Welcome to the full year 2022 results announcement conference call for Budweiser Brewing Company APAC Limited. Hosting the call today for Budweiser APAC is Mr. Jan Craps, Chief Executive Officer and Co-Chair of the Board, and Mr. Ignacio Lares, Chief Financial Officer. The results for the full year ended 31st December 2022 can be found in the press release published earlier today and available on the Hong Kong Stock Exchange and Budweiser APAC's websites. Before proceeding, let me remind you that some of the information provided during this results call, including our answers to your questions on this call, may contain statements of future expectations and other forward-looking statements. These expectations are based on the management's current views and assumptions and involve known and unknown risks, uncertainties, and other factors beyond our control.
It is possible that Budweiser APAC's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Budweiser APAC is under no obligation to, and expressly disclaims any such obligations to, update the forward-looking statements as a result of new information, future events, or otherwise. For a discussion of some of the risk and important factors that could affect Budweiser APAC's future results, see risk factors in the company's prospectus dated 18th September 2019. The 2021 annual report published and other documents that Budweiser APAC has made public. I would also like to remind everyone that the financial figures discussed today are provided in US dollars, unless stated otherwise. The percentage changes that will be discussed during today's call are both organic and normalized in nature, and unless otherwise stated.
Percentage changes refer to comparisons with the 2021 full year. Normalized figures refer to the performance measures before exceptional items, which are either income or expenses that do not occur regularly as part of Budweiser APAC's normal activities. As normalized figures are non-GAAP measures, the company discloses the consolidated profit, EPS, EBIT, and EBITDA on a fully reported basis in the press release. Further details of the 2022 full year results can be found in the press release published earlier today. It is now my pleasure to pass the time to Mr. Jan Craps. Sir, you may begin.
Thank you, Anna. Good morning, everyone. Thank you for joining our earnings call. We faced a challenging Q4 last year with extensive channel closures and reduced consumer mobility in China. Our top line continued to grow over the full year, thanks to the resilience of our teams and the strong growth momentum and market share gains in South Korea and India. We also delivered full-year volume, revenue, and revenue per hectoliter expansion at a company level, although operational deleverage in China and commodity price escalation resulted in a mid-single-digit decline in EBITDA. Before I hand it over to Iggy to take you through our financial performance, I will take a few moments to provide more color on each of our key markets. In China, Q4 was a challenging quarter, driven by extensive channel closures and reduced consumer mobility while the COVID cases peaked.
Our business was disrupted due to prolonged channel closures, especially in regions where our footprint is most concentrated. Our premium sales channels were disproportionately impacted, especially nightlife venues and Chinese restaurants, which led to a double-digit revenue decline. On a full year basis, however, with respect to our premium and super-premium portfolio, revenues were above pre-pandemic levels, and volumes grew by double digits in more than half of the expansion cities despite COVID restrictions. We continue to invest in our craft portfolio, expanding our Brewpub footprint with three new locations and adding BrewDog to our craft offerings. We also continue to cater to rising demand for new product offerings and differentiated drinking experiences, such as through the introduction of Budweiser Brewmaster Reserve Rabbit limited edition to celebrate the Chinese New Year.
On the digitalization front, our B2B platform, BEES, has been expanded to more than 160 cities and accounted for more than 40% of our revenue in the month of December. I would like to provide some updates on the current situation in China. While the resurgence of COVID infections in December 2022 and January 2023 significantly impacted traffic in stores, business recovery has been strong since February. We estimate that both the restaurant and nightlife channels across our footprint had almost fully reopened by the end of February. In light of the current pace of improvement, we are optimistic about our business in 2023 following a transitional first quarter. Turning now to South Korea.
Full-year volumes increased by high single digits, supported by solid market share gains in both on-premise and in-home channels, with total market share increasing by 150 basis points. Revenue expanded by mid-teens, and revenue per hectoliter increased by high single digits, benefiting from revenue management initiatives. EBITDA grew by strong double digits driven by top-line recovery. In India, we continue to outperform the industry with premium and super premium revenue almost doubling compared to 2021. India is now among the top five largest markets globally in volume for the Budweiser brands, with the industry having recovered to above pre-pandemic levels. Before I wrap up, I would like to also take a minute to talk about the key ESG outcomes we have delivered last year.
Over the full year, we reduced carbon emissions per hectoliter by about 20% across our total value chain compared to our baseline year of 2017. We reduced carbon emissions per hectoliter within our operations by about 50% against the same baseline year. Our Jinzhou brewery in China became our second carbon neutral brewery in APAC. We have lowered our water usage to 2.20 hectoliters per hectoliter of beer produced across our APAC breweries, representing a 26% decrease compared to our 2017 baseline. Our Nanning brewery recorded 1.11 hectoliter per hectoliter, the lowest level of water usage among ABI breweries globally and a benchmark for the world's beer industry. We also increased our local barley harvesting in China by 60% to 40,000 tons, benefiting 4,500 farmers covering 60,000 hectares of land.
I will now pass it over to Iggy to take you through our financial results. Over to you, Iggy.
Thank you, Jan. Good morning, everyone. In 2022 full year, volumes grew by 0.7%, with strong performance in South Korea and India offsetting widespread channel closures in China throughout the year. Revenue grew by 2.4%, while revenue per hectoliter grew by 1.7% as revenue management initiatives in South Korea and premiumization in India were mostly offset by the challenging conditions in China. Our normalized EBITDA decreased by 5.2%, while our normalized EBITDA margin decreased by 239 basis points. Commodity price inflation was also a prevalent challenge throughout the year. Our cost of sales per hectoliter increased by 7.7%, mainly due to anticipated raw material and packaging cost escalations, as well as operational deleverage in China during COVID restrictions, both of which were partially offset by efficiency initiatives and optimized sourcing.
Now let's take a look into our performance in several key markets. In China, volumes declined by 3.0% with COVID having a disproportionate impact on the on-premise channel, leading to a 44 basis point decline in market share. Revenue decreased by 4.2% as revenue per hectoliter decreased by 1.2% due to a negative channel mix, especially in the fourth quarter. Full year normalized EBITDA declined by 11.7%, with the top line decline and operational deleverage being partially offset by agile cost management and commercial investment optimization. In East Asia, revenue increased by 15.5%, volumes grew by 8.9%, and revenue per hectoliter expanded by 6.1%. Normalized EBITDA increased by 23.9%, with operational leverage driving margin expansion.
Finally, we closed 2022 with a stronger balance sheet despite the difficult operating conditions, thanks to ongoing financial discipline and cash management practices. Our net cash position increased by $0.5 billion- $2.5 billion as at the end of 2022. We are pleased to announce that the board has recommended a 25% increase in dividend to $0.0378 per share, compared to $0.0302 in 2021. This concludes the presentation, Jan and I are here to answer any questions that you may have. Thank you.
Thank you. Ladies and gentlemen, the floor is now open for questions. Please press star one one to ask a question. In the interest of time, we ask participants to limit themselves to two questions, and please ask your question one at a time. We'll pause for a moment to build up a queue. Once again, that's star one one on your telephone keypad now. Once again, ladies and gentlemen, that is star one one to ask a question. Our first question is from Euan McLeish from Bernstein. Your line is now open. Please go ahead.
For the call this morning. Just wanted to pick up on your COGS line, first of all, if that's okay. It seems that you actually managed to control COGS better than we were expecting in the fourth quarter. There's obviously a lot of different moving parts there. Can you help us understand the kind of key factors, the input prices which had been having the most pronounced impact on your COGS? How that combined with hedging is gonna drive the evolution of your COGS line going forward. It'd also quite helpful if you could maybe just help us to understand a bit more about your how your procurement relationship with ABI has been helping or impacting your COGS line as well. Thanks.
Good. Thank you, Euan. Good morning. Good to hear you. Let me maybe pose this question to Iggy about the COGS. Go ahead, Iggy
Sure. Thank you, and thanks for the question, Ewan. Let me start maybe with a reminder on our hedging policy. You know, it's designed to reduce volatility in our input costs, as you well know, and give us some visibility to better manage them through this kind of 12-month visible rolling horizon. Of course, we reserve some flexibility in exceptional circumstances. Given commodities can represent, you know, between a third to two-thirds of our COGS on a per hectoliter basis, and that depends, of course, on the geography and brand mix. Without taking any actions, we would've anticipated last year a mid-teens increase, right, in the cost of goods per hectoliter. This would be in 2022.
Of course, as we noted, our COGS per hectoliter only increased 7.7% on a full year basis, and 5.6% specifically in Q4, driven mainly by the offsets from efficiency initiatives and the benefit of operational planning. In 2023, we still expect, of course, continued escalation in commodities. If you think about the market rates in 2022, we know that would be the case, but we expect them to a lesser magnitude as the year-over-year escalation has been more muted, if you look at current spot pricing.
For example, if we take a look at aluminum, which of course is one of the key drivers, from that peak of above $4,000 per metric ton, at the start of the previous year to near to $2,500 per metric ton. We're now holding at obviously a reduced rate, so it's more of a tailwind than a headwind at this point. Barley has been more volatile, of course, and that was driven by unfavorable weather and overall malting, acreage, reduction, or malting barley acreage reduction. It's increased over the past year. Of course, the seasonal, cycle there for the harvest can also influence it significantly.
I think this is one of the places where the benefit of being part of the ABI network is very helpful, right? The procurement relationship gives us global sourcing flexibility, so we can quickly adjust our sourcing origin. Since malting tends to be done locally, that reduces volatility for us as well. The other great benefit for us, of course, is the purchasing power of the total ABI scale, right? We benefit from both on the Bud APAC side. I mean, what does this mean then for 2023, right? To get to your question. At the end of the day, on a like-for-like basis, we're seeing a half or less of the year-over-year escalation than we would've seen in 2022 versus 2021.
We would also expect that the cost escalation will be far more weighted towards the first half of the year, so first half of 2023, than the second half of 2023. We expect it to ease in the second half of 2023. There will, of course, still be some volatility going forward, but we don't see raw material cost increases and packaging material cost increases structural headwind. More a transitional one, as we mentioned before. Of course, we'll look to mitigate, you know, cost-related risks with other initiatives, not just on the hedging side or on the raw material side. Also includes premiumization, revenue management, and efficiency initiatives as well. Thanks for the question, Euan.
Great. Thanks very much, Iggy. Appreciate that. Just on the China on-trade, it's been a pretty turbulent few years in the China on-trade, obviously Q4 was kind of at the extreme end of that. Can you maybe talk a bit about about the kind of level of outlet churn that you've seen, and how that's impacted your strategy in China, how the level of on-trade outlet churn has impacted your premiumization rollout, and how that impacts your business going forward? Is this a threat or is this an opportunity for you in 2023?
Yeah. Thank you, Euan. I think, I mean, overall, we see it as an opportunity, right? I think when we talk about expansion, we always talk first geo and channel expansion. The two parts. Geo, you would have seen that, despite all these COVID, kind of restrictions that we had, we still have more than half of our expansion cities growing, double digits, for Budweiser and Super Premium, last year. The underlying trends are really strong. We actually continue to expand. For this year, we wanna bring Budweiser distribution from 201 cities to 220 cities in 2023. For Super Premium, we wanna go from 51- 60.
And remember, cities we define as, you know, cities where we sell more than 10,000 hectoliter or more than 1 million liters of Budweiser, basically. So we continue to invest on expansion and, you know, we do have a lot of kind of room to grow in China as the disposable income continues to increase. On channels specifically, you're right that the on-premise would have been disproportionately impacted last year, especially nightlife, but also premium restaurants. However, when we look at February, actually since December, we see a recovery of the opening rates. As of end of February, we estimate that we are essentially at 98% reopening rate. So almost 100, right?
Probably a couple of %, would indeed be some churn, but it's a relatively limited churn. I think the industry has shown a lot of resilience, in the last number of years. We believe that this will turn into an opportunity because obviously last year there would have been a disproportionate impact on our channel mix, and as a result, brand mix. We believe that this year, especially nightlife channels should increase its mix, both in the industry, but especially in our mix. We do expect to unwind the disproportionate impact it had on our business and as such, take a disproportionate portion of the growth.
Which by the way, is something we have also seen if you compare 21- 20, we also saw a very similar kind of unwinding of an impact and us taking a disproportionate portion of the growth. As you know, right, premiumization continues to drive the industry both short-term and long-term. We expect it not to change. We're quite excited actually with 23. Thank you for your questions, Euan McLeish.
Yeah. Wonderful. Thanks very much.
Thank you. Your next question is from Leaf Liu from Goldman Sachs. Your line is now open, Li. Please go ahead.
Thanks. Thanks, operator. Thanks a lot, Jan and Iggy. This is Li from Goldman Sachs. Thank you for taking my questions, and hope you are both doing well and get to travel around more this year. I've got two questions. I will ask one by one. Firstly on China reopen. With reopen, definitely the worst is behind us. We are also seeing encouraging recovery trend and some good monthly runway among the China brewers recently. Will you please share the recovery moment that you have observed year to date? Thanks.
Good morning, Li. It's very good to hear from you. Thank you for your question. You're right. I think when we look at last year, right, obviously there was big disruptions because of the COVID restrictions throughout the year. Q4 visibly, as you see in our results, right, would have been the most challenging quarter of the year. It was both because of the channel closures in the beginning of the fourth quarter, combined with big consumer traffic reductions, especially towards the end of the fourth quarter. When we look at January, the conditions began to improve, right? Of course, with the 10 days earlier CNY than the previous year, volumes would still have been negative versus prior year in the month of January because of 10 days earlier CNY, basically.
If we look at February, we estimate, as I mentioned to you in rights, that all channels, that's almost fully reopened by the end of the month. We see very healthy traffic in our stores and for our business. We see it is very similar across all city tiers, whether it's kind of tier one, tier three, tier five. All city tiers basically very similar recovery patterns across the country. Our volume in February grew by more than 20% in the month. We had more than 20% volume growth last month. Which obviously is very encouraging and makes us very optimistic and very excited actually for this year. Then if you...
as I was, saying with Euan as well, right, I think if you think about last year, our business would have been disproportionately exposed to these channels and regions most impacted by the restrictions. Accordingly this year, we are quite excited by the opportunity to capture an outsized benefit from the recovery, following a transitional first quarter. It gives you some color-
Thank you so much.
-to where we are.
Thank you so much. That's really exciting and encouraging about China. My second question is on Korea outlook. What will be the long-term growth driver in Korea? Like, do we still see sufficient room for ASP increase each year given the current inflation environment in Korea and also the annual excess tax escalator model by Korea government? The government will review the excess tax again quite soon in April this year. Thank you so much.
Yeah, thank you, Li. You're right. I think Korea is a country that has already recovered last year, right, from COVID. The restrictions were lifted early last year. It's actually, like for us, for the team, kind of an extra driver to be excited for this year in China as well. Because when you look at our results in South Korea, top line, EBITDA, they all increased by double digits last year. EBITDA grew, strong volume recovery, as well as the revenue per hectoliter performance that was quite solid, right? Volumes grew high single digits, which was both industry recovery and a strong market share performance, driven by the all new Cass innovation we had. When we look at net revenue grew mid-teens in South Korea.
Combination of volume recovery and revenue managing initiatives, where, as you remember, we took price early last year, both on the core business and on the high-end business. Recently, end of January, the government has even lifted the indoor mask regulation or restrictions as well. But, you know, also interesting to note that when we look at the beer industry, it is not fully recovered yet to the pre-pandemic levels. It's another reason, at least for us, to believe that there is more room for growth from an industry perspective as well. I always say, coming to your other question, right, for APAC East, if you look at the key drivers for growth, and the EBITDA expansion, it's first rates, then operational efficiencies, and then mix. If you look at the longer term perspective.
On rates for the moment, nothing to announce, right, regarding price increases. On the operational efficiencies, we continue to implement cost and operational efficiencies across the business in East Asia, and applying our cost and connect win mindset, to reduce indirect overhead costs and drive the EBITDA margin, which still has room to recover, right? We're on the right track there. We believe the industry will continue to premiumize in South Korea as well. It is still under index versus more mature markets. As you know, we are well positioned. We are the market or the segment leader, in premium as well. We believe we will continue to grow, as the premium segment grows in South Korea. Thank you for your questions, Li.
Sure. Thanks.
Thank you. Your next question is from Anne Ling, who's from Jefferies. Your line is now open, Anne. Please go ahead.
Thank you very much for taking my questions. I have two questions here. Let me start with the first one. It's on the China commercial investment. Will we beef up our marketing and promotion expense in China short-term, especially at the beginning of the reopening?
Yeah. Thank you, Anne. Good morning. Thank you for your questions. I think, I mean, obviously, COVID restrictions made it a rather challenging year last year. On the positive end, I think our team really developed a set of very solid capabilities, especially on resource allocation. I think there is a big agility in the team. They're acting in a very agile way, also in terms of where to invest the commercial resources. You know, they're quite efficient as well in terms of what to spend where and when. I think the team learned a lot in the last three years and then even more in the last year specifically.
When we look at 2022, our sales and marketing as a percentage of net revenue was actually lower than 2021. The team was able to quickly save and reallocate investments between regions and channels. As you might remember, we developed a digitized tracking platform where we looked at different trends at a city level. Of course, our digitization is helping us do that. And we reallocate quite efficiently our resources where they have the best ROI and the most impact. We learned a lot in the last three years, and I think it will really help us for the future. When you look at next year or the coming year, we believe our commercial investment is at the right level, if you look at it as a percentage of net revenue.
We're quite optimistic about our business and we do continue to see opportunities to apply our cost connect win mindset also within the commercial investments and reinvest any savings we have to connect with our consumers and drive longer term growth for our business.
Okay. Thank you. My second question is on management's plan to increase shareholders' return. What is the rationale behind the proposed dividend payout for year 2022, i.e., you know, an increase in the payout dividend?
Thank you. This sounds like a question for Iggy.
Thanks, Jan. Thanks for the question, Anne. I think the first thing is we should probably refer back to the current capital allocation priorities, right, which we share often. I mean, first and foremost, we see tremendous opportunity for organic growth, so we invest in organic growth initiatives first and foremost. Of course, we pursue strategic and organic growth opportunities that make sense with financial discipline. Finally, we share profit with our shareholders. I think keeping that context in mind, you know, even despite the challenges in 2022, we were able to maintain a very strong balance sheet.
You know, the financial discipline and cash management practices led to a significant increase in cash and cash equivalents, right, from $2 billion the previous year to about $2.5 billion at the end of 2022. Keeping that in mind, and taking a look at what we're able to project, we believe that there was a great opportunity here to increase, of course, the amount of profit we shared with our shareholders. That's what drove the dividend per share proposal in this case, right? Again, $0.378 per share for the full year 2022 is the proposed dividend payout. It represents a fairly significant increase, both in absolute dollar terms, but also as a percentage, right?
It'll be just over $500 million in total dividend payout. It's, you know, a dividend payout ratio of 58% and a 1.2% dividend yield, both of which we see as, you know, on par or ahead of listed peers, which is important as well. It's a significant increase. Again, it's a 25% increase, which is more than we've done in the past. I think it's more really a product of our strong balance sheet position, right? Having that strength and knowing that we can fund organic and inorganic growth and still share more with shareholders drove the proposal. Thanks for the question, Anne.
Thank you very much. Thank you.
Thank you. Your next question is from Lillian Lou from Morgan Stanley. Your line is now open. Please go ahead.
Thanks. This is Lillian Lou from Morgan Stanley. Also, I have two questions for Iggy and Jan. First of all, in China reopening set up in 2023, what are the company's key strategic focus in terms of products, market expansion channel, and how will you prioritize resource allocations in between sales and profitability?
Thank you, Lillian. Good afternoon. Good to hear you. Let me take this one. I think really our strategy will be allowed to come to full play in 2023, as we get these COVID restrictions behind us. Really our strategy continues to be about premiumization, expansion and digitization. When you look at the digitalization opportunity on the commercial agenda, it is still our biggest opportunity. Of course, it will be first about Budweiser expansion of the portfolio, because, you know, we have several innovations behind Budweiser that we want to continue to scale this year, especially Budweiser Supreme in the premium restaurants and dining meal occasion.
Budweiser Magnum with a very special profile, beautiful packaging, higher ABV, more developed kind of Budweiser experience. The second one is about Super Premium, which we want to build as our next blue ocean, right? It's really a segment of high growth in the future. We have a winning portfolio there, where we are leading the segment and continue to bring new offerings to the markets. Probably our biggest priority from an expansion point of view from our portfolio would be Blue Girl this year, with innovations, from an innovation perspective, because Blue Girl is very strong in Guangdong, Fujian, but we believe we have significant opportunity from an urban center perspective in expanding to more and more cities in the future.
If you think about geographic and channel expansion, I covered it a lot in the previous questions. Really, keep in mind that Super Premium is only a 10% distribution today in China according to our estimates. Budweiser is roughly 1/3, right? One out of three stores has a Budweiser distribution point. Even with the size of these brands, we have plenty of opportunity to continue to expand both geographically and channel-wise as disposable income increases in China. Of course, we have Beyond Beer, where you know that we focus on RTD spirits and energy drinks, so premium end of the spectrum. We believe we continue to invest there, start to have some interesting propositions with potential. Finally, digitization.
We are quite excited with what the team has been doing, despite all of these restrictions to go from two cities at the beginning of last year to 160+, and go from a very minor portion of our revenue, to more than 40% of our revenue in digital in B2B, in our BEES platform, in the month of December. It's quite exciting because as you probably know, you need scale to be able to develop the right algorithms and really add value for our partners in the ecosystem. We are quite excited with what technology can bring us to be an ever smarter competitor and an ever smarter driver of premiumization, you know, to sell more and more stores with a better ROI and better service.
We truly think we're in a very special moment here to accelerate this, in our agenda as well.
Thanks a lot, Jan. Next question is about the M&A strategy, 'cause it's it has been our long-term strategy and sort of halted during the COVID period. After markets are back to normal now, sort of, are there any updates or progress on the M&A front? Thank you.
Thank you, Lillian. Let me give this one back to Iggy.
Thanks, Jan. No, Lillian, I think the thesis for our IPO still holds, right? One of the main reasons we did it was to create this local champion as a catalyst, right, for further regional consolidation, which we see as a significant opportunity still in Asia Pacific. That hasn't changed, right? You know, I think beyond that, of course, given the fact that we see inorganic growth as a core competency, we will continue to consider, you know, suitable opportunities when and if they arise. Strategically, you know, we'll continue to look at it through the following lens. First, to cover sizable white space, right, in both existing and new markets. M&A can be a tool to accelerate growth, right, in many of these markets.
We also still see the opportunity to combine our world-class portfolio with those of local players, right, who may have an established route to market already. Of course, you know, given the scale of procurement that we have and given the best practices, right, that we have across different regions, we know that we can import those in some of these markets. Of course, on the opposite side, we can still see opportunities to transform great local brands into regional champions, right, which can leverage our global network. Of course, you know, any such transaction, if and when it were to happen, will be, you know, subject to the same strict financial discipline that you know and trust us for. We keep evaluating.
You're right that markets have begun to reopen. At this point, we still don't have any news to announce to the market at the moment. Thank you for the question, Lillian.
Thanks. Thanks a lot. Yeah, thanks a lot, Jan and Iggy.
Thank you.
Thanks.
The next question is from Melody Zhou from CICC. Your line is now open, Melody. Please go ahead.
Hello. Okay. Hi, it's Melody Zhou from CICC Food and Beverage team. Thank you so much for giving me the chance to ask you these two questions. My first question is about China premiumization. Are we seeing premiumization trend continue? Do consumers downgrade beer consumption? What is the pace of upgrading this year? This is my first question.
Thank you, Melody. Good afternoon. Good to hear from you. I mean, yes, we are, I mean, very excited by the overall premiumization potential in China, and APAC at large, but China especially, because essentially it's driven by the increase of the number of middle income households. Whatever economic projection you do for China, I think everybody would agree that the number of middle income households will increase. In our own estimates, we believe it will be about quadruple, so times four in the next 10 years, at which point it will be more than two times, the number of middle income households in the U.S. It gives you an idea of the size of the opportunity, in China.
Also our strategy is really structurally intact, because there is really no change in this assumption of the opportunity. When you, when you look at beer premiumization itself, really beer is an affordable luxury. We think that consumers will continue to consume and upgrade and premiumize to premium, super premium beers, 'cause really it's affordable on a relative scale versus other categories, and it gives people not only a physical reward, but also a mental reward and brings them comfort. We believe that this will continue to increase, especially as the sales channels reopen.
Because when you look at even last year with all the headwinds that we had from a restrictions point of view, you know, we still saw more than half of our expansion cities with double-digit growth in these segments. We see despite all of these restrictions, you know, it's a pretty resilient category because our premium and super premium portfolio was still growing in volume and revenue versus pre-pandemic levels. Really, we believe there is a lot of growth to come. For 2023, you know, given all the headwinds we had in 2022, if anything, we expect to take a disproportionate share of the growth because of the weight, of the impact on this segment last year with the premium channel closures. Very much like happened in 2021 versus 2020.
That was a very similar situation. you know, we continue to be excited by the premiumization opportunity here in China.
Okay, thank you so much. My second question is about overseas market, especially for India. What will be the outlook for profitability in India market this year? Can you share the target for the percentage of contribution to group EBITDA? Thanks.
Thank you, Melody. India, I think has had an amazing year, 2022. is again one of these markets that are post-COVID recovery, and you see our team and our portfolio, our strategy really fully at work. we've seen, you know, India, our business in India continue to be a number 1 brewer in the premium segment, which is a high growth segment. We have about 67% segment share in premium, super premium in India, to the point that, you know, it became two-thirds of our business of our net revenue in India coming from that segment. Actually our premium, super premium net revenue almost doubled versus last year. we see a lot of momentum there.
When we compare it to the IPO timing, actually India starts to be relevant in our numbers, right. India is about 5% of our net revenue for APAC, about 1% of the EBITDA. EBITDA doubled versus last year, driven by the strong double-digit volume and revenue growth. Our strategy there continues to be focused on premiumization. We are leading the premium segments. We've seen very significant growth there and very strong brand power. You know, we are driving a fast growth in the premium segment in the India industry. We combine it with a lot of engagement on moderation.
We have an active engagement with several state governments to adapt the tax structure that is existing today in the alcohol segment. Because beer is really a beverage of moderation, so we want to have more promotion of beer and also our lower and no alcohol beverages with a more favorable go to market and tax allowances to stimulate this part of the alcohol industry. Last but not least, as we get scale in India, obviously you can imagine we can improve profitability quite a bit by brewery productivity, but also by investing in returnable packaging, because as scale comes in, all the economics start to work much better in India.
We actually have quite a bit of opportunity there to continue to improve our cost benchmarks and our productivity in that country. We scale, that will come, and there's a big focus for the team as well to accelerate our EBITDA growth as well as scale comes back to the country and continues with the momentum we have in the business there. Thank you for your questions, Melody.
Thank you so much. Oh, thank you so much for the detailed answers. Hope you have a nice day.
You too.
Thank you. We have time for one more question. Our final question will come from the line of Ethan Wang from CLSA. Your line is now open. Please go ahead.
My question is coming from on a ASP growth pace angle in China. We know China has finally reversed all the COVID restrictions, which gives confidence to the market that ASP increase in the beer sector is gonna continue. When investors try to gauge our company's ASP growth in China, would the management suggest using a pre-COVID ASP growth pace as a benchmark? Actually, investors can expect even higher ASP growth due to all our efforts during the past few years? Maybe more importantly, what will be the major drivers behind management's expectation on this ASP growth? Thank you.
Thank you, Ethan. Good afternoon. Good to hear from you. When we talk about the ASP in China, first thing to say is that the most important driver is premiumization, so really, mix, right? Combination of brand mix driven by channel mix, product mix, they're all key drivers of our revenue per hectoliter growth . Really they are the very important ones to project, right? As you know, we don't give specific numerical guidance on this KPI. But you can imagine, as premiumization continues to grow, this is a very important driver that makes us actually quite optimistic, given the business recovery I've been describing in the earlier answers. On top of that, we have been taking price, right? As you've seen.
We announced in the last quarterly call that we have taken price on the premium, super premium segments in November, benchmarking the CPI. Actually very recently, yesterday actually, first of March, we took price on the core and value segments in China as well, slightly above CPI actually, as a consequence of the whole kind of context that we take into account when we take these decisions. I would say in the last couple of months, right, November, we took premium, super premium at CPI. March, first of March, we took core and value.
We'll continue to evaluate opportunities for the other segments, but really premiumization continues to be the key driver for ASP, and we're quite excited overall about what premiumization opportunity offers itself as we as we see the business recover.
Sure. Thank you, Jan.
Hi, Ethan. We actually have one, have enough time for one more question, if you may ask your question again, please. Thank you.
Sure. Maybe, wanna touch on our non-traditional beer business, our craft beer portfolio and Beyond Beer business. Because consumer behavior and impact in APAC region keeps changing and things that drinking habits are to extend beyond the traditional beer. To understand Budweiser has actually built up these business lines outside traditional beer for years. Is it possible for management to give us an update on the latest strategy on this front, in particular, yeah, the craft beer and the Beyond Beer business. Thank you.
Sure. Thank you, Ethan. Quite interesting topic although, you know, it's really about the future portfolio, right? Because as we look at premiumization, really the biggest driver is Budweiser and then the blue ocean of super premium, where we focus a lot on Corona, Blue Girl, Hoegaarden, and of course, given the size of these mega brands. When we look further out, we're already building the portfolio to capture further premiumization above these price points. That's where we really have a very interesting portfolio versus our key competitors because of course, we have access to these 500 brands of ABI globally, and we're continuing to build partnerships as well.
If you look at our craft part of the super premium portfolio in craft and specialties, of course, we have a number of specialties brands that we are starting to import and test in the highest income cities in China. Within craft, we have Goose Island as international craft brand. We have Boxing Cat and 059 Coastline as regional brands. Very recently we have also added BrewDog to our craft offerings as an international craft brand with big potential in China as well, just to continue offering more options to Chinese beer lovers and to continue to bring different experiences as well. On these craft brands, we typically invest as well in brewpubs and taprooms. We continue to expand.
We actually just in the fourth quarter opened three new locations for our brewpub and taproom kind of portfolio. We expect in the next 12 months with kind of normalization of the business environment with less restrictions to continue to accelerate the openings as well of these footprints both in our own kind of ownership, but even more with the franchise partners. When you look at Beyond Beer, the other part of what I think your question was is really we. It's also our portfolio building, right? Beyond Beer, we are earlier in the journey, right?
We do have an ecosystem that is very welcoming to offering more brands in our portfolio, whether that's in Beyond Beer with a big focus on RTD, you know, or leveraging our route to markets to bring other offerings to the market as well. Because our wholesaler partners are very premium partners. They have channels that are very open for a broader portfolio. We've been innovating quite a bit in the last couple of years. You know, beyond the partnerships that we have, we also invest in our own kind of product innovations. End of last year, we've seen a lot of success with some RTD offerings. We have Fúcha , which is a ready to drink alcoholic tea basically.
Also Route 2, which is more a nightlife oriented, young adult, population, premium offering. Kind of a flavored vodka offering, which has been doing very well as well in our nightlife channels. We have different offerings that we are going from seed to launch stages, that the teams are quite excited about in specific cities and regions. I'm sure you'll hear more about these in the next coming quarters as we expand and as we build these brands to become relevant on the RTD front as well. Thank you for your questions, Ethan. Appreciate it.
Sure. Thank you, Jan. Thank you for sharing.
Thank you. Ladies and gentlemen, this concludes our Q&A session today. I would like to turn the conference back over to Mr. Jan Craps for the closing remarks. Please go ahead, sir.
Thank you, Anna. As we shared earlier, there are already strong signs of business recovery in China this year. We are optimistic about our business, excited about the opportunity to capture disproportionate benefits from this recovery. I wanna thank everybody for joining us today, and I look forward to speaking to you again soon. Thank you. Talk soon.
Thank you. Ladies and gentlemen, this concludes today's results call. Thank you all for your participation. You may all now disconnect.