Ambev S.A.

Good morning, and thank you for waiting. We would like to welcome everyone to the AMBEV first quarter 2019 results conference call. Today with us, we have Mr. Bernardo Paiva, CEO for AMBEV, and Mr. Fernando Tenebaum, CFO and Investor Relations Officer. As a reminder, a slide presentation is available for downloading on our website at ri.ambev.com.br, as well as through the webcast link of this call. We would like to inform you that this event is being recorded and that all participants will be in listen-only mode during the company's presentation. After AMBEZ remarks are completed, there will be a question and answer section. At that time, further instructions will be given. Should any participant need assistance during this call, please press star zero to reach the operator. Before proceeding, let me mention that forward-looking statements are being made under the safe harbor of the Securities Litigation Reform Act of 1996. Forward-looking statements are based on the beliefs and assumptions of AMBEV's management and on information currently available to the company. 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. I would also like to remind everyone, as usual, that 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 first quarter 2018 results. Normalized figures refer to the performance measures before exceptional items, which are either income or expenses that do not occur regularly as part of AMBEV's normal activities. as normalized figures are non-GAAP measures, and the company discloses the consolidated profit, EPS, EBIT, and EBITDA on a fully reported basis in the earnings release. Now, I will turn the conference over to Mr. Fernando Tenenbaum, CFO and Investor Relations Officer. Mr. Tenenbaum, you may begin your conference.

Thank you. Hello, everyone. Thanks for joining our 2019 First Quarter Fund Call. I'll guide you through the financial highlights of our operations, including our below-the-line items and cash flow, as well as commercial initiatives of CAC, LAS and Cananá. After that, Bernardo will give you more details about our operations in Brazil. Beginning with the main highlights of our consolidated results. On a consolidated basis, In the first quarter, top line grew 13.7%, a combination of volumes increasing 5.7% and net revenue per hectolitre up 7.5%. A DISA reached 5.1 billion reais, an organic growth of 16.4%, while a DISA margin increased 100 base points to 40.5%. Normalized net profit from the quarter was up 6.2%, delivering R$2.8 billion. It is worth highlighting that following the categorization of Argentina as a country with a three-year cumulative inflation rate greater than 100%, the country is considered highly inflationary in accordance with IFRS. Similar to the last two quarters, We continue to report the results of our operations in Argentina, applying hyperinflation accounting. Having said that, I'll now move to our designal results and start with Brazil. In the quarter, Brazil's EBITDA reached 2.9 billion reais, an increase of 8.1% versus first quarter's 1,018, while March's contracted 220 base points to 40.8%. Brazil had a very solid performance with volumes delivering double-digit growth at 11.3%, which coupled with a 3.7% net revenue per hectare liter growth, yielded a top-line 15.4% higher than first-class in 2019. Net revenue per hectare liter ended up leading to line inflation, cycling of last year's price increase, and negativity impacted by regional means, as North and Northeast regions grew ahead of the country average. While our volumes grew 11.3%, industry estimates by nuisance points toward a low single-duty growth. Euribita for Bia Brasil was up by 5.4% in the quarter, with margin contraction of 400 base points, to 42%. This contraction was explained by the cost pressures we had anticipated in the full year 2018 early release. Cash calls for Hexaliter grew by 24%, impacted by aluminum, ballet, and effects. Cash SG&A increased 3.1%, which is less than inflation in the period, even accounting for bonus accruals that we didn't have in the first quarter of 2018. Such performance was most related to initiatives on non-working money expenses. Including bonus accruals, Brazil's year-to-date growth would have been around 7%. In NAVI Brazil, prop line was up by 25.1% in the first quarter. the result of a 7.6% net revenue from head center growth and 16.3% volume increase. In the last two years, Indus also grew low single digits, according to Nielsen. Indus in the quarter grew 31.9%, with margin extension of 178 points to 33.6%. In terms of cost and expenses, Cash cost per hectolitre was up 4.7%, with higher aluminum costs being offset by lower sugar prices and operational leverage. Cash SDG&A was up 17.3%, impacted by bonus accruals, distribution expenses related to volume growth, which was partly offset by phasing in non-working money, as well as phasing of expenses in Q1. For the full Brazilian business, We reiterate our guidance of cash cost and actual interest growth of new teams in Brazil for this year. We should see more pressure in the first three quarters, easing off towards the end of the year. Moving now to Central America and the Caribbean. Central America and the Caribbean continues to show good momentum, with a 12.7% net revenue growth, which is a combination of 9.1% increasing volume and a healthy 3.3% net revenue growth. EBITDA in the quarter reached 578 million reais, posting a double-digit growth of 14.4%, and margin spending 58 points to 39.5%. Cash costs per hectolitre increased by 8.5%, mostly affected by Panama, where our strong volume evolution since 2017 has driven additional temporary costs in order to supply the market with no disruption. Further, Cash FG&A in the region was at 1.1%, below the average inflation in the region, pressured by variable compensation accrues and FG&A stays in Guatemala, and boosted by improving distribution expenses, mainly in Dominican Republic, as well as projections related to non-working money. We are pleased with our commercial strategy tax, delivering healthy volume performance in virtually all counties in which we operate. In the core segment, we continue to invest in our trade programs, strengthening our connection with our consumers through commercial platforms to further enhance the present brand in the Dominican Republic. We added more than 3.5 thousand coolers in the quarter. In Panama, our second-largest marketing region, we keep investing in the trade execution with our main brand, Atlas Golden Lights, and being present in the kick-selling moments in the country. such as Carnaval and Atlas Golden Fest. Panama Carnaval was received with a solid, complete portfolio. Atlas Golden Lights led the way with the campaign, taxable soul of soul. That invited consumers to disconnect from daily routine and enjoy sunny days. We also had, for the first time, a super clean execution of Carnaval with Coronas. These years, Atlas Golden Fest was the biggest music festival in the country. It's for a public of 18,000 people, 80% more than last year's edition, and it's a major social media engagement. We also continue to roll out optimization strategy in the region, developing Corona, Escalatois, Modelo, and Budweiser to optimize the execution both for the on-premise and off-premise channels. Premium accounts for less than 5% of the digital industry volume in fact, representing a great opportunity for the future. I'd like to take this occasion to say that we continue to be very excited about our business development and its strong volume, performance, and cash, reinforcing our positive outlook for the region moving forward. Switching now to Latin America South. Volumes in the region declined 10.6% during first quarter 2019, mostly driven by Argentinians, where volume decreased by new cities impacted by a challenging macro environment. That revenue for Hector Lipper increased 27.1%, which led to a 14.5% top-line growth. Editing last for the quarter was up 36.5%, with margin extension of 820 base points to 47.6%. Cash calls for Hector Lipper in the quarter declined 4.7%, mostly driven by favorable effect hedges, while cash and CNAs increased by 19%. Despite the macroeconomic volatility throughout the region, we remain in focus on what we can control in our business and have positive developments. In Argentina, we maintain the strategy of differentiating the core brands, Jumis, our plastic lager, and Brahma, our existing lager. We opened for the first time Jumis' own bar, named Los Plastos de Jumis, to further improve consumer experience. On the corpus segment, Budweiser continues to embrace the new platform, sponsoring Lollapalooza through several activations, promotions, and even releasing an exclusive 473 ml can. We also launched Andes Origins Vengenia, another limited edition variety for the Andes Origins. Due to this great, Vengenia was the first beer to be present at a wine festival. Our high-end strategy has also shown promising results in last. We saw a clear portfolio of space in the industry across all countries in which we operate. Both Stella Artois and Corona launched a better world campaign with huge institutions in Argentina. For the first time, Stella Artois took the donations to SPAC and changed its iconic red cartouche to blue. Not only Stella started blue. We launched Stella Blue Challenge, by inviting different stakeholders such as top celebrities to join in by coloring their hair blue, Buenos Aires City by turning city monuments blue, and one of the main newspapers in the country by turning their logo blue. Corona launched Protected Paradise and Plastic Doesn't Belong to the Ocean as a focus of their summer campaign, generating a lot of work through cleaning up, activations, and a huge tank full of plastic in the middle of the city's main train stations. Going forward, while cautious with Argentina in the short term, we have positive mid- and long-term perspectives in the country and remain confident in our ability to deliver solid top line and a dip in the whole region, supported by a strong portfolio. Turning now to Canada. In the first quarter, top line in Canada declined by 3.1%, a combination of a 1.2% max revenue per hectare increase and a 4.3% volume decline. which was mostly driven by a slowdown in the beer industry. Edita reached 329 million reais, which is 6.5% higher than in the first quarter of 2018, with margin extension of 230 base points to 25.4%. In the quarter, cash costs for Hector Edita declined 1.9%, as higher aluminum and other commodity prices and lower dilution of fixed costs were more than observed by a new comparable in first quarter 2018. Cash efficiency declined by 6%, driven by phasing of sales and marketing expenses. Despite the industry challenges, we had positive achievements with our portfolio during the quarter. Focus Core and Core Plus brands also continued to deliver strong results, with Nickelodeon remaining the fastest growing brand in Canada in the quarter. and Bud Light continues momentum and gaining market share. In the premium segment, our high-end portfolio is growing ahead of the industry, led by the double-digit falling growth of premium import brands. Corona launched its first winter 360 campaign called Corona Sunsets Winter Tour. Now back to consolidated figures below a distance. In the first quarter, Net financial results total an expense of 672 million reais, 12.2% higher than our Q1 2018. Main items in the financial expense in the quarter were, first, interest income of 135 million reais driven by our cash balance. Second, interest expense of 391 million reais that also includes interest in selling in connection with Brazilian tax regularization program, as well as the non-cash accrual of approximately 60 million reais related to the per option associated to our investment in the Dominican Republic business. Third, 195 million reais of losses on derivative instruments, which were rough year over year, explained by the increase of effect heavy carry costs linked to our profit with sold and capital exposure in Argentina, partly offset by equity swap gains. Fourth, Lock is a non-derivative instrument in the amount of R$111 million, mainly related to an adjustment in the fair value of the poor option in the Dominican Republic. 5. Technical financial transactions in the amount of R$54 million. 6. R$153 million of other financial expenses, partly explained by intercomponent transactions. Finally, 7. 97 million reais of financial income related to non-cash income resulted from the adoption of hyperinflation accounts in Argentina. The normalized effective tax rate was 18.7% in the quarter, lower than in Q1 2018. Cash generated from operations in Q1 2019 was 2.1 billion reais, which is 121% higher than last year. Apex reached R$ 546 million in the past, increasing 15.5% versus 2019. Thank you very much. Bernardo now will share some of the initiatives and thoughts from the Brazilian market before going to training.

Thank you, Fernando. Hello, everyone. As mentioned by Fernando, we started the year delivering solid volume and VBA growth. When we announced the 2018 full-year results, we highlighted that the transformational investments we made behind our strategic platforms in the past years, even in a moment of external volatility and challenging macroeconomic environments, would place us in a much stronger position to compete in the Brazilian beer market, and that we would be prepared to fully benefit from the economic rebound. Our performance this quarter is a consequence of the consistent investment we did in our strategic platforms. It's important to point out we have not seen yet disposable income resuming growth, which would likely provide a meaningful positive impact. As owners, we focus on the long-run and sustainable value creation. Therefore, it's important to understand our strategy. Having said that, I would like to take some time to further explain our strategic platforms, what's our long-term plan, and how we implement it. The heart of it is the consumer-centric approach, which, with the category development framework, guides the design of our portfolio. The same consumer-centric approach is translated into our strategic platform. Premiumize at scale, differentiate the core, and drive smart affordability. supported by sustainability, operational excellence, and finally, business transformation enabled by technology. All of this is supported by our major long-term sustainable advantage, our dreams, people, and culture. Now, let's go through the category framework and portfolio strategy. Our approach is based in the market maturity model and on the category expansion framework. The market maturity model is about how gear and markets evolve, while the category extension framework is a vision of the portfolio mix and initiatives that should be applied to each market stage. Markets have different stages of maturity, one, two, and three. Therefore, different consumer-centric approaches should be adopted in each of these stages. In the lower maturic level, consumption is mostly on-premise, men socializing and relaxing, and the competition is informal alcohol or spirits. In the middle maturic level, drinking is mixed gender and social. Occasions are balanced between home and on-premise, although beer remains stronger in the on-premise. Competition remains primarily spirits, and some drinks are consumed in alcohol-appropriate occasions. Finally, in the high-maturity level, shopping is mostly off-premise and more than trade. Consumption is in-home and milk, and relaxed occasions dominate the landscape. Competition from wine and spirits is bigger. Smaller alcohol categories arise, and in the non-alcohol space, varieties increase. The category expansion strategy, in its turn, is about how beer optimally evolves to address the change in market opportunity. We start with a classic lager that has the typical features of the lowest maturity levels, and then the portafolio bulbs, expanding to other kinds of beer and categories. Our largest beer market, Brazil, is on average at middle maturity. However, as a large and diverse country, there are regions in all different levels. In this stage we are in Brazil, One of the most important trends is the takeoff of premiumization. So, let's talk about the premium strategy. As we have been saying, premiumization is a trend and a portfolio game. As consumers evolve, there are much more occasion-need state spaces, and no brand standalone can fulfill all these requirements. With that in mind, in mature markets, there is no single brand that holds more than around 60% of the premium segment. It's important to reinforce that our strength in the segment is a superior portfolio of brands, combining global and domestic premium brands. As the market matures, the average number of brands per country increases. So to win in the premium segment, you have to build a strong portfolio, and it has to have it. as it has been doing in the past years. From an organizational structure standpoint, we created a high-end dedicated team years ago, a group that focused exclusively on the premium segment, boosting its execution and supporting its growth. Such strategy is already providing tangible results. This quarter, our global brand, comprises of Budweiser, Stella Soir and Corona grew more than 50%. Once again, we gained market share in the dream, as we have been doing in the last consecutive quarter. Brand construction goes through an investment experience that allows consumers to realize the values of each brand in a deeper way. This can be done through sponsoring an asset that's relevant to consumers such as Lollapalooza, NBA, or the NFL, or through proprietary events, such as Bud Basement, City Stella, and Corona Sunset, where the immersion into the brand value is very relevant. All of this is amplified by social media. We are also stepping up on packaging with initiatives such as the new visual brand identity and the new bottle shape for Budweiser, which enhances the brand's attributes and also on packed assortment, having now in our portfolio more cans and sharing size bottles. Budweiser, our largest global brand, plays a key role as a bridge for consumers who are trading up towards the premium segment. It was the premium brand with the biggest number of mentions in digital platforms in the quarter, a growth of 100% compared to the first quarter of 2018. This quarter was marked by campaigns such as International Women's Day, Super Bowl, and Lollapalooza. Stella Fla is a reference of European quality in Brazil. A classic Belgian lager with a distinctive taste that experienced an accelerated growth from the second semester on last year. In this quarter, we maintained the focus on gastronomic cultural events, It's another successful addition of our proprietary events here at Stella Soir in Rio de Janeiro, one of the main markets for Stella in Brazil. Stella Soir volume was also supported by the continued expansion of new peck formats, such as the sharing size bottles and the new cans that offer to Stella consumers new options to taste a Stella in different locations. Stella volumes continue to deliver very strong double digits. Corona bought more than double this quarter, a historical achievement. The brand was present in the trendiest New Year's Eve party in the country with the Corona Sunset Circus. In the better words front, Corona officially launched the partnership with Polly for the Ocean, to clean 20 Brazilian beaches in 2019. together with our World Surf League Champion, Gabriel Medina. With that, the brand reaches its all-time high number of mentions in the social media in the quarter. Now, I would like to spend a few words about the domestic portfolio, Original and Serramaut in particular. This brand was first developed in their own trade channel, delivering amazing experience to consumers. Original and Serramaut had their combined volume increase in double digits during the first quarter. In summary, our premium portfolio continues to lead and that organic growth. We believe that we are far from reaching the full potential of the premiumization trend, which will fuel our results for the future. Now moving to the core segments. We made some transformational investments in our core segments in the past year, with new visual brand identities, great packaging improvements, launch of new liquids, building a portfolio to offer consumers a variety of choices for different tastes and occasions. This started with Brahma in 2016. We launched three varieties of Brahma Eta, creating a true family of beer. And since its launch, Brahma family has been growing strongly quarter after quarter. Brahma family is all about beer expertise. Brahma Edison reinforced that and has also had a positive impact on the brand X of Brahma, its mother brand. Based on the learnings from Brahma, he created the Skull Family, a family of beers designed to bring innovation and variety to the beer market. In addition to Skull Pilsen, the original liquid, the Skull Family is composed of Skull Rocks, a beer with special rocks, and Skull Furumouchi, a bill that addresses consumers' interest in few months, and also prefer a very drinkable liquid. All of them maintain the main attributes of Skoll, which is drinkability. The development of this family extends the location and consumer reach of our core portfolio, and also enhances the quality perception and brewing credentials of the respective mother brands. Both families maintain the cattle extension framework positioning of the brand. Skol as our easy drink lager and Brahma as our classic lager. Brahma continues to grow well above the industry quarter after quarter. To increase its meaning and relevance, Brahma launched in this quarter a new campaign reinforcing that the brand has been part of the Brazilian consumer's life for a long time. The objective to remind Brazilians of emotional moments, while reinforcing that Brahma was always present in these moments. While in 2018 we focused on strengthening Brahma's qualities through our 130-year anniversary celebration, sharing with consumers the pure knowledge that we acquired over the years, we now want to reinforce our qualities, heritage, and traditions through a more emotional approach. This new campaign will be reflected in all Brahma's touchpoints, including soccer with Copa America and country music. Skoll closed the summer with a very strong carnival. The brand promoted the most important street parties in Brazil, providing breakthrough experience to more than 37 million consumers in more than 31 cities. The brand Skol also increases in a positive way the numbers of mentions in social media. Total mentions increased by 23% in more than half given by Skol Poromaus. Skol Poromaus is not yet being sold in office in the States. We are still rolling out nationally, but so far the product is an amazing success. Having the three varieties of liquids support the family concept, and the Skoll family grew in the quarter. I will now spend a few minutes talking about values. As we mentioned before, the value segment is characterized by the importance of brand accuracy. Moreover, even though it's quite relevant in terms of volume, its share in the easy street profit pool is very, very low. However, considering its size, we have seen stagnant affordability, with relevant brands and without disruption in profitability. As a result, we have developed initiatives related to packaging, such as the 300 ml returnable glass bottle, and 18 can packs, and more recently, new brands, such as Noxa and Magnifica. Regarding this quarter, the value segment declined 280 points against its peak last year, We remain confident that once we start to see disposable income improving, we are likely to see the value sagging back to its historical levels. Nossa and Magnifica continue their successful rollout in the states of Pernambuco and Maranhão, respectively. Moving to sustainability. Sustainability is an important platform to pursue the dream of building a better world and also enhance Last year, we announced an aggressive set of environment targets for G5 2025. These are goals related to challenges proposed by the United Nations through the Sustainable Development Goals and aimed at reducing CO2 emissions, renewable energy, water management, intelligent agriculture, and circular packaging. As well of these goals, we also have a strong commitment for responsible consumption. A few days ago, for example, we launched a huge campaign on TV, social networks and print vehicles warning to the danger of drinking and driving. We show some of our beer logos with letters mixed up to say this is what happens when people drink and think it's okay to drive. Profit obtained with this product is totally reverted to projects of access to affordable water in the Brazilian Saniare. So far, we've delivered more than 3 million reais, benefiting 26,000 people. And we have our VOA program, an internal consulting company with voluntary participation for our people, created to help NGOs optimize their profits, budgets, and also manage people and careers. We are proud to help by doing what we do best. The project has impacted socially over 2 million people, with 185 NGOs and 200 company volunteers. The result of such meaningful initiatives is that the best ranked second in the Merkle 2018 reputation pool. Moving now to operational excellence. operation excellence has always been one of our biggest strengths and key differentials. Given that point of sales connects our brand to consumers, client service is a strong focus. We've been improving our process by reducing pain points and freeing up sales representatives time in order to focus on activities that add more value to the point of sales. Our mantra is, whatever we call it Brazil, that had to be unbound. We divided the country in a large quantity of micro territories, and we have been stepping up our rule to market focus on the idea that consumers should always be able to have products close, cold, and at the right price. In order to measure client satisfaction, last year we started tracking the net promoter score of our clients. This allow us to better understand their standpoint and how can we provide more value-added service with greater granularity in the country. We are also investing in predictive algorithms with the use of machine learning to address possible client issues before it happens. We have also excellent programs to ensure consistent quality and sharing of best practices on rules, logistics, sales, and shared service centers. In summary, there is an ongoing pursuit of operational excellence that delivers both efficiencies and quality. Talking about technology, it has been a key enabler for us. For example, the ideal order for each point of sale is provided by a constantly evolving algorithm through our portal, seller sales, as well as salesman handhelds. This process has enabled the portfolio strategy execution, delivering savings, improved volume as well, thus free time from our sales force to focus on port of sales execution and client service rather than other tapings. In March, we concluded the acquisition of our main IT solution supplier, responsible for more than 60 EIT processes. Technology is core and very strategic for our business. The rationale behind this acquisition was to internalize technology knowledge and expand technology support to other areas of AMBAP with more activity and scale. With the acquisition, over 400 developers with deep knowledge in several areas and in the nearest technology joined AMBAP's team. We understand that increasing use of data and personalized content will play a major role in the life of consumers. With that in mind, we created our own digital content bureau called DraftLine. DraftLine has the objective of establishing a closer relationship with our consumers in a more personalized way and on a larger scale. It will use data and create content to constantly increase brands' engagement. It will also work as a laboratory for new marketing formats in a more agile way of working than traditional ecosystems. Now moving to the next division. We are quite pleased with our performance this quarter. Volume growth came from all different segments in our portfolio. An important highlight is the premium brands such as Gatorade, H2OH, Lipton, and Tonic Antarctica, which not only grew double digits, but brings a healthy contribution to portfolio mix. Finally, we are only able to achieve such results in the first quarter, given the amazing people who have always been the foundation of our company. With our team, our culture, and our consumer-centric business model, we act confidently. that we are in a strong position to deliver long-term sustainable growth. We can now move to the Q&A. Thank you.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble the roster. And our first question today comes from Antonio Gonzalez with Credit Suisse. Please go ahead.

Good morning, Fernando. Thank you for taking my question. I just have two quick ones, if I may. The first one on HGMA in the year of Brazil. I think that if we take out the bonus accruals, right, even with the double-digit volume growth, if my numbers are right, SGMA and underlying SGMA in the year of Brazil was basically flattish, right, year on year. So I wanted to ask you a review on the sustainability of this trend and whether the operational excellence and the tech initiatives that you just described, Bernardo, are already meaningfully impacting SGMA positively or at this stage it's been early days? So that's number one. And number two, if I may very quickly, you make reference to value grants declining 200 basis points, right, in the beer industry. That seems quite substantial. If I'm not mistaken, you've made reference before to five or 600 basis points of value increasing throughout the crisis, right? And now in just one quarter, we see a meaningful reversion. So I just wanted to confirm whether This is on your new Nielsen numbers. Are the numbers fully comparable? And can you give any, I guess, bigger picture thoughts on how quickly can this reversion fully materialize?

Thank you.

Hi, Antonio. Fernando here. Thanks for your question. On the SGNAPs, I think it's very clear that with our hedging policy, we always know one year ahead what's going to happen to our cost of goods sold. And knowing that we're going to have some cost pressures this year, of course, we prepared ourselves and we look for even more savings in what we call non-working monies. And you're right, given all the new technology initiatives, we lever a lot on that also to find even more efficiencies on the SG&A side. So when we look ahead, I do believe we can continue to deliver a good performance on the SDG&A front. So I don't think that should be an issue this year. Of course, on the cost side, on the cost of goods sold, as anticipated and as the guidance that we provide, we'll be under pressure this year. But as we always do, we'll try to offset some of that on the SDG&A line.

Hi, Antonio. So a link to your question of the value brands and the numbers that we've shown to you is 200 bits. I mean, below the peak of last year's Nielsen numbers, the Nielsen 2.0 numbers. So basically calculate that, all the brands that are marketing in the price index below 90. So those are official numbers that we have made by Nielsen. And you always said that when at least the consumer confidence would pick up a little bit more. Consumers would trade up and will meet, I mean, encounter our much stronger portfolio of core brands like we showed to you in the slides of Brahma family, Skoll family, Bohemia, and then the core segment would resent, would grow again. Based on the news and numbers, that is exactly what happened in the first quarter.

And those numbers, thank you, Bernardo, just to clarify, those 200 basis points are from the peak in the second semester of last year or from a year ago?

It was from the second semester of last year and using numbers. Exactly the quarter, maybe I can follow up with you for the numbers from last year. In the last quarter, the value in the final months of the year started to ease. and decline, and then I can follow up with you, but I think the third quarter of last year. But I will follow up with you, but for sure last year.

That's very helpful. Thank you.

Thank you.

And our next question comes from Robert Ottensohn with Evercore. Please go ahead with your question.

Great. Thank you very much. And I apologize if you answered this, but the line wasn't that clear. It looks like you've invested a significant amount over the last four or five years on innovation, which is great given the kind of challenges that you had. And you're starting to see some of the benefits from that. Can you perhaps contrast? What percentage of your sales or volume came from innovation this quarter compared to where it was a couple of years ago? That's question number one. I realize that may be tough to get. Second, can you help us think through the general volume run rate that you're at now? Obviously, you had a huge benefit from the carnival this quarter. What would be kind of a more normalized run rate given the current economic environment? Thank you.

Thanks for the question, Robert. I think the first question, and you have been preparing investing in the portfolio, as was shown, I mean, minutes ago, in the last years. And for sure, the innovation pipeline is full. I mean, we have been implementing those. new launch, new liquids, variants of core brands, premium brands, and all of this supported by our innovation center in Rio de Janeiro, the state of the art that really assure, I mean, that you have the best liquids in the market. So, innovation was key in the first quarter. Skoll Puro Monte was a huge success. To be very candid, we have kind of to delay the national rollout because the first quarter was much stronger than we expected. But not only in the core, innovation impacts in premium as well, as I've been saying. So we cannot, I mean, disclose the number of robots, but it was strong. And the other important benefit was the trade-off. I mean, with the consumer confidence starting to come back, even knowing that the disposable income is not yet there, I mean, it didn't change, the trade-up will benefit us, like benefit in the first quarter, because we had a big headwind of the value segment in the last four years. That's not the case. It was not the case in the first quarter. So consumers are trading up for premium, so continue to grow the premium segment, and then when they come back to the core, they are seeing all the innovation in terms of our core brands that I just mentioned in my This is the first question. The second question linked to the volumes was basically that, no? What, if you are easy comes or not. Again, as we are now sitting in the 2018 call, the last call of the year, we highlighted, as I mentioned to you, the transformational investment we've made behind our strategic platform. Even in the moment of external volatility and challenge macro and so on. Then our statement that this would place us in a much stronger position to compete in the Brazilian bear market and we would be prepared to the fully benefit from the economy rebound. Our performance in the quarter is specific to our question what a consequence for those consistent investments we did in our strategic platforms. It's important to point out we have not seen yet disposable income resuming growth, which would likely provide a meaningful positive impact if it happens in the future. Of course, we have an easy response given the first quarter of 2018, but even compared to 2017, it's a 2.2% volume growth. As I said, we've expected and have an increased trade-up that the shrink of the value segment the mainstream brands of the portfolio of the variants of FamilySkoll and FamilyBrahma performed well. Important to say that Brahma has been performing above last year and then very well in many consecutive quarters, but the FamilySkoll performed above last year as well. And the premium portfolio of brands, superior portfolio that we have, growing ahead of the industry, gaining share for many consecutive quarters. And in the value segment, although this is shrinking, it's not exactly a segment that's a profitable one, but we found ways to be present and to gain share in the value segment, as we did as well, in a profitable way with those local brands like Magnifica and Noisa. So basically that's it. So we are cultural optimists. About 2019, as we begin to see consumer trends stabilizing, as we continue to invest behind the portfolio, new packets in premium, innovation, more to come, line extensions, the mainstream, new liquids, to name a few. So, for sure, we believe, very confident, that we are exiting this crisis that Brazil erected in a stronger and superior place that we came in. So, long answer. I hope that answered your question, Robert.

Thank you.

Thank you.

And our next question comes from Leandro Fontanesi with Bradesco. Please go ahead with your question.

Hi, Bernardo Fernando. Thank you for the opportunity. I have two questions as well. You mentioned Nielsen 2.0. Just to confirm, the data that you mentioned in the press release that the market grew low single-digit, if that's really this Nuscent 2.0 full comparison base, and if that's the best indication that we should use to indicate what will sell out during the quality. And the second question is, one big can maker mentioned last week that the biggest, the largest beer player in Brazil was shifting from returnable bottles to cans, and if you could comment What's driving the strategy? What's behind that? Thank you.

I think that's the first question, Leandro. Thanks for the question. Those are new send data, comparable bases, expanded base, the 2.0, and then the numbers of those single digits. is sell-out numbers, using sell-out numbers. But something that's important, sideways, for our main tool, just to highlight some of the things that we always talk about, sell-in and sell-out. This year, actually, the sell-in and sell-out dynamics, there was no major effects. We started the year for strong January, and the base remained consistent to the end of the quarter. For sure, the sell-out of new things doesn't catch 100% from January to March, because there's a delay of 20, 15 days a month in terms of the sell-out data that they measure in the market. But in our numbers, in our volume, it's no major big effect. January was strong, and then there's the same price that we had until the end of this quarter. Saline and sell-outs had more of an impact in the first quarter of 2018, given the bad weather at the end of December 17 and January. This was one of the reasons why the first quarter of 2018 was the easiest comp among the quarters in the 2018 year. But all in all, start the year with intentional loadings does not make any sense. as we have three quarters ahead of us, the full year, and basically wouldn't be right. Basically, that's what I can tell you about the numbers of sell-out. The other thing about the CANs and RGB, we'll continue to invest behind affordability, smart affordability, and then that's why RGB is very, very important. We see opportunities to grow in the off-trade as well, and to refund even more than one liter. So we're doing that. But in the end, as a consumer-centric company, we'll be aware of consumer trends, and if they want more camps, we'll supply them. By the way, we have a very good relationship with the suppliers, and you're building a camp plan. So we are really focused on an approach of occasions, need states, and what a consumer wants. RGB is part of that, but if they want camps, they will have camps in a nice portfolio, superior portfolio, like I just shown slides ago.

Hope that answers your questions.

Yep. Thank you very much for the call, Bernardo.

Okay. Thanks, Fernando. And our next question comes from Isabella Simonaria with Bank of America, Merrill Lynch. Please go ahead.

Thank you. Good morning, Bernardo, Fernando. Just two quick questions. First of all, in last, in Argentina specifically, What are the real risks you guys are seeing given the political and macro challenges? Do you see chances of a price control on your segment? I hear Bito mentioned two SKUs have suffered from price controls recently. What are the real risks you guys are seeing in Argentina? Second of all, think about beer Brazil. In the second quarter last year, we had the effect of the World Cup and the truck driver strike, which apparently one upset the other. So can we think about Q2 as a comparable basis for this year? Thank you.

Raiz Amela, Fernando Villa. Argentina, I think you get the right point. There are some kind of macro challenges, if I could say so. So the economy, GDP is suffering. Inflation is very high. Consumer confidence is at a low. And we had very tough comparables, because if you remember, first quarter last year, we saw very strong volume growth. So when you add all that, for sure you had volume pressures on the first quarter in Argentina. We are used to operate in a market like that. It's no news to us. So I believe that in this year there are likely to be still some macro challenges given how the economy is going. But if you look over through it, if you take a medium and long term view, then I think you should be always in a good place because there is a lot of growth still to come in Argentina. So per capita opportunities, premiumization opportunities, and that hasn't changed. But I think it's fair to assume that this year is going to be more volatile than average in Argentina.

And I think just to add, Isabella, we don't see there any formal... price control. We adopted and we put two SKUs in this policy because we want to help the country as well to go through this tough moment in terms of macro debt, so supporting the country there. But it's not kind of a formal enforced price control at all. We are confident that Argentina is always like that, ups and downs. We have been there for many, many years, a successful business, and we will continue to be, and this price control problem has no meaningful impact in our profitability. So, link it to the quarter, as you said. So, last year, yes, you're right, I mean, we had truck drivers in May, but a very strong World Cup, so kind of a water wash, or even a little bit, the World Cup was a little bit, even, I mean, a better effect than what we lost in terms of the truck drivers strike. So for sure, the second quarter is not a easy comp at all compared to the first quarter. That was an easy one given the weather and given the other things that we mentioned last year.

That's it. Thank you.

Thank you.

And our next question comes from Ben Serrer with Barclays. Please go ahead with your question.

Perfect. Well, thank you very much, and good morning. I actually have a question a little bit on your outlook in terms of costs and what you've been seeing. There's been a lot of pressure during the quarter in terms of some of the input cost pressure, commodity prices, aluminum, and so on. Is there something you have done in terms of strategy to offset that, i.e., pricing strategy, or have you engaged in some sort of a hedging strategy to kind of at least, well, smoothen a little bit the impact or try to offset some of the impact? That would be a first question, and I have a minor follow-up. Thanks.

Hi, Ben. Fernando here. Our hedging policy, we always hedge one year ahead. So the good thing about this hedging policy is that in the first quarter of last year, I knew that I would have some pressures on the first quarter of this year, because I knew what would be the effects, I knew what would be aluminum, I knew what would be barley. So with that in mind, we already prepared ourselves, and we tried to find additional savings, some of them on the cost of goods sold line, and a lot of them also on the SG&A line. Hayu? So that's why you are seeing that our SG&A didn't grow as much as other lines, as the cost of goods sold lines, and it's somehow a way for us to offset this growth. We know that going forward and to the remaining of the year, we're going to have pressures on the cost of goods sold. We disclosed that in our guidance, and as always, we try to find ways to offset that on our other lines, SCG&A and other lines. But we don't plan to do any offsetting on the revenues per hectolitre line. That follows the commercial strategy.

Okay, perfect. And then just quickly on the, just following up a little bit on your strategy and what you have in terms of the different approaches, Elevate and so on. Have you seen some sort of, I mean, you kind of indicated towards to, but like market share changes or how competitors have started to react on what you've been doing in the different categories, be it on the affordability side or on the core side or the premium side, like those three sectors that's what most focus on?

Yeah, thanks, Ben, for the question. I think negative to the market share, don't... disclosure numbers, but what you can say that the industry grew low single-digit based on using 2.0, around 3%, and our volumes grow ahead of that, as you saw our numbers. In terms of the reaction of the market and so on, we have our plan. The strategy is there. It's focused big time on the innovation and the expansion of the portfolio of the core and premium. Premium is growing a lot. We're gaining share. When you do that, you're not talking about price disruption in the market, nothing like that. It's basically growing from the top layers of the price structure, so premium and core. I think that's good for the industry. We're building brands. Brazil was always a competitive market, like it was in the last many, many years. I think that we have a superior portfolio, rule to market, dream people culture to win and continue to win in this market. Very confident of that.

Okay. Perfect. Well, thank you very much.

Thanks, Al.

And our next question comes from Antonio Bardepo with Itaewoo. Please go ahead.

Hi, guys. Thanks for the question. My first question is on lots. We saw that volume, the volume loss accelerated a little bit in the quarter compared to what it had been in the fourth and third quarters as well. I'd just like to see your opinion on what do you think changed to accelerate the volume loss in last? Do you think it's just a natural consolidation of a weaker environment in Argentina, or is there something different? Did you lose market share in there? Were you a bit more aggressive on pricing ahead of the cost increase that is likely to come in the upcoming quarters? If you could shed a little bit of color on that, I would appreciate it. That's my first question.

I think, Antonio, what happened in Argentina, basically, and in Paraguay as well, to be fair, it was a tougher comp. I mean, first half of last year was really, really strong in those countries. And in a way, what you could say, the macro is not helping at all at this time. I think that those countries will, for sure. always ups and downs, as I always say, in terms of the macro environment there. But the fact that in the first half, in the first quarter, I mean, it really was a tough macro and tougher comps when compared to the previous year. So portfolios there are strong. Again, shiny premium. We have Brahma and Kiyomi doing well. And I think that all the plans in terms of concept The concept-wise, all the platforms are very similar that I just explained to the Brazilian market. Adapted for the local environment, for sure, but as a concept in the same direction.

All right, thank you. And if I can go back to the Brazilian beer segment, when we look at the revenues per hectolitre, It's the second quarter in a row that we see the revenues growing a little bit below inflation, not by much, but a little bit below inflation. We expected a bit more with the growth of the premium segment and now with the loss of share of the value segment as well. Could you tell us if the prices per brand are increasingly in line with inflation, why aren't we seeing this effect? more strongly on the revenues per hectolitre in the Brazil segment, where this revenues growth is being diluted away, in your opinion?

I think, very good question, Antonio. I think that what, I mean, basically, when you see a trade-off, what the value segments that's going down, We are not, I mean, we're not, I mean, present and specifically, and we're gaining share there, but still, it's a very low market share, way below our fair share in the better segment. So, when this happened, the trade-off, I mean, happened in both two segments, for the Core to the Core Plus, continued to happen, continued to grow the premium. But the core segment, what you expect, when we have a shrink in the value segment, the core segment, it's a segment that, I mean, in the shorter term, when you have a big swing of that, I mean, it's a segment that suffers more when you have an issue of the value segment growing. is the segment that most benefits when you have the opposite, I mean, the value shrink. On top of that, we have regional mix. We have different prices per brand, per region. According to the regional mix, this could affect the net revenue product, even if premium growing, even if increasing price per brand back in line with So this regional mix, it's an important thing to be aware. The growth of the core segment is important to be aware as well. But if people want to buy our beers, innovation and so on, it's a good thing. That's why the volume was strong as well.

Just to make sure I understand it correctly, Bernardo, I can say, I can affirm that regions with lower average price grow faster than the others, and I think that's the most important reason why we are not seeing this effect.

Yes, just to give one example. If you grow more in the northeast and north, that's, by the way, a region that is our lowest market share in B when I compare that. If you have a trade-up there, if you have an innovation there that's helping, that's like score is doing well. This is the regional mix. Let's talk about things. We are growing volume in the region that we have been underperforming, maybe in the last in the last period. So that's the reason we make $700,000. So even if we don't change, I mean, if you have the same price policy everywhere, increased price line inflation, But if you have one region, in this example, the Neno, that's the northeast and north, growing volume way ahead of Brazil, like happened in the first quarter, this affects the driving project. But it's a good thing. It's a region that, it's a very important sign that our port-to-port strategy is working there, that the value sign is shrinking there, that NOSSA is working, and scope pure mouth is working. And family brand is working. So good news. Hope that was clear now.

Very clear. Thank you.

And our next question comes from Luca Cepicchia with Le Goldman Sachs. Please go ahead. Hi.

Good morning, Bernardo Fernandez. Thanks for taking my question. I wanted to follow up on the premium portfolio performance. I think if I was looking, I was checking back at the first quarter last year, and I think it's part of the fact that the overall volumes for beer Brazil were weak, were down, and comps were fairly easy this time around. In premium, I think last year you mentioned that in the first quarter you did grow by double-digit as well. So, you know, 50% growth or a double-digit growth year-over-year, seems to signal very strong and very consistent performance. So my first question would be, can you give us a measure of how much what you define as the premium portfolio represents of the overall? And secondly, if directionally you could remind us, give us a sense of the weight of the different brands, or at least the global brands relative to the national brands, if you can just maybe remind us the the significance of the family of brands. That would be my first question. Secondly, just on portfolio innovation, there have been a number of initiatives. You enter the value segment in a way with Magnifica. You introduce PureMalt across the Scott, Emily, I was just curious, looking forward, what other areas of innovation, if not, without being specific, you're most excited about? Is it flavors, packaging? What type of areas are you looking at to continue to innovate in the portfolio? Thank you.

Luca, thanks for the question. I think at Premium, just the weight of Premium is around 11% of our beer volume. and growing, so that's good. It's a good trend, and the segment, we think that it continues to grow. What you said, that the global brands this quarter grew 50%, and the domestic ones, double digits, so that's a very, very strong growth. We have the numbers, the news expanded numbers for the premium segment and the premium industry for the last quarters, and yes, we're growing big time share in the premium segment. It's a strong growth. It's a portfolio gain. And it's quarter after quarter. And we are winning. This is a fact. We have the numbers. We have the news expanded. And it's including a much easier reading because premium is more of trade. It's most scan. So, I mean, it's really there. It's real. So, and then if you see other markets, and I've been saying, if you go to the U.S., the thing that you see, the leading brands in the premium segment has around 60%, 70%. It is a portfolio game. I mean, basically what you saw in every market. So now we have here Budweiser, our biggest brand, a strong brand, almost the same size of the competitors' brands that they have. But you have Stella that's growing double, double digits, big time. You have Corona, 100%. Colorado, original that back to growth, who made a pilot in the south to sell Patagonia that did very, very well. Then you build kind of a structure, a high-end structure internally to deal with this complexity. It's working. I think that the innovation that would come In the premium segment, for sure, we have more things. One example that I can tell you, we'll launch BEX in the most important urban centers. It's an amazing brand, German brand. All the edgy attitude of this brand. from German, it's pure mouth, pure claw, it's bitter, it's trendy, you know, it's an amazing brand, and you launch kind of one month. And in the core, I think that this concept of family that we applied for Brahma worked very well for Skoll as well. So that opened doors for us to give more, for your eyes, variety in terms of liquids to the core consumer in Brazil. That's amazing for the industry because you can expand the industry giving access to people to great liquids that could come in the umbrella of the portfolio. in the future. Very excited about the portfolio approach that we have been putting in premium, in core, and I think that more things to come.

Bernardo, if I can follow up. The emphasis on premium, which has been there for a while and seems to be working and be successful, it seems to me though you are You're more assertive now on the idea that the scaling benefit or the scaling opportunity is larger. Is that correct? Are we seeing, I wouldn't call it premium 2.0, but in a sense, more of a maturity of the strategy from a premiumization standpoint?

Look, it was always there. We always knew that premium would be bigger, but to do the premium brand, it's not like you have to seed the brand at stage by stage. So we're reaping the benefits in terms of Corona, of Stella, of the seeding that we've done years ago. We cannot launch a beer in premium like you launch bags and out of the gate sell tons of volumes and so on. So, I mean, the brand loses the uniqueness. So we always thought that premium would be the segment that will grow more in Brazil. The maturity model shows that. I mean, the weight of the segment, even the price and the growth of the segment shows that. But to build a portfolio of brands, a superior one, you have to be patient with that. And I think that was a big change in terms of our way of building brands. We are patient. So we have been investing in Stella for years, having Corona for years, a pipeline of premium brands. And in the right moment, in the right stage, we scale up. And then you see the variables come. The good thing, there's lots of things to come from, even Bud, Stella, Corona, and others. new liquids and initiatives that are foreseen to be launched in the future.

Very good. Thank you. Thanks very much.

And our next question comes from Thiago Duarte with BTG. Please go ahead.

Hi. Hello, everybody. Thanks for the question. I have three questions, if I may. The first one is related to the industry. You mentioned that you believe that the industry has grown low single digits in this quarter, and if we If we circle back to the last several releases from Ambev, and I think it's the first time that you actually state that the industry has apparently grown. So actually, Bernardo, my question to you would be, you know, whether you think this path of recovery for the industry in general is a good proxy for what you expect to see for the whole industry throughout the year, so for the whole of 2019. So if we... If in your view, we should expect the industry to keep growing in the next few quarters, or you expect the comps to also affect how you see the industry growing in the rest of the year. So that would be the first question. The second question would be related to market share. In the past, we've discussed with you guys several times about the fair share of MBEV in the market, that 67%, 69% market share, if I'm not mistaken. And of course, A lot has changed over the last few years. You now mentioned the new SYNC 2.0 as a better assessment of the size of the industry and so on. You've introduced a lot of innovation. There's a much more granular approach to the market. And in this quarter in particular, it looks like you have outperformed a lot the industry, right? So my question to you guys is where you believe you are in terms of the fair share, in terms of where you're your ideal market share should be considering the portfolio that you have in place with the premium brands, with the value propositions, and the mainstream, I think would be interesting if you could elaborate on that. And the third question is actually about the Sculpture Mouth, which you mentioned as being a very successful launch. It's still rolling out in the rest of the country, as you said, but it was a very huge success, as you described, especially during the carnival. So my question to you is, how you see the introduction of PureMouth relative to the Skoll Pilsen, and what kind of cannibalization you have been seeing, if any, and how the Skoll brand has performed from a market share perspective considering the entire family. I think it would be interesting to see the benefits of the brand extension that you are introducing there. Thank you very much.

Thanks for the question, Charles. I mean, the first one, the industry, I mean, it's not our data. It's Nielsen data. It's low single digits, around 3%. And you cannot comment about the full year numbers. But again, those are numbers based on the research for big coverage of Nielsen in the quarter. So, linking to the market share, we're not disclosure market share, but I could say that It's not an issue. We are within our range, and we are confident that we're on the right path to continue to evolve in terms of our position in the market. In link to the pure malt, this cold pure malt effect, I think there's amazing knowledge because it brings the concept of the pure malt from a little bit bolder liquid in this cold way, a very drinkable liquid. That was a kind of a long research and test that our brewmasters have done in the last years in our innovation center in Rio de Janeiro to assure that there's specific process, boiling process that assure that even with low bitterness you can maintain this flavor aspect of a pure malt but in a very drinkable liquid. Because of that, and because the liquid is drinkable, but is different from Skull Pilsen, the cannibalization is way below the average of the launch that we've done. Even without the full rollout in the full country, the Skull family grew in the quarter. That's very important. It was helped by Skull Pure Malt, for sure, but not only that. When you launch a family of quality beers like we have now at Skoll and you had in Brahma in the past, all those innovations bring brand equity and equity for the mother brand. So I think that the innovation pipeline is full, and I think this family approach is working very, very well. And just to remind us in the core segment, Bohemia, Bohemia, it's a big, big success as well. It's a very strong brand. It's selling a lot, a lot. And it's growing, I mean, double, sometimes triple digits. So we have Buena, PureMouth that have been helping us in the core segment as well. So that's what I could say. Thanks, Tiago.

Thank you.

And our next question comes from Lucas Ferreria with JP Morgan. Please go ahead.

Hi. Thanks for the question. Guys, my first question is a follow-up on this regional mix you commented before. I was just wondering if this is a trend that we should expect to continue in the following quarters, or in other words, if you see sort of more room to grow your market sharing these regions. or if that was something punctual. I'm asking because follow-up to Antonio's question, I also noticed that your, another way I think that we could also track this premiumization is look at your EBDOT per hectoliters sold, and this number declined by 5%. I understand the cost impact. It's clear to me, but I would expect also premium to help over time your EBITDA per hectare liter metrics. So wondering if the regional mix has an effect of that. In other words, serving these regions could also be less profitable to you guys. And the second question is on the non-alcoholic portfolio and the results. Actually, pretty strong results. If you can comment on, you know, which were the categories inside non-alcoholic that, you know, drove volumes up in your results? And if we see already in these results the impact of actually IPI tax benefits, right, this year where we should have started to see some impact in the first quarter. Wondering if there were some and if you can comment on the profitability there, how sustainable that is going forward. Thank you.

Hi, Lucas. Fernando here. So, on your first question about pricing, premium, and margins, I think the biggest impact that we have in our net revenues per hectolitre was actually the regional mix on the first quarter. So, with North and Northeast growing at a faster pace than other regions. And not that other regions didn't grow as well, but North and Northeast grew at a faster pace. Of course, premium helps. Premium improves natural revenue per hectolitre, but in this quarter, it was somehow offset by the original mix. On the EBITDA per hectolitre, the major drivers are actually costs. We have a meaningful impact in costs, which was anticipated, and that's why we have some pressure on our EBITDA per hectolitre. Then again, we always say that Effects, commodities, they are kind of cyclical. Sometimes they help, sometimes they go against us. If you take a long run, definitely premium and the premium portfolio that is getting more relevance aggregates EBITDA margin and aggregates EBITDA per hectolitre. So net-net, it's very critical. On the NAB question, the growth was pretty much across the board. I wouldn't single out any particular part of the portfolio. I think it was across the board, very robust, both our premium portfolio, Gatorade, H2O Age, energy drinks, as well as our more core like Guarana, Pepsi, everything performed quite well in the quarter. So I wouldn't highlight one single area that performed better than the other.

And I think, Luca, just, I mean, the same thing that I've been talking about, our beer business, we have been doing for non-alcoholic business as well. So premium portfolio is very, very important. Invest on that. And like brands like Tonica, that's really a huge success and growing a lot. So helping us, the premium segment, and for sure, Guadalajara Baskets, a very, very strong brand, and we continue to invest.

And on your question on API, there was not too much of a change. The law was changed last year, so there is not too much of new news here, and the impact was not that relevant in our numbers.

Thank you.

And this will conclude our question and answer session. I would like to turn the conference back over to Mr. Bernardo Paiva for any closing remarks.

So basically what I could say that we are very confident with the transformational investments and focus that we've done in our strategic platforms in all of those years. As we've always said, we have been preparing ourselves for a moment that have a better macro environment. Consumer confidence helped a little bit in the first quarter and was a very, very big quarter. innovation helping us in Brazil big, big time, and then the pipeline is full for the future. So we'll continue to focus on the long run and sustainable value creation in an algorithm of growth that's consumer-centric, and for sure we'll continue, in my opinion, reaping the benefits of this approach in the years to come. So thank you. Have a great day. Enjoy the rest of your day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.