Operator : And welcome to the 2026 First Half results announcement conference call for Budweiser Brewing Company APAC Limited. Hosting the call today from Budweiser APAC is Mr. Y.J. Cheng, Chief Executive Officer and Co-Chair for the Board; and Mr. Bernardo Novick, Chief Financial Officer. The results for the 6 months ended 30th June 2026 can be found in the press release published earlier today and available on the Hong Kong Stock Exchanges and Budweiser APAC website. 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 obligation to update the forward-looking statements as a result of new information, future events or otherwise. For a discussion of some of the risks and important factors that could affect Budweiser APAC's future results, the risk factors in the company's prospectus dated 18th September 2019, the 2025 annual report published and any other documents that Budweiser APAC has made public. I would also like to remind everyone that the financial figures discussed today are provided in U.S. 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 same periods in 2025. Normalized figures refer to 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 disclosed the consolidated profit, EPS, EBIT and EBITDA on a fully reported basis in the press release published earlier today. Further details of the 2026 first half results can also be found in the press release. It is now my pleasure to pass the time to Y.J. Sir, you may begin.

Yanjun Cheng : Thank you, Ray, and good morning, everyone. Thank you for joining today's call. In the first half of 2026, our business in China continued to be impacted by a slower-than-expected recovery. However, we continue to rebuild momentum across South Korea and India where a strong commercial execution and power of our brand supported continued market share gains. In the second quarter, we underperformed a soft industry in China, which was impacted by a wise weather and continued weakness in on-premise channels, bringing down both our top and bottom-line result. This was partially offset by continued momentum in South Korea where we gained market share and in India where favorable industry momentum and strong growth in Premium and Super Premium portfolio contributed double-digit volume growth. I will now hand it over to Novick to discuss our performance in more detail. Thank you.

Bernardo Novick Rettich : Thank you, Y.J., and good morning, everyone. In the first half of 2026, total APAC volumes decreased by 2.2%. Revenue decreased by 1.4%, while revenue per hectoliter increased by 0.8%. Our normalized EBITDA decreased by 8.9%, while our normalized EBITDA margin contracted by 236 basis points. In the second quarter, total volumes decreased by 4.1%, impacted by performance in China, partially offset by growth in South Korea and in India. Revenue decreased by 2.1%, while revenue per hectoliter increased by 2.1%, benefiting from a positive country mix and brand mix in China. Our normalized EBITDA decreased by 9.7%, impacted by our topline performance in China, increased marketing investments and reduced operating income. In the first half of 2026, our profit attributable to equity holders of Bud APAC increased by 15.6%, lapping one of the one-offs or, say, nonrecurring items in 2025 and also benefited by tax phasing between second quarter and the third quarter. Now let me cover some of the highlights from each of our major markets. In China, volumes decreased by 9.7% in the second quarter. Revenue decreased by 8.6% while revenue per hectoliter increased by 1.2%, driven by positive brand mix. Normalized EBITDA decreased by 16.9%, increased by our topline performance and reduced other operating income. We made further progress in our channel expansion strategy, focusing on premiumizing the in-home channel and expanding our penetration in the O2O channel. We delivered strong double-digit growth in the O2O in both the second quarter and in the first half, supported by brand and package innovations. South Korea. In South Korea, volumes in the second quarter increased by low teens, cycling an easier comparable caused by shipment phasing ahead of our price increase that happened in April 2025. Revenue per hectoliter decreased by low-single-digits, impacted by negative packaging mix. Normalized EBITDA increased by strong double-digits with our normalized EBITDA margin expanding substantially by 400 basis points, supported by our strong topline performance and operational leverage. Given this shipment phasing, it's important to look at the first half to get a more normalized view of our South Korea performance. In the first half overall, volumes were flat with continued market share gains in both on-premise and in-home channels. Revenue per hectoliter increased by low-single-digits, driven by revenue management initiatives. Normalized EBITDA increased by mid-single-digits with our normalized EBITDA margin expanding substantially. And then finally, India. We continue to invest in India to accelerate growth across our portfolio. We delivered double-digit revenue growth in both the second quarter and the first half of the year, while gaining market share in the states we operate, supported by share gains in Premium and above segments. And with that, Y.J. and I are here to answer any questions you might have. Thank you.

Operator : Our first question is coming from Anne Ling from Jefferies.

Kin Shun Ling : I have 2 questions. First one is regarding the weather in China, whether there's any impact. Have the recent floods in the Northeast China as well as Guangxi and the heavy rainfall across like East and Southern China. Do you have -- does it have any, like, noticeable impact on the sales volume in June and July? If so, would you help quantify the extent of the disruption and indicate whether demand has normalized in the affected regions subsequently? That's my first question. And should I continue with my second one or...

Unknown Executive : One question at a time, please.

Kin Shun Ling : Okay. [Foreign Language]

Yanjun Cheng : Anne, thank you for your question. So if you don't mind, I'm going to answer in Chinese. [Foreign Language]

Kin Shun Ling : [Foreign Language] Regarding the China's on-trade volume trend, would you comment on the volume trajectory across channels? Has the on-trade volume decline begun to stabilize? And are you seeing any signs of recovery in the on-trade channel, in particular the Chinese restaurant segment? Given the easier comparison in second half '26, do you expect the on-trade volume to return to a positive growth at some point during second half '26?

Yanjun Cheng : [Foreign Language]

Operator : Our next question is coming from Lillian Lou from Morgan Stanley.

Lillian Lou : I have 2 questions as well. I will start the first one on China first. It is actually a follow-up question regarding the volume trend, in particular into third quarter and fourth quarter. What's the status of the sell-in and the sell-out situation? Because if I remember correctly, last year's second Q, we started to apply the lean model with the distribution with our distributor wholesalers. So that means actually running into third quarter and fourth quarter, we are more on the same comp base. So how do we see this volume year-on-year trend? Maybe it's whether our chance to be bottoming out on the year-on-year basis? [Foreign Language]

Yanjun Cheng : I'll hand over to Novick to answer this question.

Bernardo Novick Rettich : Okay. Great. Lillian, nice to hear from you. Thank you for the question. So maybe recapping a little bit on the industry. So we saw a slightly positive industry in Q1. We saw a negative, at least from our side, industry in Q2, the main 2 drivers being macro environment and bad weather. Regarding channels, we continue to see weakness in on-premise. We haven't seen any recovery so far in Q2. And regarding your question about moving forward, in July we still see weakness in the market. So we remain cautious. At this point, it's difficult to foresee improvement in Q3 in top and bottom line. But look, the priority continues to be to stabilize volumes in China. And we believe the right thing to do is to continue investing behind our brands to recover in the medium term. But thanks for the question.

Lillian Lou : My second question is on overall EBITDA margin. So can you actually give us a little bit more detail in terms of how to project the second half EBITDA margin because of a few variables based on what we already achieved in second Q. One is the China pressure that could be some still lingering deleveraging effect and commercial investment as well as the Korea volume recovery and Indian growth. Are these negative, positive? How it worked out in terms of the EBITDA margin outlook in the second half? And also whether we can see a bit of EBITDA margin improvement toward the year-end or 2027. [Foreign Language]

Bernardo Novick Rettich : Thank you, Lillian. You're right. I mean, I think it's important to mention that we are still in investment mode in China. Our priority continues to be stabilizing volumes. When we look at APAC, first, overall, I mean the 3 reasons or drivers for our EBITDA performance are, of course, number one, China topline; number two, what the increased investments. And then number three, other operating income that has been negative, but offset, of course, by strong topline in Korea and India. So maybe speaking a little bit about each. In Korea, we have a good second quarter. So as I mentioned earlier in the call, for Korea, it's very important that we look at the first half overall because there is a little bit of phasing between Q1 and Q2. When you look at first half overall, we had flattish volume in a negative industry, which means that we continue to have good commercial performance and we see some margin expansion. Looking forward, we start to have some higher cost because of our hedging for H2 and probably '27. India continues to surprise us in positive ways: strong double-digit topline growth and EBITDA also improving. So it's small, but starting to make a bigger difference for us. And China, as I was saying before, priority continues to be to stabilize volumes. We continue to invest in our brands and we expect this investment to continue in the second half, okay? So yes, margins might continue under pressure for a bit in China because the priority is now to invest in our brands, which we believe is the right thing for the long term. Thank you for the question.

Operator : Our next question is coming from Chen Luo from Bank of America.

Chen Luo : Y.J. and Novick, this is Chen from BofA. I've got 2 questions. First, I will start with the margin side. So if I'm right, I think we have a 1-year cost hedging policy. And given the rising cost pressure into '26, are we actually seeing a delayed GP margin pressure into '27? And if that is correct, are we going to focus on SG&A control or continue with commercial investment to revive the topline growth going forward? [Foreign Language]

Bernardo Novick Rettich : Thank you, Chen Luo. You're completely correct. We have a 12-month hedging policy, which means that the recent increase in commodity prices has a delayed impact for us. When you look, for example, at aluminum, right, the current prices has increase 10%, 20%, depending which period you're comparing. We are going to start to have those effects in the second half and some of those effects for 2027. On the other hand, we have some good news on barley, which helps offset, but not totally, the increases. So you're right also that we are trying to have initiatives to offset. I think the supply team in the company has done a very good job trying to bring efficiencies to offset some of these impacts. And to the question about whether that is going to stop us from making investments in the market, the answer is no. We believe the right thing to do now is to keep investing behind our brands and to recover the volumes in China. Thanks for the question.

Chen Luo : Okay. That's very helpful. So my second question is on dividend. So given the fact that China has seen volume decline for almost 3 years and we have also seen several years of earnings decline, will there be any implication to our dividend policy as I understand that our dividend has been largely fixed for quite a few years despite the earnings volatility? [Foreign Language]

Bernardo Novick Rettich : Yes. I mean it's taking us longer than we expected to recover. I think it's -- I always repeat this part about that the capital allocation priorities remain the same for us. And our number one priority is organic growth. So that's why we believe that we need to keep investing in our business. It's the priority number one. Selective M&A is number two, if it comes. And then number three is return the money to our shareholders. But I think you're right. It's fair to assume that if resume -- if results don't improve, if they end up being below our expectations, it's going to be difficult to maintain the dividends at the levels that we have. Having said that, it's too early. We are still, like, half the year. And we'll keep working hard to try to improve the performance. Thanks for the question.

Operator : Our next question is coming from Xiaopo Wei from Citi.

Xiaopo Wei : [Foreign Language] This question is related to earlier commentaries about the commercial investment on branding. We have noticed many successful FIFA World Cup campaign advertisements. Is there any visible impact on the volume in the short term? We understand that investment is for long-term brand equity. So if it's not, there's no short-term volume positive impact. Then how long do you think it will be monetized in the volume operation?

Bernardo Novick Rettich : Xiaopo, sometimes these investments take a little bit longer to see the benefits, but these are the right long-term investments for the brands. We're very proud of our partnership with FIFA. I think it was an amazing workup. I personally had the luck to go to one of the games with my kids and they really enjoyed it. I think it was a great way to show soccer overall and to showcase the partnership that Budweiser, the big brand that it is in China and globally, has been partnering with FIFA for 40 years. So it's 11 different editions. We have actually seen packaging featuring the 11 different editions of the Budweiser can. That was -- that is still in the market in many places in China. We also took advantage of the opportunity to do a partnership with Erling Haaland. I don't know how many of you know him. He's a Norwegian striker that had a very good World Cup. And he's helping us with the launch and the rollout more than the launch of Budweiser Magnum. That is one of our biggest bets in Premium in China. And this partnership has been very successful so far. Again, the main objective for this and particularly for China, right, that is not in the same time zone, more than volumes, it strengthened our brand equity. Our results overall in our brands, despite the negative volumes and the share loss, were good in this first half in terms of brand and brand equity. And we are committed. We are here for the long term. And we'll continue to invest behind our brands that at the end are the most important assets for our company. Thank you for the question.

Xiaopo Wei : And I have a follow-up question to you, Bernardo. Since you are very new to the CFO chair, we have to ask this question to you. So since the IPO of the company, we have seen great, great growth about India. And it is, in our view, a validation of the competitive model in the non-China, non-Korea APAC market. So will you slightly pivot towards inorganic growth opportunity in the region after seeing the Indian high growth and also the China weakness? [Foreign Language]

Bernardo Novick Rettich : Thanks for the question. I think that the growth in India and Southeast Asia overall highlights one of the advantages I see for our company, which is our geographic footprint. I think we have, in a way, a competitive advantage versus our regional competitors of our exposure to some of these growth areas. And having said that, that doesn't change our capital allocation priorities. Again, I will repeat them. Number one is still organic growth. And that's why we keep investing in our business to recover. But yes, number two continues to be inorganic. And you know how it is with inorganic possibilities. They might appear at some point. They not only depend on whoever is interested in buying, but whoever is interested in selling. So we are still engaged in having conversations. And we will be in the table in case an opportunity comes. But there is no big shift in priorities regarding the importance of inorganic. Of course, we don't have anything to announce at the moment. And if something arrives, we'll let you guys know. But yes, thank you for the question.

Operator : Our next question is coming from Euan McLeish from Bernstein.

Euan Mcleish : So yes, Bernardo, you've been really clear that China volume growth is your top priority. Like historically, your main driver of the topline was this geographic route-to-market expansion strategy. And then probably, I don't know, 18 months ago or so, you sort of pivoted to much more about the in-home channel route-to-market expansion. Was this a good choice for you? And how do you think about the relative attractiveness of the 2 growth strategies as we go forward?

Bernardo Novick Rettich : Thank you, Euan, for the question. You are correct. I think if you look back in our history, right, a lot of our growth, particularly for Budweiser in the early years was, of course, growing the brand where we were, but a lot of geographical expansion. Of course, the more you grow, that expansion growth is lower. And -- but doesn't mean that we don't have opportunities. And I think regarding the market, our expansion strategy was always starting more with the high end, more in the nightlife and out-of-home. And as the market is shifting and now it's going more to the O2O, we are trying to see different ways to penetrate new markets. So we are shifting a little bit the strategy there. But we still see opportunities to cover spaces where we are not. Although, of course, it's not at the same rate as it was in the past. But we do see opportunities. And we keep working on trying to fight for new growth opportunities in China.

Euan Mcleish : It seems that the margin declines in China kind of accelerated when you made the shift to the in-home expansion strategy. Is this more about kind of temporary step-up costs and just trying to build your platform in that channel that will then -- and these investments will then be leveraged and the margins will start to drop through? Or is it just inherently a higher cost of doing business in the in-home channel, so we should expect permanently lower margins because of this strategic choice?

Bernardo Novick Rettich : Euan, I think it's probably a little bit of both. I think as I've been mentioning, we are increasing investments as a percentage of net revenue in China to get to these priorities that we have. Of course, when you do that, the ROI of the investments are lower, right, because volumes are decreasing as you see. But we still believe it's the right thing to do. We need to be patient and the results will come. But on the other hand, on the O2O expansion, the margins are lower. We have been able to offset some of those -- the extra cost of operating O2O by premiumizing. I think the O2O as a channel is a more premium channel than the in-home overall. So that offsets. And we have an advantage there versus the competition because we have a more premium average portfolio to play and Super Premium, by the way, that helps in the O2O. But I think when you look at the margins, the answer is both. Some of the things we are doing or the things that are happening are structural and some are investments that we are doing now to try to recover.

Operator : Our next question is coming from Ye Liu from Goldman Sachs.

Ye Liu : Y.J., Novick, I have 2 questions. I will ask one by one. So the first one is on China about the channel inventory. So what are the channel inventory levels right now in terms of days and turnover do you maintain across China's distribution network? And how does this compare to the ideal level? Also, will we still continue to focus on a lower, healthier channel inventory into the second half in order for a longer term, more healthy volume recovery? Or we are already like at the ideal level right now? I will also translate into Chinese. [Foreign Language]

Bernardo Novick Rettich : Thank you, Liu. Yes, we have been taking steps to adjust our inventory. Our inventory today is lower than it was at the same time last year. Having said that, we are not yet at what you're asking if we are in the ideal level. I don't think we are yet. I think we are still a little bit -- we still have some room to improve in both Tier 1 and Tier 2 inventories. So we -- going forward, we remain charged, but we look at inventories and there might be a little bit more adjustments in the second half. But we are getting close to what we think is the ideal level for inventories. Thank you for the question.

Ye Liu : That's very clear. The second question is about Korea's consumer environment. So how do we look at this consumption environment in Korea given the volatility in the equity market? Also any benefits to local beer consumption increase or beer consumption upgrade from the equity market wealth effect? And how would we look at into the second half? [Foreign Language]

Bernardo Novick Rettich : Thank you, Liu. Again, in Korea, it's important that we look at the first half overall, reminding you that our volumes were flat but our estimate is that the industry actually declined low-single-digits. Overall, the economy is doing well. Consumer confidence is up. Of course, the stock market was really up in the recent days, not so much. But overall, this positive economic sentiment that we were seeing in the first half of the year has not translated yet into overall recovery in alcohol consumption. On the positive side for us in beer, beer is gaining share throughout in the first half versus soju. And we believe this is some of the more beer-friendly occasions are gaining some traction, which is good for us. We also see in a declining industry some pockets of growth, particularly around nonalcohol, flavored beer, RTD. This is gaining popularity and this is helping us. Again, it's important to mention that we have positive momentum. And we are outperforming the industry in both the in-home and out-of-home, and that we remain focused on our strategy of innovating. I think as market leaders, we need to lead and lead with innovation with balanced choices that is the future in a market like Korea and developing new occasions, particularly on the occasions that are growing and are helping us on the share of growth side.

Operator : Our next question is coming from Jessie Xu from JPMorgan.

Jessie Xu : Bernardo, Y.J., Jessie Xu from JPMorgan. My first question is a follow-up on South Korea and nonalcohol categories. We know that South Korea has often been an early mover in Asia, leading other countries across different consumer trends. So could you share the latest developments you are seeing in nonalcohol beer and the broader beyond beer category in South Korea, particularly in terms of consumer behavior, adoption and key consumption occasions? And how are you positioning your portfolio there, including the key investment priorities in Korea to capture that growth? [Foreign Language]

Bernardo Novick Rettich : Thank you, Jessie. I think one of the advantages of being a global company is that we can see and compare situations that we see in Korea and other developed markets. And in mature markets, it's important to lead with innovation, particularly on what we call balanced choices. And there are a lot of pockets of growth that are important and growing like nonalcoholic, flavor and RTD. Maybe I can share with you all like 2 examples that I think are important to share in South Korea. One is Cass Zero that we relaunched as Cass 0.00. And in this case, we are using a new technology that helps with the alcohol removal. And it's bringing like a new Cass that is closer in original flavor and a crispy texture and is now the #1 nonalcoholic segment in the segment. So I think we are happy to see that. This is also an advantage of being a global company and having some of these technologies that are like very advanced. Another example, and it's also an advantage of being a global company, is the launch that we just did of Nutrl, in July. Nutrl, I feel close to it because it's one of the brands that I was responsible when we acquired them in North America. It's a Canadian vodka soda that we acquired in Canada and then we launched in the U.S. and is doing very well in both cases. And we brought it to Korea, we just launched it. The team was very creative and we launched it with a partnership with the 2 of the Seventeen K-pop group there. It's targeted, of course, to LDA, but younger consumers. It's a lemon flavor vodka sparkling beverage with zero sugar. And it's into this ready-to-drink category that is growing. And I think the advantage that we have in Korea is having these global brands and having a strong route to market that can allow us to keep innovating. It's why we are managing to have stable volumes even in a soft industry, right? So we believe that this RTD represents a very good opportunity for the future. And the team is actively working and talking with consumers to see how else can we develop new products for new occasions in South Korea. Thank you for the question, Jessie.

Jessie Xu : That's very helpful. And then my second question is on China and pricing. Well, cost inflation started to come through from the second quarter and into the third quarter, while the overall demand is fairly still weak in China. But given some competitors already took price up in April, how are you thinking about your pricing strategy as of now? Do you anticipate taking any pricing actions soon? And if so, would they be broad-based or more targeted by market, by channel or brand tier? Or put it differently, how are you balancing protecting volume or share versus protecting margins into the second half? And what would be the key triggers for acting on price? [Foreign Language]

Bernardo Novick Rettich : Maybe to answer, I think it's always good to start with the strategy, right? So our priority in China continues to be to stabilize volumes. And as you can see in our results because of the soft industry and our underperformance in share, we still like focus on trying to stabilize volumes. So yes, we are aware of some competitive reactions in some regions, in some packs. We continue to monitor. But at this point, we don't have any news to share about price increases. In the first half, we invested in some areas. We had a positive mix, but we have some investments, particularly to support our wholesalers that, of course, are like us under pressure given this volume decline. We are also investing behind our brands. We are also investing behind the growth in O2O. Some of these things take a while to see effects, but we believe are the right movements for the long term. So I think the message to you about pricing is that at this point, we continue to have a focus on stabilizing volumes and we expect to continue investing in the second half.

Operator : In the interest of time, our final questions will come from Christine Peng from UBS.

Christine Peng : So I also have 2 questions. So one is about China. So I appreciate management's earlier commentary in terms of the China strategy. You talked about channel expansion. You also talked about portfolio diversification. But on the other hand, the timeline in terms of volume recovery and margin seems uncertain. So given the external environment, especially considering volumes still declining, industry competition is still very fierce. So I'm just wondering whether the management will consider any strategic pivots beyond these measures you just talked about. And if that happens, what's going to be the financial impact on the company's revenue and EBITDA margin going forward?

Yanjun Cheng : [Foreign Language]

Christine Peng : [Foreign Language]

Yanjun Cheng : [Foreign Language]

Christine Peng : [Foreign Language]

Yanjun Cheng : [Foreign Language]

Christine Peng : [Foreign Language] So I have -- the second question is about Indian as well as Southeast Asian markets. So we all understand management is now prioritizing revenue over profitability for Indian markets. But I was just wondering whether there will be any pathway or timetable in terms of improving the Indian market profitability in the next 12 months. And also for Southeast Asia market, which we also understand is probably not making much money. So what's going to be the plan to improve that market's profitability in the next 12 months?

Yanjun Cheng : So you want to translate to Chinese or...

Christine Peng : [Foreign Language]

Yanjun Cheng : [Foreign Language]

Operator : This concludes our Q&A session today. I would like to turn the conference back over to Y.J. for the closing remarks.

Yanjun Cheng : Thank you, Ray. Our priority in 2026 is still to stabilize volume and rebuild our market share momentum in China. We continue to invest behind our mega brand and innovations, strengthening execution and expanding our in-home channel presence. Despite current performance softness, we remain confident in our people and we are focused on our strategy going forward. Thank you all for joining us today. And I'm looking forward to speaking to you soon.

Operator : This concludes today's results call. Please disconnect your lines. Thank you.