Budweiser Brewing Company APAC Limited (1876) Earnings Call Transcript & Summary

Welcome to the 9 months 2021 Results Announcement Conference Call for Budweiser Brewing Company APAC Limited. Hosting the call today from Budweiser APAC, Mr. Jan Craps, Chief Executive Officer and Co-Chair of the Board; and Mr. Ignacio Lares, Chief Financial Officer. The result for the first 9 months of 2021 can be found in the press release published earlier today and available on Hong Kong Stock Exchange and Budweiser APAC website. Before proceeding, let me remind you that some of the information provided during this results call, including answer 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's possible that Budweiser APAC 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, see Risk Factors in the company's prospectus filed with the Hong Kong Stock Exchange on the 18th of September 2019 and the 2021 interim report published on the 10th of September 2021. 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 a comparisons with the same period in 2020. Normalized figures refer to performance measures before exceptional items which are either income or expense that do not occur regularly as part of Budweiser APAC normal activities. As normalized figures are non-GAAP measures, the company discloses the consolidated profit, EPS, EBIT and EBITDA on a fully reported basis in the press release. Further details of the 9 months 2021 results can be found in the press release published earlier today. It is now my pleasure to pass the time to Mr. Jan Craps. Sir, you may begin.

Thank you, Aaron, and good morning, everyone. Thank you for joining our earnings call. In the first 9 months of 2021, we posted solid financial results while continuing to make progress in premiumization, digitization and expansion. Our focused strategy led to another quarter of revenue per hectoliter growth in all of our key markets, driven by our leadership in the Premium segments. In the first 9 months of '21, we have now delivered a double-digit increase in revenue, supported by high single-digit volume and mid-single-digit revenue per hectoliter growth. This strong top line growth has translated into a significant improvement in EBITDA as well. Looking only at the third quarter, however, conditions became more challenging due to the closure of restaurants and nightlife venues across various regions of China in response to several COVID outbreaks and the imposition of the strictest COVID restrictions in South Korea since the onset of the pandemic. Our volumes declined by 6.1% due to these restrictions, however, the impact on our top line performance was minimized by continued premiumization, which led to revenue per hectoliter expansion in all our key markets. We likewise maintained a healthy EBITDA margin in line with the same period last year as our agile commercial planning, cost reduction initiatives and effective hedging policies mitigated commodity price escalation. On that note, I will take a few moments to provide additional color on each of our key markets before I hand it over to Iggy to take you through our financial performance. In China, the industry was significantly impacted by COVID restrictions, leading to a mid-single-digit industry decline in Q3. Our volumes were impacted due to channel closures in Fujian and Guangdong, 2 of our more premium coastal markets where we have a strong presence. Despite this, we still estimate that we have grown volumes ahead of industry and gained market share year-to-date. Our strong underlying brand mix supported revenue per hectoliter growth in Q3. More importantly, the recent challenges did not stall our long-term growth momentum. We delivered Super Premium segment growth, driven by the double-digit growth of Blue Girl and Hoegaarden. Despite revenue declining in Q3 as compared to 2020, total revenue was above the same quarter of 2019. We also continued our ESG journey in China. In this quarter, 6 more of our breweries entered into renewable power purchase agreements, joining our existing 3 breweries in the RE100 rollout. Enhancing our green logistics was another key priority. To this effect, in September, we launched a hydrogen fuel cell heavy truck at our Foshan Brewery, making us the first beverage company in the country and also making Foshan the first brewery in the ABI global network to use this advanced technology. This follows a deployment to date of 270 green trucks within our logistics fleet. In South Korea, we are gaining market share year-to-date despite negative channel mix and achieved a strong share growth in Q3, led by the performance of our recent innovations, All New Cass and HANMAC. While volumes declined by mid-single digits in the third quarter due to the strictest COVID restrictions to date, net revenue per hectoliter continued to grow by low single digits as a result of better channel and brand mix. Our Premium brands also continued to expand and achieved double-digit growth year-to-date, led by Budweiser and Hoegaarden. Despite the restrictions in Q3, we are encouraged to see the COVID situation starting to improve as vaccination rates have significantly increased in South Korea. More than 70% of the population have been fully vaccinated, and nearly 80% of population has received its first dose. We are also encouraged to see that the Korean government plans to lift most of the pandemic restrictions, including business hours and capacity limits in stages from November 1. On the ESG front, we have seen our sustainability efforts yield another milestone in South Korea. We are set to become the first company in South Korea to use cell-generated renewable energy, which is a key step towards RE100. Moving to India. Here, we continue to show strong recovery momentum as our volumes and revenue grew double digits in the third quarter. In addition, our Premium and Super Premium portfolio, led by Budweiser, achieved strong double-digit growth, further solidifying our leadership position in the premium and above segments. And on that note, I will now pass it over to Iggy to take you through our financial results in the first 9 months and the third quarter of '21. Over to you, Iggy.

Thank you, Jan. Good morning, everyone. I am delighted to join you all at the results call today. As Jan mentioned earlier, while the COVID restriction headwinds in the third quarter prevented some of the growth we saw earlier in the year, our year-to-date performance continues to be robust. In the first 9 months, total volumes increased by 8.2%, driven by strong commercial performance across all our markets. Revenue grew by 14.3% and revenue per hectoliter by 5.6%, led by premiumization with both the Premium and Super Premium segments growing by double digits year-to-date in all of our key markets. Overall, cost of sales increased by only 1% on a per hectoliter basis over the 9-month period as we have successfully mitigated the majority of commodity price increases and other escalations year-to-date with an effective hedging policy and offset the balance with cost management initiatives. Year-to-date, normalized EBITDA has increased by 26.8% and our normalized EBITDA margin has improved 328 basis points to 33.2%, driven by top line growth and operational efficiencies. Normalized profit attributable to equity holders reached $872 million, more than 50% higher than the normalized profit of $542 million we reported in the same period of last year. Looking at our key markets in more detail. In China, volumes declined 7.1% in the third quarter due to channel closures, partially offset by revenue per hectoliter growth of 3.7%. Cost management initiatives and agile commercial investments offset the majority of the volume decline. As a result, normalized EBITDA declined by 6.6%. In South Korea, volume decline was likewise partially offset by continued net revenue per hectoliter growth. Here, better channel and brand mix, especially a higher contribution from the in-home channel and from our Premium brands, drove the continued strength in net revenue per hectoliter. Our EBITDA margins also notably improved this quarter as compared to the same period last year as a result of commercial investment phasing and cost management initiatives alike. That concludes the summary of our results. And with that, Jan and I are here to answer any questions you may have.

[Operator Instructions] Our first question is Lillian Lou from Morgan Stanley.

I have 2 questions. I will ask one by one. My first question is on China. So with this COVID situation continues, how do we see this impact to business more holistically and also in the longer run? And related to that, what's the new strategy company would like to put in place if assuming these COVID cases are going to carry on for a longer period of time? I will ask a second question later.

Sure. Thank you, Lillian. I hope you're doing well. Thanks for your question. Regarding COVID in China, it's clear that in Q3, we had several localized channel restrictions and also some natural disasters in China that impacted the industry, and it led really to a mid-single-digit industry decline in the third quarter. We were impacted disproportionately because essentially, in July and August, the outbreak that started in Nanjing led to the closure of nightlife channels in several provinces, including Guangdong. And then when we move to September, channel closures in Fujian and in Heilongjiang also impacted our Q3 volume. And as you know, these are 2 markets where we have a strong presence. On the positive side, if we look at the vaccination rates in China according to the official numbers, at the end of last week, China was at 75.6% full vaccination rates. And the other positive on that front is that we also see local governments are getting ever more effective in controlling outbreaks and they are reducing the time to get outbreaks under control. Now, let's say, also reducing the impact on the industry going forward. If you look at our strategy short term, obviously, we continue to be very agile with our commercial investments. We follow this very closely, as you can imagine, and we reallocate resources between channels and also between geographies if we see outbreaks with the following restrictions. Next to that, more medium, long term, we continue to invest behind premiumization, which is really the key of our strategy. You would have seen in the third quarter, despite all of these impacts in the different provinces, including some of the more premium provinces, we still grew Super Premium volume, outperforming the market. And we grew double digits in both Blue Girl and Hoegaarden, which are 2 of our top 3 brands. As you can imagine, Corona, being so strong in Fujian, did not grow double digits but these 2 big brands did. And next to that, we continue to invest in expansion, both in geography and channel expansion, according to the market maturity model. I hope that answers your question, Lillian, and gladly over to your second question.

Yes. So the second question is on Korea. So you mentioned that we had a strong market share gain in third quarter in the market. So do you have any breakdown how the market share has changed in the in-home channel and the on-premise channels?

Sure. So turning to Korea. We are quite pleased with our market share developments. We are gaining market share year-to-date. And also in the third quarter, we achieved a strong market share growth despite the negative channel mix. As you know, we're even stronger in on-premise than in retail. And due to the COVID restrictions, the on-premise channel declined and the retail channel grew. So despite this negative channel mix, we achieved a strong market share growth in Q3, continuously progressing from the trend we already had in the first half. Also, if you look at our year-to-date, in-home market share was above the 2019 level even. When we look at what is driving that, it's really driven by All New Cass and HANMAC innovations, and both of these actually have a strong impact in the Korean restaurant channel as well. So since we introduced All New Cass, actually, that has been growing market share, both in the on-premise and the in-home channels, further strengthening its leadership position in South Korea. When we look at HANMAC, which is our first classic lager product, where we call Cass an easy drinking lager products. Actually, HANMAC came in to further enrich our brand portfolio. It's very complementary to Cass. It became the third biggest brand in Korean restaurants already. And we really have the ambition to continue to build HANMAC to represent the K lager with its very unique proposition because HANMAC is a brand that uses high-quality domestic rice from South Korea. We also see that our share in the total malt industry has been improving steadily as we execute our strategy in South Korea. And our total market share in the first quarter is now back in line with the third quarter of 2019, which we're also happy to see. Thanks for your question, Lillian.

Next question is Melody Zhou, CICC.

It's Melody Zhou from CICC. And I also have 2 questions, and I will ask this question one by one. The first one is for China. Will there be price hike this year or next year? This is my first question, Jan.

Thank you, Melody. Yes, I think this is probably a hot topic. This is in China, right, and across different markets, especially with the commodities increase that we expect in the coming years. And -- but what I can update you is based on the public data, right? We have communicated recently to our wholesalers that we will increase price of our Core+ brands in selected cities starting the 1st of November. The price increase for these Core+ brands will range between 3% and 10%, depending on the city and the brands. If you look at the other segments, what I can share additionally is looking back at the historical price increases. If you would look at that, you would see that we have typically increased price of Budweiser on the 1st of December. And we also typically have increased, historically, prices of our Core and Value brands on the first of April. And of course, another context I want to give is that even with the price increases that I'm sharing here with you, because the Core+ brands are public and Bud and Core and Value, you can just look at our historical trends or kind of increases. Beyond that, I think it's important to stress that premiumization will remain and is expected to remain the main driver of our net revenue per hectoliter growth, complementing any rate increases. I hope that answers your question.

It sounds pretty good. And the next question is also about the China market. So did your operation impacted by the government power cuts? And how do you prepare for the power shortage in China is my second question.

Sure. Thanks, Melody. Yes, the power cuts are something we follow very closely, as you can imagine. I think -- to give you some context here, I think it's important to know that we have currently 31 breweries in China that make up our brewery network. This brewery network has been operating so far without any significant impact in our production or supply chain. And our supply chain network is equipped with co-brewing capabilities. So we are quite flexible to manage any uncertainty that might continue to arise in the coming months. And also additionally, I think interesting to refer back to our ESG commitments, right, because we are making quite some progress on ESG. And in that context, as you know, we have 4 goals and one of them has to do with renewable energy and our carbon footprint. If you look at our energy efficiencies, they continue to increase to improve efficiency. We also continue to increase our renewable energy usage. So we remain committed to our 100% renewable electricity goal from -- by 2025. And we currently have 7 breweries in China with solar panels already installed. We also have 3 breweries that are already RE100, so they use 100% renewable energy. And we have 6 additional breweries that are getting close to this via the PPAs to be expected in the next coming months. Thank you for your question, Melody.

Our next question is Chen Luo, Bank of America.

I've got 2 questions on China. The first one is about the [ channel ] expansion. How has our progress been in the 50 focus cities for the Premium portfolio and 31 focus cities for the Super Premium? For example, growth in terms of number of point of sales, relative sales growth in these focus cities versus the group asset? Any color would be helpful.

Luo, good to hear from you. Yes, good question. I think last time we shared a little bit more color indeed on our expansion strategy. So I can give you an update with some numbers or trends that might be helpful. As you know, our expansion strategy is really based on our market maturity model and we model this on a city-by-city basis. And we have a different strategy for different cities based on their market maturity and based on their kind of market share position where we are present. So I think last time, I mentioned that for the Super Premium segment, we see a lot of opportunities in 31 cities, which typically are high-disposable income cities because that's where consumers are ready for the Super Premium brands. And they do include both coastal cities where, as you know, a lot of the high-disposable income is concentrated in China. But we do have a number of inland Tier 2 cities like when I think about Changsha or Chengdu, I think they are good examples of other cities that would be on this list of 31. When we look at the results in the third quarter, without giving you exact numbers, but Super Premium sales to wholesaler has grown strong double digits in the year-to-date, and that is both compared to 2020 and to 2019 in these expansion cities. If you look at Budweiser, last time I mentioned, we are targeting more than 50 cities for Budweiser on the city list. Typically, they are middle market maturity cities but with a lower market share so that we can accelerate the expansion in the Premium segment. What we see in these 50-plus cities is that we see Budweiser's shipments grew strong double digits as well year-to-date, both compared to 2020 and to 2019, and we actually accelerated our growth in these expansion markets. So when you look at these Budweiser cities, to give you a sense of our investments there, right, we -- since July, so since the third quarter, we increased the number of sales reps by more than 150. We also have more than 150 brand promoters focused on these 50 cities added to what we had in place before July. And we started selling Budweiser in more than 3,000 new parks in the month of July. So it gives you an idea of the scale and the ambition we have in this city list. When you look at the provinces where we already have strong market presence, so you have to think of Fujian, Guangdong, et cetera, there, we are more focused on expanding the drinking occasions for our consumers, typically via line expansions. So there, good examples, I think, would be Budweiser Supreme, which is focused on the premium dining occasion. Bud Supreme grew strong double digits year-to-date versus last year. Budweiser Magnum is an innovation we bring with a higher ABV option for meal-bonding occasions. And another example is Hoegaarden, where the fruity range that we introduced last year and we expanded this year were really focused on consumers in the she economy, has shown very strong results. The fruity range has now reached more than 10% of the total Hoegaarden family since the launch last year. So with that, I hope I gave you a little bit more color on our expansion and update with some numbers that can help you evaluate our progress.

Yes. That has been very helpful. And I've got one more question which is also related to premiumization. So what is our growth outlook for the Premium and Super Premium portfolio in Q4 and also in next year in view of the current COVID situation? In which channel or consumption occasion do we see the fastest growth for Premium and Super Premium?

Sure. You would have seen in our release that in the third quarter, revenue per hectoliter continue to grow 3.7% if we compare it to last year. It grew mid-single digits as well versus the third quarter of 2019. So despite these COVID impacts, which were, unfortunately, in Q3 more concentrated in our stronger areas, especially the premium areas, we still see quite a consistent growth in our revenue per hectoliter. The main driver is, of course, the strong underlying brand mix, which outweighed the negative channel mix. If you look at Super Premium, we grew volume in the third quarter despite these channel closures in the coastal markets. And you would have noticed that Blue Girl, Hoegaarden grew double digits. Corona, as I mentioned before, was impacted by the COVID restrictions in Fujian. When we look at year-to-date, both Premium and Super Premium segments both continue to grow double digits. The Super Premium segment, last quarter, I mentioned that this segment had more than quadrupled its size since the first half of 2017, which was before the last quarter the last time we reported in our segment size. It also represents more than half of the revenue growth in the China business if I talk about the Super Premium segments. And it now represents about mid-single digits share of our total volume and mid-teens in the net revenue. When I look at Budweiser, maybe to complement that information on Super Premium, if I look at the Premium segment with Budweiser, it continues, of course, to be a strong #1 brand in the Premium segment. It also grows -- the weight of Budweiser continues to grow in our portfolio year-to-date. Currently, Budweiser makes up nearly half, so nearly 50%, of our revenue share. And that's reminding you as well that Budweiser is still less than 50% numerical distribution in China. So we continue to see strong growth potential for Budweiser, which links back with your earlier question on the expansion cities where we believe we can continue to grow strong double digits in the future. I hope that answers your question, Luo Chen.

Our next question is Euan Mcleish, Bernstein.

So you mentioned about Korea and how there's some good news there in this reopening map that the government just announced. Can you maybe just walk through what needs to happen from an external environment point of view and also from an internal oriental brews executional point of view in order for you to be able to get back or close to your APAC East FY '19 levels, if indeed that's achievable? And also, it would be really helpful if you could maybe -- if we put kind of reopening and other macros aside, maybe if you could just comment on the most pressing commercial risks that you're facing in Korea, that would be great.

Sure. Good to hear from you. Indeed, turning to Korea, right, I think generally speaking, we are quite excited with the commercial momentum we see in South Korea and the commercial plan that we have. And we see a confirmation that our commercial strategy is delivering good results. If you look at the external environment, of course, COVID remains the most important factor for the moment in our results. And I mean, happy to see that the situation is starting to improve, right? If you look at our results, our volume declined low single digits in the quarter, and that was in the context of the highest level of COVID restrictions since the beginning of the epidemic, right? And we clearly outperformed the industry in the third quarter. And actually, our third quarter total market share was slightly higher than the 2019 third quarter market share. Why do I say I expect improvements? We are quite encouraged by the vaccination rate in Korea. After a little bit of a later start, I would say we see a very quick acceleration of the vaccination rates. And today, more than 70% of the population has been fully vaccinated, close to 80% first dose. And recently, the government announced publicly a first draft scheme of lifting most of the pandemic restrictions starting on the 1st of November. So actually, the final measures should get communicated tomorrow, on October 29, when we will see the draft, which also is a public document. We see that the government announced that as of the 1st of November, there would be no more business hour limits for restaurants and bars, and that is quite significant. And also private gatherings would be allowed up to 10 people starting on the 1st of November. Now also to manage expectations, of course, different than in some other countries, we know that typically, let's say, we expect the population in South Korea to adapt gradually to these changes, right? We don't expect kind of a euphoria scenario like we can see in some of the western countries. But still, these are changes that are important that we expect to impact significantly the industry in the future because this was the main driver of the difficult industry in the last quarter. When we look at our internal point of view, in the Core segment, obviously, we launched All New Cass and HANMAC in the first half of '21. We saw quite some positive results that I kind of mentioned in my previous answers to some previous questions. When I turn to the Premium segment on top of that, we also have been quite successful with our innovations in premium Hoegaarden Botanic, Hoegaarden fruit flavors, they really capture the rising she economy in South Korea. And year-to-date, we are in double-digit growth in our Premium segment, and we have acquired a strong leadership position in South Korea in the Premium segment. So we're quite pleased with our results there. In the Core segment, we see that our new packs and our new can combinations, which we call OBPPC, have been quite successful as well to incentivize our shoppers to target different occasions and choose different pack types and typically, bigger pack types which, for the leading brands like us, can be quite important as well. So when we turn that combination to your specific questions on EBITDA levels, right? We believe our business strategy, if you combine the accelerated net revenue per hectoliter growth, driven by the positive channel and brand mix, we see the EBITDA margin improve, right? Actually, in the third quarter, our EBITDA margin was higher than 30%, which is quite a bit better than what we had in the first half. And actually, we don't really see any structural reasons why the EBITDA should remain below the 2019 level when we look forward. Obviously, an important driver for next year will be the commodities topic. When we look at our commercial strategy, we do believe we have a strategy that can complement cost initiatives to further compensate any increased commodity costs in the future. Of course, when you look at the risk question or when you ask what -- I mean externally, outside of COVID, what is important for us in South Korea? But of course, our revenue management initiatives, they will continue to be a critical driver. And they're always part of a competitive context, of course, when we look at our revenue management strategy. I hope that's a relatively complete question -- answer to your question, Euan. Back to you.

Jan, I appreciate that. I guess following on from there, you mentioned the cost pressures. Obviously, malt pressures are rising for the 2021 harvest and aluminum hedges are rolling off and energy and shipping costs are up. So it maybe helpful if you could walk us through the key cost inflation, COGS inflation pressures that you face, and specifically when and how you expect them to start impacting your business, and then the kind of plans to mitigate those. Bit of detail on that would be real helpful as well.

Thank you. Let me maybe pass this question to Iggy. Iggy, if you can take this one.

Of course. Thanks, Jan. Thanks for the question, Euan. So I think maybe let's start with the commodity prices have increased in several categories, and of course, those include aluminum and barley. And that increase has been happening for more than a year now. Given our hedging policy for raw materials, it tends to drive coverage about 1 year out. This gives the business significant runway to execute cost management initiatives, increase operating efficiency and any other initiatives they have to mitigate a significant portion of commodity escalations. If you think about it from a hedging policy perspective, the performance in Q3 this year is already actually a good example of that as initiatives we started actually in the second half of 2020 are part of what helped us to keep COGS per hectoliter in check despite a significant increase already year-over-year in commodities. In fact, if I look at the efficiency initiatives we've executed across functions, in most cases, we've been able to offset most, if not all, of raw material and currency impacts year-to-date. We've also leveraged our supply chain's agility to optimize sourcing options as needed. It's good flexibility to have. And this helps us -- or has helped us thus far to also offset or prevent some of the energy and shipping cost escalations that we're seeing in the market. So as a result, even if you look at it on a year-to-date basis for COGS, it remains stable despite the fact that we have some of these commodity escalations already implicit in our results even despite, of course, the natural escalation that you see from increasing premium channel and package mix, which, of course, is a critical part of our strategy. Well, we don't provide any specific guidance on COGS per hectoliter escalations moving forward, neither at the group or at the regional level. We do continue to see volatility in commodities even in the past few weeks and in both directions, right? So accordingly, I wouldn't say we see commodities as a structural headwind. To the contrary, I'd say they're more of a transitory impact. And we're fairly confident that we'll continue to deliver on our best-in-class cost management, operational efficiency and equally critical, as Jan mentioned, revenue management capabilities to minimize the impact of further commodity escalations as we move forward. I hope that answers your question holistically there, Euan.

And there's 1 webcast question. I will pass it to Jan to read.

Thank you, Aaron. So there's a question on the. Webcast. Recently, we heard that India antitrust body fined several brewers in the country. What is the background? So thank you for your question. It's correct, right? In India, there was a final order after the investigation of the CCI, the competition authorities in India. That was actually last month, in September 2021. This was after multiple years' antitrust investigation by the competition authorities, which -- in which we basically received no fine as a company. There was a complete immunity based on the leniency petition that we filed in India back in 2017, which was basically after first discovering the conduct in the legacy business practices after we acquired an existing business in India. It was interesting to see as well that the CCI decided that we were the sole company identified as receiving no penalty. And they noted that there were -- that we initiated internal definitive corrective administrative and HR measures as well as that we initiated widespread compliance programs for the employees in India. So why is this important to us, right? Not only because, of course, compliance is a very important value in our principles but also because from a business perspective, it creates a level playing field in India for us to operate in, and to grow fast in the India markets where all the players are held to high standards of compliance and integrity. And of course that, in turn, fosters consumer choice and a healthy competitive environment for us to innovate and to deliver great consumer experiences in India. And as you know, India is a market that shows a strong growth potential for the future. So we're quite excited with this level playing field. So thank you for that question.

Again, we go back to the audio questions. Our next question is Lincoln Kong from Goldman Sachs.

So the first question is about the China business. I just want to ask about the recovery pace so far, especially for those on-premise and online channel, given that in some of our stronghold province, we have seen the COVID impact. How is the recovery trend there? And related to that, are there any progress updates in terms of our online or DTC channel as well as other new channel expansion in China?

Sure. Thank you, Lincoln. Good to hear from you. So when we look at COVID in terms of channel recovery in China, essentially, we find that all the channels have largely returned to normal, except for certain geographies where there are local COVID outbreaks. So in cities with outbreaks, we typically see nightlife and on-premise channels impacted due to the restrictions. However, when we look at the duration of these kind of restrictions, typically, they stay between 4 to 6 weeks. And after 4 or 6 weeks, we see the channels normalizing. As I mentioned before, actually, we see an improvement -- continuous improvement in how to deal with these outbreaks by the local governments. When I look at the recent Fujian outbreak in September, it actually took 3 weeks to get the virus under control. And so we saw a faster recovery during the month of October in Fujian specifically. As you know, we track the recovery index across channels on a very regular basis, which allows us to do our resource allocation in a very flexible way and agile way, especially from on-premise to in-home, but also between regions. Turning to your question on e-commerce specifically, we do see success in e-commerce as a brand-building channel specifically for very attractive marketing campaigns. I think when we looked at, for example, innovation products like Budweiser MEX, we see a lot of success for this product via e-commerce channel. It also is a channel that helps us sell a lot of variety of different packaging via the channel and really target specific consumer segments. And it is a channel that is very Premium-, Super Premium-oriented and is very prone and open to innovation. So we are really keen to continue to develop our leadership position in the e-commerce channel. Also, there are a number of new channels, right? We see some rebalancing and shifts between the different e-commerce digital sales channels. And we see, for example, a lot of growth in emerging promos like Pinduoduo, but also the newer kind of sales channels like Little Red Book, et cetera. There is a lot of shifting between the channels, and we're very closely investing and making partnerships in the different platforms. When you look at the direct-to-consumer connection, I think, is interesting as well. When we look at the month of September, we are now at about 33 million first-party consumer records in China. And when you look at our BUD SPACE, which is our digital consumer loyalty program, we continue to expand that to create ever more connections with our consumers on a direct basis. So thanks for that question, Lincoln.

Sure. Just the second question is a quick one on India. So we see in the third quarter, we have a strong growth recovery for the India space. So how is the latest COVID situation, our performance and the market share situation there? If that will be a drag or actually a positive contribution to our group P&L going forward?

Sure. Thank you, Lincoln. When we look at India, on the COVID front maybe first, because there has been a lot of impact on India when we look at the first half of the year, but actually, again, good to see a strong progress there. The government announced in India that they have now administered more than 1 billion COVID-19 vaccine doses to date. There is still the target from the government to have 80% of the total adult population fully vaccinated by the end of this year. And when we look at the progress, by the end of last week, India was at 21% fully vaccinated, but already at 51% of the population receiving their first dose. So we see a lot of progress as well in India. When we look at consumer demand, we see a gradual recovery month-over-month in India. We see the retail channel more or less fully reopened today. And when we look at the on-premise channels, we see about 75% of the on-premise channel reopened. So quite a good picture, I would say, in India and much better than at the beginning of the year. When we look at our business, we see a continuous improvement quarter-over-quarter. When we look at the last quarter, we achieved double-digit growth in both volume and revenue despite any ongoing COVID restrictions in the on-premise channel to a certain extent. And actually interesting to note as well that our EBITDA now exceeded the 2019 levels in India in the third quarter. When we look at what is driving this, it's essentially a very successful premiumization. We see both Premium and Super Premium segments or brands in our portfolio, achieving very strong double-digit growth. And the main brand, of course, in India is Budweiser. It's the #1 premium brand in India by far. And it continues to outperform the industry and grow market share and grow segment share. So I hope this covers your question, Lincoln.

This concludes our Q&A sections today. I would like to turn the conference back over to Mr. Jan Craps for the closing remarks.

Thank you, Aaron. Despite the volatility and headwinds we faced in the third quarter due to the COVID restrictions, the consistency of our strategy has driven our recovery and growth so far in 2021. Our premiumization strategy is further affirmed by our performance, our geographic expansion has continued to yield results and we have made further inroads on digitization. For the remainder of '21, we will continue to focus on our 3 strategic pillars. We will also further broaden our Premium, Super Premium portfolio and the occasion targets in order to develop sustainable, high-quality growth for our shareholders and our stakeholders. Thank you very much for connecting and see you next time.

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