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]

Financial Performance - Ambev's consolidated normalized EBITDA increased by 37.3%, reaching BRL 29 billion in 2024 compared to 2019[8] - Ambev's consolidated normalized EBITDA increased by 11.4% in FY24[10, 22] - Cash flow from operating activities increased by 5.6%, reaching BRL 26.1 billion in 2024[30] - Normalized profit decreased by 2.3% to BRL 14.9 billion in 2024[24] Business Unit Performance (FY24 vs LY) - Brazil Beer: Volume increased by 0.6%, net revenue increased by 3.2%, and EBITDA increased by 9.8%[10] - Brazil NAB: Volume increased by 4.1%, net revenue increased by 13.7%, and EBITDA increased by 25.7%[10] - LAS (Latin America South): Volume decreased by 10.0%, net revenue increased by 6.0%, and EBITDA increased by 9.3%[10] - CAC (Central America & Caribbean): Volume increased by 1.9%, net revenue increased by 7.0%, and EBITDA increased by 16.5%[10] - Canada: Volume decreased by 3.1%, net revenue decreased by 1.2%, and EBITDA increased by 4.4%[10] Capital Allocation - A total of BRL 12.5 billion is to be returned to shareholders, including BRL 3.8 billion in IOC, BRL 6.7 billion in dividends, and BRL 2 billion in share buybacks[39]

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]

Core Viewpoint - Ambev SA is approaching a golden cross, a technical indicator that may signal a potential bullish trend for the stock after a challenging year marked by stock price declines and currency issues [1][2]. Group 1: Company Overview - Ambev controls 66% of Brazil's beer market and has a near-monopoly in the Dominican Republic, with significant stakes in Argentina and Canada, showcasing its dominance in the Latin American beverage market [1]. - The company is part of AB InBev and has shifted its focus towards premium beer brands, which, along with steady price increases, has helped it navigate market challenges [1]. Group 2: Financial Performance and Projections - After a slowdown in 2023, Ambev is experiencing a rebound in 2024, with growth picking up in the second quarter and expectations of improved margins by 2027 due to stabilizing commodity prices [2]. - The stock is currently trading at $2.25, below key moving averages, indicating a bearish sentiment among cautious traders [2]. - Ambev's fundamentals remain strong, trading at a discount to historical averages, with a dividend yield of 6.71% and a net cash position of 10.7 billion reals (approximately $1.88 billion) [4]. Group 3: Technical Indicators - A golden cross is imminent as the 50-day moving average is close to crossing above the 200-day moving average, which could indicate bullish momentum [2]. - The Relative Strength Index (RSI) is at 38.41 and declining, suggesting that the stock may soon be oversold, potentially leading to buying pressure [3]. - The Moving Average Convergence/Divergence (MACD) indicator shows a negative value of -0.02, indicating a need for closer observation of the stock [3].