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Discounted Cash Flow (DCF) Analysis Unlevered


Ambev S.A. American Depositary Shares (Each representing 1)

Ambev S.A. American Depositary Shares (Each representing 1) (ABEV)

Consumer Defensive

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 14,857.7314,299.0811,833.9214,005.4414,466.2212,945.8212,690.7912,440.7812,195.7011,955.4411,719.92
Revenue (%)
EBITDA 7,047.026,736.305,421.126,165.205,894.995,324.625,632.175,521.225,412.455,305.825,201.30
EBITDA (%)
EBIT 6,155.565,838.314,642.455,086.784,804.234,287.664,741.284,647.884,556.314,466.554,378.56
EBIT (%)
Depreciation 891.46897.98778.671,078.421,090.751,036.96890.89873.34856.14839.27822.74
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 5,008.543,917.953,504.022,505.573,130.492,958.123,238.693,174.893,112.343,051.032,990.92
Total Cash (%)
Account Receivables 1,258.451,136.781,055.591,341.721,492.911,257.041,162.481,139.581,117.131,095.121,073.54
Account Receivables (%)
Inventories 1,200.501,281.201,099.371,334.721,304.851,391.681,176.441,153.261,130.541,108.271,086.44
Inventories (%)
Accounts Payable 3,917.984,212.513,177.413,938.334,170.613,861.743,583.883,513.283,444.063,376.223,309.71
Accounts Payable (%)
Capital Expenditure -1,566.00-1,630.10-1,307.65-1,228.28-937.41-894.56-1,166.28-1,143.31-1,120.78-1,098.71-1,077.06
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 4.32
Diluted Shares Outstanding 4,049.03
Cost of Debt
Tax Rate 13.97
After-tax Cost of Debt -0.65
Risk-Free Rate
Market Risk Premium
Cost of Equity 7.80
Total Debt 222.19
Total Equity 17,491.79
Total Capital 17,713.98
Debt Weighting 1.25
Equity Weighting 98.75
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 14,857.7314,299.0811,833.9214,005.4414,466.2212,945.8212,690.7912,440.7812,195.7011,955.4411,719.92
EBITDA 7,047.026,736.305,421.126,165.205,894.995,324.625,632.175,521.225,412.455,305.825,201.30
EBIT 6,155.565,838.314,642.455,086.784,804.234,287.664,741.284,647.884,556.314,466.554,378.56
Tax Rate 20.61%14.26%22.63%2.45%40.92%13.97%19.14%19.14%19.14%19.14%19.14%
EBIAT 4,886.785,005.803,591.784,962.192,838.113,688.863,833.783,758.253,684.213,611.643,540.49
Depreciation 891.46897.98778.671,078.421,090.751,036.96890.89873.34856.14839.27822.74
Accounts Receivable -121.6781.19-286.14-151.19235.8794.5622.9022.4522.0121.57
Inventories --80.69181.83-235.3529.87-86.82215.2423.1822.7222.2721.83
Accounts Payable -294.53-1,035.10760.92232.28-308.87-277.86-70.60-69.21-67.85-66.51
Capital Expenditure -64.09-322.45-79.37-290.87-42.85271.73-22.98-22.52-22.08-21.64
UFCF 5,778.256,303.383,275.926,200.683,748.954,523.145,028.344,584.094,493.794,405.264,318.48
WACC
PV UFCF 4,666.673,948.383,592.203,268.152,973.34
SUM PV UFCF 35,270.78

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.75
Free cash flow (t + 1) 4,491.21
Terminal Value 119,765.71
Present Value of Terminal Value 82,460.53

Intrinsic Value

Enterprise Value 117,731.31
Net Debt -2,735.93
Equity Value 120,467.24
Shares Outstanding 4,049.03
Equity Value Per Share 29.75