Ambev S.A. - ADR

Strong Q1 Performance: Ambev reported a solid Q1 2025 with high-single digit revenue growth and a 0.7% volume increase, reaching all-time high levels for the first quarter. EBITDA grew by double digits with a 180 basis points margin expansion, despite a challenging comparison due to last year's tax one-off, resulting in a flat net income.

Pricing and Revenue Management: Net revenue per hectoliter rose by approximately 2.5%, supported by effective revenue management initiatives and a strong brand portfolio. However, a mismatch in the pricing calendar and reduced carryover from the previous year impacted revenue growth.

Concerns Over Cost Challenges: Looking ahead, Ambev anticipates significant FX and commodity pressures starting in Q2 2025, which poses challenges to margins. Management acknowledges that 2025 will differ from previous years, requiring an adjusted approach to maintain margin expansion amidst rising costs.