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Recognized for its high profit margins and good results for investors, Ambev experienced a different moment: with a 15% increase in Ibovespa's share, the company's shares fell by nearly 30%. %, the company lost the most in absolute value last year: from 340.7 billion rand to 241 rand, the São Paulo Stock Exchange progressing in anticipation of economic growth, Ambev has already recovered some of the losses from 2018.
good performance up to 2015 with a model based on direct distribution, strong sales in s the bars and presentation of its main beers in 600 ml bottles. The transformations of the sector in recent years, however, are starting to test this model of success so far.
For Bradesco, one of the biggest challenges is the growth of beverage sales at Atacarejos, which gives Ambev the edge. direct distribution and greater reach, mainly in bars. The company now has 1 million points of sale, while Heineken (owner of Kaiser and Schin) has 600 000 and Petrópolis (Itaipava) 700 000. The problem is that the sale of beer in supermarkets, which does not require a distribution system as complex as that put in place by Ambev, has progressed in recent years. In addition, in countries that have experienced deep crises such as Brazil, consumption has not recovered after the economic recovery.
In a report, Bradesco predicts that the share of beer sales in the markets will increase from 38% currently to 41%. % up to 2022. Another obstacle to Ambev's trajectory is the expansion of the "premium" and "discount" segments and the loss of space in the intermediate segment, where its main brands predominate (Skol, Antarctica and Brahma ). In times of crisis, the "discount" market, where the cheapest beers are found and whose brands make no difference to the consumer, has gone from 19% to 25%. The "premium", which was not affected by the reduction in incomes, also increased to 12%, nearly 5% ten years ago. As a result, the Ambev segment lost ground.
Although the company launched new products to respond to these changes, the results were not maintained. "Ambev continues to underperform in the traditional category while premium growth has not yet translated into increased profitability," writes Thiago Duarte in a BTG Pactual report. The company's chief financial officer, Fernando Tennenbaum, said that
Competition
In addition to the changes in the industry, badysts point out that competition is also fiercer. According to Euromonitor, Ambev has lost nearly 5 percentage points of the market over the last 10 years. The UBS bank claims that Heineken has consolidated its brands, hindering the recovery of Ambev's market share. The bank interviewed 1,600 consumers who concluded that Heineken's perception as a premium brand had risen from 20% to 24% over the last year, while Amberv's Stella Artois had dropped 35%. % to 31%.
Future
Despite the difficulties, the brewery sector tends to start slowly improving. Projections point to a recovery in the market as a whole after three years of decline. On the cumulative amount of 2019, the Brazilian stock market is growing at an accelerated pace, shares of Ambev have already recovered by 16%. Yesterday, the company closed for a value of R $ 294.7 billion.
However, costs can again reduce margins. Ambev conducts financial operations to hedge short-term exchange rate fluctuations. This impact usually occurs 12 months later. The 2018 dollar summit is going to hit society now. "It is unlikely that 2019 will be as bad as 2016 (for the company), but we still see little room for very positive surprises," says BTG. The market is realizing that margins (Ambev) may not return to the level before 2016. The competition and the industry have changed, says an badyst. In a recent report, UBS pointed out that the company's margins would not reach the pre-crisis level until 2025.
Strategy
The Expansion of the Company 39, product offering is Ambev's main strategy to restore the market and return to normal. produce results similar to those before the crisis. Since 2015, the company has developed its three main brands (Skol, Antarctica and Brahma) with 10 launches. "Today, for example, we have Skol, Skol Hops and Skol Puro Malta, you can play the products on different occasions," says the company. CEO of the company, Fernando Tennenbaum.
[edit] [ajouter un listing] Although it has always opposed the "discount" beer segment – because it considers that the consumer does not differentiate brands -, the company has also invested on this market. Last year she launched Nossa in Pernambuco and Magnífica in Maranhão, whose recipes are cbadava-based and cheaper than traditional brands. The executive says entry to the segment was not strategic. strategy to respond to the crisis, but an "opportunity" to connect public spaces where "off" brands must always prevail. For Tennenbaum, in other states of the country, this market will decline again as the Brazilian economy recovers.
Although Ambev says it does not expect significant expansion in the most popular segment, the launch of the new brands has been well received by investors. According to BTG Pactual, the tax benefits granted to the company by the states where the drink is produced allow it to be sold up to 10% cheaper than Schin – now in the hands of Heineken – and without loss of profit margin. 19659003] Optimism
Tennenbaum is optimistic about the recovery of the country's economy – and therefore with Ambev. "As Brazil grows, it can recover a margin – how much (margin) it is difficult to say." He admits that the exchange rate will have an impact this year due to the devaluation of the Brazilian currency in 2018, but nothing compared to 2016.
That year, he adds, the devaluation was d & # 39; 39, a larger scale and the result of society was also compromised. "The question now is whether we will review the volume (for the sale of beverages)," Tennenbaum said, questioned about the company's performance. on the stock market in 2018.
The estimates of CervBrasil (an industry badociation of which Ambev is no longer part) indicate that beer production was 13 billion liters last year, 8% less than In 2014, a record year. The projection of the entity for this year is up 3% in volume if the government managed to accelerate the structural reforms of the economy. On the contrary, there must be stagnation.
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