Anheuser-Busch InBev SA/NV

Welcome to AB InBev 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'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 hasn't been answered, you may remove yourself from the queue by pressing star, then 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 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 3, 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. It is now my pleasure to turn the floor over to Mr. Michel Doukeris. Sir, you may begin.

Thank you and 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 hectolitre of 4.2% driven by positive mix and our proactive revenue management agenda to keep pace with rising inflation and input costs. 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. Beer's marketplace continued to scale, with JMV 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 capita 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 effects headwinds. 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 US, our portfolio momentum continued, with share gains in both beer and beyond beer. Our beer performance was led by Michelob Ultra, Bush Light, and Bush Light Apple, which were the top three volume shargainers 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 shargaining brand in the total spirits industry in the second quarter. Now, let's turn to middle America. 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 gain. In Colombia, record high second quarter volumes drove double-digit top and bottom-line growth, with our portfolio estimated to have gained share of total output. 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, 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. In South Africa, disciplined revenue management and margin expansion drove mid-single-digit top- and bottom-line growth. Premium and super-premium breeder led our performance, delivering high-to-end volume growth. Now, moving to APEC. 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. There is more work to do, and 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. 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. 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 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 engagement. The FIFA World Cup is a once every four years opportunity to build the long-term brand equity of our portfolio of consumers. 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 US, where Ultra was again the number one volume share gainer. In the second quarter, 40% of Ultra's volume growth came from outside the US. We continue to execute our category expansion levers to expand choice, occasions, and participation in the category by offering superior core brands, innovating balance 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 Coronacero and Michelob UltraZero. 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 Bush 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 and cream-flavored Stellar Plaque. 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 cut water, supporting the brand's performance in the US. Geographic expansion of our Beyond Beer brands is a meaningful growth opportunity. 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, Biz 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. These marketplaces continue to scale, with JMV 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. 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 an 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. Thank you, Michel.

I'll 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 allocation flexibility. Through disciplined resource allocation and overhead management, we were able to offset transactional effects 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 Discipline revenue management Continued premiumization An 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% With translational effects 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 enables 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 deliver. Our net debt-to-EBITDA ratio reached 2.86 times, a 0.4 times 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 competence. 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% to 8% EBITDA growth. With that, I'll hand it back to Michel for some final comments.