Q2 2021 Anheuser Busch Inbev NV Earnings Call
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Welcome to Anheuser Busch Inbev second quarter, 2021 earnings conference call and webcast.
Hosting the call today from AB Inbev are Mr. Michel.
Paris, Chief Executive Officer, and Mr. Fernando Tennenbaum, Chief Financial Officer.
To access the slides accompanying today's call. Please visit a b and deaths website at www Dot <unk> dash Inbev dot com and click on the investors tab and the reports and results Center page today's webcast will be available for on demand playback later.
Today.
At this time, all participants have been placed in a listen only mode and the floor will be opened for your questions. Following the presentation. If you would like to ask a question at that time. Please press star 1 on your Touchtone phone.
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And to Kevin's Please press star zero.
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 ebay and both actual results and financial condition may differ possibly.
And 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 and future results see risk factors and the company's latest annual report on form 20-F filed with the Securities and Exchange Commission on the 19th of March 2021.
And that assumes no obligation to update or revise any forward looking information provided during the conference call and should not be liable for any action taken in reliance upon such information.
Now it is my pleasure to turn the floor over to Mr. Michel do Caris, Sir you may begin.
Thank you Jessie and welcome everyone to our second quarter, 2020.1.
Gordon and his call and my force as CEO of ABB and that.
It's a pleasure to be speaking with you all today and I Hope you and your families and always staying well and face before.
Before we move through the agenda for the call I would like to take a moment technology breakthroughs accomplishments and to wish him the value.
Yes.
And I know I speak on behalf of my colleagues when I say over and Miss working with such a great leader mentor and partner and friend.
As I reflect upon the last 2 months I can best describe it this time as a celebration of our culture and a great example of our unique dream people culture.
Platform working at its best.
At <unk>, we believe debt, having diverse experiences and perspectives drives growth and value creation.
Throughout my 25 years of the company I've had the privilege to lead <unk> business across different regions of the world working our loans.
Outside the industry's most talented and passionate colleagues every step of the way.
Stepping into this role and I look forward to working together with the team to collectively drive our business into this next chapter.
As we position the business for the future and focus.
Loans on the following priorities.
First.
We will continue to meet the moment and build on our current top line momentum.
Our business and the beer category has improving resilience and reliable in times of crisis.
And despite them and go in challenging environments will continue.
To lead with our customer and consumer centric approach.
Secondly, we will continue to invest in and accelerate what's already working <unk>.
This includes category development premium innovation health and wellness beyond beer and our digital transformation initiatives.
And we followed this platform and direct to consumer.
Finally, we are confidence in the future growth prospects of our business and the beer category, our commercial strategy combined with our fundamental strengths, which include our people leadership across the world's largest.
Beer profit pools balanced exposure to both developed and emerging markets operational excellence and a culture of ownership provides a unique platform to unlock growth and value creation for all of our ecosystem.
With that I would like to spend the rest of our time.
And together today discussing our second quarter operating performance and commercial and sustainability highlights.
And with them hand, it over to Fernando to discuss our financial and non.
After that.
We'll take your questions.
Let me now take you through the operating.
Performance for the quarter.
Our business is delivering growth ahead of pre pandemic levels.
Compared to the second quarter of 2019, we delivered topline growth of 3.2% even in the context of ongoing impact related to call.
COVID-19.
When compared to the second quarter of 2020, we delivered topline growth of 27, 6% with volume growth of 28%.
Our beer volumes grew by 25%.
While.
Our non beer volumes grew by 23, 2%.
Revenue per hectoliter increased by 5.8%.
Driven by favorable brand mix from the outperformance of our premium portfolio and.
And revenue management initiatives and.
EBITDA grew.
31% with an EBITDA margin of 35, 8%.
Topline growth operational leverage and ongoing cost discipline were partially offset by anticipated transactional FX and commodity headwinds and <unk>.
Additionally.
<unk> grew by SCE G&A increases across our markets as a result of higher variable compensation accruals and growth in sales and marketing investments to support our topline momentum.
Our normalized EPS increased to 95.
While underlying EPS increased to 75.
Our net debt to normalized EBITDA decreased from 4.8 times on December 31, 244 times for the 12 months period ending June 30th.
We reduced our total.
Total gross debt by $8 billion in the first half of the year.
Now I would like to share some highlights from our key markets.
In the U S. We delivered topline growth of 6.8%.
Driven by the consistent implementation of our commercial.
Strategy.
As we remained focused on prioritizing the needs of our customers and consumers. We are absorbing additional cost headwinds related to the tighter supply chain impacting our bottom line performance.
In Mexico, our business.
<unk> continues its momentum with topline growth of more than 10% versus 2019 pre pandemic levels.
We continue to see healthy growth across all segments of our portfolio.
Sure. This platform now accounts for over 60% of our.
Our revenue with an average in EPS, Scott Duane points higher compared to non digital customers.
In Colombia, we grew volume by mid single digits versus 2019, despite ongoing COVID-19 restrictions.
Our business is.
Almost entirely digital with nearly 80% of our revenue coming through this and our digital platform.
In Brazil, we grew volume by nearly 13% once again outperforming the industry. According to our estimates and.
EBITDA declined.
Declining as topline growth was offset by anticipated cost headwinds.
The digital transformation of our business in Brazil is progressing rapidly.
With beef covering more than 70% of our active customers and set delivery fulfilling more orders in the first.
First half of this year than all of 2020.
Our business in Europe grew revenue.
The high teens and EBITDA by strong double digits supported by gradual reopening of the on premise.
And the continued strength of our premium.
Businesses.
In South Africa, we continue to see strong underlying consumer demand for our brands outside of government mandate alcohol bands.
The most recent them was instituted on June 29, and lasted until July 2015.
Impacting the less selling weeks of the quarter and the first month of the third quarter.
In China, we estimate our volumes.
Outperforming the industry led by our premium and superpremium brands, which grew by double digits in both volume and revenue.
Moving on let's discuss the key commercial and sustainability highlights from this quarter.
We continue to develop our unique and diverse portfolio of brands to reach more consumers on modern patients.
As you can see on slide 9 we delivered share gains in the mainstream.
We segment globally.
And with healthy performances in many of our main markets.
Our premium portfolio grew by 28%.
And our beyond beer brands grew by 45% and we continued to enhance our portfolio with innovation.
Mainstream diving a bit deeper into the performance of our global brands. The combined revenues of Budweiser and Stella Artois and Corona grew by 23% globally and by 19, 3% outside of the brands' home markets, where they typically command a premium price.
Compared to pre pandemic levels of 2019, all 3 brands delivered growth outside of their respective home markets.
Now, let's talk about innovation.
Our innovation strategy enables us to deliver a portfolio of differentiation.
Gated and superior products to address consumer and customer trends.
Our seed and we're and approach gives us critical learnings quickly.
We treat them use to scale, our winning innovations April sales, we call proof and move.
From a total amount.
<unk> continues to be a true success story.
Leading the call pure malt segment in Brazil.
And it delivers and new experience to consumers by blending 2 months to create a superior liquid we felt winning flavor profile.
Based on the brand's success.
<unk> expanded this concept to markets, such as Mexico, Colombia, and Peru This year.
And the beyond beer space, we quickly leverage the learnings from the sales force segment in the U S to adapt and ischial Micaela Bolter, a seltzer in Mexico in less.
We had months.
The brand is now the leader in the sales force Segmenting, Mexico with nearly 50% market share.
We are also expanding the Mike's hard brands firmly into new markets to further strengthen our global beyond beer portfolio.
The Mike's hard lemonade and.
And Mike product sales for Fireeye and will be available and more than 20 markets by day end of the year.
Moving on let me take a moment to share with you attached from point of mine.
Our brands and the creative work that brings them to life and connect them we followed.
Consumers.
And this year's 10 Lions International Festival of creativity, and our marketing teams achieved the best performance ever.
Aiming for 2 items, including 4.1 by our internal creative agents dropped line.
Our.
Campaigns spanning across 11 of our brands and 6 of our countries showcasing our commitment to brand building.
Smart drinking diversity and inclusion and transformation through data and technology.
<unk> was our best.
Performing brands and winning a total of 16 Lions.
Regulations to our teams and our partners for debt Amazing work.
Now I would like to talk about the digital transformation of our business.
Our digital platforms are gaining scale.
Driving value across our ecosystem.
Our book to be platform. This is no lines in 12 markets with $1.8 million monthly active users.
It captured over $4.5 billion in Gms Z this quarter are.
A greater.
And then 50% increase from the first quarter.
Beef has achieved a significant adoption by customers in our SaaS and focused markets.
We have 62 over 90% of our revenue in these initial markets coming now from digital.
Yeah.
Our own DTC e-commerce revenue more than doubled compared to the same period last year.
In Brazil for example, does that delivery continued its exponential growth with.
We continue to scale the successful model across out footprint with.
And with career platform is now available.
And in 10 markets covering more than 220 cities.
Now, let's talk about sustainability.
And then ability is core to our strategy and a key driver of innovation.
I want to briefly highlight a couple of recent examples.
Of our ongoing commitments.
First the appointment of <unk> as our dedicated Chief sustainability officer reporting directly to me.
Builds on a strong track record in the space and further accelerates our ESG agenda setting.
Secondly.
And I want to share 1 of our most transformational sustainability programs, they're 100 plus accelerator.
We have accelerated 36 start ups across 16 countries since 2019 to further its scale sustainability solutions.
And to support our work around.
Smart agriculture, and simple of packaging, we are leveraging <unk>, our blockchain enabled supply chain platform from our first 100 plus accelerator cohort.
<unk> provides farmers and recyclers improved security of deliveries and payments and.
And the digital economic identity to access formal financial services, while also providing us with more visibility across our value chain.
In the second quarter, we expanded <unk> to Latin America.
Following its success across several markets in Africa.
And Colombia, it is enhancing the traceability of our recycling supply chain and improving the financial inclusion of our recycling collectors and.
And at corridor. It is supporting local bottle sourcing for the rest of the Cambria brand.
With that.
I would like to hand, it over to Fernando to discuss our financials Fernando.
Yeah.
Thank you Michele good morning, good afternoon, everyone.
I Hope you are all safe and well.
Let me first take you through the drivers of our underlying EPS.
Our underlying EPS increased by 35.
From 40.
275.
Normalized EBIT increased by 68 cents per share.
Net finance costs, we recorded lower interest expense.
<unk> growth debt reduction offset by other finance costs.
We saw higher income tax expense due to increased profitability.
Country mix and reduced benefits from tax attributes.
<unk> 26 per share.
We also recorded higher non controlling interests.
<unk> 9 per share.
Noting from higher profit of our listed subsidiaries Budweiser APAC and Ambev.
Along with the issuance of a 49, 9% minority stake in.
In our U S basic metal container operations in December 2020.
On Slide 17, you will see debt our debt maturity profile is well distributed across the next several years with no significant maturities over the next 5 years.
And in the first half of the year, we redeemed a total of $5 billion of bonds.
Combined with the redemptions of commercial paper, we reduce it total gross debt from $98.6 billion at December 31.
296 billion.
At June 30.
Furthermore, we redeem and an additional $565 million of bonds in July.
We continue to reduce debt, while maintaining a strong liquidity position of $16.9 billion at the end of the question.
At celebrate further on our debt portfolio on slide 18.
As a reminder, we do not have any financial covenants on our entire debt portfolio, including our sustainability linked revolving credit facilities.
Our bond portfolio.
Thanks.
Lilly insulated from interest rate volatility as approximately 95% holds a fixed rate.
Furthermore, the portfolio is comprised of a variety of currencies with 51% denominated in U S dollars, 36% in.
And Europe, and the remainder and currency such as the Canadian dollar pound.
Sterling and Korean won diversifying our FX risk.
The weighted average maturity of our debt portfolio is more than 16 years.
Finally, we continue to have a very.
Largely global weighted average.
<unk> rate of approximately 4%.
Now, let's talk about capital allocation.
Maximizing long term value creation drive, how we balance our capital allocation priorities.
The first priority for the use.
<unk> of cash is to invest behind our brands and to take full advantage of the organic growth opportunities in our business.
Second deleveraging to around a 2 times net debt to EBITDA ratio remains our commitment.
Third with respect to M&A, we will always be ready to look at opportunity.
We manage when and if they arise subject to our strict financial discipline and the leverage and commitments.
Our fourth priority.
And is returning excess cash to shareholders in the form of dividends and our share buybacks.
And with that I'll hand, it over to Jesse.
To begin the Q&A session.
Okay.
Thank you the floor is now open for questions and the interest of time, we will limit participants to 1 question and 1 follow up question again, if you have a question or comment. Please press star 1 on your Touchtone phone if at any point. Your question has been answered EMEA.
<unk> 20 per yourself from the queue by pressing star Q, we do ask that you pose your question you pick up your handset and provide optimal sound quality.
Thank you. Our first question is coming from Trevor Stirling with Bernstein. Please proceed with your question.
Good morning, Michelle and Fernando just 1 question from my side.
<unk> is a ratings and North America.
Strong price mix and the quarter over 4% and yet EBITDA margins compressed 280 basis points could you just give us a little bit of color about what drove that and how much of that pressure and we expect to persist into the second half of the year.
Hi, Trevor good morning.
And thank you for your question.
And I think that as you said, we delivered topline growth of 6.8% and day left and this quarter and was driven by volume as well as net revenue per hectoliter net came very strong.
We made and the decision.
A decision to prioritize.
So to levels to our consumers and customers during the year and as Youll know.
Last year, we had a lot of disruptions in the supply chain.
And as you can imagine when we ramp last year from full markets to serve seen only.
Pay off premise, you'll have like bigger package, leading 1 channel bigger drop sites as the markets and the economy reopens and because of consumer and mobility.
You can imagine that the channels. They will open gradually and you go from concentrated volume as being off premise.
And so down to see convenience stores and different package.
Lower drop size.
A subsequent on premise of reopening even more packs and even more.
And drops for you to do we feel are.
Distributional network and this of course is something that you.
And this the shutdown and the reopening almost like a reset.
And you'll get straight debt I'd like to costs impacting big time.
Quarter in North America, 1 imported counts in order to maintain service level, because they can market and the U S was very tight.
<unk> <unk> and first half of this year, we are important and counts from several other markets and as well as as we describe it and if per as relieves the accruals for variable compensation leachate, Camden and hand over to Fernando to talk a little bit more because this is 1 and fact that we'll see across.
Less different markets.
Hi, Trevor Fernando here, So building up on what Michelle Michelle said.
Variable compensation is going to come across not only the U S but across all zones.
And all the compensation structure that will have is closely linked to business performance and.
In 2.
The planning and most of all the people, including the accumulated ship team did not receive a bonus.
And because we had given especially what happened and the first half of last year.
This quarter given that we and the performance was strong our EBITDA grew 22%. So we have variable compensation accruals.
And which will require that quarter by quarter zone level and it depends on the operational performance. So if you look at second quarter, we grew even more than we grow in the first quarter, so that commence from variable compensation accrual.
So.
And <unk>.
This is my <unk> might change but.
And it's 1 number for you to have in mind debt whenever we'll see strong growth debt also commenced.
Higher variable compensation accruals.
And bringing this to 1 point for you to have in mind, the underlying trends in the U S reflected in our top line remains very.
Yeah.
Thank you very much Michelle and financing personally and just ask a follow up on particularly centered around our bonus accruals.
And your guidance implies that the second half EBITDA.
EBITDA growth for the group will be significantly less and even flat, maybe down and maybe up slightly and presumably.
Strong and the bonus accruals were much lower and the second half maybe and the first half.
Hi, Trevor.
Not giving any guidance on how we accrue, but it's fair to say that the growth of total business hasnt impact their growth on a given quarter on how we accrue bonus so and.
It is also fair to state them under 1 that who made if you look at our guidance of 8 to 12 debt C. Suite grew ahead of debt on the first half of the year. Our guidance. If you do the math that you were going to grow at a lower base than we do on the first half so that is a component and to take into account to our new accrued loans.
And thank you. Our next question is coming from the line of Simon Hales with Citi. Please proceed with your question.
Alright, Thank you and morning, Michele good morning Sandy.
Can I ask you a little bit about marketing spend and cleaning data.
<unk> spend again through the period, where all we know and comes with the level of support.
She was getting behind the business, especially in key markets like the U S compared to where we were pre pandemic and more generally and Michelle when you look forward and you will.
And me too.
Significantly further up weighted over the next 2 to 3 years overall levels of marketing and debt matures more about maximizing the efficiency and me.
And with that.
Yes.
And good morning, and thank you for the question. So I think that the first message. There is that we continue to be poor.
<unk> and confident on the momentum of our business, we follow our book.
Top line growth.
Growing ahead of pre pandemic levels and we are supporting this growth investing in both.
Sales and marketing, but also capex as we continue to drive this growth and this momentum forward. When we think about our ability to continue to drive the business and organic growth.
We will continue to invest and accelerate things that are already working for us.
And we see several opportunities seen zarya category development premium amortization beyond via our digital transformation and innovation.
Yes.
Got it.
Thank you. Our next question is coming from the line of Pinard, Oregon with Morgan Stanley. Please proceed with your question.
Hi, Thanks for taking my question, how do you expect your commercial strategy and Brazil to evolve over the next year and the context of increasing capacity and.
And the industry and <unk>.
By that I would love to hear how much of the market share gains you've had or a sustainable you think and how would you think about pricing going forward.
Good morning, and <unk>, So Brazil, as we highlighted in the main highlights and Swift.
Very strong momentum our volumes grew double digits outperforming the industry, we have our premium portfolio and our global brands also growing double digits very strong performers.
Our innovation is leading the way, but and multiple mouth now as the leader in the pure malt.
<unk> segment and continues to grow very strong momentum and.
And our core brands throughout the pandemic has shown a lot of resilience. So the core segments remains performing very well and you know our history and heritage and Brazil with good operations performance, we've been proving.
And this and unlocking a lot of opportunities with new Tech knowledge, So digital transformation and Brazil with beef and the way that we serve seller customers and our direct to consumer which is that delivery day continues to strength the beer business that we have debt, giving us opportunity to.
Beyond beer and have also good performance and the power of our brands is responding to gathering momentum and that we have so we are closer to consumers. We are closer to customers and our brands are gaining momentum. So we are very confident and positive on the outlook.
Luke and Brazil.
Yes.
Thank you.
Thank you. Our next question comes from Priya <unk> Gupta with Barclays. Please proceed with your question.
Hello. Thank you so much for taking my question.
Michelle welcome and Fernando anything.
And with Steve's questions will be scared a little bit more towards you.
First I was hoping that you could talk a little bit about the leverage showed good progress and for being about 4 times over the first half as we considered the second half given sort of the implicit.
Cadence reduction.
EBITDA and wanted to get your thoughts on whether there is scope to see a similar level of improvement and how we should think about the different pace of recovery that's occurring in various markets. As a result of the delta there in and and vaccine rate affecting that thank you.
Hi.
Yeah. Thanks for the question so are you.
Youre right, we did average like 4 tons and the first half of the year, we are not giving any specific guidance on that is going to go moving forward, but.
If you look like we.
Had we had that did the increasing that help with net debt.
Was was pretty much flat, which is normal as part of this seasonality of our business.
And normally we tend to generate a meaningful amount of cash and the second half so and the second half and not only have they beat the components, but you also have the.
You also have the debt paydown component.
If I could highlight 1 point was.
Gross debt reduction, which is a very important 1 and it talks a little talk somehow to your question about our business our business has proven to be very resilient and very reliable.
Last year and the beginning of the year, we decided to increase cash balances, which was important and given how.
Certainly the environment to us.
And especially in the first 2 months of the pandemic as we keep going and our business has proven over and over again to be resilient reliable and predictable.
Starting with boost and this cash and balance so a number that I would like to highlight 2.8 billion reduction and cash balances and.
Gross.
And the better we have and this year, we still have a very healthy liquidity position, but this total disconnects directly to our interest expense, which was reduced by almost like $100 million and the second question.
Okay. That's helpful and just following up on that last point with regards to interest expense.
And that's.
Given the progress that you've made on addressing the debt maturities that you have over the next 5 years or so and pushing out the maturity profile. How are you thinking about opportunities to further improve your interest expense, particularly with some of the long dated or higher coupon debt that you have outstanding. Thank you. Thanks.
Thanks Bill.
Probably we're going to continue to generate cash and continue to reduce debt that is going to be the focus so the interest expense reduction.
Likely to come from reducing paying down debt rather than any other initiatives.
Thank you our next.
Expansion is coming from Sanjay <unk> with.
With credit Suisse. Please proceed with your question.
Yes.
Yes.
Hey, Michelle and from that the 3 questions from me. Please firstly can you just talk a little bit about how the channel and package mix of your portfolio is evolving because the on premises for.
Reopening and cross media markets.
Are you seeing that.
And it's quickly go back to kind of pre pandemic levels, So we sort of lagging.
And secondly, Fernando I was just wondering if you'd be able to quantify the 18% increase in SG&A and the first half from yeah exactly how much of that.
And was driven by bonus accruals.
And then I.
No.
By early to be talking about 2022, but clearly with recent commodity cost moves.
The industry is likely to price pressure.
And on input costs.
The view on how significant that could be.
Youre thinking about pricing.
And of course your market to manage through that thanks.
I think jade.
Good afternoon and let.
Let me take the first 1 here and then we'll hand over for now and just to talk about the satcom and maybe come back and talk about the third.
I think that our.
And how are we trying to describe earlier.
On the call to traveler.
As you can imagine when the markets were locked down.
You had this huge migration that was from 1 premise convenience store.
All consumers going to the large off trade.
And a large off trade what we saw was a lot of concentrated volume net.
It was concentrated in large banks.
As we reopen and what we've been seeing and majority of markets. Okay, not everywhere, but the majority of markets is that first you start with consumer and mobility.
And I'll walk and then the first channels definitely impacted our day small off trades and convenience stores and then the difference when you go to the large big box you start having more small and medium facts and a lot of alright, we choose the turf in the convenience store and.
Last 1 to pick up it's been 1 trade.
And the on trade is generally is starting with bigger brands.
And a lot of bottles.
But quickly down transitioning to more brands and draft as well and then you'll go from.
And.
Large volumes concentrated packs.
<unk> get about I have to <unk> and then a third wave that brings much more variety and the smaller packs as well.
Of course as you do was at force is a onetime step up right because things tend to be normal.
After that and you've been seeing markets that are more normalized and now I can use examples and their vehicles to meet and beat you ask if you think about Florida.
As already operate and force somehow 3.
And 3 months in a more normal.
And to normal pace.
And overall, you'll see.
That is 90 plus percent of don't trade and the matter of.
Convenience stores are fully operating and the off premise continues to keep some of these ramps and before <unk>.
I assume are related to occasions, a lot of in home occasions that came into play and <unk>.
And over to Fernando.
CRM and talk about SG&A and.
Michelle.
And <unk>.
We are not.
And not giving.
Guidance.
And to find the bonus accruals.
But probably the best way to think about it and I know that sometimes you have some kind of platform.
What day.
But.
Normally.
The best way to put it to try to model.
Sales and marketing is always as a percentage of revenues and maybe you can you can you can use that as a proxy.
And with some from some of our IBD through up and down, but it's a good proxy and.
And then if I could make a statement.
Good EBITDA.
<unk> increased debt, we have in our administrative expenses was divided from competition.
And so that's probably a good way flow to look at debt.
And I'm going I'm going to hand back to Michelle So we can comment on the cost pressures for 2022 and beyond.
So I think if I got your question right and just.
And then brought about pricing and costs and how does 2 things come together I think that I would like to start by thinking of both our age 1 revenue per hectoliter, we grew 4.7% while in the quarter..2 we grew 5.8%.
And when they think about total price decision and of course, they take under consideration and several elements that includes the local market situation local market competition, but also inflation and because of our hedging policy and our industry leading profitability we do.
You have time to react as we plan for what's coming and on our long term strategy for price. There is no change we continue to look at CPI inflation, and how we price, but we do have in house capabilities track record and a lot of experience in your operating.
And in different inflationary environments, and therefore, we have confidence on the way that we look forward and our ability to continue to drive momentum, while we are cautious and looking at debt costs. So we can further tailor our price movements for the next year.
Yes.
Alright, Thank you Michelle.
Okay.
Thank you. Our next question is coming from the line of Mitch <unk> with Deutsche Bank. Please proceed with your question.
Thank you Hi, Michelle and Fernando.
1 big picture 1 from Michelle.
And as the global.
For AC and Bayer.
To get your perspectives on the health of the category overall, and specifically its competitive position relative to other segments. It seems in particular that youll competitors and spirits are investing more and so does that require a competitive response EMEA.
Thanks.
Morning, nothing non thanks for your question.
So I think Thats, if you allow me to step back for a second and we.
At this point there are several times during the call today and the press release, the beer category globally has proven to be.
Very resilient and our business value reliable even in the context of the pandemic.
And on top of that when you look into global beer category.
<unk> is growing meaningful markets, such as Brazil, China, Mexico, Colombia and.
It's Africa you name it.
Beer is gaining share of growth and now our top line growth that was ahead of pre pandemic levels demonstrates not only the resilience, but the reliability of our business and all and momentum.
And when you think more mature markets if thats.
It will come at the question to you like U S U K, Canada, even France beer is growing and the last few years and what is driving growth is both premium innovation and innovation.
For example on the beyond beer and the impact that Salesforce for example had been.
And so.
Are they ready to drink Cup sales are having and a very mature markets such as Canada when.
When we think about the capabilities, we have the brands that we are working with and they novation debt count right. We do have an opportunity to increase our addressable market and growth.
The WAC and give you. Another example, cutwater, our ready to drink and brands in the U S is growing triple digits and is growing ahead of our segments now and the industry that is very healthy and growing triple digits as well, we do have here a big opportunities we have the right.
<unk> ability to win at scale for us.
And <unk> and globally in this beyond beer opportunity addressing more consumers more occasions and building on the strength of our relative market and the platform that we built over the years.
<unk>.
So we see confidence.
Capability look debt for the beer industry, which is growing globally, but as well as further opportunities for us to build and unlock value by going beyond beer and taking advantage of what we built over the last several years.
Yeah.
Understood. Thank you.
Thank you. Our next question is coming from Rabat and sign with Evercore. Please proceed with your question.
Great. Thank you very much and and congratulations again Michelle.
You talk about a number of places and in the press release.
Being consumer and customer centric.
Confidence.
Wondering what that means to you.
And how.
And how you look at that and whether that is different than how the company operated and the past. Thank you.
Thank you Robert.
Very.
4 question and I appreciate you're giving them the chance to talk about debt.
And I will try to be.
Very brief here, but I think that debt or 3 points. When you think about customer and consumer centricity. The number 1 is really a mindset change in the company.
We thought that Ti can best describe as instead of looking inside out and so what we want to achieve and execute things you really need to look outside and and.
And Fortunately I think thats over the last few years. This transformation is already taking place and the overall company while some book.
<unk> of our company has been just journey for a much longer time think about China and everything that we built in China. The second 1 is a very deliberative initiative of investing behind the insights.
Getting much more data and analytics toward quinoa.
In our favor and with that re Orient the entire company on this outside the perspective and the company portfolio to be more oriented to where consumers are moving to and revenue opportunity of growth for the future.
So I have no debt you are very familiar.
And we have share this in previous investors meeting I have twice with you our standard white idea and China, our standard IP idea in Wes and understanding very clear growth opportunities for us. So we could ruthless and very confident invest.
And in the future not only the portfolio, but also and capabilities that we need to win in the future for the company example of this capability sorry, the high and company, our beyond beer company and something that and very focused now our digital transformation and I would like to expand a little bit on the digital side.
The digital transformation that we're going through now has 1 single minded objective is really accelerates our capabilities in terms of how we can grow and expand our topline.
And the way that I like talking about debt is really and opportunity for us.
And to leverage the good of our reach of our scale and non investment capacity.
And with more data, we follow a route to market and this platform that we have globally.
We can quickly expand more best practice.
Think about the 6 million.
And customers that we have and the 10 million transactions that we have each and every week and now the data that is seeking debt on a city by city basis, where people are trying on debt excel spreadsheets.
Best of all our analytics capabilities debt now through.
We.
We can consolidate all of this data in 1 single database.
We come down and bad debt and understand this data we can better use this data and create much more value by using these and connecting with our customers offering different services.
And this.
Operating even different products, which we are doing in some markets. We are expanding our ability to sell other products within the <unk> platform and serves our console and our customers. When you think about the consumer side of debt with our direct to consumer debt.
Footage proving that we can get much closer to.
And to consumers and consumer occasions, and learn much more and use much more 1 to our marketing and then fully leverage and unleash the power that we have we've addressed like I can go low and no.
I believe and gives you a much more examples but may be you will understand if I just use 1 metaphorically example, which is think about this concept of stepping stones each.
Each time that we get 1 more customer or Walmart consumer data on our data Lake we learn more and.
And here testing more things and we become much more agile and we can implement at larger scale.
1 to 1 initiatives that before we were not able to do and we are doing this with this as we expand to day 12 markets for $5 billion and Gen Z.
And we start doing deals with DTC doubled net revenues now.
In this quarter and we expanded to several other markets and this journey is just at the beginning and I believe that we can unlock a lot of value and resources for us to fund our growth journey.
Terrific. Thank you very much.
Okay.
Thank you. Our next question is coming from Edward Mundy with Jefferies. Please proceed with your question.
Good morning, Michelle moving Fernando.
Interested and your innovation and.
And from the early customer feedback and the rollout.
Segment into Colombia, and Mexico and from the other markets.
And sort of how quickly and emerge from inception to non share I know you split up the innovation process and the U S and beyond pure Malte do you think there are opportunities to bring a bit more excitement into the big category. It's my first question and my follow up and 1 for Fernando you banked a pretty decent first half and EBIT.
Our perspective, the EBIT front, a bit more of a framework and how you think about the range of <unk> to some of the puts and takes to get to that 8% to 12%.
Okay.
Thank you. Thanks for your question, let me take the first 1 on the innovation and then we will then hand over to Fernando to complement on the age to EBITDA.
And so in terms of innovation, we have been investing behind innovation and we've been delivering on very sustainable and the strategic innovations and they just mentioned for example, the innovations and the products that we are creating digital and just imagine.
Imagine how fast we are able to create a new digital brand.
SK with up to $4.5 billion in 1 single quarter in Jay Z and <unk> opportunities. Once we connect is 1.8 million customers that we have for this to build.
And unlock and monetize this platform overtime in products Duple malt is a true success story in Brazil.
<unk>.
Built this brand in Brazil, our team build this brand and delivered an incredible project debt is leading.
And in multiple segments in Brazil, and the pure malt segment and is leading with product quality and we've put out the taste and with product attributes.
These travels so prove and move is what we are doing and in other markets. This has collapsed a lot of innovation.
<unk> is also proving to be true. So thats why we have now Columbia, we have now Mexico and other markets and that was all done in a period of less than 1 year from the launch in Brazil to this scale up but I just mentioned during the webcast that sell.
<unk> sales. So for example, and Mexico was less than 2 months and is now leading the sales per segment in Mexico and is a meaningful size of the beyond beer in Mexico more than 10% already is seltzer.
And when we think about delivering to consumers is all about.
<unk> already experienced this and our ability to continue to innovate and learn again from the good of our scale and Thats why operating 50 different markets gives us an advantage, but then we have product innovation that goes straight into be it we have put out.
And the comparability simulations and beyond beer and what I'm very excited about our innovations and put up its debt, while creating now in the digital space I mentioned here.
But that delivery is another brand that was created in a very short period of time and is already.
And there is massive in Brazil, as 1 of the main apps what people towards it and having beverages being delivered at home a very loyal consumer base and continues to scale up very quick and Brazil, and now is scaling up in another 12 different countries. So when you think.
Ultimate vision on our site think about products and good products.
Beyond beer and the capabilities that we have and our ability and that's been proving now to create digital products that we won't look a lot of value for our ecosystem.
And on your question on.
<unk> of scenarios or the guidance.
The best way to put it and its like a weed we gave our guidance.
On the after the first quarter.
And we continue to stand behind our guidance the business is very reliable very predictable. So we knew starting that.
And on range first half would be stronger just because of where the kind of the <unk> chief of the pandemic last year happened. So we knew that the first half will be stronger we also knew and.
And as we've talked and the market it would be some headwinds from FX and.
FX and commodity that's our hedging policy, but.
If there is 1 takeaway that I would have is that debt.
Continue to be confident from the business.
Very predictable very reliable even in the challenging environment that we're in and the nation that we had debt. We should have revenue growth ahead of EBITDA because the top line is performing very well and expect to continue to be attributes.
Wrong.
So very very happy with the business momentum.
Okay.
Okay.
Thank you. This was the final question and Youre.
Question has not been answered please feel free to contact the Investor Relations team I will now turn the floor back over to Michelle Gutierrez for closing remarks.
Thank you, Jeff and thank you all for your questions to wrap up I would like to say that we continue to be focused on meeting the moment and delivering 2021 and building on our current topline momentum.
We'll continue to invest in and accelerate what's already working.
<unk> and explore future growth opportunities and further unlock value from our ecosystem.
Finally, I would like to express my gratitude to our 164000 colleagues globally for their continued resilience.
<unk> and ownership.
Thank you all.
Time to date and your ongoing partnership and support of our business, Please stay safe and well.
Thank you. This concludes today's earnings conference call and webcast. Please disconnect your lines and have a wonderful day.
And for them.
[music].
Okay.