global scale and diverse geographic footprint
- Strong portfolio of megabrands (8 of top 10 most valuable beer brands globally)
- Advanced digital ecosystem (BEES platform and direct-to-consumer initiatives)
- Leadership in premium and super-premium segments
- Efficient operating model driving margin expansion
Key Risks
- Ongoing macroeconomic challenges in China
- Potential currency headwinds, particularly in Brazil and Mexico
- Competitive pressures in the value segment in some markets
- Continued recovery of Bud Light brand in the U.S.
- Weather-related impacts on beer consumption in key markets
Analyst Q&A Focus Areas
- U.S. market recovery and portfolio rebalancing
- Sustainability of margin expansion
- China market outlook and recovery potential
- Impact of BEES platform on business execution
- Ready-to-drink (RTD) category performance and competitive dynamics
Anheuser-Busch InBev Summary:
AB InBev demonstrated strong execution of its strategy in Q2 2024, delivering solid financial results and progressing on its digital transformation initiatives. The company’s focus on megabrands, premiumization, and expansion into adjacent categories like RTDs is yielding positive results. While challenges remain in certain markets, particularly China, the overall momentum across the majority of its operations positions AB InBev well for continued growth. Investors should watch for further developments in the U.S. market recovery, the scalability of the BEES platform, and the company’s ability to navigate potential currency headwinds in key markets.
