Ambev S.A.

Transforming our country Hearts we will conquer The show must continue Look at the people asking for peace So much thirst to renew The show must continue And from the eyes of Guilherme Eyes are always to deliver The show must continue Good morning and thank you for waiting.

We would like to welcome everyone to Ambev's first quarter 2022 results conference call. Today with us we have Mr. Jean Gerentate, 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.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 Ambev's remarks are completed, there will be a question and answer section. At the time, further instructions will be given. Should any participant need assistance during this call, please press star 0 to reach the operator. Before proceeding, let me mention the forward-looking statements are being made under the safe harbor of the Security 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 the 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 a forward-looking statement. I would also like to remind everyone that, as usual, the percentage trends that will be discussed during today's call are both organic and normalized in nature, and the less otherwise stated percentage trends refer to comparisons with first quarter 2022 results. Normalized figures refer to performance measures before exceptional items, which are either income or expenses that do not occur regularly as part of Dombevi's normal activities. As normalized figures are non-DAAP 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. Jean Gereissat, CEO for Ambev. Mr. Gereissat, you may begin your conference.

Good morning, good afternoon, everyone. Thank you for joining our earnings call for the first quarter of 2022. Three weeks ago, during our Investors Day, we focused on how our culture, our strategy, and our business model has evolved, how we embrace technology in benefit of our customers and consumers, why we see several opportunities to create value going forward, and our overall company's transformation. Today, I will, of course, focus more on our Q1 results. But as I do this, I will also highlight how many of the things we showcased during the investors day are already positively impacting our short-term performance. Let's talk about the quarter. During our full year 2021 call, I explained why I believe we were starting 2022 better positioned, while acknowledging we expected a tough start to the year. Q1 2021 had a very strong performance with volumes up 12%, net revenue up 28% and the bid up 24%, record growth rates for a first quarter of the year. And this year we were off to a slow start because we had a one-off January, a very tough month in many markets given the Omicron varieties. However, I was happy to see that the team managed to deliver a better overall performance than we expected, particularly in Brazil and Laos. For instance, Brazil volumes bounced back in February and were very strong in March, which drove consolidated volume growth of 5.5% in the quarter. Brazil net revenue per hectolitre grew not only year over year, but sequentially versus Q4 21, both in BEER and in NAB. In BEER, volumes grew 2.1% despite the tough January, thanks to premium portfolio growing high teams and core portfolio growing mid-single digits. According to our estimates, we once again gained market share versus last year. Our three main core brands, Grama Antarctica and Skoll, were ranked in the top of the 10 most valuable brands in Brazil, among 478 brands in 36 different categories, according to BrandZ. In the Corplus segment, Spotlin remains expanding its distribution and volume per outlet, and Brahma Duplo Multi launched new returnable and one-way presentations, which will address more consumption occasions. NAB volume grew 16.9%, driving market share gains, according to our estimates. The premium brands' volume grew above the rest of the portfolio, led mainly by energy drinks, H2O, Pepsi, and Gatorade. In last, volumes grew 2.9%, despite a strong comparable in Argentina and the volume impact in Bolivia due to another COVID-19 wave in January. In Chile, we gained market share, according to our estimates, and expanded distribution, despite lapping the start of the partnership with Coke bottlers. Our Core Plus and above portfolio continued to grow in Chile, as well in Paraguay and Bolivia. Of course, not everything worked. In CAC, volumes declined 4.7% due to supply constraints in the Dominican Republic, our largest market in the region. We expect supply constraints to ease going forward. However, above the core portfolio continued to gain weight in our volumes thanks to brands such as Corona and Modelo. In Canada, volumes declined 8.4%, mainly driven by the worst industry of the last 30 years in January, which then recovered in February and March sequentially, coupled with tough comps from Q1 2021. Despite weak volume performance, we estimate having gained market share in beer, and our net revenue per hectolitre grew 4% due to consistent implementation of revenue management initiatives. So let's go deep in what's behind this performance. Let's talk about our five pillars of our how to win framework. The first pillar, brands for each and every one. In Brazil, Focus Brands, Brahma Bags, and Budweiser added over 500,000 fans versus same period of last year, according to our estimates. And in last, number of fans increased by 300,000. After reaching a better balanced price relativity between one-way and RGBs, our pack price strategy, our returnable packaging grew double digits in Brazil, mainly in the 600 ML presentations in premium and the 300 ML presentations in core portfolios. Second pillar, thirst to lead the future. Our innovations continue to over-index market share, according to our estimates, reaching 17.6% of Brazil's beer net revenue, thanks to the continued success of Brahma Duplo Malte, Spaten, and Stella Gluten Free. Innovations also reached over 17% of last net revenue. We launched new can sizes and secondary packaging to serve more occasions in the off-trade channel to brands such as Budweiser, Brahma Duplo Malti and Original 2. Third pillar, a toast to our customers' success. The digitalization of our customers continued to prove successful and supported our net business to achieve a higher penetration per outlet and increase its number of customers. And we continued the successful expansion of Biz in Paraguay and Argentina. Biz marketplace in Brazil grew GMV almost 10 times versus the first quarter of last year. and in the last six months served more than 500,000 customers offering 400 SKUs which include partners such as Pernod Ricard and Bacardi. This bank continued its rollout in our operations reaching more than 270,000 accounts and more than 1.4 billion TPV in the month of March. And lastly, in April, we announced the deal between us and Transportes Imediato, which is a relevant player in the logistic industries in Brazil. Together, we will further advance on the urban distribution center's development.