Anheuser-Busch InBev SA/NV Q2 FY2025 Earnings Call

Welcome to AB InBev's Second Quarter 2025 Earnings Conference Call and Webcast. Today, hosting the call from AB InBev are Mr. Michel Doukeris, Chief Executive Officer, and Mr. Fernando Tennenbaum, Chief Financial Officer. To access the slides that accompany today's call, please visit AB InBev's website at www.ab-inbev.com and click on the Investors tab and the Reports and Results Center page. Today's webcast will be available for on-demand playback later today. Some of the information provided during the conference call may include statements about 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 AB InBev's actual results and financial condition may differ, possibly significantly, 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 AB InBev's future results, please refer to the risk factors in the company's latest annual report on Form 20-F, 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 will not be liable for any actions taken in reliance upon such information. I would now like to turn the floor over to Mr. Michel Doukeris. You may begin, sir.

Thank you, and welcome, everyone, to our second quarter 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 this quarter. After that, we will be happy to answer your questions. Let's start with the key highlights. The consistent execution of our strategy delivered another quarter of solid results, with EBITDA increasing by 6.5% and continued margin expansion. The performance of our premium brands and the strategic choices we made in revenue management drove an acceleration in our revenue per hectoliter growth, increasing by 4.9% versus last year. In the U.S., our portfolio is continuing to build momentum and gain share of the industry. We are continuing to increase our investments in our brands to fuel growth. Our non-alcohol beer portfolio continued to outperform globally, increasing revenues by 33%. The growth of BEES marketplace accelerated this quarter, increasing GMV by 63% versus last year to reach $785 million. And the ongoing optimization of our business drove an 8.7% increase in the underlying U.S. dollar EPS and a $0.5 billion increase in free cash flow. Turning to our operating performance. Volumes declined by 1.9%, impacted by soft industry and performance in China and Brazil. While overall volumes were below potential, the underlying momentum in markets representing the remaining two-thirds of our business continued with volume growth of 0.7%. Double-clicking on these two markets. First, Brazil. The majority of our volume decline was driven by a soft industry, which was impacted by adverse weather conditions. During the second quarter, we made strategic revenue management choices to position the business well for the second half of the year. Second, in China, the quarter two industry volume trends were in line with the first quarter, declining by low single digits versus last year, but our volumes underperformed with continued weakness in our regions and channels. Moving back to the global results. Top line growth accelerated with revenue increasing by 3% this quarter versus last year. EBITDA increased by 6.5%, and the continued optimization of our business drove operating leverage through the P&L, resulting in EPS growth of 17.4% in constant currency and 8.7% in U.S. dollar terms. Our diversified geographic footprint enables us to deliver consistent results. Revenue increased in 70% of our markets. And we delivered top and bottom line growth across four of our five operating regions. Now I'll take a few minutes to walk you through the operational highlights for the quarter from our key regions. Starting with North America. In the U.S., the momentum of our portfolio continued, and we are increasing investments in our brands to fuel growth, led by Michelob ULTRA and Busch Light, the #1 and #2 volume share gainers in the industry. Our market share momentum accelerated, and we delivered both top and bottom line growth. And in the spirits-based RTDs, our portfolio grew volumes by low teens, led by Cutwater and Nutrl. Now moving to Middle Americas. In Mexico, our volumes grew by low single digits, likely ahead of the industry, which benefited from Easter shipment phasing, but was negatively impacted by adverse weather in June. Revenue increased by mid-single digits, with growth led by our above-core beer portfolio. In Colombia, record high volumes drove high single-digit top- and bottom-line growth, with our portfolio estimated to have gained share of total alcohol. In Brazil, our revenue declined by 1.9%, impacted by volume performance. EBITDA increased by 5.3%, with margin expansion of 216 basis points as productivity initiatives more than offset the top line decline and transactional FX headwinds. In South Africa, the underlying momentum of our business continued, gaining share of both Beer and Beyond Beer. Revenue and EBITDA grew by mid-single digits, with our performance driven by premium and super-premium brands, which grew volumes by mid-teens. In Europe, an improved industry, continued premiumization of our portfolio, and further margin recovery drove top- and bottom-line growth. Our volumes were flat, outperforming the industry in five of our six key markets, led by our mega brands and our non-alcohol beer portfolio. While we are talking about Europe, I spent a lot of time with our team in the market over the last few months. And looking at the industry performance this quarter, we can see an interesting example of the resilience, momentum, and relevance of the beer category. With more normalized weather, the industry delivered flattish volumes and revenue growth, with beer gaining share of total alcohol. In our developed markets, we have the opportunity to innovate, premiumize, increase category participation, and be present in more occasions to deliver profitable growth. To mention just a few examples from Europe, consumers are enjoying the taste of Leffe with meals in France and Italy, the perfect serve of Stella Artois during Roland Garros and Wimbledon, celebrating 100 years of the refreshing taste of Corona during the summer, and the PerfectDraft experience at home in the U.K., and our non-alcohol beer portfolio in more occasions. With the right portfolio, innovation, and focus on consumers and occasions, the category has attractive growth opportunities across our footprint. Now moving to APAC. In China, revenue declined by 6.2% with our volumes underperforming the industry. We are committed to our strategy and are taking action to strengthen our execution by increasing discipline and excellence in our route to market, increasing investments in our mega brands, accelerating our expansion in the in-home channel, and scaling up key innovations such as Harbin Zero Sugar. Now let's look at the key highlights of our three strategic pillars, starting with leading and growing the category. We continue to invest in our megabrands and mega platforms. In the first half of the year, we invested $3.6 billion in sales and marketing and have averaged more than $7 billion on an annualized basis over the last six years. Focused portfolio management, increasing market investments, and improved effectiveness drove an increase in brand power of our portfolio, led by our megabrands. These consistent investments in our brands are reinforcing the strength of our portfolio. According to Kantar BrandZ, we own eight of the top ten most valuable beer brands in the world. Michelob Ultra and Stella Artois, two of our global mega brands moved up in the rankings by one position to reach #5 and #9, respectively; and Corona and Budweiser continued to lead at the top two brands globally. We have evolved our portfolio management approach to focus our investments in our megabrands to drive efficient, profitable growth. We have around 50 megabrands globally, typically five per market. And these brands continue to lead our growth, with net revenue increasing by 5.6%. Our global megabrand, Corona, continued to drive premiumization across our markets, growing revenue by 7.7% outside of Mexico and growing volumes by double digits in more than 30 markets. Through the consistent execution of our category expansion levers, we are increasing category participation across our markets by offering superior core brands, innovating in balanced choices to provide consumers with no and low alcohol, low carb, zero sugar, and gluten-free options. And we are expanding our Premium and Beyond Beer portfolios. As a result, on a rolling 12 months basis, participation of legal drinking age consumers with our portfolio increased across our markets. In non-alcohol beer, our portfolio momentum continued with net revenue growing by 33%, led by the growth of Corona Cero. We are now leaders in seven of our top thirteen non-alcohol beer markets and estimate to have gained share in 70% of them. With 65% of the volume coming from new consumers and new occasions, we believe non-alcohol beer is a key opportunity to develop the category and drive incremental volume growth. Innovation is a key component of our ambition to drive increased participation and develop new occasions. Two good examples of our innovation capabilities this year are both from our U.S. business, where we are leading the industry in innovation year-to-date. Busch Light Apple is a seasonal offering that provides consumers with a crisp, refreshing taste and was brought back to the market by popular demand after a three-year absence. Since launch in May, the brand is now the #1 innovation in the industry, driven primarily by 21- to 24-year-old consumers who have a six times higher rate of purchase for Busch Light Apple versus the industry average. Michelob Ultra Zero, with only 29 calories, is brewed for those consumers looking for a great tasting, zero alcohol, low-calorie beer. Since launch early this year, the brand is the #2 innovation in the industry and is the #6 volume share gainer in the overall beer category year-to-date.

Thank you, Michel. Good morning, good afternoon, everyone. I will take a few minutes to discuss the progress we have made in optimizing our business. Our EBITDA margins improved by 116 basis points this quarter with expansion in four of our five operating regions. We know that each quarter will be different, but 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. We delivered underlying EPS of $0.98 per share, an 8.7% increase in U.S. dollars and a 17.4% increase in constant currency versus last year. EBITDA growth accounted for a $0.16 per share increase, with translational effects a $0.08 per share headwind. Lower net interest expense and the optimization of other below EBITDA line items drove the balance of our EPS growth. As we continue to focus on optimizing our business, in the first six months of this year, we increased our free cash flow by $0.5 billion versus last year through a combination of driving organic EBITDA growth, reducing our net interest expense through deleveraging, optimizing our net working capital, and improving the efficiency of our CapEx through disciplined resource allocation. With this increase in cash generation, we continue to make progress on our deleveraging journey. Our net debt-to-EBITDA ratio reached 3.27x, an improvement from 3.42x year-over-year. As is typical, the ratio increased versus the full year given the seasonality of our cash generation and increased cash outflow from our full-year dividend and completion of our share buyback program. In the first half, we continued to strengthen our debt maturity profile by executing a bond redemption and issuance, allowing us to extend our average maturity while maintaining our weighted average coupon. Our bond portfolio remains well distributed with no relevant near- and medium-term refinancing needs. We have approximately USD 3 billion worth of bonds maturing through 2026 and no financial covenants. Our results in the first half of the year, the resilience of our strategy, and the strength of our megabrands all reinforce our confidence in our ability to deliver on our 2025 outlook of 4% to 8% EBITDA growth. With that, I would like to hand it back to Michel for some final comments.

Thanks, Fernando. Before opening for Q&A, I would like to take a moment to recap on the first half of the year, and look ahead at the opportunities our brands have to activate the category. We are encouraged by our first half results as we delivered EBITDA growth at the upper end of our outlook. Underlying EPS increased by high single digits in U.S. dollars and by 19% in constant currency. The performance of our premium brands and our revenue management decisions drove an acceleration in our revenue per hectoliter growth. Our diversified footprint is proving to be a strength as our developed markets across the U.S., Canada, and Europe showed a resilient performance, growing top and bottom line in the second quarter of 2025. And as Fernando just mentioned, our first half performance and the strategic choices we have made position us well to deliver on our outlook for the year. In the first half of this year, our brands met consumers in some of the most iconic events in sports and culture, developing new occasions and creating moments of celebration and cheers. Looking ahead to the second half, we are uniquely positioned to activate the category. From the NBA and NFL to celebrating 100 years of Corona around the world to the buildup of the Winter Olympics, we will be focused on connecting with consumers and bringing to life our purpose of creating a future with more cheers. With that, I'll hand it back to the operator for the Q&A.

Our first questions come from Mitch Collett with Deutsche Bank.

Michel, Fernando, I've got two questions, please. So firstly, given the volume decline in the first half and some of the headwinds you've seen that might persist into the second half. I guess, it looks unlikely that you'll see volume growth in fiscal '25. But how comfortable are you with not achieving volume growth this year? And how do you think about volume growth longer term? I appreciate you won't guide on fiscal '26 today, but how confident do you feel about volume growth going into fiscal '26 based on what you know today? And then, the second question, I guess, is linked. Given those temporary headwinds to volume this quarter, you've actually had a pretty decent organic EBITDA growth delivery and you're in the top half of your range. So to what extent is that margin improvement permanent? And how should we think about organic EBITDA growth in a better volume context?

Thanks for the question. So I think that to start answering this question and talk about volume, it's always good to remember the business that we have, which is a large one globally with operations in over 50 countries, selling beer in over 100 countries. And as we always say, this is a great footprint because it allows us to navigate different environments and continue to deliver on a consolidated basis. But of course, this can also expose us to different country-specific challenges from time to time. We are all aware of the slowdown in China and the reset in Argentina, just to mention a few of them. In a business that is as large as this one, it's difficult to draw conclusions based on a quarter or just one KPI, such as volume. For example, since pre-COVID, our volumes have been growing by 0.5% on average. This quarter, specifically, driven by the Brazilian industry, where both countries had tough industries, but also our performance in China and in Brazil were below our expectations. This volume was not where we would like to be. But if you go to other KPIs and you look at what we deliver, of course, revenue and all-time high EBITDA have been growing quarter over quarter within the range that we have for the market. This is a year outlook, and we've been delivering consistent EPS growth in constant currency, but also in dollars, growing 8% this quarter, 7% since 2021. And we continue to make progress on our cash flow that continues to improve year-on-year. All of that to say, we remain confident in the footprint that we have and the advantage of this footprint globally. The forecasts for the industry in the long run do not change; this industry will continue to grow and gain share of growth, and we are confident in the business and the strategy that we are executing. I will leave Fernando with the second part of your question.

Mitch, Fernando here. So when you ask about margins, if you look at the second quarter, the margin expanded by 116 basis points, and we expanded in four of our five operating regions. We don't provide margin outlook, but we said several times before that 2025 looks to be more like a normal year of cost inflation, somewhat in line with inflation across our markets for the year. But then when you double-click and you said that several times, when you look at the FX curves, we always hedge one year out. So we have very good visibility on what is happening. We expect the phasing of cost inflation to be weighted from Q2 onwards. And then taking one step back and looking at the broader picture. We have also stated several times that the EBITDA performance we have, especially during the COVID years, has been driven by transactional effects and record high commodity prices. But none of these headwinds were structural. So the fundamental drivers of our industry-leading margins remain intact. So that's to say that we are controlling what we can control. And when we look forward, not specifically quarter-by-quarter, we still see a lot of opportunities to improve margins.

Our next questions come from the line of Rob Ottenstein with Evercore ISI.

Great. Michel, the results in the U.S. are really impressive, and it's an incredible turnaround story and quite a success. As you reflect on what you've accomplished in the U.S., what are the key learnings? And are there things from the U.S. that you can transport—learnings that you can transport to other regions to help improve performance in those areas as well?

Robert, thanks for the question. So the U.S. has been a topic in our calls and conversations over the last several years. And I think that we always need to start with the idea that we proposed back in 2017, this rebalance of our portfolio. We have been since investing in the brands that we thought had potential for acceleration, which were in line with what we see are emerging and consolidating consumer trends. Our share momentum in second quarter improved. So we are—any metric you take from Circana to BIR on the 60 to 70 basis points. This growth so far has been led by Michelob Ultra and Busch Light. And because of the intentionality of the innovations we had during the year, there were fewer innovations but more meaningful innovations. We see a boost in this share due to the seasonal launch of Michelob Ultra Zero in the first quarter of this year and Busch Light Apple coming in as a seasonal product in the second quarter. The learnings from this are consistency. We've been talking a lot about this. It requires a long-term plan, a very consistent view on the category, our portfolio choices, and the investments we made for the long term. We called this inflection point last year because we've been following the percentage of brands in our portfolio that are growing and where the industry is going. We see now a further acceleration that you don't capture on this share in the Beyond Beer space, because a lot of our choices were in the ready-to-drink cocktails and the vodka seltzer, but both Cutwater and Nutrl are showing strong consistent growth. Some of those elements, of course, are embedded in our plans globally. When you think about the 10-year plan we have in the company, the megabrand choices, and the consistency of the investment behind these choices, as well as our innovation and expansion in tools to increase penetration, such as non-alcohol, gluten-free, zero sugar, and Beyond Beer choices. So I think there is more for us to see in the U.S. There is much more for us to do. But so far, we are pleased with the current momentum and especially with the demand for the brand. So Ultra continues to accelerate. Busch Light is very well-positioned, and our innovations are working hard to support this growth.

Our next questions come from the line of Olivier Nicolai with Goldman Sachs.

Michel, Fernando, first of all, I've got a follow-up on Mexico. I think in the press release you commented that Mexico grew in the quarter, but in June, it was weak, blaming the weather. Is there any consumer slowdown in Mexico that you're seeing at the end of the quarter, which could have an impact in H2? And then, the question is going back to the Brazil Beer volumes decline. So beyond the weather, could you perhaps break down the key elements to explain the underperformance? Have you been increasing prices perhaps a bit too much or more than the rest of the market? And do you believe that volumes could bounce in H2 when it comes to mainstream beer, or is there something a bit more structural there?

Good morning, Olivier, Michel here. I'll take the two questions. One more specific, one more broad. Feel free to follow up if I didn't cover both of them. So I think that in Mexico, again, it’s a great industry with a great business that we have. Volumes during the quarter increased by low single digits, outperformed the industry. Results were good top to bottom. We had different components during the quarter. So I think you can remember several of them. Easter shipment shifting from quarter one to quarter two comparables because last year was a very strong quarter in Mexico. I think we all remember that the government, because of the elections, had more spending in the first half of the year, and this helped the quarter two results, which were strong last year in terms of weather as a matter of fact. I'm not sure if I captured it well, but you mentioned blaming the industry. We actually just state the fact; we are not blaming the weather, right? So I was just stating that it was cold and rainy with some storms in Mexico during this quarter. So the back end of the quarter was rather slow compared to the beginning of the quarter because of Easter. But all-in-all, we delivered a great quarter, outperforming the industry. Underlying demand for our brands remains very strong. As in many markets, and I think that this somewhat connects the first part of the question with the second one. We see the economy continuing to progress, but across the board, we see consumer confidence not at the high levels that we saw back in '22, for example. One would expect that at one point, as the economy continues to progress, consumer confidence will converge, but we are not there yet. And more specifically, if you look at the different consumer cohorts by socioeconomic level, the more value-seeking consumers are under pressure because of inflation in some specific markets. And when we look at the basket—for example, in the U.S., the consumer basket among different cohorts of consumers and socioeconomic levels remains stable as they are buying on average the same dollar amount they usually buy. But we all know that the same dollars with inflation mean less units being bought in the basket. This is a point that we all need to be carefully monitoring. So far, alcohol has kept its share of these baskets stable. In markets where purchase power is already rebuilding, take Europe, for example, that suffered more after COVID, particularly due to the cost of electricity, fuel, and energy—those costs are normalizing. With that, purchasing power is recovering and we see the industry recovery in line, both on the dollars being spent and also in terms of quantity. Therefore, the economy continues to progress, but consumer confidence remains below historical levels. At one point, we all expect this to converge. Baskets are stable in dollars, euros, but where there is more inflation, consumers are being more selective in their purchasing quantities. So we need to continue to monitor the economy, focus on the areas we can control, and then we will see, as we move forward, those things converging such as purchasing power, consumer confidence, and volumes.

Our next questions come from the line of Sanjeet Aujla with UBS.

Michel, Fernando, a couple from my side, please. Firstly, on China, can you talk us through how you're seeing the on-premise channel progress through the quarter? On the one hand, you're cycling some of the macro headwinds from last year. However, it feels like the government has really stepped up the anti-extravaganza campaign. And maybe talk us through how you're thinking about that into the second half of the year. So the first question on China. Second question on Brazil. I think one of your peers confirmed they had taken a price increase in July. Have you noticed an improvement in your market share trends as you're going into Q3 on the back of that?

Sanjeet, good morning, Michel here again. So two points in your question. First, China. It is not new in our conversations that the industry has seen a significant slowdown. As we look at quarter one and quarter two of this year, the comps were not easy for the industry, and it continued to perform slightly negatively. That was the picture in the first quarter of the year, and it remained the picture in the second quarter. Of course, the degree of the underperformance is now much smaller than what we saw last year. We continue to think that as we move through the quarters, we will see this impact reduce, with comps becoming more favorable for the industry. At some point, this industry should turn in the right direction, but we are not there yet in quarter two. The on-trade channel, which is an important component, continues to be very weak. So the recovery of the on-trade is not happening. The growth we see in the industry is more in the off-premise. A significant portion of our plants in China is now improving the role to market and propositions for the off-premise. The good part is that we under-index our share in the off-premise channel, leaving us ample space for growth—though it requires adjustments in execution. I can’t comment on any new measures from the government regarding the on-trade since it's new information. I was in China recently and noted there was less traffic in on-trade locations, especially Chinese restaurants. But we will need more time to see where this will lead us. On the other hand, we all see growth in the off-premise, which seems to be already overcoming the industry's decline and is a big opportunity for us, given our under-indexed share. For your second question on Brazil, I think we commented on that in the press release and during the call. But in Brazil, the industry was soft in quarter two. Similar weather conditions in the U.S. and Mexico extended throughout the Americas. Brazil and Argentina faced challenging weather, particularly in the south, but milder in the southeast. When the weather is bad across Brazil, it has a major impact. That was the main adverse factor leading to the industry underperformance in Brazil in quarter two. We also had our revenue management calendar. We discussed this during the second half of last year; our transactional effects played an important role in costs that are substantial for Brazil this year. Revenue management had to follow our plans, and we rolled out price increases as we do every year. The relative pricing in terms of competition was tough for our Brazilian team in the first half of the year. We see the market adjusting as we progress through the year. Price adjustments are being made, and we expect better relative positioning as we move forward. However, we can only control our own agenda and revenue management, so we are monitoring, executing, and preparing the business for a stronger second half.

Our next questions come from the line of Andrea Pistacchi with Bank of America.

Yes. Michel, Fernando, two questions, please. The first one on the U.S. I mean, you had a very solid performance, particularly on profit in the U.S. But the industry—the rate of decline of the industry in the last couple of months seems to have worsened. Clearly, weather impact, pressure on the low-income consumer which we know. But should the industry continue to decline at a greater pace than it has been historically, that historic 1%, 2%. Do you think you have enough levers to continue to at least hold profits flat or maybe grow it a bit in the U.S.? And what are these levers? And then the follow-up will be, I think, for Fernando. So I wanted to ask about share buybacks. You completed the EUR 2 billion finished back in June. Free cash flow in H1 was very solid. Yes, most of the cash is generated in H2, but H1 very solid. The yen currency is relatively stable. So what held you back from increasing the buyback already at this point? I know over the past couple of years, you announced a buyback in October, but particularly given the attractive levels of the share price, why not increase the buyback earlier?

Andrea, Michel. I'll take the first one here and hand it over to Fernando to follow up on your second question, okay? So I think that the U.S. industry and our own performance—we discussed it a little bit in response to Robert's question earlier. We see good momentum in our portfolio, with strong brands leading this. Michelob Ultra is a premium brand in our portfolio, allowing us not only to continue to grow share but also to improve our financials. Busch Light and our focus on innovation continue to perform well, which is very positive. When you look at the industry, you are correct that it remains below long-term trends. As previously mentioned, many unexpected weather events impacted the industry in the first half of the year. So we see differences between states in which weather's been unfavorable compared to others. A significant portion of the decline from historical trends stems from differing weather and consumer confidence levels in various states. The second area you mentioned, pockets of consumer constraint have indeed emerged. As we stated, while the basket remains stable in overall consumption, dollar amounts are affected by inflation, and the quantities purchased have been limited. However, the share of alcohol beer in these baskets has remained stable. Thus, as the economy continues to progress, and purchasing power rebuilds for these consumers, we can only expect a normalization in consumer behavior. Importantly, we are committed to maintaining productivity, managing costs, and improving efficiency. These core levers, along with effective marketing strategies, will enable us to sustain and potentially grow our top and bottom line, irrespective of current conditions. Let me also use this opportunity to highlight developments in Europe, where we have enjoyed favorable conditions, driving a high share of our beer market growth while competing effectively with other sectors. As we manage this dynamic environment, we remain focused not on individual metrics but, instead, on our overall trajectory of growth over the long term. So I believe we can navigate short-term challenges while building long-term momentum. Now I'll pass this to Fernando to address your second point regarding buybacks.

Andrea, Fernando here. So on your question, what I can tell you is that our capital allocation plans remain unchanged. We approach our cash utilization with discipline. However, as noted, the increased cash generation and lower leverage provide us with greater flexibility in capital allocation decisions. The primary goal of our capital allocation policy is to create value for our shareholders. As you've said, cash flow tends to weight towards the second half of the year. While the first quarter was robust, generating $0.5 billion more than the previous year, we have no announcements at this time. However, the key takeaway is that our plans remain unchanged, and we are experiencing increased flexibility as we strengthen our balance sheet and benefit from solid cash flows.

Our next questions come from the line of Edward Mundy with Jefferies.

Good morning, Michel, Fernando. So first question is coming back to the concept of volume growth where you're growing probably below your potential. I think historically, some of the developed markets have probably held you back a little bit, but you're sounding much more assured on Europe, and we've seen outperformance for a couple of quarters now in the U.S. Does this give you more reassurance in your ability to grow group volumes over the medium term as you get through some of these short-term issues in Brazil and China? And then the second question is on your plans to activate category. I think Slide 31 shows some of the sports properties against which you activate. Thinking about FIFA 2026 and probably some of your learnings from the FIFA Club World Cup this year, I think it's fair to say that you're getting sharper on marketing. Do you see a bigger opportunity for the business and the category as you look out to next year?

So two-fold. I talked a little bit about this before. The gift of our global footprint allows us to navigate various environments while continuing to deliver on a consolidated basis, even amid specific challenges in target markets as they arise. Focusing on factors within our control helps us succeed in operating our extensive portfolio. Our EBITDA and EBIT growth consistently show favorable performance, often offsetting volume fluctuations across various regions. The long-term perspective holds firm as we concentrate on optimizing our portfolio and reaping benefits from our diverse locations. We are heartened to see this quarter that developed markets such as the U.S., Canada, and Europe are gaining a stronger foothold and resiliently pursuing top and bottom line growth. We retain confidence in the positive medium-term outlook across group volumes while addressing current variances and challenges in Brazil and China. Now regarding FIFA and upcoming events, we anticipate heightened excitement with major tournaments driving incremental growth. Historical data indicates that World Cup years typically coincide with volume spikes—not only during the tournament but also throughout the year due to the buzz surrounding the event. Looking ahead, FIFA 2026 promises unprecedented engagement, with an expanded lineup of participating nations fostering extended opportunities for our brands. This enthusiasm, bolstered by our successful prior partnership with Michelob Ultra as the sponsor of the FIFA Club World Cup, sets a strong foundation for next year. Notably, the Winter Olympics this season, spanning from late 2025 into the following quarter, offers additional avenues for engagement, particularly as we gain confidence from our previous Olympic activation experiences. We remain committed to our major platforms, recognizing their significant ROI and essential role in fostering brand momentum.

Our next questions come from the line of Laurence Whyatt with Barclays.

A couple from me, if that's okay. Firstly, on the U.S. business, you hopefully showed the slide showing the very strong brands you have across the world and included in the Bud and Bud Light. I think over the recent years, those brands have struggled, as you pointed out that mainstream beers have been outperformed by some of the premium brands and imports. But of course, recently, you've shown success with Busch Light, which holds a similar category. Do you think there's any opportunity to reinvigorate those two brands? Or do you think there's simply the potential for other brands to take your marketing spend and make better use of it with better returns? And then secondly, on Europe, you've highlighted the almost perfect conditions across that market, excellent weather. You've taken share in several of your markets. But of course, volume growth, you said was flat. Are you surprised by that? Do you think there's a better opportunity to grow volumes in Europe? Or is it just going to be a very difficult market to obtain volume growth in the future?

Thank you, Laurence. So regarding the U.S. and our portfolio, the key is to continue rebalance our offerings to ensure they align with emerging consumer trends. Michelob Ultra holds a prominent position in our portfolio, successfully driving share and positively impacting financial performance. Busch Light also remains a strong candidate for growth, and recent trends support the strategy of focused innovation for the brand. To illustrate, Michelob Ultra is currently growing across all 50 states in the U.S., with notable share in markets—some states report shares as high as 11%. By contrast, Ultra's share is significantly lower at roughly 6% in less established markets, highlighting untapped growth potential. Similarly, Busch Light commands market positions above 10% in select regions, but overall distribution currently lags, which opens avenues for expanding its presence. Regarding Bud Light and Budweiser, we have prioritized investments across all of our brands, though progress may be variable. Through disciplined planning and targeted execution, we can rejuvenate these brands while driving performance across our portfolio. Addressing Europe, conditions indeed remain favorable, evidenced by our ability to increase market share across various countries. While volume growth has been flat, we have observed positive growth in revenue, which can be attributed to premiumization trends and strategic pricing. Factors such as longstanding brand loyalty and changing consumer preferences continue to shape the industry's trajectory, indicating that while growth may not always come rapidly, we remain optimistic about long-term developments. Overall, I am confident in our strategies and their ability to facilitate market growth across our diverse regions.

Our final questions will come from the line of Chris Pitcher with Rothschild & Company.

Thank you very much, Michel, Fernando. Just a couple of quick questions. Following up on the China question. There's a lot of talk about it being a cyclical shift by category. But do you think, given how long it's been going on now, that there may be a more fundamental change in the way beer is being consumed? And have you had to reweight your sales force to target that off-trade opportunity? Or do you still generally believe the economy comes back, and people go back to nightclubs, it will return to normal? And then secondly, it looks like you're stabilizing and growing share in India, which is encouraging. How much are you investing in that market for the next ten- to twenty-year story?

Chris, thank you. So regarding China, as we previously indicated, I believe it's both. We need to maintain the strength we hold within the on-trade and build on our existing share while also facing the need to strengthen our efforts in the off-trade. The SKUs we manage for each channel differ significantly, and we are fine-tuning our portfolio accordingly. We are also working hard on addressing specific execution challenges within the off-trade. Given our historically heavy focus on the on-trade, adjustments will take time as we build our execution capabilities. However, I remain excited about our prospects in this off-trade expansion because we deliver under-indexed performance within that domain, translating into a considerable opportunity for growth. To add to that encouraging news, our margins continue to hold steady in China, emphasizing our robust business, even amid volume declines. Moving on to India, we view the market with great vitality. The industry is significantly expanding here, and we excel in the premium segment, leading with strong market shares across our premium offerings. We recently surpassed double-digit market share with our Budweiser brand in India and continue to reinforce our brand equity and capacity. We make ongoing investments in foundational systems across our business, positioning ourselves for long-term growth. As the industry continues to evolve and more states remove barriers to distribution and adjust taxation frameworks, we see promising growth opportunities. The journey in India is just beginning, and we expect our trajectory to reflect significant upward movement.

This was the final question. If your question has not been answered, please feel free to contact the Investor Relations team. I will now turn the floor back over to Mr. Michel Doukeris for closing remarks.

Thank you, and thank you all for your time today and for your ongoing partnership and support of the business. So tomorrow, Friday, is International Beer Day. I hope that you have time to grab friends, drink some beer, and celebrate. So cheers. Thank you, and stay well.

Thank you. This does conclude today's earnings conference call and webcast. Please disconnect your lines at this time, and have a wonderful day.