Anheuser-Busch InBev SA/NV

To access the slides accompanying 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. 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 1 on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. If you should require operator assistance, please press star 0. 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 embeds 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 20F filed with the Securities and Exchange Commission on 19th of March, 2021. AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call. and should not be liable for any action taken in reliance upon such information. It is now my pleasure to turn the floor over to Mr. Michel Dukaris. Sir, you may begin.

Thank you, Jessie, and welcome everyone to our third quarter 2021 earnings call. It's a pleasure to be speaking with you all today, and I hope you and your families are staying well and safe. As the world reopens, I'm looking forward to being able to meet with you in person in the near future. Today, I would like to start with an overview of our third quarter operating performance and key commercial and sustainability highlights. Then, I will hand it over to Fernando to discuss our financials. After that, we'll be happy to take your questions. So let's start with our operating performance for the quarter. When compared to the third quarter of 2020, we delivered top line growth of 7.9%, with a health mix of 3.4% volume and 4.3% revenue per hectolitre, driven by revenue management and premiumization. EBITDA increased by 3%, with an EBITDA margin of 36.5%. Versus third quarter 2019 pre-pandemic levels, we grew top line by low things, driven by the consistent execution of our strategy and strong underlying consumer demand for our brands. This quarter, we also returned to growth at the bidder level versus third quarter 2019, as we continue to manage our costs efficiently. Our underlying EPS increased from 80 cents to 85 cents, and our normalized EPS was 50 cents. We delivered a strong performance in the context of a challenging global operating environment, characterized by ongoing COVID-19 restrictions, commodity inflation, and supply chain constraints. Our results were driven by relentless execution demonstrated by our teams, consistent investment in our brands, and accelerated digital transformation. In light of our continued momentum, we are raising the bottom end of our EBITDA growth guidance from 8% to 12% to 10% to 12%. Looking ahead to 2022, the current supply chain disruptions will result in higher input costs. We have a proven track record of operating effectively in inflationary environments around the world. We will continue to deliver on our best-in-class revenue management capabilities, while relying on the strength of our brand portfolio and enhanced digital capabilities to optimize our performance. In light of these cost headwinds, we continue to meet the moment, and we have already taken action with increased pricing in several markets. such as Brazil, Mexico, Colombia, China, and Nigeria, among others. Now, I would like to share some highlights from our key markets. In the US, both revenue and EBITDA grew by mid-single digits versus 2019. Compared to third quarter 2020, our top line declined by 80 bps this quarter. driven by a lower industry and supply chain disruptions, resulting in out-of-stocks. We remain focused on consistent execution of our commercial strategy and rebalancing our portfolio towards faster growing above core segments. In Mexico, we delivered high single-digit top line and mid-single-digit bottom line versus 2019. fueled by ongoing portfolio development, digital transformation, and continued channel expansion through OXO and Modelorama. Our BIS platform continues to expand, now comprising nearly 70% of our revenue. In Colombia, we delivered record volumes this quarter, growing top and bottom line ahead of pre-pandemic levels. Supported in part by our innovations Beer share of total alcohol increased by approximately 120 base points, year-to-date August versus the comparable period in 2019, resulting in the country's highest beer per capita consumption in 25 years. This now represents 85% of our revenue in Colombia, with an average NPS score of 56. In Brazil, we achieved all-time high rolling 12-month beer volume in third quarter 2021, growing volumes by 7.3% versus third quarter 2020, and by 35% versus third quarter 2019. We outperformed the industry for the fifth quarter in a row, according to our estimates. All segments of our beer portfolio grew by at least double digits versus the same period in 2019, with the premium and corpus segments leading the way. This now covers more than 85% of our active customers across the country. Our business in Europe grew revenue by low single digits and EBITDA by mid single digits versus the same period last year. supported by premiumization, operational efficiencies, and additional revenue management initiatives. As vaccination rates continue to increase in our key markets, and as the on-premise recovers, our performance is improving, driven by health distribution and market share gains for our portfolio. In South Africa, our business delivered volume growth in the mid-20s, versus third quarter 2020. Compared to third quarter 2019, even though there were 25 fewer trading days, our revenue declined by only low single digits, reflecting a strong underlying consumer demand for our products. In China, The implementation of COVID-19 restrictions led to a total industry decline of mid-single digits, according to our estimates. The restrictions disproportionately impacted our key regions, leading to a 7.1 volume decline. Nevertheless, the premiumization trend remains strong, as our super premium portfolio once again outperformed, led by double-digit growth of Blue Girl and Vulgarda. Moving on, let's discuss the key commercial and sustainability highlights from this quarter. We continue to develop a unique and diverse portfolio of brands to reach more consumers in more occasions. As you can see on slide 8, our mainstream brands grew revenue by 4%, gaining share of segment across most of our main markets. Our premium portfolio continued to lead the way, delivering over 11% revenue growth. Our Beyond Beer brands continued to add profitable growth, delivering $1.2 billion in revenue year-to-date. Diving a bit deeper into the performance of our global brands, The combined revenues of Budweiser, Stellar 2i and Corona grew by 5% globally and by 9.3% outside of the brand's home markets, where they typically command a premium price. Now, let me talk about innovation. Our innovations are meaningfully contributing to our results, making up approximately 10% of our revenue year-to-date. Based on the success of Brahma Duplo Malt in Brazil, we are expanding the double malt concept to more than 10 markets, including the launch of Castle Double Malt in South Africa this quarter. To address the global trends of health and wellness and moderation, we are developing a portfolio of differentiated offerings. We are seeding Michelob Ultra, our premium low-carb, low-calorie beer, in 10 markets. We are also enhancing our non-alcoholic portfolio by expanding Bud Zero to more than 10 markets by the end of the year. We continue to explore and innovate in beyond beer space. Michelob Ultra Hard Seltzer is leading the emerging seltzer segment in Mexico, with nearly 50% market share. In addition, Catwater continues to rapidly expand. growing triple digits in the U.S. We are also scaling the Mike Hart brand family to more than 15 markets this year. Now, I would like to talk about how we are transforming our business with technology. Our digital B2B sales platform, BIS, is enabling us to turn customer pain points into opportunities for growth. we are live in 13 markets with 2.1 million monthly active users with over $5.5 billion in gross merchandising value this quarter, demonstrating an accelerated growth trajectory in the past 12 months. To give you a deeper understanding of the value we are unlocking with our digital transformation, let me walk you through the journey in our BIS pilot market, the Dominican Republic. We chose the DR as the first market for a full rollout of our digital transformation, launching BIS in 2019. The DR is an ideal candidate to test and capture learnings to inform the global expansion of the platform. First, it is a market of relevant size. which would allow us to understand the potential impact of a full transformation. It is also a market where we have a significant presence with a high level of direct distribution, which facilitates rapid expansion and adoption. Lastly, it is a market with lower digital penetration and a high level of traditional trade. which would provide us with learnings on how to address perceived barriers to adoption. We have seen exciting results since we digitally transformed the market, with the platform unlocking incremental growth for our business and our customers. The digitization of our route to market enabled us to fully execute our commercial strategy. With this now making up over 90% of our revenue in DR, we are reaping the benefits of accelerated revenue growth versus historical levels. For these customers, particularly those that are fully engaged with our features offered in our platform, we see accelerated performance across several key metrics with higher revenue per order, higher delivery frequency, and more unique SKUs purchased when compared to 2019. We have now rolled out this to 13 countries in the last two years. and we are incorporating the learnings we have gained along the way to accelerate the digital transformation across our global footprint. Now, let me talk to you about another pillar of our digital transformation, our own direct-to-consumer business, which generated more than $1 billion in revenue year-to-date, and it is growing rapidly. The biggest contributor is our e-commerce platform, which grew by 90% year-to-date. In Latin America, we are building an omnichannel ecosystem with our e-commerce career platforms across more than 10 countries, leveraging a best-in-class physical presence with our retailers and brick-and-mortar direct-to-consumer businesses. In Europe, we are delivering a superior and unique at-home experience through in-home drafts and products on our e-stores, now delivering more than $100 million in revenue year-to-date. Now, let me change gears and talk about sustainability. I'm so proud of our journey and our team's in the way we are advancing our ambitious sustainability agenda. We are taking action to decarbonize our footprint. Earlier this year, we announced our first carbon-neutral brewery in Wuhan, China. This quarter, we achieved carbon neutrality for our second brewery and our first smokehouse in Brazil. As pioneers in sustainable brewing, We will continue to pursue innovation and partnerships in support of the transition to a low-carbon economy. Additionally, in September, at the 76th session of the United Nations Global Assembly, we were recognized as one of only 37 Global Compact Lead companies for our ongoing commitment to the UN Global Compact. It's 10 Principles for Responsible Business and the Related Sustainable Development Goals. Congratulations to our teams and partners for these important achievements that are driving our sustainability agenda forward. With that, I would like to hand it over to Fernando to discuss our financials. Fernando?

Thank you, Michel. Good morning. Good afternoon, everyone. I hope you are all safe and well. Let me first take you through the drivers of our underlying EPS. Our underlying EPS increased by $0.05 from $0.80 to $0.85. Normalized EBIT increased by $0.13 per share. In net finance costs, we recorded lower interest expense due to gross debt reduction, partially offset by other finance costs. We saw higher income tax expense due to increased profitability, country mix, and reduced benefits from tax attributes, worth $0.05 per share. We also recorded higher share of results from associates, worth $0.01 per share, and higher profit attributable to non-controlling interests, worth $0.10 per share. resulting from higher profits of our listed subsidiaries Budweiser, APEC, and Ambev, along with the issuance of a 49.9% minority stake in our U.S.-based metal container operations in December 2020. Moving on to slide 18, you see that our debt maturity profile is well distributed with no significant maturity over the next five years. Let's elaborate further on our debt portfolio shown on the previous slide. As a reminder, we do not have any financial covenants on our entire debt portfolio, including our sustainability-linked revolving credit facility. Our bond portfolio remains largely insulated from interest rate volatility, as approximately 95% holds a fixed rate. Furthermore, the portfolio is comprised of a variety of currencies, with 52% denominated in US Dollars, 34% in Euro, and the remainder in currencies such as the Canadian Dollar, Palm Sterling, and Korean Won, diversifying our FX risk. The weighted average maturity of our debt portfolio is more than 16 years. We continue to have a very manageable weighted average coupon of approximately 4%. Now let's talk about capital allocation. Maximizing long-term value creation drives how we balance our four capital allocation priorities. Our top priority for the use of cash is to invest in our brands and to take full advantage of the organic growth opportunities in our business. Our optimal capital structure remains around a two times net debt to EBITDA ratio. With respect to M&A, we will always be ready to look at opportunities when and if they arise. This is subject to our strict financial discipline and the leveraging commitments. Finally, we aim to return excess cash to shareholders in the form of dividends and or share buybacks. However, In line with our financial discipline and the leveraging objectives, there will be no interim dividend. The Board's proposal with respect to a full-year 2021 dividend will be announced with our full-year 2021 results on February 24, 2022. I will now hand it back to Jesse so he can begin the Q&A session. Thank you.