Ambev S.A. ($ABEV3)

Good afternoon, and thank you for waiting. We would like to welcome everyone to Ambev's 2026 First Quarter Conference Call. Today with us, we have Mr. Carlos Lisboa, Ambev's CEO; and Mr. Guilherme Fleury, CFO and Investor Relations Officer. As a reminder, this conference presentation is available for download on our website, ri.ambev.com.br as well as through the webcast link. We would like to inform you that this event is being recorded [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 that, as usual, the percentage changes that will be discussed during today's call are both organic and normalized in nature, and unless otherwise stated, percentage changes refer to comparisons with 2025 first quarter 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, operating profit and EBITDA on a fully reported basis in the earnings release. Now I will turn the conference over to Mr. Carlos Lisboa. Mr. Lisboa, you may begin your conference.

Good afternoon, everyone, and thank you for joining our first quarter earnings call. As we start the year, here is the message I would like you to take away today. In tough moments, great companies and cultures find a way to get stronger and that is what this quarter begins to show. We entered this year in a better position than we started last year despite the dynamic operating environment. From day 1, we frame our mission around 3 priorities: Avoid disruptions, keep momentum and build a stronger company. Last year was the many and that made the third objective, the hardest to deliver. As a team, we embrace the challenge elevated our market intelligence capabilities and focus on what we could control, guided by our growth strategy. Within that context, embedded delivered a solid start to the year. Total volumes were broadly flat against the toughest comparison base of the year while beer returned to growth, up low single digit. Net revenue grew high single digits, supported by net revenue per hectoliter growth and even with continued cost pressure we delivered double-digit EBITDA growth with margin expansion of 60 basis points, while net income grew by a low single digit. The quarter also reflected solid operational cash flow generation and continued discipline in returning cash to shareholders. That is why the first quarter matters. First, it materializes the strengthening we built over the past year, boosted by continued improvement of the BA industry across most of our footprint, coupled with our commercial momentum. Second, it delivered a balanced shape of P&L from top to bottom, being a solid first step for trading the kind of year we want to have. What gives us confidence is not only the quarter itself, but how it reflects the way our strategy is evolving across the company. On the Pillar 1 as the category captain, our mission is to lead, develop and grow the beer industry, bridging the gap between the categories potential and actual consumption. Across our footprint, the [indiscernible] to continuously strengthen the core segment, where many of our most loved brand set and which remains the foundation from which the category can expand. While continuing to build the segment shaping the future of beer, premium, balanced choices, no alcohol and flavored beer. In doing so, we are developing a more complete portfolio and broadening the reach of the category over time. On the Pillar 2, we are building a true digital ecosystem and becoming an even more outside the organization. On the direct-to-consumer front, we are strengthening how we understand and address consumer needs. So we can serve them better with the right products for the right occasions. On the B2B front, data, insights and digital tools are helping us support customers better. recommending the right portfolio and activation strategy for each point of sale and ultimately driving stronger sellout. By doing so, we allocate resources more efficiently. Improve returns and make Pillar 1 stronger. Under Pillar 3, we continue to build the muscle that makes the other 2 pillars scalable. The discipline we have built on revenue management, costs, expenses, cash generation and resource allocation is what allows us to free up resources to reinvest behind our brands, and strategic priorities while protecting profitability and improving return on invested capital over time. Our ambition is for test pillars to evolve simultaneously and work as a flywheel, reinforcing 1 another and perpetuating our profitable growth journey. As we continue to implement our strategy across our footprint, the breadth of our results stand out. We delivered flat or posted net revenue growth in all of our business units. EBITDA grew across all of them with margin expansion in 4 out of 5. Within that, let me turn to the main highlights across our markets. In Brazil, beer, the quarter had the toughest comparison base for the industry year-on-year. In this context, it still declined by mid-single digits in the period, although improving sequentially versus the fourth quarter of last year. The distinction matters because the softness is explained much more by cyclical factors affecting occasions than about structural drivers. Fundamentals remain solid and the weather continued to be the main drag concentrated in the South and Southeast, but with lower intensity than in previous quarters. As we said during our last call, what changed was not whether consumers wanted beer, but how often the right occasions happen. Within that context, Ambev outperformed commercially. Our volumes grew 1.2% in the quarter. Building on the progress achieved in the second half of last year, and we entered this year from a stronger commercial position, supported by continued market share progression. Brand equity also kept improving, reinforcing the link between stronger brands better portfolio execution and share gains across all beer segments according to our estimates. We continue to win where the category is expanding the most. Premium grew more than 20%, led by Stella, Corona and original. Balanced choices grew over 70% with [indiscernible] and Michaelob Ultra more than doubling. No alcohol beer grow low teens with Corona Cero growing over 70% and [indiscernible] traction in the regions where it has been introduced closing the quarter, reaching double digits of the non-alcohol segment mix. At the same time, our core plus value portfolio, although more exposed to weather and macro consumption dynamics perform ahead of total industry declining by low single digit. Even so, it continued to improve sequentially with a more balanced performance across brands and regions and gained market share versus last year. Beyond beer also continued to gain momentum, growing in the 20s with our portfolio addressing unmet consumer needs on more occasions, led by bps, [indiscernible] and our newest portfolio member, [indiscernible]. Altogether, this is bringing to life the most complete portfolio we have ever had, 1 that allow us not only to sell more but to sell more to more consumers on more occasions and create more value for longer. This portfolio supported a solid net revenue per hectoliter performance, up 8.3% in the quarter as we began to implement our revenue management agenda our digital platform allowed us to manage price discounts and mix with more precision and better returns. On the customer side, this marketplace also continued to gain relevance with around 75% of our customer base already buying through the platform, driving GMV to double, supported by continued expansion of 3P. And on the consumer side, Ze Delivery remain a key activation stage for our brands and one of the major convenience platforms in Brazil, representing mid-single-digit of our beer volume in the country. In the quarter, GMV grew high single digit with 16 million orders delivered to 5 million monthly active users, of which around 80% are millennials and Gen Z. In essence, Ze gives us a direct window into the future. and that is visible in our portfolio. Premium represents around mid-30s of volumes on the platform versus nearly mid-20s in Brazil Beer while balanced choices are around 50% above Brazil beer average. More broadly, Ze is becoming both a growth engine and a catalyst of transformation for the organization, helping us accelerate the digital data analytics and AI-driven culture and improving how we understand consumers, develop our portfolio and operate the business going forward. And everything that was said translated into a solid P&L. Top line grew 9.6% and EBITDA grew 7.6% despite cost headwinds from FX and commodities. In Brazil NAB, 2025 was marked by 2 distinct [indiscernible] in the first half, strong commercial execution and favorable pricing position supported solid volume performance and market share gains. In the second half, however, despite our consistent revenue management, market share performance came under pressure as the pricing relativity became less favorable. In the first quarter of this year, we cycle a tough comparison base. And although both relativity and market share improved sequentially, volumes were still down 3.9% versus last year underperforming the [indiscernible]. Regarding our portfolio, [indiscernible] equity reached all-time high at the end of 2025, significantly ahead of its market share, while our no-sugar portfolio grew in the mid-teens led by Guarana Zero, Pepsi Black and H2O. In the quarter, our disciplined execution showed up in the P&L. With top line growth of 1.8% and EBITDA up 16.4% with 400 basis points of margin expansion. In Argentina, the macro environment has become more stable with lower inflation and less FX volatility than what we faced a year ago. That improvement, however, has not yet translated into a meaningful recovery in consumption. The beer industry remains soft in the first quarter, and the demand continued to reflect a cautious consumer environment. So while the industry appears to have found a more stable level since Q4, we continue to believe in a gradual recovery. Within that context, our performance in Argentina continued to strengthen. Despite volumes declining by low single-digit sellout market share increased versus last year. Supported by mega brands equity and consistent execution. Above core grew high single digits, led by Stelara and Michaelob Ultra Ultra. We remain focused on protecting our commercial position with a disciplined revenue management agenda while continuing to invest behind our brands to reignite the category growth. And as we build momentum toward the FIFA World Cup, [indiscernible] will be key consumer connected platform in the country. In the Dominican Republic, we had a solid start to the year. The consumption environment continued to improve supported by a more constructive macro environment and healthier category dynamics. Beer continued to gain share of alcoholic beverage helped by better price relativity. In that context, total volumes grew high single digits, supported by disciplined commercial execution. Market share remains stable and President, Brand health continue to strengthen reaching all-time high levels. In Canada, the beer industry remained soft in the quarter, declining mid-single digit, affected by a weak consumer backdrop and unfavorable weather conditions. Within that context, we maintain a stable share in beer and continue to gain sharing beyond beer, supported by momentum of our mega brands. In beer, Busch and Michaelob Ultra were the top 2 fastest growing brands in the industry, while mics, not and cut water led our market share gains in beyond beer. All in all, despite volumes declining 2%, EBITDA grew 6.7% with 160 basis points of margin expansion. With that, I will now turn it over to Fleury for financial highlights.

Thank you, Lisboa. Hello, and good afternoon, everyone. We entered the year maintaining the same financial discipline that has guided us over the past quarters to drive long-term value creation through our capital allocation framework. We delivered normalized EBITDA growth of 10.1%, translating to an increase of 0.3% in normalized net income. From an operating cash flow perspective, we delivered the strongest first quarter performance in the past 10 years, which not only allows us to continue investing behind our brands but also reinforces our commitment to return excess cash to shareholders over time, materialized through the execution of our ongoing share buyback program and our IOC announcements. So let me walk you through the quarter in more details. On the operational side, normalized EBITDA reached BRL 7.6 billion with 60 basis points of margin expansion, supported by top line performance and continued financial discipline. Consolidated cash COGS per hectoliter excluding marketplace, increased 9% in the period, with Brazil beer up 14.6%, reflecting the expected pressure from FX and commodities headwinds, which should gradually ease starting in the second quarter as previously anticipated. That said, we continue advancing on cost initiatives towards capturing efficiencies. Consolidated cash SG&A grew 4.8% in the quarter, with efficiencies coming mainly from distribution expenses driven by operational leverage in Brazil beer. We continue to invest consistently behind our brands in the period, and consolidated sales and marketing grew 5.1%. Most importantly, I want to remember that our sales and marketing expenses tend to follow our Mega platforms event calendar, which this year includes the FIFA World Cup in quarter 2. Looking at our financial performance. Net financial expenses totaled BRL 1 billion in the quarter, about BRL 200 million higher than last year. mainly driven by higher carry costs on derivative instruments. As a result, normalized net income reached BRL 3.8 billion with a normalized EPS of BRL 0.24, growing 0.5% versus last year. Now turning to cash flow generation. Cash flow from operating activities totaled BRL 3.2 billion in the quarter, an increase of BRL 2 billion year-on-year. This was mainly driven by improved working capital dynamics, particularly through better package and raw materials inventory management as well as improvement in payables, mostly coming from a reduction in barley payments in the period and lower bonus payments following last year's performance. Cash flow used in investing activities totaled BRL 2.4 billion, BRL 1.6 billion higher than Q1 25 mainly coming from BRL 2 billion impact of the deconsolidation of assets previously reported as restricted cash in CAC as per applicable accounting standards. For more details, please refer to Note 5.1 to our financial statements. Cash flow used in financing activities totaled BRL 1.2 billion, against BRL 8.8 billion year-on-year, reflecting the execution of our previous share buyback program and the timing of our 2024 dividends payout, which in 2025 together consumed BRL 7.7 billion of our Q1 cash position. Under our priority to return excess cash to shareholders. We continue executing our ongoing share buyback program announced in October last year. And yesterday, the Board of Directors approved the payment of BRL 1.2 billion related to the second tranche of the IOC declared in December of 2025, and a new IOC declaration of BRL 700 million to be paid by December 2026. In summary, we started the year with momentum. We will stay focused on what we can control while continuing to invest in long-term value creation. At the same time, we remain mindful that the global geopolitical environment continues to be dynamic. Therefore, we are closely monitoring developments across all of our markets and we maintain our Brazil beer cash COGS per hectoliter, excluding marketplace guidance unchanged from 4.5% to 7.5% increase in 2026 and continue to pursue our ambition of expanding consolidated margin over time. With that, let me hand it back to Lisboa.

Thank you, Fleury. So as I close, I would like to leave you with 3 messages. First, our conviction in the category remains unchanged. Beer is one of the largest, most loved and most profitable consumer categories in the world, and its potential is far from being fully captured across our footprint. We continue to see room to broaden the categories reach, remain relevant to consumers as their needs evolve over time and participate in more consumption moments. Second, we have a growth formula anchored in the 3 pillars of our strategy, presenting encouraging results. In our view, that is the way not only to build momentum, but to make it less by turning 1, 2 in 3 into a true flywheel. And third, while the environment remains dynamic, 2026 is also shaping up to be the year of socialization. It started with Carnival. And the month ahead bring a strong occasion-driven calendar, including the FIFA World Cup. These are the moments when our brands connect more deeply with consumers and when as people come together beer becomes part of what makes those moments very special. And our ambition remains the same, always strive for our better version. This quarter was an important step in that journey, and it gives us confidence in what comes next. And before I finish, I want to thank our teams across Ambev. Your ownership resilience and discipline in executing our strategy are what made this quarter possible. Thank you very much for joining us today. And with that, let me hand it over to the operator.

[Operator Instructions] Our first question comes from [indiscernible] with [indiscernible].

My question is about net revenue per hectoliter in Brazil beer. For us that leads to us the main highlight of the quarter, especially given how your volumes also performed. So if you could qualify the 8% year-on-year increase, what drove that in terms of the contribution from mix any contribution from price increases in case they took place in the first quarter would also be very helpful. And also seasonally, Q1 usually has a weaker pricing than Q4, right, because of state taxes in Brazil. if there was anything different in this ICMS dynamic this year that may also, in part, explain the pricing performance in Brazil beer. That would be my question.

Thanks for the question. Look, I think it's always important to, as you said, explain what are the components driving the net revenue per clear performance? And first and foremost, in terms of hierarchy, the first component is exactly the all the effort put behind our revenue management agenda in '25 and the carryover we brought into the first quarter of '26. Keep in mind that from '24 to '25, we didn't have pretty much a carryover, right? So in other terms, it is an easier comp. The second component in the hierarchy comes from our revenue management agenda into '26, right? And the third component comes from the mix since our above core segment continued to grow in a very solid pace, right? Altogether, drove a pretty healthy net revenue per colder around the high single digit, as you mentioned, right, keeping our strategy unchanged, right? We want to keep the rate broadly in line with inflation over time and capture post mix and evolve in a solid basis moving forward.

And just to complement here, [indiscernible]. On the tax side, there was nothing that was important to highlight during the quarter. So same as last year.

Our next question comes from Nadine Sarwat with Bernstein. I believe she's having some technical issues. We are going to go ahead to the next question from Thiago Duarte with BTG.

My question is really now jumping into volumes in Brazil beer. In the presentation, we shared that the industry was down by mid-single digits in Q1. And at the same time, I think, Lisboa, you continue to suggest that you think this was due to cyclical factors such as the weather, right? And last quarter, marked, I think the fourth quarter in a row of falling industry volumes at a relatively steep pace. So in theory, starting now in Q2, we are cycling through that, I think, easy comparison base. And so my question to you,[indiscernible] , and I think you mentioned in different occasions in recent past, how confident you are about the potential of the category. -- and obviously, this year, you have a positive calendar effects such as the World Cup. So my question too is really how confident you are now that we are cycling through this easy comparison base, how confident you are that volumes can grow in the balance of 2026 in the next 3 quarters?

And thanks for the question. Just a clarification. First, actually, the industry is cycling through the toughest comparison base, not the easiest comparison base, right? Since Q1 '25 was pretty much the only quarter when the industry pretty much landed in a positive territory. From that onwards, was a solid negative performance in all quarters. from 2 to quarter 4, right? So when the category, the industry landed around mid- to low single digit in this quarter versus last year. In our point of view, is a continuation of a recovery because we are -- the categories, again, landing in the toughest comparison moment, right? And about the drivers, I think it's always good to understand what happened last year. And we always emphasize that the issue was not whether consumers wanted beer but how often the right occasions happen, right, given the fact that what mostly impacted the industry were cyclical drivers, which is pretty much the same that happened in this quarter in '26, right, being the most relevant impact coming from the weather. However, in a lower intensity vis-a-vis what we saw from quarter 2 to quarter 4 from last year, right? And I think it's important for you to keep in mind, Thiago that the correlation between industry performance and the weather is very visible for us. And this is something that we have been dedicating a lot of time and effort here to improve the capacity we have to read what is happening around us, right? Regarding the context or in other words, cyclical drivers impacted the industry performance and also structural drivers. And when we look at, right, everything that impacted last year the industry that is still impacted this year in the industry, and we look forward. We do expect that, first and foremost, the calendar will bring a pretty interesting right ground for the industry to continue recovering moving forward. right? A combination of long holidays, a combination of Chief World Cup coming exactly at the moment when the industry declined the most, high single digits against. And after that, you have in mind that the major impact coming from -- came from the weather. We don't expect, despite the fact that we don't control this piece right? We don't expect the weather to impact the industry the same way happening because, right, the issue came from the distance, the gap between a very warm weather in '23 and '24 against a code long winter time in '25. And that gap was the main reason why right, we saw such a big decline, which is very unusual for the beer industry to face in a region like Brazil, right? The other piece of the equation, which is still in place, by the way, right, is the household income pressure, which is something that we continue to pay attention. However, the category usually shows its resilience in moments like that. were seen as an affordable entertainment for consumers in Brazil. And that gives us the chance to despite the pressure, continue to see and drive category industry momentum moving forward. I hope to have answered your question.

And it's [indiscernible] if I just add, I think we all heard this [indiscernible] mention a few moments ago about the momentum of our portfolio. this year compared to what we had before. So the compounding effect about the momentum of our portfolio is also very relevant when you think about volume for this quarter and when you were to put together a view for the year.

Our next question comes from Lucas Ferreira with JPMorgan.

I wanted to explore [indiscernible] topic you just mentioned about the momentum of the brands. But if you can go down to the category levels and also brand specific, especially the key brands in premium and core how they have been performing? What has been sort of the surprise in your view in terms of resilience, right, in tough environments in both premium and core and especially in core, how things look like in your view going forward through the rest of the year, which seems where maybe the market is a bit more competitive or maybe where -- you guys have a bit more trouble. So basically, how to think about this momentum going forward, especially regarding the core segment, which was maybe on the weak side this quarter.

Look, I think the first point to highlight here is the mission we set for ourselves to really not only lead but also develop and make this industry the category grow over time, right? In other words, we want to be truly a captain of the category here in Brazil, right? With that in mind, the way we should land this mission is by protecting elevating the brands that compose in our point of view, the core of this category here, our domestic right, large core brands. And we have been doing that, and we discussed about it right last year, also putting the efforts behind a portfolio play in this game, right? We want to have more than one core brand playing this role because we know that Brazil is a very large country and our competitive dynamics, they change depending on the region, right? So in other words, it's important for us to have more than one brand, and this is a large piece of the equation, piece of the category, and we have a very high share level there, right? By having this strong core segment, you can really play the game to expand the category, right, develop the category to attract more consumers to jump into more occasions, right? And we are doing so in a pretty solid way. I think the first point to highlight is the premium segment. Again, a portfolio game. There, we find brands like [indiscernible], original, right, Corona placing very solid and consistent right volume performance along quarter-over-quarter, right? And taking us to regain the leading position and also today, having the brands growing the most in the Brazilian market within this segment. On the other side of the story, a new choice for us, right, the one we call balance portfolio, right? The piece of the portfolio composed by no-alcohol beers, right, which, by the way, continue to deliver various solid results. And the new brands like Stella [indiscernible] and Michelob Ultra, which has been growing in an exponential way here. Altogether, this portfolio jumped from mix?

Right to this quarter, delivering almost 4% of our mix. So it's a very solid pace of growth, right? And we are complementing this game with new members like flyfish, right? We are bringing to life the versitility that the category brings to us. right? And by doing so, we are creating new experience to our consumers to learn everything that beer can be here. And this is what really excited us. And it's nice to be part of a global enterprise, but because we -- it's almost like having crystal ball in your hands, right? We know what beer can be. And we know that we can make this love category, even stronger in Brazil. And this is exactly the mission that we set for ourselves since day 1. They can guarantee you all embed partners, they are in love with this idea, right, to drive this category even further.

Our next question comes from [indiscernible] with HSBC. I believe he's having some technical issues as well. We're going to go ahead to our next question from Ben with Barclays.

Just wanted to follow up a little bit on the [indiscernible] outlook. You could help us understand and frame maybe the the cadence throughout the year. Obviously, we saw the pressure as in first half as an expected. But just given the the current environment with higher aluminum prices, et cetera. How should we think about the cost flow through for you guys based on the hedges for the rest of the year?

So when we do and as we have done last year, so let me go back a little bit at '25, which will probably ease for you to understand how we are working -- when we start the year, we have extensive analysis, and we have our hedges, which give us a very good visibility on the forecast going forward. And last year, you remember that was a very tough year for us because when we give the guidance to the market, we didn't have a view about how the industry would perform throughout the year. So last year, I'll start by saying that we had to reignite the muscle of the organization of looking into very details of costs, production, distribution and so on and so forth and that is working all together different areas, which allowed us to end the year despite the volume decrease at the lowest part of our cash COGS guidance for the year. When we're starting '26, what we have said to the market is our range between 4.5% for Brazil Beer cash COGS per activity exclude the marketplace from 4.5% to 7.5% and we understand that the market is still dynamic. That's what I just said to you guys. But the information that we have today with also the discipline, with also the cost discussions and projects looking forward to different areas. We are maintaining our cash COGS from 4.5% to 7.5% for the year. We know -- and that's something that I also comment that we know that Q1 is probably the highest on cost, and that should start easing through the second quarter onwards. And allow me also to mention one thing that makes very clear for everyone. When we think about not direct cost, but investments that we do in sales and marketing, we understand and we made it clear that Q2 is probably will be more skewed when I look into the FIFA World Cup and activations that we have compared to the prior years. So probably expect Q2 to be more skewed on the sales and marketing on H1. But we are confident that we -- and we're working very hard to maintain the guidance throughout the year.

Our next question comes from Gustavo Troyano with Itau BBA.

My question also relates to beer Brazil, especially on the FIFA World Cup impact here, and basically, I just wanted to understand your perspective on how much of that consumption related to the World Cup is something that you can already see a few months in advance from the events of potentially starting to flow through your results as early as the first quarter. versus something that really only becomes clearer as we get closer to the event itself by the second quarter. So how do you think it works this time line for this demand to flow through your P&L? And related to this time line. I was wondering whether you're already seeing any early pricing movements from competitors ahead of this demand peaks. So would you say that this period ahead of the World Cup could create any opportunity to fine-tune relative pricing across SKUs or whether if you think it makes sense to adjust pricing ahead of the World Cup as well. Thank you very much.

I will keep the protocol in place. I'm going to answer 1 question to give you all the chance to interact with us, okay? So regarding your first question, World Cup contribution, historically, the World Cup usually brings a contribution of around 0.3 to 0.4 industry growth year-over-year annually is peaking, right? That contribution usually impacts as well the second to third quarters, right, which is exactly when we're going to see the event taking place, right? For sure, you have prep games in different regions across our footprint, and those are moments as well when we activate our brands, right, with campaigns, promo different sorts of activations, right, and that creates additional consumption moments, right, which is good for the category, right? Keep in mind that in Brazil, what we missed the most last year were occasions, frequency. So whenever you have the chance to activate frequency, right, it is good for us on a year-over-year basis, right? I think you saw during the beginning of the session, we already have our portfolio, right, of brands exploiting them in different ways. And this is beautiful because we have a complementary portfolio of brands, and they can use the platform to create new bonds with consumers, right, in different ways. And this is one for my point of view as a market here, right? And this is exactly what you're going to see moving forward and gaining even more traction, right? Because as we speak, our teams are ready to land everything that we developed last year. to reach such a unique moment for using pretty much across our footprint in a very stronger way to keep our momentum forward. As Fleury mentioned before, we jump into this year with our portfolio delivering solid results right across the board from core to high end, to beyond and flavor beers -- and now the World Cup comes in a very interesting moment for us to keep this momentum forward, right? So that's it, I think, very excited about the opportunity and ready to make it happen.

And just to add one thing, [indiscernible], I think it's important to remember that on this World Cup, different from the prior. Our digital platforms are much more evolved. So we're going to see a lot of activations through something that we've been developing for a long period of time. So the connection that we make consumers to the delivery and the connection that we make our [indiscernible] of sales that we interact directly through bis I believe amazing. We're going to be going to see a lot of activation, and it's our job, as it was said, help grow the industry.

Our next question comes from Robert Ottenstein with Evercore.

And apologies if I missed it. I know there was a question -- I think it was the first question was on the price mix. And you mentioned some carryover from '25 business mix and RGM. Can you be a little bit more specific in breaking things out. I think I in Brazil is running around 4%. So should we think in terms of 4% pricing and then 4% mix? Or how should we look at that and then perhaps in connection with that, can you give us the latest breakout of the premium segment, what percentage of your business is premium, how much that is up and the impact of that on the revenue per activator.

Look, as you said, we detail a little bit what you just asked in the beginning of the conversation, but I'm going to emphasize the key message here. The revenue management agenda has a mission that is composed by twofold, right? One is protect the industry growth category accessibility in other terms, right, while protecting our profitability. Right. That's the reason why we're going to always aim a rate strategy aligned with inflation over time. to allow our consumers, especially those coming from mid- to low socioeconomic and to access the category, right? And that's exactly what we happened in the beginning of this year. The main difference is the carryover against an easier comp from last year given the fact that we don't have a carryover from '24 into '25, right? So [indiscernible] building up the net revenue per hectoliter in part of 1. First and foremost, carryover. Second point, our revenue management agenda taking place already and the third component is the mix contribution, right? To your complementary question, the mix for us represents 20% of our volumes growing around 20%, right, in a very consistent basis. That's the reason why you see an interesting contribution coming from the mix which usually represents around 15% of what we see in our net revenue per hectoliter performance.

This concludes the Q&A session. I would like to invite Mr. Carlos Lisboa to proceed with his closing remarks. Please go ahead, sir.

Thank you for joining our call today. As we close, I would like to reinforce a few messages. First, this quarter marked a solid first step into the kind of figure we want to have. Second, our growth formula is based on the 3 pillars of our strategy working as a flywheel. When these pillars advance simultaneously, they show encouraging results, one another and supporting our profitable growth journey. And third, we are confident in beer. It is a loved and versatile category with clear headroom to grow. '26 is shaping up to be a year of socialization. And when people get together, Beer has a unique role in making those moments more special. With that, I would like to thank you all, and hope to see you soon.

This concludes today's presentation. You may disconnect, and have a nice day.