Welcome to the Anheuser-Busch InBev’s Full Year 2019 Earnings Conference Call and Webcast. Hosting the call today from AB InBev are Mr. Carlos Brito, Chief Executive Officer; and Mr. Felipe Dutra, Chief Financial and Solutions Officer. To access the slides accompanying today’s call, please visit AB InBev’s website at www.ab-inbev.com and click on the Investors tab and the Reports and Results Center page. Today’s webcast will be available for on-demand playback later today. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions] Some of the information provided during the conference call may contain statements of future expectations and other forward-looking statements. These expectations are based on management’s current views and assumptions and involve known and unknown risks and uncertainties. It is possible that AB InBev’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in the forward-looking statement. For a discussion of some of the risks factors and important factors that could affect AB InBev’s future results, see Risk Factors in the Company’s latest annual report on Form 20-F filed with the Securities and Exchange Commission on the 22nd of March 2019. AB InBev assumes no obligation to update or revise any forward-looking information provided during the conference call and shall not be liable for any action taken in reliance upon such information. It is now my pleasure to turn the floor over to Mr. Carlos Brito. Sir, you may begin.

Thank you, Maria, and good morning, good afternoon, everyone. Welcome to our full year and fourth quarter 2019 earnings call. Today I'll be taking you through the results of the full year and fourth quarter including highlights from our key markets. I'll then spend a few minutes on our non-alcohol and direct-to-consumer businesses and provide you with an update on our Better World agenda, before Felipe addresses our financials. We'll then be happy to take your questions. Our performance in 2019 was below our expectations and we are not satisfied with these results. There were many successes but we also faced many challenges. This year we took steps to evolve our revenue growth to be more balanced between volume and revenue per hectoliter, which is critical to long-term sustainable top and bottom line growth. We grew volumes by more than 1%, our third consecutive year of volume growth with the rate of growth accelerating each year. This contributed to a strong and balanced top line growth led by a broad set of markets including Brazil, Mexico, Colombia and South Africa. We saw an improved performance from the U.S., our largest market, which delivered revenue and EBITDA growth and improved market share trends. We made significant progress toward our deleveraging commitments, resulting in a leverage ratio of four times at the end of the year, accounting for the proceeds expected to be received from the divestment of the Australian operations while excluding the last 12-month EBITDA from the Australian operations. That being said, this year was not without its challenges. We faced significant headwinds in our cost base, driven primarily by the highest annual increase in commodity and transactional currency costs in the past decade, which held back EBITDA growth by approximately 200 basis points. We also faced challenging macroeconomic environments…

Thank you, Brito. Good morning. Good afternoon, everyone. Let's start, with an update on our net finance costs. Net finance costs in the year, were over $4.3 billion, compared to over $6.8 billion in 2018. This decrease was mainly driven by lower mark-to-market gains, related to the hedging of our share-based payment programs of nearly $900 million, compared to a loss of nearly $1.8 billion, in 2018. Excluding the impact of the gains and losses, related to the hedging of our share-based payment programs. Our ETR in 2019 was 24.9%, slightly better than the low end of our guidance. This was due to a significantly lower ETR, in the fourth quarter, driven by accrued benefits from interest on capital in Brazil. Our effective tax rate guidance for the full year 2020 is between 27% and 29%, excluding any gains and losses, related to the hedging of our share-based payment programs. The expected increase in ETR is driven by the full impact of the U.S. tax reform, record-low interest rates in Brazil, which minimize the interest on capital benefit. And the change in the country mix. Moving on now to earnings per share, our underlying EPS this year, defined as our normalized EPS excluding the impact of mark-to-market related to the hedging of our share-based payment programs. And hyperinflation adjustment in Argentina, decreased by $0.47 from $4.10 to $3.63. The decrease was mainly driven by lower normalized EBIT. And net finance costs, excluding the impact of the hedging of our share-based payment programs. We closed fiscal year 2019, with $13.4 billion of cash flow from operations, an EBITDA margin of 40.3%, and converted 25.5% of our net revenue into cash, well ahead of most of our peers, in all three metrics. Moving to core working capital, another important dimension for cash…

Thank you. The floor is now open for questions. [Operator Instructions] Our first question is coming from the line of Robert Ottenstein of Evercore ISI.

Great, thank you very much. Two questions, one, the revenue per hectoliter was disappointing. And it's -- you gave some good explanations for that, in terms of consumer mix, affordability initiatives, the non-beer. And so all of that makes sense, but it is a metric that is important. It's one that in the past we followed to get a sense of how you're doing in revenue management. So I'm wondering, if you can give us a sense of what the revenue per hectoliter looked like for just beer or any kind of comparable measure on that metric. So that would be number one. And then second, I was just wondering, Brito, in particular, if you could give us your assessment of the hard seltzer outlook, in the U.S. Based on our numbers, it looks like you're getting about an 18% market share. I know it's early days. Does that sound about right? And do you see hard seltzers being margin accretive to the U.S. business? Thank you.

Thank you Robert. So, to your first question and then about net revenue per hectoliter in the fourth quarter. So before I go there, let me just remind us that the net revenue for the full year was 3.1%. In the fourth quarter it came down. Reasons why it came down; first, I mean in Europe, we're expanding our portfolio into new customer occasions and price tiers within premium. So for example by the launch of Budweiser in Netherlands and France that's early days but doing very well. This, of course, is a dilutive impact on our net revenue per hectoliter, but it's incremental to our portfolio because it addresses price segments we were -- in which we were totally absent. Then in Brazil, we saw the impact of category mix due to the rapid growth of non-beer versus beer. So for example beer grew 3%. CSD carbonated soft drinks; water; everything else that's non-alcohol grew 11%. So that, of course, the non-beer business has a lower revenue per hectoliter. But again it's incremental business. So another thing in Brazil is that we have implemented some tactical revenue management initiatives. You remember that in Q3, we had a price increase that had some issues in terms of its implementation given the competitive reaction where competitive reaction that took price down at the same time. And then as these things came to more of a normality, but it only came halfway through the fourth quarter, so you still have some impact in that in the fourth quarter. In China, we also had some tough comps. If you remember Q4 last year in China, our revenue per hectoliter grew over 10%. So we're cycling that in China. So I think those are some reasons why the net revenue per hectoliter in the…

Is it margin-accretive? Would you expect hard seltzers to be margin accretive for you in the U.S. this year? Or do you need more scale?

It is once production is streamlined, because today it's not yet there. As you can imagine we have to invest. And today we're still dependent on a couple of beers, a couple of breweries to cover the whole country. But as is often the case as it grows then we go for the breweries. And then, of course -- and that's what our U.S. business guys announced. They announced an investment of $100 million in our Beyond Beer big bets in terms of OpEx and CapEx. And some of that CapEx is not only for capacity but also for localization of capacity, so we can cover the whole U.S. from a more streamlined perspective.

Thank you very much.

Thank you.

Our next question comes from the line of Trevor Stirling from Bernstein. Trevor, your line is open. Make sure you are not on mute. And we'll move on to our next question. Comes from the line of Edward Mundy of Jefferies.

Accelerate versus the 4.6% you did in fiscal 2013 to 2017 given the more growthy portfolio...

Ed, we didn't get the first part of your question for some reason. Can you start again please?

So is that better?

Yes.

Good okay. So the first part of my question is that back in the capital markets event in South Africa in 2018 -- you didn't provide guidance, but I think you indicated that you expected group growth to accelerate versus the last five years from fiscal 2013 to 2017 of 4.6% partly because of the more growthy portfolio that you're getting from SABMiller as well as the enhanced revenue management toolkit from the category expansion model framework. I appreciate in the very near-term the external environment has been incredibly tough. But has anything changed in how you look at the opportunity today for your business for growth? And my follow-up question is around COVID-19. And I appreciate you don't have a crystal ball on where COVID-19 ultimately ends up, but I was wondering whether you could elaborate a little bit more around some of the assumptions around the scale and magnitude of the virus as to how it relates to your guidance of 2% to 5% EBITDA growth.

No. I mean given what we said in terms of our belief that we can grow top-line faster if that was your question in South Africa in August that year we continue to believe the same thing. This year our top-line was below that average. It was 4.3% as opposed to 4.6% because of a couple of things. First, China in the second half decelerated right because of the nightlife channel. Second, Brazil, Korea we had -- Korea we had macro issues. The industry is down by high single-digits. We also had a price increase that we implemented and when looking back the execution of that price increase was not optimal. The same can be said about Brazil in that consumers remain under pressure. Things are getting better, but the price increase was done at a moment when the competitors were doing something very different and that took a while for us to streamline. And because of that we lost volume and also because we are underindexed in some fast-growing segments like seltzer and pure malt. So I mean as we fix pure malt as we do in Brazil -- think about this pure malt in Brazil we had no presence. Today in less than a year or so we have the number one and three position as of the fourth quarter already in the pure malt section -- sector in Brazil. And we would like to have the first three positions there. Seltzer, we're -- we came from the high from a 10% share but we are growing very fast and we think the portfolio approach will get us to number two position in that segment. In premium in South Africa, for example, we had an amazing performance this quarter again record-high share, but still below our fair share.…

Thank you.

Thank you, Ed.

Our next question comes from the line of Trevor Stirling of Bernstein.

Hello, Brito can you hear me this time?

Yes.

Great. Brito in your prepared remarks and in the press release, you talked a little bit about being not satisfied and you talked about some of the headwinds that emerged over 2019 that weren't there when you started the year. But if you look at the elements of performance that were actually inside your own control, which elements of your own say within-control performance are you not satisfied with and would you aim to resolve next year?

Well, I think as you said some elements we anticipated for the market just to be -- in the name of completeness I'll start from there, Trevor. So, we said that the second half of the year will be tougher because of the timing of our commodity and FX hedges. We also said it would be tougher because of the sales and marketing phasing coming from our World Cup year a year before. We also said that there was some inventory in China that was advanced in Q2 for summer activities. Every year is a bit different. This year it was Q2 and that would take away a little bit from Q3. So, all that was said was public and all that. On top of that, things we didn't expect was; first, the price increase we executed in Brazil in the first week of July in terms of execution was not very successful not because we executed it poorly but because we didn't anticipate market participants' reactions. And some participants took their price down as we were taking our price up. So, that took a while some months including into the fourth quarter with volume impacts to get fixed. Let's put it this way, to find its new balance. So, we lost volume in Q3 and part of Q4 in a market that's very important for us in a period where that quarter is important. The last quarter for Brazil is the main quarter. So, that was not in our plans. In Korea, the same thing happened. We implemented a price increase in April. Every three years we implement a price increase in Korea. We implemented one in April; the same thing happened. Competition took a different view. And then we had to roll back prices in October. So, again, we lost a lot of the summer in South Korea. So, I think those two things are things that looking back we could have done better. Nightlife channel, it was hard to predict because it was something that was mandated by -- it was an externality. Maybe we could have shifted resources faster as we're doing now to other channels. And as I said before, we under-indexed in some fast-growing channels like seltzer, pure malts, and example South Africa and premium. We're growing all these channels but maybe we could have started six months a year before than whichever time we started. So, I think those are things that are within our control. We learned from it. We intend to do a better job going forward. But you're right some things were externalities. We had no control. And we normally focus on the things we control. We're very avid with ourselves as you know and don't take it -- we don't take this lightly. So, we are learning and trying to see how we can do it better next time around.

And just my follow-up question Brito, you talked about -- in Brazil at the start about part of the problem was that beer grew 3% and non-beer 11%. But if I look at beer Brazil from the AmBev accounts, price/mix there was down 20 bps in the quarter. Was that due to rebating of price increases to try and regain some volume in Q4?

Well, that was due to many things including the one I just mentioned that the issue we have with the execution of the price increase in the third quarter bleeds -- bled into the fourth quarter. So, that, of course, affected the year-on-year comparison. Also this quarter the positive brand mix from premium growth was more than offset by these tactical revenue management initiatives. So, that offset. And the negative geographic mix, right from expanding more in the north and the northeast as pure malt started growing and accelerating, pure malt is more prevalent these days in the north and the northeast. So, that has a geographic mix -- and you know that we make less of a margin those margins because of socioeconomic classes. The lower socioeconomic classes are more prevalent there. As well as some smart affordability initiatives like the growth of our local craft beers. On top of all that, you also had non-alcohol as you said growing way ahead of beer with a lower net revenue per hectoliter but incremental margins. So, I mean you put all these in the mix that was why we didn't grow much in terms of net revenue per hectoliter. On the other hand, if you look at the full year, in Brazil, net revenue per hectoliter grew by 1.9%. So -- I mean, of course, impacted by the fourth quarter. So, I mean we had good growth in net revenue per hectoliter. Net revenue in Brazil full year grew 7%. Total volume in Brazil grew 5%. So, I'm very happy to see Brazil back to growth. This is great. Brazil hasn't grown volume for some years, so it's great to see net revenue more balanced with volume growth in both beer and non-beer. It's great to see premium growing double-digits even in the face of a cost of sales that went up by 15.5% during the year. So, that's something that was really brutal. Doesn't happen all the time. And that cost of sales took -- let me check here took 300 basis points from our EBITDA. So, the EBITDA in Brazil declined by 4.4%. Three percentage points of that 4% was the commodity and FX that was higher than any time we can remember. So, I mean that's also something that should be mentioned.

Thank you very much Brito.

You're welcome.

Our next question comes from the line of Celine Pannuti of JPMorgan.

Yes, thanks very much. Good morning everyone. My question is on -- a follow-up on the price/mix. I wanted to understand first of all if you could help us how big is smart affordability as a percentage of sales in 2019? And what would be the plan for 2020 in terms of rollout? And just to what you are seeing in terms of pricing, do you think that the environment is looking better in terms of pricing increase for 2020? I'm also asking that because you're guiding for raw material costs and transaction to be around mid-single digits for 2020. In that regard, it would be helpful if you could tell us, why is it that you have mid-single-digit? I presume transaction is a big impact. And in which countries we should expect this to be the most impactful? Thank you.

In terms of smart affordability, let me just make sure we all talk the same language on that. So again, this belongs to the category expansion framework. So it's not a new idea. It's just that, we've been active in all dimensions of – more active in all dimensions of the category expansion framework and less active on smart affordability. So now that, we have more studies, more insights, more learnings because we try different things in different places and we build toolkits to be replicable, we now can be more active. In especially markets like Africa and Latin America, there's a lot to be done there because people need – a lot of people don't consume beer, because they can't afford it, right? And if this is incremental volume done the right way, this can be dilutive to net revenue, but it's incremental to dollars in terms of margins. So we have been expanding, our portfolio to offer more accessible price points. It does include new packaging formats and also new beers brewed with local crops. So, smart affordability is a big umbrella that includes all this. These offerings drive incremental profit, but generally have a dilutive effect, but net revenue per hectoliter is always the same. And – but they are contributing meaningfully to growth in many of our markets, including Brazil, Argentina, Colombia, Ecuador, South Africa. So that was your first question. We don't have any guidance that we're giving at this point of how big or how impactful this will be. But make sure that this is part of the category expansion framework. Category expansion framework is about enlarging the category, so we can create more value in the category. It's not about getting net revenue down. In the category expansion framework, you have five dimensions. You have core with subdivisions of classic and easy drinking. You have flavors, you have styles, you have premium and you have smart affordability. Smart affordability is the only one of the five that could dilute net revenue per hectoliter, but it can bring new consumers to the category. You have to remember that in these geographies, there are many people that either consume cheap alcohol that has no quality from B brands or illegal alcohol. So that's what we're trying to do: trying to get these consumers into our category safer for them as well, because of branded products, more high-quality products. So – but again, this doesn't live by itself. This lives in the context of the category expansion framework that has five dimensions. This is one of them and the only one that goes from core down. That's the first thing. Your second question was about price. And can you just remind us exactly – you asked whether the environment is better for price, right?

Yeah. I mean, you mentioned earlier that it has been difficult for you execution of pricing has been complicated. And since you are mentioning still a high raw material cost inflation will you be able this year to get better pricing?

Yeah. No, no, no. I mentioned two markets. I mentioned Brazil and South Korea. I didn't say the price was being tough. I said that pricing execution looking back maybe could have done – could have been better planned, right? So that's what we learned from it that at the end the market moved somewhat, but in a different timing. And we would normally do pricing in a different time. We tried to do in a different time from normal and it didn't work so well. So it was more on the execution piece than believing that there is no pricing possibilities, because again remember as we grow premium, as we grow styles as again within the category expansion framework there are many things that can create net revenue opportunities per hectoliter not because of price, but because of mix. So that's the story in China, where we don't do a lot of price increases but the mix gets net revenue to grow every year by 6%, 7% at least in the past. And again, when you get all factors embedded we've given an EBITDA guidance for next year given what we know today about COVID-19 of EBITDA growing organically between 2% and 5%. So I think this encompasses everything. And we also gave guidance, including for the first quarter and said that the growth organically of EBITDA, total ABI should be around minus 10%, because of all the things we said tough comparable in Brazil, right? Let's remember that Brazil had an amazing quarter last year and that we're comping that and that we have the COVID-19 that is impacting the China business. Thank you.

Our next question comes from the line of Carlos Laboy of HSBC.

Yes. Good morning, everyone. Brito we see considerable discounting in some of our emerging market tours of local premium brands whether it's maybe Bohemia in Brazil, Castle Lite in South Africa or even of global brands in some of these markets. When is it helpful and strategically important to discount? And when is it destructive? How does this fit into your broader strategy for building these premium brands?

Well, this thing a price ladder Laboy as you know is very dynamic. And for example – I'll give you an example. Pure malt in Brazil was a segment that five years was non-existent. All of a sudden you create a segment called pure malt. We didn't create, but all of a sudden somebody created others jumped into that bandwagon including us. And now Bohemia is the number one in there. So Bohemia was in a place, which was premium segment. The premium segment was more and more populated by international brands. So Bohemia was losing a little bit of that edge of premium. So it went to the premium segment still premium with improvements within pure malt and now it's the number one category. So it's now called core plus. So yes, we repositioned Bohemia from premium to core plus, because we asked Bohemia to play a different role, because now we have a big portfolio of local core brands – I mean local, craft brands and premium brands in the premium segment. And Bohemia you can find a position for everybody, but in the premium segment Bohemia had an amazing role to play so much so that it's grown by triple digits in the last three years, and it became only in three years the leader in the pure malt segment at a core-plus price as opposed to be walking sideways or backwards in the premium segment. So I think you have to be – you have to understand that some brands will play different roles because sometimes segments have to get redefined when a new segment comes in, right? So Pure Malt in Brazil redefined the segment, so it's a portfolio strategy. That's why it's good to have brands because sometimes just like a soccer player sitting…

Thank you.

You’re welcome.

Our next question comes from the line of Simon Hales of Citi.

Thank you, morning for two. A couple please for me. I wonder just following on Brito on your comments around the category and sort of management framework and the increased implementation of the affordability strategy. What does the strategy sort of mean? And how do you think about perhaps medium-term group margins -- margin development from here? Do you think you can still expand margins over the medium term with the application of that strategic approach as it stands? And secondly just on the -- oh sorry. Sorry Brito.

I think so I think so because you should think of the category expansion framework it has core in the middle, you have styles going to one side, flavors going to the other side and you have premium going up and you have smart affordability going from core down. We've been active in all five, but not at the same intensity that we've been in core. And then we started doing premium. We still have lots to do in flavor and styles and those are very accretive to margins. So smart affordability is the only one that dilutes margin, but brings new consumers into the category and it's incremental to margin dollars. So I mean, if you look at all five dimensions being only one dilutive all the other four are neutral to incremental. And we are not yet at full steam in all 4.

Got it. And then just secondly, just going back to the U.S. business obviously a lot of innovation coming into the portfolio again in 2020, you talked about the -- obviously the hard seltzers. How do we think about sort of the investment that's going in behind that? And I hear what you say around the CapEx side, what about marketing investment for 2020? Should we expect a step change in the business? Or was it just a reallocation of spend within that U.S. portfolio to support all that innovation?

Well let me tell you, Simon if you don't mind, I will step back and talk about the five commercial priorities in the U.S. with numbers, okay, because again those are metrics. So the first priority is to grow Core Plus. We went from 6% of total market to 8% in two years driven by Michelob Ultra. The second one is to grow superpremium. We're flat, so here we can do a better job. But we're flat at 20% of the segment. In premium, we wanted to double -- we wanted to multiply by 10 times our volume. And in two years, we double it from -- we double from two years ago. Mainstream that's core and value we want to stabilize. Two years ago we're losing 60 bps that's core and value; now we're losing 13 bps. And Beyond Beer that we were declining 6% two years ago we're now double-digit revenue growth. And that is what's causing our net revenue in the U.S. to grow this year at 0.5%; EBITDA 1.1%; margin expansion of 28 bps going to 40.8% EBITDA margin in a very competitive market. So that is what we're doing. And to support the growth of Beyond Beer especially seltzer, we are going to commit to 20% increase in investments in the U.S. And that's mostly CapEx, but also some OpEx behind Michelob Ultra Pure Gold, behind Michelob Ultra mother brands and behind seltzers in terms of capacity and also in terms of canned wine and canned cocktails. So I mean all these things are mostly CapEx. And in terms of OpEx there's a lot of resource reallocation because that's where growth is.

Great. That’s very helpful. Thank you.

Thanks Simon.

Our next question comes from the line of Andrea Pistacchi of Deutsche Bank.

Yes, hi. Thank you. I first have a question for Felipe on the tax rate and then a quick follow-up. So one of the reasons for the higher tax rate guidance is the U.S. fiscal reform you said and the -- I think the nondeductibility of your interest charge. Is there a path over the medium term to reduce the tax rate as you delever the balance sheet? And then Brito going slightly deeper on Beyond Beer in the U.S., you talked about seltzers. You've just referred in the previous question to canned wine Babe; and Cutwater sort of ready-to-make cocktails. Can you just talk a little bit more about these how they're performing the size of these now? And are we close to the point where these two brands in particular can start to make a more meaningful contribution to the total?

Andrea, this is Felipe. On the effective tax rate, the point on U.S. tax reform is the full implementation of that. I would say the most relevant impact it's also coming from the country mix as there has been a significant shift. And this thing is less sensitive to the leverage level. And what happens if you recollect at the very beginning part of the SAB funding was not deductible. There is room for -- still for deleveraging and that should help. But I think for 2020, you should stick to the current guidance of 27% to 29%.

And on the Beyond Beer, Andrea let me just recap that Beyond Beer. So big growth driver for the industry, so that's something we have to take advantage profitable, brings a lot of consumers back incremental. So, first the seltzer, we already spoke about it. Second, canned wine and spirits. When we started ZX five years ago, one of the missions of ZX was to look at alcohol adjacencies or other alcohol segments, where there were profit pools and volumes that we're not using or potent and go there with some innovative approaches. And that was the canned wine, the canned spirits, and now ready-to-drink works as well though our broad based machine for cocktails and beer, which has been around in the U.S. not really commercial in many states, which allow us to gain incremental volume outside the beer category. We're leveraging our existing capabilities and assets. The other one was to fill the category white space focusing on brands like Kombrewcha, which is kombucha with alcohol that have a higher opportunity to grow in micro trends. Southwest is big on that. But we continue to bet on that, because that could be something that connects to health and wellness, very low ABV, something that health and wellness consumers are willing to pay a premium for. And then leveraging the improved performance of our existing brands like the Ritas. We're seeing improved brand health and volume trend performance in Ritas. And the idea really is to establish this as a business unit and that's what we did in November last year when we established a new Beyond Beer business unit, which allow us to focus on developing this portfolio to meet consumer needs in these different categories and occasions. So, we're very committed to Beyond Beer. That's why we announced this investment mainly on seltzer, but not only but also for canned wine and spirits. And we think there's a lot of interesting volume and margins to be captured here.

Okay. Thanks.

And ladies and gentlemen, we have time for one more question. Our last question comes from the line of Sanjeet Aujla of Credit Suisse.

Hi, Brito and Felipe. So you've been talking about category expansion for a couple of years now. It seems like the pace of innovation has stepped up, but it doesn't seem like it's been enough. Is there a risk you're trying to do too much at once and perhaps spreading yourself too thinly and losing focus on the core brands?

No. I don't think so Sanjeet, because I mean the teams that are doing this are separate teams. That's why -- one of the reasons why ZX was put in place. So, core is more than 70% of our business. We want to continue to hero the core within our company but we know that these days this is not only about focus in one thing. You have to do and. Again, the category expansion framework gives a good roadway to do that. So, we have proven ways of work in core. There's still work to be done of course, because core is being challenged by many sides from below from above. But we've been investing in core trying to understand a bit more how brands can be positioned, packaging, promotion activities, new channels, e-commerce. So lots of things that core is very important. So core is also about deliver the current but transform the business continue to transform, so it continues to remain relevant. And a lot of these other innovations are being done by different sides of the business. For example, the premiumization is being done by the High-End Company. So the High-End Company is separate from the core organization right? The flavor and styles are being done by ZX, right. And the smart affordability is being done by the core, because they are more connected in terms of packaging, occasion, box. And the idea is to the High-End Company -- I mean the High-End Company grew double-digits, both top and bottom line. ZX is already 15% of our revenue growth. So I mean -- but to your question, you're right not everybody is doing the same thing. So, core is core together with smart affordability. Okay? Then you have High-End taking care of premiumization, and then you have ZX taking care of styles and flavors. So that's pretty much how we are divided to conquer.

Just a quick follow-up. It seems like the competitive intensity across the industry has stepped up over the last couple of years. Is that offsetting some of the gains that you're making with category expansion? And what's embedded in your outlook for the competitive environment? Do you expect it to remain just as intense?

No, no. I mean, beer has always been competitive. What you see different today is because two or three companies in the beer business are developing more and more global brands. They start facing each other just like Coke and Pepsi, right? Coke and Pepsi, they are exactly in all the markets facing each other. Beer used to be very local in terms of brands. That's going to international, then going to global brands. And this -- as this continues to grow, competitors are going to face each other in many markets at the same time, but because the growth to another market is being done via global brands that is also very healthy compared to other food and beverage categories, where the new entrant comes as a private label. Our business at least the new entrants comes at the very top either as a craft or as a global brand and that get consumers to trade up. And that's beneficial for the category, beneficial for our players, especially for the leading player in that market. So when somebody comes to our market and starts developing or is asking as well in the premium segment, if we don't sleep on the wheel, we're going to be the biggest beneficiary of that segment growing faster, right? So -- and that's what we want to do. As more people invest in seltzer, we want to have a close to fair share and at some point fair share. So as the segment grows, we take our fair share of that growth. Today, we're not there yet.

Got it. Thanks.

And this was our final question. If your question has not been answered, please feel free to contact the Investor Relations team. I will now turn the floor back over to Carlos Brito for closing remarks.

So, thank you Maria. And I would like to do two things in this call. I'd like to close the business part and then I would like to close and talk about our 30-year colleague, Felipe his last conference call. So, bear with me a little bit. So in terms of the business in closing, throughout the year, we achieved a more balanced top line growth between volume and revenue per hectoliter growth, and made considerable progress toward our optimal capital structure. However, our overall performance was below our expectations. We're a company of owners, who are never fully satisfied with our results. As I said during the call, we learn from some implementations and executions of prices for example, or some categories that we're under-indexed and we're trying -- and we're going to fix this very quickly. We're a strong diversified company, with an unrivaled geographic footprint portfolio of brands and talent pool. We'll use these learnings from this year to better position ourselves to deliver long-term growth. While there are some short-term challenges ahead, we're confident in our strategy and plans to grow our business by delivering balanced, sustainable, top and bottom line growth in 2020 and beyond. So, before I conclude, now I want to take a couple of minutes to thank Felipe Dutra, my friend, my partner, our Chief Financial and Technology Officer, who'll be stepping down after a long and distinguished career with our company to pursue new projects. As we announced earlier this year, Felipe's departure will be effective after our Annual Shareholders' Meeting on April 29. Since he joined our company in 1999, Felipe has embodied the spirit -- this is wrong 1989. Felipe has embodied the spirit of true ownership. He's been in the company for 30 years, has been the architect…

Thank you. This does conclude today's earnings conference call and webcast. Please disconnect your lines at this time and have a wonderful day.