ABEV Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Normalized EBITDA Margin: Increased by 50 basis points to 33.4%, marking the third consecutive year of margin expansion.

Net Income: Stated net income reached nearly BRL 16 billion, with an 8.2% year-on-year increase in EPS and a 2% increase in normalized EPS.

Cash Flow: Operating cash flow totaled BRL 24.5 billion, down BRL 1.6 billion from the previous year due to softer volumes impacting working capital.

Shareholder Returns: Announced BRL 20 billion in returns, the highest in company history, including BRL 13.2 billion in dividends and BRL 2.5 billion in share buybacks.

2Strategic Updates and Business Highlights

Three Strategic Pillars: Continued focus on strengthening the portfolio, enhancing customer engagement, and improving profitability.

BEES Marketplace: Full-year GMV grew 70%, with gross margin up 3.5 percentage points, enhancing the core business through better execution.

Zé Delivery: Achieved BRL 4.7 billion in GMV, up 13%, with 67 million orders and 27 million active users, solidifying its position in Brazil's convenience market.

Market Share Gains: In Q4, ABEV gained low single-digit market share in the Brazilian beer industry, with premium and non-alcohol segments showing significant growth.

3Forward Guidance and Outlook

2026 Expectations: Anticipating continued growth driven by events like the FIFA World Cup and a holiday-rich calendar in Brazil.

Cost Guidance: Expecting Brazil Beer cash COGS per hectoliter to increase by 4.5% to 7.5%, influenced by commodity prices, particularly aluminum.

Pricing Strategy: Aiming to balance accessibility for consumers with profitability, leveraging a diversified portfolio to manage revenue effectively.

4Bad News, Challenges, or Points of Concern

Volume Pressure: 2025 saw volume pressures primarily due to adverse weather conditions and cyclical factors affecting out-of-home consumption, particularly for core brands.

Market Conditions: The macroeconomic environment in Argentina remains challenging, with slower-than-expected consumption recovery impacting results.

Cost Headwinds: Anticipated increases in costs due to commodity price pressures and the need for continued efficiency improvements.

5Notable Q&A Insights

Brazil Beer Volumes: Q4 saw a recovery in beer volumes, particularly in December, attributed to improved weather and market share gains. October was notably weak.

Core vs. Premium Brands: There is ongoing concern about the core brand's relevance as premium segments grow; however, management believes in the core's potential and is investing in innovations like Skol Zero Zero.

Impact of GLP-1 Drugs: No significant impact observed on ABEV's portfolio from GLP-1 drugs, but management is monitoring trends closely.

Capital Allocation: Discussions on dividends will continue quarterly, with a focus on sustainable returns while investing in growth and potential M&A opportunities. This summary encapsulates the key financial metrics, strategic initiatives, outlook, challenges, and insights from the Q&A, providing a comprehensive overview of ABEV's performance and future direction.