ABInBev(BUD)2025-03-12 20:37Financial Performance - The company reported total revenue of USD 59.8 billion in 2024, with 27.9% (USD 16.7 billion) coming from its Brazilian subsidiary Ambev and 10.5% (USD 6.2 billion) from Budweiser APAC[80]. - The company recognized a non-cash impairment charge of USD 1,143 million related to its investment in the AB InBev Efes joint venture as of June 30, 2022[70]. - The ongoing conflict between Russia and Ukraine has adversely affected the company's financial performance and operations, leading to increased risks and potential disruptions[69]. - The company has experienced higher commodity and logistics costs in recent years, which may continue to impact its operations and profitability[86]. - Approximately 65% of the company's 2024 revenue is expected to come from developing markets, including countries like Brazil, China, and Mexico[119]. - The company faces potential negative impacts on operating income due to increased water costs and regulatory changes related to water usage[91]. - The beverage industry is experiencing increased competition and changing consumer preferences, which could lead to reduced margins and profitability[123]. - The company is subject to various tax regulations, including excise taxes, which can significantly impact revenue and profitability[137]. Risk Factors - The company is facing challenges in divesting its non-controlling interest in AB InBev Efes due to sanctions and restrictions imposed by various governments[72]. - The company is exposed to risks related to the availability and price of raw materials, which can be affected by geopolitical instability and inflationary pressures[85]. - The company’s ability to manage currency risks and commodity price fluctuations is critical, as derivative instruments may not provide complete protection over the medium to long term[87]. - The company’s operations are significantly impacted by energy price volatility, which can challenge profitability in certain markets[90]. - The company is exposed to risks associated with minority investments in developing markets, which may limit control over operations and compliance[106]. - The company faces significant financial risks in developing markets, including political instability, inflation, and currency devaluation, which could adversely affect its operating results[120]. - Continued volatility in operating currencies may decrease the company's net assets and impact its financial condition and operating results[121]. - The company is exposed to risks from negative publicity and regulatory changes regarding health concerns related to alcohol consumption, potentially impacting demand and profitability[129]. - Regulatory restrictions aimed at reducing the availability of alcohol products could materially affect the company's business and financial condition[130]. - Compliance with antitrust and competition laws poses risks, with potential regulatory scrutiny affecting operations in multiple jurisdictions[142]. Operational Challenges - The company relies on third-party suppliers for key raw materials, and disruptions in supply could adversely affect production and financial results[101]. - The consolidation of retailers may pressure the company to lower prices, potentially reducing profitability in key markets[100]. - The company has limited suppliers for certain packaging materials, increasing the risk of supply chain disruptions[105]. - The company must fulfill commitments related to previous acquisitions to maintain regulatory compliance, which may affect operations[118]. - The company may face challenges in identifying suitable acquisition targets due to regulatory and market limitations[114]. - The company’s marketing efforts may be constrained by regulations on advertising, which could reduce the value of its brands and related revenues[153]. - The company’s operations are subject to environmental regulations that could result in substantial liabilities, impacting its financial condition[163]. Sustainability and Compliance - The company has set a goal to achieve net zero emissions across its value chain by 2040, which requires ongoing investment and may expose it to reputational risks if not achieved[160]. - The company has committed to sustainability goals, including smart agriculture and water stewardship, which may require additional investments and compliance efforts[160]. - The company faces potential liability and costs associated with compliance with anti-corruption laws and regulations, which could impact its reputation and profitability[144]. - The company has been cited in ongoing investigations related to business partners managed by former government officials, which may affect its operations[146]. Employee Relations - The United States organization has approximately 5,300 hourly brewery workers represented predominantly by the International Brotherhood of Teamsters, with collective bargaining agreements effective from March 1, 2024, to February 28, 2029[168]. - Approximately 1,300 hourly employees at certain company-owned distributorships and packaging plants are also represented by unions, which could impact production due to potential work stoppages or slowdowns[168]. - The company emphasizes the importance of recruiting and retaining skilled employees to support product development and marketing efforts[178]. Cybersecurity and Data Protection - Cybersecurity incidents and disruptions to information systems could lead to revenue loss, additional costs, and regulatory scrutiny, highlighting the importance of robust cybersecurity measures[169][170]. - The company has experienced several cybersecurity incidents in 2024, but none had a material impact on business operations or data security[174]. - The company is subject to various privacy and data protection laws, including the General Data Protection Regulation in the EU and the California Consumer Privacy Act, which may require costly changes to business practices[175][176]. - The company faces risks from natural disasters and public health crises, which could disrupt operations and negatively impact financial results[177]. Shareholder Considerations - The market price of the company's Ordinary Shares and ADSs may be volatile due to various factors, including financial performance expectations and market conditions[181][182]. - The company may not guarantee future dividend payments, as these will depend on business outlook, cash flow, and financial performance, particularly in light of increased debt from the SAB combination[187]. - Future equity issuances may dilute the holdings of current shareholders or ADS holders, potentially affecting the market price of Ordinary Shares or ADSs[190]. - Registration and sales of Ordinary Shares could increase the number of shares sold in the public market, adversely affecting the market price and increasing volatility[193]. - Investors may experience dilution if they cannot participate in equity offerings, and certain shareholders may not be entitled to exercise rights unless registered under relevant laws[194]. - ADS holders may not be able to exercise their voting rights unless they withdraw the underlying Ordinary Shares[196]. - The company is a Belgian public limited liability company, and shareholders may not enjoy certain rights and protections typically afforded to U.S. company shareholders[200]. - As a "foreign private issuer," the company is exempt from certain U.S. securities laws, resulting in less publicly available information compared to U.S. public companies[204]. - It may be difficult for investors outside Belgium to serve process on or enforce foreign judgments against the company due to the location of assets and non-resident board members[205].