• EBITDA Growth: 8.5% overall, 8.7% excluding Argentina.

• Gross Margin Expansion: 180 basis points organically, 220 basis points excluding Argentina.

• EBITDA Margin Expansion: 110 basis points organically, 130 basis points excluding Argentina.

• Normalized Profit Decline: Approximately 11%.

• Cash Flow from Operating Activities: Grew over 2%, totaling about BRL8.1 billion.

• Net Finance Results Improvement: Improved by roughly BRL150 million compared to 2023.

• Income Tax Expense: Around BRL1.1 billion, with an effective tax rate of almost 24%.

• Cash Flow from Investing Activities: Approximately negative BRL1.1 billion, impacted by lower CapEx.

• Cash Flow from Financing Activities: About negative BRL1.1 billion, improved by BRL300 million versus Q3 2023.

• Share Buyback Program: New BRL2 billion program approved for share cancellation.

• Warning! GuruFocus has detected 4 Warning Signs with ABEV.

Release Date: October 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ambev SA (NYSE:ABEV) delivered another solid quarter of growth and profitability, with mid-single-digit top-line growth and high single-digit gross profit growth.

• The company achieved record volumes in Brazil, with premium and core plus brands growing significantly, particularly Corona, Spaten, and Original.

• Ambev SA (NYSE:ABEV) has made significant strides in innovation, particularly in the beyond beer category and balanced lifestyle brands, including gluten-free and low-calorie beers.

• The company has successfully leveraged technology, with platforms like BEES and Ze Delivery enhancing market reach and customer service.

• Ambev SA (NYSE:ABEV) has maintained strong cash flow generation, with cash flow from operating activities growing over 2% despite tax headwinds in Brazil.

Negative Points

• Ambev SA (NYSE:ABEV) faced a tough consumption environment in Argentina, with volumes declining in the mid-teens.

• Normalized profit declined around 11% despite EBITDA growth, impacted by tax headwinds in Brazil.

• The company experienced challenges in Panama due to industry contraction driven by recent tax increases.

• In Brazil, the core brands declined by low single digits, with Skol suffering more than expected.

• Ambev SA (NYSE:ABEV) anticipates cost headwinds in 2025, particularly from aluminum and currency fluctuations.

Q & A Highlights

Q: Can you provide more details on the pricing strategy in Brazil, especially ahead of the summer season? A: Jean Neto, CEO, explained that Ambev took pricing actions earlier in September across the portfolio, which impacted volumes initially but was a strategic decision to lead the market. The focus brands performed well, and the company expects a return to normality in October.