Q4 2024 Ambev SA Earnings Call
What I'm, the CEO and Mr. Luke has lead our CFO and Investor Relations Officer.
As a reminder, a slide presentation is available for downloading on our website, our idle beds dot com dot BR as well as through the webcast link of this call.
We would like to inform you that this event is being recorded and all participants will be in a listen only mode. During the company's presentation.
After Bob's remarks are completed there will be a Q&A section when we kindly ask that each participating sell side analysts ask only one question.
That's.
Look at the heavy beer, the bitter beer, the beer that... Amigo, level 1!
Before proceeding let me mention that forward looking statements are being made under the safe Harbor of the Securities Litigation Reform Act of 1996.
Speaker Change: Wow, this is great. Yes, son. Bitter beer on the beach.
Forward looking statements are based on the beliefs and assumptions of Ambev <unk> management and on information currently available to the company.
Speaker Change: Tim Guatapéza, amigo Tim Guatapéza Tim Guatapéza, amigo Tim Guatapéza Tim Guatapéza
They involve risks uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future.
Investors should understand that general economic conditions industry conditions and other operating factors could also affect the future results of Ambev and could cause results to differ materially from those expressed in such forward looking statements.
The beer must be round. Drink in moderation.
I would also like to remind everyone that as usual the percentage. It changes that will be discussed during today's call are both organic and normalized in nature and unless otherwise stated percentages changes refer to comparisons with 2023 fourth quarter results normalized.
Normalized figures refer to performance measures before exceptional items, which are either income or expenses that do not occur regularly as part of ambev normal activities.
As normalized figures are non-GAAP measures the company discloses the consolidated profit EPS operating profit and EBITDA on a fully reported basis in the earnings release.
Speaker Change: How did we manage to go from Mucuria to São Luís in such a paranoid way? I don't know. I only know that it was like this.
Carlos Lisboa: Now I will turn the conference over to Mr. Carlos Lisboa.
Carlos Lisboa: Mr. Lisboa you may begin your conference.
Carlos Lisboa: Thank you for joining our fourth quarter and full year 'twenty 'twenty four for New school.
Carlos Lisboa: Today.
Mark: Mark My first earnings call as CEO of food and Bev and it is a pleasure to connect with you.
Speaker Change: Returning to my home at Ambev <unk> 25th anniversary.
Mark: It's amazing people is a dream come true.
Mark: This is the place where it grew as a professional and over the years has shaped who I am as a person dreamy big heavy enormous shipment, though and not taking shortcuts will always be pillars forever senior I do.
La Rua Brasilia Rio de Janeiro, Brazil Adults only
Mark: Stepping into this role made me realize that a lot has changed since I left Brazil, and there is plenty to learn from you and familiar colleagues at the same time I bring 32 years of experience with the company.
Speaker Change: The same underwear from many years ago, the same place on the couch, television volume in the same number as the year of an achievement, even not watching the game if necessary. It's not just about superstition, you know, but about being part of that force to feel like the twelfth player. Yes, there will be people who say it's nonsense, and that's okay.
Mark: Throughout this time.
Mark: Had the privilege of leading marketing functions that Ambev and also global brands at Abi.
Mark: I also managed businesses in more developed markets like Canada as well as many emerging markets in Latin America, South and more recently immuno America zones, the largest zone for Abi.
Mark: As I embark on this new and exciting chapter of my career I am confident we can shape, a bright future for our company.
Speaker Change: I had no choice. I had to do it again. Sure, the brand said that the message could only reach all the fans by collecting accurate and in-depth data about our tastes and behaviours.
Mark: I am glad today Ambev is stronger than it was five years ago. Thanks to June jewelry, such leadership and the team.
Speaker Change: Today, we have a unique portfolio of domestic and global brands that hold significant relevance for our consumers in each of our markets positioning us to lead the category into the future. We also became a digital company with over 80.
Speaker Change: Pretty cool, right? Anyway, in this data, they found me at a barbecue with some friends.
Speaker Change: And I had ordered 3 bags of charcoal, 10 packs of beer, 3 bags of ice and a piece of gum. Well, now I'm alone and without any grill.
Speaker Change: 8% of our gross revenues transacted through Bp's, our b to B platform.
Speaker Change: Oh, I remember that Zed Delivery said it was just a very clever low-budget marketing stunt. I have no idea what it means, but you know, right? Well done, DTC.
Speaker Change: Our digital transformation has emerged as a key enabler in our evolution to even more customer and consumer led organization.
Speaker Change: Our effectiveness in meeting their needs.
Speaker Change: Good morning, good afternoon and thank you for waiting. We would like to welcome everyone to UNBEB's 2024 4th Quarter Results Conference Call. Today with us we have Mr. Carlos Lisboa, UNBEB's CEO, and Mr. Lucas Lira, CFO and Investor Relations Officer.
Speaker Change: Finally over the past five years consolidated EBITDA grew by 37% and generated nearly 65 billion reais eat free cash flow to equity while investing approximately 30 billion in Capex and 33 billion Reais, you sales and marketing.
Speaker Change: As a reminder, a slide presentation is available for downloading on our website ri.unbev.com.br as well as through the webcast link of this call.
Speaker Change: In 24 plays an important role in this journey first we maintained topline momentum.
Speaker Change: <unk> reputation remains strong as the most relevant category, we deem alcoholic beverages, having game will maintain share of throat at the majority of our top 10 markets in those markets beer currently has aggregated share of throat of over.
Speaker Change: We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the company's presentation.
Speaker Change: After MBEV's remarks are completed, there will be a Q&A section when we kindly ask that each participating cell site analyst asks only one question.
Speaker Change: 60%.
Speaker Change: Before proceeding, let me mention that overlooking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996.
Speaker Change: We remain believers in eight of our top 10 markets continue to develop the category not only by offering lava brands, but also bringing innovative liquids and new packaging solutions to address multiple consumer needs and consumption occasion.
Speaker Change: Forward-looking statements are based on the beliefs and assumptions of UMBEP's management and on information currently available to the company.
Speaker Change: They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future.
Speaker Change: <unk>.
Speaker Change: As a result, our volumes, excluding Argentina grew by one 4% with our Mega brands, increasing by seven 6% and improving brand health in most of our markets.
Speaker Change: Our digital initiatives continue to progress Biswas alive in eight of our top 10 markets by the end of the year and achieved $1 3 million monthly active buyers and increase of 14% versus last year.
Speaker Change: I would also like to remind everyone that, as usual, the percentage changes that will be discussed during today's call are both organic and normalized in nature, and unless otherwise stated, percentage changes refer to comparisons with 2023 fourth quarter results.
Speaker Change: As for DTC Z delivery in Brazil fulfilled over $6 6 million orders, 10% higher than 2003, providing 90 million consumers with the convenience of having code beer and or the marketplace products quickly delivered right to their homes.
Speaker Change: Our topline performance in digital transformation, coupled with a disciplined approach to our cost and expense management led us to EBITDA growth with margin expansion in all our business units.
Speaker Change: As normalized figures are non-GAAP measures, the company discloses the consolidated profit, EPS, operating profit, and EBITDA on a fully reported basis in the earnings release.
Speaker Change: Now, I will turn the conference over to Mr. Carlos Lisboa. Mr. Lisboa, you may begin your conference.
Speaker Change: Delivering a double digit consolidated EBITDA growth with gross and EBITDA margin expansion for the second consecutive year.
Speaker Change: Thank you for joining our fourth quarter and full year 2024 earnings call.
Speaker Change: On top of that we generated nearly 18 billion of free cash flow to equity at 37% improvement versus last year.
Carlos Lisboa: Today marks my first earnings call as CEO of Ambev, and it is a pleasure to connect with you.
In terms of capital allocation, we have executed approximately 45% of our current share buyback program as of today and also completed the payment of IOC and dividend payout approved in 2024.
Carlos Lisboa: Returning to my home at UMBEV on its 25th anniversary and lead its amazing people is a dream come true.
Carlos Lisboa: This is the place where I grew as a professional and over the years has shaped who I am as a person.
Speaker Change: Moreover, yesterday, our board of directors approved the distribution of intermediary dividends of around 2 billion reais to be paid in April.
Carlos Lisboa: Dreaming big, having an ownership mentality, and not taking shortcuts will always be pillars for everything I do.
Carlos Lisboa: Stepping into this role made me realize that a lot has changed since I left Brazil, and there is plenty to learn from new and familiar colleagues.
Speaker Change: Now I would like to share the commercial highlights for the year in our main markets.
Speaker Change: In Brazil beer industry remained Brazilian.
Carlos Lisboa: At the same time, I bring 32 years of experience with the company. Throughout this time, I have had the privilege of leading marketing functions at Umbev and also global brands at ABI.
Speaker Change: Growing by low single digits in the year, even with a decline in Q4, mostly driven by bad weather, which impacted key beer consumption occasions.
Speaker Change: Our full year volumes increased by 6% driven by market share gains according to our estimates.
Carlos Lisboa: I also manage businesses in more developed markets like Canada, as well as in emerging markets in Latin America South, and more recently in Middle America zones, the largest zone for ABI.
Speaker Change: Both core brands grew by low teens led by Corona spotting and Budweiser, while core brands dropped by low single digits as Brahma and Antarctica growth was offset by the decline of scope, which is a priority for us in 2025.
Speaker Change: Furthermore, we continue to lead no alcohol beer segment.
Carlos Lisboa: I'm glad today AMBAV is stronger than it was five years ago, thanks to Jean-Jerry Satz's leadership and the team.
Speaker Change: Growing the twin disc led by Corona et cetera, and Budweiser zero.
Speaker Change: Still in Brazil, net volumes rose by four 1% led by our focus on no sugar CSD sports and energy drinks.
Carlos Lisboa: Today, we have a unique portfolio of domestic and global brands that hold significant relevance for our consumers in each of our markets, positioning us to lead the category into the future.
Speaker Change: But in Antarctica grew volumes by high single digits, driven by Guarana zero and reach over 1 million customers for the first time in history supported by base.
Speaker Change: In Argentina, the overall consumer environment remained challenging throughout the year with beer industry down in low twenties.
Carlos Lisboa: Our digital transformation has emerged as a key enabler in our evolution into an even more customer and consumer-led organization, enhancing our effectiveness in meeting their needs.
Speaker Change: However, our continued work to be better prepared for the future led to a stable market share. According to our estimates while our Mega brands improved brand health.
Finally, over the past five years,
Speaker Change: Moving to Dominican Republic volumes grew by mid single digits led by the President family of brands, which achieved all time high volumes and drove gains in the brand health of our Mega brands Mauro.
Carlos Lisboa: Consolidated BitDA grew by 37% and generated nearly R$65 billion in free cash flow to equity, while investing approximately R$30 billion in CapEx and R$33 billion in sales and marketing.
Speaker Change: Moreover, we estimate to have gain market share in the year and Leslie in Canada, Our Mega brands grew volume by low single digits led by Corona and Michelob Ultra while also improving brand health.
Carlos Lisboa: and 24 played an important role in this journey. First, we maintain top-line momentum.
Carlos Lisboa: The beer reputation remains strong as the most relevant category within alcoholic beverages, having gained or maintained share of troth in the majority of our top 10 markets.
Speaker Change: Total volumes declined by three 1% in the year. Despite a post of performance in the fourth quarter now Lucas will cover our financial performance in more details.
Carlos Lisboa: In those markets, beer currently has an aggregated share of throat of over 60%.
Lucas: Thanks, <unk> and Hello, everyone.
Carlos Lisboa: We remain beer leaders in eight of our top ten markets.
Lucas: Going into 2024, we knew the year would be extremely challenging in terms of financial performance given the significant tax headwinds in Brazil, and the overall environment in Argentina.
Carlos Lisboa: continue to develop the category not only by offering loved brands but also bringing innovative liquids and new packaging solutions to address multiple consumer needs and consumption occasions.
Lucas: Nevertheless, we challenged ourselves to deliver another year of free cash flow growth in spite of this.
Lucas: And on balance the team managed to deliver results that were better than expected.
Carlos Lisboa: As a result, our volumes, excluding Argentina, grew by 1.4%, with our megabrands increasing by 7.6% and improving brand health in most of our markets.
Lucas: In terms of growth EBITDA grew 11, 4% organically 12, 1% ex Argentina.
Lucas: Normalized profit declined by two 3%.
Our digital initiatives continue to progress.
Lucas: Here EBITDA growth and the best net finance results since 2014, nearly offset a negative impact of almost $3 5 billion reais in less tax deductibility in Brazil, which resulted in a step change in our effective tax rate by the way this year nearly 60% of <unk>.
Carlos Lisboa: Biz was live in eight of our top ten markets by the end of the year.
Carlos Lisboa: As for DTC, Zé Delivery in Brazil fulfilled over 66 million orders, 10% higher than in 2023, providing 90 million consumers with the convenience of having cold beer and other marketplace products quickly delivered right to their homes.
Lucas: Our net value added went to federal state and municipal taxes up from roughly 53% last year.
Lucas: Meanwhile, cash flow from operating activities grew five 6%, while free cash flow to equity increased 37%.
Carlos Lisboa: Our top-line performance and digital transformation, coupled with a disciplined approach to our cost and expense management, led us to a bit of growth with margin expansion in all our business units.
Lucas: Now in terms of profitability gross margin expanded 170 basis points organically 190 basis points ex Argentina, and EBITDA margin expanded 200 basis points organically 220 basis points ex Argentina.
Carlos Lisboa: delivering a double-digit consolidated EBITDA growth with gross and EBITDA margin expansion for the second consecutive year.
Lucas: And return on invested capital declined to 18, 6% with better asset turnover more than offset by no Pat margin contraction, given the significant tax headwinds in Brazil.
Carlos Lisboa: On top of that, we generated nearly R$18 billion of free cash flow to equity, a 37% improvement versus last year.
Lucas: And finally in terms of value creation, we managed to keep our return on invested capital above our weighted average cost of capital by six percentage points and economic profit was positive despite a higher cost of capital.
Carlos Lisboa: In terms of capital allocation, we have executed approximately 45% of our current share buyback program as of today and also completed the payment of IOC and dividend payout approved in 2024.
Lucas: Now, let me double click on cash flows.
Lucas: Cash flow from operating activities totaled a little over 26 billion Reais cash.
Carlos Lisboa: Moreover, yesterday our Board of Directors approved the distribution of intermediary dividends of around two billion reais to be paid in April.
Lucas: Cash flow used in investing activities totaled approximately negative $5 5 billion rise.
Carlos Lisboa: Now, I would like to share the commercial highlights for the year in our main markets.
Lucas: Cash flow from financing activities totaled about negative $10 4 billion reais.
Carlos Lisboa: In Brazil, beer industry remained resilient, growing by low single digits in the year, even with a decline in Q4, mostly driven by bad weather, which impacted key beer consumption occasions.
Lucas: What's more we ended 2024 with about 29 billion reais in cash and cash equivalents, which gives us ample liquidity going forward.
Lucas: Which brings me to the topic of capital allocation.
Lucas: Thanks to our strong balance sheet and resilient cash flow generation, we will continue to reinvest in organic growth opportunities which are plenty.
Carlos Lisboa: Our full-year volumes increased by 0.6%, driven by market share gains according to our estimate.
Carlos Lisboa: Above core brands grew by low teens, led by Corona, Spaten and Budweiser, while core brands dropped by low single digits as Brahman Antarctica growth was offset by the decline of Skoll, which is a priority for us in 2025.
Lucas: Invest behind attractive nonorganic growth opportunities that may arise.
Lucas: And return excess cash to shareholders over time.
Lucas: In the last quarter of 2024, we announced approximately $12 5 billion reais of excess cash to be returned to shareholders and eight 7% increase when compared to a gross payout in 2023.
Carlos Lisboa: Furthermore, we continue to lead non-alcohol beer segment, growing the twenties led by Corona Zero and Budweiser Zero.
Lucas: About $3 8 billion Reais, we are in the form of IOC paid in December 2020 for Nir.
Carlos Lisboa: Still in Brazil, NAB volumes rose by 4.1% led by our focus on non-sugar CSD, sports and energy drinks.
Lucas: Nearly $6 7 billion Reais, we are in the form of dividends paid in January 2025.
Carlos Lisboa: Guaraná Antarctica grew volumes by high single digits, driven by Guaraná Zero and reached over 1 million customers for the first time in history, supported by bees.
Lucas: And roughly $2 billion of eyes were in the form of share buybacks out of which approximately $800 million have been executed to date.
Lucas: In addition, consistent with the board's decision to commence intermediary dividend a dividend has been declared totaling approximately 2 billion reais to be paid in April.
Carlos Lisboa: In Argentina, the overall consumer environment remained challenging throughout the year, with beer industry down in low 20s.
Carlos Lisboa: However, our continued work to be better prepared for the future led to a stable market share according to our estimates, while our megabrands improved brand health.
Lucas: Turning to 2025, we will continue to focus on optimizing our business by managing and allocating resources diligently and in a smart way.
Lucas: Moreover, our ambition is to stay on the margin expansion track, despite the well known cost headwinds, particularly in Brazil, given the depreciation of the Brazilian real and increase of aluminum prices.
Lucas: Assuming current FX and commodity prices, we expect our cash Cogs per hectoliter in Brazil beer, excluding non ambev marketplace products to grow between five 5% and eight 5% in 2025.
Carlos Lisboa: Moreover, we estimate to have gained market share in the year. And lastly, in Canada, our mega-brands grew volume by low single digits, led by Corona and Michelob Ultra, while also improving brand health.
Lucas: To overcome this challenge we will once again rely on our strict financial discipline in terms of cost and expenses, but revenue management will also play an important role.
Carlos Lisboa: Total volumes declined by 3.1% in the year, despite a positive performance in the fourth quarter. Now Lucas will cover our financial performance in more detail.
Lucas: In 2024, although our price to retailers and mix were ahead of inflation. Our overall net revenue per hectoliter performance was negatively impacted by higher state taxable base, which should be less of a factor in 2025. It's.
Thanks, Lisboa, and hello, everyone.
Lucas Lira: Going into 2024, we knew the year would be extremely challenging in terms of financial performance, given the significant tax headwinds in Brazil and the overall environment in Argentina.
Lucas: It's not an easy task, but the team is once again up for the challenge.
Carlos Lisboa: Nevertheless, we challenged ourselves to deliver another year of free cash flow growth in spite of this.
Speaker Change: Before handing it back to Liz boom as you know this is my last conference call.
Speaker Change: After five years in the role and 20 years between Ambev and AB Inbev, it's time for a break and it's time for me to spend more time with my family.
Carlos Lisboa: In terms of growth, EBITDA grew 11.4% organically, 12.1% ex-Argentina, normalized profit declined by 2.3%,
Speaker Change: So I just wanted to take a moment to give thanks.
Speaker Change: Thanks to Mariana My wife, and our three daughters for allowing me to go all in overall these years.
Speaker Change: Thanks to the team's I had the privilege of leading and learning from.
Speaker Change: Especially my team as CFO for having my back as well.
Speaker Change: Thanks to all of those who inspire me bet on me challenged me and gave me feedback over the years.
Speaker Change: And thanks to the investment community for your Trust your questions provocations and your feedback during our interactions.
Carlos Lisboa: Meanwhile, cash flow from operating activities grew 5.6% while free cash flow to equity increased 37%.
Speaker Change: <unk> learned a lot.
Speaker Change: That's it for me.
Speaker Change: Lola overdue.
Speaker Change: Thank you Lucas and since this is your last earnings call at them Bev I would like to thank you for the great laser ship and dedication over the past few years.
Carlos Lisboa: Now, in terms of profitability, Gross Margin expanded 170 basis points organically, 190 basis points ex-Argentina, and EBITDA Margin expanded 200 basis points organically, 220 basis points ex-Argentina.
Speaker Change: <unk> been a fundamental part of the evolution of our company that I mentioned earlier.
Speaker Change: Before we go to Q&A, let me share recent experience that truly resonated with me too.
Carlos Lisboa: and return on invested capital declined to 18.6% with better asset turnover more than offset by NOPAT margin contraction given the significant tax headwinds in Brazil.
Two weeks ago, we had our Brazilian annual sales convention My first in 15 years. This event is a cherished tradition at Ambev. It reflects the essence of our company.
Carlos Lisboa: And finally, in terms of value creation, we managed to keep our return on invested capital above our weighted average cost of capital by 6 percentage points, and economic profit was positive despite a higher cost of capital.
Speaker Change: We gathered for thousands of people from all over the country to share our plans and ambitions for the year.
Now let me double-click on cash flows.
Speaker Change: It is simply impossible to leave this event without feeling earn a <unk> by our people fully even more in love for our category and our brands and being confident about the future of our company.
Cash flow from operating activities
Carlos Lisboa: Cash flow used in investing activities totaled approximately negative 5.5 billion Reais.
Carlos Lisboa: And cash flow from financing activities totaled about negative 10.4 billion RAFs.
Speaker Change: It is with this energy and inspiration that we kick off the next 25 years of our company our focus will be on to execute our strategy and progress in all its three pillars across our markets.
Carlos Lisboa: What's more, we ended 2024 with about R$29 billion in cash and cash equivalents, which gives us ample liquidity going forward.
Which brings me to the topic of capital allocation.
Speaker Change: Pillar number one lead and grow our category.
Carlos Lisboa: Thanks to our strong balance sheet and resilient cashflow generation, we will continue to reinvest in organic growth opportunities, which are plenty, invest behind attractive non-organic growth opportunities that may arise,
Speaker Change: Over 95% of our volumes come from Latin America markets with growth potential as beer category holds a unique culture relevance in the region and consumption per capita is still low compared to similar regions.
and return excess cash to shareholders over time.
Carlos Lisboa: In the last quarter of 2024, we announced approximately 12.5 billion Reais of excess cash to be returned to shareholders.
Speaker Change: Therefore, we have plenty of opportunities to engage more consumers with our category across a wider range of occasions.
Carlos Lisboa: An 8.7% increase when compared to our gross payout in 2023.
Speaker Change: Pillar number two digitize and monetize our ecosystem, we want to build our organization for the future and data insights from our <unk> ecosystem, we will allow us to be ahead of time by proactively addressing our customer and consumer needs.
Carlos Lisboa: About 3.8 billion Reais were in the form of IOC paid in December 2024.
Carlos Lisboa: Nearly 6.7 billion Reais were in the form of dividends paid in January 2025.
Carlos Lisboa: and roughly 2 billion Reais were in the form of share buybacks, out of which approximately 800 million have been executed to date.
Speaker Change: Number three optimize our business, we will execute pillar number one and number two while simultaneously working to expand margins and improve earnings per share.
Carlos Lisboa: In addition, consistent with the board's decision to commence intermediary dividends, a dividend has been declared totaling approximately R$2 billion to be paid in April.
Speaker Change: We will focus on profitable growth to deliver sustainable value creation to all shareholders.
Carlos Lisboa: Turning to 2025, we will continue to focus on optimizing our business by managing and allocating resources diligently and in a smart way.
Speaker Change: And one last thought before I close when I look back to the company that fascinated me 32 years ago. There are many things that remain true.
Carlos Lisboa: Moreover, our ambition is to stay on the margin expansion track despite the well-known cost headwinds, particularly in Brazil, given the depreciation of the Brazilian Real and increase of aluminum prices.
Speaker Change: But there is one there is really special.
Speaker Change: Quality of our people and their ability to adapt and overcome challenges I'm very proud to be part of this team again.
Speaker Change: I'd like to thank the entire team for the warm welcome together, we build them Bev of many years to come.
Speaker Change: Thank you very much for your attention and now I will hand, it back to the operator for the Q&A.
Carlos Lisboa: To overcome this challenge, we will once again rely on our strict financial discipline in terms of costs and expenses, but revenue management will also play an important role.
Speaker Change: We will now begin the Q&A session to ask a question, we kindly ask sell side analysts to click on race hand button at the bottom.
Carlos Lisboa: In 2024, although our price to retailers and mix were ahead of inflation, our overall net revenue per hectolitre performance was negatively impacted by higher state VAT taxable base, which should be less of a factor in 2025.
Speaker Change: There's a question from the queue or after your question has been made please click lower hand button.
Speaker Change: We reinforced our request that each participants as only a single question.
Carlos Lisboa: It's not an easy task, but the team is once again up for the challenge.
Speaker Change: Our first question comes from Thiago Duarte with BTG.
Carlos Lisboa: Before handing it back to Lisboa, as you know, this is my last conference call.
Speaker Change: You can open your microphone.
Speaker Change: Yeah.
Yes. Thank you good afternoon, everybody as ball Lucas nice talking to you. Both yes, I have a question and I think I'm going to have to split it into the.
Speaker Change: After five years in the role and 20 years between AMBEV and AB-IMBEV, it's time for a break and it's time for me to spend more time with my family.
Carlos Lisboa: So, I just wanted to take a moment to give thanks.
Speaker Change: The first one is actually regarding one comment that is boarded in his opening remarks talking about coal and I think you mentioned the.
Carlos Lisboa: Thanks to Mariana, my wife, and our three daughters for allowing me to go all in over all these years.
Speaker Change: The decline of coal volumes in 2024 and end of Skoal beans.
Carlos Lisboa: Thanks to the teams I had the privilege of leading and learning from, especially my team at CFO for having my back as well. Thanks to all of those who inspired me, bet on me, challenged me, and gave me feedback over the years.
Speaker Change: If I understood correctly, a priority in 2025, so it would be nice if you could talk a little bit more about it.
Speaker Change: And elaborate a little bit why do you think that's important for the portfolio as you said yourself.
Carlos Lisboa: and thanks to the investment community for your trust, your questions, provocations, and your feedback during our interactions.
Speaker Change: This bore the company is stronger today than it was before the portfolio is stronger there are many more brands participating in.
I truly learned a lot.
That's it for me, Lisboa over to you.
Speaker Change: And the volume mix of the company.
Carlos Lisboa: Thank you, Lucas. And since this is your last earnings call at Ambev, I would like to thank you for the great leadership and dedication over the past years. You have been a fundamental part of the evolution of our company that I mentioned earlier.
Speaker Change: So if you could elaborate in terms of the size and the scope of the opportunity for his call that would be great.
And then second.
Speaker Change: If you could talk a little bit more and particularly in the fourth quarter about the.
Speaker Change: The volume performance in beer, Brazil, you mentioned the weather as a headwind during the quarter that's clear.
Speaker Change: Before we go to Q&A, let me share recent experience that truly resonated with me.
Speaker Change: Two weeks ago, we had our Brazilian annual sales convention, my first in 15 years.
Speaker Change: But I was wondering if there was.
Speaker Change: Differences in terms of the performance of volume was on a regional basis and the reason I'm asking this is because you had a relatively soft.
Speaker Change: This event is a cherished tradition at UMBEV and reflects the essence of our company.
Speaker Change: Price increase year over year.
Speaker Change: We gathered 4,000 people from all over the country to share our plans and ambitions for the year.
Speaker Change: We saw <unk>, increasing as a percentage of sales.
Speaker Change: So I'm led to believe that you had a better performance in regions like the northeast and the north as opposed to the south and southeast and I wanted to confirm if that makes any sense.
Speaker Change: It's simply impossible to leave this event without feeling energized by our people, falling even more in love for our category and our brands, and being confident about the future of our company.
Speaker Change: And if not if you could elaborate on that would be great as well. Thank you so much.
Speaker Change: And it is with this energy and inspiration that we kick off the next 25 years of our company. Our focus will be on to execute our strategy and progress in all its three pillars across our markets.
Tiago: Hey, Tiago.
Tiago: True pleasure to talk to you today and thinks about the quest the two questions. Okay. So let me elaborate first about skoal.
Tiago: One of the things that I've learned.
Tiago: Throughout my journey.
Pillar number one, lead and grow our category.
Tiago: Yeah, I wish the falling whenever.
Tiago: You have a healthy core for your category.
Speaker Change: come from Latin American markets with growth potential as beer category holds a unique cultural relevance in the region and consumption per capita is still low compared to similar regions.
Tiago: Potentially you are going to drive.
Tiago: Right you are category to a healthier condition right. So in Brazil, we have three strong <unk>.
Tiago: Core brands right and they have a complementary role, which is very interesting for us and on top of that they have different.
Speaker Change: Therefore, we have plenty of opportunities to engage more consumers with our category across a wider range of occasions.
Tiago: Competitive levels across the country as you mentioned in your second question right. So when you think about call right skull is together with Brahma right. The two most important brands that we have right in terms of volume and top line.
Pillar number two, digitize and monetize our ecosystem.
Speaker Change: We want to build our organization for the future and data insights from our digital ecosystem will allow us to be ahead of time by proactively addressing our customer and consumer needs.
Tiago: Contribution.
Tiago: Number of Brazil right.
Speaker Change: Pillar number three, optimize our business. We will execute pillar number one and number two while simultaneously working to expand margins and improve earnings per share.
Tiago: Many of our initiatives and decisions were very assertive.
Tiago: Alright for many brands and impacted positively, but AMA anaptotic power.
Tiago: However, this was not the case with skol right and Thats. The reason why I made the point that we have knowledge that 2024 was not a great year for this call and with <unk>.
Speaker Change: We will focus on profitable growth to deliver sustainable value creation to all shareholders.
And one last thought before I close.
We will treat it as a priority moving forward and I think you saw in the beginning of the of the session right as part of the video a neo right Mark key initiative to support in a different way scope this year.
Speaker Change: I am very proud to be part of this team again and I would like to thank the entire team for the warm welcome. Together we will build the UMBED of many years to come.
Tiago: A little bit more about the brand just to clarify why it is so important for us on top of the.
Tiago: Volume and topline relevance.
Speaker Change: 17 States of Brazil. This call is the leading brand.
Speaker Change: Thank you very much for your attention, and now I will hand it back to the operator for the Q&A.
Speaker Change: On top of that 15% of Brazilian consumers consume skull in the last three months.
Speaker Change: We will now begin the Q&A session. To ask a question, we kindly ask cell site analysts to click on the Raise Hand button at the bottom. To remove a question from the queue or after your question has been made, please click the Lower Hand button.
Speaker Change: Right.
Speaker Change: Ed.
Speaker Change: And on top of their internal relevance.
Speaker Change: When you reflect about what this brand stands for represents for the category.
Speaker Change: We reinforce our request that each participant asks only a single question.
Speaker Change: On the functional and as.
Speaker Change: This call is a season of a use it to drink liquid that we know.
Our first question comes from Thiago Duarte with BTG.
Speaker Change: You know the law.
Speaker Change: Liquid profile consumers love the most in Brazil right.
You can open your microphone.
Speaker Change: The emotional and skull represents exactly what the category represents for Brazilian consumers is all bulk dry fun being with France, right. So with everything I said is almost like an obvious conclusion that should be a priority for us to.
Yeah, thank you. Good afternoon, everybody.
Lisboa, Lucas, nice talking to you both.
Speaker Change: Yeah, I have a question and I think I'm gonna have to split it in two
Carlos Lisboa: The first one is exactly regarding one comment that Lisboa did in his opening remarks, talking about scope. And I think you mentioned...
Speaker Change: Put this brand back on a positive trajectory and this is actually what we're going to do I.
Carlos Lisboa: the decline of Skoll volumes in 2024 and of Skoll being...
Speaker Change: I hope too.
Speaker Change: Answer your question about the brand and the second point about the regions.
if understood correctly, a priority.
Carlos Lisboa: in 2025. So it would be nice if you could talk a little bit more about it and elaborate a little bit. Why do you think that's important for the portfolio as you said yourself?
Speaker Change: Right. When you say that some specific ratios continued to lead the way in terms of growth and Youre right to mention right more and more this right as the leading regions for us in terms of volume performance throughout the year and was not different in the last quarter.
Carlos Lisboa: Lisboa, the company is stronger today than it was before, the portfolio is stronger, there are many more brands participating in the
Speaker Change: Of 24.
Carlos Lisboa: in the volume mix of the company. So if you could elaborate in terms of the size and the scope of the opportunity for Skoll, that would be great.
Speaker Change: Thanks again.
Speaker Change: Thank you that was very clear. Thank you so much.
Carlos Lisboa: And second, if you could talk a little bit more and particularly in the fourth quarter.
Speaker Change: Our next question comes from Carlos Laboy with HSBC, you can open your microphone.
Carlos Lisboa: about the volume performance in beer Brazil. You mentioned the weather as a headwind during the quarter, that's clear.
Carlos Laboy: Thank you.
Carlos Lisboa: Maybe we can build on that answer you just gave lisboa.
Carlos Lisboa: But I was wondering if there was differences in terms of the performance of volumes on a regional basis. And the reason I'm asking this is because you had a relatively soft...
Speaker Change: Two how you look at the position of all.
Carlos Lisboa: All your Mega brands within the portfolio.
Speaker Change: And maybe you can also touch on.
Speaker Change: How you're approaching maybe occasion brand package price.
Carlos Lisboa: price increase year over year. We saw tax subventions increasing as a percentage of sales.
Speaker Change: Pardon me.
Speaker Change: Point of sales segmentation.
Speaker Change: Changes to address how you view this broader portfolio.
Carlos Lisboa: So I'm led to believe that you had a better performance in regions like the Northeast and the North as opposed to the South and Southeast.
Speaker Change: Thing playing differently going forward.
Speaker Change: Hello Boy nice to talk to you again thanks.
Carlos Lisboa: And I wanted to confirm if that makes any sense. And if not, if you could elaborate on that, it would be great as well. Thank you so much.
Speaker Change: Thanks for the question.
Speaker Change: One of the things that I that I loved the most about my my return to Brazil is the opportunity that we have as a team.
Speaker Change: Hey Tiago, it's a true pleasure to talk to you today and thinks about the question the two questions okay so let me elaborate first about Skoll
Speaker Change: To move this.
Speaker Change: Our new portfolio forward right.
Speaker Change: She and the team did a great job right complementing what you used to have here in Brazil in terms of domestic really strong domestic brands.
Tiago: One of the things that I've learned, you know, throughout my journey
Tiago is the following, whenever
Speaker Change: The new portfolio of global brands right play a very interesting complementary role attending.
You have a healthy core for your category.
Tiago: potentially you're going to drive, right, your category to a healthier condition, right? So in Brazil we have three strong
Speaker Change: More consumers and having the chance to introduce our you know our category into more occasions.
Carlos Laboy: And I'm, saying all of this because in the end this should be our role laboy as leaders of the category are our main objective must always be move our category forward right prepare our category to a more mature type of reality tomorrow.
Tiago: across the country, as you mentioned in your second question, right?
So, when you think about Skoll, right?
Carlos Laboy: And by doing what we are doing today I mean in terms of you know brands assortment SKU Assortments right. This will give and already.
Tiago: Skoll is the, you know, together with Brahma, right, the two most important brands that we have, right, in terms of volume and top line contribution.
Carlos Laboy: Give us the opportunity to you know.
Tiago: at Umbed Brazil, right? Many of our initiatives and decisions were
Carlos Laboy: We present, a different box right different occasions with the relevance of our category demands the beer category in Brazil has one of the strongest reputations.
Very assertive.
for many brands and impacted positively Parama and Antarctica.
Tiago: However, this was not the case with Scott, right, and that's the reason why I made the point.
Carlos Laboy: The category in the World.
Carlos Laboy: Our role is to boost it right and after all these years right living abroad, and it's great to see that our category can be way more than it is here in Brazil right. So there is plenty of opportunity for us with the vault develop the category in different places.
Tiago: that we acknowledge that 2024 was not a great year for the school and we...
Tiago: will treat it as a priority moving forward. And I think you saw in the beginning of the session, right, as part of the video, a new, right, marketing initiative to support in a different way Skoll this year.
Carlos Laboy: Right, we expressed it get the category in different ways right in Mexico was amazing to see right mixes.
Tiago: Talking a little bit more about the brand, just to clarify why it is so important for us, on top of the volume and top line relevance, in 17 states of Brazil, Skoll is the leading brand.
Carlos Laboy: Being done with beer right using as a base and people who logging the chance and the opportunity to experience our products in very different ways than we do here in Brazil, just to give you. One example, so in the and this is all about our key role as leaders.
Tiago: On top of that, 50% of Brazilian consumers consumed Skoll in the last three months.
Carlos Laboy: Most of this category forward and make our.
Right, and
and on top of doing our internal relevance.
Carlos Laboy: Category, even stronger to continue right surprising our consumers.
Tiago: When you reflect about what this brand stands for, it represents for the category.
Carlos Laboy: In a very positive and strong way right and into and now when we combine global local and Neil liquid solutions that we brought and we were all bring to consumers.
Tiago: On the functional end, the skull is a synonym of an easy-to-drink liquid that we know.
Tiago: is that, you know, the liquid profile consumers love the most in Brazil, right? And on the emotional end, Skoll represents exactly what the category represents for Brazilian consumers. It's all about joy, fun, being with friends.
Carlos Laboy: We are pretty sure that our category will surprise us.
Carlos Laboy: For us in a very meaningful way forward.
Speaker Change: He has more if I may can I, just add one one comment Carlos which is which relates to digital okay. And then how digital has helped us over the last few years to kind of fundamentally fundamentally change, how we interact with and us.
Tiago: Right, so with everything I said is almost like an obvious conclusion that should be a priority for us to put this brand back on a positive trajectory and this is exactly what we're going to do.
Speaker Change: As a result of better serve clients and consumers.
Tiago: I hope to, you know, have answered your question about the brand. And the second point about the regions.
Speaker Change: Alright, so by by introducing this by introducing that delivery right in the meaningful way that we did in Brazil, and there is more to be done outside Brazil, as well for that matter.
Tiago: You're right when you say that some specific regions continue to lead the way in terms of growth, and you're right to mention, right?
Speaker Change: We managed to really.
Tiago: North and Northeast, right, as the leading regions for us in terms of volume performance throughout the year and was not different in the last quarter of 24.
Speaker Change: Deliver kind of a paradigm shift where we now have a one to one conversation with clients one to one conversation with consumers, which has helped US a lot in terms of.
Thanks again.
Speaker Change: The assortment that we offer to whom when we offer it how we offer it and so it really gives us a much more robust platform right to really Ah.
Thank you, that was very clear. Thank you so much.
Speaker Change: Our next question comes from Carlos Laboy with HSBC. You can open your microphone.
Speaker Change: Expose our consumers and our clients to our broader portfolio.
Speaker Change: Well said.
Carlos Laboy: Thank you. Maybe we can build on that answer that you just gave, Lisboa, to how do you look at the position of all your mega brands within the portfolio?
Speaker Change: Thank you very much thank you.
Speaker Change: Next question from Isabella <unk> with Bank of America.
Speaker Change: You can open your microphone.
Carlos Laboy: And maybe you can also touch on how you're approaching maybe occasion, brand, package, price positioning, point of sale segmentation changes to address how you view this broader portfolio playing differently going forward.
Isabella: Hi, good afternoon, everyone of the guys hear me well.
Speaker Change: Nice talking to Ya catalogs and Lucas.
Speaker Change: Two questions from my side, one you guys mentioned in if I'm not mistaken.
Speaker Change: And this is the first time in a while.
Speaker Change: About inorganic growth right.
Speaker Change: Hello boy, nice to talk to you again. Thanks for the question.
Speaker Change: So I wonder if you could elaborate a little bit more.
Speaker Change: On that.
Speaker Change: Type of.
Speaker Change: Opportunities are out there and and what's the strategy behind this inorganic growth if eventually it happens.
to move this, you know, our new portfolio forward, right?
Speaker Change: And my second question is you guys really is probably the guidance of cost for beer, Brazil for the year, which.
Speaker Change: Jean and the team, they did a great job, right, complementing what you used to have here in Brazil in terms of domestic, really strong domestic brands.
Speaker Change: Is that having place in there and I understand there is.
Speaker Change: with a new portfolio of global brands, right? Playing a very interesting, complementary role. Attending, you know, more consumers and having the chance to introduce our, you know, our category into more occasions.
Speaker Change: Look as you mentioned right revenue management and cost efficiency and so on but I wonder.
Speaker Change: Yeah.
Speaker Change: If you could could bring a little bit more details on what can be done right, especially in terms of revenue management we saw.
Speaker Change: <unk> contribution in the last few years, so I wonder if.
Speaker Change: How much more is there to come to overcome probably not only a year, but two years of cost ahead of inflation.
Speaker Change: That's it for me thank you.
Speaker Change: must always be move our category forward, right? Prepare our category.
Isabella: Hi, Isabella.
Speaker Change: Also really nice stuff to you let me take the second one and then I'm going to let Lucas elaborate about the first okay.
to a more mature type of reality.
Speaker Change: tomorrow, right? And by doing what we are doing today, I mean, in terms of, you know, brands assortment, SKU assortments.
Speaker Change: So the.
Speaker Change: The point is the following I think over the last several years.
Speaker Change: The largest attractor of our margins.
Speaker Change: right, this will give and already, you know, give us the opportunity to, you know, be present in different talks, right, different occasions with the relevance of our category demands.
Speaker Change: Not only Brazil, but mainly in Brazil, where input cost pressure.
Speaker Change: 24 <unk>.
Speaker Change: It's just the beginning of what we consider a recovery journey.
Speaker Change: Right.
Speaker Change: The beer category in Brazil has one of the strongest reputations for the category in the world.
Speaker Change: So I'm, saying I'm, saying this is just to emphasize that you know we put a special emphasis behind productivity.
Speaker Change: right our role is to boost it right and after all these years right living abroad it's great to see that our category can be way more
Speaker Change: This year right.
Speaker Change: And as you said right.
Speaker Change: Our revenue management initiatives combined with you know this.
Speaker Change: This productivity emphasis should be the key drivers to let us deliver again margin expansion. This.
Speaker Change: than it is here in Brazil, right? So there's plenty of opportunities for us to develop the category. In different places, right, we express the category in different ways, right? In Mexico, it was amazing to see, right, mixes.
Doug: This is Doug.
Doug: You know a collective ambition that we have right at our best.
Doug: And this is the point that I want to emphasize with you right. We know that this year will be different from last year. When we had somehow a tailwind on the cost and.
Speaker Change: being done with beer, right? Using beer as a base and people loving the chance to use and the opportunity to experience our products in very different ways than we do here in Brazil. Just to give you one example.
Doug: We know we gave you the new guidance on the cash Cogs side right, but despite.
Speaker Change: So, in the end, this is all about our, you know, key role as leaders, right, move this category forward and make our, you know, category even stronger to continue, right, surprising our consumers.
Doug: The challenge the team is up for the <unk>.
Doug: Delivering again, a positive year for us in margins.
Carlos Lisboa: Lucas with Ya, Thanks, Lisboa with respect to inorganic growth as abella.
Speaker Change: in a very positive and strong way, right? And in the end, now when we combine global, local, and new liquid solutions that we brought and we will bring to consumers.
Doug: I think the first comment to make is.
Doug: Our first and foremost priority is reinvest in organic growth and that Hasnt change and will not change.
Speaker Change: you know, forward, we are pretty sure that our category will surprise us in a very, you know, meaningful way forward.
Doug: In particular, because we see we still see plenty of opportunities for organic growth in the country that is true for Brazil that is true for Latin America, South CAC and in Canada.
Carlos Lisboa: Lisboa, if I may, can I just add one one comment to Carlos, which is, which relates to digital, okay, and then how digital has helped us over the last few years
Doug: Obviously, each market has its right its specificity, but when it comes to organic growth, we still see plenty of opportunity going forward. So that's where that's where I think the bulk of our energy time focus capital is going to be deployed.
Carlos Lisboa: to kind of fundamentally change how we interact with, and as a result, better serve clients and consumers.
Speaker Change: So by introducing beef, by introducing that delivery in the meaningful way that we did in Brazil, and there's more to be done outside Brazil as well for that matter,
Doug: Going forward.
Doug: I think the comment around inorganic growth I should be read in the context of how we look at capital allocation more broadly okay.
Doug: <unk>.
Doug: Once we're once we've kind of exhausted our organic growth reinvestment opportunities, we will look to allocate the excess excess capital that we have behind either inorganic growth opportunities, which are hard to time.
Speaker Change: I think we managed to to really deliver kind of a paradigm shift where we now have a one-to-one conversation with clients, one-to-one conversation with consumers, which has helped us a lot in terms of
Doug: If and when they may arise and we're fairly disciplined about M&A.
Speaker Change: the assortment we offer, to whom, when we offer it, how we offer it. And so it really gives us a much more robust platform, right, to really expose our consumers and our clients to our broader portfolio. Well said.
Doug: Strategy planning execution in this company. So it has to also be at the right price and make strategic sense for the organization long term.
Doug: One number to return excess cash to shareholders be it in the form of IOC dividends or buybacks.
Thank you very much. Thank you.
Doug: So I think the comments should be the comments should be read in that light. We are always in the water looking for opportunities and I think if.
Next question from Isabela Simonato with Bank of America.
You can open your microphone.
Doug: If you look at how we how we approach kind of inorganic growth opportunity over the last few years, we've been looking at inorganic growth opportunities that either will help us serve clients better.
Good afternoon, everyone. Hope you guys hear me well.
Speaker Change: Nice talking to you, Carlos and Lucas. Two questions on my side. One, you guys mentioned, and if I'm not mistaken, it is the first time in a while, about inorganic growth, right? So I wonder if you could elaborate a little bit more on that and what type of...
Doug: I think a good example is for when we acquired menu Dot Com, which was subsequently kind of rolled up into beef okay.
Doug: Or M&A.
Doug: M&A opportunities that allow us to.
Speaker Change: opportunities are out there and and what's the strategy behind this inorganic growth if eventually it happens?
Doug: Deliver more value to consumers.
Doug: Okay.
Doug: On the portfolio side, Vietnam beer, Vietnam alcoholic beverages ready to drink beverages in some markets in Canada just to give you. An example, we acquired neutral a few years back.
Speaker Change: and my second question is you guys released right the guidance of cost for beer Brazil for the year which is ahead of inflation and I understand there's
Doug: Which has been doing particularly well over since the acquisition. So I think the point around inorganic is really we're in the water. We're always interested in looking for interesting opportunities, but with this customer or consumer value add mindset. Thank you.
Speaker Change: look, as you mentioned, right, revenue management and cost efficiencies and so on, but I wonder
Speaker Change: If you could, could bring a little bit more details on what can be done, right, especially in terms of revenue management. We saw a big contribution in the last few years, so so I wonder if how much more is there to come to overcome probably not only a year but two years of costs ahead of inflation.
Doug: That is very clear thank you very much.
Lucas Fajita: Next question from Lucas Fajita with J P. Morgan.
Speaker Change: You can open your microphone.
That's it for me. Thank you.
Lucas Fajita: Hi, guys. Good afternoon first of all Lucas Good luck in your next steps.
Speaker Change: Hi Isabella, also really nice to talk to you. Let me take the second one and then I'm gonna let Lucas elaborate about the first, okay?
Speaker Change: Thank you very much for all the interactions are all these years.
Speaker Change: I have a question on you you discussed a little bit pricing volumes in <unk> and.
Speaker Change: The point is the following, I think, you know, over the last several years
Speaker Change: And the outlook for Cogs in the year, So I wanted to discuss a little bit the outlook for market investments distribution costs by May four 2025 in Brazil.
the largest detractor of all margins
Speaker Change: Not only Brazil, but many in Brazil, were input cost pressure.
Speaker Change: In light of the comments on you guys made on his call and organic growth. So.
Speaker Change: 24 was just the beginning of what we consider a recovery journey, right?
Speaker Change: In sum what does any fly.
Speaker Change: Two marketing span expenses in the year, how much investments do you guys doing.
Speaker Change: So, I'm saying this just to emphasize that, you know, we're going to put a special emphasis behind productivity this year, right?
Speaker Change: In the in the older platform.
Speaker Change: Could we expect that to fall off.
Speaker Change: The revenue growth or you think it's time to accelerate accelerated a little bit so how to think about that.
Speaker Change: And, as you said, right, our revenue management initiatives, combined with, you know, this productivity emphasis, should be, right, the key drivers.
Speaker Change: That would be great. Thank you very much.
Hey, Hi, Lucas. Thank you. Thank you for thank you for the kind words.
Speaker Change: It's been a pleasure.
to let us deliver again margin expansion.
Speaker Change: I think I think a good way to a good way to think about SG&A going forward.
Speaker Change: This is the, you know, collective ambition that we have right around us.
Speaker Change: Is is to think about what we've actually managed to accomplish in terms of how we've managed SG&A over the last couple of years.
Speaker Change: And what I mean by that is when you look at our SG&A results and here I am focusing on Brazil beer.
Speaker Change: We gave you, you know, the new guidance on the cash co-oxide, right? But despite the, you know, the challenge, the team is up for the, you know, delivery again, a positive year for us in margins.
Speaker Change: Just as an illustration.
Speaker Change: I think we've managed to successfully.
Speaker Change: Deliver goods SG&A performance overall.
Speaker Change: Through a combination of number one.
Speaker Change: Lucas, with you. Thanks, Lisboa. With respect to inorganic growth, Isabella, I think the first comment to make is
Speaker Change: Continuing to invest in sales and marketing to further strengthen our portfolio broaden our portfolio and continue to invest behind our brands. So we don't want to compromise on that.
Our first and foremost priority is reinvest in organic growth.
Speaker Change: Quite the contrary so we've managed to to to continue to invest behind sales and marketing while funding this investment in <unk> and sales and marketing through better performance on the distribution side better performance on the admin slash.
and that hasn't changed and will not change.
Speaker Change: In particular, because we still see plenty of opportunities for organic growth in the country. That's true for Brazil, that's true for Latin America South, CAC and Canada. Obviously, each market has its, right?
Speaker Change: <unk> overhead side, okay. So when it comes to distribution over the last couple of years, we've seen efficiencies coming from the DTC side of the business. We saw a lot of opportunities to as we as we integrated for example is that delivery more into the core business, we saw an opportunity to.
Speaker Change: its specificities, but when it comes to organic growth, we still see plenty of opportunity going forward. So that's where I think the bulk of our energy, time, focus, capital is going to be deployed.
Speaker Change: going forward. I think the comment around the inorganic growth should be read in the context of how we look at capital allocation more broadly, okay, because
Speaker Change: To become more and more.
Speaker Change: Productive on the distribution side and as we learned more about our last mile capabilities, and what works better with consumers in CDA or CDB.
Speaker Change: Once we've kind of exhausted our organic growth reinvestment opportunities, we will look to allocate the excess capital that we have.
Speaker Change: It allows us to be more and more efficient as we as we as we progressed.
behind either inorganic growth opportunities, which are hard to time
Speaker Change: And on the on the admin side I think here there is no silver bullet no quick solution, it's really about.
Speaker Change: if and when they may arise, and we're fairly disciplined about M&A.
Speaker Change: strategy, planning, execution in this company. So it has to also be at the right price and make strategic sense.
Speaker Change: Implementing and tracking and monitoring living our ZB culture, if you will.
Speaker Change: With a lot of visibility ownership accountability of the package owners.
Speaker Change: To make sure that we continue to to to run an efficient and efficient operation and really help operational leverage overall and so by being more disciplined on the distribution and Adam inside we allow access or we free up resources better said.
Speaker Change: So I think the comment should be read in that light. We're always in the water looking for opportunities. And I think if you look at how we approach kind of inorganic growth opportunity over the last few years, we've been looking at
Speaker Change: To continue to invest behind sales and marketing.
Speaker Change: inorganic growth opportunities that either will help us serve clients better
Speaker Change: And just to give you some numbers if you look at Brazil beer performance full year SG&A, if I recall correctly, we actually ended up growing below inflation for the year if you exclude.
Speaker Change: I think a good example is for when we acquired menu.com, which was subsequently kind of rolled up into peace, okay, or
On variable compensation, which will always.
Speaker Change: Very year over year, but I think that was the.
Speaker Change: M&A opportunities that allow us to deliver more value to consumers.
Speaker Change: And if I recall correctly 2023 was not that much different so I think that's that's something that we will always.
Speaker Change: Okay, be it on the portfolio side, be it in beer, be it in non-alcoholic beverages, ready-to-drink beverages in some markets.
Speaker Change: Look look at and look for now.
Speaker Change: It's not something we are particularly solving for okay. We're not guiding anything specific with respect to SG&A. Our guidance is strictly cash cogs per hectoliter related but.
Speaker Change: In Canada, just to give you an example, we acquired Neutral a few years back.
Speaker Change: which has been doing particularly well over since the acquisition. So I think the point around inorganic is really, we're in the water, we're always interested in looking for interesting opportunities, but with this customer or consumer value add mindset. Thank you.
Having having the ability over the last couple of years of delivering SG&A growth ex variable comp at or below inflation. I think is a good. It's a good challenge for the team and something that we will always be kind of tracking okay just to complement.
That is very clear. Thank you very much.
Lucas Ferreira: Next question from Lucas Ferreira with JP Morgan. You can open your microphone.
Speaker Change: Lucas.
Speaker Change: Yes.
Speaker Change: I truly believe that our flywheel that represent the essence of our strategy 123.
Speaker Change: Hi guys, good afternoon. First of all, Lucas, good luck in your next steps and thank you very much for all the interactions all these years.
Speaker Change: Is a powerful mechanism right to make the number one right. We bolstered by the number two category whenever you have the capabilities that come from.
Lucas Ferreira: Guys, I have a question on, you discussed a little bit pricing, volumes, and the outlook for COGS in the year. So I wanted to discuss a little bit the outlook for market investments, distribution costs, if I may, for 2025 in Brazil.
Speaker Change: Digital transformation.
Speaker Change: Again right.
Speaker Change: At 10 in a way better way youre customers and consumers and when you sum up wanting to you give.
Speaker Change: especially in light of the comments on you guys meeting on Skoll and organic growth so in sum what does it imply?
Speaker Change: Give yourself the opportunity to optimize your business and free up resources to invest in number one and by doing so you do it again and do it again you are turning again turning again.
Speaker Change: to marketing expenses in the year, how much investments are you guys doing?
in the in the older platform.
Speaker Change: Could we expect that to follow the revenue growth, or do you think it's time to accelerate a little bit? So how do you think about that? That would be great. Thank you very much.
Speaker Change: So.
Speaker Change: Investing your business, while creating true value for all stakeholders right. I think this is the essence of what we understand we as a team should do in every single market we operate.
Speaker Change: Hey, hi Lucas. Thank you. Thank you for the kind words. It's been a pleasure.
Speaker Change: That's clear guys. Thank you very much.
Speaker Change: I think a good way to, a good way to think about SG&A going forward is to think about what we've actually managed to accomplish in terms of how we've managed SG&A over the last couple of years.
Speaker Change: Our next question comes from Felipe <unk> with Scotia.
Speaker Change: You can open your microphone.
Speaker Change: Thanks, operator, good morning <unk>.
Speaker Change: Thanks for the space.
Speaker Change: and what I mean by that is when you look at our SG&A results and here I'm focusing on Brazil beer just as an illustration
Speaker Change: Best of luck and thanks for everything over the years.
Speaker Change: I wanted to ask a question on the digital front.
Speaker Change: <unk> had a few years under your belt and you did a few changes to optimize the business and folded into the core as Lucas just mentioned in.
I think we've managed to successfully
deliver
Good SG&A performance overall.
Speaker Change: In 2024, so just wondering if you could give us an update.
Speaker Change: through a combination of number one, continuing to invest in sales and marketing,
Speaker Change: On the third party product side of East I'll have the partnerships evolve and perhaps you can comment on where profitability and ROIC are coming out.
Speaker Change: to further strengthen our portfolio, broaden our portfolio and continue to invest.
Speaker Change: After the changes that we made last year.
Speaker Change: behind our brand, so we don't want to compromise on that. Quite the contrary. So we've managed to continue to invest behind sales and marketing, while funding this investment in sales and marketing through
Speaker Change: And perhaps what you can expect for the midterm. If you already have some targets for that.
Speaker Change: And that will be my question. Thank you.
Hi, Phillip let's connect to you.
Speaker Change: Sure.
Let me kick off here then.
Speaker Change: Over to Lucas to complement the point, okay. So the essence of your the answer for your question as the falling.
better performance on the distribution side?
Better performance on on the admin slash overhead side
Speaker Change: okay so when it comes to distribution over the last couple of years we've seen efficiencies coming from the DTC side of the business we saw a lot of opportunities to as we as we we integrated for example that delivery more into the core business we saw an opportunity to become more
Speaker Change: These marketplace continues to be a very interesting new venture for our company in different markets, but mostly here in Brazil, Gmg full year 'twenty four grew almost 50% year over year to be more precise 47%.
Speaker Change: 86% in Q4, mainly driven by <unk> expansion right.
Speaker Change: more productive on the distribution side and as we learned more about our last mile capabilities and what worked better with consumers in City A or City B we it allowed us to be more more efficient as we as we as we progressed.
Speaker Change: Still a lot of opportunities ahead of us.
Speaker Change: Since we continue to learn a lot as you can imagine right.
Speaker Change: The quantity of data that we are collapsing.
and on the admin side.
Speaker Change: Converting data into insights and by doing so we continue to strengthen the relationship we have with our partners and our dandy better our customers right.
Speaker Change: I think here, there's no silver bullet, no quick solution, it's really about...
Speaker Change: implementing and tracking, monitoring, living our ZBB culture, if you will.
Speaker Change: We see the marketplace as a very interesting way to become a true.
Speaker Change: Our one stop shop for our customers right providing.
to make sure that
Speaker Change: we continue to run an efficient and efficient operation and really help operational leverage overall.
Speaker Change: It's more been more alternatives right to fulfill their inventories and offer.
Speaker Change: Diverse.
Speaker Change: And so by being more disciplined on the distribution and admin side, we allow access or we free up resources, better said, to continue to invest behind sales and marketing.
Speaker Change: Quantity of products and categories to their consumers and.
Speaker Change: It's very interesting because you know whenever we make the marketplace is stronger we see our car business right is strong as well. So the combination is is a pretty interesting way for us to.
Speaker Change: and just to give you some numbers, if you look at Brazil beer's performance full year SG&A, if I recall correctly, we actually ended up growing below inflation for the year if you exclude variable compensation, which will always right
Speaker Change: To drive what I mentioned before not only new ventures.
Speaker Change: Being new growth corridor for us, but at the same time, helping us to strengthen the core side of the business.
Speaker Change: vary year over year, but I think that was a, and if I recall correctly, 2023 was not that much different.
Philip: So just to add little more hi, Philip here. Thanks for the question and the feedback.
Speaker Change: So, I think that's something that we will always look at and look for. It's not something we are particularly solving for, okay? We're not guiding anything specific with respect to SG&A. Our guidance is strictly cash cogs per hectolitre related.
Philip: I think my only additional climate is.
With respect to the to the marketplace side of the business and I think 2024 was another year, where the partnerships that we started to forge over the last few years, they really continue to evolve.
But
Philip: Good way.
Philip: And this is true not only on the marketplace side, but also on the software as a service the <unk> side of the business.
Philip: So we're going to continue to invest behind kind of strengthening and deepening the partners that we've established to date and also explore future partnerships with other FMC G companies.
Lucas
Speaker Change: I truly believe that our flywheel that represent the essence of our strategy one, two, three
Philip: In Brazil for instance.
is a powerful mechanism, right?
Philip: But I think with respect to marketplace I think one of the interesting interesting things to note is <unk>.
to make
The number one right
Speaker Change: be boosted by the number two, the category, whenever you have the capabilities that come from the, you know, digital transformation.
Philip: Given that we already have this very valuable assets deployed in the form of our relationship and our reach to roughly 1 million points of sale in Brazil on the daily on a weekly basis right that relationship that that.
You can write
Speaker Change: attend in a way better way your customers and consumers and when you sum up one and two you give yourself the opportunity to optimize your business and free up resources to reinvest in number one and by doing so you do it again and do it again you turn it again turn it again
Philip: Tangible has already been invested.
Philip: And so.
Philip: On the more tangible side, alright, our distribution capabilities with our direct distribution and also leveraging the distribution capabilities of our <unk>.
Speaker Change: So you keep investing in your business while creating true value for all stakeholders, right? I think this is the essence of what we understand we as a team should do in every single market we operate.
Philip: Wholesalers that installed base is already there and so for us it's the marginal capital deployment that we have to make to allow ourselves to offer to our clients. This broader assortment of other categories right. It allows us to have.
That's clear, guys. Thank you very much.
Our next question comes from Felipe Ucruz with Scotia.
Philip: Despite the lower margins of this type of business are very attractive very attractive return on invested capital.
You can open your microphone.
Philip: And we're not at the point, yet where we have to significantly.
Felipe Ucruz: Thanks, operator. Good morning as well. Lucas and team, thanks for the space. Lucas, best of luck and thanks for everything over the years.
Philip: Significantly invest behind our our warehousing.
Philip: Not only size, but also scope and technology and capabilities to manage a more significant amount of skus and we are still in early days. So I think we still have a good runway to really leverage the installed distribution footprint and warehousing capacity and capabilities that we have and so.
Thank you.
I wanted to ask a question on the digital front.
Felipe Ucruz: You know, you've had a few years under your belt, and you did a few changes to optimize.
Felipe Ucruz: the business and fold it into the core, as Lucas just mentioned, in 2024. So, just wondering if you could give us an update on the third-party product side of East.
Philip: Margins.
Philip: Are continuing to progress.
Felipe Ucruz: I'll have the partnerships evolved and perhaps you can comment on where profitability and ROIC are coming out after the changes that you made last year and perhaps what you can expect for the midterm if you already have some targets for that.
Speaker Change: We are not that's kind of the level of certain benchmarks in Brazil, but 2024. It was another year of a step in the right direction on the operational margin side, but the good news is that return on invested capital is continued to be very attractive and improving and we still see a decent.
and that'll be my question. Thank you.
Hi Filipe, nice to connect to you.
Speaker Change: The runway for that to improve going forward okay.
Speaker Change: Let me kick off here, then I hand over to Lucas to complement the point, okay? So the essence of your, the answer for your question is the following.
Speaker Change: Very clear thanks, a lot guys.
Speaker Change: Our next question comes from he Caribou houses with Morgan Stanley you can open your microphone.
Speaker Change: This marketplace continues to be a very interesting new venture for our company in different markets but mostly here in Brazil.
Speaker Change: Hello, everybody thanks for the call.
Speaker Change: GMV for year 24 grew almost 50% year-over-year to be more precise 47%
Speaker Change: I wish you all the best in a position to pleasure talking to you and Lucas as always thanks, so much for all the.
Speaker Change: 86% in Q4, mainly driven by 3P expansion, right? We still have a lot of opportunities ahead of us.
Speaker Change: Always the very detailed answers I appreciate the time and patience with us.
Hum.
Carlos Laboy: Two quick follow ups Liz Boy, if I may as you return to Brazil, how do you assess competition in Brazil for Brazil beer, specifically, we we will recall ambev raising prices around September if I'm not mistaken of course, we appreciate all of the issues of EES EMEA last year.
Speaker Change: Since we continue to learn a lot, you can imagine, right?
Speaker Change: the, you know, the quantity of data that we are collecting and, you know, converting data into insights. And by doing so, we continue to strengthen the relationship we have with our partners and attending better our customers, right?
Carlos Laboy: Let's see your chart. The bridge that you showed a pricing mix at five 5% for 2024.
Speaker Change: We see the marketplace as a very interesting way to become a true one-stop shop for our customers, right, providing them
Carlos Laboy: And as we start to think about the cost Inflations Tonight at the 7% to use your midpoint of the guidance for for beer inflation. This year I mean, it could raise some eyebrows considering that there may be still some discount activity. We noticed some discount activity by the end of the fourth quarter. So as you come back to Brazil, I just wanted to hear.
Speaker Change: Right more than more alternatives right to fulfill their inventories and offer a diverse
you know, quantity of products and categories to their consumers.
Speaker Change: What are your latest thoughts on competition you have to be competitors there.
Speaker Change: And it's very interesting because, you know, whenever we make the marketplace stronger, we see our car business, right, is strong as well. So the combination is a pretty interesting way for us to, you know.
Carlos Laboy: Going through very different.
Carlos Laboy: Performances, so I would be curious to hear how you balanced that out with the performance of your.
Carlos Laboy: Your peers.
Carlos Laboy: And how does that work.
Carlos Laboy: What does that mean for Ambev and a quick follow up the.
Speaker Change: to drive what I mentioned before, not only new ventures, you know, being new growth corridors for us, but at the same time helping us to strengthen the core side of the business.
Second follow up would be on the comment that you made that one of your objectives is to develop the category.
Carlos Laboy: Can you give us some more examples of I mean pay caps in Brazil. When you think about per caps in Brazil, they seem high as a country, but maybe are you seeing opportunities in other regions or different channels or we're talking about new liquids or a new ways that ambev is going to be able to grab share of throat from other alcoholic.
Lisboa: So just to add Lisboa, hi Filipe, thanks for the question and the feedback. I think my only additional comment is
Lisboa: With respect to the marketplace side of the business and I think 2024 was another year where the partnerships that we started to forge over the last few years
Carlos Laboy: Beverages I'm, just trying to understand as you come back to Brazil, what are the low hanging fruit that you see for the market in Brazil that maybe you saw elsewhere and.
Lisboa: They really continue to evolve in a good way, and this is true not only on the marketplace side, but also on the software-as-a-service, the 3P side of the business.
Carlos Laboy: And then in practical terms, how could you essentially boost the beer relevance for for a country that is already drinking beer for awhile.
Lisboa: so we're going to continue to invest behind kind of strengthening and deepening the partners that we've established to date and also explore future partnerships with other FMCG companies in Brazil for instance.
Speaker Change: Hello, everyone.
Carlos Laboy: Super clear.
Carlos Laboy: Thank you very much for the for the two questions. Let me first elaborate about the second question right.
Carlos Laboy: Category.
Carlos Laboy: Look.
Carlos Laboy: I think the first reflection for OS as the falling.
Lisboa: But I think with respect to marketplace, I think one of the interesting things to note is...
Carlos Laboy: The industry I'm going to use Brazil as a proxy.
Carlos Laboy: Just to for to elaborate to your to your question, but that's applies abroad, Brazil is well first and foremost.
given that we already have
Lisboa: this very valuable asset deployed in the form of our relationship and our reach to roughly 1 million points of sale in Brazil on a daily, on a weekly basis, right? That relationship, that intangible has already been invested.
Carlos Laboy: Industry Cosmo.
Carlos Laboy: <unk> industry.
Carlos Laboy: So Brazil very resilient since 2020 growing year after year after year right at 24 was not different despite what we saw in the end of the year with no adverse weather impact right. This is the first point for us to keep them.
and so
Lisboa: And on the more tangible side, right, our distribution capabilities with our direct distribution and also leveraging the distribution capabilities of our wholesalers, that installed base is already there.
Carlos Laboy: Mike.
Carlos Laboy: The second one is falling.
Lisboa: And so, for us, it's the marginal capital deployment that we have to make to allow ourselves to offer to our clients this broader assortment of other categories.
Speaker Change: It's a wrong conclusion assumed that the pickup in Brazil already achieved a very high level with very little room for growth right.
Speaker Change: <unk>, Brazil similar to other regions, where we operate is a develop region right and you see very interesting moves right four curie within this reality right population moves from a lower socioeconomic levels to higher social economic and.
Lisboa: It allows us to have, despite the lower margins of this type of business, a very attractive return on invested capital.
Lisboa: And we're not at the point yet where we have to, right, significantly invest behind our warehousing, not only size, but also scope and technology and capabilities to manage.
Speaker Change: Levels, you'll see right population growth with makes you know there would be a consumer base bigger year after year and on top of that when you compare Brazil with other markets around the world peer markets.
a more significant amount of SKUs.
Lisboa: We're still in early days. So I think we still have a good runway to really leverage the installed distribution footprint and warehousing capacity and capabilities that we have. And so margins are continuing to progress.
Speaker Change: You quickly.
Speaker Change: We realize there is room for growth and why Im saying this.
Lisboa: we are not at kind of the level of certain benchmarks in Brazil but
Speaker Change: Participation, which means number of consumers connected to your category right. When you compare Brazil with markets like Mexico order emerging.
Lisboa: 2024 was another year of a step in the right direction on the operational margin side.
Lisboa: But the good news is that return on invested capital is continuing to be very attractive and improving, and we still see a decent runway for that to improve going forward, okay?
Speaker Change: Regions right around the ward, we see a gap of 10 percentage points almost right five to 10 percentage points. When you go to the other side of the story I mean, the number of occasions, where beer participates right. Brazil also shows a gap right.
Very clear. Thanks a lot, guys.
Speaker Change: Our next question comes from Ricardo Alves with Morgan Stanley. You can open your microphone.
Speaker Change: Consumption habits in Brazil is very concentrated during the weekend right why are we in all the markets, we do see consumers adopting beer adopting our category right indifferent.
Ricardo Alves: Hello everybody. Thanks for the call. I wish you, Lisboa, all the best in the position. It's a pleasure talking to you. And Lucas, as always, thanks so much for all the always the very detailed answers. Appreciate the time and patience with us.
Speaker Change: It's in the week right different day tax right. So I'm going to give you. One example from Middle America is one of the key drivers for us in the last few years.
Was the development of our category with mills.
Ricardo Alves: Two quick follow-ups, Lisboa, if I may. As you return to Brazil...
Speaker Change: A very interesting type of occasion for gear, which is clear.
How do you assess competition?
Speaker Change: Clearly an opportunity for us not only Brazil, but outside Brazil as well. Another. Good example to just to reinforce what I'm, saying in terms of category development, there's been no alcohol beer.
In Brazil, for Brazil beers specifically, we...
Ricardo Alves: We recall MBEV raising prices around September, if I'm not mistaken.
Ricardo Alves: Of course, we appreciate all the issues of ESMES last year.
Ricardo Alves: but seeing your chart, the bridge that you showed, pricing makes at 5.5% for 2024.
Speaker Change: Right, we do see some very interesting growth rates across the globe, Brazil was not different our regions not different right. So and when we compare the current level of development development of Bureau, local hall at beer against all the mall.
Ricardo Alves: And as we start to think about the cost of inflation tonight, the 7% to use your midpoint of the guidance for for bear inflation this year.
Ricardo Alves: I mean it could raise some eyebrows, considering that there may be still some discount activity. We noticed some discount activity by the end of the fourth quarter.
<unk> markets that is a huge gap.
Speaker Change: Right and represents a lot of growth if we do it the right way not only for those who cannot drink alcohol, but mostly for those who love.
Speaker Change: So, as you come back to Brazil, I just wanted to hear what are your latest thoughts on competition. You have two big competitors that are, you know, going through very different.
Speaker Change: Beer.
Ricardo Alves: performances, so I'll be curious to hear how you balance that out, the performance of your peers.
Speaker Change: Right now with no alcohol beer theyre going to have the chest to choose beer and more occasions.
Speaker Change: Just to amplify a little bit more what I'm, saying about the potential that our category has not only in Brazil, but across the region right for us at Ambev.
Speaker Change: And how does that, what does that mean for AMVETS? And the quick follow-up, the second follow-up.
Speaker Change: would be on the comment that you made that one of your objectives is to develop the category. Can you give us some more examples? I mean, per caps in Brazil, when you think about per caps in Brazil, they seem high as a country, but maybe...
Speaker Change: Request regarding your first question right.
Speaker Change: If theres something that didn't change because.
Are you seeing opportunities in other regions or different channels?
Speaker Change: Since my departure is the fact that the Brazilian market has always been very competitive very and today is not different right. So just to emphasize what I am saying again right we always.
Speaker Change: Are we talking about new liquids or new ways that Ambev is going to be able to grab a share of fruits from other alcoholic beverages? I'm just trying to understand, as you come back to Brazil...
Speaker Change: What are the low-hanging fruits that you see for the market in Brazil that maybe you saw elsewhere? And then in practical terms, how could you essentially boost the beer relevance for a country that is already drinking beer for a while? Appreciate the time, everyone.
Speaker Change: Ted.
Speaker Change: <unk>.
Speaker Change: Out of the top five brands most relevant brands in Brazil throughout all these years.
Speaker Change: Since.
Speaker Change: The Virginia found that so this is not a new reality for us so as a consequence.
Speaker Change: Super clear, Ricardo. Thank you very much for the two questions. Let me first elaborate about, you know, the second question, right, the category. Look, I think the first reflection for us is the following.
Speaker Change: In our point of your competition is good make us a stronger competition is good make the category is stronger right and it's great. Because we are always challenging ourselves right to bring a better version of our company.
Speaker Change: I'm going to use Brazil as a proxy, just to elaborate to your question, but that applies you know, abroad Brazil as well. First and foremost.
Speaker Change: To be way more competitive in this very dynamic reality right.
Speaker Change: Your point about pricing right, we don't we don't give guidance.
Industry
Speaker Change: Because my attention okay industry be a industry Brazil very resilient
Speaker Change: Guidance about pricing right, what I can say to you.
Speaker Change: since 2020, growing year after year after year, right? And 2024 was not different, despite what we saw at the end of the year with, you know, adverse weather impact, right? This is the first point for us to keep in mind.
Speaker Change: Pricing will be a key component to deliver to our ambition to continue margin expansion in 2025 together with cost.
Speaker Change: Management.
This is what I can reinforce and how we will reinforce a lot and this is what the team is committed to the level and not only pricing usable, but I wouldn't I would broaden it a bit right because it think pricing is an important lever, but I think revenue management strategy as a whole I think is youre right as or more.
The second one is the falling.
Speaker Change: I think it's a wrong conclusion to assume that the per capita in Brazil already achieved a very high level with very little room for growth, right?
because, you know, Brazil...
Speaker Change: Portland.
similar to other regions where we operate, is a development.
Speaker Change: Looking at looking forward.
region, right? And you see very interesting moves.
Lucas Fajita: Thank you very much this book for the detailed answer and Thanks, Australia Lucas.
Speaker Change: right, occurring within this reality, right. Population moves from lower socio-economic levels to higher socio-economic levels. You see, right, population growth
Speaker Change: Thanks Nicole.
Speaker Change: This concludes the Q&A session I would like to invite Mr. Carlos Lisboa to proceed with his closing remarks. Please go ahead Sir.
Speaker Change: What makes, you know, the LDA consumer base bigger year after year? And on top of that, when you compare Brazil with other markets around the world, peer markets
Carlos Lisboa: Thank you for joining our call today I'm very happy to be back 15 years later right a better version of myself.
Speaker Change: Came to lead a company that I love.
You quickly, you know, realize there is room.
Speaker Change: More experience yet hungry for new learnings and also accomplishments I.
for Growth.
and why I'm saying this.
Speaker Change: I'm pretty sure that together with the team we will build a better version of our company for the future.
Speaker Change: You know, participation, which means number of consumers connected to your category, right? When you compare Brazil with markets like, you know, Mexico or other emerging.
Speaker Change: It is a pleasure to meet with you and I hope, we're going to have a chance to meet again in person sometime soon.
Speaker Change: regions, right, around the world, we see a gap of 10 percentage points, almost, right? Five to 10 percentage points. When you go to the other side of the story, I mean, the number of occasions where beer participates, right? Brazil also.
Speaker Change: Thank you all bye bye.
Speaker Change: This concludes today's presentation you may disconnect and have a nice day.
shows a gap.
Right
You know the...
Speaker Change: Consumption habit in Brazil is very concentrated during the weekends, right? While in other markets we do see consumers adopting beer, adopting our category, right? Indifferent.
Speaker Change: moments in the week, right? Different daytimes, right? So I'm going to give one example from middle America as one of the key drivers for us in the last few years.
was, you know, the development of our category with MILS.
Speaker Change: A very interesting type of occasion for beer, which is clearly an opportunity for us, not only Brazil, but outside Brazil as well. Another good example, just to reinforce what I'm saying in terms of category development, is the non-alcohol beer.
Speaker Change: Right. We do see very interesting growth rates across the globe. Brazil is not different. Our region is not different.
Speaker Change: Right. So, and when we compare the current level of development of, you know, non-alcoholic beer against all the more developed markets, there is a huge gap.
Speaker Change: right, and represents a lot of growth. If we do it the right way, not only for those who cannot drink alcohol, but mostly for those who love
Beer.
Speaker Change: Right, and now with no alcoholic beer, they're going to have the chance to choose beer in more occasions.
Speaker Change: Right, just to exemplify a little bit more what I'm saying about the potential that our category has not only Brazil, but across the region, right, for us at AMBEV.
Ricardo Alves: Regarding your first question, right, is there something that didn't change, Ricardo, since my departure?
Ricardo Alves: is the fact that, you know, the Brazilian market has always been very competitive.
Ricardo Alves: very, and today is not different, right? So just to emphasize what I'm saying again, right, we always
had
Ricardo Alves: Three out of the top five brands, most relevant brands in Brazil throughout all these years.
Ricardo Alves: since, right, the beginning of AMBES, so this is not a new reality for us.
Ricardo Alves: So as a consequence, you know, in our point of view, competition is good, make us stronger, competition is good, make the category stronger, right?
Ricardo Alves: To your point about pricing, right, we don't we don't give you know guidance about pricing, right? What I can say to you
Ricardo Alves: Price will be a key component to deliver to our ambition to continue margin expansion in 2025 together with cost
Management
Ricardo Alves: This is what I can reinforce and I will reinforce a lot.
and this is what the team is committed to deliver.
Ricardo Alves: And not only pricing is blue, but I would, I would broaden it a bit, right, because I think pricing is important.
Lucas Lira: Lira, but I think revenue management strategy as a whole, I think is, you're right, as it are more important looking forward.
Carlos Lisboa: Thank you very much, Lisboa, for the detailed answer, and thanks as well, Lucas. Thank you. Thanks, Ricardo.
Speaker Change: This concludes the Q&A session. I would like to invite Mr. Carlos Lisboa to proceed with his closing remarks. Please go ahead, sir.
Speaker Change: Thank you for joining our call today. I'm very happy to be back 15 years later, right? A better version of myself came to lead the company that I love.
More experience, yet hungry for new learnings and also accomplishments.
Speaker Change: I'm pretty sure together with the team, we will build a better version of our company for the future.
Speaker Change: It is a pleasure to meet with you, and I hope we're going to have a chance to meet again in person sometime soon. Thank you all. Bye bye.
Speaker Change: This concludes today's presentation. You may disconnect and have a nice day.