AMBEV S.A. 2026 Q3 Earnings Call

Good afternoon, everyone, and thank you for joining our third quarter earnings call. At the end of our last call, we said we had reached halftime. We closed the first half encouraged by what we had delivered, but with a clear challenge ahead of us to sustain that performance as the year progressed. The third quarter provides another important proof point on this journey. The shape of the performance closely mirrors what we delivered in the first half. Total volumes grew 0.8%, net revenue grew 7.6%, and normalized EBITDA increased 8.9%, with 40 basis points of margin expansion, while normalized EPS grew 15.4%. Looking at the first nine months, the consistency becomes even clearer. Total volumes grew 0.7%, with beer growing at more than twice that pace, bringing beer growth broadly in line with its historical growth rate over the past decade, despite a still challenging environment.

The quality of our portfolio, together with disciplined revenue management, supported net revenue growth of 7.3%, ahead of inflation, while normalized EBITDA grew 9.3% and normalized EPS grew 12.3%. Importantly, we delivered this while continuing to invest behind growth, with market investment growing double digits organically in both the quarter and year to date. This is the growth formula we are pursuing. A stronger and broader set of brands delivering healthy volume growth, net revenue ahead of inflation, and disciplined conversion all the way to the bottom line. Delivering it consistently requires us to be ambidextrous. Behind that formula is a clear growth strategy based on three interconnected pillars: lead and grow the category, digitize and monetize our ecosystem, and optimize our business. Together, they form the flywheel that delivers profitable growth and perpetuate it over time.

Before going deeper into how that flywheel works in practice, let me give you a quick view across our markets. Our unique footprint and leadership positions set us apart. We operate mostly in emerging markets, where beer is one of the most loved consumer categories. These markets have different economic and consumption cycles, and close to half of our business is outside Brazil. Because those markets do not all move together, the portfolio can absorb volatility in one market while benefiting from stronger momentum in another. In both the first quarter and year to date, LAS, CAC, and Canada all delivered EBITDA growth ahead of net revenue with margin expansion despite very different industry environments. This quarter, LAS stood out on profitability despite a still soft consumer environment. Delivered healthy volume growth with margin expansion. Canada again expanded EBITDA and market share despite a soft industry.

That balance allows the group to perform, while we keep closing gaps where needed and accelerating business with stronger momentum. In Brazil NAB, the commercial recovery became more visible in the quarter. Volumes grew by a mid-single digit, despite the continued phase out of a lower return channel, while sellout market share improved sequentially, reaching last year's level with price relativity remaining at historical levels. Year to date, net revenue and EBITDA were ahead of last year, with around 200 basis points of margin expansion. Just as important, we kept investing to foster growth. Our zero sugar portfolio grew double digits in both the quarter and year to date, with pioneering propositions such as Guaraná with fibers, scaling to national distribution. Brazil Beer provides the clearest example of our three pillar strategy working as a flywheel. On pillar one, lead and grow the category.

The Brazil beer industry continued its sequential recovery through the second and third quarters. Nielsen data shows some timing differences between Q2 and Q3 around the capture of FIFA World Cup related demand. In Q2, Nielsen reported an industry that was still slightly negative, with its measurement period ending before capturing most of the FIFA World Cup demand that took place later in June. In Q3, Nielsen reported industry growth of approximately 4%, also capturing part of that late June demand. For that reason, the two quarters are better understood when read together. Across Q2 and Q3, Nielsen indicates industry volume growth of 1.3% year-over-year. We estimate that nearly half of that growth came from the FIFA World Cup, with the remainder reflecting the underlying strength of the category, despite still challenging macro conditions and mixed weather. That reinforces our view that the category's foundations remain solid.

Our own performance should be read through the same lens. Brazil beer volume grew 5% in Q2 and 0.5% in Q3, resulting in 2.7% growth across the two quarters. Nielsen indicates that our sellout grew approximately 3.5% over the same two-quarter period, higher than reported sell-in. Market share momentum explains that sellout outperformance versus industry. According to Nielsen, our share continued to improve sequentially in the quarter. Versus last year, we gained share in both on and off trade, with particularly strong progress in premium and zero alcohol, where we further expanded our leadership, while mainstream remained broadly stable. Year to date, share gains were also broad across most regions. As category captain, we want to bridge category potential to actual consumption. This is why we have built what we believe is our most complete portfolio so far with complimentary propositions across consumer needs, occasions, and price points.

Our brand's equity continued to strengthen, reaching a five-year record on a year to date basis. Our category development playbook is creating new growth engines with premium volumes growing high teens, balanced choices more than doubling, and no alcohol beer growing in the 40s in the quarter. The quality of the portfolio is increasingly supporting volume growth, share expansion, and value creation. In the quarter, we took another step in our revenue management agenda while maintaining price relativity above last year's level. A more complete portfolio also brings more complexity. What lead us to our second pillar, digitize and monetize our ecosystem, and how we use it to turn that complexity into a business opportunity. On B2B, this has become the foundation of our commercial capabilities, delivering efficiency and better services to our customers. Its role is twofold. First, it strengthens the core business.

The platform is embedded in how we plan, sell, and execute across more than 1 million points of sale. Its data and intelligence help us improve sellout activation, sharper product recommendations, and increase the availability of the right brands and SKUs in the right points of sale. That granularity matters. In the on-premise channel, one of the most fragmented and execution intensive channels in the market, our market share reached its highest level in five years, according to our estimates. Supported by stronger distribution and execution, with SKUs per point of sale growing a high single digit year-to-date and double digits in Q3 versus last year. Second, this same infrastructure enable us to build new growth engines. Through this Marketplace, we expanded the assortment available to our customers beyond our own products, and therefore expanding our total addressable market.

Over 80% of our customer base has already bought through Marketplace, and GMV grew above 80% in both the quarter and year-to-date, supported by the continued expansion of 3P. On the consumer side, Zé Delivery follows the same strategic growth. For the core beer business, Zé provides a direct relationship with roughly 27 million consumers annually, a user base largely composed of young adult beer lovers. That direct connection give us a valuable window into how demand is evolving. Premium represents around mid-30s of Zé volumes versus nearly the mid-20s in Brazil beer, while balanced choices over-index by around 50% versus Brazil beer average, helping us identify trends, test propositions, and scale what works faster. In the quarter, Zé GMV grew mid-teens, while Zé Marketplace already represents close to 20% of that GMV.

Similarly to BEES, we are also bringing to our consumer a broader assortment and expanding the categories and occasions we can serve them beyond our own portfolio. The more growth opportunities we create under pillars one and two, more important a disciplined resource allocation becomes. Which brings me to pillar three, optimize our business. For us, optimization is not simply about spending less. Between the gross revenue and net income we generate, there is a significant pool of resources that we allocate every day. Our opportunity is to keep improving where those resources go, the returns they generate, and how much we can recycle behind future growth. We see that discipline across different lines of the P&L. First, in revenue management. Our broader portfolio and digital capabilities allow us to manage the company's pricing and promotions more efficiently and with greater precision.

As a result, the incremental gross revenue generated per BRL invested in this enable on-trade promotions improved by around 50% versus 2025. Second, in cost productivity. In Brazil Beer, expected commodity headwinds, particularly aluminum and diesel-related costs, have pressured Brazil Beer cash COGS per hectoliter year-to-date. Better sourcing, increased vertical integration, and continuous improvement across our operations generated approximately 450 million reais of non-commodity savings year-to-date, helping offset a meaningful part of those pressures. Third, in organizational productivity. Year-to-date, hectoliters sold per FTE increased approximately 4% versus last year and more than 20% versus five years ago. This reflects continued investments in automation, technology, digital tools, and increasingly, artificial intelligence, helping our people simplify processes, make better decisions, and focus on higher value activities. We are reinvesting those efficiencies behind our brands and commercial priorities. In 2026, marketing investment grew almost double the top-line growth. That is the flywheel. Category growth, sharp execution, and disciplined resource allocation to sustain profitable growth.