Ambev (ABEV3) concluded 2024 with results pleasing the market, but concerns about the quality of these results lingered. The balance sheet, released on February 26, indicates challenges relevant for 2025, as noted by financial institution BTG Pactual. Although the performance in the fourth quarter was positive, market dynamics and 2025 challenges do not signal growth acceleration.
BTG suggests Ambev faces unit cost increases of 5.5% to 8.5% in Brazil, which could pressure margins. The bank stated, "Given the weak price performance and stagnant volumes, we believe margin expansion will be limited, barring fiscal incentives or external help."
Despite these challenges, Ambev reported EBITDA of R$ 9.6 billion for Q4, outperforming BTG’s expectations by 13% and marking a 10% organic growth year-over-year. EBITDA margins expanded to 35.4%, 270 basis points above bank forecasts. Yet, this growth was driven more by non-recurring factors like fiscal incentives, rather than actual performance improvements. BTG pointed out, "Despite margin exceedance, volume decreases and underperformance in some markets indicate Ambev still faces tough challenges for consistent growth."
The volume of beer sold domestically fell nearly 4% over the year, the lowest since 2019, with average beer prices increasing only by 2.4%, lagging behind inflation. While Brazil struggled, Ambev found success in other territories such as Central America and the Caribbean, reporting the highest profitability margin of 44%. Volumes increased by 4% in Canada, where market share grew significantly, evidenced by 29% EBITDA growth. On the broader Latin American front, results proved mixed; hyperinflation temporarily boosted figures, yet declining volumes impacted overall outcomes.
Looking back over 2024, Ambev closed the year with a record cash balance nearing R$ 18 billion—the highest annual closing ever recorded. The company also announced cash dividends totaling R$ 2 billion, scheduled for payment on April 4, 2025. Ambev remarked, "Shareholders who have indicated their bank accounts will see their credits deposited directly. Shareholders who have not will receive payments through Banco Bradesco."
Investors are advised to note the terms for these dividends: shareholders must hold their positions by March 14, 2025, with Ambev shares transitioning to ex-dividend status from March 17. The payout reflects foundational profits attributed to the period between January 1 and January 31, 2025, which will be part of the mandatory minimum dividends for the year, with any leftover allocated toward investment reserves of previous periods.
On the stock market, Ambev shares have responded positively, leading the few gains on the Ibovespa index. They rose by 5.05% on the morning of the announcement. Comparatively, the second-best performing stock at the same time was Embraer, which had only increased by 2.36%. Analysts at institutions like Jefferies, Bradesco BBI, and Citi praised Ambev’s quarterly earnings, noting how they exceeded expectations largely due to strong international results. Nonetheless, all maintained neutral recommendations for the stock. Jefferies observed the results were buoyed by "hyperinflated growth rates" from Argentina compared to the previous year, which helped mask disappointing operational performance domestically.
Overall, as Ambev enters 2025, it faces significant headwinds including uncertainties about macroeconomic conditions, putting its growth potential at risk. Nevertheless, the company's strong cash position and balanced dividend distribution strategy suggest it remains capable of managing these challenges effectively. Investors will await how Ambev navigates the hurdles of the coming year, balancing growth with financial prudence.