Ambev S.A. (NYSE:ABEV) is one of Goldman Sachs’ top penny stock picks. On February 12, Ambev S.A. (NYSE:ABEV) delivered mixed fourth-quarter and full-year results, with revenue surpassing consensus estimates by R$210 million, coming in at R$24.81 billion. Ambev S.A. (ABEV) Q4 Revenues Top Estimates Despite Volume Contraction Photo by Danilo Alvesd on Unsplash However, it was an 8.2% year-over-year decline, attributed to a 3.6% decline in consolidated volumes due to cyclical factors affecting consumption ...

Financial Data and Key Metrics Changes - The company achieved a consolidated normalized EBITDA margin expansion of 50 basis points, reaching 33.4%, driven by a 7.5% growth in net revenue per hectoliter and improved financial discipline [18][19] - Stated net income reached almost BRL 16 billion, with stated EPS increasing by 8.2% year-on-year, while normalized EPS increased by 2% [20] - Cash flow from operating activities totaled BRL 24.5 billion, which was BRL 1.6 billion lower than the previous year due to softer volumes impacting working capital [21] Business Line Data and Key Metrics Changes - In Brazil Beer, full-year volumes were in line with a soft industry, with market share expanding meaningfully in Q4 as conditions improved [12][13] - Premium and super premium volumes increased by high teens, while non-alcoholic beverages grew around 30%, reflecting strong portfolio brand equity [14] - The BEES Marketplace saw full-year GMV grow by 70%, driven by third-party expansion, while Zé Delivery closed 2025 with BRL 4.7 billion in GMV, up 13% year-on-year [10] Market Data and Key Metrics Changes - The consumption recovery in Argentina is taking longer than expected, but performance improved sequentially throughout the year [16] - In the Dominican Republic, the consumption environment improved sequentially, with beer gaining share of alcoholic beverages [16] - In Canada, the company outperformed both beer and beyond beer industries, supported by strong brand performance [16] Company Strategy and Development Direction - The company is focused on long-term value creation through disciplined execution of its capital allocation framework, emphasizing organic growth and selective M&A opportunities [18][22] - The strategy is built on three pillars: strengthening the core business, leveraging data and technology, and enhancing operational efficiency [9][11] - The company aims to maintain accessibility in pricing while protecting profitability, balancing the need for core brand relevance with premiumization [70] Management's Comments on Operating Environment and Future Outlook - The management noted that 2025 was a challenging year due to adverse weather conditions impacting beer consumption, but they are optimistic about 2026, citing events like the FIFA World Cup and a holiday-rich calendar as growth drivers [24][25] - The management emphasized that beer remains a culturally relevant category in Latin America, with strong fundamentals and room for growth [8][25] - The company is prepared for potential challenges in 2026, including cost pressures from commodities, but remains focused on margin expansion [22][72] Other Important Information - The company announced approximately BRL 20 billion in shareholder returns in 2025, the highest in its history, through dividends, interest on capital, and a share buyback program [12] - The effective tax rate for the year was 17.7%, reflecting one-off effects, with a normalized rate of approximately 20% [20] Q&A Session Summary Question: Insights on Brazil's beer volume growth in December - Management explained that the growth was driven by improved weather conditions and market share gains, with October being the main drag on performance [30][31] Question: Thoughts on sustaining profitability and cost management for 2026 - Management highlighted the need for continued focus on cost initiatives and resource allocation to maintain margin expansion, with guidance for cash COGS per hectoliter expected to increase between 4.5% and 7.5% [39][40] Question: Capital allocation and dividend policy for 2026 - Management indicated that discussions on dividends will continue quarterly, focusing on cash generation and maintaining a balance between growth investments and shareholder returns [47] Question: Strategic vision regarding core brands and portfolio performance - Management reaffirmed the importance of core brands in the portfolio, emphasizing ongoing efforts to keep them relevant while also expanding premium offerings [54][55] Question: Impact of GLP-1 drugs on the portfolio - Management noted no significant impact from GLP-1 drugs but acknowledged the need to monitor emerging trends and consumer preferences [63] Question: Pricing strategy and mix considerations for 2026 - Management discussed the dual focus on maintaining accessibility for core brands while also protecting profitability through strategic pricing and revenue management [70][71]

Financial Data and Key Metrics Changes - The company achieved a consolidated normalized EBITDA margin expansion of 50 basis points, reaching 33.4%, driven by net revenue per hectoliter growth of 7.5% and operational efficiencies [18][19] - Stated net income reached almost BRL 16 billion, with stated EPS increasing by 8.2% year-on-year, while normalized EPS increased by 2% [20] Business Line Data and Key Metrics Changes - In Brazil Beer, full-year volumes were in line with a soft industry, with market share expanding meaningfully in Q4 as conditions improved [12][13] - Premium and super premium volumes increased in the high teens, while non-alcoholic beverages grew around 30% [14] - BEES Marketplace's GMV grew 70%, and Zé Delivery delivered BRL 4.7 billion in GMV, up 13% year-on-year [10] Market Data and Key Metrics Changes - The beer category in Brazil faced headwinds primarily due to cyclical factors and weather conditions, impacting out-of-home consumption [7][8] - The Dominican Republic and Canada saw sequential improvements in consumption, with beer gaining share of alcoholic beverages [16] Company Strategy and Development Direction - The company is focused on three strategic pillars: category leadership, leveraging data and technology, and enhancing operational efficiency [9][11] - The strategy aims to bridge the gap between beer's potential and actual consumption, fostering category growth [8] - The company plans to continue investing in organic growth, maintain a disciplined approach to M&A, and return excess cash to shareholders [22] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the beer category's fundamentals and its potential for growth, particularly in Latin America [7][25] - The upcoming FIFA World Cup and a holiday-rich calendar in Brazil are expected to create favorable conditions for socialization and beer consumption in 2026 [24][25] Other Important Information - The company announced approximately BRL 20 billion in shareholder returns in 2025, the highest in its history [12] - The effective tax rate for the year was 17.7%, influenced by one-off effects [20] Q&A Session Questions and Answers Question: Insights on Brazil's beer volume growth in December - The management attributed the growth to improved weather conditions and market share gains, with October being the main drag on performance [30][32] Question: Thoughts on sustaining profitability and cost management for 2026 - The company plans to continue focusing on cost efficiencies and maintaining disciplined resource allocation to support margin expansion [34][39] Question: Capital allocation and dividend policy for 2026 - The management indicated ongoing discussions about dividend distributions, emphasizing a consistent return to shareholders while considering organic growth investments [46][49] Question: Strategic vision regarding core brands and premiumization - The management believes in the importance of core brands for accessibility and plans to keep them relevant while also expanding premium offerings [54][56] Question: Impact of GLP-1 drugs on the portfolio - The management has not observed a significant impact from GLP-1 drugs but is monitoring the situation and adapting the portfolio to meet consumer needs [63][66] Question: Pricing strategy and mix considerations for 2026 - The company aims to balance accessibility with profitability in its pricing strategy, leveraging a complete portfolio to manage revenue effectively [71][74]

Financial Data and Key Metrics Changes - The company achieved a consolidated normalized EBITDA margin expansion of 50 basis points, reaching 33.4%, driven by net revenue per hectoliter growth of 7.5% and operational efficiencies [16][10][17] - Stated net income reached almost BRL 16 billion, with stated EPS increasing by 8.2% year-on-year, while normalized EPS increased by 2% [18] - Cash flow from operating activities totaled BRL 24.5 billion, reflecting a BRL 1.6 billion decrease from the previous year due to softer volumes impacting working capital [19] Business Line Data and Key Metrics Changes - In Brazil Beer, full-year volumes were in line with a soft industry, with market share expanding meaningfully in Q4 as conditions improved [11][12] - Premium and super premium volumes increased in the high teens, while non-alcoholic beverages grew around 30%, indicating strong performance in expanding segments [12][13] - BEES Marketplace's GMV grew by 70%, and Zé Delivery achieved BRL 4.7 billion in GMV, up 13% year-on-year, consolidating its position as a major convenience platform [9][10] Market Data and Key Metrics Changes - The macro environment in Argentina improved with lower inflation and less FX volatility, although consumption recovery took longer than expected [14][15] - In Canada, the company outperformed both beer and beyond beer industries, supported by strong brand performance [15] - The Dominican Republic also saw sequential improvement in the consumption environment, with beer gaining share of alcoholic beverages [15] Company Strategy and Development Direction - The company is focused on three strategic pillars: fostering category growth, leveraging data and technology for business enhancement, and maintaining operational efficiency [8][10][24] - The company aims to expand its consolidated EBITDA margin despite anticipated cost pressures, particularly from commodity prices [20][10] - The strategy includes a commitment to return excess cash to shareholders, with BRL 20 billion announced in shareholder returns for 2025 [11] Management's Comments on Operating Environment and Future Outlook - Management noted that 2025 was a challenging year that tested the company's strategy, but they emerged stronger and better prepared for future opportunities, including the FIFA World Cup [4][24] - The company believes that the headwinds faced were primarily cyclical and occasion-driven, not indicative of a fundamental change in beer consumption [6][7] - Management expressed confidence in the beer category's growth potential, supported by favorable demographics in Latin America [7][24] Other Important Information - The company announced a new BRL 2.5 billion share buyback program as part of its commitment to return cash to shareholders [11] - The effective tax rate for the year was 17.7%, influenced by one-off effects, with a normalized rate of approximately 20% [18] Q&A Session Summary Question: Insights on Brazil's beer volume growth in December - Management explained that the growth was driven by improved weather conditions and market share gains, particularly in the latter part of the year [26][29] Question: Thoughts on capital allocation and dividend policy for 2026 - The company emphasized ongoing discussions regarding cash position and shareholder returns, maintaining a focus on organic growth and selective M&A [45][47] Question: Strategic vision regarding core brands and premiumization - Management reiterated the importance of core brands while acknowledging the strong performance of premium segments, indicating a balanced approach to portfolio management [51][54] Question: Impact of GLP-1 drugs on the portfolio - Management stated that there has been no significant impact from GLP-1 drugs on their business, but they are monitoring the situation closely [61][64] Question: Pricing strategy and mix considerations for 2026 - The company highlighted the dual focus on maintaining accessibility for consumers while also protecting profitability through strategic pricing [68][70]

Earnings Call 4Q25 & FY25 Guia de cores 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 2025 (4Q25 and FY25). 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 websites. This pre ...

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Group 1 - Ambev is considered a cheap penny stock, with Barclays maintaining a Hold rating and a price target of $2.5, while Bernstein downgraded it to Market Perform with a price target of $2.88 due to valuation concerns after a 16% year-to-date gain [1][2] - In Q3 2025, Ambev's premiumization strategy led to over 9% growth in volumes for premium and super-premium brands, capturing nearly 50% market share in Brazil [2] - The company's digital ecosystem showed significant growth, with the marketplace initiative's GMV increasing 100% to an annualized BRL 8 billion, and the DTC platform Ze Delivery seeing a 7% GMV increase [2] Group 2 - Despite positive developments, Ambev faced challenges such as softer beer industry volumes in Brazil due to unseasonably cold weather and constrained consumer purchasing power, along with a mid-single-digit decline in Argentina's beer volumes [3] - Financially, Ambev reported a normalized net income of BRL 3.8 billion (up 7%) and a stated net income of BRL 4.9 billion, representing a 36% increase year-over-year [3] - Ambev operates in the production, distribution, and sale of various beverages across Brazil, Central America, the Caribbean, and parts of Latin America and Canada [4]

Core Viewpoint - Ambev's stock has shown a slight recovery after a significant increase in stake by a major hedge fund, despite mixed market sentiment and cautious ratings from analysts [1][6]. Company Performance - Ambev's stock price increased by 3.48% to $2.38, with a market capitalization of $36 billion [2]. - The stock has a 52-week range of $1.73 to $2.58 and a gross margin of 48.20% [2]. - The trading volume reached 47.5 million shares, which is nearly 18% above the three-month average of 39.9 million shares [2]. Market Sentiment - The stock has been on a downward trend for the past week, down 7.0% over that period [6]. - Some investment firms are increasing their holdings in Ambev, while others suggest it may be time to take profits [3][6]. - Bernstein downgraded Ambev from "outperform" to "market perform," citing concerns about the sustainability of this year's rally [6]. Hedge Fund Activity - Squarepoint Ops reported a 400% increase in its stake in Ambev, although this stake is relatively small compared to its total assets under management of nearly $100 billion [7].