Ambev S.A.

Good afternoon and thank you for waiting. We would like to welcome everyone to Ambev's 2025 Fourth Quarter and Full Year Results Conference Call. Today with us, we have Mr. Carlos Lisboa, Ambev's CEO, and Mr. Guilherme Flutti, CFO and Investor Relations Officer. As a reminder, this conference presentation is available for download on our website, ir.ambev.com.br, as well as though the webcast link. We would like to inform you that this event has been recorded and all participants will be in listen-only mode during the company's presentation. After Ambev's remarks are completed, there will be a Q&A section, during which we kindly ask that each participant's self-side analysts ask only one question. 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 a web's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depends 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 Unbev and could cause results to differ maturely 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, presented changes refer to comparison with 2024 fourth quarter and full year results. Normalized figures refer to performance measures before exceptional items which are either income or expenses that do not occur regularly as part of unbebbed normal activities. As normalized figures are non-gap measures, the company disclosed a consolidated profit, EPS, operating profit, and a VDA on a fully reported basis in the earnings release. Now, I'll turn the conference over to Mr. Carlos Lisboa. Mr. Lisboa, you may begin your conference.

Good afternoon, everyone, and thank you for joining our fourth quarter and full year 2025 earnings call. As we close the year, Here is the message I hope you take away today. We made meaningful progress on the mission we set from day one, even in a dynamic context that stress tested our strategy. Here is how we progressed. First, avoiding disruptions. We built on a strong foundation. and maintain execution consistency across the company. Through active listening, we protected what was working and implemented improvements without destabilizing the organization. Second, keeping momentum. Over the course of the year, we advanced quarter by quarter on different fronts, finishing the year with a better performance for 2026. Third, building a stronger company. We avoided changing directions with the context. We advanced simultaneously on the three pillars of our strategy because that is where our differentiation comes from. This is what we mean by being ambidextrous. And it is building a flying wheel that strengthens each year and sustains our performance over time. As a result, we ended 2025 stronger than we started. We strengthened our portfolio, got closer to our customers and consumers, and advanced profitability. Volumes, however, were pressured by the environment, and that matters because it frames our ambition for what comes next. To use a simple analogy, 2025 was a tough season to play. With a wet beach, cold weather, and a game that kept changing, it forced us to build muscle. resilience and adaptability, and it strengthened our collective ownership as a team. And just as important, that strengthening showed up in our people. In a demanding year, employees' confidence in our future increased, driving engagement indicators to all-time highs. back to post-pandemic peak levels and reinforcing that our culture truly stands out in challenging moments. All that means we are coming out better prepared for the next season, which in 2026 happens to be the FIFA World Cup, a big passion point in our markets. So, let me touch on another passion, beer. What we saw in 2025 reinforces our view that the headwinds were primarily cyclical and occasion-driven, not a sudden change in beer fundamentals. A strong proof point is this. The most engaged consumers, our beer lovers, got closer to the category, and the category equity strengthened over the years. In other words, beer continues to be loved, culturally relevant, and deeply connected to socialization across our markets, where it holds a high share of alcoholic beverages. And we continue to see meaningful runaway ahead. The category has had room to expand, supported by favorable demographics in Latin America, and grow through occasions development, both out of home and at home, and through a broader portfolio that addresses trends and needs recruiting new consumers. Simply put, what changed in 2025 was not whether consumers want beer, but how often the right moments happen. Now, let me connect that to our strategy. Under Pillar 1, As the category captain, our job is to bridge the gap between beer's potential and actual consumption, fostering category growth. In 2025, we led where the category expanded the most, premium, balanced choices, and non-alcohol. We elevated the core segment through innovation and investments, while building adjacencies like flavored beers. And that leads us to our pillar two, where we are using data and technology to shape our own future and stay ahead of the curve, strengthening the core business while building new growth engines. On the B2B side, our priority is to go deep with bees as an enabler to make the core business stronger, helping us win through better execution at the point of sale. Our ecosystem is built on the idea that the better our customers perform, the better we perform. That is why we are embedding digital sell-out activation tools Powered by our data and insights, benchmarking what works across points of sale and translating it into shopper activation and portfolio recommendations. Also, this marketplace continues to scale. with full-year GMV growing 70%, driven by 3P expansion and gross margin up 3.5 percentage points versus last year, reinforcing both relevance and improving economics. On the consumer side, Z Delivery closed 2025 with all-time high performance, delivering R$4.7 billion in GMV, up 13% versus last year, 67 million orders and 27 million yearly active users, up 11% versus last year, consolidating its position as one of the major convenience platforms in Brazil. Strategically, that put us close to young adult consumers. with nearly 80% of buyers, either Gen Z or Millennials, and it accelerates both execution and our test and learn innovation loop. It is our food in the future. And this brings us to our third pillar, the muscle that makes the other two pillars scalable. In 2025, we set a clear ambition. to expand Ambev's consolidated EBITDA margin again. Despite industry softness and effects and commodity headwinds, we delivered a meaningful evolution from top to bottom line. That came from thoughtful choices on resource allocation, revenue management, productivity, and expenses governance, while sustaining brand investment. That discipline translated into delivery. At the consolidated level, we expanded organic beta margin by 50 base points, marking our third consecutive year of margin expansion, and by 110 base points in Brazil beer. And that reinforced our confidence in capital allocation. Consistent with our commitment to return excess cash to shareholders over time, we announced approximately R$ 20 billion in shareholder returns in 2025, the highest in our history, through R$ 13.2 billion in dividends, R$ 4.2 billion in interest on capital, and a new R$ 2.5 billion in share-by-back programs. and we are starting the year paying the first 1.2 billion reais tranche of the IOC declared by year-end. Now, let me give a quick overview across our footprint. In 2025, we grew EBITDA across all our business units, and we expanded the EBITDA margin in 4 out of 5. In Brazil Beer, full year volumes were in line with the soft industry, and our performance reflected two different halves. Our revenue management initiatives weighted on share in the first half. As conditions improved in the second half, market share expanded meaningfully. In Q4, as the weather sequentially recovered, so did our volumes. October was the main drag, and we returned to growth in December. For the quarter, we delivered a low single-digit market share gain in use and sell-out. We continue to lead where the category is expanding the most. premium and super premium volumes increased high teens and we closed the year as leaders in the segment reflecting stronger portfolio brand equity our balanced choices brands grew high 60s and non-alcohol grew around 30 percent as we continue to expand leadership and unlock incremental occasions In the quarter, we delivered 100% of the Brazilian beer industry's growth in premium and non-alcohol, according to our estimates and Nielsen sell-out data. In the core segment, softness was more pronounced, given its higher reliance on out-of-home socialization. we are sustaining its recovery through stronger trade activation, marketing campaigns, and continued innovation. And we started to see progress with market share gains in Q4. In BrazilNet, during 2025, the disciplined execution of our strategy and resource allocation supported EBITDA growth with margin expansion. At the same time, Guaraná Antarctica's equity improved, showcasing the strength of the brand. In the first half, volume momentum and commercial execution supported market share gains, despite margin pressure given higher costs. In the second half, the CSD industry decelerated, amid the same cyclical drivers that impacted beer. and price relativity became less favorable following our revenue management decisions, resulting in market share pressure while delivering a better profitability profile. In Argentina, the macro environment continued to improve, with lower inflation and less FX volatility. The consumption recovery, however, is taking longer than we expected, and continue to wait on results in 2025. Still, performance improved sequentially throughout the year, with a more balanced dynamic between top line and bottom line in the fourth quarter, supported by tighter execution and revenue management. Looking ahead, we remain constructive on a gradual recovery as the consumption environment improves. In the Dominican Republic, the consumption environment also improved sequentially through the year, despite a weather-related disruption in Q4. In this context, beer gained share of alcoholic beverages in full year, supported by healthier dynamics between categories, while President's brand health reached all-time highs. In Canada, we outperform both beer and beyond beer industries, supported by our beer mega-brands and continue beyond beer momentum, while maintaining disciplined cost execution and delivering EBITDA margin expansion. With that, I will now turn it over to Fleury.

Thank you Lisboa and hello everyone. As we entered 2025, we made it clear that this would be another year focused on long-term value creation through disciplined execution of our capital allocation framework. In a dynamic operating environment, we focused on what we can control and delivered another year of normalized EBITDA growth with margin expansion, EPS growth, resilient cash generation, and a higher capital return to our shareholders. Let me walk you through our financial performance for the year, starting with the margin improvement dynamics. We closed 2025 delivering consolidated normalized ABTDA margin expansion of 50 bps, reaching 33.4%, mainly driven by three factors. First, net revenue per hectolitre growth of 7.5%, supported by stronger brands, revenue management strategy, and continued premiumization across our portfolio, leading to net revenue per hectolitre growth across all of our business units. Second, financial discipline. Consolidated cash cogs per hectolitre performance benefited from productivity initiatives and operational efficiencies across our industrial and logistics operations. Brazil Beer is a clear proof point. Despite the cost headwinds anticipated at the beginning of the year and the operational deleveraging associated with lower volumes, our cash COGS per hectolitre excluding Non-AMBEV marketplace products increased by 6.1% in 2025, at the lowest quartile of our guidance. And third, efficient resource allocation. In SG&A, we continue to invest behind our brands, while keeping total cash SG&A growth under control. Now moving to below EBITDA lines. We closed the year with almost R$4 billion in net financial expenses, mainly explained by FX variation losses related to foreign currency, denominated assets, and the BRL appreciation, coupled with expenses related to sourcing U.S. dollars in Bolivia. In terms of income taxes, our effective tax rate for the year was 17.7%, reflecting some one-off effects, mainly from Q3, such as the Barbados divestment, the partial reversal of tax liabilities associated with the 2017 Brazilian tax amnesty program, and certain effects related to tax credits. Absent such one-offs, our consolidated effective tax rate would have been approximately 20% for the year. As a result, stated net income reached almost R$16 billion, with stated EPS increasing 8.2% year-on-year, while normalized EPS increased by 2% in the year. Now, turning to cash flow. Cash flow from operating activities remained solid, and totaled R$24.5 billion. R$1.6 billion lower than last year, mainly due to softer volumes that impacted working capital. Cash flow consumed in investing activities totaled approximately R$5 billion, mainly driven by CapEx investment, broadly in line with last year. Cash flow consumed in financing activities amounted to R$26.8 billion, driven by shareholder payouts and the completion of our 2024 share buyback program in total we returned 21.7 billion reais to shareholders on a cash basis meaning that approximately 90 percent of our operating cash flow was returned to shareholders in 2025 and reinforcing our commitment to sustainable long-term value creation, our return on invested capital continued to be meaningfully above our weighted average cost of capital and improved in 2025, driven by no bad margin. For 2026, we remain consistent towards our capital allocation priorities of, one, reinvesting in our organic growth to keep supporting the development of Pillar 1 and Pillar 2 of our strategy. Two, maintaining a disciplined approach towards M&A opportunities. And three, consistently return excess cash to shareholders over time. In terms of costs, in 2026 we expect Brazil beer cash cogs per hectolitre, excluding non-AMBEV marketplace products, to increase between 4.5% and 7.5%, driven primarily by commodity prices, aluminum in particular, and portfolio mix, with higher cost pressures anticipated in the first half of the year. At the same time, We remain focused on identifying opportunities and enhancing efficiency as we continue to pursue our ambition of expanding consolidated margin over time. And before handing it back to Lisboa, I would like to share a team update. Patrick Conrad, a seasoned finance professional, is joining our investor relations team, succeeding Guilherme Yokai-Shia. Ioka, in turn, will transition to a fully dedicated position, leading Ambev's treasury team. I would like to take this opportunity to thank Ioka for the outstanding work he has done leading Ambev's investor relations team over the past five years, and to wish both continued success in their new roles. Now, back to you, Lisboa.