Welcome to the Anheuser-Busch InBev's Full Year 2017 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 Technology 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 reports and filings 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 phone. 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 annual report on Form 20-F filed with the Securities and Exchange Commission on the twenty-second of March 2017. 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. Good morning, good afternoon, everyone, and welcome to our full year 2017 earnings call. Today, I'll be taking you through the results and highlights of our first full year as a combined company following the combination with SABMiller. I'd like to spend some time on our enhanced global footprint and brand portfolio, then introduce you to our category expansion framework that we have adopted from SABMiller and implemented across all markets this year. This is one of the intellectual synergies resulting from the combination and something we believe will enable us to grow the global beer category. I'll then spend a few minutes on our better world initiatives. Finally, Felipe will discuss our earnings, cash flow, and capital allocation. As a result, we'll spend more time discussing our strategy going forward and will not go into all of the details of our regional performances.
We therefore encourage you to refer to the press release we published earlier this morning. We'll be happy to answer any questions on our markets during the Q&A portion of today's call. 2017 was a landmark year for our company. Not only did we deliver our best results in the last three years, but we are well on our way to achieving our most successful business integration ever following the combination with SABMiller. The strong performances came from all around the globe, with revenue growth in 9 out of our top 10 markets. Of note, Mexico delivered high single-digit revenue growth, with healthy growth coming from both our core and premium brand portfolios through impactful brand executions. Europe delivered top-line growth for the fourth straight year, with Western Europe growing revenue by high single digits as a result of leveraging our premium brands.
Our global brands revenue was up by 9.8%. We saw highly successful scale-ups of our global brand portfolio in our new markets, especially Colombia, Peru, Ecuador, South Africa, and Australia. Our passion for brewing was evident in the 191 awards we won around the world this year, making us the most awarded brewer at major international beer competitions. We continue to focus on creating the highest quality beers to meet consumer needs across a wide variety of occasions. Our EBITDA grew by double digits, thanks to our top-line growth and enhanced by synergy capture in markets including Africa, Latin America, and Australia, as well as healthy margin expansion in China. We delivered solid results in 2017. This is only the beginning of our combined company's journey for the next 100 years and beyond.
For the 5 years ending 2017, our revenue CAGR of 4.6% exceeded that of all our global FMCG peers. The structural change in our global footprint resulting from the combination with SABMiller positions us towards higher growth markets, as evidenced by the accelerated momentum in 2017, with revenue growth of 5.1%. In full year 2017, we accelerated our revenue growth with top line up by 5.1%. Revenue per hectoliter grew by 5.1% as well, both on an organic and constant geographic basis. Our global brands grew revenue by almost 10%, which I'll discuss in more detail shortly. We experienced volume growth of 0.2% as a result of beer volume growth of 0.6%, which was partially offset by a decline in our non-beer volume of 3.1%.
Especially strong volumes were recorded in Argentina, with beer volumes growing by double digits and soft drinks achieving the best result in more than six years, as well as Africa, outside of South Africa, which grew on beer volumes in the mid-teens. EBITDA grew by 13.4%, with margin expansion of 288 basis points to 39.1%. The U.S. was a strong contributor to EBITDA this year, with growth of 1.9% and margin expansion of 159 basis points to 41.2%. The U.S. gross profit margin expanded for the eighth straight year, growing 66 basis points to 61.4%. Normalized earnings per share increased by 42.8% on a reported basis to $4.04 from $2.83, mainly driven by a higher profit. The board has proposed a final dividend of EUR 2 per share for fiscal year 2017, bringing the total dividend for the year to EUR 3.60, in line with the prior year.
We finished the year with an especially strong fourth quarter, growing revenue by 8.2%, with revenue per hectolitre growth of 6.6% and 6.7% on a constant geographic basis. All six of our regions contributed by growing revenue. Our global brands had their best quarter of the year, with revenue up by 17.8%. Total volumes grew 1.6%, driven by beer volume growth of 2.3%, though our non-beer volumes declined by 3.6%. EBITDA for the quarter was up by more than 20%, with margin expansion of 446 basis points to 42.4%, and our normalized earnings per share grew by 141.9% on a reported basis. In Brazil, we rebounded in the second half, growing EBITDA by 20.4% after declining 19.7% in the first half of the year. Following the combination with SABMiller, we have increased our exposure to emerging markets that are positioned for accelerated future growth.
Emerging markets now contribute to more than 70% of our volumes and almost 60% of our revenue. As you see on slide nine, a geographic diversity provides us with a natural hedge against geopolitical volatility in any given market. In other words, we're not overly exposed nor dependent on any single market. Additionally, this mix will likely evolve over time as a consequence of varying growth rates among the markets. Our broad geographic footprint is enhanced by our portfolio of over 500 global, international, and local brands, which provide a wide selection for our consumers around the world, addressing their needs across a variety of occasions. This past year, we were recognized for having seven of the top ten most valuable beer brands in the world by BrandZ, which provides us with a best-in-class portfolio to scale across our markets.
Three of those seven brands make up our global brand portfolio, Budweiser, Stella Artois, and Corona. The home markets for each brand are the U.S. for Budweiser, Belgium for Stella Artois, and Mexico for Corona. Outside of their home markets, the global brands capture higher revenue per hectolitre as well as higher margins. They're also growing faster outside of their home markets, with revenue up 16.8% in 2017. This past year, our three global brands contributed to more than 17% of our total beer volumes and almost 20% of our total beer revenue. More than half of both the volume and revenue contribution comes from outside of their home markets. In total, including the home markets, revenues of our global brands grew by 9.8%, well ahead of the growth of our total portfolio. Each brand accelerated its growth rate versus 2016.
Budweiser revenues grew by 4.1%, extending its lead as the number one beer brand in next domestic sales volume. The growth was driven by strong performances in China, Brazil, and the U.K. Stella Artois revenue grew by 12.8% with solid performances in Argentina, the U.S., and Australia. The brand continued its partnership with Water.org and Matt Damon this year, providing one million people with access to clean water. Corona led the way as revenue grew by 19.9%, driven by Mexico, China, Australia, and Colombia. The brand's global image is enhanced through platforms such as its partnership with the World Surf League and the Corona Sunsets music festivals, of which over 7,000 were executed in 2017. These results are underpinned and fueled by consistent global messaging and market activation.
We believe this portfolio of complementary brands has the strength to be marketed worldwide, capitalizing on common values and experiences that appeal to consumers across borders. I'd now like to introduce you to the category expansion framework. The category expansion framework was created at SABMiller before the combination, with intention to grow the global beer category for the long term. We believe that the insights derived will enable our company to achieve further growth across our diverse geographic footprint at different levels of maturity. Beer is the number one alcohol beverage category in the world by volume as well as penetration. The advantages of beer are many, including that it's the beverage of moderation as well as that it is the most accessible and inclusive. The global beer category continues to grow in volume and value. However, volume growth is accelerating in recent years, driven primarily by mature developed markets.
We understand why the category faces challenges, as traditional beer occasions become less prevalent when markets mature and consumers have an increasingly wide variety of beverage choices for different occasions. We also understand where there are growth opportunities, not just in emerging markets, but in mature markets as well. As markets evolve, we see beer occasions evolve too, moving from primarily male-dominated socializing in the on-premise to more in-home, mixed-gender occasions and consumption with meals. To address consumer preference across occasions, this framework defines our strategy to grow the global beer category as well as provide us with insights to grow our share of beer. This best practice excited our management teams around the world, has since been fully integrated into our global strategy, and was used to frame our current three-year plan.
This is a great example of how we combine the best of both by bringing together category-level thinking and global execution. This framework incorporates our four commercial priorities. It positions us to develop our global strategy to ensure we are both bringing new consumers into the beer category, as well as offering our existing consumers new opportunities to engage with a wide range of product offerings for new and different occasions. The framework considers the maturity of a market using a host of different variables, for example, disposable income. Different markets around the world can be then segmented into groups where growth trends are similar. This facilitates the transfer of learnings between comparable markets, allowing us to leverage our global scale and manage a complex geographic footprint. It also helps to structure portfolios that are designed to capture future growth given emerging trends. This is not a quick fix.
We still need to build brands based on consumer insights and segmented channel management as we always have. However, we're very excited by a new common language for all of our markets. It has made us far more strategic about how and where to invest behind our brands. I'd now like to take a few minutes to explain it in a bit more detail. At the center of the category expansion framework lies core lager, the heart of our business. In many of our markets, both developed and emerging, our largest brand is the local core lager. Therefore, it's important that we defend this part of the beer category. We have begun segmenting our core lagers into two types, easy-drinking lagers and classic lagers. Easy-drinking lagers tend to be a lighter liquid that is tailored to more easygoing, mixed-gender occasions.
Classic lagers are more full-bodied and positioned for more traditional beer occasions, such as sporting events. By differentiating between these two types of core lagers, we are able to reduce cannibalization and strengthen the positioning of our brands. For example, in Argentina, we have taken bold moves to strengthen the portfolio by differentiating between Quilmes, a classic lager, and Brahma, an easy-drinking lager, resulting in the successful improvement of both brands in 2017. In many emerging markets, a large percentage of alcohol consumed is illegal and illicit alcohol. This is often the consequence of lack of affordable options for consumers with limited disposable income. This represents an opportunity for us to provide consumers with affordable, high-quality, branded alternatives. Some of our businesses in Africa have achieved this by pioneering the use of local crops to create new beer brands at appealing price points with healthy margins.
We look forward to potential opportunities to further scale these learnings. On the other side of the price spectrum, there exists an opportunity in both emerging and developed markets for premiumization, as many consumers are trading up to more high-end beers in a wide variety of occasions. With our portfolio of complementary global brands, we are well-positioned for this trend. Furthermore, we recently launched our high-end company, a business unit made up of our global, specialty, and craft brands. It is now established in 22 markets of ours that account for approximately 70% of the high-end opportunity worldwide. Our specialized teams are dedicated to accelerating our growth rate with revenue of EUR 4.6 billion in 2017 and almost 26% growth versus 2016. In addition to offering consumers a variety of options across many price points, a further way to grow the category is through flavored beer.
Like easy drinking lagers, flavored beer provides an option for mixed gender occasions, as well as entering new occasions that have historically been owned by other alcohol beverage categories. We have seen success with many of our brands in this segment in both emergent and developed markets. In South Africa, Flying Fish grew volumes by more than 60% by recruiting females and younger LBA consumers into the beer category and taking share from cider. In Western Europe, our innovation Cubanisto, a rum-flavored premium beer, grew top line by more than 40% this year by successfully competing against spirits in the nightlife occasion. In addition to flavored beer, other beer styles beyond lagers allows us to compete in a wider set of occasions.
One of the biggest opportunities for this is in the meal occasion, where our craft portfolio as well as our international brands enable us to engage consumers through beer and food pairings. Leveraging this in many of our mature markets, such as in France with Leffe, which has become the number one beer brand by penetration in that country. We continue to invest in the global craft and high-end space to offer more choice of beer styles across our footprint. The category expansion frameworks defines different portfolio priorities for each market based on the maturity of the market. For instance, in emerging markets, there is a bigger focus on classic lagers and affordable brands, as we are first and foremost trying to introduce more consumers to the beer category. In developed markets, the emphasis lies on broadening the set of occasions in which beer has a role to play.
Going forward, we'll be discussing this strategy in more detail and look forward to sharing our plans and results. We're excited about the opportunities coming from this intellectual synergy and the possibilities it opens for future growth. I'd now like to move on to our initiatives that fuel our dream to bring people together for a better world. Sustainability is not just related to our business, it is our business. Brewing our beers is reliant on a healthy, natural environment. Therefore, this past year, we're committed to securing 100% of our purchased electricity from renewable sources across our global operations by 2025. This is an ambitious goal, but it's an important one that aligns very well with our dream.
We also leverage our brands to promote sustainable initiatives, such as Corona's new partnership with Parley for the Oceans to protect 100 islands by 2020, and Stella Artois continued campaign with Water.org to bring clean water to people in the developing world. Part of our dream for a better world is aspiring to make every experience with beer a positive one. Through our global smart drinking goals launched in 2015, we aim to reduce the harmful use of alcohol and foster a culture of smart drinking and road safety globally. The AB InBev Foundation was established to support us in achieving these goals. We have also expanded our offerings of no and low alcohol beer products around the world to provide consumers with added choices in more occasions, in line with our commitment to have no and low alcohol beers represent 20% of our global beer volumes by 2025.
With operations in more than 50 countries, we're dedicated to improving the lives of the communities of which we are a part, as well as supporting the farmers and small retailers in our value chain to help them be more productive. In 2017, we donated almost 3 million cans of water to areas affected by natural disasters in the U.S. and donated the proceeds from 3 million limited edition Corona cans to people impacted by the severe earthquakes in Mexico. In summary, we're focused on conserving natural resources, promoting smart drinking road safety, and supporting our communities. In 2017, we reached all of our previous sustainability goals, which expired at the end of this past year. Later this month, we'll be announcing our 2025 sustainability goals.
These goals will focus on four areas, agricultural development, energy and carbon, water stewardship, and packaging, and we look forward to sharing them with you soon. I'd now like to hand over to Felipe, who will take you through our 2017 earnings, cash flow, and capital allocation. Felipe?
Thank you, Brito, good morning, good afternoon, everyone. Let's start with an update on the synergies. In the fourth quarter, we delivered $381 million of synergies, bringing the total for fiscal year 2017 to just over $1.3 billion, and the total synergies captured to date to over $2.1 billion. Our total synergy guidance remains at $3.2 billion to be delivered within the four-year period following the close of the combination. This number is inclusive of the $1.05 billion of cost savings previously identified by SABMiller. As a reminder, these synergies do not include any top line or working capital synergies. We continue to expect the synergy captured to require approximately $1 billion of one-off cash costs to be incurred in the first three years after closing. Of which $588 million has been spent to date.
Net finance costs in the year were over $5.8 billion compared to over $5.2 billion in 2016. This increase was driven primarily by the interest expenses on the legacy debt of SABMiller, the annualization of the bonds issued in 2016 to fund for the combination with SABMiller, as well as currency and other hedging results. The increase was partially offset by lower mark-to-market losses linked to the hedging of our share-based payment programs of $291 million, compared to a loss of $384 million in 2016. Our normalized effective tax rate for the fourth quarter was 32.1%, up from 28.6% in the fourth quarter of 2016, resulting from higher profit and the timing of certain deductions during the year. In 2017, our normalized effective tax rate was 22.9% as compared to 20.9% in 2016. I would also like to update you on the impact of the recent U.S. tax reform legislation.
With over 18,000 U.S. employees and significant tax payments in the U.S. since 2009, we are proud to be the leading employer and taxpayer in the country. We believe a tax reform bill that lowers the corporate tax rate and incentivizes domestic investment will benefit American workers. We are hopeful that this tax reform boosts for innovation and growth in the economy. In terms of impact on the company's taxes, during the fourth quarter, we recognized a one-off cash or non-cash gain, will be cash in the future, but non-cash gain of $1.8 billion, which is primarily driven by the remeasurement of deferred tax liabilities resulting from the reduction in the U.S. statutory corporate tax rate from 35% to 21%. As we complete our analysis of this new legislation, it is possible that we will make adjustments to this provisional amount.
As of 2018, we do not expect to see a benefit of the lower U.S. corporate tax rate in our effective tax rate, as the U.S. tax reform introduces a broader tax base and new limitations on certain business deductions, which offset the impact of the reduced rate. For the group, the effective tax rate guidance for the full year 2018 is in the range of 24%-26%, which again excludes the impact of any future gains and losses related to the hedging of our share-based payment programs. Moving on now to the earnings per share. Normalized earnings per share increased by 42.8% from $2.83 in 2016 to $4.04 in 2017.
This was largely driven by a $2.66 increase in normalized EBIT linked to the organic growth and benefiting from earnings of the retained SABMiller business, partially offset by an increase in income tax expense and dilution due to the increased number of shares. We closed fiscal year 2017 with $15.4 billion of cash flow from operations and an EBITDA margin of 39.1%, converting 27.3% of our net revenue into cash, well ahead of our peer group in all three dimensions. Moving to core working capital, another important dimension for cash flow generation. Core working capital consists of those elements of working capital, which we consider fundamental to the operation of our business. It excludes certain items which management has little or no ability to influence. For example, payroll-related payables. In 2017, we reached an average level of negative 13.4% of net revenue.
The decline reported in 2017 was a direct consequence of the SABMiller consolidation, which was at much less efficient level of core working capital as a percentage of net revenue. This is another area of synergy potential when applying our traditional company cash conversion efficiencies in the combined footprint. I will now spend some time discussing our debt profile. On slide 34, you see that our debt matures profile is well distributed across the next several years. A strong cash flow generation provides us with sufficient cushion to repay or refinance outstanding debt without being dependent on capital market transactions to meet our short-term funding needs. In addition, we maintained over $20 billion of liquidity composed of cash and revolving credit lines, as shown on this slide. The weighted average coupon of our debt is 3.7%, with a weighted average tenor of slightly more than 10 years.
93% of our debt portfolio is locked into fixed interest rates, reducing our exposure to market volatility. 58% of our debt is denominated in US dollars, while roughly 32% is linked to the euro. We use the euro currency as a proxy for the emerging market basket of currencies that are relevant to our EBITDA and cash flow generation. The euro 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. In order to further balance our currency mix, we have also been issuing more debt in alternative currencies such as the Canadian dollar, the Australian dollar, and the British pound. Moving now to our dividend.
The board is proposing, subject to shareholders' approval, a final dividend of €2 per share, which combined with the interim dividend of €1.6 per share paid towards the end of last year, will lead to a total dividend payment for fiscal year 2017 of €3.6 per share. As you can see from slide 36, we are maintaining the dividend payment at the same level as the last two years and consistent with our commitment to deleveraging. Expected dividend payment dates for each of our listings are shown on page 19 of our press release. Our net debt-to-EBITDA ratio decreased from 5.5 times on a reported basis in 2016 to 4.8 times in 2017 or 4.7 times when adjusted for the closing of pending disposals and for the foreign exchange time mismatch between the balance sheet and the P&L translation. We are tracking in line with our internal deleveraging targets.
Our optimal capital structure remains a net-debt-to-EBITDA ratio of around two times, and our capital allocation objectives remain unchanged. Our first priority for the use of cash will always be to invest behind our brands and to take full advantage of the organic growth opportunities in our business. Deleveraging to around two times remains our commitment, and we will prioritize debt repayment in order to meet this objective. M&A remains a core competency, and we will always be ready to look at opportunities when and if they arise, subject to our strict financial discipline and deleveraging commitment. Our goal is for dividends to be a growing flow over time, consistent with the non-cyclical nature of our business. However, as we have said before, given our emphasis on deleveraging, dividend growth is expected to be modest in the short term.
With that, I will hand back to Maria to begin the Q&A section. 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 *1 on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the # key. We ask that you please pick up on your handsets to provide optimal sound quality while posing your question. Our first question comes from Edward Mundy of Jefferies.
Morning, afternoon, everyone. I've got one question and one follow-up. Brito, I think in your opening remarks, you flagged that the emerging markets are positioned for accelerated future growth. Are you able to provide a whistle-stop tour of the key emerging market regions and your degree of confidence and acceleration in 2018?
I think the comment was much more. 2017 was the first year of our combined company. The idea is that we gave you in that opening a little bit of our split between emerging markets and more mature markets. In our view, we all come from emerging markets. We know it's volatile at times, but it provides lots of growth and opportunity for value creation. If you go to our outlook, we also say that while recognizing volatility, as I said before, we expect to continue to deliver strong revenue and EBITDA growth in fiscal year 2018, driven by our performance in our portfolio, our footprint, and our commercial plans. This is all tied together. We're very happy with the footprint we have.
This footprint, as said before, is one that should deliver growth ahead of our CAGR of five years, as we shared with you today. For example, this year, it already did. It's more diversified and less dependent on any one single market. That was the message.
Very clear. Thank you. The follow-up is more of a philosophical question. I really appreciate the discussion on the category expansion model. You've seen that Dr. Pepper Snapple and Keurig are taking a less siloed approach to their business by combining both hot and cold non-alcoholic drinks. Brito, as you think about the market through a consumer lens based on consumer needs rather than a traditional manufacturer-led approach, largely based on beer, is there not more logic in combining beer and spirits together over the medium term, as you think about the next 100 years?
Well, at this point, we see lots of opportunities that were unveiled to us by this model. We're really surprised that every time we go to adjacencies with beer or with near beer, we tend to do well. If you look at our styles that go more to food occasions, for example
Consumers that want a different experience, they are doing very well, growing ahead of our average portfolio. If you go to the left side, flavored beer, we don't have many examples, but the few we have are doing very well. We feel that affordability with what we learned with our new colleagues. Improvement everywhere and in core lager, the heart of our business. If you look at all those points, there's so much more beer can accomplish. It's just a question of instead of fighting just for share of beer, of steering the category in directions and occasions where beer can play a role and start planting seeds today that could be part of the portfolio of the future as trends evolve and consumers change.
Okay. Thank you.
You're welcome.
Our next question comes from the line of Robert Ottenstein of Evercore.
Great. Thank you very much. Just a few related questions on the global brands. There has been some controversy on their relative profitability, and you mentioned they had higher margins, but could you be specific? Are you talking about gross margin or EBITDA margin in terms of the global brands in their out-of-home markets? Then, related to that, Corona doing extremely well. A rough sense of how many markets, and I know this, you may not have the precise number, but a rough sense of how many markets Corona is growing double-digit and you think can have a meaningful presence. Then as a follow-on, just some more details about the High-End Company that you discussed in terms of the structure of that company. Thank you.
Welcome. Okay. First, profitability, that's an easy one. These high-end brands, be it global brands or craft brands or specialty brands, they have way higher margins than our average margins even after sales and marketing investments. You can see that in many ways. You can see that because of our mixed effect has been growing year-after-year. Even in the U.S. you can see that. You can see that in our outlook with signal that we expect our revenue per hectoliter to grow ahead of inflation. That's not because of rates, that's because of the fact that mix is becoming more and more important in our net revenue per hectoliter. At the end, it's all about $ per hectoliter when it's all said and done.
Net-net, it's a great business, and that's why, Robert, we decided to invest, in your other question, in the High-End Company because it deserves a special group of people that are trained, that have a special profile to make, of course, use of what the mother company offers, but being very focused on those brands that sell maybe lesser volume, that have a more qualified distribution, but have amazing margins and amazing potential. They travel well, they have global platforms, and we have a portfolio of brands, not only one or two. We have a portfolio of brands that are complementary. The most important things, among other things, is that these brands enter new occasions. When you look at Corona or Coronita and how well it does with women, with different occasions where beer normally wouldn't enter.
When you look at Stella in the meal occasion, when you look at Budweiser in sports, in the Americana, in the bottle that travels so well, like any American brands. It is very profitable when it's all said and done. Much so that we decided to specialize people in the company to do just that. In terms of Corona, I think I said that in calls before, these are all public numbers. If you look at Corona, in most of our markets, it represents less than one share of total market in terms of beer. On the other hand, you have markets of ours in which Corona is already 2%-6% of share of total market. You can only run some numbers.
Corona is our higher priced beer from our global brands, so amazing margins, and growing amazingly well in places like China, growing 39% outside of Mexico. It's all good story in global brands with an amazing profitability.
Thank you very much.
Welcome.
Our next question comes from the line of Olivier Nicolai of Morgan Stanley.
Hi, good morning, Brito, Felipe. Just a first question for Felipe. You have refinanced some bonds at the beginning of the year at a much more favorable interest rate. Now looking at the next two years, a few of your US dollar bonds with higher interest will reach maturity. I was just wondering if you are confident that the 3.7% average interest rate that you gave for the group is going to stay beyond 2018. Just a follow-up on the networking capital chart, where I think it was showing your networking capital at -13. Should we assume a bigger contribution on your cash flow from working capital in 2018 versus 2017, considering that you have still probably some synergies to do on the SABMiller market and that your sales are obviously going to grow?
First one was retiring bonds.
On the bond market, the expected coupon rate of around 3.7%. You have to be mindful about the outstanding debt, which is at this point around $104 billion. As we recycle and retire and amortize and pay, depending on the decision to repay or refinance, and given the fact that it's primarily fixed interest rates, there may have some room for this coupon to go down, depending on what happens to interest rates in the future. I do not expect a material swing, for example, in 2018, in terms of the weighted average coupon being around the 3.7%. On the working capital, this slide shows that from the former ABI side, we have been improving net core working capital as a percentage of net revenues by one, sometimes two percentage points. Year-over-year, this trend continues.
When you see the decline of the 15.2%-13.4%, you should expect former ABI to continue to improve. As we add the former SABMiller at low to mid single digits, negative core working capital as a percentage of total revenues. That is the 13.4%. From that point, we expect the combined company to continue to expand. We expect to do faster on the former SABMiller side. There is no reason why former SABMiller should not come to similar levels of former ABI. I'm not detailing here market by market, but overall, I see as both similar comparable companies. Therefore, core working capital should be an area of relevant contribution for the overall cash flow. The beauty of being the negative territory is the more we grow revenues, more cash it generates, right? We extract from that.
That should continue to be an important cash flow contribution going forward.
Thank you very much. Congrats on your results.
Thank you.
Our next question comes from line of Tristan Van Strien of Redburn Partners.
Hi, good afternoon, guys. Two questions, or a question and a follow-on. First on your dividend. You talk about a growing flow of dividends. Can you just confirm that it's in EUR? Would you consider a scrip dividend or it's just cash? Just to follow up on, I guess, both the high-end and the category framework. You're really looking at a longer timeframe, 3 to 10 years to build brands and portfolios. How does that work with your zero-based budgeting framework? Do you have to change that a bit? Do you ring-fence money year-over-year? Just how you think about that going forward. Thanks.
Hi, Tristan. Let me take the first one on your question. We've always been a company of and not the or. We used to do top line and be efficient in cost, so much so that we have a term we use inside the company called Cost Connect Win, which says, "Let's be efficient on cost so we can connect with more consumers so we can win more business." That's exactly one of the charts we showed, in which we compare ourselves to other companies, FMCG. If you put those two charts together, you see that we have a better EBITDA margin, and we have a higher top-line growth. I think those things show that over a period of time, five years, we can accomplish both. We can be efficient while having a best-in-class and generate cash.
I think that's what we try to do as a company in the end. I don't see any conflict, quite the opposite. When you say about building brands for 10 years, let's not forget that when I talk about portfolio of today and portfolio of the future, sometimes it's about developing one brand of today that can be bigger tomorrow. It's not all about new brands. It's about getting resource allocation done in a different way so you can get a brand that's growing and accelerate that growth. Most of it is about brands that exist either in that market or brands that are global or international that can be introduced in that market. It's not about all creating new brands that will take 10 years to perform. On the first question-
Yeah, let me pick it up on the dividend piece. We have to look at both at the end of the day. Most of our cash flow generation is in U.S. dollars. We report in U.S. dollars. At the same time, we are a Belgian-based company, primarily listed in Belgium, share price quoted or trading in EUR, and therefore, it is a legal requirement to declare dividend in EUR, pay in EUR. We have to think of both and at the end, what makes more sense for the company in terms of capital allocation, the leveraging commitments, and so on and so forth. In this end, there is a big detach in terms of FX rates between EUR and U.S. dollars. We'll have to review what makes sense again, but for now, the 3.6 is something that fits within our commitments.
Okay. All right. Thanks, guys. Listen to Brito, maybe just to follow up and just perhaps a bit esoteric. In the same way in ZX Ventures, you have different incentive systems for these guys, and they're much more softer targets rather than hard KPIs, I guess. Is the same applicable for your high-end unit or the guys in charge really changing the categories because there's a much more longer timeframe rather than just hard numbers? You measure them differently.
Oh, yeah, sure. The incentive system is very similar. The KPIs are different. As I said, when you are building high-end brands, the distribution has to be qualified, the execution has to be premium. The pricing discipline has to be 100%. The global platforms and execution have to be very well coordinated on global brands. For example, the specialty brands are developed through brew pubs and different experiences. It is a different kind of activation in the marketplace. We can measure with KPIs the same way we measure for the core business, and we can use the same incentive system just based on different KPIs.
Okay. Thank you very much.
Thanks, Chris.
Our next question comes from the line of Simon Hales of Citi.
Yes, thank you. Afternoon, Brito and Felipe. A couple of questions. First one really just around how we think about your cost base, particularly input costs around 2018. I appreciate there's obviously FX transactional moves impacting, but that aside, can you talk about maybe some of the big moving headwinds or tailwinds you may be seeing? And specifically, in that regard, with regards to the U.S., a number of your FMCG peers have been flagging a tightening of trucking capacity of late. Is that something that you're seeing, and is it having any impact on your business and thoughts there? Secondly, Brito, with regards to your comments around low and no alcohol, you're clearly on track for your 20% by 2025. How should we think about the build towards that?
How much of your business is already in that low and no alcohol segment, and how rapidly should we expect it to grow over the next couple of years?
Yeah, I'll tackle the second question first. Today, we are around 8% of our portfolio. We want to get to 20% by 2025. We're not starting from zero, quite the opposite. The big thing that will accelerate this, in my view, is two things. First, the category expansion model, because it's showing us that there are opportunities in adjacencies and easy drinking and flavored liquids that we can explore. The second one is that now we already have five of our main countries in which NABLAB or non-alcohol beer and low-alcohol beer represents more than 20%, and in some, even 30%. What we see is that these products come even with higher margin if done correctly. I think this is going to be a big motivation for our people because they're going to be inspired. They can visit those countries.
They can see how it was done. There is a toolkit to be shared with other countries. Again, we're not starting from zero. The margins are very interesting, and category expansion shows the way on how to use some of those products to enter new categories or new occasions. We have already five countries that are already beyond 20% and 30%. On the first question on costs, we have here in our outlook in terms of overall performance, we say that-- Where is the cost piece here? Oh, yeah. We say premiumization revenue management initiatives towards the end of the first paragraph while keeping costs below inflation. Here we try to answer a question with this outlook, part of the outlook for the total company, not for any market specific, saying that we'll continue to manage costs below inflation.
Okay. Thank you, Brito. Can you comment specifically at all around that trucking capacity issue in the U.S. that others have been talking about?
Yeah, there is some trucking capacity issues in the U.S. The economy, of course, is heated. Because we have some inventory and some flexibility, we can avoid peak times, and we know what the peak times are. At the end of the month, a lot of companies shipping things or big events for e-commerce, like Black Friday and things like that. That for beer doesn't make any sense. We can work around those holidays and work around those peak times that were generated by e-commerce and try to manage that. You're right, there's some pressure there in terms of trucking. It's also true that a lot of companies are buying more trucks in response to that. Like any market, price goes up, more people come in. This pressure, of course, is not new.
It started already in the second half of last year and should continue during the first half. There'll be some cycling, but there's already some of it in the base.
Okay, very clear. Thank you.
Thank you.
Our next question comes from the line of Trevor Stirling of Bernstein.
Hi, Brito and Felipe. Two questions on my side, please. Brito, in the fourth quarter, there was a significant acceleration in revenue per hectoliter in LATAM North, in Mexico, in Asia Pacific. Could you give us a bit more color on what actually lay behind that? Was it easy comps? How exactly were you achieving that acceleration? The second question, perhaps more for Felipe. Looking at the associates, Felipe, that rose significantly in the quarter to a bit over $200 million. Is that the new norm that we should be expecting, plus or minus, or are there some one-offs in there?
Hi, Trevor. Brito here. I'll tackle the first one. I think what you're saying is net revenue per hectoliter on the fourth quarter compared to the rest of the year.
Correct.
For example, if you look at North America, let's pick the U.S., which is 90% of the zone. In Q1, our net revenue per hectoliter increased by 2.2%, Q2 0.9%, Q3 0.9%, and Q4 2.1%. For an average of the year, 1.5%. You see that it's not only Q4, there is some ups and downs depending on price increases, on mix of shipments, on many things. You see it started at 2.2%, went down to 0.9%, came back to 2.1%. I'd consider that normal course of business. Latin American West, I'm seeing here 9.5% for the fourth quarter, for a full year of around 6%, I think, or nine months of 4.9%. That was mainly revenue management in Colombia. In Colombia, as we flagged through the whole year, volumes were slightly negative.
The consumers had a VAT increase of 15% on the overall economy. Our guys tried with some discounts to move volume. When they saw it was not happening, they rethought their discount strategy. That, I would say, was mostly of what happened in the fourth quarter. In LATAM, it was really easy comps on the fourth quarter. If you remember in 2016, or maybe you don't remember, in 2016, the net revenue per hectoliter was negative in the fourth quarter by -4.6%. The 10% should be viewed in that context. The other zones I don't see. In APAC, there was the repatriation of Corona that impacted the third and especially the fourth quarter in APAC, in Australia mainly. Those are the big things that could explain those variations.
Very helpful. Thank you, Brito.
Hi, Trevor. Let me take the share of associates. First, a kind of disclaimer here that the share of associates as well as minorities are two lines that are not normalized, it's really as reported. Secondly, there is no reference base. For example, when you compare full year 2017 versus 2016, in 2016, we only have three months of those, which should not impact the comparisons for the quarter. The comparison for the quarter is impacted by, year-over-year is impacted by basically two things. First, at the very beginning of the integration, some of the profit recognition in the fourth quarter 2016 shifted into the first quarter 2017, causing the fourth quarter 2016 to be, let's say, abnormally low.
In addition to that, we do a lot of the accruals based on estimates, and there is a true-up towards year-end, which caused the fourth quarter 2016 to recognize incremental profits that were incurred throughout the year. When you compare fourth quarter year-over-year, you have this big mismatch.
Thank you very much, Felipe.
You're welcome.
Our next question comes from the line of Brett Cooper of Consumer Edge Research.
Hello?
Drill down a bit. Hello?
Hi, Brett.
Can you hear me?
Yeah. Hi, Brett.
Hi. I was wondering if we could get a little bit more specific on the category framework. If we take a look at the U.S., you've been trying to expand your portfolio in flavored beers. You've been doing premiumization, and that's obviously going well. You've been expanding styles. It's been unable to drive growth in that market. I'm just trying to figure out what changes going forward versus what we've seen over the last several years as you apply this framework to your business.
Brett, we've seen that in other markets, right? Look at Australia. When Australia decided to shift resources or to start accelerating some brands, it does take a while for things to compensate because some big things and the other ones are small. The big things are declining, the smaller things are growing, and it takes a while for one to grow to a size to compensate for the other. The direction's set. We think some of our brands in the U.S. will remain very important in our portfolio, but albeit at the lower size, at the smaller size, and some others will continue to grow and will be more of a bigger brand within our portfolio. That happens all the times in all markets. If you look at Brazil, the same happened. If you look at Argentina, the same happened.
In which at some point, a brand declines, another brand grows, and the portfolio. The important thing is that it should be margin accretive, right? That's what we've been trying to do in the U.S. Our battle in the U.S. has always been to stabilize or to have both at the end, share stabilization and profitability. If you look at our gross profit margin in the U.S., now for eight years in a row, has gone up. If you look at our portfolio in the U.S., we've been trying to rejig it, trying to add new things that we think are our growth engines for the future. I think we're now with the category expansion framework and with the new leadership in the U.S., I think we now are at a very important point to really start making all those things kind of connect the dots.
Not going to happen overnight. We're brewers for 600 years, we're here for the long term, and we'll do what's best for the long term. You have to remember that the share issue we have in the U.S. was created by ourselves. When we came to the U.S., we said we like the share position, not the share composition. It's too much based on low macro brands, low profitability brands. We don't think that creates a great business for the future. We're here for the long term. We're willing to take the pain to rejig this portfolio. It is true that it's taking a bit longer than we thought. Again, the direction has been set from the very beginning.
We've learned along the way, adjusted here and there, the direction is pretty much set, and that is we want to develop Bud and Bud Light and above. That's the direction where we're headed. Interestingly enough, if you look at the first 10 years or 9 years in the U.S., our financial performance has been way ahead of our plan. EBITDA almost doubled, cash flow more than 3 times. Volume was below what our plan was. Now for the second 10 years, I think we have a great base to start connecting these dots and like we did in Western Europe, where for many years we couldn't grow. The last 4 years, Western Europe has been growing top line and bottom line consistently, 4 years in a row.
Now we have the same thing in Australia, this all serves as inspirations and reasons to believe that we can do the same thing in the U.S. If you look at the U.S., Michelob ULTRA is already 10% of our business, and it's the fastest-growing brand now for 3 years in a row. Almost 12 quarters in a row, the biggest share gainer in the U.S. If you look at the big share gainer brands in the U.S., out of the 6 brands, we have 3, which is Michelob ULTRA, according to IRI. Michelob ULTRA, Stella Artois, and Bud Ice. We have brands that are growing. We have, of course, to do a better job on Bud Light specifically, and continue to accelerate, like we did in the fourth quarter, the brands that are growing.
If you look at our fourth quarter, our share performance was better than our second quarter and third quarter, and that was across the board. Not only the brands that are growing accelerated, but the brands that were declining, declined less. That's why we went back to 55 basis points share loss as opposed to 80 basis points share loss. Again, it's 1 quarter, but we've been learning a lot and applying those learnings in the marketplace.
Great. Thanks. If I can add 1 follow-up. Is there a reason why we've seen less of the no and low alcohol beer in the U.S. as opposed to other markets, especially in light of, as you mentioned, volume struggles that you've had here?
It's a good point. I think we have our plate full in the U.S. We've been testing some other things in other markets, so as not to distract them. Of course, with the learnings, you can be sure that some of those things will be migrating to the U.S. pretty soon.
Great. Thank you.
Thank you, Brett.
Our next question comes from the line of Komal Dhillon with JPMorgan.
Hi, good afternoon. Good morning. Just two questions, please. One on the global brands. The slide on that growth of those brands was very helpful. Could you comment on the underlying volume growth rates on these brands, ex home markets? I mean, excluding the one-offs from taking distribution back in-house like Corona in Australia. Just to follow up on that working capital synergies question, please. You're expecting to take former SABMiller to former ABI levels for core working cap to sales. Is the current lack of capital synergies from the SABMiller deal so far due to difficulties in changing terms with suppliers in Africa? Just could you give us some more color on what is going on in the first 15 months of integration, please?
Hi, Komal. This is Felipe. On the core working capital side, we have been progressing across the SABMiller territory. As I said before, there was, I think, a question on that one. We see no reason why former SABMiller shouldn't get to similar levels of former ABI, quite frankly. That is where we are heading to. The first 15 months, that was not an exception.
Komal, I think your first question was, let me see if I understood it correctly. You want to know what global brands are having, what kind of growth they had in their home markets, right?
Yeah, in volume terms, please. Ex the distribution, taking back distribution in-house, like for Corona in Australia. Just underlying, what could we expect in the future?
What I know, I don't have an exact number in front of me, but what I know is that Stella Artois is back to growth in Belgium. What I know is that Corona is growing in Mexico, and Lauren can confirm the numbers afterwards to you. What I know is that Budweiser is declining 35 basis points in terms of share last quarter in the U.S. Lauren, can you-
Sorry, I'm talking about. Oh, sorry, you said. I'm just talking about ex home markets, in the growth markets.
Well, that I had in my speech. Oh, here. We have that on page, what's this page? 11 of our script. If you look at global brands outside of home markets, they are growing at 16.8% for 2017 revenue growth. Right. If you go now for page 12, you see that Stella Artois, or I better say Corona, is growing revenue 39.9% outside of Mexico. Budweiser, 10.8% outside of the U.S. Stella Artois, we'll have to get you that number, but should be very close to the 12.8 because Belgium is growing very slightly. Around 12% outside of the home market. Those are the numbers.
Okay. Thank you.
Thank you.
Our next question comes from the line of Mark Swartzberg of Stifel Nicolaus.
Okay. Stifel Financial. Good afternoon, everyone. Brito, on the U.S., really building on Brett's questions, you drew attention to this focus on hyper-local execution. Question one is, how important might that be? What are you seeing from these test markets that might be encouraging for the larger performance in the U.S.? Secondly, you also drew attention to quality messaging and innovation for Bud Light, and you've been seeing encouraging signs for Bud Light for a number of years. Is there any reason to think that the quality messaging will be more impactful to improving the share trends for the brand?
Yeah, Mark, I think on Bud Light, it's interesting. We've had a lot of positive feedback from Bud Light drinkers on our essential ingredients campaign, because it had been a while since the last time we spoke about ingredients, what goes into the beer, and quality of Bud Light, and the special process and everything. That was something that was very well-received, and we will continue to make that part of our Bud Light communication. We made it a priority for Bud Light to defend its quality credentials, for sure. We'll continue to highlight the power and mostly the simplicity. We will see that some consumers are a bit tired of the complexity of the category that it became with all crafts and all different liquids that are very hard to understand.
Bud Light is a simple beer with essential ingredients, fresh, and that appeals to a lot of consumers. Dilly Dilly, on the other hand, put Bud Light back into pop culture, number 1 topic in conversation in terms of beer and social media. It's something that brought Bud Light a lot of what made Bud Light big, which is being in tune with young people, young adults, and also being topical in terms of conversation. I think Dilly Dilly, I think quality message and continued execution, some insights from the category expansion model in terms of easy drinking will make a difference for Bud Light. Your first question was?
About the hyperlocal execution. You've had some test markets in 2017. How encouraging are they for what might happen nationally in 2018?
I think one thing we did in the U.S. was that we centralized maybe too much, we have too many programs that are national. The fact is that the U.S., like China and Brazil, is a continent in itself, and you have many different U.S.' within the U.S. States are very different from the heartland to the coast, to more Hispanics, to all sorts of different Hispanics, some more Mexicans, some Cubans, some Dominicans. We have brands that appeal to all these different ethnicities. But when you have a national program, it's very hard to execute as per different markets' makeup. I've been traveling the U.S. for the past three weeks with the new leadership, Michel, Brendan, Marcel.
What we see is that there is an opportunity to really go back to many years ago when we had more regional events and we had different portfolio makeups, slightly different per-region. Because again, in some places you have Dominicans who have Presidente, the number 1 by far in the Dominican Republic. If you have Mexicans, again, Bud Light is the number 1 beer with Hispanics. We need to tailor the message to the Hispanic consumer and also invest behind Estrella Jalisco, which by the way, this year will be a big year for it because it's the sponsor of the World Cup and the Mexican national team in the U.S., and so on and so forth. I think it's something that we need to do better. You go to Miami, Beck's, for example, has a strong following.
There are many different things that could be hidden jewels. Not to talk about craft and specialties that go better here than there. Places where you have more events than others. Different things that we'll try more and more to tackle in this huge continent called the U.S., as we do in China, as we do in Brazil. Nothing new, just that we have to apply to the U.S. as well.
Great. Thank you, Brito.
You're welcome.
Our next question comes from the line of Mitchell Collett of Goldman Sachs.
Hi there. In the outlook statement, you say that you expect to deliver net revenue per hectoliter ahead of inflation. Do you think you achieved that in FY 2017? Does that imply revenue per hectoliter growth can accelerate in FY 2018? If it does, would you expect that to be offset by volume being slightly softer? I just wanted to come back to the U.S. Where you've said that a few times that you want to get the right balance between share and profitability. This year, your gross margin went up 90 basis points more than your EBITDA margin. What would be the right balance between profitability and market share within the U.S.? Thanks.
Well, I'll start from the second question. In terms of the U.S., what we have is a market with very strong cash flow, very strong margins, hard currency, and an amazing scale. We want to keep that. Of course, we want to grow that. More than growing, we want to first keep and then grow, as we did, by the way, in 2017, in which we grew EBITDA by 1.9%. We want to continue to grow cash flow, as we did, by the way, in 2017 in North America. We have to get that share profitability right. I mentioned here, with Mark and Brett Cooper, many of the things we're doing in the U.S., and that we want to do it the right way so it's sustainable, so it's profitable, so it's accretive. That's our intention in the U.S.
In terms of your first question, our implied inflation for our footprint was 4%, or between 3.5% and 4% last year, and we grew top line by 5.1%. What we said for the outlook was already achieved last year and prior to that, and that is done through mix mostly. Okay? Yeah, just one example, 2017 was a good example.
Okay. I guess as a follow-up to that, given the shift you've highlighted in your business towards growth markets and given the acceleration for your global brands as well as your new category management initiatives, do you think the five-year CAGR is the right starting point when we think about your organic revenue growth for the next two or three years, or could it be slightly higher than that?
Well, 2017 was higher, SABMiller brought us markets that are more growth-oriented by the very nature of those markets. I'm not giving any guidance here, but of course, we'll continue to work to beat that five-year CAGR going forward. That you can be sure.
Great. Thank you.
Our next question comes from one of Pablo Slomik of FIG.
Thanks for taking the question. One for Felipe, one for Brito. Felipe, just remind us of by how much did the EBITDA margins in Mexico increase over the last five years. The reason I ask for that refresher is just that if you can, give us some color in terms of where were margins for the beer business in Colombia, Peru, and South Africa when you took over that business. Obviously, we have the SABMiller numbers at the regional level and consolidated, but we don't have that country granularity. That would help. The second one, Brito, for you. Obviously, great quarter, great year, lots of momentum in the beer business, so much to do, so much opportunity, and even in the U.S., you talk about the next 10 years.
I guess my question is, when I hear Felipe in every call tell us that M&A remains a core competency for the company, and here we are, all of us on the buy and sell side thinking, okay, there's nothing else for Anheuser-Busch to buy in the beer industry pretty much that's sizable and relevant for them. You're going to have to get out of beer and go into other categories. I guess I'm asking, just help us think through that, because you've done so well in beer, you do have a little opportunity there. There's this risk looming that you have to enter a new category. How should we think about that? Thanks.
Well, Pablo, thanks. At this point, we're really focused on finish our integration. Let's just remember, we did a huge business combination. We're far from done. We had a very good start. 2017 was our first full year. Integrations normally take two, three years to be totally done in terms of synergies, integration, best practice, best of both. I wouldn't just write off what we're doing now as, okay, it's done, next. We also have deleveraging that we need to do before we can think of anything else. 99.9% of our people in the company, of our 200,000 colleagues, are always, not now but always, focused on the organic business at hand. Only a few people are looking at the market opportunities, and we don't do that every day. Our business is really to grow what we have. We don't need to do any more acquisitions.
We have an amazing portfolio. We have leading positions in nine out of the 10 top markets for beer today and where growth is going to come from in the future. We operate in 50 markets. As you saw in the two charts, we have leading top line and cash conversion and EBITDA margin compared to FMCG. We want to do better than that. We can do better than that. We have lots to do. Very happy with year one of integration, but it's not done yet. Too soon to think of anything other than that at this point.
On the first one, for the synergies announced as part of the Modelo transaction, that would imply an EBITDA margin expansion in the mid-teens and to be capturing three years. Three years are well behind, the business continued to expand margins, showing that, yes, there is a big wave that comes together with synergies and the combination of keeping net revenues growing ahead of inflation while costs moving below inflation, that should drive further margin expansion compounded by volumes growth. That is that. On the SABMiller transaction is no different. When you apply the $3.2 billion on the former SABMiller EBITDA prior to the combination, that would imply margin expansions in the mid-teens. Therefore, that should be captured across all SABMiller markets as synergies are captured. I hope that gives you a sense on what is coming.
Thanks. That's very helpful.
Thank you.
Brito, can I ask just a quick follow-up? In the U.S., obviously Corona is doing great overseas, like you described. It's also doing very well in the U.S., right? So far, your Mexican brands, Montejo and Estrella, haven't really tackled Corona. I would argue that Corona, it's more a lifestyle brand that supports the growth there than necessarily the Hispanic side of it, although it also helps. My question is, you have Kona in your portfolio, that in my opinion, a very strong potential direct competitor of Corona, but your distribution is not doing much with it. When I say you have it, obviously it belongs to another company, but you are the distributor for it. I think you could be doing a lot more with that brand and maybe challenging Corona more directly in lifestyle. Thanks.
I think the category expansion model opening our eyes to many opportunities. I'm not going to comment anything specifically because there's a competitive sensitive, but I think it's something that we are applying to the U.S., our main market, and it's interesting to see how some insights are sometimes not the obvious ones. Again, we have an amazing portfolio. We have brands that, as you said, can be activated more intensely, in segments or regions. We have to be more region-specific because the U.S. is a continent. Where you do that, by the way, in Brazil. If you go to Brazil and you look at what we do in the Northeast compared to the Southeast, the problems are very different. Of course, when you have a World Cup or a Carnival, that's across the country. The rest of the year, the problems are very different.
You go to China, same thing. To go to Guangdong or go to Sichuan, the problems, of course, some are national, but a lot of them are very localized. In the U.S., for some reason, we took that empowerment from the regions, and now we're giving it back. Of course, we tested in the last two years, and we're giving some of that back because we see opportunities with ZIP code analyses, analysis of database that we have now with big data, with lots of things that were not available before and that now are available. We also enhanced our leadership to be able to have that kind of empowerment to make those kind of decisions on a local level.
The wholesalers that are now closer to us and vice versa are also amazing partners in deciding or helping us decide how to best tailor programs to different regions. They've been there for generations. They have a vested interest in. 90% of their volume or close to it is our products, and they are very loyal to our brands and very interested in succeeding. It's a win-win for both of us. We're going to be working more closely with the panel in our Win Together program with the wholesalers that was started two years ago, and that's going very well. That's all part of this logic of more localization.
Understood. Thank you.
Ladies and gentlemen, we do have time for one more question. Our final question will come from the line of Sanjeet Aujla of Credit Suisse.
Hi. A few questions on the category expansion framework, please. If my memory serves me correct, this was a 5 to 10-year plan for SABMiller. How quickly do you think it can have a visible impact on your results? Do you think it should be sooner than that? Secondly, do you think you've got enough people from SABMiller to help you execute on the category expansion framework and embedding that across the organization? Thirdly, just specifically on refreshing and segmenting core lager brands between classic and easy drinking. It's something you gave the example of having done it in Argentina. Are you planning to implement that across all markets? Will that be happening over the next 12-18 months? Thanks.
That's a very good question because what we see in many of our markets is that because core lager has always been the center of gravity of our business, most of our business, most of our strong brands are in that box. Sometimes we've been not very accurate in positioning brands in different domains in consumer minds. Sometimes they are just on top of each other. What the category framework showed us is that these brands can be better positioned and therefore have less cannibalization and appeal to different occasions and different consumer needs if done correctly according to the model. For example, in Argentina, we had the example of Quilmes and Brahma being right on top of each other, and consumers didn't know exactly why I should pick one or the other.
Last year we did was the first country where we took the learnings even before the year started because we learned about that in 2016 and executed that and separated in terms of communication, packaging. Every touch point was separated more between core lager or classic lager and easy drinking. The results are very good, were very good. We are very excited about going to markets where we have similar issues, including the U.S., where Bud and Bud Light sometimes sit very close to each other.
Including Brazil, where Skol and Brahma, for a long time, have used some properties that are the same or very close, are executed in the same displays in the supermarket and all that, and tried to really get these personalities of these brands to really be more accentuated, so they appeal to different occasions, different consumer needs, and therefore, are more complementary than cannibalistic. Okay? In terms of people, yes, we have the people, our new colleagues from SABMiller. Most of them that work with the category expansion model, and most of them that we invited to stay, that embrace our new dream of the new company, stayed. We're very excited, very proud to be called their partners. Very proud to have them with us.
Yes, as I said at the very beginning of the call, the category expansion has been adopted last year, three-year plan, one-year plan, and became company language. It's not a marketing language, it's a company language. Right? Thank you. If there are no more further questions, Maria, let me summarize the call. In summary, 2017 was a transformational year for our company. The integration with SABMiller is our most successful ever. This is the first and foremost due to our people, who have continued to amaze us throughout this process. We are also very excited about the intellectual synergies that have arisen from the combination, such as, for example, the category expansion framework we just discussed. Additionally, we achieved our best performance in the last three years, growing revenue in nine out of top 10 markets and achieving double-digit EBITDA growth.
We will continue to work hard to grow the global beer category while evolving our brand portfolio to ensure we are rising to every occasion to capture future growth. We are very excited about 2018, knowing that the first quarter will be soft, and the reasons for that are very simple. First, phasing of sales and marketing initiatives, largely due to the World Cup year. If you go back to 2010 and 2014, the two last World Cups, you will see that our first quarters or first half of the year are normally more charged in terms of sales and marketing because of all the promotions we do leading to the World Cup. This year will be no different. The other reason is that there is a soft top-line start in Brazil.
Not only Carnival was earlier this year, second, we had very poor weather since mid-December in Brazil, which again, affected sales. We also have a tough comp because last year in the first quarter, our beer Brazil business grew ahead of the industry, five and a half percentage points ahead of the industry. Gain share big time last quarter. Weather, Carnival, tough comp. There is also some inventory in China that moved because of Chinese New Year, just like Carnival moving in the calendar year. Again, we are very excited about 2018. As we said in our outlook, we remain excited and committed to deliver strong revenue and EBITDA growth in the year, knowing that the first quarter will be soft as a result of everything I said. Again, thank you very much for joining the call, and Dilly Dilly to all of you.
Thank you so much. Bye-bye.
Thank you. This does conclude today's earnings conference call and webcast. Please disconnect your lines at this time and have a wonderful day.