Good morning and thank you for waiting. We would like to welcome everyone to Ambev's First Quarter 2019 Results Conference Call. Today with us we have Mr. Bernardo Paiva, CEO for Ambev; and Mr. Fernando Tennenbaum, 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 Ambev’s remarks are completed, there will be a question-and-answer section. At that time, further instructions will be given. [Operator Instructions] Before proceeding, let me mention that forward-looking statements are 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 percentages changes refer to comparisons with first quarter 2018 results.

Normalized figures refer to 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 on the earnings release.

Now, I will turn the conference over to Mr. Fernando Tennenbaum, CFO and Investor Relations Officer. Mr. Tennenbaum, you may begin your conference..

Thank you. Hello, everyone. Thanks for joining our 2019 first quarter earnings call. I’ll guide you through the financial highlights for following operations, including our below the line items and cash flow, as well as commercial initiatives on CAC, LAS and Canada. 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 hectoliter of 7.5%. EBITDA reached BRL5.1 million with an organic growth of 16.4%, while EBITDA margin increased 100 basis points to 40.5%.

Normalized net profit for the quarter was up 6.2%, delivering BRL2.8 million. It is worth highlighting that, following the conceptualization of Argentina as accounting hyperinflation rate, rates had been 100%, the country is considered as highly rational in accordance with IFRS.

Similar to the last few quarters, we continue to report the results of our operations in Argentina applying hyperinflation accounts. Having said that, I’ll now move to our regional results and start with Brazil.

In the quarter, Brazil reached BRL2.9 million, an increase of 8.1% versus first quarter's 2018 while margins contracted 220 basis points to 40.8%.

Beer Brazil had a very solid performance, with volumes delivering double-digit growth at 11.3%, which adjusting for the 3.7% net revenue per hectoliter growth, with top line 16.4% higher than the first quarter 2018.

Net revenue per hectoliter ended up being in line with inflation, fighting off high price increase and negatively impacted by the regional link as most ahead of the country average. While our volumes grew 11.3%, the industry estimated by Nielsen points low single-digit.

EBITDA for Beer Brazil was up 5.4% in the quarter with margin contraction of 400 basis points to 42%. This contraction was explained by the cost pressures we were anticipated in the full year 2018 earning release. Cash COGS per hectoliter grew by 24% impacted by aluminum, barley and FX.

Cash SG&A increased 3.7%, which is inflation in the period even accounting for accrual initiatives in the first quarter 2018. Such performance was mostly related to initiatives expenses, including bonus accruals, Brazil Beer EBITDA growth having around 7%. In NAB in Brazil, top line was up by 25.1% in the first quarter.

Revenue grew about 7.6% in net revenue per hectoliter growth, and 16.3% volume growth. Similar, to beer, EBIT also grew low single digits according to Nielsen. Increase in the quarter grew 31.9% with margin expansion of 170 basis points to 33.6%.

In terms of cost and expenses, cash COGS per hectoliter was up 4.7%, with higher aluminum cost being offset by lower sugar prices and operational leverage.

Cash SG&A was up 17.3%, impacted by bonus accruals, distribution expenses related to volume growth, which was partially offset by savings to non-working money as well as phasing from expenses in Q1.

From the Brazilian business, we reiterate our guidance for cash COGS per hectoliter growth of mid-teens in Brazil for this year, which should be more pressured in the first three quarters, easing off towards the end of the year. Moving now to Central America, and the Caribbean.

Central American and Caribbean continues to show good momentum with 12.7% net revenue growth, which is a combination of 9.1% increase in volume and a healthy 3.3% net revenue growth. EBITDA in the quarter reached BRL578 million, boasting a double-digit growth of 14.4% and margin expanding 50 basis points to 39.5%.

Cash COGS per hectoliter increased 8.5%, mostly affected by Panama where our strong volume evaluations since 2017 has driven additional temporary costs in order to supply the market with no disruption.

Further, cash SG&A in the region was up 1.1%, below the average inflation in the region, pressured by variable compensation accruals, and SG&A phasing in Guatemala and with the brand improving distribution expenses mainly in the Dominican Republic as well as for projects related to nonworking money.

We are responsible for commercial strategy, delivering healthy volumes individually in all countries, in which we operate. In the core segment, we continue to invest in our trade programs, strengthening our connection with our customers through commercial platforms to further enhance the Presidente brand in the Dominican Republic.

We added more than 3,500 coolers in the quarter. In Panama, our second largest market division, we keep investing in the trade execution with our main brand, Atlas Golden Light, and being present in the key selling moments in the country, such as Carnival and Atlas Golden Fest.

Panama's Carnival, whether this seems to selling some descent volume, Atlas Golden Light led the way with weekend sales, impacted the result also. They invited consumers to disconnect from daily routine and enjoy holiday. We also had, for the first time a super premiumization of Carnival in Corona.

This year, Atlas Golden Fest was the biggest year's festival in the country, since current got 18,000 people, 80% more than last year's edition and have [indiscernible].

We also continue to roll out optimization strategy in the region, developing Corona, Stella Artois, Modelo and Budweiser through a customized execution, both for the on-premise and off-premise channels. Peru accounts for less than 5% of the beer industry volume impact, 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 strong volume performance impact, we – of course now it's possible to move further in the region moving forward. Switching now to Latin America South.

The volume in the region declining 10.6% during first quarter of 2019, mostly driven by Argentina where volume is decreasing by mid-teens, impacted by a challenging macro environment. Net revenue per hectoliter increased 27.1%, which amounts for 14.5% top line growth.

EBITDA for the quarter was up 36.5% with margin expansion of 820 basis points to 47.6%. Cash COGS per hectoliter in the quarter declined 4.7%, mostly driven by favorable FX hedges, while cash SG&A 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 maintained a strategy of differentiating the core brands, Quilmes, our classic lager, and Brahma, our easy drinking lager.

We opened, for the first time, Quilmes' own bar and named it Los Clásicos de Quilmes to further improve consumer experience. In the core plus segment, Budweiser continued to embrace the music platform, sponsoring Lollapalooza with several activations, promotions and even releasing an exclusive 473 ml can.

We also launched Andes Origen, Vendimia, another limited edition variety from the Andes Origen. The beer looked great. The Vendimia was the first beer to be present at the wine festival. Our high end strategy showed off – show promising results in LAS with our premium portfolio facing the industry across all counties in which we operate.

Both Stella Artois and Corona launched at a Better World campaign with immediate executions in Argentina. For the first time, Stella Artois took the [indiscernible] and changed its iconic red customers to blue. The one on Stella Artois is blue.

We launched the Stella Group Challenge by inviting different stakeholders such as top celebrities enjoying by coloring their head blue, where the very few by [Indiscernible] monuments blue and one of the main stages in the country by turning the [indiscernible] blue.

Corona launched its Protect Paradise and Plastic Doesn't Belong to Ocean, as a focus of the summer campaign, generating a lot of growth through cleaning app, activations and huge [Indiscernible] the plastic and the middle of the city's main train station.

Going forward, while cautious if we can continue this in the short term, we have started medium and long term perspective in the country and remain confident in our ability to deliver solid top line and everything in the whole region, supported by a strong portfolio. Turning now to Canada.

In the first quarter, top line in Canada declined 3.4%, a combination of 1.2% net revenue per hectoliter increase and a 4.3% volume decline, which was mostly driven by a slowdown in the beer industry. EBITDA reached BRL329 million, which is 6.5% higher than in the first quarter of 2018, with margin expansion of 230 basis points to 25.4%.

In the quarter, cash COGS per hectoliter declined 1.9%, as higher aluminum and other commodity prices and lower dilution of fixed cost was more than offset by a new comparable in the first quarter 2018. Cash SG&A declined 6%, driven by phasing of sales and marketing expenses.

Despite being faced with challenges, we have posted achievements with both core and core plus during the quarter. Core plus core brands also continued to deliver strong results, with Michelob Ultra remaining the fastest growing brands in Canada in the quarter and Bud Light continuing its momentum and gaining market share.

On the premium segment, our high end portfolio is growing ahead of the industry, led by the double digit volume growth of premium Core brand. Corona launched its first 360 campaign called Corona Sunsets Winter Tour. Now back to consolidated figures in more detail.

In the first quarter, net financial results total an expense of BRL 672 million, 12.2% higher than our Q1 2018. Main items in the financial expense in the quarter were; first, interest income of BRL135 million, driven by our cash value.

Second, interest expense of BRL391 million that also improved interest incurred in connection with Brazilian Tax Regularization Program, as well as a non-cash accrual of approximately BRL60 million related to the production associated to our investment in the Dominican Republic.

Third, BRL195 million of losses on derivative instruments, which were, year-over-year, explained by the increase of the FX hedges carry costs related to our cost of goods sold and CapEx exposure in Argentina, partially offset by equity swap gains.

Fourth, losses of non-derivative instruments in the amount of BRL111 million, mainly related to an adjustment in the current value of the production in the Dominican Republic. Fifth, taxes on financial transactions in the amount of BRL54 million. Sixth, BRL 153 million of other financial expenses, partially explained by intercompany transactions.

Finally, seventh, BRL97 million of financial income related to non-cash incomes resulting from the adoption of Hyperinflation Accounting 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 BRL2.7 billion, which is 121% higher than last year.

APAC reached BRL546 million in the quarter, increasing 15.5% versus Q1 2018. Thank you very much. Bernardo now will share some of the initiatives and thoughts on the Brazilian market before going to Q&A..

Thank you, Fernando. Hello, everyone. As mentioned by Fernando, we started the year delivering solid volumes in EBITDA growth. When we announced the 2018 full year results, we highlighted that is transformational investment behind our strategic platforms in the past years.

Even in a moment of external volatility and challenging macroeconomic environment, which placed us in a very stronger position to compete in the Brazilian beer market, and definitely would be prepared to fully benefit from the economic rebound.

Our performance this quarter is a consequence of the consistent investment we've used in our strategic platforms. It's important to point out we have not seen yet disposable income resuming growth, which would likely provide meaningful boost or bonus. We're focused 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 is the consumer-centric approach, which, with the category developed framework, guides the design of our portfolio.

The same consumer-centric approach is translated into our strategic platforms, 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 Dream, People and Culture. Now let's go through the category framework and portfolio strategy. Our approach is based in the market maturity model and the category expansion framework.

The market maturity model is about how end market evolve while the category expansion 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 consumers-centric approach should be adopted in each of these stages.

In the lowest maturity level consulted mostly on-premise, now socializing and relaxing, and the competition in or experience. In the middle maturity level, which is mix general and social, occasions are balance between home and on-premise, although beer remains stronger in the on-premise.

Competition remains finally sprit and soft drinks are consuming non-alcoholic occasions. Finally, in the high maturity level, soft drinks is mostly off-premise in more than three, consumption in home, and meals and relaxed occasions dominate the landscape.

Competition from wine's and beer is bigger, the more alcohol category arise and there is no state for right liquid. The category expansion strategy in it strength, it's about how beer possibly evolved, a changing in market opportunity.

We started with the Classic Lager then added the typical features of the lowest maturity levels and explaining to what the kind of beer and calories. Our widest beer market, Brazil, it's 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 gain. As consumers evolve, they have are much more occasion and needs taste basis. And no brand standalone can fulfill all these requirements.

With that, in mind, in mature markets, there is no single brand that covers more than around 60% of the premium segment. It's important to inform that our strength in this segment is a superior portfolio of brands, combining global and domestic premium brands. As the market matures, the average number of brand per country increased.

So to lead in the beer segment, you have to build a strong portfolio and invest in that with healthy tool in the past years. For our organizations structure standpoint, we created a high-end-dedicated team years ago, a group that focus exclusively on the premium segment, both in execution and supporting its growth.

Such strategy is already provided tangible results. This quarter, our global brands comprised of Budweiser, Stella Artois and Corona, grew more than 50%. Once again, we gained market share in the premium, had been doing in the last consecutive quarters.

Brand construction goes through an investment experience that allows consumers to take advantage of each brand in a deeper way.

This can be done through sponsoring assets that's relevant to consumers, such as Lollapalooza, NBA, or the NFL or to for future events such as Bud Basement, Villa Stella and Corona Sunset where the immersion into the brand value will develop. All of this is emphasized by social media.

We are also stepping up on packaging with initiatives such as the new digital brand identity and the new bottle change for Budweiser, which enhanced the brands strategy and OpEx assortment having now in our portfolio more cans and sharing size bottles.

Budweiser, our largest global brand, made a hero, has reach for consumers who are trading us towards the premium segment. Throughout the premium brands with the biggest number of mentions in digital platforms in the quarter, a growth of 100% compared to first quarter 2018.

This quarter was marked by campaigns such as International Women's Day, SuperBowl and Lollapalooza. Stella Artois reference of solid beer quality in Brazil, a Classic Lager with a distinctive taste that experienced accelerated growth from second semester on last year.

In this quarter, we've maintained the focus on gastronomy culture events with another successful edition of our proprietary Villa Stella Artois in Rio de Janeiro, one of the main markets for Stella Artois in Brazil. Stella Artois also supported by the continued expansion of new packs formats, such as the sharing-sized bottles and the new cans.

Therefore present Villa Stella Artois consumers new option to taste a Stella in different occasions. Stella Artois continues to deliver very strong double-digit. Corona volume more doubled this quarter, a historical achievement. The brand was present in the trended New Year Eve party in the country with the Corona Sunset circle.

In the [indiscernible] front, Corona officially launched the partnership with Parley for the ocean to clean 20 Brazilian beaches in 2019, together with our World Surf League Champion, Gabriella Medina. With that the brand reaches its all-time high number of mentions in social media in the quarter.

Now I would like to spend a few words of all the domestic portfolios; Original and Serramalte in particular. These brands were first developed in their own trade channels. This is an amazing experience to consumers. Original and Serramalte had their combined volume increasing double-digits during the first quarter.

In summary, our premium portfolio continues to lead Ambev 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 segment.

We made transformational investments in our core segments in the past years, 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 Extra creating a true family of beers. And since its launch, Brahma's family has been growing strongly quarter-after-quarter. Brahma family is all about the beer expertise. Brahma Extra reinforced that and has also had a positive impact on the brand Extra Brahma, its mother brand.

Based on the learnings from Brahma, we created the Skol family, a family of beers designed to bring innovation and variety to the beer market.

In addition to Skol Pilsen, the original liquid, the Skol family is composed of Skol Hops, a beer with special Hops and Skol Puro Malte, a beer that address consumers interest in Puro Malte and also prefer a very drinkable liquid. All of that maintains a main attribute of Skol, which is drinkability.

The development of this family extended occasion and consumer reach for our core portfolio, and also enhanced the quality perception and brewing credentials of the respected mother brand. Both families maintain the careful expansion favorable positioning for the brand. Skol is our easy drinking lager and Brahma is our classic lager.

Brahma continues to grow well above the industry, quarter-after-quarter.

To increase its meaning and relevance, Brahma launched this quarter a new campaign reinforcing that the brand has been part of the Brazilian consumer's lives for a long time just to remind Brazilian of emotional moments, while reinforcing the Brahma was always present in these moments.

While in 2018 we focused on strengths in Brahma's quality through our 130 years industry celebration, sharing with consumers the beer knowledge that we have acquired over the years. We now want to reinforce our quality, heritage and tradition to a more emotional approach.

This new campaign will deliver bracket in all Brahma touch points, including soccer with Copa America and [indiscernible]. Skol closed the summer with a very strong Carnival. The brand promotes the most important Street parties in Brazil, providing breaks through experience to more than 37 million consumers in more than 31 cities.

The brand Skol also increased in a positive way the numbers of mentioned in social media. Total mentions increased by 23% and more than half driven Skol Puro Malte. Skol Puro Malte is not yet in stores nor Brazilian states. We are still rolling out nationally but so far, this product is an amazing success.

Having the three varieties of liquids support the family concept and the Skol family grew in the quarter. I will now spend a few minutes talking about value. As we mentioned before, the value segment is characterized by the reinforcement of brand attributes.

Moreover, even though it's quite relevant in terms of volume, each share in the industry profit pool is very, very low. However, considering site, [indiscernible] affordability with relevant brands and result with disruption in profitability.

As a result, we have developed initiatives to related to packaging, such as that 300 ML returnable glass bottle and 18-can packs, and more recently, new brands such as Nossa and Magnífica. Regarding this quarter the value segment declined 208 points against its sales last year.

We remain confident that once we start to see disposable income improve, we are likely to see the brands cycle back to its historical levels. Nossa and Magnífica continue their successful rollout in the state of Pernambuco and Maranhao, respectively. Moving to sustainability.

Sustainability is an important part of us to pursue the dream of being in a better world and also enhance Ambev reputation. Last year, we announced a set of environment targets to be achieved by 2025.

These are goals related to challenge proposed by the United Nations through sustainable development goals and aimed at reducing CO2 emissions, renewable energy, water management, intelligent agriculture and circular packaging. As well as 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 network and print cycles warning to the danger of drinking and driving. We show some of our beer locals we plan to say this is what happens when people drink and think its okay to drive.

[Technical Difficulty] profit obtained with this product was totally reverted to projects of access to potable water in the Brazilian semi-arid. So far, we delivered more than BRL 3 million, benefiting 26,000 people.

Here we have our VOA product, an internal consulting company with voluntary participation of our people, created to help NGOs to optimize their process, 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 resulted in Ambev being ranked number two in Merco 2018 reputation pool. Moving onto operational excellence. Operational excellence has always been one of our biggest strengths and key differentials. Given that points of sales connect our brands to consumers, client service is a strong focus.

We have been improving our process by reducing pain points, and freeing up sales representative time in order to focus on activities that add more value to the point of sales. Our mantra is, Wherever we call it Brazil, there has to be Ambev.

We decided the county from the largest market territories, and we have been setting up our route-to-market focused on the idea that consumers should always be able to have broader scope [ph] and at the right price. In order to measure client satisfaction, last year, we started tracking the net promoter score of our clients.

This allows to better understand their pain points 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 product to make sure consistent quality and sharing of best practices on breweries, logistics, sales and shared service centers. In summary, there is an ongoing pursuit of operational excellence that delivers full efficiency and quality. Talking about technology. We have seen activity enabler for us.

For an example [ph], the ideal order for each point of sale is provided by a constantly evolving algorithm, through our portal, tele sales, as well as salesman handheld.

This process has enabled the portfolio strategy execution, delivering savings, improved volume as well as freed time from our sales force to focus on point of sales execution and client service rather than order taking. In March, we concluded the execution of our main IT solution supplier, responsible for more than 16 IT products.

Technology is core and very strategic for our business. The rationale behind this acquisition was internalize technology knowledge and expand technology support to other areas of Ambev with more agility and scale. Through this acquisition, over 400 developments with deep knowledge in several areas and in the newest technology joined Ambev's team.

We understand that increasing use of data and personalized content will be a major role in the life of consumers. With that in mind, we created our own digital concept bureau called Draftline. Draftline has intended to establish a closer relationship with our consumers in a more personalized way and on a larger scale.

It will use data and creates content to constantly increase brand engagement as we also work as a laboratory for new marketing formats in a more agile way of working than traditional ecosystems. Now moving to the NAB 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 Tônica which not only grew double-digit, but brings a healthy contribution to portfolio mix. Finally, we are only able to achieve such results in the first quarter due to the amazing people who have always been in the foundation of our company.

With our team, our culture and our consumer-centric business model, we have confidence 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 begin the question-and-answer session. [Operator Instructions] And our first question today comes from Antonio Gonzalez with Credit Suisse. Please go ahead..

Good morning, Bernardo and Fernando. Thank you for taking my questions. I just have two quick ones, if I may. The first one on SG&A in Beer Brazil. I think that if you take out the bonus accruals, right, even with double-digit volume growth, if my numbers are right, SG&A -- underlined SG&A in Beer Brazil was basically flattish, right, year-on-year.

So, I wanted to ask your view on the sustainability of this trend and whether the operational excellence and the tech initiatives that you just described, Bernardo, are really meaningfully impacting the SG&A positively? Or at this stage, it's the early days? So that's number one. And number two, if I may, very quickly.

You made reference to value brand declining 200 basis points, right, in the beer industry. That seems quite substantial, now if I'm not mistaken, you made reference before to 500 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 really comparable? And can you give any, I guess, bigger picture thoughts on how quickly can this reversion fully materialized? Thank you..

Hi, Antonio. Fernando here. Thanks for your question. On the SG&A bps, I think it's very clear that we follow hedging volumes. 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 and what we call non-working money. And you're right, given all the new technology initiatives, we lever more 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 good performance on the SG&A floats. 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 in the guidance that is provided, we've been in pressure this year.

But as we always do, try to offset some of that on the SG&A line..

Hi. Antonio. So linked to your question of the value brand, the number that we've shown to you is 200 bps -- I mean, below the peak of this year are Nielsen numbers, our Nielsen 2.0 numbers. So, basically, calculate that, all the brands that are marketing in the price mix below 90. So, those are official numbers that we have made by Nielsen.

And we always said that at least the consumer confidence with pick up a little bit more. Consumers will trade up, and we will meet -- I mean encounter our much stronger portfolio of core brands like we've shown to you -- I've showed to you in the slides, of Brahma, Skol family, Bohemia, and then the core segment would present -- would grow again.

So, basically, based on the Nielsen, numbers that backlog happen in the first quarter..

And those numbers -- thank you, Bernardo.

Just to clarify, those two conversations 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 UC numbers, exactly the quarter -- maybe I can follow up for the numbers from last year..

That's….

In the last quarter, the value in the final months of the year started to -- I mean, ease and decline. And then I can follow up with you. But we're I think the third quarter of last year. But I will follow-up with you. But for sure, last year..

That's very helpful. Thanks..

Thank you..

And our next question comes from Robert Ottenstein 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? So that's question number one. And I realize that may be tough to get.

And then second, can you help us think through kind of that sort of the general volume run rate that you're at now? Obviously, you had a huge benefit from the Carnival this quarter. What would be the kind of a normalized run rate given the current economic environment? Thank you..

Thanks for the question Robert. I think the first question, we had been procuring, investing in the portfolio as we've 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, variance of core brands, premium brands.

And all of this is supported by our innovation-center in Rio de Janeiro that's state-of-the-art, that really assure that I have the best liquids in the market. So innovation was key in the first quarter. Skol Puro Malte 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, it means as well with design. So, we cannot disclose the number, Robert, but it was a strong.

And the other important benefit there was the trigger, with the consumer confidence starting to come back, even though in 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. We had a big headwind of Everson like it was the last four years.

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 innovations in terms of our core brands that I just mentioned in my speech. This is the first question.

The second question linked to the volumes was basically -- was basically that, no? What strategic comps? Again as we announced in the 2018 year -- the last call of the year, we highlighted the mission to customer vessel we made our strategic performance. It the past years, so even the moment of in external volatility and challenging market and so on.

And then our statement that this would place us in a much stronger position to compete in the Brazilian beer market, and we'll be prepared to fully benefit from the economy rebound. So, our performance in the quarter is specific to your question, was a consequence for those consistent investments we did in our strategic platforms.

And it is important to point out that we have not seen disposable income resuming growth which would likely provide a meaningful positive impact if it happens in the future. Of course, we had easier comps given in the first quarter of 2018. But even compared to 2017, it's a 2.2% volume growth.

So, as I said we expected and happened increased trigger that the streak of the value segment, the mainstream brands of the portfolio of the family Skol family Brahmas performing well. It's important to say that Brahma has been performing above last year and there were many positive quarters. But the family Skol 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 as well.

And in the value segment, all of those 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 profitability way with those local brands like Magnífica and Nossa. So, basically, that's it.

So, we are cautiously optimistic both in 2019 as we begin to see consumers trends stabilizing as the consumers behind the portfolio, new package and premium, innovation, more to come, line expansion, the mainstream, new liquids, to name a few.

So for sure, we believe -- very confident that we are exiting the prices that Brazil elected in a stronger and superior place that we can be. 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 the Nielsen 2.0 full comparison base.

And if that's the best indication that we should use to indicate what we want to sellout during the quarter? 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 this strategy? What's behind that? Thank you..

I think I'll take the first question. Leandro, thanks for question. Those are Nielsen data, comparable basis, expanded base, the 2.0, and then the numbers of low-single-digit is sellout number and you'll see sellout number.

But something that's very important sideway for me just to highlight some of the things that we always talk about is selling and sellout. This year, actually, the selling and sellout dynamics, there was no major effect. We started the year with a strong January, and the base remained consistently until the end of the quarter.

For sure, the sellout of – the sellout of new season catched 100% from January to March, because there is a delay kind of -- 20, 15 days a month in terms of the sellout data that they measured in the market. But in our numbers, in our volume, there is no major big effect.

General strong, and then that's the same pace that we have in the end of this quarter. Selling and sellout has more of an impact the first quarter of 2018, given the weather -- bad weather at the end of December 2017 and January.

This was part -- this was the reason why -- 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, we 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.

So basically, that's what I can tell you about the numbers of sellout. The other thing about the cans and RGB, we continue to invest behind affordability and smart affordability, and that's why RGB is very, very important. So, we see opportunities to grow in the off-trade as well and to reap-up even more than one later. 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 cans, we'll supply them. By the way, we have a very good relationship with the suppliers, and they are building a can plant. So we are really focused on approach, of occasions, need space and what our consumer wants. RGB is part of that.

But if they want cans, they will have cans in the nice portfolio, superior portfolio, like I've just shown slides ago. Hope that answers your question..

Yeah. Thanks very much for the color, Bernardo..

Okay. Thanks..

And our next question comes from Isabela Simonato with Bank of America Merrill Lynch. Please go ahead..

Thank you. Good morning, Bernardo, Fernando. Just a quick questions. First of all, in LAS, in Argentina specifically, what are the real risks you guys are seeing given the political and macro challenges? Do you see chances of price control on your segments? And you bit of mentioned two SKUs have been -- had suffered from price control recently.

So what are the real risks you guys are seeing in Argentina? And 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 offset the other. So can we think about Q2 as a comparable basis for this year? Thank you..

Hi, Isabella. Fernando here. Argentina, I think you get the right point, there are some kind of macro challenges, if I could say. So the economy, the 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 new 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 [indiscernible] 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. So we adopted -- I mean, we put two SKUs in this, because we want to help the country as well, to go through this -- this I mean tough moment in terms of macro there, so supporting the country there. But it's not kind of a formal enforced price control at all.

So just to add -- I mean, we have confident that Argentina is always like that, ups and down. We have been there for many, many years as a successful business, and we'll continue to be. And this price control problem has no meaningful impact in our profitability.

So linked it to the quarter, as we said -- so last year, yeah, you're right, I mean we had truck drivers in May but a very strong World Cup, so kind of a water wash. So even a little bit -- the World Cup was a little bit even I mean better effect in the -- what we lost in terms of the truck drivers strike.

So for sure, the second quarter is not 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 very clear. Thank you..

Thank you..

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

Well, thank you very much, and good morning. I actually have a question a little bit on your outlook in terms of cost and what you've been seeing. Clearly, 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 impact or try to offset some of the impact? That would be a first question, and then 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 would have some pressures in the first quarter of this year, because I knew what would be the effect -- because I knew what would be aluminum, and I knew what would be valley.

So with bear in mind, we already prepared ourselves, and we try to find additional savings, some of them on the cost of goods sold line and a lot of them also in the SG&A line. 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 somehow a way for us to offset this growth.

We know that going forward and through the remaining of the year, we're going to have pressures on the cost of goods sold. We disclosed that back in our guidance. And as always, we try to find ways to offset that on our other lines, SG&A and other lines.

But we don't plan to do an offsetting on the revenues revenue per hectoliter line that follow 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 [Indiscernible] but like market share changes or how competitors have started to react and 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 we're most focused on?.

Thanks, Ben, for the question. I think in regards to the market share, we don't disclose the numbers. But what we can say that the industry grew low single-digit based on Nielsen 2.0, around 3%. And our volumes grow ahead of that as we 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 innovation and the expansion of the portfolio of the core and premium. So premium is growing a lot. We're gaining share. So it's not -- I mean, 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.

So I think that's good for the industry. We're building brands. So -- and Brazil was always a competitive market likewise in the last many, many years. And I think that to have a superior portfolio, go-to-market dream, people, culture, to win and continue to win in this market. Very confident on that..

Okay, perfect. Thank you very much..

Thanks, Ben..

And our next question comes from Antonio Barreto with Itau. Please go ahead..

Hi, guys. Thanks for the question. My first question is on LAS. We saw that volume, the volume LAS accelerated a little bit in the quarter compared to what it had been in the fourth quarter 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 LAS? 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 the pricing ahead of the cost increases that are likely to come in the upcoming quarters? If you could share a bit of color on that, I would appreciate.

That's my first question..

Antonio, what happened in Argentina, basically and Paraguay as well to be fair it's just tougher comp. I mean, first half of last year was really, really strong in those countries. And in a way, what we could say the macro is not helping at all at this time.

I think in those countries that we know for sure, always ups and downs that you always see in terms of the macro environment there. But the fact that in the first half -- in the first quarter, I mean, it's really, really it was a tough macro and tougher comps when you compared to the previous year. So portfolio is very strong.

We are gaining share in the premium. We have Brahma in Quilmes doing well. And I think that all the plans in terms of concept wise all the platforms are very similar that I just explained to the Brazil market. And that is for the local environment for sure. But as a concept, it's 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 hectoliter, it's the second quarter in a row that we see the revenue grow 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 for brands are increasing in line with inflation, why aren't we seeing this effect more strongly on the revenues per hectoliter in the Beer Brazilian segment? Where these revenue's growth has been diluted away in your opinion?.

Very good question, Antonio. I think what's -- I mean, basically, when you see a trade up, what the value segments that's going down, we are not -- I mean, we're not present, specifically and we're gaining share there, but still at a very low market share, way below our fair share in the value segment.

So when this happens, the trade up, happening in both two segments for the core, to the core plus, continue to happen, continues to grow the premium. But the core segment, what we expect? When we'll have shrink in the value segment.

The core segment? In fact, it's a segment that -- I mean, in the shorter term, when you have a big shrink of that -- I mean, it's the segment that suffers more when you have an issue of the value segment, right? But it's a segment that most benefits when you have the opposite the value shrink.

And on top of that we have regional mix, so we have different prices per brand per region. And according to the regional mix, this could affect in net revenue project even if premium growing. Even if increasing price per brand is in line with inflation. 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 people want to buy our beers, innovation so on is one it's introducing. 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 grew faster than the orders and you think that's the most important reason why we are not seeing this effect?.

Yes. Just give you one example. If we go more in the northeast and north, that's by the way a region that we saw lowest market share in beer when you compare that. And if you have a trade up there and we have innovations there that's helping. That's like Skol is doing well. So this is the effect of the regional mix, but some of that things.

So we are growing volume in a region that we have been underperforming maybe in the last years. So that's the regional mix that I talked to. So even if we don't change, I mean, if we have the same price policy everywhere, increased by volume inflation.

But if you we have one reason, in this example, that’s [indiscernible] the northeast and north growing volume way ahead of Brazil like happened in the first quarter, this affected revenue for us.

But it's a reason that -- it's a very important sign that our portfolio strategy is working there, the development is shrinking there, that Nossa is working and [indiscernible] is working and finally Brahma is working, so good news. Hope that works for you now..

Very good, thank you..

And our next question comes from Luca Cipiccia with Goldman Sachs. Please go ahead..

Hi good morning. 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, I think in spite 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 digits as well.

So 50% growth on a double-digit growth on year-over-year seems to signal a very strong, a very consistent performance.

So my first question would be can you give us a measure of how much would you define the premium portfolio represents of the overall? And secondly, if directionally if you could remind us, give us a sense of the ways of the different brands or at least the global brands relative to the national brands, if you can just maybe remind us the significance of the 70-year old brands.

So that would be my first question. And then secondly, just on portfolio innovation, there've been a number of initiatives, you enter sort of the value segments in a way with Nossa, with Magnífica. You introduced pure malt across the Skol family.

I was just curious, looking forward, what other the areas of innovation, if not -- without being specific, you're most excited about. Is it flavors, packaging? What type of area that you're looking at to continue to innovate in the portfolio? Thank you..

Luca, thanks for the question. I think premium -- just the weight of premium is around 11% of our beer volumes and growing. So that's good. It's a good trend. And the segment will continue to grow. What you said, that's the global brand this quarter grew 50%, and the domestic ones, double-digit. So we had a very, very strong growth. We have the numbers.

The news expanded number for the premium segment and the premium industry for the last quarter. And yes, as we're growing big time share in the premium segment, so strong growth, it's a portfolio gain and its quarter after quarter, and we are waiting. This is a fact. We have the numbers.

We have the news to expand that and including a much easier reading because premium is more of trade, it's most scanned, so I mean, it's really there. It's real. So then if any of you see other markets and I've been saying if you go to U.S., I think the leading brand in the premium segment has around 60%, 70%. It is a portfolio gain.

I mean, basically, what you saw in the end in every market, so now we have here Budweiser, our biggest brand. It's a strong brand, almost the same size as the competitor's brand that they have. But we have Stella that is growing double, double-digit, big time. We have Corona, 100%.

Dorado original back to growth -- we made a pilot in the south to sell Patagonia that did very, very well. And then we built kind of a structure, a high-end structural being truly, to give this complexity. And it's working. So I think that the innovation that would come in the premium segment, for sure have more things.

One example that I can tell you, we launched Beck's in the most important urban centers. It's an amazing brand, German brand. You know all edgy -- the edgy, I'll say, attitude of this brand, from German. It's pure malt, Puro Malte. It's bitter. It's trendy. It's an amazing brand. And we launched kind of one month.

And in the quarter, I think this concept of family that we applied for Brahma is working very well for Skol as well. So that opened doors for us to give more variety in terms of liquids to the core consumer in Brazil.

So that's amazing for the industry because we can expand the industry, giving access to people to great liquid that could in the umbrella of the portfolio in the future, so very excited about the portfolio approach that we have employed in premium, in core and of more things to come..

And Bernardo, if I can follow up, just the emphasis on premium, which has been there for a while and it seems to be working. It seems to me though 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 like sort of 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 give a premium brand, I mean it's not like, you have to see the brand stage by stage.

So we're reaping the benefits in terms of Corona and Stella, the seeding that we've done years ago cannot launch a beer in premium like we launched Beck's and out of the gate sell tons of volumes and so on. So I mean the brand loses its uniqueness. So we already 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 that is Tier 1, you have to be patient. And this is a big change in terms of our way of beer brands. We are patient.

So having investing in Stella for years, having Corona for years -- our pipeline of premium brands in the right moment, in the right stage with scale up, and then you'll see the vital count. They’re both same.

There are lots of things to come from, even Bird, Stella, Corona and other new liquids initiatives that we’re foresee 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 circle back to the last several releases from Ambev.

And I think it's the first time that you actually stated that industry has apparently grown. So actually, Bernardo, my question to you would be 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 -- 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 will 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 Ambev in the market, right, the 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 Nielsen 2.0 as a better assessment of the size of the industry. So one, 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 your ideal market share should be considering the portfolio that you have in place with the premium brands, or the value propositions and the mainstream, I think with the industry if you could elaborate on that.

And the third question is actually about the Skol Pure Malt, 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 do you see the introduction of pure malt relative to the Skol Pilsen? And what kind of cannibalization you have been seeing, if any? And how the Skol 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're introducing there.

Thank you very much..

Thank you for your questions, Thiago. I mean, the first one, the industry. I mean, it's nothing like that. I know 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 from the big coverage of Nielsen in the quarter.

So linked to the market share, we'll not disclose our market share. But I could say that it's not an issue. We are within our range. And we are confident that we are on the right path to continue to move in terms of our position in the market.

Linked to the pure malt, the Skol Pure Malt effect, I think it was an amazing launch because it brings the concept of the pure malt from a little bit bolder liquid in the Skol way, a very drinkable liquid.

That was kind of a long research and that brew market terms, in the last years in our innovation center in Rio de Janeiro assures us a specific process, boiling process that assure that even with a little bitterness, you can maintain this flavor aspect of a pure malt, but in a very drinkable liquid.

So because of that and because the liquid is drinkable, but is different from Skol Pilsen the cannibalization is way below the average of the launch that we've done. And even without the full rollout in the full country the Skol family grew in the quarter. That's valid important. And it was helped by Skol pure malt, for sure, but not only that.

So when you launch a family of quality beers like we have now in Skol and we have in Brahma in the past, all of those innovations bring brand equity and equity for them by the brands. So I think the innovation pipeline is full and I think this family approach is working very, very well.

And just remind us in the core segment, Bohemia, Bohemia is big, big success as well. It's a very strong brand. It’s selling a lot. And it's growing, I mean, double, sometimes triple-digits. So we have Bohemia pure malts, definitely been helping us in the core segment as well. So that's what I could say. Thanks, Thiago..

Thank you..

And the next question comes from Lucas Ferreira with JPMorgan. Please go ahead..

Hi. Thanks for the question. Guys, my first question is a follow-up on this regional mix you've 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 a more room to grow your market share in 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 we could also track this premiumization is look at your EBITDA per hectoliter sold.

And this number declined by 5%. I understand the cost effect. That's clear to me. But I would expect also premium to help over time your EBITDA per hectoliter metric. 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, which were the categories in sign non-alcoholic that drove volumes up in your results? And if we see already these results the impact of actually API tax benefits, right, this year where we should have started to see some impact in the first quarter.

I'm wondering if there were some 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’re having on net revenue per hectoliter was actually the regional mix on the first quarter. So it's not growing at a faster pace than the other regions.

And not that other regions even grew as well, but they're not to grow at a faster pace. So of course, premium helps. Premium improved revenue per hectoliter but, in this quarter, it was somehow offset by the regional mix. On the EBITDA per hectoliter, the major driver is actually costs. So we have a meaningful impact in cost, which was anticipated.

And that's why we have some pressure on our EBITDA per hectoliter. But there, again, we always say that FX, commodities, they are kind of a cyclical. Sometimes they help, sometime they go against us.

If you take a long run definitely premium and the premium portfolio that is gaining more relevance aggregates EBITDA margin and aggregate EBITDA per hectoliter. So, net-net, it's very accretive. On the NAV question, the growth was pretty much across the board. I wouldn't see single one out any particular impact from a part of the portfolio.

I think it was across the board, very robust both for premium portfolio, Gatorade, H2OH, energy drinks as well as our more call, like Guaraná, Pepsi, everything performed quite well in the quarter. So I wouldn't highlight one single item that performed better than the other..

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

And for sure, Guaraná Antarctica is a very, very strong brand. And we'll continue to invest..

And Lucas, for your question on, API, there's not too much of a change. It's kind of -- the lowest change is 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 has a better macroenvironment. Consumer confidence helped a little bit in the first quarter.

And it 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 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 has now concluded. Thank you for attending today's presentation. You may now disconnect..