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

Welcome to the 2022 First Half Results Announcement Conference Call for Budweiser Brewing Company APAC Limited. Hosting the call today for Budweiser APAC is Mr. Jan Craps, Chief Executive Officer and Co-Chair of the Board; and Mr. Ignacio Lares, Chief Financial Officer. The results for the 6 months ended 30th June 2022 can be found in the press release published earlier today and available on the Hong Kong Stock Exchanges and Budweiser APAC's 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, see risk factors in the company's prospectus dated 18th of September 2019. The 2021 annual report published and other documents that Budweiser APAC has made public. I would also like to remind everyone that the financial figures discussed today are provided in 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 stated otherwise, percentage changes refer to comparisons with the same period in 2021. 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 discloses the consolidated profit, EPS, EBIT and EBITDA on a fully reported basis in the press release. Further details of the 2022 first half results can be found in the press release published earlier today. It is now my pleasure to pass the time to Mr. Jan Craps. Sir, you may begin.

Thank you, Anna, and good morning, everyone. Thank you for joining our earnings call. I hope you're all safe and well. In the first half of 2022, we continue to deliver top and bottom-line growth and grew revenue per hectoliter across all of our key markets. After being significantly impacted by COVID prevention measures and corresponding channel disruptions, particularly from mid-March through May, our business in most parts of China recovered in June. At the same time, we delivered robust commercial performance and financial results in South Korea and India under improving market conditions. Before I hand it over to Iggy to take you through our financial performance, I will take a few moments to provide more color on each of our key markets. In China, COVID restrictions significantly impacted the operating environment, leading to a mid-single-digit industry decline in the second quarter. We continue to see strong underlying consumer demand for our brands. Channel disruptions peaked in April and gradually eased through May with nightlife and restaurants reopening. Conditions progressively improved month-over-month leading to a high single-digit volume growth in June, with our Premium and Super Premium portfolio reaching double-digit growth in the month. Overall, in the first half of the year, we saw ongoing premiumization despite the headwinds from channel and geographic mix. Both Premium and Super Premium increased their volume weight within our overall portfolio, and compared to 2019 pre-pandemic levels, our Premium and Super Premium revenue combined grew by mid-single digits in the first half of 2022. We're also encouraged by the progress made year-to-date on the other strategic pillars. On the expansion front, year-to-date, both Budweiser and our Super Premium portfolio grew double digits in cities outside of COVID-impacted regions. And on digitization, we expanded our BEES B2B platform to more than 55 cities by June and are now connected with more than 30,000 monthly active users. In South Korea, all COVID restrictions in on-premise channels have been lifted since mid-April, leading to industry growth. We further accelerated our commercial plans, driving market share gains in both the on-premise and in-home channels, leading to a significant increase in total market share. Our commercial investment also translated into strong financial results with revenue growing double digits and EBITDA growing by strong double digits in the first half of the year. In India, our business in the first half outperformed the industry and achieved solid revenue and EBITDA growth. We've also seen a strong industry recovery with volumes outpacing pre-pandemic levels. Budweiser, our largest brand in India, further expanded its market share. Last but not least, on ESG, I'm pleased to share that Bud APAC has been rated AA by MSCI, representing our third ratings upgrade in less than 3 years. This recognition makes us an ESG leader among the 50 global beverage peers as assessed by MSCI. Moreover, our Jinzhou brewery in China is on track to become our second carbon-neutral brewery this year, further demonstrating our commitment to a low carbon transition. We continue to work towards achieving our 2025 sustainability goals and 2040 net zero ambition across our value chain. I will now pass it over to Iggy to take you through our financial results for the first half of the year. Over to you, Iggy.

Thank you, Jan. Good morning, everyone. As discussed earlier, we were able to maintain top and bottom-line growth during the first half of the year despite the severe headwinds in China. Overall, revenue grew by 2.7% and EBITDA was in line with the first half of 2021. Revenue per hectoliter rose by 4.2%, growing in all of our key markets as we continue to drive premiumization and revenue management initiatives. However, total volumes declined by 1.4%, fully attributable to channel closures and COVID restrictions in China, which were partially offset by strong performance in both South Korea and India. Another major theme this year has been inflation, which has translated into escalated raw material and packaging costs. We continue to leverage our hedging policies, optimize sourcing and efficiency initiatives to effectively offset a significant portion of this escalation. As a result, cost of sales increased by 7.7% in the first half of the year with the cost of sales on a per hectoliter basis increasing by 9.2%. Overall, profit attributable to equity holders in the first half of 2022 was USD 625 million, an increase of 24.3% on a reported basis as compared to the same period of last year. Now looking into our performances in key markets. In China, volumes declined by 5.5% in the first half. Revenue per hectoliter increased by 2.4% as we continue to execute our premiumization strategy and revenue management initiatives, limiting the decline in revenue to 3.2%. Normalized EBITDA declined by 7.3% in light of COVID restrictions and lower other operating income, partially offset by savings derived from agile commercial investment reallocation. In East Asia, revenue grew by 13.9%, with volumes and revenue per hectoliter increasing by 7.1% and 6.4%, respectively. Normalized EBITDA grew by 39.2%, coupled with continued margin expansion. The last point I would like to make before moving on to the Q&A is on our balance sheet. Despite the challenging environment, we maintained a strong balance sheet as a result of financial discipline and cash management. As of the 30th of June, of this year, our available cash and cash equivalents, which is shy of USD 1.9 billion. That is all for me. And so with that, Jan and I are here to answer any questions that you may have.

[Operator Instructions] Your first question is from Lillian Lou, who is from Morgan Stanley.

Jan and Iggy for the detailed explanation and also congratulations to the solid results despite the impact of COVID. So my 2 questions are both China's recovery trajectory. The first one is more of a review of the performance in second quarter. So I understand there has been a good recovery since June. Could you walk us through the sequential changes month-by-month during second quarter, especially how was the impact in April and May because we're trying to understand how the business and demand react to the COVID and also the COVID matters. That's my first question. I will ask my second after you answer.

Perfect. Thank you, Lillian. I hope you're doing well and thank you for your question. If we look at the COVID prevention measures, of course, in the second quarter, they had a significant impact on our business environment. And that's why we shared that we had a mid-single-digit decline in the industry on the volume front. However, what is encouraging is that we do see a strong underlying consumer demand for our brands. And when we look at the second quarter, we did see operating conditions really progressively improve month over month. And you would have seen in the month of June, we had high single-digit volume growth in the last month of the quarter. Now if we look month-by-month, in April, really the channel closures were at the highest levels. So at that time, we estimated about 38% of nightlife was opened by the end of April, and about 82% of Chinese restaurants were opened at the end of April, and then I'm speaking nationally for China. And of course, our Premium and Super Premium portfolio, they would have been disproportionately impacted because of the channel mix. If we look at geography, really East, Southeast, Northeast were the regions with the most restrictions, and many other cities are also going through sporadic shorter kind of channel disruptions. In the month of May, we saw already some clear improvements in the channel reopening. So we saw nightlife based on our estimates at 88% opening rates, we saw Chinese restaurants at 96% opening rates by the end of May. However, we still saw several bigger cities at a time, Beijing, Tianjin, Shanghai still with nightlife under restrictions. But the good thing is that in the regions where we saw lockdowns being lifted like Fujian, Zhejiang, Guangdong we saw good progress in the business recovery. And then we got into June, we saw high single-digit volume growth because the operating environment continued to improve. In that month, in the last month, basically, we saw Premium and Super Premium portfolio also bouncing back to double-digit growth. And when we look at the end of June, we estimate about 91% of nightlife and 98% of Chinese restaurants where reopened, but there were still some markets with nightlife restrictions, again, especially Beijing, Tianjin, Shanghai, the bigger cities where there were still some impacts. What is maybe interesting to share as well is that our team builds kind of a digitized tracking platform so that we essentially put in the number of COVID cases in any given city. And based on best experience, it basically shows us where to expect any channel closures or city restrictions, and that actually helps the team to reallocate commercial investments in a very agile way, whether it's either sales investments, trade activity or media investments that basically linked up to this digitized tracking platform so that we can very flexibly basically reallocate resources between sales channels and geographies as well, which has helped us keep a good commercial or on our investments as well. Let me hand it back to you, Lillian, and see if that answers your question, and what the other question is.

Yes, sure. My second question is more forward-looking. So given the situation, and you just mentioned that we see very solid underlying demand for Premium and Super Premium products, so how has been the recovery pace in July and so far? And also, it seems like the reopening rate of the entree channels is pretty good at the moment. And how do we see the traffic, i.e., the underlying traffic recovery versus the opening rate? And what kind of a strategy company would adopt to cope with relatively still bumpy situation in different regions and nationally?

Yes. Thank you, Lillian. So as we saw over the second quarter, we did see market conditions improve progressively month-over-month, and we saw that continuing into July as well, and we had a good start of July. When you look at the most recent couple of weeks, we are experiencing new sporadic or increased sporadic COVID cases due to the BA.5 variant, which you might have seen pop-up in some cities in China in the last number of weeks. So if you look at the reopening rates as of this week, we estimate it to be around 81% for nightlife and 97% for Chinese restaurants, which was slightly lower than the end of June. In July, though, the COVID cases, let's say, they are between 700 and 900 cases per day according to the official reporting, we do see the cases more concentrated now in Gansu and in Guangxi province, and some cases as well in Chengdu and Shenzhen. And when we look at Shenzhen, for example, we do see that the conditions already seem to be improved in the last couple of days. So with the current dynamic policy, we basically believe there will be sporadic COVID prevention measures in the next upcoming months but with shorter periods. So this will continue depending on the regional COVID situation. What we actually see is the government addressing the situation to implement really science based and targeted epidemic control, so it's more targeted. And really balancing epidemic control on one hand, but an economic and social development on the other hand. So we do see a lot of progress on that front. And on our end, this kind of digitized tracking tool that I mentioned just before really helps us navigate the situation. Our teams are very well organized for this. They built quite some experience in the last couple of years in how to deal with the situation and how to remain agile and plan in a way that we can quickly adjust where needed. And we do expect some sporadic but shorter impacts in the next number of months. I hope that helps, Lillian.

Your next question is from Anne Ling, who's from Jefferies.

Jan, Iggy, this is Anne Ling from Jefferies. I have a question regarding the consumption downgrade or trading deal. So what is the impact of weak consumer sentiment over the business? Do you think that this will hurt volume growth in particular? And also like in your experience in other markets, what is the impact on weak consumer sentiment over the volume of, in particular, like Premium products and Super Premium products?

Thank you, Anne. I hope you are doing well. Thanks for that question. So we actually did quite some consumer research in the last number of months on how do we see consumer sentiment, and then specifically applied to the beer category in China. And what we see is that there has been a stronger recent Core and Value sales, which is actually more driven by channel restrictions and geographic mix rather than a structural consumer trade. So we actually see that, for example, in the first half of the year, both Premium and Super Premium increased the volume rate in our total portfolio if we compare it to last year. So when we look at this consumer research, it's actually confirmed that today in China, Premium and Super Premium beer, by the way, are both seen as affordable luxuries. Even if within the beer category, they are relatively expensive from a price index point of view, on an absolute price point for a consumer in China, they are actually very affordable luxuries. And they're a type of small luxuries that can play a role as an emotional stimulus to bring people more comforts and rewards during difficult times, and that's why consumer demand for premium beer remains strong. And actually, when you go 2 years back in 2020 after the first kind of the start of the pandemic, we saw a very similar pattern. So we saw in the first number of months, Premium and Super Premium suffering a little bit more due to the restrictions, but again, due to channel mix. And then 1 or 2 months later, we saw Core and Value recover, but then Premium and Super Premium recover later than Core and Value because of the channel reopening delayed. And so after the recovery period, we saw Premium and Super Premium fully recovered and even getting some tailwinds, especially in the AB restaurants and the nightlife reopening then. So we are actually quite optimistic on the midterm business prospects in China. And if you look mid- to long-term, of course, there is an incredible room for growth in China for premiumization, mostly because of the middle-class households that we expect to continue to grow in a number of years to come and actually in the next 10 years, quadruple, right? We expect that to be about twice the number of middle-income households in China as in the U.S. today, if we look at China 10 years from now. So we expect our business momentum and the potential in the market to be basically structurally intact. Thank you for your question, Anne.

Your next question is from Lynn Wu, who is from Bank of America.

I hope you are both doing well. I've got 2 questions. First, also on China's premiumization. I think you alluded to this a bit earlier. Our Premium and Super Premium portfolio had a strong recovery in June, as well as in the first half, also see a solid growth versus pre-COVID level, which is quite encouraging, especially given the lockdown this year. Could you maybe share with us a bit more details on your Premium and Super Premium portfolio's performance essentially on our focus brands, such as Budweiser, Corona and Blue Girl?

Sure. Thank you, Lynn and thank you for your question. I hope you're doing well. So when we look at Premium and Super Premium, we actually continue to see strong underlying consumer demand. And then it really depends on these COVID prevention measures, how that expresses itself in our sales numbers, right? So in Q2, of course, we did see a disproportionate impact on Premium and Super Premium portfolios because of the channel closures, and also basically geo-mix, right, the geographic mix, which was unfavorable for Premium and Super Premium brands. But when we look at June when channels recover and the Southeast, East provinces recovered, we see that the volume growth is back high single digit overall in Premium and Super Premium even double digits. So maybe some interesting insights right on the topic. We do see premiumization continue in the first half of the year despite all of these headwinds. Premium and Super Premium increased total weight in our total portfolio if you compare to last year. If we compare to 3 years ago, so pre-pandemic 2019 levels, we see Premium and Super Premium revenue continued to grow and was actually mid-single digits this year, H1 versus 3 years ago, H1. So we continue to see growth despite all the restrictions this year. And when we look at Bud and Super Premium in expansion cities outside of the COVID-impacted regions, we also see double-digit growth in expansion areas. So actually, the basic premise is still valid. And then we continue to see strong consumer demands underlying. And as these restrictions ease and they become more targeted to balance kind of consumer health with economic and social development, we actually do see this demand come through immediately in our numbers. Thank you for the question, Lynn.

My second question is on South Korea. In terms of volume growth and brand marketing. The South Korea market looks to benefit from very strong pent-up demand in nightlife reopening and also recent government fiscal stimulus. How sustainable do we expect the strong momentum to be? Also I noticed that we launched Cass White in Q2. Do we have any branding or marketing campaigns planned for the second half?

Yes, thank you. So in South Korea, we are quite excited as well. You would have seen that the daily number of COVID cases has been declining since mid-March already in South Korea. Recently, there's been a slight uptick because of the BA.5 variant as well, but it actually did not create too much concern because the critical illness and the hospitalization rates, they remain very low. So the government came out in South Korea, which is living with COVID policy. And basically, all the COVID-related restrictions in the on-premise have been lifted since mid-April about. So as a result, if we look at the H1, the industry has been recovering, operating environment has been improving. But still, you should mention that industry is still below pre-pandemic levels in 2019, which is interesting because it does make us cautiously optimistic for further improvements in the business environment in the quarters to come. In that industry context, which is improving, if you look at our market share, we achieved strong market share gains in Q2. It's actually the strongest quarterly market share in the last 3 years in South Korea, and we see market share growth, both in on-premise and in in-home. So in on-premise, for sure, driven by innovation with all new Cass and HANMAC. It's really a strong performer, especially in Korean restaurants channel. And then in the in-home channel, we had our OBPPC strategy, which is basically new packs and can combinations on Cass, which is driving and incentivizing shoppers to buy bigger packs for specific occasions. To your point, we also launched the Cass White innovation. It is our first wheat beer for the national brand Cass. And we are early days, right? We're about 3, 4 months into the launch, and we see positive initial feedback. Actually, we also confirmed that this innovation has a positive halo effect for the Cass mother brand. So Cass as a brand has been performing very strongly since the all new Cass campaign last year with the flint bottles. We see market share gains in all channels and basically strengthening its leadership position. In the second quarter, Cass actually grew mid-teens in the second quarter, which is faster than the industry recovery, which was already strong in itself. So I hope that gives you some color, Lynn, on South Korea where we're quite excited.

Your next question is from Euan Mcleish from Bernstein.

I've got 1 question on cost of goods sold, if that's okay. Can you give us some color about how your FY '23 cost of goods sold base is shaping up and the sort of raw material inflation that you're currently anticipating next year? The reason I ask the question is because there's obviously malting-barley is very important for your cost structure, and we're seeing quite a big spike in malting-barley prices in Northern Europe. So it would be great if you could maybe dimension your typical exposure to malting-barley in Northern Europe and how your procurement team is thinking about the pricing risk and how to manage them going forward.

Sure. Thank you, Euan. Good to hear from you, hope you're doing well. So maybe this question, let me pass it to Iggy to see what level of detail we can provide on commodities.

Sure. Thanks, Jan, and thanks for the question, Euan. So I think maybe I would start with 2022 COGS. I think that will help to maybe contextualize 2023. So I mean, if you recall, we tend to apply a hedging policy design to give us a 12-month rolling horizon. And of course, we keep some flexibility for special circumstances, many of which apply this year, right, between the conflict in Western Europe in COVID and other factors, right? So this helps obviously reduce volatility on our input costs, as well as give us more time to plan and execute initiatives. And although we don't give a specific guidance on COGS per hectoliter, as we shared previously, we did expect commodity escalation to be most pronounced this year, right, in 2022 in the second and third quarters of the year. And that's, of course, if you take a comparison to kind of summer Q2, Q3 2021 market pricing, right, versus the previous year, we would have done some of that hedging. Maybe a way to think of it is if you think the commodities represent between 1/3 and 2/3 of COGS per hectoliter, of course, that depends on the product or the brand and the geography as well. If we hadn't taken any actions, you could have expected these COGS per hectoliter increase about 10% to 15% in the first quarter of the year and closer to 15% to 20% in the second quarter of the year. You recall, of course, we announced that the first quarter was 6%, COGS per hectoliter escalation. This quarter, we have been 12.3%, and that's, of course, impacted somewhat by the operating deleverage headwind in China in Q2. But that suggests, of course, that cost management initiatives would have offset a significant portion of the commodity impacts. If you look at the rest of the year, so if you look at the rest of 2022, the direction you would see in the third quarter of 2021, so if you look at last year, commodity pricing was actually similar to the second quarter. And the fourth quarter would have been better, somewhat better than the third and second, more similar to what we would have seen in the first quarter of last year. If we look in 2023, then you would, of course, still expect some continued escalation in commodities given the market rates year-to-date, right, 2022 are higher than they were at this time last year, but that escalation would be in a lesser magnitude because, of course, that year-over-year has been more muted. When we take a look at the spot pricing really for both aluminum and barley, I won't cover them all, but aluminum and barley being the two most relevant here. We, of course, have seen a retreat in aluminum from about $4,000 per metric ton. A few months ago back to $2,400 per metric ton. Of course, it's still higher than kind of the historical average, but more in line with history. Barley has been more volatile. So to your point, there's still a lot of speculation that there will be further disruptions in Europe, which, of course, plays into that volatility. But let us not forget, of course, we're still pending the Northern Hemisphere harvest, right? So the next couple of months, we'll give some more visibility on that. And this is where I think the global sourcing flexibility, we have become a significant competitive advantage, right? We've been adjusting our sourcing, so we're not dependent on any 1 region. It gives us a lot of flexibility. This has minimized impact thus far. And then maybe just a reminder, of course, the barley sourced from these locations, but most of the malting tends to be done locally, which also does help to reduce some volatility. So maybe the way I would summarize it, we're still expecting some volatility moving forward, but we don't see raw material cost increases being a structural headwind. We still think it's a transitory one. And then, of course, equally important, we still continue to mitigate cost related risks with initiatives, as we always share. And many of these extend beyond COGS, right, optimization, revenue management and, of course, general cost management initiatives. I hope it gives you a bit more color, Euan, in regard to kind of full year '23 COGS.

Your next question is from Lee Liu, who's from Goldman Sachs.

Jan, Iggy, this is Lee from Goldman Sachs. I hope you are both doing well in your business trip. And thanks for the detailed color on China. I've got 1 question specifically about Korea. We have seen a significant EBITDA margin improvement in the first half of Korea, but still way below the last -- in 2019 second quarter level at about 35%. So given that we are seeing continued volume recovery in Korea and with new product launch in your view, what is more normalized EBITDA margin level for Korea and East region in midterm, and also assuming its cost pressure normalizes.

Thank you, Lee, and good to hear from you. Let me also pass this question to Iggy maybe to take you through South Korea.

Sure, of course, Jan. Thanks for the question, Lee. So maybe I would start with the first half results this year for APAC East, where we had significant margin expansion in South Korea in both the second quarter and the first half overall, with APAC East margin in the first half expanding by more than 500 basis points, right? So from 24% to 29.4%. In the first half, I mean, this was really driven by very solid revenue growth, right, of almost 14%, which is a combination of industry growth -- the industry recovery, continued market share gains, and then many of the revenue management initiatives that we've discussed in the past. And then, of course, this strong top line growth, coupled with an easy comparable in SG&A in the first half led to an EBITDA growth of almost 40%. Now, what we don't provide a specific guidance for EBITDA margin, I can say that there's really no structural limitation that will prevent margins from returning to pre-pandemic levels in the midterm as you asked, right? It's more a matter of how the drivers of EBITDA margin evolve in the quarters to come. So I think the first one, and a very important one, the industry continues to improve, but it actually hasn't yet recovered back to pre-pandemic levels. So we believe there is still room for further recovery. Second, I would look at pricing and revenue management initiatives. We'll continue to benefit from the implementation of some of these initiatives in H1, right? So as we shared, we had 7.7% price adjustment for the Core segment, right, so for Cass and HANMAC in March, and the 10% price adjustment in Premium, right, for the in-home channels at the start of the year. And so, of course, we'll benefit from these. You only have a portion of that baked into first half results. Then maybe the third driver would be commodities, right? I mean, there tends to be cyclicality in commodity prices. Today, we are still at or near historical highs in many categories. So normalization, of course, will benefit margins more towards pre-pandemic levels. And then, of course, the other element is the opportunity for continued premium mix evolution, right, which we know there's still opportunity. That's one of the dynamics in the Korean market specifically. So I guess maybe the way I would summarize it is, if you look at those drivers, there's really no reason why we wouldn't be able to reach those types of, call it, pre-pandemic EBITDA margin levels. And short term, of course, it's really more a matter of how commodities and, of course, the comparables that we have on a quarter and half basis tend to unwind. So hopefully that gives you a bit more color on kind of the EBITDA margin picture for Korea and East Asia.

Your next question is from Melody Zhou from CICC.

It's Melody Zhou from CICC Food & Beverage team, and congratulations on such a great performance and the upgradation to MSCI AA rating on ESG. So great. And I want to ask 2 questions about the Chinese market, and again, ask them one-by-one. So the first one is about expansion. How was your performance in the expansion cities? This is my first question.

Perfect. Thank you, Melody. I hope you're doing well. So on expansion, we basically continue to invest in our expansion cities. So we have this playbook. We basically have 2 things, right? We had a market maturity model first, which is basically helping us identify, which are the regions with high consumer demands where we can grow our portfolio and grow our go to markets to invest in expansion. And then once you identify the target city list we have this expansion playbook, which really tailors the strategy and toolkits city-by-city depending on the maturity level and depending on our kind of market position within each specific city. So in 2022, this year, we target more than 70 cities for Budweiser expansion, more than 45 cities for Super Premium expansion. And when you look at the performance so far, despite COVID restrictions, we really see our expansion strategy resilient. So in June, for example, Budweiser grew double digits. Super Premium even grew strong double digits versus last year in the expansion cities. When we look at the kind of whole first half of the year, both Bud and Super Premium grew double digits versus last year if we look at the expansion cities without COVID restrictions, so without channel closures, et cetera. So overall, this remains a very important strategy for us and a big priority. And despite the kind of restrictions we had in the second quarter in the first half, we continue to invest full on because it's really an important priority for us for premiumization and expansion in China. Thank you for your question.

And my second question is about digitization. So do you have any updates on the digitization and the commercial performance in the e-commerce channel?

Sure. So on digitization, really, if you look at our kind of commercial capabilities that we want to kind of continue to grow the top line by investing in digitization you really see 4 pieces of the strategic intent. So the first one is we want to sell more volume. We want to do that by connecting with more customers, we want to increase the return on investment of our investments and we want to offer more services. So selling more to more stores with higher ROI and more services. So if you look at these, which is our B2B platform, right, the digital platform, we take 2 different angles for the platform. One is our trade marketing investment and digital engagement module. That basically continue to expand. We have today more than 650,000 customers who have adopted BEES into their business for all interactions with us on basically trade program execution, digital engagement, trade marketing investments. If we look at the transactional functionality, the more traditional B2B, there we basically, in a digitized way, we are expanding the BEES platform. We started in 2 pilot cities initially last year, and today, we are in over 55 cities by the end of June, and we have more than 30,000 monthly active users, and we intend to increase that quite a bit in the next number of months. If you look at the consumer level kind of digital interactions, we have strong partnerships, as you know, in e-commerce, right? We're the leading e-commerce power in China. So if you look at JD, for example, we are one of the 3 partners recognized by JD Group Super Key Accounts. So only 3 CPGs basically in China that are recognized as Super Key Accounts by JD. And so with this partnership, we are basically working together to conduct consumer insight studies to co-create innovations to have a joint marketing plan with the JD Group, so quite important for our e-commerce development. And if you look as an example, right, the last campaign at the 6.18 campaign, on June 18, in the shopping festival, Budweiser was ranked the #1 brand in the beer category again. We actually had 2 of the top 3 positions and with Budweiser and Hoegaarden actually, which was #3 ranked in the JD platform. And actually in all the top stores, we were basically two top positions in the different stores as well. So we did quite well confirming our #1 position in e-commerce as well. So I hope that gives you some color, Melody, on the digital front.

We have time for 1 more question. Our final question will come from the line of Clement Xu from DBS.

This is Clement from DBS. Actually, I've got 2 questions. My first question is about India. So given our successful performance in India, do we expect our strong growth in terms of volume and revenue to continue there?

Sure. Thank you, Clement and thank you for your question. So on India, we actually had quite a strong revenue and EBITDA growth in the first half of the year, essentially driven by premiumization and increasing consumer demand. So we are very optimistic about the long-term potential of India because India has a demographic advantage, of course, but also growing prosperity and premiumization trends playing out in that market. And as you know, we are a segment leader in Premium and Super Premium segments by quite a bit. If you look at premiumization first, maybe India is one of the largest and fastest-growing beer consumption markets in the region with a young population and a growing middle class. So when we look at our Premium and Super Premium portfolio in the first half combined, it doubled versus last year, supported by an ESECOM as well, right? As you remember last year in April, there was a Delta wave in India, so that created kind of a difficult circumstance last year, ESECOM this year. But also when we look at the volume weight of Premium and Super Premium, it continues to increase within our overall portfolio quite significantly. So if we compare pre-pandemic levels 2019 first half to this year first half, Premium and Super Premium this year grew strong double digits versus 3 years ago. Budweiser is our #1 premium brand in India, and it continues to outperform the industry, it continues to increase market share as well. But we also have Corona, for example, which is now available in more than [Technical Difficulty] in India and with a strong consumer response. And we also see big potential for wheat beer. So we launched Hoegaarden White with big innovations of Hoegaarden Fruity and we actually launched a Nectarine variant and Rose variant in India. So a lot of efforts towards product innovation, and Hoegaarden as well and Corona actually both to men and women really opening the beer market there. A second driver there, which is quite interesting is the beer as an alcoholic drink of moderation. So we believe that beer has quite some growth potential in India, and we play on this by also promoting low and nonalcoholic beverages. And as you might know, in India, they have a favorable go to market versus alcoholic beverages. So we continue to increase our distribution in the country with nonalcoholic drinks. We, of course, have our beer BEES zero-zero variance, where we continue to innovate. We already had Budweiser zero-zero, we have Hoegaarden zero-zero, but now we launched fruity variants, Bud zero-zero Green Apple, we have Hoegaarden zero-zero Rose in India. And then we also build distribution on energy drink, where we launched Budweiser BEES a number of months ago, which is also doing quite well. So we actually see both premiumization as a key driver, but also BEES as the drink of moderation with quite some potential in India and very strong numbers in the first half. Back to you, Clement.

Jan, that's very helpful and actually a very encouraging view. My second question relates to China. Given the recovery trend in China that you have mentioned, could you share with us some more details about our summer campaigns in China.

Sure. Thank you, Clement. We are quite excited with our commercial campaigns for the summer. And I don't know if you had a chance, but actually, we started the team at the idea of starting to share kind of our campaigns before this call. So basically 2 minutes before the call, we played our most recent campaigns of the different brands across our different countries, so it gives you a flavor of our campaigns right of our brands and as both this time we shared campaigns of China, but also Korea, India, and Vietnam, so which I think gives you a flavor over our brand activity over the summer. So we actually have quite strong 360 campaigns across the summer. And if I look at China, maybe, we are very focused on our 6 mega brands that I mentioned in the last call, 3 months ago. And they cover various channels and demographics, so that we can continue to drive consumer penetration and consumption, especially for our Premium and Super Premium brands. So when we look at the summer campaign for Budweiser, it's centered around EDM with top world DJs, right, with DJ Marshmello. And of course, our Asian brand ambassador with Eason Chan. Harbin Ice, it's making its Harbin Ice's national summer campaign, right, very much focused on cold with Harbin Ice. And Corona and Hoegaarden, we launched fruity variants with Corona Fresca and Hoegaarden fruity variant campaigns to engage with co-ed drinkers, right, both male, but also a special focus on female drinkers. And we see a lot of growth in that category. If we look at Q3, you will also see more of our FIFA World Cup activation coming live. So we are, of course, Budweiser continued to sponsor one of the biggest events in the world, right, with the FIFA World Cup, which this year is later in the year. And it's really driving both commercial growth, but also brand equity enhancement. So we are using the FIFA World Cup to create unique experiences for our consumers in Asia. We have the BUDX Hotel, we have EDM parties, we have viewing parties. There's a lot of activities planned for the second half of the year. And then on top of that, we are leveraging FIFA World Cup 360 degrees in our trade activations that can be both in nightlife, in Chinese restaurants, in-home channels. So basically leading with Budweiser, the category growth in the second half, and we have quite exciting campaigns coming up for that. So thank you for your questions, Clement, really appreciate it, and hope you're doing well.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session today. I would like to turn the conference back over to Mr. Jan Craps for the closing remarks. Please go ahead, Mr. Craps.

Thank you, Anna. So while we continue to anticipate sporadic COVID prevention measures in China, we are encouraged by the month-over-month improvement in operating conditions in China in the second quarter. We continue to see great potential in the Chinese market, and we will remain agile in our investments and allocation of resources to foster this potential in the future. In parallel, we continue to be very excited by the strong momentum in South Korea and India, and we will continue to look for opportunities to accelerate growth. Our dream remains to become the most loved high-quality growth leader in beverages, and we will continue to proactively lead and shape the category, we will digitize our ecosystem and optimize our business to accelerate the path to this dream along with our shareholders, partners and communities. And really, we want to dream big to create a future with more cheers. So I look forward to speaking to you all again very soon. Thank you.

Thank you. Ladies and gentlemen, this concludes today's results call. Please disconnect your lines. Thank you.