Economic Indicators - Brazilian GDP growth was 3.4% in 2024, up from 3.2% in 2023 and 3.0% in 2022, indicating a positive trend in economic conditions [447]. - Brazilian unemployment rate decreased to 6.8% in 2024 from 7.8% in 2023 and 9.3% in 2022, reflecting improved labor market conditions [448]. - Brazilian inflation, measured by IGP-M, was 6.5% in 2024, compared to a deflation of 3.2% in 2023 and inflation of 5.5% in 2022, indicating rising cost pressures [451]. - The real depreciated against the U.S. dollar by 27.9% in 2024, following appreciations of 7.2% in 2023 and 6.5% in 2022, which may create inflationary pressures [452]. - Argentine GDP contracted by 2.6% in 2024, marking the second consecutive year of decline, with inflation rates reaching 117.8% [458]. - The average exchange rate for the Argentine Peso against the U.S. dollar was ARS 916.75 in 2024, reflecting significant depreciation [456]. Company Financial Performance - Net sales increased by 12.2% in 2024, reaching R$89,452.7 million compared to R$79,736.9 million in 2023, driven by a 13.3% growth in net revenue per hectoliter [475]. - Sales volume decreased by 0.9% to 181,920.5 thousand hectoliters in 2024 from 183,659.0 thousand hectoliters in 2023, primarily due to declines in Latin America South and Canada [475]. - Gross profit rose by 13.3% to R$45,837.6 million in 2024, with a gross margin improvement to 51.2% from 50.7% in 2023 [473]. - Net income slightly decreased by 0.8% to R$14,847.0 million in 2024, resulting in a net margin decline to 16.6% from 18.8% [473]. - Brazilian operations net sales increased by 4.8% to R$48,605.3 million, with volumes growing 1.5% to 128 million hectoliters, marking a historical high [477]. - Latin America South operations saw a significant net sales increase of 43.7% to R$19,829.7 million, driven by a 59.6% rise in net revenue per hectoliter [481]. - Cost of sales increased by 11.0% to R$43,615.1 million, but as a percentage of net sales, it decreased to 48.8% from 49.3% [485]. - Net revenue per hectoliter for total operations increased by 13.3% to R$491.7 in 2024, with notable increases in Latin America South (59.6%) and NAB (9.2%) segments [477]. - Canada operations net sales increased by 4.8% to R$9,993.9 million, supported by an 8.2% increase in net revenue per hectoliter despite a 3.1% decline in volume sold [482]. Tax and Credits - The company recognized R$19 billion in tax credits from the exclusion of ICMS from the PIS and COFINS calculation base from 2017 to 2024 [465]. - In 2024, the company recorded a positive impact of R$2,533.9 million in net revenue due to hyperinflation accounting adjustments in Argentina [463]. - The company has R$607.5 million in tax credits related to IRPJ and CSLL taxes unduly paid over SELIC interest, pending judicial proceedings [467]. - The company recorded R$3,243.1 million in tax credits for 2024, compared to R$3,040.4 million in 2023, reflecting gains from tax incentive programs [564]. - The total amount deferred in tax benefits as of December 31, 2024, was R$372.2 million, with a current portion of R$145.1 million [564]. Operational Changes and Market Dynamics - The impact of COVID-19 led to significant changes in market dynamics, with a notable increase in e-commerce sales despite restrictions on on-trade channels [468]. - Strategic revenue management initiatives contributed to the growth in net sales across various segments, particularly in Brazil and CAC operations [480]. Expenses and Income - Sales, marketing, distribution, and administrative expenses increased by 12.6% in 2024 to R$26,392.4 million [494]. - Other net operating income rose by 21.1% in 2024 to R$2,457.3 million, primarily due to higher VAT tax credits [502]. - Income from operations increased by 15.8% in 2024 to R$21,801.7 million [504]. - Net finance result improved, decreasing by 35.8% in 2024 to an expense of R$2,318.2 million [505]. - Consolidated income tax expense totaled R$4,640.4 million in 2024, with an effective tax rate of 23.8% [507]. Cash Flow and Debt - Cash flows generated from operating activities increased by 19.7% in 2023, to R$24,711.4 million from R$20,642.1 million in 2022 [553]. - Cash flows used in investing activities increased by 15.2% in 2023, to R$5,766.0 million from R$5,004.2 million in 2022 [554]. - Cash flows used in financing activities decreased by 1.4% in 2023, to R$16,115.2 million from R$16,337.8 million in 2022 [555]. - As of December 31, 2024, the total net cash position was R$26,384.9 million, an increase from R$12,835.1 million in 2023 [557]. - Short-term debt as of December 31, 2024, totaled R$1,276.4 million, with 27.0% in foreign currencies, compared to R$1,298.1 million and 19.6% in foreign currencies in 2023 [558]. - Long-term debt as of December 31, 2024, was R$2,176.3 million, with 28.0% in foreign currencies, down from R$2,203.0 million and 28.7% in foreign currencies in 2023 [560]. Leadership and Governance - Ambev's CEO, Carlos Eduardo Klutzenschell Lisboa, has been with the company since 1993 and has held various leadership positions, including Global Vice President for Global Brands [599]. - Lucas Machado Lira serves as the Chief Financial, Investor Relations, and Shared Services Officer, having joined Ambev in 2005 and held multiple leadership roles [600]. - Leticia Rudge Barbosa Kina is the Legal and Compliance Vice President, with a background in law and economics, and has been with the company since 2002 [601]. - Ricardo Morais Pereira de Melo, the People and Management Vice President, has been with Ambev since 1996, holding various sales positions [602]. - Eduardo Braga Cavalcanti de Lacerda, the Commercial Vice President, has been with the company since 2001 and has held various roles including Non-Alcoholic Vice President [603]. - Valdecir Duarte, the Industrial Vice President, has been with Ambev since 1998 and has held several engineering and supply chain management positions [604]. - Paulo André Zagman, the Logistics Vice President, joined Ambev in 2002 and has held various roles including Chief People Officer [605]. - The Board of Directors includes independent members and experienced executives, enhancing governance and strategic oversight [593]. - The company has a strong focus on leadership development, with many executives holding advanced degrees and specialized training [599][600][601][602][603][604][605]. Compensation and Share Plans - The total compensation for all members of the Board of Directors, Executive Officers, and Fiscal Council in 2024 amounted to R$177.1 million, including fixed and variable remuneration, benefits, and share-based payments [614]. - The average compensation for Executive Officers in 2024 was R$11.7 million, with a maximum of R$46.3 million [617]. - As of December 31, 2024, there were 72.5 million stock options outstanding under the Ambev Stock Option Plan, covering approximately 528 employees [618]. - The Share Based Payment Plan allows for the granting of up to 3.0% of Ambev's share capital, with 120.5 million Restricted Shares offered to approximately 519 participants as of December 31, 2024 [630]. - The average individual compensation for members of the Board of Directors in 2024 was R$3.1 million, with a maximum of R$14.3 million [617]. - The total number of Board of Directors members in 2024 was 13, with 7 members compensated for their service [617]. - The variable remuneration for Executive Officers in 2024 was R$19.5 million, contributing to a total of R$152.7 million for this group [615]. - The minimum individual compensation for Executive Officers in 2024 was R$6.5 million [617]. - The Share Plan includes provisions for Restricted Shares and Performance Shares, which vest in three to five years depending on the program [630]. - The Board of Directors has the authority to manage the Share Plan and establish terms for each Share Based Payment Program [627]. Pension Plans and Profit-Sharing - As of December 31, 2024, Ambev had 8,896 participants in its pension plans, including 220 in the defined benefit plan and 7,448 in the defined contribution plan [637]. - The expenses under the profit-sharing programs amounted to R$1,431.3 million for the year ended December 31, 2024, compared to R$963.5 million in 2023 and R$1,119.2 million in 2022, indicating a significant increase [642]. - Ambev adopted a clawback policy on October 19, 2023, allowing recovery of incentive-based compensation from executives in case of financial restatements, applicable to compensation received after October 2, 2023 [632]. - The defined contribution pension plan covers substantially all new employees, while the defined benefit plan has been closed to new participants since May 1998 [634]. - The profit-sharing plan's variable payments are based on achieving corporate, departmental, and individual performance targets, with a three-tier distribution system [640]. - Ambev's pension plan assets are primarily composed of equity securities, government and corporate bonds, and real estate properties [637]. Shareholder Engagement - The company held individual and group meetings with shareholders and analysts in 2024 to discuss business performance and growth opportunities [643]. - The IAPP (Ambev Private Pension Institute) manages the pension plans, which are independent and benefit solely the employees [634]. - The company has a collective award system for operational employees based on performance at production sites and distribution centers [641]. - No ABI exceptional stock options or restricted stock units were outstanding or held by Ambev executives as of the date of the report [633].

Core Insights - The article emphasizes the importance of in-depth research and insights for informed investment decisions in the Latin American equity market [1] Group 1 - The company has over 5 years of experience in equity analysis specifically focused on Latin America [1] - The research provided aims to assist clients in making informed investment decisions [1]

4Q24 & FY24 Earnings Call This presentation was prepared by Ambev S.A. ("Ambev" or "Company") for the exclusive use in the earnings conference call of the fourth quarter and full year of 2024 (4Q24 and FY24). This presentation should not be considered as a complete document and should be analyzed together with the Company's financial statements (DFP) for the year and the respective press release, both available on the U.S. Securities and Exchange Commission – SEC and the CVM website. This presentation was p ...

Financial Data and Key Metrics Changes - Consolidated EBITDA grew by 11.4% organically and 12.1% excluding Argentina [21] - Normalized profit declined by 2.3% due to increased tax deductibility issues in Brazil, with nearly 60% of net value added going to taxes, up from 53% the previous year [22] - Free cash flow to equity increased by 37%, totaling nearly R$18 billion [15][25] - Gross margin expanded by 170 basis points organically and EBITDA margin expanded by 200 basis points organically [23] Business Line Data and Key Metrics Changes - Volumes excluding Argentina grew by 1.4%, with mega brands increasing by 7.6% [14] - In Brazil, beer industry volumes increased by 0.6%, with core brands growing by low teens, while Skol volumes declined [17] - Non-alcohol beer segment grew by 20%, led by Corona Cero and Budweiser Zero [18] Market Data and Key Metrics Changes - In Argentina, the beer industry declined by low 20s, but market share remained stable [19] - Dominican Republic volumes grew by mid-single digits, driven by the Presidente family of brands [19] - In Canada, total volumes declined by 3.1%, despite a positive performance in Q4 [20] Company Strategy and Development Direction - The company aims to lead and grow the beer category, digitize and monetize its ecosystem, and optimize its business for sustainable value creation [35][38] - Focus on expanding margins and improving earnings per share while continuing to invest in organic growth opportunities [27][78] - Emphasis on productivity and revenue management to overcome cost inflation challenges [75][76] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the competitive landscape in Brazil, emphasizing that competition strengthens the category [126] - The company sees potential for growth in per capita consumption and opportunities to develop the beer category in various occasions [120][123] - Management is committed to margin expansion despite cost headwinds, particularly in Brazil [27][128] Other Important Information - The company has executed approximately 45% of its current share buyback program and approved R$2 billion in intermediary dividends to be paid in April [16][26] - Digital transformation has been a key enabler, with over 88% of gross revenues transacted through the BEES platform [11] Q&A Session Summary Question: Insights on Skol's performance and its importance - Management acknowledged Skol's decline in 2024 and emphasized its priority for 2025, highlighting its significance in the portfolio and market [41][50] Question: Regional performance differences in Brazil - Management confirmed that regions like the North and Northeast led in volume growth, consistent with overall trends [53] Question: Position of mega brands and pricing strategies - Management discussed the importance of a diverse portfolio and the need for strategic pricing to maintain competitiveness [56][112] Question: Inorganic growth opportunities - Management stated that organic growth remains the priority, but they are open to inorganic opportunities that align with strategic goals [71][78] Question: Marketing investments and distribution costs outlook - Management indicated a commitment to continue investing in marketing while managing distribution costs effectively [86][88] Question: Update on BEES marketplace and profitability - Management reported a 47% year-over-year growth in GMV for BEES, emphasizing the importance of partnerships and distribution capabilities [101][106]

Core Insights - The article highlights Paul Franke's extensive experience in stock picking and investment strategies, emphasizing his contrarian approach and the development of a system called "Victory Formation" for identifying investment opportunities [1]. Group 1: Investment Strategy - Paul Franke employs a contrarian stock selection style, utilizing daily algorithm analysis of fundamental and technical data to identify stocks [1]. - The "Victory Formation" system focuses on supply/demand imbalances indicated by specific stock price and volume movements, which are critical for successful stock selection [1]. - Franke recommends a diversified approach, suggesting investors hold at least 50 well-positioned stocks and use stop-loss levels of 10% or 20% on individual choices to enhance market outperformance [1]. Group 2: Focus Areas - The "Bottom Fishing Club" articles target deep-value candidates or stocks that are experiencing significant upward technical momentum reversals [1]. - "Volume Breakout Report" articles discuss positive trend changes supported by strong price and volume trading actions, indicating potential investment opportunities [1].

Performance Analysis - Brazilian brewer Ambev S A has experienced significant declines in its stock performance over various time frames including a 30% drop over the past year a 22% decline over three years a 52% decrease over five years and a 58% fall over ten years all figures include dividends [1] Investment Strategy - The investment approach discussed favors a long-term buy-and-hold strategy focusing on stocks that can sustainably generate high-quality earnings typically found in the dividend and income sectors [2] Analyst Position - The analyst holds a beneficial long position in shares of BUD through stock ownership options or other derivatives and the article reflects the analyst's personal opinions without any compensation from the mentioned companies [3]

Company Overview - MoneyShow is a pioneer in investor education since 1981, operating globally as a financial media company [1] - The company hosts leading investment and trading conferences that attract thousands of investors [1] Services Offered - Each conference features workshops, presentations, and seminars led by top financial experts in the nation [1] - MoneyShow provides exclusive seminars-at-sea in collaboration with leading partners in the investment industry [1] - The company operates Moneyshow.com, an award-winning multimedia online community [1] - MoneyShow publishes free Investing and Trading newsletters, offering individual investors access to the latest investment and trading ideas from respected financial newsletter advisors [1]

Investment Strategy - The investment strategy focuses on protecting principal and thinking long-term, with a 5-10+ year investment horizon [1] - The strategy includes being long on treasuries and select high-quality companies, with no use of margin [1] - The approach covers multiple sectors, employing both dividend and non-dividend long-only stock strategies [1] Global Market Performance - Brazil is highlighted as one of the worst-performing markets historically, with the iShares MSCI Brazil ETF mentioned as an example [1] - The strategy occasionally seeks stock investments outside the US, particularly during periods of macroeconomic stress [1] Macroeconomic Focus - The strategy includes coverage of macroeconomics, particularly monetary policy and global excessive debt levels [1]

Financial Performance - The company reported an EBITDA growth of 8.5%, with a 8.7% increase excluding Argentina. Gross margin expanded by 180 basis points organically and 220 basis points ex-Argentina. EBITDA margin increased by 110 basis points organically and 130 basis points ex-Argentina. However, normalized profit declined by around 11% [26][27][29] - Cash flow from operating activities totaled approximately BRL8.1 billion, showing a slight increase of nearly BRL200 million compared to the previous year [31][32] Business Line Performance - In Brazil, the non-alcoholic beverage (NAB) segment achieved all-time high volumes, particularly in the Health and Wellness portfolio, with Guarana Zero up over 50% and Pepsi Black and Gatorade up low 20s. Beer volumes reached record levels, with premium brands growing above 20% [14][15][17] - In Canada, volumes improved sequentially, with premium and core plus brands growing by low-single digits. The market share remained stable, with brand health indicators improving [12] - In the Latin America South (LAS) region, volumes declined in the mid-teens due to a tough consumption environment in Argentina, although market share gains and improved brand health indicators were noted [11] Market Performance - The Dominican Republic showed mid-single digit volume growth, driven by strong brand health for Corona and Presidente. However, Panama faced industry contraction due to recent tax increases [13] - The company noted that the Brazilian beer market is structurally improving, with a focus on premiumization and brand health [36] Company Strategy and Industry Competition - The company is focused on maintaining core brand relevance while expanding premium and super-premium segments. The strategy includes a nimble pricing approach and a commitment to margin expansion [74][75] - The company has made significant investments in technology and sustainability, including the launch of carbon-neutral plants and a digital marketplace [22][23] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about cash generation in Q4, despite facing tough comparisons from the previous year. They believe that the macroeconomic environment in Argentina is improving, with expectations for sequential improvements moving forward [78][79] - The company is committed to maintaining a balance between price increases and brand health, with a focus on innovation in the premium segment [74][75] Other Important Information - The company announced a BRL2 billion share buyback program, reflecting a disciplined approach to capital allocation and a belief in the company's intrinsic value [24][60] - Management highlighted the importance of Ze Delivery, which has gained significant traction among consumers, and the RGB initiative, which is expected to enhance brand performance [82][84] Q&A Session Question: Pricing strategy in Brazil and performance of Skol - Management acknowledged that while the beer segment performed solidly, Skol faced more pressure than expected. They believe this is a short-term issue and expect normalization in future performance [36][38] Question: Revenue per hectoliter and premiumization impact - Beer net revenue per hectoliter grew by 2.6%, with a positive brand mix contributing to this growth. Management emphasized the importance of expanding the wholesaler network [42] Question: Strategy for lower-end market competition - Management stated that the focus remains on premiumization rather than competing in the lower-end market. They are working on maintaining core brand relevance through strategic pricing and packaging [47][48] Question: Innovations for 2025 - Management discussed ongoing innovations, particularly in the functionality of beer, including gluten-free and low-calorie options, which are expected to drive future growth [54] Question: Taxation and monetization strategy - Management noted that while the effective tax rate has increased, cash flow generation remains strong due to available tax credits and deferred tax assets [69] Question: Competitive landscape and cost outlook for 2025 - Management indicated that while costs are expected to rise, they are committed to margin expansion and maintaining a nimble pricing strategy [74][76]

Company Overview - Ambev S.A. (NYSE: ABEV) is a significant player in the beverage market, demonstrating steady demand and growth in recent years [1] - The company boasts a large portfolio of products, which creates diverse revenue streams and aids in expanding its market share [1] Investment Strategy - The investment approach focuses on identifying good companies at bargain prices that promise long-term returns and dividends, regardless of the investing climate [1] - The strategy is influenced by value investing principles, particularly those of Warren Buffett, aiming to acquire companies with strong fundamentals at substantial discounts from their intrinsic value [1]