Anheuser-Busch InBev S.A. ADR

Company Overview

Business Model: Anheuser-Busch InBev SA/NV is the world’s largest brewer by volume, engaged in the production, marketing, distribution, and sale of over 500 beer and malt beverage brands. Its portfolio includes global brands such as Budweiser, Corona (except in the United States), Stella Artois, and Michelob ULTRA, alongside local market brands like Bud Light (United States), Modelo Especial (Mexico), and Skol (Brazil). The company also diversifies into soft drinks and "Beyond Beer" products, including spirits-based ready-to-drink (RTD) canned cocktails like Cutwater and vodka-based seltzers like NÜTRL.

Market Position: Anheuser-Busch InBev SA/NV holds the #1 total market share of beer by volume globally and is one of the world’s top ten consumer products companies by revenue. It maintains a #1 market share position in 28 countries, including the United States, Mexico, and Brazil. The company is also estimated to hold the #1 position by volume in the fast-growing premium beer category in China.

Recent Strategic Developments: Innovation contributed approximately 11% to total revenues in 2024, driven by the global expansion of Corona Cero to over 45 countries, and new product launches like Michelob ULTRA Zero in the United States, Harbin Icy GD Zero Sugar in China, and Cass Light Zero Sugar in South Korea. The company is expanding its no- and low-alcohol beer portfolio, which has grown from 26 to 60 brands over the last five years. The "Beyond Beer" segment contributed 2% of revenue in 2024, with Cutwater being the #1 brand in spirit-based RTD canned cocktails in the U.S. and NÜTRL ranking as the #2 vodka-based seltzer in the U.S. Digital transformation efforts include the BEES B2B platform, live in 28 countries, generating USD 49 billion in gross merchandise value (GMV) and USD 2.5 billion in GMV from third-party products in 2024. The omnichannel direct-to-consumer (DTC) ecosystem operates in 21 countries, generating approximately USD 1.4 billion in revenue in 2024.

Geographic Footprint: The company operates in nearly 50 countries, structured into six business segments: North America (United States, Canada), Middle Americas (Caribbean, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, Peru), South America (Argentina, Bolivia, Brazil, Chile, Paraguay, Uruguay), EMEA (Europe, Africa), Asia Pacific (China, India, Japan, New Zealand, South Korea, Vietnam), and Global Export and Holdings Companies. Approximately 65% of 2024 revenue was derived from developing markets.

Cross-Border Operations: Key international subsidiaries include Anheuser-Busch Companies, LLC (Delaware, U.S.A.), Ambev S.A. (Brazil), Budweiser Brewing Company APAC Limited (Cayman Islands), Cervecería Modelo de México, S. de R.L. de C.V. (Mexico), and ABI SAB Group Holding Limited (United Kingdom). The company has various licensing agreements, such as the perpetual license of the Corona beer brand to Constellation Brands, Inc. for the U.S. market, and Ambev S.A.'s long-term agreement with PepsiCo, Inc. for bottling, selling, and distributing PepsiCo brands in several Latin American countries. Ambev S.A. also operates an indirect joint venture in Cuba, Cervecería Bucanero S.A., with the Government of Cuba.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 55.26%
• Operating Margin: 25.91%
• Net Margin: 12.41%

Investment in Growth:

• R&D Expenditure: $222 million
• Capital Expenditures: $3.74 billion (net)
• Strategic Investments: In 2024, investments were made in additional brewing, packaging, and distribution capacities in multiple countries, including Brazil, Colombia, Honduras, Mexico, South Africa, and the United States.

Currency Impact Analysis: In 2024, 75% of revenue was derived from operating companies with non-U.S. dollar functional currencies. Unfavorable currency translation effects, including hyperinflation accounting, negatively impacted consolidated revenue by USD 2.0 billion, primarily from South America and EMEA. Reported profit was negatively impacted by USD 0.2 billion due to foreign exchange rate fluctuations. Equity attributable to equity holders decreased by USD 8.5 billion in 2024, primarily due to the weakening of the Mexican peso, Colombian peso, and Brazilian real. The company utilizes hedging policies to manage commodity price and foreign currency risks, with much of its debt denominated in U.S. dollars while a significant portion of cash flows is in other currencies.

Business Segment Analysis

North America

Financial Performance:

• Revenue: $14.66 billion (-2.8% YoY)
• Operating Margin: 29.68%
• Key Growth Drivers: The mainstream beer portfolio gained market share in Q3 and Q4 2024. Michelob ULTRA Zero experienced strong consumer demand, and the Beyond Beer (spirits-based RTD) portfolio delivered mid-teens volume growth, led by Cutwater and NÜTRL. Product Portfolio: Major brands include Bud Light, Michelob ULTRA Zero, Cutwater, and NÜTRL. Market Dynamics: U.S. sales-to-wholesalers (STWs) declined 3.9%, and sales-to-retailers (STRs) declined 5%. Canada volumes experienced low-single digit declines.

Middle Americas

Financial Performance:

• Revenue: $17.07 billion (+4.4% YoY)
• Operating Margin: 39.88%
• Key Growth Drivers: Mexico volumes increased low-single digits, outperforming the industry with record high volumes and market share gains. Corona Cero volume grew strong double-digits. The BEES Marketplace GMV grew 24% versus 2023, and TaDa Delivery orders increased 21% versus 2023. Colombia volumes increased low-single digits, with the beer category growing and the portfolio gaining 85 basis points share of total alcohol. Above core beer brands like Corona and Stella Artois delivered high-single digit volume growth. Product Portfolio: Key brands include Corona Cero, Corona, and Stella Artois. Geographic Revenue Distribution:
• Mexico: Volumes increased low-single digits.
• Colombia: Volumes increased low-single digits.

South America

Financial Performance:

• Revenue: $12.42 billion (+3.2% YoY)
• Operating Margin: 24.24%
• Key Growth Drivers: Brazil total volumes grew 1.5% (beer +0.6%, non-beer +4.1%). Above core beer brands such as Budweiser and Corona delivered low-teens volume growth, and no-alcohol beer volumes grew double-digits. The BEES Marketplace GMV grew 47% versus 2023, and Zé Delivery generated over 66 million orders (+10% versus 2023). Product Portfolio: Key brands include Budweiser, Corona, Budweiser Zero, and Corona Cero. Market Dynamics: Argentina total volumes declined high-teens due to significant inflationary pressures. Geographic Revenue Distribution:
• Brazil: Total volumes grew 1.5%.
• Argentina: Total volumes declined high-teens.

EMEA

Financial Performance:

• Revenue: $9.00 billion (+4.8% YoY)
• Operating Margin: 19.60%
• Key Growth Drivers: Europe volumes grew low-single digits, outperforming the industry in 5 of 6 key markets, driven by megabrands Corona and Stella Artois. The San Miguel brand was added to the UK portfolio as of January 2025, positioning the company as the leading brewer in the UK. No-alcohol Corona Cero expanded to 27 markets, growing volumes strong double-digits. South Africa volumes grew mid-single digits, outperforming the industry in both beer and Beyond Beer segments. Product Portfolio: Key brands include Corona, Stella Artois, Corona Cero, Brutal Fruit, Flying Fish, and Redd’s.

Asia Pacific

Financial Performance:

• Revenue: $6.20 billion (-9.2% YoY)
• Operating Margin: 19.72%
• Key Growth Drivers: South Korea volumes increased mid-single digits, outperforming the industry and achieving the highest market share in 10 years. Product Portfolio: Key brands include Harbin Icy GD Zero Sugar and Cass Light Zero Sugar. Market Dynamics: China volumes decreased 11.8% due to a soft industry. The BEES platform is present in over 320 cities in China, with approximately 80% of revenue generated through digital channels.

International Operations & Geographic Analysis

Revenue by Geography:

International Business Structure:

• Subsidiaries: Anheuser-Busch Companies, LLC (U.S.), Ambev S.A. (Brazil), Budweiser Brewing Company APAC Limited (Cayman Islands), Cervecería Modelo de México, S. de R.L. de C.V. (Mexico), ABI SAB Group Holding Limited (United Kingdom).
• Joint Ventures: Ambev S.A. operates an indirect joint venture in Cuba, Cervecería Bucanero S.A., with the Government of Cuba. The company also has jointly controlled entities in Brazil (two), Mexico (one), and Canada (two).
• Licensing Agreements: The Corona beer brand is perpetually licensed to Constellation Brands, Inc. for the U.S. market. Anadolu Efes has rights to brew and sell Budweiser in Russia, Ukraine, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan, Georgia, Armenia, Azerbaijan, and Mongolia. Stella Artois, Beck’s, and Beck’s Vier brands are licensed to Carlton & United Breweries (Australia). Ambev S.A. holds exclusive rights to bottle, sell, and distribute certain PepsiCo, Inc. brands in Brazil, Argentina, Uruguay, Bolivia, Dominican Republic, and Panama.

Cross-Border Trade: The filing does not provide specific details on primary export destinations, key imported materials, or explicit transfer pricing policies beyond general mentions of multi-jurisdictional tax strategies.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Anheuser-Busch InBev SA/NV repurchased $937 million in shares in 2024, following $362 million in 2023. A USD 1 billion share buyback program was completed in March 2024, and a new USD 2 billion program was approved in October 2024, valid through October 2025.
• Dividend Payments: Total dividend payments amounted to $2.67 billion in 2024 and $3.01 billion in 2023. The Board proposed a full year 2024 dividend of EUR 1.00 per share, subject to shareholder approval.
• Future Capital Return Commitments: The company maintains an optimal capital structure target of a net debt to Normalized EBITDA ratio of around 2x.

Balance Sheet Position:

• Cash and Equivalents: $11.17 billion (as of 31 December 2024)
• Total Debt: $72.17 billion (interest-bearing loans and borrowings as of 31 December 2024)
• Net Debt: $60.65 billion (as of 31 December 2024), a decrease from $67.57 billion in 2023.
• Credit Rating: S&P Global Ratings: A- (long-term), A-2 (short-term), stable outlook. Moody’s Investors Service: A3 (long-term), P-2 (short-term), stable outlook.
• Debt Maturity Profile (as of 31 December 2024, USD million): | | Carrying Amount | Less than 1 year | 1-2 years | 2-3 years | 3-5 years | More than 5 years | |---|-----------------|------------------|-----------|-----------|-----------|-------------------| | Unsecured bond issues | 69,484 | 627 | 496 | 4,501 | 9,166 | 54,693 | | Lease liabilities | 2,303 | 556 | 549 | 356 | 404 | 440 | | Secured bank loans | 19 | 3 | 3 | 3 | 7 | 4 | | Unsecured bank loans | 94 | 94 | — | — | — | — | | Unsecured other loans | 269 | 169 | 90 | 10 | — | — | | **Total** | **72,169** | **1,449** | **1,137** | **4,870** | **9,577** | **55,137** |

Cash Flow Generation:

• Operating Cash Flow: $15.06 billion (2024)
• Free Cash Flow: $11.32 billion (Adjusted Free Cash Flow, 2024)
• Cash Conversion Metrics: Changes in working capital reduced operational cash flow by USD 22 million in 2024.

Currency Management: As of 31 December 2024, 2.7% (USD 2.0 billion) of interest-bearing financial liabilities bore a variable interest rate, with the remaining 97.3% bearing a fixed interest rate. The expected average gross debt coupon on bonds in 2025 is approximately 4%. The company uses a hybrid currency matching model and financial instruments to mitigate currency and interest rate risks.

Operational Excellence

Production & Service Model: The company's production process involves brewing, fermentation (typically 5-11 days), maturation, filtering, and packaging. Malted barley is the primary ingredient, supplemented by other grains. The company utilizes its own proprietary yeast. As of 31 December 2024, Anheuser-Busch InBev SA/NV operates 220 breweries and/or non-beer plants globally.

Global Supply Chain Architecture: Key Suppliers & Partners: The company relies on third-party suppliers for essential raw materials such as malted barley, hops, water, and sugar, as well as packaging materials including glass, PET, and aluminum/steel bottles and cans. Supply contracts are typically medium to long-term. Manufacturing Partners: Anheuser-Busch InBev SA/NV owns and operates a network of manufacturing facilities, including 20 malting plants, 6 rice and corn grits mills, 4 glass bottle plants, 4 crown and closure plants, 2 label plants, 8 can plants, 2 can lid manufacturing plants, and 1 soft drink concentrate plant.

Facility Network:

• Manufacturing: The company operates 220 beverage production plants globally (171 beer/alcoholic malt, 17 soft drinks, 32 both), with a total annual engineering capacity of 751,207 thousand hectoliters (499,395 thousand hectoliters for beer/Beyond Beer, 75,932 thousand hectoliters for non-beer).
• Research & Development: The Global Innovation and Technology Center is located in Leuven, Belgium, supported by regional development teams.
• Distribution: The logistics organization manages inbound and outbound flows from plants, distribution from secondary drop points to customers, and last-mile delivery for direct-to-consumer offerings such as Zé Delivery (Brazil) and TaDa (Latin America and Africa).

Operational Metrics: The filing indicates a total annual engineering capacity of 751,207 thousand hectoliters and 2024 volumes of 575.7 million hectoliters.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels: Anheuser-Busch InBev SA/NV distributes its products through both owned distribution networks, which deliver directly to points of sale, and third-party distribution networks, comprising wholesalers and independent distributors. In the United States, 10 of 382 wholesalers were company-owned as of the end of 2024. Digital Platforms: Key digital channels include the BEES B2B platform, which facilitates business-to-business transactions, and direct-to-consumer (DTC) e-commerce solutions such as Zé Delivery, TaDa, and PerfectDraft.

Customer Portfolio: Regional Market Penetration: The company holds the #1 market share position in 28 countries globally and is estimated to hold the #1 position by volume in the fast-growing premium beer category in China.

Competitive Intelligence

Global Market Structure & Dynamics

Industry Characteristics: The brewing industry has experienced significant consolidation over several decades. Anheuser-Busch InBev SA/NV is the #1 total market share of beer by volume in the world. The company holds the #1 market share position in 28 countries globally, including the United States, Mexico, and Brazil, and is estimated to hold the #1 position by volume in the fast-growing premium beer category in China.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors: Based on 2023 data from Plato Logic Limited, primary competitors include Heineken, Carlsberg, CR Snow, and Molson Coors Brewing Company. Market Share Comparison (2023, volume in million hectoliters):

• Anheuser-Busch InBev SA/NV: 513.5
• Heineken: 265.5
• Carlsberg: 116.9
• CR Snow: 111.5
• Tsingtao: 80.1
• Molson Coors Brewing Company: 79.6
• Asahi: 70.5
• Beijing Yanjing: 39.4
• Castel: 38.6
• Constellation Brands: 35.4

Regional Competitive Dynamics: The filing highlights the company's #1 market share in 28 countries and its leading position in the premium beer category in China, indicating varied competitive landscapes across its major geographic markets.

Risk Assessment Framework

Strategic & Market Risks

Global Market Dynamics: Anheuser-Busch InBev SA/NV is exposed to global, regional, and local economic weakness and uncertainty, including geopolitical instability, tariffs, and inflation (e.g., Argentine inflation approximately 117.8% in 2024). Approximately 65% of 2024 revenue is derived from developing markets, which are subject to risks such as currency devaluation, nationalization, and political instability. Technology Disruption: Cybersecurity incidents and disruptions to information and operational technology systems pose risks to the company's reputation, revenue, and operations across its global footprint.

Operational & Execution Risks

Global Supply Chain Vulnerabilities: The company faces significant exposure to fluctuations in raw material (e.g., malted barley, hops), packaging (e.g., aluminum cans, glass bottles), energy, and water prices. Reliance on key third-party suppliers and a limited number of suppliers for certain materials increases supply chain disruption risk. Trade Restrictions: Operations are subject to export control regulations, embargoes, economic sanctions, and trade restrictions imposed by various international bodies, which can impact cross-border trade and market access.

Financial & Regulatory Risks

Currency & Financial Risks: Fluctuations in foreign currency exchange rates lead to volatility in financial results, as 75% of 2024 revenue was from non-U.S. dollar functional currencies. A significant portion of the company's debt is U.S. dollar-denominated, while cash flows are generated in multiple currencies. Regulatory & Compliance Risks: The business is highly regulated globally, covering aspects such as production, marketing, advertising, environmental protection, and data privacy (e.g., EU GDPR, California Consumer Privacy Act, China Personal Information Protection Law, Brazil General Personal Data Protection Law). Non-compliance can result in fines or loss of operating licenses. Tax Regulations: The company is subject to excise and other indirect taxes, which constitute a large proportion of product cost. The OECD's Pillar Two (global minimum corporate tax rate of 15%) became effective 1 January 2024 in many countries, including Belgium, increasing compliance burdens. The company is involved in numerous tax disputes in Brazil with possible losses ranging from R$0.3 billion (USD 0.1 billion) to R$28.1 billion (USD 4.5 billion) as of 31 December 2024, and has resolved South African tax matters with a payment of R4.5 billion (USD 0.2 billion).

Geopolitical & External Risks

Country-Specific Risks: Ongoing geopolitical conflicts, such as those between Russia and Ukraine and in the Middle East, could adversely affect business. The company derecognized its 50% non-controlling interest in the AB InBev Efes joint venture in 2022, reporting a USD 1,143 million non-cash impairment charge. In December 2024, a Russian decree placed AB InBev Efes Russian operations under temporary management.

Innovation & Technology Leadership

Research & Development Focus: Global R&D Network: Research and development efforts are focused on breakthrough, incremental, and renovation innovations across production processes, product features, packaging, and branding. The Global Innovation and Technology Center is located in Leuven, Belgium, supported by regional development teams. R&D expenditure was $222 million in 2024. Innovation Pipeline: The company's innovation pipeline includes the global expansion of Corona Cero, new zero-sugar product launches like Michelob ULTRA Zero, Harbin Icy GD Zero Sugar, and Cass Light Zero Sugar, and the expansion of its no- and low-alcohol beer portfolio.

Intellectual Property Portfolio:

• Patent Strategy: Anheuser-Busch InBev SA/NV holds over 160 pending and granted patent families covering brewing processes, beer flavor stability, non-alcoholic beer development, and other technologies.
• Licensing Programs: The company owns perpetual rights to its principal brand names and trademarks in its main commercialized countries, with some exceptions.

Leadership & Governance

Executive Leadership Team

International Management Structure: The company operates with a decentralized management structure that includes dedicated regional CEOs for its South America, Middle America, Asia Pacific, Africa, Europe, and North America Zones, reflecting its multi-jurisdictional operations.

Board Composition: The Board of Directors consists of 15 non-executive directors. Four directors are independent, while others are nominated by major shareholders. The Audit Committee's voting members are independent under Rule 10A-3 of the Exchange Act. However, some directors on the Audit, Nomination, and Remuneration Committees would not meet NYSE independence requirements.

Regulatory Environment & Compliance

Multi-Jurisdictional Regulatory Framework: Primary Regulatory Environments: Anheuser-Busch InBev SA/NV's operations are subject to extensive regulatory requirements in over 150 countries. These regulations cover various aspects, including production, distribution, marketing, advertising, environmental protection, and data privacy (e.g., EU GDPR, California Consumer Privacy Act, China Personal Information Protection Law, Brazil General Personal Data Protection Law). In the U.S., federal and state laws specifically regulate the brewing, sale, marketing, labeling, and wholesaling of products.

Cross-Border Compliance: The company is subject to export control regulations, embargoes, economic sanctions, and trade restrictions imposed by various international bodies, including the United States, the European Union, and the United Nations. Compliance with these multi-jurisdictional requirements is managed through internal programs and controls.

International Tax Strategy: The company is subject to income and other taxes in numerous jurisdictions. The OECD's Pillar Two model rules, establishing a global minimum corporate taxation rate of 15%, became effective 1 January 2024 in many countries, including Belgium, impacting the company's tax obligations and compliance burden. The company is involved in numerous tax disputes in Brazil and has resolved tax matters in South Africa.

Environmental & Social Impact

Global Sustainability Strategy: Environmental Commitments: Anheuser-Busch InBev SA/NV has established 2025 Sustainability Goals focused on smart agriculture, water stewardship, circular packaging, and climate action. The company aims for 100% of direct farmers to be skilled, connected, and financially empowered; 100% of communities in high-stress areas to have measurable water availability/quality improvement; 100% of products in packaging that is returnable or made from mostly recyclable content; and 100% of purchased electricity from renewables by 2025. The long-term ambition is to achieve net zero emissions across the entire value chain by 2040. Regional Sustainability Initiatives: In 2024, the company collaborated with over 20,000 farmers and invested in long-term water solutions across 36 sites globally.

Social Impact by Region: The company has invested over USD 1 billion in social marketing campaigns since 2016 to promote smart drinking initiatives globally. In 2024, it donated over 2 million cans of emergency drinking water in the U.S. and over 170,000 cans in China, demonstrating regional community support efforts.

Currency Management & Financial Strategy

Multi-Currency Operations: Currency Exposure: The company has significant multi-currency exposure, with 75% of its 2024 revenue derived from operating companies with non-U.S. dollar functional currencies.

Hedging Strategies: Anheuser-Busch InBev SA/NV utilizes derivative financial instruments, including foreign currency rate agreements, interest rate swaps, cross currency interest rate swaps, commodity swaps, commodity futures, and equity swaps, to mitigate currency and commodity price risks. Transactional exposures are hedged, but translational exposures are not. As of 31 December 2024, anticipated exposures for 2025 for USD/Brazilian real, USD/Mexican peso, and USD/Colombian peso were substantially hedged.