Anheuser-Busch InBev SA/NV Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
July 30, 2026

Key Takeaways

  • Positive Sentiment: Q2 revenue rose 5.6%, supported by 1.1% beer volume growth, 4.2% revenue per hectoliter growth, and global market-share gains. EBITDA increased 5.8% with margins broadly stable despite higher sales and marketing investments and transactional headwinds.
  • Positive Sentiment: Underlying EPS increased 23.4% to $1.21, while first-half free cash flow rose $2.5 billion to $3.9 billion. Net debt to EBITDA improved to 2.86x, increasing flexibility for dividends, share repurchases, selective M&A, and continued deleveraging.
  • Positive Sentiment: Growth was broad-based across mega brands, non-alcohol beer, premium beer, and Beyond Beer. Non-alcohol revenue grew 27%, mega-brand revenue increased 6.2%, and U.S. spirits brand Cutwater delivered triple-digit revenue growth; BEES third-party marketplace GMV rose 50% to $1.2 billion and is already EBITDA-positive.
  • Negative Sentiment: China remained a significant weakness, with revenue down 8.8% as a high-single-digit industry decline, adverse weather, and on-premise softness pressured volumes. Management said market-share trends improved sequentially but acknowledged that substantial execution work remains.
  • Neutral Sentiment: Management reaffirmed its 2026 outlook for 4%–8% EBITDA growth and expects growth to be broadly balanced between the first and second halves. Second-half energy and logistics costs may rise, although transactional FX headwinds are expected to ease and revenue management should provide offsets.
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Earnings Conference Call
Anheuser-Busch InBev SA/NV Q2 2026
00:00 / 00:00

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Operator

Welcome to AB InBev's second quarter 2026 earnings conference call and webcast. Hosting the call today from AB InBev are Mr. Michel Doukeris, Chief Executive Officer, and Mr. Fernando Tennenbaum, Chief Financial Officer. To access the slides accompanying today's call, please visit AB InBev 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. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star, then two. If you should require operator assistance, please press star zero.

Operator

Some of the information provided during the conference call may contain statements of 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 materially, 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, see risk factors in the company's latest annual report on Form 20-F filed with the Securities and Exchange Commission on March 3rd, 2026. AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information.

Operator

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

Michel Doukeris
CEO at AB InBev

Thank you. Welcome everyone to our second quarter 2026 earnings call. 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. After that, we'll be happy to answer your questions. Let's start with the key highlights. The momentum of our business continued in the second quarter. While the consumer environment remains dynamic, the consistent execution of our strategy and investment in our mega brands and mega platforms enabled us to deliver solid top and bottom-line performance. Beer volumes increased by 1.1%, with market share growth globally and record high second quarter volumes in Mexico, Colombia, Ecuador, amongst others. Revenue increased by 5.6%, with solid revenue per hectoliter of 4.2%, driven by positive mix and our proactive revenue management agenda to keep pace with rising inflation and input costs.

Michel Doukeris
CEO at AB InBev

Underlying EPS increased by 23.4% to reach $1.21. Free cash flow in the first half of the year increased by $2.5 billion to reach $3.9 billion. Our performance was driven by our growth drivers with continued momentum across our mega brands, non-alcohol beer and Beyond Beer. BEES marketplace continued to scale with GMV increasing by 50% to reach $1.2 billion. Overall, this quarter demonstrated continued volume momentum, market share gains, and solid cash flow generation, reinforcing our confidence in the resilience of our strategy. Turning to our operating performance. Total volumes increased by 0.9% in the second quarter, with solid revenue per hectoliter growth driven by our revenue management capabilities and positive mix. EBITDA increased by 5.8% with flattish margins as disciplined cost management enabled increased sales and market investments and offset transactional effect headwinds.

Michel Doukeris
CEO at AB InBev

Our geographic footprint and global scale enable us to deliver consistent results through different operating environments. Our footprint is both well-diversified and balanced. With around 70% of our EBITDA generated in emerging and developing markets, we are well-positioned to capture future industry growth with a mix of currencies. Now, let's review our key regional highlights, starting with North America. In the U.S., our portfolio momentum continued with share gains in both beer and Beyond Beer. Our beer performance was led by Michelob ULTRA, Busch Light, and Busch Light Apple, which were the top three volume share gainers in the industry. Our Beyond Beer portfolio delivered revenue growth in the mid-70s, led by Cutwater, which grew revenue in the triple digits and was the number one share gaining brand in the total spirits industry in the second quarter. Now, let's turn to Middle Americas.

Michel Doukeris
CEO at AB InBev

In Mexico, we continued to strengthen our portfolio architecture and expand our total addressable market by offering consumers more choices across more occasions. We grew revenue in premium, mainstream, non-alcohol beer and Beyond Beer, driving mid-single-digit top and high single-digit bottom-line growth with market share gains. In Colombia, record high second quarter volumes drove double-digit top and bottom line growth with our portfolio estimated to have gained its share of total alcohol. In Brazil, market share gain and an improved industry drove beer volume growth and a double-digit bottom line increase. Our premium and super premium beer brands led our performance and delivered mid-20s volume growth in strengthening our leadership position in the segment. In Europe, volumes grew by low single digits as market share gains, innovation, and continued premiumization drove a low single-digit top-line increase.

Michel Doukeris
CEO at AB InBev

In South Africa, disciplined revenue management and margin expansion drove mid-single digit top and bottom line growth. Premium and super premium beer led our performance, delivering high 20s volume growth. Now moving to APAC. In China, revenue declined by 8.8% as we underperformed a soft industry, which was impacted by adverse weather and continued softness in the on-premise channel. While overall volumes remained under pressure, we continued to invest in our mega brands and innovation and strengthening our portfolio brand power. Our market share trend improved sequentially, supported by a return to growth in our super premium and core plus brands. We are investing to improve our execution, expand our in-home channel presence, and increase our participation in the growing segments of the industry. Let's now turn to our strategic pillars, starting with lead and grow the category.

Michel Doukeris
CEO at AB InBev

Relevant brands are essential to our strategy as we drive organic growth. Through consistent investment and continued improvements in our marketing capabilities, we are strengthening our connection with consumers and increasing the brand power of our portfolio. This progress was recognized at this year's Cannes Lions Festival, where we were named the 2026 Creative Marketer of the Year, the only company in history to receive this award three times. The strength of our portfolio is reflected in the latest Kantar BrandZ ranking. Eight of our brands are within the top 10 most valuable brands in the world, with Corona ranked number one for the third year in a row. Our mega brands continue to drive profitable growth across our markets, with net revenue increasing by 6.2%. Corona drove premiumization with revenue growth of 17% outside of Mexico and double-digit volume increase in 37 markets.

Michel Doukeris
CEO at AB InBev

The combination of our mega brands and platforms is a powerful opportunity to connect with consumers through moments of celebration. Following successful activations in the first half of the year, we have a strong lineup for the second half and into 2027. Through our mega platforms, we are placing beer and our brands at the center of culturally relevant moments for consumers, including the Winter Olympics, Roland-Garros, the FIFA World Cup and Wimbledon. By deploying our leading digital capabilities and a strong execution by our teams, our brands were the most talked about during these events, achieving billions of impressions and earning the number one share of digital engagements. The FIFA World Cup is a once every four years opportunity to build the long-term brand equity of our portfolio of consumers.

Michel Doukeris
CEO at AB InBev

Across the tournament, beer was central to the moments of celebration, connection, and shared experiences that make the event so iconic. In line with our strategy to expand the availability of balanced choices, we leveraged the FIFA World Cup to roll out Michelob ULTRA across the Americas, building on its momentum in the U.S., where ULTRA was again the number one volume share gainer. In the second quarter, 40% of ULTRA's volume growth came from outside the U.S. We continue to execute our category expansion levers to expand choice, occasions, and participation in the category by offering superior core brands, innovating balanced choices, and expanding our premium and beyond beer portfolios. In non-alcohol beer, our portfolio outperformed the industry and delivered a 27% revenue increase, led by Corona Cero and Michelob ULTRA Zero.

Michel Doukeris
CEO at AB InBev

With an estimated 60% of the volume coming from new occasions and new consumers, non-alcohol beer is an opportunity to develop the category and drive incremental volume growth. In the second quarter, we brought Busch Light Apple back to the U.S. by popular demand. Since its launch in April, the brand became the number two volume share gainer in the total industry in quarter two. Ahead of Wimbledon, we launched Strawberries & Cream flavored Stella Platinum. The innovation contributed to a four percentage point increase in Stella's share of total alcohol beverage at the tournament. In Beyond Beer, we expanded the portfolio variety of Cutwater, supporting the brand's performance in the U.S. Geographic expansion of our Beyond Beer brands is a meaningful growth opportunity.

Michel Doukeris
CEO at AB InBev

In the first half of the year, we expanded the availability of Flying Fish in eight markets and are encouraged by the early results we see across Europe and the Americas. Let's turn to our second strategic pillar, digitize and monetize our ecosystem. In the second quarter, this captured $15 billion in gross merchandising value, a 16% increase versus last year. On an annualized basis, we have more than 25 billion AI-driven touchpoints across our ecosystem, creating opportunities to improve customer service, revenue management, and support the execution of our commercial agenda. This marketplace continued to scale with GMV from third-party products increasing by 50% versus last year, to reach $1.2 billion. Our digital D2C business is growing and enabling us to monetize our ecosystem. Our digital platforms served 13 million consumers and generated $165 million in revenue.

Michel Doukeris
CEO at AB InBev

As we digitize and monetize this ecosystem, we are commercializing third-party products on our D2C platforms and now have a growing D2C marketplace with annualized GMV of $200 million. With that, I would like to hand it over to Fernando to discuss the third pillar of our strategy: optimize our business.

Fernando Tennenbaum
CFO at AB InBev

Thank you, Michel. I will take a few minutes to discuss the progress we have made on four areas in optimizing our business. Superior profitability, compounding dollar EPS growth, improved free cash flow, and capital location flexibility. Through disciplined resource allocation and overhead management, we were able to offset transactional effect headwinds to maintain our superior margins while increasing sales and marketing investments. Over the last 12 months, we have invested $7.9 billion in sales and marketing, and we increased our investments organically by 9% in the first half of this year to fuel the growth of our business. While each year has unique dynamics, we are confident that the combination of our leadership advantages, disciplined revenue management, continued premiumization, and efficient operating model creates an opportunity for further margin expansion over time. Moving on to EPS. Top-line growth and effective cost management drove constant currency EPS of 12.9%.

Fernando Tennenbaum
CFO at AB InBev

With translational effect tailwinds, dollar EPS increased by 23.4% to reach $1.21 per share. As we focus on optimizing our business, in the first half of the year, we increased our free cash flow by $2.5 billion, driven by EBITDA growth and working capital improvements. This increase in cash generation enabled further capital allocation flexibility while strengthening our balance sheet. We increased our dividend, executed share repurchases, and pursued selective value-accretive M&A while continuing to deleverage. Our net debt to EBITDA ratio reached 2.86x, a 0.4x improvement year-over-year. Our bond portfolio remains well distributed with no relevant medium-term refinancing needs. We have no bonds maturing in 2026, a weighted average maturity of 12 years, and no financial covenants.

Fernando Tennenbaum
CFO at AB InBev

Our results in the first half of the year, the resilience of our strategy, and the momentum of our business all reinforce our confidence in our ability to deliver on our 2026 outlook of 4%-8% EBITDA growth. With that, I'll hand it back to Michel for some final comments.

Michel Doukeris
CEO at AB InBev

Thanks, Fernando. Before opening for Q&A, I would like to take a moment to recap the second quarter of the year and the opportunities we have ahead of us. Our performance this quarter reflects the resilience of our strategy and our ability to deliver reliable compounding growth through different operating environments. Our top line grew 5.6%, with beer volume growth of 1.1% and net revenue per hectoliter growth of 4.2%. We increased sales and marketing investments in our brands by 9% organically. Underlying EPS grew by 23.4% in the second quarter and by 22.1% in the first half. Free cash flow increased by $2.5 billion to reach $3.9 billion at the half year. Net debt to EBITDA improved by 0.4x year-over-year, reaching 2.86x, strengthening our balance sheet and increasing our capital allocation flexibility.

Michel Doukeris
CEO at AB InBev

Together, these results reinforce our confidence in our ability to deliver compounding growth and long-term value creation for our shareholders. With that, I'll hand it back to the operator for the Q&A.

Operator

Thank you. The floor is now open for questions. In the interest of time, we will limit participants to one question and one follow-up question. Again, if you have a question or comment, please press star one on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. We do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Our first questions come from the line of Edward Mundy with Jefferies. Please proceed with your questions.

Edward Mundy
Edward Mundy
Analyst at Jefferies

Good morning. Good afternoon, everyone. My first question is for Michel. You've been executing your growth strategy for about five years now, and we're seeing both pretty healthy revenue per hectoliter growth and return to positive volume growth. How do you assess where ABI is in that journey today? As you see the growth contribution from the mega brands, premiumization, low, no alcohol, beyond beer all coming through, does this give you greater confidence in the durability and consistency of growth from here? That's my first question. My follow-up is for Fernando. Over the last two years, there's been a big focus on deleveraging and strengthening the balance sheet.

Edward Mundy
Edward Mundy
Analyst at Jefferies

As you think about the next few years, will this increase capital allocation flexibility be aimed at accelerating organic growth in bolt-ons, or do you think there's scope for progressively higher cash returns to shareholders in the fullness of time?

Michel Doukeris
CEO at AB InBev

Hi, Ed. Good morning, and thanks for the question. As you stated, I'll take the first one here and leave the second to Fernando. You are right that over the last five years, and especially when you look at this year, we have been successfully, I would say, resetting the business because we had a lot of debt. We had growth constraints in many areas across the globe. As we organized our portfolio, this architecture that we have today is much more flexible because we have growth not only in beer, but in different segments in beer from core, premium, non-alcohol. We added to that beyond beer, which is growing globally in a very healthy way.

Michel Doukeris
CEO at AB InBev

We put together capabilities around revenue management, organic growth, innovation, and digital that prepared the company to the moment that we are seeing now in 2026, where we see volume growth, solid revenue price per liter growth coming both from revenue management and from mix management. Worth to remember that mix for us gets into the revenue per hectoliter. We don't add the mix to volume. Volume is purely hectoliter-base. We will continue to optimize the business. We've been seeing strong EPS growth in the first half of the year, 22%, with this 23% in the second quarter.

Michel Doukeris
CEO at AB InBev

Continuation of the strategy execution, but moving from a moment where we were resetting the business, reducing debt, organizing the capabilities to growth, to a moment that we see more the reignition of the volume growth and the acceleration of our strategy and growth levers as we move forward. Thanks for the question.

Fernando Tennenbaum
CFO at AB InBev

Hi, Ed. This is Fernando here. You asked about cash flow allocation flexibility. First of all, it's fair to say that it's a good cash flow, and it's kind of Michel touched probably in the first two items of our strategy. The third item is optimize our business. As we keep delivering kind of this sort of results, and we keep growing the business while maintaining CapEx that within our outlook, containing these levels, the consequence of that is that you do generate more cash. As you continue to evolve the business and continue to generate more cash, you create more optionality. If you look what we've done this year so far, this year, while kind of if you see from a dividend standpoint, dividend was up. We were able to invest behind the organic growth of the business.

Fernando Tennenbaum
CFO at AB InBev

You see more sales and marketing investments to support the growth. You see that while we were doing that, we also did some selective M&A. We did the MCC and the BeatBox M&A, and we did all that while also improving the strengthening the balance sheet, we reduced the leverage. When you combine all of that, what I can tell you is that the goal of first is always to create value, and this optionality increase the ways that you can create value. Our capital allocation is dynamic, as we said. At any given moment in time, the goal is always to create value. With more cash flow, this task become easier because you have more optionality.

Edward Mundy
Edward Mundy
Analyst at Jefferies

Okay, thank you.

Operator

Thank you. Our next questions come from the line of Mitch Collett with Deutsche Bank. Please proceed with your question.

Mitch Collett
Mitch Collett
Analyst at Deutsche Bank

Hi, Michel. Hi, Fernando. I've also got two questions. My first one is for Michel. You said, Michel, that from the World Cup, you expected, I think, 20-30 basis points of full-year volume benefit. Now that the World Cup is behind us, is that roughly what you saw? Can you comment on how you think your World Cup activations may benefit your brand and your business longer term? My second question, I think, is for Fernando. I think you said on the 1Q call that you expect a more balanced year from an organic EBITDA growth perspective. Is that still what you would expect given the relevant puts and takes from both 1H and 2H as you see them now? Thank you.

Michel Doukeris
CEO at AB InBev

Hi, Mitch. Thanks for the question. I'll take the first one here and leave the second to Fernando. Yes, we talked about this lift from the FIFA, which for us on average is around 0.25 percentage points in the range that you said, 0.20-0.30 percentage point. I think that this is going to be the number that we will end up reaching this year. Of course, we still have the second half of the year. We can calculate the exact lift of the months of June and July. I think that's going to be within the range. More important, as you mentioned, I think that the benefits of the activation and everything that we have done and seen from the World Cup will extend far beyond the year. We really executed a global campaign. It was fantastic.

Michel Doukeris
CEO at AB InBev

We had, for the Americas, Michelob ULTRA, to the rest of the world, Budweiser. On our local markets, many of our local brands supported the local teams. One, which I think that's going to be the most impactful part of the FIFA for us, was the rollout of Michelob ULTRA across Americas. Before FIFA, you could find Michelob ULTRA in Canada, U.S., Mexico, some other Caribbean, Central America markets. Now you extend this all the way through Brazil, Argentina, Paraguay. The brand, as we launch it, introduce it, is performing very well. To give you a number, which I think is very relevant.

Michel Doukeris
CEO at AB InBev

Despite of the fact of the size that Michelob ULTRA has in the U.S. and is number one share gainer in the U.S., which brings a lot of growth to the brand, 40% of what the brand grew on the second quarter came from markets outside of the U.S. This balanced choice idea is very relevant within our strategy. Michelob ULTRA plays a central role in that, and the rollout of the brand, very strategic across Americas during FIFA will be one of the best outcomes of this investment that we've made for FIFA. On top of that, I think that we saw consumers having a lot of fun, really celebrating the moment of FIFA throughout the three countries here, but also globally. I think that the participation was fantastic. The sales on the concessionaries were above and beyond expectations.

Michel Doukeris
CEO at AB InBev

We could have had more, let's say, if the U.S. could have gone further in the competition, if the Brazilian team had performed better, equally to Mexico, Colombia. Nevertheless, the fans enjoyed until the last minute. The audience was great. The investment that we made was great. Now we are turning the page to the second half of the year, where we also have a lot of activities and plenty of exciting moments to be together with consumers. Thank you.

Fernando Tennenbaum
CFO at AB InBev

Mitch, Fernando here. You are asking if it still holds true that there should be a more evenly distributed year in terms of growth. Yes, it still hold true. We knew kind of a lot of the puts and takes since the beginning of the year, and we're being very proactive in the revenue and cost management to better balance half one and half two. The only caveat, and we said that before, is that sales and market should be more skewed towards Q2 and Q3, especially given the World Cup. Overall, we expect a balanced year and within our outlook of 4%-8%.

Mitch Collett
Mitch Collett
Analyst at Deutsche Bank

Thank you both.

Operator

Thank you. Our next questions come from the line of Rob Ottenstein with Evercore ISI. Please proceed with your questions.

Rob Ottenstein
Rob Ottenstein
Analyst at Evercore ISI

Great. Thank you very much. Michel, I was wondering if we can drill down on the U.S. market. Lots of puts and takes, right? There's the weather, higher gasoline prices, holiday timing, FIFA. When you kind of cut through it all, how do you assess the strength of the U.S. beer market in Q2 versus Q1 versus last year? Anything that comes out? Then more importantly, how do you look at your business? Maybe kind of give a scorecard to how you're doing in the market, which is certainly better than it has been in the past. Give yourself kind of a scorecard What are you doing now to ensure continued and building momentum on the top line and the bottom line into the second half of the year, and into 2027? Thank you.

Michel Doukeris
CEO at AB InBev

Thank you, Robert. It's always good to put the U.S. in context, right? Very relevant market for us. It represents around 10%-15% of our business globally. Of course, house of brands such as Michelob ULTRA, that I just spoke about, that we are rolling out through Americas. It's an innovation to the other markets, but is an innovation that is over 20 years in the making in the U.S. and continues to grow. I think that is super relevant the way that you put the question, because there is many puts and takes on the quarter two. I think starts with Easter. We all know, because we live here, that the weather is being and continue to be a challenge in the U.S., while we continue to transition from the La Niña to the El Niño.

Michel Doukeris
CEO at AB InBev

At the back end of the quarter, you had both FIFA but also July 4th that this quarter, flipped it to the quarter three versus where it was last year on the quarter two. We see that the quarter one started with a good mood for consumers and a stabilization that further deteriorated a little bit on the quarter two because of inflation that accelerated gas prices and everything that we are seeing around the country. That's the part that we cannot control, the calendar, the economy. We can just adapt, and I think that the architecture of our portfolio today is way better than what used to be. That was the main mission for the team here since 2017, was rebalance the portfolio. I'm happy to see today that we are gaining share in beer, we are gaining share in beyond beer.

Michel Doukeris
CEO at AB InBev

We were the fastest growing company in spirits because of the performance of Cutwater and also the fastest growing brands in the non-alcohol space. I think that the mission of rebalancing the portfolio and getting this portfolio architecture to be more flexible to where consumers are going is working, and we are winning with consumers across all segments, and especially on the segments that are growing the fastest. I will leave the scorecard for Brandon to you guys to give, because I know that you are way better than me on that. The main thing that we are doing is we are continuing to invest behind our brands so they continue to be relevant for consumers across relevant occasions. I think that FIFA was an incredible display of that. We are making this portfolio architecture both more flexible and more competitive.

Michel Doukeris
CEO at AB InBev

That's why we are gaining share across the segments, we continue to invest on our capabilities, being revenue management capabilities, execution capabilities, digital capabilities, and especially the capabilities around marketing that get us closer to consumers. Thank you.

Operator

Thank you. Our next question is coming from the line of Olivier Nicolaï with Goldman Sachs. Please proceed with your question.

Olivier Nicolaï
Olivier Nicolaï
Analyst at Goldman Sachs

Good morning, Michel, Fernando, and Shaun. First, going back to slide 27, if I may. On the free cash flow, which was very strong in H1, should we assume you will be able to keep most of these networking capital benefits in second part of the year? Are you on track to get towards $13 billion of cash flow this year, which would be, I believe, a record for the company. Secondly, perhaps for the U.S. and for Michel. You're currently leading the spirits RTD segments. How do you assess the risk of increased competition from spirits companies as they scale up production and distribution and potentially try to become more aggressive on price? And to some extent, what kind of real competitive advantage does brands like Cutwater and NÃœTRL have to fend off new competitors coming from spirits producer?

Olivier Nicolaï
Olivier Nicolaï
Analyst at Goldman Sachs

Lastly, that's another question promised. Thank you for flagging the mix component within your revenue per hectoliter .

Fernando Tennenbaum
CFO at AB InBev

Hi, Olivier. Fernando here. Thanks for your question. We've been working a lot on pillar three of our strategy, which optimize our business. The good cash flow that we saw in H1 was a consequence of that. In a nutshell, if you think about it, since we are growing a bit and we are driving efficiency across other lines, we had more EBITDA, good organic, good nominal growth, and our cash flow out our EBITDA. Sorry, our CapEx outlook is the same $3.5 billion-$4 billion from last year. We look at the other lines. Of course, you could expect that this growth is something that one would expect. We don't give a specific guidance on quarter-on-quarter or don't give a specific guidance on cash flow.

Fernando Tennenbaum
CFO at AB InBev

If you add all the pieces of our outlook, you could expect us to continue to make improvements in our cash flow year-over-year.

Michel Doukeris
CEO at AB InBev

Hi, Olivier. On the second question, I've been answering this question in different shapes and forms around the RTDs, the momentum that we have, not only in the U.S., but globally, and the, let's say, increased competition in the segment in the U.S., maybe in some other countries as well, as we keep rolling out our global portfolio and gaining space in this area. To be very straightforward on your question, I think that we are the competition. Slightly different here. While in beer we've been dealing across all markets, with competitors, which we always welcome to the industry because they make us better, more innovative, and stronger in execution. In the spirits side, we are the competition.

Michel Doukeris
CEO at AB InBev

We are winning with consumers because we are providing a superior proposition, not only with Cutwater, but with NÃœTRL. Now we just acquired a great company, BeatBox, that's going to bring more to this arena. We are leveraging our brand-building capability. It was worth to say that this brand was inexistent six, seven years ago and is moving towards becoming a $1 billion brand and is the fastest growing brand in the spirits industry in the U.S., now a top six or seven, overall in size brand in the spirits industry, and leading with very strong execution. Competition's out there. In this case, we are the competition.

Olivier Nicolaï
Olivier Nicolaï
Analyst at Goldman Sachs

Very clear. Thank you.

Operator

Thank you. Our next question comes from the line of Chris Carey with Wells Fargo. Please proceed with your questions.

Chris Carey
Chris Carey
Analyst at Wells Fargo

Hi, everyone. Thank you for the questions. My first question is on China. Clearly, trends took a bit of a step back here in Q2 relative to Q1. Can you just give us a sense of industry performance this quarter versus last quarter and your own performance relative to industry growth rates? Maybe sprinkle in some on-premise and off-premise commentary on how weather may have negatively impacted you in the quarter itself. And then from a pricing standpoint in China, I think this was the first positive revenue per hectoliter since the beginning of last year in China. Is that just a product of product or channel mix or is there something else that was driving a bit of a step change relative to some of those investments you've been making into demand building in the region?

Chris Carey
Chris Carey
Analyst at Wells Fargo

I think in general, it's a question about understanding how the country is evolving and perhaps a bit of a question on your ability to have some visibility into the market in the coming quarters. Thank you.

Michel Doukeris
CEO at AB InBev

Hey, Chris. Good morning. Thanks for the question. I will step back for a second to address the question, and then I will get straight to the points that you mentioned there. We are, of course, not happy with our performance in China. As I said on the remarks, there is more work to do, and we are working very hard on that. When you think about the dynamic of the market, and it is being extremely dynamic in China, the quarter one was a more encouraging quarter. We saw an industry that was coming from a better performance at the back end of last year.

Michel Doukeris
CEO at AB InBev

The timing of the Chinese New Year was very good for the industry and overall, because we have data for the quarter one, the industry was almost stable, and we had an improved performance, so we had a slightly better result on the quarter one. Not ideal yet, but better. As we entered quarter two, we saw a deterioration on the industry. April was already below quarter one. We have all the data for May, and May was very weak. It was like 7%+ negative. When you look at what happened, most of this is attributed to the continuation of a consumer environment that is constrained but a way worse weather. This extended through June, where we do not have yet all the data, but the data that we have, for example, for off-trade points out for a June that was worse than May.

Michel Doukeris
CEO at AB InBev

All in all, I think that the industry in the quarter two, as we come to see the numbers consolidated, will be a high single-digit negative industry. In this context, our market share continued to improve. It is not positive yet. We saw good numbers on the nightlife, for example, where it was more stable, the industry, and we gained share. We saw positive performance on our super premium and core plus segments, which is encouraging because we are investing there and innovating. Of course, there is way more that we need to continue to do, and we are prioritizing investment on our brands. Power for our brands grew on the second quarter. We are investing in capabilities so we can service better the off-trade channel both the O2O and the physical outlets.

Michel Doukeris
CEO at AB InBev

We need to look now to the second half of the year to continue to do better on what we can control, which is our execution and market share, and see how the industry will evolve. The biggest negative highlight on the quarter two was, for sure, the industry. Nevertheless, as I said, we are not happy, and there is more work that we need to do. Thank you for the question.

Operator

Thank you. Our next question has come from the line of Sanjeet Aujla with UBS. Please proceed with your questions.

Sanjeet Aujla
Sanjeet Aujla
Analyst at UBS

Hi, Michel, Fernando. I'd like to dig into Middle Americas in a little bit more detail. Probably the standout performer this quarter. In particular outside of Mexico, we've seen a nice inflection in markets like Colombia, Peru, Ecuador. How much of that do you attribute to the World Cup? Is there a more underlying inflection in the consumer environment or the broader beer category? Is it something you guys are doing differently there? Thank you.

Michel Doukeris
CEO at AB InBev

Hi, Sanjeet. Good morning. Thanks for the question. You're right, Middle America had an outstanding performance on the quarter two. Very strong execution by the team there. Growth was broad-based when you think countries, but also across different segments. Growth came from core beer, premium beer, beyond beer. Non-alcohol performed very well. I think that you have maybe two realities in Middle Americas, it's a very large zone. I think that in Mexico, we see resilient consumer environment, but it's not one that is supporting the growth. The growth is really coming from the execution, the innovation, and the market share performance. In which, of course, across the whole region, FIFA was supportive, even more in Mexico, because Mexico host a bunch of games, and there was a lot of excitement there.

Michel Doukeris
CEO at AB InBev

I think it's worth remembering that last year we talked a lot about the weather, right? We don't like to talk too much about this, but the La Niña, El Niño transition is being tactful for last year and this year. I think that last year, the Middle Americas was on the opposite side. The Middle Americas was more exposed to the Pacific, the region that had the worst weather last year. This year, one could say that the Atlantic side of the Americas is where the weather is being worse for us. It's benefiting a little bit of this weather component of last year. When you get the other countries below Mexico, they are all very stable in terms of the economic environment, inflation, disposable income is growing.

Michel Doukeris
CEO at AB InBev

As we always say, these emerging markets will represent 70% of the industry growth to the future. You see this coming through, because the participation is healthy, the per capita is moving in the right direction. As we continue to execute and invest in innovation, we are getting closer to consumers, winning with consumers in more occasions. This portfolio architecture is really working well for us, combined with the capabilities that we have been investing on, such as digital, brand building, revenue management. They are all coming together in a very strong way in Middle Americas. Thank you for the question.

Operator

Thank you. Our next question has come from the line of Chris Pitcher with Rothschild & Co Redburn. Please proceed with your questions.

Chris Pitcher
Chris Pitcher
Analyst at Rothschild & Co Redburn

Thank you very much. I've got one follow-up question, then a separate one. On the ready-to-drink discussion in the U.S., you talked about the competitive threat. What about the supply side? The triple-digit growth on Cutwater is very impressive. How are you keeping up with that? Are there any constraints, either from supply or distribution, that maybe you could be growing even faster? Secondly, forgive me, my phone line dropped off, so if this is covered, please tell me. But in terms of BEES marketplace, can you just help us understand how that incremental contribution to GMV benefits your EBITDA? Because obviously you had a sizable $400 million uplift in the period. If you could share some of the economics, that'd be very helpful. Thank you.

Michel Doukeris
CEO at AB InBev

Hi, Chris. In terms of supply for ready-to-drink, we shared this in couple of occasions, and I'm happy to share with you. We invested a lot on our capabilities, and this again, we've been working on this for five, six years in a row now. We are not constrained on capacity. We have flexibility enough to supply. Of course, we have a huge headroom for growth in distribution and in rate of sales without constraints on the supply side. As we grow, as needed, we have enough resources. Fernando was talking about the cash flow generation to make sure that we are investing in line with our expansion ambitions and needs. On the supply side, we are good. What we need to do is really continue to connect with consumers. Deliver the superiority on the product and execute so we can sell more.

Michel Doukeris
CEO at AB InBev

The idea here is we are the competitors, we are gaining share, we will continue to invest to continue to grow our presence in this segment. This continues to scale up. I think that we are supporting this growth with the right investments. As you know, I repeated this many times, the marketplace is profitable for us since day one. It was one of the conditions in which we decided to build the marketplace. It is incremental for us on the EBITDA side. I said that today is equivalent to a top 20 country in terms of size, in terms of EBITDA, is one of the top 10 contributors for EBITDA growth, is quickly escalating, let's say, its ability to grow and contribute more on the outlook.

Michel Doukeris
CEO at AB InBev

We are just at the beginning. The growth rate, 50%, is still a good one. We think that we can do even more. We can accelerate more the growth of the marketplace. We have a pipeline of customers in countries that is very strong. That supports the growth for the years to come. Now it's about execution. This execution comes with very good incrementality to our financials. Thank you.

Chris Pitcher
Chris Pitcher
Analyst at Rothschild & Co Redburn

Thank you.

Operator

Thank you. Our next questions come from the line of Laurence Whyatt with Barclays. Please proceed with your questions.

Laurence Whyatt
Laurence Whyatt
Analyst at Barclays

Hi, Michel, Fernando. Thanks very much for the questions. A couple from me as well, please. I just think about the Brazilian market. A few years before the pandemic, it was one of the very strong growth markets. Perhaps we've seen a little bit of modest growth over the past few years, notwithstanding your result today, which was very strong. I'm just wondering, over the past few months, quarters, is there anything that's changed in the Brazilian market that makes you question whether your long-term expectation of volume growth could be challenged in any way? Are there any issues or anything you can foresee that might change that assumption? Secondly, perhaps a bit more shorter term, just looking at the Colombian market, you had a very strong performance there in this quarter and recently.

Laurence Whyatt
Laurence Whyatt
Analyst at Barclays

Is there anything that's specifically taking place in Colombia you want to call out to suggest that that could be more sustainable level of growth? Thank you very much.

Michel Doukeris
CEO at AB InBev

Hey, good morning, Laurence. On Brazil, I think that you have the quarter-by-quarter picture. We all know that there are different dynamics that impact each and every quarter. If you open a little bit the aperture for the lens, the industry before and after COVID has been performing very well. It's gaining share of alcohol beverage. Beer is increasing share on alcohol beverage there. We had a very strong growth in the spirit of 2021, 2022, 2023. As I said before, last year, we know that we had a challenge on the weather condition that started in June, extended through October, beginning of November. We haven't seen yet this year positive effects from the weather. I said the Atlantic region of the Americas is really suffering and is colder than usual, is more wet in region than usual. The Pacific side is the opposite.

Michel Doukeris
CEO at AB InBev

It's been very good this year. I think that the industry in Brazil is moving on a good direction, of course, given the current economic scenario and where consumers are, pretty resilient. On the other hand, our portfolio in Brazil is growing from strength to strength. We recover our leadership in premium. Now we are accelerating the growth of our premium brands. We made a very decisive move in the non-alcohol. This is growing in relevance for us. They are gaining share. We are in the early stages of the Beyond Beer, but we have very good numbers coming out of Brutal Fruit, BeatBox, and Flying Fish, and I think that we are building the awareness of these brands, building the penetration, and the headroom for these brands to grow there is huge, and our distribution is very effective. Our marketing capabilities are good.

Michel Doukeris
CEO at AB InBev

I'm positive on the outlook to Brazil. Of course, on the part that we control, very positive. When you look at the comps on the weather, that at one point will get better. That's gonna be supportive for the industry there. We keep an eye on the economic indicators. This year, we have elections on the second half, which can be a positive for the overall economy there as well. Positive, good momentum. The team is doing a good work balancing well volume and share gains with profitability. In terms of Colombia has been performing well for a while for us. We've been unlocking this opportunity that I keep saying about the future growth for the industry coming from emerging markets. Colombia is part of that.

Michel Doukeris
CEO at AB InBev

The economy in Colombia took a little bit more time than some other markets to change from a constrained economy to one that was more supportive. You remember there is a lot of imports coming to Colombia. Because of the effects, there was a lot of inflation. The inflation took long to accommodate. You see the last 12 months in Colombia in terms of disposable income, inflation, consumption, they've been all supportive. We are doing our part there with the portfolio, with the investments, so we can capture this growth. We are also in Colombia gaining share of total alcohol, which is very good for the category. Because we lead, we are benefiting a lot from that. Healthy market, great execution, a lot of potential for the future, not only in Colombia but across the Americas, because all these markets have population growth, economic growth.

Michel Doukeris
CEO at AB InBev

Those are all fundamental strengths for the category and important drivers for volume growth in the future. Thank you.

Operator

Thank you. Our next questions come from the line of Robert Vos with ABN AMRO ODDO. Please proceed with your questions.

Robert Vos
Analyst at ABN AMRO ODDO

Yes. Hi. Good day, all. Thanks for taking my questions. Sorry to come back on China and weather. If the volumes were almost down 10%, is it in any way possible to say what growth could have been under the assumption of a more neutral impact from the weather? Is that a few points on growth or is it far less? Any indication there would be helpful. My second question is on non-beer volumes in Brazil. Maybe not your core business, but they were down 4.4% in the quarter, despite an easier comparison base than what you showed in the first quarter. Is there anything to mention there why the volumes were still down quite significantly in the quarter? Thank you.

Michel Doukeris
CEO at AB InBev

Hi, Robert. Morning. Thanks for the questions. I think that the China answer is since the market share improved sequentially, the result would still be like the quarter one, but is slightly better if it was not for the weather impact. Not positive yet. That's why we have to do more, and we have a lot of work to do. Would be similar to quarter one, is slightly better because of the share improvement. In Brazil, in non-alcohol, I think that we've been two or three quarters under pressure on the share side. A little bit of price relativity gap. Competition investing heavily in prices. We've been balancing our agenda on our own strategy to make sure that we have costs under control, price/revenue management to the costs that are coming because the hedges last only for March 12 months.

Michel Doukeris
CEO at AB InBev

We see that these relativities start to close. We see that the share performances start to improve. Now we need to see the volume coming back, which is We don't disclose any expectations for the second half of the year, but the expectations in this case are as we continue to do our work, industry improves, we want to see volume growth in the non-alcohol portfolio as well in Brazil. A little bit of relative, a little bit of the industry that was not that good in the first half of the year for soft drinks in Brazil.

Robert Vos
Analyst at ABN AMRO ODDO

Thank you.

Operator

Thank you. Our final questions will come from the line of Trevor Stirling with Bernstein. Please proceed with your questions.

Trevor Stirling
Trevor Stirling
Analyst at Bernstein

Hi, Michel and Fernando. Michel, my first question for yourself. There's a lot of very good things in the quarter. If you had to pick out one area, a country, a brand, an activation which really over-delivered in your view, which one would you pick out? I guess the disappointing one is probably China, so I'm not going to ask you that question. Then Fernando, coming back to this question about the phasing of EBITDA growth across the year. One thing you didn't mention was the transactional FX hedges and how those change from being negative in the first half, being positive in the second half. Is that still relevant in terms of as we look at the phasing of the EBITDA growth across the year?

Fernando Tennenbaum
CFO at AB InBev

Hi, Trevor. Let me get your last question, then Michel will address the first one. On transactional FX, it still holds true. We know that we had some headwinds, mostly in Mexico and Brazil in the first half comparing to the second half, this is true. On the other hand, probably something that has evolved a little bit is you saw a little bit more pressure in terms of energy, which sometimes is unhedged, and logistic expenses, which are rising on H2 a little bit. On the other hand, you have the revenue management agenda. The statement that should be balanced between H1 and H2 still holds true. Probably what changes lightly is that you see some of these unhedged energies becoming a little bit higher, which is going to impact more the second half.

Fernando Tennenbaum
CFO at AB InBev

You have the FX, which was more of a headwind in the first half, being more supportive in the second half. Puts and takes, the balance H1 and H2 still holds.

Michel Doukeris
CEO at AB InBev

Yeah. On the first question, Trevor. Thanks for the question. I would just go back to your first question here, thank you for the opportunity to talk a little bit more about this. If you think about regions, fair to say that Middle Americas was very strong, and we saw growth broad-based across the region, incredible execution, as we saw in the North America and South America. The results of this execution, when you put all together, weather, economy, what we have done, it stands out in Middle Americas

Michel Doukeris
CEO at AB InBev

If I'll take one point, I will be repeating this because again, I think that our strategy is where we put our energy to execute, and the results are a consequence of the work that we are doing. We have a very intentional movement on improving the architecture and the functionality of our portfolio. The fact that we used this big platform, the FIFA, to roll out Michelob ULTRA across Americas, this is the one thing that I think that's going to have a lasting, positive impact for us. Because this need for our consumers is somehow universal. The balanced choices and having the opportunity to socialize and to enjoy our products with products that have a modern formulation, the case of Michelob ULTRA, lower calories, lower carbs. This brand performs very well across all the markets where we introduce.

Michel Doukeris
CEO at AB InBev

You know that's a core plus, so it creates a very positive effect on our mix. In all these markets that are very large markets for us, the opportunity to have a brand that trades up and has a lot of incrementality, both for the category and for the mix, is very important and is perhaps the most intentional move that we have done, in terms of execution on the quarter two. If we continue to execute our strategy, and we have still lots to do, lots of things that we can improve, then we will continue to see the results that we saw this quarter in the first half of the year, such as the growth that we saw in EPS, 22% on the quarter, 22% on the first half of the year. The improvements on the cash flow.

Michel Doukeris
CEO at AB InBev

Back in 2025, 2024, we were talking about the step change and the sustainability of that change. Now you see on the quarter one, $2.5 billion growth on the cash flow. The consequences, they come after great execution. Our execution is good. It's still way more that we can do, but we are moving on the right direction. Thanks for the question.

Operator

Thank you. 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.

Michel Doukeris
CEO at AB InBev

Thank you. Thank you, everyone, for your time today, for the ongoing partnership support for the business. I hope that you all stay well, and since we are approaching Friday, take some time to drink a beer. Cheers.

Operator

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

Analysts
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