Q3 2022 Anheuser Busch Inbev SA Earnings Call

October 27, 2022

Speaker 1: Vamos creo.

[Company Representative] (Anheuser-Busch InBev): Vamos, carajo.

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Operator: Welcome to Anheuser-Busch InBev's Q3 2022 Earnings Conference Call and Webcast. Hosting the call today from AB InBev are Mr. Michel Doukeris, Chief Executive Officer. Mr. Fernando Tennenbaum, Chief Financial Officer. To access the slides accompanying today's call, please visit AB InBev's website at www.ab-inbev.com and click on the Investors tab in the Reports and Results Center page. Today's webcast will be available for on-demand playback later today. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. If you should require operator assistance, please press star zero.

Speaker 2: to Anheuser-Busch InBev's third quarter 2022 earnings conference call and webinar.

With the Anheuser Busch Inbev third quarter 2022 earnings conference call and webcast.

Speaker 2: Hosting the call today from AB and BEV are Mr. Michelle Ducaris, Chief Executive Officer, and Mr. Fernando Tenenbaum, Chief Financial Officer.

Hosting the call today from AB Inbev are Mr. Michel do terrorists, Chief Executive Officer, and Mr. Fernando Tennenbaum, Chief Financial Officer.

Speaker 2: To access the slides accompanying today's call, please visit AB InBev's website at www.ab-inbev.com and click on the Investors tab in the Reports and Results Center page. Today's webcast will be available for all of you.

To access the slides accompanying today's call. Please visit AB Inbev website at Www Dot AB Inbev dot com and click on the investors tab and the reports and results Center page.

Today's webcast will be available for on demand playback later today.

Speaker 2: At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions.

At this time, all participants have been placed in a listen only mode and the floor will be opened for your questions. Following the presentation.

Speaker 2: If you would like to ask a question at that time, please press star one on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. If you should require operator assistance, please press star zero.

If you would like to ask a question at that time. Please press star one on your Touchtone phone.

If at any point. Your question has been answered you named remove yourself from the queue by pressing star two.

If you should require operator assistance, please press star zero.

Operator: Some of the information provided during the conference call may contain statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. It is possible that AB InBev's actual results and financial condition may differ, possibly materially, from the anticipated results and the financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect AB InBev's future results, see Risk Factors in the company's latest annual report on Form 20-F, filed with the Securities and Exchange Commission on 18 March 2022. AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information.

Operator: Some of the information provided during the conference call may contain statements of future expectations and other forward-looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties. It is possible that AB InBev's actual results and financial condition may differ, possibly materially, from the anticipated results and the financial condition indicated in these forward-looking statements. For a discussion of some of the risks and important factors that could affect AB InBev's future results, see Risk Factors in the company's latest annual report on Form 20-F, filed with the Securities and Exchange Commission on 18th March 2022. AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information.

Some of the information provided during the conference call may contain statements of future expectations and other forward looking statements. These expectations are based on management's current views and assumptions and involve known and unknown risks and uncertainties.

Speaker 2: These expectations are based on management's current views and assumptions and involve known and unknown risks and...

Speaker 2: It is possible that AB embeds actual results in financial condition may differ, possibly materially from the anticipated results and the financial condition may vary.

It is possible that AB inbev actual results and financial condition may differ possibly materially from the anticipated results and financial condition indicated in these forward looking statements.

Speaker 2: For a discussion of some of the risks and important factors that could affect AB and BEV's future results, see risk factors in the company's latest annual report on Form 20-F filed with the Securities and Exchange Commission on the 18th of March, 2012.

For a discussion of some of the risks and important factors that could affect AB inbev future results see risk factors in the company's latest annual report on form 20-F filed with the Securities and Exchange Commission on the 18th of March 2022.

Speaker 2: and be in bevassim, no obligation to update or revise any forward looking information provided during the conference call. And Sean Opie liable for any action taken and reliant some-

<unk> assumes no obligation to update or revise any forward looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information.

Operator: It is now my pleasure to turn the floor over to Mr. Michel Doukeris. Sir, you may begin.

It is now my pleasure to turn the floor over to Mr. Michel <unk>, Sir you may begin.

Michel Doukeris: Thank you, Jesse, and welcome everyone to our Q3 2022 Earnings Call. It is a great pleasure to be speaking with you all today. Today, Fernando and I will take you through our Q3 operating highlights and provide you with an update on the progress we've made in the execution of our strategic priorities. After that, we'll be happy to answer your questions. Let's start with our Q3 operating performance. We are very pleased with the continued momentum of our business and the strength of the beer category across our footprint, even in the context of the ongoing dynamic operating environment. Our volume momentum accelerated this quarter, driven by strong consumer demand for our brand portfolio, ongoing digital transformation, and increased investment in our brands. We delivered our best quarterly volume performance this year with 3.7% volume growth.

Speaker 3: Thank you, Jesse, and welcome everyone to our third quarter 2022 earnings call. It is a great pleasure to be speaking with you all today.

Thank you Jesse.

Welcome everyone to our third quarter 2022 earnings call.

Great pleasure to be speaking with you all today.

So David will take you through our third quarter operating highlights and provide you with an update on the progress we've made in the execution of our strategic priorities.

Speaker 3: Today Fernando and I will take you through our third quarter operating highlights and provide you with an update on the progress we've made in the execution of our strategic priorities.

Speaker 3: After that, we'll be happy to answer your questions.

After that we'll be happy to answer your questions.

Speaker 3: Let's start with our third quarter operating performance.

Let's start with our third quarter operating performance.

Speaker 3: We are very pleased with the continued momentum of our business and the strength of the beer category across our footprint, even in the context of the ongoing dynamic operating environment. Our volume of momentum oscillates throughout one second.

We are very pleased with the continued momentum of our <unk>.

And the strength of the beer category across our footprint even in the context of the ongoing dynamic operating environment, our volume momentum accelerated in this quarter.

Speaker 3: driven by strong consumer demand for our brand portfolio, ongoing digital transformation and increases investment in our brands. We delivered our best quarter volume performance this year, with 3.7% volume growth.

Driven by strong consumer demand for our brand portfolio.

In digital transformation and increasing investments in our brands, we delivered our best quarterly volume performance this year with three 7% volume growth.

Michel Doukeris: Revenue per hectoliter increased by 8%, driven by revenue management initiatives and premiumization across the majority of our markets, resulting in top line growth of 12.1%. EBIT increased by 6.5% as our top line growth was partially offset by anticipated transactional effects, commodity headwinds, and increased sales and marketing investments in our brands. Normalized EPS was $0.81 and underlying EPS was $0.84. As a result of our performance and continued momentum, we are raising the bottom end of our 2022 EBITDA growth outlook from 4% to 8% to 6% to 8%. Our medium-term outlook remains unchanged. This quarter, we once again delivered broad-based growth with a top line increase in all five of our regions and volume growth in over 60% of our markets.

Speaker 3: Revenue per hectolitre increased by 8%, driven by revenue management initiatives and pre-munization across the majority of our markets, resulting in top-line growth of 12.1%.

Revenue per hectoliter, increasing by 8% driven by revenue management initiatives and premium amortization across the majority of the Florida markets, resulting in top line growth of 12, 1%.

Speaker 3: EBITDA increased by 6.5% as our top line growth was partially offset by anticipated transactional effects and commodified headwinds and increased sales and marketing investments in our brand.

EBITDA increased by six 5% as our topline growth was partially offset by anticipated transactional FX and commodity headwinds and increase in sales and marketing investments in our brands.

Speaker 3: Normalized DPS was 81 cents and the underlying DPS was 84 cents.

Normalized EPS was <unk> 81.

And the underlying EPS was <unk> 84.

Speaker 3: As a result of our performance and continued momentum, we are raising the bottom end of our 2022 EBITDA growth outlook from 4% to 8% to 6% to 8%. Our medium-term outlook is about 0.5% to 0.5% in the EBITDA growth outlook.

As a result of our performance and continued momentum we are raising the bottom end of our 2022 EBITDA growth outlook from 4% to 8% to 6% to 8%.

Our medium term outlook remains unchanged.

Speaker 3: This quarter, we once again deliver broad-based growth with a top-line increase in all five of our regions, and volume growth in over 60% of our...

This quarter, we once again delivered broad based growth with a topline increase in all five of our regions and volume growth over 60% of our markets.

Michel Doukeris: Our diverse geographic footprint provides a unique combination of growth and reliable cash flow generation, positioning us well to deliver superior value creation. Now, let me share some highlights from our key markets. In the US, the beer industry remains resilient, with volume trends improving throughout the year in all major beer segments, even in the current inflationary environment. Our business delivered another quarter of top line growth and strong cash flow generation. Our Above core beer portfolio outperformed the industry, gaining share within the segment for the third quarter in a row, led by Michelob ULTRA, which grew volumes by double digits. Our SPR volumes declined by 1.7%, estimated to be below the industry. Within the spirits-based ready-to-drink segment, our portfolio continued to outperform the industry, with both Cutwater and NÜTRL growing a strong double digits.

Speaker 3: Our diverse geographic print provides a neat combination of growth and reliable cash flow generation, positioning as well to deliver superior value creation. Now, let me share

Our diverse geographic footprint provides a unique combination of growth and the reliable cash flow generation positioning us well to deliver superior value creation.

Now, let me share some highlights from our key markets.

Speaker 3: In the US, the beer industry remains resilient, with volume trends improving throughout the year in all major beer segments, even in the current environment.

In the U S. The beer industry remains resilient with volume trends improving throughout the year.

All major beer segments, even in the current inflationary environment.

Speaker 3: Our business delivered another quarter of top-line growth and strong cash flow generation.

Our business delivered another quarter of topline growth and strong cash flow generation.

Speaker 3: Our above court be a portfolio outperformer the industry gain share within the segment for the third quarter in a row led by Nicola Boltrer which grew volumes by double

Our above core beer portfolio outperformed the industry gaining share within this segment for the third quarter in a row led by Nicola Ultra which grew volumes by double digits.

Speaker 3: Our FTR volume declined by 1.7%, estimated to be below the age.

Our STR volumes declined by one 7%, we estimated to be below the industry.

Speaker 3: Within the experience-based ready-to-drink segment, our portfolios continue to outperform the industry. With both, cut water and neutrals growing, its strong double-dip.

We didn't experience based ready to drink segment, our portfolio continued to outperform the industry, which both cut watering neutral growing at strong double digits.

Michel Doukeris: We continue to make progress in our commercial strategy, with over 40% of our revenues now coming from Above Core beer and Beyond Beer brands. In Mexico, we accelerated our market share gains and delivered a third consecutive quarter of double-digit top and bottom line growth. Our volumes grew by more than 10%, with growth across all segments of our portfolio, led by a bold core, which delivered volume growth in the high 20s. In Colombia, we delivered double-digit top and high single-digit bottom line growth and continued to expand the beer category, again, reaching all-time high per capita consumption. We delivered volume growth across all segments of our portfolio, with our premium and super premium brands growing volumes in the high teens, reaching all-time high volume and share of our total revenue. Our business in Brazil delivered double-digit top and bottom line growth with EBITDA margin expansion.

Speaker 3: We continue to make progress in our commercial strategy, with over 40% of our revenues now coming from above-core beer and beyond-beer brands.

It continues to make progress in our commercial strategy, we fulfilled 40% of our revenues now coming from our both quarter beer and beyond beer brands.

Speaker 3: In Mexico, we accelerated our market share gains and delivered a third consecutive quarter of double-digit top and bottom line gains.

In Mexico, we accelerated our market share gains and delivered a third consecutive quarter of double digit top and bottom line growth.

Speaker 3: Our volumes grew by more than 10% with growth across all segments of our portfolio, led by a both core which delivered volume growth in the high 20s.

Our volumes grew by more than 10% with growth across all segments of our portfolio led by our both core which delivered volume growth in the high Twenty's.

Speaker 3: In Colombia, we deliver double digit top and high single digit bottom line growth and continue to expand the beer category, again reaching all-time high per capita consumption.

In Colombia, we delivered double digit top and high single digit bottom line growth and continued to expand the beer category again, reaching all time high per capita consumption.

Speaker 3: We deliver volume growth across all segments of our portfolio. With our premium and super premium brands growing volumes in the high teams, reaching all-time high volume in share of our total revenue.

We delivered volume growth across all segments of our portfolio with our premium and Super premium brands growing volumes in the high teens, reaching all time high volume and share of our total revenue.

Speaker 3: Our business in Brazil delivers double-digit top and bottom line growth with a beta margin of 0.5%.

Our business in Brazil delivered double digit top and bottom line growth.

Did the margin expansion.

Michel Doukeris: Our premium and super premium brands continued to outperform this quarter, delivering high single digits volume growth. Total beer volumes were flat as we cycled a strong performance year-over-year. Digital transformation continued to make progress, with over 70% of our B2B customers now also B2B marketplace buyers and our digital Zé Delivery product reaching 4.3 million monthly active users. In Europe, we grew top line by double digits, driven by volume growth, revenue management initiatives, and on-premise recovery. Our portfolio continues to premiumize with growth this quarter led by our premium and super premium brands. EBITDA declined by mid-single digits as top line growth was offset by elevated cost pressures and increased sales and marketing investments to support our premium strategy in FIFA World Cup activations. Our business in South Africa grew both top and bottom line by double digits this quarter.

Speaker 3: Our premium and super premium brands continue to outperform this quarter, delivering high single digits volume growth.

Our premium and superpremium brands continue to outperform this quarter delivering high single digit volume growth.

Speaker 3: Total VF volumes were flat as we cycled a strong performance year over year.

Total VF volumes were flat as we cycle, a strong performance year over year.

Speaker 3: Digital transformation continues to make progress, with over 70% of our Biz customers, now also Biz marketplace buyers, and our digital Z-delivery product reaching 4.3 million monthly active users. In Europe , we..

Digital transformation continues to make progress with over 70% of all of these customers now also be as marketplace buyers and our digital does that delivery product, reaching $4 3 million.

Monthly active users.

In Europe , we grew top line by double digits.

Speaker 3: driven by volume growth, revenue management initiatives, and on-premise recovery.

By volume growth revenue management initiatives and the on premise of recovery.

Speaker 3: Our portfolio continues to premiumize, with growth this quarter led by our premium and super premium brands.

Our portfolio continues to premium nights with growth this quarter led by our premium and Super premium brands.

EBITDA declined by mid single digits.

Speaker 3: As stop line growth was offset by elevated cost pressures and increased sales and market investments to support our premium strategy in FIFA World Cup activation.

Topline growth was offset by elevated cost pressures and increased its sales and marketing investments to support our premium strategy in FIFA World Cup Activations.

Speaker 3: Our business in South Africa grew both top and bottom line by double digits this quarter.

Our business in South Africa grew both top and bottom line by double digits this quarter we.

Michel Doukeris: We delivered growth across all segments of our portfolio, led by over 30% revenue growth in our leading core brand, Carling Black Label. Our premium, super premium, and beyond beer portfolios all delivered a double-digit increase in volumes. We are investing in capacity expansion to support our growth in South Africa. In China, COVID-19 restrictions continued to disproportionately impact our key regions and sales channels. Underlying consumer demand remains consistent, with volumes growing by 3.6%. We continue to invest in our strategy, geographic expansion, premiumization, and digital transformation. In our priority expansion cities, excluding those impacted by restrictions, Budweiser and our super premium portfolio grew volume by double digits. Premiumization of the beer industry in China remains an exciting long-term value creation opportunity.

Speaker 3: We deliver growth across all segments of our portfolio, led by over 30% revenue growth in our leading program, Carlin Black Label.

We delivered growth across all segments of our portfolio led by over 30% revenue growth in our leading card brand Carling Black label.

Speaker 3: Our premium, super premium and beyond beer portfolios all deliver a double digit increase in volume.

Our premium Super premium and beyond beer portfolios, all delivered a double digit increase in volumes.

Speaker 3: We are investing in capacity expansion to support our growth in Salta.

We are investing in capacity expansion to support our growth in South Africa.

Yes.

Speaker 3: In China, COVID-19 restrictions continue to disproportionately impact our key regions and sales channels.

In China, COVID-19 restrictions continue to disproportionately impact our key regions and sales channels.

Speaker 3: Underlying consumer demand remains consistent with volumes growing by 3.6.

Consumer demand remains consistent with volumes growing by three 6%.

Speaker 3: we continue to invest in our strategy, geographic expansion, premiumization and digital transformation.

We continue to invest in our strategy geographic expansion, bringing innovation in digital transformation.

Speaker 3: in our priority expansion series, excluding those impacted by restrictions.

In our priority fix patient series, Inc. Excluding those impacted by restrictions Budweiser and our Super premium portfolio grew volume by double digits.

Speaker 3: but wiser and our super premium portfolio grew volume by double dish.

Speaker 3: premiumization of the beer industry in China remains an exciting long-term value creation approach.

Premium amortization of the beer industry in China remains an exciting long term value creation opportunities.

Michel Doukeris: We continue to make progress across our ESG priorities, with highlights this quarter including, in recognition of our global water stewardship initiatives, we are proud to recently be included on Fortune's Change the World list. We have achieved carbon neutrality at eight facilities to date and continue to drive deep decarbonization across our value chain. We brought together key packaging and raw material suppliers that account for over 50% of our Scope 3 emissions to share best practices and take collective climate action through our global supplier collaboration initiative called Eclipse. Now, let's move on to our strategic pillars. Let's start with pillar one of our strategy, lead and grow the category. Our creative marketing capabilities continue to be recognized.

Speaker 3: We continue to make progress across our ESCG priorities. We highlight this quarter includes

We continue to make progress across our ESG priorities, we highlight this quarter, including.

Speaker 3: In recognition of our global water stewardship initiatives, we are proud to recently be included on Fortune's Change the World list.

In recognition of our global water stewardship initiatives, we are proud to recently being fluid on fortune's change the world list.

Speaker 3: We have achieved carbon neutrality at eight facilities to date and continue to drive deep decarbonization across our value.

We have achieved carbon neutrality at eight facilities to date and continue to drive deep de carbonization across our value chain.

Speaker 3: We brought together key packaging and raw materials suppliers that account for over 50% of our scope 3 emissions to share best practices and take collective climate action through our global supplier collaboration initiative called ECLIPSE.

We brought together keep packaging and raw material suppliers that account for over 50% of our scope three emissions to share best practice and fake collective climate action to all global supply of collaboration initiatives called Eclipse.

Now, let's move on to our strategic pillars.

Speaker 3: Let's start with pillar one of our strategy, lead and grow the category.

Our creative marketing capabilities continue to be recognize it.

Speaker 3: Our creative marketing capabilities continue to be recognized.

Michel Doukeris: Following our best ever performance at this year's Cannes Lions International Festival of Creativity, we were recently named as the world's most effective marketer in the Global Effie Index for the first time. This combination of best-in-class creativity, brand building capabilities, and effective marketing are driving strong consumer connections with our brands and enabling our accelerated top line growth. A big congratulations to our teams and partners for this extraordinary achievement. We continue to execute on our five levers to drive category expansion. By making the category more inclusive, offering superior core propositions, developing consumption occasions, and expanding our premium and beyond beer portfolios, we delivered another quarter of consistent and profitable top line growth. Our global brands continue to drive premiumization across our markets.

Speaker 3: Following our best ever performance at this year's Ken Lyons International Festival Creativity, we were recently named as the world's most effective market.

Speaker 3: in the Global F-Exiveness Index for the first time.

Speaker 3: This combination of best-in-class creativity, brand building capabilities, and effective marketing are driving strong consumer connections with our brands and enabling our accelerated top-line growth.

Speaker 3: A big congratulations to our teams and partners for this extraordinary...

Congratulations to our teams and partners for this extraordinary achievement.

Speaker 3: We continue to execute on our five levers to drive category expansion.

Speaker 3: and by making the category more inclusive, offering superior corporate positions.

Speaker 3: developing consumption occasions, and expanding our premium and beyond beer portfolios, we delivered another quarter of consistent and profitable top-line growth.

Speaker 3: Our global brands continue to drive premonization across our markets. The combined revenues

Our global brands continued to drive premium amortization across our markets.

Michel Doukeris: The combined revenues of Corona, Stella Artois, and Budweiser grew by 12.7% outside of the brand's home markets, led by Corona with 23.5% growth. To illustrate how our portfolio development and execution are driving growth, I would like to take you through 3 examples from our market expansion model. Let me start with an emerging market example, Zambia. In emerging markets like Zambia, our primary objective is to make the category more inclusive. By developing superior core propositions, introducing premium and beyond beer brands, over the last 5 years, we have expanded our portfolio with a broader range of offerings, expanding price in different segments and consumption occasions. Per capita consumption of the formal beer category has increased by approximately 2 liters, with significant headroom for growth.

The combined with revenues of Corona, Stella Artois, and Budweiser grew by 12, 7% outside of the Brands' home markets led by Corona with 23, 5% growth.

Speaker 3: Stelartois and Budweiser grew by 12.7% outside of the brands home market.

Speaker 3: led by Corona with training 3.5% growth.

To illustrate how our portfolio development and execution are driving growth I would like to take you through three examples from our market expansion model.

Speaker 3: To illustrate how our portfolio development and execution are driving growth, I would like to take you through three examples from our market expansion model.

Speaker 3: Let me start with an emerging market example, ZAMDA.

Let me start with some emerging market example.

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Speaker 3: In emerging markets like Zambia, our primary objective is to make the category more inclusive.

We are emerging markets like Zambia, our primary objective is to make the category more inclusive.

By developing superior court for positions introducing premium and beyond beer brands over the last five years, we have expanded our portfolio with a broader range of offerings spanning price in different segments and consumption occasions.

Speaker 3: introducing premium and beyond beer brands. Over the last five years, we have expanded our portfolio with a broader range of offerings, expanding price in different segments and conceptual.

Speaker 3: Per capita consumption of the formal beer category has increased by approximately 2 liters with significant

Per capita consumption of the form will be a category has increased by approximately two liters, we have significant headroom for growth.

Michel Doukeris: While still in the early stages of premiumization journey, our above core portfolio has increased its share of our revenue by over 300 basis points to reach approximately 23% today. Category expansion and market share gains have resulted in the consistent growth of our business, increasing volumes at an 8.7% CAGR since 2018. Now let's take a look in one of the key developing markets in our portfolio, Mexico. By consistently investing in our portfolio development, we are unlocking the full potential of the beer category. We are now offering a more complete range of brands and packs across core to reach more consumers in more occasions and leading the development of premium and beyond beer segments. The development of the business in Mexico is truly remarkable.

Speaker 3: While still in the early stages of the renaming journey, our above-core portfolio has increased its share of all revenue by over 300 base points to reach approximately 23% today.

Why is stealing the early stages of realization journey.

Or are both core portfolio has increased the share of our revenue by over 300 basis points to reach approximately 23% to date.

Speaker 3: Category expansion and market share gains have resulted in the consistent growth of our business, increasing volumes at an 8.7% gager since 2010.

Category expansion and market share gains have resulted in the consistent growth of our business increasing volumes at eight 7% CAGR since 2018.

Speaker 3: Now let's take a look in one of the key developing markets in our portfolio.

Now, let's take a looking one of the key developing markets in our portfolio Mexico.

By consistently investing in our portfolio development, we are unlocking the full potential of the beer category.

Speaker 3: By consistently investing in our portfolio development, we are unlocking the full potential of the beer category. We are now offering a more complete range of brands and packs across core to reach more consumers in more occasions and leading the development of premium and beyond beer segments.

We are now offering a more complete range of brands impacts across court to reach more consumers in more occasions in leading the development of premium and beyond beer segments.

Speaker 3: The development of the business in Mexico is truly remarkable.

The development business and that is truly remarkable.

Michel Doukeris: Beer per capita consumption continues to grow, and our volumes have consistently outperformed the industry, growing at 5.6% CAGR since 2017. Our core brands continue to lead the industry, while our above core portfolio is leading premiumization. Now moving on to an example from one of our developed markets, the US. In the US, we are at half time of our 10-year plan to rebalance the portfolio towards the growing segments of the market. Five years ago, the portfolio was over-indexed to declining segments in the industry. Today, as we continue to rebalance and enhance our portfolio, we are better positioned across all segments of the market. To accelerate growth, we are focused on our priority mega brands. Within mainstream over the last five years, we stabilized our share.

Speaker 3: Beer per capita consumption continues to grow and our volumes have consistently outperformed the industry, growing at 5.6% CAGR since 2017.

Per capita consumption continues to grow and our volumes have consistently outperformed the industry growing at five 6% CAGR since 2017.

Speaker 3: Our core brands continue to lead the industry, while our above-core portfolio is leading pre belt market.

Our core brands continue to lead the industry, while our both core portfolio is leaving for immunization.

Speaker 3: And now, moving on to an example from one of our developed markets, the US.

And now moving onto an example for one of our developed markets.

Yes.

Speaker 3: In the US, we are at half time of our 10-year plan to rebalance the portfolio towards the growing segments of the market.

In the U S. We're at halftime of our 10 year plan to rebalance the portfolio towards the growing segments of the market.

Speaker 3: Five years ago, the port phone was over-indexed to the crime segments in the industry.

Five years ago, the portfolio was over indexed to declining segments in the industry today.

Speaker 3: Today, as we continue to rebalance and enhance our portfolio, we are better positioned across all segments of the market.

To date as we continue to rebalance and enhance our portfolio, we had a bad debt position across all segments of the market.

To accelerate growth, we are focused on our priority Mega brands.

Speaker 3: To accelerate growth, we are focused on our priority, Megabread.

Speaker 3: We've been mainstream over the last five years. We stabilize the door shut.

We've been mainstream over the last five years, we stabilize the dollar share.

Michel Doukeris: Busch Light is one of the top 5 share gainers in beer industry since 2019 and has gained share of beer for the last 15 quarters in a row. Bud Light remains the number one brand in volume and brand power. Our above core portfolio continues to improve performance and is gaining share in the last 3 quarters. Michelob ULTRA doubled volume in the last 5 years, becoming the second-largest brand in the industry and continues to grow double digits. In the premium segment, Stella Artois, Kona Big Wave, and Estrella Jalisco are growing volumes in the high single digits. Within beyond beer, we now have two of the strongest propositions in the fastest-growing spaces of the category with Cutwater and NÜTRL. In 2017, 27% of our revenues came from the above core and beyond beer segments.

Speaker 3: Bush Life is one of the top 5 shargamers in beer industry since 2019.

<unk> is one of the top five share gainers in beer industry since 2019.

Speaker 3: and has gained its share of beer for the last 15 quarters in a row.

And has gained its share of beer for the last 15 quarters in a row.

Speaker 3: But life remains a number long branding volume and brand follow.

Bud light remains the number one brand in volume and brand power.

Speaker 3: Our above core portfolio continues to improve performance and is gaining share in the last 1.6 million computers over every 50 years and

Our above core portfolio continues to improve performance and is gaining share in the last three quarters.

Speaker 3: MIGUEL LOGO ULTRA, DOUBLED VOLUME IN THE LAST 5 YEARS

Miguel logo ultra doubled volume in the last five years, becoming the second largest brand in the industry and continues to grow double digits in.

Speaker 3: becoming the second largest brand in the industry and continues to grow double-D.

Speaker 3: In the premium segment, Stella Artois, Kona Big Waves, and Estrella Jalisco are growing volumes in the high single dish.

In the premium segment Stella Artois.

Kona Big wave and Australia, how this group are growing volumes in the high single digits.

Speaker 3: Within Beyond Beer, we now have two of the strongest propositions in the fastest growing spaces of the category, with cut water and newt.

We deem beyond beer, we now have two of the strongest propositions in the fastest growing spaces of the category with cutwater in neutral.

Speaker 3: In 2017, 27% of our revenues came from the both core and beyond BSAC.

From 2017% to 87% of our revenues.

<unk> film that both quarter and beyond beer segments.

Michel Doukeris: Today, these segments make up over 40% and have been key contributors to approximately $800 million in revenue growth over the last 5 years. As a result of this portfolio rebalancing, our business has now delivered revenue growth in 8 of the last 9 quarters. As we enter the H2 of our 10-year plan, we have a healthier portfolio positioned for growth and expect to engage in a multi-year increase in commercial investments to accelerate our portfolio rebalancing. Now let's turn to our second strategic pillar, digitize and monetize our ecosystem. This continues to accelerate usage and reach, capturing $7.7 billion in GMV this quarter, a 40% increase year over year. This is now available in 19 markets, reaching 3.1 million monthly active users and generating over 1.8 million orders per week.

Speaker 3: To date, these segments make up over 40% and have been keen contributors to approximately $800 million in revenue growth over the last five years.

To date this segments make up over 40% and has been key contributors to approximately $800 million in revenue growth over the last five years.

Speaker 3: As a result of this portfolio rebalancing, our business has now delivered revenue growth in eight of the last nine quarters.

As a result of this portfolio rebalancing our business has now delivered revenue growth in eight of the last nine quarters.

Speaker 3: As we enter the second half of our 10-year plan, we have a healthier portfolio, positioned for growth, and expect to engage in a multiyear increase in commercial investments to accelerate our portfolio growth.

As we enter the second half of our 10 year plan, we have our healthcare portfolio positioned for growth and expect to engage in a multiyear increase in commercial investments to accelerate our portfolio rebalancing.

Speaker 3: Now let's turn to our second strategic pillar digitize and monetize our

Now, let's turn to our second strategic pillar digitize and monetize our ecosystem.

This continues to accelerate usage enrich capturing seven $7 billion in Gen Z this quarter, a 40% increase year over year.

Speaker 3: This continues to accelerate usage and reach, capturing $7.7 billion in Gen Z this quarter, a 40% increase year over year.

This is now available in 19 markets, reaching $3 1 million monthly active users and generating over $1 8 million orders per week.

Speaker 3: This is now available in 19 markets, reaching 3.1 million monthly active users and generating over 1.8 million orders per week.

Michel Doukeris: In 14 of the 19 markets, our customers are also able to purchase third-party products through this marketplace. Customer adoption is increasing, and 44% of these customers in these markets are now also BEES Marketplace buyers. Today, we have over 200 partners providing more than 500 brands through the platform, generating September annualized run rate revenue of approximately $850 million. This winning partnership empowers our customers to grow via the benefits of digital inclusion and enables our partners to benefit from our world-class platform and route to market and highly engaged BEES user base. Now let's talk about direct to consumer. Our digital direct consumer products, Zé Delivery, TaDa, and PerfectDraft, are now available in 17 markets and generated over $100 million in revenue and 17 million orders this quarter.

Speaker 3: In 14 of the 19 markets, our customers are also able to purchase third-party products through BizMark.

In 14 of the 19 markets.

Our customers are also able to put a chase third party products through <unk> marketplace.

Speaker 3: Customer adoption is increasing and 44% of Biz customers in this market are now also Biz marketplace buyers.

Customer adoption is increasing and 44% of discuss summit's in these markets are now also be as marketplace buyers today.

Speaker 3: Today, we have over 200 partners providing more than 500 brands through the platform, generating September annualized run rate revenue of approximately $850 million.

To date, we have over 200 partners, providing more than 500 brands through the platform generating September annualized run rate revenue of approximately 850 million U S dollars.

Speaker 3: This winning partnership empowers our customers to grow via the benefits of digital inclusion and enables our partners to benefit from our world-class platform and roll-to-market and highly-engaged Biz user base. Now let's –

This win win partnership empowers our customers to grow via the benefits of digital inclusion and enables our partners to benefit from our world class platform and route to market and highly engaged user base.

Now, let's talk about direct to consumer.

Speaker 3: Our digital direct consumer products Z Delivery, Tada, and Perfect Draft are now available in 17 markets and generated over $100 million in revenue and 17 million orders this quarter.

Our digital direct to consumer products that delivery Tata and perfect drop are now available in 17 markets and generated over $100 million in revenue and 17 million orders this quarter.

Michel Doukeris: With that, I would like to hand it over to Fernando to discuss the third pillar of our strategy, optimizing our business. Fernando.

Speaker 3: With that, I would like to hand it over to Fernando to discuss the third pillar of our strategy, optimizing our business.

With that I would like to hand, it over to Fernando to discuss the third pillar of our strategy optimizing our business for number.

Fernando Tennenbaum: Thank you, Michel. Good morning. Good afternoon, everyone. We aim to maximize value by focusing on three areas. One, optimized resource allocation. Two, robust risk management. And three, efficient capital structure. With respect to capital allocation, we aim to maximize long-term value creation by dynamically balancing our priorities. We continue to invest in organic growth and support our strategy to lead and grow the category and digitize and monetize our ecosystem. The excess cash generated by our business is then dynamically allocated to our other three capital allocation priorities, deleveraging, selective M&A, and return of capital to shareholders. Our debt maturity profile remains well distributed, with no bond maturities in 2022 and 2023, and no relevant medium-term refinancing needs.

Speaker 3: Thank you, Michel. Good morning, good afternoon, everyone.

Thank you Michele good morning, good afternoon, everyone.

Speaker 3: We aim to maximize value by focusing on three areas. One, optimized resource allocation. Two, robust risk management.

We aim to maximize value by focusing on three areas.

One optimizing resource allocation.

True robust risk management and.

And three the efficient capital structure.

Speaker 3: With respect to capital allocation, we aim to maximize long-term value creation by dynamically balancing our priorities.

With respect.

Two capital location, we aim to maximize long term value creation by dynamically balancing our priorities.

Speaker 3: We continue to invest in organic growth and support our strategy to lead and grow the category and digitize and monetize our ecosystem.

We continue to invest in organic growth and supports our strategy to lead and grow the category and digitize and monetize our ecosystem.

Speaker 3: The excess cash generated by our business is then dynamically allocated to our other three capital allocation priorities. The leveraging, selective M&A and return of capital to shareholders.

The excess cash is generated by our business is then dynamically allocated to our August three capital location priorities deleveraging selective M&A and return of capital to shareholders.

Speaker 3: Our best mature profile remains well distributed with no bond maturities in 2022 and 2023 and no relevant medium term refinancing needs.

Our debt maturity profile remains well distributed.

Mo bond maturity in 2022, and 2003 and more relevant medium term refinancing needs.

Fernando Tennenbaum: If you look at our debt maturity profile, we have $2.8 billion of bonds maturing through 2025, and more than sufficient liquidity today to redeem all of these bonds. Our bond portfolio has an average pre-tax coupon of around 4% and a weighted average maturity of approximately 16 years. Moreover, our debt portfolio does not have any financial covenants and is comprised of a variety of currencies diversifying our FX risk. 94% of our bonds have a fixed rate insulated from interest rate volatility and inflation. Now, let me take you through the drivers of our underlying EPS for the quarter. Underlying EPS was stable at $0.84 per share, $0.01 lower than Q3 last year. Organic EBITDA growth accounted for a $0.17 per share increase, but was partially offset by $0.12, primarily from translational effects.

Speaker 3: If you look at our debt maturity profile, we have 2.8 billion US dollars of bonds maturing through 2025 and more than sufficiently created today to redeem all of these bonds.

If you look at our debt maturity profile, we have $2 8 billion U S dollars of bonds maturing through 2025 and more than sufficient liquidity today to redeem all of these bonds.

Speaker 3: Our bond portfolio has an average pre-tax coupon of around 4% and a weighted average maturity of approximately 16 years.

Our bond portfolio has an average pretax coupon of around 4%.

And our weighted average maturity of approximately 16 years.

Speaker 3: Moreover, our debt portfolio does not have any financial covenants and is comprised of a variety of currencies diversifying our effects risk.

Moreover, our debt portfolio does not have any financial covenants and is comprised of a variety of currencies diversifying our FX risk.

Speaker 3: 94% of our bones have a fixed rate, insulated from interest rate volatility and inflation.

94% of our bonds have a fixed rate.

The latest interest rate volatility and inflation.

Speaker 3: Now let me take you through the drivers of our underlying EPS for the quad.

Now let me take you through the drivers of our underlying EPS for the quarter.

Speaker 3: The underlying PES was stable at 84 cents per share, one cent lower than the third quarter last year.

Underlying EPS was stable at 84 cents per share <unk> <unk> lower than the third quarter last year.

Speaker 3: Organic EBITDA growth accounted for a $0.17 per share increase but was partially offset by $0.12 primarily from translational effects.

Organic EBITDA growth accounted for a <unk> 17 per share increase but it was partially offset by 12.

Primarily from translational effects.

Fernando Tennenbaum: Higher depreciation and amortization accounted for 3 cents. As we continue to deleverage, our net interest expense has reduced, contributing a 4 cents improvement. Other financial results reduced EPS by 8 cents, largely due to higher cost of hedging, driven by a higher interest rate environment. I'll now hand it back to Michel for some final comments. Michel?

Speaker 3: Higher depreciation and amortization accounted for three cents.

Higher depreciation and amortization accounted for <unk>.

Speaker 3: As we continue to leverage, our net interest expense has reduced contributing a four cents improvement. Other financial results?

As we continue to deleverage our net interest expense has reduced contributing a fourth improvements.

All the financial results.

Reducing EPS by <unk> <unk>.

Speaker 3: largely due to higher cost of hedging driven by a higher interest rate environment. I'll now hand it back to Michel for some background

Largely due to higher cost of hedging driven by a higher interest rate environments.

I'll now hand, it back to Michele for some final comments.

Michel Doukeris: Thanks, Fernando. Allow me to take a few minutes to recap my key takeaways for the quarter and how we are continuing to meet the moment. The beer category continues to demonstrate its strength and is gaining share of throat globally. Our business has momentum. We delivered our best quarterly volume performance of the year, with growth in over 60% of our markets. BEES is now present in 19 countries. This marketplace is gaining traction with annualized run rate revenues of $850 million. Our industry-leading portfolio of brands, revenue management capabilities, and operational excellence enable us to navigate the inflationary environment. We continue to execute our strategy and deliver 8% net revenue per hectolitre growth this quarter. Looking ahead to the opportunity to activate demand, I could not be more excited for what we have coming in Q4.

Thanks Fernando.

Speaker 4: Allow me to take a few minutes to recap my key takeaways for the quarter and how we continue to meet the month.

Allow me to take a few minutes to recap my key takeaways for the quarter and how we are continuing to meet the moment.

Speaker 4: The beer category continues to demonstrate its strength and its gaining shot of throat globally.

The beer category continues to demonstrate the strength and is gaining share of throat globally.

Speaker 4: Our business has momentum. We delivered our best quarterly volume performance of the year, with growth in over 60 percent of our markets.

Our business has momentum we delivered our best quarterly volume performance of the year with growth in over 60% of our markets.

This is now present in 19 countries.

Speaker 4: This marketplace is gaining traction. We've analyzed the run rate revenues of $850 million.

This marketplace is gaining traction we found in our lives at the run rate revenues of $850 million U S dollars.

Speaker 3: Our industry-leading portfolio of brands, revenue management capabilities, and operational actions enable us to navigate the inflationary environment.

Our industry, leading portfolio of brands revenue management capabilities and operational excellence enables us to navigate the inflationary environment.

Speaker 3: We continue to execute our strategy and deliver 8% net revenue per hectolitre growth this quarter.

We continued to execute our strategy and delivered 8% net revenue per hectoliter growth this quarter.

Speaker 3: Looking ahead to the opportunity to activate demand, I could not be more excited for what we have coming in the fourth quarter.

Looking ahead to the opportunities start to the day demand I could not be more excited for what we have coming in the fourth quarter.

Michel Doukeris: This is a unique moment for us as a company and for me as a lifelong football fan and beer lover. In less than a month, I will be one of the billions of fans watching the FIFA World Cup, Qatar, the largest global sporting event. We are ready to connect people around the world through our shared passion for football and beer. Budweiser, the official beer of the FIFA World Cup, is kicking off its most ambitious global campaign yet. Our leading core brands like Brahma in Brazil, Jupiler in Belgium, and Quilmes in Argentina will be leaning into our national team partnerships, supporting local retailers and fans. These campaigns will be executed in over 70 countries and 1.2 million points of sales. We will also be creating new consumer experience, such as the biggest digital campaign in our history.

Speaker 3: This is a unique moment for us as a company and for me as a lifelong football fan.

This is a unique moment for us as a company and for me as a lifelong football fan.

And <unk>.

Speaker 3: In less than a month, I will be one of the billions of fans watching the FIFA World Cup Qatar, the largest global sporting event in the world.

In less than a month.

Would be one of the billions of fans watching the FIFA World Cup Qatar.

Largest global sporting event.

Speaker 3: And we are ready to connect people around the world through our shared passion for football and being.

And we are ready to connect people around the world through our shared passion for football and beer.

Speaker 3: But why is it the official beer of the FIFA World Cup is kicking off its most ambitious global campaign yet?

Budweiser the official beer of the FIFA World Cup is kicking off its most ambitious global campaign yet.

Speaker 3: Our leading car brands like Brahma in Brazil, Jupyter in Belgium, and Kilis in Argentina will be leaning into our national team partnerships supporting local retailers and families.

Our leading car brands like Brahma in Brazil, <unk> in Belgium, and Cumulus in Argentina, we are.

Building into a national team partnerships supporting local retailers and fans.

Yes.

Speaker 3: These campaigns will be executed in over 70 countries and 1.2 million points of sale.

These campaigns will be executed in over 70 countries and $1 2 million points of sales.

Speaker 3: We will also be creating new consumer experiences, such as the biggest digital campaign in our history.

We will also be creating new consumer experience such as the biggest digital campaign in our history.

Michel Doukeris: We are engaging with more customers through BEES, and we have launched direct-to-consumer activations through Zé Delivery and TaDa. I could not be more excited and proud of our team and partners. The future of More Cheers is right around the corner. Before I hand it back to Jesse to begin the Q&A session, let me share with you a short video that really brings FIFA and our campaigns to life.

Speaker 3: We are engaging with more customers through Biz, and we have launched direct-to-consumer activations through Z-delivery and Tada.

We are engaging with more customers through bids and we have launched direct to consumer activations through sat delivery anti bot.

Speaker 3: I could not be more excited and proud of our team and partners.

I could not be more excited and proud of our team and partners.

Speaker 3: The future of Marchiers is right around the corner.

The future is more tiers is right around the corner.

Speaker 3: Before I hand it back to Jesse to begin the Q&A session, let me share with you a short video that really brings FIFA and other campaigns to life.

Before I hand, it back to Jesse to begin the Q&A session. Let me share with you a short video that really brings FIFA and our campaigns to life.

Speaker 5: I'm about to buy one of the hardest workers Real family man practice ain't perfect You can gather all the world and stay thirsty Took a lot to get us here and <expletive> Christians Chill and be chill to feel some mercy Losers just lose while women get worser I can't help but finally get turnt up Somebody tell me a blood-wiper's murder I wanna rule the world I can't hold it Tell her her life I feel like I'm chosen Chat on site I feel like I'm frozen Whole bunch of real good vibes and feel so good I think it's about that time it's getting closer Whole lot of fingers crossed a lot of hopeless Wishing for the best preparing for the worst Every man wants a little better Some stuff is out around here I can't be smallest Phone know nothing dawg I know one thing Chill and be chill to feel some mercy Losers just lose while women get worser I can't help but finally get turnt up Somebody tell me a blood-wiper's murder I wanna rule the world I can't hold it Tell her her life I feel like I'm chosen Everybody wants to rule the world Everybody wants to rule the world Everybody wants to rule the world When you really in the truth you don't gotta say I'm so close to these feelings I ain't gotta make it Gotta go in this trash I can't help but say Come on baby don't turn around Everybody wants to rule the world Everybody wants to rule the world

[Company Representative] (Anheuser-Busch InBev): I'm by far one of the hardest workers. I really firmly believe in practice makes perfect. You can gather all the water. Stay thirsty. It took a lot to get us here. We from curses. Kill or be killed. The floor so no mercy. Losers just lose while winners get worshiped. I came here for fun. Let's get crunk. Somebody pass the Bud while I'm still smoking. I wanna rule the world. I can't hold it. Tale of a life, I feel like I'm chosen. Head on tight, I feel like I'm focused. Whole bunch of real good vibes. We stay focused. I think it's about that time to get coaches. Whole lot of fingers crossed, a lot of hoping. Wishing for the best, preparing for the worst. Everybody wants to rule the world. Some stuff is out of my hands. I can't control it.

Following on worker's career, primarily ramp that these rates are as good as you can gather on a relative basis.

Thank you.

<unk>.

I will then give one shift.

Thanks Harlan.

Sure.

Exactly.

I want to erode a lot.

Okay.

Hi.

So I think as Thomas J codes with Colorado fingers crossed.

We can further benefit there.

Fair enough.

[Company Representative] (Anheuser-Busch InBev): If I don't know nothing, dog, I know one thing. Kill or be killed, the floor so no mercy. Losers just lose while winners get worshiped. I came here for fun, let's get crunk. Somebody pass the bud while I'm still smoking. I wanna rule the world, I can't hold it. Tail of a life, I feel like I'm chosen. Everybody wants to rule the world. When you really live the truth, you don't gotta fake. I'm so close to the bands, I gotta make. Gotta go where they stretch, I can't hesitate. Have no business on signing around. Everybody wants to rule the world.

Hi, David.

It had been.

<unk>.

When you get one shift.

Thank you so much.

Can you just elaborate.

Okay.

Kevin.

Fair enough.

Okay.

Yes.

<unk> also calculated if I got it got it wrong.

Page 10 on David's answer.

Okay.

Right.

Yes.

Okay.

Operator: Thank you. We will now be conducting our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Our first question is coming from the line of James Edwardes Jones with RBC. Please proceed with your question.

Thank you we will now be conducting a.

Speaker 2: We will now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to ask a question.

A question and answer session.

We'd like to ask a question. Please press star one on your telephone keypad.

Information tone will indicate that your line is in the question queue.

Press Star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys, one moment. Please poll for questions.

Speaker 2: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker 2: Our first question is coming from the line of James Edward Jones with RBC. Please proceed.

Our first question is coming from the line of James Edward Jones with RBC. Please proceed with your question.

James Edwardes Jones: Good morning and afternoon. Two questions, please. The business has got momentum, Michel, as you're saying, but are you concerned about the wider economic context you're operating in, and is that going to detract from that momentum? Secondly, I suppose one for Fernando, please. The proportion of your debt denominated in euros has fallen from 33% at the last year-end to 25% at the end of September. Is that purely a reflection of the euro's depreciation, or is there anything more than that going on?

Good morning and afternoon.

Two questions. Please the business momentum is shown as youre, saying.

But are you concerned about the wider economic context, youre pricing in fact turns which is tracked.

Tim.

Speaker 6: And secondly, I suppose one for Fernando, please, the proportion of your debt denominated in euros has fallen from 33% at the last year and 25% at the end of September .

Secondly, I suppose one Fernando please proportion procure debt denominated in euros was falling from 33% last year end.

35% at the end of September .

Speaker 6: Is that purely a reflection of the euro's depreciation or is there anything more than that going on?

It's not purely a reflection of the euros depreciation or is there anything more than that.

Michel Doukeris: Hey, James. Good morning. Good afternoon, everybody. I'll take the first one and hand it over to Fernando to comment on the second question. I think that there are two parts to this answer. The first one is we must focus on what we can control. On what we can control, what we see is business momentum. This business momentum has to do with the execution of our strategy and everything that we've been discussing over the last quarters and in our meetings. We are really focused on the category, balancing well our revenue strategy, investment in our brands, and the acceleration of our digital transformation, so we can continue to lead and grow the category.

Speaker 3: Hey, James. Good morning. Good afternoon, everybody. I'll take the first one and hand it over to Fernando to complement on the second question. I think that there are.

Hey, James Good morning, Good afternoon, everybody I will take the first one and hand it over to Fernando to complement on the second question.

There are.

Speaker 3: two parts to this answer. The first one is we must focus on what we can control. And what we can control, what we see is business momentum. And this business momentum has to do with the execution of our strategy and everything that we've been discussing over the last quarters and in our meetings. So we are really focused on the category.

Two parts to this answer the first one is we must focus on what we can control.

And while we can control, what we see as business momentum.

And this business momentum has to do with the execution of our strategy and never seen that we've been discussing over the last quarters and in our meetings. So we are really focused on the category.

Speaker 3: balancing well our revenue strategy, investment in our brands, and the acceleration of our digital transformation so we can continue to lead and grow the category.

<unk> seen well our revenue strategy investments in our brands and the acceleration of our digital transformation. So we can continue to lead and grow the category.

Michel Doukeris: Of course, the consumer confidence inflationary environment gets us to be carefully balancing each and every piece of our strategy while we continue to be, again, focused on what we can control. What we can control is the execution of our strategy.

Speaker 3: Of course, the consumer confidence, inflationary environment gets us to be carefully balancing each and every piece of our strategy while we continue to be, again, focused on what we can control. And what we can control is the execution of our strategy.

Of course, the consumer confidence inflationary environment gets us to be carefully balancing each and every piece of our strategy. While we continue to be again focused on what we can control and what we can control is the execution of our strategy.

Fernando Tennenbaum: James, on your second question, Fernando here. Our data, it's mostly the euro depreciation, so that's the biggest impact you see there. Probably it's worthwhile calling out the attention because the euro depreciation is probably what you see happening on the balance sheet, and that's the one you see the impact or you see on our income statement flowing through the interest line. We don't see, but that is a huge economic benefit it's worth highlighting, is the rising rate environment. Our bonds were trading in the beginning of the year at around 120% of par. Now, given the rate environment, they are trading a little bit lower on average than 90% of par.

Speaker 3: And James, on your second question, Fernando here, so our debt, it's mostly the Euro depreciation, so that's the biggest impact you see there. But probably it's worthwhile calling out the attention because the Euro depreciation is probably what you see happening on the balance sheet and that's the one you see the impact or you see on our income statement flowing through the interest line.

And James on your second question the number here so our debt.

It's mostly the euro.

Euro depreciation so that's the biggest impact to see that but probably it's worthwhile calling out the attention because the euro depreciation is probably what you see happening on the balance sheet and Thats. The one you think back to what <unk> seen on our income statement slowly through the interest.

Speaker 3: What we don't see, but there is a huge economic benefit towards highlighting, is the rising rate environment. Our brons were trading in the beginning of the year at around 120% of parks.

Why do we don't see embedded but that is a huge economic benefit to towards highlighting is the rising rate environment.

Our brands were trading in the beginning of the year at around 120% of park.

Speaker 3: And now, given the rate environment, they are trading a little bit lower on average than 90% of part. And given that we continue to the leverage and we are buying back bonds, it means that each dollar that we buy back of that is worth more than $1. And if you apply the math in our whole portfolio, you'll see that the interest rate component has a much bigger economic benefit, the rate interest rate environment than any effect swings.

And now given the rate environment, they are trading a little bit lower on average than 92% of par and given that we continue to deleverage and we're buying back bonds. It means that each dollar of debt buyback of debt is worth more than $1.

Fernando Tennenbaum: Given that we continue to deleverage and we are buying back bonds, it means that each dollar that we buy back of debt is worth more than one dollar. If you apply the math in our whole portfolio, you see that the interest rate component has a much bigger economic benefit, the raised interest rate environment, than any FX swings.

And if you apply the masking our whole portfolio you will see that the interest rate component has a much bigger economic benefits the raising interest rate environment than any any effect swings.

James Edwardes Jones: All right. I hadn't thought of that. That's very interesting. Thank you.

On top of that and that's very interesting. Thank you.

Operator: Thank you. Our next question is coming from Simon Hales with Citi. Please proceed with your question.

Thank you. Our next question is coming from Simon Hales with Citi. Please proceed with your question.

Speaker 2: Our next question is coming from Simon Hales with Citi. Please proceed with your question.

Simon Hales: Thank you. Morning, Michel. Morning, Fernando. Two for me as well, please. Obviously we're getting close to the end of 2022 now. I wonder, Fernando, whether you could share any thoughts at all on your outlook for COGS as we move into 2023. I appreciate you might not want to give any specific sort of inflation guidance on COGS, but maybe a directional steer on 2023 COGS versus 2022 would be helpful. Then secondly, Michel, maybe coming back to, you know, the comments you were making at the end around the World Cup. Can you talk a little bit about the phasing perhaps of spend and activations into the World Cup?

Speaker 7: Ah, thank you. Morning, Michelle. Morning, Fernando. Two for me as well, please. Um, obviously we're getting close to the end of...

Thank you Bob Michel Moly can undo two for me as well please.

Obviously, we're getting close to the end of 2022 now I wouldn't be fernanda, whether you could share any thoughts at all on your outlook for Cogs.

Speaker 7: I wonder, Fernando, whether you could share any thoughts at all on your outlook for COG.

Speaker 3: moving to 2023. I appreciate you might not want to give any specific sort of inflation guidance on COGS, but maybe a directional steer on 2023 COGS versus 2022 would be helpful. And then secondly, Michelle, maybe coming back to the comments you were making at the end around the world. Thank you for being here.

Moving to 2023 I appreciate you might not want to give any specific.

Sort of inflation guidance on Cogs, but maybe a direction directional steer towards.

<unk> thousand three coax versus switch to would be helpful.

And then secondly, Michel maybe coming back to the comments you were making with the end around the World Cup.

Speaker 3: Can you talk a little bit about the phasing perhaps of spend and activations into the World Cup? Should we expect to see a big step up in Q4 on marketing spend and SG&A in general or a number of that or big part of that spend already being felt in Q3 as well in preparation?

Can you talk a little bit about the <unk> spend and activations into the World Cup and should we expect to see a big step up in Q4 on marketing spend in SG&A. Gen models, a number of vessels, we call that spend already being felt in Q3 as well your preparation.

Simon Hales: Should we expect to see a big step-up in Q4 on marketing spend and SG&A in general, or is a number of that or big part of that spend already being felt in Q3 as well in preparation?

Fernando Tennenbaum: Thanks, Simon. Fernando here. On your first question on COGS, of course, we are not giving any outlook so far. What we commented on the last earnings call still holds true, which given if you look at the spot rates today, you are likely to still have some pressures next year, but to a lesser extent than the pressures we had this year. If you want to look around the world, it's not at the same magnitude. Probably the region that is most impacted next year is going to be Europe. It's disproportionately impacted because of energy costs and because of agricultural barley costs. What we said in the last quarter still holds true, some pressure, but to a lesser extent than the one we said we saw this year. Michel?

Speaker 4: Thanks Simon, Fernando here. So on your first question on COGS, of course we are not giving any outlook so far, but what we commented on the last earnings call still holds true. If we look at the spot rates today, you are likely to still have some pressures next year, but to a lesser extent than the pressures we had this year.

Thanks, Simon so number here.

So on your first question on Cogs on Cogs of course, we are not giving any any outlook. So far but why do we commented on the last earnings call is two holds true.

<unk>.

Given if you look at the spot rates today, you are likely to still have some pressures next year, but to a lesser extent than the pressures. We've had this year and if you want to look around the world. It's not the same magnitude probably the region that is most impacted next year is going to be Europe is disproportionately impacted.

Speaker 4: And if you want to look around the world, it's not at the same magnitude. Probably the region that is most impacted next year is going to be Europe . It's disproportionately impacted because of energy costs and because of agricultural barley costs.

Because of energy costs and because of.

Agricultural bodily costs, but what we said in the.

Speaker 4: But what we said in the last quarter, it still holds through some pressure, but to a lesser extent than the one we saw earlier.

Les collected stool holds through some pressure, but to a lesser extent than the ones that we saw this year.

Michel Doukeris: Hi, Simon. Good morning, good afternoon. Thank you for the question. I think that on FIFA, maybe getting from the beginning, the main point, I've been talking about these similar challenges and opportunities that we would be facing this year on the operating environment, and so far it's been reality, as well as the opportunities with the comeback of the on-trade, with marquee events returning. As you travel around the globe, it's been very tough to buy tickets, to be able to go to any concert or sports events. We've been planning and working very hard for FIFA, and that's gonna be by far the biggest category activation opportunity in the year, the biggest sports event in the year. We will activate this across 70 countries and many of our brands.

And Michele.

Speaker 4: Hi, Simon. Good morning, Dr. Nunn. Thanks for the question. I think that on FIFA maybe getting from the

Hi, good.

Good morning.

Thanks for the question.

FIFA may be getting from the.

Speaker 4: the beginning, the main point. I've been talking about this.

The beginning the main point I've been talking about this.

Similar to <unk>.

Speaker 4: challenge and opportunities that we would be facing this year on the operating environment and so far it's been reality as well as the opportunities with the comeback of the home trade with marquee events returning and as you travel around the globe it's been very tough to buy tickets to be able to go to any concert or sport event.

<unk> and the opportunity.

That we would be facing this year on the operating environment and so far it has been <unk> as well as due to our needs with the comeback of the on trade.

My key advanced returning and then as you travel around the globe is being that is tough to buy tickets to be able to go to any coal search our support to them.

Speaker 4: And we've been planning and working very hard for FIFA and that's going to be by far the biggest category activation opportunity in the year, the biggest sports event in the year and we will activate this across 70 countries and many of our brands. And in order to do with being heavy upping.

We've been planning and working very hard for FIFA, and thats going to be by far the biggest category activation opportunity in the year the biggest sports it down in the year and we will expose deals across 70 countries.

And many of our brands and in order to do we've been.

Michel Doukeris: In order to do, we've been heavily upping expenses, so already in Q3, but also in Q4. I would say that our sales and marketing this year will be more skewed towards H2. As always happens when we have FIFA years, we concentrate more the investments across this big activation, so Q3, Q4. But at the same time, it's not only more investment because we last year invested more on our brands, and this year we invest more on our brands as well, but it's becoming more effective. As we digitally transform, as better and sharper creativity and focus on the key brands on our portfolio and segments, we've been striking a balance of both, not only higher support and more money being invested, but in a more efficient way.

<unk>.

Speaker 4: Expenses so already in the quarter three, but also in the quarter four. So I would say that our sales and marketing this year will be more skilled towards the second half.

<unk> expenses saw already in quarter, three but also in quarter four so I would say that our sales and marketing this year would be more skewed towards the second half as always happens when we have FIFA years, we've concentrates more things estimates across this digitization so quarter three quarter four.

Speaker 4: As always happens when we have FIFA years, we concentrate more on investments across this big activation, so Q3, Q4. But at the same time, it's not only more investments, because we last year invested more on our brands and this year we invest more on our brands as well, but it's becoming more effective.

But at the same time is not only more investments because <unk> invested more in our brands and this year, we invest more in our brands as well, but it's becoming more effective and as we digitally transform.

Speaker 4: And as we digitally transform as better and sharper creatives and focus on the key brands on our portfolio and segments.

As bad debt and sharper Creek is it and focus on the key brands on our portfolio and segments, we have been striking a balance of both not only.

Speaker 4: We've been striking a balance of both, not only higher support.

Higher.

Support and more money being invested but in a more efficient way.

Speaker 4: and more money being invested, but in a more efficient way. I will directly answer your question.

Michel Doukeris: directly answer your question, H2, heavier investments than H1 in order to be able to support this huge moment and huge category, opportunity for beer consumption.

But directly answer your question second half <unk>.

Speaker 4: heavier investments than first half in order to be able to support this huge moment and huge category of opportunity for beer consumption.

Here investments than first half in order to be able to support this huge moment and huge category opportunity for via consumption.

Simon Hales: Got it. Very helpful. Thanks to you.

Got it very helpful. Thanks.

Operator: Thank you. Our next question is coming from the line of Tristan van Strien with Redburn Partners. Please proceed with your question.

Thank you. Our next question is coming from the line of Jason Vince Ryan with Redburn Partners. Please proceed with your question.

Tristan van Strien: Hi, Michel and Fernando. Two for me as well, please. I think just first to follow up on the environment. It seems like the consumer is very confident in places like Mexico and Brazil, and you even mentioned Zambia here, and it's reflected in the beer sales. Can you just maybe give a bit more content to that? I mean, is this? Is there a confident consumer? Are they kind of protected from what's happening in the developed world? Is this sustainable? Some views on that as we look over the next few quarters, what you're seeing on the ground.

Speaker 8: Hi, Michel and Fernando. Two for me as well, please. I think this first to follow up on the environment.

Hi, Michelle and number two for me as well. Please I think just first to follow up on the environment. It seems like the consumer is very confident in places like Mexico, and Brazil, and you even mentioned Zambia here and it's reflected in the beer sales can you just maybe give a bit more content to that.

Speaker 8: It seems like the consumer is very confident in places like Mexico, Brazil, and you even mentioned Zambia here and it's reflected in the beer sales. Can you just maybe give a bit more content to that? I mean, is there a confident consumer? Are they kind of protected from what's happening in the developed world? Is this sustainable? So some views on that as we look over the next few quarters, what you're seeing on the ground.

Is there a confident consumer are they kind of protected from what's happening in the developed world is to sustainable. So some views on that as we look over the over the next few quarters, what you're seeing on the ground.

Tristan van Strien: The second question, just going back to the developed world on the US, there have been a few comments, I think, by one of your competitors, one of the smaller ones, who's saying that traditional beer as we know it may never grow again in our lifetime in the US. I would love to hear your view on that, what your thinking is on that. Also, as I look at your slide on the US, I think this is the first time you've spoken about Kona and Estrella Jalisco. What do you see in those brands to kind of reinvigorate the beer category, and why you're pushing them as you go into 2023? Thanks.

Speaker 8: And the second question, just going back to the developed world on the US, there have been a few comments, I think, by one of your competitors, one of the smaller ones, who's saying that traditional beer as we know it may never grow again in our lifetime in the US. I would love to hear your view on that, what your thinking is on that.

And the second question just going back to the developed world on the U S. There's been a few comments I think about one of your competitors when we smaller ones.

Saying that traditional beer as we know it may never grow again in our lifetime in the U S. I would love to hear your view on debt what your thinking is on that.

Speaker 8: and also as I look at your slide on the US.

So as I look at your slides on the U S. I think this is the first time, you've spoken about Kona and a stellar.

Speaker 8: I think this is the first time you've spoken about Kona and Astellas, to this go. What do you see in those brands to kind of reinvigorate the beer category and why you're pushing them as you go into 2023?

This go what do you see in those brands to kind of reinvigorate the beer category and why are you pushing them.

As you go into 2023.

Thanks.

Okay.

Michel Doukeris: Hey, Tristan. Good afternoon, and thank you for the question. I think I got here three. I'll try to answer them even though there is some correlation. I think that on the first and the second, they are somehow interconnected. I think that when we look at the beer category, and I keep on repeating that based on the data that we have and what we are seeing out there, beer category is very resilient. It's been proving this over the years. You look back in time across all type of economic environments, and even during the pandemic, we discussed this big time, the category is very resilient. Yet, it's true that inflation is a global thing. It is different on a country by country, and it's different region by region.

Speaker 4: Hey Tristan, good afternoon and thank you for the question. I think that I got here three. I'll try to answer them even though there is some correlation. I think that on the first and the second they are somehow interconnect.

Hey, Tristan Investor.

No.

And thank you for the question I think.

I got here three ill try to answer them, even though there is some correlation.

I think that in the first and the second they are somehow interconnected I think thats when we look at the beer category and they keep on repeating that based on the data that we have and what we are seeing out there.

Speaker 4: I think that's when we look at the beer category and I keep on repeating that based on the data that we have and what we are seeing out there.

Category is very resilient.

Speaker 4: And it's been proving these over the years. You look back in time across all type of economic environments. And even during the pandemic, we discussed this big time. The Cape Verde is very rich.

And it's been proving deals over the years, you look back in time across all.

Type of economic environments, and even during the pandemic, we discuss it this big time.

I think what is very resilient.

Speaker 4: And yet, it's true that inflation is a global thing. It is different on a country by country and it's different region by region. And you see anywhere like 80% inflation in Argentina to 2% inflation in China. So yes, there is global inflation, but the inflation is different market to market.

Yes.

It is true that inflation is a global thing.

<unk>.

It is different on a country by country and is different region by region.

Michel Doukeris: You see anywhere like 80% inflation in Argentina to 2% inflation in China. Yes, there is global inflation, but the inflation is different market to market. It's also true that the knowledge of consumers and all stakeholders, including the government, central banks, to deal with this inflation is being built differently over the years on a country by country basis. That's why you see consumer confidence index different because of the different reality of the inflation and the preparation that people have to deal with that being different on a country by country. You are talking about that, but Latin America is being so far a place where both consumer confidence is higher, but inflation is less impactful than it is, for example, to the extremes of what you see in Europe and somehow in North America.

And Youll see annular like 80% inflation in Argentina to 2% inflation in China. So, yes that is a global inflation, but the inflation is a different market to market.

Speaker 4: It's also true that the knowledge...

It is also true that their knowledge of consumers.

Speaker 4: of consumers and all stakeholders including the government, central banks, to deal with this inflation is being built differently over the years on a country by country basis. That's why you see consumer confidence.

And all its stakeholders, including the government and central banks to deal with this inflation is being built differently over the years on a country by country basis, That's why you see consumer confidence.

Speaker 4: index different because of the different reality of the inflation and the preparation that people have to deal with that being different from my country by country.

Index different because of the different realities of the inflation and the preparation that people have to deal with that being different on a country by country.

Speaker 4: You were talking about that, but Latin America has been so far a place.

You're talking about that but Latin America has been so far a place where both consumer confidence is higher but inflation is less.

Speaker 4: where both consumer confidence is higher but inflation is less.

Speaker 4: impactful than it is, for example, to the extremes of what you see in Europe and somehow in North America. And what is very different during this time is that employment is very high. It doesn't matter where you go, what at least is more normal.

Impactful down. These for example to the extremes of what you're seeing in Europe .

And somehow in North America.

Michel Doukeris: What is very different during this time is that employment is very high. It doesn't matter where you go, or at least it is more normal, whenever you go. Consumers are holding up stronger. I think the evidence that you can see is that our volume in the quarter was the best this year and was broad-based, like 60% of our markets had volume growth, which is very good for a given quarter. I think that if you then pivot and you talk a little bit about the US, the industry in the US is not only resilient, but is big, it's profitable, it continues to premiumize, and it is incredibly dynamic, right? It's a market that keeps on reinventing itself and proposing new ways for consumers to interact and to be with the industry.

What is very different during this time is that employment is very high it doesn't matter, where you go what at least is more normal.

Speaker 4: whenever you go. So consumers are holding stronger. Evidence I think that you can see is our volume in the quarter was the best.

Whenever the golf so consumers are holding is stronger evidence I think that you can see as our volume in the quarter was the best this year and was broad based like 60% of our markets had volume growth, which is very good for a given quarter.

Speaker 4: this year and was broad-based, like 60% of our market.

Speaker 4: volume growth which is very good for a given quarter.

Speaker 4: I think that if you then pivot and you talk a little bit about the US, the industry in the US is not only resilient, the, everybody is deep.

We think that each of them.

And you've talked a little bit of both the U S.

The industry in the U S is not only resilient.

But he is deep.

Speaker 4: profitable, it continues to primo nice and it is incredibly.

<unk>.

It continues to premium knife and it is incredibly dynamic right. So it's a market that's keeping reinventing itself.

Speaker 4: So it's a market that keeps on reinventing itself.

Speaker 4: and proposing new ways for consumers to interact.

And proposing new ways for consumers to interact and to build for the industry. So much so.

Speaker 4: and to build the industry. So much so, you published the other day and I read your report, the industry continues to be in good shape, growing revenues and of course there is a lot of dynamics playing inside.

Michel Doukeris: So much so, you published the other day, and I read your report. The industry continues to be in good shape, growing revenues. Of course, there is a lot of dynamics playing inside the industry, right? One of the dynamics is the emerging beyond-beer space, flavored beverage, fourth category, whatever people call. From time to time, there are some different calls around this industry, right? A year ago or two years ago, people were discussing seltzer becoming like 100% of the industry, whatever the number was. You remember that I told more than once that I didn't believe that that would happen.

<unk> published the other day and I read your report the industry continues to be in good shape growing revenues and of course, there is a lot of dynamics playing inside the industry right. One of the dynamics is there more to gene.

Speaker 4: One of the dynamics is the merging.

Speaker 4: Beyond Space, Flavored Beverage, Fourth Category, whatever people call it. From time to time there are some

Beyond space flavor beverage category wherever people call.

And time to time there are some.

Speaker 4: different calls around this industry, right? So a year ago or two years ago, people were discussing sales sort of becoming like 100% of the industry, whatever the number was. I remember that I told more than once that I didn't believe that that would happen.

Different calls around <unk>, right, so a year ago or two years ago.

People are discussing sales sort of becoming like a 100% of dms whatever the number was.

Youll remember that a towards more than once that I didn't believe that that would happen.

Michel Doukeris: Yet, beyond beer, we continue to add consumers and growth to the industry, which is very exciting because the beyond beer space sources from wine, sources from spirits, and is more similar to the beer industry that we all are part of. This brings more growth for retailers, growth for wholesalers, and growth for the beer players. I think that beer as an industry is incredibly relevant for our wholesalers, for our retailers, and they need to get behind as they do, behind the industry and behind the players that invest and work to make this industry a better industry. In what I can speak on our behalf, as committed as ever, investing, as always.

Speaker 4: And yet, Beyond Beer will continue to add consumers and growth to the industry.

Yes beyond beer will continue to add consumers and growth to the English, which is that exciting because they are beyond the VA space starts us from wine <unk> spirits and is more similar to the beer industry that we all are parked off Mds.

Speaker 4: because they don't really taste. Sources from wine, sources from...

Speaker 4: and is more similar to the beer industry that we all are part of. And this brings more growth, growth for retailers, growth for wholesalers, and growth for the beer play.

It brings more growth grow for our retailers grow for wholesalers and growth for the beer players.

Speaker 4: I think that beer as an industry is incredibly relevant for our wholesalers, for our retailers, and they need to get behind as they do behind the industry and behind the players that invest and work to make this industry a better environment.

Think that beer as an industry is incredibly relevant for our wholesalers for our retailers and they need to get behind as they do.

And the industry and behind the players that invest and work to make this industry a better industry in what I can speak on our behalf.

Speaker 4: in what I can speak on our behalf.

Speaker 4: as committed as ever, investing as always. And we talked about this on the last meeting that we have with our wholesalers, we call the EAM meeting. And we talked a little bit here, as we were showing the examples of the category growth. We are engaging on a multi-year investment increase in the last...

As committed as ever.

Investing.

As always.

Michel Doukeris: We talked about this on the last meeting that we had with our wholesalers. We call the SAMCOM, and we talked a little bit here, as we were showing the examples of the category growth. We are engaging on a multi-year investment increase in the US because we are right at the halftime of our 10-year plan. The first five years, we managed to stabilize the share in mainstream. We got our above core portfolio to be from 27% to 41% of our revenues. We have today brands that connects with Kona, Estrella Jalisco, Cutwater, that position us much better for the growing parts of the industry. It's about second half, grow strong, invest more, and accelerate growth.

We.

<unk> talked about <unk> on the on the last meeting that we have with our wholesalers are called the AAM meeting and we've talked a little bit here as we are showing the examples of the category growth we are engaging on a multi year investment.

Increase in the U S. Because we are right at the halftime of <unk>.

Speaker 4: because we are right at the half time of our 10-year plan.

Our 10 year plan.

Speaker 4: The first five years we managed to stabilize the sharing mainstream. We got our above core portfolio to be from 27 to 41% of our revenues. We have today brands that connects with Kona, Estrella, Halisco, Cutwater that position as much better for the growing parts of the industry. So it's about second half.

The first five years, we managed to stabilize the share in mainstream.

We've got tell what are both core portfolio to be from 27% to 41% of our revenues. We have today brands that connect with core nice tray of Jalisco.

Cutwater that position us much further.

The growing parts of the industry. So it is about second half goes strong invest more and accelerate growth and in this scenario to stray a holistic today fastest growing Mexican brand in the U S.

Speaker 4: go strong, invest more, and accelerate growth. And in this scenario, Estrella Jalisco today, fastest growing Mexican brand in the US, only present in much of the

Michel Doukeris: In this scenario, Estrella Jalisco today, fastest growing Mexican brand in the US, only present in markets where we started developing the brands such as California, Arizona, Texas, but with a huge headroom for growth. Kona is an incredible lifestyle brand, as it is Cutwater, that has a lot of space in premiumization. We are very happy with the acquisition, the partnership that we have with CBA. Kona is growing double digits strong. It's an incredible brand people love as much as we love the brand. Beer industry in the US is big, profitable, resilient, very relevant for our wholesalers and retailers, and we are fully committed to continue to support them and invest for growth. Thank you, Michel. Very clear.

Only presence in markets where.

Speaker 4: We started developing the brands such as California, Arizona, Texas, but we had huge room for

We started developing the brands, such as California, Arizona, Texas, but we have a huge headroom for growth in coronary is an incredible lifestyle brand as they discuss water that has a lot of space and could immunization. We are very happy with the acquisition the partnership that we have with <unk>.

Speaker 4: Kona is an incredible lifestyle brand as it is cut water that has a lot of space improvisation. We are very happy with the position, the partnership that we have with CBA and Kona is growing double digits strong. It's an incredible brand. People love as much as we love the brand. So beer industry in the US is big, profitable.

CBA and Kona is growing double digit strong is an incredible brand people love as much as we love the brands so be it industry. The U S is big for us.

<unk> resilient value relevant for our wholesalers and retailers and we are fully committed to continue to support them and invest for growth.

Speaker 4: very relevant for our wholesalers and retailers, and we are fully committed to continue to support them and invest for growth.

Thank you Michelle very clear.

Operator: Thank you. Our next question is coming from the line of Mitch Collette with Deutsche Bank. Please proceed with your question.

Speaker 2: Our next question is coming from the line of Mitch Collette with Deutsche Bank. Please proceed with your question.

Thank you. Our next question is coming from the line of Mitch Collett with Deutsche Bank. Please proceed with your question.

Mitch Collett: Hi, Michel. Hi, Fernando. I've got two questions. 2022 has faced quite a few challenges. You've had, you know, lockdowns persisting in China, very significant raw material inflation, some headwinds in Brazil from a delayed carnival, but you're now able to guide to EBITDA growth in the top end of your medium-term guidance range. If you can achieve in the top end of your range, given those challenges, how does that make you think about the validity of that range going forward in what might be a more normal year? My second question is on the spirits-based RTDs in the US, which I think you were just talking about. That category is achieving explosive growth, and you seem to be gaining from it with Cutwater and NÜTRL.

Ill, let Michelle hopefully one day.

Two questions.

Speaker 3: So F22 has faced quite a few challenges. You've had knockdowns persisting in China, very significant raw material inflation, headwinds in Brazil from a delayed carnival. But you're now able to guide to edict dial growth in the top end of your medium term guidance.

F 'twenty two.

Quite a few challenges you've had.

Persistent in China.

Raw material inflation headwind.

Headwinds in Brazil, not late Carnival.

They will supply.

The EBIT growth.

With your medium term guidance range. So if you can achieve the top end of your range given those challenges how does that make you think about.

Speaker 3: So if you can achieve in the top end of your range, given those challenges, how does that make you think about the validity of that range going forward in what might be a more normal year? And then my second question is on the spirits-based RTDs in the US, which I think you were just talking about.

That range going forward.

Might be a more normal year and then my second question is on the spirits RTD in the U S, which I think you were just talking about.

Speaker 3: That category is achieving explosive growth and you seem to be gaining from it with cut water and neutral. I know you said in the presentation that corn above is 40% of your US revenue. Can you just give us the proportion of your US revenue that is spirits based RTDs and then perhaps a bit more colour on the growth which I think you said was double.

And that category is achieving explosive growth.

And we seem to be gaining cutwater leap. So I know you said in the presentation that core and about 40% of your U S. Can you just give us the proportion of your U S revenue that is.

Mitch Collett: I know you said in the presentation that off-premise is 40% of your US revenue. Can you just give us the proportion of your US revenue that is spirits-based RTDs? Then perhaps a bit more color on the growth, which I think you said was double digit. Thank you.

It's based on <unk> and then.

Perhaps a bit more color on the growth, which I think you said was double digit.

Fernando Tennenbaum: Hi, Mitch. Fernando here. Let me get the first one. Your question on guidance. I feel you're right. This has been a very dynamic year, but it's fair to say that the business continued to have momentum. When we look at the year-to-date performance and the momentum that we have in our business, we feel it was appropriate to raise the bottom end of our EBITDA guidance for our EBITDA outlook for this year, from 4% to 8% to 6% to 8%. We also mentioned that our medium-term outlook remains unchanged. Whenever we talk about outlook, it's good to take a step back and understand why we decided to provide an outlook. At the end of the day, when we had our investor seminar last year, we made a clear evolution of our strategy.

Speaker 4: Let me get the first one, your question on guidance. I feel like this has been a very dynamic year, but it's fair to say that the business continues to have momentum. And when we look at the year-to-date performance and the momentum that we have in our business, we feel it was appropriate to raise the bottom end of our beta guidance for the outlook for this year, from four to eight to six to eight percent.

I am Fernando here, let me, let me get this first one.

Your question will.

On guidance a few <unk>.

This has been a very dynamic year, but it's fair to say that the business continues to have momentum and when we look the year to date performance and the momentum that we're having on the business. We feel it was appropriate to raise the Boston Orlando forward EBITDA guidance for the outlook for the year.

So will fluctuate to 6% to 8%.

Speaker 4: We also mentioned that our medium thermal loop remains unchanged. Whenever we talk about outlook, it's good to take a step back and understand why we decided to provide an outlook.

We also mention that our medium term outlook remains unchanged and whenever we talk about outlook. It's good to take a step back and understand why we decided to provide an outlook at.

Speaker 4: At the end of the day, when we had our investor seminar last year.

At the end of the day, when we had our investor seminar last year.

Speaker 4: We made a clear evolution of our strategy. We removed it from more inorganic to inorganic one. And given that we're moving to an organic strategy, which would require us to invest to even grow the gear category, invest to advance our digital transformation. And we do all of that. We are dynamically allocating resources to grow and optimize our business while we're still the leverage.

We made a clear evolution of our strategy to move it from me.

Fernando Tennenbaum: We are moving from more inorganic to an organic one. Given that we're moving to an organic strategy, which would require us to invest to lead and grow the beer category, invest to advance our digital transformation, and we do all of that while we're dynamically allocating resources to grow and optimize our business while we're still deleveraging. It would be important to give confidence, what one would expect as an algorithm for ABI. That's why I ended up providing the outlook. Of course, now we just adjusted the full year 2022, given the momentum and given the performance so far. For the medium term, it remains unchanged.

More inorganic and organic one and given that we're moving to an organic strength ish.

Which would require us to invest to lead and grow the beer category.

<unk> advanced our digital transformation and we do all of that we already been dynamically allocating resources to grow and optimize our business why was two deleveraging it would be important to give confidence.

Speaker 4: It would be important to give confidence what one would expect as an algorithm for ADI. That's who I am, providing the outlook.

What what one would expect as an algorithm for Adi that's why ended up providing the outlook.

Speaker 4: And of course, now we just adjusted the full year 2022, given the momentum and given the performance so far. For the medium term, it remains unchanged. And next year, when we get to the full year end release, we make a decision whether we make any different outlook for the year 2023. But no update so far.

And of course now we just adjusted the full year 2022, given the momentum and given the performance so far.

For the medium term it remains unchanged in the next year when we get to the full year earnings release, we make a decision rather than make any different outlook for the year of 2023 with mobile update sofa.

Fernando Tennenbaum: Next year, when we get to the full-year-end release, we make a decision whether we make any different outlook for the year of 2023. No update so far.

Michel Doukeris: Yeah. Mitch, just complementing this answer that Fernando gave to you and to everybody, I think that, in a way, each year will be different with its set of challenges and equal opportunities. As we put together our strategy, we are really focused in controlling what we can control. In order to execute this strategy, we need to have investments, and we'll be always balancing the risks and opportunities while giving certainty to people that the financial discipline will continue to be always there. That's why we provided this outlook, which as Fernando said, remains unchanged to the medium term. On the RTD space, this in a way connects with Tristan's question at the beginning, on the brands and how the market's evolving. This beyond beer space, ready-to-drink beverage in the US is a reality.

Okay.

Speaker 9: Yep, Mitch. Just complimenting this this answer that Fernandez gave to you and to everybody, I think that in a way, each year will be different with each year.

Yes Mitch.

<unk> <unk>.

Complementing. This this answered the threat of them gave them to you and to provide I think that.

In a way.

Each year will be different.

It's SaaS off Charley.

Speaker 4: challenge and equal opportunities.

Challenge.

And equal opportunities.

And as we put together.

Speaker 4: Our strategy, we are really focused in controlling what we can control.

Our strategy, we are really focused in controlling what we can control.

Speaker 4: And in order to execute this strategy, we need to have investments and we'll be always balancing the risks and opportunities.

In order to execute business traffic, we need to have investments and there will be always balancing the risks and opportunities, while giving certainty to people that the financial discipline. We will continue to be always there and thats why we provided the outlook wechat.

Speaker 4: while giving certainty to people that their financial discipline will continue to be always there and that's why we provided this outlook which as Fernando said remains unchanged to the midterm.

And then the sad remains unchanged to the midterm on debt to deep space.

Speaker 4: On the RTD space, this in a way connects with Tristan's question at the beginning.

This in a way connect with <unk> question at the beginning on the brands and how the market's evolving. So this builds be it a space ready to drink beverage in the last as the reality it will be part of the industry will continue to happen, but the manifestation.

Speaker 4: on the brands and how the market is evolving. So this Beyond Beer space ready to drink beverage in the US is a reality. It will be part of the industry, will continue to happen, but the manifestation in what...

Michel Doukeris: It will be part of the industry, will continue to happen, but the manifestation in what beverages, types of liquids, it will be always changing a little bit, right? We have seen different waves and different type of beverage and liquids there. I think that at this time, in the US, ABI, we are not only well-positioned because we got very early into the trend with Cutwater and NÜTRL, but we have a good combination of understanding on how this will evolve, the right brands that we've been investing to develop, and they've been growing very well. For us today, give or take annualized sales, let's say $150 million and growing ahead of the industry, high double digits. Very promising.

In what's beverages types.

Speaker 4: types of liquids, it will be always changing a little bit. So we have seen different waves.

Types of liquids.

It will be always changing a little bit right. So we have seen different ways and different type of beverage and liquids, there and I think that at this time.

Speaker 4: and different types of beverage and liquids there. And I think that at this time, A being the US, ABI, we are not only well positioned because we got very early into the trend of cut water and neutral, but we have a determination of

<unk> the last CPI, we are not only well positioned because we got very early into the transition cutwater and neutral, but we have a good combination of understanding on how this will evolve the right brands that we've been investing to develop and there has been <unk>.

Speaker 4: understanding on how this will evolve, the right brands that we've been asking to develop and they've been growing very well. For us today, give or take, analyze sales, let's say $150 million.

<unk> is very well put us to date give.

Give or take and Elisa sales, let's say $150 million.

Speaker 4: and growing ahead of the industry, high double digits.

And growing ahead of the industry.

High double digits. So very promising is still in the big scheme of things of the U S is small to the total revenues that we have but to relevant for the growth given the speed and reach is growing and again in the complex cocktail ready to drink.

Speaker 4: So very promising, still in the big scheme of things of the U.S.

Michel Doukeris: It's still in the big scheme of things of the US, is small to the total revenues that we have, but relevant for the growth given the speed in which it's growing. Again, in the complex cocktails ready to drink, Cutwater is the leading brand today, and NÜTRL is leading brand in Canada. We are in the middle of the rollout in the US, but everything that we've seen in terms of performance looks very good and the brand's incredible, so we are very optimistic for what it can bring to us next year and beyond.

Speaker 4: is small to the total revenues that we have, but relevant for the growth, given the speed in which it's growing. And again, in the complex cocktail Ready to Drink, Cut Water is the leading brand today, and Neutro is the leading brand in Canada. We are in the middle of the rollout in the US, but everything that we see in terms of performance.

Cutwater, leading brand today and neutral is a leading brand in Canada. We are the needs of the rollout and the last but that would seem to efficacy in terms of performance.

Speaker 4: Looks very good and the brand is incredible. So we are very optimistic for what it can bring to us next year and beyond.

It looks very good and the Brent incredible so we're very optimistic for what it can bring to us next year and beyond.

Mitch Collett: It's very helpful. Thank you, guys.

Thank you Bill.

Operator: Thank you. Our next question is coming from the line of Brett Cooper with Consumer Edge Research. Please proceed with your question.

Thank you. Our next question is coming from the line of Brett Cooper with consumer Edge Research. Please proceed with your question.

Brett Cooper: Hi. Thanks for taking the question. Just a quick one. I was hoping you could help us understand the performance of beer category in our brands, specifically in outlets using BEES Marketplace versus those outlets where they're not using it. Thanks.

Speaker 10: Hi, thanks for taking the question. Just a quick 1. I was hoping to help us understand.

Hi, Thanks for taking the question just a quick one I was hoping you could help us understand the beer category in your brand specifically in outlets using these marketplace versus those outlets, where theyre not using it.

Speaker 10: beer category in door brands specifically in outlets using these marketplaces versus those outlets where they're not using it. Thanks.

Michel Doukeris: Let me try to give you a couple of points here on that. This is in 19 countries, and in these 19 countries, we have a very high adoption, so much so that in most of them we are already above 80%, 90%. Marketplace is today in 14 countries, and more than 40% of the B's customers are now also B's marketplace buyers, and the traction is improving. Meaning more and more B's customers are buying in marketplace. The traction is coming as well, if you think about the flywheel, so you get customers to buy and you attract more partners. Today more than 200 partners have joined us in the different places, and they provide more than 500 brands products options for our customers to buy within the marketplace.

So let me try to give you.

Speaker 4: Couple of points here on that. So this is in 19 countries. And in these 19 countries, we have a very high adoption, so much so that in most of them, we are already above 80%, 90%.

Couple of points here on that so busy in 19 countries.

And India is 19 countries, we have a very high adoption.

So much so that in most of them, we are already above 80% 90%.

Speaker 4: Marketplace is today in 14 countries.

Marketplace is today in 14 countries.

Speaker 4: and more than 40% of the BIF customers are now also BIF marketplace buyers and the traction is improving meaning more and more BIF customers are buying in marketplace.

And more than 40% of the customers.

Now also these marketplace buyers and the traction.

Is improving meaning more and more of these customers are buying in marketplace.

Speaker 4: The traction is coming as well if you think about the flywheel. So you get customers to buy and you attract more partners. So today more than 200 partners have joined us in the different places and they provide more than 500 brand products options for our customers to buy within the marketplace. Thank you.

The traction is coming as well is to think about the flywheel sort of gap customers to buy and you attract more partners. So today more than 200 partners.

<unk> joined us in the different places and they provide more than 500 brands for all of its options for our customers to buy within the marketplace.

Michel Doukeris: The reality is quite straightforward because this is making us more effective on the point of sales. Being able to sell more of our portfolio and the beer category is performing better, where we have this as a tool. When we have marketplace, you have a more engaged customer, so the points of sales, they use more the tool, they have more transactions, they buy more from us being direct first party type when we sell the products or when you just commercialize the products and the other company's third-party delivery. Because they are more engaged, they are performing better where we have marketplace than where we don't have this. It's like it's a flywheel that gets better. The more the customer engages with us, the better our business is with them.

<unk>.

The reality is quite straight forward because this is making us more effective on the point of sales. So we are being able to sell more of our portfolio in the beer category is performing bad debt why do we have this as a tool and when we have market.

Speaker 4: straightforward because this is making us more effective on the point of sales. So we've been able to sell more of our portfolio and the beer category is performing better where we have this as a tool. And when we have marketplace, you have a more engaged customer. So the points of sales, they use more of the tool, they have more transactions, they buy more from us being.

Base, you'll have more engagement customer so the points of sales.

To use more of a tool they have more transactions they buy more from us being.

Speaker 4: direct first party type when we sell the products or when you just commercialize the products and the other companies third party deliver. And because they are more engaged, they are performing better when we have marketplace than where we don't have, than when we don't have this. So it's like a flywheel that gets better. The more the customer engages with us, the better our business.

Direct first party type when we sell the products or Wendy just commercialize the projects and the other Companys third party delivered and because they are more engaged and they are performing better why do we have marketplace than glad we don't have then when we don't have this so it is like.

Is that.

A flywheel that gets.

The more the customer engages with us the bad debt our business.

Speaker 4: is with them and because we are enabling them.

Michel Doukeris: Because we are enabling them with digital inclusion, what happens is that they have a better portfolio to sell, better service level from the companies. They can then attract more consumers, and they can grow their business and have a better impact in their communities. We are very excited with this possibility of including the customers digitally and making them more profitable, bigger, and more successful as business owners.

He is with them and because we are enabling them.

Speaker 4: with digital inclusion, what happens is that they have a better portfolio to sell, better social level from the companies.

<unk> digital inclusion what happens is that they have a better portfolio to sell fabless Soc level from the companies they come down attract more consumers and they can grow their business and have a bad debt impact in their communities. So we're very excited with this possibility.

Speaker 4: they can then attract more consumers and they can grow their business and have a better impact in their communities. So we are very excited with this possibility of including the customers digitally and making them more profitable, bigger, more successful as business owners.

Including the customers digitally and make them down more profitable bigger more successful as business owners.

Operator: Thank you. We'll move on to our next question, which is coming from the line of Laurence Whyatt with Barclays. Please proceed with your question.

Thank you we'll move on to our next question, which is coming from the line of Laurence <unk> with Barclays. Please proceed with your question.

Laurence Whyatt: Hi, Michel, Fernando. Thanks so much for the question. Too also for me following on BEES. First one, in Brazil, it's one of your more mature markets on BEES. But you don't appear to have taken any material market share despite your competitors not having similar platforms. So just wondering if there's anything we're missing there or whether that should be expected to happen. And then secondly, you recently started disclosing your BEES in China, going to around 10% now, I think you said. How do you expect the Chinese market to be any different to the markets you're already in BEES? Or how is it different, and could you get to similar levels in China as you do in your mature markets? You say sort of 80-90% of your customers using digital methods.

Speaker 11: Hi Michelle, Fernando, thanks very much for the question, two also for me following on the

Hi, Michelle Thanks.

Thanks, So much for the question to say for me following on on BS.

Speaker 11: First one in Brazil, it's one of your more mature markets on bees, but you don't appear to have taken any material market share despite your competitors not having...

First one in Brazil, one of your more mature markets on bes.

<unk> appear to have taken any material market share. Despite your competitors, having similar platforms. I was just wondering if there's anything we're missing there whether that.

Speaker 11: if there's anything we're missing there or whether that should be expected to happen.

Should we expect it to happen and then secondly, you have recently started disclosing your fees in China around 10% now I think you said.

Speaker 11: And then secondly, you recently started disclosing your bees in China going to around 10% now.

Speaker 11: Do you expect the Chinese market to be any different to the markets you're already in in bees? Or how is it different?

How do you expect the Chinese market to be any different to the markets you're already in MBS or how is it different and could you get to similar levels.

Speaker 11: you get to similar levels in China as you do in your mature markets. You say sort of 80, 90% of your customers using digital math.

In China as you do in your mature markets, you say sort of 90% of your customers using digital method.

Laurence Whyatt: Thank you very much.

Methods. Thank you very much.

Michel Doukeris: Hey, Laurence, thanks for the question. I'll get the first one and then talk a little bit more about China as I build on the answer for the first question. I think that this is all about getting our customers to be more digital, having a better service level, understand better what are the opportunities to make their business grow and thrive, right? Because we thrive when our communities thrive, and we grow when our customers grow. This is enabling for them to get better businesses and to make a more profitable business for themselves. Of course, in doing so, we can get our business as well to perform better with these customers, and this is what you see across all 19 countries where this is operating today.

Hey, Laura Thanks for the question.

Speaker 4: I'll get the first one and then talk a little bit more about China as I build on the answer for the first question.

I'll get the first one and then talk a little bit more about China as they build on the answer for the first question. So I think that this.

Speaker 4: is all about getting our customers to be more digital, having a better service level, understand better what are the opportunities.

Is all about getting our customers to be more digital having a bad their census level understand further what are the opportunities to make their business grow anthrax right, because we thrive when our convenient store.

Speaker 4: to make their business grow and thrive.

Speaker 4: Because we thrive when our communities thrive and we grow when our customers grow. This is an enabler for them to get better businesses and to make a more profitable business for themselves.

And we grow when our customers grow and this is a enabler for them to get better businesses and to make a more profitable business for themselves of course in doing so we can get our business as well to perform better we've discussed.

Speaker 4: Of course, in doing so, we can get our business as well to perform better with these customers.

Speaker 4: And this is what you see across all 19 countries where BIS is operating today. You see a more thriving environment for the small and medium enterprises.

And this is what is C across all 19 countries well.

This is operating today, you'll see a more trading environment for the small and medium enterprises and youll see that the beer categories performing better.

Michel Doukeris: You see a more thriving environment for the small and medium enterprises, and you see that the beer category is performing better. Therefore, as a consequence, our business is performing better as well. When you think about China, I have mentioned this before, in one of the calls answering one of the questions from our colleagues here, that I can simplify how this is moving globally to you thinking about three different clusters. The cluster number one is what we call the direct distribution operations, where you can think of Brazil, you can think of Mexico, Argentina mostly.

Speaker 4: and you see that the beer category is performing better, and therefore as a consequence our business is performing better.

And therefore as a consequence, our business is performing better as well when you think about China and I have mentioned this before one of the calls answered one of the questions from our colleagues here.

Speaker 4: When you think about China, and I have mentioned this before, in one of the calls answering one of the questions from our colleagues here, that I can't simplify how this is moving globally to you thinking about three different clusters.

I can simplify how big.

Is moving globally to you thinking about three different clusters.

Speaker 4: The cluster number one is what we call the direct distribution operations, where you can think of Brazil, you can think of Mexico, Argentina, mostly. And these markets, because you have direct distribution, one ERP system, integration is very quick. And we scaled it up very fast over the last two years.

Number one is what we call the direct distribution operations. While you can think of Brazil, you can think of Mexico, Argentina, mostly and these markets because we have the direct distribution. One ESP system integration is very quick and we scaled it up very fast.

Michel Doukeris: These markets, because you have direct distribution, one ERP system, integration is very quick, and we scaled it up very fast over the last two years. The second cluster is the product that we are developing for large key accounts, so we can improve this electronic transaction EDI systems that we have. It's called BEES Link, is in development. Once we get these large accounts to be with a better system, I always compare like the landline phones that we had in the past with the modern iPhones, right? There is a lot of opportunities to get the EDI system of the big accounts today to be much more modern because they are in place for 20 years and they didn't change a lot. They don't have recent data, they don't have AI, all the possibilities that we have today as we improve them.

<unk>.

Over the last two years. The second cluster is the project that we are developing for large key accounts. So we can improve this electronic transactions CGI systems that we have is called <unk> link.

Speaker 4: The second cluster is the product that we are developing for large key accounts. So we can improve these electronic transactions, ZDI systems that we have. It's called BizLink, it's in development. And once we get these large accounts to be with a better system, I always compare like that.

I think the development and once you get these large accounts to be we felt that the system iOS compared like there.

Speaker 4: landline phones that they had in the past with the modern iPhones, right? So that is a lot of opportunities to get the EDI system of the big accounts today to be much more modern because they are in place for 20 years and they didn't change a lot. They don't have vision data. They don't have AI. All the possibilities that we have today as we improve them. And then the third wave is the wave of indirect marketing.

Landline phones that they had in the past with the modern iphones right. So that is a lot of opportunities to get the NDA system of the big accounts to date to be much more modern because they are in place for 20 years and they didn't change a lot they don't libraries and data they don't have the EI.

All the possibilities that we have today as we improve them and then the third wave is the waves of indirect markets and in the indirect market is where do you have a three tier system and not all with your systems are equal, but youll have US you have the wholesalers and then it has a point of sales in China.

Michel Doukeris: Then the third wave is the wave of indirect markets. In the indirect markets is where you have a three-tier system. Not all three-tier systems are equal, but you have us, you have the wholesalers, and then you have the point of sales. In China, the US, they fall into this third wave. In China today, we have, like, 15%, let's say, of our sales already in BEES because the ecosystem in China is very different for all technologies. BEES there, we are developing a lot of things in China following the standard product and the same product algorithms and AI that we have in the other markets, but building and hosting this in China.

Speaker 4: And in the indirect markets is where you have a three-tier system. Not all three-tier systems are equal, but you have us, you have the wholesalers, and then you have the point of sales. In China, the US, they fall into this third wave. In China today, we have a three-tier system.

The U S. They fall into this third wave in China today, we have like.

Speaker 4: 15% let's say of our sales

15%, let's say of our sales.

Already beef.

Speaker 4: Because the ecosystem in China is very different for all technologies. We are developing a lot of things in China following the standard product and the same product algorithms and AI that we have in the other markets, but building and hosting this in China. And because of the whole system there and the structure of the market.

Because the ecosystem in China is very different for all acknowledges <unk>, we added developing a lot of things in China. Following the standard product and the same products algorithms and AI that we have in the other markets, but building and hosting using <unk>.

Michel Doukeris: Because of the wholesaler system there and the structure of the market, those are the markets that we need to first develop, choose places that we go, and then roll it out and scale in a staged way, market by market, wholesaler by wholesaler, state by state. At the beginning, that is more customization because we need to make the transformation. Our teams, they evolved a lot in the way that they learn and how to roll this fast. Now we are in a scaling up mode in China. The benefits for the customers will be pretty similar across all markets because it will empower them digitally. We'll give them more tools to manage their business, a superior portfolio, and service level. For us, of course, if this works, so more satisfied customers, we will have a better category. It doesn't matter, China, Brazil, US.

Anna.

And because of the wholesaler system, there and the structure of the market.

Speaker 4: Those are the markets that we need to first develop, choose places that we go, and then roll it out and scale in a staged way. Market by market, we'll serve the wholesalers state by state. At the beginning, that is more customization because we need to make the transformation. But our teams, they evolved a lot in the way that they learned how to roll this fast. And now we are in a scaling up mode in China.

Those are the markets that we need to first develop choose places that we go and then roll it out in any scale.

Page or the way a market by market will set up a wholesale is state by state at the beginning that is more customization, because we need to make the transformation, but our teams they have over the last in a way that they learn how to roll the SaaS and now you're adding that is scaling up mode in China.

Speaker 4: the benefits for the customers.

Their benefits for the customers will be pretty similar across all markets because it will empower them digitally we will give them more tools to manage their business. Our superior Port 400 service level and photos of course, if this works so.

Speaker 4: will be pretty similar across all markets because it will empower them digitally, will give them more tools to manage their business, a superior portfolio and service level, and for us of course if this works. So more satisfied customers.

More satisfied customers, we will have a better category doesn't matter is China, Brazil U S.

Speaker 4: We will have a better category. Does the matter China, Brazil, US?

Michel Doukeris: If the category is better and the customers are more empowered and growing, our business will also benefit and grow. The model for China, the waves of China is the third wave, not the first one. Yes, the benefits and outcomes that we expect are very similar. Better for customers, more empowered digitally, a better category development, more vibrant, with more tools to activate, and as a consequence, a better business for us to be part of.

Speaker 4: And if the category is better and the customers are more empowered and growing our business will also benefit and grow. So the model for China, the wave of China is the third wave, not the first one. Yes, the benefits and outcomes that we expect are very similar. Better for customers.

And if the category is badger and the customers are moving forward and growing our business. We will also benefit and growth. So the model for China. The waves of Chinese the third wave and on the first one.

Yes, the benefits and outcomes that we expect a very similar better for customers morning, Paul word digitally a better category development environment vibrant with more tools to excavate and as a consequence of better business for us to be part of.

Speaker 4: more empowered, digitally a better category, development more vibrant, with more tools to activate and as a consequence a better business for us to be part of.

Laurence Whyatt: That's all really cool. Clear, Michel. Thank you very much.

So really coke plant Michelle Thank you very much.

Operator: Thank you. Our next question is coming from the line of Rob Ottenstein with Evercore. Please proceed with your question.

Thank you. Our next question is coming from the line of Robert <unk> with Evercore. Please proceed with your question.

Speaker 2: Our next question is coming from the line of Rob Ottenstein with Evercore. Please proceed with your question.

Robert Ottenstein: Great. Thank you very much. Two questions. First, I was surprised about how well Budweiser did globally, given the fact that a lot of its sales are in China, and China has been weak. Could you please remind us what percentage of Budweiser sales are in the US and outside of the US, roughly? And what's driving the global Budweiser growth? That would be question number one. And then question number two is, you know, there's always this ongoing debate about beer versus spirits. And clearly spirits are doing much better than beer in the US. Can you talk about what you're seeing now in the rest of the world? And maybe, you know, what markets beer is doing better and gaining share? You called out, I think, Colombia.

Speaker 12: Great, thank you very much. Two questions. First, I was surprised about how well Budweiser did globally, given the fact that a lot of its sales are in China.

Great. Thank you very much two questions first.

I was I was surprised about how well Budweiser did.

Globally, given the fact that.

A lot of its sales are in China, and China has been weak. So could you. Please remind us what percentage of Budweiser sales are in the U S and outside of the U S roughly and.

Speaker 12: So could you please remind us what percentage of Budweiser sales are in the US and outside of the US roughly and what's driving the global Budweiser growth? So that would be question number one. And then question number two is, you know, there's always this ongoing debate about beer versus spirits. So that would be question number three is, you know, there's always this ongoing debate about beer versus spirits.

And what's driving the global Budweiser growth so that would be question number one and then question number two.

Is.

Theres always this ongoing debate about beer versus spirits.

Speaker 12: And clearly spirits are doing much better than beer in the US Can you talk about what you're seeing now in the rest of the world and maybe you know? What what markets beer is doing better and gaining share you pulled out in Colombia any other mark?

And clearly spirits are doing much better than beer in the U S.

Can you talk about what Youre seeing now in the rest of the world and maybe what markets beer is doing better and gaining share you called out I think Colombia any other markets would be helpful. Thank you.

Robert Ottenstein: Any other markets would be helpful. Thank you.

Michel Doukeris: Hey, Robert. Good morning. Thank you for the questions. I'll try to address both here. Yes, you know that we don't disclose absolute numbers, percentages by country, region, but definitely the two largest markets globally for Budweiser are the US and China. You know this correctly. The brand overall globally is very healthy. You see, even in the US, the brand power and the share of segment is probably having the last two years, the best performance in more than 20 years. In China, the brand remains very solid. Demand, when you are outside the lockdowns, remains solid. When you get the cities that we are expanding that are not facing any lockdowns, the growth is very healthy and the brand is growing in other markets across the globe.

Speaker 4: Hey, Robert, good morning. Thank you for the questions. I'll try to address both here. Yet you know that we don't disclose absolute numbers, percentages by country, region.

Hey, Robert Good morning.

Thank you for the questions I'll try to address both here at home and all of that we don't disclose some solid numbers percentages by country or region.

Speaker 4: but definitely the two largest markets globally for Budweiser are the US and China. So you know this correctly. And the brand overall globally is very healthy. You see even in the US, the brand power and the share of segment is probably having the last two years the best performance in more than 20 years.

But definitely the two largest markets globally for Budweiser, the U S and China.

So in all of this correctly.

On the brand overall globally, it's very healthy you'll see.

Even in the wax the brand power and the share of segment.

Is probably having the last two years the best performance seen more than 20 years.

Speaker 4: In China, the brand remains very solid. Demand when you are outside the lockdowns remains solid.

In China the brand remains very solid.

Demand when you are outside the Lockdowns remains solid when youll get the Cds that we had expanding that are not facing any lockdowns. The growth is very healthy and the brand is growing in other markets across the globe. So we can think about Nigeria, you can think about.

Speaker 4: When you get the series that we are expanding that are not facing any lockdowns, the growth is very healthy.

Speaker 4: and the brand is growing in other markets across the globe. So you can think about Nigeria, you can think about France, the UK, you can think about the Latin American countries where we have the brand. So the brand continues to perform, expand globally and the largest activation for the year will be actually in the quarter four because Budweiser is the sponsor of FIFA World World.

Michel Doukeris: You can think about Nigeria, you can think about France, the UK, you can think about the Latin American countries where we have the brand. The brand continues to perform, expand globally, and the largest activation for the year will be actually in Q4, because Budweiser is the sponsor of FIFA World Cup, and we are activating 70 countries. It is the largest activation for the Budweiser brand yet. It's gonna be a very exciting moment for Budweiser in Q4. We've been discussing this and sharing data with you all, IWSR data and Euromonitor data, and beer globally is gaining share of throat. We have many countries in which this is true. It's not one or two countries. Beer is gaining share of throat from most spirits, the low-end spirits across many countries.

France. The UK you can think about the Latin American countries, where do we have the brand. So the brand continues to perform expand globally and the largest activation for the year.

We will be actually in the quarter four because Budweiser is the sponsor of FIFA World Cup and we are activating 70 countries and is the largest activation for the Budweiser brand yet. So it is going to be very exciting moment for Budweiser in the quarter for <unk>.

Speaker 4: and we are activating 70 countries and is the largest activation for the Budweiser brand yet. It is going to be a very exciting moment for Budweiser in the quarter.

Speaker 4: And we've been discussing this and sharing data with you all, IWSR data and aero monitor data. And beer globally is gaining a shot of throat.

And we've been discussing decent shedding data we few wall.

The data and the other one that sort of data and video globally is gaining share of growth.

Speaker 4: We have many countries in which this is true. It's not one or two countries. We are getting shut off the road from

We have many countries in which this is true it's not one or two countries.

<unk> is gaining share of Peru from most.

Speaker 4: spirits, the low-end spirits across many countries.

It's periods than low end experience across many countries in Europe , you'll see be it gaining shelf through do you see it from wine is one of the reasons why funds are growing in Europe , Despite a fall inflation.

Michel Doukeris: In Europe, you see beer gaining share of throat this year from wine, is one of the reasons why volumes are growing in Europe in spite of all inflation and pressures in the market there. In the US, what you see today is beer much more stable than what was few years ago. We saw during the pandemic and post-pandemic beer growing penetration and participation, and the category is more stable. When you add on that, the ready-to-drink beverage, the so-called fourth category, gaining space. Today, a lot of the growth for spirits that you're mentioning is coming from the ready-to-drink cocktails. It's good to have Cutwater there growing double digit, having NÜTRL there accelerating and growing also ahead of the industry for this segment. Excited with the opportunities and headroom.

Speaker 4: In Europe you see beer gaining share of throat this year from wine is one of the reasons why fun.

Speaker 4: are growing in Europe despite of all inflation and pressures in the market there. In the US what you see today is beer much more stable than what was.

And pressures in the market there and in the U S. What you see today is.

Much more stable than what was a few years ago. So we saw during the pandemic and post pandemic via growing penetration and our participation and the category is more stable. When you add on that they are ready to drink beverages. The so called fast category.

Speaker 4: few years ago. So we saw during the pandemic and post-pandemic, beer growing penetration and participation, and the category is more stable. When you add on that, the ready to drink beverage, the so-called fourth category, gaining space.

Gaming space and today a lot of the growth for this period that you are mentioning.

Speaker 4: And today a lot of the growth for spirits that you are mentioning, coming from the Ready to Drink.

It's coming from the ready to drink.

Speaker 4: So it's good to have cut water there growing double-digit, having neutral there, accelerating growing also ahead of the things.

Cocktails. So it's good to have cutwater data growing double digit having neutral they're accelerating and growing also ahead of the.

The industry for this segment.

Speaker 4: and excited with the opportunity and headroom. You know that we have a very diversified geographical footprint.

Excited with the opportunity some head room, you'll know that we have a very diversified.

Michel Doukeris: You know that we have a very diversified geographical footprint. That's my view is that it sometimes is underappreciated, but all the growth opportunities in Latin America, in Africa, and in Asia that we have not only for volume but for growth in premium beer, it's incredible. Premium beer is growing faster than premium spirits globally. This is a fact, again, as much as beer gaining share of throat when you do the apples-to-apples comparison. Premium spirits and premium beers, premium beer is growing ahead of premium spirits and has even more headroom for growth as Latin America premiumizes, as the US continues to premiumize, and the rest of the world is almost untapped opportunities for premium beers. Great momentum out there for the category, proving to be not only big, profitable, but also resilient and with incredible opportunities to continue to premiumize.

<unk> footprint.

Speaker 4: that my view is that sometimes it is underappreciated, but all the growth opportunities in Latin America, in Africa, and in Asia that we have not only for volume, but for growth in terms

My view is that in some time this is underappreciated, but all the growth opportunities in Latin America enough BRCA in Asia that we have not only for volume.

But for our growth in premium.

Speaker 4: Beer, it's incredible and premium beer is growing faster than premium spirits globally. There's a fact, again, as much as beer gaining share of throat, when you do the apples and apples comparison premium spirits.

Yes.

It is incredible and premium beer is growing faster than premium spirits global.

Back again as much as beer gaining share of throat. When you do the apples and apples comparison premiums periods and premium beers premium beer is growing ahead of premium spirits and has even more headroom for growth has left an American putting a nice as the U S continues to premium <unk>.

Speaker 4: premium beers. Premium beer is growing ahead of premium spirits and has even more headroom for growth as Latin America premiumizes as the US continues to premiumize and the rest of the world is almost untapped for opportunity for premium beers.

And the rest of the world this almost untapped.

<unk> for premium beers, so great momentum would therefore, the category proving to be not only be profitable, but also resilient and they are incredible opportunities to continue to prevail nice so.

Speaker 4: Great momentum there for the category, proving to be not only big, profitable, but also resilient, but also a new incredible opportunity to continue to premiumize.

Michel Doukeris: So much so that Corona revenues grew 23.5% this quarter. A number for us to remember as well on how big the opportunity is for us to continue to premiumize the category globally. Thank you for the question.

Speaker 4: So much so that Corona revenues grew 23.5% this quarter. So a number for us to remember as well on how big the opportunity is for us to continue to proronize the category globally. Thank you for the question. That's terrific. Thanks for coming and have a good winter.

So much so that corridor on our revenues grew 23, 5% this quarter. So a number for us to remember as well on how big the opportunities for us to continue to prove our knives that category globally. Thanks for the question.

Operator: That's terrific. Thank you. Thank you. Our final question is coming from the line of Trevor Stirling with Bernstein. Please proceed with your question.

That's terrific. Thank you.

Thank you. Our final question is coming from the line of Trevor Stirling with Bernstein. Please proceed with your question.

Trevor Stirling: Hello. I've got two questions please, Michel and Fernando, concerning regional performance. The first one is, I think virtually every region had margin compression of one form or another, but looked like the margin compression was worst in Middle Americas. I wonder, could you give some color about why Middle Americas came under such pressure? Second thing, well, in Brazil, I think beer volumes were flat, but premium was up high single digits. Core was up mid-single digit, but was it the economy end of the portfolio that was weak?

Speaker 13: Hello, I've got two questions please, Michelle and Fernando. Concerning regional-

Two questions, please machines and undo that Cassini regional performance.

Speaker 13: The first one is, I think virtually every region had margin compression of one form or another, but it looked like the margin compression was worst in middle Americas. And I wonder, could you give some color about why middle Americas came on?

First one is I think virtually every region had margin compression in one form or another but it looked like the margin compression that exist in middle Americas, and I Wonder could you give some color about why middle Americas came under such pressure.

Speaker 13: And the same thing, in Brazil, I think beer volumes were flat, but premium was up high single digit, core was up mid single digit, but was at the economy end of the portfolio.

Okay.

In Brazil beer volumes were flat, but premium was up high single digits pool was up mid single digits. So it wasn't the economy and a portfolio that was weak.

Michel Doukeris: Yeah, Trevor, if I got the two questions correct there, let me start with the Middle Americas. I think that's twofold on this answer. One, as much as we've been talking about the inflationary costs for next year being overweighted on Europe, as we came from the 2021 to 2022, both the costs and the supply chain disruptions, they were not equally distributed across all markets. Middle Americas overall, when you cut from Colombia all the way up to Mexico, is growing a lot. This growth requires both infrastructure of suppliers as well as time to accommodate all the disruptions that we saw during the COVID period. Because of that, the costs there, this quarter and over 2022, were more accentuated than other markets.

Speaker 4: If I got the two questions correctly there, let me start with the middle Americas. I think that's twofold on this answer. One, as much as we've been talking about the

Yes.

If I've got the two questions correct. There, let me start with the mid to Americas.

I think thats two fold on the zone, one as much as we've been talking about that.

Speaker 4: the inflationary costs for next year being overweighted in Europe . As we came from the 2021 to 2022, both the costs and the supply chain disruption

The inflationary costs for next year.

Overweighted on Europe .

As we came through on the 2021 to 'twenty to 'twenty two.

Sure.

The cost and the supply chain disruption.

Speaker 4: They were not equal distributed across Walmart.

They were not equally distributed across all markets.

Speaker 4: and middle Americas overall, when you cut from Colombia all the way up to Mexico, is growing a lot. And this growth requires both infrastructure of suppliers and infrastructure of suppliers.

Neither Americas overall, when you cut from Columbia, all the way up to Max is growing a lot.

And this growth requires both infrastructure of suppliers.

Speaker 4: as well as time to accommodate all the disruptions that we saw during the COVID period.

As well as.

Tying to accommodate all the disruptions that we saw during the Covid period.

Speaker 4: And because of that, the costs there this quarter and over 2022 were more accentuated than other markets.

And because of that the cost as they are.

This quarter in over 2022, we're more weighted than other markets.

Michel Doukeris: As we continue to grow, you are accelerating both top line and bottom line in a very healthy way, generating very good cash flow growth, while the margins in the short term are under pressure. You know my answer to that, I like our margins. They have a very clear reason why they exist, is like based on our market positions, the strength of our brands, and how efficient our operations are. We continue to grow in Middle Americas, and margins tend to revert, as all the supply chain disruptions end and as we settle and get more organized with the investments that we've been doing for our partners to have the correct supply footprint there. The second one, more in Brazil. I think that, in Brazil, the story is very simple.

Speaker 4: And as we continue to grow, you are accelerating both top line and bottom line in a very healthy way generating very good cash flow growth.

And as we continue to grow Youre accelerating both topline and bottom line in a very healthy way generating very good cash flow growth.

Speaker 4: While the margins in the short term are under pressure, but you know my answer to that, I like our margins, they have a very clear reason why do they exist. It's like based on our market positions, the strength of our brands, and how efficient our operations are. Joining me for the first time in my entire career at Asi time. How would I address that!

Why are the margins in the short term are under pressure by the enrollment my answer to that they like our margins they have a very.

Clear reason why do they exist is like based on our market position the strength of our brands and how efficient our operational side. So we will continue to grow in middle Americas and margin stands to revert.

Speaker 4: So we continue to grow in middle Americas and margins tend to revert as all the supply changes.

As all of the supply chain disruptions.

Speaker 4: And as we settle and get more organized with the investments that we've been doing for partners to have the correct supply footprint there.

And as we settle and get more organized than with the investments that we've been doing for our partners to have the correct supply footprint there the second one.

Speaker 4: The second one, more in Brazil. I think that in Brazil the story is very simple. We've been growing.

Morning, Brazil, I think that in.

Michel Doukeris: We've been growing Volumes and top line in a very strong manner. Last year, all-time high on the Q3, Q4. This year we are in line with these high numbers. Premium is growing faster than value and core. You see that our core plus propositions, and here namely is Spaten, is having a terrific, fantastic year in Brazil, growing a lot and leading the growth on the portfolio, while the value part of the portfolio is growing less because the core is also very healthy in Brazil with Brahma performing very well. It's more like the growth and the performance so far is being led by the core and above. Because we are facing very good industry numbers and our own numbers from last year, the value part of the portfolio is worse than last year underperforming.

In Brazil. The story is very simple we have been growing.

Speaker 4: volumes and top line in a very strong manner. Last year all-time high on the quarter 3-4, this year we are in line with these high numbers, but premium is growing faster than value and core and you see that our

Volumes and top line in a very strong manner.

Last year, all time high on the quarter three for this year, we are in line with this high numbers.

Liam.

He is growing faster than the value and core and youll see that our.

Speaker 4: core plus propositions and here mainly is spot them is having a terrific fantastic year in Brazil growing a lot and leaving the growth of the portfolio while the value part of the portfolio is growing less because the core is also

<unk> plus propositions and here, namely is platinum is having a terrific fantastic here.

In Brazil growing a lot in leading the growth from the portfolio, while the value part of the portfolio is growing last because the quality is also.

Speaker 4: very healthy in Brazil with Brahma performing very well. So it's more like the growth and the performance so far being led by the...

Very healthy in Brazil, we should bernama performing very well so it's more like the growth and the performance. So far is being led by the court in our growth and because we are facing very good industry numbers in our own numbers from last year the value part of the port for.

Speaker 4: core and above, and because we are facing very good industry numbers and our own numbers from last year, the value part of the portfolio is versus last year than they are performing.

No.

Versus last year underperforming.

James Edwardes Jones: Understood. Thank you very much, Michel.

Understood. Thank you very much Michelle.

Michel Doukeris: Thank you.

Thank you.

Operator: Thank you. We have reached the end of our question-and-answer session. I'd now like to pass the floor back over to Mr. Doukeris for any additional closing remarks.

Thank you we have reached the end of our question and answer session. So I'd now like to pass the floor back over to Mr. Gutierrez for any additional closing remarks.

Michel Doukeris: Hey, thank you, Jesse, and thank you everyone for joining us today and for your time and your ongoing partnership and support for our business. I hope you have great week, and you are all as excited as I am for FIFA and what's coming in Q4. Thank you again. Have a great day.

Speaker 4: Thank you, Jesse, and thank you everyone for joining us today and for your time and your ongoing partnership and support for our business. I hope you have a great week and you are all as excited as I am for FIFA and what's coming in the quarter four. So thank you again and have a great day.

Thank you Jessie and thank you everyone for joining us today and for your time and Youre growing partnership and support for our business I Hope you have great week and you at all as excited as I am for FIFA and what's coming in the quarter. Four so thank you again have a great day.

Operator: Ladies and gentlemen, this does conclude today's teleconference and webcast. Once again, we thank you for your participation, and you may disconnect your lines at this time.

Ladies and gentlemen, this does conclude today's teleconference and webcast. Once again, we thank you for your participation and you may disconnect your lines at this time.

Okay.

Yes.

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