Budweiser Brewing Company APAC (1876) Q3 2024 earnings summary

Executive summary

• Nine-month 2024 results were impacted by industry weakness in China, partially offset by strong performance in South Korea and India, with continued market share gains and revenue per hectoliter growth in these markets.

• Premium and Super Premium portfolios contributed about two-thirds of revenue in both China and India, with ongoing premiumization and innovation efforts.

• Normalized EBITDA decreased by 6.2% to $1,579 million, and normalized profit attributable to equity holders dropped to $777 million from $879 million.

• Gross profit margin expanded by 108 basis points to 51.4% in 9M24, driven by revenue and cost management.

• Sustainability initiatives maintained a low risk rating, ranking high among global peers, and campaigns promoting responsible drinking were launched.

Financial highlights

• Total volumes decreased by 8.1% to 71,198 thousand hl and revenue declined by 6.1% to $5,104 million for the first nine months of 2024.

• Revenue per hectoliter grew by 2.2%, driven by revenue management in Korea and favorable brand mix, partially offset by negative channel mix.

• Normalized EBITDA margin decreased by 4 basis points to 30.9% year-over-year; gross profit margin expanded by 108 basis points.

• Cost of sales decreased by 8.1% (0.1% per hectoliter), mainly due to operational efficiencies and commodity tailwinds.

• 9M24 normalized EBIT was $1,091 million (-9.7% year-over-year); 9M24 basic EPS was 5.62 cents USD.

Outlook and guidance

• Management remains confident in long-term growth opportunities, especially in China, driven by premiumization, expansion, and digitization.

• Short-term challenges in China are expected to persist, but ongoing commercial momentum in South Korea and India supports market share gains.

• In South Korea, further margin recovery is expected, supported by pricing, operational efficiency, and mix improvements.

• Cautious optimism for margin improvements in Korea due to recent price increases, with most impact expected in 2025.

• Too early to assess the impact of recent Chinese government stimulus on beer demand; focus remains on strategy execution.