ABEVAmbev S.A.
Is the business good?
The checks split: nothing decisive, though earnings fully cash-backed (1.3×).
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
Margin-driven, fat margins on slower asset turns. ROE 18% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is ABEV?
Ambev S.A. earns 29% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 20 points above what the capital costs: growth creates value
- Operating margin
- 26%
Operating margin · Beverages - Brewers median 18% · fiscal year to FY2025
- Cash conversion
- 1.33×
Cash conversion · 1.51× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −0.83%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 27% |
| FY2021 | 23% |
| FY2022 | 22% |
| FY2023 | 24% |
| FY2024 | 24% |
| FY2025 | 26% |
Details›
- Gross marginfiscal year to FY2025
- 51%
- Operating marginfiscal year to FY2025
- 26%
- Net marginfiscal year to FY2025
- 18%
- Free cash flow margin
- 23%
- Revenue, trailing twelve months
- $88.2B
- Free cash flow, trailing twelve months
- $19.9B
- Net income, trailing twelve months
- $15.5B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 29%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.