Good morning, and thank you for waiting. We would like to Welcome everyone to Ambev Fourth quarter and full year 2022 results conference call. Today we have with us Mr. Jean Jereissati, CEO of Ambev, and Mr. Lucas Lira, CFO and Investor Relations Officer. As a reminder, a slide presentation is available for downloading on our website, ri.ambev.com.br, as well as through the webcast link of this call. I would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company's presentation. After Ambev's remarks are completed, there will be a question and answer section. We kindly ask that each analyst asks only one question. Should any participant need assistance during this call, please press star zero to reach the operator. Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor and Securities Litigation Reform Act of 1995. Forward-looking statements are based on 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. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the SEC from time to time. 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. In addition, words such as believes, expects, anticipates, intends, plans, estimates, projects, forecasts, and future or conditional verbs such as will, may, could, should, and would, as well as any other statement that necessarily depends on future events, are intended to identify 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. Unless otherwise stated, percentage changes refer to comparisons with fourth quarter or full year 2021 results as the case may be. Normalized figures refer to performance measures before exceptional items, which are either income or expenses that do not occur regularly as a part of Ambev's core activities. As normalized figures are non-GAAP measures, the company discloses the consolidated profit, EPS, operating profit, and EBITDA on fully reported basis in the earnings release. These normalized figures must not be considered as an alternative to GAAP measures to evaluate our financial performance. In addition, they may not be comparable to non-GAAP measures used by other companies in the industry. Now I'll turn the conference over to Mr. Jean Jereissati. Mr. Jereissati, you may begin your conference. Hi, everyone. Welcome to our Q4 and full year 2022 earnings call. We have a lot to cover today. How we ended 2022, which was a great year for us, how we have planned for 2023, and how the year has started. Let's begin. We are a company that dreams big to create a future with more cheers, 2022 was a year of many achievements in bringing this dream to life. Our team's engagement remains at great levels. Interestingly, the question on pride to work at Ambev reached its highest score since 2018. My team came through once again, I want to thank and tell them how proud I am to be on their side every day transforming this company. Our reputation and connectivity with our ecosystem also improved with NPS up 14%, which meant more positive impact and shared value creation with clients, wholesalers, suppliers, and the community we serve. Operationally, our Brazilian business was the highlight, with our platform framework showing its potential, thanks to the healthier brands, continued innovation, improved service level, and the scale-up of our technology, B2B, and DTC big bets. Financially, there were lots of reasons to celebrate. 2022 was another year of record volumes, this time with better net revenue per hectoliter performance and with double-digit normalized EBITDA growth, which was ahead of our growth in 2021. In addition, normalized net income also grew double digits, and ROIC expanded thanks to better asset turnover. All this backed by another year of consistent free cash flow generation. Q4's performance allowed us to deliver a stronger H2 and put us in a good position to start 2023. Volumes grew 1.5% in the quarter, our 10th consecutive quarter of volume growth, reaching the highest volume in any given quarter in the history of this company. Net revenue per hectoliter grew nearly 20% versus Q4 2021, with growth in all regions. Normalized EBITDA grew a little over 27% in the quarter despite inflationary pressures impacting our costs and expenses. The commercial execution during the FIFA World Cup stood out in the quarter. In Brazil Beer, for instance, despite the poor weather and Brazil's early elimination, we managed to activate our brand with clients and consumers throughout the tournament, led by our high-end brands which grew volumes north of 25% and our mainstream brands, which grew mid-single digits. We sponsored more than 40 events, reaching over 20 million consumers with Brahma and Budweiser as the official sponsors of the tournament. This enabled us to serve our clients better with demand peaking at 480,000 hectoliters in a single day for the first time in our history. While Zé Delivery was the official delivery app of the Brazilian national team, increasing not only awareness from 50% to 62%, but also expanding to over 350 cities across Brazil. As for Brazil NAB, Guaraná Antarctica, the official sponsor of the Brazilian national team, was one of the most talked brands in social media during the World Cup. Meanwhile, Pepsi Black remained on fire, more than doubling volumes versus Q4 2022. We were awarded the Bottler of the Year for PepsiCo in Latin America. In Argentina, we organized the biggest celebration to welcome the champions, with Quilmes leading the national team's parade upon their arrival in Buenos Aires, and Budweiser hosting celebrations in every region to give consumers the Buds we brought home. In LAS overall, although volumes were down 1.6% in the quarter, net revenue per hectoliter increased 56.4%, and normalized EBITDA was up 93.6%. For the year, LAS delivered around BRL 5.8 billion of normalized EBITDA, out of which approximately BRL 3.6 billion came from Argentina. Not everything went well in the quarter. In Canada, despite market share gains in beer, we were unable to grow volumes on the back of a weak industry. Normalized EBITDA declined about 4% thanks to commodity and full inflation, more than offsetting net revenue growth. Meanwhile, despite a sequential improvement overall, CAC volumes were down more than 13% in the quarter, while normalized EBITDA declined at nearly 11%. In the Dominican Republic, high inflation continued to be a reality. In Panama, volumes continued to be impacted by short-term competitive dynamics challenges in traditional trade, and we have not yet recovered previous market share loss. Finally, there was a tax settlement in Dominican Republic, which led to higher other operating expenses, which is a one-off. Absent this tax settlement, normalized EBITDA would have increased about 0.1% in the quarter. That's it for 2022, and now let's talk about 2023. I'm actually starting the year more confident than I started 2022. Even though there are still challenges and volatility in many countries, there are plenty of opportunities ahead, particularly in Latin America markets, as I believe the region is set to benefit in the current environment. Also, our business continues to have momentum thanks to the execution of our commercial strategy, leading to continued top-line momentum. For the past several years, we witnessed significant inflation impacting our costs and expenses well ahead of our top-line performance. Now, there is no longer this disconnection between top line and cost and expenses inflation. In fact, what we are seeing is quite the opposite. Continued top-line momentum while costs and expenses inflation comes down, and this is excellent news. Finally, our balance sheet and cash generation remains strong. The fact that our cash generation has been consistent even during COVID and despite all the macro challenges we face, is a clear evidence of our financial capabilities. What do we want to accomplish in 2023? In 2023, we want to deliver another year of continuous and consistent improvement. Let me break it down what I mean by this. In terms of growth, our ambition is to deliver 2 things. First, another year of consistent top line and bottom line growth with Brazil keeping its momentum while our international operations work to bounce back with CAC in Canada recovering performance. In last, our biggest focus will be Argentina, where we will work to keep operational momentum while preparing our business to be flexible and agile, to adapt to the macro environment to the extent that volatility may require. Second, at the consolidated level, pursue another year of normalizing the growth acceleration, growing above the 17.1% we delivered in 2022. In terms of profitability, we want to continue working towards not only improving ROIC, but also improving our margins performance. We have work to do here, but we believe we are on the right track, and it's good to see that costs and expenses headwinds seem to be finally easing. Having said that, it's been a busy start to the year. There has been a lot of noise from events unrelated to us. We have already set the record straight, and we will continue to do so to protect our company and our reputation. The silver lining, however, has been to see how our ecosystem has had our back. It has been amazing to see how much my team has shown leadership to carry on, also how much support we have been receiving from former employees, consumers, clients, wholesalers, suppliers and partners. Lucas will go into a bit more detail, I wanted to nonetheless thank everyone for being there for us. If you put the distractions aside, the truth is that the business continues to do well. We are kicking off the year with Carnival in Brazil finally coming back for real. Our plan for Carnival was built around bringing our platform to life at the different festivities across the country. This was definitely the carnival of the Brahma franchise, which was executed nationwide and presented as traditional media, social, street vendors and point of sales. Brahma was not alone with our Beats franchise innovating with Caipi Beats, the hottest innovation of the season. While Zé Delivery showed up big time to deliver a broad assortment of mainstream core plus and premium brands to consumers. Brahma, Caipi Beats and Zé Delivery were ranked among the four brands with the most earned impressions on social media during Carnival, with Brahma ranked in the first place, more than doubling the number of earned impressions that Brahma and Skol together had in the carnival of 2020. To wrap up, as I have said before, 2023 will certainly bring challenges and risks, but also opportunities. With a business that is over 80% located across Latin America, we know how to navigate uncertainty and volatility. We will continue to focus on the things we can control, executing our plan to deliver consistent results once again. In fact, what gives me additional confidence is that since 2020, we have been building a better company on the back of our transformation journey. First, we have a solid culture that has continued to evolve as we have embraced active listening across our ecosystem, more collaboration internally and externally, and more long-term thinking embedded in our planning, decision-making and compensation model. Second, our operations are solid. In 2020, we developed a sound long-term strategy for the next 10 years, and we have been executing the plan consistently since then. We decided to recover from COVID, prioritizing top line growth, step changing our volume performance thanks to a more client and consumer-centered platform model. The plan has been working. Third, we are financially solid. Our cash flow generation has been consistent over the years, allowing us to invest in future growth while maintaining a strong balance sheet and also remaining net cash. In other words, I feel we are stronger than ever thanks to the great people we have, to a clear strategy with disciplined execution of the plan and no shortage of capital to fund this journey. That was it. Thank you all and let me handle this over to Lucas. Thank you, Jean, and hello everyone. I would like to start by covering the noise in the beginning of the year that Jean mentioned and address this right away. There are three topics in particular: payables with suppliers, tax litigation in Brazil, and the Brazilian tax reform and IOC. First, payables with suppliers. As a matter of policy, we do not enter or support forfaiting transactions or Risco Sacado. When we do so, it's on an exceptional basis or to comply with local laws in some Latin American jurisdictions. That said, amounts involved are immaterial as disclosed in our 2022 financials, so this is a non-issue for us. Also, since we are a listed company in Brazil and in the US we comply with IFRS. Given our payment terms, we apply IFRS 13. IFRS 13 considers therefore, the effective cost that's reported in our COGS excludes this component, and our accounts payable are accounted for at present value. Second, tax litigation in Brazil. Brazil has an extremely complex tax system that often gives rise to different interpretations and, as a result, extensive litigation. This is a reality of several Brazilian companies, whether large, medium, or small. Just to give you an idea, according to a study published by Insper in 2020, if you add up all the tax litigation in Brazil, it amounts to approximately 75% of the country's GDP. Anyway, as we've abundantly disclosed in our public filings, we have a relevant amount of tax litigation that, based on the advice of external counsel, there is a possible but not probable chance of loss. About 90% of this amount relates to 15 specific tax positions, such as goodwill amortization, IOC, Manaus Free Trade Zone, foreign profits, among others. These tax positions have been challenged by tax authorities over the years and will continue to be litigated for several years to come. We believe in the merits of our legal position in each of these cases and that we will ultimately prevail. Regarding specifically the Manaus Free Trade Zone, in addition to what we've publicly stated and disclosed, it's worth reminding everyone that these tax incentives are set forth in the Brazilian Constitution and our subsidiary, Arosuco, has been producing concentrate for Guaraná Antarctica and other non-alcoholic beverages in the region for over 20 years, investing in our local production capacity, sourcing Guaraná seeds locally, as well as generating jobs for local communities. The disputes between tax authorities and taxpayers are known for more than 12 years, the part of the case that reached the Supreme Court in 2019 was actually ruled in favor of taxpayers. Third, the Brazilian tax reform and IOC. It's been widely reported that there's a tax reform under discussion that may be passed in 2023. This reform may include changes to indirect taxes, but also direct taxes. We support any tax reform that reduces the complexity of the Brazilian tax system and that does not increase the total tax burden of the industry, which is already among the highest in the world. Now, in the context of the legislative debate about the direct taxes reform, there have been discussions towards ending the tax deductibility of the IOC. If the IOC is no longer deductible for tax purposes, we will look for alternative ways to mitigate, at least in part, the impact on the company. Since the legislative debate on the tax reform is ongoing, it's still early to comment further. We will keep the market informed as appropriate. Okay. With that out of the way, let's move on to our performance for 2022 and our priorities for 2023. Starting with 2022. 2022 was another year where we delivered on all our ambitions. Number one, Brazil back to bottom line growth with normalized EBITDA up 15.6%. Number two, at the consolidated level, normalized EBITDA grew 17.1% versus 10.9% growth in 2021. Number three, H2 was stronger than H1, with consolidated net revenue growing 20.3% versus 19.1% in H1 and normalized EBITDA increasing 20% in H2 versus 13.4% in H1. What's more, normalized profit increased 12.6% thanks to normalized EBITDA growth, lower growth of net finance expenses, and lower effective tax rate. ROIC ex tax credits expanded from 20% to nearly 25%, with asset turnover improving once again. Cash flow generation topped BRL 20 billion for the year, despite a year-over-year shortfall in Q1 and much lower cash generation in CAC and Canada throughout the year. All this while still investing for the future with BRL 6.5 billion of CapEx and BRL 6.5 billion in sales and marketing. Finally, for the year, our payouts totaled BRL 12 billion in the form of IOC related to our 2022 fiscal year, but also from prior years. Consequently, we start 2023 with a cash position of nearly BRL 15 billion with less than BRL 4 billion in debt, which is a great liquidity position to be in. In terms of sustainability, we also made meaningful progress towards our 2025 goals. For instance, we ended 2022 with 11 carbon neutral operations, eight plants in Brazil, two in Uruguay, and one in Argentina that combined will avoid the emission of 30,000 tons of CO2. We reached 100% of renewable electric energy in our operations of Brazil, Argentina, Paraguay, Chile, and Uruguay, adding to the Dominican Republic, Panama, and Guatemala, where we had reached such threshold in 2021. Lastly, we already managed to reduce carbon emissions from Scope one and two by more than 40% since 2017. While for Scope 3, we reached over 200 active partners of our supply chain in Brazil in the collective effort led by us to reduce Scope three emissions, representing more than 70% of the total value chain emissions, keeping our commitments for 2025 on track. Let's quickly talk about 2023. First, what should be similar to last year? Number one, top-line growth remains a key priority, with net revenue performance once again driven more by net revenue per hectoliter than volumes. Number two, we expect a tougher Q1 given higher input cost pressures, but this time more from commodities than effects. three, our focus on value creation drivers such as return on invested capital, economic profit, and free cash flow generation all remain. In terms of what should be different from last year, one, although input cost pressure remains a headwind, we expect our cash COGS per hectoliter for Brazil beer, excluding non-Ambev marketplace products, to grow between 6% - 9.9% for the year, which is significantly lower than the 16.6% growth in 2022. This cost outlook is a result of our commodity hedges, where aluminum became a tailwind, as well as our FX hedges, with the average BRL-USD exchange rate at 5.10 for the year, after four years as a significant source of pressure. Number two, SG&A growth should improve given lower inflation overall, as well as internal restructurings designed to streamline and optimize our B2B, D2C, and Fintech technology big bets. We invested heavily from 2020 until 2022 to scale up these platforms quickly. We now see room for a more integrated approach as far as structure is concerned. Number three, CAC in Canada back to organic growth. In CAC, we will continue to focus on reigniting demand for our portfolio by activating key selling moments via brand and trade investments, as well as a disciplined commercial execution. While in Canada, we will focus on resuming momentum by focusing our investments in above core and Beyond Beer brands, also evolving the digital transformation that is currently underway with BEES. Finally, speaking to our financial priorities for the year, no change here. We will continue to focus on four things. Improving our financial discipline with a focus on liquidity as well as cost and expense management while reinvesting for growth. Improving profitability through increasing our return on invested capital, but also focusing on margin expansion. Furthering our value creation agenda with a focus on growing economic profit as well as free cash flow. Returning excess cash to shareholders over time. In other words, we will pursue another year of continuous and consistent improvement in our financial performance as we continue to transform this company. That was it on my side. Time for Q&A. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We kindly ask that each analyst only asks one question. One moment, please, while we pull for questions. Our first question comes from Rodrigo Alcantara with UBS. Please go ahead. Hi. Thank you for taking my question and congrats on the results guys, Lucas. My question would be regarding on Canada. Just curious if you can explain a bit better how you plan to resume growth there. It appears to be more like, kind of like a structural problem, a market problem rather an in-depth situation, right? Just curious if you can comment how you plan to grow in this trend if that's the case. Also, again, in Canada, perhaps if you can comment on an EBITDA minus CapEx perspective, how did the quarter look like? That would be my question. Thank you. Okay. Hi, Rodrigo. Thank you for your question. This is Lucas speaking. In terms of reasons to believe for Canada in 2023, I think there are a few points worth highlighting, okay. I think number one, we're gonna continue to work to resume momentum, right, by continuously to allocate resources right behind our brands within the core plus premium segments in the market. We've had over the last few years, very good market share performance across segments, across regions within Canada, despite a decline in the industry in the same period, okay. Number two, we're gonna continue to bet behind the Beyond Beer. Beyond Beer was an industry that suffered particularly more in 2022 than other beverage categories. We did see some sequential recovery towards the back end of the year. If the Beyond Beer industry, right, continues to regain momentum going forward, and as we continue to invest behind our portfolio there, that should also be helpful looking ahead. Okay. In addition to that, I think there's a big focus on our part to stabilize mainstream in the Canadian market. Above core, right, core plus and premium brands have momentum like Michelob Ultra, Corona, and Stella Artois. Within mainstream, we started to stabilize mainstream in 2022, and Bud Light outperformed in that case, in that segment. We need to keep it up with respect to Bud Light and improve performance for Budweiser in that segment going forward. Okay. Apart from that, I think the... If you think of kind of macro overall, I think Canada inflation kind of remains at high level, but it's expected to mitigate somewhat in 2023. Having this kind of downwards trend of inflation helps. That's another thing to follow, okay? We're also not seeing kind of any evidence of widespread trade down. Okay? If you combine these things, there's not gonna be like a one silver bullet solution, right? It's gonna be a combination of things, execution of commercial strategy, right? I forgot to mention, BEES in Canada, right, started to be rolled out in 2022, and we have also plans for continuous expansion in 2023. That's also a big focus for us going forward. Okay? Yeah. That's great. Also if you can comment on just on the cash flow generation perspective in Canada. Any figures you can comment there? Yeah. I think with respect to Canada, there was, I mean, consistent with the tougher EBITDA performance that we faced during the year, right? Cash flow also, right, ended up being impacted. Okay? That's certainly something that we need to improve going forward. If you break cash flow down for Canada, the bigger issues that we saw in Q4 were around payables, okay? That was the biggest issue that we faced when you think of kind of working capital. From a working capital perspective, it was mostly related to payables. Just given our CapEx curve for the year, okay, and overall performance in the back end of the year, particularly December. We typically have December as, if not the most important, month for cash flow generation. It's among the top months for cash flow generation. Right, given our performance in Q4 with the volume shortfall and the like, that ended up also having a consequence on our working capital, okay? CapEx overall remains kind of consistent with the past, just the calendarization was different, and it ended up impacting our payables for last year. Okay? Okay. That's very clear. Thank you, Lucas. Thank you. Our next question comes from Lucas Ferreira with JP Morgan. Please go ahead. Hi. Good afternoon, everybody. My question is about your outlook for beer sales in 2023. If you can comment about your, first of all, expectations for the industry, if you think there is space for growth in consumption after a very strong 2022. In the case of Ambev, if you think you can still gain market share, which part of the market you should expect that to grow more. And also if you can comment briefly on the this beginning of the year, that was also kind of rainy, especially in São Paulo, given the issues you guys had in the fourth quarter. If you can have a sort of any early views on the first quarter of 2023. Thank you very much. Thank you, Lucas. Jean here. I think it's a good question about volumes. We had a strong year in 2022. Overall, we have a plan for 2023 to continue to gain market share in our key markets, including Brazil. We have been working on the brands, on innovation. Our RGM is unparalleled now with B, so we are confident on market share gains. Talking about the industry, yes, we had a Q4 and moving into Q1, a bad weather, raining, mostly in Brazil, but these things usually goes with the time. We believe that industry still, we're gonna be positive in main of our markets with market share gains. That's pretty much it. Perfect. Thank you very much, yeah. Our next question comes from Marcella Recchia with Credit Suisse. Please go ahead. Hi, Jean. Hi, Lucas. Thank you for taking my questions. Let me just first do a follow-up on Lucas' questions, regarding Brazil, and then I will have other two questions very quickly. Can you just remind us, the price increases taken throughout 2022 for Brazil beer and what's the expected carryover for 2023? Then I ask you the other two questions. During Q4, Marcella, we usually have our conduct on prices just before the summer. Mostly of the price for 2023, we already passed through in Q4. What we are seeing is that still elasticities are resilient and most of the carryover of 2023 is already in place. It's a good starting point where we are today. Okay. The other two questions, very briefly. Basically first on Brazil beer. We can see that volumes are up 17% versus 2019, top line up 48%, but margins down around 13 percentage points, right? With now also, besides the focus on absolute growth, how much of that margin do you think you can recover, and if there is any timeframe for that? That would be the first question. Just to already ask the second one, regarding the guidance of consolidated organic growth of ahead of 17%, which regions can we expect to outperform and underperform this level? Thank you so much. Marcela, you've been following us and we made a conscious decision in our 2020 10th year strategic plan that came together with the pandemic to accelerate our performance across the board at Ambev, where we decided to go out of the pandemic with a top-line led recovery to accelerate our plan of reconnecting with consumers and customers, innovating the white space that we have in the market. It was pretty much our. A conscious decision to accelerate top line. And at that time, we had that dilemma on decide our conduct on revenue management more based on EPCR or EGPM. We, we were very deep on consumer understanding and we decided to rate the products and to follow more of the basket of our consumers, more of EPCR, even though our costs, they were cyclical, moving more close to the EGPM. The good part it is that we have been for 10 quarters accelerating performance on the top line, 10 quarters with positive volumes growth. We are in this brink of this point where our costs are beginning to come back to normality. Still our, we see our top line with volumes and resilience on conduct with momentum. I think it's in our journey, it's time to keep the strategy. Naturally, we believe that the things will get easier on the margin side if we continue like that. We gave the guidance of cash COGS moving in between 6% and 9.9%. We have to remember that this number was 22% in 2021. It was something around 16% last year. Now it's moving to something more close to a high single digits. I think this is, we see like things coming together where the margins should begin to expand back. I think it's hard to give a timeframe, but I think that's the year where we are really fighting to have margin expansion again on top of top-line growth and return on invested capital growth too. This is one thing. The second question is that we want to accelerate a bit the performance. Last year we mentioned 2022 has to be better than 2021, and then we moved to H2 has to be better than H1. Now we are looking to 2023 to be better than 2022. I think this shows a lot of consistency and fundamentals and structurally the company moving into the right direction. What we believe it is that Brazil will keep its momentum. Both business, beer and NABS, they will keep momentum. There will be an important unlock of value in LAS, where we begin to see Chile really unlocking value. Our supply capacity constraint eased. We made the investments. Our plants really increased capacity, so we'll be able to reduce and accommodate imported beers that we had that was very expensive with this whole issue of ocean price that we had last year. In Argentina, we were really very rigid on our hedging policy and protection that we have to in terms of currencies in Argentina. We feel that we are kind of overpaying for the financial protection. We worked a lot throughout last year to really work on operational hedge, to evolve contracts with suppliers, to have more local currencies on our contracts. I think we'll be there's unlock of value in LAS, mainly because of Chile and Argentina. We see Canada back into normality and CAC going back to normality too. Moving first to work on margins on CAC, then on volumes a little bit further on. Somehow Brazil momentum and reversion of international operations. Okay, Jean Thank you so much. Our next question comes from Carlos Laboy with HSBC. Please go ahead. Yes. Hello, everyone. I have two questions. One for Lucas. How does ABI dropping its net debt to EBITDA below 0.3% as you look at this year, change your flexibility on how you think about the capitalization of Ambev differently? For J.J., can you speak to how some of your brand marketing keeps evolving to appeal more broadly to men and women more evenly? Is it working? Perhaps you can direct some of your answer to Corona specifically and the progress that's being made there. Okay. I'll take the first one then, and then João can address the second question. Hi, Carlos. Thanks for the question. When we think about capital structure, we need to keep in mind, we need to be mindful of the fact that the current state of our capital structure, right, is impacted by the deductibility of the IOC, right? As a result of that, whenever we think about capital structure, that's an important consideration, okay? Number one. Number two, I would say that when we think about kind of ABI's net debt, I mean, for us that's more of an issue, right, for ABI and less of an issue for us. We tend to focus on what's the optimal capital structure for Ambev, okay. Within that, optimal capital structure, we need to always be mindful of the IOC. That's an important consideration, okay. Jean, over to you. Okay. Laboy, talking about brands. Yes, at the previous three years, there was a lot of work on reworking on our brands, reprioritizing brands, really organizing a portfolio that has less overlap, that really have targeting consumers in the right way. We are very happy with overall, this overall strategy. We are seeing equity of our portfolio in general picking up. Going back a little bit on Brahma Duplo Malte. Brahma Duplo Malte was so relevant to the Brahma franchise. It really rejuvenate our most important brand, that is Brahma. We saw now during the carnival, Brahma really picking up as the franchise overall and really reconnect with the young people as we've not seen for a while. We are very excited about seeing Brahma rejuvenating with Brahma Duplo Malte. We saw in this carnival too, our innovation strategy at its best, the Beyond Beer impact during carnival and the new product that we launched, that it was a Caipirinha in can with the Beats franchise. It was amazing to see how it really goes Beyond Beer. It was really, it was really about young population. It was really about women. It was really about there is a lot of incrementality on that product as we see in the market. Going to premium. Corona is a brand that we don't talk that much because it's a so important jewel that we have in our portfolio that we are really working more on the brand side ahead of the volumes. Really connecting the brands with the exploration of the new generation of sustainability, of reconnecting with their soul. We are very excited about Corona. Corona is performing very well, is gaining a lot of brand equity. We are really nurturing in a way that it can be the most premium, the most important premium brand in Brazil. Thank you. Our next question comes from Guilherme Palhares with Bank of America. Please go ahead. Good afternoon, everyone. Just some clarifications on the last questions. Jean, you mentioned that there is a lot to do in Chile. There is capacity to unlock there. We know that the company had a deal with Embotelladora Andina, the distribution deal. I was just trying to understand how much capacity you are adding to the region and how relevant that distribution channel became for you in the country. The second question is related to NAB. If you could share a bit in terms of the potential cross-sell that you had already with the beer business using these, and what we can expect for this cross-sell to be going into 2023. Thank you. Okay. Thank you for the question, Guilherme. Chile, we ended up the year increasing 30% with our local capacity over there. It was an important expansion in our supply capacity that we had. This will help us to really unlock value and sustain momentum over there. For sure the deal with Embotelladora Andina was we changed levels over there. It's really overall our most important partner over there, is our RTM. We still get, we still go direct on supermarkets. But, they do the logistics. Overall, the traditional trade, their own premise, we really go through them. It's amazing, their execution and their ability, their reach in Chile. Very happy with the deal. We've been nurturing the country for a while, we increased supply capacity that will help us to unlock a lot of value in the country. This is one thing. The second thing, it was a great year for NAB. It was really something that changed our perspective on the possibilities that we have moving forward with NAB. It's the combination of a stronger than ever partnership with PepsiCo. We are really in a good moment of doing the plan together. Both companies betting on Brazil as a important footprint for the growth and right decisions on the portfolio side. We increased capacity down here for Gatorade. We launched, we completed our SKU for Pepsi Black that we didn't have. H2OH! is really on fire, flying. Good decisions on the portfolio side. A partnership with PepsiCo is stronger than ever. We have BEES that really unlocked our capacity and possibilities of reach and connection with our customers. In the end, in the past, we had a funnel that it was the sales rep that has limited time to talk about our products. Now we have like, 25 minutes more of attention of our customers to our full portfolio. Algorithms that really suggest for customers, what type of products they want. A lot of attention from customer sides to really solve their day in one platform with this. NPS, customer satisfaction going up, usage going up, and a total different possibility that we have to increase and land innovation and have a broader portfolio. The combination of good portfolio decisions, good partnership with PepsiCo and BEES, it is really something that made us super confident that this business can be much bigger than than it is today. Thank you, Jean. Our next question comes from Thiago Callegari with BTG Pactual. Please go ahead. Hello, Jean. Hello, Lucas. two questions on my side. The first one on Brazil beer. When we look at the product mix in Q4, we see premium growing in the 20s, core plus growing roughly nine consolidated and appears that core plus underperformed in the quarter. I just wanted to understand how do you see the portfolio changing among these categories throughout 2023? And during 2022, if you could also comment how much mix helped to the 12% price gain that are delivered in Brazil beer. That's the first one. The second one on CAC, if you could just share more details in terms of the recovery path ahead. What was already achieved in Q4 and what we need to reach the historical volumes and profitability levels that you had there. How should we think about the timing for that? Those are the two ones. Thank you. Okay. Ricky, let me get the first one. It was a very strong year for us in volumes. In the end we grew 0.4% in 2021 in Q4, right? 3.5% in the full year. What we are seeing is that in last quarters, there were an acceleration on the premium and our core is very resilient. These are strong volumes in total, core resilient, a lot of trade up, we are seeing the premium very resilient. When you look in the middle, in the core plus, what we are seeing more and more is that we had a big boom with Brahma Duplo Malte during the pandemic. It was designed for the in-home occasion, it was designed to rejuvenate Brahma. As the consumers coming back to the trade, we are seeing the combination of Brahma Duplo Malte and Brahma. They are very positive. Brahma Duplo Malte is more helping to rejuvenate the full franchise of Brahma. We are seeing a interaction over there in Brahma Duplo Malte and Brahma, that we, that we are happy, that has been very beneficiary for the most important brand that we have in our portfolio. We have Spaten that we started really with this mindset of Spaten being core plus plus. The truth it is that Spaten is really moving into the premium segment. The prices on Spaten has been very resilient. As we're still supplying the full market in Brazil, demand is ahead of our supply capabilities. We are beginning to see, we are seeing more and more during this effect on Q3 and Q4 of Spaten moving ahead of the 130% price index that we have in the market. Spaten is really premiumizing and really going more on the premium basket. This number that I'm giving you, the 25%, does not have Spaten. We still are following Brahma Duplo Malte and Spaten together. They are, they were positive, this combination during the year. What we are seeing is that Spaten moving into premium and Brahma Duplo Malte helping to rejuvenate the full franchise of Brahma. This combination looks as something that is been very, very good for us. We are very excited with this move. Somehow I think it's I will begin to talk moving forward with Spaten more on the premium segment and Brahma Duplo Malte more inside the Brahma family. Okay. In terms of CAC, Ricky, I think two points to consider. I think number one, in Q4, we managed to continue to progress the plan, right, to recover following the stabilization of the supply chain issues, right? Glass bottles, imported products that we faced earlier in the year. We had set out an objective on our part, having stabilized the supply chain, to really recover coverage, so availability of the products, of the SKU that were unavailable in the past, given the supply chain disruption, right? We set specific targets to improve the level of coverage. The good news is that in Q4, the level of coverage continued to improve sequentially, okay, from Q3 to Q4. That's good news. The second KPI that we kind of decided to focus on as part of this recovery plan is to track the suggested price to consumer, right, that we work with, and the adherence of that by our clients. There's also, right, encouraging news there because from Q3 to Q4, the level of price adherence to our suggested PTC also continued to progress well on a sequential basis, right? Meanwhile, kind of inventories levels have kind of normalized, so there's less of an issue there, okay? In the Dominican Republic, I think there's good progress. Even when you break down volume performance by month, right? We saw already, we had November slightly better than October, and December was already much better than November and October. Again, early days, we still have a lot of work to do going into 2023. I think Q4, the recovery is going as planned. There was the tax settlement one-off that obviously impacted the overall performance, but that's kind of behind us. The focus in the Dominican Republic is really make sure that the execution in the marketplace and the availability and the health of our brands, right? Is progressing, is recovering. In terms of Panama. Panama, we also had some progress. I would say not as much as in the Dominican Republic, okay? I think Dominican Republic is one step ahead of Panama in terms of recovery. In Panama, what I would highlight of evolution in Q4 is really the NPS, so NPS. Our service level to clients from Q3 to Q4 also kind of step changed, so that's important progress. We saw some of that in the Dominican Republic, NPS was more pronounced, the evolution. In Panama, just to give you a data point, we went from the low point of NPS of 20% to 57% in Panama, right? During Q4. That's a step in the right direction. We still faced issues in terms of specific channels, particularly the traditional trade. Our market share there is still kind of below what we would like it to be, so we have to fix the execution of the brands and make the right portfolio bets in terms of resource allocation for our investments. Again, we're confident in the plan for 2023. In terms of the timeframe for the recovery, it's hard to give you a specific timeframe, but we do see, right, 2023 as a year where we can go back to organic EBITDA growth in CAC, right? That's an important objective of ours. We weren't happy with the overall performance of the business in 2022. We need to do a better job in 2023. Q4 has given us some early signs that give us confidence for 2023. Riqui, let me just go back. I think you had a second question that I didn't address. It was more on the rates... Mix ... on the mix and prices overall. I would say that somehow of this total net revenue per hectoliter that we had, a big chunk of it, like 75% of it was really rate. Then the rest of it, you should break it down, half of it being mix and mainly brand mix. Half of it would be overall margin pool that we have, like channels and trade. Okay. That's very helpful, Jean and Lucas. Thanks so much. Our next question comes from Ricardo Alves with Morgan Stanley. Please go ahead. Hi, Jean, Lucas. Thanks so much for the call. A couple of questions. One for Jean, Brazil Beer. Wanted to talk a little bit more about competition. The 4% volume performance, to the point that you made, the company's running at a high level. Back in October, I think that expectations were higher because of the World Cup. Just curious to see what, in your view, held back volumes from going beyond that 4%. Beyond the weather issue that we already discussed, but did you see any kind of consumer deceleration or perhaps fiercer competition, which I wanted to pick your brains on? I don't know, maybe competition directly or maybe one of your two largest competitors may have been more aggressive on the own trade channel. Just a little bit more color on the competition front. The second question, Lucas, if I may, on derivatives. The line in the quarter, if I'm not mistaken, BRL 530 million or so, we thought that that line also based on our last call, thought that, you know, because of Argentina and Brazil hedges, we were expecting a higher number. Just wanted you, if you could elaborate a little bit on that. Particularly considering Argentina hedging or the carry costs running above 100%. I think that maybe Jean alluded to that, maybe you're doing less hedges, just wanted to have more clarity just to, for the sake of modeling, if we should assume that what we saw in the fourth quarter could be something more consistent, for us to model going forward or, you know, if there should be a ramp up, on the derivatives line into the first quarter and the first half overall. Thanks again, everybody. Let me get the first one. Lucas get the second one. Ricardo, thank you for the question. Yeah. 4% volumes in Q4. Just to remember, this was ahead of... Q4, we saw sequentially, improvement on market share for us. In 2022 was a year where we gained market share overall. 4% were good volumes. I will try to give you my best guess here, okay? This is not the perfect numbers, but it's our best guess. My best guess is that the World Cup drove 1.5% of the volumes in the quarter. This was, we believe that some point in time, could be better than that. I think we could have 1% more if Brazil went to the finals, but they didn't. Just talking about Brazil. On the other hand, it was really we are seeing really the rainy weather in Q4 and a little bit in the beginning of this year that could have mitigated like 1 full point for us in Q4, the weather that we had that we had back there. This is more or less the numbers that we had for Q4. We are excited about market share gains. We believe that we can continue to gain market share during 2023. Our plans are really on this direction of gaining market share. There is still a lot of room for Spaten to grow our high-end brands. They are very solid. It was amazing to see in this return how regional pick it up, how Chopp Brahma in Brahma franchise overall is doing well, and how the core is resilient. We really believe that somehow we will be continued to gain market share. Yes, competitors are active. Brazil was always a market that where we with a very strong competitive environment. If you look back and to see everything that we did from 2019 to today, it was great. Our company is really on another level in terms of volumes, in terms of market share level. We are very excited about this whole critical mass that we have. Okay. speaking about the losses on derivative instruments, Ricardo, when we think of the evolution of that line in 2022, we need to look at both the carry costs for right, for hedging the dollar against the Brazilian real and the carry costs for hedging the Argentinian peso against the US dollar. In Q4, okay, what we saw was in terms of the Brazilian real hedges, we actually didn't see an increment because although the exposure was higher in Q4 of 2022 versus Q4 of 2021, the carry cost in Q4 of 2021 was already around 7%, a little over 7%, which was also the case for Q4 of 2022. The exposure went up, but the carry costs didn't have a material increase. Net-net, there wasn't a big impact in the quarter from the carry cost in Brazil. Okay? In Argentina, in the quarter, what we saw was a higher carry cost. If you look at the carry cost from Q4 2021, it was in the 60s%, okay? Whereas the hedging, the carry cost for Q4 2022 was around the 100% that you mentioned. Since Q3, when the moment we started to see the carry cost, right, go above 100%, it became really prohibitive. Even though, right, we have the policy in place with on average 12 months of hedging in advance with this window, right, 2 months to go longer, 2 months to go shorter, so it's a 10-14 month range. In Argentina's case, given that the cost became kind of prohibitive in our judgment, we started in Q3 to reduce, right. We reduced the level of hedging that we do until we see the carry costs, right, move away from the prohibitive levels that we witnessed in the second half of the year. Okay. What that means for Q4 is that although the carry cost went up, our overall exposure was lower because we started this process of hedging less overall in Argentina according to our the management of our hedging policy. Okay. For the year, for the year, the picture is slightly different because Argentina was still a factor. For the year, Brazil was also a relevant factor because if you take the overall view for the year, the carry cost in Brazil on average jumped from low single digits, around 4% to north of 7% for the year. Okay? That was a bigger impact if you take the yearly view. Going forward, we're still following the hedging policy, right, for currency and commodities. I would say that apart from the views that we've taken for the Argentinian peso, and Jean alluded to the fact that in addition to this decision around financial hedging less than in the past, we're also reviewing, right, our local sourcing and the terms of that, to try and have more of our contracts, right, denominated linked to local currency inflation and not the US dollar. There's a work plan to get more operational hedges in place. Okay? Going forward, apart from the view on Argentina Right. I think it's still reasonable to work within our 12-month on average hedging for currencies, for aluminum, for barley and whatnot. Okay? That's very helpful. Thank you, Jean. Thank you, Lucas, as well. The next question comes from Robert Ottenstein with Evercore. Please go ahead. Great. Thank you very much. A couple here. You mentioned, in the call, I think, on the press release, positive brand health metrics in Brazil in beer. Is there any way that you can give us any sort of quantification on that, how it compares to the past, just so that, you know, we kind of put more meat on the statement? You know, maybe the particular brands, any order of magnitude, anything around that? In a related question, you know, a couple of years ago, you went on a journey of really kind of changing the culture of Ambev. You changed some of the incentive programs, the targets. You know, perhaps if you can give us an update on those changes and how those have improved, you know, your execution, you know, what you've liked so far from those changes, what still needs to be done. Thank you. Okay. Robert, talking about brands first, I would mention, we have a metric that we follow of our full portfolio that we ask. If one of our brands is a brand that the consumers love. The question is, do you love one of these brands? We put our brands in the other brands over there. We had in Brazil, by the end of 2019, 44 million consumers mentioning that one of our brands were a loved brand by them. We ended up 2022 with 49 million consumers mentioning that one of our brands is a loved brand by them. I think this is the magnitude of impact on consumers that our portfolio had in this preview before the pandemic and then right now. This is the growth is very concentrated in the brands that we decided, that we picked to ignite. And the growth is very concentrated on Brahma, with Brahma Duplo Malte, the Brahma franchise, Beck's, Corona, Stella and Budweiser. Okay? These are the four or five brands that really move the needle. Now we are seeing Spaten really arriving with a lot of power for a first-year brand. This is the type of numbers that I can share with you. Moving into culture. Yes, we've been working a lot on culture revolution. Like back there in 2018, we had a clear view that our growth matrix had changed for the future that so the so what we did in the previous 20 years was not the same things that we should do in the next 20 to be a successful company. Our growth matrix were more on reconnection with our community and ecosystem. It was really about understanding pain points and innovating customers and consumers, and then using this window of opportunity to transform the company into technology. When we look at this, what we needed to do in this 20 years, it was clear for us that our culture has to evolve. We really maintained the roots of a company that has really ambition and dream big. We have this mindset that this company is owned by the employees. We really sustained that, we really brought 3 new behaviors, values that we are working a lot. That is collaboration, there is active listening and long-term perspective. These 3 things are really embedded in the evolution of our culture. We have been measuring this in our climate surveys, engagement surveys, we are happy with the progress that we made. You know that culture evolution is things that takes time. You have to live every day. I have to really, be an example of that. We really have to build the habits, but we are very happy with the progress that we've been made on that matter. Great. Just to follow up on the brand health metrics, and that was a great number. Was that increase more pronounced than any particular part of the country? Does that open up opportunities or suggest opportunities in other regions? Was it relative to any particular demographic? What we are seeing that, I can't pinpoint one region, specifically, but somehow, a lot of these efforts, they are coming, in, the legal drinking age population of 18 to 25. What we are seeing is that this population, we are really picking up, and we are bringing more, women, to connect with our brands too. I think these are two, drivers of connection. That's fantastic. Thank you very much. Our next question comes from Thiago Bortoluci with Goldman Sachs. Please go ahead. Yes. Hey, Jean. Hey, Lucas. Good afternoon, everyone, and thanks for taking my questions. I'd like to explore a little bit more the dynamics on cost inflation and pricing, right? You have this guidance, right? From what I understand and what I can see in the implied curve, it really seems that the cost inflation for Brazil beer is much more front-loaded, right, in the first semester. If this is right, and assuming this is, would it change at all your pricing strategy and the traditional pricing calendar that you typically follow in the year, in the sense of eventually you're trying to anticipate a little bit the pricing to fully offset the inflation already in the beginning of the year? This is the first part of the question. The second one, you have still a range, right, of 6%-10%? Obviously, I understand there's volatility, and we'll only know for sure once you go for it. From the uncovered part of your cash costs, right, which is currently the largest component that's yet to be covered? Those are the questions. Thank you very much. Okay. Thank you. The first question is, so we made the decision to disconnect the pricing actions that we have the decision, then, disconnect with our costs, right? I mentioned that, right or wrong, that was the decision to really look into consumer pockets in brand power, in demand, and really made the decisions on pricing more looking into consumers than looking in cyclical effects and calendar effects of costs. We're gonna maintain that. We are really making our decision on pricing, understanding disposable income, understanding brand equity, understanding consumer demand. We will be very consistent on that matter, of really maintaining beer included in the basket of our consumers and desired, okay? Somehow we see the effects of costs in a different calendar, that's true, but we will not change the way we price because of that. We have been maintaining that for, like, two years and a half, and we're gonna continue on that direction. The good part is that the things are coming together. We are seeing resilient elasticities in consumer demand of our portfolio, and we are seeing now our costs really coming back to some normality, to some mean. This naturally will make us to be in a better position in terms of margins. Okay. Just to add on the, on the non-commodity inflation, I would highlight a few things here, Thiago. I think, one, mix is a factor, right? Depending on how our returnable glass bottle volumes perform versus our can volumes, right, during the year, that can have an impact, okay? That's something to consider. In addition to that, if you take... There are some of our input costs, part of the price is linked to the commodity cost, the core commodity, like aluminum, right, which follows the LME. Another part of the price equation is linked to local inflation, things like labor. We have fixed industrial costs that also need to be considered. What we're seeing in the non-commodity side of the equation, in addition to mix, is just an escalation, right, overall, with the non-core that's linked to the commodity itself, and that's mostly labor, and fixed industrial costs. Okay. That's great, Lucas and Jean. Thank you very much. Our next question comes from Felipe Ucros with Scotiabank. Please go ahead. Thanks, operator. Good morning, Jean and Lucas. Thanks for the space. Maybe a follow-up on BEES. You mentioned that obviously there's gonna be more focus in Canada, and the market is clearly very different, right? You've been very focused on BEES in Dominican Republic, Brazil, Panama, Argentina, but now this is kind of a market with a very different makeup on the channels. Just wondering how you approach the market differently, given that situation. I also wanted to do another question on the efficiency of selling and marketing expenses. ABI mentioned how that number has been fixed at about $7 billion per year for the last four or five years, I think they mentioned. Somehow they're managing to move up the ranks on all sorts of different awards. Just wondering if you can talk about how that translates and what's happening at Ambev. Thank you. First talking about BEES. First of all, we are very excited about BEES. We talk a lot about the marketplace and the partnership and the alliances that we are doing with BEES. We are really increasing our alliances with Diageo, with Pernod Ricard. Mondelēz is really a company that we are collaborating in this. Edson Queiroz, there is a water brand in Brazil, PepsiCo. We talked a lot about the marketplace effect and the ability for us to bring to really be the connection of suppliers and customers and be in the middle. We are very excited because in Brazil we are increasing sequentially value on that, revenues, that what the margins are getting better, our alliances are getting deeper. Customers they like. The truth it is that the BEES is is really a transformational tool of our company that it's the frontline of our business. And we have to rethink the GTM as it is needed and use BEES as the platform that will make us much more productive, more efficient in terms of sales force efficiency, in terms of changing the role of the sales rep to be more of a sales representative that work on on on pull and not on push. BEES, we don't talk that much, but is my frontline, is my new sales force. Having said that, we are really supporting that it really be our frontline in every place that we are. We started in Dominican Republic, we came to Brazil, we went to Argentina. Paraguay is really moving. We are implementing in Bolivia, naturally Canada is coming. It's really about the connection with our customers and the efficiency of our sales force and the ability that we to be more productive in our core business. It's not just about the value that brings from the alliance, but be more efficient on our core when you talk about sales rep, trucks, and deliveries. It will help us across the board on that, and that's how it's gonna help Canada. Of course, Canada had its particularities, but somehow Our company there will be more productive with BEES. Just to add specifically on Canada. BEES in Canada, I think a good way to think about it is one of our priorities is to get it right in Quebec, because in Quebec there we have a route to market that allows us to go straight to the client. That's an opportunity for us to replicate in Quebec many of the learnings we've had in terms of implementing BEES in places like Dominican Republic and in Brazil. I think in Quebec, which is a priority, right? I think the ambition is to make Quebec kind of a benchmark, right? For more developed markets in terms of BEES execution. Okay? Then you have the other regions of Canada where the route to market is not direct. You go through The Beer Store in Ontario. You have the liquor board in British Columbia. In those regions, of course, we have to kind of adapt how BEES will be used as a solution. Irrespective of the different route to markets in Canada, we see an opportunity for BEES to become an industry-leading B2B solution that's gonna kind of bring digital net revenue and be adopted by the packs across the country. Another aspect of Canada, no different from other markets, is BEES allows us to not only deliver incremental services to our clients, but also bring in other companies as partners for the platform, right? We're starting to see that happen in Brazil, and then we're starting to see that happening in the Dominican Republic as well. That's another opportunity for Canada during the course of 2023 and the years to come. This concludes our question and answer session. I would like to turn the conference back over to Mr. Jean Jereissati for any closing remarks. Thank you very much. Thank you everyone who joined the call for your time and attention. 2022 was a solid year on the strategic, operational, cultural and finance sides. Another year of record volumes, with better net revenue per hectoliter performance and double-digit normalized EBITDA growth ahead of what we promised, ahead of 2021. Net income also grew double-digits. ROIC expanded and economic profit also improved despite the higher cost of capital. In what we see for 2023, our ambitions are top-line growth remains a key priority with revenue, net revenue performance driven more by net revenue per hectoliter than volumes. On bottom line, as 2022 was better than 2021 and H2 of 2022 was better than H1 of 2022, we will work to continue keep it up to 2023 to be better than 2022. Profitability both in terms of ROIC as well as margins and free cash flow generation. Although we are expecting a tougher Q1, in terms of, mainly of cash COGS given the higher prices on commodities. Really excited, really optimistic about 2023 and thank you very much. See you in May and have a great day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Culture is basically what we believe in, how we interact with each other, what are the rituals and things that are part of our day-to-day. Our culture should not be like something that is strange to you. It should not go against any of your values. It's just like the way that we in the company write down things that we expect from people for them to understand, ways that we.