Welcome to the Anheuser-Busch InBev's first quarter 2019 earnings conference call and webcast. Hosting the call today from AB InBev are Mr. Carlos Brito, Chief Executive Officer, and Mr. Felipe Dutra, Chief Financial and Solutions Officer. To access the slides accompanying today's call, please visit AB InBev's website now at www.ab-inbev.com and click on the investors tab and the result center page. Today's webcast will be available for on-demand playback later today. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your touch-tone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. If you should require operator assistance, please press star zero.
Some of the information provided during the conference call may contain statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. It is possible that AB InBev's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect AB InBev's future results, see risk factors in the company's latest 20-F filed with the Securities and Exchange Commission on the 22nd of March 2019. AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information. It is now my pleasure to turn the floor over to Mr. Carlos Brito.
Sir, you may begin.
Thank you, Maria, and good morning, good afternoon, everyone. Welcome to our first quarter 2019 earnings call. Today, I'll be taking you through the highlights of the first quarter, especially those of our two largest markets, the U.S. and Brazil. I'll then discuss the exploration of a potential listing of our minority stake of our Asia Pacific business before handing over to Felipe, who will discuss our financials. We'll then be happy to take your questions. Let's start with the highlights. 2019 is off to a strong start as we accelerate our momentum from the fourth quarter last year into a solid first-quarter performance. We delivered healthy, broad-based top and bottom-line growth, with particularly good results from Brazil, Colombia, Europe, Nigeria, and the U.S.
These results were delivered despite the unfavorable timing of a late Easter holiday, which is an important consumption occasion in markets such as the U.S., Mexico, Colombia, South Africa, and Australia. The benefits of this holiday will fall in the second quarter of this year. As such, we expect this effect to normalize on a half-year basis. Additionally, some of our main markets, especially Argentina and South Africa, continue to suffer from difficult macroeconomic conditions that subdue consumers' confidence and spending patterns. We also face some commodity and currency headwinds as expected, mainly due to higher aluminum and barley prices. That being said, we have a lot to be proud of this quarter. We're very pleased with our results from Brazil, both in beer and non-beer. We have outperformed the market with double-digit volume growth. We also grew volume across all segments of our beer portfolio.
This strong performance was supported by the later timing of Carnival, resulting in a favorable comparable. In the U.S., our top-line performance continues to improve as a result of our evolved commercial strategy, with an emphasis on premiumization and innovation. This quarter, we had our best market share trend performance in the past 25 quarters, with an estimated market share decrease of just 10 basis points. Premiumization remains the key focus for our global business, fueling top and bottom-line growth with strong results from our The High End and global brand portfolio. The High End grew revenue by almost 20%, while our global brands, Budweiser, Stella Artois, and Corona, grew revenue by 14% outside of their respective home markets. As we have stated previously, sustainability is our business, and it's good business.
We're proud to progress toward our 2025 sustainability goals, reducing carbon emissions across our value chain by 4.5% over the past year. Let me now take you through some of the numbers from the quarter. In the first quarter, our revenues grew by 5.9% with revenue per hectoliter growth of 4.6%. Total volumes grew by 1.3%. On-beer volumes grew by 1%, with especially strong contributions from markets such as Brazil, Nigeria, Europe, Peru, and Colombia, partially offset by South Africa, Argentina, and the later timing of the Easter holiday in many of our markets. Non-beer volumes increased by 4.9%, predominantly driven by Brazil. Solid top-line performance, coupled with operating leverage, favorable brand mix, and continued cost discipline, resulted in EBITDA growth of 8.2% and margin expansion of nearly 90 basis points.
Our underlying EPS decreased by $0.06 to $0.79 as our strong performance was more than offset by the negative impact of unfavorable currency translation effects. Our global brands continue to lead our growth, with global revenue up by 8.5% and by 14% outside of the brands' home markets, where they typically command a premium price point. Budweiser's role in our premium portfolio is to offer consumers a trade-off from core beer. It had great results in the first quarter, with revenue growing by more than 15% outside of the U.S. The success was driven by especially strong performances in China, Brazil, the U.K., and Colombia. Stella Artois also delivered a solid performance, with revenue growing by nearly 8% in the quarter. The growth was from a broad group of markets as the brand experienced double-digit revenue growth in more than 30 countries, including Brazil, South Korea, and Mexico.
Corona, our most premium global brand, sustained its strong momentum from last year, with revenue up 15.7% outside of its home country of Mexico. This growth was led by Brazil, Colombia, the U.K., China, and Canada. I'd also like to update you on our 2025 sustainability goals. We announced these goals in the first quarter of 2018 and have come a long way in the past year. In only 12 months, we've made strong progress against these commitments. We reduced our carbon footprint by 4.5% across our value chain, reached an average water usage of under three hectoliters per hectoliter of beer we brew, and contracted approximately 50% of our purchased electricity from renewable sources. We continue to put strong programs and partnerships in place.
We launched the 100+ Accelerator, piloting 21 companies across the world to help solve our biggest sustainability challenges, and have already received multiple industry awards and recognitions. We're also leveraging technology to accelerate our progress. We have successfully tested electric vehicles to be added to our fleets in Mexico, Colombia, and the U.S. We recognize there's a long way to go to reach these ambitious goals, but we're very excited about the progress we've made to date in close alignment with the United Nations Sustainable Development Goals, SDGs. I'd like to highlight the performance of some of our major markets. Further details can be found in our first quarter 2019 results press release, published earlier today. Additionally, I'll provide more detail on the performance of the U.S. and Brazil in the quarter shortly, given their improved commercial results as well as their relevance to our total company's performance.
In Mexico, revenue and EBITDA increased as a result of growth in our revenue per hectoliter and enhanced by meaningful contribution from our premium portfolio, led by Michelob ULTRA and Stella Artois. Our volumes were lower versus last year, purely driven by the later timing of Easter. This effect which we expect to normalize on a half-year basis. Despite this phasing effect, we estimate we outperformed the industry in the first three months of the year. We're also very excited to have signed a contract with OXXO, the largest retailer in Mexico, to offer a superior portfolio of beers in over 17,000 stores across the country. The rollout is underway, and will cover OXXO's entire Mexican footprint by the end of 2022. This important commercial alliance enables us to reach more consumers in more occasions and further grows the beer category in Mexico.
In Colombia, we grew volumes by low single digits despite the negative impact from Easter timing. Revenue per hectoliter increased by high single digits, fueled by positive brand mix as our global brand portfolio grew over 60%. Solid top-line growth together with continued synergy capture resulted in double-digit EBITDA growth. South Africa had another challenging quarter, with the later Easter resulting in a tough comparable and further exacerbated by a persistently challenging macroeconomic environment. This environment is impacting consumer demand and driving the continued segment mix shift out of the core, which is more elastic and where we over-index. While we still under-index in the growing premium segment, we gained more than six percentage points of market share in the segment versus the first quarter of last year. In China, we continued to drive premiumization, which resulted in healthy brand mix and a solid financial performance.
Although the overall volume performance was affected by the earlier timing of the Chinese New Year, Budweiser continued to grow across China by mid-single digits. Our super premium portfolio, led by Corona, Franziskaner, and Hoegaarden, once again delivered double-digit growth. We continue to improve our U.S. performance through an evolved commercial strategy focused on leveraging our full portfolio, especially through premiumization and innovation. Our market share trend performance is heading in the right direction as we invest behind the sustained momentum of our above core portfolio and the stabilization of our core and value brands. We have improved our share trend from losing 70 basis points in full year 2017 to 45 basis points in the first half of last year and 35 basis points in the second half of last year. During the first quarter of this year, we continued to improve the trend, getting to minus 10 basis points.
Nine of our brands were among the top 15 market share gainers in the country in the first quarter, according to IRI, reinforcing our commitment to a portfolio strategy. This was led by Michelob ULTRA as the top share gain in the U.S. once again, now holding that position for more than four consecutive years. In order to do so, it's vital that we listen closely to our consumers and we use the insights that we gain to power our portfolio of brands. It's clear that consumers are demanding more transparency in the food and beverage they purchase. Thus, the beer industry needs to provide such transparency to evolve with consumer preferences.
As a category leader, we're spearheading this effort by clearly labeling the ingredients on the packaging of the number 1 selling beer in the United States, Bud Light. This is a long-term play for the benefit of not just the brand, but the entire beer category. Bud Light will continue providing consumers with the transparency they demand, and you can expect to see this approach with our other brands down the line. Furthermore, taking a regional approach is a key component of our U.S. strategy. The beer market in the U.S. is large and diverse, and the consumer environment differs quite a bit from one region to the next. Therefore, the closer we get to the consumer, the more we can leverage the effectiveness of our wholesaler network to better meet consumer needs.
Big and powerful brands are still very relevant in the lives of our consumers, as long as they remain close and speak to them. Examples of successful executions at a local level include the Bud Light Philadelphia NFL campaign, Philly Philly, the Bud Light Cleveland Browns Victory Fridges, and the Michelob ULTRA New York City Marathon. We'll continue to invest behind local community-relevant campaigns, which go beyond traditional media by leveraging social conversations and delivering best-in-class brand experiences. Innovation is another major driver of our improved performance in the U.S. We have revamped our approach to innovation by bringing consumers to the forefront and placing an emphasis on rapid test and learn pilots. This enables us to adapt ahead of national roll-outs, testing in a fast and small way. Once the concept is validated, we can then scale it up quickly and efficiently.
With our new, more nimble approach, we can speed up time to market to less than 100 days. Last year alone, we launched several new products such as Bud Light Orange, Budweiser Freedom Reserve, and Michelob ULTRA Pure Gold Organic. These new products contributed to half of the innovation volume for the entire U.S. beer category in 2018. In the first quarter of this year, we continued to lead the category. We have ventured into new segments, such as with Michelob ULTRA Pure Gold, as the first beer brand at scale to obtain organic certification from the USDA, and into new occasions, such as with Stella Artois Spritzer, which offers a refreshing alternative to wine. Furthermore, we're leveraging our global footprint, such as through the U.S. launch of Patagonia, a premium local brand from our portfolio in Argentina.
We identified an opportunity for this brand to meet consumer needs in the U.S. and acted with speed, getting the brand on the shelves in selected markets only 60 days after identifying the opportunity. In line with our culture, we're never completely satisfied with our results, and we acknowledge there's still work to be done in the U.S. However, we're seeing many encouraging signs that our evolved commercial strategy is delivering results. We firmly believe that we have the right people, portfolio, plans, and strategy in place to shape and lead future growth of the U.S. beer category. Now, I'd like to discuss our business in Brazil in a bit more detail. Brazil was a leader amongst all of our markets this quarter in both volume and revenue growth. We achieved double-digit growth in both beer and non-beer, outperforming their respective categories.
We're very pleased with the strong start of the year in which we grew volume across all segments of the industry. The favorable result was supported by the later timing of Carnival, as well as the lower industry weight of the value segment, even though we have not yet seen an increase in consumer disposable income. We continue to gain share in the growing premium segment, with our global brand portfolio growing by more than 50% and Corona more than doubling its volume since the first quarter of 2018. Our local premium brands also contributed meaningfully to our results, with volumes up by double digits. We firmly believe that premiumization is achieved through a portfolio of brands and are confident that our expanded portfolio is best positioned to continue winning in this segment.
We're very pleased with the growth of our core portfolio, which benefited from recent innovations and line extensions, including Skol Puro Malte, which offers consumers a pure malt choice in the core segment. The category expansion framework has given us the tools to better differentiate our core brands, firmly position Skol as an easy-drinking lager, and Brahma as a classic lager. This is driving improved performance of the entire core portfolio. Furthermore, we saw the ongoing decline of the value segment in Brazil as consumers are trading up. However, the value segment remains very relevant in certain regions of the country, and for this reason, we have launched affordable brands brewed with ingredients grown by local farmers to profitably compete in this segment.
We currently have two regional brands brewed with local cassava, Nossa, in the state of Pernambuco, and Magnífica in the state of Maranhão, both of which have achieved very positive results to date. We will continue to explore additional opportunities to expand our affordability initiatives throughout relevant states while achieving margins comparable to those commanded by our core brands. In summary, we are confident in our commercial strategy, superior portfolio of brands, and most importantly, our committed and talented people. The transformation investments undertaken in our business, even during the times of extreme volatility and a challenging macroeconomic environment, have put us in a stronger position to win in the Brazilian beer market going forward. Moving on. As we announced in our press release this morning, we are actively exploring a potential initial public offering or IPO of a minority interest in our Asia-Pacific business on the Hong Kong Stock Exchange.
Proceeding with the listing will depend on a number of factors, including, but not limited to, valuation and prevailing market conditions. The merits of this initiative are based upon the creation of an APAC champion in the consumer goods space. Furthermore, our superior portfolio of brands and leadership position in the beer industry provide an attractive platform for potential M&A in the region. We appreciate that a minority stake listing would accelerate our deleveraging path. Nonetheless, our commitment to reach a net debt-to-EBITDA ratio below four times by the end of 2020 is not dependent on the completion of such a transaction. I would now like to hand it over to Felipe, who will take you through our first quarter 2019 financials. Felipe?
Thank you, Brito. Let us start with an update on our synergies. In the first quarter of the year, we delivered $100 million of synergies, bringing the total synergies captured from the SABMiller combination to more than $3 billion. Our total synergy guidance remains at $3.2 billion, which will be delivered by the end of 2019. As a reminder, these synergies do not include any top line or working capital synergies. Net finance costs in the quarter were $363 million compared to nearly $1.6 billion in the first quarter 2018. This increase was primarily due to mark-to-market gains linked to the hedging of our share-based payment programs of more than $950 million compared to a loss of $222 million last year. Excluding the impact of the gains and losses related to the hedging of our share-based payment programs, our effective tax rate this quarter was 27.7%.
This increase is primarily driven by category mix in the quarter, and we remain fully committed to deliver our 2019 guidance of ETR between 25%-27%, excluding any gains and losses relating to the hedging of our share-based payment programs. Our underlying EPS, defined as our normalized EPS, excluding the impact of mark-to-market related to our share-based programs and hyperinflation adjustments in Argentina, decreased by six cents from $0.85 to $0.79, as our strong organic performance was more than offset by the negative impact of unfavorable currency translations in the quarter. On slide 21, you will see that our debt maturity profile is well distributed across several years, and we maintained roughly $16 billion of liquidity at the end of 2018.
In the first quarter, we completed both a U.S. and EUR notes offering and subsequent tender offer for notes maturing between 2020 and 2026, allowing us to significantly extend our debt maturity profile and eliminate refinancing pressure for the foreseeable future. These transactions enable us to repay our debt with free cash flow while facilitating deleveraging. As a reminder, our debt portfolio remains insulated from interest rates volatility, as 94% of our debt holds a fixed rate. Furthermore, the portfolio is comprised of a diverse mix of currencies, with 56% of our debt denominated in U.S. dollars, roughly 35% in EUR. We use the EUR currency as a proxy for the emerging market basket of currencies that are relevant to our EBITDA and cash flow generation.
The EUR has a strong correlation with our main emerging market currencies and has the advantage of providing access to bond markets with significantly higher liquidity and lower costs. Following the recent notes offering, the tender offer, we have extended our weighted average maturity to roughly 14 years, and our debt maturity in any given year is considerably lower than our annual cash flow generation. Finally, we continue to expect the average pre-tax gross debt coupon in the full year 2019 to be between 3.75% and 4%. As you can see on slide 24, our capital allocation objectives remain unchanged. Deleveraging to around two times remains our commitment, and we will prioritize debt repayment in order to meet this objective. We expect our net debt-to-EBITDA ratio to be below four times by the end of 2020.
As Brito said earlier, this commitment is not dependent on the completion of a potential IPO of a minority interest in our APAC businesses. Before we move to the Q&A section, we want to acknowledge that you may be interested in learning more about the potential listing of our minority stake of the APAC business. However, given regulatory restrictions, we will not be able to provide any information that is materially different from what we have disclosed in our press release from this morning and earlier in this call. We'll share more information if and when there is news to share. Thank you for your understanding. With that, I will hand back to Maria to begin the Q&A section. Thank you.
Thank you. The floor is now open for questions. In the interest of time, we will limit participants to one question and one follow-up question. Again, if you have a question or comment, please press star one on your touch tone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. We do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Thank you. Our first question is coming from Olivier Nicolai of Morgan Stanley.
Hi, good morning, Brito, Felipe. Just one question and one follow-up. First, on the U.S., you were almost in line with the market this quarter, and you flagged that it was your best performance since end of 2012. Could you please give us an update on your portfolio strategy and why this time it is different, and that this improvement is more sustainable than the one we will have seen at the end of 2012? Just follow-up on Mexico, I think your margin increased strongly in Q1. I was just wondering if there was any one-off here or is it going to be the new run rate since you have new capacity coming up online. Thank you.
Olivier, hi, good morning. On your first point, we're very excited about the U.S. business. We have this evolved commercial strategy, that is not one quarter alone. If you look at the last few quarters, you've seen a trend in market share getting better. It's still negative, for sure, but it's getting better, close to stabilization. That's very encouraging. This strategy is based on a portfolio approach as opposed to one or two brand approach. That's very important. They have the core plus with Michelob ULTRA, which remains very solid and remains the top share gain in the U.S. now for four years, more than 24 quarters. In super premium, our craft portfolio continues to gain a raw share, this is also growing double digits, there's a big potential for us, great margins there. Innovation, also doing very well.
We led the industry last year in terms of innovation. Again, this quarter, the same thing. Also in the mainstream, if you consider mainstream core and value, business is getting a bit better, mostly because of the value segment performance. That all together has enabled us to get from a minus 70 bps in 2017 market share loss, to have a first half of last year of a net loss of minus 40, minus 20 for the last quarter, minus 10 bps for this quarter, 2019. You see a trend there, we're able to get the momentum. Let me give you the numbers again. For 2017, minus 70 bps, that was there. First half of last year, minus 45 bps. Second half of last year, minus 35 bps. Coming to minus 10 this quarter.
In your second question, about What was the second question again?
Mexico.
Mexico. Yeah.
Okay.
I wouldn't try to analyze margins on a per quarter basis because there are so many-
Of course.
moving pieces. What you said about capacity, of course, is something that will optimize our logistics and supply chain for sure. Again, I wouldn't take one quarter to get any kind of reference in terms of margins. I think we'd have to take the full year or at least a half year.
Perfect. Thank you very much.
Our next question comes from the line of Trevor Stirling of Bernstein.
Hi, Brito and Felipe. Two questions on my side, please, Brito. Two contrasting countries, I guess. Colombia, up low single digits despite the timing of Easter. It definitely appears that your new competitor in Colombia is having pretty low significant impact so far. In contrast, South Africa, where volumes down, revenue per hectare flat, margins contracting 600 basis points. Could you talk a little bit about the reasons for the success in Colombia and why South Africa is so weak at the moment?
Well, thank you. First, for Colombia, we have a solid position in Colombia, for sure, with a strong portfolio in core in the premium segment. We continue to invest in Colombia, not only for the global brands that are new to that market, but very strong already. Also revamping some of our core propositions like Águila, for example, new VBI, new packaging on the easy drinking side. I think Colombia has shown that our brands are very strong. The country is going through also some much better time in terms of macro compared to South Africa, so that of course benefits everybody in the market. Everybody also investing in trade tools like coolers, merchandisers, and sampling for new brands and stuff. We have a very robust program in Colombia.
The difference with South Africa, where we also have very strong brands and a very strong market position, is that the macros are much worse in South Africa. If you look at unemployment, inflation, brownouts, elections tomorrow, lots of things going on in South Africa. Easter in South Africa, of course, plays a role. I think what's happening in South Africa is that consumers are under pressure. Given our very strong position in the core segment, the core segment and the core consumer tends to be more elastic and more subject to those pressures on the macro side. There's also a premiumization trend going on in South Africa, in the premium segment growing fast, where we now have brands to compete, before we didn't.
Those brands are doing very well, but we under-index, under-share in The High End compared to the core. There's a mix effect at this point that's against us in South Africa, plays the whole macro. I think those two things are very different from the Colombia case, if I may.
Brito, the zero revenue or flat revenue per hectoliter in the quarter, which presumably was a component of the 600 basis points of margin expansion. Is there no underlying pricing in the mainstream products at the moment?
Which market are you talking about? You're talking about South Africa?
South Africa.
South Africa.
South Africa, sorry.
Okay. In South Africa, well, not only you have the price increase that was in the first quarter of last year, there's a phasing issue there. You have, of course, the excise tax that went up by seven-plus% also in the first quarter of this year. When you put those two together, you have, let's say, a tough comp there, right there.
Okay. Thanks very much, Brito.
Thank you.
Thank you, Trevor.
Our next question comes from the line of Fernando Ferreira of Bank of America Merrill Lynch.
Hello? Can you hear me?
Yeah.
Can you hear me now?
Yeah. Hi.
Sorry. Thanks for the questions. I have two, please. First one on M&A. Historically, ABI has been focused on controlling the assets that you invested in. I'm wondering if that's still the case or if going forward you could perhaps be more flexible than you were historically, like the JV in Russia, for example. Second question to follow up on your Brazil presentation. Brito, can you mention how relevant the value brands were in terms of your growth contribution in Q1? If you could share some numbers on Nossa and Magnífica, it'd be great. Thank you.
On M&A, as you know, most of our people in the company are focused on the organic business. That's what we do every day. 99% of the people and the time are focused on the organic business. We do M&A from time to time. We recognize that's a strength as well of the company, as well with on the organic side as on the inorganic side. Each situation is different. The joint venture in Russia is different. Normally, of course, we like to have control, because then we can implement our priorities, our global brands and our strategies. That's the key element. Again, each situation is different. Again, if you're referring to the potential Asia IPO, it's somewhere north of stake that we could, at some point, when Anheuser decide to do it, float.
Of course, we would remain with the control. In terms of value brands in Brazil, it's interesting that the value segment grew the last two quarters of last year, now it's kind of retrenched again. It shrunk again. We think it's because consumers are feeling better, and they tend to upgrade. Given that the value segment in Brazil is north of 20% at this point, we decided to participate in a more intense way. Of course, with initiatives that can create the price point we need to compete in that segment, with the kind of margins that are very close to the core business, which are the margins that we feel would justify such investment. That's where Magnífica and Nossa come into play. These are brewed with local cassava. There's a very strong appeal to the local population. It also supports local farmers.
Because of all that, we're able to have a lower competitive price point, with margins that are very close to our core business. We'll remain. Now we feel that we can be more competitive, not only with these two brands, also with some pack price initiatives that we have, mostly on returnable bottles, the 340 returnable bottle, the mini, and also the big one-liter bottle that provide people more for less or an attractive price point in the case of the minis. It's a strategy of not only new liquids, also pack price points.
Thanks, Brito. Would you say that this trade up is sustainable at this point, or is it still early to say?
Well, what we can say, Fernando, is that consumers, in terms of confidence, they feel better about the future. If you compare consumer confidence compared to six months ago, for example, it's been going up every month pretty much, especially after the elections. I think the elections was an important turning point in that the last three years that have been very tough in Brazil in the macro, political, and so many bad news every day in the paper. I think consumers are willing a leap of faith that this new government will be able to pass the reforms. We are cautiously optimistic that these reforms will be passed. Of course, that will be very important so consumers continue with this frame of mind. It's also true to say that this new optimism has not yet translated in more consumer disposable income. That's also true.
That's a fact. Confidence is up, which is also normally, it's a predictor of good things to come. Again, we're cautiously optimistic, and we saw a very strong quarter. Helped, of course, a bit by the Carnival timing. We outperformed the industry. We grew across all segments, great to start the year like this.
Thanks, Brito.
Thanks, Fernando.
Our next question comes from the line of Simon Hales of Citi.
Thank you. Hi, Brito. Hi, Felipe. Just following on, Brito, on Brazil, obviously clearly a strong performance in the quarter, but obviously lots of moving parts as you referenced in terms of the timing of Carnival, the easy comp, et cetera. What do you think the underlying run rate is for volume growth that you're seeing at the moment with all those factors taken into account? Secondly, wonder if you could just talk a little bit about your low and no alcohol portfolio and maybe update us as to the trends you're seeing there and where you are now in terms of your 2025 targets as a percentage of revenue from that portfolio?
Good. Thank you, Simon. In Brazil, again, very strong volumes, 11.3% growth, and that was both in beer and non-beer. It's very hard to give guidance at this point, but what we can say again, growth was broad-based, outperforming the industry for us and across all segments. Those are all very positive news. I think a lot of this growth also came from investments that we did in transformational initiatives in the last three years when the country was in a tough macro situation, when consumers were not feeling that confident about the future. Because we know Brazil now for 30 years, and we know that the fundamentals are very strong. In the last three years, we have invested in transformational things like global brands, new packs. We have really enlarged the offerings we have in global brands.
We have invested in the new BVIs, so visual identity to our core brands. Also sleek cans came to market. The Brahma family continued to expand. The Skol family expanded with Pure Malt and Skol Hops. The value brands, we have new liquids that are taking advantage of local grain production to be able to compete better and more effectively in the value segment. We inaugurated a new R&D center in Rio, and we continue to make strides in route to market, reaching more blocks as we go more and more granular in the western side of the country and the north part of the country. All these things are investments that are not new. Have been there now for three years because, again, we've always believed Brazil, that the potential and the fundamentals have not changed.
We think we're in the best position of all companies in that market to take advantage of when consumers feel better about life and about the future in general. We have a superior portfolio, and we have an amazing route to market and amazing people. We're cautiously optimistic that this year could be, with the reforms passed, very positive for our consumers in Brazil. In terms of NABLAB, your second question, today we are at 8% in terms of our volume. We made some progress. We continue to be very committed to it. We have more than 76 brands today around the world in the NABLAB space. We believe it's going to be a portfolio game, not one or two brand type game. We have already six of our countries that are above the 20% threshold, be it emerging and developed markets.
We have role models for countries and what NABLAB kind of role can play in both kinds of markets, developing and developed. I mean, we feel that we have the toolkit and we now have to get to our target, and we're very committed to doing it. Those are very interesting propositions because first it goes along trends we see in the consumer space in terms of moderation, health, and wellness, and also premium products, because normally these products are sold at a premium price. Thank you.
That was very clear. Thank you.
Our next question comes from one of Chris Pitcher of Redburn.
Thank you. Good afternoon. Thank you very much. Couple of questions. Firstly, your increased confidence on the United States in terms of market share improvement is happening without any change in your mainstream brands, Budweiser and Bud Light. Given the success you're seeing at the super premium end and core plus, and also at the value end, is this changing the role that Budweiser and Bud Light is potentially playing within the portfolio? Secondly, can you give us an update on the Zenzele scheme in South Africa? Because we believe you're due to deliver shares next year, and how that's going to affect your share count and where they'll be sourced from. Thank you.
Okay, Chris. In terms of the U.S., yes, we are confident that our evolved strategy is working. This strategy is a strategy of a portfolio gain as opposed to one or two brands. Yes, it's true that when we got here 10 years ago, everything was about Bud and Bud Light. Today, Bud and Bud Light, of course, remain the two most important brands in our portfolio. If you look at Michelob ULTRA, it's already 10% of our portfolio, and growing. The biggest share gain in the U.S. for now four years. If you look at craft, if you look at Stella Artois, if you look at the new line extensions we've had, like Pure Gold from Michelob ULTRA, the Bud Light series, I mean, the Budweiser series and the Bud Light Orange and Lime.
I mean, all these things are getting consumers to trade up. It is true that there is some cannibalization, because Michelob ULTRA, of course, is growing. Bud Light being the biggest brand in the U.S., it's being cannibalized by Michelob ULTRA as well for sure, but at a much better margin. In a way, it's accretive to the business, and it's in line with consumer trends. Bud and Bud Light will remain key brands for us in our portfolio, but maybe they'll be smaller in size going forward and other brands will be bigger. Because we're trading up, that is a move that's accretive in nature. Again, it's a portfolio play, and some brands will be smaller, some brands will be bigger for sure.
In terms of Zenzele, the current Zenzele scheme matures next year, 2020, we have already engaged with government authorities and other stakeholders on an outline for our plans to be adopted upon maturity. As engagements are still ongoing, it would be premature to provide details at this time. We'll continue to update you as we have new news on the scheme. Again, the scheme will mature only next year. Thank you.
Our next question comes from the line of Carlos Laboy of HSBC.
Yes. Good morning, everyone. Brito, can you speak to how you determine whether a line extension is successful or not as it's rolling along, and what criteria guides you to make sure that you're doing it right and optimizing it? On an unrelated basis, if you can just give us an update on your thinking, how it's evolving regarding brewing capacity rationalization. Is there room for improvement here in the U.S., Canada, and Mexico? Thanks.
Okay. In terms of your second question, brewery capacity in Mexico, we continue to invest. We have just officially opened in the first quarter our central brewery in Hidalgo. That's going to be very important to rationalize the current footprint we have in Mexico, in which we still import quite a sizable volume from the U.S. Being more self-contained in Mexico is very important. We also added significant capacity to our grid by enabling two new lines in our Yucatan plant brewery, which we also invested some years ago. Those are new capacity in Mexico. In the U.S., of course, we have enough capacity, but we continue to invest in U.S. capacity because we have craft brewers or craft beers that are expanding. We have more premium beers, premium packaging. We have more assortment.
In the U.S., we continue to transfer lines, shift this line, adapt a new line to new package assortment. This thing of brewery footprint is very dynamic, and it's always happened. Same in Canada. In Mexico, clearly, we're adding capacity. In the U.S., we're managing the existing footprint, but we continue to invest because of package assortment and new brands. In terms of line extension, of course, we try to do a line extension on things that will make the mother brand stronger, things that connect to the mother brand, connects with the brand positioning of the mother brand. This is key. Whenever we do something in Bud Light, it has to do with the easy drinking, the refreshment, the young side of the brand. Same we do with Skol in Brazil, as we did Pure Malt.
Of course, we have a plan in terms of volume, in terms of distribution, in terms of consumer takeout. We also have social listening that today is very active in our company. That's a very current way to look at what consumers are saying, behaving, talking about the brand, sharing with their friends about brand new. All those things are things that are there for us to judge if a line extension is doing well or not, but not forgetting the mother brand. Line extension should always not borrow, but also add to the mother brand franchise.
Thank you.
Thank you.
Our next question comes from the line of Eddy Hargreaves of Investec.
Hi. Thanks for the questions. Good morning.
Good morning.
First one, just briefly going back to South Africa. You've obviously gone through the macro and portfolio positioning issues there. In addition, you have been experiencing some distribution and stock-out difficulties. Can you confirm that those issues are now resolved? Then my second question is a broader one. I know you're constrained with what you can say on the potential partial IPO, but it was striking in your statement that you're talking about the creation of an APAC champion in consumer goods being the main merit of this. Can you explain how that would be advantageous for you? Surely you're a beer and soft drinks company. You're not thinking of expanding into infant milk or noodles, are you?
I think on your second question, you got it right. It's more about the pursuing of the IPO at this point and why we're doing it, the platform. I wouldn't get hung up on the consumer goods. As I just said, we're not going to go into infant milk or anything like that. I think the important thing is the platform. If you compare it to InBev as another platform that has championed our growth and expansion in Latin America, that's the kind of parallel we try to drive. Not in terms of the percentage that we owe or anything like that, but just the idea of having something that we have a lot of experience with, which is the InBev platform, replicating that in a new exciting growth market like APAC. That's the main idea, and that's why we use the word platform.
On your first question about South Africa, in terms of out of stocks, it's pretty much resolved. Of course, when you look at things like Flying Fish, which is a growing brand we have in South Africa, we still have some issues there. We're expanding capacity because we still have some cap. Yes, there's still a few brands that are capped, but the bulk of our brands, the out of stocks are resolved. They were resolved by the end of last year.
Thank you.
Thank you.
Our next question comes from the line of Andrea Pistacchi of Deutsche Bank.
Good morning. I have two questions, please. The first one is on Argentina, where you had a difficult quarter, unsurprisingly, but mid-teens or teens volume decline. If you can talk a bit about whether the worst is behind there in your opinion. The second question is on Nigeria, please. You gave us a lot of color on Nigeria Investor Day in South Africa in August, where you said that you had about a 22% market share. Could you just give us an update, please, on Nigeria, what you are seeing in the market, maybe where your share is now and the progress you have made in the past six, nine months?
First, Andrea, let's go to Argentina. You are right. Consumers are in a tough spot in Argentina. Very high inflation, 50% or more on a yearly basis. Elections coming up in October. A lot of uncertainty in terms of the future in the political side. Currency also devalued, lots of pressure on the consumer. Yes, there is consumption contraction in Argentina, as a result of all those things I just described. We believe in our commercial strategy. The premium portfolio, amazingly enough, continues to show very strong performance with Stella Artois, Corona, and a local brand of ours, Patagonia. We're very excited also to have Budweiser back. Of course, it's true that overall volume is suffering. We also have now some price controls that would not affect our business. We have two SKUs in the price control, one in soft drinks, one in beer.
Those represent a small percentage of our volume. It's hard to predict what Argentina will look like. Consumers will remain under pressure, we think, this year. It's not the first time In a way, our people are used to deal with kind of situation. And we have a great team in Argentina that's, of course, always looking at ways to adapt their strategy, because we're there to service consumers, and they are under a tough spot right now. Again, hard to predict, but it's not the first time we've seen that in Argentina. In terms of Nigeria, we had a very strong first quarter. Achieved volume revenue growth double digits. Nigeria remains a very successful story for us.
Now with the capacity that we haven't had for some years, in which we were capped, now we can sell Trophy and Hero, our big brands, alongside with Budweiser in a more freely way in Nigeria. That's why growth continues, and growth can be seen across all regions in Nigeria. Doing very well, very excited now with a portfolio that also has core, but also global premium brand with Budweiser. Budweiser was launched last year during the FIFA World Cup, and Nigerians, our consumers in Nigeria, they're very connected to soccer and very connected also to American brands. That duo did very well, and Budweiser is off to a very strong start in Nigeria. Thank you.
Thank you.
Thank you, ladies and gentlemen. We have time for one more question. Our final question will come from the line of Robert Ottenstein of Evercore.
Great. Thank you very much. You're clearly getting some nice progress on the top line and on the margins. I'm wondering if you could tie that into some of the initiatives that you talked about in South Africa. Particularly Felipe Dutra went into some good length on what you were doing with big data, artificial intelligence, machine learning. I'd love to hear how that's helping you both connect to the consumer and be more of a consumer-centric company, giving consumers what they want, as well as driving productivity. Thank you.
Great question, Rob. Thank you. Let's talk about two points, consumer and customer. I think the most important one is that technology is all about business transformation first. In business transformation, 70% of it is around people and ways of work, and 20% or 30% is around technology, per se. That's what we've learned as we did it ourselves and benchmarked with other companies that are ahead of us. In terms of customer, as we showed in South Africa, there's a big effort. We showed many things, but I'll focus on contact strategy. There was a big effort on evolving our contact strategy. Our contact strategy with the partners, retailers used to be all based on a sales rep. Today, it's much more of a hybrid strategy in which we're evolving from that model of a sales rep.
They're becoming more of a business development rep, to one where we have the business development rep plus a tele sales support plus we have our B2B strategy. Today, we have 40% of our sales are digital sales, and we want to get that to 70%. 40% digital today, 60% is still analog with a sales rep. Connected park is also something we showed in South Africa. That's the means by which we connect the point-of-sale equipment of the park, and we not only deliver an app in which the park can manage its business, but we also, in return, get access to data and consumer insights to better service our parks, but also understand consumers on a more real-time basis. That's getting closer to the consumer via the customer.
On the consumer front, we of course, are trying to get closer to consumers and have a more one-to-one contact with consumers. That's what we show in South Africa. There were some verticals connected to that. First, trying to get more insights as you get more consumers and get better consumer records. Second, that can help us in many fronts, including media efficiency, because it can be more tailored and more customized. We also have a big B2C effort, business to consumer, and that's expressed in many ways, but I would say that our e-commerce platforms that today are in 20 countries, we're going to continue to expand that in those countries plus some new countries. We also have brand building by tailored content. Our earned media today is 8% of our total media. We want to get that to 30%.
All that should benefit top-line growth because that's in the products we have, that's what we see. Again, many things happen also in supply chain, on logistics in general, production, brewing of beer and all that. On customer and consumers, that's how I would summarize the efforts, and those are three important things, contact strategy on the customer level and consumers one-to-one on the consumer level.
Thank you very much.
Thank you. Well, thank you. In the first quarter, we delivered strong results and we saw improved performance in many of our key markets, especially Brazil and the U.S. We remain focused on driving the organic growth of our business while deleveraging towards our optimal capital structure and have taken significant steps to improve our debt maturity profile through our refinancing initiatives. We believe that our commercial plans, superior portfolio of brands, diverse geographic footprint, unparalleled operating efficiency, and strong pipeline of committed and talented people position us to continue delivering strong results in 2019 and beyond. Again, thank you very much for joining the call today. Thank you for your time, and enjoy the rest of your day. Thank you. Bye-bye.
Thank you. This concludes today's earnings conference call and webcast. Please disconnect your lines at this time and have a wonderful day.