Trevor Stirling

Trevor Stirling presented a comprehensive analysis of the 2026 margin outlook, considering improved volume momentum, FIFA World Cup activation, COGS outlook (H1 vs. H2 pressure), disciplined A&P spend, and solid price mix, asking if his positive reading was accurate.

Answer

CEO Michel Doukeris and CFO Fernando Tennenbaum affirmed that structural opportunities exist for further margin expansion, driven by efficiency, premium brands, and an efficient operating model. Fernando Tennenbaum confirmed expectations of more COGS pressure in H1 due to FX hedges from the previous year, and a concentration of sales and marketing investments in Q2 and Q3 for the World Cup, but reiterated confidence in long-term value creation.

Trevor Stirling asked for the margin outlook for 2026, considering the 100 basis points expansion in 2025 despite volume challenges, a more positive volume outlook for 2026 (due to momentum and the FIFA World Cup), a similar COGS outlook with H1 pressure, increased but disciplined A&P spend, and solid price mix.

Answer

CFO Fernando Tennenbaum concurred with the comprehensive analysis, stating that AB InBev structurally sees opportunities for further margin expansion, especially in more 'normal' cost dynamic years like 2025 and expected for 2026. He noted that COGS would likely face more pressure in H1 2026 due to FX curves from the previous year, with easier comps in H2. Sales and marketing investments would be concentrated in Q2 and Q3 due to the World Cup. He emphasized that fundamental drivers like iconic mega brands, global footprint, leadership positions, an efficient operating model, and financial discipline continue to provide room for margin improvement.

Trevor Stirling asked a big-picture question about whether the trend of younger consumers drinking less alcohol, observed in the U.S., is also emerging in key developing markets like Mexico, Brazil, and Colombia.

Answer

CEO Michel Doukeris acknowledged that participation among the youngest cohorts is slightly lower globally, partly due to a delayed social start for the 'COVID generation,' but he sees behavior normalizing as they age. He also noted stronger participation among older cohorts and emphasized that the 'balanced choices' portfolio, including non-alcoholic options, is designed to resonate with these evolving consumer trends.

Trevor Stirling asked about the key factors that would determine performance at the high or low end of the 4-8% organic EBITDA growth guidance for 2025. He also sought to confirm the key drivers for 2025 cash flow, including EBITDA growth, lower interest, and neutral working capital.

Answer

CEO Michel Doukeris stated it was too early to specify factors for the guidance range but expressed confidence in delivering within it, citing a consistent track record. CFO Fernando Tennenbaum confirmed the cash flow drivers, noting that organic EBITDA growth, a more normalized working capital cycle, and a stable outlook for other items should continue to generate strong cash flow.

Trevor Stirling from Bernstein asked for an update on Bud Light's performance in the U.S., noting it seemed unresponsive to investment. He also asked what factors could push second-half EBITDA growth to the high or low end of the guidance range.

Answer

CEO Michel Doukeris stated that Bud Light's performance is stabilizing, with improving brand health indicators, and noted that key marketing activations are concentrated in the second half with the NFL season. CFO Fernando Tennenbaum listed H2 factors as continued momentum in LatAm and Africa, potential FX headwinds, and a heavier Q3 marketing spend for the 'summer of sports,' which could affect quarterly phasing but not the full-year outlook.

Trevor Stirling from Bernstein asked for specifics on the US route-to-market transformation and questioned what management sees as the next major global growth brand for Diageo.

Answer

Interim CEO & Director Nik Jhangiani described the US route-to-market changes as adding incremental, upskilled sales resources focused on helping distribution partners drive shopper execution. Regarding the next growth engine, he stated the focus is on unlocking potential across the entire portfolio—including malts and tequila—rather than relying on a single brand, with a sharpened strategy to be shared later.