Budweiser Brewing Co

And welcome to the 2026 First Half Results Announcement Conference Call for Budweiser Brewing Company, APAC Limited. Hosting the call today from Budweiser APAC is Mr. Y.J. Chung, Chief Executive Officer and Co-Chair for the Board, and Mr. Bernardo Novick, Chief Financial Officer. The results for the six months ended 30th June 2026 can be found in the press release published earlier today and available on the Hong Kong Stock Exchanges website and Budweiser APAC websites. Before proceeding, let me remind you that some of the information provided during this results call, including our answers to your questions on this call, may contain statements of future expectations and other forward-looking statements, and these expectations are based on the management's current views and assumptions and involve known and unknown risks, uncertainties, and other factors beyond our control. It is possible that Budweiser APAC's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in this forward-looking statement. Budweiser APAC is under no obligation to and expressly disclaims any such obligation to update the forward-looking statement as a result of new information, future events, or otherwise. For discussion of the sum of the risk and the important factors that could affect the Budweiser impact's future results, the risk factors in the company's prospectus dated 18th September 2019, the 2025 annual report published, and any other documents the Budweiser impact has made public. I would also like to remind everyone that the financial figures discussed today are provided in US dollars unless stated otherwise. The percentage changes that will be discussed during today's call are both organic and normalized in nature and unless otherwise stated. Percentage changes refer to comparisons with the same periods in 2025. Normalized figures refer to performance measures before exceptional items, which are either income or expenses that do not occur regularly as a part of a Budweiser APAC's normal activities. As normalized figures are non-GAAP measures the company disclosed the consolidated profits EPS, EBIT and EBITDA on a fully reported basis in the press release published earlier today. Further details over the 2026 first half results can also be found in the press release. It is now my pleasure to pass the time to Y.J. Sir, you may begin.

Thank you, Ray. And good morning, everyone. Thank you for joining today's call. In the first half of 2026, our business in China continued to be impacted by a slower than effective recovery. However, it continues to be built momentum across South Korea and India, where strong commercial execution and power of our brand supported continued market share gains. In the second quarter, we underperformed a soft industry in China, which was impacted by a wise weather and continued weakness in on-premise channels, winning down both our top and bottom line result. This was partially offset by continued momentum in South Korea where we gain market share and in India where favorable industry momentum and strong growth in our premier and super premier portfolio contributed double-digit volume growth. I will now hand it over to Novik to discuss our performance in more details. Thank you.

Thank you, YJ, and good morning, everyone. In the first half of 2026, total APAC volumes decreased by 2.2%. Revenue decreased by 1.4%, while revenue per hectolitre increased by 0.8%. Our normalized EBITDA decreased by 8.9%, while our normalized EBITDA margin contracted by 236 basis points. In the second quarter, total volumes decreased by 4.1%, impacted by performance in China, partially offset by growth in South Korea and in India. Revenue decreased by 2.1%, while revenue per exoliver increased by 2.1%, benefiting from a positive country mix and run mix in China. Our normalized EBITDA decreased by 9.7%, impacted by our top-line performance in China, increased marketing investments, and reduced and Operating Income. In the first half of 2026, our profits attributable to equity holders of APAC increased by 15.6%, lapping one of the one-offs or say non-recurrent items in 2025 and also benefited by tax facing between second quarter and the third quarter. Now, let me cover some of the highlights for each of our major markets. In China, volumes decreased by 9.7% in the second quarter. Revenue decreased by 8.6%, while revenue per hectolitre increased by 1.2%, driven by positive brand leaks. Normalised EBITDA decreased by 15.9%, increased by our top-line performance and reduced other operating income. We made further progress in our channel expansion strategy, focusing on premiumizing the in-home channel and expanding our penetration in the O2O channel. We deliver strong double-digit growth in the O2O in both the second quarter and the first half, supported by brand and package innovations. South Korea. In South Korea, volumes in the second quarter increased by low teams, cycling and easier comparable, caused by shipments facing ahead of our price increase that happened in April 2025. Revenue per hectolitre decreased by low single digits, impacted by negative packaging. Normalised EBITDA increased by strong double digits, with our normalised EBITDA margin expanding substantially by 400 basic points, supported by our strong top-line performance and operational leverage. Given this shift in spacing, it's important to look at the first half to get a more normalized view of our South Korea performance. In the first half overall, volumes were flat. We continued market share gains in both on-premise and in-home channels. Revenue per exoliter increased by low single digits, driven by revenue management initiatives. Normalized EBITDA increased by mid single digits, with our normalized EBITDA margin expanding substantially. And then finally, India. We continue to invest in India to accelerate growth across our portfolio. We deliver double-digit revenue growth in both the second quarter and the first half of the year, while gaining market share in the states we operate, supported by share gains in premium and above segments. And with that, YJ and I are here to answer any questions you might have. Thank you.