The Volume Inflection Survives a Clean Comparison, But China Halves and the Half-Year Guide Never Moved

Results vs. Consensus

AB InBev is followed on an organic basis, meaning constant currency and constant scope, and the compiled consensus the shares trade against is expressed that way. The reported-dollar figures matter for the balance sheet and for the per-share arithmetic, but the scorecard the sell side keeps is the organic one. On that scorecard the quarter beat on all four tracked lines, by less than the first quarter did, and with a materially different composition underneath.

Q2 2026 Scorecard

The volume beat is the thinnest of the four. Consensus had already moved to 0.7% after the first quarter, so 0.9% clears a bar that had been raised, not the disbelieving bar of three months ago. The EBITDA beat, at 120 basis points, is less than half the 270 the first quarter delivered, and the company-compiled range around that consensus ran from 3.0% to 5.9%, meaning the print landed at the top of the range rather than outside it.

Year-over-Year Income Statement

Per-share growth of 23.4% is computed on unrounded amounts; the rounded $0.98 and $1.21 shown imply 23.5%. The organic column excludes currency translation and scope changes, so the organic and reported signs differ on cost lines, where an organic increase in expense is shown as a negative.

The 123.8% jump in reported profit is not an operating event. Non-underlying net finance income swung from an expense of $234M to income of $1,402M, a $1,636M movement the company attributes to mark-to-market gains on the derivatives that hedge its share-based payment programmes and the shares issued in the Grupo Modelo and SAB combinations. Those derivatives gain when AB InBev's own share price rises, and the ADR entered the print up 32.5% year to date. Of the $2,075M increase in reported profit, $1,367M is non-underlying, so roughly two thirds of the headline is the company marking a position in itself.

Sequential Comparison

Half-Year Position

Half-year underlying EPS growth of 22.1% is the company's figure on unrounded amounts; the rounded $1.79 and $2.18 shown imply 21.8%.

Revenue

Organic revenue growth of 5.6% split into total volume of 0.9% and revenue per hectolitre of 4.2%. Both components decelerated slightly from the first quarter, and the composition inside the 4.2% is where the change sits. In the first quarter the premium tier did the work: above-core beer grew revenue 11%, Balanced Choices 17%, Beyond Beer 37%, and mainstream contributed almost nothing at 0.8%. This quarter that inverted at the margin. Above-core decelerated to 6.9%, Balanced Choices to 13%, and the megabrand aggregate to 6.2% from 8.2%, while mainstream accelerated to 2.7% on double-digit growth in Colombia and high-single-digit growth in Peru and Ecuador.

Mainstream growth is good news for volume and mildly bad news for mix, and that trade shows up directly in the 30 basis point deceleration in revenue per hectolitre. It is the right trade to make in Latin America, where the per-capita opportunity is real and where the company grew Colombian volumes low-teens and Ecuadorian volumes in the mid-twenties. But it does mean the "structural mix" argument management made in May is running at a slower rate than it was, and revenue per hectolitre at 4.2% against management's stated inflation of roughly 3% to 3.5% leaves less than a point of pure mix on top rather than the full point to point and a half the first quarter produced.

Reported revenue grew 11.0% against organic at 5.6%. Translation supplied $822M and scope removed $6M, so the entire 540 basis point gap is currency.

Margins

Gross margin expanded 99 basis points organically to 57.5%, an acceleration on the first quarter's 76, and this time the gain was not entirely given back below the line. Organic SG&A rose 6.5% against revenue at 5.6%, and other operating income fell 7.9%, but the drag was smaller than the gross-margin gain and normalized EBITDA margin expanded 4 basis points. It is a trivial number in isolation. It matters because it is the first organic margin expansion in the two quarters we have covered, after a 4Q25 that contracted 10bps, and because it came in the quarter management had explicitly pre-announced as the heaviest for marketing spend.

"EBITDA increased by 5.8% with flattish margins as overhead management enabled increased sales and marketing investment and offset transactional FX headwinds."
— AB InBev, Q2 2026 results release

The spend was real. Sales and marketing investment rose 9% organically in the first half against revenue at 5.7%, and the trailing-twelve-month figure now stands at $7.9 billion. Absorbing a 9% marketing step-up, a transactional currency headwind and a 16.1% EBITDA decline in China while still expanding group margin is a genuine operating result, and it is the single most underweighted item in the quarter.

Below EBITDA the leverage widens further. Depreciation and amortisation, which the company does not disclose as a line but which is recoverable as normalized EBITDA less normalized EBIT, was $1,334M against $1,288M, growth of 3.6% while revenue grew 11.0%. That produced a 220 basis point spread between organic EBIT growth and organic EBITDA growth, up from 180 in the first quarter. Capital discipline is quietly becoming the second-largest source of earnings growth in this business after price-mix, and it is not in anybody's algorithm.

EPS

The per-share bridge is where the quarter needs the most care, and it reads better than the first quarter's did.

Each line in the bridge is independently rounded to the cent, so the components do not sum exactly to the subtotals.

Strip the currency and the quarter delivered $0.13 of the $0.23, or 12.9% growth. That is a meaningful step up from the first quarter's 8.8%, and it is the number to underwrite. Translation's share of the increase fell to 43% from 56%, and the tax line went from a tailwind to a headwind, costing $0.09 as the normalized rate rose from 25.3% to 26.1%. In other words the 23.4% headline is flattered, but it is flattered by less than the first quarter's 20.8% was, and the underlying rate accelerated by four points while the flattery shrank. That combination is the strongest single argument the bulls have coming out of this print.

The buyback contributed roughly 0.7 points via a share count down 13 million year over year, which remains modest for a company running a $6 billion programme and is a direct consequence of the pace discussed below.

Segment Performance

AB InBev reports six zones. The geographic inversion we flagged in May continued: Middle Americas is now 43.1% of group EBITDA against 40.6% in the first quarter, and Asia Pacific has fallen to 8.3% from 9.1%. Some of that shift is seasonal: North America and EMEA peak in the second quarter, while the second quarter is the southern-hemisphere winter that takes South America from 21.9% of group EBITDA in the first quarter to 14.9% here. The direction of the Middle Americas and Asia Pacific moves is structural and has been running for several years.

Global Export and Holding Companies carries central costs and prints a negative EBITDA by construction; its +7.9% organic figure means the loss narrowed by $21M organically, with scope and translation more than offsetting that to leave the reported loss $7M wider.

Middle Americas

The standout, and now unambiguously the company's centre of gravity. Volumes grew 4.7% and beer volumes 4.8%, revenue 9.8% and EBITDA 10.3% with 23 basis points of margin expansion on a base margin of 50.3%. Mexico delivered mid-single-digit revenue and high-single-digit EBITDA growth with margin expansion; Colombia posted record second-quarter volumes with high-teens revenue and high-teens EBITDA growth; Ecuador grew volumes in the mid-twenties to a second-quarter record; Peru grew volumes high-single-digit.

"You have maybe two realities in Middle Americas, it's a very large zone. I think that in Mexico, we see resilient consumer environment, but it's not one that is supporting the growth. The growth is really coming from the execution, the innovation, and the market share performance."
— Michel Doukeris, CEO

That distinction is worth holding onto. Management is explicitly saying the Mexican consumer is not the tailwind; share gain and portfolio architecture are. It also flagged a weather comparison working in the zone's favour this year after working against it last year, which is the honest way to characterise a 4.7% volume quarter in a region that produced records.

Assessment: at 30.6% of revenue and 43.1% of EBITDA with a 50.3% margin, this zone now determines the group's earnings algorithm. The risk in owning BUD has quietly become concentration in Mexico and the Andean markets rather than exposure to a moderating US beer category, and that reframing is not yet reflected in how the stock is discussed.

North America

Revenue grew 2.6% organically on volumes down 0.7%, but EBITDA grew only 0.5% and margin fell 74 basis points to 34.9%. Inside the zone, the United States grew revenue 2.7% with revenue per hectolitre up 3.3% and EBITDA up 0.1%; Canada grew revenue low-single-digit with volumes down low-single-digit while ranking as the number one share gainer in both beer and Beyond Beer.

The US acceleration deserves precision, because it is a phasing effect rather than a demand event. In the first quarter, sales to retailers grew 0.3% while sales to wholesalers fell 3.2%, a 350 basis point undershipment. This quarter, sales to wholesalers improved to (0.6)% while sales to retailers fell to (1.9)%, a 130 basis point overshipment. The revenue line therefore improved 160 basis points while the depletion line deteriorated 220, and revenue per hectolitre decelerated 110 basis points on top.

"Our STRs and STWs tend to converge on a full year basis."
— AB InBev, Q2 2026 results release

On a half-year basis shipments still trail depletions by 90 basis points, so roughly that much catch-up remains available across the back half. After that the US revenue line has to grow on depletions, and depletions are currently negative.

Assessment: the portfolio work is real and measurable. The company was the number one share gainer in total alcohol in both the quarter and the half, Michelob Ultra, Busch Light and Busch Light Apple were the top three volume share gainers in the industry, and Cutwater was the number one share gaining brand in the entire US spirits industry. None of that changes the fact that zone EBITDA grew 0.5% and margin fell 74 basis points. This is share gain inside a shrinking box, and the box shrank faster this quarter.

South America

The best margin story in the print: revenue up 7.6% on volumes up 1.4%, EBITDA up 14.3% with 171 basis points of margin expansion. Brazil, which is most of the zone, grew revenue 7.8% with revenue per hectolitre up 5.3%, beer volumes up 5.0% against a soft non-beer line down 4.4%, and EBITDA up 16.1% with 230 basis points of margin expansion. Premium and super-premium beer grew volumes in the mid-twenties and mainstream returned to roughly flat with estimated share gain. Argentina grew revenue mid-teens on low-single-digit beer volume growth.

Assessment: Brazilian beer returned to growth exactly as management said it would in May, and the margin expansion says the growth is not being bought. The non-beer soft-drink business remains the weak spot, down 4.4% against an easier comparison, and management attributed that to competitive price investment it has chosen not to match while its hedges roll off. That is a defensible call and a real drag; it cost the zone roughly a point of volume.

EMEA

Revenue grew 3.3% on volumes up 0.8%, but EBITDA grew only 1.7% and margin fell 49 basis points. Europe grew volumes and revenue low-single-digit with EBITDA declining low-single-digit as the top line was absorbed by marketing investment behind Roland-Garros, Wimbledon and the Corona and Stella Artois franchises. South Africa grew revenue and EBITDA mid-single-digit with margin expansion, though volumes fell low-single-digit and underperformed the industry. Nigeria declined low-single-digit on both volume and revenue.

Assessment: a zone that is being run for brand equity rather than current earnings. Europe declining on EBITDA while gaining share in five of six key markets is a deliberate trade, and the mega-platform activations behind it are the same playbook that produced the Michelob Ultra rollout. It is defensible but it is a second consecutive quarter of EBITDA underperforming revenue here, and the payback is not yet visible.

Asia Pacific

The quarter's failure. Volumes fell 4.7%, revenue 2.8%, and EBITDA 10.9% with margin down 269 basis points to 29.9%. China, which drives the zone, fell 9.7% on volume with revenue down 8.8% despite revenue per hectolitre up 1.0%, and EBITDA down 16.1%. South Korea was the offset, with volumes up low-teens against an easy shipment-phasing comparison and revenue up high-single-digit.

"All in all, I think that the industry in the quarter two, as we come to see the numbers consolidated, will be a high single-digit negative industry. In this context, our market share continued to improve. It is not positive yet."
— Michel Doukeris, CEO

The release puts the industry decline at mid-single digits and management put it at high-single-digit on the call, so the company underperformed a market that was itself falling. The 1.0% increase in revenue per hectolitre is the first positive Chinese price-mix reading in over a year, driven by a return to growth in super-premium and core-plus brands.

Assessment: the zone margin has now fallen 289 basis points in the first quarter and 269 in the second. Asia Pacific is 8.3% of group EBITDA, so the arithmetic damage is contained, but the strategic damage is not: this is the second consecutive quarter in which management has named execution, channel presence and segment participation as simultaneous problems and offered no milestone against any of them.

Key KPIs

Two readings sit inside this table. The premiumisation engine that carried the first quarter slowed across every tier except Beyond Beer, and the volume engine that had been dormant, mainstream beer, woke up. The net effect on revenue per hectolitre is mildly negative and the net effect on volume is positive, which is a reasonable trade at this point in the cycle but is not the mix-compounding story the first quarter told.

Key Topics & Management Commentary

Overall Management Tone: Management was confident and noticeably less defensive than in May, opening with the volume and cash flow lines rather than pre-empting an objection. The one genuine soft spot was China, where the posture shifted from framework-level reassurance to open concession, including an unprompted admission of dissatisfaction and a counterfactual that conceded no underlying improvement. Analyst pushback was unusually mild for a print of this profile, and the recurring line of questioning about second-half phasing produced the only new disclosure of the call.

1. The volume inflection survived a comparison without Easter

The single most important test this quarter was whether the first quarter's return to volume growth held once the Easter shift reversed. It did, at 0.9% total and 1.1% beer, and it held broadly: three of five zones grew volumes, with record second-quarter volumes in Mexico, Colombia and Ecuador, and Brazilian beer volumes returning to growth at 5.0%.

The honest qualification is that one calendar assist was replaced by another. The FIFA World Cup landed in June, and management sized its full-year contribution when pressed.

"Yes, we talked about this lift from the FIFA, which for us on average is around 0.25 percentage points in the range that you said, 0.20- 0.30 percentage point. I think that this is going to be the number that we will end up reaching this year."
— Michel Doukeris, CEO

A 25 basis point full-year benefit concentrated in June and July implies something larger than that inside the second quarter alone. Netting a June World Cup benefit against a March Easter reversal, the underlying run-rate is probably a few tenths below the reported 0.9%, which is the same conclusion we reached in May about the first quarter's 0.8%.

Assessment: two consecutive positive quarters against eight consecutive declines is a trend change even if each quarter carried a calendar assist. The third quarter, which laps a weak base and carries the July tail of the World Cup, will be the last quarter with an excuse available in either direction. We treat the volume pillar as confirmed but still unproven at a clean run-rate.

2. The US top line grew because shipments caught up, not because demand did

This is the quarter's most important disclosure and it is buried in the market commentary. US revenue accelerated 160 basis points to 2.7%, which reads as a recovery. The components say otherwise: shipments to wholesalers improved from (3.2)% to (0.6)% while depletions to retailers deteriorated from +0.3% to (1.9)%, and revenue per hectolitre decelerated from 4.4% to 3.3%.

Management framed the demand weakness as calendar and macro rather than share.

"I think starts with Easter. We all know, because we live here, that the weather is being and continue to be a challenge in the U.S., while we continue to transition from the La Niña to the El Niño. At the back end of the quarter, you had both FIFA but also July 4th that this quarter, flipped it to the quarter three versus where it was last year on the quarter two."
— Michel Doukeris, CEO

That accounting is fair and probably explains most of the 220 basis point swing in depletions. It also means the third quarter should recover some of it on the July 4 shift alone. The structural point stands regardless: the company promised in May that shipments and depletions would converge, and they did, which consumes the tailwind rather than creating one. On a half-year basis shipments still trail depletions by 90 basis points, so a modest amount of catch-up remains for the back half and then the line has to grow on consumption.

Assessment: the commitment management made in May was delivered exactly. The problem is what it reveals. Strip the shipment catch-up and the US business grew revenue on price alone against falling consumption, in a quarter when it was the number one share gainer in total alcohol. That is the definition of gaining share in a shrinking category.

3. China went from a drag to a hole

Chinese volumes fell 9.7% against 1.5% in the first quarter, revenue fell 8.8% against 3.9%, and EBITDA fell 16.1% against 11.8%. Management opened its answer with a concession rather than a defence.

"We are, of course, not happy with our performance in China. As I said on the remarks, there is more work to do, and we are working very hard on that."
— Michel Doukeris, CEO

It then walked through the industry data month by month, describing April as below the first quarter, May as "very weak" at "like 7 %+ negative," and June, on partial off-trade data, as worse than May, concluding that the quarter's industry decline would be high-single-digit. The release itself puts the industry at mid-single digits, so on management's own call commentary the company underperformed a worse market than the release describes.

The most revealing exchange came later, when a follow-up asked what the number would have looked like without the weather.

"I think that the China answer is since the market share improved sequentially, the result would still be like the quarter one, but is slightly better if it was not for the weather impact. Not positive yet."
— Michel Doukeris, CEO

Assessment: that answer concedes the case. Ex-weather, China would have delivered roughly what it delivered in the first quarter, which was itself a 1.5% volume decline and an 11.8% EBITDA decline. Nothing structural improved; the weather simply made a bad quarter worse. The one genuine positive is that revenue per hectolitre turned positive at 1.0% on super-premium and core-plus recovery, the first constructive price-mix reading in China in over a year.

4. Margin expanded after a fourth quarter that contracted

Organic EBITDA margin rose 4 basis points against a 15 basis point contraction in the first quarter and a 5 basis point contraction across the half. The size is trivial; the timing is not. This was the quarter management had pre-announced as carrying the heaviest marketing load of the year, and sales and marketing investment did rise 9% organically across the half to a trailing-twelve-month $7.9 billion.

The mechanism is visible in the gross line. Gross margin expanded 99 basis points organically to 57.5% because cost of sales grew 3.2% organically against revenue at 5.6%, and the company held SG&A growth to 6.5% while funding the marketing step-up out of overhead reduction.

Assessment: the interesting question is what happens when the marketing load lightens. Management has said the step-up is skewed to the second and third quarters, so the fourth should carry less. If gross margin holds anywhere near this rate into a lighter spend quarter, the group margin expansion could be considerably larger than 4 basis points, and nothing in the guide contemplates that.

5. Free cash flow more than doubled and nobody asked about it

Half-year free cash flow rose $2,526M to $3,881M, and cash flow from operating activities rose 93.8% to $5,241M. On a call that ran ten analyst turns, this was raised once, and the answer was a description of the strategy pillar rather than a bridge.

"We don't give a specific guidance on quarter-on-quarter or don't give a specific guidance on cash flow. If you add all the pieces of our outlook, you could expect us to continue to make improvements in our cash flow year-over-year."
— Fernando Tennenbaum, CFO

The company's own explanation in the release attributes the increase to "increased profit of the period and changes in working capital," and notes that both halves reflect seasonal working capital builds. The prior-year comparison is unusually low: HY25 operating cash flow of $2,704M was weak, so the 93.8% growth rate overstates the underlying step.

Assessment: a genuine improvement flattered by a soft base and by working capital timing that has not yet unwound. The number to hold judgement for is the full year, where FY25 free cash flow was $11.26 billion and the half-year figure represents 34% of it. Even on the unimproved FY25 base, that is a 6.6% free cash flow yield against the current market capitalisation, which is not how a stock at 20 times forward earnings usually screens.

6. Capital allocation rotated from buybacks into M&A, quietly

Net debt rose to $64.2 billion from $60.9 billion at year end even as leverage improved to 2.86 times from 3.27 a year earlier. The bridge the company gives is unambiguous: $3.8 billion of interest and taxes, $2.9 billion for the reacquisition of the 49.9% minority stake in the US metal-container plants, $0.5 billion for an 85% controlling stake in BeatBox, $2.6 billion of dividends across AB InBev, Ambev and minorities, and $1.8 billion of buybacks across AB InBev and Ambev, against a $0.9 billion currency benefit.

Against that, $6 billion buyback progress went from $1.4 billion at 1 May to $1.9 billion at 24 July. That is $500M in 84 days, or roughly $2.2 billion annualised, against $765M in the preceding 81 days. The pace stepped down 37% in the quarter that produced record free cash flow.

"We increased our dividend, executed share repurchases, and pursued selective value-accretive M&A while continuing to deleverage."
— Fernando Tennenbaum, CFO

Assessment: the metal-container buy-in is a defensible use of $2.9 billion, since it removes a minority claim on a vertically integrated asset the company already controls operationally. But the framing on the call, which presented optionality as an unambiguous good, elides the choice actually made. Given free cash flow of $3.9 billion and a 2.86 times leverage ratio against a stated 2.0 times optimum, the company deployed roughly $3.4 billion into acquisitions and $1.8 billion into its own equity across AB InBev and Ambev. Shareholders who own this for the deleveraging-plus-return story got neither this half.

7. The premiumisation engine slowed and the core picked up the slack

Every premium tier decelerated: megabrands to 6.2% from 8.2%, above-core beer to 6.9% from 11%, Balanced Choices to 13% from 17%. No-alcohol held at 27%. What accelerated was the bottom of the portfolio, with mainstream beer revenue up 2.7% against 0.8%, driven by double-digit Colombian growth and high-single-digit Peru and Ecuador.

Management's framing of revenue per hectolitre remained the same as in May, and it took the opportunity to restate the accounting convention that makes the metric work.

"Worth to remember that mix for us gets into the revenue per hectoliter. We don't add the mix to volume. Volume is purely hectoliter-base."
— Michel Doukeris, CEO

Assessment: this is a healthier composition for volume and a weaker one for the mix thesis. Mainstream growth in the Andean markets is exactly where the industry's incremental hectolitres come from, and it lifts a lower-margin part of the mix. The result is a revenue per hectolitre rate of 4.2% against roughly 3% to 3.5% inflation, which leaves under a point of structural mix rather than the point to point and a half the first quarter produced. The pillar is intact, not accelerating.

8. Beyond Beer accelerated to 44% and is now a top-two revenue contributor in the US

The only growth driver that accelerated. Group Beyond Beer revenue grew 44% against 37%, and in the US the portfolio grew revenue in the mid-seventies, with Cutwater growing triple digits and ranking as the second largest contributor by brand to total group revenue growth in the quarter. The company also closed the 85% BeatBox acquisition in the half.

Pressed on whether spirits companies scaling into ready-to-drink represent a competitive threat, management gave the most quotable answer of the call.

"To be very straightforward on your question, I think that we are the competition. Slightly different here. While in beer we've been dealing across all markets, with competitors, which we always welcome to the industry because they make us better, more innovative, and stronger in execution. In the spirits side, we are the competition."
— Michel Doukeris, CEO

On supply, management stated it is "not constrained on capacity" with "huge headroom for growth in distribution and in rate of sales."

Assessment: Cutwater ranking second by brand in group revenue contribution is the first hard sizing the company has given for Beyond Beer's materiality, and it is larger than we assumed. The absence of a disclosed revenue base for the segment still makes independent verification impossible, which is the same complaint we filed in May. The confidence on competitive positioning is earned; the confidence on supply is a claim we cannot check.

9. BEES marketplace got its first EBITDA sizing

Marketplace GMV grew 50% to $1.2 billion, and total BEES GMV grew 16% to $15.0 billion across 30 markets and more than 6 million customers, capturing 72% of company revenues through B2B digital channels. Asked directly how the incremental GMV converts to EBITDA, management gave a number for the first time.

Q: "But in terms of BEES marketplace, can you just help us understand how that incremental contribution to GMV benefits your EBITDA? Because obviously you had a sizable $400 million uplift in the period. If you could share some of the economics, that'd be very helpful."
— Chris Pitcher, Rothschild & Co Redburn

A: "As you know, I repeated this many times, the marketplace is profitable for us since day one. It was one of the conditions in which we decided to build the marketplace. It is incremental for us on the EBITDA side. I said that today is equivalent to a top 20 country in terms of size, in terms of EBITDA, is one of the top 10 contributors for EBITDA growth, is quickly escalating, let's say, its ability to grow and contribute more on the outlook."
— Michel Doukeris, CEO

Assessment: "a top 20 country in terms of EBITDA" and "one of the top 10 contributors for EBITDA growth" is the first quantitative anchor the company has offered on this asset in the periods we have followed. It is still a relative measure rather than a dollar figure, but it is bounded: a top-20 country's EBITDA in a business earning $23 billion a year is plausibly in the low hundreds of millions, and a top-10 growth contributor at a company adding roughly $1.1 billion of organic EBITDA a year is plausibly tens of millions of incremental EBITDA. Neither is large enough to reprice the stock today, and both are large enough to be worth tracking.

10. Currency helped again, by less, and the tax prop is gone

Translation supplied $0.10 of the $0.23 increase in underlying EPS and 5.4 points of the 11.0% reported revenue growth. Both are smaller shares than the first quarter's, when translation supplied $0.09 of a $0.16 increase. More importantly, the normalized effective tax rate rose to 26.1% from 25.3%, which put it inside the guided 26% to 28% band for the first time this year and cost $0.09 per share in the bridge.

Assessment: the earnings quality improved on both axes. Constant currency growth accelerated from 8.8% to 12.9% while the translation share of the increase fell from 56% to 43%, and the below-guide tax rate that flattered the first quarter reversed. The bear point about reported growth overstating the business is still true in the headline, and it is less true than it was.

11. The guide was reissued word for word, for the third consecutive release

All four outlook items are byte-identical to the May release and to February's: EBITDA growth "in line with our medium-term outlook of between 4-8%," net pension interest and accretion of $190M to $220M per quarter with an approximately 4% average gross debt coupon, a normalized effective tax rate of 26% to 28%, and net capital expenditure of $3.5 billion to $4.0 billion.

Half-year organic EBITDA growth is 5.6%, just below the 6.0% midpoint. The company weights roughly 52% of annual EBITDA into the second half, so the unchanged band implies second-half organic EBITDA growth of anywhere between 2.5% and 10.2%. That is not guidance at the end of July; it is a range wide enough to accommodate almost any outcome.

Assessment: our May note said a narrowing to the upper half of the band at the half year would move us to Outperform. It did not happen, and management was not asked to explain why. Two readings are available: either the band is deliberately conservative and the company intends to beat it quietly, or there are second-half offsets it has chosen not to size. The energy-cost disclosure discussed below suggests the second reading has at least some support.

12. Grading the commitments management made in May

Our May note closed with six specific forward commitments. Grading them is what separates a thesis from a series of reactions, so here is where each stands.

Assessment: three of six delivered, three did not. The two that failed are the two that carried the most weight in our May rating framework, which is why the rating does not move up despite an operationally stronger quarter.

Guidance & Outlook

The only new forward-looking content on the call came in response to a recurring line of questioning about first-half versus second-half phasing, which produced a disclosure the release does not contain.

"On transactional FX, it still holds true. We know that we had some headwinds, mostly in Mexico and Brazil in the first half comparing to the second half, this is true. On the other hand, probably something that has evolved a little bit is you saw a little bit more pressure in terms of energy, which sometimes is unhedged, and logistic expenses, which are rising on H2 a little bit."
— Fernando Tennenbaum, CFO

That is a new cost headwind, introduced without sizing, that partly consumes a tailwind management had promised in May. The conclusion was nonetheless unchanged.

"Overall, we expect a balanced year and within our outlook of 4%-8%."
— Fernando Tennenbaum, CFO

Implied second-half ramp: half-year organic EBITDA growth of 5.6% against a full-year band of 4% to 8%, with roughly 52% of annual EBITDA falling in the second half, implies second-half organic growth of 2.5% at the low end, 6.4% at the midpoint and 10.2% at the top. A "balanced year" in management's own words points to the middle of that.

Street at: the compiled twelve-month price targets published before the print averaged roughly 6% below where the shares closed on the reaction day, which is a Street that had not marked its targets to a 32.5% year-to-date move rather than a Street with a differentiated view of the fundamentals.

Guidance style: unusually and deliberately uninformative. Three consecutive releases with identical wording, at a company that has now delivered 5.3% and 5.8% organic EBITDA growth in consecutive quarters, is a choice. Our reading is that the band is being held wide because China is unforecastable, not because the rest of the business is.

Analyst Q&A Highlights

Ten analysts asked questions. The distribution is itself informative: China drew two separate turns, second-half phasing drew two, and nobody asked why the guide was not narrowed or what the $2.9 billion metal-container buy-in earns.

Where the strategy stands after five years of resetting the business

The opening question invited management to characterise the company's position in its own arc, and the answer was the clearest statement of phase change we have heard from this team. Management described the last five years as a period of debt reduction and capability building, and this year as the point at which those investments convert into growth.

Q: "You've been executing your growth strategy for about five years now, and we're seeing both pretty healthy revenue per hectoliter growth and return to positive volume growth. How do you assess where ABI is in that journey today? As you see the growth contribution from the mega brands, premiumization, low, no alcohol, beyond beer all coming through, does this give you greater confidence in the durability and consistency of growth from here?"
— Edward Mundy, Jefferies

A: "Continuation of the strategy execution, but moving from a moment where we were resetting the business, reducing debt, organizing the capabilities to growth, to a moment that we see more the reignition of the volume growth and the acceleration of our strategy and growth levers as we move forward."
— Michel Doukeris, CEO

Assessment: this is a company declaring the turnaround over and the compounding phase begun. It is a claim about the next five years, not the last quarter, and the only evidence it can offer today is two quarters of volume growth and a leverage ratio still 0.86 turns above its own stated optimum. Worth noting for what it implies about capital allocation: a management team that believes it is past the reset has less reason to prioritise deleveraging.

What the growing cash flow gets spent on

The follow-up asked directly whether increased flexibility goes to organic growth and bolt-ons or to higher shareholder returns. The answer declined to choose, describing capital allocation as dynamic and pointing to the fact that all four uses happened simultaneously in the half.

Q: "Over the last two years, there's been a big focus on deleveraging and strengthening the balance sheet. As you think about the next few years, will this increase capital allocation flexibility be aimed at accelerating organic growth in bolt-ons, or do you think there's scope for progressively higher cash returns to shareholders in the fullness of time?"
— Edward Mundy, Jefferies

A: "Our capital allocation is dynamic, as we said. At any given moment in time, the goal is always to create value. With more cash flow, this task become easier because you have more optionality."
— Fernando Tennenbaum, CFO

Assessment: a non-answer, and the actual half-year allocation answers it anyway. Of the cash deployed, $3.4 billion went to acquisitions and roughly $1.8 billion to buybacks across AB InBev and Ambev. Investors who own this for a rising cash return should read the actions rather than the framework.

Whether the World Cup lift matched the 20 to 30 basis point promise

A direct test of a number management gave last quarter, and the answer confirmed it, with a longer-dated claim attached about brand equity outliving the tournament. The most concrete item was the Michelob Ultra rollout across Latin America, which management called the most durable outcome of the spend.

Q: "You said, Michel, that from the World Cup, you expected, I think, 20 -3 0 basis points of full-year volume benefit. Now that the World Cup is behind us, is that roughly what you saw? Can you comment on how you think your World Cup activations may benefit your brand and your business longer term?"
— Mitch Collett, Deutsche Bank

A: "Despite of the fact of the size that Michelob ULTRA has in the U.S. and is number one share gainer in the U.S., which brings a lot of growth to the brand, 40% of what the brand grew on the second quarter came from markets outside of the U.S."
— Michel Doukeris, CEO

Assessment: management hit its own number, which is worth crediting, and the 40% figure is the useful disclosure. A brand that was confined to North America and the Caribbean now grows almost half its incremental volume elsewhere, and it is a core-plus product, which means the geographic expansion is mix-accretive. That is a better answer than the tournament arithmetic the question asked for.

First-half versus second-half phasing, and a cost headwind that was not in the release

The dominant recurring topic of the call, raised in two separate turns. Management held the line that the year is balanced and inside the 4% to 8% band, then volunteered a second-half cost pressure that the written release does not mention.

Q: "One thing you didn't mention was the transactional FX hedges and how those change from being negative in the first half, being positive in the second half. Is that still relevant in terms of as we look at the phasing of the EBITDA growth across the year?"
— Multiple analysts incl. Trevor Stirling, Bernstein; Mitch Collett, Deutsche Bank

A: "Probably what changes lightly is that you see some of these unhedged energies becoming a little bit higher, which is going to impact more the second half." ... "You have the FX, which was more of a headwind in the first half, being more supportive in the second half. Puts and takes, the balance H1 and H2 still holds."
— Fernando Tennenbaum, CFO

Assessment: the only genuinely new forward-looking information disclosed on the call, and it cuts against the guide. A transactional currency tailwind that management promised in May is now partly offset by an unhedged energy and logistics cost it has declined to size. "Puts and takes" is doing a lot of work in that sentence, and it is the strongest available explanation for why the 4% to 8% band was not narrowed.

China: what the number would have been without the weather

Two separate turns pressed on China, and the second produced the most consequential admission of the call. The first asked for the industry-versus-company decomposition and the pricing inflection; the second asked what the volume line would have looked like on neutral weather.

Q: "Sorry to come back on China and weather. If the volumes were almost down 10%, is it in any way possible to say what growth could have been under the assumption of a more neutral impact from the weather? Is that a few points on growth or is it far less?"
— Multiple analysts incl. Robert Vos, ABN AMRO ODDO; Chris Carey, Wells Fargo

A: "I think that the China answer is since the market share improved sequentially, the result would still be like the quarter one, but is slightly better if it was not for the weather impact. Not positive yet. That's why we have to do more, and we have a lot of work to do."
— Michel Doukeris, CEO

Assessment: the honesty is creditable and the content is bad. Management's own ex-weather counterfactual is a repeat of a quarter that saw volumes fall 1.5% and EBITDA fall 11.8%. Weather turned a bad quarter into a terrible one; it did not create the problem. This is the second consecutive quarter with no milestone, no timeline for the in-home channel build, and no sizing of the incremental investment.

Cutting through the calendar noise in the US beer market

A request for management's own scorecard on the US, and the answer catalogued the distortions before pivoting to portfolio architecture. Management named Easter, weather, the La Niña to El Niño transition, gas prices and the July 4 shift into the third quarter, then declined to grade itself.

Q: "When you kind of cut through it all, how do you assess the strength of the U.S. beer market in Q2 versus Q1 versus last year? Anything that comes out? Then more importantly, how do you look at your business? Maybe kind of give a scorecard to how you're doing in the market, which is certainly better than it has been in the past."
— Rob Ottenstein, Evercore ISI

A: "We see that the quarter one started with a good mood for consumers and a stabilization that further deteriorated a little bit on the quarter two because of inflation that accelerated gas prices and everything that we are seeing around the country. That's the part that we cannot control, the calendar, the economy."
— Michel Doukeris, CEO

Assessment: management confirmed the US consumer got worse through the quarter, which is the honest read of depletions falling from +0.3% to (1.9)%. The portfolio answer that followed is real and verifiable: number one share gainer in total alcohol, the top three volume share gainers in beer, the number one share gainer in spirits. What the answer never addresses is the zone EBITDA line, which grew 0.5% with margin down 74 basis points.

Whether scaling spirits companies threaten the ready-to-drink position

The competitive-threat question on ready-to-drink, and the most assertive answer of the call. Management inverted the premise, arguing that in spirits-based RTD it is the incumbent rather than the challenger, and pointed to a brand approaching $1 billion that did not exist seven years ago.

Q: "You're currently leading the spirits RTD segments. How do you assess the risk of increased competition from spirits companies as they scale up production and distribution and potentially try to become more aggressive on price? And to some extent, what kind of real competitive advantage does brands like Cutwater and NÜTRL have to fend off new competitors coming from spirits producer?"
— Olivier Nicolaï, Goldman Sachs

A: "To be very straightforward on your question, I think that we are the competition. Slightly different here." ... "In the spirits side, we are the competition." ... "We are winning with consumers because we are providing a superior proposition, not only with Cutwater, but with NÜTRL."
— Michel Doukeris, CEO

Assessment: the confidence is supported by the data. Cutwater grew revenue in triple digits, was the number one share gaining brand in the entire US spirits industry, and was the second largest brand-level contributor to total group revenue growth in the quarter. The unaddressed part of the question is price. Management answered on product superiority and distribution, and said nothing about what happens to segment margins if better-capitalised spirits houses decide to buy share.

What They're NOT Saying

1. Why the 4% to 8% band was not narrowed at the half year: asked indirectly twice through the phasing questions and never put directly. Half-year organic EBITDA growth of 5.6% against a band implying a 2.5% to 10.2% second half is uninformative this late, and management volunteered no view on where inside the band the year lands.
2. The size of the second-half energy and logistics cost pressure: disclosed on the call as a new headwind that partly offsets the promised transactional currency tailwind, with no dollars, no basis points and no indication of how much is already in the guide.
3. Any milestone or timeline for China: second consecutive quarter with none. No target for a return to volume growth, no date for the in-home channel build, and no sizing of the incremental investment behind a business whose EBITDA has now fallen 11.8% and 16.1% in consecutive quarters.
4. What the $2.9 billion metal-container buy-in earns: the largest single capital deployment of the half, disclosed in the net debt bridge and never mentioned in the prepared remarks or asked about in Q&A. No return on capital, no EBITDA contribution, no minority-interest saving quantified.
5. A completion date for the $6 billion buyback: still none, now three quarters after the programme was announced. At the most recent pace of roughly $500M a quarter, the programme runs into 2028, and management continues to decline to characterise the pace as a run rate.
6. The absolute size of Beyond Beer, no-alcohol or the BEES marketplace: all three disclosed only as growth rates or relative comparisons. The BEES marketplace answer, "a top 20 country in terms of EBITDA," is the closest thing to a sizing the company has ever given and is still a comparison rather than a number.
7. Where US wholesaler inventory now sits: after a 350 basis point undershipment in the first quarter and a 130 basis point overshipment in the second, the company reasserted that the two converge over a year without disclosing the resulting inventory position. On a half-year basis shipments still trail depletions by 90 basis points.
8. Any second-half or full-year free cash flow framing: after a half in which free cash flow nearly tripled, the CFO explicitly declined to guide it, offering only that year-over-year improvement should continue. For the metric that most directly determines the pace of both deleveraging and the buyback, that is a conspicuous silence.

Market Reaction

• Pre-print setup: BUD closed at $84.87 on 29 July, up 32.5% year to date against the S&P 500's 6.9%, up 27.5% over trailing twelve months and up 3.0% over the trailing thirty days. The 52-week closing range entering the print was $57.10 to $85.09, so the shares sat within $0.22 of their closing high.
• Reaction session: the release landed at 7:00 a.m. CET, before the US open. The ADR opened at $83.92, traded a range of $83.82 to $86.17, and closed at $86.14, up 1.5% or $1.27, a new 52-week closing high.
• Volume: 3.3 million shares against a thirty-day average of 2.1 million, or 1.6 times normal, against 3.1 times in May.
• Primary listing: the Brussels line fell as much as 3.8% intraday to EUR 71.08 before recovering to close at EUR 73.76, down 0.19%. With the euro up 0.53% against the dollar on the session, the local close plus currency accounts for roughly a third of a point of the ADR's move; the remaining point was added after Euronext closed.
• Benchmark and peers: the S&P 500 rose 1.66% and the consumer staples sector fell 2.16%. Among peers, Coca-Cola Europacific rose 0.55% and Heineken's ADR 0.26%, while Diageo's ADR fell 0.11%, Coca-Cola 0.66%, Boston Beer 0.94%, Constellation Brands 1.04% and Molson Coors 2.83%.

The shape of this reaction is the near-inverse of May's. In May an 8.7% single-session gain repriced the growth algorithm and dragged the whole brewer complex with it. This time the stock added 1.5% on a day the index added 1.66%, so on a relative basis the print was worth nothing against the tape. Volume at 1.6 times normal, against 3.1 times in May, says the same thing: this was a confirmation, not a repricing.

The two-stage move is the more interesting artefact. Europe traded the China line and sold the stock nearly 4% intraday. The US session, which had a full trading day after Brussels closed, bought it back and took the ADR to a closing high. The most economical explanation is that the European book was positioned for the guidance narrowing that did not arrive and reacted to the Asia Pacific numbers, while the US book weighted the volume, margin and free cash flow lines. Both are defensible readings of the same release, which is usually what a stock at fair value looks like.

The peer tape rules out a category read-through. Molson Coors fell 2.83% and the staples sector fell 2.16% on a strongly positive index day, so no part of BUD's move was the market repricing beer demand. Set against a stock that entered the print up 32.5% year to date against an index up 6.9%, and exited it above its own 52-week closing high, a 1.5% gain on a 1.66% tape is the market saying the print was already in the price.

Street Perspective

Debate: Is the volume recovery durable or serially calendar-assisted?

Bull view: two consecutive positive quarters after eight consecutive declines, with beer volumes outgrowing total in both, record second-quarter volumes in three markets and Brazilian beer returning to 5.0% growth. Easter helped the first quarter and the World Cup helped the second, but a company that grows through two different calendar setups is showing a portfolio effect rather than a calendar effect.

Bear view: every quarter of this recovery has had an identifiable assist, and the company has now spent both of them. The third quarter faces the July tail of the World Cup, which flatters it again, and the fourth faces a clean comparison with a Chinese business declining at 10% and a US consumer whose depletions have gone negative. The first genuinely unassisted print is not until the fourth quarter.

Our take: the bull has the better of it now, which is a change from our May position. Holding 0.9% while giving back Easter, in a quarter when Asia Pacific removed roughly three quarters of a point of volume from the group on its own, is a harder result than the first quarter's 0.8%. The fourth-quarter test still matters, but the burden of proof has shifted to the bear.

Debate: Does the free cash flow step-change justify a re-rating?

Bull view: half-year free cash flow nearly tripled to $3.9 billion, operating cash conversion is improving structurally as capital expenditure runs below depreciation, and the FY25 base of $11.3 billion already implies a 6.6% free cash flow yield at the current price. A staples business generating that yield while growing constant-currency earnings at 12.9% is mispriced.

Bear view: the comparison base was unusually weak, the increase is substantially working capital that has not unwound, and the CFO declined to guide the metric at all. More to the point, the cash was already spent: $3.4 billion on acquisitions and $2.6 billion on dividends, with net debt rising $3.3 billion and the buyback slowing 37%. Cash flow that does not reach shareholders is not a re-rating catalyst.

Our take: the bear is right about this half and the bull may be right about the trajectory. The resolution is the fourth-quarter cash flow statement, which is when working capital normally unwinds and when we will see whether the second half funds a faster buyback or another acquisition. Until then the free cash flow line is an argument, not evidence.

Debate: How much is China worth as a call option?

Bull view: Asia Pacific is only 8.3% of group EBITDA, so the arithmetic damage is small and shrinking. Chinese revenue per hectolitre turned positive for the first time in over a year, super-premium and core-plus returned to growth, and market share improved sequentially. A business this depressed inside a company this diversified is free optionality on any Chinese consumer recovery.

Bear view: the option premium is being paid every quarter. Zone margin has fallen 289 and 269 basis points in consecutive quarters, and the company is investing into a market where it underperformed a mid-to-high-single-digit industry decline. Management's own counterfactual says nothing structural improved. An option with no expiry date, a rising premium and a management team that will not name a milestone is not free.

Our take: the bear has this one and the market appears to agree, judging by the European session's reaction. The relevant question is not what China is worth if it recovers but how long the board tolerates a zone that consumes investment while losing share in a falling market. That question has not been asked on a call yet, and it should be.

Model Update

Our May initiation set FY26 underlying EPS at $4.15 and FY27 at $4.50. The half year came in ahead of the run-rate that implied, so both move up. The driver set below shows what changed and why.

FY27 moves to $4.75 from $4.50, which applies roughly 8% to 9% constant-currency growth to the revised FY26 base and assumes zero contribution from translation. That last assumption is the widest source of error in the whole model in both directions: FY25 delivered 6.0% in dollars against 9.4% constant currency, and the first half of FY26 ran the other way by 11 points.

Valuation at the 30 July close

Enterprise value does not add back minority interests, principally in Ambev, which took $333M of second-quarter profit, so it understates the full claim on consolidated EBITDA. The multiples are comparable to how the sell side conventionally quotes AB InBev but are not a strict enterprise-value calculation.

Valuation conclusion. At 19.8 times our revised FY26 estimate and 18.1 times FY27, the shares are fuller than they were in May on a raised numerator. The raise is real: FY26 goes up 4.8% while the price went up 7.2% from the 5 May close, so the multiple expanded again rather than the estimate catching up to the price. Applying 19 to 20 times to the FY27 estimate of $4.75 gives a twelve-month fair value of $90 to $95. From $86.14 that implies a 4.5% to 10.3% price return, or 7.6% to 13.4% including the 3.1% cash return.

Two things about that range deserve emphasis. First, the shares are now inside the $86 to $90 fair value band we published in May, having entered it during the reaction session, so the easy part of the initiation call has been collected. Second, the cash return leg has weakened rather than strengthened: 3.1% today against 3.5% in May, because the price rose and the buyback pace fell. A deleveraging story that is not deleveraging, at 2.86 times against a stated 2.0 times optimum, with a buyback running at roughly $2.2 billion annualised against a $6 billion authorisation, is not compounding the way the pillar assumed.

Thesis Scorecard Post-Earnings

The pillars below are the same seven established in May, graded against what this quarter's print and call revealed. Status tags carry the notation used in the standing thesis file.

Overall: the thesis is unchanged in structure and shifted in balance. The operating case strengthened where it matters most for the next four quarters, with volume holding through a clean comparison, margin expanding after a contracting fourth quarter and constant-currency earnings accelerating four points. The capital case weakened on every axis, with net debt up, leverage flat, the buyback slowing and $3.4 billion redirected into acquisitions. Two of the three bear points got worse and the third got better. Net, this is the same Hold with a better business inside it and a worse entry point around it.

Action: Hold. Our May note set two explicit rating triggers: a guidance narrowing to the upper half of the 4% to 8% band at the half year would move us to Outperform, and a further step down in China would move us the other way. The guide was reissued verbatim and China halved, so both fired against an upgrade even as the operating quarter was the better of the two we have covered. We stay at Hold on a raised estimate and a fuller multiple. The upgrade case now rests on the fourth quarter: a clean unassisted volume print, a fourth-quarter cash flow statement that funds a faster buyback rather than another acquisition, and any milestone at all on China would take us to Outperform. A third consecutive quarter of Chinese deterioration, or a full-year EBITDA outcome below the 6.0% band midpoint, would take the rating the other way.