Welcome to Anheuser-Busch InBev's first quarter 2023 earnings conference call and webcast. Hosting the call today from AB InBev are Mr. Michel Doukeris, Chief Executive Officer, and Mr. Fernando Tennenbaum, Chief Financial Officer. To access the slides accompanying today's call, please visit AB InBev's website at www.ab-inbev.com and click on the Investors tab in the Reports and Results 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, 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 star two. 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 17th of March 2023. 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. Michel Doukeris. Sir, you may begin.
Thank you, Jesse. Welcome everyone to our first quarter 2023 earnings call. It is a great pleasure to be speaking with you all today. Today, Fernando and I will take you through our first quarter operating highlights and provide you with an update on the progress we've made in executing our strategic priorities. After that, we'll be happy to answer your questions. Let's start with our operating performance. Our business momentum continued this quarter. We are very pleased with our strong performance to start the year. We delivered revenue growth of 13.2%, with volumes up by 0.9%. Revenue per hectoliter increases by 12.4%, driven by price actions across our markets, other revenue management initiatives, and ongoing premiumization.
We grew EBITDA by 13.6% with a margin expansion of 13 basis points, despite continued commodity cost headwinds and while increasing sales and marketing investments in our brands. Underlying EPS was $0.65, an 8.7% increase versus last year. Our focus on disciplined resource allocation and everyday efficiency continues to enable us to invest for the long term while delivering consistent, profitable growth. We delivered broad-based growth this quarter with both top and bottom line increases in all five of our regions. Revenue increased in 80% of our markets, with volume growth in over 60%. Our diverse geographic footprint provides a unique combination of growth and reliable cash flow generation, positioning us well to deliver superior long-term value creation.
I'll take a few minutes to walk you through the operational highlights for the quarter from our key regions, starting with North America. In the U.S., the beer industry remains resilient, with industry volume trends improving sequentially and U.S. dollar sales up 3%. Our business delivered another quarter of top-line growth and stable EBITDA, despite the elevated cost environment. Our above core beer portfolio continued to gain share of segment, growing volumes by mid-single digits. Since we are talking about the U.S., let me share some thoughts on the Bud Light situation and put it in the context of our global company. Let me start by clarifying a few facts. This was the result of 1 can. It was not made for production or sale to general public. It was 1 post, not a formal campaign or advertisement. Bud Light campaign is easy to drink, easy to enjoy.
We should address the situation through the lens of 3 areas that are very important: our people, our consumers, and beer. Let's start with our people. This situation has impacted our people and especially our frontline workers, the delivery drivers, sales representatives, our wholesalers, bar owners and servers. These people are the fabric of our business. They are our neighbors, family members and friends. They are in every community in America. We've been doing everything we can to support our teams and ensure their safety while continuing to brew, package, and together with our wholesalers, deliver great beer to the market. We are providing direct financial support to the frontline teams that work for us and our wholesalers. As to Bud Light, we have significantly increased our investments behind the brand in the US, including tripling our media spend over the summer. Now let's talk about our consumers.
We continue to be committed to the programs and partnerships that we have forged over decades with our consumers and with organizations that represent a wide range of communities where we operate. We work every day to delight our consumers and bring people together. When we do this well, our brands perform. Finally, let's talk beer. Everything we do should be about beer and should promote beer. Beer is an essential part of life's meaningful moments, whether in sports, music, or celebrations. These are moments that bring people together, and this is why I love beer. While beer will always be at the table when important topics are debated, the beer itself should not be the focus of the debate. Bud Light is about being easy to drink and easy to enjoy. That's what consumers want, and that's what we are focused on delivering.
We stand behind Bud Light. We'll continue to invest in the brand to drive it forward. As CEO, I'm accountable for our results, this company, and our shareholders and stakeholders and my team. Bud Light is very important to our U.S. business. I will never minimize this situation. However, seeing the context of our global company provides perspective. Over the years, our global footprint has enabled us to successfully navigate different types of challenges, such as temporary ban on beer sales in certain countries and the months-long shutdown of bars and restaurants across the globe. With respect to the current situation and the impact of Bud Light sales, it is too early to have a full view. The Bud Light volume decline in the U.S. over the first three weeks of April, as publicly reported, would represent around 1% of our overall global volumes for that period.
With this perspective, in the context of our global business, we believe we have the experience, the resources, and the partners to manage this, our full year EBITDA growth outlook is unchanged. In summary, we are focused on our people, our consumers, and beer. We want to reiterate our support for our wholesaler partners and everyone who brings our great beers to the market. I can tell you that we have the agility, resources, and people to support the U.S. team and move forward. We'll continue to learn, meet the moment and come out stronger, we work tireless to do what we do best, bring people together over a beer and creating a future of more cheers. Moving on to our largest region, Middle Americas, which continues to deliver strong results.
In Mexico, we continue to outperform the industry and grew top line and bottom line by double digits. Our volume growth was broad-based, led by our above core beer brands, which grew by low teens. Our digital direct-to-consumer platform, TaDa, is now operating in over 50 cities and fulfilling on average over 300,000 orders per month, enabling us to build closer connections with our consumers. In Colombia, our business delivered top line growth with our beer portfolio continue to gain share of total alcohol despite inflationary pressures impacting consumer demand. EBITDA declined at low single digits driven by anticipated cost pressures. Our leading mainstream portfolio drove our performance, delivering mid-single digit revenue growth. In South America, our business in Brazil delivered double-digit top and bottom line growth with 235 base points of margin expansion.
Our beer volumes grew by 0.9% with stable market share despite lacking any strong comparable. Our premium and super premium brands led our growth, delivering a volume increase in the mid-thirties. Let's talk about EMEA. In Europe, we grew top line by double digits with flat volumes despite a soft industry. EBITDA grew by high single digits. We continue to premiumize our portfolio with our global brands and super premium portfolio delivering low teens revenue growth led by Budweiser and Corona. In South Africa, we delivered record high volumes for the first quarter and grew revenue by high single digits. EBITDA declined by low single digits impacted by anticipated commodity cost headwinds. Our performance was led by Carling Black Label, the number 1 beer brand in the country. Our premium, super premium and beyond beer portfolios all delivered double-digit increases in revenue. Finally, APAC.
In China, our business delivered double-digit top and bottom line growth as channel traffic continued to normalize and consumer demand for our portfolio accelerates. We delivered volume growth across all segments of our portfolio, led by our premium and super premium brands, which grew by approximately 10%. I would like to share with you a few sustainability highlights. We continue to work in collaboration with our suppliers to drive decarbonization across our supply chain. In March of this year, we were recognized by CDP as being a top supplier engagement leader in 2022. In circular packaging, our teams won awards for our innovations using upcycled barley straw and majority recycled marine waste for Corona six-packs and crates. Let's move on to our strategic pillars. Let's start with pillar 1 of our strategy, lead and grow the category.
We continue to execute on our five levers to drive category expansion and delivered strong quarter of consistent and profitable top-line growth. We are leading and growing the category by offering superior core propositions, developing new consumption occasions, and expanding our premium and beyond beer portfolios. Our global brands continue to scale and drive premiumization across our markets. The combined revenues of Corona, Stella Artois, and Budweiser grew by 15.4% outside of the brand's home markets, led by Budweiser, which grew by 17.8%. Let's turn to our second strategic pillar, digitize and monetize our ecosystem. This continued to accelerate usage and reach, capturing $8.2 billion in gross merchandising value this quarter, a 32% increase year-over-year in reaching 3.1 million monthly active users.
Customer satisfaction continued to improve with our weighted average Net Promoter Score improving to positive 59, up 11 points since last year. In 15 of the 20 markets where business lies, our customers are also able to purchase third-party products through BEES Marketplace. Customer adoption is increasing with 59% of BEES customers now also BEES Marketplace buyers. In the first quarter, BEES Marketplace generated approximately $295 million in GMV, representing $1.2 billion on an annualized basis. Let's talk about how we are strengthening our direct relationship with our consumers. Our digital B2C products, Zé Delivery, TaDa, and PerfectDraft, are now available in 20 markets and generated over 16 million orders and $100 million in revenues this quarter.
With that, I would like to hand it over to Fernando to discuss the third pillar of our strategy, optimize our business. Fernando, over to you.
Thank you, Michel. Good morning. Good afternoon, everyone. We aim to maximize value by focusing on three areas: optimized resource allocation, robust risk management, and efficient capital structure. With respect to capital allocation, we are focused on maximizing long-term value creation by dynamically balancing our priorities. We continue to invest in organic growth to support our strategy to lead and grow the category and digitize and monetize our ecosystem. The excess cash generated by our business is then dynamically allocated to our three capital allocation priorities: deleveraging, selective M&A, and return of capital to shareholders. Our debt maturity profile remains well-distributed, with no bond maturities in 2023 and no relevant medium-term refinancing needs. If you look at our debt maturity profile, we have $3 billion worth of bonds maturing through 2025.
Our bond portfolio has an average pre-tax coupon of around 4% and a weighted average maturity of fourteen and a half years. Our debt portfolio does not have any financial covenants, and it is comprised of a variety of currencies diversifying our FX risk. 95% of our bonds have a fixed rate insulated from interest rate volatility and inflation. As a result of our deleveraging progress, strong free cash flow generation, and robust risk management practices, both Moody's and S&P recently upgraded our credit rating to A3 and A minus respectively. Let me take you through the drivers of our underlying EPS this quarter. We grew underlying EPS by 8.7% versus last year, delivering $0.65 per share. This increase was primarily driven by nominal EBITDA growth, which accounted for a $0.13 per share increase.
As we continue to deleverage, our net interest expense has reduced, contributing a $0.01 improvement. Higher income tax reduced EPS by $0.04, driven by country mix. I would like to hand it back to Michel for some final comments before we start our Q&A session. Michel?
Thanks, Fernando. Before opening for Q&A, I would like to take a moment to recap my key takeaways for the quarter. We continue to make progress in executing across each of our three strategic pillars. Our business momentum continued this quarter. Driven by the strength of our leading brand portfolio, we grew volumes in 60% of our markets. We made important strategic choices in pricing and other revenue management initiatives, which drove continued strong net revenue per liter growth of 12.4%. We progressed our digital transformation, generating $8.2 billion in GMV through BEES, with 59% of BEES customers now also BEES Marketplace buyers. EBITDA grew organically by 13.6% and our margins expanded even in the context of continued elevated cost environment.
As a result of our deleveraging progress and strong free cash flow generation, our credit rating was upgraded 1 notch by both Moody's and S&P. We are investing to drive long-term value creation, and our results this quarter are another proof point of the effectiveness of our strategy. With that, I will hand it back to Jess for Q&A.
Thank you. The floor is now open for questions. In the interest of time, we will limit participants to 1 question and 1 follow-up question. Again, if you have a question or comment, please press star 1 on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. We do ask that while you pose your question, you pick up your handset to provide optimal sound quality. Our first question is coming from the line of Priya Ohri-Gupta with Barclays. Please proceed with your question.
Good morning. Thank you so much for taking the question. Firstly, congratulations on the upgrade from both Moody's and S&P. Fernando, I'd love to start with you. Now that you've achieved those low single A ratings, how should we think about your focus on getting to three times net leverage as a near-term target? Is there any potential desire to move towards mid-single A ratings over time, given that that could lift you to tier one commercial paper access? Thank you.
Hello. Good morning, Priya. Thanks for your question. The best way to frame it is to go back to our resource allocation priorities. The objective at the end of the day is to maximize value creation. We always invest behind the organic growth of our business, and with the remaining cash, we balance deleveraging, shareholder payout, and selective M&A. When you think about deleveraging, we said a few times that we maximize the value of our business at 2 times, but 90% of these benefits we will be capturing around 3 times. Our goal is to do the right thing for the business, and by doing the right things for the business, the rating will be a consequence. In a nutshell, for the time, we still see a meaningful amount of value on deleveraging.
We increased the dividend last quarter, in the grand scheme of things, most of the cash is still going towards deleveraging. As we start moving closer to 2 times and start passing 2 times and moving closer to 2 times, more and more, we can have other priorities. Always with the mindset of doing the right thing for the business and rating will be a consequence.
Great. Thank you. Just as a follow-up, you know, you highlighted that you have, you know, only about $3 billion of maturities coming due through 2025. As you think about, you know, further debt reduction, would you prioritize looking at those or maximizing deleveraging by perhaps looking further out the curve given some of those bonds are still trading below par? Thank you.
It changes a lot depending on the interest rate environment. Whenever we are in a position to start redeeming more debts, we always look at the different trade-offs. If you recall correctly, in early 2020, given all the uncertainties, we focused a lot on the short term, because interest rates were low, it made more sense for it to redeem short-term debts. As we see interest rates rising, it made more sense for us to redeem long-term debt because it was much more attractive. We are in a position, given all the risk management initiatives that we did in 2020, that we don't have any near-term maturities.
We can really make sure that we focus on whatever is maximizing value because the risk profile is in a very good place.
Great. Thank you so much.
Thank you, Pia.
Thank you. Our next question will be coming from the line of Rob Ottenstein with Evercore ISI. Please proceed with your question.
Great. Thank you very much. So Michel, as you clarified in your comments, in terms of Bud Light, this is all about one can, one social media post, one influencer. Yet somehow it's just become, you know, something a whole lot bigger than that. There continues to be a lot of misinformation out there, a lot of confusion. Can you offer any thoughts, reflections on how this happened, what you've learned, and you know what now that we're here, what are you gonna do about it? Thank you.
Morning, Robert, and thanks for the question. I think that, to start with, we need to understand the current environment and especially social media landscape and how consumer brands, especially big brands with significant reach, can be pulled into a discussion like this one. We know that ours, Bud Light, is certainly not the first brand that was pulled in a situation like that. As I said, while beer will always be at the table when important topics are debated, the beer itself should not be the focus of the debate. To me, this is the key learning. Moving forward, I agree with you. One challenge is what you call the misinformation and confusion that still exists.
We'll need to continue to clarify the facts that this was 1 can, 1 influencer, 1 post, and not a campaign, and repeat this message for some time. As we do that, we are more focused on leveraging our global experience and mobilizing our global resources to support the US team as we move forward. We have adjusted and streamlined our marketing structure, so the most senior marketeers are more closely connected to every aspect of our brands. In addition, we are supporting our frontline teams. We are investing behind Bud Light, tripling our media investment for the summer, and we are investing more together with our wholesalers in our local markets. Just getting like last week, Bud Light was on the stage at the NFL Draft. We released a new TV commercial that continues our campaign, the current campaign, Easy to Drink, Easy to Enjoy.
We had strong presence in the Stagecoach Country Music Festival in California, and there is much more to come. As I said, it's too early to have a full view on the impact, but I know that we have the people, the partners to learn from that, to continue to move forward and to come out stronger.
Very clear. Thank you.
Thank you. Our next question is coming from the line of Mitch Collett with Deutsche Bank. Please proceed with your question.
Thank you. I've got 2 questions, please. The first is, given the strong start to the year from an organic EBITDA perspective, can you give some color on why you didn't raise or refine the 2023 guidance? In particular, I'd be interested in the puts and takes from a volume pricing, COGS and SG&A perspective, as we pass through the quarters. Secondly, Colombia has been a really strong performer for a couple of years now, but it seems to have hit some challenges in Q1. Do you expect to be able to take enough price to offset input cost pressures in Colombia, and do you think the consumer is in the right place to accept it? Thank you.
Thanks, Mitch. Fernando here. Let me take the first question. In terms of guidance, I always refer back to the reason why we started giving guidance. We give guidance, our medium-term outlook at the end of 2021 because we are moving from an inorganic strategy to an organic strategy. When we look at the medium term, that's the growth that our business can sustain and can deliver. With that in mind, every quarter is gonna be different. There are gonna be better quarter, worse quarters, and there will be puts and takes, different regions of the world performing different ways. With regard to this year specifically, we just had the first quarter. It's too early. We had a good quarter. Of course, there are always puts and takes.
That's why for the moment, we are maintaining because the main objective of the guidance is to give certainty of the medium-term potential performance of the business. In terms of commodities, the question that you asked, we said about 2023 that we would have some commodity pressures, of course, to a lesser extent than 2022. We have most of our commodities hedged, but there is always a portion of your cost of goods sold that is not hedged. A good example is cost of freight.
To some extent, this is moving in our favor. This is moving favor. It's somewhat helping. You also have the different geographies component. We said that before that you have some regions like Brazil, where the cost of goods sold should be in a better place. You could actually see the Brazilian operation having gross margin expansion already this quarter, and this is their commodity scenario. On the other hand, you have regions like Europe, which is still somewhat under pressure on the commodity front, and you continue to be for this year because energy prices, although they are improving, they are still very high compared to previous levels. A lot of puts and takes. We just had the first quarter.
We continue to be confident on the business, but I think it's too early for us to talk about changing the guidance the outlook one way or another. The second question I will pass to Michel.
Hey, Mitch, good morning. Thanks for the question. I think that when we talk about Colombia, if you allow me just to step back for a second, I think that we need to look at this developing markets and how inflation, cost of goods sold, and consumer purchase power is playing a different role in each of these countries. The fact that, as I said before, and I keep repeating, we've been balancing our revenue management strategy, aligned with category, consumer purchase power, and the inflation and cost of goods sold. Colombia is coming from a very good performance for the industry. The last year was a great year for the industry. This year in quarter one, we saw volumes declining by low single digits. We have good share. Beer is gaining share of throat.
What we saw in the industry overall was an impact from a softer macroeconomic. We need to remember that Colombia imports a lot of goods. You have two impacts there. One is the inflation itself, the other one is FX. The country is moving. You see that salary is already moving up as well. The demand for our brands remain strong. We grew well gaining share of total alcohol. Our brands, core brands, performing well. Premium brands performing well as well. Under this macro background, we need to keep watching how the industry will behave while we continue to invest in our brands. They have good underlying demand. The business is great.
The macro environment was a little bit soft, but we continue to watch this across the globe very carefully as we continue to push forward on our both category strategy but also revenue management strategy. Thank for the question.
Thank you.
Thank you. Our next question is coming from Trevor Stirling with Bernstein. Please proceed with your question.
Hi, Michel. Just 1 question from me. Following up, thank you very much for your perspectives on the Bud Light feeding frenzy. We're looking, I suppose, trying to judge things based on the scanner data, which is 1 channel and several weeks in advance. I know you have more closer to real-time data across many channels. Is there any sign that the pressure is starting to ease or it's still way too early to say?
Hey, Trevor. Morning. I think that's still too early for us to understand the duration and the total impact. We look at the same public data that you look, and we see the data. There's a lot of information on the week basis, but we also see day after day. We can see on the days that there is some stabilization. This Bud Light volume in the first three weeks, as I said, they would account for, like, 1% of our global volume in this period. There is still a lot of confusion there and misinformation, as I was telling Robert. We need to continue to clarify this information as we move forward.
We need to continue to invest as we have done last week. Together with our wholesalers, continue to drive both, the business forward, the focus on beer, which is what we do best, and make sure that the right information is clarified to everybody, because when we do beer, our brands perform well.
Thank you, Michel.
Thank you.
Thank you. Our next question is coming from the line of Jeff Stent with BNP. Please proceed with your question.
Can you hear me?
Yes.
Hello?
Hello. Yes. Yes. We can hear you.
Hi. Hi. Great. Fantastic. Two questions, the first of which, would the 4%-8% like for like EBITDA guidance still hold if Argentina was to be excluded? That's the first one. The second one is, you know, you've talked a lot about Bud Light, but has there been any sort of spillover impact beyond Bud Light? Also, what are you doing to ensure that the marketeers don't sort of enter a state of paralysis and, you know, become very fearful of sort of embracing any creativity? Thank you.
Hi, Jeff. Fernando here. Let me take the first one. I'll go back to the reason why we provided an outlook
We did that, the medium-term outlook at the end of 2021. What is the potential for our business over the medium term now that we move from an inorganic to an organic strategy? That includes our whole portfolio. Of course, there is one very important KPI, but there are other KPIs that we should be looking at. From first quarter, for example. From first quarter, we ended up growing more than our outlook. We ended up growing 13.6, but this is the organic growth. If you look from an EBITDA standpoint, we grew more on a nominal basis, we grew more than $270 million. It was a very strong growth. If you look from an EPS standpoint, we grew like 8.5%.
At the end of the day, this is our full business, and we need to make sure that we manage all the different variables, all the different KPIs. The goal at the end of the day is to create value, and that's what we are aiming for. The outlook is for our full business. The second question, I'll pass to Michel.
Yes, Jeff, good morning. Thanks for the question. I think that, similarly to what we just discussed on the Bud Light volume, the public available data shows some spillover effect across the other brands, while the majority of the impact is still on Bud Light. This is happening, I think that on the same direction, given the information that's out there, the confusion and the noise, and of course, more localized on Bud Light, and we continue to drive our programs forward for all brands. I think that one of the key points that I was highlighting before is that we continue to be committed to the programs, partnerships, investments that we have in place. Our key programs and campaigns for the brands, they remain in place. One key thing in the U.S. was quickly adjust and streamline our structure.
In this situation, and given the current environment, especially for the social media landscape, that we have senior marketeers running the programs. We have a strong plan for the year. The brands are performing very well in the quarter one. The programs we know, they impact correct consumers, and they move the brands in the right direction. I think that as we do what beer needs to do, focus on sports, focus on music, focus on connecting with our consumers, our brands perform well, this we know, right? We'll continue to invest. We are heading up investments now during the summer across all brands as original part of our plans. Also we are heading up the investments on Bud Light as we reallocate global resources and invest more on Bud Light.
I think that we feel good about the plans that we have moving forward. While it's still too early to understand, again, all the numbers and the duration of this impact, we need to keep moving the business forward. As CEO, I think that my role is to really get the learnings, mobilize resources, support the team, and work together with our partners as we move forward.
Thank you.
Thank you. Our next question is coming from Laurence Whyatt with Barclays. Please proceed with your question.
Hi, Michel, Fernando. Thanks very much for the questions. 2 for me, please. Firstly, on margins, they've come a lot better this quarter than perhaps the street was expecting. I seem to remember, previously you said that Q1 was probably gonna be the toughest quarter for COGS. Do you see the COGS environment getting a little bit easier from here? How would you split the impact from COGS from both commodities and transactional effects? The second question on China. Could you give us any more color on the exit rate or a sort of March number? I think you previously mentioned that Bud APAC was up around 20% in February. Can we assume that March was significantly stronger than that? Thank you.
Hi, Laurence. Fernando here. Let me take the first one on margins. Definitely we talked a lot about COGS, when we talk about COGS, it's two stands. COGS probably, we still have some pressures this year. Probably the pressure is a little bit higher on the first half of the year, a little bit smaller on the second half of the year. Of course, there are some portions that you cannot hedge, and I mentioned a while ago, freights, and this is something that came in our favor. Every market is different. If you say about transactional effects, it's better in Brazil than it was the year before, and you are seeing that reflecting to the Brazilian beer margins already. The gross profit already being positive, increasing year-on-year.
It's a little bit more of a pressure when you think about Europe. Every market different. You have to bear in mind that EBITDA margin is not only about cost of goods sold, it's the main driver of our last year's cost of goods sold. You also have overhead, and overhead was an important component. Of course, overhead, you have seasonality, so it's gonna be slightly different quarter on quarter. We're still maintaining our outlook, where revenues are growing ahead of costs, and continue to manage. Any opportunity to improve, any opportunity to better, we continue to leverage on that. Probably a number that you should continue to look is how commodity effects evolve. For 2023, it's more or less set. A few open items like freight, but more or less set.
For 2024, at least, too early to say, but we are not seeing any major swings in commodity itself like we've seen the last couple of years. If that's the case, that should be positive news also going forward. It's too early to have a final view on that.
Yes. China, I think that the way that we see the quarter one is like a transition quarter. You remember all the restrictions being lifted at the end of last year. There was a earlier Chinese New Year, so January was a little bit dislocated, and therefore, we see continued recovery that accelerated throughout the quarter. If you look at some of the lead indicators, let me share one. For example, the own trade, nightlife, Chinese restaurants reopening. Beginning of the year, January, they were around like 70%-75%. As you look at the same indicator in March, we were pretty much like close to 100% of the POCs operating, with normalized operating environment in store traffic. That happened from middle February towards March. We of course, we put our plans in place.
We are getting our fair share in premium and super premium. As the channels reopen, the long-term trends of premiumization, they continue to impact the industry and our business in China, which benefits from that. We have strong innovation, and we see that the industry is recovering. The premium opportunity continues to be huge in China, and we have disproportionate or asymmetric market share in this segment. As the channel reopens, this is a tailwind for the business. The prospects for the long term do not change. We think that in the short term there is this good opportunity and the industry so far is performing well.
Understood. Thank you very much.
Thank you.
Thank you. The next question is coming from the line of Edward Mundy with Jefferies. Please proceed with your question.
Morning, guys. Thanks for taking the question. Sorry to come back to Bud Light, but I just want to pick up on some of your opening comments, Michel, around having the experience, the resource and the partners to manage through. If we take experience, could you talk about some of the prior experience ABI has of brands turnarounds of this nature? I mean, Stella Artois for many decades in the U.K. had a pretty bad name, and those previous negative associations have been eliminated. What are the two or three things you've got to get right, as you think about, you know, taking things forward from here? Then on resource, I think you mentioned you're gonna mobilize global resource to support the U.S. team. I think Bud Light's about a $5 billion revenue business at supply level.
You probably spend 10% on A&P, maybe a fraction of that, maybe half that is media. Call it $250 million. You're gonna triple that's about $500 million or worth about 2% to group EBITDA. Are those numbers directionally okay, or have I missed something there?
Oh, Ed. Sorry. Hey, Ed. Good morning. I think I got all your topics here, and I'll try to cover one by one. The first point around experience and how we deal with different situations globally. Of course, starting from the point that each and every situation is unique in itself. Given the current environment, especially social media landscape and how brands have been pulled into these situations, that is a big learning from this situation that can help the company also on the other way around globally. We have faced, as you know, just to think about COVID, from alcohol ban in some countries, and then we had to adapt to this situation, keep a very agile mindset, rethink the way that we go to market and how we organize our operations.
To any other geographers in the very big footprint that we have, you remember, for example, the U.K. for a time was an issue. We had issues before in Korea. We had issues in Brazil and the way that our brands got attacked for some time there. We redesigned the portfolio, rethought the way that we communicate our brands, and we always stay true to what we do best, which is brew high-quality products, make sure that we keep connected with our partners, investing to the long term, and keep reading and learning from consumers and see how we adjust our path forward. We know that easy to drink is to enjoy. It's a powerful message for Bud Light. We know that the Bud Light lane is around quality beer is to drink, is to enjoy, is about sports.
That's why we came back strong with the NFL Draft. It's about music, and it's about everyday enjoyment. When we do that, our brand performs very well. As we mobilize resources, there is people resources, time, there is knowledge resources, there is partners that we have, and there is money. Our plan for the summer in the US was already a very strong plan, and the triple the media idea is versus what we had last year. Traditionally, Bud Light invests very heavily in the shoulder season because of football, NFL. This year, we built a plan to be more connected with the summer season because this is very important for mainstream brands, therefore very important for Bud Light. There was already a heavy up investment there.
Now we are using resources that we have, that we are using for other brands and other priorities to further increase the investments that we have in the U.S. Because we have many lines in the P&L, right? Not only sales and marketing, we are mobilizing lines across the P&L as well, and media does not make 100% of the sales and marketing investment of any of our brands anywhere globally. The match is not really like as you triple media, you triple the entire marketing budget. There are other lines within the sales and marketing package as there are other lines on the P&L that we can work as we always do in a very agile way. Because of that, we reiterated our EBITDA growth.
As we did during COVID, we are scrambling, moving very fast, getting this agile mindset to work as we support and increase the investments in media in the U.S., we are working the other muscles that we have from the global company, the size and the scale that we have, while the EBITDA outlook is unchanged.
Thank you. If I could just perhaps just follow up. I appreciate you don't run your business on a 4-8. That's really a framework for us essentially, and some years ahead, some years below. I guess, you know, you're faced with a choice of either, you know, looking to protect your bottom line in the US or perhaps you could use a windfall from the rest of the group, you know, from a COGS rollover or trying to bounce back to double down in the US. Is the message that, look, you're running a business for long term, and you're gonna really double down on the US, and you can, you know, allocate global resources to really go behind Bud Light?
All markets are important for us. We do not minimize the situation on the U.S. Fully committed to get our plans and our brands and our portfolio to rebalance in the U.S., and we are investing to make it happen. This all falls into our outlook. We always have an issue to deal with every quarter, every year in every geography. It's very important that at global level, we keep this agile mindset to use the resources. Definitely, urgency creates opportunities as well. As we invest, focus, mobilize in the U.S., we think that this situation is manageable globally. We never minimize any issue with our brands or consumers, but we are confident that we have the team and the resources to continue to invest, to move forward in the U.S., and to support our team there to get out of this stronger.
Thanks, Michel.
Thank you. Our next question is coming from the line of Sanjeet Aujla with Credit Suisse. Please proceed with your question.
Hey, Michel and Fernando. Two from me, please. Firstly, appreciate your earlier comments on Colombia, you know, if I look at some of your major emerging markets, more broadly, volume seems to have deteriorated as pricing has picked up. You know, I'd love to get your thoughts on any inflections you're seeing in consumer behavior, particularly with regards of frequency of consumption, pack formats, et cetera. My follow-up is really around Brazil. One of your competitors there recently filed for bankruptcy. I think you called out stable market share in the quarter, love to get your perspective on how you see the competitive landscape evolving in Brazil in recent weeks and months. Thank you.
Sanjeet, good morning. Thanks for the question. two pieces there. I'll try to address both to you. The first one, I think that there is this inflationary scenario which is common across the globe, and we see that, as I've been saying, different clusters, three type of clusters, where we see the industry and the whole, consumer purchase power and consumer goods moving is slightly different, and they all dealing with the same issue. The key point there is we see the beer category continues to be resilient and performing well and gaining share of throat. I just gave the example of Colombia.
Of course, when we talk about resilience, doesn't mean, growth across the board in all the markets at the same time, especially because when inflation moves fast, you have this timing in which salaries, especially minimum salaries for these developing countries, they get to be approved. Think about, Brazil that just announced that the salary increase is now in May, right? January to April, consumers were dealing with high inflation, and they had their salaries from last year. Industry performed well, but now you have an extra injection of cash and purchase power coming to consumers. When inflation goes up, there is some time for prices to catch up, and there is some time for salaries to catch up. I think that we need to look throughout the lenses of the full year before drawing too many conclusions.
Amongst the markets, they have different realities. To use the same example, while you see currency devaluation in Colombia, and Colombia has a high percentage of goods that they import. Brazil is in the other side of that because currencies there are appreciating, and therefore, the import goods will have, like, a different impact on the basket for inflation as well as for consumer purchase power. I think that we keep an eye on that, an eye on our revenue management. The industry is performing well in most of the countries, especially when we look at in the context of the other beverage. We know that premiumization will be in place, that beer is more resilient, and we are happy so far with our strategy in terms of revenue management. This is coming.
On the other point, on Brazil, what I say is that, I see 3 things in Brazil that are very interesting and very important. I see the industry structure in Brazil, health one, players focus on premiumization. We see an environment in terms of inflation price that's playing well for the industry. We see that Brazil was hit earlier than other markets on the cost effects, and now you're getting to the other side of this equation, where cost of goods sold is becoming more normalized, and effects is playing more in our direction. You see the company, our portfolio today in Brazil is as healthy as never before. Spaten is performing very well. Original, which is a premium brand of ours, performing very well. Our core brands performing very well.
Corona, we had a limitation in terms of supply that we are organized to have more volume. As we supply the brand sales by itself, very healthy brand in Brazil, growing a lot. Our digital transformation continues to accelerate not only the pace in which we gather more consumers into Zé Delivery, but our capabilities with this and the algorithms, artificial intelligence helping us to harness the data and to elevate the potential of what we have there. This is a competitive advantage that we built and is helping us in drive the business forward. I'm optimistic with Brazil. I think that the team there is doing a great job. Our market share is in good position. Our revenue strategy is well-organized, in place. Our portfolio, very healthy, and our digital transformation is accelerating our opportunities and potential in Brazil.
I see Brazil in a place that's as good as it has been for many years.
Thanks, Michel. Just one quick follow-up on that. Has there been any noticeable change in the competitive landscape since one of your competitors filed for bankruptcy there in recent weeks?
Not meaningful for us to talk about here. I think that while they deal there with that situation, our focus is on our consumers. Our focus is improving our service level that's very high in Brazil now, in getting our portfolio to perform the portfolio of the physical brands that we have and the digital assets. We remain a steady focus on our strategy.
Great. Thank you.
Thank you. Our final question is coming from the line of Brett Cooper with Consumer Edge. Please proceed with your question.
Thank you. Wanna come back to, I guess, the first question, but more from an operational standpoint. After the SABMiller deal, you guys have been relatively inactive on acquisitions. At the same time, the beverage and alcohol markets have changed and evolved and are evolving. Can you continue to maximize the growth potential of your business via organic activity or acquisitions in higher growth parts of the industry necessary to maximize that growth in returns?
Hi, Brett. Fernando here. At the end of the day, this is a resource allocation discussion and about the value creation discussion. If you look at our business, when we did the Investor Day, we said that the outlook for the business is to be able to deliver 4%-8%. If we deliver that, there is minimum amount of value to be created. We can enhance this value creation by making resource allocation decisions, and that's the triangle. Which means that the priority to invest behind our business because we believe it can grow at a decent pace, and can create a lot of value.
With the excess cash, and our business generates a meaningful amount of excess cash, how we use that excess cash can also create value on a standalone basis. Over the last two or three years, there was a strong focus on the leveraging because as we said, the leveraging creates a meaningful amount of value, most of that when you get to us three times. We made meaningful progress, we are not at three times yet, which means that we can still benefit from value creation by the leverage a little bit further. As we keep making progress, other options open up for us. Other options like we increase dividend is likely. As a percentage, it was a meaningful increase. In absolute basis, it was not that much of an increase, increased dividends, we are improving on that.
M&A is definitely an option as well. We can have selective M&A. We know how to do M&A. We did M&A in the past. We know how to create value out of M&A. If the right deal at the right moment shows up, of course, we entertain that if it can bring another avenue of growth. We don't need M&A to deliver a meaningful value creation and to continue growing.
If I can bother you with one follow-up. One component of your business is different than it was when you've done M&A in the past, is all the digital infrastructure that you've built. How do you think that extracts value from transactions or creates or I guess improves your ability to create value from organic activity? Does that weight your view one way or the other over the medium to long term?
Yeah, I can take this one. I think that, in a short answer, these digital products that we created, both on the B2B side and on the B2C side, they help us to get better, and they are the second pillar of our strategy. They get us better because we have more information. With more information, we can make better decisions. As we standardize our ways of operating with these products, we have efficiencies that we can extract from this scale, from these revised processes, and our ability to act faster with the data that we have. A second part of that, as I keep saying, another advantage of the digital products is that once you build them, the scalability is very fast, and you don't need more resources.
Different from the physical products, if you grow Corona, the example that I just gave here in Brazil, we need more bottles, more production capacity. We need to invest in physical assets so we can grow our physical brands, which we are doing. On the digital space, the scalability, once the product is ready and available, is much faster, and the resources that you need to invest for the scalability are much smaller in proportion to the physical products. We can continue to grow, and we are doing that, for example, with BEES. We are getting to geographies where we do not operate. We are getting there with the digital product by using partners. Then you can continue to monetize the digital product, even if you are not present in that market.
Now that we are becoming present in that market, so we might have opportunities to go to market differently than what we had before. You are right in the intuition that the digital products are, add on to our M&A toolkit, but they can also become an important vehicle as we grow organically, including geographies that we are not present today, because the digital route to market becomes an enabler for our expansion strategy. Thank you.
Great. Thank you.
Thank you. This was our final question. If your question has not been answered, please feel free to contact the investor relations team. I will now turn the floor back over to Mr. Michel Doukeris for closing remarks.
Thank you, Jesse, and thank you all for your time today and for your ongoing partnership and support of our business. Stay safe and well.
Ladies and gentlemen, thank you. This does conclude our earnings conference call and webcast. Please disconnect your lines at this time and have a wonderful day.