Mitch Collett

Mitch Collett asked for insights into the phasing of 2026, specifically regarding transactional effects, marketing and sales spend concentration, and uneven comps. He also inquired about the sustainability of low CapEx levels, given they remain below depreciation, and how technology and AI contribute to this efficiency.

Answer

CFO Fernando Tennenbaum explained that transactional effects would likely present a greater challenge in H1, particularly in markets like Brazil and Mexico due to prior year currency depreciation, with easier comps in H2. He noted a concentration of sales and marketing investments in Q2 and Q3 due to the World Cup. Regarding CapEx, he expressed confidence in maintaining the guided levels through efficiency and technology, ensuring sufficient investment for business support and growth.

Mitch Collett inquired about the phasing of financial performance in 2026, specifically regarding transactional effects, marketing and sales spend, and uneven comparable periods. He also asked about CapEx, noting it remains below depreciation, and how technology and AI contribute to keeping it low and its sustainability going forward.

Answer

CFO Fernando Tennenbaum explained that transactional FX would present a greater challenge in H1 2026 due to currency depreciation in markets like Brazil and Mexico in early 2025, with easier comparisons in H2. Sales and marketing investments would be concentrated in Q2 and Q3 due to the World Cup. He affirmed confidence in delivering CapEx within the outlook by leveraging efficiency, technology, and AI, ensuring all necessary business support and growth CapEx are covered, and expressed comfort with the current CapEx levels.

Mitch Collett inquired about AB InBev's longer-term volume growth prospects, particularly within its footprint, and whether the company anticipates a return to volume growth in 2026, citing the FIFA World Cup opportunity. He also asked for insights into the potential impact of input costs in 2026, specifically regarding FX and hedging strategies.

Answer

Michel Doukeris, Chief Executive Officer, attributed 2025's dynamic environment to inflation and unseasonable weather, but affirmed unchanged category growth fundamentals, with over 80% expected from developing/emerging markets where AB InBev is strong. He expressed a positive outlook for 2026 due to lower inflation, potential for purchase power rebuild, and the significant impact of the FIFA World Cup in North America. Fernando Tennenbaum, Chief Financial Officer, stated that while no specific COGS guidance is provided, 2026 is expected to be a more 'normal year' for FX and commodities, with potential pressure on U.S. COGS from Midwest premium and varying FX dynamics compared to 2025.

Mitch Collett asked about AB InBev's longer-term volume growth expectations for the beer category, particularly within their key footprint, and whether a return to volume growth is anticipated in 2026 given the external factors impacting 2025. He also sought color on the potential impact of input costs for 2026, specifically regarding FX movements and the timing of hedging strategies.

Answer

CEO Michel Doukeris stated that 2025 was atypical due to inflation and unseasonable weather, but fundamental category drivers remain strong, with over 80% of growth expected from developing markets. He expressed a positive outlook for 2026, citing lower inflation, potential for rebuilding purchase power, and the FIFA World Cup in North America, which historically boosts the category. CFO Fernando Tennenbaum indicated that while no specific COGS guidance is provided, the 12-month hedging policy suggests 2026 could be a more 'normal year' for input costs, with potential pressure in the U.S. offset by FX.

Mitch Collett of Deutsche Bank questioned AB InBev's comfort with potential full-year volume declines in 2025 and the longer-term outlook for volume growth. He also asked about the sustainability of margin improvements and how EBITDA might perform in a better volume environment.

Answer

CEO Michel Doukeris acknowledged the Q2 volume softness, particularly in China and Brazil, but emphasized the strength of the company's diversified global footprint and long-term industry growth forecasts. CFO Fernando Tennenbaum added that while Q2 margin expansion was strong, cost inflation phasing would be weighted from Q2 onwards. He reiterated that fundamental drivers for margin expansion remain intact, despite past headwinds from FX and commodities.

Asked about the 'four and more' revenue growth ambition beyond FY25. He questioned if FY26 will be in that range and what steps are being taken to accelerate growth to 4% or more, despite the headwinds in FY25.

Answer

Management reaffirmed their conviction in the 4% top-line growth target for the medium term. They noted that several headwinds in 2025 (tea transition in Spain, Suntory exit in Australia, Indonesia weakness) are specific to the current year. With a strong Q2 and start to Q3, they are confident in their midterm growth outlook for 2026 and beyond.

Mitch Collett from Deutsche Bank asked about the 'four and more' revenue growth ambition beyond 2025 and the steps planned to achieve that acceleration.

Answer

CEO Damian Gammell reaffirmed the company's conviction in its medium-term 4% top-line growth target. He explained that certain 2025 headwinds are one-off events, and the underlying business strength, portfolio, and commercial calendar support this ambition for 2026 and beyond.

Mitch Collett from Deutsche Bank asked about the 'four and more' revenue growth ambition, questioning how the company views this target beyond 2025 given the current year's guidance revision.

Answer

CEO Damian Gammell reaffirmed the company's conviction in its long-term growth targets. He characterized several of 2025's revenue drags, such as the tea transition in Spain and the Suntory exit in Australia, as one-off events. He stated the expectation is to stick with the 4% revenue guidance for 2026 and beyond.

Mitch Collett from Deutsche Bank AG asked how Diageo's growth initiatives address the structural trend of moderation and where the reinvested portion of cost savings will be allocated in fiscal 2026.

Answer

Interim CEO & Director Nik Jhangiani stated that Diageo views moderation as a long-term opportunity, addressing it with non-alcoholic products like Guinness 0.0, low-ABV innovations, and RTDs. He explained that reinvestments from cost savings will target enhanced commercial execution and smarter A&P spend, with efficiencies in non-working marketing being reallocated to increase media scale and reach.