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Simon Hales

Simon Hales

Managing Director and Senior Equity Analyst at Citigroup Inc.

London, GB

Simon Hales is a Managing Director and Senior Equity Analyst at Citi, specializing in Consumer Staples and Beverages research across key markets in the US, UK, France, and Italy. He covers major companies such as Anheuser-Busch InBev, Philip Morris International, Diageo, and Royal Unibrew, and is recognized for a strong track record with a 61% success rate and an average return of 5.5% per rating according to TipRanks. Hales joined Citi in December 2017 after holding senior analyst and leadership roles at Barclays Capital, Evolution Securities, Dresdner Kleinwort Wasserstein, and JPMorgan Chase, beginning his equities research career in 2004. A Durham University graduate with expertise in capital markets and financial modeling, he holds professional credentials expected for a senior research analyst at a top investment bank.

Simon Hales's questions to Anheuser-Busch InBev SA/NV (BUD) leadership

Question · Q3 2025

Simon Hales sought clarification on the extent of destocking in China during Q3, its impact on the 11% volume decline, and whether further destocking is expected in Q4, potentially leading to a less severe volume decline. He also asked about the market availability of new innovations like Magnum and 1-liter cans. Additionally, he inquired about the early consumer and retail reaction to the Form Energy launch in the U.S. and its key differentiators.

Answer

CEO Michel Doukeris explained that China's volume decline was due to a third from geographical/channel footprint, a third from inventory adjustments (mostly completed by Q4), and a third from channel shifts (on-premise to off-premise). He noted that new innovations like Magnum and Corona's drop line can are being rolled out, with increased off-premise distribution and investments expected to kick in during Q4 and next year. For Form Energy, he highlighted AB InBev's new majority ownership and long-term commitment, along with strong partners. The brand targets a specific consumer cohort with a 'clean energy' approach, showing good traction with distribution and awareness building for next year's upside.

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Question · Q3 2025

Simon Hales asked for more details on China, specifically quantifying the Q3 destocking impact on volumes and whether further destocking is expected in Q4, potentially leading to less severe volume declines. He also inquired about the market availability of new innovations like Magnum and 1-liter cans. Additionally, Hales sought information on the early consumer and retail reaction to the U.S. launch of Form Energy and its key differentiators.

Answer

Michel Doukeris, Chief Executive Officer, explained that China's volume decline was partly due to geographical/channel footprint, inventory adjustments, and shifts to off-premise. He noted that most inventory adjustments are complete, with a small portion remaining for Q4, and anticipated acceleration from STRs and innovations. Doukeris confirmed new innovations like Banmagno and Corona's drop line can are rolling out. For Form Energy, he highlighted AB InBev's new majority ownership and long-term commitment, emphasizing its focus on a specific consumer cohort with a 'clean energy' approach, which is gaining traction with distribution and awareness building for next year's upside.

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Question · Q1 2025

Simon Hales asked for perspective on the broader consumer environment, given a competitor's recent guidance cut, and requested details on the momentum of new U.S. product launches like Michelob Ultra Zero ahead of the summer.

Answer

CEO Michel Doukeris distinguished between cautious consumer sentiment and resilient consumer behavior, noting beer remains an affordable category. He highlighted strong momentum for innovations like Michelob Ultra Zero and Busch Light Apple. CFO Fernando Tennenbaum added that the company's full-year outlook remains unchanged, supported by cost hedging and a clear view of FX impacts.

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Question · Q4 2024

Simon Hales questioned the lower U.S. margin expansion in Q4, asking for the 2025 outlook considering investments and cost pressures. He also requested more detail on the scale of factors expected to negatively impact Q1 volume performance.

Answer

CEO Michel Doukeris stated that the priority in the U.S. is investing to fuel commercial momentum and market share, which is the primary focus over specific quarterly margin figures. CFO Fernando Tennenbaum detailed the Q1 headwinds, including one less selling day versus a leap year, a later Easter shifting inventory builds, and difficult year-over-year comparisons in both the U.S. and China.

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Simon Hales's questions to COCA-COLA EUROPACIFIC PARTNERS (CCEP) leadership

Question · H1 2025

Inquired about the strong Q3 trading, particularly the impact of weather in Europe, the continuation of away-from-home growth, and the scale of the impact from recent flooding in the Philippines on the APS business.

Answer

Management stated that the guidance already reflects the weather impact in the Philippines. Indonesia has seen stabilization. In Europe, good weather in June and July has boosted business across all markets, especially in Great Britain, and this positive trend is helping the away-from-home channel.

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Question · H1 2025

Simon Hales of Citi asked for more detail on the strong start to Q3, particularly regarding regional performance in Europe and the impact of flooding in the Philippines.

Answer

CEO Damian Gammell attributed the strong start to favorable weather across Europe, especially in Great Britain, which boosted July's business. He noted that the impact from the Philippines is factored into the guidance and that Indonesia's performance has begun to stabilize.

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Question · H1 2025

Simon Hales of Citi requested more detail on the strong Q3 trading, seeking regional color on Europe's performance, the impact of weather, away-from-home trends, and the potential impact of flooding in the Philippines.

Answer

CEO Damian Gammell stated that guidance already reflects the weather situation in the Philippines and noted a stabilization in Indonesia. He confirmed that favorable weather in June and July positively impacted European markets, especially Great Britain, contributing to a broad-based strong start to Q3.

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Question · Q4 2023

Asked about the timing of the 2024 efficiency program benefits and the expected cadence of savings for the remainder of the program through 2028.

Answer

The EUR 60-70 million in benefits for 2024 will be weighted towards the second half of the year. For the subsequent years through 2028, the savings are expected to be delivered in a more linear fashion, tied to the phasing of major initiatives like the S/4 HANA implementation.

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Simon Hales's questions to DIAGEO (DEO) leadership

Question · H2 2025

Simon Hales from Citigroup Inc. asked for details on the drivers behind the expected H2 fiscal 2026 sales acceleration and for clarification on the EBIT impact from recent disposals and capitalized finance costs.

Answer

Interim CEO & Director Nik Jhangiani attributed the expected H2 acceleration to sharper commercial execution, a focus on RTDs, and broader portfolio work. He quantified the EBIT impact from the Ghana and Seychelles disposals at approximately $15 million for fiscal 2026 and noted that capitalized finance costs are expected to normalize after a prior period adjustment.

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Simon Hales's questions to British American Tobacco (BTI) leadership

Question · H1 2025

Simon Hales from Citi inquired about the early consumer feedback and performance of the GloHilo launch in Japan, the momentum of VeloPlus in the U.S. amid competitor activity, and sought clarification on the costs and savings of the 'Fit to Win' program.

Answer

CEO Tadeu Marroco highlighted positive consumer feedback for GloHilo in Japan, noting its premium positioning and a 1.5% share gain in Sendai. He also affirmed VeloPlus's strong U.S. momentum and high consumer retention. CFO Soraya Benchikh clarified that the 'Fit to Win' program's costs are included in 2025 guidance, with the £500 million in savings being an annualized figure by 2028, part of which will be reinvested for growth.

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