Good morning and thank you for waiting. We would like to welcome everyone to Ambev's Second 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 being made under the Safe Harbor of the Securities Litigation Reform Act of 1996.

Forward-looking statements are based on the beliefs and assumptions of Ambev's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur in the future.

Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Ambev and could cause results to differ materially from those expressed in such forward-looking statements.

I would also like to remind everyone as usual that the percentage changes that will be discussed during today's call are both organic and normalized in nature and unless otherwise stated percentages changes refer to comparisons with 2Q 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, the company discloses the consolidated profit EPS, EBIT, and EBITDA on a fully reported basis in the earnings release.

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

first, interest income of BRL166 million driven by our cash balance.

Second, interest expense of BRL383 million that also include interest income in connection with the Brazilian Tax Regularization program, as well as non-cash accrual of approximately BRL60 million related to our put option associated to our investment in the Dominican Republic business.

Third, BRL204 million of losses on derivative instruments, which were up year-over-year explained by the increase of FX hedges carry cost linked to our cost of goods sold and CapEx disposure in Argentina, partially offset by equity swap gains. Fourth, losses on non-delivery activity instruments in the amount of BRL13 million.

Fifth, taxes on financial transactions only amount of BRL19 million. Sixth, BRL94 million of order financial expenses, partially experienced by accruals on legal contingencies and pension plan expenses. Seventh, BRL99 million of exceptional financial expenses explained by non-cash intercompany transactions.

Finally eight, BRL88 million of financial income related to non-cash income resulted from the adoption of hyperinflation accounting in Argentina. The normalized effective tax rate was 12.2% in the quarter higher than in Q2 2018. Year-to-date the normalized effective tax rate was 15.7% versus 13.6% in the same period of 2018.

Cash generated from operating activity in Q2 2019 was of BRL3.1 billion, which is 3.1% lower than last year. Year-to-date cash generated from operating activities is growing by 25%, reaching BRL5.2 billion. CapEx reached BRL896 million in the quarter and BRL1.4 billion year-to-date, increasing 12.8% versus first six months of 2019. Thank you very much.

Bernardo will now share some initiatives and thoughts on the Brazilian market before going to Q&A..

Thank you, Fernando. Hello everyone. As mentioned by Leonardo, during the second quarter we saw success for many of our initiative, including innovation and continued premiumization. Our Beer Brazil volumes increased 2.9% in the second quarter, with the flattish industry according to Nielsen.

Year-to-date volume grew 7.2% in relation to the first half of last year, while the industry grew low single-digit. I'm very excited about the consistent implementation of our strategic platforms, which allowed us to deliver a very healthy top-line both in volumes and in net revenues per hectoliter despite an improving, but few challenging markets.

We remain confident that Brazil presents a great potential for the future as half of the population above 18 years old is not drinking beer yet. The legal drink age population grows on average 1.5% per year. The penetration of beer among women is lower than in more mature markets and premiumization is still in early stage.

So now let’s talk about our first strategic platform, which is premiumize at scale. Premiumization is a continuous trend and is always important to reinforce that our strength in the segment is a great portfolio combining global and domestic brands.

This quarter with official launches Beck’s in Brazil Beck’s is a legit pure malt that follows the purity law since 1873. It has a unique bitter flavor and is the biggest selling German lager in the world.

As we highlighted last quarter brand building goes through an investment experience, which allow consumers to leave the values of each brand in a deeper way. Such approach continues to deliver tangible results. This quarter our global brands, comprised of Budweiser, Stella Artois and Corona grew together double-digits.

Stella grew more than 50% and Corona once again more than doubled its volume. Budweiser stands for authenticity, explore nightlife, rock pop culture in great moments of consumers life. Our proprietary event, NBA House was again a huge success, especially this year, when the NBA Finals were broadcasted on free to air television.

Budweiser has been sponsoring NBA for the last past years. Bud Basement was a hot spot for support in Brazil and Copa America. It was present in six main Brazilian capitals with music and brand activation. More than 100,000 people attended and over 28.4 million were impacted by social media.

Stella Artois continue to embrace the food platform, participating cool food events across the country, as well as leverage the final episode of Game of Thrones. In the video, that reaches almost 3 million views, Brazilian influencers share that Stella here with food want sharing with Champaign one of the television show stars.

Stella Artois volume was also supported by the continued expansion of new Beck formats, such as the sharing size bottle, and the new cans. Corona continues to embrace the better world platform. The campaign listen to the ocean had a very positive and strong impact.

The brand took advantage of this fantastic momentum to call the attention of the plastic dampened in the oceans. The video with [indiscernible], reached almost 4 million views and allowed in June to the brands all time high number of mentions in social media.

Colorado, our biggest premium craft brand and the leading brands on the craft segment in Brazil launched Colorado Ribeirão. It's easy to drink craft with distinctive taste, following or obsession of quality and differentiation. Ribeirão will act as an entry point to that craft segment.

As the brand power for our premium portfolio continues to evolve and to increase. We are able to release new package allowing consumers to taste our products in different occasions, delivering strong sustainable volume growth.

We are certain that the premium market is a portfolio gain and that we are in a very strong position to continue to gain share in the segment. Now moving to differentiate the core. Brahma, our classical lager beer has been experiencing memorable momentum and growing strongly.

The brand connects consumers two relevant platforms, such as [indiscernible], the Brazilian pop music and soccer. Brahma’s momentum was reinforced by the digital reality show the Next Number One. In this six episode YouTube show, in partnership with Villa Mix, Brahma searches for the next number one pop singer.

The show was the biggest digital reality show ever produced in Brazil, with over 157 million views with 98% of positive health. The launch of the first episode was the peak of the views ever registered by Google Brazil, and five episodes were trended topics on Twitter on their lunch. The quarter was also marked by an amazing Copa America execution.

Brahma sponsored 27 Arenas set up traditional venues in five main Brazilian capitals, where consumers watch the games, while enjoying free entertainment. More than 230,000 people attended such events, and over 45 million were impacted by social media.

Brahma also did a campaign with Marta one of the greatest Brazilian soccer players of all time and awarded six times Best FIFA Woman's Player of the Year. Finally, in June, the brand reached its all-time high number of organic mentions on social network surprising 200,000.

Skol’s quarter was market by exciting results of Skol family campaign and the national rollout of Skol Puro Malte after its remarkable launch during Carnival. Skol family campaign reinforced the family concept I the Skol way of approaching consumers, young, modern and innovative.

The campaign had more than 100,000 organic mentions on social media with 91% positive health, which is the best result ever achieved for Skol campaign. So far Skol Puro Malte continue to show very, very encouraging results.

Also, in the quarter we launched the Skol Puro Malte barrow with an easy to open barrow cap allowing the brand join special consumer occasion. I will now spend a few moments talk about the drive smart affordability. As we mentioned before the value segment is characterized by the importance of brand equity.

Moreover even though it’s quite irrelevant in terms of volume its share of the industry profit pool is very low. During the second quarter the share of the value segment of the total industry remains stable versus the first quarter, but below second quarter 2018.

We are confident that once we start to see disposable income improving, we are likely to see the value segment trending back to its historical levels. One of our approach to the value segment is to build regional connections, does create brand equity and affordable price point.

And given local raw materials, local marketing and only most profitable package. We are also able to deliver very healthy margins. After the successful launch of Nossa in Magnífica we roll it out in June the beer Legitima in the state of Ceará the brand replicates the same successful strategy.

Now moving to operational excellence, our mantra is wherever we call it Brazil there has to be Ambev. Operational excellence has always been one of our biggest strengths and key differentials. Given that point of sales connect our brands to consumers, customers experience is a strong focus.

We have been measuring the net promoter score of our customers in a consistent basis in order to understand and address the main pinpoints and improve the experience. As the premium segment advance, we are also able to implement hypersegmentation for mature markets, mature cities that we are rolling out to the country's main capital.

That strategy trickles down to sales structure, differentiated trade market execution, flexibility on deliver time among others. Such initiatives translate into premium volume growth, brand building and market share gain.

Talking about technology, as we highlighted last quarter technology has been a key enable for us to support our strategic growth platforms. To optimize Ambev’s operations one of the focus of the quarter was the integration of HBSIS, expanding and improving technology to all the areas of Ambev with more agility and scale.

On our relationship with customers, we're focus on freeing up sales representative time in order to focus on activities that get more value to the point of sales. As a consequence, sales which are not conducted by sales reps at site now account for 29% of the total volume of on-premise compared to 18% in the second quarter 2018.

Part of this was driven by Parceiro Ambev, our B2B tool and one of the largest e-commerce in the country with more than 100,000 clients. Let's talk briefly about a project called Draftline. With Draftline our main ambition is to reach out directly to consumers.

The levers for that goal are first, improving consumer intimacy, anticipating consumer needs and establishing one-to-one relationship at scale. Second, building up a proprietary audience base. Third, being able to extract real time consuming site. And last precise media.

It’s the digital transformation, helping us to understand deeply our consumers and connect better with them. Now moving to our NAB division. We’re 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 Lipton and Tonica, which grew double-digits, bringing a high contribution to the portfolio mix. Talking about sustainability.

This year, we are conducting the second edition of the program VOA, an internal consulting company with voluntary participation of our people, created to help NGOs to optimize their processes, budgets and also manage people and careers.

In this edition, 200 Ambev employees are working together with 75 selected NGOs impacting around 2 million people nationwide. AMA, our mineral water that converts all the profit obtained with the project to initiatives of access of potable water in the Brazilian semi-arid has reached its 30 projects benefiting 30,000 people.

Finally, so far 2019 has been a good year. Our portfolio of brand is delivering a healthy top line growth, helping to offset the cyclical pressures arising from FX and commodities. When you look beyond such costs headwind, we get even more excited about the strong fundamentals and growth potential of our business.

We are only able to achieve such results in the first half, given the amazing people who have always been the foundation of our company. With our team, our culture and our consumer centric business model, we are confident in a strong position to deliver long-term sustainable growth. We can now move to the Q&A. Thank you..

We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Luca Cipiccia with Goldman Sachs. Please go ahead..

Hi. Good morning, Bernardo, Tennenbaum. Thanks for the question and congratulations on the results. I wanted to ask a couple of things. Maybe first, I think you make a comment in the release about stronger performance in the North and the Northeast, which partly explain the mix and the revenue per hecto.

Can you maybe expand on whether that is coming from stronger industry growth overall, market share gains, some of the initiatives in the portfolio that you had, over the last few months including in value and I would assume it's still a pretty low contribution, but anything that you can share there in terms of regional performance, that would be helpful.

And then secondly, which is related to this, maybe an update on the sort of value of the mainstream segment, relative growth performance. I think earlier in Q1, you mentioned that you saw that inflection already.

I think it was interesting that earlier today, Coca Cola FEMSA made similar comment in saying that the lower income consumers are coming back to some of those segments in their categories, which in itself would be a sign of sort of the trading down, maybe abating or inverting.

So anything else that you can add on that discussion also would be very interesting to hear. Thank you..

Hi, Luca, Thanks for the questions. Maybe to the volume, so just perhaps talking about the overall volume numbers that we had it was there to the 2.9% above last year, while the industry was flattish. So good news that we grew volume ahead of the industry.

And again, the performance that we have is a consequence of the investments, consistent investments behind our strategic performance I've been doing all of those things. And it’s important to point out that we have not seen disposal coming yet resuming growth, which would likely to provide a meaningful positive impact.

When we go to the premium segment, I mean, we have been saying this I mean for many, many quarters that our strength is superior portfolio of brands, global brands, domestic brands, and we continue to gain share in this segment, led by mainly for the soft and soft drinks because the industry of premium segment, it's bigger in the focus of Brazil and the focus of Brazil and given the disposal income that's higher here.

When you look to the core, I think that have been doing a very good job and differentiating the families know the brands Skol and Brahma creating the fence. We started with Brahma three four years ago and then we have these two Skol that I mean it's performing pretty well. Now have Skol Puro, Skol Hops and Skol Puro Malte.

And then I think that the group in the core in the Northeast, it's really above the average of the country because our market share there was lower. Because all those innovations that are bringing in the core was really helping us there, not only the core, but core plus. We're growing Skol Puro Malte there a lot and Berlin as well.

So the growth in the Northeast, just to answer specifically your questions. It's basically innovation, serving better the customers, the portfolio is stronger.

And we are growing volumes ahead of the industry and not only with the core brand, but with the -- our brands, local brands, like Magnesium Magnifica and Nossa that are really performing very, very well.

And let's Always remember that those brands given the agreement that we have with the local farmers, the market is local these and so on, we are talking about good margins. They are in a very good price point, but they have kind of core margins that help us to grow in the value segment with enough profitability.

So -- which means that we are creating brand equity for those brands, people really like this written on ink [ph]. And specifically link it to the value segment, the peak was at the end of last year.

And then we saw in the first quarter, a decline of 200 basis points in the size of the segment that remain stable for the second quarter to the first one. But below last year and below the peak of December of the last quarter last year, which means that really think that the trigger from value to core started to happen.

We think that the disposable income increasing or becoming better in a better shape in the future. The core segment will benefit the most and the position that you have in the core segment was already strong, and even stronger now with the famous of Brahma and Skol performing pretty well..

Very clear. Thank you. Thank you, Bernardo. Thank you very much..

Thanks, Luca..

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

Hi, guys, good afternoon. Thank you for your question. First of all, when we think about -- when we talk to our pricing checks and our channel checks, we see prices of a couple of brands in the premium segment like Stella Artois and Budweiser for example, being gradually decreased.

First of all -- but my first question, do you agree with that? And the second one, is it fair to say that you were pushing a little bit to the lower end of the pricing point in the premium segment? And as a commentary on that, there was one slide in your presentation for this quarter talking about expanding the premium with scale.

And I understand that that mostly means small brands in the premium segment.

But could I interpret that as well as increasing the reach of the consumers unit premium segment with lower prices as well, maybe even transitioning some of these brands to the mainstream plus segment? And if that is the case, wouldn’t you run the risk of cannibalizing some brands in the core segment, can you comment on that?.

Thanks for the question. Firstly, get to the price. It's very important to highlight that each brand has a different role and some price point. And given the premium is a portfolio gains is very, very important. So in the premium segment for example, Budweiser is our largest premium global brand in Brazil.

And it plays a key role as a bridge from people who are trading up towards the premium segment. So this is the role of Budweiser. Stella Artois its prices above Budweiser and Corona above Stella and we just launched that in Brazil that will be priced between Stella and Corona. So basically this is our pricing strategy didn't change.

Linking to the channel specifically like you said, what you see is in Brazil, in mainly premium that are the big, big volume in the off trade are usually done via promo based on part of the retailer strategy to attract consumers to the stores. There wasn’t any difference in pricing policy of the off-brands in relation to the first quarter.

By the way as you see our performance in the [indiscernible] was above inflation even with our very strong growth in the North and Northeast of the country that we have lower price given the price of the industry there is lower as you know. So having said no change in the pricing policy.

Linked to the innovation so this is what the insight that you had is many other markets is ago. So we had all the numbers we studied other markets we leave it there and we knew that it would be a portfolio gain. We don’t find that mature market any brand that has more than 67% of market share.

So we knew that Brazil would grow and the urban centers in the more healthy cities and states to the premium segment with the trade that would happen so to build the portfolio was very, very important.

And that’s why we created kind of innovation mindset internally with skills, process, people to ensure that this innovation machine would deliver a portfolio and a broader portfolio in the future.

So that’s happening and will continue to happen because it’s a portfolio gain and you have amazing brands, you have global brands, regional brands, we have craft brands.

And so we think that the premium will continue to be a portfolio gain and need to prepare ourselves like we have been doing to prepare that’s why we are gaining share in the premium segment for many, many quarters and are very confident continue to do so.

Linked the trade up is specific what I see I don’t see a trade up, a big trade up from the core to the premium what I see for the future that it could be an opportunity for us, if the disposable income in the country resumes growth that I mean if it happens and then we always think that this could happen.

But the most important segment that we have the benefit of that will be the core segment. That the biggest change in terms of the size of the segment in the last four, five years was exactly core going down and value going up.

Disposable income going up the trade up from core, from value to core would happen like happened in many, many markets and our core portfolio is very, very strong. I don’t see any issue in terms of a trade up from core to premium. And if it happens it’s not bad because it might have been better. So basically, we want to have to transit..

Okay, thank you, Bernardo. Very clear. Just and I got another question, if we think about the other revenues in this time around, we saw a little bit of a lower gain and it’d be a segment in the we’ve seen volatility in the past in the line, but you mentioned that you loss some benefits in Santa Catarina for example.

So my question is how much of this loss can you attribute Santa Catarina and how much is just normal volatility on the mix as you mentioned as well? And if you have any other benefit inside to expire in the upcoming years?.

Hi, Antonio this is Fernando here. Most of the volatility was due to the regional mix and to where you are being producing because different states have different incentives.

The one that expire in the Santa Catherina but it was a smaller portion of that and there is no other I think at least in the short-term there is no other meaningful one expiring..

Thank you, Fernando..

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

Hi, hello everybody. I have a question circling back a little bit to the discussion about pricing in Brazil Beer. You guys made it pretty clear that the geographic mix somewhat offsets the premiumization even though you still managed to grow roughly in line with inflation.

So I just wanted to get a little bit more detail two things that you didn’t comment on and I just wanted to make sure if there was an impact or not on the pricing side? The number one is regarding packaging or presentation, what we heard in our channel checks is that there was a -- if you look on a year-over-year basis, the industry's much heavier on cans as opposed to returnable bottles.

So we just want to see and to hear from you guys, whether you saw something like that affecting the mix, especially the presentation mix in the quarter? And secondly, in terms of discounts, right, when we look at your financials, and of course, you don't break it down for the Brazil Beer division, but you do offer the parent company and the consolidated perspectives there.

I mean, we continue to see discounts as a percentage of gross revenues going down. And I remember I think, Fernando, we discussed that a few quarters ago and your point was that you continue to see room for reducing discounts from the levels that we had a year or two years ago.

So just wanted to see if you really had lower discounts this quarter, versus the last few quarters, and whether of course, you see more room for reduction because we are really at a very lower, much lower level compared to what we were some time ago? Thank you..

Hi, Duarte. Thanks for the question. I think at first, I'm linking it to the -- I mean you talk about the initially talk on what bev revenues and then how the mix of regions can affect that. So the fact that the portfolio in the North and Northeast, it's stronger now. It's more on core market and value market there less than premium.

And I think that we've over there a lot in both segments the portfolio approach not only in the fact that I've been talking a lot in terms of the regional brands, Magnifica, et cetera, but as well in terms of core. So core, core plus is we're gaining volume way ahead of the industry in those regions and I ahead of the average of the full country.

And the portfolio of core is healthy not only Brahma is doing well, but Skol family is doing well Skol Puro Malte and Bohemia. And because of the price of those markets was always below the parts of the [indiscernible] you have this regional mix impact, because really the growth there is really significant.

That's good news, because we have been working hard in terms of the go-to-market there with the portfolio approach. You have to really be able to grow that was the -- always was the reason that our market share was not as we expected and below average of the full country.

So opportunity there in the packages with the portfolio approach in the main segments there that’s core and value in those markets, like I said before.

We get to the camps and RGBs, we continue to push the RGBs in the right way so that in a mere one year [ph] so that's very, very important and continue to see opportunity of growth on that because you know that 50% of people already 8 plus in Brazil, they don't drink beer in 80% of the city is 50% is that because they have money constraints.

And then with disposable income going up, I think the RGB will be even more important to expand the availability to accessibility to the -- our core brand. But having said that, what we saw first the premium segments growing and premium segments growing and we are gaining share in this segment. And premium segment mostly one way.

So cans -- we saw cans growing but because of that. And the second thing when we launch a new brand, we innovate something in a very strong way like Skol Puro Malte like the Bohemia Pure Malte.

The first volume that comes because the big trial on that comes from one way because mix up people who try a new brand, a new liquid they will not buy one liter bottle very terrible to do that. They will buy a can; they buy along that.

So those two effects yes push a little bit the weight of the cans in our mix, but for good reasons premium is growing and innovation in the core is doing pretty well. So that's explain a little bit the trends in the cans based on your question. So now I'll Fernando..

Thiago, on our cash on discounts.

At the end of the day, you are always find ways to be more efficient, be through the age impact, be the through to how we price it because you know that there is some inefficiencies specially in the off trade and overtime, as process improves, as you get more efficient you try to find ways to be more efficient on that line.

And that's why you'll be seeing the difference between gross and net revenues diminishing overtime. Of course, the bulk of that has already been done. But there is always room to be a little bit better on that. But I wouldn't say there is a huge space to improve a lot..

Just to another -- I mean, just to add on that in terms of the mix. And the biggest, the biggest, by far effect in our cost of goods sold this quarter was FX and aluminum that is typical.

That's why the performance in top-line so important, because you know that’s cyclical including the last numbers that we saw for aluminum, I mean are good numbers and including the currency went down against U.S. dollars kind of 4, 3.75 to 3.76.

So if you continue and our plan to continue to perform well in top-line and this cost effect is cyclical, it's very good news for the future..

Yes. Thank you very much. Just a little follow-up here. Just to make sure I understood the maths, especially on the first part.

So you described Bernardo the increase in the one way presentations, the big part of that mostly as a -- let's say innovation and introduction of several liquids and extensions that you guys introduced in the in the recent past.

So would you say that, if you exclude that effect, you could see more room for growth in returnables or a more favorable mix. Just for me to understand how you guys see this packaging and presentation mix evolving in the future? Just want to follow up here..

It's not, I mean, I gave a guidance on that, because the markets can move. But just so, if the core labels, because innovation and profitable innovation in core with new brands and because the planning, the premium segment is growing with higher margins, innovation, higher margin is coming.

We are gaining share in premium is not bad, it's good for the business. Because we did have a day, I mean, we are explaining the industry and we are gaining share in each specifically segment. That’s the aim and that's why that’s our plan for the premium segment. So that's good news.

So can going full premium, it's very good margins are better and expanded the industry, and I am gaining share in the segment that's growing.

But having said that, I see it's not in the numbers the opportunity of the RGB to help us and this trade up from value to core, when disposable income start to resume growth in our country here in Brazil is happening with the core brands, the innovation that we have the Skol family, the Brahma family I think yes one leader represents a great opportunity of trade up from value.

And to core and including from people that not even drink today, because of money restrictions. So it's both, actually both opportunities, RGB in core, trade up in premium innovation with better margin even sold in one way package.

Does that help?.

Yes. Very clear, thank you very much..

Thank you, Duarte..

The next question comes from Antonio Gonzalez with Credit Suisse. Please go ahead..

Good morning, Bernardo and Fernando. Thank you for taking my question. Just two quick ones. The first one on Skol. Last quarter, you mentioned that the entire family was growing, right? And this quarter, you made some very positive comments on the pure malt line extension. But you didn't comment on the family overall.

Can you comment on whether that growth for the family continued into 2Q? And I don't know if you can mention any trends, as you do the rollout of pure malt is cannibalization on Skol Pilsen increasing is it in line with your expectations? And also perhaps the upgrading from value to mainstream remain flattish, right quarter-on-quarter.

So I don't know if that has an impact on the mother brand Skol? So that's number one. And then number two very quickly, you've been talking about these tech enabled solutions right over the last few quarters, Ambev and so forth. And this is enhancing your ability to serve the point of sale.

I presume, this is also explaining part of the growth in the Northern and the Northeast you can increased frequency of visits in remote places and so forth.

So I wanted to ask at this stage what is the bottleneck to accelerate these better services, is it the macro environment itself you're waiting for the macro to recover even further to accelerate these investments or really it is just the pace of execution that you can sustain at the moment in order to increase the frequency of visits and the quality of service in these particularly in the North, Northeast in the more difficult to access areas? Thank you..

Yes, Antonio, thanks for the question. Maybe the first question makes it to Skol, very happy with the Skol family, we don't disclose the growth per brand. And we could say that Skol Puro Malte is a major success launch we have created and changes this whole family volume trend, big time. That help the full business a lot.

Always to bear in mind that the second quarter with Copa America and with the country music platform was heavy more on Brahma. But that -- and reactivate Skol, not as we activated Brahma in the second quarter.

So -- but it's clear that the trend for the Skol family is a big, big change and Skol Puro Malte is not even I mean 100% launched because as I said before, here in the Q&A, people -- I mean when we launch a product like that, it’s a huge success, because start to trial the product and then you start to front back and then move to other pack to other channels.

So we're still launching Skol Puro Malte, it’s healthy, the brand equity of the Skol mother brand and the full family. So very happy with the results of Skol overall. We have a major trend shift in terms of volume of that brands and Skol Puro Malte is really doing amazingly well. This is your first question.

The second question, I have been working this digital transformation in the company for some years and just bought [indiscernible] to help us grow even faster.

I think that it’s helping us in many, many fronts not only the -- when I talk about the point of sale, but I discuss about the direct line, we can discuss about the processes internally how we can optimize the process using technology to assure that our SG&A will continue to be in good shape.

I think specific to the point of sales we see a huge opportunity for us because we have a right touring there, we have context of those points of sales weekly for many, many years.

We are increasing big time our basic service for those customers, our NPS is growing, we created three years ago a client service area internally here in Ambev in Brazil in other countries as well for sure that this NPS will continue to evolve and evolving big time. And with that makes much more easier to implement a B2B too. So that's growing a lot.

And I think that the pace of growth, it's more linked, and that’s growing fast, it could go faster, could. But there is an abduction time of the two for the customers is not a think of lack of focus or even lack of investment. So we're investing our focus on that is very important technology.

It's embedded in our DNA and the adoption will happen, and it's very strong the next -- last year 80% of our sales and on trade was done in the same quarter and site visits via other ways of order taking. So -- which means that way 82% was in site visits.

So this number was 18% the other quarter, this quarter is 29%, it’s a big evolution in terms of the contact strategy to the box to the point of sales..

That's very helpful. Thank you, Bernardo..

Thank you, Antonio..

The next question is from Robert Ottenstein with Evercore ISI. Please go ahead..

Great. A couple of questions. I think you were asked this, but I'm not sure I heard the answer. Net revenue per hectoliter up 3.7%.

Did you give us a number of what that would have been on a constant geographic basis?.

Hi, Robert. We don't disclose that, but you can bet it to be better than that on a constant geographic basis..

Okay, and then in terms of pricing this year, will it be the normal timeframe or perhaps in August like you've done in other years?.

It's not going to be much different than in past years. Some of the pricing is already in the market like some of that we already started in July for some SKUs..

It’s a little bit earlier..

It's more or less similar to last year, you don't increase all the packages exactly the same day. So for some SKUs, you already started, but it's going to be -- it's happened in the third quarter like it happened last year..

Great. And then my last question, you now have a very strong portfolio of global international brands bringing Beck’s in, Bud, Stella, Beck’s, Corona. And you gave us a little bit of sense of kind of the pricing ladder.

Would your expectations also be that the volume will be kind of the correlated such that the lower price ones would have the most volume so that Bud would be the largest volume Corona the least? And tied to that, have you had any surprises in terms of the customer acceptance of these brands, like a lot of these brands are new to the customers in Brazil.

Any thoughts in terms of how they've been accepted and surprises along those lines?.

I think, as you already said, the portfolio approach will be the win approach. And that’s by the way what's happening the last many questions have been gaining share in the premium segment. And the beauty of that that you have entry brands in that specific segment like Budweiser.

It’s amazing brand it’s very good, it is a bigger brand and you build a portfolio from there. And I'm not even talking about some brands here. We have a local craft that we just launched. A lager like a little bit beer in terms of the liquid, but you launched it Colorado Ribeirão Lager that's growing a lot.

So I really, I am not the stages of that specific brands and business start to scale up in the prices weak. Last year. I mean, we have been moving a lot in the way that we innovate. So we do more pilots, we understand in small cities, in regions.

So let's see we launched it brands are not specifically, many important brands in the portfolio in the South of the country. And was an amazing result, it was an amazing result that's will scale up for the future.

Not give 100% cover to say the name of the brand, but just saying that when I talk about the expansion of a portfolio of premium, it's not only the expansion, but the way that we do it the way that we innovate, doing small pilots. And then I mean, make success case there and then go I mean new things to big things and bigger to bigger things.

So I mean, we adjusted in the last years the innovation process.

That helps us we have a healthy pipeline in not only the premium but in the core as well, but specifically in premium, bringing brands with different price levels that we are assure towards the profitability of the overall portfolio is pretty good and we have one brand for specific occasion for specific price points.

For each specific occasion, each specific price point..

Thank you..

Thanks Robert..

Excuse me, this concludes our question and answer session, I would like to turn the conference back over to Mr. Bernardo Paiva for any closing remarks..

So, thanks for the attention. I think that we continue to be very excited about the implementation of our strategic platforms, not only Brazil, but in the other countries. I think that consistency is the name of the game to win in a market that demands a connection. And even more with people that we were going to use every day.

We are really truly consumer centric company and really very excited about the prospects of the portfolio of the brands of the way that we operate. Thanks a lot. Have a nice day..

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