Ambev S.A.

Good morning, and thank you for waiting. We would like to welcome everyone to AMBEV's second quarter 2020 results conference call. Today with us, we have Mr. Jean Gerasotti, CEO for AMBEV, and Mr. Lucas Lira, CFO and Investor Relations Officer. As a reminder, a slide presentation is available for downloading on our website, ri.ambev.com.er, 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 listen-only mode during the company's presentation. After AMBED's remarks are completed, there will be a question and answer session. At that time, further instructions will be given. Should any participant need assistance during this call, please press star zero to reach an 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 AMBED and could cause results to differ materially from those expressed in such forward-looking statements. 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 the second quarter 2019 results. Normalized figures refer to performance measures before exceptional items, which are either income or expenses that do not occur regularly as part of AMBAP's normal activities. As normalized figures are non-GAAP measures, the company discloses the consolidated profit, EPS, EBIT, and EBITDA on a fully reported basis in the earnings release. Now, I'll turn the conference over to Mr. John Gerasate, You may begin your conference.

Thank you. Hello, everyone.

Thank you for joining our call. Before I share with you an overview of our business during the second quarter and look us over the highlights of our financial performance, I would like to deeply thank all those who are helping our societies during the COVID-19 pandemic. Those who are fighting in the frontline on a daily basis are the real heroes and are making a real difference as the world tackles pandemic. Thank you very much. Our second quarter was certainly much very marked by the pandemic, but also by our team's incredible collective and positive reaction to it. Last quarter, I mentioned the main factors that I believed would make the difference in navigating the crisis were being the leader and most efficient player in the market, having the highest reach in terms of a distribution network built over the last 20 years, navigating the crisis with a solid cash position, And finally, leveraging on technological and innovation platforms that we have been investing behind for a while. In what was probably the most difficult quarter of our history, we demonstrated the strength of our business, the resilience and creativity of our people, and our ability to impact the world in a positive way. In almost all the countries in which we operate, we ended the quarter better than we started. COVID-19 brought new challenges to our business and the ecosystem of our industry. Everybody is reinventing themselves. Consumers are changing their habits, demanding more convenience and new ways of entertainment. And the OnTrade channel is rethinking itself. The good news is that we have been setting up the company to respond quickly to these changes. And we are starting to see the benefits of this new mindset and strategy. From April to June, we saw a sequential improvement in consolidated volumes. April volumes declined 27% year over year. May declined 7% and June actually grew 5%. Despite this positive trend, there is still plenty of uncertainty in the market. Things can change rather quickly and profitability was and should continue to be a challenge as on trade socializing occasions are and will continue to be impacted moving forward. Restrictions are still very fluid and macro and currencies remained volatile. In terms of volumes, Bolivia, Dominican Republic, and Panama were hit the hardest. These countries started the quarter with more severe restrictions on people circulation and alcohol sales and adopting an on-and-off trade opening hours. As the quarter progressed, Such restrictions were gradually eased, but there are still some in place as we speak. Chile and Paraguay suffered less because our volumes are heavily weighted towards the Austrade channel. Nonetheless, a challenging macro environment has led to a slower recovery in Argentina. In Brazil, where the Austrade channel plays an important role Restrictions varied between regions, with big cities and urban centers being more affected. We saw a gradual improvement as part of the on-trade start to adapt, operating with deliveries and takeaways, and cities started to reopen. The small mums and pops stores gained relevance as customers choose for local consumption to avoid longer buying journeys, partially offsetting the impact on the on-trade channel. Canada, despite an industry decline, our volumes benefited from the strong performance of our premium, corkless, and beyond beer portfolio. As I have mentioned before, we have a strategy built on three pillars. First, we really want to work as an ecosystem. We are reframing our purpose of bringing people together for a better world, and we have mobilized ourselves by donating our capabilities, competencies, and the time of our teams to help solving urgent social challenges. We were recognized by the United Nations with the Solidarity Award. This award is given to impactful work that individuals and organizations have been taking to support communities as we navigate the pandemic. All this because we have been able to move fast to respond to these social needs. Given a more creative and agile mindset, we could answer the demands of the communities we are part of. In Brazil, we also took part of Movimento Nos, a coalition of eight consumer goods companies that will help approximately 300,000 POCs to reopen with a total of R$ 370 million, impacting indirectly more than 3 million people. Besides all this, it was a moment for us to renew the pact we have with our customers, suppliers, and the community. We achieved the all-time high customer satisfaction measured by the NPS metric, doubling our results versus last year for the same period. Second, innovation as a mindset. As markets mature, consumers demand more options to the different occasions. And we are transforming our business to respond faster to demands like that and shifts in market trends. As a result of this transformation, in Brazil, for example, our market share of products launched in the past three years now over index our total market share. What is driving these results are a step up in consumer centricity capabilities, flexibility to create unique recipes with exclusive ingredients, a pilot testing approach, the creation of an ecosystem that benefits clients, consumers, and suppliers with superior value, and the logic of creating demand ahead of production. Following this formula, we developed Brahma DuploMount. We managed to deliver in three months the volumes we originally planned to deliver by the year two of our business plan. The brand took advantage of the live stream phenomenon. Incrementality has been higher than expected, and margins are healthy for the company. There is still much to do, but we are off to a great start. The live streams were a groundbreaking innovation in media and entertainment. Where there was fear, we brought joy. This quarter, we promoted almost 400 live streams with more than half a billion views. Brands that engaged in lives had an exponential growth on social media. Also, we learned that before and during the lives are excellent opportunities for us to engage with consumers through our D2C platforms. Third pillar of our strategy, business transformation enabled by technology. Where there were movement restrictions, we offered convenience. Our direct delivery systems at consumers' homes have grown exponentially. Our D2C platform, such as Zend Delivery in Brazil, to Cerveza in Dominican Republic, and App Bar in Argentina, are gaining significant traction, as well as our partnership with third-party home delivery platforms. This quarter, Zend Delivery registered 5.5 million deliveries, 3.6 times more than the full year of 2019. Another example is the proprietary B2B platform that we call BEAST that has been piloted in the Dominican Republic and that we have started to roll it out in other markets. In Dominican Republic, we already have the majority of our revenues generated through BEAST. And also, we see an opportunity that we could incorporate different segments such as food, dairy products, wine, and hard liquors. Although April seems to have been the low point, we will continue to see uncertainty in the market going forward. We are here for the long term and are confident in our ability to bounce back. We will keep focusing on our people being there for our consumers and clients, continue to invest towards a winning and fresher portfolio, serving our communities, and collaborating with our wholesalers, suppliers, commercial partners, and governments. Finally, I would like to thank my team with all my heart. This was the most challenging quarter of our history, and we were only able to go through it and achieve these results, given the amazing people that always have been the foundation of our company. So, thank you all, and let me hand over this to Lucas.