Welcome to the 2021 first half result call of Budweiser Brewing Company APAC Limited. Hosting the call today from Budweiser APAC are Mr. Jan Craps, Chief Executive Officer and Co-chair of the board, and Mr. Ignacio Lares, Chief Financial Officer. Results for the first half of 2021 can be found in the press release published early today and available on the Hong Kong Stock Exchange and Budweiser APAC website. Before proceeding, let me remind you that some of the information provided during this result call, including our answer to your questions on this 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, uncertainties, and other factors beyond our control.
It is possible that 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 obligation to, update their forward-looking statement as a result of new information, future events, or otherwise. For a discussion of some of these risks and important factors that could affect Budweiser APAC's future results, see risk factors in the company prospectus filed with the Hong Kong Stock Exchange on the 18th of September 2019 and the 2020 annual report published on the 26th of March 2021. I would also like to remind everyone that financial figures discussed today are provided in U.S. dollar, unless stated otherwise. The percentage changes that will be discussed during today's call are both organic and normalized in neutral, and unless otherwise stated.
Percentage changes refer to comparisons with the same period in 2020. Normalized figures refer to performance measured before exceptional items, which are either income or expense that do not occur regularly as part of Budweiser APAC's normal activities. As normalized figures are a non-GAAP measure, the company disclosed the consolidated profit, EPS, EBIT, and EBITDA on a fully reported basis in the press release. Further details of the financial year 2021 interim results can be found in the press release published early today. It's now my pleasure to pass the time to Mr. Jan Craps. Sir, you may begin.
Thank you, Aaron, and good morning, everyone. Thank you for joining our earnings call. I hope you are all safe and well. I'm pleased to present another encouraging set of interim results, which demonstrates the fundamental strengths of our company and the resilience of our people. With their efforts, we continue to drive high-quality growth, delivering double-digit increases in volume, net revenue, and EBITDA during the first half of 2021. In addition, net revenue per hectoliter grew in all key markets, driven by our effective premiumization strategy. As I'm sure many of you are already aware, we recently announced a green financing loan, which links our financial metrics with the achievement of ESG targets. This will further incentivize us to accelerate our sustainability efforts, which have advanced significantly to date in 2021.
Before I hand it over to Iggy to take you through our financial performance, I would like to share some highlights for our key markets during the first half of the year. In China, we achieved profitable high-quality growth on the back of the successful execution of our premiumization, digitization, and expansion strategy. Our first half volumes, revenue, and EBITDA all increased by double digits year-on-year. In the second quarter, revenue grew mid-single digits. A volume decline of 4.5% due to a high base last year was more than offset by strong net revenue per hectoliter growth of 9.5%. Budweiser, the leading brand in the premium segment, achieved double-digit growth in revenue and in volumes despite a COVID-19 outbreak in Guangdong, and in addition, our super premium brands also grew by double digits this quarter.
In the regions with the highest consumer demand and where our brands have a particularly strong market presence, such as Fujian and Guangdong, we also focused our efforts on Budweiser innovations to connect with more consumers. The strong uptake of Budweiser Supreme in premium Chinese restaurants and into new channels further reinforced our growth momentum. We also saw promising initial results for Budweiser Magnum, which was launched in the second quarter to offer a sophisticated and stronger flavor profile for special occasions. Other innovations launched year to date, such as Budweiser ME3 and Corona Fresca: Seasalt And Guava, allow us to connect with female consumers and begin to capitalize on the growing She Economy with fruit-flavored options that serve additional drinking occasions. In the e-commerce channel specifically, we launched Budweiser ME-X, which has 3x the higher net revenue per hectoliter than Budweiser Classic.
This product has ranked as number one in the food and beverage category during this year's 618 e-commerce shopping festival. Our proactive efforts to shape the category accelerated our growth in the premium and super premium segments. To support our continued premium super premium growth, we have announced plans to build a new craft brewery in Putian, Fujian Province, and further expand our existing brewery in the city. We expect that our Putian brewery will remain as the largest brewery in Asia upon completion. The momentum of our super premium and premium segments reinforces our determination to continue investing in the high-end beer segment in China. In parallel, we continue to enhance our digital capabilities. In the first half of this year, we reached 29 million first-party consumer records.
This was led by Bud Space, but extends across a series of brand assets and consumer digital products, allowing us to identify unique consumer insights to drive further growth. From a sustainability perspective, our Wuhan brewery is poised to become our parent company, AB InBev's, first brewery globally to achieve carbon neutrality by the end of this year. Moving on to India, the country was impacted significantly by a new wave of COVID. The health and safety of our colleagues and the community remains our number one priority. As India battles with COVID, we have donated over 300 oxygen concentrators, distributed over 8,000 essential aid kits. We procured 500,000 surgical masks and added COVID hospital bed capacity. In addition, we have leveraged Budweiser's reach to facilitate locating and deploying medical resources to individuals in need through the Budweiser Stronger Together social media campaign.
Despite a difficult situation, we managed to achieve double-digit growth in volume and revenue in both the first half and the second quarter of 2021, but remain below 2019 levels. We continue to expand our non-alc offerings to reinforce our premium and super premium portfolio. In South Korea, led by the success of our recent innovations, including all new Cass and our new classic lager, Hanmac, we estimate our volumes outperformed the industry. Volumes declined by low single digits in Q2, impacted by ongoing COVID restrictions. Revenue per hectolitre grew low single digits driven by positive brand and pack mix. We also achieved double-digit growth in the premium segments led by Budweiser and Hoegaarden. In the second quarter, we launched Hoegaarden Botanic and Hoegaarden Pomelo to capture new drinking occasions and further attend to the rising demand for new products and experiences from female consumers.
I will now pass to Iggy to take you through our financial results for the first half. Over to you, Iggy.
Thank you, Jan. Good morning, everyone. I am delighted to join you all at this results call today. As Jan mentioned earlier, we delivered another encouraging set of results in the first half. Despite the headwinds resulting from the ongoing pandemic, our total volumes were 18.4% higher than in the first half of last year. This result is attributable to remarkable efforts in premiumisation and continued recovery in China. We recorded a year-over-year volume growth of 21.8% in China while maintaining healthy inventory levels. This strong performance was partially offset by South Korea, which is still affected by ongoing COVID restrictions. Revenues grew 26% in the first half, driven by double-digit growth from our premium and super premium portfolio, and supplemented by favorable brand and pack mix. Revenue per hectolitre increased across all our key markets.
In China, our largest market in APAC, both net revenue and EBITDA increased substantially by 33.5% and 60.3% respectively. Our premiumisation efforts resulted in a 9.7% increase in revenue per hectolitre, benefiting from a lower net revenue per hectolitre base in the first half of 2020. The overall cost of sales improved by 0.4% on a per hectolitre basis, as we continue to drive operational efficiencies and leverage volume recovery to further dilute costs. Normalised EBITDA increased by 53%, driven by a 60.3% increase in China versus the same period last year. Normalised EBITDA margin increased from 27% in the first half of 2020 to 33.2% in the first half of 2021, as top-line growth significantly outpaced inflation and cost escalations in the period. Normalised profit attributable to equity holders reached $520 million, which is $298 million higher than the first half of 2020.
Normalized earnings per share was $0.0393 in U.S. dollars. As we move into the second half of 2021, our strong first half of the year allows us to continue to invest in our business to accelerate our momentum and lead future high-quality growth. With that, Jan and I are here to answer any questions you may have. Aaron, back to you.
Thank you, management. The floor is now open for questions. In the interest of time, we are asking participants to limit themselves to two questions at a time. For audience, please press zero one for questions, zero two to cancel. For online questions, please submit in the Q&A box. Our first question is, Euan McLeish, from Bernstein.
Great. Good morning, Jan and Iggy. Thanks for taking my question. I have two questions, one about Bud brand in China, and the second one about price competition in Korea, and I will ask them one by one, if you do not mind.
Sure. Thank you, Euan.
Great. So in China, it is good to see the Budweiser brand momentum running at double digits again. Bud is clearly the most important driver of your earnings in China. I presume, there is obviously quite a benefit of the recovery from COVID and organized crime related outlet closures before that. You have talked about distribution growth opportunities as premium channels expand. What I am interested in is, if you look at the core Bud brand, excluding channel reopening, excluding geographic expansion, what does the underlying growth momentum of the brand look like? It is a big brand, so I presume it is slowing over time, but I just really want to understand what is the medium-term sustainable trajectory, and what are the big threats that you see to that Bud brand growth, in the medium and the short term?
Sure. Thank you, Euan. Thank you for your question. Good morning. You are right. Budweiser is the number one brand in premium segments in China, and we achieved this double-digit growth, in volume and revenue, compared to last year. By the way, we also grew versus two years ago, and that was despite the COVID restrictions we had in Guangdong in the month of June. I think to answer your question, probably two parts of the answer. We always split our markets in China, between the mature markets in which Budweiser already has a strong market position, and then the expansion markets where we see opportunity to continue to increase distribution, and our route to markets. In the first ones, in the mature markets, we typically focus not only on Budweiser Classic, but also on the new line extensions.
We focused a lot this year on Budweiser Supreme, especially in the small bottle formats, which is focused on the premium dining occasions. It is a variant of Budweiser that is specifically brewed to pair very well with meals. That one is doing very well, very strong double-digit growth. We see Bud Supreme expanding nationally, to become a very strong second proposition of Budweiser next to Bud Classic. In Guangdong, we have Bud Light. Guangdong is our biggest selling region for Budweiser, and there Bud Light is offering a lighter profile for even more refreshment. You probably remember that we launched Budweiser Magnum in the second quarter. In the months of April, May, we launched Budweiser Magnum. Budweiser Magnum is really there to provide a stronger flavor profile, variant of Budweiser with higher ABV, targeted to meal drinking occasions.
We see very good early signs of Budweiser Magnum, in the markets. Then a very special one with the ME series, with Budweiser ME. We have ME3. We launched ME-X, this year. Really focused on more the fruit flavors options that we want to offer. Of course, a lot of female drinkers, but also some male drinkers who really appreciate a very innovative format of Budweiser, in the market. Really when you look at our mature markets, it is all about occasion expansion. It is driving distribution of these innovations to complement the occasions of Budweiser and continue to increase the price points because, most of these variants would be at premium prices, some of them even significantly premium to the classic Budweiser. If you go to the distribution expansion, in some markets, Budweiser still has a very limited distribution level.
And it really correlates typically with the disposable income in the different markets and the maturity level. Last call, I think I shared that we have Budweiser distribution at less than 50%, numeric distribution. It is actually well below 50% at the national level. We do see significant opportunity for Budweiser to continue growing, because we have a strong brand awareness and love for the brand across the country. And actually, when you look at Budweiser sales to retailer volumes outside of these strong presence markets like Fujian and Guangdong, we actually see strong double-digit growth for Budweiser, in the first half, even if we compare to 2019 first half. We see a very solid, continued growth, especially also outside of these strong presence markets. So maybe an interesting information for you know about our maturity model, right?
And how we cluster all the cities in China between the different maturity levels and market share, clusters that we have, to cluster these cities together. We actually currently have a list of more than 50 cities, five zero, where we specifically focus to expand Budweiser, as a brand. So that is the focus on Budweiser Classic, Budweiser Red. And typically, what these cities have in common is that they would be middle market maturity, and lower market shares. And these are actually the cities that we have a very fast growth of Budweiser, and it comes down to the expansion playbook that we have in finding the right wholesalers, building go-to-markets, and increasing our coverage of the stores in these 50 cities. There is over 50 cities in which we focus on the Budweiser expansion.
We see a lot of growth opportunity for Budweiser, even if it is a big brand. We see strong double-digit growth, which kind of confirms that. But when you dive deeper in the nature of the growth, it is actually very encouraging because in the more mature markets, we see growth in new occasions at higher price points. And in the markets where Budweiser has low distribution levels, we are actually quite targeted in more than 50 cities in expanding the playbook that we have for markets with a lower maturity.
Okay, great. Thanks very much, Jan. Moving on to Korea. Obviously, you can see in these results that margin pressure does not seem to be abating. And it looks like the success of Hanmac is driving a bit of a competitive response from HiteJinro. I see that they cut the wholesale price of 500 ml cans of Terra, which is obviously focused on the CVS channel. Can you maybe tell us, contextualize this move for us? Is this kind of material price reduction something that you see typically in the off-trade in Korea? Is this normal competition or is this a change in the nature of competition? And how has this kind of dynamic played out in the past? So I am interested in your reaction and just contextualization around how different is this?
Is this a change in the nature of the Korean market that we need to think about as something going forward?
Yeah. Thank you. I think very good question. I think South Korea is a market, I'm sure we'll talk a little bit more about, in this call. There are quite some changes in South Korea when you look at our commercial agenda, and we're actually quite happy with the progress the team has been making in South Korea. We're very encouraged with the results for the first half outside of industry, I should say. When I look at the price movements, I'm sure you won't expect me to comment on every competitor move in detail. But, when I look a little bit broader, I think, an important move we did in the beginning of the year that is maybe a little bit less visible because it gets quite detailed.
But we essentially applied a framework that we call OBPPC, which is, basically occasion, brand, pack, price, and channels. So it's looking at what are the right packagings and what price points within each channel, depending on the occasion we try to serve. Actually, the team in Korea did a very detailed work on that and decided in the first half of the year to launch a number of packaging innovations on the Cass brand, which as you know, is by far the biggest brand in South Korea. These launches have been very successful. Actually, if I give you an example, Cass used to be sold in single can and then in the 4 x 500 ml can, for example. The team launched, in the second quarter, a packaging, which is an 8x 473 ml can.
So it is a slightly smaller can, but you can only buy it if you buy it by eight cans. These 473 ml can would be at a lower average price point, but shoppers need to buy more cans to basically get access to the price point. So it's kind of a pack price approach, but targeting specific occasions. When we communicate about a pack through the line, we also link the packaging to specific occasions. This has worked quite well and has kind of opened a new way for South Korea, to position packs in specific occasions with access to new price points. Now, obviously, this launch was focused on the in-home channel. Due to the COVID restrictions, you can imagine that the weight of the in-home channel has increased quite a bit in the last 12- 18 months, due to the COVID restrictions.
And you imagine that some of the other players have also wanted to increase their weight in this channel. We've seen a lot of our competitors go more into lower price points and placing more discounts. Now to your question on the 500 ml can, actually, most of the 500 ml cans are sold in the CVS channel. Most of the other channels in retail are focused more on the smaller cans, the 355 ml cans. When you look at a CVS channel, actually more than 80% of the 500 ml cans are sold by four. So typically, the promotion shoppers get is four cans for KRW 10,000 . That's kind of a typical promotion in CVS. So the average can price is KRW 2,500 , so KRW 10,000 divided by four. While if you buy a single can, it's typically KRW 2,700 .
But even if some competitors would decide to reduce the price of their cans to KRW 2,500 from KRW 2,700, in reality, most shoppers already get access to the price point by buying the cans by four, which is by far the biggest format or way of buying the tall cans in the Korean CVS channels. So even if some players give some discounts to get there, we don't really see any significant impact on our volumes in the channel. We believe that our strategy of differentiating the packs to target specific consumer consumption occasions and activating price curves in a sustainable way, will help us more from a medium to long term, to really drive the right category growth in South Korea, which is really our role as a market leader.
Great. Thanks, Jan. That's very helpful. Appreciate it.
Thank you.
The next question is Chen Luo, Bank of America.
Thank you, Jan and Ignacio. I have got two questions. The first one is on China. We noticed that both our premium and super premium portfolio have grown pretty nicely in first half. However, given our high base, I think it is not that easy for us to achieve super strong growth for our premium portfolio as compared with our competitors who have got lower base in the category. However, it seems that Bud has still enjoyed very clear advantages in the super premium portfolio. We understand that super premium is a small part of our total China volume. Based on our estimate, it could be roughly around mid-single digit percentage of total volume. But can we get any color on the revenue and earnings contribution from the super premium portfolio? Any color on our future strategy in this category will be also very helpful.
I will start here for this question first, and later I will talk about other question on Korea. Thank you.
Sure. Thank you, Luo Chen . Good morning. Maybe, let me focus on super premium. But before I do that, I would like to say that we are actually quite excited as well on our premium portfolio and on the growth potential of Budweiser. I know there is a lot of competitors focusing on the premium segments, since one or two years and launching a lot of initiatives there. We are actually quite excited with the momentum behind Budweiser. We see a lot of opportunity to continue with our kind of line extensions, focusing on different occasions. The pure expansion is actually, if anything, an even bigger opportunity than before because we see the Chinese consumer premiumizing quite quickly. We believe we can accelerate our geographic expansion quite effectively because our playbook basically works, right? We remain very excited by the premium segment growth.
You are right, I think the super premium part of the business is typically a little bit less understood, and I will try to share a couple of numbers with you that I think you will find interesting. So maybe for context, right? We started focusing big time on the high-end company really about five, six years ago, when we launched a special team, to essentially have a dedicated team developing our portfolio of super premium brands, launching them with differentiated drinking rituals, and then developing also Focuses on these smaller brands at the time that took special care and special attention to grow, right? As you probably know, in this part of the portfolio, really, having multiple offerings and a rich portfolio is really the critical advantage.
As you know, we are very fortunate that with our parent company, AB InBev, we have more than 600 brands that we can basically leverage, which many of them have an amazing heritage and differentiated positioning, and different flavor profile, taste profile, styles that we can bring in from different countries. Not only the products, but also the experience into China. When we did it, this segment was very small, right? Super premium at that time, five, six years ago was really small. Already a number of years ago, we decided to continue to expand our portfolio with partnerships as well. For example, with Guinness in the stout segment or Sapporo in the Japanese beer segment. We continued to build a very strong portfolio in the last five, six years, in China, and some of these brands really got to scale in the meantime.
If we think about Corona, Blue Girl, Hoegaarden, the whole brands that really came from a very small base to a significant base. Actually, this part of the portfolio is very difficult to copy by any competitor. If you think about it more strategically, what we did with Budweiser 10 years ago was betting on a segment that at that time was very small, which was a premium segment and became very sizable. If anything, there is a parallel to make with the super premium segment five years ago, which was very small. If anything, we believe the super premium segment from a profit pool perspective, can be as big 5-10 years from now, or even bigger than what the premium segment became in the last 10 years. So some numbers to share.
I think last time we shared some numbers with the analyst community was at the Investor Day, in 2017. I think I am quite excited to share that if you compare the super premium segments as a percentage of our contribution to our total revenue, today, the segment has quadrupled, versus 2017, so in the last four years. Actually, when you look at the share of our volume, about mid-single digits of our volume is today the super premium segment. If you look at the net revenue, it is in the mid-teens of our net revenue, if you look at the first half of 2021. Actually more than half, if you look at the last four years of our business, more than half of our net revenue growth contribution in China came from the super premium segment.
If you think about that mid-single digit volume, mid-teens revenue contribution to our total business and more than half of the revenue growth, you can see that actually from a growth perspective, super premium is a segment that is maybe less discussed, when you look at our competitor moves, but it is very strategic in the beer industry in China and is a very big part of our strategy. That is why we have actually, in our expansion strategy, like I mentioned to you, Euan, earlier, we have just over 50 cities where we focus big time on Budweiser classic geographic expansion. We actually have a list of 31 cities in China, where we have a big focus on the super premium portfolio expansion. These cities where I was talking with Euan earlier, saying that the 50 + cities are typically middle maturity, low market share.
The list of 31 cities is typically late maturity to high maturity levels, where logically, on average, we would have higher market shares because, of course, Budweiser would be better developed there, and our go-to market would be typically stronger in these markets already. Within that segment, I mentioned the brands that are already at scale, with Corona, with Blue Girl, with Hoegaarden, but they are growing very strongly because from a market share perspective, we believe these brands can get much bigger in China if we compare it to other markets in the world. On top of that, we have what we call the craft and specialty portfolio. If you look at the craft and specialty portfolio, it is one of the future growth drivers. Actually, the craft and specialty segment in our portfolio has doubled its size if you compare this year versus last year.
We keep adding new brands in there. Of course, we have Goose Island in there. We have Boxing Cat in craft. We have brands like Guinness, Sapporo, Stella Artois in there in specialties. We continue bringing more and more brands in there that are very differentiating. If you think about the Belgian portfolio with Belle-Vue Kriek, or we have Tripel Karmeliet, we have Leffe. We have a lot of brands that we can bring into the country, to expand our craft and specialties portfolio, where the assortment is really critical to differentiate and offer choice to our consumers at these higher price points.
Thanks for the question, Luo Chen, because it is quite an exciting part of our portfolio where we see a lot of the future growth happening, and more difficult, I would say, for competitors to build such a wide, rich portfolio that we can offer in the marketplace.
Thanks a lot, Jan, for sharing a lot of useful information on the super premium segment. Moving on to Korea. We understand that currently the country is seeing the worst-ever wave of COVID outbreak, fueled by the more contagious Delta variant. The restrictions on activities are even tighter now than before. Are there any changes to the overall consumption sentiment that we have observed so far in South Korea? What is our outlook for the South Korean business in second half? Thank you.
Yeah. Thank you, Luo Chen. I think South Korea, you touched on the point of COVID restrictions, right? It's probably the most important point to mention in this call that has influenced our results. Because, essentially in South Korea, volumes declined by low single digits because of these restrictions. If you look at the underlying performance commercially, we are quite happy with the performance in South Korea. We grow a significant market share despite the channel headwinds. Because as you know, the first thing that happens when the COVID restrictions come in, typically the on-premise channel is much more impacted than the retail channel. In the on-premise channel, we have a higher than average market share. So we are disproportionately impacted as a grower in South Korea. Despite this quite negative channel mix, in the second quarter, we gained significant market share in South Korea.
We're quite encouraged by the success of our innovations. If you look at the industry, which is the essence of your question, the COVID situation continues to be very fluid in South Korea. Actually, the government initially announced that they would ease all the social distancing restrictions on the 1st of July, which was quite exciting for us because that kind of followed a long period with restrictions, which were higher in Seoul, the capital, Seoul and surroundings than in the rest of the country. But then as we approached the 1st of July, towards the end of June, actually, the number of cases had been quite stable between 400 and 500 in the last weeks and months before the 1st of July. Then suddenly with the Delta variant, it reached peaks of 1,600 per day and even higher in these days.
The government kind of changed their decision, and they decided on the contrary, instead of relaxing the restrictions, they decided to reinforce the restrictions to the highest level, which is level four, in the Seoul area, and increase it as well in the rest of the country. Practically speaking, basically private gatherings are only allowed up to four people. If you're in Seoul and surroundings, after 6:00 P.M., you can only be with two people in a group. So essentially, putting significant restrictions on the on-premise, and most bars and nightlife venues would simply be closed. On the positive side, the government announced that they are quite ambitious with their vaccination program. They have an official target of more than 70%, full vaccinated by September this year. They're making progress towards the target.
I would say commercially, we are very confident with our plans in South Korea, very much encouraged by the consumer reactions to our portfolio and our innovations that we launched in the last six months. COVID-wise, it remains fluid, and we hope that the vaccinations and the social distancing restrictions that the government put in place will help to reduce the restrictions and the impact on the industry.
Thanks a lot, Jan.
Thank you, Luo Chen.
Our next question is Lincoln Kong from Goldman Sachs.
Yeah. Thank you, management. I have two questions on China, asked one by one. First one is, in terms of the latest volume trend we are seeing, say, in June and July, because we are start to see the COVID resurge in East China as well as the Henan flood. Do we have any sign of a volume impact from that? In terms of the ASP, the first half, we are about a mid-single digit higher versus 2019 level. Looking forward, how should we think about this ASP trend into the second half? We know we had some moderate price hike earlier this year. Do we see any chances for further price hike by end of the year? That's the first one.
Sure. Thank you, Lincoln. Good afternoon. If I look at the short term, right, like the last two months period, I think there were a couple of main events, right? I think the first one was the Henan region, Zhuxian Xiang , regions that were impacted by serious floodings. Obviously, our first priority there was our colleagues, our wholesaler partners, and the communities, right? Happy to say that our teams and partners are all safe. For the communities, we actually were able, with the help of our wholesaler partners, from a distribution perspective, to provide almost 500,000 cans of emergency drinking water to the people who are affected in the province. The second event is really the COVID cases, right? I think in June, mostly in Guangdong. In July, recently, Jiangsu Province, right, centered in Nanjing.
But then also the Liaoning, Sichuan provinces, where there is a number of new cases. The good thing there is that we've seen local governments reacting very quickly in terms of identifying the issues and screening the populations at mass scale, and actually very quickly identifying the cases there. From a business perspective, if I look back at June, Guangdong, of course, that would have impacted our business. But by the end of June, all the impacts would be in our Q2 numbers that we reported, right? So anything that happened in Guangdong is in the numbers of H1 and in Q2. Despite that, we grew double digits for Budweiser and Super Premium. As you know, Guangdong is quite a big province for us, so you can imagine the underlying momentum of our premiumization trends.
Next to that, we don't really see any significant impact on our business, especially in the premium segments, in the other provinces, so the more recent outbreaks in July, because of our more limited market position in these provinces. There will be some impact in the core and value segments. Core plus, maybe. For premium, super premium, a relatively limited impact of these COVID cases just because of the geographic kind of position for the moment. Of course, I'm very cautious to predict anything on COVID, right? We monitor the situation all the time. As you know, we adapt our commercial plans in a very agile way, to adapt to the business environment. But essentially, that is the situation here. When we look at the segment trends, right? I think in the second quarter, you would have seen that there was an overall volume decline of 4.5%.
That is really due to the high base in 2020. Of course, that was because last year, this time, the COVID restrictions eased and we had very high comps especially in the month of May and June. Remember that June was the biggest month ever in our history, right? It still stands today. But the volume decline was basically fully driven by the core and the value segments, which is why you see our revenue per hectolitre go by 9.5%. Actually, to your question on future looking, right? I think when you compare our revenue per hectolitre to last year, of course, you would have the difficult base in 2020 second quarter because of the big core and value kind of recovery in Q2 last year, that would have given easy comps from the revenue per hectolitre point of view to last year.
So probably comparing to 2019 would be a better comparison from a revenue per hectolitre point of view. There, we are more in the mid-single digits, which goes back to our continuous trends in the last number of years. I think that would be roughly in line with what we would have seen the last three years as well. The time that we talked in the IPO period, right? I think revenue per hectolitre-wise, we are typically in this mid-single digit range. So you see the continued success of our premiumization strategy. We do not really see any slowing down of that. Also for the future, we see a continued premium, super premium success in our portfolio. As I mentioned earlier, super premium, I think will continue to be a big growth driver as well, to support us.
Okay. Thank you. The second question is more about our key strategic focus, because I think early this year, we had some management change for the China team. So in terms of our promotional intensity and the key priority change during the summer season, how are we doing anything different or new this year versus past? In terms of how do we have a focus in terms of the expenses allocation, especially, say in some certain on-premise channel or high-end channel. How are we thinking for this year in terms of the spending?
Yeah. Thank you, Lincoln. I think when you look at our management team, we see a lot of continuity and proven talents that are basically offered a chance to step up in our organization. When you look at our Chief Sales, Chief Marketing, and the President for the High-End Ventures, they are all very seasoned colleagues of ours, more than 10 years in the company, and they all have a background in our business, in the sales and the marketing fronts, either running big business units, running the high-end company, or running our biggest brands in marketing. So I think you will see a lot of continuity in our strategy, because we believe with this team, we will continue to deliver very strong results in the future. When you look at our strategic priorities, it is really about premiumization, digitization, and expansion.
I think premiumization, I covered in Euan's and Chen Luo question before. I think you see our excitement behind Budweiser. You see our excitement behind the super premium portfolio. We put more and more focus on our beyond beer company, kind of portfolio, which is very small today still, but we are really planting the seeds for the next 5- 10 years to complement our super premium portfolio, in the future. On digitization, we also have very big initiatives on the consumer front, on the customer front. We believe we continue to invest in the right kind of initiatives there. Thirdly, in expansion, we continue to see very big expansion opportunities.
Maybe to give you an idea, from last year, we expanded significantly at the county level, maybe back to the provinces where we have high market shares like Guangdong, Fujian, some other provinces in the country. Our teams there, obviously, as you probably know, as we premiumize when we get into a new province, we start typically from the city centers. Then nightlife, CR, Chinese restaurants, and we build the business into the in-home channel over time. What these teams are very focused on is not only innovations to drive more consumer occasions, but they also go for more counties in the same province because it's kind of the approach that we can expand the strength of our brands into more counties outside of the city centers. It's really a matter of building the right go-to-markets.
In the last year, to give you an idea, we invested in more than 500 counties out of the 3,000 counties in China, with a full portfolio approach. We actually do quite some expansion at the county level in China to continue to build our distribution successfully. The other one is what I mentioned earlier. In the cities or the provinces that we have lower market shares, there we go more for the tier two and below cities with a focus on Budweiser. There's a 50 + city list that I mentioned earlier, because there we see a lot of middle maturity markets that we can continue to expand in. That's really the essence of our strategy, that continues to be our focus. From a resource allocation point of view, I think we continue to invest behind these three strategies.
Of course, as there are some changes with COVID restrictions, et cetera, we are quite nimble in adapting our resource allocation. But I think we've been quite effective at doing that in an agile way.
Okay, great. Thank you.
Thank you, Lincoln.
Next question is Melody Zhou from CICC.
Hi, it's Melody from CICC. Thank you so much for giving me the chance to ask the questions. I have two questions about our e-commerce channel and the category expansion. The first question is, how is your 618 online shopping festival and the second quarter performance in the e-commerce channel? What will be the strategy going forward in this channel? For example, in B2B and B2C. This is my first question. Yeah.
Sure. Thank you, Melody. Good afternoon. I think when we look at the e-commerce channel, we really leverage this channel for brand building. As you know, we are leading the e-commerce channel, and it is a channel that is growing quite healthily. But if you look at the role of the channel for us, just like nightlife is a brand-building channel for us, we also consider e-commerce as a brand-building channel. We execute specific marketing campaigns in this channel because we can reach different consumers, and the media we can use to reach them is very rich. The better we know our consumers via first-party consumer data, the better we can also segment them and target our messages in a relevant way.
It is a very different strategy than a pure price promotion strategy, which can also exist in this channel, but we do not take part in that, and we clearly have a differentiated price approach. Really, when you look at our approach and the bulk of the volume that we sell in the channel would be in differentiated packaging assortments. We offer experiences they can only find online, not offline. A significant part of our revenues is sourced from innovations. As an example, in June, we launched Budweiser ME-X. ME-X was a new variant of ME3, the ME series of Budweiser. To give you an an idea, this actually sells at 3 x the net revenue per hectoliter than the regular Budweiser, in the e-commerce channel. It is quite a high price point, 3x.
When you look at the commercial success of that, we partner with our brand ambassador, Xiao Zhan, who in China is very, very famous. We actually co-developed for this ME-X variant to be launched with his support, and it became the number one ranked brand in food and beverage during the 618 e-commerce shopping festival. It actually got to CNY 15 million GMV. Not just in beer, not just in beverage, but in the all total food and beverage category in China in the 618 shopping festival, became the best-selling article online. It was quite a good example, I think of showing what role the channel plays for us. Next to that, we have the O2O channel, which is also growing very rapidly, accelerated since COVID and continues to be a fast growth driver.
We are also leading the O2O channels, with our premium and super premium brands, especially. Beyond that, I would say, as you know, digitization is important strategy for us. We invest in first party consumer data. We now have more than 29 million first party consumer data in our database, and we can segment them and target these consumers individually via Bud Space and other kind of consumer products, digital products. Then next to that, we continue with our B2B application, which is really digitizing our go-to market and future-proofing the go-to markets. We started six months ago, and we continue to expand to more cities and more channels as we digitize the go-to market in the different channels together with our wholesaler partners. We are quite excited about that as well for the future.
And I am sure we will share more data on that in the quarters to come.
Okay, thank you so much for such a detailed answer and, congratulations on such a great performance on e-commerce channel. My second question is about the category expansion. Will Bud APAC continue to expand the category? I know that in the first half of this year, whiskey and RTD were expanded one. I want to know what is the next one, and is there any planning to expand the sales volume of whiskey and RTD in the future? This is my second question.
Thank you, Melody. I think within beer, I mentioned a lot of innovations that we launched, and we continue to be very innovative, especially in premium and super premium segments, but also for the full portfolio. You are right, we also have our eyes outside of the beer category. I think probably the biggest deals that we announced earlier was our partnership with both Red Bull and then Fireball, which officially started on 1st of June . We started distributing their products on 1st of June . It was a transition month, of course, so the numbers are still relatively small in our numbers on the scale of things. These are really strategic launches for us because we believe premium spirits and energy drinks will continue to grow. They are growing segments or growing categories.
We also have a route to market that can really facilitate the expansion, and we can add to the growth of these segments and become a relevant player in these different new categories. Especially in a premium way. When we look at Fireball, clearly, we see an opportunity to penetrate the channels where we already sell our premium, super premium products, and capture different drinking occasions. It is more about mixing and shots, which is very complementary to beer. In the future, we will also develop the wider portfolio of Sazerac, which is a partner company behind Fireball. They are very beautiful brands like Buffalo Trace, like Southern Comfort, very premium and super premium spirits, in which we will invest in the future to develop a more specialized go-to market, to offer more choice in our most premium sales channels.
If you look at Red Bull, of course, the energy market is already big. But we believe that there is room to premiumize that market like we did in beer as well. Red Bull is, of course, a globally leading premium energy drink, and we believe we can bring new drinking occasions in the channels where we are strong. We have integrated Red Bull in our go-to market, especially nightlife and some other CVS channels where we are pretty strong. We believe we can build a distribution and strength of Red Bull as one of our key beyond beer brands for the future. Interesting to know is that both portfolios are more profitable for us than the average of the group on a per hectoliter basis, so they continue to build on our premiumization strategy.
Of course, in addition to these partner brands, in the future, we will announce more and more launches because they are actually too small to mention today, but we have an approach that we launch new innovations in a seeding way. We launch them typically online or in one of two cities in specific channels. Then we fine-tune the liquids, the taste profile, the packaging with the consumer feedback, because these days it is very easy to get feedback from which consumer segments you reach, what is the repurchase rate? What is the feedback we see from consumers online or in our consumer groups? Then we fine-tune the proposition to then quickly scale it in the market. So, we will bring more news on that.
We also have a beverage fund, which is kind of an initiative in more of a VC approach, where we can also launch smaller initiatives or partner with other companies to build a richer portfolio for the future. So we have different ways of building this beyond beer company approach. Some of them are bigger and proven, like Fireball, Red Bull, Mike's Hard Lemonade in the ready-to-drink space. Some of them are being launched, and seeded in a small scale, but will be bigger in the future as we prove their success. Some of them are in the works, from the kind of beverage fund approach, to find the right partners to expand our footprint there. Thank you for your question, Melody.
Next question is Lillian Lou from Morgan Stanley.
Hey, thanks. My two questions, one is on China. In particular, what is the margin outlook? Maybe related, because we do not have the breakdown on country level for gross margin, but I noticed on the group level, the gross margin actually narrowed, despite the premiumization trend. What kind of reason behind it and how we look at the margin trend in the next quarters? That is also related to China in similar situation, if I am right. The second question is short, so I just ask together. What is the situation in India when we look at the second half? What kind of impact of India situation to the total profit on the profit side? Thank you.
Thank you, Lillian. I will ask Iggy to take the first question and I will take the second one.
Perfect. Thanks, Jan. Thanks for the question, Lillian. Let us start then maybe with the margin view. In the first half of 2021, we had very strong performance actually in China, right? Not only at a volume level, but also net revenue and EBITDA. Top line actually went all the way down to bottom line. They all grew double digits on a year-on-year basis. Obviously, in the second quarter, as Jan mentioned, we had the tougher base last year, given the strong May and the record June. But even so, we were able to grow net revenue 4.6 percentage points organically, more so on a reported basis, and EBITDA grew ahead of that. In fact, both net revenue and EBITDA returned to second quarter 2019 levels, even despite the strong comparables in that year as well.
When we look at it from an operating leverage perspective, we actually have a favorable operating leverage in China. We are actually growing EBITDA ahead of net revenue, in all those comparables, right? In the first half and second quarter, et cetera. While we do not disclose the EBITDA margin at that level, you can obviously assume, given the size of China, that a significant portion of the 589 basis points advancement in EBITDA margin from 27 percentage points last year to 33.2 percentage points came from China. If we look at the business, you could argue that Q3 and Q4 performance was already largely returned to normal business. We are operating in what you would call now back to similar to steady state conditions in an EBITDA margin perspective in China specifically.
Beyond that, of course, as we look forward, but we don't give an outlook, we do know that commodity prices have increased in several categories, aluminum, paper, and steel, among others. But at the end of the day, we have a hedging policy that allows us to plan for this up to 12 months in advance to some of these categories. This allows the teams internally to actually build out plans to offset a significant portion of commodity increases. Using our cost connect win approach, we can then apply that for growth purposes. In terms of price increases, we mentioned in the last call, if I recall correctly, that we had executed a price increase on Budweiser at half of CPI, and we had also executed actually in April a national price increase on our core and value brands. So those two are there already.
But we continue to evaluate pricing opportunities in a more tactical way, right? In terms of region and channel using the OBPPC methodology as well that Jan mentioned earlier. So, that's always part of the process, but premiumization will remain as the main driver of ASP or net revenue, back to the growth moving forward.
And Lillian, maybe on India, right? In second quarter, India was all about the COVID, kind of a second wave that hit India very hard in the second quarter. So we really looked at how do we take care of our colleagues, our business partners, our communities. So you would have seen in our press release as well that we actually had quite a big community support program. So we did a lot of things from oxygen concentrators to aid kits to surgical masks to testing kits and even hospital beds. So I think the team really put a priority on the health and safety of our communities. And, we've supported our colleagues as well with the vaccinations. So more than 70% of our colleagues are vaccinated now in India to support them and their families and partners as well.
If you look at the consumer recovery is there in India if you compare to last year. We actually, even despite these big challenges, we grew high double digits in premium, super premium portfolios, and we grew the overall business on a double digit basis as well. But we are still below the 2019 levels. And on the EBITDA level, not a lot of impact. I would say it's not a big contributor positively or negatively to the results, because of double digit growth to last year and relatively lower margins than the other countries. So not really a big impact from the EBITDA perspective, Lillian. So thank you for your question.
Thanks a lot. Thanks a lot, Jan and Ignacio.
Our final question is Anne Ling from Jefferies.
Hey, hi, management team. Two questions on my side. First, going back to Korea. I understand that you mentioned earlier about the market share increase for this first half. Would you share with us a bit more by brand? Like for Cass and Hanmac, how the performance has been doing in the first half, and what you expected moving forward, and how did it help in terms of your market share improvement? The second question I have is on the green financing loan, which was announced in July, with a $ 500 million loan facilities. For example, the interest expense is tied with some KPI regarding how you achieve in terms of some ESG target. Would you help us elaborate a little bit more on that? Is that something that you plan to focus a bit more on moving forward?
Thank you, Anne. Good afternoon. Thanks for your questions.
Thanks.
Let me take the first one. I will let Iggy come back on the green financing loan. On South Korea, you are right. We gained market share in the second quarter. Actually, it is really driven by these innovations that I mentioned, right? Actually, both Hanmac and then the all-new Cass, and then also, of course, the double-digit growth of our premium portfolio, which is also very encouraging there. If you look at the channels, really most of the share growth was in the on-premise. I would say in-home was probably flattish in the first half. In the on-premise, we saw significant share gains, and especially in Korean restaurants, where really you see the strength of the momentum of all-new Cass, which is gaining significant share.
It was very nice to see. We talked last quarter that we tested these innovations quite extensively, and we launched Hanmac before the national rollouts. We actually saw the same results as we saw in the pilot phase and even better since we launched. When you look at Cass, it is really the all-new Cass campaign that we launched in April in Seoul, and then we went national soon after. The market share in Korean restaurant channel has increased significantly after national rollouts. We also see on the brand health, very strong reaction of consumers on our new campaign and the new bottle. Our brand perception is very positive. We are number one in first choice beer. We are number one for young people, right? The young people is very important for a brand like Cass, and we are number one as well there.
I think people really see the differentiation of the new proposition with the cold brewing technology, the transparent bottle, but also the new campaign, which is all about being true and being real as a consumer. So we gain market share in Korean restaurants, and we also see a significant momentum in general. If you look at Hanmac has seen continued momentum since the launch. We see increased brand awareness. We see good conversion rates six months into the launch. Hanmac is really complementary to Cass, right? Where Cass is an easy drinking brand, Hanmac is a classic lager brand. It became the third biggest brand in Korean restaurants now. We are about 1.5% market share in in-home, according to Nielsen. So we are on track with what we wanted to achieve and what we expected since the launch.
Really, Hanmac's ambition is to be a K-lager, right? Like there is K-pop, there is no K- beer or Korean specific lager. Hanmac really uses the domestic rice from Korea, and communicates very strongly on the K-lager front. So we are actually quite excited with our commercial plan in South Korea. Premiumization working well, but then Cass and Hanmac, which were the two big bets from a portfolio perspective, really delivering the results we were anticipating. Of course, the industry is not helping us and is disappointing in our results. Of course, from a total volume perspective and industry perspective. Of course, I remind everybody, we did support these innovations with the marketing support in the first and especially the second quarter. They will normalize as we go through the year.
But we are very excited with the momentum that the team builds from a market share and just a brand health perspective on this important portfolio. For the last question, let me hand it over to Iggy.
Thanks, Jan. Thank you for the question, Anne. In the case of the green financing loan, we have been doing sustainability for a long time. It is not new in the business. What started to change is we are integrating sustainability into every aspect of our business, including actually linking financial performance to sustainability KPIs. As we continue to make great strides towards the 2025 sustainability goals, one of the next steps was to sign the sustainability-linked revolving credit facility, where the loan's interest is actually, or the interest rate is linked to the achievement of these predetermined ESG targets. The green news here is that the market rewards companies that value sustainability and execute sustainability because the rates are as a result better than they would be for a non-sustainability linked loan.
We believe this initiative will aid us in delivering a measurable and positive impact to the environment and in the communities in which we operate. These KPIs, which incentivize improvement, actually relate to climate action, water stewardship, circular packaging, and smart agriculture, where now there will be an additional incentive, obviously, for us to accelerate those efforts. It is very exciting. We have this aspiration to be a leader in ESG as much as we are a leader in the beverage category here in APAC. By doing this, we can hopefully lead that wave towards green financing becoming a significant portion of the industry. Thank you for the question.
Got it. Thank you, Ignacio. Thank you, Jan.
Thank you. Pleasure. Thank you, Anne.
This concludes our Q&A section today. I would like to turn the conference back over to Mr. Jan Craps for the closing remarks.
Thank you, Aaron. Our strategic strengths have enabled us for accelerated recovery and growth in 2021. Therefore, we are optimistic about our business outlook, evidenced by the ongoing growth momentum. Of course, since the pandemic is not over yet, and full recovery is subject to a nonlinear trajectory, there could still be volatility and some headwinds. For the remainder of 2021, we will focus on our three strategic pillars: premiumization, digitization, and expansion. We further broaden our premium and super premium portfolio to deliver sustainable, high quality growth for both our shareholders and our stakeholders. Thank you very much for joining the call. Stay safe and well, and see you next time. Thank you.
This concludes today's result call. Please disconnect your lines. Thank you.