AB InBev Aktie

Welcome to AB InBev's Third 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. [Operator Instructions]

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 third 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 will be happy to answer your questions.

Let's start with the key highlights. The momentum of our business continued in the third quarter. Consistent execution of our strategy enabled us to deliver solid top and bottom line performance while investing in our brands and capabilities to fuel future growth. Volumes grew for a third consecutive quarter, with market share growth globally and record high third quarter volumes in 15 markets, including Colombia, Peru, Ecuador, South Africa, India and Dominican Republic, amongst others.

Revenue increased by 4.9% with solid revenue per hectoliter growth of 4.2%. Underlying EPS increased by 22% to reach $1.21. We stepped up sales and marketing investments to activate key mega platforms this quarter, strengthening our brand power and supporting increased participation with our portfolio. Our performance was driven by our replicable growth drivers with continued momentum across our mega brands, nonalcohol beer and beyond beer. This marketplace continued to scale, with GMV increasing by 45% to reach $1.4 billion. Given our strong balance sheet and increased capital allocation flexibility, the Board has approved an interim dividend of EUR 0.40 per share.

Turning to our operating performance. Total volumes grew by 0.4% in the third quarter, led by growth in our soft drinks business. Beer volumes were flattish as growth in 2/3 of our markets was offset by a challenging industry in China. Our best-in-class revenue management capabilities, combined with positive mix contribution from our mega brands, delivered a revenue per hectoliter increase of 4.2%.

EBITDA increased by 3.9% with flattish margins as higher sales and marketing investments and commodity headwinds were partially offset by disciplined revenue and cost management. U.S. dollar EBITDA increased by 6.5% in the third quarter and by 10% year-to-date. EBIT increased by 6%, and underlying EPS grew by 22% as we continue to optimize the business and drove operating leverage through the P&L.

Our geographic footprint and global scale continue to enable us to deliver consistent results across 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. We have gained share of total alcohol for 10 consecutive quarters and are the #1 share gainer year-to-date. Our beer performance was led by Michelob ULTRA and Busch Light, which were the top 2 volume share gainers in the industry. Our beyond beer portfolio continued to expand our total addressable market and delivered revenue growth in the low teens, led by Cutwater and Nutrl.

Now let's turn to Middle Americas. In Mexico, market share gain and margin expansion drove mid-single-digit volume growth and double-digit bottom line growth. We grew revenue in mainstream, premium, nonalcohol beer and beyond beer and continue to increase our portfolio brand power. In Colombia, record high third quarter volumes drove double-digit top and bottom line growth. Volume and revenue grew across all price segments, with our portfolio gaining share of alcohol beverages. In Brazil, market share momentum and volume growth drove a mid-single digit top and bottom line increase. Our premium and super premium beer portfolio led our performance and delivered high teens volume growth, and strengthening our leadership position in the segment.

In Europe, market share gains and premiumization drove continued top line growth. Volumes were flat, estimated to have gained or maintained share in the majority of our key markets, with our performance driven by our mega brands and nonalcohol beer. In South Africa, record high volumes and premiumization drove high single-digit top line growth. Our premium beer portfolio led our performance, delivering [ mid thirds ] volume growth.

Now moving to APAC. In China, revenue and volumes declined by 16.8% as we underperformed a challenging industry. We estimate the industry declined by low teens in our footprint, impacted by abnormal weather and continued weakness in the on-premise channel. While our overall results remained below potential, we made progress in areas of strategic focus. We continued to invest in our mega brands, innovations and strengthen our portfolio brand power.

Our in-home channel market share trend improved versus last year, supported by continued momentum in our core plus and super premium brands and growth in the O2O channel. There is more work to do, and we are investing to improve our execution and rebalance our portfolio towards growing segments, channels and geographies.

Let's now turn to our strategic pillars, starting with lead and grow the category. Our mega brands continue to drive profitable growth across our markets, with net revenue increasing by 7.7% during the quarter. Corona continued to drive premiumization, growing revenue by 20% outside of Mexico and growing volumes by double digits in 37 markets.

The combination of our mega brands and platforms is a powerful opportunity to connect with consumers through key moments of culture and celebration. Following successful activations in the first 9 months of the year, we have a strong lineup for quarter 4 and into 2027. These mega platforms, including our partnerships with Live Nation and Netflix, are placing beer and our brands at the center of culturally relevant moments for consumers. Our strategic investments strengthened the connection with consumers and supported a continued increase in our portfolio brand power.

Consistent execution of our category expansion levers drove increased consumer participation with our portfolio this quarter, with growth across our core, premium, balanced choices and beyond beer brands. In nonalcohol beer, our portfolio outperformed the industry and delivered a 35% revenue increase, led by Corona Cero and Michelob ULTRA Zero. 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.

Let's now turn to our second strategic pillar, digitize and monetize our ecosystem. In the third quarter, this captured $15.9 billion in gross merchandising value, a 12% increase versus last year. This marketplace continued to scale, with GMV from third-party products increasing by 45% versus last year to reach $1.4 billion.

Our digital D2C business is growing and enabling us to further monetize our ecosystem. Our digital platforms served 13 million consumers and generated $158 million in revenue. We are also commercializing third-party products on our D2C platforms and now have a growing 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.

Thank you, Michel. I'll take a few minutes to discuss the progress we have made on 3 areas in optimizing our business: superior profitability, compounding EPS growth and increased capital allocation flexibility.

Let's start with superior profitability. Our margins are best-in-class, reflecting the fundamental strength of our business, our brands, scale, leadership positions, efficient operating model and ownership culture. Disciplined revenue and cost management enable us to offset commodity cost headwinds and maintain our margins while we're stepping up investments in key mega platforms this year.

Over the last 12 months, we have invested $8.1 billion in sales and marketing to support our growth priorities as we move into the next phase of our strategy. While each year has unique dynamics, we are confident we have opportunities for further margin expansion over time.

Moving on to EPS. Top line growth, effective cost management and the continued optimization of our business drove constant currency EPS growth of 13.9%. With translational FX tailwinds, dollar EPS increased by 22.4% to reach $1.21 per share.

We have a strong balance sheet. Given the proactive management of our bond portfolio, our last 12 months free cash flow is greater than any of our annual bond maturities, putting us in a position where we have no relevant refinancing needs. 98% of our debt is fixed rate with an average coupon of around 4%, and there are no financial covenants on our bonds.

Given the strength of our balance sheet and free cash flow generation, we have increased flexibility on our capital allocation choices. The objective of our capital allocation framework is to maximize value creation for our shareholders. Consistent with our ambition for a progressive dividend over time, we have announced an interim dividend of EUR 0.40 per share compared to an interim dividend of EUR 0.15 per share last year.

We also continue to execute on the 24-month $6 billion share buyback program announced last year. And to date, we have repurchased $2.6 billion of shares. Looking ahead, the strength of our ownership culture and execution, together with our best-in-class brands and solid year-to-date results, reinforce our confidence in our ability to deliver our 2026 outlook.

With that, I'll hand it back to Michel for some final comments.

Thanks, Fernando. Before opening for Q&A, let me recap on our performance this quarter and the opportunities we have ahead of us. Our continued momentum reflects the resilience of our strategy and our ability to deliver reliable compounding growth across different operating environments. We continue to invest to strengthen our capabilities and brand power to lead and grow the category.

Revenue grew by 4.9% with continued volume growth and a revenue per hectoliter increase of 4.2%. Underlying EPS momentum continued, increasing by 22% in both the third quarter and year-to-date. With our strong balance sheet and increased capital allocation flexibility, we announced an interim dividend of EUR 0.40 per share. As we progress through the next phase of our strategy, we are well positioned to deliver superior value creation.

With that, I'll hand it back to the operator for the Q&A.

[Operator Instructions] Our first question is coming from the line of Edward Mundy with Jefferies.

So my first question is a pretty big picture question, if that's okay. So in 2026, you've got a pretty healthy balance between volumes, price and mix, and the replicable growth drivers are clearly working. I'm not looking for explicit guidance for 2027, but how are you thinking about those three buckets going into next year, especially as there's a bit more commodity pressure sort of creeping in?

And then my follow-up question is really around nonalcohol, which accelerated in the quarter. What is it do you think you're doing differently relative to your peers that's driving this outperformance? And do you really feel like you're at the tipping point now where zero alcohol can really scale and become a meaningful growth engine?

Michel here. So two questions there. I think that they interconnect in a way. But I think you mentioned -- and just to reinforce that we are not providing any guidance so far for 2027. During the Capital Markets Day, we talked about this midterm outlook evolving from EBITDA, 4% to 8%, to become EBIT, 5% to 9%, as we now get into what we call the second phase of our 10-year plan.

And as we look at the components of the results this year, year-to-date, now 9 months gone, volume is growing, very healthy net revenue per hectoliter. Of course, it comes from two different areas. We've been pricing, as we always do, in line with inflation. And our revenue management capabilities, which we discussed during the Capital Markets Day, is something that we are investing a lot. They continue to evolve.

And due to the strong brands that we have and the capabilities that we have, we are topping up what we put in terms of price with very healthy mix, mix that's coming from premiumization, right pack price strategy and also from the growth engines that we referred to because non-alcohol is at the premium margins for us, ready-to-drink beverages, higher price per hectoliter, incremental net revenue there. And we continue to, of course, in a very detailed way, using all the tech capabilities that we have, to optimize the way that we promote, discount and go to market. So as we look forward, this type of algorithms, which is positive volume, healthy net revenue per hectoliter, gains in mix, optimization of the cost lines and the right growth engines is what we anticipate will drive our momentum moving forward.

On the non-alcohol, I think that we've been investing on this now for 5 years, and we've been very clear on why we are investing. The key reason is because it brings new consumers to the category, and we are seeing today participation for our overall portfolio growing globally across the vast majority of the markets. It brings new occasions because it's very flexible as a liquid. It can be during the day, during the night, weekend, weekday. And it covers a very wide range of consumers from LDAs to adults that want to continue to entertain and enjoying beer but want to try in some occasions, nonalcohol beer.

And what we are doing, I think that it is investing in the right brands and platforms. You remember, we made a massive investment with the Olympics. Our technology for the liquids is huge breakthrough. So today, the taste and the quality of the liquids that we are putting in the market is second to none and the best that we have had so far, but we don't stop investing in fine-tune the technology and improve taste and quality.

And this, of course, is getting traction. It used to be less than 1% of our business. Today, it's more than 1.5%, approaching 2% on a run rate. And the growth rates are very good across the globe, double digits in most every market. We are taking leadership on this segment in many markets, but now it's stretching the this leadership up, and we see this continue to grow. It's very early stage. We'll continue to see more coming there.

I think that the third component on this question on the same lines is how we are leveraging the business beyond this growth. You just saw the EPS growth of 22%. I think that Fernando can add a little bit on that because the optimizing the business is also a component on how this strategy is coming to life.

Thank you, Michel. You mentioned volume, price and mix. But at the end of the day, it's all connected. We are investing more into our business. You saw our sales and marketing. We're investing behind the mega platforms and doing all of that while managing to maintain the EBITDA margins.

And then when you start going below the line, kind of all the things that we've been doing, this, for example, you are improving cash flow improving cash flow, you have a higher average cash balance on your bank accounts. You have better interest income that helps net interest income. Some of the different mix of countries that are performing, we see like Middle Americas, very strong performance. Just to give some examples, countries like Peru or Colombia, they are bigger than China today, and they come with a higher EBITDA margin and very good profitability. So when you start adding all these components, we make sure that we are investing enough to support the strategy.

Top line is in a healthy place. Price is in a healthy place because we're investing behind our brands. And then you have a lot of leverage to your P&L, then you can deliver a solid EPS. Of course, this year, you had some tailwinds from FX on your EPS. But even without the FX, we are growing at 13.9% at constant currency, which tells a lot about the efforts that we are doing to optimize our business. And then again, we see opportunities to do more as we continue to delever, as we continue to further optimize our business.

Our next questions come from the line of Sanjeet Aujla with UBS.

A couple from me, please. I'd like to dig into China a little bit. I think on the call, Michel, you referenced the category down low teens in your footprint. Can you help us disaggregate how much of that is weather-related versus underlying consumer? And do you think the destocking will be done by the end of this fiscal year? That's my first question.

My second question is on the strength in Middle Americas. You saw a nice acceleration there in Q3. I think the whole region is on track to deliver the strongest volume growth outside of COVID in the last decade. And so I'm just trying to understand how much of a -- how material is the World Cup impact there in the quarter versus what was just an underlying strong consumer backdrop?

Thanks for the question. Two very different parts of the world there in terms of not only geography, but momentum for the category and for our business. I will start with China. And when you look at the results in China, one can take this in a way that's very hard to understand, like 16% volume down.

But when you dig into the numbers -- and we have like several sources to check these numbers in China. And one, we always say that the sources do not align 100% always. But you have production, you have production reported by the companies, which is different from the statistic bureau, and you have Nielsen. I think that they all converge on the quarter 3 to an industry that is high single digits down at national average. So depending on the source, between 8% and 9% down for the industry when you take this industry on our footprint. Because, again, we are more in the East Coast of China, expanding inland in a faster way now, but it is still very concentrated. We were very exposed to all this incredibly bad weather that landed in China and in the region over the summer. So our footprint, considering the channels, geographies, and the overall industry, was north of 10% down.

So in this context, our performance, if you look through the quarters, just as an example, quarter 1, the industry was flattish. It was not too different in the quarter 3 than what it was in the quarter 1 in relative terms performance. If you go to the share was actually better because we started the year with a negative market share, 1 point, 1 point something down. And this share is getting closer to 0 as we go through the months and was below 0.5% in the quarter 3.

So the actions that we have in place in China in innovation, the investments that we're making on the key brands being on the brand equity, power is growing, but also in distribution. Distribution is in good place, evolving. They are working. We are growing in the O2O channel. We are growing with the key innovations that we did in brands and packs, but the industry was really the big deal.

And you are right on your question because take any market of ours where you have wholesalers more than one tier like China and the retailers after the wholesalers. When you get on the summer a 10% industry down, you are confronted with a choice that is not easy many times, which is you either leave your channels stuffed and then with too much inventory as you head towards the winter on an industry that is very negative, or you need to adjust your inventories. And a drop in the industry like 10% will push you to get inventories 2 to 3 days down in a month. You know that this is another big component on your shipments, which is, after all, what we report. So majority of the decline in China was industry and inventories driven, while we continue to underperform in sales to consumers, this industry that was very negative.

I don't see a reason that is consumer driven for these industries to be too bad in China. Again, you go through the quarters, quarter 1 was -- quarter 2 was mid -- like -- yes, less than mid-single digits, down was like between 2 and 4, depending on the source. And then on the third quarter, we saw this big deceleration. We need to look more into the fourth quarter now and the comps for next year because after all, it's hard to believe that something like this will repeat itself. And we need to continue to make the right investments and continue to make progress there on what we want to do.

The inventory thing is a moving target because if the industry is up, then you have, of course, a benefit on your inventory. If the industry is moving down as we saw in the third quarter, you need to adjust anyway, but we are planning and we're working very hard to get to the end of this year with normal inventories in China. That's our objective so we can have a more clean cut in everything that we do for next year.

When you think about [ MAS ], I think this is just a fantastic performance. We host our Capital Markets Day there 3 years ago, so we could give you a picture of how relevant this industry is and how exciting the opportunities that we had ahead of us were in [ MAS ]. And I'm really happy to see how these opportunities are becoming not only reality, but the materiality of these opportunities are becoming even bigger than what we share over there. So I think that the team in Middle Americas, together with Jean Jereissati there, are doing a fantastic job.

We saw participation growth across all the markets. We saw industry growth, the underlying trends that are driving that such as the economy, the health of consumer, the LDA population all playing in our favor, and this was boosted by a very good weather. You remember that we talked a lot about the bad weather last year in [ MAS ]. So this year was the opposite of that. We had some tailwinds coming from the comps and the weather, gaining share across majority of the markets where we have space in the beer share and gaining share of total alcohol beverage in the markets where our share in beer is already very high. So the beer category is moving ahead of the other categories.

What's driving that? So very consistent execution of our strategy. All the growth levers, being nonalcohol, beyond beer, premium are growing well ahead of the industry. And the growth was broad-based. So in an interesting way, the overall consumer environment in this region is better than the average at global level. The inflation that is moving on the opposite direction than what we see across the globe, especially in Europe, Asia and North America. And this is bringing a little bit more affordability to the category when you compare the disposable income to the prices that are moving with inflation. And this is all supportive to the underlying momentum that we see in both the category and our brands.

Our next questions come from the line of Andrea Pistacchi with Bank of America.

My first question is on Brazil, please, where the industry, I think you said grew mid-single digit in sell-out based on Nielsen. And you gained share, but your beer volume was up 0.5%. So could you possibly help us bridge the gap here between sell-in and sell-out? And with the comps becoming a bit more demanding going forward, how do you see the consumer and the industry environment evolving over the next few quarters with the elections also now behind?

And then I'll have a follow-up question for Fernando on the dividend, which you obviously increased the interim dividend quite meaningfully, as you said. Previously, I think you'd indicated that dividend increases would likely be relatively gradual over time. So should we see today's increase mainly as a rebalancing between interim and final dividend? Or does a stronger balance sheet give you -- you say it gives you more options, but does it give you scope to accelerate the increase in the overall payout?

Andrea, Fernando here. Let me start by your second question, and then I'll move to Michel. So on the dividend, we said before that we have this ambition to grow for a progressive dividend over time. We also said that our cash flow is skewed towards the second half of the year.

So you're right, with the strong balance sheet, now we have increased capital allocation flexibility. So as business performing, you see our EPS continues to perform. We announced this dividend -- this interim dividend with EUR 0.40, which compares to EUR 0.15 in 2025. And I think this is, at the end of the day, consistent with our stated ambition of a progressive dividend over time. And Michel?

Andrea, on Brazil, I think that is not that complicated to triangulate the numbers. But of course, it demands clarification on the sources and how we look at each of these components, right? So you have in Brazil, the supply data, let's say, what goes out of the production in the breweries. And when you look at this data in the year-to-date, we are gaining share, and the industry is performing relatively well. And then I'm not using the comps of last year here, but the year only.

When you look at the sales to consumer data, Nielsen, the industry on the quarter was also relatively good. Perhaps one would say under expectations versus the comps last year, but the weather that impacted Brazil last year was not really much better this year. And the economic situation in Brazil is still resilient, but it's not one at least on the middle of the year that was supportive for the overall consumer and consumption power.

And in this environment, the difference between production shipments and sales to consumer is the way that people ship and control inventories through the channels and the comps. When you look at all of that, so the underlying demand for the brands and the market share in the different sources is positive. It's being driven by our premium brands that are growing well ahead of the industry, but a very strong performance from the balanced choices portfolio that we have and the core. And the market share is very healthy.

Nielsen in production data also have a mismatch in terms of when you do the cut for the data, right? So a little bit of the Nielsen quarter 3 data is skewed towards the World Cup period. And therefore, in production would be more second quarter than third quarter. But at the end of the day, when you look at the accumulated of the 9 months and the cut only of the quarter 3 sales to consumer, they are both very healthy.

I think that as we look to the fourth quarter in Brazil, we will see a little bit of the consumer environment, on your question, improving. Because you are aware that we had the elections this year in Brazil in October, right at the first month of the quarter 4. And usually, during this period, there is more money into the economy. So people received some of the adjustments in the salaries and the benefits that go to the overall population. And we are now phasing from the winter period towards the summer in Brazil, where if all the forecast is correct, we're going to have a little bit of the bounce back from the El Nino that was more on the negative side from half year last year to half year this year. And that should be a little bit of an inversion now as we go to the summer in Brazil.

It's going to be a little bit hotter. It's going to be drier. We will see a little bit of better weather to the big regions in Brazil, especially Southeast and the Northeast regions in Brazil that should benefit for our industry from better weather than what we saw last year. So after that, then we need to see how the year ends and the next year starts to then measure how the consumer environment will be for next year. But this is for quarter 3 and what we are seeing now as we face from quarter 3 to quarter 4.

Our next questions come from the line of Robert Ottenstein with Evercore ISI.

My first question is on the cost outlook. It's changed a lot since the beginning of the year. So I was wondering if you could touch on the incremental pressures that you're seeing going into Q4 and '27? And how comfortable are you that you have the operating levers to deal with that environment and still hit your medium-term guidance? Maybe touch on what actions you're doing now to meet those challenges? So that's the first question.

The second question, a little bit longer term, is fairly recently, you've added Michelob ULTRA to your global brands. And I love to get a sense of a little bit more detail on the strategy there, what kind of traction you're seeing and reasons to believe that Michelob ULTRA deserves to be a global brand and can make a meaningful difference to the top line longer term?

Rob, Fernando here. I'm going to take the first question. If you recall, in the beginning of the year, we said that we are always fully hedged on the things that we can hedge. There are things that we cannot hedge, and we should have a cost more skewed towards the first half than the second. Then on our update on the last earnings call, we said that the non-hedged piece, we saw some further pressure. So our expectation is for the cost to be more balanced between half 1 and half 2. And I think this still stands. So we are seeing -- and this is what we saw in Q3 that costs were more balanced between half 1 and half 2.

Having said that, we have our proactive -- we've been proactive in our revenue and cost management agenda to make sure we balance the profitability. And I think Q3 clearly shows that. When we look for next year, we are not providing any guidance or any outlook so far. But what we -- if you look at the current market prices and kind of knowing that we have this 12-month hedging policy, so we are pretty much not 100%, but almost fully hedged for next year. You have some sort of visibility, and it's looking like more of a normal year. More to be updated when we have the final hedge, but it's looking more like another normal year with the levers that we have in revenue management, cost management, we should be able once again to continue being -- consistently delivering.

We don't have an outlook for next year yet. We are going to disclose the outlook for next year during our Q1 -- our full year earnings in February. But so far, looking more like another normal year.

Robert, Michel here. On your question on the global brands strategy and more specifically, ULTRA playing a role here. I think that one of the main things that we are doing and we communicated a lot during the Capital Markets Day is this idea of consistent compounding growth today while investing for the future. And we are investing in very specific platforms that we call growth levers that are aligned with the consumer trends that we see that are both relevant, but also global trends.

And one of these trends is what we call balanced choices. So consumers that love the category, that love the experiences around beer and want to do this regularly, more often, consistently, but they want to balance this with other choices and activities that they have. In this area, our portfolio has been growing way ahead of what we are growing on average or the industry is growing. And this idea of low calories, low carbs, low sugar and in some cases, as we said before, non-alcohol beers, they are leading this trend and reshaping in a way, the way that the category interacts with consumers and the way that consumers see our category. Because after all, beer is very social, is very enjoyable, refreshing. When you adapt the process and the formulation, you end up having less sugar, less calories, less carbs, less alcohol than other competing categories.

And in this sense, Michelob ULTRA is the most successful brand that we have in this portfolio. We don't need to talk here about the momentum in the U.S. and how the brand became the #1 brand, the fastest growing. We started the expansion where it was very logical, Canada, Mexico. But we saw an unbelievable opportunity to invest and align this with our mega platforms during the FIFA World Cup, and we made the push for the Americas.

So if you look at the quarter 3, 60% of all the growth that the brand had globally came from outside of the U.S. So during the World Cup, we said it was 40%. This quarter was 60%, which shows an acceleration and a long-term legacy that this investment will leave to the company because the brand across all markets outside the U.S. is either core plus as it is in the U.S. or it is even premium. So it's even more profitable on a relative basis than the price positioning that we have here.

And the momentum is huge. So you look at markets like Brazil, Argentina, Colombia, Mexico, the brand is doing very well and accelerating. And we are very confident that it is the right positioning, it's the right liquid. It has the right platforms. So it just connected now FIFA with NBA that Michelob ULTRA sponsors. So we can talk about the benefits and the key assets of the brand year long.

So it's a great brand, right at the center of a megatrend that is global for consumers. We are expanding now through Americas. This is working very well, and we will continue to do in a very organized and disciplined way, the expansion and the investments to grow this brand further. It's very incremental for our portfolio. Thank you for the question.

Our next questions come from the line of Mitch Collett with Deutsche Bank.

My first question is for Fernando, I think. So Fernando, at the Q2 stage, you talked about a relatively balanced year in terms of EBITDA growth from 1H to 2H. Is that still your expectation with just 1 quarter to go? Because it implies a step-up in Q4. And can you talk about the puts and takes as you see it for 4Q? I appreciate you just said that you expect COGS to be reasonably balanced.

And then my second question is a broader question on pricing. One of your bigger competitors yesterday talked about taking pricing below CPI yesterday. I'm conscious that you just said that it's going to be a relatively normal year for COGS, but ABI has always aimed for pricing to be roughly at CPI. Are you seeing any change in the industry pricing environment?

Mitch, Fernando here. Just repeating what we said in Q1, we said that this year would be more or less balanced between first half and second half. I think given what we are looking in the market, it still holds, kind of. Of course, you have puts and takes. But again, business is resilient, kind of we continue to be proactive in revenue management and cost management. So it still holds.

Mitch, Michel here. On the pricing part, I think that first and foremost, we stated this before, and there's no change on our view that we price in line with CPI on average. And we do this every year with a very simple calendar across the countries. And when we do that, we are always assessing, as I always say, the different realities across markets because we want to price with the right discipline and carefully balance the consumer environment, the competitive environment and the ability that our brands have to charge a higher price or a premium price in each and every market.

We discussed a lot during the Capital Markets Day, how much we are investing in capabilities, best-in-class capabilities. And one of these capabilities is revenue management. So I could talk about this, but I think that the results, they speak louder than that. If you look at the year-to-date revenue per hectoliter is up 4.3%. If you look at the quarter, was up 4.2%. We said that a portion of that is coming from health mix, which is part of our revenue management agenda, but the price part is robust and is earned given the quality and the investments we are making on our brands that they continue to grow participation, they continue to grow power. And of course, because of that, we earn the right for the premium price that we have in the market, but also to follow inflation.

While, of course, not talking specifically about any competitor, the industry overall tends to price around inflation. And I have said before, it's still the reality. If you look pre-COVID to post-COVID, the industry took a lot of costs and did not price it all into the price to consumer. So the margins are not where they used to be or should be if you just go back to before COVID. So it would be, I think, a little bit different to believe that the industry overall will continue to take more costs without passing on prices.

But of course, for you to be able to keep up with inflation, you need to have the right capabilities, and in this case, revenue management capabilities. You need to have health brands and you need to have these brands performing. And those two things, they come only with quality management and teams that have the experience and the ability to manage the brands and the business that they have. So I can't comment on the capabilities and the management teams of any other competitor, but we are very confident on what we are doing today. So we're going to keep up with our policy.

Our next questions come from the line of Laurence Whyatt with Barclays.

A couple of questions from me as well, please. Firstly, you've had BeatBox for nearly a year now. And so I just wanted to check in on the progress against your expectations when you acquired that brand, how it's fitted into your wider portfolio of the beyond beer portfolio and whether you think that portfolio is now sufficiently diverse to be able to deal with the continued growth in the beyond beer space, particularly in the U.S., but also in other markets?

And then secondly, I guess, a bit more technical for Fernando. Just noticed the SG&A line in Asia Pacific was quite a bit lower as a percent of sales in this quarter. I was wondering if you could just give any explanations? Of course, that division had a few challenges this quarter. But is there any specific reason why the SG&A line was quite a bit lower?

Laurence, Michel here. Thanks for the question. BeatBox, if you if you would like follow how we do the integrations of the other brands being Cutwater, Nutrl and now BeatBox -- after the acquisition, we always partner big time with the founders. They often stay in the business for many years with us.

And the idea of the year 1 of any integration is really a learning experience. And we get together with the founders. We learn about the brand. We learn about the operations. We organize with them, the integration of the key areas. And we plan for what we call the year 2, full integration of the commercial plans.

So BeatBox is going through the year 1 of the integration. And next year is the year where it's going to be fully integrated on the commercial plans, on the sell and resets with retailers. And probably, we'll take the stage in the U.S. on our meeting with our wholesalers, our [ SCO ] recall. And it's going to, for sure, have a big push from the team because we have opportunities in distribution, household penetration, innovation and probably pack and price that will be integrated into the commercial plans. So I think that's going to be a good addition for next year.

The integration so far is doing well, no surprises. And the contribution that we are looking forward for next year is the big thing. I think that when you combine the portfolio that we have today in the U.S. in beyond beer is a fantastic portfolio that will allow us to interact with a broad-based group of consumers, cover very well channels and occasions. And because of that, we are very optimistic about continuing to grow and further strengthen our position on this segment.

On Asia here, between Fernando and I, please add on, Fernando, if you want. But a lot of our expenses in SG&A in Asia are variable with volumes. So we've been, of course, because of the industry performance, adjusting this through the quarter. And I think that is just like linked to the overall industry performance because the expenses, they follow in a way, how much we sell, ship and execute on the channels. So I just think that is like-for-like.

Just to add on top of that, there is always the ongoing overhead management that we always do try to be more efficient, but it was mostly driven by sales and marketing.

Our final questions will come from the line of Olivier Nicolai with Goldman Sachs.

I got a follow-up and a question. But before I start, I was just wondering, what was the mix component within revenue per hectoliter in Q3? Is it similar to the 1% you had in H1?

And so the questions are -- on the follow-up, could we go back to the EBITDA decline that you had in the U.S. in Q3? And how much of a drag was actually linked to the extra marketing investments related to the World Cup versus the input cost inflation and transportation cost that you mentioned?

Lastly, on Brazil, taxation is apparently set to increase in February 2027, from what I have read. There is also an online gambling ban coming up. I was just wondering, how do you assess those two elements and the potential impact on volumes for both of them? And how much of a headwind has online gambling been historically in terms of share of wallet?

That was a nice buildup on the last question. I'll try to take the parts here if I can get all of them right, okay? So mix, a very similar contribution. We don't disclose each and every quarter, what is one thing, what is the other. We are pricing roughly with inflation. In a way you can say that 25% to one third of the revenue per hectoliter is a contribution from mix of premiumization, mix of the right categories. Think about RTD, non-alcohol and brands, okay? So 25% to 30% is mix, 70%, around 70% is pure price rate.

The EBITDA in the U.S., I think that we talked a lot about this during the call, and we even showed a little bit of this on the press release and the presentation. Delivery overall, very broad-based growth for the company, very solid. We are investing on our next phase of the 10-year plan. The U.S., as a host of FIFA, had costs linked to that. Mega platform, very important for the business globally, but also for the U.S. And this cost is a big component on the Q3.

The U.S. is also having costs related to unhedged commodities. The simplest one for you to understand is transportation, because of oil, diesel costs. It is a cycle of higher transportation costs on the U.S., which is not abnormal because every x years, the U.S. has these cycles of higher cost in transportation. So I think we are in the middle of one. In this case, is diesel oil-driven, and it is impacting the business because this is not 100% hedged in most of our geographies, especially in the U.S.

But other than that, business, normal course, gain share in total alcohol, gain share in beer, health growth on the key brands, leading growth in RTDs and in beer and in -- with #1 and #2 brands in beer at this point. So costs from FIFA, marketing costs from transportation.

When you think about Brazil, we talked a little bit about this overall consumer environment. So it's stable, resilient, but it's not at the same pace of other Latin American countries. It's a little bit under pressure. And the pressure comes from inflation, interest rates, and there is always something else. I think that gambling was a big discussion in Brazil. It was biting into the disposable income, especially for low-income consumers. It grew very fast and was impacting not only the debt that these consumers are carrying, but also the available income for consumption in general. It was not only beer, it was across all categories.

I'm not following this 100% close, but there was like a ban on this gambling that came before the elections. People are trying to recover their money that was into these platforms. And I think that the overall speech that you [ listened ] in Brazil is that, that was very important to recover disposable income and purchase power of the families because it was a little bit of control. And because of that, the government made the decision that they made.

On the tax reform, still very early. Things are evolving. We continue to say that, of course, any efforts to simplify taxes in Brazil are welcome. The watch out is that the tax burden in Brazil is very high. If you look at beer specifically, it's one of the highest tax burden globally. So we are following.

I think that, again, with the elections, there will be more money in the economy. With the gambling, if this is contained, there will be more disposable income. The tax reform is a watch out, but it's still too early. The overall speech from the government is a neutral tax burden when you combine everything. And if anything is beyond what it is the rate today, I would assume that the different categories and companies will need to price this into the final price to pay for that and to keep their margins under control.

So there's more to come. I think that on the back end of the year, beginning of next year, if anything is more supportive from the consumer standpoint, given the injection of money coming from the election, plus the control on gambling, but then the tax reform is going to be a chapter for us to discuss next year. Thanks for the questions.

Thank you. That 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.

Thank you. Thank you, everyone. Thank you for your time today and ongoing partnership and support for the business. And don't forget to drink some beer. Cheers.

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

Please welcome to the stage, Sean Fullalove.

Good morning, everyone. Welcome to day 2 of our Capital Markets Day. It was great to share ABInBEV 2 yesterday, some shared a few more at the bar afterwards, which was also fun. First things first, from the legal friends. On the screen here, you can see our legal disclaimer, again, which is available on our website and is also relevant to what we will share today. Everything that we talk about today that is not a historical fact. -- is a forward-looking statement, and these are not guarantees of future performance. As a helpful reference, we also have this up in 20-F, which you can refer to on our website, and that also contains a discussion of our risk factors including geopolitical and economic uncertainties.

So yesterday, we heard some reflections from Michelle on the journey of the company. The progress that we have made in executing our strategy and our focus as we have shifted into the reignite phase of the 10-year plan. Today, I'll get some perspective on our category, our footprint and the unique leadership advantages of ABI. And then Marcel, Lucas and Nick talked about our progress and ambitions in the first 2 pillars of our strategy to lead and grow the category and digitize and monetize our ecosystem.

When David showed us some real-life analytics products that are embedded in our business today that are driving meaningful value across both growth and efficiency. And then we closed the day with Brendan and Karl, who showcased how our global strategy has been executed right share in the U.S. market. driving market share momentum across total alcohol as we continue to rebalance our portfolio towards the growing segments of the industry. Importantly, we also took some time to experience firsthand our capabilities, innovation, and the cultural relevance of our brands, right share at the Arconic Saint Louis brewery.

The opportunity to socialize swap perspectives, share AB InBev together is truly a great privilege of being in our category. And as you can see here in our photo colas from day 1, we also had the early morning spinning class. We have Fernando put me to shame and probably the less said about that, the better. So moving swiftly along. Today, we're going to start with Michelle who is going to talk a little bit about our culture and the 10 principles of the company.

Then Simon Westenberg, our Chief Sales Officer, here in the U.S., is going to showcase our route-to-market route-to-market and sales capabilities. Then we're going to head for a market visit around the states area to see how our strategy and execution is coming to life with our customers and consumers.

So let's start today with culture, and I'd like to invite Michel to this stage. Michel, over to you.

Hey, good morning, everyone. So I hope you enjoyed yesterday that you had a good time at the brewery. I always tell people, it doesn't matter how many times I go back to that St. Louis brewery is always different, it's always rewarding and it's fantastic to see everything that is happening there, but connect this with the culture, heritage and the history of Houser Bush. So we start today talking about culture. And as we put together the program for this 2 days, of course, there is always more things that we have ENHANZE and in the shelves that we want to fit in the time that we have together because it's just today, we need to make choices on what topics we bring forward what conversations we believe will be more important to you.

And in talking ShongFernando and I, we thought that a refresh to you into the 10 principles and the culture and tell a little bit of what's happening and how we are evolving this over the last 5 years would be a good kickoff for the day to -- and I think that we are on the topic because yesterday through the conversations we had during the visit to the brewery or dinner many people asking me questions about the culture. And it's a frequent topic that time to time when we are traveling visiting investors, when they come to talk to us, people always have some curiosity about.

So the next 45 minutes, give or take, will be a little bit about this culture. And I will do this in a way that they do internally. So I travel all zones that we have once a year. We have early event that we call LPC inside the company. It stands for our leadership performance and culture or as we like to call now leadership performance in cheers because it's always a very good opportunity to meet people and talk to them.

And the way that they chose to talk about culture with our teams is by showing them examples, things that we do, and they are in line with our culture. Things that they -- on a day to day as they make decisions, they bring the culture to life. And this page is a very important one because it's one that you'll see in all offices when you visit an ABI office in all our breweries in all places, we always have this 10 principles around the office and where the management meets where our teams come together.

Two messages here on this first page before we go through all of them. The first one is that we have decided on the last 5 years to bring forward on a big way this idea of ownership. For those that know us for longer, you remember that we are owners was somehow part of one principle and was described within the principles. And we think that this is so important on our culture for our company that we want to start with this idea of ownership and explain people why this is so important for us.

And in a nutshell, if you think about our ownership structure, so we have families that for centuries they are around the business as investors as owners. We have, on our controlling group, a group of shareholders that they are in the business for the very long run. And the company itself was built and we teach people in a way we coach people every single day from the day that they start in the company.

To the day that they are performing today and in the future that this idea of treating the company, as Zone is one of the most important things for us on our company. And our compensation system, there was a question yesterday, we reinforce the culture of partnership because a good portion of the management compensation is linked to shares, RSUs, PSUs and therefore, the way that the company performs, impacts directly the management of the company, their wealth and their future.

And then when you look at the 10 principles, owners who dream big, owners who focus on superior results, owners who lead by example. Equally, for those who know us for longer, we will see that this is a simplified and more straightforward view on our principles. So at one point, for those that follow this through the years, those were very worthy principles. And sometimes, we were trying to accommodate for a huge amount of things in each and every principle.

And what we saw was a little bit of a dilution of what the understanding of these principles were. And we decided to simplify as we did for many other things in the company, leave this very actionable, so people can clearly understand what these principles are about and when we go talking to people, of course, we explain a little bit, but we give examples, right?

So I'll give you here 2 things: that I think that can give you more the sense of that. So when we talk about focus on superior results, we don't want to have another 35 words to describe what this is. We want to tell people in a simple way that we can't do everything, neither we can be everything for everyone. And therefore, our choice is to look at our business benchmark ourselves versus other companies and work as hard as we can to do better today than we did yesterday. And that's it. So everything else would be a complication.

So on your Kenny line that you are visiting yesterday, our operator knows that he needs to have a better view that if can take more production out of that line -- he's making a contribution for a future of more cheers because for more cheers, we need more productivity. When you think about the idea of attracting and developing great people, so we tried to write in many, many ways. What does it mean? In simply put, great people are the right people for ABI that can produce great results and leave an uplift this culture each and every day.

So you don't need more description because people are people and great people are those that are able to translate what they have and what they can put together in results, and they need to do this with their teams and in the right way. because as principal #1 at, we do not take shortens. So the idea of putting the principles in a simplified way, actionable was to make sure that across the globe, this can be translated in a simple way and that the 130,000 people that we have, they understand what we stand for.

It's never intended to be better than anybody else is never intended to over select people, but it is important for us to be able to operate at a global level that we have a set of principles that are very clear for everybody, and they work as a group to bring people from Africa, from Latin America, from North America together under the same company. Then if you go through the principles, as I said, the way I talk about them to my teams across the globe is with examples.

So what does dream big means? And I will put 2 examples here. So on the left, I find this a fantastic example of explaining what dream big means because who would think that a small brewery from Belgium. -- or a small brewery from Brazil would have a dream to become the biggest brewery globally, but more than having the drain would effectively commit and work relentless to achieve that. Many steps on the way and ABI was built. But it's also an important pivot on the history of this company coming back from this acquisition and inorganic strategy, as I said yesterday, the difference in the words very small.

The work to be done huge to transform this company from a company that was built and managed with an inorganic strategy. to become an organic compounding machine that can grow over time with smaller deployments of cash with higher returns on this growth and fully maximizing this footprint that we built. And interesting enough, not you here, but I have heard from people when we decide to do that, questions like why even bother to try -- the only thing you guys are good at is cutting costs. You won't be able to build brands. You guys are not good at marketing. So we have heard all of that.

And part of our culture, it's benchmarking, is learning, is working hard, and I always tell people. If 1 day, you doubt ABI skews -- we're going to be very open to discuss and listen. But one thing that I always tell people don't doubt our view because these people, they can really do things -- and once you set the direction and people understand the value of what they are doing, they will usually becomes stronger than the skill.

And as you saw, yesterday, and we will see today a little bit more. We can also improve the skill, and we are working very hard to improve our own capabilities. But I love this example, 2 different times, 2 different stories, 2 different outcomes. And you see this when you said consistent, compounding organic growth, the reason very simple.

One year is more difference. 2 years, good difference. 5 years, a meaningful difference. By consistently compounding organic growth and the size that ABI has today, as we translate this to EPS, our returns -- they become way better than the CPG medium than the top quartile, and they start to become differentiated. And if we can continue to compound over time, -- that difference will become even larger. And that is what is behind our pivot from inorganic to organic.

It is our ability to consistently compound growth over time and translate it to superior earnings and shareholder returns. Talking about superior results, we shared this yesterday. So as we continue to benchmark and as we continue to look at each and every opportunity inside the company, of course, we share all this challenge with our own teams.

And we want to have not only superior organic growth, but superior translation of this growth into our financials. And these KPIs are further breaking down in many, many areas where we want our teams to improve their own performance versus last quarter, last year, versus the peer set, and they have the responsibilities as owners to build the plants, to learn what to do, to make decisions with the investments and resources that they have. And this translates in many different ways.

So one story that I love sharing for our team because, again, it's about consistency. It's about compounding over time is about reading trends and deciding when to further accelerate. Think about this, Michela ultra, a brand that 20 years ago, was very small and just a small player in the largest profit pool for beer globally. And today, in less than 20 years, becomes the #1 brand in the U.S. is also the fastest-growing brand in the U.S. and is now a global brand that we are expanding across Americas, and we know that there is further potential for this brand.

So consistent, compounding built over time, always contemporary. So we don't get ourselves into the traps of the past that try to define the brand just in one space, but it's a brand that proves what superior results over time is. If you think about leading by example, and taking accountability. This is a very important principle for us as we talk to our management team.

As we discussed with them the choices that they make and we give them time to leave with the consequences of that. As we measure the results and we discussed the returns on the investments, the returns of the decisions that they make, what we learn with our own mistakes and what we want to replicate. And I always share this example because I think it's a great example, especially for the young leaders that we have in the company.

And this today looks very obvious that we are investing, and we are driving growth with no alcohol beers, but believe me, that was not obvious at all. I myself, I have participated in many management meetings inside the company, Board meetings where we had this mix of blue and red teams trying to say whether we should invest more, where we should be selective, not waste time and interesting enough, the idea of -- this is too small People don't like it because the net tastes good. It doesn't make sense to have beer without alcohol. This team won many, many times.

And for years, we watch this movie, not participating, showing little to no interest. But there is always a site companies, people that have different ideas. So right here in North America, a group of people had a different idea for that. And together with Blue masters, people from the commercial team people from the inside areas, even though it was not a big priority for the company overall, we thought that the beer could be better, and we kept working on the product and then our colleagues from Belgium, they found the technology that was just incredible that makes the non-alcohol beer taste as good as any regular beer.

I heard a lot of comments yesterday on triple Carmila, right? Think how hard it is to make a triple without alcohol that taste fantastic. So this is what is happening today. Our product Innovation was a big breakthrough. But it's still the pace was not good enough. The focus was not big enough. And during a cold winter in New York, I remember this, Marcelle, Padelpeople that are here in this room, they came to me with an idea that 1 could think that was crazy.

Crazy because we had already closed all our budgets. Our budgets, they closed somehow in October, right? Crazy because no beer brand has ever sponsored the Olympics. But we thought that we had the chance that we had an open and without thinking about budget without thinking that this could not be possible. We just decided to try and to go after that.

And we, on this idea of leading by example, we not only saw the opportunity, but we committed to the opportunity. We invested big. We worked very hard to accomplish in 6 months what other people take a year or 2 years planning, which is activate an Olympic game. We decided to go global to each and every market. making an effort. And in a period of 3 to 4 years, we came from basically being part, but not really being there in this segment, to lead this segment globally.

And today, there is no one country, one person in the ABI team that doesn't believe that we are just at the beginning of what is a massive opportunity for our company, but was necessary to commit was necessary to take the leadership, was necessary to invest ahead of time and then put the team to play. So across the globe, everybody has targets on that, but more people have a true commitment to lead in this segment. And this is really working, and we continue to shape the category.

And the more we do, the more we learn that the opportunity is really big. It's an opportunity for more occasions for more consumers to make beer more available so we can continue to drive this incredible category. This is another principle that's very relevant for this because we often say that we have many competitive advantages, including our people and our culture. And as we work to develop people, this is always a very important part on each and every conversation that we have with our teams.

So we have several ways in which people can access ABI as a platform. This starts with internship programs across the globe. We have what a lot of people know, the global management trainee what we have from 150 to 200 people coming into the company each and every year, 1% of our population is made of what we call partners. So these people are the people that they reach partnership level and then their compensation change, their participation on these events change, but moreover, their responsibility for the future of the company, also changed.

And then, of course, we have our senior leadership team, 120 people, 130 people globally. And the representation of this team here with the senior management team that you are having the opportunity to meet some of them here this year. And it's everybody, responsibility inside the company to make sure that we are improving the quality of these people each and every day.

So people often ask me and someone asked me this question yesterday how I manage my time throughout the year. And I always say that 20%, 25% of my time is dedicated to what I call governance. So we have a Board. We have a senior management team. So we need to make sure that the companies work in the right cadence I explain another 25%, 30% of my time in what we call long-term planning. So from the planning for the 10 years, the sessions on innovation how we translate these plans for each and every BU in which you operate. That is 1/3 of my time, give or take, which is visiting areas seeing the markets, being close to retailers, consumers and 20% of my time is people and people matters, right?

So 10 days ago, 2 weeks ago, my entire senior leadership team spent a week remotely. We're running Mexico this year, reviewing the talent bench of the company. and we were reviewing people by people for 3, 4 days to make sure that our people have the right skills that the right resources are in the critical missions that people are developing their careers at the pace of their own talent and where we have gaps that we don't have the right people, that we are going search, recruit, bring people along to reinforce the bench of the company. This is a machine that works for many, many years, a machine that people like me that's over 30 years in the company. I, of course, leave it through that benefited from the opportunities that the company gave to me, and we continue to run this machine in a very old way like all across the globe.

It's crazy to think that there were more than 2,000 meetings like the 1 I did with my team across the company globally because every country, every region runs the same process -- and this all builds up to the way in which we manage the company pipeline across the globe. But people who work with us are not only the people that we have inside the company. I think that a massive change that happened in the last 5 years is how we are bringing even more people to help and to support our initiatives. And we are very proud about the partners that we have working with the company. Those partners are committed.

Some of them come and talk to you here as we are running our programs, and we care a lot about these partnerships. We want people that want to work with us, not because we have great brands, big budgets, a big company, but people that are connected toward the dream and ambitions that we have are. So I participate personally in each and every negotiation of that. Of course, I'm not often talking about the numbers. What I'm doing is cultural check. We have Marcelo and I 1 thing that I call chemistry session. So we want to get a big name to work with 1 of our brands. They make the contact. They talk about the budget.

I talk about the culture. I talk about what the brands are, what we want to achieve I want to feel that people are committed to what we want to do, that we're going to be able to work together, that will have a true partnership that will last. And in this process, sometimes you have great outcomes because I have no doubt that I'm talking to someone that we will represent the company. And sometimes you have people that they do not have a real interest on the brand on the category of what we are trying to do.

And in this case, many times, we decide not to partner with. But this is not to be understated. The quality and the commitment of the partnerships that we have across the globe is second to none. Those are great people with great assets with great reach that can make a company like ours bigger more relevant, more present in consumers' lives each and every day. And we are very proud of the partnerships we have. Principal build brands that consumers love.

Of course, you all remember, this is a principle that was not here before. It's a principle that was incorporated on this change. I will share this video with you because I never get tired of watching this video that says a little bit of what we mean by Love and why we measure this number of lives all the time.

[Presentation]

Those are the beer lovers, and we start tracking this. We are tracking each and every quarter, each and every year, how many people across the globe declare that they love one of our brands. And this is a very important KPI on our flywheel because everything starts there with people who are beer lovers and connect with our brands.

In a very interesting way, many times people ask me how I want people to remember the time in which I was at ABI as an architect as an engineer, as a financial engineer. And I always tell people that I'm a very simple person and they love beer. So on people to remember that I'm a beer lover and there is no better manifestation of this low than what we do in the care that we have with our brands, how much we invest, how much we care about the details with which we build these brands, the experiences that people have when they are a bar and in stadium, at home, and they are enjoying with their family, friends, these moments that they work very hard to have. So nobody needs to ask me this anymore.

So I am a beer guy, so if you want to remember me at any time, thank you for that. I'm a beer lover and I love our brands. And I've been dedicating 30-plus years to make sure that these brands show up in the right way, in the right place, in the right moment for consumers to have the pleasure of enjoying a cold one and celebrate their great moments. But these people, they are the real deal for us.

And building these brands is a mix of many things. Sometimes, it's pure talent, sometimes is a little bit of lucky, sometimes it's talent, lucky and investments. And when you get a brand right, it's fantastic because everything works better for the company. Those brands they grow. Our customers like us more, our consumers interact more with our products. And this is a history that I love is Stella pure gold in Brazil a line extension of Stellar tote that taps into these trends of low carbs, low calories, gluten-free, what we call balanced choices.

I could tell you here four hours, everything that we learned as the team there decided to build this brand and the way that we build this brand. But I think that listening from a customer that centers a nodule. In Brazil, people do a lot of old dues on WhatsApp. Talking about this brand, we will say way more than what I could say. So I'll try to play the audio here to you. The audio is translated from Portuguese to English. So the translation can be a little bit lost, but I saw that we have some investors, analysts that speak Portuguese are Brazilian, so pay attention on them, and you see that it's way funnier than what you can get in English, which is already good enough, okay? So let's go.

[Presentation]

Okay. So this is a point of sales sending a message to a sales supervisor talking about a brand that is filling the momentum, and this is what we call consumer love. Brand that represents a lot to people with platforms that are very premium with a product that's very modern that fits for what people want now. They want to socialize. They want to enjoy. They want to feel good about not indulging too much because tomorrow, they need to go and continue to do their activities that now have many more things on the day that they used to have in the past. -- because that is the gym that is the work that is meeting people that is watching the series and that is socializing.

And as we continue to improve our portfolio evolve with innovation, we are finding more and more cases like this of making our product more relevant today for the consumers of tomorrow. So grow with our customers and communities, there is no example to me that speaks louder than this.

Nick was telling here yesterday, the very young insight in which this was built. It's this idea that the small retailers across the globe are underserved. The mall retailers across the globe are underserved. And we are one of the few companies globally that serve them with a very high service level. They are very important to our business. In a world where people say that Posiet is very important, that 24/7 availability is very important. The knowing your customer is very important.

The small retailer is right there in the neighborhood, in the corner of the street, but very few companies we're bringing them the best prices, the best product portfolio, the best credit, the best marketing activities, the best service. And with this, we were able not only to make our business better and more present in this retailers' lives but to bring along other partners that start to treat them as very important customers.

And as they drive our business improves. As they drive, their committees improve. As this grows, more partners have great results and invest more with us to improve the lives of these retailers. Over the 30 years that I'm in the company for many, many years, each and every year when we do our plans on the SWAT, we would say, small retailers declining volume, big retailers growing relevance. And in the last 5 or 6 years, the more retailers grow at the same pace or faster than the small retailers because their business is stronger.

Meaningless to say that's very important for us, the capillarity of our distribution the availability of beer. People don't want to travel 2 kilometers, 3 kilometers to buy beer. They want to go across the street or even order on that delivery of [indiscernible] to receive beer in 15, 20 minutes, cold preferably. And this network serves us for all for being there when people want to walk and buy or to be the base in which the delivery and Tada grows.

So this is a great example of thinking about our customers and developing solutions to make them stronger, and therefore, our business will also grow. So simple and scalable solutions. I love this example. And this resonates a lot with our teams. So instead of many people thinking about small marketing activities, having the opportunity to assemble and put to work these mega platforms unleash the real benefits of our scale.

As I always say, very hard for one brand on a given country to be the sponsor of the Olympics to be able to have Olympics and FIFA, but because of our scale, because of our 50 mega brands because of our playbook to activate that, we can build the calendar that our teams across the globe can activate.

We can measure the ROI of these initiatives in a centralized way with great benchmarks across all countries. We can buy materials cheaper because we buy at scale. We can partner with people to activate these platforms and multiply that effect across many brands into our system. And because of that, these mega platforms are even more important today for us than they were yesterday.

And they are growing in relevance in the way that we concentrate our market investments in the way that we build our brands in combination with relevant cultural moments for our consumers. We pride ourselves of managing our costs very tightly. And while in the past, a lot of people only saw this as people cutting costs to improve margins.

Fernando, we'll share some examples of what we are doing and how serious we are about managing our budgets. But the way I speak to my team, is keeping things tightly, so you can own your own decisions. You can have the privilege of reinvesting money when opportunities arise. And let me give you here one example of that.

So you all asked this question, how sustainable it is, the levels of CapEx that we have today? How were we able to reduce CapEx from $5.5 billion to $3.6 billion, while our revenues are growing, our volumes are growing, our portfolio continues to develop. And I keep saying that here is a great example of this ownership in practice. Not the ownership of the budget. So the bigger my budget, more of our owner I am, but the productivity and the returns of this money. The questions are on at asks before investing each and every dollar, the best practice and the long-term planning that we can do.

So we build the right brewers for 10 years, not for next year only. If I know that I need 3 breweries in the next 10 years, I can then negotiate harder with the suppliers because of buy everything, the 3 at the same time, not one by one. The way that I coordinate my supply chain with a long-term perspective, so we don't need to build the same thing 2 or 3x.

All of that allowed us to find billion. My speech to my team, that's the easiest one because it is the money that we already earned is already in our pocket. It's just hold this money. If you need to earn this money again, selling more beer, raising prices, getting more consumers, this is way tougher. But by doing that, we are able to go and get the Olympics. We're able to go and invest in Champions Lake.

We're able to get this money the same money to work harder for us. because now is working in the benefit of our brands in making the lives of our consumers, one in which they can enjoy more things. And the ability to save in 1 hand and invest in the other hand is one that makes you feel good about the efforts you make each and every day, okay?

So thinking long term, Principal #9. This is another example that I love, and I often give this example why it's so important to do a plan like our plan, the 10-year plan? Because you can see the trends for consumers you can project implications of these trends, you can foresee the creation of markets that yesterday were not part of your business.

And you look at that when we start talking first time 2017 about this idea of beyond beer, okay? So this is something that we created. People can call TDs mixed beverage, whatever, we call Bioneer. We saw a trend with consumers, consumers that were not better, consumers that are more swifter consumers, that they were interacting several products, trying to find a brand for them to call their brand, a product to be their product of choice. -- not once, not twice, people said that this was not a strategy that this was dilutive that these products will not work Nevertheless, we built a business of $2 billion and growing in less than 10 years.

Today, we have a global portfolio. of bond beer brands that has been deployed and scaled across different countries. And every time we do, the feedback is the same. More consumers, more occasions, incremental volumes. But you never do that if your horizon was just next quarter or next year. You had to think long term and where this portfolio can take you through.

As Brandon was sharing yesterday, fastest-growing spirits brand in the U.S. They are the case that we have only 3 brands. They just get water neutral and bit box. Top 10 spirits brand in the U.S., selling 3 brands only. investing in 3 brands only using the capabilities that we have as you saw yesterday from the same brewery, from the same wholesaler and mostly same retailers. 7% growth on a year-to-date.

In the last principle, as we close here, so never take shortcuts. This is very important for us. because there is always an easier way to go. There's always the temptation of doing something that sold for tomorrow, very few people, very few people have the courage to say no to stick to the long term with their own ideas to do something that is harder and takes longer but we'll get you to a better place than you were if you would take the shorter and the easy decisions.

In this case, the example that I want to give you here, I think we are in the U.S. is worth sharing that. Go back to 2017 and think about how many times One had to explain what rebalanced the portfolio was. And why we should build the brands of tomorrow instead of trying to close the gaps in decline of the brands of yesterday. Why invest in RTDs when a lot of people think that this was not a strategy? Why to dedicate time to a value brand like Busch when BudLight was not doing well.

And when you look at this business today and the business that we had 5 years ago or 10 years ago, as Brendan said yesterday, it's a very different business. This portfolio today simpler, growing more relevant to consumers, opening up the spaces and occasions that we have never had before. But yes, unfortunately, we are never able to solve in one quarter, the U.S. problem.

We had to commit for 10 years of consistency of hard work and of believing on what we were doing because the temptations, the incentives to take shortcuts, even they excuses, they were always there. And again, people, most will never remember that it took us 10 years before we were able to get half of our portfolio as we have today in growing areas of the industry.

And with this growth, market share comes, the engagement of the team comes, the engagement of the wholesalers and retailers comes -- and then you can go back to be the company that on Hauser Bush has always been in the U.S, okay? So it was a quick conversation. I know that you might have questions later. We thought that would be important to spend some time talking about our culture because as I say, we've been working extremely hard to build competitive advantage and best-in-class capabilities.

But underneath, behind all these capabilities, that is this culture, a culture of learning, listening, work hard and deliver superior results. This is a durable culture. It needs to be nurtured and that's why I spend so much time traveling the world and talking to our teams about that, but it's one work that's worth because this makes the company durable together with teaches culture and together with the talent that we have in the company that keeps on growing and developing with us, okay?

Thank you. I will hand over back now to the team. I think that we have Simon, if I'm not mistaken, coming and explaining the market visit. Simon?

All right. Good morning, everyone. My name is Simon Wuestenberg. I joined ABI 20 years ago and for the last 5 years, I have had the tremendous pleasure of leading sales for the United States business. With my team, I also have the pleasure of taking you all on a market visit today. But before we do that, I thought it would be a good idea to give you all an update of our route to market in the United States, how we approach sales and some of the capabilities that we have built to help us win.

It's clear. I think you've seen that yesterday that the United States has unique aspects to it. As Brendan shared, our volume goes through wholesalers that are independently owned businesses, meaning that they make their own decisions. We have alcohol beverage laws that prohibit us from making payments to our retailers or incentivizing them for behavior. And that's true whether they are large chains like a Walmart or a 7-Eleven or whether that's your local convenience store or the corner bar.

All this brings complexity into what we know is a highly competitive market. However, we have built a sales strategy a sales structure and capabilities that allow us to win within this reality. And I think that the results show that this is working. We're now consistently growing market share, not just within beer, but in total alcohol beverage and we are leading growth in the industry. So before we head out on our market visit, I wanted to touch on 3 main points, and let me start with our wholesalers.

Our wholesalers are the very important second tier in the 3-tier system. We work with just under 400 independently owned wholesalers for whom our brands typically represent the large majority of their business. These are local businesses with exclusive territories, and they have the warehouses, the trucks, the sales teams. And our relationship with them is not transactional. This is a long-term partnership that is focused on mutual growth.

Together, our wholesalers deploy around 10,000 sales reps, and they call on about 0.5 million accounts. On average, we call on each of these accounts just more than 1 time every week. We then partner with our wholesalers to apply this sales outreach in the most optimal way to grow our joint business. So our wholesalers have exceptionally strong relationships in the markets that they serve, and we then equip them with the tools to out-execute their competitors locally. That ranges from tool kits to activate our mega platforms to an advanced and a fully integrated sales tech ecosystem.

We developed that technology, working closely together with Nick Caton and the Global B team, and it allows us to blend proven global solutions with a deep understanding of the unique 3-tier system. And the power of that digitization really comes to life in the 350,000 independent accounts that we call on. These are accounts where decisions get made store by store bar by bar, these decisions are made by the owner or by the manager.

And in the last few years, we've transformed how we prioritize our efforts in these accounts, right? What are the most important accounts to focus on. when we're in these accounts, what are the -- what is the next most important thing that will impact our performance? And how can we help the sales rep get things done more efficiently. Our technology today is fully adopted by our wholesaler system and it helps answer those very questions.

I'll give you an example. Today, just about all the execution priorities that those 10,000 sales reps focus on are defined through an advanced AI model. This model digests the tens of thousands of data points that we have for each account, industry, sales census, survey data. And so it basically reasons like someone who knows a market really, really well and can do that at scale with incredible granularity. It then recommends the highest impact actions in each of these accounts.

And these objectives consistently outperform human target setting. Now that matters out in the market. Yesterday, Karl showed you the gap between high and low share markets for Mickelepultro and Busch light. This market share gap is equally reflected in execution as well. and our technology now helps us close those gaps by deliberately prioritizing the highest opportunity accounts. These capabilities are also helping us rapidly expand cut water space and distribution.

And we all know, cut water is a brand where we are still in the early stages. And also here, -- our tools help our wholesalers focus on the biggest opportunities for expansion in their respective territories. So these are just 2 examples of how our tech capabilities now will allow us to identify and localize opportunities to accelerate our performance across the whole portfolio. We also deployed base and even if adoption is still building what we've seen is very strong growth over the last years. NBs connects flawlessly with the other tech tools that I just mentioned. So it also helps our wholesalers get things done in their market, resulting in superior performance.

Now it speaks for itself that this partnership and these capabilities are easily flexed to win within beer and mall-based beverages, but they now do more than that. They help us lead growth with our spirits wine and now energy drinks. Our wholesaler partnership has proven to be ideally suited to not just compete but to win.

So we are very connected to our wholesalers. And together, we get it done. Over the last few years, we have significantly improved our sales outreach, and that has translated into a step change in the execution of our brands. and we enjoy working together as well. Brendan mentioned it, our wholesalers have given us the highest marks ever in their latest voice of the wholesaler survey. So we feel good about how we're working together -- and I can tell you, we enjoy winning together. The second point I'd like to touch on is chain retailers or key accounts. Think of national chains like a Walmart or local chains like you'll see in our market visit today like Snook.

Chains are becoming an increasingly important part of the market as more volume shifts into larger and more consolidated retail groups. Now winning here matters for a few reasons. They consistently outperform the rest of the market. They premiumize faster, and importantly, they set the standards for the full market. Decisions here are made centrally meaning that if we get the sale, it comes to life across dozens, hundreds or thousands of stores. And these customers are sophisticated. They have high expectations from us as we engage with them.

And what makes the U.S. special is that the chain universe is still highly fragmented. That means that we call on hundreds of chain buying teams. So winning with key accounts in the United States is not just about hypercare on a handful of accounts, and that is why we have built an expert key account and category team that is designed to operate at scale, and it has been pretty successful in doing that.

And that matters because we play a very special role for our customers. Beer and beyond beer are the second largest category in food and beverage. And obviously, we lead that category, not just in size, but with a rebalanced portfolio anchored in today's growth segments positioning us as the key supplier to maximize for growth.

We helped double down on that growth with a robust customer capabilities that we've built across category management, revenue management and trade marketing. These capabilities, all have 1 thing in common, and it is that they are insight-led, deep insight in the consumer, in the shopper and how they engage with our category. And again, whereas these capabilities were very beer forwards that first, we now bring the same level of expertise across total alcohol beverage.

And the biggest transformation for us probably has been around category management, where since 2018, we have overhauled how we help our retailers find category growth. And last night, you obviously visited the pinnacle of that effort at the Vault. But the real hero of our category work is not a building. It is our ability today to bring objective strategic views on the beer and beyond beer categories to all of our chain customers together with clear tailor-made recommendations on how to win within this critical category across the shelf, across the store floor across their digital channels. And this is working. You heard it yesterday.

As we strengthened our capabilities, we went from being the category captain for 50% of the industry stores and dollars to now over 70%. And more important than that 70% number where we are the captain, the industry consistently quarter after quarter outperforms compared to where we are not. I think that's a great example of how our transformed customer capabilities helped drive results at scale. The third thing I would like to touch on today is how we are able to now activate our mega brands and platforms locally and at scale. And a great recent example is the FIFA World Cup and how it helped us accelerate MikelaPultra by combining a robust media plan with a message activation on the ground.

Of course, we activated the 11 host cities from stadiums to key neighborhoods with fan fest and watch parties across hotels and stores and bars. And of course, we worked with our chain customers to roll out customized FIFA World Cup plans fully integrated from their store floors to their digital channels, getting as a record share of ads, a 20% increase in display activity and dedicated brand pages on their loyalty apps and websites.

But where the new power of our system now really shines is in the on-premise. Miklaultra was already by far the #1 brand in the on-premise. But with the FIFA World Cup, we increased our distribution by 13%. And we didn't stop there. Together with our wholesalers we executed almost 40,000 Michelob Ultra soccer activations where we had teams engage one-on-one with more than 2 million consumers, giving them the opportunity to win tickets to games, to win Miklaultraswag and where we put beers in hands. So in this example, for us, the FIFA World Cup was not just about the stadiums or even the whole cities.

With our wholesalers and our retailer partners, we were able to bring this mega platform to consumers across all 50 states and meet them where they are. whether that was in a downtown Boston, a Scottish fans through a big party in Hispanic grocery store in California, a watch party in the main, Iowa or folks watching the game in a cowboy bar in Wyoming. We showed up resulting in Mikulapultra accelerating not just in its strongholds but posting strong growth nationwide. And so far, we've been using this muscle on Ultra and Stella but light and in 27, we're going to be bringing this to all of our mega brands because this is what our system can now do.

Taking the biggest platforms and making them local, relevant and scalable. And you can see that right now, by the way, with our football season that just got off to a hot start America's #1 passion point where we'll be doing almost 30,000 activations.

So if you step back, the U.S. sales story is about how we connect the dots across the 3-tier system so that the right things happen in stores and bars. Over the last 8 years, we have rebuilt the sales strategy, the structure and the capabilities that allow us to put numbers on the board in beer, in spirits and now also in energy. And we do that by partnering closely with our wholesalers by ensuring that they have the tools to win in their markets and by championing the category that we lead with our retailers. And we are now bringing our mega platforms to life as we build our mega brands at an unprecedented scale store-by-store, bar by bar, meeting our consumers where they are.

I am incredibly excited to show you what that looks like in the market today in our hometown. So here is the plan. If we can keep the pace Together, we're going to be visiting 2 grocery stores, a convenience store and a bar that will give you the opportunity to touch and feel every channel. Now as you probably noticed traveling in, there are not a lot of stores here in the downtown area. So the ride is to the first store will take around 20, 25 minutes.

During that time, you'll see a short video for me with more context on the St. Louis market and what to watch for as you're out in a trade. So from here, we'll break into 8 groups, each led by a member of my team. Very practically, you all have the number of your group on your batch. The ask is that we all get up, we go downstairs to the ground floor -- there are 8 buses waiting in front of a bus, someone's holding up the number of that bus and you just go into the bus that's on your batch. That's fun. Cheers.

[Break]

So welcome back from the market visit, hope the traffic wasn't too bad getting in, and you manage back in time for some lunch. I know we've had some conversations with a few people where their flights are a bit earlier. So we're going to try and condense a little bit the schedules so people can stay for as long as possible. So we'll make the Q&A maybe a little bit shorter. And I think we'll end maybe 10 or 15 minutes earlier than we originally scheduled, so we can try and have as many people stay as possible.

So thanks very much to the market visit leaders for hosting us. I really appreciate it. I know for my van, we had many interesting conversations with the different outdate owners. So that was great to see. I'd also like to welcome back the webcast audience, if you still with us. I hope you enjoyed the 3-hour break and back with us now.

We have 2 more sessions or 3 more sessions before we let you leave to catch your flights home, or in the case of some of you, I think you're hitting on a grand tour of the U.S. and other Capital Markets Day, so I hope you enjoy those as well.

So we're going to start with Fernando, who's going to talk about the third pillar of our strategy, optimize our business. So Fernando, over to you.

Hello, everyone. Thanks for joining our Capital Markets Day here in St. Louis. It is a great pleasure to welcome you all here in person, and thanks to those taking the time to join remotely across the various time zones. We always learn from talk with you at these events, and we really appreciate the time. Sean, where are you, Sean? Sean has given me the [indiscernible] task of being the final speaker on day 2 after lunch, too early morning spinning classes and a market visit. So once again, I appreciate the vote of confidence, Sean. Thanks.

So the presentation yesterday we brought to life the first two pillars of our strategy. So lead and grow the category and digitize and monetize our ecosystem. Then we had the brewery tour and the branded merchant dinner last night, along with today's market visit. I believe that gave you an opportunity to see this strategy in action. Now I will take you through the third pillar of our strategy, which is optimize our business. This session, it brings together how it translates our strategy into financial performance and long-term financial returns and long-term shareholder returns.

So let's get started. So quick introduction, I'm Fernando Tennenbaum. I'm AB Bev's Chief Financial Officer. I've been with the company for more than 22 years across different financial functions including investor relations, treasury, M&A. And just prior to my current role, I was the CFO of our publicly listed subsidiary, InBev. The goal of optimizing our business is simple. We want to maximize shareholder value over time. So every investment, every operating decision and capital allocation choice, we need to evaluate that through that lens. When we look at our value creation model, we focus on four areas: So the first one is consistent compounding growth. We talk a lot about it yesterday, but consistent compounding growth. The second one is disciplined resource allocation. The third area is strong free cash flow generation. And the fourth with this free cash flow dynamic capital allocation decisions. I'd like to say that each one of this supports the other, working together to drive shareholder value.

So let's start with the first one, consistent compounding growth. When you see this slide now, you might be wondering, why the first slide in the finance guy's presentation is about sales and marketing investment. But in reality, it's strong. Quarterly relevant brands are the foundation for driving consistent compounding growth. Strong brands, the increased consumer loyalty, they earn a premium price. They enhance profitability which enables us to invest more to continue to increase the power of our portfolio. As you can see on the chart, we have consistently invested in our brands, mega platforms and capabilities. Since 2021, we've put more than $7 billion on average a year in sales and marketing. Yesterday, Marcel showed the impact of this investment. Our capabilities have evolved, enabling us to better serve our customers, attract new consumers and lead and grow the category. And in our industry, scale matters. It improves efficiency, profitability and importantly, increase our capacity to invest. Over the last few years, you have seen us partner with global mega platforms, such as the Olympics, FIF, Netflix, Live Nation and beginning 2027, the WFA Champions League. All of these partnerships, they are enabled by our scale, footprint and brands. So importantly, this investment, it has also been driving consistent financial results. So while the operating environment has remained dynamic over the last 5 years, our top line performance has been reliable. Revenue has compounded the mid-single digits over the whole period was supported by contributions from volume, revenue management and positive mix.

If you move down the P&L, let's take a look at margins. Our margins are best-in-class across our CPG peer group, reflecting the full momentum strength of our business. It is our brands, scale, leadership positions, efficient operating model and ownership culture. Strong margins enables us to efficiently convert each dollar of revenue growth into earnings. At our last Capital Markets Day in Mexico City, we showed how commodity cost increases and transaction effects headwinds put pressure on margins from 2021 to 2023. Over this period, we chose to absorb cost increases on behalf of consumers, maintaining our disciplined pricing approach while we continue to invest in the business. At that time, we said there was no structural reason our margins could not expand over time. Indeed, over the last couple of years, we've seen some progress in this direction. Since 2023, input costs have increased mostly in line with inflation on average, and this more normalized environment has given us the opportunity to improve margins. By maintaining disciplined revenue management, unlocking production cost efficiencies and tightly managing overhead costs from '23 to '25, we expanded gross margins by 200 basis points and EBITDA margin by 220 basis points. The key point is that we have expanded margins while we continue to invest behind our brands and capabilities to drive top line growth. We are encouraged with the margin progression so far. While each year will be different, we believe we can continue to trend in the right direction over time.

Now moving to bottom line performance. Our top line growth and margin improvement, it has delivered reliable compounding EBITDA growth. Every year has had its own dynamics. But the resilience of our strategy and the diversification of our footprint have enabled us to deliver with team or above our medium-term outlook in every year since 2021, but is in the top quartile of our CPG peers on a CAGR basis.

The next step is converting this EBITDA growth into dollar EPS. Since '21, we have grown underlying EPS at an 8.3% CAGR. Once again, it is putting us in the top quartile of our CPG peers. By improving cost efficiency and optimizing across the P&L, we have been able to deliver consistent EPS performance.

Now let's move on to our second focus area, which is disciplined resource allocation. The scale of our business, it gives us significant capacity to invest, that makes disciplined resource allocation even more important. Every dollar must compete for capital and be direct towards the opportunities with the strongest mix of strategic impact, growth and financial return. Yesterday, David presented Watchtower, showing how you acknowledge to help make the optimal decision for our commercial investments. For CapEx, we follow project-by-project evaluation process that enables us to assess the trade-offs, make better investment decisions and invest in opportunities that offer the best mix of growth and financial return. Having said all that, frameworks are easy to put on light, very easy. What really matters is how we execute. It is the process. It is the quality of our decisions our willingness to make the right trade-offs. This is what delivers values.

Our resource allocation capability has been one of the drivers of the improved CapEx efficiency across the business over the last few years. With technology, increased best practice sharing among our zones and applying as [indiscernible] mindset, we have reduced net CapEx from $5.5 billion in '21 to $3.6 billion in '25. Importantly, this increased efficiency did not come at the expense of growth. As our top and bottom line performance show, we have continued to invest in the initiatives that support long-term growth. Nearly half of our CapEx has gone towards growth projects. With the balance supporting our existing business.

Let's take a look at some concrete examples. We have invested into new facilities, including a $400 million brewery in Colombia. We have expanded our Beyond Beer, no alcohol beer and premium beer production capabilities globally. You saw an example of [ this on this tour ] with the Beyond Beer packaging here in the St. Louis brewery. As you heard yesterday, we have invested into new partnerships with global mega platforms, such as the Olympic and Netflix, and we extended our partnership with Fifer. In addition to capabilities and capacity, we continue to invest to strengthen the resilience and efficiency of our supply chain. We remain focused on improving operational efficiency in three key areas that are essential to our business, agriculture, water and energy and emissions.

In water, we have challenged ourselves to go further on water use. We are aiming to achieve an average efficiency ratio of 2 hectoliters per hectoliter across our breweries globally by 2030. Water stewardship is at the core of building resilience in our business. There is no water. There is no beer. Return on invested capital is a key measure of our growth, efficiency and disciplined resource allocation are improving the value creation potential of our business. Our main focus here is increasing total ROIC, which measures return across the full invested capital base. Since 2021, it has increased by 120 basis points driven by higher profit and greater capital efficiency. While total ROIC is the key KPI for us, given the change in our strategy to organic growth, ROIC excluding goodwill, is a use for additional measure for our -- of our return potential going forward. It shows the returns generated by the operational -- operating capital deployed in the business and it makes it easier to compare us with peers. We see a clear path to further improve ROIC through continued profit growth and greater efficiency across the invested capital base.

That will bring us to the third pillar of our value creation model, is strong free cash flow generation. In the end, everything we do to optimize the business across the P&L and balance sheet is reflected in free cash flow. We often say inside the company, and I think I said a few times yesterday, cash is king. Free cash flow is the clearest measure of whether our growth, efficiency and capital discipline and translate into real financial returns. At our full year 2024 results, we spoke about the step change in our free cash flow from $9 billion to $11 billion. And we also noted that we expect it to grow from this base going forward. If you look at performance over the last 12 months ended June 30, 2026, this is a very good example of this with our free cash flow is stepping up to nearly $14 billion on the last 12 months. When you look ahead, EBITDA growth continue to be expected to remain the main driver. But along with disciplined CapEx, lower net interest expense as we continue to deleverage and the structural benefit we have given our negative working capital cycle. Similar to the CPG category overall, when it comes to free cash flow generation, is scale and efficiency are very important. The strong free cash flow gives us the capacity to invest for growth while maintaining flexibility in our capital allocation choices to drive value? And strong cash conversion enable us to make every dollar of profit become more meaningful for our stakeholders. Michel mentioned earlier that we are relentless in benchmarking ourselves against our peers, always looking for ways to improve and become truly best-in-class. The mix of our profitability, cash conversion and free cash flow scale is unique among CPG companies today. While we continue to see further opportunity to see opportunities for further improvement, we are already operating at best-in-class levels across these metrics, which provides a powerful platform for long-term value creation.

And now to the fourth pillar, dynamic capital allocation. Free cash flow generation is only meaningful if it is being allocated in the most effective way to maximize long-term value creation. Our capital allocation framework remains unchanged. Our #1 priority is to invest into the organic growth of our business. Fully funding attractive growth opportunities remains nonnegotiable, and we continue to see many options for investment across the business. After funding the business, the excess cash is dynamically located across our other three capital allocation priorities, deleveraging, return of capital and selective M&A. And the goal is to create the greatest value for shareholders. In the near term, our ambitions are true: Fully fund our growth plans, progressively increase the dividend, complete our current $6 billion share buyback program, and further strengthen our balance sheet.

Looking at the balance sheet, we are pleased with the progress we have made on the leverage over the last 5 years. From '21 to '25, we have allocated $25 billion of cash to reduce debt. And we reached a net debt-to-EBITDA ratio below 3x in the full year of '24 for the first time since 2015. Our optimal capital structure remains around 2x. But with leverage at the 2.87x at the end of 2025, there is some further progress to make but the balance sheet already gives us much more flexibility. As the balance sheet has become stronger, we have increased our return of capital to shareholders. We have increased the dividend every year since 2021, it was supported by EPS growth and a measured increase in the payout ratio. In 2025, we also declared an interim dividend for the first time since 2019. While our payout ratio remains low compared with CPG peers, our ambition is to maintain a progressive dividend over time. Together for our dividend, we have also been executing larger share buyback programs. Our approach is to deploy capital dynamically. When we believe our shares represent an attractive opportunity to create value, buybacks can be an effective use of capital along our other priorities.

We have completed $5.5 billion of share buybacks since 2023. And $3.7 billion remains on the 24-month program announced in October '25. Our focus is on completing the current program. Beyond that, we continue to assess the buybacks through the lens of long-term shareholder value. M&A remains a core capability. However, it now complements organic growth rather than being the foundation of our strategy. We have the experience, playbooks and discipline to do selective deals that create value. Acquisitions and disposals must compete with the returns available from invest organically in our business. That creates a high hurdle and a very focused opportunity set. Over the last few years, we have sold some non-core assets and use that money to either increase the exposure to growth segments or to improve profitability. On the disposal side, you can see a few examples here such as -- the sale of certain nonstrategic brands and assets like more craft brands and facilities in the U.S. On the acquisition side, we have made bolt-on acquisitions like big box to improve our portfolio. I believe you saw a bit box on the market today. Cutwater and neutral are other good examples that were completed a few years earlier and are now meaningful parts of our portfolio. We have also evaluated EPS accretive opportunities like buying back the minority stake in our metal container business here in the U.S., while organic growth is our main focus. Selective acquisitions and disposals of relevant options to consider and they meet our financial and strategic criteria.

Putting it all together. 5 years ago, most of our excess free cash flow was allocated to the leveraging and for a good reason, moving from nearly 5x net debt to EBITDA to below 3x was the best use of capital to create shareholder value. Since 2021, we have allocated $25 billion of cash towards reducing debt and made our balance sheet much stronger. As a result, we have already begun to rebalance our capital allocation priorities. As we continue progressing towards our optimal capital structure, we see clear scope for that rebalancing to continue over time. Optimizing the business is a simple idea. And by simple, I don't mean easy because the actions behind it are very detailed, and they require everyday financial discipline, some judgment on trade-offs and a long-term view. We have made progress across key metrics in our P&L, balance sheet and cash flow. But as Michel said, the job is not finished yet. Actually, the job is never finished. So it's important to keep score and ensure that we are moving in the right direction.

So here is my scorecard for the last 5 years. Our business has consistently grown revenue and EBITDA at the top end of our peer group through different operating conditions. Our margins have seen some recovery in 2023 while we continue investing behind the growth. EPS and ROIC have increased through stronger profit growth and capital efficiency. Free cash flow has increased from $9 billion in 2021 to nearly $14 billion in the last 12 months. In capital allocation, we have made our balance sheet stronger, steadily increased our dividend and run larger share buyback programs. When you look at this score card, I believe the progress is clear. We have made the business stronger, increased our earning power and improved our financial flexibility. At the same time, we still see meaningful upside ahead.

So let's shift from reflecting best performance to discussing our future potential. When we introduced our medium-term outlook in 2021, EBITDA was the right measure at that time. It was the right measure because we are focused on the leveraging organically building our capabilities and showing the resilience of our business. But going forward, we believe EBIT is the more relevant measure. As we focus on consistent compounding growth and better asset utilization, EBIT more clearly reflects business performance and long-term shareholder value creation. Our new medium-term outlook is for consistent compounding EBIT growth of 5% to 9% on average, reflecting the progress we have made in building the earnings power and capital efficiency of the business. The drivers of our underlying growth model, they remain consistent. It is category expansion and market share momentum. Revenue management and positive mix. Its operating leverage, capital efficiency and margin expansion. Just to be clear, our outlook for 2026 remains unchanged at 4% to 8% EBITDA growth. And we will provide our outlook for 2027 when we report our full year 2026 results. Our key focus areas for value creation going forward. They are no different than what we had in the past. Why is different from 5 years ago is that now we are starting from a position of strength. We have built better processes and invest in the capabilities we need to drive consistent compounding growth. We have improved the efficiency of our resource allocation and are using more technology to make better investment decisions. Together, organic performance, best-in-class profitability and strong cash conversion are increasing our free cash flow generation.

With a stronger balance sheet, we have increased the flexibility to continue to evolve our capital allocation mix. What gives us confidence is that these are not independent drivers. They build on one another. Consistent compounding growth increases profitability and cash generation. A strong cash generation gives us more capital so we can allocate. Disciplined capital allocation allow us to continue invest in growth, make the business stronger and increase return to shareholders that, in turn, support the next cycle of growth.

This is how we intend to compound superior long-term shareholder value. Thank you.

Thanks, Fernando, for the presentation. I think next up, we're going to have a second Q&A panel. We're originally scheduled for 30 minutes. We might try and keep it at 25, just to make sure we can have as many in the room stay for the session and the closing as well. So I'd like to invite Michel and Fernando back to the stage, if you can join me up here.

In terms of logistics, we're going to do the same as we did yesterday. So we're going to start by taking some questions in the room. Those that didn't get a chance to ask yesterday, we'll probably prioritize you if you would like to ask a question. Ed, you are on the blacklist for today, but if you would like to ask another question, then you can still be allowed. We also have the live stream questions here. So if anyone is -- would like to ask a question to livestream, I can take a read here, and we might take 1 or 2 of those. So we have some mics around the room like we did yesterday. Please raise your hands, and we will get started. Same rules, no ones As, no ones Bs, no half part, half part, trying to stick to one question as much as possible.

Great. Let's get going, James from RBC, let's start with you.

Interesting, the increase in medium-term growth. Why are you changing from EBITDA to EBIT. You've kind of you alluded to it, I think, but I didn't really understand the justification.

James, it's the evolution. If you look like over the past 5 years, there was a lot of emphasis in resetting the business, which means to strengthen the balance sheet and probably one of the key KPIs when I think about leverage net debt to EBITDA. So while we were working on the fundamentals, we are also resetting the business and preparing for this next phase with reignite. When you move into reignie, it's not only the growth of the generate, but how you grow kind of how efficient you are in growing and delivering this growth. So for us, is the natural step to move from research to ignite to move from EBITDA to EBIT, and then you can see kind of all the benefits of that we have in a business at the scale that we are. And when we grow the scale that we are, we believe kind of this new range of 5 to 9 is one that makes more sense for this next phase.

We'll come to Trevor over here in the middle.

Question for you, Michel. I appreciate it's impossible to cover everything in two days. But one zone that we haven't really touched on is Asia, neither the challenges in China nor the opportunities in Asia ex China. So maybe could you give us an overview of where you see Asia today?

So Asia is a great opportunity, as you know, when you think about population and population growth. Asia is a massive pocket for today's business and for future business. And our business in Asia over the years, as you know, has a growth story, let's say, from 2010 to 2017, '18. And we had the period between '18 to '25, where many things changed mostly in China, and our business did not catch up at the speed that we needed to catch up with the market and with the change. Some of this change when you think about what happened during post-COVID were really, really big structural changes in the market, like the change between the East Coast and the inland China, the changes that happened between on-trade channels and off-trade channels. And this all had an impact on our business and what impact that one day can come back because the business remains somehow strong in these regions with the brands that we have, but we can't wait forever for the change. So we should be acting, we should have acted. And now we are running after this adaptation on the portfolio, on the channels, on the gas taking long because the consumer in China is also not in the best place. It's taking long because the fact that the business shift away from the channels and regions where we operated, created an issue on inventories, on the role to market, on the sales force, but we continue to be very positive about the long-term outlook for the region overall for China as a specific market. If you look around China, so talking about Asia, as I said, in general, so our business in Korea remains very strong...

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in terms of performance in the U.S., both top line and bottom line to be able to deliver to be in that range. What do you need to see happen there?

I think let me start and then Michel can follow up on that. We don't disclose market-by-market because actually, that's one of the strengths of our company. They have a very diverse portfolio of countries of brands around the world. If you look over the last 5 years, we discussed different topics around the world. And every year, there was one topic, one way or another, and we deliver nevertheless. So I think when we look at kind of when we set our goals, we look at the whole portfolio of countries, the whole portfolio of brands. And when we put the outlook at that, we feel confident with this portfolio, we can deliver this 5 to 9 on the medium term on a consistent basis.

Just to complement on that, I think that without giving any details on a country by country, but you saw here Brandon, Kyle, Simon talking about that. I think that we -- our business reached an inflection point in terms of relative performance. And we think that this relative performance given the portfolio of brands, footprint that we have and the direction that we see in the market is to be sustained. We've been enhancing this momentum in beer with the total alcohol lenses with beyond beer portfolio that continues to grow. Brandon shared here, we are always experimenting around other possibilities to monetize our ecosystem. So we are experimenting energy in protein now, and there are other possibilities that can always add to this algorithm, and we move it from what we call an area that is suboptimal on the portfolio performance to an area where we believe in sustainable top line growth, a natural evolution for that, that depends on the overall economic situation, the consumer disposable income, how tariffs and commodities are impacting the business is a profitable business, as [ Stade ] described it on the first day that is able to grow top and bottom line, okay? So the assumptions for the U.S., they do not change. We focus on rebalancing the portfolio operate the business in an optimal way and find ways to monetize the ecosystem that we have, which is a fantastic ecosystem in the U.S. We are not insulated from the overall economy from everything that around surrounds us. As the economy progress, business will improve performance. The important is that we have today a portfolio that can outperform the average market.

We'll go to Ed, and then welcome to Javier and then we'll go to the other two tables.

I'm Ed Mundy from Jefferies. So in 2021, you pointed out the new growth strategy. In Mexico, you provided some proof of concept. And then today, you've showed how far your capabilities have advanced and that you've got this consistent compounding model. If we think about where the next CMD might be in, let's say, 2029, what do you think are going to be the absolutely key 2 or 3 things that you've got to get right to then reflect that or working as you would like it to work.

You're merciless. So we don't even finish this one anyone to know what's going to be the next. Thank you so much. So we talked about, and I will talk a little bit about this on the closing. But the three objectives for the Re-ignite is to continue to deliver consistent compounding growth. And as I shared on that slide, this consistency he awards big time over time because the small effects, they compound on a big difference from the medium from the top quartile over time. so consistent compounding results. As I said, the second one is accelerating investments for growth. This is the real core of the Re-ignite. And I hope as we want to do always that when we look back 3, 4 years down the road, we will see not only the consistency and the acceleration of these investments but the result that this will bring to the business on this idea of organic growth. And last, of course, we all work to see this being translated in superior shareholder value creation. So those are the three objectives. Those are three things that you can definitely expect to see me talking when we meet again in 2, 3 years, let's see when that's going to be.

Let's go to Javier at this table on the end.

It's Javier Lastra from Berenberg. My question is on bids, which I think we've all appreciated the size of the operation and the the very strong capabilities you have there. But we've seen many other e-commerce platforms in other sectors struggle to generate profits really. And yet you seem like you are already there in terms of the platform being profitable. So I just wonder, what do you feel you've done differently that has allowed you to reach that consistent profitable state that many others have struggled in other sectors.

Yes, thanks for the question. It's a great topic. And I think that there is, as anybody else, we also had our own doubts, dilemmas and conflicts around these initiatives. And I was talking to some people here during the day. I like a lot the idea of having principles as we define things that we are going to do. So I shared this morning, the 10 principles on culture. They are very important when we make decisions around people, right? So you can have 100 different opinions the principles are clear. You guide their decisions based on principle. And in business, I have a couple of principles that are very strong, doesn't mean that they are always right. Doesn't mean that we don't flex them over time. But I firmly believe that businesses and all the efforts that we put behind, they exist to generate profit. And regardless what initiatives you have in mind when you fund an initiative, cash is the most important thing that we need to manage. So through the years, being direct-to-consumer being this, I was always very strong on the point of view with our teams that whatever we do, we're going to be able to generate profitability to have positive cash and to self-fund our growth. And if at one point, the opportunity is just way too big, and we need to fund, we need to be very clear about the returns that we expect for that. So one of the points, and we had several discussions on that on how fast we would accelerate the 1P, how fast we would onboard accelerate the 3P, so we were extremely disciplined. Nick was talking about this. Nick is here. He was talking about this during the process in making sure that we are cash accretive to the business that we are very aware of the margins of each business model that we have the benchmarks to the other companies that we co-op learning from as we build this, and that we are at their margins or better. So I think that I understand the dilemma of other e-commerce business, the competition that they have, the privilege that they have to be funded by people. And therefore, they can just grow without thinking about their own cash. For us is different. These the delivery. They live with ABI, they compete with all other businesses that we have in terms of cash deployment, and they need to be very efficient. And because we are a big platform, the benefit that they have is not free money for growth, but it is the ecosystem in which we grow. So our acquisition cost is smaller, our scale is bigger, our ability to dilute fixed costs is bigger. The infrastructure that we have to support the business, the back ground, backbone of the business, the back office is also big. And instead of allowing people to just spend money on structure, customer acquisitions, so on and so forth. We prefer to use the money to grow the business in the right way, generating right margins and right cash.

We'll go to Chris at the back here.

Chris Pitcher from Rothschild & Co Redburn. We started the event with your sort of outlook for the market being 0.3% to 0.5%. And to get from that to 9%, that's quite a good conversion from volume to that. Just understanding the top end of your range. Everything that we've seen for the last two days, these new avenues for growth beyond beer, be it no and low alcohol particularly Bs. They all seem to me to be highly margin accretive. And is that variance between 5% and 9% from that sort of relatively low growth market backdrop the success at which these new enterprises to add Capital Markets Day in 3 years, those are the ones that are going to drive the variability? Or are you perhaps thinking more of a market coming through stronger? Just trying to understand that -- the top end.

Try to elaborate and give some color on all of those. And I mentioned a lot of things kind of I mentioned volume. I mean to revenue management. I mentioned mix I mentioned cost efficiency. I mentioned margin expansion. I mentioned capital efficiency. At the end of the day, there are a lot of ways for us to continue to optimize our business. And it's the combination of all of those that is going to lead to the 5% to 9%. Every year is going to be different. There are years that there are going to be more headwinds. There areas there are going be more tailwinds, different regions performing differently. But with all these levers that we have in our hands, we are comfortable that we can pull them at the right moment, the right way, we that's sustainable and still delivered within the 5% to 9% in the medium term.

Just to complement on that, another point linking to what you said I think that [ Tadeu ] shared two things. You share this structural components of the global beer industry that link it to our footprint, would yield a CAGR of 0.3 to 0.5. The second thing that he shared and is very interesting for curiosity, which he has a lot, they have a lot. If you go back on our industry, our industry has two things that are very interesting. One is what they call the resilience because in good times and in bad times, the industry is very tight and you go on this plus 2%, minus 1% over time. You go 10 years, that's the story. 15 years, that's the story. 20 years, that's a story. Because the industry goes, because it's very penetrated together with the overall economies across the globe. So one of the components could be a great year. to be on the top. One of the components to be at the average or at the low end could be a bad year. Now interesting enough, if you break even the years in semesters, you have equaling numbers of semesters that are positive and negative. If you break it by quarter, you're going to find an equally number of quarters where this industry goes up and goes down, right? And I think that the range that we have is a range that is tight enough to not be too big for not making sense, and it's good enough to get us structured to be always operating with discipline, to make sure that we are investing in the good moments, that we are pricing at the right moment, that we are outpacing the market always by 1%, 2%, so this compounds over time. But I think that the industry part that you mentioned is a very interesting one. So structurally, 0.3%, 0.5%. Historically, half of the year is positive, half of the year is negative, but the range is very tight. So we don't go 10% up, 10% down, right? So very controlled range.

Laurence at the end there, and then we'll see how the time goes based on Laurence's question. Make it a 1-minute question.

Always one question, Shaun. I'd like to ask about your portfolio because you gave some interesting stats yesterday around the total addressable market and what the potential could be. And of course, over the last few years, ABI has moved into plenty of new categories, whether that's beyond beer, spirits, now energy drinks, protein drinks. What do you see as the limit of what ABI could potentially own as an own brand? Could we see the portfolio expand further than, say, energy drinks into traditional soft drinks or protein to protein snacks or there's plenty of adjacent opportunities that B gives you the opportunity to get into?

Yes, so let me answer the question starting from the [ Opus Tango. ] So our business is and will be in the future, beer. And beer is the most relevant part of our business. It's a fantastic category to be is the right platform for us to build everything that we want to build in the future. We set this back there into 2021, and I think today is becoming more measurable and meaningful that we would expand our portfolio to create digital brands that we could scale at low capital deployment and with speed. And you see today where this marketplace is going. And you see the materialization of this digital direction that we decided to take, and how this is now enhancing our portfolio with brands such as the delivery in this marketplace. I think that at this point, it's even more clear that this idea of beyond beer is a place that we see high fit to the assets that we have to the brand building capabilities to the role to market capabilities, and this will become an ever growing part of our portfolio. Today is a $2 billion, growing north of 30%. We believe that the headroom there is a huge headroom for growth. In many markets, think about Brazil, Argentina, [indiscernible], El Salvador, we work with soft drinks. We are the largest bottler, I think we still are from Pepsi outside of the United States. Those are great business, highly synergetic to our roll to market and where it makes sense. We have been in and out over the years, more than out, and this is good. And of course, from there onwards, there will be always opportunities. That today, we are ever more equipped to spot because of the insights that we have, because of the marketplace capabilities. And if there is high returns, if there is an opportunity for us to do more, that will be always evaluated and considered on a market-by-market base. But most importantly, on the global strategy on how we want to digitize and monetize the ecosystem. That's why the digital products are the leading, the spearhead of this diversification, let's say, but other things can fit in there. If they are good returns, route to market, effective, and if we can make it in a way that leverage our assets. So that's why we are doing energy drink in the U.S. That's why we are partnered here to do protein, ready-to-drink in the U.S. So there are other opportunities, but we need to start from developing beer, continue to invest on our digital products, take all the opportunities that we have in build beer. And then from there, we're going to build on top.

Thanks, Laurence. Laurence asked a 5-min question. So we're actually at time, unfortunately, I think for this, we will rapid here. Olivier, happy to catch up with you and Andrea after this well on those for you to connect with us.

So we wrap day, guys. I think for Q&A. Thanks very much for the time. Thank you all in the room and on the webcast for their participation. There were a few questions here on capital allocation, Fernando will take them separately with you afterwards. So Michel, you can say here on stage, I think, given you'll be wrapping us up, no need to introduce you, but stage is yours. Handshake.

So that brings us almost to the end of the 2026 Capital Markets Day. And I'll try to take us home in an effective way quick, so you don't miss our flights, you can be on time for other appointments that we have -- that you have.

So you know, let me start this way that an event like this takes a lot of preparation, a lot of people to organize details, and I'm very happy with the dedication of the team. I just want to take a minute here to thank all the presenters, the hosts, the U.S. North American team. The team that worked with us here in terms of organization, from switch, from the hotel, the agencies. But above all, thank you for the attention, for the engagement for the questions. I think we had great days together. I hope that the pictures are just the pictures that we call show here. I didn't review before. So everybody having a lot of fun, and I hope you enjoyed the day yesterday, the day to day, the visit to the brewery. I was talking to my team before on their side, they all are very proud and they like a lot the interactions and to be with you. Okay. So please just join me in thanking them. Thank you.

Shaun is investing very heavily on his next career is spinning structure. So it's like 1/3 of the entire Capital Markets Day was about [indiscernible] Shaun. So I see that you enjoy the case. But let me, before I get like the final takeaways to you, I talked about sharing a few personal reflections, okay, in a very personal point of view. So the first thing is that I'm very optimistic and confident in the next phase of our journey, the Re-ignite. And the reason why is because our ambition and our plans are grounded in very strong elements. First, this relentless benchmarking exercise where we are always learning from peers and from whatever is available there, coping and improving this at ABI. Second, I think you had the time to interact with our team. It's a great team. We combine it. We have 400 years of experience in CPG and in this business. Some of them, 3 years, some of them 30 years, but combining. We have 400 years of experience in our business. And then through these benchmarks, which is something that I invest a lot of timing, learning and understanding. I start seeing these stories that I call enduring growth stories. And I have learned that best-in-class CPGs, they do a couple of things. But the most important thing, they compound value and growth over time. So there is a lot of small elements, but they compound value over time. And what's interesting as they compound growth over time is how they do that. And I took three lessons from that. One is consistency. Two, relentless. And the third is what I call quietly confident. And let me double-click on what I call consistent. Consistent is this idea of long term. And that's why I invest so much time on planning on what we call 10-year plans. They have price discipline, not too much, not too little, but consistence in the way that they look at the value of their brands. And they do that because they are consistent not only on pricing, but even more important in the way that they invest, and they sustain brand investments so they can price correctly. And they are very smart in the way that they allocate capital, so they can have the right returns. Simply put, there is no strategic zigzagging. There is no big strategy of this year. There is no one strategy for every part of the business. They consistently compound over time. When they say relentless, I mean focus on execution each and every detail, delivering results regardless the environment, can be in a given month, quarter, year, but when you look over time, there is always consistency in results. And this is built with a culture of performance and the idea that the job is never finished. They are never satisfied.

And lastly, what I call quietly confident. This confidence comes from being predictable. Usually, there is no drama. Very simple and effective portfolio architecture. What I admire the most, they are humble. They are always humble in the way that they see what they're doing, but what they want to do. And they value quality overhype. Long term, sustainable, investing for the future, valuing quality overhype. So my biggest reflection on that is that becoming a best-in-class CPG is at the end, a leadership choice. Choice to be predictable, to build margins, to earn more cash and to build a resilient business, to have the discipline, to stay the course, even when things are very hard. So the key question that I always put to my team is, how do we measure our success, the progress of our business. And this is never based on a single quarter year, the most fashionable of the KPIs of every and each day, but it's -- when we look at the business today and structurally, -- this business is stronger than it was 5 years ago. And with that, I would like to share what my key takeaways for the today's art. So you can take this home and start your work, which I know that we'll do from this one page, okay? So 5 years into our 10-year plan, I feel we have done most of what we said we would do. Consistent compounding results, stronger balance sheet and we built key capabilities for organic growth. But the job is not finished, and we are just getting into the rig night. The reset is complete and the rig night has begun. In this phase, we are focused on continued delivering consistent and compounding results increasing investments to accelerate growth, and we want to outperform the category. And all of that continues to be important to create shareholder value.

We operate in a category that's fantastic. We already saw the love that consumers have for this category. And it is one of the most attractive categories in the world. And therefore, the right platform for us to build everything else that we want to build, be it is big, be it is profitable, be it is growing and is growing share of alcohol beverage and is loved by consumers. But we made the decision to go beyond so we can bring even more people to celebrate together. And this enlarged our total addressable market on a very important way. We have, today, very unique leadership advantage, and they are getting stronger as we combine them with the right capabilities. We have our global scale, diversified footprint, iconic brands and superior profitability. All the investments we've made to create best-in-class capabilities, they made us more consumer-centric, digitally enabled and financially effective. We successfully rebalanced our portfolio in the U.S. Our business today has momentum, is growing share on the increased addressable market. We scaled our digital platforms. Our products today are strong, they make our business stronger, but they also generate new revenue streams that are even more important for the future. This morning, we talked about our culture. Our people and our culture, they have enabled the transformation from inorganic to organic. Simple, two letters, but very hard to make in 5 years. The culture that enabled that is durable and will be the same that will drive the next phase of growth. As we saw Fernando, our leverage continues to go down. Cash flow remains stronger. And as time goes by, we'll have even more flexibility on our capital allocation. We evolved our outlook because, again, next phase and this outlook of EBIT will reflect better the efforts we will make in this phase of growth. The medium-term outlook as next year will become EBIT 5% to 9%, and details of that as [indiscernible], when we present the total results for 2026 will be given to you.

And the last takeaway here before I let you go, I think that brings us back to the same question that they started the meeting with. What does it take to become a best-in-class CPG? Because at the end of the day, this is what we aspire to be. And what we are building towards. So I'm very happy with the 2 days here, a lot of people asking this question to me, and I'm happy, not because of the presentations, not because we are sharing results but because we could spend some time together, drink a beer, learn from new as we share the time here together. And I hope that you feel good as well as you go back home, okay? Safe travels. Enjoy the rest of your tour in the U.S. for those traveling from abroad, enjoy back home for those from the U.S. I hope the New York is operating. I'm going in that direction as well. So remember to drink a beer at the weekend, it was a pleasure to be with you. Thank you. Bye-bye.

Please welcome to the stage, Shaun Fullalove.

Hello. Good morning, everyone. So, firstly, welcome to St. Louis. Thanks to those who have been able to join in person. It's hard to believe that it was 3 years ago already since we were all last together in Mexico City. This also marks the 3-year anniversary of my spinning class career. And so I look forward to revisiting that chapter with some of you at 6:30 in the morning tomorrow. Hopefully, the weather in St. Louis is as kind to us as it was in Mexico City. I know it was a long flight for many. Ironically, we have people from Cape Town, where I think it was quite easy. We have people from London and from Europe where it was quite easy. The hardest part to travel from apparently was New York yesterday. So those that persevered through the travel disruptions, we really appreciate you being here with us in person.

We have a great agenda of presentations and experiences today and tomorrow. So I'm sure we will make it worth your while. Most importantly, we'll have a couple of opportunities to share a beer. So we look forward to doing that. I think I have met almost everyone here today, but in case not, I am Shaun Fullalove, and I have had the privilege of leading the Investor Relations function here at ABI for the last 5 years. Michel and Fernando, surprisingly, have also allowed me to be the MC for the event again. So I will do my best to keep us on track during the day.

Before I invite Michel to the stage to kick us off, I just have a few housekeeping matters to mention. So firstly, in small words up here, just a quick reminder on the legal side. This is our disclaimer, which is available on our website. Don't expect you to read all of this now. But everything we talk about today that is not a historical fact is a forward-looking statement, and these are not guarantees of future performance. As a helpful reference, you can refer to our 20-F on our website that contains a discussion of all of our risk factors, including geopolitical and economic uncertainties.

For those that didn't join for breakfast this morning, then the bathrooms are to the right -- to the right as you exit the room. For those that didn't join for spinning this morning, which is most of you, so expect to see you tomorrow. Then I think we still have a few spare seats still. So if you would like to do it in the stadium next door, then reach out to me or Pat or Kate and my team, and we can sign you up. We also have an event WhatsApp channel. So we've evolved from the app from last time to a WhatsApp channel. If you haven't signed up for that yet, there should be a QR code floating around somewhere. We're using that as a channel just to communicate about events, reminders, et cetera, during the next couple of days.

What else? We have a planned 20-minute break. It should be around 10:30. It might be slightly earlier, depending how the agenda moves. We'll have lunch around 12:15, 12:20. And then we have a short break around 3:00 p.m. just to allow you to drop bags, et cetera. And then we will head to the brewery in the late afternoon for the brewery tour, dinner and brand experience event. So -- but of course, I know people have traveled from far. So if you need to take a break more frequently, feel free to do that.

Finally, name badges. I'm not wearing mine right now, but they have a few relevant details. First one is your table number, which I think you guys are all at the right tables now. So, you've figured that out this morning. The second one is going to be your brewery tour group for this afternoon. We'll leave in different vans and then we'll split into different groups to make sure you're in the right beer brand group for this afternoon. And then the third is going to be your market visit group for tomorrow. So we will split into groups then as well. Any issues with logistics or scheduling or anything that you need to be resolved, please stop by the concierge desk right outside here on the second floor, and we can sort it out. And that is it, I think, in terms of reminders and logistics. So let's get it started.

With that, I'd like to invite our CEO, Michel Doukeris, to the stage to take us through the introduction. Michel, it's with you.

[Presentation]

Please welcome to the stage, Michel Doukeris.

Good morning, everyone, and welcome to the 2026 ABI Capital Markets Day. Thank you for those here in person and those joining us virtually. It is really exciting to come together in St. Louis, the historic home of Anheuser-Busch Brewery. It was right here 150 years ago that a legacy was born and the first Budweiser was brewed. Over the next few days, you will experience firsthand Anheuser-Busch's history and heritage, how we have rebalanced our portfolio to create momentum in the U.S. and our global strategy in action. You also hear from several members of our global and U.S. leadership teams. And we have 3 objectives for our time together. First, update you on the progress we've made in our global strategy. Second, reinforce our unique leadership advantages and even more importantly, show how we have been investing to build superior capabilities. And lastly, share how we have transitioned from the first half of our 10-year plan, what we internally call reset to our next phase of growth called reignite.

Allow me to start by recapping what we discussed during our last 2 meetings together. In 2021, we made a deliberate choice. We moved from inorganic to organic growth strategy. We set a long-term ambition, simplified our strategy, and we committed to consistent compounding growth. In 2023, we shared the elements to create superior value, a large and growing category, hard earned and unique leadership advantages, replicable growth toolkits and superior profitability. Together, these elements formed a compelling investment thesis, one that was so simple, it fit on the back of a beer coast. I hope you have some at your table. Today, we are halfway through our 10-year plan. From the beginning, we committed to delivering consistent and compounding EBITDA growth within the range of 4% to 8%. And since 2021, we have been delivering within or above this outlook every year. And just as important, we have grown our EBITDA in nominal terms from $19.2 billion in 2021 to $22.4 billion in the last 12 months. This was the result of consistent execution of our strategy across our footprint.

Our net revenue increased from $54 billion in 2021 to roughly $63 billion as of the last 12 months. We are growing brand power and market share globally. And we reached all-time high volumes in 16 of our markets in the H1 of this year, including countries like Mexico, South Africa, Colombia, and India. We are digitizing and monetizing our business, scaling BEES into a superior B2B platform. BEES has achieved $60 billion in annualized GMV this year. BEES marketplace is delivering around $5 billion in GMV, and it is becoming a meaningful incremental revenue stream. We estimate that BEES marketplace, if treated like a country, would be a top 10 contributor to EBITDA growth for us this year. And we continue to optimize our business. We expanded our EBITDA margin and generated $13.9 billion in free cash flow, an increase of $4.6 billion since 2021. And we have reduced our net debt ratio to below 3x. All of this results in industry-leading EPS growth that has been both consistent and compounding.

Despite a challenging operating environment, we have delivered in line or above the top quartile of CPGs across relevant KPIs. And as I always say, we have a resilient strategy that just like beer is made for all occasions. Five years ago, most of our excess free cash flow was allocated to deleveraging. Today, we have a stronger balance sheet. Our capital allocation has evolved, and we have increased our capital return to shareholders. As our leverage continues to trend down and our cash flow generation remains strong, we will further increase our capital allocation flexibility. Everything that I have shown so far is what we call above the surface, things you can see in our reported results.

But the biggest transformation is what we've been building under the surface. We have a very strong foundation with leadership advantages that differentiate us, an unparalleled ecosystem that gives us meaningful scale, a broad diversified footprint with meaningful market positions in large markets, a portfolio of leading and iconic mega brands and superior profitability and cash conversion. This is the foundation on which we began to transform from inorganic to organic.

And let me be clear here. While the difference between the words is small, in reality, the transformation is way bigger. Delivering organic growth requires a different muscle, and it was one that we needed to build. So we started with a simple question. What do best-in-class CPG companies do differently? We benchmarked global CPG peers, studied what capabilities separate the top quartile from the rest. And then we asked ourselves, where are we best-in-class? Where are we good but not yet great? What are the gaps we have to close? And with that clarity, we focused on building the right capabilities, those that would accelerate our transformation and strengthen our strategy. And for 5 years, we've been consistent, investing time and resources to build and embed these capabilities into how we run our business.

Today, we have the capabilities that make us more consumer-centric, digitally enabled and financially effective. These include more actionable consumer insights, a focused and effective portfolio, a replicable mega platforms toolkit and scaled digital platforms that give us better insights and create incremental revenue streams. We still have work to do, and we continue to benchmark to learn and to improve. Our ambition is to be superior across all these capabilities. You'll hear a lot about this over the next 2 days. And in a nutshell, this is what we've been doing since 2021, delivering consistent and compounding results, reducing our leverage and investing to build organic capabilities for growth. We are today a very different company, very different than we were just 5 years ago. We have an industry-leading portfolio of mega brands and mega platforms, and our markets have momentum.

We have the largest and fastest-growing nonalcohol beer portfolio globally. We have been scaling up our beyond beer brands. And in this space, we are the challengers, which give us huge headroom for growth. We have a sizable and fast-growing BEES marketplace business. Our free cash flow has reached an inflection point, and we have a new level of capital allocation flexibility. This is the company we have today and what we've been building under the surface. For those who know me, you know I'm a huge basketball fan. This is the Knicks winning the title.

So here is one story and is a story of a player called Kobe Bryant. He's one of the greatest players in history, known for his obsessive preparation, discipline and resilience. And after his team took a 2-0 lead in the 2009 NBA finals, he was asked by a reporter why he was not happy? And he famously replied, what's there to be happy about? Job is not finished. What's there to be happy about? Job is not finished. I tell my team the same thing. The job is not finished, and we are only getting started. 2026 marks the midway point of our 10-year plan and the first year of our next phase, reignite. We will continue to deliver consistent compounding results while increasing investments to accelerate growth and create superior shareholder value.

Before I pass it to the team, I would like to leave you with another thought. You came here knowing us as company that's best in beer. And every day, as we continue to strengthen our capabilities, I ask myself, what does it take to be a best-in-class CPG company? Because that's what we aspire to be. And so as we go through the next 2 days, I would like to ask you to keep that same question in mind, and I would love to hear your feedback over a beer. What does it take to be a best-in-class CPG company? So thank you for joining us here today. The team worked very hard, including Shaun, to create an engaging agenda for you. Please enjoy St. Louis. I'm looking forward to our time together and of course, a beer at the end of the day.

Now I'll hand it over to Ricardo Tadeu, our Chief Growth Officer. Thank you. Cheers.

Please welcome to the stage, Ricardo Tadeu.

Good morning, everyone, and welcome again to the growth session now of our ABI's Capital Markets Day. As Michel said, my name is Ricardo Tadeu. I recently completed 31 years with the company, 24 of which were spent in the field and the last 7 leading global functions. Since 2022, I've been ABI's Chief Growth Officer. To be honest, the first time I saw this slide, I thought, can someone for the next time stop counting? Someone stopped the clock, Shaun, come on, right? Now my friends, on a more serious note, when I see this slide, more than thinking about my career, it makes me reflect on how important it is to experience the industry, its cycles and different types of markets. It also reminds me what a great place ABI is to work if you're passionate about learning and of course, about beer. It is really, for me, a great privilege to represent this fantastic ever-evolving organization.

And I say that with all my heart, there's never a year or a day like the other. As Michel mentioned in his introduction, we have just delivered the first chapter of our 10-year plan, reset and transition into our next phase, which is reignite. And now we're going to address the first 2 elements of our strategy, lead and grow the category and digitize and monetize our ecosystem. I have 3 topics to cover in my introduction to the growth session. Once I have covered them, Marcel, Lucas and Nick's presentations will follow and detail how we plan to accelerate our growth in the years to come. My first topic is the beer category itself. I will explain the current state of the beer category with a focus on our footprint, its trajectory and opportunities.

In the second part, I'll detail what growth means to ABI as it's important to qualify what we want to achieve. And in the third and final part, I'll briefly outline the One ABI Way and some of our best-in-class capabilities that Michel mentioned to lead and grow the category. To start, I'd like to share why we believe the beer and beyond beer category is a great platform to delivering our ambition to be a best-in-class CPG. Let's begin with the foundations of the category. Beer is made from natural ingredients and it's local. It has been a part of human culture for a very long time, and it's still relevant today. This is so embedded in consumer lives that even in a challenging consumer environment, the category has continued to grow over the last 5, 10, 15 years. And during this period, it has outperformed the CPG median and kept its participation stable.

The relevance of our category can also be seen in its sheer scale. It is one of the largest profit pools among CPGs, creating value through superior margins and the deep emotional connection with consumers. As we can see in the power of beer. On top of all that, beer is estimated to grow volume and its share of alcohol in the next 10 years. Having spent more than 30 years in the beer industry, I have, of course, experienced a number of cycles, shift in consumer trends, and seen different realities. This experience has taught me that the stage of development in each country is an important factor for assessing how to grow and the rate of growth. That's why we classify markets into 3 volume growth stages. Developed markets have lower growth potential, but still offer great opportunities for specific levers such as premium, balanced choices and beyond beer.

Emerging markets, on the other hand, are the least developed markets with long-term growth potential, mostly driven by our superior core and developing markets, these are the ones in the middle. These are the countries that present a great opportunity of balanced growth in terms of core volume, premiumization, but also category expansion through balanced choices and beyond beer already. Now coming back to developed markets. These markets, they have a lower rate of growth because LDA populations are growing slowly or declining. While the beer industry consumption level or BICL, what some of you will refer to as LDA per capita consumption is at much higher levels already. But even very developed beer markets tend to have a higher income consumer base and clear growth levers. As we refine our portfolio and innovate in the right spaces, we can take full advantage of these opportunities.

Now let's take the Netherlands, for example. In this developed market, we increased our volumes by double digits over the last decade. Our whole Europe business grew by 1% in the first half of this year, outperforming the industry. This is real proof that a developed beer market can deliver volume growth. Our very presence here in St. Louis reflects our confidence to drive revenue growth across developed markets. It may take time, but with clarity of direction and consistency in execution, we can grow. Brendan, our host, will take a deeper look at our progress in the U.S. Now what about the less developed markets? Emerging and developing countries have 60 million new consumers entering our category every year, much lower consumption levels and great room for expansion. These markets are becoming more relevant each year, and this is where ABI's footprint makes a real difference. More than 60% of our volume comes from there.

In these markets, mostly located in Latin America and Africa, we have leading market share positions and advanced commercial capabilities. More than 90% of our volume in these places is commercialized through BEES, and we have large-scale D2C platforms. Now share information. It may surprise you, but we have captured 98% of all beer volume growth in these regions since 2019. I repeat, 98%. That's exactly what we mean by leading and growing the category. Over the last 15 years, global beer volumes have grown at an annual rate of 0.3%, while sales have grown steadily at mid-single digits. Of course, this underlying growth is not immune to short-term disruptions caused by weather, macroeconomic conditions and geopolitical events.

The global beer industry grew in 9 and declined in 6 of the last 15 years, but the year-over-year variations were not extreme. Excluding COVID, annual beer volume growth ranged from minus 1.2% to plus 2.6% over this whole period. The steady long-term growth is driven by a structural tailwind from emerging and developing markets. These markets have grown at an annual rate of 1.8%, more than offsetting the decline in the developed markets. Now when we weight each market according to its current share of our portfolio and apply the historical rates, we see annual structural growth between 0.3% and 0.5% volume. So while it's impossible to predict how the industry will perform in any given year, we are confident it will grow over time in our footprint. And of course, this is only our starting point, not our ceiling. Our objective is to outperform the category in a profitable way, taking advantage of our differentiated footprint, leadership advantages and superior capabilities. okay?

Now let's move to the second part of the presentation and clarify what we mean by growth. While we do intend to outperform the industry, we don't intend to grow volume at any cost. As Michel just said, our growth must be consistent and compounding and consistent growth is the ability to deliver top and bottom line growth while demonstrating the potential to keep compounding that growth as far as anyone can imagine. This can only be accomplished by being the best curators of the category in a responsible way and by building and nurturing iconic brands that are meaningful to our consumers. To translate these intentions into metrics, growth at ABI has 3 distinct elements; one, it demands reliable top line growth, which means volume and net revenue per hectoliter. This top line growth must flow to the bottom line. It can't be so expensive that it doesn't translate into cash flow generation.

And three, it must have a long-term horizon because our goal is to compound and finish every year stronger than we started. And as we aim for consistency, I want to clarify the types of growth that we don't pursue. Then healthy growth when top line growth doesn't flow to the bottom line and what we call the chicken fight, when top and bottom line growth are achieved, but not consistently. For example, I think you guys may understand when an innovation gains significant distribution before developing enough velocity. In this case, it can have some initial success, but it will be short-lived. The main pillars of our growth model are market share growth, which demonstrates the power of our portfolio and our ability to out-execute our competitors. Revenue per hectoliter outperformance versus CPI, driven by price, mix and additional revenue management initiatives such as discounts and portfolio optimization and innovating with a growth mindset as we expect trends to continue evolving, opening avenues for new products, brands, packs, and even business models like D2C and BEES.

With that, I conclude my second part, detailing what growth means to us and how we prepare our teams across markets to deliver consistent compounding growth. Moving to the third and final topic, I will introduce some of our unique capabilities to lead and grow the category. Following my presentation, Marcel will cover this topic in a more comprehensive way. He will dive deeper into the One ABI Way, our category growth framework and our growth levers. I'd like to start by highlighting key elements of our growth operational guide, which we call the One ABI Way. Developing the beer category in a responsible way, building our brands and constantly refining our portfolio are our main responsibilities.

As we know, one brand can't be everything to everyone in a credible way. That's why our job is to craft a strong portfolio to better serve our consumers and customers. Through our portfolio strategy included in the One ABI Way, we identify and select our mega brands and become more precise in allocating brand resources. It may sound easy to copy the idea and name any large, big legacy brand, a mega brand. But our model is based on an algorithm that balances scale, profitability, growth potential and a clear alignment with a megatrend. It is this true combination that turns true mega brands into powerful drivers of profitable growth with highly superior ROI. And this is important because not every company has true mega brands.

Now the One ABI Way also includes our connections and mega platforms. And again, it may seem easy to become a big sponsor or hire popular influencers, but it's much harder to execute them in a singular way when a true mega brand can connect through a passion point using real-time insights and technology to reach the hearts, minds and mouths of our consumers. That's why mega platforms are much more than sponsorships. What we just saw in the latest FIFA World Cup was a great example of how our mega brand, Michelob ULTRA, associated with a mega platform led the digital conversation and was launched in several countries, sowing the seeds of growth for years to come. This is just one of many examples, including Corona Cero in the Olympic Games and Stella Artois.

The main point here is that we have a very successful playbook. Through this focused approach, we reduced from 500 to 50 the number of brands with relevant support, increased investments in our mega brands and reached our all-time high brand power in Q2 2026 according to Kantar. And importantly, we are seeing this brand power growth translate into market share. In Brazil, for example, our internal analysis shows that we gained 200 basis points of volume share at the same relative price index. This was a consequence of a stronger portfolio. At the global level, we see the same dynamic. Our portfolio gained 40 basis points of market share at comparable relative price points over the same period. This means consumers are attributing more value to our portfolio during their weekly visits to their local store. I don't think it can get more tangible than this. And building on the strength of our portfolio, we're also unleashing our digital capabilities to drive growth.

Let me highlight some of them. Through our D2C platforms, we connect with consumers at scale, deepen our understanding of their needs and turn those insights into more relevant innovation and more powerful brands. With BEES, we are helping our customers to grow and taking our revenue management to the next level. By tailoring offers to every individual customer, we can optimize discounts and measure the incrementality of each investment we make. Through BEES AI, we are driving a more profitable mix by ensuring the right brands, packs and price points for each market and consumer occasion. Putting all this together, our revenue management has become more precise, fully data-driven and connected to the true value of our portfolio. This has been a great enabler of our growth ambitions.

Over the last 3 and 5 years, we have consistently outperformed our peers, delivering net revenue per hectoliter well above other brewers and the median of CPGs. The first half of this year was no different. Our net revenue per hectoliter grew more than 2 percentage points ahead of our peers, while we also outperformed in beer volume. In an environment where consumers are under pressure, we are very proud to earn our growth through the improvement of our portfolio, our unique revenue management capabilities and the value we bring through innovations. In the end, it's all about compounding growth and building a company that gets stronger every year.

With that, I conclude my introduction. We covered 3 topics. One, the beer category is a big, loved, profitable, growing category, and we have a unique leadership position in an advantaged footprint. Two, growth for us must be consistent and compounding top line that flows to the bottom line and it's long-term oriented. Three, our superior capabilities will position us to continue outperforming the industry in the years to come. Our next 3 speakers will take you now inside the strategy. First, Marcel Marcondes on how we lead and grow the category, followed by Lucas Herscovici on D2C and why it's now a real competitive advantage and closing with Nick Caton, on digitize and monetize. He will show how BEES keeps compounding and how it's helping us become a best-in-class CPG.

Thank you so much for your attention. And I'd like to invite Marcel to the stage. Thank you.

Please welcome to the stage, Marcel Marcondes.

Thank you, Michel. Thank you, Ricardo. Great chat. Hello, everyone. It's a big pleasure to be here. I am Marcel Marcondes, Chief Marketing Officer and a proud ABI owner for more than 20 years. I actually started my career at Unilever. And after many years in beauty, mainly hair care, after many years selling shampoos, I decided it would be kind of a good trade to go to beer. At ABI, I had both marketing and sales jobs in Brazil before I moved to the U.S. 12 years ago, where I served as the Head of our Global Brands, CMO of North America and President of our Beyond Beer business. Now for the last 5 years, I have the privilege of serving as a global CMO. My job today is the following. You heard earlier from Michel about the why, the strategic direction. Ricardo just spoke about the what, the growth principles. My job is to talk about the how, how to lead and grow the category. And this is when the rubber hits the road.

So we're going to get together into a little more details to give you a real inside view. Also, we're going to hear from some of my colleagues through video. The structure of the presentations will follow the same framework we use every single day, and it's split in those 3 parts; our consumer-centric capabilities, our missions to grow the category and the levers to lead the category. Let's go. So let's get started. On capabilities, you know very well that ABI was built using a powerful inorganic strategy, leading the consolidation of the industry until it became the undisputed leader. But now as you heard from Michel, our strategy is focused on consistent compounding growth. And so we spent a few years working to build new capabilities and also wiring the whole company in new ways of working. We call it the One ABI Way.

The One ABI Way goes from category and consumer understanding all the way to sustainable value creation. And this is what guides the work of our entire commercial teams. So now I'm going to share with you a few highlights of how it works. On category understanding, we built a very unique system that tracks participation, occasions, and surveys for the whole industry in 32 markets, representing 95% of our revenues. We have quarterly readings on an industry level, company level and brand level, also with very specific cuts by consumer cohort. That system gives us the ability to identify gaps and opportunities in a very granular level, and that is a game changer in our process as it becomes the starting point of every commercial plan.

In other words, it gives us intentionality in every move we make. Consumer understanding. Here, the whole point is to go way beyond research and to really understand real consumer behavior. For that, we have our consumer hours program because just like pilots must have flight hours to fly an airplane. We also require all commercial leaders to dedicate time for direct consumer engagement. By the way, last week, we achieved 50,000 consumer hours across our senior leadership. That's equivalent of years of consumer learnings. And now AI is turning this capability into a real consumer intelligence because all that consumer knowledge, combined with our proprietary data is becoming quickly actionable as it enables us to build digital consumer twins and create synthetic consumer audiences. This new capability was developed in partnership with MIT, and it gives all our teams much faster ways to test insights and innovation ideas, reducing testing times from weeks to just minutes. All in all, this mix gives our leadership the best of analytical power combined with human intimacy.

The third is portfolio strategy. And for a CPG that owns 500 brands, that is key. So I'm going to talk a little bit more about it. Our approach is based on the mega brands and mega platforms. As Ricardo just said, this is a transformational capability to drive growth because mega brands gives us focus as we clusterize our brands according to the strategic roles in every single market. As a consequence of that, we're reducing the amount of brands with meaningful support from 500 to 50, the ones with both scaling potential and healthy growth rates. Those are the mega brands, around 5 per market.

After a few years working like this, mega brands now represent 60% of our volumes, and they're also punching above their weight on investments. So that puts momentum in our favor. Moreover, that focus allows us to invest behind bigger and more global platforms to activate the mega brands. Those are the mega platforms. We've built an unparalleled calendar with the most culturally relevant platforms in sports, music, travel, streaming and more, always aligned with the positioning of our brands. So let's take a quick look at what we have for this year and beyond.

[Presentation]

I like this job. But now it's very, very important to note that mega platforms, as Ricardo said, are much more than just sponsorships. They have to represent 3 big elements; passion points consumers love, big beer occasions, and they have to allow us to have huge commercial integration, all at scale. So let's see FIFA World Cup as an example. This is how it works in real life. On media, as the official partners, we have priority to get all the best placements. We maximize reach. On product, we have exclusive limited edition packs that drive velocity. On trade, our status as official partners allows us to build disproportionate displays, resulting in extra shelf space. Then experiential brings everything together, creating moments where people socialize with our beers in their hands. And finally, digital connects our brands with culture. After all, those platforms are naturally what people are talking about.

All in all, this massive commercial integration is how we set the bar for the mega platforms. With all the efforts connected to the same program at global scale, we naturally get much better ROIs compared to a regular media-only approach. In other words, we become much more effective. And we track effectiveness against our peers. We use the Effie Index, the leading effectiveness entity. We used to be here in 2019. And now since 2022, we've been there. That is progress and consistency. Most importantly, working like this, now we own 8 out of the top 10 most valuable beer brands in the world, and our portfolio now has 22 billion-dollar brands, actually expecting Cutwater to join that list very soon. This is how we're moving from being advertisers to becoming full experience providers. This is how we turn our brands and our scale into real competitive advantage.

All right. So now let's move to innovation. You're all going to see a lot of innovation boosting our plans here these days. And they're all consequence of a new process for consistent growth. It starts with portfolio health, where innovation now becomes accountable for the health of our SKUs, aiming to optimize the good ones and delist the ones with no added value. Guys, we already reduced 25% of all our SKUs in the last years. Second is pack and price. Revenue management is fully integrated with marketing. So packaging is more than ever treated as real innovation focused on addressing consumer participation and also new occasions. Then comes brand superiority, where we now test our mega brands versus competitors every year to make sure they are always superior. And we do that because it's proven superior brands always overperform non-superior ones, and that is a key discipline for a company that owns iconic brands.

Finally, we have the new-to-the-world propositions, where we're developing the next generation of beers for the next generation of consumers. To launch those innovations, we use our DTC business that Lucas will talk to us about as a very unique launch pad because that way, we're able to seed fast and also get first reactions directly from consumers before we decide to scale up. All in all, by working like this, we currently have both the #1 and the #2 innovations in the majority of our key markets, and our innovation business already delivers more than $6 billion per year. But stay tuned. Later today, you're all going to have a very immersive experience on what's to come. At this point, after category consumers, portfolio and innovation, we're ready with the planning cycle. So now we move into the capabilities for execution.

And next is connections and creativity. There's a lot in there, but I'm going to highlight 2 programs. First one is Creative X, which is a process we use to train our teams globally on how to ask for creativity, judge creativity and have external assessments to constantly raise the bar, always with one same mindset, using creativity to solve business and consumer problems. Very important to say that nobody at ABI gets rewarded for awards, but I believe it's telling that we moved from winning just 2 Lions at the Cannes Fest in 2016 to winning 200 Lions in the last 5 years, becoming the first company in history to be awarded the Creative Marketer of the Year 3 times in '22, '23 and '26. Most importantly, that way, our brand portfolio just reached its all-time high scores in brand power, led by our mega brands.

But, in a highly digitized world, I also need to talk about DraftLine. DraftLine is our global in-house agency with offices in 13 countries, working to connect creativity with data and technology to drive personalization at scale. At DraftLine, we take a very analytical and detailed approach to audience segmentation. Then we use AI to serve millions of different consumers with personalized tailor-made content at scale. Also, at DraftLine, we have a global newsroom routine, just like a publisher, where we track all social media conversation across 200 markets, speaking 24 languages, and then we decide when and whether our brands should join in real time. That process makes us move fast with the agility to see a moment going viral during the Olympics at 11:00 p.m. and having it incorporated into our global Corona campaign the very next day or when Michel is there cheering and seeing the Knicks winning the NBA and we have that iconic moment becoming a Michelob ULTRA campaign in just a few hours.

By working like this, we're not only improving significantly our efficiency, but we also make our brands relevant in culture. We even track the share of social media engagements in all big cultural moments, especially our mega platforms, and our brands have been consistently leading all of them on a global basis. I can tell you, those capabilities represent a big competitive advantage in the world as it is today. And from there, we move to trade marketing, where we have been improving our capabilities as well to evolve from driving availability to also building premium brands and expanding consumption occasions. So you all can expect to see much more of these, transforming airport spaces into true Corona oases that immerse travelers in the brand world the moment they walk in or off-trade shelves that actually make you feel like you're at the beach, making people stop in their tracks and feel the Corona vibe as they shop or interactive displays that double as brand merch stores and much more. After all, we all believe that trade marketing is called trade marketing for a reason. So we're treating that very seriously.

And finally, we have value creation, of course. This is when we bring all those capabilities together in one central intelligence to drive consistent compounding growth. As Ricardo mentioned, this is all about top and bottom line growth together with long-term brand building. So in the end, we need to make sure that everything we do lands in that place. And this is why we created the One ABI Way hub because it works as one source of truth for the whole organization, bringing together all the data points from those 7 pillars, also using AI for both automation and optimization. It makes a big difference. Let's take a look.

[Presentation]

All right. So this was the first part of our conversation, all of our consumer-centric capabilities. After years of development and big investments, ABI is now working as a top consumer-centric CPG to drive consistent compounding growth. So far, so good. So let's now move to the second part of our conversation, which is exactly how we use those capabilities to grow the category, to grow the pie. After all, I know that we all read a lot of different and sometimes conflicting headlines about the industry. So it's very important to have solid data and intentional plans to make an impact. By the way, what a great industry this is. I always tell people that it's a privilege to work with something that is made with natural ingredients that is brewed locally and that participates in people's lives in moments like this, when friends and family get together to have a great time to build memories. Guys, I never forget I started my career selling shampoos.

But the point here is that everything starts with building a strong category perception and timing could not be better. Consumers are consistently showing us they want moderation and socialization, and that's exactly what beer stands for. This is why we created -- we started to track the power of the category, just like we do with our brands. And based on the key attributes that influence perception, we built a full calendar to celebrate beer. For example, during FIFA World Cup, we had cheers to bars, a massive mobilization to invite consumers to socialize and watch the games there. Also last month, we celebrated International Beer Day, reminding consumers of the positive role that beer plays in their lives. So let's take a quick look at Cheers to Beer.

[Presentation]

Cheers to Beer. Guys, as we work like this and track the category power, we see not only that beer is clearly the strongest category in the industry, but also that it is growing power. And that goes hand-in-hand with beer consistently gaining share of alcohol according to IWSR. But we know that category perception is just the beginning. As leaders, we need to go much deeper in the work to actually grow the pie. So let me introduce you to the beer consumption pyramid. We split legal drinking age consumers into groups that do not drink beer, that drink every 6 months, every month and every week. And our plan is based on 3 consumer missions; to grow the weekly drinkers, which we call beer lovers; to address the barriers of infrequent drinkers and to position beer to win in more occasions.

So let's double-click in each of them, growing beer lovers. The key element here is the following; consumers need to socialize. That's what they want and with moderation so they can socialize for longer. And given that's exactly why beer exists, by design, our mega platforms always invite consumers to get together. Here's a clear example, the Olympics. That's the biggest event in the world, but beer had never been allowed as a global partner. In '24, the IOC understood our proposal for socialization and moderation and Corona became the first beer in history to become a global Olympic partner with Michelob ULTRA in the U.S. That was a big move for the whole category, but also a big demonstration of consumer behavior when they socialize.

Look at that picture. That's Winter Olympics earlier this year. Everybody said it would be challenging. It was super cold and people would not want to drink cold beer. But look at what happened. If we were not there, all those people would have gone to the other line. But we were there. And Corona had 57% share of all beverages sold in the venues. Guys, we sold more Corona than water. Case in point, social moments shape consumer behavior. And that was a tough example. That was winter. You all saw what happened at the World Cup during summer. Same message from consumers, same lines, same performance. This time, even selling more than soda and chicken tenders combined. They were even collecting cups from other people. Again, those social moments are shaping consumer behavior. But don't take it from me. Let's hear directly from them.

[Presentation]

Smart guy. This is why we made huge investments to evolve from having in our calendar only 1 global event every 4 years to now having at least 2 of the largest events in the world every single year because this is how we grow beer lovers. So now let's talk about addressing the barriers or should I say the opportunities of infrequent drinkers. After analyzing participation data, we have 3 cohorts here; budget-conscious drinkers, female drinkers and LDA drinkers. They're all very different and therefore, have different barriers to be addressed. Budget-conscious drinkers are actually the biggest opportunity to be addressed because they represent almost 1/3 of the beer volumes. They're the typical beer drinkers and the clear barrier for them is affordability.

As you know, we face all-time low consumer sentiment that plus the constraints on disposable income makes affordability become the #1 reason to reduce consumption. We know that working minutes to buy beer is a key metric to watch there and data is showing us huge opportunities to make beer more affordable, especially in developing markets. To address that, you're going to see a lot of packaging innovations, both with smaller formats for lower out-of-pocket as well as larger formats to deliver more for less.

Now female drinkers. Women historically have lower alcohol participation compared to men. Our data showed that many of them are sweet seekers. They prefer sweet over beer. Also, fitness is an increasing priority for many of them. And this is why we'll double down on 2 areas. On beer, women have higher participation levels with our balanced choices brands like Stella Pure Gold; low calories, gluten-free or Michelob ULTRA; low carbs, low calories. By the way, ULTRA will bring female drinkers to the spotlight next year as Brazil hosts the Women's FIFA World Cup. Now on the beyond beer side, women actually over-index versus men as they engage with those sweeter and high-end propositions like Brutal Fruit, usually shifting from wine and spirits. Brutal Fruit, for example, has 4x more women participation with 84% incrementality to the business. It is a no-brainer.

And finally, LDAs. LDAs represent 10% of the industry, and they are naturally a more complex group that needs to be addressed in different angles. From the product angle, they have a wider taste profile. And this is why we developed flavored beers. Here in the U.S., this is what happened when we brought Busch Light Apple to the market. Internationally, our global proposition is Flying Fish, and that is what happened when we launched it in Belgium. But pay attention to this number. 50% of those consumers are new to the category. Also for Beyond Beer, we invested in brands like Beats and BeatBox exactly because they have strong flavor profiles. As a consequence, they not only have very strong results, but also 2x higher participation amongst LDAs.

But this game is not just about flavors. LDAs frequently choose beer during live experiences, for example, especially concerts. Beer plays a very important role there. As they want to socialize for longer, they often alternate alc and non-alc beer to enjoy the full experience. And this is why we joined forces with Live Nation, the global leaders in live music. We're becoming their preferred partners and turning them into a true channel to connect with LDAs. Let's take a quick look.

[Presentation]

And friends working like this, things are changing. This year, we've seen beer growing participation with LDAs and ABI overperforming the industry. Also, IWSR just released a study showing that the consumption gap between Gen Z and general population is now negligible. In the end, it's always all about socialization.

Now let's cover the third consumer mission to grow the category, to expand beer occasions. Understanding occasions is key, given consumers have different needs in different moments, and that brings great opportunities. Here, we also decided to prioritize 3 occasions based on growth and winning ability. First one is watching sports. This occasion is big, growing, and it's a natural choice for beer. All big sports events are reaching record viewership levels, and we have massive synergies with our mega platforms. This is why today, ABI is one of the biggest players across any industry in this territory. And now with the addition of Champions League next year, we'll have not only another global moment for watching sports on weekdays, but also from Tuesdays to Thursdays, 10 months per year. But on this one, there's someone that knows it much better than me. David, what would you say about Champions League?

Thanks, Marcel, and I'm really sorry that I can't be with you today. Champions League will always be very special to me, and it gave me one of the best moments of my career. It represents the pinnacle of European club football with the most passionate fans week in and week out. I think that heritage and tradition is a perfect fit with Stella. We've obviously already done some incredible work together over the past few years. And I think that we can really create something special with the Champions League partnership. I can't wait to get started. Have a great day, everyone, and cheers.

Cheers, David. Thank you. Second occasion is casual meals. This is another big occasion, but here, beer underperforms versus other beverages. And this is a massive opportunity for the nonalcohol propositions because they can occupy that space of the adult refreshment choice. Because after big investments in brewing technology, today, we deliver high-quality non-alc beers with full flavor, different flavors, low carbs, low calories and even with electrolytes and protein. So we're seeing an increasing number of adults substituting soft drinks or other beverages for non-alc beers during meals. That is changing the industry, and it opens a huge addressable market for beer.

The third occasion is home gatherings. First, because of COVID and now constraints on disposable income, consumers are still choosing many times to socialize at home. And the biggest driver of choice here is convenience for hosting. This is why for beer, we're expanding our PerfectDraft machines led by Stella and also our direct-to-consumer brands like Z� Delivery and TaDa, which, by the way, are growing 11% users just this year. On Beyond Beer, Cutwater, for example, is a brand designed for hosting because it delivers the convenience of a real high-quality cocktail that is ready to drink. This is why Cutwater is growing triple digits, and it is now the fastest-growing spirits brand in the U.S.

But lastly, we did another unprecedented partnership for the in-home occasion, Netflix. With almost 1 billion viewers, Netflix is both an occasion on its own and also a very strategic partner to shape the industry, given its impact and influence in culture. Through our partnership, we match their shows to our brands and work together to authentically integrate and promote the shows. Only this year, our brands will be present in more than 300 titles, addressing different consumer groups and different occasions. Also for a few big titles, we are together literally coproducing content in a way that it becomes almost impossible to distinguish what is advertising from what is just another episode. So let's see a quick example from the recently launched The Gentlemen Season 2. If you watched it, you will understand what I'm talking about.

[Presentation]

Never corner a bull, David. All right. So that was the second part of our conversation, how to grow the category. In summary, I shared our efforts to drive category perception together with very intentional moves to address our 3 consumer missions; to grow beer lovers, to address the barriers of infrequent drinkers and to expand beer occasions.

So now let's go to the third and final part of our conversation today, how to lead the category. Because after growing the pie, let's talk about how to win a larger slice of it. This is our category expansion model. As markets develop, there is a growing level of relevance in 4 levers; Superior Core, Premiumization, and Balanced Choices, and Beyond Beer. The way we work is to develop replicable solutions to lead each of them at scale.

So let's start with Superior Core. Core brands are the base of the industry. We are leaders in core, and we are gaining share. Our replicable model is based on superiority, affordability and local pride because our core brands carry the colors and the values of their nations. They're big icons of local culture and must always make consumers proud.

Let's now hear from Felipe Ambra, our Marketing VP in Mexico and see our Superior Core brands in action.

Let's do it, Marcel. Hello, everyone. It's a pleasure to be here. When we talk about leading the beer category, it starts with one simple belief, a healthy core is the strongest engine of sustainable growth. In Mexico, our core portfolio does more than drive our business. It helps grow the entire beer category. As Marcel mentioned, our approach is based on 3 connected elements; superior brands, igniting local pride with affordability. Together, they provide a powerful value equation, brands that consumers truly love because they offer the best liquid, the most appealing positioning at the right price and in the right pack format.

In Mexico, we have 2 iconic brands, Corona and Victoria. Corona embodies the ambition and progress of Mexico. The spirit of Mexicans who keep moving forward and conquering the world. This comes to life on campaigns and platforms like Corona's 100th anniversary, highlighting the extra that has defined the brand for a century. A mindset that continues to ignite Mexican ambition today in a concept that naturally evolved into our FIFA World Cup platform. Victoria plays a complementary role. While Corona represents Mexico's future Victoria Honors Mexico's Roots from D�a de los Muertos to the rituals that inspired Victoria [indiscernible]. The brand keeps Mexican traditions relevant for new generations. But strong brands alone are not enough. Consumers participate in the category when they perceive the value is right. That's why we have built a comprehensive price and pack architecture from affordable entry packs to larger multi-serve formats that deliver better value for each offering.

Every pack has a role. Every price point has a consumer, and every occasion has an offering. By balancing brand strength and affordability, we create sustainable growth for both our brands and the category. Ultimately, core superiority is about maintaining the right balance, superior brands with deep cultural relevance, the right affordability architecture and consistent investment behind our portfolio. When consumers love and can afford our brands, the entire category grows. That is the power of core superiority in Mexico. Corona and Victoria are not only iconic and superior brands, we believe they will be long-term value-creating assets. Thank you.

Thank you, Felipe. So now let's move to premium. Premium continues to be the biggest volume opportunity for the industry in absolute terms. After all, beer is an affordable luxury and the mix of premium improves year-over-year. We are leaders in premium, and we're gaining share. Our replicable toolkit here is the following. Instead of having one brand trying to be everything to everyone, we are strategically leveraging the power of our global brands, having each one of them positioned to address each of the 4 consumer motivations to drink beer.

Corona is all about relaxation. Stella to elevate the moment, ULTRA for an active lifestyle and Budweiser, the energy for the celebrations. That complementarity across brands is hard to beat because each of them authentically owns their territories. Playing like this, our global brands are consistently leading premium growth. So now let's hear from Richard Oppy, our Global President for Premiumization.

It is a privilege to lead the premium company at AB InBev. As Marcel just mentioned, we have a powerful premium portfolio organized around the consumer need states. Starting with Corona, which is all about relaxing and unwinding. Corona is the most powerful beer brand in the world and the #1 volume growth driver for AB InBev, even commanding a 25% price premium to its key competitor. Corona has been recognized as the most valuable beer brand in the world for 3 consecutive years. Behind this success is a simple formula, consistency. Corona reminds people what this is living is all about, an invitation to disconnect from routine and reconnect with nature. Talking about nature, Corona is brewed with 100% natural ingredients and has one of the most distinctive assets in the category, the iconic lime ritual.

Corona owns the summer season, activating Corona Sunsets Sessions globally, including Copacabana, which hosts the biggest beach concert in the world. This Corona mindset translates to all seasons throughout the year as we demonstrated through the successful Winter Olympics activation. Stella Artois is a brand that elevates the moment. With more than 600 years of brewing heritage and an uncompromising commitment to quality, Stella Artois is crafted to the highest standards, transforming everyday occasions into moments that are truly worth more. As a leader in premiumization within the on-trade channel, Stella Artois is renowned for its iconic perfect serve ritual served in its iconic chalice, it delivers a distinctive and elevated experience that reinforces the brand's premium credentials and makes every moment feel more special.

To accelerate momentum, we're continuing to activate Stella through its tennis platform, including Wimbledon and Roland-Garros. And we couldn't be more excited about our latest mega platform with enormous reach, and that is the -- your UEFA Champions League beginning in July 2027. This prestigious European football competition of the highest quality will partner with our European beer of the highest quality, which has a taste worthy of champion. At the same time, our partnership with Netflix is helping us connect with new consumers in a meaningful way, increasing the brand's cultural relevance. Michelob ULTRA is the superior light beer with low carbs and low calories leading the balanced choice need state and addressing the growing consumer demand for products that fit and active social lifestyle. The proposition has already been proven in the U.S. where Michelob ULTRA is the #1 beer brand by volume.

In 2026, we used the FIFA World Cup as a launchpad to expand Michelob ULTRA across the Americas, and it's working. Today, 45% of Michelob ULTRA's volume growth comes from outside the U.S. To accelerate momentum, we're investing behind superior platforms like the FIFA Men's and Women's World Cup, PGA Golf, the NBA and an exciting new global running platform launching in 2027, allowing the brand to connect with consumers through their passions and grow participation. And finally, Budweiser leads the build energy need state and is the brand at the heart of celebrations. Whether it's a personal achievement, a shared victory or a cultural moment, when it comes to celebrating, one thing remains true, this calls for a Bud. To strengthen this positioning, we are doubling down on one of the most powerful celebration passion points, music.

Through iconic partnerships with some of the biggest artists in the world as well as activations at festivals like Tomorrowland, Lollapalooza and key Live Nation venues, Budweiser is shaping culture and strengthening our relevance with the next generation of LDA drinkers. In closing, we have a powerful and complementary portfolio of premium brands that are delivering exceptional results, reinforcing the strength and momentum of our premium company.

All right. Thank you, Oppy. So now let's move to balanced choices, the third growth lever. Guys, here, we're literally building the next generation of beers for the next generation of consumers. Our balanced choices portfolio includes non-alc beer and also the beers with full taste and low stats. On the non-alc beer segment, we've been growing 3x faster than the industry, led by Corona Cero globally, Michelob ULTRA Zero in the U.S. and a pipeline with styles, flavors and next-generation beers with electrolytes and protein.

In parallel to that, we continue to develop our beers with full taste and low stats like low carbs, low calories, gluten-free and sugar-free propositions, all of them with significant growth rates. We are leaders in balanced choices, and we are gaining share. This portfolio already represents 11% of our total business, but we strongly believe this is just the beginning because these propositions are changing the industry. With strong brands boosted by pioneer innovation, we are literally working to lead the future of the category.

So let's now see that process in action with Dani Waks, our Marketing VP in Brazil.

Thank you, Marcel. Excited to talk about the next generation of beers. As you have just seen, balanced choices is a combination of 2 segments, nonalcohol and low stats. And in Brazil, this is not a niche anymore. On the contrary, balanced choices is becoming the next major transformation of the beer market, responsible for a big, big part of its growth. So let's start with non-alc. This is a segment that has been growing way above the industry over the last years and one in which we are the leaders here in Brazil. We have a portfolio of brands in different price segments. We have Brahma Zero, Skol Zero Zero, which is the first zero alcohol, zero sugar beer of the market, Bud Zero and Corona Cero.

We must continue to normalize the consumption of zero beers, close the gap in pack and distribution to expand its occasions and build non-alc intentionally with to make sure it is seen as the best option in the adult refreshment space. We're also pushing non-alc into the next generation of beer. We just launched Spaten Pro, the first beer with protein in Brazil. Now let's talk about full taste, low stat beers. This is a space that includes low gluten, lower carbs, lower calories. It is a segment in which we also lead here in Brazil, and it is growing even faster than non-alc. There are 2 brands here that capture the essence of this segment. The first one is Stella Pure Gold, all the flavor of Stella gluten-free and with 18% fewer calories than the regular Stella.

It is so successful that it already represents half of Stella's volume, growing at over 100% CAGR from its launch to 2025. Stella Pure Gold is a great example of a full flavor, lower calorie beer. Now let's talk about Michelob ULTRA, 80% less carbs than regular beer with a great and refreshing taste that Brazilians love. As a matter of fact, it's the brand in our portfolio with the fastest growth and we are expanding capacity, developing new pack formats and investing a lot in experiential like the World Cup and the running platform, which is huge in Brazil.

To sum up, 3 important messages. Number one, balanced choices is already a reality in Brazil and a massive engine of growth. Number two, we need a full portfolio of different brands and liquid propositions tailored to different consumer needs and spaces. And number three, we must bet big behind the space, be it in experiential, trade, packs and distribution. When all of these elements come together, we can turn a powerful consumer trend into a category growth lever, building the next generation of beer for the next generation of LDA consumers.

Thank you very much, Dani. So now to close our growth levers, let's cover beyond beer. This segment is also shaping the industry and steadily growing participation because it addresses those 20% of drinkers that are sweet seekers. Also, beyond beer is profitable and very incremental. But just like every great opportunity, beyond beer comes with a caveat that we learned after wins and mistakes over the years. This is a world for pure-play brands, not for line extensions. On beyond beer, we are not leaders. We're actually the challengers as we expand our footprint. But we're growing 37% revenues and gaining share very rapidly.

Here in the U.S., for example, we are already the fastest-growing spirit company based on our beyond beer sales, and we're ready for more. After years of learning how to play this game, we now have 6 pure-play brands with proven performance and lots of momentum. They are ready for expansion. We're talking about Brutal Fruit, Flying Fish, Nutrl, Cutwater, Beats and BeatBox. The more we simplify the portfolio and expand those brands, the more we grow. You're going to hear a lot about this in the U.S. presentation. So now let's hear from a region that proves beyond beer is an opportunity everywhere.

Let's hear from Leanne, our Marketing VP in Africa.

Thank you, Marcel. It's 100% true. 20% to 30% of alcohol consumers are sweet seekers regardless of market maturity in Africa. That's why we anchor beyond beer in our global segmentation backing pure-play brands that can win today while building the portfolio of the future. I'm incredibly proud of what we're seeing from 2 beyond beer brands born here in South Africa, the leading brand in our global, flavorful and refreshing segment. Flying Fish is our crisp, refreshing, lemon-flavored premium beer made for LDA to 24 consumers seeking more flavor. As a pure-play brand, it gives us permission to connect in fresh ways and bring new excitement into the category. We've done exactly this with surprisingly good sets. Leaning into our passion point of DJ sets and music streaming, we launched experiences in unexpected locations across SA.

And Halloween has given us the perfect moment to really show up differently with a limited edition passion fruit and lemon release. Brutal Fruit elevates everyday occasions, bringing women together to enjoy a glass of fruity, sparkling refreshment. Some recent innovations have set out to do exactly that. Brutal Fruit L'Orange Rossa strengthens our leadership in spritz. Our elegant new Brutal Fruit brand luxe sharing bottle enhances the moment. And following encouraging results, Brutal Fruit nonalcoholic is now scaling nationally, bringing an alcohol-free choice to the category that still feels social and really special. And in Party Mix MXD, South Africa's 2025 innovation of the year shows the size of the opportunity in our build energy social occasions. You can count on Africa to keep building beyond beer brand with distinctiveness, boldness and real consumer relevance, creating the future with more occasions, more growth and more tiers. Thank you.

Thank you, Leanne.

All right, everybody. So that was the third part of our conversation, how to lead the category. This is all about the 4 growth levers, and our job is very clear to deploy replicable models and lead all of them. As you can see on the screen, we have a lot of momentum. We're very ambitious, but also very humble. We know there is still a lot to be done. And with that, we conclude our session today on how to lead and grow the category. I really hope you all enjoyed this real inside view of everything we're brewing for the future.

In summary, we covered today, our consumer-centric capabilities, the One ABI Way, wiring the entire company to behave as a top CPG, driving consistent compounding growth. Then we covered how to grow the category, driving category perception by executing 3 consumer missions: growing beer lovers, addressing infrequent drinkers and expanding beer occasions. And then we covered how to lead the category, using replicable models to lead each of the 4 growth levers that shape the industry. There is still a lot to do, but we are very confident that now we have the brands, the capabilities and a very intentional plan to deliver our strategy to lead and grow this amazing category.

So thank you all for your time, and see you all at the immersion area. Thank you very much.

Please welcome back Shaun Fullalove.

Thanks, Marcel and team. I know there was a long session. Something else we have to get used to given the format of this presentation, is my last name being said multiple times. It's taken me 42 years to get used to it. So we're all in this together, I think, hopefully it becomes normal by the end of the session. We covered a lot of ground there. I think I know everyone had long travels in here, so we're going to take a short break now. I think we're going to take 20 minutes. So let's try and be back in seats around 10:00, 11:00, 10:30. You should be able to grab some coffee outside, maybe a Phorm Energy outside. And for those on the webcast stream, we will see you in 20 minutes.

[Break]

Please welcome to the stage, Lucas Herscovici.

Good morning, everyone. It's a pleasure to be with all of you today. I'm Lucas Herscovici, Chief Direct-to-Consumer Officer for ABI. I joined this company 25 years ago as a global management trainee back in Argentina. After starting my career in sales, I later moved to marketing, embarked on several international assignments in global headquarters and the North America zone. I moved to U.S. 18 years ago here to St. Louis. I'm honored to be part of the SLT since 2018, first as Chief Non-Alcohol Officer and later as Chief Sales Officer. Now for the past 4 years, I had the privilege of serving as Chief Direct-to-Consumer Officer.

D2C is at the frontier of pillars 1 and 2 of our strategy. And my job today is to show you how D2C is becoming more and more an unmatched competitive advantage to accelerate ABI's organic growth to lead and grow the category. I will use the same framework shared by Marcel to show you how D2C augments each of these 3 pillars, creating a unique competitive advantage for ABI. First, I'll show you how D2C is improving our consumer-centric capabilities by scaling best-in-class digital products and becoming a powerful tool for insights generation. Then I'll show how D2C is also becoming a unique platform to grow the category through brand building and occasions development. And finally, I'll show you how D2C is helping us to lead the category by becoming an innovation lab for new product development. Now let's go through each of them.

Supporting our consumer-centric capabilities, we have scaled our best-in-class digital products across key markets under 3 digital mega brands: Zé, TaDa and PerfectDraft. For developing markets, our value proposition is focused on delivering cold beer in less than 30 minutes at supermarket prices. Zé Delivery is our brand in Brazil, which we replicated to the rest of the world under the brand TaDa. For developed markets, our proposition is called PerfectDraft, which is like an espresso for beers. Consumers get to enjoy the draft beer experience at home from over 40 different beer brands buying their kegs online or in physical stores. Both propositions leverage the breadth of ABI's physical, brand and experiential assets, making them key differentiators versus other players. These products have scaled and they're growing consistently.

In the first half of 2026, net revenue grew 9%, active consumers 11%, and we have over 4 million consumers that are already enrolled in our rewards programs. As shown in the chart on the right, online beer sales have grown 5x faster in our D2C markets versus our non-D2C markets. This important difference proves that scaling best-in-class digital products is developing the beer category. Now let's move to insights generation, a key foundation of organic growth companies and of our One ABI Way. Our experience has shown that having D2C creates a unique capability versus other CPG companies in 3 different ways. First, using real-time first-party data helps us detect demand 2 to 5 weeks ahead of other CPGs that usually rely on sell-in data. This gives us a better pulse of the market, helping us make commercial decisions that are more efficient and effective.

Next, we use D2C as our crystal ball to understand consumers through proprietary research and highly granular data, whereas CPGs usually rely on external research and aggregate data. And lastly, we use our data and personalized product algorithms to act as an innovation accelerator, where CPGs usually use broader tools that lead to slower and more expensive innovation. D2C insights also increase our consumer understanding and help us build stronger brands. Research companies provide an important foundation for understanding brand loyalty across the market. We complement that perspective with our D2C first-party data surveying consumers every week at greater scale. That gives us a more frequent and granular view of brand loyalty KPIs, including monthly insight at zip code level while allowing us to connect what consumers say with their actual purchase behavior.

For example, in H1, brand retention, one of our brand interaction KPIs reached 62% for Stella Artois family and 73% for Michelob ULTRA compared with 52% for the average of our competition. This shows the power and momentum we have with these 2 premium brands in Brazil. We're now making consumer insights accessible at scale. Our Insights hub in Brazil combines a simple chat-based interface with qual and quant research tools, allowing colleagues to explore multiple data sources and run their own research using AI. This tool also makes the consumer hours mentioned by Marcel more efficient and effective, allowing us to engage one-to-one with the right consumers and understand challenges and opportunities in greater depth.

Let's watch a video that brings this to life.

[Presentation]

Well, now let's take a look at how D2C contributes to grow the category by building brands and developing occasions. As Marcel shared, there are 3 occasions we're prioritizing: watching sports, casual meals and gathering at home. Let's see some examples on how D2C is helping develop each of them. Through our D2C data, we know that watching football at home represents a meaningful occasion with growing monthly frequency and a strong weekend role. Our D2C platform allows us to know team fandom of each user and their purchase behavior during football games. Based on this capability and Brahma's partnership with most football clubs in the country, we developed a big national always-on 360 activation program that has been growing consistently for the past 2 years.

Let's watch a video to learn more about it.

[Presentation]

So based on the success in Brazil, we're now scaling this idea to Mexico through a program called Club Corona that is enabled by TaDa. Consumers scan unique codes under bottle crowns, earn points and redeem rewards. The program is built around returnable glass bottles and is expanding nationwide. Key partners such as OXXO, Tigres in America extend its reach across retail, soccer clubs and the 12 teams that are participating. Gamification keeps consumers engaged through match time bonuses and result predictions, connecting our brands, consumers and retailers with a full digital ecosystem. Now let's talk about casual meals. It is a sizable occasion, but decreasing versus last year. The occasion is concentrated on weekends where Stella Artois is among the key brands.

Based on these insights, we launched Stella Artois Thursdays to create an additional weekday moment for Stella Artois Pure Gold, activated across Zé Delivery, Netflix, influencers and offline. On Thursdays, thanks to the activation of this program, Stella Artois Pure Gold now accounts for around 60% of Stella Artois GMV and participation is up 90% versus last year. In-home gathering is also a meaningful occasion, and PerfectDraft is a great proposition to activate it in Europe. PerfectDraft in the U.K. continues to expand its reach with active households growing 18% versus last year and volumes growing double digits for 24 consecutive months. As you can see on that beautiful image, we have leveraged our partnerships with David Beckham and FIFA World Cup to activate this occasion with excellent results. Finally, let's see how D2C plays an important role as an innovation lab, enabling ABI to lead the category.

D2C impact on leading the category is visible across the growth levers shared by Marcel, where D2C over-indexes in every one of them. As you can see on the slide, D2C is significantly overrepresented in beer lovers past 7-day participation as well as mix for returnable glass bottles, premium brands, balanced choices and beyond beer. Additionally, D2C also helps accelerate innovation. At pre-seed, we rapidly test concepts with real consumer feedback. We did it with Vicky Chelada in Colombia, where consumer response did not show potential, helping us avoid investing further in launching the product. At seed, we identified momentum 10x faster than we used to do with traditional research. In Peru, TaDa Insights helped us develop Mike's Mango Hot, which we then tested through D2C before a broader rollout, helping make August the strongest RTD sales month in Peru in 6 years.

At scale, we trial products nearly 60x cheaper through targeted sampling. For example, in Q2 this year, we reached 240,000 targeted consumers with Michelob ULTRA trial program in Brazil. We estimate this would have cost $19 million through a traditional nontargeted sampling program versus only $300,000 spent through Zé Delivery to reach consumers in a personalized way. Our ecosystem data can also influence online to off-line execution via integration of D2C with BEES. As we saw before, D2C data shows us what consumers are buying and which brands they love. Zé data then enriches these algorithms to identify a retailer where Stella Artois Pure Gold is missing despite local consumer demand and loyalty. The opportunity then appears as a suggested order in the BEES seller app and as a personalized task for the BDR, the business development rep.

This closes the loop from consumer signal to retailer action, helping Stella Artois Pure Gold gain distribution and consequently, market share. So now let me close with the key takeaways from today. First, our best-in-class digital products have scale and are delivering consistent growth in key markets. Second, they generate insights capabilities that are very hard for other CPGs to replicate. Third, D2C is enabling us to build brands and occasions that are growing the category. And finally, D2C serves as an innovation lab for faster, cheaper and more targeted learnings. What you saw today is just the tip of the iceberg of what D2C is. Let me share with you a closing video that showcases the full power of D2C within the ABI ecosystem, creating industry-leading capabilities that we are very proud of. Let's watch the video.

[Presentation]

Thank you for your time today. Later today, I invite you to visit our booth to learn more about our D2C brands and experience freshly poured Stella Artois and Corona Cero from our PerfectDraft machines.

Now I hand it over to Nick to talk about BEES. Thank you.

Please welcome to the stage, Nick Caton.

All right. Good morning, everyone. Three years ago, I had the opportunity to stand in front of many of you and talk about BEES and the transformation we had begun in how we connect with millions of retailers around the world. Since then, we've made substantial progress. And today, I'm excited to share with you how far that journey has taken us. But first, a quick introduction. I'm Nick Caton, Chief B2B Officer at AB InBev. My 14 years at ABI have taken me to Asia Pacific, North America and our global headquarters, working across different parts of the business from sales and finance to technology. And for the past 4 years, I've had the privilege of leading BEES. During that time, I've seen BEES grow from a transformation within ABI into something with a much bolder ambition. At BEES, we are digitizing the world's B2B transactions.

We do this to create value for everyone in the ecosystem. More value for retailers through easier access to the leading brands and products they need, more value for suppliers through direct always-on digital connections that leverage AI to identify opportunities for growth and more value for communities through more small businesses thriving. Today, to help you understand the journey we have been on and the opportunity we have ahead, I'll share with you how we are addressing retailer needs, the value we are delivering for ABI, the best-in-class capabilities we've developed and as a consequence, how we are expanding our addressable market. Let me start where it all began, our retailers. ABI serves millions of retailers around the world across different channels, countries and routes to market. And serving them means being close to the day-to-day reality of running their businesses.

That proximity has given us a deep understanding of what these businesses need to thrive and of the barriers that can hold them back. Historically, in traditional trade, the relationship with a supplier depended heavily on a brief visit from a sales rep. A few minutes a week determined what retailers could buy and therefore, what they had available to sell. While technology was transforming many aspects of their lives, it was not transforming their businesses. And in an age of rapidly advancing technology, many of those retailers were simply left out. And this wasn't only a traditional trade problem. Modern trade retailers faced many of the same frustrations just in a different form. Although key accounts had access to digital tools, much of that infrastructure that connected them with their suppliers had been built decades ago.

So in both small neighborhood stores and large modern trade operations, the way retailers and suppliers work together created friction that made it harder for both of them to grow.

[Presentation]

With BEES, we are transforming our route to market through a global platform powered by data and AI. We are fundamentally changing how we serve retailers and how we execute our commercial strategy. And that transformation is already well underway at scale. Today, BEES is live in 30 markets with more than 4 million retailers, generating approximately $60 billion in gross merchandise value through the platform every year. What enables that scale is a common platform and data foundation built to support every market, channel and user we serve. BEES connects every retailer touch point across the route to market through a suite of purpose-built front-end applications for retailers, sales reps, delivery drivers and customer service agents. Different applications, purpose-built for different users, all powered by the same platform and intelligence.

Ordering, sales visits, customer service and delivery all generate data, giving us a richer and more complete view of every retailer and how best to serve them. And we do this with BEES AI, our embedded intelligence layer. It processes data at scale, turning it into insights that shape more personalized experiences. And because each interaction informs the next, we can continuously improve how we serve retailers and unlock growth. One of the clearest things we've learned is that digitization doesn't make our relationships with retailers less personal. Done well, it makes those relationships stronger. We see it in the way retailers engage with us today, ordering on their terms, spending much more time with us and reporting higher satisfaction. BEES gives retailers more control over when and how they do business with us.

Today, over 1/3 of orders are placed outside of business hours, giving retailers the flexibility to order when it works for them rather than depending on the timing of a sales rep visit. And greater convenience has led to greater engagement. BEES adds 30 minutes of direct interaction with our retailers every week. And we've reinforced that engagement through Club B, our rewards program, giving retailers more reasons to participate and rewarding them for doing so. Today, over 3 million retailers are active Club B members. And ultimately, we see this strength reflected in greater satisfaction. Since we began implementing BEES, retailer NPS has increased by more than 45 points, reaching 71. Now I've shared so far how we have fundamentally transformed our relationship with our retailers. I hope you see that we didn't just digitize those relationships, we made them stronger.

Now I'd like to share how by serving our retailers better, we've created value for ABI at scale. First, BEES enables us to sell more profitably. By empowering our retailers to place orders themselves, we can refocus our sales force on opportunities that create the most value for each retailer. That makes every visit more focused and more productive. BEES enables each sales rep to serve 15% more stores, while our frontline cost as a percent of net revenue has declined by 1/3. And productivity extends beyond sales. Better visibility and planning help us use our logistics network more efficiently. Today, our deliveries are 15% more productive. And we've improved our financial operations as well. With data and AI helping us manage credit risk more effectively, bad debt has declined by 27%.

Taken together, BEES is clearly making our route to market more efficient. But efficiency is not the primary goal. The biggest value that BEES creates is growth. Let me highlight Brazil as a case example. Before BEES, we served around 750,000 buyers in Brazil. Today, we serve 1.3 million. We now have direct connections with retailers who may have been indirectly served in the past, which enables better channel management and more effective revenue management. And because these retailers are directly connected, we can engage with them more frequently and more effectively. Through digital communications, personalized shopping recommendations and tailored promotions, we can surface the products and opportunities most relevant to each retailer. That has helped us increase the number of products we sell with approximately 20% more SKUs per buyer in Brazil. In addition, BEES also supports growth through smarter commercial investment.

With Club B, instead of relying on broad-based discounts, we can personalize points offers for each retailer. And that investment works harder. Club B points offers generate 35% higher ROI than regular promotions. And importantly, the growth that we have experienced in SKUs and buyers came in service of our commercial strategy. Let me show you how. The increase in SKUs and buyers led to a strong increase in our multiple points of distribution in Brazil. This measures the availability of our products in the market. Importantly, our share of distribution also grew. So not only are we growing the distribution of our products, we are growing our share of shelf as well. With BEES, our growth in distribution focuses on the products that have the best fit with our retailers and the most consumer demand. And as a consequence, this distribution growth translates directly into market share growth.

So as this example in Brazil shows, BEES enables us to reach more retailers with more products and reinforce our commercial strategy. And we do this not only in Brazil, but globally. We use BEES as a global platform to enable our mega brand and mega platform strategies. BEES helps us translate our commercial strategy into execution at the individual retailer level.

A great example is Corona Cero at the Paris Olympics. BEES gave us the infrastructure to take this new mega platform, execute across markets and build the availability of Corona Cero globally. Through the platform, we could activate retailers quickly, put the right offers and incentives in front of them and give our frontline clear actions to drive execution.

In just 6 months, Corona Cero doubled its global footprint, reaching 30 markets around the world. We simply could not have executed that quickly and that effectively without BEES. Similarly, BEES supported the execution of Michelob Ultra for the FIFA World Cup. Our ambition was clear: use the World Cup mega platform to accelerate Michelob Ultra's growth.

That meant turning one global strategy into thousands of retailer-level activations and sales rep executional objectives. For retailers, we personalize the shopping experience, surfacing Michelob Ultra through relevant recommendations, offers and incentives. For our sales reps, BEES Force translated that same strategy into retailer-specific actions, helping them prioritize where to expand distribution, what to sell and what to execute in store.

So rather than executing one campaign the same way everywhere, we could execute one strategy but with greater precision, retailer by retailer. And the results were significant. For example, in Latin America, distribution grew 250% with volume growing 200%. This is the advantage that BEES gives ABI, the ability to turn our commercial strategy into execution with greater speed, precision and scale.

Now I've showed so far how BEES generates value for retailers and for ABI. I'd like to now share with you some of the leading capabilities that we've built into the BEES platform. With the speed of technology and AI advancement today, our capabilities are accelerating, and I'm excited to share with you some of what makes BEES best-in-class.

BEES' scale creates a virtuous cycle that is becoming ever more powerful. BEES generates proprietary data from the way retailers buy and the way our teams serve them. BEES AI turns that data into insights about what each retailer needs and where the next best opportunity is. But the real differentiator is what happens next.

Because BEES is so deeply embedded throughout our route to market, those insights can immediately shape what we do, what we recommend, what we offer and where our teams focus. More usage creates more data. More data strengthens our AI, better AI produces sharper insights and better insights drive better action. And today, this cycle operates at global scale.

And that scale comes from how deeply we've embedded BEES AI across the retailer journey. BEES AI identifies opportunities from what we know about each retailer based on their interactions in the platform and the commercial priorities we want to execute. For the retailer, that means an experience built around them.

In BEES Customer, the products we recommend, the orders we suggest, the promotions and Club B offers we surface and the communications they receive are all tailored for what is most relevant to that individual retailer's business. And personalization goes beyond what they buy. Retailers can select the delivery timing that works best for them and the best way to pay for their order, including with access to credit.

For the sales rep, BEES Force makes the visit just as personalized. It prioritizes the opportunities that matter most in each retailer and guides the rep towards the actions most likely to create value in each and every store. Today, BEES AI powers more than 25 billion of these personalized touch points every year. Let me show you what that looks like.

[Presentation]

Every retailer is different. So every interaction is [ too ]. Consider, for example, 3 stores in Colombia, in the same region of Colombia. Even in the same neighborhood, they can have very different shoppers' purchase patterns and growth opportunities. BEES AI uses those differences to shape what each retailer sees in BEES Customer and the objectives for each sales rep in BEES Force.

The commercial strategy is consistent, but the execution is adapted to each and every retailer. On the left, the first retailer has never purchased Michelob Ultra before. BEES AI identified that Michelob Ultra would be a good fit for this retailer, so we can share an activation directly in BEES Customer and reinforce it with a sales rep task to explain the brand value proposition and support a first purchase.

In the middle, by contrast, this retailer already purchases Michelob Ultra and is a Club B Black member, one of our most engaged rewards program members. In this retailer, our objective is to ensure we grow the volume of Michelob Ultra, leveraging points-based offers and supported again by sales rep execution. And in cases where our retailer does not have an affinity for Michelob Ultra, as in the retailer on the far right, our activations are focused on other strong brands in the portfolio. In this case, Águila.

As I hope it's clear, our online activations are fully personalized to the opportunities for each retailer. And even within the same sales rep route, the objectives and the importance of each objective is fully personalized. Our deployment of BEES AI is industry-leading in terms of both sophistication and scale.

And by better serving our retailers and by enabling our consumers to have greater access to our portfolio, ABI consistently outperforms in our most digitally mature markets. Our volume grows faster, our revenue management is more effective and total net revenue outpaces. Now in addition to these results, there are 3 main reasons that give us confidence that BEES is best-in-class.

The first is adoption. Technology only becomes an advantage when it is adopted at scale. And BEES has reached greater scale than all other B2B platforms combined. Second, BEES brings the route to market together in one connected AI-powered ecosystem. Each product is purpose-built for the users it serves, with BEES AI turning our data into the decisions that matter most.

So BEES doesn't just connect the route to market. It makes every part of it smarter and more effective. BEES is the most advanced AI-powered product ecosystem in CPG. Third, and perhaps the strongest validation of what we have built is that other leading companies are choosing to deploy BEES in their routes to market.

Today, we work with both the world's largest consumer goods companies and iconic local companies. Our partnerships represent around $5 billion in annualized GMV and are growing rapidly. BEES has the broadest and deepest partnerships of any B2B CPG platform. And as a result, the capabilities we built to transform our own route to market are now creating value across a much broader ecosystem.

I've shown so far how BEES addresses retailer needs, creates value for ABI and has built best-in-class capabilities. But those capabilities are now expanding beyond our own business. Years of deploying and scaling BEES have validated a platform that can operate across different countries, channels and routes to market.

And that enables a massive opportunity, expanding our addressable market. We define our total addressable market as all underserved B2B transactions around the world. These are transactions still held back by fragmented routes to market, disconnected systems and limited access to data, technology and AI. These are exactly the challenges that BEES addresses.

Our marketplace business is scaling rapidly, but the evolution of that growth is just as important as its scale. We established the marketplace through our 1P model using our route to market to sell partner products. Increasingly, growth is coming from the 3P model, where partners use BEES to digitize their own routes to market.

Today, 3P represents more than half of the marketplace GMV. And as you can see, it is growing rapidly. As 3P becomes a larger share of the business, our growth shifts towards a more asset-light, higher-margin model. Let me explain in more detail how these models work.

In 1P, ABI buys and resells partner products through our established route to market. For partners, that means immediate access to our retailer network, expanding their distribution and helping them reach more customers without having to build that route to market themselves. For us, it broadens the assortment we offer and offers retailers. It allows us to monetize our logistics capabilities where the returns are attractive.

In 3P, partners implement BEES within their existing route to market, using our platform to digitize and improve the way they serve their customers while continuing to operate their own supply and logistics network. That allows partners to benefit from the same digital capabilities we've proven at ABI, while allowing BEES to monetize its platform through a more capital-light, higher-margin model.

And in both models, both 1P and 3P, we offer value-added services from digital advertising and sponsored placements to rewards, analytics and financial services. These services give partners more ways to influence demand, target their investment and improve execution while creating additional revenue streams for BEES.

And across all of this, the principle is the same. We grow by creating value for the entire ecosystem. For retailers, that means greater access to leading brands with more convenience. Once our retailers gain access to 3P products in BEES, we see them purchase 2.5x more SKUs through BEES.

For suppliers, it means stronger brand execution and more opportunities to grow. On average, our partners grow their SKUs per retailer by 15% after launching BEES. And for communities, it means more small businesses thriving. Today, we have over 4 million retailers and 2,000 distributors leveraging the BEES ecosystem. This win-win-win value proposition is why leading companies are choosing to scale with us. Let's see an example.

[Presentation]

You all know, Nestlé is a very large company, selling in [ 188 ] countries across multiple channels. For several years now, Nestlé has been working with BEES, building a partnership to transform how we serve one of these channels, fragmented trade retailers. This channel presents an exciting growth opportunity for Nestlé, particularly in developing markets.

Developing markets are over 40% of our group sales and growing strongly. Over the past few years, we have launched BEES in 15 countries, including very large markets for us such as Brazil and the Philippines. At Nestlé, we are focused on how AI can help us unlock growth, not just efficiency. So our approach with BEES is not to replace our sales reps calling small retailers.

Our approach is to leverage AI to amplify the sales teams to better serve the small retailers and to engage directly with them [indiscernible]. Beyond the digitalization of order capturing activities, AI helps our teams make better personalized recommendations, promotions and communications, identify new selling opportunities and serve customers more effectively. This is driving tangible commercial results.

BEES is helping us to enhance distribution and visibility for our brands in fragmented trade, enlarging our coverage, driving broader assortment and ultimately sales and volume growth. We have seen that stores using BEES are growing faster than the ones not using it. And Nestlé's assortment grows faster in these stores.

So it's a win-win partnership with BEES. It combines a proven best-in-class B2B platform with our strong route-to-market capabilities in developing markets. While we have already reached significant scale, we believe we are still early in the journey with BEES, and there is much more to come.

Thank you, Jordi, and the entire Nestlé team for the partnership and the trust that you placed in BEES. It's a privilege to extend the capabilities of BEES to an iconic global company like Nestlé. We are proud of what we've built together, and we share the belief that there is still much more opportunity ahead.

Having proven BEES at global scale with ABI and now another CPG in Nestlé, we are confident that BEES can further extend to new industries and new channels. Let's see an example.

[Presentation]

I would also like to thank Rodrigo, Rogerio and the L'Oréal teams for their ambition and their partnership.

Together, we are bringing BEES into the pharmacy channel -- and as you can see, although it is a new industry and a different route to market, the underlying opportunity is the same, connecting brands, distributors and retailers through one digital platform. For L'Oréal, BEES creates direct digital influence at the retailer level, using targeted offers, communications and recommendations to shape purchase decisions.

And because L'Oréal can now interact directly with its retailers with personalized offers, it can more effectively drive conversion and improve its revenue management capabilities. For distributors like Okajima, BEES helps them unlock growth, improve operational efficiency and serve their retailers more effectively.

Now what we've built together is a strong proof point, a proof point that BEES can travel beyond the immediate industries and channels where it began. And we believe there is much more value we can unlock. The opportunity ahead goes beyond the transaction itself, including value-added services like advertising, campaigns, sponsored placements and rewards offers.

These digital commercial levers give partners more direct, targeted ways to reach retailers and influence demand. And our advanced capabilities in data, insights and image recognition help partners understand what is happening in their market and execute more effectively. And with payments and credit, we can address financial friction that can otherwise make it harder for retailers and suppliers to do business.

These services create more value and incrementality for our partners while also creating new revenue streams for BEES. Let's hear what one of our partners has to say about these capabilities.

[Presentation]

I'd like to thank Martin and the entire PepsiCo Brazil team for showing how BEES can help build brands with retailers digitally and engage them in more relevant and effective ways.

Now as the platform evolves, the digital assets and capabilities we've built can create novel and unexpected new revenue opportunities. Club B is a good example. As we expanded the catalog of products retailers could redeem with their points, we saw a significant increase in the redemption of electronic goods.

That business has now reached some material scale with very attractive redemption margins. The capabilities we've built to create more value for retailers are also now opening entirely new sources of profitability for BEES. And as we continue to scale the platform, we continue to find new ways to create value.

The more scale and relevance that BEES reaches, the more opportunities we generate. And looking ahead, we truly believe there is a massive opportunity to build further scale. Today, BEES transacts approximately $60 billion of gross merchandise value annually, and we know there is a much bigger opportunity ahead.

If you look at just the markets where BEES has the strongest product market fit today, Latin America and Africa, and consider immediately adjacent categories like beverages and snacks, the addressable market in 2030 can expand to nearly $300 billion. Now if you consider additional categories that are already available on BEES, like food, dairy, personal care and household products, the addressable market in 2030 can more than double to approximately $600 billion.

Now if you expand further to categories that we're starting to offer on BEES like health and electronics, the addressable market grows to nearly $1 trillion in Latin America and Africa alone. Now against that opportunity, the $60 billion in annualized GMV that BEES transacts today represents only a fraction of the market we are capable of transforming.

And BEES is strategically positioned to win because it combines 2 advantages: First, an end-to-end technology ecosystem that no other supplier has built. And second, the retailer reach, distributor relationships and decades of route-to-market experience that others cannot easily replicate. That combination gives BEES the ability to win.

BEES is high growth, profitable and cash accretive today. So as we expand into new markets, scale with more partners and develop new revenue streams, we are building from an already profitable foundation, which is becoming increasingly meaningful to ABI. BEES marketplace is already ABI's #7 contributor to EBITDA growth globally and growing at high pace.

And importantly, the composition of that growth continues to improve. As the capital-light 3P model and value-added services become a larger and larger part of BEES, the highest margin components of the business grow fastest. I'd like to leave you now with 4 things that I hope you take away from today.

First, BEES gives us a best-in-class capability to translate our commercial strategy into execution with greater speed, precision and scale. Second, what we've built creates an opportunity far beyond our own business. BEES expands our addressable market to new geographies, channels and industries.

Third, that opportunity is already translating into growth. Our marketplace is scaling rapidly with a proven 3P model that allows us to grow in an increasingly capital-light, higher-margin way. And fourth, BEES is profitable, cash accretive and BEES marketplace is already the #7 largest contributor to ABI's EBITDA growth.

We started BEES by solving real problems for our retailers and transforming our own route to market. In doing so, we built something much bigger, a best-in-class capability that strengthens ABI today and gives us a platform to capture an enormous opportunity ahead.

That is why we believe BEES can play a role in digitizing the world's B2B transactions, creating more value for retailers, suppliers and communities as we do it. Thank you for your time today, and I encourage you to stop by the BEES immersion space and experience for yourself many of the capabilities I've shared with you today. Cheers.

Please welcome to the stage, David Almeida.

Good morning. My name is David Almeida, and it's good to be in St. Louis, a city where I had the pleasure to live for 7 years and it is a hometown of one of my children. But more importantly, a city has been part of who we are as a company for over 150 years.

I joined this company 28 years ago, and I've had the privilege of working in multiple zones and functions. And today, I lead the strategy and technology functions. Over the next 20 minutes, I plan to show you how AB InBev has developed best-in-class tech, data and AI capabilities and how we're already leveraging those capabilities at scale to create value and how we'll do even more going forward.

You've just seen BEES and DTC from Nick and Lucas. They are the visible face of our digital strategy, best-in-class platforms that our customers and consumers touch every day. These platforms directly support our strategy to lead and grow the category and are big levers for digitizing and monetizing our ecosystem.

But AB InBev's digital capabilities extend well beyond them.

Behind the digital storefronts sits a global enterprise backbone, a set of global systems that run commercial, finance, supply chain and people the same way in every market. That helps us optimize our business at scale. Finally, we've developed advanced analytics capabilities that deliver enhanced decision-making to both our front-end applications and our enterprise systems in near real time. This advanced analytics capability is the focus of my presentation. But before we dive into real examples of how AI delivers material value to ABI today, it's important to understand the context in which this capability was developed. We've been investing significantly in our technology capabilities with intentionality since 2019.

Before 2019, technology in this company looked like much of the industry, fragmented systems, manual processes, limited visibility across our zones and the cyber risk that comes with all of that. Fragmentation meant duplicated costs and very little that could scale globally. From 2019 to 2023, we transformed our technology capabilities. We modernized our infrastructure. We moved our workloads to the cloud, and we launched our global enterprise platforms, S/4HANA, Workday, o9 and others. We launched and scaled these. We made major investments in our data and analytics capabilities, including our growth analytics center in Bangalore and building our enterprise data platform, BrewDat.

This was a period of concentrated investment. Since 2023, we've been scaling what we built, focused on few global platforms that can be best-in-class and leveraged globally. This is the phase of reuse and value realization. Earlier this year, we asked Bain and Microsoft to independently benchmark us against CPG peers. They scored us 1.2x the peer set on technology maturity and even higher on efficiency because of our scale and our strategy of standardization on global platforms. And that is the economic point.

Because the foundations exist, each additional market should need less incremental investment than the original build. Our strategy is build once, deploy repeatedly, improve globally. Within technology, analytics is where we are furthest ahead on the benchmark, 1.3x the CPG peer set. And the reason is simple. We built the foundations before we built the products. People, data and global platforms.

First, people. We built our own teams, data engineers, data scientists, machine learning engineers, and they work as one development flywheel. Data foundations feed data science. Engineering turns models into products and everything is embedded where decisions are made. In a world where intelligence is a competitive advantage, our data, our models and our intelligence stays ours. This is a strategic choice, and it will matter more every year.

Second, data. We built BrewDat, one trusted governed data platform designed for analytics and AI. In 2021, 29% of our data assets sat in one place. Today, 95% live in BrewDat, one version of the truth for every zone and every function. AI is only as good as the data underneath it. When that data is connected, insight reaches a decision faster.

Third, global platforms. In 2021, 48% of our technology spend went to global platforms. Today, that number is 92%. Standardized, high-performance platforms are the surface area that brings intelligence to the user directly at the point of decision. 10 years of consistent investment has built the global portfolio of analytics products woven into how we run this company. How we make beer, supply, logistics, procurement, how we grow it, how we sell it, including our most prominent use case, BEES AI and personalization, which Nick has just covered.

And then there's Gen AI, the newest and potentially most promising iteration of AI. It's early days in the application of this new technology. But just as we did with AI, we're building the foundations for what may come while staying laser-focused on creating value. From the brewery to the shelf, there is intelligence in the decisions we make. Now, there's a lot of talk about AI. So, instead of talking, I'd rather show you real use cases and demos of where AI is integrated at the point of decision, sometimes invisibly and already generating substantial value for ABI. So, let me show you 3 of them, 3 real problems, 3 advanced AI products and the results they created for our business, starting with logistics.ai.

First, the logistics machine that moves our beer. We run one of the largest networks in consumer goods. So, better intelligence here means more coordinated, more efficient decisions in every market. The opportunity sits in 3 places: transport, where swings in volume and freight prices drive cost; warehouse, where SKU complexity needs room to build more efficiently; and the last mile where route, fleet and distribution planning can work better together. Logistics.ai captures that opportunity by embedding intelligence into the logistics platform you already run and it's delivering $50 million of value and a 6% improvement in case-fill rate.

Let me show you a quick video.

[Presentation]

Those are real trucks, real pallets, real savings. Second, what's power. Managing our commercial investments through smarter resource allocation is one of the biggest value opportunities in our business. 30-plus countries, 15-plus brands in each of them, 100-plus variables, 52 weeks. That's more than 15 million decisions a year steering our sales and marketing spend. And every one of them faces the same 3 questions. What drove last month's results? Where should the next million dollars go? And what will it take for us to hit our target? No planner, no team, however experienced, can answer all those questions. Watchtower does.

Every brand, every market, every time the same way. It attributes what drove the result, commercial investments, price, execution, or external factors. It optimizes where the next dollar earns the most within real budget and portfolio constraints. In its first 6 markets, it influenced roughly $600 million of decisions and created approximately $35 million of value. It's now rolling out to 30-plus markets. Our ambition is simple, and I think unprecedented in our industry. Every commercial decision grounded in science. Let me show you what that looks like on the ground.

[Presentation]

I love that example. It's a real product used by more than 150 of our colleagues who make commercial investment decisions across our company. Third and finally, the place where every consumer decision ends, the beer shelf. A well-organized beer shelf is worth 6% to 8% of category growth. Most shelves aren't well organized. 80% of volume comes from 21% of SKUs, yet the biggest brands are usually underrepresented on the shelf. 1 in 3 shoppers walks out empty-handed. That is lost revenue for us and for our retail partners.

CatExpert.ai models each store across 200-plus variables. So suburban supermarket and an urban convenience store each get the right answer. It then resolves more than 15 million SKU shelf combinations into a single executable planogram. Where it's live, it can deliver 2% net revenue uplift and 40 basis points of share. And because it grows the whole category, retailers ask for it. It makes us a better partner, not just a bigger supplier. We currently cover more than $2.5 billion of net revenue and estimate that we will cover $7 billion by 2030.

Let's look at a quick video here.

[Presentation]

What matters is where the value comes from. Growing the whole category, for the retailer, the shopper and us. That's why it scales. So let me bring together what you've just seen, around $30 billion. That's the scale of business decisions our analytic products inform every single year. Decisions made with intelligence not just instinct. These products are embedded in our daily workflows used by thousands of people who may never think of themselves as using analytics at all. And it doesn't stop with decisions. Our portfolio of global products is creating meaningful value.

That's what our data and analytics capability makes possible. That's how our company runs today. And we're early in this journey. The path ahead is clear and it's disciplined. We scale what's proven. You've seen the pattern. 6 markets become 30 and the same playbook runs across our whole portfolio. The products exist and now we multiply the footprint of these products across markets. And we accelerate Gen AI selectively. Gen AI does not reset the technology. It increases the value of the foundations we've already built, the data and the platforms.

In Gen AI, we've chosen 4 areas to focus our investment and energy: one, decision copilots embedded in our products, so insights arrive faster; two, agentic automation of the repetitive service and transactional work, that's the lowest hanging fruit; three, AI agents that make our own engineers faster at building and testing; and four, end-to-end process reinvention, where our digital twins are already reshaping cross-functional work in Mexico, Canada and China. Let me take you deeper into one area Marcel touched on earlier, how we're using Gen AI to better understand our consumers and drive growth.

[Presentation]

It's not a demo. It's a real use case of how we're transforming our business using Gen AI. So let me conclude. Here's what I'd like you to remember. Five things. One, we lead CPG peers in technology capabilities, and we did it more efficiently. Two, we turn data and analytics into operating products embedded in how we run the business. Three, these products inform around $30 billion of business decisions every year and deliver meaningful value for our business. Four, the job is not done. We have a clear path forward, taking proven products to more markets. And five, Gen AI expands the opportunity from decisions to impact. 28 years ago, I joined a company that ran on experience and instinct. Today, it runs on experience, instinct and intelligence. The next decade belongs to the companies that combine all 3.

Thank you. Here's the future with more cheers.

Please welcome, Shaun Fullalove.

Okay. Thanks to Lucas, Nick and David for those presentations. First session this morning, we covered the lead and grow part of the strategy. These 3 sessions here, we covered most, I think, of the digitize and monetize section. So we're going to head to a lunch break shortly. We're going to make it slightly extended today to give you a chance to interact with some of the BEES and the D2C booth that we have outside of the terrace. One reminder for those that do want to spin, apparently, we have 3, 4 bikes left. I'm personally willing to sacrifice mine if there's a fifth that wants to do it. So if you would like to, please register at the desk outside you on the right. One of Fernando's only feedbacks to me for the Capital Markets Day was to make sure that the food is excellent. So make -- I hope the food lives up to everyone's standards outside. Enjoy the lunch, take some time to browse through the booths, interact with some of the products and technology, and we'll see you back here at 1:00 p.m.

[Break]

Please welcome to the stage, Brendan Whitworth.

All right. This is the coveted post-lunch presentation, which will be me and my presentation versus you and your digestion. But my name is Brendan Whitworth, and I'm the CEO of Anheuser-Busch in the North America zone. I've been in this position since 2021, and I joined AB InBev in 2013. I started in our global office before joining the U.S. business as a Region Vice President in 2015. I also ran our trade marketing organization and was our Chief Sales Officer prior to my current role. It is an absolute pleasure to host you in St. Louis and share a little bit about the U.S. business.

Anheuser-Busch has been around for over 165 years, and it all started right here. And this year marks the 150th anniversary of Budweiser, our flagship beer brand that led to the growth of our broad and diverse portfolio. So while St. Louis houses the history of this great American institution, and it remains vital, a vital location in our company's network today, our business now looks different than it did centuries ago. It even looks different than it did a decade ago. While we have been historically known as the world's largest and very humbly best brewer of lagers and ales, we are now one of the top and the fastest-growing spirits company and an emerging player in energy drinks. And this obviously isn't by mistake. It is the outcome of a deliberate strategy, purposeful investment and sustained execution over recent years. It's also the outcome of deeply understanding the consumer and using our capabilities to generate new adjacent businesses that expand our addressable market.

And we know that growth is not uniform across the industry. And while there are certain pockets that are in decline, there are also pockets of growth. And for years, we've viewed the industry and the consumer through the lens of total alcohol and built our portfolio of solutions around it. So even as cyclical macro factors pressure our industry and CPG more broadly, this approach has better positioned us to win and continue making progress in rebalancing our portfolio. So while the St. Louis brewery first made Budweiser 150 years ago, we've invested in its capability and its capacity to make spirits-based brands like NÜTRL and Cutwater at scale today. And we've done the same in other strategically placed breweries in Los Angeles, outside Atlanta and Upstate New York.

Now before I go any further into greater details of where we've been focused for the past few years, I'd like to take a step back and consider the strengths and attractiveness of the U.S. market. The U.S. is a developed market with the world's largest profit pool for global CPGs and stable cash flow generation in hard currency. The U.S. also typically exports trends and brands to other parts of the world. This is true for our industry and many other industries. If we are successful building brands in the U.S., there is a good chance that they can be successful elsewhere in the business. And I think that Michelob ULTRA is a pretty good example of that.

The U.S. is also an ecosystem of strong and well-resourced partners like our wholesalers and our retailers that help bring our products to consumers every single day. As I mentioned, our addressable market today is total alcohol. That means that we compete in an almost $190 billion industry with 6% growth over the last 5 years. And while we're just getting started in energy, and we have much more to prove, it could bring an additional $25 billion to our addressable market. But now if we just focus on beer and beyond beer, we segment the beer category across core beer, premium beer and no-alc beer. And beyond beer encompasses all ready-to-drink products, whether they're made on a malt base or a spirits base. And we map our portfolio to these segments: Busch Light and our legacy brands, Budweiser and Bud Light compete in core.

Michelob ULTRA leads the premiumization trends for us and for the industry. And similarly, Michelob ULTRA Zero now leads growth in no-alc beer. Cutwater leads growth in beyond beer. And we are also very excited about NÜTRL's growth and our most recent acquisition, BeatBox. And if you choose to view us only as a beyond beer company, we are the third largest and by far, the fastest growing.

Now for the remainder of my time, I'd like to focus on 2 aspects of our global strategy, lead and grow the category and optimize the business. So let's start with lead and grow the category and dive a bit deeper into the consumer and our portfolio.

We began our journey to rebalance the portfolio in 2018. Along the way, we've shifted resources and our execution more disproportionately to our growth brands or what we now call mega brands. We acquired new brands through thoughtful and growth accretive M&A, and we've launched focused innovation. And we build our portfolio for all U.S. consumers, but we prioritize 2 key groups while growing the occasions in which we reach them. So let's start with our true beer lovers, which are 35-plus-year-old men. They're at the heart of the beer category and drink more than 50% of all beer. Over the past few years, they are steady in their consumption and growing servings per year. And this group includes Hispanics and it cuts across socioeconomic standings from high income to low income.

The second group is LDAs, 21- to 24-year-olds. And first things first, we have to dispel an industry myth. This group is just as likely to drink alcohol as everyone else with over 50% claiming to have had a drink in the past week. This group is very much co-ed and over-indexes their consumption towards beyond beer. And across all groups, U.S. consumers have expanded their repertoire with over 70% regularly drinking at least 2 categories. That is compared to just under 60% 10 years ago. And this is why we have tailored our multiyear portfolio strategy to compete across several alcohol segments.

Now participation in beer remains higher than any other category. And beyond beer is the category that has significantly and consistently grown over recent years, reaching 52%. However, we also know consumers have faced increasing pressure in recent years, the rising cost of essentials weighing on discretionary spending and the consumer sentiment at historically low levels. We're seeing these types of cyclical macro factors affect our industry, and as I mentioned, broader CPG landscape. But our addressable market has remained relatively resilient with beer and beyond beer share of total alcohol remaining stable. So we've been focused on driving our commercial performance across these categories.

And if we choose to just look at beer, we've been growing share since the fourth quarter of 2024, led by Michelob ULTRA, which has been growing share for 10 quarters in a row. While ULTRA has been leading the growth for our portfolio and the industry as the fastest-growing beer brand, Busch Light has been the second fastest-growing beer brand. Busch Light has also been the platform for the most successful innovation of the last couple of years in Busch Light Apple. And while ULTRA and Busch Light are different brands, they are similar in their respective positions being relentlessly consistent over decades, reliably meeting consumers where they are and remaining relevant in their lives.

Now if we look over at beyond beer, we've been leading the way in both volume and share growth. Cutwater has reliably grown double and triple digits for years en route to its position today as the #1 largest ready-to-drink cocktail, almost 5x the size of the next largest brand. And ready-to-drink cocktails as a segment has grown significantly over the past few years to its current size of about $3 billion. And it's important to note that this RTD category sources more than 2/3 of its growth from wine and spirits, with over 40% from spirits alone. So it's highly incremental to our portfolio. But what's even more exciting is that we size the cocktails segment within spirits more broadly as a $25 billion opportunity.

And Cutwater is less than a 5% share, while already leading as the fastest-growing spirits brand. So we believe Cutwater has a very long runway ahead of it. And while Cutwater has been leading ready-to-drink cocktails, we've been playing catch-up with NÜTRL vodka seltzer and are happy with our progress so far. NÜTRL has grown to be a top 4 seltzer regardless of being made on a vodka or a malt base, and it's the only one across the top 5 growing double digits.

So if you put our entire alcohol business together, including both beer and beyond beer, we have been growing share of total alcohol for 9 consecutive quarters. And in 2026, we are leading the industry's growth with the top 2 fastest growing in total alcohol brands with Michelob ULTRA and Cutwater, which are largest in their respective growth in beer and their respective growth in spirits. So all of this work has culminated in our Above Core beer and our beyond beer brands now representing about 48% of our total net revenue, which is a clear sign of the progress that we're making in rebalancing our portfolio. And this early momentum is not by accident.

As I mentioned, it's a result of a deliberate strategy executed over time, combined with purposeful investment. The global company's commitment to invest in the U.S., combined with our local productivity initiatives have allowed us to make increasing investments in our marketing budget to support growth. And our Chief Commercial Officer, Kyle, will take us through how we are effectively spending that money next. And it's too early to mention any highlights about Phorm Energy, but this is an exciting brand with an exciting platform that includes other categories like protein. We have great partners in 1st Phorm, which is one of the leading sports nutrition companies in the U.S. and in Dana White, the UFC CEO and entertainment mogul, and we are excited about where this brand and this business is headed.

Now it's worth mentioning that our portfolio rebalance has been led by the mentality of doing less and expecting to get more. We repeat the mantra of simplicity, focus and consistency. And to clear bandwidth to accomplish what's most important, we made a deliberate effort to reduce SKUs and delist brands. In Beyond Beer and craft alone, we delisted over 60% and 75% of our SKUs, respectively. And we completely delisted over 30 brands. And overall, we're happy with our portfolio progress to this point, but acknowledge there's much more work to do.

So now let's move over to optimize the business. Our goal here has been to drive efficiency where it matters, so we can allocate resources to where it counts. We've made necessary decisions across the business like closing 3 of our large Anheuser-Busch breweries and reallocating volume to our lower cost, more efficient facilities. We closed smaller production locations and verticalized operations. And we sold 11 craft breweries and closed 17 craft pubs. And while these decisions impact people and local communities, they deliver productivity that we have been able to reinvest in our portfolio. Along with our supply chain, we've also rightsized our overhead and found that our organization is more effective and efficient overall and their belief in our work has never been higher.

Our recent employee engagement survey came back with the highest scores in our company's history. And while we've driven productivity, we've also made investments to support our portfolio and its growth. We've invested $2 billion in our supply chain over the last few years to increase capacity in the right locations and establish new capabilities like producing no-alc beer and spirits. And as I mentioned, we now produce Cutwater in 4 locations across the U.S. and have ample capacity to fuel future growth.

Now I'd like to finish up today by talking a little bit more about the industry ecosystem that I mentioned earlier, namely our wholesalers and our retailers. As you know, the U.S. is a 3-tier system with brewers, wholesalers and retailers. And while there are strategic locations where we are legally allowed and we do own the distribution, 95% of our business goes through our independent wholesalers. And almost 100% of our business is sold through chain and independent retailers. And it's critical that we work closely and constructively with these partners because we all mutually benefit from this amazing industry.

And while investments in brands and analytical capabilities matter a lot, so do investments in establishing meaningful relationships. Our Anheuser-Busch wholesalers are oftentimes multigenerational businesses that deeply understand their markets and have strong relationships in those markets. But in addition to planning, executing and co-investing in brand plans, we also work with our wholesalers on technology and analytics solutions. We have the scale to invest in these solutions to help them direct their execution, truly know what's happening in the market and fully understanding its impact.

And included in those suite of tools is BEES, which continues to increase its adoption in the U.S. And while our wholesalers are oftentimes multigenerational with Anheuser-Busch, we've also welcomed new family businesses into our network over the years. Of recent note has been Southern Glazer's, Wine & Spirits or should we say Southern Glazer's Wine, Spirits & Beer. And for those that don't know, Southern is a $25 billion net revenue company that has a long history as the largest nationwide distributor of wine and spirits in the U.S. And most recently, our wholesalers have given us the highest marks ever in their Voice of the Wholesaler, an annual internal survey that's been in place for over 40 years. This gives us confidence that one of our most important partners believes in our strategy, our brand plans and the direction that we are headed.

Now the relationship with our retailers today goes far beyond planning ads, displays and promotions. Those are routines. We made the decision years ago to become strategic. That meant a significant and recurring investment in the category. We added capabilities, people, insights, research, and we built a retailer collaboration center that we call the Vault. This is the physical space, which you'll see later today, where we bring everything together and co-plan the category with our retailers. We have become true strategic advisers to our retailers, and they have rewarded us by naming Anheuser-Busch as category captain for over 70% of the industry's volume.

So in summary, we've done a lot of work over recent years to rebalance the portfolio and rightsize the business. We invested in capabilities to expand our addressable market, and we have become a top growing spirits company. We've driven productivity to invest in the most important parts of our portfolio, and we have taken our most important industry partners along with us. We are encouraged by the early momentum. But as Kobe said, the job is not finished. We have a lot of work ahead of us, but we are extremely excited for it. And we are confident that our business is better positioned for future growth now than it has been in a very long time.

So with that, I'd like to welcome Kyle, our Chief Commercial Officer, to the stage to walk you all through our commercial strategy. Thank you.

Good afternoon, everybody. I'm Kyle Norrington. I've been with our company, leading brands and commercial teams for 26 years. I started my career in Labatt Breweries of Canada in sales and marketing. Then I had the opportunity to lead our global brands from New York City. I returned back to Canada as the Business Unit President for a few years. And for the past 5, I've had the privilege of serving as Chief Commercial Officer, leading all marketing and commercial strategy here in the U.S. And I'm very excited to share the progress that we are making and the plans we have to lead and grow the category, leveraging the One ABI way Marcel talked through this morning.

Now as Brendan laid out, and you will see throughout my presentation, consumers are at the heart of everything we do. We have a simplified complementary portfolio designed for growing segments. And we activate in the passion points that help us reach and engage our LDA drinkers. We are focused on our beer lovers. We are future-proofing with LDAs, and we are obsessed about the occasions where we connect with all of them. Our focus has helped us grow market share across the board, and we have the fastest-growing brand in each of the respective segments.

So let's dive deeper into the levers and start with our premium portfolio that has been consistently growing volume, share and brand power since 2024, led, of course, by the #1 in volume and the fastest-growing beer in America. Ultra started its run nearly 25 years ago, defining the Balanced Choice segment with its low carbs, calories and a superior smooth taste. Across the past 2.5 decades, Ultra has shown up consistently delivering on its purpose to champion a social and active world. Let's take a look at our journey to #1.

[Presentation]

So as you can see, our mega platforms help reinforce our purpose from the original active lifestyle all the way to a decades-long PGA partnership that has helped us be the beer for millions of 19 full celebrations. Ultra, like most of our mega brands is well positioned to help reach our key consumer groups and convert occasions through our mega platforms. Perhaps none more mega than this past summer, as the biggest brand had the biggest sporting event in history in our own backyard.

So we built a commercially integrated plan like never before, coordinated from TV screens to in-store to the life-changing experiences themselves to ensure we squeezed every last drop out of the opportunity. Let's see it.

[Presentation]

We like to say that Spain, one on the field, but Ultra definitely one with the fans. Being commercially integrated is critical to cutting through the clutter and winning the attention war, but it's even harder with LDAs, where we have a big opportunity on category relevance and an important job to drive participation with beer lovers. So our brands and platforms have got to be part of culture. That's why we have Ultra sitting literally courtside for every nationally televised game in America.

The NBA is now the second most watched sport in the U.S. and the largest following of any league on social media. It helps us drive next level engagement with this critical LDA consumer and engage we do, creating relevance and an unskippable presence for our brand by being integrated and celebrated throughout from the court to the dressing room, to the parade right down Broadway. Let's check it out.

[Presentation]

The next fans out there, come on, right? Finally, our international sports platforms help us get after streaming and sports viewing occasions. The World Cup was an amazing opportunity for Ultra. But another summer event on American soil is set to take the country by storm.

In 2028, the Summer Olympics are back in America, 32 years in the making. And if the World Cup taught us anything, we need to plan to win. So that's exactly what we've been doing. After many years of faraway locations with challenging time zones, Paris '24 and Milan '26 put the Olympics back on the map. And Ultra maybe's historic sporting moments count, just likely we will for L.A.

Let's take a look.

[Presentation]

The Olympic rings are the most recognized logo in sport. And the Team USA marks help us flex our patriotic muscles. So we'll waste no time leveraging them to drive occasions. It's been over 30 years since America hosted the Summer Olympics. So we've created a 12-month plan that kicks off next summer as Ultra leads the country down the road to LA '28 and wins gold before the torch is even lit. But as Brendan said, the job is not finished, and we have lots of headroom to keep growing this brand.

Today, Ultra is growing in all 50 states. But when you look closer, you see immense opportunity. In many states, Ultra is over a 12% share of the category. But there are almost as many states, mostly in the Northern U.S., where Ultra is still under a 6% share. Getting these lower states to our national average represents over $0.5 billion revenue opportunity. With the trends at its back, unrivaled platforms, growing investment and the focus of the entire system, we are confident in our ability to keep growing this brand.

Next, let's talk about Balanced Choices, where we are the #1 and the fastest growing with over 40% share of no-alc beer. As you've heard, it's a booming category around the world, and the U.S. is no different with beer lovers and LDAs looking to extend or introduce it to new occasions like meals, but people often ask me, how big can no-alc actually get? You hear stories of European countries where it's a 10% share of the category, but it feels so distant from the U.S. reality, where it is growing fast, but still only 1.2% of beer. Well, you don't have to look any further than our neighbors to the north for perspective, where the category is already 4% of beer and continues to grow.

Just the Canadian sizing represents over $1 billion opportunity. So that's why we've invested in a portfolio across price points, flavors and styles. But we saw an opportunity to help lead and grow this segment. So we asked ourselves, what brand could credibly launch a category-defining active lifestyle, no-alc beer innovation. Well, the answer was obvious. So after 2 years of development, testing, refining, we launched Ultra Zero. With only 29 calories and the same ultrasmooth taste, it became the #1 innovation of 2025 and in under a year, the #1 no-alc beer in America. Let's take a look.

[Presentation]

This January, we compliment Zero with a lime variant that has performed really well. It got a hint of sweetness that LDAs are looking for and it pairs great with food. So give it a try at the immersion if you haven't tasted it.

Now to the core that represents just over half of the beer category, where we lead with 52% share of the segment. And we are growing share and brand power consistently since 2024. We have an iconic portfolio of brands, but I want to spend some time talking about the next icon that, quite frankly, doesn't get the attention it deserves. Busch Light is the second fastest-growing brand in the entire beer category. It's a textbook case for the power of clear, consistent positioning. It rewards those who hold true to their roots. It delivers the familiarity that drinkers are looking for with a witty, no nonsense attitude. With its growing equity and affordable price, it delivers massive consumer utility. And for over 20 years, it has activated outdoor platforms that are authentic to our drinkers.

[Presentation]

While we remain consistent, Busch Light continues to bring exciting news to our fans. Who else could partner with America's #1 outdoor retailer, Bass Pro Shops and America's #1 farming brand, John Deere, and have it feel completely authentic. Platform activation like this has helped it become the second fastest-growing brand in the category 2 years running. But the run room is still huge. Busch Light is over 10% share in 12 states and is the #1 beer in many of them. With total U.S. share at around 5%, closing the gap presents a massive opportunity.

So we continue to invest behind the partnerships, the media and the execution. But Busch Light's growing relevance with LDAs has helped us innovate into another opportunity, flavored beer. It's a sizable segment that drives incrementality for the brand and category. 2 years ago, after listening to our please from the big and loyal fan base that we have, we relaunched Busch Light Apple and LDAs stocked up big time on the brand they affectionately call Bapple.

[Presentation]

Busch Light Apple became a 3.4% share of the entire beer industry in just 1 week and the #1 beer innovation through H1 of 2026. How do you like them apples? Well, I like them so much. They'll be back next spring.

Now let's get into Beyond Beer because it is our #1 growth lever today. It is highly incremental to our beer portfolio and provides new ways to connect with both men and women, LDA and older consumers by disrupting traditional spirits occasions. Today, we are a top 10 spirits supplier and the fastest growing. However, the job is not finished. There is still an ocean of opportunity for our mega brands and big pockets of growth for future innovation.

And you heard this from Brendan, and it bears repeating. We have the fastest-growing brand in the spirits category with Cutwater. But it was not an overnight success. After the M&A in 2019, we nurtured this innovative product to the mega brand it is today.

[Presentation]

Cutwater is a product that solves a consumer problem. As alcohol repertoire has evolved over the last 30 years so did occasions for cocktails. They were all arm just stuck in the fancy bar, they came home, where hosts like to serve their guests of Margarita or a Martine, but not everybody is a mixologist. They don't want to buy all the ingredients. And when the game is on and the party is pumping, they definitely don't want to go through the time and hassle of making a cocktail, insert Cutwater, bar quality cocktails made with real spirits and the crack of a can, elevated in a unique glass over ice and personalized with your garnish of choice.

We have intentionally and consistently positioned Cutwater against the massive entertaining occasion. See how this has come to life in the last couple of years.

[Presentation]

There is a Cutwater for every season from a marg on a dock in the summer to a white rusher for the holidays, Cutwater has become synonymous with the best occasions for cocktails. But there is one moment in the U.S. that's like no other, and that's the Super Bowl.

In 2027, we will put the fastest-growing spirits brand on the biggest broadcast in America. Now is the moment for this brand to step on to the big stage and drive massive reach. I believe we have the biggest, most comprehensive commercial and innovation plan in the brand's history. But as a team, we feel like we're just scratching the surface because there is so much headroom to grow at the expense of spirits with this disruptive, highly relevant and incremental brand.

Now at the short time I had today, I was only able to dive into a few of the key brands driving our momentum. But as I said, we have a distinctive complementary portfolio of mega brands, like the #1 core beer in Bud Light, an iconic American brand that activates the biggest passion points and beer occasions in the industry, from tailgating to grilling to watching the game with your friends, to the King of Beers, 150-year young American icon that has won the hearts and votes of the nation for the past 2 Super Bowls and 8 before that.

To complement Ultra and Premium, we have Stella Artois. This summer, we leaned into the World Cup with our star. Fans, new and old drank it up. So we're excited to fuel this momentum as Stella Artois becomes the official beer of the UEFA Champions League in July 2027. We also have a Kona Big Wave, our Liquid Aloha, the country's next-generation lifestyle brand that has become a tidal wave in the on-premise, now ranking as the #9 cap in the country. In Beyond Beer, Neutral continues to be one of the fastest-growing brands in spirits-based seltzers, and we are well on our way to our ambition to become #2 in the industry.

And I couldn't be more excited to welcome BeatBox. This brand engages LDAs for a wide flavor lineup. Its packaging and ABV were intentionally designed for the occasions that matter to the target consumer. But having this amazing portfolio has not driven complacency. Our innovation strategy and team are always looking for new pockets of growth. We evolved how we innovate, better leveraging our expanded industry to drive incrementality, spending more time developing insights, testing and patiently piloting to improve before we scale and killing nonproductive brands saving money and focus.

We have leveraged these capabilities to drive excitement and trial in our mega brands, where we've hit a few home runs from Bapple to Ultra Zero to what is now the second biggest Cutwater cocktail, the Lemon Drop Martini. But we're also hitting some singles as we develop seeds or micro M&A in areas that we see opportunity from a flavorful lemonade and shadies, all the way to authentic flavors of Chillitas. Our strategic, intentional and iterative approach is working, but we are far from done.

Now as I close, I want to highlight that our performance has been fueled with intentional concentrated investment. 96% of our marketing spend is behind our mega brands and our largest sustained brands. And since 2021, our media investment on them is up over 50%, helping us show up when and where our drinkers are looking for us. And no other company invests in partnerships like we do. From the NFL to the NBA to new partners like the Champions League, to Team USA and LA '28 that's right around the corner. But as I said earlier, connecting with consumers is harder than ever. So beyond our investment and amazing partnerships, we've done a lot to drive an unskippable presence for our brands and culture. From the most streamed shows to the biggest games, our brands are seamlessly integrated into content that our drinkers love and watch across platforms every day. Let's take a look.

[Presentation]

So in summary, we are rebalancing our portfolio toward growth by putting the consumer at the heart of everything we do. We have expanded Beyond Beer, where we have a unique, diversified and complementary set of brands that drive incrementality. We invest in commercially coordinated mega platforms and partnerships that help us connect to our key consumers and the occasions that matter. Finally, our focused strategy and our brands are better positioned to lead and grow the category. Thank you all for your time today.

All right. So now you've seen how we're approaching the U.S. business and the portfolio. I wanted to take a minute to explain how this will all come together this afternoon. We're excited, as I mentioned earlier, to host you at our St. Louis campus, where you'll get a chance to tour our facilities as well as experience the brand immersion to see firsthand how our portfolio and our plans come to life for our consumers.

So let me start with a little bit more about the campus. As I mentioned earlier, the St. Louis brewery is where it all started over 165 years ago. And today, it remains our biggest brewery and one of our most capable. We've invested to produce at scale, everything from Budweiser to Cutwater. The campus also features our Anheuser-Busch Tour Center, where people come from all over the country and the world to experience what we do and to see our beloved Budweiser Clydesdales. And St. Louis houses much from our company's past. This campus is also a home for our future.

As I mentioned earlier, a few years ago, we built The Vault, our industry-leading customer collaboration center, where we discuss and build our annual plans alongside our chain retailers. It's equipped with state-of-the-art analytics and technology, and The Vault facilitates critical key account relationships in a complex and sophisticated retail landscape.

While you have the opportunity to see these incredible parts of our campus on the tour, we've also set up, as I mentioned, an immersion area where you will experience firsthand our U.S. mega brands and the mega platforms. Our portfolio rebalance is anchored in focusing our resources behind the brands with the greatest ability to win during the moments that matter most to our consumers. So we're excited to show you exactly what it looks like and what it feels like.

And lastly, we've carved out dedicated time to a key part of our portfolio strategy, innovation. As you heard from Kyle, we've evolved our approach to innovation. We are better at leveraging our capabilities and our deep consumer insights to drive incrementality and expand our addressable market. And today, you'll hear more about how we bring innovations to life across categories, ranging from no-alc beer to Cutwater spirits to form energy and form protein. You'll also see how Marcel and his team approach innovation through a global lens, and we'll have the opportunity to sample some of our biggest bets and successes across our global market.

But it's important to note that what you'll see later today goes beyond simply showcasing our rich heritage, world-class production and our iconic brands. It's a tangible look at how the choices and investments we've made in our capabilities, our portfolio, our partnerships and innovation are all working in service of better positioning our business for long-term growth. Thank you.

Thanks, Brendan and Kyle, for the presentation. That concludes our presentation agenda for the first day. We're going to end with a Q&A panel session with our speakers from today, plus special guests, Fernando, who didn't speak today, but will tomorrow. So give us a few moments here just to set up the stage with a few additional chairs. If I could ask Michel, Fernando, [indiscernible], David, Marcel, Nick, Lucas and Brendan who has just sat down and can now come back up to the stage.

A couple of notes on logistics here just saw they're coming up. We'll start by taking some questions from here in the room. For those that are on the webcast stream, I do have an iPad, I guess, here in front of me with the Q&A functionality. So if you want to ask questions on the stream, please submit them. I'll see them here and we may take a couple of questions from there as well.

One of the notes is we will have -- we will have a second Q&A panel tomorrow, which will just be Michel and Fernando. If you want to direct questions to the others, now is a good opportunity to do that. So if we run out of time today, we have the second chance tomorrow. So which knowing this group of analysts seems highly likely that we'll run out of time. So we give you the second opportunity to ask what you would like. We have some mics around the room here. So if you want to ask a question, please raise your hand. We'll go in order. As I see you, please try and stick to one question, looking at you, Sanjit, if possible, just to give everyone as much of a chance to ask. So we have around 40 minutes. Let's get started. Robert, you're right in front of me. Let's go here first.

Thank you. This has been great. I want to just kind of flip back to Michel's first presentation. Michel, you talked about the evolution of the company and the changes that you've put in place, and we've seen results and you're going to take it to the next level. Can you talk a little bit about how you've changed the incentive programs? You've touched on that a little bit over the years, but love to have just a little better sense of how those have changed to drive long-term consistent, reliable growth and brand building and what other metrics that you're looking to strive and how maybe you've moved away from an emphasis on very discrete short-term targets?

Yes, Robert, thank you for the question. And of course, incentives are a very important part of the way we run the business at ABI, and we are known by this idea of having measurable KPIs and aligning these KPIs with the way we compensate people. But they never work in isolation, right? So you need like the people, you need the culture and you need the direction, the ambition where we need to go. The incentives, they wrap it up with the KPIs and the compensation system.

And we have made basically 3 changes since 2021. The first one was simplification. Our model tends to be more complex than the average models that you find in the market. And we thought that would be very important to simplify so more of our people would be able to have clarity and understand how their actions and their initiatives impact the company results and how this impact reverts back to them in their own compensation. So step one, we made the simplification.

Step number two, we have decided to align more with long term. And the way that we did that was both, as I said, on the culture and the way we run the business, but then we reflected that as well on the remuneration system. So we basically rebalanced the short-term bonus with the long-term bonus. And we used to have 20%, let's say, for executive level on the long term and 70% on the short term. We balance more towards 30%, 50%, and this was very helpful because then instead of looking for the year KPI, people are more aligned with what we call missions that are on average 3- to 5-year missions, and we give them 1/3 of their compensation in long-term incentives, not short-term bonus.

The third change that we made was then, I think, an important one. We adjusted the weight of how we pay bonus. So in the past, the formula is to be there is a global part, there is a zone part, then there is the [ BU ] part, and this was over-indexed towards the front end, right? So there was less solidarity at the global level and the big objectives and more focus on the short-term objectives of each and every market. So we rebalanced that. We put more weight on the full entity targets, so more solidarity to the global company, and we kept very sharp, less KPIs on the front end.

So simplification, long term, more alignment with the overall company rather than the pieces and bites of the company. And then together with that, we made a change on this long-term incentive that used to be 100% in RSUs. We broke this in 2 parts, RSUs and PSUs and the PSUs are TSR relative. So we rank and benchmark us versus this CPG peer set. And the better we perform versus the peer set, the better the PSU performed for the individual. So simplification, more long term with alignment with the shareholder TSR and then more solidarity with a higher weight for the total company and a smaller weight for the short-term individual targets. But again, this works together with the culture, the people, this works together with the dream, the ambition, the direction that we want to have.

Thanks for the question, Robert. We'll keep going this direction now. Ed Mundy here. This one.

Ed Mundy from Jefferies. I think you've demonstrated very clearly how when you join up all the various parts of the growth strategy, it's a pretty compelling offering. Obviously, one part of that is to allow you to both lead and grow the beer category, but the other part is mix, which I think you pointed to, Michel, driving at least 1% to top line growth over the last couple of quarters which I guess back in 2021 wasn't necessarily the case before you really got momentum in your strategy.

My question is really what is -- how do you think about sustainability of mix? Is there still very big headroom for growth on mix, number one. And number two, Fernando, since you haven't had a chance to speak today. What does that mean from a CFO standpoint and does that give you opportunity to really deliver towards the upper end of your framework?

Yes. So we talk a lot and Tadeu today was talking about this, the revenue management strategy, right? And revenue management can be as simple as trying to price your products with whatever basket you have to follow, being costs, being CPI, being the competitive market or you can double and triple click on that and have a more holistic approach, really thinking about how to maximize your revenue to the different levers that you have into the business. And Tadeu was talking today about the price, which is an important lever and how we, as a company, try to [ precify ] our products, balancing correctly the disposable income, the situation of each market with the inflation. But how we add on top of that, our mix management and in this mix management, you have everything from the SKUs that we delisted to our ability to premiumize and innovate in packs that have more margin than the current packs that we transact with consumers.

And on top of that, we have initiatives that we always have in the company in the past, to be fair, more localized on initiatives to control better promotions, discounts to maximize your commercial activities. And because of this today, we can gather the best of this practice and make it work at scale with the best possible data, with the best possible execution and with the speed that the digitalization brings to us. So it's a very holistic approach to revenue management. After all, we've been able to get net revenues above inflation, better than the CPG peer set and better than the brewers. And in the last few quarters, we saw this component of north of 1% coming from revenue initiatives and mix. And as long as we have the right portfolio architecture, continue to innovate and speed up the work, the quality of the work that we do with data, we will be able to sustain this. So this is an objective for the whole commercial team, is an objective to the whole organization and is embedded in how we've been managing the business.

And maybe I will answer only part of your question because I don't want to give any spoiler for tomorrow. So just bear with me tomorrow, you'll get more color on that. But just echoing Michel, definitely, if you have a mix and it's helping revenue, that kind of helps kind of the whole P&L, of course, but more to come tomorrow.

Ed, I'm going to allow your 1A, 1B question sound, but black mark against your name for tomorrow. We'll go to Sanjeet and then we'll go to the [ table ] behind that.

I'll keep it to one, Shaun. For Brendan, on beyond beer, you've had phenomenal growth in the last 12 months. Cutwater now is coming to a point where it's starting to cycle a lot of those high growth rates. You expressed a lot of confidence in your presentation on room for upside. But can you just double-click into that? And just give us a feel for where the upside is going to come from? Is it more about innovating across the brand? Is it more about distribution? Do you pivot now to really pumping distribution on this? Or yes. And I guess the plan for BeatBox now, it doesn't feel like you've done much yet, but what are you hoping to get out of BeatBox?

Yes. I think the answer to the Cutwater question is like D, all of the above, right, because it still has ample room for growth on everything. As Kyle mentioned, right, innovation has been a great platform for Cutwater, so the Lemon Drop Martini has been a great producer for us. We still have stuff in the pipeline, but still its base sits inside of sort of the tequila-based margarita world. And it's not a coincidence that we think now is the right time to put Cutwater on the greatest awareness platform that exists in U.S. marketing, which is the Super Bowl. So very excited for kind of what 2027 brings.

And of course, any time a brand grows, right, at some point in time, the percentages become less and less, but then we start looking at what are the absolute incremental cases that it delivers to the business. And we still feel in very good shape as it pertains to that, whereas maybe there's not triple-digit percentages of growth, but the absolute cases that incrementally delivers to the business because we're focused on volume is what matters the most to us over an extended period of time.

I think BeatBox, anytime you do an M&A, there's always that time period where you transition. I think the brand was inside of our route to market more than maybe some other brands, but we're essentially transitioning an entrepreneurial way to execute the business to the way that AB InBev and Anheuser-Busch executes the business. So that's around visibility on data, how we work the logistics, how we get it around to our wholesalers in a more efficient way than the way the founders got it around. So we're really excited for what the growth projection is for 2027. And I think we just need to reorganize some of the base executional work, which is kind of the same playbook that we used with Cutwater. So we feel confident in how we build the base of its execution and its distribution. And what's great is the founders as we -- as our model always does are with us, and they're going to be part of the solution as we move forward, but we're bringing the muscle of Anheuser-Busch to the game. So I think it's going to be cool what we can do.

We'll go back to Simon, and then Chris in the middle.

Simon Hales from Citi. I wonder if I could ask a little bit more about BEES. Obviously, you referenced the perhaps $1 trillion addressable market that is out there. Obviously, that's a long-term potential opportunity. When I try to think about some of the drivers of the some of the shorter-term uplift we're seeing, particularly in BEES marketplace with the GMV. How do I really drill into that? Is the expansion you're seeing there coming through signing up new big CPG companies to the platform? Is it existing big CPGs like we saw in the presentation, expanding into more of your BEES markets?

And I was particularly interested to see, I think, in the Nestle presentation and referencing using BEES in the Philippines, which I think is a market where you don't have much of a beer business. Are there many other markets that you've got big opportunities to roll out that aren't traditional ABI heartlands?

Thank you for the question. It's a little bit of all of the above. So first, BEES continues to expand within AB InBev's footprint. So today, we're live in 30 markets, but we see more geographic opportunity within ABI's footprint. So that will be a driver of growth for us. For the marketplace in some of our large-scale partners, you may have seen in the Nestle video that Nestle is live in 13 markets. So as we go with these large partners, there is a path of growth to expand within those partners. And as they go live at different times, there's growth that comes from them. So we have partners who are earlier in the maturity, partners who are later in the maturity. So within our existing partners, just as we expanded up to 13 markets with Nestle, we can continue to expand with other partners. And we don't think that the 13 markets with Nestle is a ceiling. As you heard from Jordi in the video, he sees there's more opportunity to come.

Beyond geographies and our current partners. There's also new channels and partners we can go to. As you saw in the L'Oreal video in case it wasn't clear, that video showcased both L'Oreal, the brand owner and Okajima, the distributor. So a large portion of B2B transactions around the world do come from direct distribution, but a lot come from indirect distribution, like Okajima. And we are building a group of distributor partners who are launching BEES as these are an important way in which many brand owners reach the market in many ways in which retailers access products. So in addition to geos and partners, there's also different verticals, specifically going into our partnerships with indirect distributors as ways that we can continue to expand the relevance of BEES.

And you mentioned the Philippines. Yes, I can't comment on future plans launches with partners. But the Philippines is a good example that BEES can travel beyond where ABI has direct operations. So it's a very interesting proof point and learning opportunity for us.

Thanks, Simon. We're going to Chris, and then we'll come to Robert.

Chris Pitcher from Rothschild & Co Redburn. 2 half questions hopefully. One was sort of a follow-on from Simon's. On BEES, understanding the opportunity, it almost feels like in those Latin American and African markets, the total addressable market has perhaps become bigger than you thought in Mexico. But outside of those sort of areas where you have fragmented retail and a strong market share, maybe that the adoption rate hasn't been as quick. Could you maybe talk about how it's gone in China and maybe some of the issues in the U.S. in terms of getting it adopted?

And then the follow-on, I was quite surprised to see the rate of technology investment falling back to only 1.1x 2019. How are you going to maintain BEES advantage? I would have thought ABI would have kept spending to keep ahead of the game.

Great. I'll start, and then I can pass to you. And Brendan, if you want to complement on the U.S., feel free. So BEES continues to grow both in direct distribution and indirect distribution markets in ABI. In indirect distribution markets like the U.S. and China, we, of course, partner with our thousands of wholesaler partners. And so the pace of adoption takes more time in indirect markets as we work with our wholesale partners.

So we highlight Latin America and Africa as where we are most highly digitized and most advanced because of the pace of the rollout that we have had, but we continue to expand in both U.S. and China. And in the U.S. specifically, we work with a group of lighthouse wholesalers who are most engaged with BEES in proving the same value that we see outside of the U.S., in the U.S., and you'll see BEES in the market visit tomorrow in some of our retailers. Specifically to the investment, do you want to take that?

I think, Chris, the best analogy I can make on that is mega brands in the platforms. So when we started digitizing the company and really going for digital transformation, we did a lot of things. We diverged and we launched a lot of initiatives. And we launched a lot of initiatives, it's zone initiatives, local initiatives, right, where there was a big sense of urgency. And now we're in a phase where we really focus. What we found was a lot of those things that we launched were actually not even helping because they were diverting resources and they're actually getting in the way of our systems architecture.

So we took the new approach now similar to megabrands and mega platform, which is let's really put the money behind things that matter, make a big difference and do them end to end, really well done, right? So we're doing fewer things and really executing at scale. And I think the operative word here is really focus, focusing on bigger global platforms and making a big difference. And then the other leg of that is technology is evolving. So we talked about, for example, GenAI. So one of the biggest developments in GenAI is coding has become simpler, right? So with Anthropic, for example, and some of the other leading models that are out there, it's easier to code and more less expensive to code today. Parts of the process have become more efficient, right? So it's a combination of focus behind big global platforms with greater efficiency in the way we work. And we actually feel that we have the resources we need to really drive continued expansion of these platforms that we built that we can really roll out globally.

Great. We'll come here to Robert.

I have a question for Brendan. You're very successful currently with Michelob ULTRA and also Busch Light. So in that context, what is -- how we should describe your current strategy for Bud Light? Are you still investing behind the brand and how? Or is it more a milking strategy for that brand?

No, it's not milking at all. I mean, I think Bud Light still has a massive amount of investment and some of the most premier properties that we can associate ourselves with like what's happening right now with the kickoff of the NFL, right, in week 2. So it still is an amazing brand with huge rates of sale, huge participation and we're there to make sure that we get the absolute most out of it as we look across our portfolio of megabrands and support those disproportionately as well.

So I think we're happy with the progress and the success that we've had on Michelob ULTRA and Busch Light and we're just as focused on Bud Light, and it has some of the best stuff that we have to bring to the table and a lot of money.

Checking here on the live stream. We have 3 questions, Fernando, but they are all about capital allocation. So I'm going to reserve those for tomorrow, I think, and then we can discuss that in the second panel. We'll go to the back here to Gen.

Gen Cross from BNP Paribas. My question is going back to BEES. You talked a little bit about these other revenue streams, which sound very interesting. I just wondered if you could share a bit more color on how big these other revenue streams are right now in the context of EBITDA growth contribution that BEES marketplace is providing? And also how we should think about that scaling going forward? Should we think about it scaling kind of basically proportionally to the 3P GMV growth?

Thank you for the question. We're not going to disclose specific additional details about the sources of profitability of BEES beyond what I shared before. But what I can tell you is that we don't have to invent the playbook on how to generate revenue from a platform. So we've been able to be inspired by other successful platform businesses. And our focus is on building the scale of the platform, which comes from generating real commercial value to our partners, generating real convenience and value to our retailers. And as we build the scale of the platform, generating that value for both sides of the equation, we've been able to prove to ourselves with conviction that, that will generate additional new revenue streams.

Come over here to Sarah, then we go to Andrea after that.

Sarah from Morgan Stanley. Just a question about the business mix within the U.S. You've talked a lot about experiential or the sponsorships and sporting and some sort of great videos. How is your mix between on-trade and off-trade shifted between, say, the start of the strategy and where we are now? And is that also part driver of the improved profitability in the U.S.?

I think the U.S., it's a vast majority, right, massive off-premise and on-premise is kind of around 15%. I think COVID had a little bit of a shock to that because on-premise suffered disproportionately. But it's always been a vast, vast, vast majority on the off-premise. I think what's interesting in the off-premise is just the rate at which chains and retailers are becoming a greater percentage of the business. Independent is still relevant, but chain is much larger.

So we kind of obviously saw this evolution over time which is why we wanted to get significantly better and really lead the industry and how we partner with chain -- sophisticated chain retailers to be the captain of the category and then what we think is the best thing for the category to be able to sell behind that with our solutions.

If you look at this at the global level, it's very interesting because the COVID was a big hit on the on-trade as we know globally. And after COVID, there was a group piece of the on-trade that never came back. In some areas, it's taking way longer to recover. Think about Europe, for example, think about China. But now you see places like the U.K. and there is a little bit of a revival of the on-trade. You see places like Latin America where the channel is growing, but people never stop socializing, gathering and doing things.

So at the same time that the off-trade in home occasions grew, we've been seeing an incredible explosion of these live events. And it doesn't matter where you go. You can go for the New York and final of the Knicks or you can go to Brazil to the rodeos, but you can go to concerts in Europe and they are all selling 20%, 30% above historical levels. I think that everybody saw during the World Cup here in the U.S. across the board in Mexico was the same thing. The concessionaries were reporting all-time high sales on the matches that were played in the U.S. and Mexico. And you had the big matches like the Argentina and England, but you had a small matches of Scotland in Boston, and they all worked similar. It was like 20% to 30% more consumption.

So I think that on-trade, the average globally is slightly below the bars and pubs. The live events are 20%, 30% above. You can even say that's more because there are more concerts, more games, more events and the in-home socialization occasions are also more frequent now than they used to be before. In many of these events, equally interesting, there are events that you have like limited audience. So I went to a rodeo in Brazil that you can fit 100,000 people per day. That's it. So there is no space for more people than that. And still the event sold 20%, 30% more because the hours were longer. So people were in and out what used to be a night event became 2 events, 1 during the day, 1 during the night and the surrounding areas of the event now have activations, people gathering, camping, barbecuing. And at the end of the day, the event sold 1.3x more than what's sold before. So love was here. So people don't event, people don't destroy. At the end of the day, things get transformative.

We'll go to Andrea and then we'll come to Olivier and we'll go to, let's say, with the back.

Andrea Pistacchi, Bank of America. So you've told us today about some exciting plans to accelerate Stella with Champions League sponsorship, the Netflix partnership. So it feels like, I mean, you're focusing on the brand more than you have ever done before. So should we think of Stella as a sort of incremental vector of growth for you going forward? And how do you size the opportunity for Stella when you benchmark it with the global brand like what you've done with Budweiser and Corona in the last 10, 15 years?

It's a great question. Thank you. I would say that when you think of the status quo approach for these discussions, usually, one would think of the big brands with the big programs, medium brands with the medium programs, so on and so forth. That is a defensive or a status quo maintenance approach.

Under Michel's leadership, the direction is very clear. We're here to play the game of growth. And then that relationship between the programs and the brands changes. And so we give the big programs to the biggest growth potential and so on and so forth. So this is why you see Olympics with Corona, very successful on growth rates. World Cup with Ultra and Ultra is not even fully globally distributed yet, very healthy growth rates and now Champions League with Stella.

So it follows the same thinking to boost growth creation with brands that have both scale and growth potential. That's what we're seeing. The performance of Stella, for example, is very healthy in the last couple of years. There is much more room for growth. It's doing really well in Brazil. It's growing in Mexico. It's growing in the U.S. It's the leading brand in the U.K. It's growing very well in Africa. And we haven't even started in Asia, for example. So the geographical expansion, the growth opportunity is huge.

And then given Champions League is the premium expression of European football, so we attached the brand that is the premium expression of European beer. That is an authentic match that connects with a huge growth potential to fulfill our strategy.

Great. Let's go to Olivier, and then we'll come to you, Mitch.

Jean-Olivier Nicolai, Goldman Sachs. One perhaps for Ricardo. Going back to the underlying market growth of 0.3% to 0.5% for ABI footprint. By how much will you assume to outperform this considering that today, the only market really where you underperform in China?

This is without considering market share. First, this is just industry footprint. And this is just a mathematical analysis of taking back the last 10 years, 15 years of growth from different countries and applying this growth to our current footprint and the weight that each market has today. So depending on when you do 5, 10, 15, you get to 0.3% to 0.5% volume growth because there is variations in the year, we showed that in the last 15 years, 9 had industry growth, 6 we had decline even with small variations. Of course, we never know what will happen in the next year, right? But we know that this is a structural growth tailwinds. That's part of our footprint. So that was what I meant in that slide.

We'll get Mitch in the back and then to Laurence.

It's Mitch Collett from Deutsche Bank. I'm interested in the dichotomy between -- you've said a few times you talked about focus. And at the same time, you're obviously trying to grow in beyond beer and energy and other areas. How do you manage those competing forces. And as you focus more on a narrower set of brands, how do you make sure that the benefit to those big focused brands isn't offset by a degradation to the brands that get less investment?

I can take this. I think that the definition of focus, of course, has different levels. We are a very large company. Everything we show today is just part of what we actually do and the teams in the future, a small part, some examples. I think that focus is about making choices, prioritizing resources. David showed lots of tools that we apply today that help us make more informed decisions, better decisions to ensure that we can do more with the same or more with less that we can guarantee our connection with consumers, guarantee that we know what's happening in the market that can lead the category, but leveraging our resources the best way possible.

That doesn't mean doing very few things because the world doesn't allow us to just speak 1, 2, 3 bullets and say, well, this will make the company be successful. No, we still have to do a lot of things. But if you assume and think about the number of markets that we service, the number of route to market, partners, of course, we have to be very precise in how we allocate our time and our resources so we can perform well.

Just adding to that point, which I find a very interesting question because it's one that we ask ourselves every day, right? So if you are managing a company, a regular company, you're going to be wrestling with these decisions. If you are managing a company that spreads across 120 countries, 500 brands, 120,000 people, we can guarantee that this dilemma knocks your door each and every day. And you can do both. So we share the numbers here. We delisted 25% of our SKUs. We refocused from having 200 brands receiving meaningful investments to dedicate over 2/3 of all resources that we have to just 50 brands. At the same time, and people sometimes don't realize that it's good when we abstract from the quarter and we think, for example, 5 years. But 5 years ago, we didn't have a $2 billion business in beyond beer. And while in the ABI universe of $63 billion net revenue, $2 billion looks small. If you just think for a minute, $2 billion business that was built over the last 5, 6 years. 4 years ago, 3 years ago, we had like a sluggish portfolio of local non-alcohol brands in beer. And today, we lead not only in market share but also in growth. And this portfolio today with Corona and Michelob ULTRA is 3x bigger than what was 4 years ago. So at the time that you simplify your choices outside in, right? What are the consumer forces, consumer trends, consumer need states, spaces in which we can have growth. And then you prioritize your brands, your channels, your segments, you can actually achieve both.

And by doing that, which I think that builds on the question that Ed was asking before, the growth that comes from brands at scale is a more profitable growth. So the simplification and focus is also part of the revenue management initiative. Because if we grow more with Michelob ULTRA, we have more benefits of scale. If we can scale Cutwater faster, you have more to take out of this brand then if you dilute yourself as we used to have in the U.S., only in the U.S., over 35 brands in this flavored space, right? So today, between Apple, NUTRL and Cutwater, we have over 2/3, 80% of the business of the flavor and beyond beer in the U.S. So it's an and game. It's not or. And yes, you can do both, but you need one strategy, you need one way of operate. You need the team that executes that and then you need to be ruthless about deciding what you do and what you don't, which I think was a lot of the conversation here, both global and in the U.S. It's a matter of making choices.

Just we got Laurence, just to prove that I am reading the questions. I'm going to take a quick one from here, and then, Laurence, we'll end with you. Just because you talking about beyond beer, Michel, someone was asking here where do we see a relevant opportunity for our beyond beer portfolio in Europe. The actual question was, why can't they buy Cutwater in Europe, but I'm going to paraphrase here in terms of what they actually want to know.

I think as Marcel said before, just getting quick to that, the consumer need is global. So that is 20% to 30% of the alcohol consumption occasions and consumers globally that they prefer sweeter than bitter, okay? And sweeter spreads across wine, cocktails, ready-to-drink beverage or combinations of those. And this is equally important in Europe as it is in South Africa. We believe that there is a deployment of efforts and capital to make things happen. We have our geographical matrix to prioritize things.

There are brands that come first and others follow, and that is at the end of the day, execution, right? And if you go to Europe today, not everywhere, but in many countries, we launched Flying Fish because Flying Fish for us comes as the first door in which you can access these consumers and these occasions. We have other plans for the other brands that we'll be introducing. And perhaps pretty soon, I don't know where the question is coming from in Europe, pretty soon, you might be able to find your Cutwater. You are not the only one. So there will be people competing for the shelves. So if we launch, make sure that you go there and get your case.

Great. We'll take a last one from Laurence to make it a good one and then we'll wrap it up after that until tomorrow.

Laurence Whyatt here from Barclays. I want to follow up again on Budweiser and Bud Light in the U.S. because, of course, if we think back to the 2019 Capital Markets Day, they were a big focus of the event there, and there was a lot of talk of improving brand metrics and the like. Of course, the volumes of both brands have struggled in the U.S. in the interim years. But Brendan, you mentioned there's still a lot of focus on them. There's a lot of investment that's going in on them. We saw some new activations, I think 2024 with UFC and the like.

Previously, when we thought about the challenges of both brands, it sort of mentioned that the mainstream portfolio struggled in the U.S. But of course, the success of Busch shows that, that doesn't preclude a brand from growing. Just wondering, do you see these brands as ever getting back into growth? Or are they likely to see permanent decline from here?

Hard to predict the future, right? And I don't think that's what we're here to do. I think as it pertains to the importance of those 2 legacy core brands to our business, that's significant. And we invest and we execute and we bring properties to them that are very meaningful. I think even if you look at what we did with Budweiser this year on its 150th anniversary, some of the highest levels of investment that the brand has had in a while. So we're about making choices across the portfolio. And we've got an amazing brand that's premiumizing the industry in Michelob ULTRA. We have an amazing brand that's inside of mainstream in Busch Light. And just as Kyle mentioned, right, we have a very high share within the core mainstream segment, and we work across all 3 of those big brands in order to make sure we continue to grow that.

I can add on that because I saw the question twice and maybe complementing and building on what Brendan said. This connects with the answer I was giving before, right? So you manage your portfolio. And when you manage a portfolio, you make choices, choices that allow you to maximize current consumer trends, capabilities and specific points of differentiation that your brands have. And at this moment, brands like Cutwater, Michelob ULTRA, Busch Light, NUTRL, they are commanding the growth as we rebalance our portfolio in the U.S.

But part of this architecture continues to be to have brands such as Bud Light, Natty Light, Budweiser that are part and they build in the distribution muscle in the consumer base that we have, and those are incredible franchises. Someone asked a minute ago about Stella Artois, right? So as we've talked about Stella Artois today, excited with David Beckham and the growth that the brand has in Belgium or what is happening in Brazil with Stella and Stella Pure Gold, we forgot that 4 or 5 years ago, we were coming from a decade in which this brand had no growth at all, right? And the brand was an incredible brand, huge credentials, was positioned on a place that worked for the brand in the past, on trends that in the past were important, such as European heritage sophistication, and we had to reposition the brand, make the brand more culturally relevant for today's consumers and occasions.

And as we do that, as Marcel said, today, this is one of the fastest-growing brands in our portfolio. So the idea that the brands go in only one direction or that you can accommodate investments, priority execution for all brands that you have, they are both not ideal and not pragmatic. So the approach that we have, I think, in the U.S. with the megabrands is a very pragmatic, is covering the most relevant brands that over to Budweiser, Bud Light, Busch Light, Michelob ULTRA, Stella [indiscernible], but investing disproportionately on those brands that are better positioned for what the market will be in the future. right?

I gave this question 10 years ago when we started rebalancing the portfolio in the U.S. And why I was talking about rebalancing the portfolio, investing for the future, people were asking me the same question over and over and over about Bud Light. And fast forward 10 years, almost overnight, today, we have a growing business in the U.S. gaining market share and having brands that are leading the industry, not only in the beer space, but also around beer because back there, we decided to go beyond. It took me 5 years just to explain people what beyond beer was, right? And today, you see Cutwater, the presence, the relevance and the growth.

So fantastic brands. They are very important in our portfolio. We are making choices in our portfolio architecture to be able to win. And those choices are important choices for us.

I'll just give you one -- I mean, there's a couple of different definitions of resources that you can apply. The individual that's responsible for Budweiser and Bud Light is probably our most senior, most accomplished marketer inside of the North America business. So we're still very much committed to those brands because they have to work for us, 100%.

We'll end it there, guys. I think thanks very much for joining on stage. We'll wrap it up there. A couple of notable logistics for everyone as we like to step off the stage here just in terms of what we'll do next. So we'll make -- take some chairs up here. So that concludes, I think, the general session for day 1. For those on the webcast, we'll say thanks very much for joining. I know it's late across some of the time zone, so we will see you tomorrow.

For those of us in the room, we're going to take a 35-ish minute break, I think, so allow you to put your bags back up. I would advise bringing a jacket with you to the brewery to the extent you haven't. For Laurence, I would advise taking the tie off maybe being a bit more casual for the brewery tour, if you like. The transfers to the brewery are going to leave at 3:30 sharp, so try and gather down here around 3:15, 3:20 if possible. We'll split into the groups and then we'll go to the brewery after that.

Remember that you're required to wear closed-toe shoes for the brewery for safety purposes. And then you'll see on your badges, I think I explained earlier, just which group you're going to be in for the tour. So I think that is it, stop by the concierge desk. If you have any questions come first floor. Good point. Lobby is on the first floor, not the second floor. So we'll meet down there in 35, 32 minutes around 3:15. Great. All right. Thanks, guys.

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'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. [Operator Instructions]

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 hectoliter 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-alcoholic beer and Beyond Beer. This 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 marketing investments and offset transactional FX 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 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 3 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 #1 share gaining brand in the total spirits industry in the second quarter.

Now let's turn to Middle Americas. 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 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. 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 continue 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 improvement 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 Cannes Lions Festival, where we were named the 2026 Creative Marketer of the Year, the only company history to receive this award 3 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 #1 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, Rolland 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 #1 share of digital engagements.

The FIFA World Cup is a once every 4 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 share the experiences that make the event so iconic. In line with our strategy to expand 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 #1 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. 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 #2 volume share gainer in the total industry in quarter 2. Ahead of Wimbledon, we launched Strawberries and Green flavored Stellar Plus. The innovation contributed to a 4 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. In the first half of the year, we expanded the availability of flying fish in 8 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 touch points 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. 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.

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 FX 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%. With translational FX 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. 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.

Thanks, Fernando. Before opening for Q&A, I would like to take a moment to recap the second quarter of the year and the opportunity 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. And net debt to EBITDA improved by 0.4x year-over-year, reaching 2.86x, strengthening our balance sheet and increasing our capital allocation flexibility. 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 Instructions] Our first questions come from the line of Edward Mundy with Jefferies.

So my first question is for Michel. So you've been executing your growth strategy for about 5 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? And as you see the growth contribution from the mega brands, premiumization, non-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.

And my follow-up is for Fernando. Over the last couple of years, there's been a big focus on deleveraging and strengthening the balance sheet. And as you think about the next few years, will this increased capital allocation flexibility be aimed at accelerating organic growth and bolt-ons? Or do you think there's scope for progressively higher cash returns to shareholders in the fullness of time?

Ed, thanks for the question. As you stated, I'll take the first one here and leave the second to Fernando. I think that you are right that over the last 5 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. And as we organized our portfolio and 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. And 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 per hectoliter 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. And we will continue to optimize the business. We've been seeing a strong earnings per share growth in the first half of the year, 22% with this 23% in the second quarter. So continuation of the strategy execution, but moving from a moment where we were resetting the business, reducing that, 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. Thank you for the question.

Ed, this is Fernando here. So you asked about cash flow allocation flexibility. First of all, it's fair to say that it is 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. And as we keep delivering kind of this sort of results and we keep growing the business while maintaining CapEx within our outlook, containing these levels, the consequence of that is that you do generate more cash. And as you continue to evolve the business and continue to generate more cash, you create more optionality. If you look at what we've done this year so far, this year, while kind of if you see from a dividend standpoint, so dividend was up.

We were able to invest behind the organic growth of the business. So you see more sales and marketing investments to support the growth. You see that while we are doing that, we also did some selective M&A. We did the MCT and the BBox M&A. And we did all that while also improving the strengthening the balance sheet, so we reduced the leverage. So when you combine all of that, what I can tell you is that the goal of us is always to create value and this optionality increase your -- the way that you can create value. So our Capital allocation is dynamic, as we said. But at any given moment in time, the goal is always to create value. And with more cash flow, these tasks become easier because we have more optionality.

Our next question comes from the line of Mitch Collett with Deutsche Bank.

I've also got two questions. My first one is for Michel. So you said, Michel, that in -- from the World Cup, you expected, I think, 20 to 30 basis points of full year volume benefit. Now that the World Cup is behind us, is that roughly what you saw? And can you comment on how you think your World Cup activations may benefit your brands and your business longer term?

And then 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?

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 in the range that you said, 0.20 to 0.30. And 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, so we can calculate the exactly lift of the months of June and July, but 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. And we really executed a global campaign was fantastic. We had for the Americas, Michelob Ultra to the rest of the world, Budweiser. On our local markets, many of our brands -- local brands supported the local teams and 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. So before FIFA, you could find Michelob Ultra in Canada, U.S., Mexico, some other Caribbean and Central America markets. But now you extend this all the way through Brazil, Argentina, Paraguay and the brand as we launched it, introduced it is performing very well.

To give you a number, which I think is very relevant, despite of the fact of the size that Ultra has in the U.S. and this #1 share gain 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. So this balanced choice idea is very relevant within our strategy. Michelob Ultra plays a central role on 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 3 countries here, but also globally. I think that the participation was fantastic. The sales on the concessionaries were above and beyond the expectations. 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 funds enjoyed until the last minute, the audience was great, the investment that we made was great. And 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.

And Mitch, Fernando here. You are asking if it still holds true that there should be a more evenly distributed year in terms of growth for. Yes, 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 1 and half 2. The only caveat, and we said that before, is that sales and marketing should be more skewed towards Q2 and Q3, especially given the World Cup. But overall, we expect a balance of year and within our outlook of 4% to 8%.

Our next questions come from the line of Rob Ottenstein with Evercore ISI.

Michel, I was wondering if we can drill down on the U S market. A lots of puts and takes, right? There's the weather, higher gasoline prices, holiday timing, FIFA. But can you -- 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? And 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, but give yourself kind of a scorecard. And 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, Robert. And it's always good to put the U.S. in context, right? So very relevant market for us. It represents around 10% to 15% of our business globally. And of course, house of brands, brands such as Michelob Ultra that I just spoke about that we are rolling out through Americas. So it's an innovation to the other markets, but it's 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 2. I think it starts with Easter, then 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 Nina to the El Nino.

Then at the back end of the quarter, you had both FIFA, but also 4th of July that this quarter flipped to the quarter 3 versus where it was last year on the quarter 2. And we see that the quarter 1 started with a good mood for consumers and a stabilization that further deteriorated a little bit on the quarter 2 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. And I'm happy to see today that we are gaining share in beer.

We are gaining share in Beyond Beer. We were the fastest growing company in spirits because of the performance of cut water and also the fastest-growing brands in the non-alcoholic space. So I think that the mission of rebalancing the portfolio and getting this portfolio architecture to be more flexible to where consumers are dining is working, and we are winning with consumers across all segments and especially on the segments that are growing the fastest.

I'll leave this scorecard for Brandon to you guys to give because I know that you are way better than me on that. And 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. That's why we are gaining share across the segments. And 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.

Our next questions come from the line of Olivier Nicolai with Goldman Sachs.

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 net working capital benefits in the second part of the year? And are you kind of on track to get towards $13 billion of cash flow this year, which will be, I believe, a record for the company? And then secondly, perhaps for the U.S. and for Michel, you're currently leading the spirits RTD segment. 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 Nutrl have to fend off new competitors coming from spirits producer? And then lastly, that's a question, promise, but thank you for flagging the mix components within your revenue criteria.

Olivier, Fernando here. So thanks for your question. So we've been working a lot on Pillar 3 of our strategy to optimize our business. And the good cash flow that we saw in H1 was a consequence of that. But in a nutshell, if you think about it, since we are growing a -- and we are driving efficiency across all the lines. We are -- we had more EBIT, good or good nominal growth. And our cash flow -- our EBITDA -- sorry, our CapEx outlook is the same BRL 3.5 billion to BRL 4 billion from last year. We look at all the lines, of course, you could expect that this growth is something that one would expect. And we don't give kind of a specific guidance on quarter-on-quarter or don't give a specific guidance on cash flow. But 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.

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. But to be very straightforward on your question, I think that we are the competition, slightly different here. So 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 spirit side, we are the competition. And we are winning with consumers because we are providing a superior proposition, not only Cutwater, but with Nutrl. 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 in existence 6, 7 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 6 or 7 overall in size brand in the spirits industry and leading with very strong execution. So competition is out there. In this case, we are the competition.

Our next questions come from the line of Chris Carey with Wells Fargo.

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 and 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? So 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.

Chris, thanks for the question. I will step back for a second to address the question, and then I will get straight to the point that you mentioned there. But we are, of course, not happy with our performance in China. And 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's being extremely dynamic in China, the quarter 1 was a more encouraging quarter. We saw an industry that was coming from a better performance at the back end of last year. The timing of the Chinese New Year was very good for the industry. And overall, because we have data for the quarter 1, the industry was almost stable, and we had an improved performance. So we had a slightly better result on the quarter 1, not ideal yet, but better.

As we entered quarter 2, we saw a deterioration on the industry. So April was already below quarter 1. We have all the data for May, and May was very weak. It was like 7-plus percent negative. And 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. And 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. So all in all, I think that the industry in the quarter 2, as we come to see the numbers consolidated will be a high single-digit negative industry.

In this context, our market share continue to improve. It's not positive yet. We saw good numbers on the nightlife, for example, where it was more stable than 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. But of course, there is way more that we need to continue to do, and we are prioritizing investing on our brands. So 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. And 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. But the biggest negative highlight on the quarter 2 was for sure, the industry. Nevertheless, as I said, we're not happy, and there is more work that we need to do. Thanks for the question.

Our next questions come from the line of Sanjeet Aujla with UBS.

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? Or is there a more underlying inflection in the consumer environment or the broader category? Or is it something you guys are doing differently there?

Sanjeet, thanks for the question. And you are right, Middle Americas had an outstanding performance in the quarter 2, very strong execution by the team there. Growth was broad-based when you think countries, but also across different segments. So growth came from core beer, premium beer, Beyond Beer, non-alcohol performed very well. And I think that you have maybe 2 realities in Middle Americas is 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 hosts a bunch of games, and there was a lot of excitement there. I think it's worth to remember that last year, we talked a lot about the weather, right? So we don't like to talk too much about this, but the La Nina El Nino transition is be impactful for last year and this year. And 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. So it's benefiting a little bit of this weather component of last year.

And when you get the other countries below Mexico, they are all very stable in terms of the economic environment, inflation, disposable income is growing. And as we always say, these emerging markets will represent 70% of the industry growth to the future. And you see this coming through because the participation is healthy. The per capita is moving in the right direction. And as we continue to execute and invest in innovation, we are getting closer to consumers, winning with consumers in more occasions. And this portfolio architecture is really working well for us, combined with the capabilities that we've been investing on such as digital, brand building, revenue management. So they are all coming together in a very strong way in Middle Americas. Thanks for the question.

Our next questions come from the line of Chris Pitcher with Rothschild & Co Redburn.

I've got one follow-up question, then a separate one. On the ready-to-drink discussion in the United States, 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? And then secondly, forgive me, my phone line dropped off. So if this was covered, please help 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 would be very helpful.

Chris, in terms of supply for ready-to-drink, we shared these couple of in a 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 5, 6 years in a row now. So we are not constrained on capacity. We have flexibility enough to supply. And of course, we have a huge headroom for growth in distribution and in rate of sales without constraints on the supply side. And 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. So 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, right? So the idea here is we are the competitors, we are gaining share, and we will continue to invest to continue to grow our presence in this segment.

And BEES continues to scale up. I think that we are supporting this growth with the right investment. As you know, I repeated this many times that the marketplace is profitable for us since day 1 was one of the conditions in which we decided to build the marketplace 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, but it is one of the top 10 contributors for EBITDA growth and is quickly escalating, let's say, its ability to grow and contribute more on the outlook. But we are just at the beginning. So the growth rate, 50% is still a good one, but we think that we can do even more. We can accelerate more the growth of the marketplace. We have a pipeline of customers and countries that is very strong, so that supports the growth for the years to come. And now it's about execution. And this execution comes with very good incrementality to our financials.

Our next questions come from the line of Laurence Whyatt with Barclays.

A couple for me as well, please. As you think about the Brazilian market and a few years before the pandemic, it was one of the very strong growth markets. And perhaps we've seen a little bit of modest growth over the past few years, I mean, notwithstanding your result today, which was very strong. But I'm just wondering, over the past few sort of 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? And then 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. Is there anything that's specifically taking place in Colombia that you want to call out to suggest that, that could be more sustainable level of growth?

Laurence, on Brazil, I think that you have a quarter-by-quarter picture, and 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. So it's gaining share of alcohol beverage. Beer is increasing share on alcohol beverage there. We had a very strong growth in this period of '21, '22, '23.

And as I said before, last year, we know that we had like a challenge on the weather condition that started in June, extended through October, beginning of November. We haven't seen yet this year positive effect from the weather. So I said the Atlantic region of the Americas is really suffering and is colder than usual, is more wedding region than usual. The Pacific side is the opposite. It's been very good this year. And 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 recovered our leadership in premium, and now we are accelerating the growth of our premium brands. We made a very decisive move in the non-alcohol, and this is growing in relevance for us there, gaining share. We are in the early stage of the Beyond Beer, but we have very good numbers coming out of Brutal Fruit, beet 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. And 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 going to be supportive for the industry there. And 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. So positive good momentum. The team is doing a good work, balancing well volume and share gains with profitability.

And in terms of Colombia, 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. So Colombia is part of that. 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 FX, there was a lot of inflation. The inflation took long to accommodate. But you see the last 12 months in Colombia in terms of disposable income, inflation, consumption, they've been all supportive, and we are doing our part there with the portfolio, with the investments so we can capture this growth. And we are also in Colombia gaining share of total alcohol, which is very good for the category. And because we lead, we are benefiting a lot from that. So health 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, those are all fundamental strengths for the category and important drivers for volume growth in the future. Thank you.

Our next questions come from the line of Robert Voss with ABN AMRO Auto.

Sorry to come back on China and weather. 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.

And then 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?

Robert, thanks for the questions. I think that the China answer is like since the market share improved sequentially, the result would still be like the quarter 1, but 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, but would be similar to quarter 1, slightly better because of the share improvement.

And in Brazil in non-alcohol, I think that we've been 2 or 3 quarters under pressure on the share side, a little bit of price relativity gap. So competition investing heavily in prices, and 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 hedge last only for max 12 months. And we see that these relativities start to close. We see that the share performance start to improve. And 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. But a little bit of relativity, a little bit of the industry that was not that good in the first half of the year for soft drinks in Brazil.

Our final questions will come from the line of Trevor Stirling with Bernstein.

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, country, brand and activation, which really overdelivered in your view, which one would you pick out? And I guess the disappointing one is probably China. So I'm not going to ask you that question. And 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 changed from being negative in the first half being positive in the second half. And is that still relevant in terms of as we look at the phasing of the EBITDA growth across the year?

Trevor, let me get your last question, and then Michel will address the first one. So on transaction effects, 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. So this is true. On the other hand, probably something that has evolved a little bit is you have -- 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. So the statement that should be balanced between H1 and H2 still holds true. Probably what changes slightly is that you see some of these unhedged energies becoming a little bit higher, which is going to impact more the second half. But you have the FX, which was more of a headwind in the first half being more supportive in the second half. So puts and takes, the balance A1 and A2 still holds.

On the first question, Trevor. Thanks for the question. I would just like to go back to your first question here, and 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, but the results of this execution when you put all together, weather, economy, what we have done, it stands out in Middle Americas.

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. So 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 a 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.

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 it's perhaps the most intentional move that we have done in terms of execution on the quarter 2. And 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, 23% on the quarter, 22% in the first half of the year, the improvement on the cash flow. So back in 2025, '24, we are talking about the step change and the sustainability of this step change. And now you see on the quarter 1, $2.5 billion growth on the cash flow. So 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. So thanks for the question.

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.

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.

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

Welcome to AB InBev's First 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 in the Reports and Results center page. Today's webcast will be available for on-demand playback later today.

[Operator Instructions] 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 first 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 global momentum of our business continued to start the year. The consistent execution of our consumer-centric strategy drove solid top and bottom-line performance.

Beer volumes increased by 1.2% with record high first quarter volumes in Mexico, Colombia, Brazil, South Africa, and Peru, among others. Revenue increased by 5.8% with disciplined revenue management and positive mix from premiumization and Beyond Beer. Underlying EPS increased by 20.8% to reach $0.97, an all-time high first quarter EPS for our business. Our momentum was driven by our mega brands, non-alcohol beer and Beyond Beer.

In the U.S., our sales-to-retailer volumes grew, and we were the #1 share gainer in total alcohol as we continue to gain share in both beer and spirits. We increased our portfolio brand power driven by increased marketing investments and estimate that we gained or maintained share in 75% of our markets. BEES Marketplace continues to scale with GMV increasing by 55% to reach more than $1 billion in quarterly GMV. In summary, our business delivered another quarter of reliable compounding growth.

We are winning in key markets and growth segments, and we are confident in the resilience of our strategy and ability to deliver consistent results. Turning to our operating performance. Total volumes increased by 0.8% and EBITDA increased by 5.3% with flattish margins as disciplined revenue and cost management enabled increased sales and marketing investments and offset transactional FX headwinds.

The strength of our diversified geographic footprint has continued to enable us to deliver consistent results through different operating environments. Our footprint is both well diversified and balanced. With 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 I'll take a few minutes to walk you through the operational highlights for the quarter from our key regions, starting with North America.

In the U.S., our business continues to build momentum with STR volume growth driven by share gains in both beer and Beyond Beer and an improved industry. Michelob ULTRA and Busch Light continue to lead our beer performance and were top 2 volume share gainers. Our Beyond Beer portfolio delivered revenue growth in the high 60s, led by Cutwater, which grew revenue in the triple digits and was the #1 share gaining brand in total spirits industry in the first quarter of 2026.

Now let's turn to Middle Americas. In Mexico, record high volumes drove high single-digit top and mid-single-digit bottom line growth as we continue to outperform the industry. In Colombia, record high volumes drove double-digit top and bottom-line growth. In Brazil, market share gain and an improved industry drove record high beer volumes and double-digit bottom-line growth. Our premium and super premium beer brands led our performance and delivered low 20s volume growth, strengthening our leadership position in the segment.

In Europe, volumes grew by low single digits as market share gains and premiumization offset a soft industry to deliver both top and bottom-line growth. In South Africa, our momentum continued with record high volumes driving mid-single-digit top line growth. Our performance was driven by our premium and super premium beer brands, which grew volumes by mid-20s. Now moving to APAC.

In China, our volume trend improved as we increased investments to rebuild momentum. Volumes declined by 1.5%, estimated to have underperformed a slightly growing industry. While we have seen some initial signs of improving performance, we still have work to do to strengthen our execution, expand our in-home channel presence and increase our participation in the growing segments of the industry. Now I would like to give you an update on the industry and the beer category and progress we have made in executing our strategy. First, I will start with the industry and the beer category.

According to IWSR, the beer category gained 60 basis points in share of alcohol beverage in 2025 and an additional 10 basis points when including the fast-growing Beyond Beer category. Combined, beer and Beyond Beer have now gained more than 300 basis points of share since 2019. The number of consumers participating in the alcohol category remained stable year-over-year, and with our data, we estimate that beer participation has also remained broadly stable.

Beer plays an important role in bringing people together and creating moments of celebration, and we believe beer has a long runway for future volume growth across our footprint, supported by favorable demographics, economic growth and opportunities to increase the category participation. Turning now to the first pillar of our strategy, lead and grow the category. Our mega brands continue to outperform with net revenue increasing by 8.2%.

Corona continued to drive premiumization across our markets, growing revenue by 16% outside of Mexico and growing volumes by double digits in 32 markets. The combination of our leading mega brands and platforms is a powerful opportunity to lead and grow the category. In quarter 1, we shared golden moments with consumers at the Winter Olympics, and we are ready to celebrate the shared passion of beer and football during the FIFA World Cup.

The consistent execution of our category expansion levers are driving momentum across our key initiatives as we continue to offer superior core brands, innovate in balanced choices and expand our premium and Beyond Beer portfolios. Led by the growth of Corona Cero globally and Michelob ULTRA Zero in the U.S., our non-alcohol beer portfolio outperformed the industry and delivered a 27% revenue increase.

With an estimated 60% of volume coming from new occasions and new consumers, we believe non-alcohol beer is a key opportunity to develop the category and drive incremental volume growth. Let's turn now to our second strategic pillar, digitize and monetize our ecosystem. The customer behavior and purchase trends captured by BEES enable us to leverage AI capabilities to execute our commercial strategy. On an annualized basis, we have over 20 billion AI-driven touch points.

Each one is an opportunity to use AI to provide superior service, progress our revenue management agenda and supply leading brands and innovations. In the first quarter, this captured $14.6 billion in gross merchandising value, a 15% increase versus last year. This marketplace continues to scale with GMV from sales of third-party products, increasing by 55% versus last year to reach $1.1 billion. Our D2C business continues to grow and is enabling us to monetize our ecosystem.

Our digital platforms served 12 million consumers and generated $139 million in revenue. As we continue to digitize and monetize our ecosystem, we have started to commercialize third-party products on our D2C platforms. While we are in the early stage of exploring this opportunity, we now have a growing D2C marketplace with annualized GMV of $160 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. Hello, everyone. I'll take a few minutes to discuss the progress we have made on 4 key areas in optimizing our business, superior profitability, compounding dollar EPS growth, capital allocation flexibility and the sustainability and resilience of our supply chain. Through disciplined resource allocation and overhead management, we were able to offset transactional FX headwinds to maintain our superior margins while increasing our sales and marketing investments to accelerate momentum.

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, effective cost management and translational FX tailwinds drove underlying EPS of $0.97 per share, a 20.8% increase in dollars.

EBITDA growth accounted for a $0.11 per share increase, partially offset by below-the-line items. 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 13 years and no financial covenants. In recognition of our consistent financial performance and the strength of our balance sheet, Moody's recently upgraded our credit rating from A3 to A2.

As we continue to strengthen the sustainability and resilience of our supply chain, we remain focused on improving operational efficiency in the following key areas: agriculture, water and energy, and emissions. Please refer to our website for further details of our goals. Our results in the first quarter, the strength of the beer category and the continued 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.

Thanks, Fernando. Before opening for Q&A, I would like to take a moment to recap on the quarter, the momentum of our business and the opportunities we have ahead of us. Our momentum continued to start the year, and we delivered solid top and bottom-line results. Our performance this quarter is another proof point of the resilience of our strategy and our ability to deliver reliable growth through different operating environments.

The combination of our diversified geographic footprint, global scale and superior local execution, disciplined revenue and cost management, consistent investment in our leading mega brands and platforms, best-in-class digital capabilities and momentum behind our initiatives and innovation in growing segments position us well to deliver compounding growth and superior value creation for our shareholders. With that, I'll hand it back to the operator for the Q&A.

[Operator Instructions] Our first questions come from the line of Edward Mundy with Jefferies.

So my first question is about the future momentum of the portfolio. It looks like you're now at a tipping point where the core is stable and the growth in the portfolio now scaled, well-integrated into the playbook and have got pretty decent momentum. How are you thinking about the portfolio from here, Michel? And then my follow-up question is on your revenue per hectoliter of 4.5% in the first quarter. Are you able to split out in broader terms what is from mix versus traditional revenue growth management levers like pricing?

Thanks for the questions. I will start with the portfolio momentum. And I think if you step back for a second and you put things in context beyond the quarter only, we are very well positioned to continue to deliver compounding growth and value creation. And this starts, of course, with our strategy. We talked a lot about this over the last 4 years. We built a strategy that both is resilient, but it's also one that we can adapt for different occasions. I always say like beer works in different occasions.

And this strategy is based on the footprint we have on the growth areas that we identified for the business and the investment choices that we made, so we could accelerate growth and create options in these areas. And of course, most of the options that we created was focusing on improving our portfolio.

You see this coming strongly in the U.S., where we are rebalancing our portfolio towards growing segments, but we are also using this at a global level, investing on the right brands and investing on the right areas where we think that both the brands that we have and innovation can meet consumer demand and accelerate the growth for both for the category and for our business.

And I think that as we keep building on that, today, we have over 40% of our revenues when you think about premium balanced choices and Beyond Beer that is growing at double-digit revenues. And we think that this is the main driver behind our momentum. And of course, the more we feed and the more fuel we give to this momentum, the more we can continue to accelerate this in the future.

And when you think about the revenue, it sounds like those 2 things are combined, right, because stronger brands and a stronger portfolio allow us to keep building on the revenue management agenda that we have. And if you look at the quarter 1, for example, mix was a very important component on our revenue per hectoliter growth, give or take inflation 3% to 3.5%. And what is built on top of that is the impact of the growing segments and growing brands, adding a component that's very structural for our revenue per hectoliter as we move forward, which is mix. Thank you for the question.

Our next questions come from the line of Rob Ottenstein with Evercore.

So Michel, you've really delivered terrific results for a couple of years now, strong start to '26. You've held, gained share in most markets. As you mentioned, you're getting strong price mix. You're showing some volume growth. And importantly, pretty much every quarter, almost every quarter, you've hit your medium-term algorithm.

And you answered part of this in the prior question in terms of improving the portfolio. But in addition to that, can you talk about maybe 1 or 2, 3 other things that you're doing differently today than maybe 5 years ago that is allowing for such strong and consistent results? And do you believe this is sustainable going forward?

Thank you, Robert. So I like the question because we always say that every quarter will be different, right? So we have different dynamics impacting the quarter and quarter 1 happen to be one on the positive side, and we are very encouraged by the way that we started the year with solid top and bottom-line performance. But it's also reassuring that over the last 4 years, we have been seeing different operating environment. Nevertheless, the strategy remains solid. and the execution is gaining momentum.

And this momentum can be perceived on the portfolio momentum, on the total revenue momentum, on the growth bets that we have, the choices that we made and how these choices now are playing out. And I think that this long-term point of view is one of the big changes that we have made because we could not do what we are aiming to do, which is our organic-led growth strategy to work on a given quarter only and needs to be to the long term.

So one of the things that I think we are all very proud is the choices we made and the investments that we have been making to the long term, investments in portfolio, investments in digital capabilities, investments on the brands that we choose to support and grow, which are the mega brands.

I also think that execution has been enabled by both a very strong culture and the way that the team is focused on growing the business and the additional benefits of our digital capabilities. So today, the fact that we wired the whole system and that data is driving a lot of the decisions we make, but also supporting the decision-making in the front line is a very important component of our growth algorithm and the way we do business today.

And last, I think I talked a little bit about this, but the team has been working very hard in doing everything that we do with a high level of efficiency, which is traditional into the company, the operational efficiencies, but also commercial efficiencies. So the work that we do is making the money that we invest work very hard for us and the brands are growing forward.

We are gaining share on the key markets that we operate and the choices we made to invest for the future portfolio are gaining momentum and paying off. So very thankful to the team, all the work that they are doing. They're working hard to learn this every day and one more quarter that we delivered on our outlook, and we are very encouraged to see what the summer is going to bring, especially with FIFA around the corner. That's going to be an interesting moment in the year. Thank you for the question.

Our next questions come from the line of Olivier Nicolai with Goldman Sachs.

Two questions, please, both related to the U.S. First, I mean, momentum in the U.S. has clearly improved year-to-date. Could you give us perhaps a bit your sentiment on the current consumer demand in light of higher gas prices over the last month? And also, is it fair to assume that STWs are going to be well ahead of STRs in Q2 as you probably build up some inventories for the FIFA World Cup coming up in June?

And then secondly, it's been only a couple of months since you got the BeatBox now part of the portfolio. But what -- can you give us a bit more details on what does that brand brings to your existing portfolio of spirits RTDs? And if you would expect the same growth trajectory that you had on NUTRL and Cutwater without cannibalizing those?

Olivier, thanks for the questions. I'll try to answer all of them. I got like, I think, 3 or 4 questions in one shot here. Let's see how we do on that. The first one, I think that the overall consumer sentiment is well known by everybody in the industry and in the consumer sector. I think we had a tough year last year for consumers as inflation was still building and people are trying to build back their disposable income.

At the beginning of the year, it's fair to say that was more benign, let's say, in the quarter 1 and of course, everything that's going on now with energy costs and potential inflation implications will have somehow a delayed impact. So we are seeing some costs going up today, but we know that it takes anywhere from 3 to 6 months for this to really hit on consumers. So at this point, I would say that things are manageable for everybody, for consumers and for the companies.

But we know that as we build towards the end of the year, depending on the direction that we see for inflation, these things will start to compound again and will be once again a factor for both consumers to manage and for the CPGs to manage. Fair to say that if you look at the last 4, 5 years, we've been managing one difference each and every year or each and every quarter.

On the question on STWs and STRs, if you look for the -- over time or during the full year, they always tend to converge. And this has been true for the last many, many years and will not be different this year. The difference on what you said, if I got correctly your question, is that we should expect on the quarter 2 an inversion on that. And this never happens because of the summer. We often sell more during the summer than what we can ship.

So the conversion that you see on STRs and STWs historically is more towards the back end of the year, not towards the summer, right? So I think that we will continue to see some mismatch as we go for quarter 2 and then quarter 3. And then for quarter 3 to quarter 4 is when things tend to converge. And on the ready-to-drink, I think that we have a great portfolio globally. We have global brands that we are growing in the local market and scaling up globally.

Just think, for example, at the expansion that we are doing now with Flying Fish. So Flying Fish from Africa traveled to Europe to South America and is growing today in many different markets. This is true for Cutwater that we are starting to expand as well. And BeatBox will add to this portfolio and it's very complementary. So it's not cannibalistic to any of the other brands that we have.

And it complements our portfolio, bringing an option that is non-carbonated, more convenient, more flavorful and therefore, suits for some different consumer occasions and consumer profile. So a strong portfolio. Now if you look at the top 10 brands, we have Cutwater, we have NUTRL, we have BeatBox.

If you look at the top 5 brands growing in the U.S., then we also have a strong set there with Cutwater and BeatBox coming. And as you combine the power of what the team built at BeatBox with the AB distribution and focus on the U.S., for sure, we will see some good opportunities come to the table. So thanks for the question.

Our next questions come from the line of Sanjeet Aujla with UBS.

Just following up on the U.S. again, please. It looks like the underlying business in Q1 is growing around 4.7%. How much of that is coming from the Beyond Beer portfolio? Is that portfolio gross margin accretive to the U.S. operations or not? And I guess, finally, as we sit here in 12 months' time, what gives you the confidence that brands like Cutwater can keep growing despite lapping what's going to be a really high base?

Sanjeet, thank you for the question. On the first point, I think that the math is very straightforward. So STRs were positive and the revenue per hectoliter was very good, building on inflation and mix, very similar to the global business, as we said before. And this momentum, if we step back and we remember, many times that I answered this question in our conversations here. So we are on a mission to rebalance our portfolio in the U.S.

Because of the nature of the market, the 3-tier system, this rebalance will never happen overnight, but it's something that we have been building over time. And today, we have over 40%, 45% of our business that is already above core, both mainstream in the U.S. And if you think about the brands that are growing pretty much the same number, they are approaching 50%.

And when you get the pace of this growth versus how we've been stabilizing the other brands that we have in the declining segment, then the product of this is a product that is very encouraging for the quarter, but also to the mid, long term in the U.S. So we have a better portfolio today than what we had a couple of years ago. And when you think about the Beyond Beer contribution on that, this was a bet that we took to the heart back then in 2017. We learned a lot. It didn't happen overnight.

So people like to think about these overnight successes. This is not. This is 10 years in the making. And this portfolio today is very strong. So we have pure-play brands that they enjoy a very special space in consumers' mind. They are building distribution still. All of them have very low distribution, very low household penetration. We are at early stage on the S curve to continue to develop and grow these brands. They all have momentum.

Some of them have accelerated momentum like triple digits, but they are all growing double digits or more. And we think that the headroom to continue to grow these brands is huge because, again, low penetration, low household penetration, low participation in consumers, but very, very strong propositions.

The margins we talked before about that, like on a gross margin percentage speaking, they are smaller than beer because they have higher cost base, smaller volumes today, but they are enjoying operating leverage because, of course, they are growing strongly. Margins are only improving. But on absolute dollars, they are way more profitable, let's say, 20% to 30% more profitable than our premium beers. So very good business for us to be in.

And Cutwater, as you said, at this point, we are concerned with the quality, we are concerned with our message on delivering superior experience ready-to-drink cocktails for consumers, and we are working to supply the demand, which has been very strong to date. So good brand, good place to be in, #1 share gainer in the spirits industry, the fastest-growing brand in that space, so contributing immensely to our momentum in the U.S. Thank you for the question.

Our next questions come from the line of Celine Pannuti with JPMorgan.

My first question would be on FIFA activation. Can you talk about when we should see the step-up in growth for the Q2 and Q3, whether there's anything you can help us in terms of quantification? And likewise, in terms of the step-up in A&P that we should expect in Q2, Q3 on that point, what was the Q1 step-up in SG&A spend on, please?

And my follow-up question would be on the price mix. So you said, Michel, that around 3% or 3.5% inflation and on top of the mix, it feels like inflation and CPI globally is not going to decelerate given what's going to happen or the events unfolding. Would it be fair, therefore, that this kind of growth in price mix is resilient throughout the year?

Thank you for the questions. I'll take 2 or 3 of them here, and then Fernando can add at the end a little bit on the cost side. And first, I think that the FIFA numbers, we have a good history on that. So every 4 years it happens, is visible for everybody. And the numbers that we -- usually globally based on the data that we have suggest that FIFA contributes historically anywhere from 20 bps to 30 bps of the year's volume.

And of course, this depends on the location of the games and the time of the games, and this can vary by country. I think it's natural to think that if you go to Germany or Brazil or Argentina, it's a more relevant event than it is, for example, in some of the Asian countries. But I think like 20 bps to 30 bps globally uplift, and it happens on the months of June and July. So it's a concentrated impact during these months.

And we will see normally this coming through in the quarter 2, quarter 3 as we approach the games. And now we are on the cut down. So we are really ready with the execution. The execution should be hitting the markets as we speak. In some of the markets, we are already advancing a little bit of that. In some of the markets, we are waiting the final stage that we are approaching now to start kicking off the campaigns. And the SG&A is the same.

So this year, on top of being during the summer, which is often a moment that we invest more, we're going to have on top of that the World Cup, and this will somehow spread equally through quarter 2 and quarter 3. Quarter 2, a little bit heavier, of course, because you have the anticipation campaigns and everything that happens. On the price side, very clear, like our policy is to price with inflation. And if inflation accelerates, we will need to then [indiscernible] that and adjust our plans.

To this point, we feel good where we are and with the plans that we have and mix, which is a very important part of our revenue strategy is compounding on these numbers. So if you look at the last quarter 1 was very good, quarter 3 was good as well. And this is a structural benefit on our revenue management. The fact that we are investing on the mega brands, our investment choices on growing segments that are more profitable, such as non-alcohol beer, premium and Beyond Beer, of course, they add to our revenue that should continue to move with inflation.

And Celine, Fernando here. Just to add on Michel's comment, Michel mentioned the SG&A, the advertisement expenses. Every year is unique in a sense. But given our hedging policy, we always have good visibility when we go into the year. So we knew that this year, we're going to have more sales and marketing concentrated around the World Cup.

And we also knew that given the hedging policy and FX movements, we know that from a cost of goods sold standpoint, you have more pressures on the H1, particularly in Mexico and Brazil rather than H2. But given that we know all that when we start the year, we took some proactive measures in both revenue and cost management agenda to better balance the year. What I mean by better balancing the year is H1 versus H2. So on the things that we can control, we try to smooth it out some of the impacts that we already anticipate going to the year.

Our next questions come from the line of Mitch Collett with Deutsche Bank.

My first question, I guess, follows on from that last comment. So how should we think about the phasing of 1H and 2H EBITDA growth given what you just said about the phasing of transactional FX, but also maybe some of the other factors like the Midwest premium and also your sales and marketing investment, which sounds like it's going to be still reasonably concentrated in Q2 and Q3, which is, I think, what you said at the full year call.

And then my second question is on the 5 markets that you call out where you've reached record high first quarter volumes. I appreciate there may be some phasing within that. But it certainly seems very counter to the prevailing narrative of alcohol consumption and beer being under pressure. So are there any commonalities between those markets that you haven't already covered in your answers to the other questions?

Mitch, Fernando here. Let me start with the first one. What I said and maybe it's good to reinforce is that we understand kind of COGS dynamics given our hedging, and we know more or less how they are going to behave. We know that probably the biggest pressure is in half 1, maybe even more a little bit towards Q1, and then they start easing off as the months go by. Knowing that you can already be proactive in your revenue and cost management initiatives to counterbalance some of these effects.

To the same token, we know that as the cost pressures or the cost will start easing up, you know that you're ramping up sales and marketing because of the World Cup. So all in all, we expect kind of a more balanced year when you go all the way to the end, even though the lines, you should see different components between the lines, which are the dynamics that we already knew once we started the year.

Yes. And taking on your second question, Mitch, thanks for the question. So first, I think that we mentioned this because we believe it's an important data point for investors and for all of you guys. And those are meaningful markets like Brazil, Colombia, South Africa, Peru, Mexico, and we have many others that reached an all-time high volume. You are right. So there is a benefit from Easter. So think about anywhere from 30 bps to 50 bps of the growth coming from the shift of Easter in quarter 1 versus quarter 2 last year.

Nevertheless, all these markets grew north of that. So they grew more than the Easter shift. And what is common across these markets is twofold. One, as we keep saying, structurally, the key fundamentals behind the beer category that are demographics, that are economic growth, and the opportunities for the category to have higher participation, they remain in place.

And even though the dynamics of each quarter will always be different, and we have seen everything in the last 4 years, those fundamental dynamics do not change. Second, our strategy is a growth strategy, and we keep working on the key elements of our growth strategy, investing to the long term, and this is obviously paying off as our portfolio gets stronger on the areas that have more growth. So in all these areas, you see strong core brands, maintaining or gaining participation in the category.

You see premium brands growing and improving access to consumers in different occasions. You see our Beyond Beer brands expanding the set of consumers that we bring into our portfolio. And last but not least, the non-alcohol as a new avenue for growth, strong growth across all these markets. So it's a global strategy that has been well executed locally on our markets that has long-term investments and choices that we make.

So we optimize these investments. And while every quarter will have its own dynamics, it's good to see that back end of last year was good. Quarter 1 was solid. And this, I think that helps to neutralize or to put in context what you call different narratives around the category because at the end of the day, beer is big, it is growing, it is gaining share of throat globally.

It's a category that's part of people's life for every moment of celebration for more than 5,000 years and it's not going anywhere, to be honest. If you look towards the summer now, it's going in a very good direction with FIFA being celebrated globally. Thanks for the question.

Our next questions come from the line of Simon Hales with Citi.

My first question was just a quick clarification really on the Q1 volume shipments that we saw. I just wanted just to check that within those numbers, there weren't any shipments ahead of the World Cup into some of your key markets, I mean particularly some of the strength we saw in Latin America, there was nothing, there was no trade loading, I suppose is the underlying question there.

And then secondly, I just wonder if you could just talk a little bit more about the performance of Brazil in the quarter, how the business evolved through the period, how you exited Q1 and particularly given that strength of volume growth in the premium segment, how confident are you in your ability to sustain growth at those sort of levels going forward, given that's quite a competitive sort of category you're involved in there?

Simon, thanks for the questions. So in terms of shipments, the answer is very clear, no. And to make this more clear, we disclosed that, for example, in the U.S., we under-shipped. So we sold more than what we shipped to wholesalers. And the buildup for the World Cup will really happen more towards June than we could have done anything in the quarter 1. So no shipments ahead of time.

This buildup should really be at the back end of quarter 2, not sooner than that. And in terms of Brazil, I always go back to the point in Brazil that is a very competitive market. And we have very strong operations in Brazil, but we've been adjusting our portfolio over the last 4 years. And we are very confident that we have strong brands now being executed in the right way as we rebalance a little bit more having a strong mainstream business, but also strong premium brands.

These brands now are growing and gaining share with accelerated momentum. So the quarter 1 had a little bit of everything because the quarter 1 in Brazil had like an excellent carnival, but then a very wet period at the beginning of January and during March. So it was more really market share gains in the right segment, especially premium and super premium.

And I think that beers, now as we look forward in Brazil, will count with same momentum behind our brands, and we are investing to continue to gain share and solidify our position there in premium. The calendar for Brazil is very supportive for the year. So there is many holidays that are extended holidays in Brazil this year. And at the middle of the year, we're going to have the World Cup.

So let's hope for the best with the Brazilian team, so we can have some good moments of celebration there in Brazil. And we'll continue to work to make this portfolio stronger to maintain the level of execution that we have there, which has been very good in the last couple of quarters. And innovation has been playing a big role in Brazil. So we have some very strong products that we innovated in the last couple of quarters and years that are doing very well.

And we are rolling out Flying Fish now in Brazil, which is a big bet as well and the Beyond Beer that can add plenty of consumers to the portfolio of brands that we have and even more occasions for us to be close to consumers and to moments of celebration there. So we feel good. Of course, we need to continue to monitor the industry while controlling what we can control, which is our own agenda and portfolio in Brazil.

Our next questions come from the line of Richard Withagen with Kepler.

I have a question on Corona. I mean the activation appears to have been very solid around the Olympics. So maybe can you explain a bit what has worked well in execution and what was less solid than you expected? And what takeaways do you have on this to also execute well during the World Cup?

Thank you, Richard. So the Olympics was very important for us as a platform to launch globally and really grow the Corona set of proposition globally. And this so far is working very well for both sides for the Corona brand because we now are present in many countries. Corona Cero is growing globally very well.

And we, just this quarter, now became leaders in value globally, and we took the leadership now in 7 out of the top 14 markets, and we continue to grow the portfolio overall double digits and is working very well with Corona as well as with Michelob ULTRA Zero in the U.S., which is the brand we are using for Olympics in the U.S.

One of the most astonishing statistics from all of that was to see during the Winter Olympics in Italy, Corona and our zero-alcohol both, the regular and zero-alcohol having 60% share of all beverages being sold in the concessionaires around the events. So 60% when we include everything from water to soft drinks to coffee, and that was during the Winter Olympics.

So it's one more proof point that people really enjoy beer, that beer and sports go well together and offering choices to consumers. Regular Corona and zero-alcohol Corona is a winning proposition for everybody out there. When you think about that with the World Cup, I think that it goes back to the point that we are leveraging global scale. So we activated the Olympics globally as we always did with FIFA and we'll do again during the summer now with FIFA.

We want to be on the anticipation of the games. So people can prepare for the Cup for those that will watch the games at home with family and friends. We want to make a huge push on bars because the bars will be the places where people will get together to watch the games. And there is nothing like watching your team around friends and family on a nice bar over a cold one.

So we're going to make a big push to support our partners so they can offer the best experience on the bars. And of course, we'll be working in the local markets from Mexico to the U.S. and Canada to make sure that everybody that's coming to watch the games will have a great experience on the stadiums and make sure that the concessionaires are well equipped to deliver a great experience there on the part that we can control, which is the beer.

So it's great to see the mega platforms working. The key behind that is the scale that we have, the ability to execute globally and the ROI in this has been very good because the brands are executing very well and consumers are giving their vote to the brands that we are using. So thanks for the question.

Our next questions come from the line of Chris Pitcher with Rothschild & Company.

I will talk about South Africa. There's been a lot of focus today on the strength of your portfolio and the mix that's coming through, particularly from revenue management. But in South Africa, it looks like revenue per hectoliter was below the rate of inflation despite, I believe, a stronger performance from Beyond Beer products, which should, in theory, be accretive to mix.

Can you give a bit more detail on why revenue per hectoliter was a bit more subdued in South Africa? And then could I just confirm, India looks like it was up about 30%. It was probably one of your top 3 volume contribution markets. It gets a specific reference from Bud Asia, but not from you guys yet, but it looks like it could well be into a period now where it's contributing to group growth and it looks like it's moved into profit. Could I confirm both of those?

Yes, Chris, thank you for the question. So South Africa, great momentum, all-time high volume for the quarter 1 with beer. Our Beyond Beer portfolio is growing very well. We have our revenue agenda working well around phasing through the year on the pricing and the investments that we've been making, both in terms of sales and marketing. So we are very confident that the agenda will continue to work well there as have been working over the years.

As a matter of fact, our prices are in place, and there is a healthy revenue coming from this pricing there. When you think about India, we comment about that in some of the calls, and I thank you for asking the question because it gives me an opportunity to talk a little bit more about India here, too many countries that we often talk about. So India has been a great story in which the industry has been growing consistently, some ups and downs.

But when you look more and you take the long term, it is an industry that's been growing high-single digits, almost double digits. Quarter 1 happened to be a double-digit industry. It is a place where we have an incredible portfolio of brands. It is today a top 5 market for Budweiser globally and becoming like a top 3 this year, probably. Budweiser has strong growth momentum there. Our share is approaching 20% on the market. It's all organic growth, mostly on the premium and super premium segment.

So the brands are working very well. Our growth was really strong, was above 30%, as you mentioned, and we keep investing to the long term. And as the industry continues to expand, per cap is very low. So the headroom for growth is immense and the strength of our portfolio there is something that we have been building for over 10 years now. So we are really playing the long-term game there. And we are happy with the execution.

That's way more that we can do to improve the industry collectively because it's not a one player game for this industry to unlock there. But on our side, portfolio is strong, momentum is good. Execution is very good, and the team is locked in pursuing our 10-year plan ambition there and transform this in a meaningful market for us [indiscernible].

So good business, good portfolio, profitability improving, but a very long game that we are playing there because per cap is still very low. And as people get wealthier, as the barriers around the industry start to be unlocked, that's huge future growth opportunities for all of us. Thanks for the question.

Our final questions will come from the line of Trevor Stirling with Bernstein.

Just one from my side, please. I'm really struck by the continued very strong growth in BEES, in particular on the platform and the 3P side of the business. And I'm just wondering, maybe one more for Fernando. Is that starting to be a meaningful contributor to your revenue per hectoliter growth in Brazil? Or is it still a little bit too small to move the needle?

Trevor, so yes, it's good growth, kind of the business growing well. It's -- as we said, it's a business that is positive in EBITDA, positive in cash flow, but it is still -- I think all the other components are far more relevant so far as contributors to the net revenue per hectoliter agenda. Michel?

Just maybe to add on your point, Trevor, the growth continues to accelerate on this marketplace. And just to ground the thought around that, the 3P, which is selling through the platform third-party products is where we see most of the growth. And in this case, we are still scratching the surface. We know that the total addressable market is a multiple of what we are capturing today. And of course, this 50%, 60% growth that we have is a way for us to continue to get more of that.

As Fernando said, cash is positive, EBITDA is positive and the margin of the 3P is very big. But today, it is a small component of the overall business, a growing one over time. So it is -- the most mix that we see today is mix from brands that come from premiumization and from Beyond Beer. But as time goes by, this will become a more meaningful contributor on this mixed component of our revenue growth.

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.

Thank you, and thank you, everyone, for your time today, for the ongoing partnership and support for our business. I hope that you are doing well. For those in the North preparing for summer and grabbing some beer to cheer. And for everybody else, of course, join us on the excitement for FIFA, that's right around the corner and for a great summer, great games and great moments of celebrations. So cheers.

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

Welcome to AB InBev's Full Year 2025 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. [Operator Instructions] Today's webcast will be available for on-demand playback later today.

[Operator Instructions] 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 12, 2025.

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 full year 2025 earnings call. It is a great pleasure to be speaking with you all today. 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 for the year.

In 2025, we executed our strategy with discipline, delivering another year of dollar-based EPS growth, continued margin expansion and solid free cash flow generation, even as we navigated a dynamic consumer environment. As we reflect on the year, we are encouraged with the consistency of our financial performance, the durability of our strategy and the resilience of our business.

While near-term demand across many CPG categories was impacted by a constrained consumer environment and unseasonal weather, we continue to invest in our strategic priorities. We remain disciplined in our revenue management choices and delivered EBITDA growth within our outlook. We continue to make progress this year. We strengthened our operating model and increased our portfolio brand power.

We also formed new long-term partnerships to extend the reach of our brands and deepen the connection to our consumers. The momentum of our growth priorities continued. Our mega brands and premium portfolio grew ahead of our overall business. The growth of our Beyond Beer and non-alcohol beer portfolios accelerated, increasing revenue by 23% and 34%, respectively. And BEES Marketplace GMV increased by 61% to now reach $3.5 billion.

Solid free cash flow generation enabled us to increase the size of our share buyback program, pay an interim dividend and propose a final dividend that combined represents a 15% increase versus last year and further strengthened our balance sheet. We exit 2025 with improving momentum across many of our key markets, and we entered 2026 well positioned to engage consumers and accelerate growth. Turning to our operating performance.

While our overall volumes for the year were below potential, momentum across many of our key markets accelerated through the fourth quarter with improved volume performance in December. The combination of our disciplined revenue management and portfolio of mega brands that command a premium price drove a revenue per hectoliter increase of 4.4% this year, resulting in top line growth of 2%.

Our productivity initiatives more than offset transactional FX headwinds to drive an EBITDA increase of 4.9% with margin expansion of 101 basis points. The strength of our diversified geographic footprint enables us to navigate the current environment and deliver consistent profitable growth. Revenue increased in 65% of our markets this year, and we delivered EBITDA growth in 4 of our 5 operating regions.

Our footprint also positions us well to capture a disproportionate share of future industry growth with a diversified mix of currencies. Around 70% of our EBITDA is generated in emerging and developing markets that are projected to account for more than 80% of the beer category volume growth through 2029. Now I will take a few minutes to walk you through the operational highlights for the year from our key regions, starting with North America.

In the U.S., our business continues to build momentum, and we gained share in both beer and spirits in 2025. Our beer performance was led by Michelob Ultra and Busch Light, which were the top 2 volume share gainers in the industry. In Beyond Beer, our portfolio growth accelerated. Revenue increased in the high 30s, led by Cutwater, which grew revenue in the triple digits. While industry volumes were below trend in 2025, we are encouraged by the start to 2026.

Beer industry volumes and revenues grew in January. And later this year, we look forward to celebrating the 150 years anniversary of Budweiser and activating the category at the FIFA World Cup. This past weekend also provided us a good opportunity to engage with our consumers in one of the most watched live sporting events in the U.S., the Super Bowl. We continue to invest behind our brands to fuel momentum, and the creativity and effectiveness of our marketing was once again recognized by consumers.

Budweiser, Michelob Ultra and Bud Light were named as 3 of the top 10 ads according to the USA Today Ad Meter with Budweiser taking the top spot for the second year in a row. Now let's turn to Middle Americas. In Mexico, our business momentum continued, delivering a mid-single-digit top and bottom-line increase with our above core beer portfolio leading our growth. In Colombia, record high volumes and margin expansion drove double-digit EBITDA growth with revenue increasing across all price segments of our portfolio.

In Brazil, our momentum improved in the fourth quarter as we gained market share and our volumes returned to growth in December as weather normalized. Our premium and super premium beer brands delivered high teens volume growth in 2025 and gained share to now lead the premium segment. In Europe, market share gains and premiumization partially offset the softer industry with performance driven by our mega brands and non-alcohol beer.

In South Africa, our momentum continued with market share gains in beer and Beyond Beer and disciplined revenue and cost management driving mid-single-digit top and bottom-line growth. Now moving to APAC. In China, revenue declined by low teens with our volumes underperforming a more stable industry as we adjusted inventory levels and focus areas to better reflect the channel and geographic shift.

In Q4, our market share trend improved to be flat versus last year, driven by improvements in Budweiser brand power and our in-home channel performance. As we move forward, we continue to focus on rebuilding momentum and reigniting growth. Now I would like to take a few minutes to reflect on the beer category and progress we have made in executing our strategy. Let's start with the category.

Beer plays an important role in bringing people together and creating moments of celebration, and we believe beer has a long runway for future volume growth across our footprint, supported by favorable demographics, economic growth and opportunities to increase category penetration. According to IWSR, the beer and Beyond Beer category is forecast to continue to gain share of alcohol beverages in 2025 and has now gained more than 200 basis points since 2021.

And looking ahead, beer is expected to grow volumes globally and continue to gain share of alcohol beverage. In 2025, we invested $7.4 billion in sales and marketing and have averaged more than $7 billion per year since 2021. Our marketing effectiveness continues to strengthen, and our mega brands and mega platform approach were key contributors to the brand power of our portfolio, reaching a record high in 2025.

Our mega brands led our growth and have increased revenue at a CAGR of 10% since 2021 and now represent 57% of our total revenues. We are the leader in the premium beer segment globally and see significant headroom for category to continue to premiumize. Premium beer is forecast to grow volumes across all geographic clusters and at more than double the rate of the category overall. And the best example of premium execution in our portfolio is Corona.

In 2025, Corona celebrated 100 years since its original launch and 2026 is off to a fast start with the brand sharing the golden moments at the Milan Cortina Winter Olympics. Since 2018, the volumes of Corona have doubled. And in 2025, volume increased by double digits in 30 markets. The quality, brand power and consumer preference for Corona has earned the right for a premium price point. Corona sells on average at a 20% premium to the nearest competitor.

And in 2025, was again ranked as the most valuable beer brand in the world. We continue to lead the development of the category and expand occasions to meet consumer trends. Our balanced choice portfolio includes options for consumers seeking low carb, low calories, sugar-free, gluten-free and non-alcohol alternatives. This portfolio is growing ahead of the overall beer category and momentum continued in 2025.

Led by Corona Cero globally and Michelob ULTRA Zero in the U.S., our non-alcohol beer portfolio delivered a 34% revenue increase, and we estimate to gaining share in 70% of our top 14 non-alcohol beer markets. While non-alcohol beer is currently a relatively small portion of our global beer volume, it is a key opportunity to develop new consumption occasions and increase participation, and we are investing and innovating to lead the growth.

In Beyond Beer, the growth of our portfolio accelerated, increasing revenue by 23% in 2025. Our performance was led by Cutwater in the U.S., which grew revenue in the triple digits and was the #1 share gaining brand in the total spirits industry in the fourth quarter. After the successful rollout in Africa, our flavored beer Flying Fish is now expanding to Europe and the Americas.

Beyond Beer now accounts for 3% of the total revenue of our business, and the category is projected to grow volumes at double the rate of the overall beer category. The strength of our brands, route-to-market capabilities and innovation pipeline gives us a strong right to win in this segment. Discipline and incremental innovation is a key enabler of our growth. In 2025, our innovations across packaging, brands and liquids contributed 11% of our total revenue.

In the U.S., we led the industry innovation with 3 of the top 5 innovations of the year, with Michelob ULTRA Zero and Busch Light Apple, the top 2. In China, we launched a 1-liter can for Budweiser and a Corona full-open lid can to bring the iconic lime ritual into the in-home channel. In South Korea, we launched the country's first 4 Zero beer with great taste, zero alcohol, zero sugar, zero calories and zero gluten.

And in Beyond Beer, we are expanding our winning propositions globally and innovating with flavor varieties to provide consumers with choice. Let's now turn to our second strategic pillar, digitize and monetize our ecosystem. In 2025, BEES captured $53 billion in gross merchandising value, a 12% increase versus last year. The growth of BEES Marketplace accelerated and delivered $3.5 billion of GMV this year, a 61% increase versus last year.

The Marketplace on BEES has grown rapidly since we initially started developing the platform in 2021. We recognized early that many of our customers could benefit from a one-stop shop for their business and similarly, that many consumer goods partners could benefit from leveraging the breadth and efficiency of the digital connection we have with our customers.

The marketplace has grown to $3.5 billion in GMV business from a standing start 5 years ago, and we continue to explore the opportunities to scale and enhance profitability. We are still early in the marketplace journey, but we are encouraged by the progress we have made and see a clear opportunity to continue the growth momentum while solving a pain point for our customers and partners.

In DTC, our digital platforms continue to enable a one-to-one connection with our consumers and developing new consumption occasions. In 2025, we continue to grow our consumer base, now serving 12.3 million consumers, an 11% increase versus 2024. 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. Good morning, good afternoon, everyone. I will take a few minutes to discuss the progress we have made on 4 key areas of focus in optimizing our business, improving margins, compounding dollar EPS and free cash flow growth, making disciplined capital allocation choices and advancing our sustainability priorities. Our EBITDA margin improved by 101 basis points this year with margin expansion across 4 of our 5 operating regions.

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. This year, we delivered underlying profit growth of $350 million. Underlying EPS was $3.73 per share, a 6% increase versus last year's in dollars and a 9.4% increase in constant currency.

Dollar-based EPS has now grown at a CAGR of 6.7% since 2021. EBITDA growth accounted for a $0.46 per share increase this year. Lower net interest expense from active debt management and continued deleveraging contributed $0.09 per share but was partially offset by a higher cost of hedging and FX movements. We maintained this level through a combination of EBITDA growth and margin expansion, reducing our net interest expense through deleveraging, and maintaining our disciplined resource allocation.

Looking ahead, we are encouraged about the opportunities to grow from this base. With this solid cash generation, we continue to strengthen our balance sheet. We repurchased $2.7 billion of debt. And despite a $2.8 billion FX headwind on our net debt from a stronger euro, we reached a leverage ratio of 2.87x. In 2025, we improved our debt maturity profile while maintaining our weighted average coupon. 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 13 years and no financial covenants. As we continue to deleverage, we have increased flexibility in our capital allocation choices. We have raised our dividend every year since 2021, including the payment of an interim dividend in 2025. We have completed $3.2 billion of share buybacks and are currently executing a further $6 billion program. For 2025, the Board has proposed a final dividend of EUR 1 per share.

Combined with the interim dividend announced in October, this represents a total dividend increase of 15% year-over-year with the ambition to continue a progressive dividend over time. Now turning to sustainability. Our 2025 goals were set in 2018 to drive impact and efficiency across our value chain. As our business is closely tied to the natural environment and the local communities, we focus on areas that are relevant to us, water, agriculture, climate and packaging.

We achieved our water and agriculture goals and made strong progress against our climate and packaging objectives over the past 8 years. We are proud of the progress made, and we'll continue building on our strong foundation in these areas. As we look ahead to 2026, we expect EBITDA to grow between 4% and 8% on an organic basis, in line with our medium-term outlook.

As we continue to invest to execute our strategy while optimizing our resource allocation, we expect net CapEx to be between $3.5 billion and $4 billion, and we expect our normalized effective tax rate to be between 26% and 28%. With that, I would like to hand it back to Michel for some final comments.

Thanks, Fernando. Before opening for Q&A, I would like to take a moment to recap on our performance for the year. It's fair to say the operating environment in 2025 was dynamic. Despite this backdrop, the disciplined execution of our strategy delivered consistent financial results. EBITDA grew within our outlook. Underlying EPS increased by 6% in U.S. dollars, and we delivered another year of solid free cash flow generation.

We strengthened our balance sheet and increased our capital allocation flexibility, enabling a progressive increase in our dividend and announcement of a larger share buyback program. While our volume performance was below our potential in 2025, we are encouraged with the momentum we saw as we exited the fourth quarter. Our volume trend improved in December, and we gained or maintained share in 80% of our markets in the quarter.

The combination of our mega brands with an unparalleled lineup of mega platforms is a powerful opportunity to lead and grow the category. This past weekend, we kicked off an exciting calendar of events with both the Super Bowl and the opening of the Winter Olympics. And then the summer will bring FIFA World Cup in North America.

With 104 games across 3 countries, each game is an opportunity to bring beer and sports together to create unforgettable moments for fans around the world. We entered 2026 with improving momentum, and we are well positioned to activate the category and engage consumers. With that, I'll hand it back to the operator for the Q&A.

[Operator Instructions] Our first questions come from the line of Edward Mundy with Jefferies.

Two questions, please. So last year, you wrote that beer is a passion point for consumers and a vibrant category globally. And this year, you're starting off with beer plays an important role in bringing people together and creating moments of celebration. I'd love to get a bit more context into this nuance.

And to what extent can you, as industry leader, help to bring across a more balanced message around the positive attributes of moderate consumption and getting people together is my first question. And my follow-up, again, for Michel. You're sounding a little bit more optimistic about the prospects for 2026. How much of this owes to sort of consistent application and progress with your strategy? And how much of this owes to some very early green shoots that you might be seeing from a cyclical standpoint?

Thanks for the question. I think that on the first point, they are actually both right. Beer is a passion point for consumers, but beer always brings people together around moments of celebration and enjoyment. And I often say that we listen to a lot of things that are happening and everything gets better when people get together and drink a beer. So the world really needs a beer.

And this is important as we get people to exchange ideas, to socialize, to enjoy moments as we saw this weekend with Super Bowl or during the Olympic Winter Games in Milan Cortina, everybody was enjoying the sessions and having the opportunity to be together with friends and drink a beer. So I'm extremely optimistic about the role that our product plays and how we can always enable memorable moments for our consumers.

That's why we invest in the platforms that we invest on our brands, and we keep pushing the category forward with innovation. In terms of the tone for 2026, let's say, I think that 2025 was definitely a very complicated year with many dynamics impacting different markets, industry and consumer goods in general, right? And beer was not insulated from what happened last year. As we saw most of the impact for beer came on the second half of the year.

But as we phased the year towards the end of the year, we saw momentum reaccelerating, especially in December. And this momentum is carrying on now early in January in majority of the markets. We have a very good year in terms of opportunities to activate and land our innovations. And I think that if you look forward during the summer, the World Cup always presents a unique opportunity for us and the fact that's going to happen in the Americas, 104 games plus across the world is going to be great.

And in connection with our strategy, of course, despite of everything that happened last year, you've seen the numbers, we continue to invest on our strategy, always focusing on the long term. Our growth accelerators and growth drivers like balanced choices, premiumization, non-alcohol beer, Beyond Beer and BEES marketplace are all working as per plan.

And therefore, the more the mix contribution of these initiatives and the more solid the execution behind our 3 pillars of this strategy becomes, the more optimism, of course, we build and continue to deliver our midterm outlook. That's why it's unchanged for 2026. Thank you for the question.

Our next questions come from the line of Rob Ottenstein with Evercore...

Michel, you've done a terrific job turning around the U.S. market, and it really looks like it's in the best position to grow in many, many years. Can you first maybe kind of give us a sense of the key elements of that turnaround and what you've learned from that?

And then perhaps even more importantly, can you talk about other major markets around the world where you can apply those learnings, those strategies, tactics to put the markets on a better trajectory and maybe specify particular actions along that front that perhaps you started in '25 or plan to start in '26, so we can get a sense of how you can take what you've learned and the momentum in the U.S. and move it around the world.

Thanks for the question. So to start with, I think that the team is doing a great job in the U.S. So they are working really hard on things that we agreed and those things are turning the results around. I think that we have been in a long journey in the U.S. since 2008. We got a business that had structural disadvantage because the portfolio was concentrated in segments that were not growing.

You remember that since 2017, when I arrived in the U.S., there was this idea of rebalancing our portfolio for growth and the idea that, of course, this rebalance will not happen overnight. So we continue to be very focused on this strategy, investing in the right segmentation and in the right brands, innovating in the segments where we had low or no participation. And the biggest learning, I think, for everybody in the U.S., including myself, is the power of consistency.

So the U.S. is a market that moves on the long horizon. It doesn't move overnight. Investments, that's why we continue to heavy up our investments in the U.S. and hard work. And I'm very glad to see the team working very hard to execute this strategy and start harvesting some of the efforts that they are making over the last 3, 5 years in this market. So we are very focused. We are very consistent.

We are investing, and we are working hard in getting this strategy to benefit our business and our wholesalers and our customers in the U.S. When you think about other markets, you know that we have a very large footprint. So every day is a different day. It's never boring. But if I would choose only one market at this moment where we are very focused in turning around is China. So China went from a big accommodation of the industry first re-accommodating.

This industry plays different by region, as you know. So the east part of China suffered much more than the inland. The on-trade channels declined much more than the off-trade. And because our business had a very large footprint in the East and in the on-trade, we had to reorganize ourselves. So we took last year a huge effort to keep the business healthy, especially in inventories, cash flow for our wholesalers, while we start to reorganize towards off-trade and more inland distribution as well.

I think the recipe for the China business is the same. It starts with right focus and moving at the speed that we need, which was not the case before. Execute with consistency. We have a great portfolio in China. invest on the right channels, which we are doing now and making sure that the team is working as hard and with the sense of urgency that we need. And I'm glad to see that quarter 4 share was stable, Budweiser was in a better place. And now in 2026, we need to continue to work on this direction so we can reignite growth there. Thanks for the question.

Our next questions come from the line of Sanjeet Aujla with UBS.

Two from me, please. I'd like to follow up on China there, please. And maybe just a little bit more of an update on your commercial execution. How far or how much progress do you think you've made in terms of penetrating the off-trade channel? Are you now gaining share within that channel? And just tied to that, what are you seeing in the on-trade channel? Any signs of some of the anti-extravaganza measures in your key provinces starting to ease at all? That's my first question on China.

And secondly, just on Brazil, it's been a tough year in Brazil from a category standpoint. You spoke about December returning to growth. Has that also continued into January? And just your -- the competitive dynamics in the market. I think you alluded to some share gains in Q4. It would be great to dig deeper into that.

Thanks for the questions. So I think that in China, the 2 questions. First, the off-trade in China is changing very quickly. So the biggest acceleration of all is this O2O channel, but it's a very sophisticated O2O channel because it's very dynamic. It serves different channels from the O2O. And this was a channel that we used to lead in China. We were lagging behind now, and we are accelerating big time gaining share of this channel.

And then there is the large off-premise, which we had to adjust distribution, pack assortment, price and promotion. And this is evolving, but there is a lot of room there for us to improve. The on-trade is not improving, but I think that the good news is that it's not getting worse either. So I saw relative stabilization on the industry last year in China, which is a good signal. The industry was let's call it, minus 1%. I think that this opens an opportunity for this year to have a more positive outlook for the industry.

Chinese New Year moved, right? So it's a little bit later, should help as well, another 2, 3 weeks of Chinese New Year loading in sales to consumers within 2026. So let's see. It's early to say. I was there in January. I liked what I saw in terms of industry consumption and our execution, but it's too early to call. And in terms of Brazil, I think that we discussed during the calls last year, there were actually 3 things playing into the dynamics of Brazil.

One was part of the consumers under stress in disposable income because of the high inflation. There was a very abnormal weather. So we call them seasonal weather but was really cold and rainy through a big portion of the middle of the year in Brazil. And then as we kept running our revenue management agenda, there were like relative price gaps in Brazil hanging there for over a year. I think that during the year and especially at the end of the year, the weather improved a big time, and that was the biggest change in the dynamics in the market.

But also, I think that the gaps in terms of relative start to close. And then the power of our brands and the level of our execution start to speak louder, and we ended the year with very good momentum. As we look at the beginning of the year, weather remains normal. Normal is good for us. And our brands continue to have very strong demand. So the beginning of the year has been so far positive. Thank you for the questions.

Our next questions come from the line of Trevor Stirling with Bernstein.

One question for me, but probably a longer one. Fernando, I appreciate you're not going to give guidance on margins. But if I look at 2025, despite the problems in volumes in many regions, you still delivered 100 bps of margin expansion. As I look forward to 2026, as Michel has commented, the outlook for volumes is looking better than it has for probably quite a few years in terms of both momentum as you exit 2025 and the FIFA World Cup coming.

So that's looking positive. COGS outlook to me looks similar to 2026, there's moving parts in different countries in Midwest premium, but probably similar, but albeit probably a little bit more pressure in the first half than the second half because of currency hedges. A&P, you're probably going to spend more because of all the activation but knowing you guys will be disciplined spend. Price/mix looks solid. That looks like a pretty good outlook for margins for 2026 as well. Am I reading things the wrong way?

Trevor, so very comprehensive analysis. I think what you are saying and what we saw happening in 2025 is not anyhow different than what we've been discussing for a while. When we look at our business, when we look structurally our business, we continue to see opportunities to drive further margin expansion. And as you said very well, kind of every quarter, every year has its unique dynamics.

But on a year where you see your cost dynamics more of a normal year, like 2025 was more of a normal year and 2026 as well and hopefully, going forward, we have to see more normal years by driving efficiency, by making sure that we continue to invest behind our brands, which command a premium with all these components, we continue to see further opportunities to expand margin, okay?

So -- and then when you talk about the cost of goods sold, you are right because you have the FX curves kind of given what happened last year, we always hedge 1 year later. You know that there is going to be a little bit more pressure on the first half than on the second half. In terms of investment, this year is somehow different because we have the World Cup. So we have some more concentration of investments of sales and marketing in the second and third quarter.

But overall, kind of business is healthy. We are excited with the opportunities, and we'll continue to invest behind it. But maybe even giving more high-level view, the fundamental drivers of our margin at the end of the day are the iconic mega brands, the unique global footprint, the meaningful leadership positions that we have, this very efficient operating model that we keep looking for further opportunities and the financial discipline and ownership culture. So I still believe we have room to further improve on that.

Our next questions come from the line of Andrea Pistacchi.

I also have 2, please. And sorry about my voice, which is a bit low. First one is on Beyond Beer in the U.S., please. Now you referenced your capabilities and route-to-market advantage that clearly gives you a right to win in Beyond Beer. So focusing on the U.S., where your prepared cocktails are growing very strongly, and you've also launched Phorm Energy this year, again, leveraging your competitive advantages.

So the question is, if you could share some thoughts maybe on what you think your Beyond Beer business could look like in the U.S. 3, 5 years from now, what the long-term or medium-term innovation pipeline looks like? Are you planning to bring new brands to market? Are you open to more M&A like the BeatBox deal? And ultimately, how large do you think -- what's the ambition?

How large could Beyond Beer be in, say, 5 years' time in the U.S.? The second question actually is also on the U.S., a bit more specific on margins going to Trevor's point, I guess. So COGS inflation in the U.S. increased a bit in Q4. I think it will increase a bit further this year. So in light of that, can you share something on your revenue management strategy in the U.S. this year? And what are the levers do you have to protect to help margins in the U.S. this year?

Andrea, no issues with the voice. I think we are both on the same page here. So mine is a little bit under the weather as well. Thank you for the questions. U.S. Beyond Beer. So this is something that we've been discussing as well since 2017 as we start to rebalance our portfolio and invest in segments that we under-index. And definitely, these ready-to-drink beverages that source from other alcohol beverages and other occasions, they are a great opportunity for our business in the U.S., and we've been investing and building capabilities and brands in this segment.

So today, this represents a little bit less than 3% of our business in the U.S., but it is growing very fast. And if you look at the brands that we are building, these brands today are ranking top 10, top 20 in the spirits industry in general in the U.S. and Cutwater specifically is ranking at the top of the fastest-growing brands in the industry for last year and the fastest one for the quarter 4.

So I think that the headroom for growth is huge because they source from outside of the beer arena, and they are very incremental to our business. They are brands that we build from scratch. Therefore, they have still a lot of headroom for growth. As you said, we continue to complement this portfolio with BeatBox, for example, which is a different proposition for different occasions for different consumer cohorts, and our portfolio is getting stronger, but we still have a lot of headroom to grow in this area.

Connecting this with the second point, they are also margin incremental. So as this mix continues to grow, as the mix of Michelob ULTRA continues to grow, this is all incremental to our margins. So we are managing our margins, not only from the cost productivity standpoint, but also from mix and revenue, as you said. And in terms of revenue, you all know we price in line with inflation.

I think that COGS and the cost of goods sold will continue to fluctuate. That's why we hedge so we can have a more long-term perspective. And we'll continue to invest to accelerate the momentum of our business in the U.S. So we are moving in the right direction, still a lot that we need to continue to do. But so far, we are happy with the evolution, and we'll continue to execute in the way that we are executing so far.

Our next questions come from the line of Mitch Collett with Deutsche Bank. Mitch, could you please check if you're self-muted.

Sorry, can you hear me now?

We can hear you.

Okay. Apologies. So Michel, Fernando, I was just going to ask about your thoughts on phasing in 2026. Fernando, I think you've just given some of the components, but transactional FX, I guess, is more helpful in the second half. You've obviously got some phasing around your marketing and sales spend and some pretty uneven comps. So can you maybe just sort of tie that together and give us some thoughts on how we should think about phasing across 2026?

And then my follow-up is on CapEx, which is still well below depreciation. And I think your guidance suggests that it will remain well below in '26. I know you've talked before about how you're using technology and AI and other tools to keep CapEx at a low level. Can you just comment on how you're doing that and how sustainable that level of CapEx is going forward?

Mitch, so on the first question on phasing. So phasing, I think on the last question, we went over very well on that, but it's -- given what happened to the FX last year and kind of knowing that we hedge 1 year out, you know that last year, you had kind of -- you are going to have a bigger challenge in the first half of the year, especially in markets like Brazil and Mexico, where currency was really depreciated at the beginning of last year.

And then you have kind of easier comps towards the second half of the year on cost of goods sold and transaction. So that is something definitely fair to say. And then of course, if you look at our financial filings like the 20-F, you look some of our exposures, you can get a good guess on how these things will behave kind of in the year of 2026. On sales and marketing, this is going to be somehow of a different year because since you have this World Cup, with a massive event in a lot of our markets, more towards Q2 and Q3.

So one would expect some sales and marketing concentration. What is important to bear in mind is that even though kind of there are different dynamics in the year, we are going to manage the business to make sure we invest in the long term and create long-term value, not necessarily trying to cater to one quarter or another. But one would expect more concentration of sales and marketing investments in the second and the third quarter this year specifically.

In terms of CapEx, it's not different than what we've been talking about. By looking at further efficiency opportunities, by looking on the role on technology, by kind of looking at every single different investment in our business, we are confident that we can kind of deliver the CapEx within the outlook for this year and still do everything that we need to do. We still have CapEx -- growth CapEx within this kind of envelope, anything that we need to support the business. So very comfortable with this level of CapEx.

Our next questions come from the line of Gen Cross with BNP Paribas.

Just one question from me actually. It's actually on BEES marketplace. It looks like you've added over $1 billion in marketplace GMV in 2022. And interestingly, it looks like it's pretty much all driven by the 3P part of the business. I think, Michel, you mentioned looking at opportunities to scale and further increase profitability in marketplace. So I just wonder if you could give us some thoughts on the potential to scale marketplace further, particularly as the higher margin 3P part of the business becomes a bigger part of the mix.

Thanks for the question. So marketplace is a growth opportunity for us, as I've been highlighting over the last couple of years. and it's incremental to the beer business that we have. So it's a new revenue stream. And it's adjacent because actually, we built the technology product to serve better our customers. At the same time, we could increase this addressable market for our business by solving 2 pain points. One pain point is our customers.

They were underserved by most of the CPGs because they are small, fragmented in distant areas. And on the other side, the CPGs need growth. They need to reach more customers. And the fact that we built this digital channel enables them to seamlessly reach a much broader and much more important base of customers. We always knew that the model would work. So we start testing and building the 1P. The 1P was using the capabilities that we have, the route to market, the trucks, the sales reps.

But as we built the product and enhanced the technology, we always knew that the biggest opportunity is actually what we call 3P, which is touchless, right? So the app is downloaded by the bar owner. The bar owner sees an assortment that's much bigger than only the beer assortment or the products that we sell. They place the orders. The orders are then redirected to the different suppliers, and the suppliers take care of the delivery of these orders.

And we, of course, in the middle, we are the product delivery and the marketplace for them to sell, to promote, to follow through with their sales team because the suite of products that this has is beyond only the app; we can also digitize our partners. And this is the part that is scaling fast and the most and is also the one that's the most profitable. The simple way to understand the opportunity is that on average on these retailers, beer accounts for 34% to 40% of what they sell.

Therefore, there is a 1.5 to 2x addressable revenues that today we do not participate without the marketplace, and we can participate. And as you know, I think you were with us in Mexico, we are, in some cases, even increasing this addressable market because we are taking, for example, technology products like minutes for people to buy and operate their phones or paying their bills.

So there is many incremental opportunities that can be built on top of that credit. We have partners today selling credit to these points of sales. So all of that builds on top of what the marketplace will directly build. So we are in early stage. It is scaling up at the pace that we want to scale up and it's becoming the business that we thought that could become. So very happy with the development, but a long way to go still. Thank you for the question.

Our next questions come from the line of Sarah Simon with Morgan Stanley.

I have 2 questions. First one was on Zero again. Your growth is extraordinarily high compared to peers. What do you think you're doing that they're not? And then the second one would be on RTDs. Your RTD business is obviously largely concentrated in the U.S. How are you thinking about that in the context of other markets and exporting it?

Thanks for the questions. I think I got both of them. If I didn't, please help me here at the end. So the non-alcohol beer, I think that we've been talking about that. We invested a lot in the technology. So making sure that we have superior products. And this investment was done in 2020, 2021, 2022. Many breakthroughs there. The liquids are fantastic.

It's really great taste beer without alcohol, products that range from what we shared with you today in South Korea that is zero calorie and zero gluten and zero sugar, great taste to the fantastic Michelob ULTRA Zero in the U.S. that has only 29 calories, but it tastes delicious. So we invested first on the product and technology. Then we start to roll out this on our winning brands. So we have great brands across the globe.

And every time that we put together a non-alcohol version of these brands, of course, consumers try and they choose the strong brands that we have. And then I think that the last point, we decided to invest and walk the talk. So just think about Olympic Games, a mega platform that we have globally that we sponsor with both Corona Cero and Michelob ULTRA Zero. So we got to get great product. We lined up the brands and innovation, and then we are investing behind that.

And when we do all of together with our execution, which is superior execution, we can gain share quickly as we are gaining. We can expand categories, reach more consumers and get the growth that we are getting with this. So consumers are there. We are there for them, and we are gaining share in an accelerated way in this segment. In terms of RTD, actually, if you look at the numbers, RTD for us is bigger outside the U.S. than it is in the U.S. It's 3% of our global business, it's around 2 -- between 2% and 3% in the U.S.

The most meaningful expansion that we are doing in this Beyond Beer space started last year, and we are rolling out this year is with Flying Fish, which is this beer liquid, but it's very different than beer. It's flavored. It has very different demographics that we reach with the product. It competes a lot outside of the beer space because of the taste profile, brings a lot of new consumers to the category because they are flavor seekers. They like sweetener liquids. They don't like too much the bitter.

And then this is now going to 10 different countries. And in every country, we have a nice story to tell so far because this is fulfilling what the plans were and what we want to achieve. And then we also have Cutwater, which we are building in a very diligent way in the U.S., but we already started to expand to Canada, and there are some other markets coming in the lineup.

And we have today a global portfolio, let's say, for Beyond beer that caters each of the segments within the Beyond Beer. So NUTRL, Brutal Fruit and Beats are also getting expanded globally to different countries. So there's more to come there. The opportunity is very big outside the U.S. and outside Africa, and we are just scratching the surface so far. So more to do. Thanks for the question.

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.

Thank you. Thank you, everyone, for the time today, for the ongoing partnership and support to the business. I hope you are all well, get some time to drink a beer. Cheers.

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

Welcome to AB InBev's Third Quarter 2025 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 in the Reports and Results Center page. Today's webcast will be available for on demand playback later today.

[Operator Instructions]

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 12, 2025. 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 Third Quarter 2025 Earnings Call. It is great pleasure to be speaking with you all today. 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. In the third quarter, we continue to navigate a dynamic operating environment with headwinds in China and unseasonable weather in the Americas, particularly in Brazil, constraining our results. After a slow start to the quarter in July and August, we saw improved performance in September. We remain focused on the consistent execution of our strategy and adapted where required. We maintained our disciplined revenue management plan and continued to deliver on our productivity initiatives.

Consistent investments in our brands and innovations drove increased portfolio brand power and continued market share gains in key markets. Despite the challenging environment, we delivered another quarter of top and bottom-line growth, margin expansion, and U.S. dollar EPS growth. Our growth platforms of premium beer, non-alcohol beer, and Beyond Beer continue to outperform, and the quarterly GMV of BEES marketplace has reached nearly $1 billion. In the U.S., our portfolio is continuing to build momentum and gain share of the industry, led by Michelob Ultra, which is now the number one brand in the industry by volume year-to-date.

Our solid financial results in the first nine months of the year reinforce our confidence in delivering our outlook for the year, given our deleveraging progress and strong free cash flow generation, the Board has approved a $6 billion share buyback program to be executed within the next 24 months, as well as an interim dividend of EUR 0.15 per share. We also continue to proactively manage our debt portfolio and have announced the redemption of $2 billion of outstanding bonds.

In summary, we are confident in the resilience of our strategy and ability to deliver consistent results. We are investing to provide superior value to our consumers, and we are winning in key markets and growth segments. We are taking action where adjustments are required and are excited about the opportunities ahead to drive shareholder value creation through profitable growth and disciplined capital allocation decisions.

Turning to our operating performance, while overall volumes were below potential, we grew revenue in 70% of our markets. The combination of our disciplined revenue management choices and portfolio of mega brands that command a premium price drove a revenue per hectoliter increase of 4.8%, resulting in top-line growth of 0.9% Our productivity initiatives more than offset transactional FX headwinds to drive an EBITDA increase of 3.3% with margin expansion of 85 bps. The strength of our diversified geographic footprint enables us to navigate the current environment and deliver profitable growth in the long term. Revenue increased in 70% of our markets this quarter, and we delivered bottom-line growth in four of our five operating regions.

Now I'll take a few minutes to walk you through the operational highlights for the quarter from our key regions, starting with North America. In the U.S., the momentum of our portfolio continued, and we are increasing investments in our brands to fuel growth. In Beyond Beer, our portfolio growth accelerated with a revenue increase in the mid-40s led by Cutwater, which grew revenue in the triple digits. Cutwater is now one of the top 10 largest spirits brands in the U.S. and was the number one share gainer brand in the total spirits industry in August and September.

In beer, our market share momentum was led by Michelob Ultra, the number one volume share gainer in the industry and now the largest brand year-to-date in both on and off-premise channels. Ultra has gained market share in all 50 states this quarter. The brand has 16% share of the industry in its top state and 8% average share nationally, but has less than 6% share of the industry in 20 states, so there remains a significant opportunity for further expansion and growth.

Michelob Ultra Zero was launched early this year and is already the second largest non-alcohol beer brand and the number one fastest growing non-alcohol beer in the industry. Ultra is the superior light beer made for those who seek an active lifestyle and balanced choices.

Now let's turn to Middle Americas. In Mexico, our revenue continued to grow, driven by disciplined revenue management choices. The industry was, however, impacted by a softer consumer environment and unseasonable weather, which resulted in our volumes declining by low single digits. With improved weather and consumer sentiment, our volumes improved sequentially throughout the quarter, gaining share and returning to growth in August and September.

In Colombia, record high volumes drove low teens top-line and mid single digits bottom-line growth, with our portfolio estimated to have gained share of total alcohol beverages.

In Brazil, market share gain and disciplined revenue and cost management offset a soft industry to deliver flat EBITDA with margin expansion. Our revenue declined by 1.9% driven by volume performance, which was negatively impacted by unseasonable weather and a softer consumer environment. When we look at our performance across both South America and Middle Americas, it is clear that the industry has been impacted by a combination of cyclical and one-off factors this quarter. Cyclical factors include inflationary pressures and low consumer sentiment, which have impacted demand not only for beer but all consumer categories to different degrees. What has perhaps been more acute for beer than other categories has been the unseasonable weather.

Latin America accounts for 20% of the global beer volume, which is typically 1.5 to 2x the weight of other categories in the consumer goods area, and the region is even more relevant for our business while we are managing through the short-term headwinds. When we look ahead at the outlook for the category, the fundamental drivers are unchanged, and we see clear potential for industry volume growth as conditions normalize, as evidenced by Mexico where our volumes returned to growth in August and September.

In Europe, continued market share gains and premiumization drove flattish volumes and margin recovery. We gained share of the industry in five of our six key markets, with our performance driven by our mega brands and non-alcohol beer.

In South Africa, the underlying momentum of our business continued, maintaining share of beer and gaining share of Beyond Beer. Top-line grew by mid single digits and EBITDA grew by high single digits with margin expansion.

Now moving to APAC. In China, revenue declined by 15.2% with our volumes underperforming the industry. While the overall industry has been impacted by a soft consumer environment, which has been even more pronounced in our footprint and key channels, we recognize that we have opportunities to enhance our execution and route to market to better align our results with our capabilities.

We are a company of owners who strive for operational excellence. We have been working in China to right size inventories in line with the channel shifts, allocate resources towards areas of growth, and elevate our execution. We have a clear view of where to improve, and as we move forward, our priority is to reignite growth and rebuild our momentum.

To achieve this, we are focused on increasing investments in our mega brands, leading innovation within the industry across packaging and liquids, strengthening our route to market in the in-home channels with an increased focus on online to offline, continuing our geographic expansion, and rebuilding our excellence in execution. We are moving with speed to ensure that our business emerges stronger and investing to be better positioned to outperform in the long term.

Now let's take a look at the key highlights of our three strategic pillars, starting with leading and growing the category. Our megabrands continue to lead our growth with net revenue increasing by 3%. Corona continued to drive premiumization across our markets, growing revenue by 6.3% outside of Mexico and growing volumes by double digits in 33 markets.

Through the consistent execution of our category expansion levers, we aim to increase participation across our markets by offering supreme core brands, innovating in balanced choices to provide consumers with no and low alcohol, low carb, zero sugar, and gluten-free options, and expanding our premium and Beyond Beer portfolios. On a rolling 12 months, participation of legal drinking age consumers within our portfolio was stable.

In non alcohol beer, our portfolio momentum continued with net revenue growing by 27%, led by the growth of Corona Zero. We are now leaders in eight of our top 14 non alcohol beer markets and estimate to have gained share in 70% of them. Non alcohol beer is a key opportunity to develop new consumption occasions and increase participation, and we are investing and innovating to lead the growth.

This quarter, we announced a partnership with Netflix, which is the world's most popular streaming service. They are creating content that shapes culture, and watching Netflix has become a new social occasion. Our iconic brands are part of the fabric of society in the markets in which we operate, and it is a perfect pairing to bring together beer and entertainment in this unprecedented way.

What makes our partnership with Netflix unique is its global reach and scale of activations across our portfolio of brands. Consumers will see this come to life through co-marketing campaigns, activations, title integration, limited edition packaging, and even at live events. What we are most excited about is how this partnership will create more meaningful experiences for consumers across their passion points, including comedy, music, cooking, and live sport events.

The beer and Beyond Beer category remains vibrant, and we are leading innovation to address emerging consumer needs, providing choice and superior value in different occasions and balanced choices. We are innovating liquids to provide consumers with different options to meet different lifestyles. From the rollout of Stella gluten-free in Brazil to Harbin Zero Sugar in China to Michelob Ultra Zero in the U.S. and Cass 4.0 in South Korea, we are leading the category in liquid innovation.

In Beyond Beer, Cutwater continues to expand, growing volumes by triple digits, approaching $0.5 billion in annualized retail sales, and is now a top 10 spirits brand in the U.S. After a successful rollout in Africa, our flavored beer Flying Fish is now expanding to Europe and the Americas. In adjacent beverage categories, we are taking the learnings from developing a number of successful brands in the energy drink space in the U.S. and have launched Phorm Energy to participate directly in this segment.

Let's now turn to our second strategic pillar, digitize and monetize our ecosystem. In the second quarter, BEES captured $13.3 billion in gross merchandising value, an 11% increase versus last year. The growth of BEES marketplace accelerated with more than 500 partners on the platform. Quarterly GMV increased by 66% versus last year and is now approaching $1 billion.

In DTC, our digital platforms continue to enable a one-to-one connection with our consumers and help us in developing new occasions. Our digital platforms generated $138 million in revenue, serving 11.9 million consumers and generating close to 18 million orders online.

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. Good morning. Good afternoon, everyone. I will take a few minutes to discuss the progress we have made in optimizing our business. Our EBITDA margins improved by 85 basis points this quarter, with expansion in four of our five operating regions. We know that each quarter will be different, but we are confident that the combination of our leadership advantages, disciplined revenue management, continued premiumization, and efficient operating model create an opportunity for further margin expansion over time.

Moving on to EPS, we delivered underlying EPS of $0.99 per share, a 1% increase in U.S. dollars and a 0.3% increase in constant currency versus last year. EBITDA growth accounted for a $0.09 per share increase, partially offset by higher other financial results, which increased due to a higher cost of FX movements and cost of hedging. The objective of our capital allocation framework is to maximize value creation for our shareholders.

Given the progress we have made on our deleveraging and our solid year-to-date financial results, we have increased flexibility on our capital allocation choices. We remain confident in the long term growth and value of our business and have announced today a new $6 billion share buyback program to be executed within the next 24 months. In addition, we have announced an interim dividend of EUR 0.15 per share, our first interim dividend since 2019. We also continue to proactively manage our debt portfolio and have announced a bond redemption of $2 billion. Our bond portfolio remains well distributed with no relevant near and medium term refinancing needs. Upon completion of the bond redemption announced today, we will have no bonds maturing through 2026 and we have no financial covenants.

Our results in the first nine months of the year, the resilience of our strategy and the strength of our megabrands all reinforce our confidence in our ability to deliver on our 2025 outlook of 4% to 8% EBITDA growth.

With that, I would like to hand it back to Michel for some final comments.

Thanks, Fernando. Before opening for Q&A, I would like to take a moment to recap on our performance year-to-date. We are encouraged by our results for the first nine months of the year as we delivered EBITDA growth at the midpoint of our outlook range. Underlying EPS increased by mid single digits in U.S. dollar and by 12% in constant currency. While our volume performance has been below potential due to a combination of cyclical and short term factors, we remain confident in the long term fundamentals of our business. With strong free cash flow generation, we have increased capital allocation flexibility and announced a $6 billion share buyback program, an interim dividend of EUR 0.15 and a bond redemption of $2 billion.

As Fernando just mentioned, our performance year-to-date and the strategic choices we have made position us well to deliver on our outlook for the year. Our brands have met consumers in some of the most iconic events in sports and culture this year, creating moments of celebration and cheers.

But, as we look to 2026, there is an incredible opportunity to activate the beer category because next year, on top of our powerful lineup of mega platforms, we have the FIFA World Cup in North America. This iconic event encompasses 104 games across three countries. Each game is an opportunity to bring beer and sports together and create unforgettable moments for our consumers.

With that, I'll hand it back to the operator for the Q&A.

[Operator Instructions] Our first questions come from the line of Edward Mundy with Jefferies. Please proceed with your questions.

Two questions for me please. The first is around the board's thinking around the shift to a two-year buyback program of $6 billion. Given the balance sheet repair, is it to signal clearer capital allocation priorities from here? Is there also a practical reason insofar as it gives you a little bit more flexibility in the pace of buybacks, given that historically you've tended to get your buybacks done ahead of schedule? That is my first question.

My second question is around the broader category, the broader beer category. One of your peers recently highlighted a medium-term outlook for global beer of about 1% volumes. Putting the external environment to one side, how important is it that the rate of pricing required across the broader industry could start to moderate after the huge extremes over the last few years given inflation and negative transaction? How important is it that the pricing going forward might become less meaningful in helping to stimulate volume growth?

Fernando here. Let me take the first question and then I will transition to Michel. When we talk about capital allocation, I think it's always important to put in context that the objective of the capital allocation is to create long term shareholder value. The framework is unchanged and remains very disciplined within our choices. What is evolving is that now that we have an improved balance sheet, we have increased flexibility and what you see is that we are exercising some flexibility. The share buyback in itself is an effective use of capital for shareholder value creation. If you think about it as we move from an inorganic to organic transition, I think the first thing that was important for us was to give a framework so people understand the sort of growth that we can deliver. That's the medium term outlook that we provided four years ago.

If you look at what we did in the beginning of this year, we provide a framework with the ambition for a progressive dividend. I think now the share buyback is just another natural evolution on that, a two year share buyback of $6 billion, but that should not be seen on a standalone basis. It's the share buyback, it's also the interim dividend which is consistent with our ambition of progressive dividend over time and also the debt reduction that we announced which is consistent with our capital allocation priorities. Much more of an evolution and kind of the consequence of the additional flexibility that we have nowadays. Michel?

I think that just building on the share buyback point, there is a lot of consistency on the capital allocation choices and this, of course, is the return to shareholders, the debt, but that is the number one priority that we have, which is organic growth. We'll continue to invest for this number one priority, which is drive the category and the company forward on an organic basis. In terms of the category overall, I think that we shared with you during the capital markets day the view that we have around the category and the potential that we see for future growth coming from structural tailwinds related to economic growth, demographics, and where this growth most likely will come from developing and emerging markets where we have a strong footprint, strong growth to market, and scale.

Therefore, we are in the same line where the full potential of the category today would be around 1% growth in normal conditions. The more we increase the addressable market with these Beyond Beer propositions, there are opportunities for us to further stretch this growth, right?

Looking at the short term, I think that we see this Latin America impact on the beer category overall. Latin America is very important for CPGs, but is much more important for the beer category to the range of almost twice the size that it represents for beer versus other CPGs. We saw some pressure across CPGs overall in Latin America, but this is more impactful for beer and even more for us because Latin America is much bigger for us than it is for beer overall and for other CPGs.

When you think about price, I think that there are two components on that. One is that beer is an affordable category and affordability is very important for beer. And after 3, 4 years of high cost pressure, high inflation for us and for consumers in general, of course we had to be very disciplined in revenue management and to recover our margins, as you just saw during the webcast, to continue to recover our margins over time because of revenue but also cost discipline.

As we look forward, inflation is normalized, coming down, so we would expect less pressure on the prices coming from inflation. I'm of the view that we should be very disciplined as category leaders to continue to build over time the capabilities to move prices with inflation so we can continue to recover our margins, but also have a good category and ability to deliver on the investments and everything that we want to do for the future.

And how you do that? You need to balance, as we always do, the affordability with the ability to build brands, because premium brands, they command premium price, use the right revenue management capabilities. A good revenue management strategy needs to deliver at least with inflation. This is in the long run, because in the long run we need to capture the cost increase and the opportunities that we have to premiumize in the market. Nothing changed on our side there. I think that what's going to change is a little bit of the environment because inflation is coming down, therefore less pressure will hit consumers.

Our next questions come from the line of Mitchell Collett with Deutsche Bank. Please proceed with your questions.

I've also got two questions, I think one for each of you. The first one is on longer term volume growth. I mean, you cited some of the external factors that have impacted not just this quarter, but overall 2025. How do you think about volume growth longer term for the category, particularly in your footprint? You gave the comment that 2026 offers an incredible opportunity to activate the beer category. Do you think you can get back to volume growth in 2026?

My second question, which I think is for Fernando, is can you give us any color at this stage? I know it's early on the potential impact of input costs in 2026. I'm specifically thinking about the impact of FX and the timing of your FX hedges.

I think that you're right, like 2025 is being very typical and that is this combination of the pressure that inflation has been built over consumer and the consumer baskets. We see this overall across many markets, reduction on the total basket, while beer and alcohol has been maintaining the share of baskets. It's really about a little bit of pressure on consumption.

There is this big one-off of this change in the weather pattern because of the La Niña that is impacting the Americas. Some countries such as Brazil were heavily impacted by that. The fundamentals behind the category growth remain the same. As we said before, a lot of this growth, projected to be over 80%, will come from developing and developed markets. Our footprint is very strong in these regions and I see no reason today why this will change over time.

Next year then becomes a very special year. While you know that we don't guide for volume, we see the outlook as a positive one because there is less pressure on consumers coming from lower inflation. As salaries rebuild, purchase power rebuilds, prices tend to normalize. Consumers tend to be in a better position. I'm not making any forecast on the consumer sentiment, neither the purchase power for next year.

Consumer sentiment is impacting this year and as everybody else, we hope that things will normalize over time. If this bounces back, it should be a positive as well. Overall for CPGs, it's hard to believe that's going to be worse than what we saw this year. The worst case scenario should be the same, but we think that can be better.

Then we have FIFA. FIFA over time is being 0.20 to 0.25 impact on the category in the years that we have the games. The fact that's going to happen in North America is great for the category because it's going to impact the overall Americas, of course, but then has great viewership time across Europe and Africa and of course in Asia. People always adapt.

The nightlife is much stronger as a consumer occasion in APAC. I think that's going to be a great year for FIFA. Everybody's very excited. The games will be longer next year because more teams, so more people participating. We can't wait to see the fans across the globe gathering and gathering over a beer to watch for that. We continue to work hard focusing on what we can control. You see that the growth of non-alcohol is a great opportunity for us.

Our Beyond Beer portfolio continues to accelerate and we continue to innovate in the balance choices. We are providing more options for consumers in more occasions. We are doing our part and we are looking forward to see how consumers will react next year.

Mitch, Fernando here. Your question on COGS. We don't provide any specific guidance on cost of goods sold, but you know our hedging policy always hedge 12 months ahead. If you look at where FX is today and what it was one year ago, you can get a good sense on that. From where the market is, it's kind of more like a normal year. Once again, I think we said normal year in 2025. I think 2026 is more of a normal year.

Different dynamics in different markets, I think next year probably given where you see Midwest premium today, probably a little bit more pressure on the U.S., but then again, this is based on current market prices. They can always move around and effects a little bit the other way around as we saw in 2025. In 2025, we saw more pressure in the first half given the currency behavior in 2024 and more pressure in the second half, I'm sorry, and less pressure in the first half. In 2026, given how things are evolving, things continue to be the same way. Likely to be the other way around, but then again, this is basically on current effects. We still have two months to go, but let's keep monitoring that.

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

A couple from me as well, please. Firstly, you kindly gave some information on the exit rate in Mexico suggesting that was improving throughout the quarter. I was wondering if you had a similar view on what was happening in both Brazil and Colombia just to see if we're getting a similar consumer improvement in other parts of Latin America. Secondly, perhaps Fernando, historically you would say that going below 2x net-to-EBITDA was value destructive for AB InBev, just wondering if you continue to share that view and what steps you could take if that metric were to be getting close to being hit.

Yes, we made a comment on the exit rate for Mexico because I think that was very telling the fact that once the price environment normalized a little bit, the weather was slightly better. We could see not only our market share bouncing back, but also volumes improving through August and September. Unfortunately, in Brazil it is a tale of two stories. I think that the industry overall remains very impacted by this very unseasonable weather. At this point, it can really be said that's unseasonable because the winter was cold. Yes, winters can be cold, but you see September is usually much better weather in Brazil, even October, and still cold and wet in a very strange way. Brazil didn't improve a lot for the weather.

Of course, we've been adjusting our execution. Relative prices in the market improved after more than a year of prices being very open on the gap, and our share bounced back strongly, which reinforces the strength of our portfolio. The way that our megabrands are growing in Brazil and the share gains on the premium segment that continue to accelerate. When you look at Colombia, Colombia is not getting all this impact. Colombia volumes continue to grow, share of alcohol beverages continue to improve, very strong performance.

Consumer confidence is not that high, but not as low. Inflationary pressures in Colombia are more moderate, so consumer is in better shape there than it is in some other parts in Latin America. Of course, this all is bouncing back and now we are looking at the summer so we can see really where the industry is going to land overall and how the weather is going to be. As we said, as we look forward for 2026, some of these one offs can actually be positive as we build back in 2026.

And Laurence, it's Fernando here. Your question on leverage. We've been very consistently saying that our optimal capital structure is around 2x. It's also fair to say that most of the benefit of leverage you get once you get to 3x. The long term goal is still 2x, but you have less of an urgency to go there. You can have more flexibility once you're below this level, which we reached at the end of last year. Of course, every year is going to be slightly different. Sometimes you have effects, fluctuations, but the resilience of our business gives us the consistency to be more on the, as I can say, more on the offense now.

Bear in mind that the priority #1 is always organic growth. We keep investing, we keep, if you see this quarter, sales and market, we continue to invest there, but definitely way more flexibility and kind of still 2x is the optimal capital structure.

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

Thank you very much. Two questions from me as well. The first one is I want to focus on the announcement that you've won the Champions League. That came as a bit of a surprise to me. So maybe put that in the context of how you're looking at sports and some of these big assets, how that's evolving. Most importantly, obviously there's a lot of big numbers on this. I don't know if you can talk about the numbers on this, but maybe talk about the ROIC, how you see that being an efficient use of marketing investment, and also a little bit about timing. My understanding is that Heineken still has it for the next couple of years. That's the first question on the Champions League.

The second question, arguably in the U.S., perhaps the greatest success this year has been Cutwater.

That's a brand that you've had for a number of years and it's just exploded this year. Maybe talk a little bit about the success that Cutwater is having this year, what you think the drivers are for that, whether you think that's sustainable, what you've learned from it, and can you take that model to other countries?

So starting with the recent announcement and the role of these events, sports and occasions, I would start by talking about consumers. This is the main reason why we do the investments and why we are lining up into mega platforms. Consumers are behaving different and consumers are as usual evolving. As such, it was very important as we build our strategy and we fine tune our execution to make sure that we are leading and moving fast to where consumers are and will be more and more. That is why when we start leading in terms of execution with this concept of mega platforms and megabrands, integrating our brands with big partner, big partnerships, big events and relevant cultural moments is key for our brands to win in the long term.

As I said before, these winning brands that command premium price and premium positioning are very important on our strategy. This works for FIFA, this works for Netflix, this will also work for UEFA, which is an important component as we build this integration with platforms and culturally relevant moments that consumers are looking for, are talking about and are experiencing. It is all about the consumer, how we integrate our brands and these relevant cultural moments and how our brands over execute competitors within the category. That is a great addition. We could not be more excited with the opportunity. As everything moves, 2027 is the right timeline for us to start executing on that.

The second part on the U.S. and Cutwater, I think that you have been following. We have been talking about this portion of the consumer and consumption occasions where bitter is not the choice, where more refreshing is not the choice, where people want to indulge a little bit more, where the palate is a little bit more sweet, right, and more mixed. We decided to bet on that back in 2018 with Cutwater. We have been building this brand very patiently, but we have built the brand in a very high quality way.

Consistency, right distribution, right price as a premium brand, right investments, right consumer occasions and as the brand improves availability, as consumers get to know the higher quality that we have on this proposition and we position very right for the right occasion, I think that the brand is gaining relevance. What we saw over the summer now is consistent brand building and relevance getting to a tipping point.

This brand is now the number one share gainer in spirits, triple digits over the summer, becoming one of the top 10 spirits brands in the U.S. and built from scratch. If one would say what we learned from that is that yes, we can build brands in a very relevant way, yes, we can build this Beyond Beer segment to be what we expect to be for us, so incremental and something that will increase our addressable market. We have been rolling out this notion of the Beyond Beer and how to tap into more occasions across many markets.

I gave here during the webcast the example of us rolling out now Flying Fish across many different markets from Africa to Europe to Americas. The early results and indicators are very positive as well. There is more to come and we continue to build Cutwater. We are just at the beginning. I think that the brand, still very small for us, is accelerating and we have a big ambition to drive not only Cutwater but Nutrl and the other propositions that we've been betting on in this Beyond Beer space.

Our next questions come from the line of Andrea Pistacchi with Bank of America. Please proceed with your questions.

This is the first one. So your volumes have been more challenging this year. But after 9 months, you're still very much on track, in fact, you're at the middle of your 4% to 8% EBITDA guidance range. So I wanted to ask whether you had to make any adaptations to the plans that you would have had at the beginning of the year, maybe more agile revenue management or something more tighter cost control?

And again, then you would have had at the beginning of the year. If you could discuss this a touch? And then just on the MAZ, the Middle America Zone, there's a question earlier on Colombia, I just wanted to broaden it slightly. So Middle Americas ex Mexico is very profitable for you. It continues to deliver solid volume growth. So could you just discuss a bit on how the environment is in these markets, why you think it's different from, say, Mexico, Brazil? How confident you are in your ability to continue to deliver volume growth in these high-margin countries in the next 12 months-or-so?

I think that in a way they are in the same vicinity right on volume and how performance and our execution is adjusting, adapting on this environment. I think that the environment is one that's very dynamic and we've been seeing this of course over the last few years. Every year there is some extra components. As I said before, to me, the extra component on this dynamic operating environment this year was the unseasonable weather in the Americas, but more pronounced in Latin America. I think that we've been adjusting. We often say here in house that our strategies, just like beer, can be used in many different occasions. We've been adapting the execution. We are very agile in reallocating resources.

Our portfolio has breadth that is useful for us in this moment because we have from premium brands to value propositions that they can adapt and be used to accelerate a little bit our execution when it's needed. The discipline in cost management, the discipline in revenue management was very, very important for us. A differentiator, I would say, during this period because despite a very challenging consumer environment, we are able to deliver margin expansion, EBITDA growth, EPS growth. Saw very solid financial results that are a product of our very solid operational capabilities and delivers through the quarter.

When you look at mass, it is not only very important for us and very relevant for our performance during the quarter and in the long run, but, of course, this quarter specifically because overweight in the beer category versus other CPGs and overweight for us ABI was a big impact on the volume. It is relevant. We are adapting, brands are performing very well, we continue to invest, we continue to manage the portion of the business that we control. And of course, in the long term we continue to see this as a very relevant growth driver for the industry. We are best positioned to capture this growth over time with the operations, scale, and brands that we have in the region. Thank you for the question.

Our next questions come from the line of Celine Pannuti with JPMorgan. Please proceed with your questions.

My first question, could you, coming back maybe on the Cutwater question, but in a broader sense, how big is Beyond Beer now for you in terms of the portfolio? You said it grew, I think, 27%. Where do you see the capabilities outside or the opportunities outside of North America? If you could help us a bit frame the growth journey and as well the profitability of that category both in North America and outside of North America.

My second question, I think it was an impressive performance in gross margin despite some of the FX headwinds that you were facing. Could you give us a view on the building block on the gross margin performance in the quarter, please?

I think that I'll hit some numbers quickly here to cover the points that you asked about. I think that the last time that we talked about that, I mentioned that Beyond Beer is a great opportunity for us because it cuts across this interaction of the different alcohol beverages and is incremental for us, right, so, 2/3 plus of the volume that we capture in these occasions from these consumers is incremental to our portfolio. I also remember that the last time that we talked about this, this was around 1% of our overall volume. This today for us is around 2%. It is growing 27%. The opportunity here is huge because the addressable market outside of the beer category is very relevant and is bigger than the beer category itself. It is a huge addressable market.

Today it is a very small portion of our volumes, but it is growing very fast. It is all about the consumers. There is a group of consumers there that indulge in different occasions with different liquid profiles. We have been learning a lot about that and we have been having some very successful launch and scale up products in this area. Cutwater, Nutrl, Brutal Fruit, Flying Fish, Busch Light Apple, to mention a few of them. On average, they are sold at higher prices than the beer equivalent products that we have. They have profitability per hectoliter per SKU that is higher than the profitability that we have with equivalent beer SKUs. I think that we continue to work hard on that.

This is small for us today, 2% of the portfolio, but it is big in our opportunity to grow with more consumers in more occasions and in a very large addressable market of consumer occasions and volume pool.

I'll hand over to Fernando to the second question.

On the gross margin side, I think the gross margin side one is a function of your health brand portfolio. You see the net revenues per hectoliter. As Michel said, premium brands command premium pricing. You can move with the revenue management agenda. The second component of that is of course the cost of goods sold. In the cost of goods sold, you have one component that is the FX and commodities, which is market price, but you have the other components, which is the efficiencies, the kind of fixed costs. There is always a kind of opportunity for us to keep driving on that. For me, it's a combination of strong portfolio with premium brands and also driving efficiency on the cost of goods sold.

If you remember, we talked about it several times that when we look for margins, we still see opportunities for us to improve our operations, to improve our margins and a lot of that would be coming from gross profit. It's just delivering on what we already mentioned several times in the past.

Our next questions come from the line of Simon Hales with Citi. Please proceed with your questions.

My first question, I wonder, Michel, could you talk a little bit more about China? Again, I wonder if you could quantify how big the destock was in Q3 in the context of the little over 11% fall in volumes, and should we expect some further destocking, do you think, in Q4? Is there any reason to believe in overall terms that your Q4 volumes in China will be less bad than they have been in Q3? Perhaps just associated with that, you highlight some new innovations that you've got coming in the market, Magnum and some 1-liter cans, are they in market yet or will they be in market in Q4? That's the first question.

The second one, a little bit more briefly, I wonder if you could talk a little bit about the early consumer and retail reaction to the launch of Phorm Energy in the U.S. and maybe highlight what really differentiates that brand from other competitors in the energy space.

On China, I think that what we highlighted in prior quarters is a kind of one third of what we see in the volumes is coming from really geographical footprint, channel footprint. One third comes from these adjustments on the inventories. You give me here an opportunity I'll take to talk about this. I think that just so I'm clear about the adjustments on the inventories, of course, when regions start to decline, we need to adjust our inventories with the wholesalers so we can have a healthy operating environment. This is what we are doing this year as channels shift as well.

You have a second adjustment that needs to be done so we keep the channels healthy, and once they rebound, we can then grow with the channels without stressing the ecosystem. One third is really the shift that happened between on and off premise, where the off premise started growing faster. The propositions that grew in the off premise are more on the core plus sub premium, and then this caused a share loss for us because we were more on the off premise, and we are of course smaller and less distributed in the off premise. Here is where we are making most of the adjustments.

When we look at China, most of this adjustment is being already done. There is still, of course, a little bit to be done as you go through October, November, December, but should not be beyond the fourth quarter. At the same time, because we start expanding distribution off premise, adjusting innovation, adjusting execution. That will be a combination of continuing to right size the inventories, but then having acceleration on our STRs and some of the innovations that we launched and tested. You mentioned BUD Magnum, very successful in India, very successful where we launched it in China.

We will start to roll it out now, not only the product itself, but some very interesting new packaging that is making a big strike in China will come to BUD Magnum. We had the new Corona can called drop line can, which is a full lid opening can. That's very interesting. We launched it first in O2O, was a big success, and now we're going to expand distribution on this packaging. We have some new deals coming in Harbin as well, not only the expansion of Zero Sugar, but some new propositions there that will be helpful as we further enhance our route to market in the off-premise.

Inventory adjustments, one-third channel shifts, one-third, these both should phase out as we go through quarter 4. And then we have increased availability in the off-premise, increased investments for execution and innovation that will start to kick in in quarter 4 and will be very relevant for us in the next year.

Phorm is interesting because in a way we've been participating in the energy drink in the U.S. for over a decade, and we have had some very successful scale up of brands in our network, but we were never majority owners of any of these brands. While we were an important component of the scale up and growth of these brands, we were not the owners. The latest one we divested at the beginning of this year, end of last year, was a good divestment, was a good run of the brand.

But now we have a brand that we are majority owners, committed to the long term. Incredible partners that are with us in the journey from our wholesalers to the Phorm partners to the UFC. Not UFC, but Dana White partner with us in building that. Brand launch is being very exciting. The product is great because I think that the most differentiated thing is the fact that we are focused on a very specific consumer cohort, those who do the work and need this energy every day. The product brings this clean energy approach, very balanced elements, and I think that the proposition is a strong one, is getting good traction, and we are just at the beginning. I think that there will be a nice upside coming next year because the launch was this year.

Distribution is building, awareness is building, and we have some flavors that we are expanding on the back end of this year and will be fully available next year. The most important thing here is our commitment and investment to the long term, because now we are majority owners of the brand and we have incredible partners that are with us on the journey.

These were the final questions. 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.

Thank you very much. Thank you, everyone, for joining, for the ongoing partnership and support for our business. I hope that you are all doing well. Remember to drink a beer for Halloween, and we'll talk soon. Thank you.

Thank you. This does conclude today's earnings conference call and webcast. Please disconnect your lines at this time and enjoy the rest of your day.