This is our first report on Brazilian beverage giant, Ambev SA. In spite of the headwinds in a few of its international operations, Ambev delivered strong results in the previous quarter in terms of both organic growth and net revenue. The company managed to surpass Wall Street expectations in terms of revenues as well as earnings and its performance was led by the revenue per hectoliter growth and volumes growth in spite of quite a tough competition in Brazil beer. This shows resilient elasticities and strong execution. In the quarter, consolidated volumes grew. Also, premium brands gained weight in the top beer markets driven by Michelob Ultra and Corona. In international operations, the results were mixed though its extend of losses have declined in the Canadian market and it continues to improve its performance sequentially. The bottle supply issues were solved in Dominican of Republic. The high inflation impacted the costs, within the regions dependent on imports. Non-alcoholic beverages also delivered a stellar quarter with volume growth. The core brands of Ambev remain resilient, and it continues to invest in further building the brand equity of the likes of Spot, Brachi, and Brahma. We initiate coverage on the stock of Ambev Sa with a ‘Hold’ rating.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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