Anheuser-Busch InBev's Q3 2025 Earnings Call: Contradictions Emerge on Volume Growth, Buybacks, and Pricing Strategy

Date of Call: October 30, 2025

Financials Results

• Revenue: Revenue per hectoliter +4.8%; top-line revenue +0.9% YOY
• EPS: Underlying EPS $0.99 per share, up 1% in USD / up 0.3% in constant currency YOY
• Operating Margin: EBITDA increased 3.3% with margin expansion of 85 bps (quarter)

Guidance:

• 2025 outlook: 4% to 8% EBITDA growth target
• Board approved $6 billion share buyback to be executed within 24 months
• Interim dividend of EUR 0.15 per share declared
• Announced $2 billion bond redemption; no bonds maturing through 2026
• Expectation that current results and deleveraging progress support delivering full-year outlook

Business Commentary:

* Revenue and Earnings Performance: - AB InBev reported top-line growth of 0.9% and an EBITDA increase of 3.3% for the third quarter of 2025, with a margin expansion of 85 bps. - The growth was driven by disciplined revenue management, premiumization strategies, and productivity initiatives, despite challenges in China and unseasonable weather impacts in Latin America.

• Latin American Challenges:
• Overall revenue in Latin America declined by 1.9% in Brazil due to unseasonable weather and a softer consumer environment.

• Despite these challenges, AB InBev maintained market share gains and disciplined revenue and cost management in Brazil.

• North American Growth:

• In North America, particularly the U.S., the growth of the Beyond Beer segment accelerated, with revenue increases in the mid-40s led by Cutwater, which grew in the triple digits.

• This growth was driven by the successful expansion of Cutwater and strategic investments in premium brands like Michelob Ultra.

• China Market Challenges:

• In China, revenue declined by 15.2% with underperforming volumes, primarily attributed to a soft consumer environment and channel shifts that required inventory adjustments.
• AB InBev is focusing on enhancing execution, expanding distribution in off-premise channels, and investing in innovation to realign growth in the Chinese market.

Sentiment Analysis:

Overall Tone: Positive

• "delivered another quarter of top and bottom-line growth, margin expansion, and U.S. dollar EPS growth."; "We remain confident in delivering our outlook for the year"; announced a "$6 billion share buyback program" and ‘‘interim dividend of EUR 0.15’’ indicating confidence and return-of-capital actions.

Q&A:

• Question from Edward Mundy (Jefferies LLC): Two questions: (1) Board's thinking around the shift to a two-year $6bn buyback program — is this to signal capital-allocation priorities and/or give more flexibility on pace? (2) On the broader beer category: importance of pricing moderating going forward and how that affects ability of pricing to stimulate volume growth?
  Response: Buyback reflects increased balance-sheet flexibility and an evolution in capital returns (alongside progressive dividend and debt reduction); on category pricing, inflation is normalizing so disciplined revenue management and premiumization remain key while long-term category growth at ~1% in normal conditions.

• Question from Mitchell Collett (Deutsche Bank AG): (1) Thoughts on longer-term volume growth in your footprint and can you get back to volume growth in 2026 given FIFA and other factors? (2) Any color on potential input cost impacts in 2026, specifically FX and timing of FX hedges?
  Response: Management sees 2026 as a more 'normal' year with potential volume upside (FIFA could add ~0.20–0.25 pts to category in event years) but provides no volume guidance; hedging policy is 12 months ahead and current market prices suggest more normalized COGS/FX dynamics into 2026.

• Question from Laurence Whyatt (Barclays Bank PLC): You noted improving exit rate in Mexico — is there similar improvement in Brazil and Colombia? Also, do you still view sub-2x net debt/EBITDA as value destructive and what would you do if leverage approached that level?
  Response: Mexico showed sequential improvement; Brazil remains weather- and consumption-impacted though share recovered, while Colombia continues strong; optimal long-term leverage remains ~2x but below 3x gives flexibility and 2x is still the target.

• Question from Robert Ottenstein (Evercore ISI): On winning Champions League rights — how do you view sports/big-asset investments, ROIC and timing (Heineken still has rights)? And on Cutwater's breakout in the U.S.: drivers, sustainability and lessons to other markets?
  Response: Big-sport and cultural partnerships are strategic to engage consumers and premiumize brands over time (execution from 2027); Cutwater's success reflects long-term, high-quality brand building, right pricing/distribution and is a proof point for scaling Beyond Beer.

• Question from Andrea Pistacchi (BofA Securities): Given challenging volumes but mid-point EBITDA delivery, did you adapt plans (more agile revenue management / cost control)? And comment on Middle Americas ex-Mexico dynamics and confidence in continued volume growth there?
  Response: They adopted agile revenue management, disciplined cost control and resource reallocation to protect margins; Middle Americas ex-Mexico remains high-margin and resilient with continued confidence in its volume growth potential.

• Question from Celine Pannuti (JPMorgan Chase & Co): How big is Beyond Beer now, growth path and profitability both in North America and internationally? Also, can you break down gross margin drivers this quarter?
  Response: Beyond Beer is ~2% of volumes and grew ~27% with higher prices and higher profitability per hectoliter versus equivalent beer SKUs (big upside opportunity); gross-margin improvement driven by premium mix (higher net revenue/hl) and COGS efficiencies.

• Question from Simon Hales (Citigroup Inc.): Can you quantify China destocking in Q3 relative to the ~15% revenue decline, should we expect further destocking in Q4, and timing/rollout of innovations (Magnum, 1L cans)? Also, early consumer/retail reaction to Phorm Energy in the U.S. and differentiation?
  Response: About one-third of the China volume decline was inventory destock (another third channel shifts and one-third geographic/channel footprint effects); most inventory adjustments should finish by Q4 while new innovations and expanded off-premise distribution will help recovery; Phorm is early but gaining traction with a targeted 'clean energy' positioning and growing distribution.

Contradiction Point 1

Volume Growth Expectations

It involves differing perspectives on the potential for volume growth, which is a critical indicator for the company's future performance and investor expectations.

What is your outlook for volume growth in 2026, given current conditions and external factors? - [Mitchell Collett](Deutsche Bank AG, Research Division)

2025Q3: 2026 offers potential for volume growth, driven by the FIFA World Cup, normalization of inflation, and potential consumer sentiment improvement. - [Michel Doukeris](CEO)

What key learnings from the U.S. market can be applied to other regions to improve performance? - [Robert Edward Ottenstein](Evercore ISI)

2025Q2: Consumers are continuing to evolve their preferences and move towards more premium and higher operating profitability segments. And these segments like Ultra and Ultra light and workers continue to gain share in the market. - [Michel Doukeris](CEO)

Contradiction Point 2

Capital Allocation and Share Buybacks

This contradiction pertains to the company's strategic approach to capital allocation and share buybacks, which can impact shareholder value and financial planning.

Can you explain the decision to implement a $6 billion two-year buyback program? - [Edward Mundy](Jefferies LLC, Research Division)

2025Q3: The shift to a two-year buyback program is in line with increased flexibility due to an improved balance sheet. - [Fernando Tennenbaum](CFO)

Can the U.S. business sustain or increase profit amid accelerating industry decline, and what prevented share buybacks from increasing earlier despite an attractive share price? - [Andrea Pistacchi](Bank of America)

2025Q2: Given the favorable capital allocation, we've announced a new $6 billion share buyback program. The program will run over 18 to 24 months. - [Fernando Tennenbaum](CFO)

Contradiction Point 3

Impact of Inflation and Pricing Strategy

This contradictory statement reflects differing views on the impact of inflation and the pricing strategy, which can affect profitability and market competitiveness.

How critical is moderating price increases in the global beer industry under recent conditions to stimulate volume growth? - [Edward Mundy](Jefferies LLC, Research Division)

2025Q3: Beer is an affordable category, and price discipline has been crucial to recover margins after cost pressures. As inflation normalizes, there will be less pressure on prices, allowing for less aggressive pricing. - [Michel Doukeris](CEO)

Mexico saw volume growth but weak June sales. Are consumer slowdowns at quarter-end impacting H2? - [Jean-Olivier Nicolai](Goldman Sachs)

2025Q2: We're expecting also our pricing to be competitive and perceived as such by our consumers. And this is important as we go into the second half of the year. - [Michel Doukeris](CEO)