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Ambev earnings: Margins expand despite softer volumes

  • Writer: Hardik Shah
    Hardik Shah
  • Oct 30
  • 3 min read
Ambev
Source: Ambev Earnings Presentation

TLDR


  • Revenue Strength: Organic net revenue +1.2% on 7.4% NR/hl (net revenue per hectoliter) growth.

  • Margin Trends: Gross margin +10 bps to 51.5%; normalized EBITDA margin +50 bps to 33.9%.

  • Forward Outlook: Management leans on brand strength, digital platforms (BEES, Zé Delivery), and disciplined cost control to navigate “soft industries.”


Business Overview


Ambev is a leading brewer and beverage company across Brazil, Central America & Caribbean (CAC), Latin America South (LAS), and Canada, spanning beer, non-alcoholic beverages (NAB), and “beyond beer.” The portfolio ranges from mainstream to premium and no-alcohol brands, complemented by digital commerce/route-to-market platforms BEES (B2B) and Zé Delivery (direct-to-consumer). In 3Q25, BEES Marketplace GMV (Gross Merchandise Value) doubled globally, and in Brazil rose 120%+, while Zé Delivery monthly active users reached 5.4M.


Ambev Earnings


Reported vs. Organic:

  • Volume: 42.4M hl (-5.8% organic). Brazil (-7.9%), Canada (-2.0%), LAS (-0.8%) partly offset by CAC (+1.3%).

  • Net Revenue: R$20.85B (-5.7% reported; +1.2% organic) driven by 7.4% NR/hl growth; LAS +9.2%, CAC +2.2%, Brazil NAB +0.5%, Canada -0.1%, Brazil Beer -2.1%.

  • Margins: Gross margin 51.5% (+10 bps); normalized EBITDA margin 33.9% (+50 bps).

  • Profitability: Normalized EBITDA R$7.06B (-0.1% reported; +2.9% organic). Normalized profit R$3.84B (+7.4%). Normalized EPS R$0.24 (+8.7%).

  • Cash Flow: Operating cash flow R$6.9B, down y/y on higher cash taxes.


“The third quarter remained dynamic as industries softness persisted… [we] delivered low-single-digit normalized EBITDA growth with margin expansion.” — Carlos Lisboa, CEO.

Forward Guidance


While no specific numeric FY revisions were provided in the release, management reiterates focus on three pillars—lead & grow the category, digitize & monetize the ecosystem, and optimize the business—to sustain growth with value creation amid near-term softness.


Risks & Opportunities:

  • Risks: Weather-driven demand variability; FX and aluminum cost headwinds; Argentina macro/IAS 29 impacts.

  • Opportunities: Premium/super-premium and “balanced choices” (no-/low-alcohol) growth; BEES and Zé Delivery data/scale advantages; efficiency gains.


Operational Performance


Execution vs. plan: Cost discipline and pricing/mix offset external pressures; normalized EPS up 8.7% on lower effective tax rate despite higher net finance expenses.


Segment snapshot:

  • Brazil Beer: Volume -7.7%; NR/hl +6.0%; normalized EBITDA margin +80 bps y/y (to 35.1%). Premium/super-premium mid-teens; BEES GMV 120%+; Zé MAUs +11%.

  • Brazil NAB: NR/hl +10%; normalized EBITDA +6.1% (margin +150 bps) amid industry softness; no-sugar beverages (Pepsi Black, Guaraná Antarctica Zero) growing strongly.

  • CAC: Volume +1.3%; normalized EBITDA +8.5% with 270 bps margin expansion; DR/CZ brands strengthening.

  • LAS: Organic net revenue +9.2%; normalized EBITDA +4.6% despite Argentina pressure; gross margin +120 bps.

  • Canada: Volume -2.0%; normalized EBITDA +2.0% with +70 bps margin expansion; share gains in beer and beyond beer.


Market Insights


Industry softness appears situational (weather, macro) rather than structural. Engagement with beer remains stable; brand equity held or improved across most markets. Premium/super-premium grew high single digits; “balanced choices” (Michelob Ultra, Stella Pure Gold, no-alcohol) rose mid-thirties.

Retailer dynamics and price relativity stayed in focus; BEES’ data sharpened revenue management (elasticities, promo, assortment). Zé Delivery expanded reach and satisfaction (NPS near highs).


Consumer Behavior & Sentiment


Consumer headwinds varied by market (e.g., Argentina macro), yet category engagement stayed resilient. No-sugar and no-/low-alcohol choices are gaining traction, broadening usage occasions and recruiting new consumers.


Strategic Initiatives


  • Premiumization & Balanced Choices: Continued mix improvement; leadership in premium/super-premium in Brazil.

  • Digital Flywheel: BEES Marketplace GMV +100% (Brazil 120%+); SKU per POS +60%; Zé Delivery MAUs +11%, AOV +9%.

  • Efficiency: Cost control and productivity helped expand margins despite FX/commodity (aluminum) pressures.

“Our digital ecosystem… helps us make faster and more assertive decisions and [build] a lasting competitive advantage.” — Jean Jereissati, CEO of Ambev Brazil

Capital Allocation

  • Dividends: Intermediary dividends of R$6B YTD.

  • Buybacks: New R$2.5B program, up to 208M shares, effective through Apr 29, 2027 (primary purpose cancellation/treasury).

  • Balance Sheet/Cash: Operating cash flow R$6.9B; lower y/y on higher cash taxes.


“Cash generation remained robust… the Board… approved a share-buyback program of approximately R$2.5 billion.” — Fernando Tennenbaum, CFO

The Bottom Line


Ambev is leaning on pricing/mix, premiumization, and digital execution to protect margins through a soft demand patch. Watch (1) elasticity and weather into Q4, (2) Argentina stabilization under IAS 29, and (3) BEES/Zé scaling effects on revenue quality and working-capital turns. The newly announced R$2.5B buyback underscores confidence in long-term fundamentals.


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