Stock Track | Ambev SA Soars 5.03% Following Robust Q4 Earnings and Strong Growth Outlook

Stock Track
28 Feb

Ambev SA (ABEV) shares soared 5.03% on Thursday in the intraday trading session, outperforming the broader market. The stock rally came on the back of the company's impressive Q4 2024 earnings release.

Ambev's Q4 earnings highlighted several positive growth drivers:

  • 37% consolidated EBITDA growth over the past five years, generating nearly BRL 18 billion in free cash flow to equity
  • 11.4% organic EBITDA growth and 170 bps gross margin expansion in 2024
  • Strong top-line momentum with beer gaining or maintaining market share in key markets
  • Digital transformation success with 88% of gross revenues from the B2B platform
  • Execution of 45% of share buyback program and dividend distribution approval

However, the company also faced some challenges that tempered the earnings performance:

  • 2.3% decline in normalized profit due to tax headwinds in Brazil and Argentina market woes
  • Increased effective tax rate, with 60% of net value added going to taxes
  • Return on invested capital declined to 18.6% due to NOPAT margin contraction
  • Core brand Skol experienced volume declines, which is a priority for improvement in 2025
  • Cost headwinds expected in 2025 from currency depreciation and higher aluminum prices

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