Anheuser-Busch InBev SA/NV (NYSE:BUD) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 09:00 am ET


Anheuser-Busch InBev SA/NV (NYSE:BUD) Q3 2018 Earnings Conference Call Transcript


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Welcome to the Anheuser-Busch InBev's Third Quarter 2018 Earnings Conference Call and Webcast. Hosting the call today from AB InBev are Mr. Carlos Brito, Chief Executive Officer; and Mr. Felipe Dutra, Chief Financial and Technology Officer. To access the slides accompanying today's call, please visit AB InBev's website at and click on the Investors tab, and then the Reports and Filings page.

Today's webcast will be available for on-demand playback later today. At this time, all participants have been placed on listen-only mode and the floor will be opened for your questions following the presentation. (Operator Instructions)

(Forward-Looking Cautionary Statement)

It is now my pleasure to turn the floor over to Mr. Carlos Brito. Sir, you may begin.

Carlos Brito

Good morning, good afternoon, everyone, and welcome to our third quarter and nine months 2018 earnings call. Today, I'd like to tell you about the results and highlights of our third quarter 2018 performance. Next, I'll spend some minutes covering our US strategy, and it has been a -- has seen a refresh earlier this year, and we are excited about the initial results. I'll then hand over to Felipe to discuss our financials before opening up for Q&A.

So let's start with the highlights. Our revenues grew 4.5% with beer volume growth of 0.5% despite macroeconomic headwinds across some emerging markets, such as Brazil, Argentina and South Africa. We continue to leverage intellectual synergies gained from our combination with SAB, as we employ the category expansion framework and market maturity models across our footprint.

Premiumization initiatives were led by our global brand portfolio, which continues to achieve double-digit revenue growth outside of their brands' home markets. We also continue to expand our portfolio of affordable options in low and middle maturity markets. This quarter, a fine example is the launch of a cassava-based beer called Nossa in the Northeast region of Brazil, which was created by leveraging the best practice from some of our other markets.

With respect to our Better World agenda, in August, we launched our 100 plus Accelerator to help achieve our 2025 Sustainability Goals. This will be an annual program designed to tackle specific challenges related to sustainability. Top line growth contributed to EBITDA growth acceleration to 7.5%, and we continue to expand our margins despite an increase in year-over-year commodity prices.

Let me now tell you more about the results of the quarter. Our revenue in the third quarter grew by 4.5% with revenue per hectoliter growth of 4.2% and of 4.4% on a constant geographic basis. This growth was led by China, Mexico and Western Europe. Our global brand portfolio of Budweiser, Stella Artois and Corona continue to grow faster than our total portfolio with revenue growth of 7.7% and 10.6% outside of the brands' home markets. I'll share more details on their performance in just a few minutes.

Our volume grew by 0.2%, with own beer volumes up 0.5%, partially offset by declines in our non-beer business of 2.4%, driven primarily by Brazil due