Ambev S.A. (NYSE:ABEV) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 11:00 am ET


Ambev S.A. (NYSE:ABEV) Q2 2020 Earnings Conference Call - Final Transcript


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Q & A

[Operator instructions] Our first question is from Thiago Duarte of BTG. Please go ahead.

Thiago Duarte

Thank you very much. Hello everybody. Thanks for taking my question. I have two questions, actually.

The first one is related to box per hectoliter increase in Brazil beer. You guys mentioned in the release the impact of FX translation, as well as mix in channels. So, just wondering if you could elaborate a little bit on the impacts of each one of those in terms of COGS, unitary COGS and Brazil Beer. And the second one, if you could -- you mentioned that you believe that you're up through the market year over year in the quarter, in Brazil Beer itself.

Just wondering if you could elaborate in terms of the different segments in the market, how you perform relative to the competition in premium and mainstream specifically? It was a little bit of a surprise to see the drop in premium, how on-premise seems to be so important there. So, just to understand the magnitude of the variations in each of these categories in your volumes.

Jean Jereissati

Okay. So, thank you very much for the question, [indecipherable]. So, I'll get the volumes and the market share first. And then, Lucas can talk about the COGS, okay? So as you see in our report, we saw a recovery on volumes sequentially from April in Brazil.

And this was a mix of things that we have seen in the market. It is pretty much the resilience of our category. What we saw in terms of occasions, it is really that this socialized out-of-home occasion was -- has been compensated by that relax at home location, okay? So this is something that is going on in the market that normally happens in more mature markets, and it was -- the strength was accelerated here in Brazil. And I think we were the first one really to pick this journey and accelerate it and bet on it.

So, this was important, not all the countries we saw this transition of occasions and the new occasions popping up. We saw that very clear here in Brazil, weekdays, improving performance, consumers drinking at home on Mondays, Tuesdays, Wednesdays. And then, I really believe that we were very happy in terms of resource allocation following the consumer and really going in that direction, OKAY? We saw too some reduction on the beach drinking, OKAY? So when we do researches with consumers, and so that was good news for the industry overall. Having said that, our performance we were -- with this mindset of really following the consumer, our channel strategy was very agile, and we were very happy to be migrate all the resources that we have for mom-and-pops that was the channel that's growing most during the pandemic, and we have a great reach to get this thing right.

And because consumers are really looking for the purchase in shorter journeys. So, this channel is a strong one, and we have been