Ambev (ABEV3) Q2 2024 earnings summary

Executive summary

• Achieved double-digit EBITDA growth (+15.9% year-over-year) and margin expansion, led by Brazil and CAC, with all-time high volumes in Brazil Beer (+2.9%) and Brazil NAB (+7.7%).

• Free cash flow improved year-over-year, reaching BRL 3.4 billion, reflecting strong operational performance.

• Normalized profit declined 8.3% due to higher income taxes in Brazil.

• Focused brand investments and premiumization drove all-time high brand health and volume growth, especially in premium and core plus segments.

• Community support and sustainability initiatives continued, including over 5 million liters of water and BRL 16 million donated to Rio Grande do Sul.

Financial highlights

• Normalized EBITDA grew 15.9% year-over-year, with margin up 300 bps; gross margin expanded 200 bps.

• Net revenue per hectoliter increased across all segments, notably +6.8% in Brazil NAB and +16.4% in LAS.

• Cash flow from operating activities reached BRL 3.4 billion, down 1.7% year-over-year.

• Normalized profit declined 8.3% year-over-year, impacted by higher taxes.

• Free cash flow up 9.0% year-over-year.

Outlook and guidance

• Confident in continued volume growth, especially in Brazil, with focus on innovation, premiumization, and margin expansion.

• Taxes in Brazil remain a key challenge, but cash flow is expected to remain solid.

• Pricing strategy will remain nimble, with price increases in line with inflation and brand/channel mix.

• Bulk of cash generation expected in H2, particularly Q4.

• Cash COGS per hectoliter in Brazil Beer expected to decrease 0.5–3.0% for the year.