Ambev SA Q4 FY2024 earnings call

Carlos Lisboa' Remarks - Returned as CEO on Ambev's 25th anniversary, brought 32 years of experience. Company has a unique portfolio of domestic and global brands. Digital transformation with BEES (over 88% of gross revenues transacted through it) and Zé Delivery (over 66 million orders in Brazil in 2024). Top line momentum with volumes excluding Argentina up 1.4% and mega brands up 7.6%. EBITDA grew double digits with margin expansion. Capital allocation: ~45% of share buyback program executed, intermediary dividends of ~R$2 billion approved. - Three pillars of strategy: Pillar 1: Lead and grow the category, leveraging Latin America markets with growth potential. Pillar 2: Digitize and monetize the ecosystem using data insights from digital initiatives. Pillar 3: Optimize the business to expand margins and improve EPS. ### Lucas Lira' Remarks - 2024 financial performance: EBITDA grew 11.4% organically, normalized profit declined 2.3% but EBITDA growth and good net finance results offset tax headwinds. Cash flow from operating activities grew 5.6%, free cash flow to equity increased 37%. Capital allocation focus on organic growth, attractive non-organic opportunities, and returning excess cash to shareholders.

EBITDA grew 11.4% organically and 12.1% ex-Argentina. Gross margin expanded 170 basis points organically and 190 basis points ex-Argentina. EBITDA margin expanded 200 basis points organically and 220 basis points ex-Argentina. In Brazil, beer industry was resilient with full year volumes up 0.6% driven by market share gains. Core brands had mixed performance; non-alcohol beer segment grew 20s. In Argentina, beer industry was down but market share was stable. In Dominican Republic, volumes grew mid-single digits with Presidente family of brands driving gains. In Canada, mega brands grew but total volumes declined 3.1% for the year.

- Expect cash COGS per hectoliter in Brazil beer, excluding non-Ambev marketplace products, to grow between 5.5% and 8.5% in 2025. ### - Rely on financial discipline in costs and expenses, and revenue management to overcome cost headwinds.

Q: Thiago Duarte asked about Skol being a priority in 2025 and regional volume performance in Brazil Beer.

A: Carlos Lisboa elaborated on Skol's importance as a leading brand in Brazil with high consumer reach and its need for positive trajectory. Regarding regional performance, mentioned differences in regions like Northeast and North vs South and Southeast, but emphasized core brand complementary roles.

Q: Carlos Laboy asked about mega brands and digital's impact.

A: Carlos Lisboa spoke about leaders moving the category forward with global, local, and new liquid solutions. Lucas Lira added digital helped with one-to-one conversation with clients/consumers, changing interaction and serving better.

Q: Isabella Simonato asked about inorganic growth and revenue management.

A: Carlos Lisboa stressed productivity and margin expansion focus. Lucas Lira stated first priority is organic growth, but will look at inorganic if opportunities make strategic sense and align with price and long-term value.

Q: Lucas Ferreira asked about marketing expenses.

A: Lucas Lira discussed SG&A management, focusing on distribution and admin efficiencies to free up resources for sales and marketing. Carlos Lisboa complemented on the flywheel strategy of the company.

Q: Felipe Ucros asked about BEES marketplace.

A: Carlos Lisboa said BEES marketplace GMV grew 47% in 2024, with opportunities ahead. Lucas Lira added partnerships evolving, marginal capital deployment for broader assortment, and attractive ROIC.

Q: Ricardo Alves asked about competition in Brazil beer and category development.

A: Carlos Lisboa said competition is good for strengthening the category, price and cost management key for margin expansion in 2025. Discussed category development opportunities in Brazil and region, like non-alcohol beer and meal occasions.