ABEV - Earnings call transcript Q3 2021

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Operator

Good morning and thank you for waiting. We would like to welcome everyone to Ambev's Third Quarter 2021 Results Conference Call. Today with us, we have Mr. Jean Jereissati, CEO for Ambev; and Mr. Lucas Lira, CFO and Investor Relations Officer.

slide as available webcast well this A our downloading link reminder: call. ri.ambev.com.br; website, as a presentation for is on of As through the recorded. that like event inform would you We is to being this are [Operator Instructions] Before of Securities under let me XXXX. the safe of Reform being forward-looking harbor mention the Litigation made that proceeding, statements Act

forward-looking uncertainties the that as conditions, that they to expressed may are third not nature; or remind usual, otherwise that, as in percentage assumptions refers those are differ XXXX to like future. discussing expenses operating and also and refer on the may Investors management to today's and income from statements based and conditions changes of comparatives understand the quarter changes not be of to part which such activities. They factors normalized I in everyone and organic we'll and during percentage economic on to occur statements. Forward-looking the company. Ambev's could therefore unless would are because general results that also performance on circumstance results of affect normal both with items the or and measures results. to in Normalized involve events regularly future future materially before that stated, risks, occur currently Ambev's exceptional either figures do relate call other could should industry beliefs Ambev available assumptions and depend information cause

on in the and measures, figures profits, are disclosed a the EPS, reported EBITDA non-GAAP normalized fully As basis consolidated earnings release. company EBIT the

Jereissati, over Ambev. conference the may Jereissati, for turn CEO begin Mr. your will to Mr. you I Jean conference. Now

Jean Jereissati

It like our the about about as very I couple of highlights like doing it's quarter I have to a setbacks. do learning Work joining a Ambev personally talking A would happened vocal earnings as cover weeks moment, recognized to of ago, but is will a how time. that today. to a lot we large so we meant on Brazil for company are last In It's of to something together best company and journey. things a quarter I go, respects, many fifth would Place I There as our is Thanks a Great everyone. for. transformation we lot Ambev ours, are of in begin people. little Transforming in to the the a work me. differently the hard. by Hello, is bit skepticism this year, call been This call. but team. like takes painful. third was

XXXX, and Just a to of of give are ranked XX. this built lot is: we we idea people how owners. transformational you this an company, In of company great A

transformation more long this better, to way. is society; for the making operate, daily and across term; has big engaged stayed and a helped the more diverse, has the but only has be to people proud humble results heart the also always in true that see basis. is enormous from And brutal enough committed soul consistently have time, that to along face in and the been happen been so bets building and, at you Our COVID; as we of and years company bold and more of the collaborative, been markets sustainable the team our this thank delivered not facts mistakes; few recover learned to a face and on a everyone pandemic made resilience and very shown last the innovative where the the happier I'm we from Brazil will other of has my has the same Ambev, so

this In with transformation another performance, which our basis, versus this our and up net delivered be a last X% on revenue XX% a consolidated step The revenue ahead XX up up we solid journey, above per line with break to we XX% rolling back 'XX, last top volumes quarter year-over-year. in nearly our X XXXX volume generally QX, third by the net saying back grew the operations the grew volumes are put performance it momentum hectoliters continued X versus XX-month this grew X levels. million peak just year-over-year million growth of quarter, direction. was hectoliters another of And delivered was revenue we as delivered in XXXX. in frankly, markets on CAC, level call ended year, below in Comparing them test XXXX. XXX that hectoliter I we Our net solid of In 'XX. another delivered a second XX% And result, bounce was If year-to-date growth, in to X% volumes and and on semester. down XX%, would region: slightly nicely. right versus QX nearly step quarter and international 'XX. the

mix. continue double plus versus tougher thanks from and XXXX recover, LAS, Chile and continuing and drove Dominican recovery this gain volumes the high-end lot of strong core a our remains our with As and Bolivia Republic but high-end levels, however, to line. do. 'XX. In XXXX digits ease, posted vaccination, work in portfolios. of terms by to to Panama, to to Canada, mobility core Paraguay portfolios we also the Argentina, there and and led a have had quarter restrictions still to below grew growth, top weight thanks in volumes plus continue our XXXX

in The restrictions; Quebec. still pre-pandemic mostly revenue some and with disruptions, net XXXX, impacted versus down revenue X%, quarter almost X.X%. supply by faced still above while declined QX the volumes levels, chain mobility we hectoliter it's in was roughly per grew net Although X.X% industry

driven Volumes almost versus against up This line XX% Turning the in Brazil, all performance QX was Guaraná and XX% and in increased Antarctica, XX% quarter compared NAB. with but and nearly and Brazil above versus grew 'XX. HXOH! XXXX XXXX. to were XX% starting XXXX. by XXXX last mainly 'XX. versus XX% And to grew of quarter which nearly XX% revenue Beer versus not Net least, Gatorade, the top XXXX

not step versus change XX% that's at of share. XX% a again is once innovation continued consistently first, despite a to strategy just XXXX revenues. and volumes Our plus competition. and It pipeline macro legacy healthier quarter our outperforming X.X% stronger This which net combination market the It's is work with strong portfolio, thing a of versus almost brands commercial industry a working. in headwinds continued a one gaining despite despite growth XXXX, of growth that has represented in the and COVID, over with result

brands by million In number addition, people fans of of increased XXXX. we X our since the

with a improve continued Net XX% connect better how level, we our in to points. service and big Promoter customers' the Score which have Second, our pain structurally quarter; solve reaching third, bets, consumers technology

For currently products instance, XX customers industries. over in of from third XX% XXX active Brazil, different BEES is now of used parties offering by our

XX% the returnable the of service top 'XX, made In and XX% year-to-date in ml with that, is addition XXXX. increasing our our to with customers. BRF with And XX%, great as line bottles channel execution revenue volumes net through hectoliter. volumes and per is All leading growing announced offer per up be in premise XX% finally, When are XX% to top that up way on glass all, hectoliter comparing continues revenue XX% our consistent line, we desire yesterday, the products solutions XXX and reopen. pack to strategy, and better available it versus which in to BEES, net was with will in

last QX to time a that I these last in our opportunity XXXX; BEES their Donus, and of underway platforms some company: our Zé potential. to our Delivery to I to QX call revolution X allow last each logistics in how year; spend I as to During technological are on quarter. Brazil on took transformation is like fintech, enabling calls, the like in platforms fulfill what the focus our of would Today,

Brazil a itself centers more creating distribution brands logistics invested for shared to-date been logistics In value, to direct X a last the transforms we footprint distribution, up In second-tier the operation have our XX,XXX XXX million with years, on several $XXX Ambev these created a As making ecosystem, currently people big into 'XXs, is connects and set must. we started technology-related operations, day. that inspiring the have across prepare platform Approximately than on a best-in-class operating deliveries initiatives with and us per models. betting third-tier spread better and logistics operation. to new

we call, small terms agile. like capabilities distribution drop-size we for are designed small footprint only distribution behind bikes, small more high-density urban with for regions, a small X efficiency. and even are provide UDCs currently to The have X And level them with Paulo. BXB, better in leaving and occupancy the also carbon to right piloting offering the creating investing in which motorcycles cheaper instance, marketplace and service faster rates near For and model bigger gaining lower trucks. of UDCs, The small in a using efficient are vans, deliveries or centers box UDCs orders. how platforms. delivery bigger lightweight These is urban integrate making We our more for delivery partners, more of centers flexible for emissions, models services idea operate DTC we operations, São growth, and

up, by top forward positioned QX and to line our consolidated stood bring EBITDA full will the XX, more bring to some just will was With And based XXXX but everybody. there next challenging, work that starting. our said, levels. Lucas another performance, financial words up ground. let very on regarding who number, performance risks XXXX the this cover be we believe been improve will continued end of to year, will also our our year-to-date tough has for for tough hand go consistent with I'm a V-shaped although led have year. nominal wrap XXXX continue for is the will year we and back XXXX a comp, detail, Thank close into the over will Lucas, remainder our quick recovery, we better better our and it and our opportunities. but you, to to We a performance. me the be we room improving To things with journey, to in what are XXXX. so XXXX year year way, its we but looking normalized

Lucas Lira

Thanks, Jean. action, announcement plants took kick and also like off marked brewery QX and carbon-neutral climate so by our was I in step where transformational malt quarter. during Good the by will would first in good right third to talking afternoon, direction about start a I transformation, the of with morning also we everyone. the Brazil.

see to purchased of get on COX Passo Paraná to in biogas from XXXX from come heat produced This of our plants low-carbon to neutralized energy when of delivered X to plant in Ponta more malt of remaining via produced energy proud purchased operations, total state in life. versus state and Sul began this we leading and renewable effluent credits. reduction and system; it biomass we're emissions Our site Rio the focused built energy here, To consumption Brewery boilers; the the do case carbon emissions Grossa in XX% in green these treatment reduction; efficiency be and XX% things: XXXX XX% on Grande electricity the on designed site hydro. from had Fundo resources, than we process XXX%

And financial build As QX total these year. XXXX; implement as in starting and starting will we steps, electrical next make investments on-site well. forklifts, sense solar farms, next

Our carbon energy energy before. attractive allowed only consumption rates not in decisions than but Also efficiency to developing months. future, to has We're of road savings become at of us terms XXX% the move have also to renewable in to coming sources a in towards event. milestone more secure which least led this to isolated we to an not share be facilities at the our expect map neutral production is carbon able neutrality

Margin we than our partially and the to financial the of the growth driven approximately quarter. team's once revenue execution performance XXXX, difference organically QX, disciplined while XXXX. QX increased headwinds. up XX% flow during Normalized grew tougher EBITDA X.X% cost came time XXXX. first flow XX%, unfortunately, declined XX% with profit XX% pressure, improved the and terms, XXXX. profit XX% In organic gross The we recovery, line QX offset XX% top normalized first QX XX% expense revenue growth nearly XXXX, below growth EBITDA and XX%. in about margin contracting by grew Turning net almost to is while in EBITDA similar line to against slightly XX% in Versus much in X.X% Overall, grew organic that, a but cash the operational half: organically, in again. in contracting X% margin quarter, in QX QX the saw XX%, through lapping year, cash remains grew organic comps in lapping half faced the growth quarter. following a XX%. operational net reality, by growth top was dynamic this to almost EBITDA

However, improvement did disregard XX% margin EBITDA nonetheless. the one-off we sequential We which a the Brazil. you QX at tax see we see stood if versus as this level at improvement go, credits long way to XXXX, a relevant but consolidated still have in

COGS for an in year. FX unhedged while Brazil pressures low for should Now higher to almost costs. consolidated expect be FX commodity per cost totaled on XX%, basis QX We we saw lowest Brazil, commodity the the COGS as in per COGS commodity in continue main QX, mix particularly the cash in and year. cash hectoliter adverse Beer to be still and go in the XX.X% XXs main which a the should hectoliter per let and Brazil through offset again growth drivers. full better me costs grow expense factors, quarter. hectoliter the once increased Beer but the issue

net same growth year-over-year of were year-over-year comp our drivers performance the variable SG&A, cash and for a ones better nearly administrative during distribution so expenses for provisions at lower track once albeit mid-teens, year-over-year. performance consolidated As Sales revenue from basis. again than marketing our QX, here a expenses accruals result impact should levels below for continue should growth year-over-year, XX.X% of totaled the which And our grew expected. were main The And year was performance. QX, remain growth. was comp on since on variable XX% primarily higher to and

fund make we is are reach, fintech no quarter, smart sense accruals overall when below regions and platforms; this this that, have whatsoever investments expenses Brazil, dollar our enable Ambev's platforms returns managed transformation. X sharing XXXX, we've break growing leverage like worth our a to in and impact, in instance, saw the Despite to the second, the with find since it's near-term and spends exception given lines investments our of addition, comp what behind true to strategy. is doubt that inflation, nonworking that down we these savings also DXC And our great attractive ex we for opportunity And administrative future. scale overhead we for In we extent. these packages: see variable first, and packages do BXB, to transformation in in the more up to as find ways scale other and technology

second, which and net year tax XX.X% as levels hectoliter hectoliter top in on comp revenue Looking above consolidated XX.X%. is performance balance feel excluding revenue EBITDA XXXX line-led volumes part should ability in final one-off volume stands we healthy across improved approximately more are feasible. XXXX more year, above of nominal consolidated the a more ahead, months net the And ambitions the Year-to-date in for and X.X% Brazil. main the growth growing recovery EBITDA credits is year-to-date X recovery we terms deliver performance between QX: at normalized in per to first, full normalized the which continue given and per BRL markets. up see our our tough billion, nominal XX a in improved Year-to-date confident XXXX of terms, as despite for and in our

the does believe remains and improving we given so last invested several solid despite cash on of environment Finally, year, and uncertain Liquidity capital. comments approach but financial we've the some priorities prudent our generation volatile, our remain faced continue strong a protecting since headwinds to quick on liquidity warranted. return remains

coupled Our organically use-of-cash allocation operating excess of over terms resource nonorganically with company. efficiency invested priorities be the in also return of and And shareholders growth remain to return improving to and game better the unchanged, reinvest on continues time. across for cash the capital, name

has profiles, deliver been and their our manage such margin ventures, DXC of more also focus which on get than segments beyond margin profitability about better XXXX, to pressure. look and believe for in ratios margin XXXX of given more that of ratios we but thinking despite tough the ratios. behind evolution will drivers returns improving good bets the and to return profitability, sustained business to ratios our of different our me platforms, our was when we've each but is focusing on the We financial and is return dimensions, both wrong: business. important as focus we BXB, progress Don't need always Given XXXX fintech in news that, the potential terms on

continuous since long to Our you, value quarterly go well and This we towards XXXX, of term. the step stay Q&A. beyond the underway and goes creating over consistent Thank improvement journey can will course way step. is we by performance, and now

Operator

[Operator Ottenstein, Instructions] Our comes first Evercore. question Robert from

Robert Ottenstein

in competitor? portion a you such a or being of competitive by in have and walked what business beers, as are that? their what value of of at whole just categories, Brazilian does Great. value a away the what kind Spaten plus of you Brazil, going economy it when but some the mean of and core particularly the in competitive your a with look is There's talk an on kind their really about a have there core leading Can obviously business, abandoning bringing tell, -- terms lot what -- of kind there's you there's in from brands terms competitor unprecedented in I an major landscape; portfolio. dynamics background -- You're dramatic beer pricing change of you the change of noise a from proposition, in lot opportunities can apparently overall architecture, restructuring totally the kind a of as been -- in of

Jean Jereissati

we more accomplishing. on they that. landscape. general, Thank for with it of arrived, I competitive the lot I to some trends, the the that while, that excited you volumes Brazilian very landscape be that, we this been about have market very trends that point consumer on always working will has side. the we understanding very much been -- learning been a And for numbers our competitive plan, our mentioned when in a foresee The I just The quarter, Since competitive what continue have had we show at Robert. would question, in and time but are

at about If it look is you numbers, the not just competition.

We our expanding are already expanding of we of in products places. the our transaction number we brands, our so really picking really very the right reach, consumers represents XX% more [indiscernible] are about plan. in so the our net revenue, excited than right are Innovation

that So we about a segment Brazil really was a came lot Brahma was be segment this Malte the talking Duplo of big potential. have core very -- a the been underdeveloped the plus to that leader and has in that

have So one are they and we growing love. high XX%. brand more brands our year-to-date, electing brands new been of more Consumers the #X end as consistently is our [indiscernible] growing

consumers So consumers we had Delivery X for and XXXX's; are Zé the million that BEES convenience we in have and reach, more that customers. transformation, the all this technology, bringing

volumes our that really the came expanded is really figure our plan. it's seeing hard in going And about direction competitors really really exactly of that, moving So what's the are -- in we performance brands. on. of from out some to industry top about on the XXX%

is selling, of of so And is sure ahead much producing production they it the -- that and [indiscernible] the end, that. levels, if are we something we getting not of this and competitors, are a of at if I'm that are -- look something than really industry are XXXX we numbers really we when So right. less competitors, that's decision in

the are getting our it We towards and consumers And looks are more like consumers. more -- somehow customers brand.

going to keep eye we're looking an competitors. So on

been excited relation with but we for I with able how Net happen our are drive on Promoter to all-time-high have we really bonding industry expansion. think us, Score the are competitive and big opportunity that we about in really it's a anything how our we consumers, are how customers side,

Operator

Crédit Recchia, Suisse. Marcella from comes question next Our

Marcella Recchia

Jean, on on questions Lucas, X Brazil I have the congrats results. Beer.

to between given the First and secondly, you would second of about like loading. first is sell-out mismatch better have question. to quarter packaging saw I my about signs performance. after And the be would an extra understand announcing sell-in that any could the it's That in XQ price boost mid-September, late if, in volume supply. increase

is a industry, of constraints it the industry signs the period could constraints glass a even seen have for I globally. at seeing ahead risk in you become fourth of And would We packaging bottles both peaking which going forward. already cans are the like aluminum if and see any to if yes, or seasonal quarter, Brazil for

Jean Jereissati

the question, Thank you for Marcella.

inventory So is mitigates type volumes rolling that Brazil excited improvement the change XX-month good in about. we a QX -- very sequential in on a -- hectoliter. levels, graphic am of Ambev think net so I that our it graphic because brought think that that because yearly any I talk our to and they per amid a performance it were I happened rolling us revenue graphic volumes really basis, on really about of for was the XX-month of

with pretty QX then we sell-in -- the keep in-line price the are any an movement we announced, we that. very -- really So up -- it They really see of really sell-out, compare that, And of hectoliter in inflationary lot that don't revenue in are efforts when really didn't were that picked fast, the we I much Brazil that QX and living in was October. they than scenario faster increase, with I in QX: There inventories to the are compared expected. a net we the on market. feel per in

availability supply a been of sharp When industry more in seeing is able glass, a supply in to pandemic. the we canes pressured. to we it the and where come what have chain more we We coming. chain question, that And know chain. second supply to see way resolved heading pressure -- controlling is that because cans, were up is since your normalized very keep we with that been the of summer under cans have We are

in see glass the type some of are expected had extent more a lesser XXXX. XXXX disruptions somehow much in We in on this that to we normalization side, but

Lucas Lira

And there, Marcella. to Lucas, This Jean. add then is just

it bottles, like in right, bottle one capacity vertical, keep countries to that when think, to comes glass production I Brazil. mind have in thing is we

also gives a that us, adapt So long-term and supply right, -- chain source overall, suppliers. our addition the reliable with very to of pressure in to flexibility more in to relationships supply bottles and for

Jean Jereissati

our footprint And too we are leveraging global on that.

Operator

Our next question comes from Ricardo Alves, Morgan Stanley.

Ricardo Alves

I one Impressive of a had the competition numbers indeed. couple questions, follow-up side. on

to -- Jean, but alluded You on the this, competitor. main

the the than you of outperforming relative could regions be first outperforming main track, think for performing significantly system, can one you that competitors? I smaller other that specific example, my smaller perhaps at you performance so where regions part if significantly very look industry there and look numbers competitor, think seen was at the performing you're better performing that of from to as your specific you're first Could question. I differently, we don't even just know numbers I the you're question you're on above shed story. categories them? where players any a light the but is or when -- your well. mean, we Coke That's your We've Are how different

Jean Jereissati

Okay.

on more try let that. to elaborate So me

a just this on plan. you're based a lot So put if market share, our are to It's see and not market that little. is of of together, gaining we It's a our you going share. lot numbers

lot ago has it innovation a segment, X come too. -- off. bet plus Spaten core Brahma in the innovation paying we Duplo very a The was is think, really has that of Malte well is I come -- there years that did there.

the itself These on to very transform pandemic; well the levels, have we XXX customers. had with -- is This from very takeaway of had during to bottles. us format, pre-pandemic brought XXX,XXX small of performing the So we initiatives and too. strategy helping this trade affordable, ml

-- Now customers we in X million are QX. reaching billion X

So really our plan structural. is

the both have two, supply when because than produced not less working. of competitors, a have look It at producing really seem that it's restriction. it's sell. that XXXX below think to can a they I you plant is doesn't them, levels, you really we it already me And

to should hands. has customers consumers buy. So in The be your

So really commercial strategy consumers. that seducing feel acquiring really like is customers more I and more our

million strategy X have is I that more We going doing -- is so consumers, feel our okay.

to And if this And have the be right of all are type in volumes. myself right capabilities even investments prepared I question of for this capacity, really -- So more to announcement is potential put in that, the the upgrade years not just really did it's they to to sell. get -- that volume feel able and capacity this on the been X competitors, we listen increasing transaction last about the an competitors I if more time on that's market. a we really

So I think this is a big question for us.

of very Middle very growing well. East, doing are have Northeast, well all segments. the Middle the areas So that: how It's on Most West. selling we are We having amazing North, been said

So we was was a The core the are growing that really core that past. handicap going it we had -- in down.

we with really have brands Malte, plus segments. are growing X I'm our on is competitor, growing. Duplo like happy the really on competitive Brahma balanced We very commercial -- XXs, high-end I balanced really seeing now Bohemia, portfolio where We are and our Brahma, seeing kind segment the core And growth of is having when so created I'm -- year-to-date Spaten. a Antarctica shows Skol off. seeing we the that the regions looks really the side; strategy. our Besides really growth the in besides landscape, commercial in that strategy that macro our paying challenge I'm a very

Ricardo Alves

on the category thoughts of the price you're mind of far, wondering there mix we're are any should accepted, When front, that on they've able so you're thinking what quick very channels final even in any when how revenue question, performing on if latest have One we the also about Beer: how or so to thinking per because one Jean. revenue. color of I unit in increase. But October helpful, don't about mix quarter, Super share know helpful. been if interested on would be hectoliter, the Brazil increases, just that is price a major fourth are that more your the

Jean Jereissati

Okay.

[indiscernible]. end, and public October. do on disclosure the beginning forecasts the did we was it in It that So of don't much in that the we

So -- is the that we in it's what seeing so are market.

while. the been it's the really the exciting pretty that you that market, much is on-premise been shape that recovery a stronger can in around have we I doing has are So me, than tell the it and numbers -- same for anticipated. is is we What

point lot, transform. because, time, We Zé seeing occasion Delivery help deliveries. And the to out-of-home we they but now traction at them became bars the helped then getting some we again. platforms are and in social a are -- seeing takeaway to

pretty get is there in your to go bar. drink the you friends the and really and with So bars when much

seeing it. us, So we picking on really us occasion. And that strongly. we always faster This we is than And coming this really it's for back looks expected. that this foresee are help is occasion for this we very been And it. up occasion like profitable will designed have

we growing XXXX example, RGB we above RGB For than more sequentially they're really are foresee the XXXX in and mix, levels. bottles the they expect. And

Operator

Duarte, Thiago from comes BTG question next Pactual. Our

Thiago Duarte

Beer I discussion stick have Brazil X with will here. questions. I the

Beer on achieved. they of margins you should several mix we the higher The just in a inflation it price capturing years actual right question the to terms margins market lag Ambev's have continues the in premiumization share, relative said and points. of first evolving, share overall how of lot not unitary one to despite fair and than and the like nominal even terms, think Brazil in looks to market is basis But but Jean It particularly relative market even beer brands' share ago. is now, are were as you're that much not a point in Pricing of the now. terms

So the mentioned Jean, in healthier better the you portfolio, opening level. a remarks service --

should what You the market fair would relevant probably than point today. more so be how actual so your if I people, and mentioned million where your time far. capturing the I your that -- that look to share, for pricing between discussion power consumers, is you're lot into have guys price a a seen, XXXX, X reaching translate relative most you point more historically, into see in we share this we -- your you market brands wonder mean,

discussion the mentioned to I in the to ABI, even broad putting from of was see on market year. conference I striking the throat comps volumes share spite and many industry. share are looking question in for is that's including Brazil, the the And it I -- beer the second their industry aside, So last mean, us still have. call in aggregate gaining very they of think, how the markets, discussion is growing being tough but

capita how the course, per relative is if could relative of into growth other as category your would you to So beverages. future in the we terms on and before alcoholic consumption And to well. nice of comment sustainable, be in view, were to where hear

Jean Jereissati

let if Duarte. see get Okay, me I right, can this

Duarte, yes it's so -- So true.

expected, than with better a -- better gaining we are than numbers anticipated. we market share We put the we together, when all

competitors what of a with compare we market based when our strategy. QX, over lot are gains this doing, there So on share there is

We have in the core building plus end high segment. the been

a the in XXs. the gave beginning we of Beer [VIC] our low remember, at Brazil year, of guidance growing in you If the

So really on the based the on side overdelivered based work and pay the that consumers the -- based had on volumes we maintained year. -- the channels; this of mix was on are big in we really part -- and top -- hedges and because put on then that that really strategy It on hedging consumer And a coming. that mix. knew our our the yes, policies impact of it, so and, currencies innovation, in that, of our was it to health; pricing what this of can mix we that,

have in to we guidance kept able [VIC] -- been think we I our our numbers.

that we really beer to are share And fast. what premiumization then consumer this we So pricing like the that learning management somehow, happened revenue excited yes. whole are is have working have talking developing we a and So excited So I'm with really side, really us about revenue our in okay? to revenue us -- our is get hectoliter okay? we that, been pay have pricing been is with pandemic, And still really and that that So the ] and we would top Brazil develop really will maturity picked muscles we to that U.S. consumer we management. year, rates. the revenue very is yes, up this was And that looked but markets, throat -- our on One we will mention that continue we is I have that at industry and we very during thing on though When of base, need. of and guidance. lot we from West, really [ maintaining from up, the And believe these it our different the per per the initiatives. capita volumes with with to that that we commodity we have this we going very of lot granular to the the side are compare How level with help about and big is that the competitive All we what part believe said happening that on industry that so we're inflation innovation having that, the opportunity, have frequency, And a Brazil per inflation cashbacks. lot will for when top this the it On in project pilot beginning is continue guarantee increase a with the management something a of the us. capita we the it decisions, to is that, in discounts still year, And of on per we inflation Brazil. lots on we was the side even this picking of -- yes, to more customers the future, have of we on are the are on way industry: to very and the expansion on a São equation, that and are follow we transformation a to guarantee peaked having of better, that Middle on our still looked of that When strategy. they consumption. next we above that, stay. to type possibilities right basket fintech a opportunities things reference ability believe consumers how the will BEES. and coming And and the of react looked side, new side our follow and world -- -- to our frequency, Paulo regions. capita. something for really at that getting have trade-off On we a of equation to be of a lot develop

Mike's In a the we think us still put excited And in beverage -- that and on what's share-of-throat going view, are in of are the our here on Brazil brand. that, future business is to we very per we working learn and future. for the So consumption in really in opportunity I the is Canada. moving a more of the about U.S., huge industry unit of and expansion top on capita beyond this beer place, just in

bringing RTDs. We are

lot are that share really this per avenue in And continue Its accretive. of is on another to about hectoliter side. -- to that is grow there is higher. we growth of of bringing wine that excited I'm We cans. And throat revenue a really opportunity on net

Operator

from question Simonato, Our of comes Bank America. next Isabella

Isabella Simonato

I have X questions. Lucas, Jean,

liquidity all, pressures FX thinking the seeing depreciation would guidance you're could And understand and in expect of timing potential but to Brazil. reform you given costs versus second increase a balance we cash all, be we I us protecting shareholders, BRL, you about in XXXX, Lucas, in if guys understand guys And about only to think of on the the an cost recent that if that mentioned a XXXX? of about year. are the next year but sheet. in have right, to time, not on the returning you hedges presentation, helpful in about the the how thinking you right, will of this your and terms year, tax How give could in the beginning of First release color where especially same

Lucas Lira

predictability, particularly fairly adapt commodities, do evolved the Isabella, thank to give throughout hedging was of the is with of We time kind the will okay, a this hedge is that time the our here to all that XXXX, BRL that, right? how right, of for Starting And for there's some going should less Argentina. be on and XXXX and right, from although, forward. in issue, input basis as message XXXX rolling you've scenario, work all underway. is especially kind important Brazil what the year because be of I us hedging say happening to to the at an and was right, FX you sure as the as the prepare, time, I'm following, headwind can seeing as give need by the but point outlook, of we're today FX, continue the first hedging it we under year, And followed main what us policy cost volatile, still question. in remains, think costs to before been of end

be right, the continue XXXX, on all said, the work into the as going to starting recovers, things contributed commodity has the one a the the is QX; visibility And expect once things to FX So last returnable my us has done, in end the on-premise not to in in to we and again is from we in mentioned we and a the favorably to hope I to results. our it will -- in healthy our hope mix As And expected, that our bottles, of February as so to commercial than the unhedged in mix you mix of a do said, more in That of the opening XXXX all XXXX play mix COGS from right? okay? in way, mix remarks, And favor. evolving better-than-expected less of play the provide of again hedging come to see side the one back right, our exposure. with still going also coming full there's a at picked when then picked least, year commodities. I hopefully, role I up, team the helped offset up as case some in better be us mix, QX, impact again pressure XXXX but that more to -- in has glass could continues what pressure, favor. that that think position the to into we extent respect also as good And helped performance job announce

decision. over for the of terms to This time. shareholders second returning is question, excess year-end cash a As in

my to allocation So we capital as about we continue under work, terms I mentioned remarks, of paradigm the in in think same how the in company.

growth, #X, reinvest priority in be all to it right, nonorganically. it be So remains organically,

conversation year-end a So have then that's And addition, excess that -- hasn't will changed. time, shareholders cash Board. with will the to to in we Ambev more return that's over we of but continue a that

Operator

Our Sachs. next comes Bortoluci, question Goldman from Thiago

Thiago Bortoluci

for results. Congrats the

in Just more hectoliter bit in revenue growth Brazil a details. trying per your up to add

call on-trade the the average into impacts the of mix positive your right. guys prices, You mentioned in earlier

for I in guidance Beer, more sequentially fourth accelerate? it that when should still hectoliter the see we Can for And terms mind is a hectoliter quarter, were Brazil up drivers per bearing net the overall expect but there? decelerating. the should but sequential in for I revenue cash what details trends, quarter, you per please up break have deceleration However, in don't sequentially we in know of the COGS what

Jean Jereissati

Yes.

really the be yes. to very the will have best honest, we market, the strategy So management get nimble revenue always learn agile, everything. for -- -- year, our end opportunities started to in And mentioning And we the have when very been June regions. that to us we be with this in

very trying up catch to were picked So -- we up so the inflation this we and move. fast, as decision or

that So the it of in was that not was something planned beginning -- year. the

And net revenue very somehow, really to like see happy to in hectoliter this the QX we context per were peaking. --

that, the year type to if So better when this price the QX, look elasticity have And HX What compare. you it's accelerating I saw -- in with is that when we of we not, come this this increase, brands compared QX. it really happy moving and basis tell revenue have QX, of algorithm or was type an last than equation we stronger. can And per that volumes, or it that our very with we suggests you, hectoliter so where it that -- equation. to volumes expectations, this us. We and that was our net are more are with had we which with equation above that surprised of the with type

so is that market. in it's I happen. right, what we planned -- the the really to this for to that us made it is do announced. We accordingly. was the more was said It's having So do year substantial. think really in It the beginning And It public, October -- move of was yes.

Thiago Bortoluci

on a the I follow-up That's just clear. may, delivery. If

mix volumes reported far? flattish You or right? cannibalization thus some in of the essentially reopening change early with signs quarter-on-quarter, Any

Jean Jereissati

Okay.

me So get Donus. about and talk will then talk technology and your platforms. BEES let Zé I the to jump I about will into question

Delivery is it. So yes, the very Zé path. really It's are we on excited about -- right

bit the little -- a all stopped city strategy all we for expansion really to the so -- have us we get our So right.

really Zé but more omnichannel on So We change really to that not Delivery the our cities less the just journey see more we expected. piece [ of spanned all with have the project, than much convenience ] think the Delivery, did about but consumers. thinking more we we that be to on not plan and is Zé

back lot on we the are the working the cities. efficiencies. starting expansion And a are last-mile We on

that these X that the these a something are then will it's doing the to you things, that pretty happened is we lot, were the And expansion is omnichannel, -- it that on working, things, efficiency. major Delivery for And Delivery, average mix So we the it one we in-home the and fronts grow to have last-mile Zé really really with but RGB So will That that business -- that on continue success occasion get the have of by to that's know: in the just term. already long And city information ahead are time. able same Zé that company. in Zé it we a of focused to Delivery. -- are city and X sustainable we something much have focusing,

of So it returnable get XX% of mix back. Delivery because, takes coming and the is the already bottles motorbike, Zé -- bottles from the it

is So about that. really really so machine excited are we working, this

it, grow. occasions; next restart the It's right. and in will last-mile omnichannel; with level place, going really more to of So Zé having in the really expansion; Delivery terms more get efficience, is be the

that buyers a mentioned talked in billion Ambev So like of to already GMV BEES. platform, our a X.X thing are of marketplace XX% in really I would achieved about lot I that we active is many one that mention annualized that we times the in BEES.

So just Ambev's not products portfolio. mentioning the from that are

something partnership partnership is is doing the different And that very like with and because doing. this So well. is I we are from what announced we mention BRF, yesterday, would this just to

We PL. one this have the been doing pretty much

the X excited what customers is a about is that doing. growing a with base now year-to-date. this providing direct, to buy. one use us. XXX,XXX but will really with go So goes that sell. was BRL million we the And Software, BEES of then first are really have platform Software Donus, our something that as is TPV BRF in their fintech, around to billion with order really customers X service of warehouses, access have of BRF we a and really BEES And is taking. their is a And will to It on has So the is fast, BRF We as okay? BRF. that a BRF through So contract really it palmtops. have they And this software we the a BEES sales was really Service it, I'm are -- so okay? end different of very on will a deal Service, they the providing one their and third customers from reps, And very with

sequentially. XXX really million It's So just BRL TPV. tripling in QX, we in have

wallets. the take downloaded We we that rates. machines, really the on working are the And customers have XXX,XXX

management our We the of really credits moving discounts and the are into customers revenue and cashbacks. really and trade-offs for doing

So initiatives, a to these They really lot our company. sizable. excited. getting are X They of I'm beginning very bring really value for are

Operator

to floor his for to turn This like concludes closing today's Q&A the I remarks. Mr. Jereissati would session. over

Jean Jereissati

all but about bonding with Brazil I'm our invested just lot, everyone the to for So really thank on recovery. comps and we sizable. here solid anticipated Also in And also will that QX, the quarter. a all even for I top invested seeing journey. and the and on seeing ventures. brand joined will transformation the our long countries to tech team We ventures, once thank continue remains as the And return we'll and the in on invested operate. a year consumers the call, to that become wrap and In we part We delivering want in would to portfolio equity momentum, on our sight a term that I'm this very through excited analysts investments to the to doing of would again, we up. the we continue that who are despite generation again of like tough -- my And having our healthy I transformation in attention. continue that to I'm capacity. Not are relationship year, we and and lose talked time full more we work now. the portfolio our we which maintain Cash towards tech invest consumers. commercial not line the grow the in

thank great And See next So have you a you very year. much. day.

Operator

participation, Thank conclude your day. have Ambev's call you good today. much does That very conference a for for and

Ambev (ABEV) 29 Oct 212021 Q3 Earnings call transcript