Ambev Again Passes on Cost Inflation in Q4, Positive Indicator for Margin Rebuild in 2H 2023

Ambev reported slightly better results that we had anticipated in the fourth quarter and full year of 2022. Volume was slightly weaker than our estimate and revenue a touch stronger. While margins continued to contract, in line with our forecast, the revenue upside trickled down the income statement and led to slightly higher earnings per share than we had expected. The operating environment continues to be challenging, and we expect further commodity inflation to be passed through this year. However, these results show that Ambev is performing as well as can be expected, and has so far been able to pass on inflation to customers.