Ambev (ABEV3) Q3 2024 earnings summary

Executive summary

• Achieved solid growth and profitability in Q3 2024, with net revenue up 4.9% and normalized EBITDA up 8.5%, driven by strong performances in Brazil and CAC, and sequential improvements in LAS and Canada despite tax headwinds in Brazil.

• Normalized profit declined 11.4% to R$3,579.6 million, mainly due to higher income tax expenses in Brazil, offsetting EBITDA growth and improved net finance results.

• CEO Jean Jereissati transitions out after five years, highlighting transformation in portfolio, technology, and sustainability, with 4 million new fans and significant value creation.

• Focus for 2024 remains on top-line and EBITDA growth, margin expansion, and robust cash flow generation.

• Cash flow from operating activities rose 2.3% to R$8,108.4 million, supported by EBITDA growth and better working capital.

Financial highlights

• Net revenue: R$22,096.7 million (+4.9% organic vs. 3Q23); Normalized EBITDA: R$7,063.4 million (+8.5%); Normalized profit: R$3,579.6 million (-11.4%).

• Gross margin expanded 180 bps to 50.3%; Normalized EBITDA margin up 110 bps to 32.0%.

• EPS and normalized EPS both declined 11.4% year-over-year.

• Year-to-date cash flow generation in line with last year, despite BRL 1.7 billion investment in Dominican Republic put option.

• Net finance results improved by BRL 150 million versus 2023, driven by lower derivative losses and hedging decisions.

Outlook and guidance

• Q4 is critical for cash generation due to seasonality, with a tough comparison from one-off payables in Canada in Q4 2023.

• Cost headwinds expected in 2025 from aluminum and currency, but margin expansion remains a priority; hedging policies in place.

• Sequential improvement expected in Argentina, with easier comps ahead and macro stabilization signs.

• Focus remains on commercial strategy execution, brand health, and readiness for the South American summer season.

• Cash COGS per hectoliter in Brazil Beer (excluding non-Ambev marketplace products) expected to decrease 0.5–3.0% for the year.