AmBev Reports Third Quarter 2009 Results Under IFRS

SAO PAULO, Nov. 12 /PRNewswire-FirstCall/ -- Companhia de Bebidas das Americas - AmBev ( ABV, ABVc; BOVESPA: AMBV4, AMBV3) announced today its results for the third quarter of 2009 (Q3 2009). The following financial and operating information, unless otherwise indicated, is presented in nominal Reais and prepared in accordance with International Financial Reporting Standards (IFRS) and should be read in conjunction with our quarterly financial information for the three- and nine-month periods ended September 30, 2009 filed with the CVM and submitted to the SEC.

This press release segregates the impact of organic changes from those arising from changes in scope or currency translation. Scopes represent the impact of acquisitions and divestitures and the start-up or termination of activities. Whenever used in this document, the term "normalized" refers to performance measures (EBITDA, EBIT, Net Income, EPS) before non-recurring items. Non-recurring items are either income or expenses, which do not occur regularly as part of the normal activities of the Company. They are presented separately because they are important for the understanding of the underlying sustainable performance of the Company due to their size or nature. Normalized measures are additional measures used by management, and should not replace the measures determined in accordance with IFRS as an indicator of the Company's performance. Comparisons, unless otherwise stated, refer to the third quarter of 2008 (Q3 2008). Values in this release may not add up due to rounding.

OPERATING AND FINANCIAL HIGHLIGHTS

Top line performance: Net sales grew 9.8% driven by volume growth and price increases across our regions. Organic volume growth of 4.7% in the period was driven by a 9.5% volume growth in Brazil, partly offset by a 5.6% and 4.5% decline in South Latin America and Hila-Ex volumes, respectively.

Cost of Goods Sold (COGS) and Selling, General & Administrative (SG&A) expenses: COGS per hectoliter increased by 1.4% as inflation was partly offset in the quarter by expected gains on our hedges, lower commodity prices for PET and corn and productivity initiatives. SG&A (excluding depreciation & amortization) increased organically by 18.7% driven by volume growth, inflation, timing of certain investments and accruals for variable compensation in the period.

EBITDA, Operating Cash Flow and Net Income: Our Normalized EBITDA reached R$2,373.8 million in Q3 2009, an organic growth of +11.0%, while margin expanded 70 bps in the period to 43.9%. Operating cash flow generation was R$1,829.4 million in Q3 2009, an increase of 3.3% yoy. Our Normalized Net Income was R$1,232.5 million (+5.6%) in Q3 2009 while our Normalized Earnings Per Share (EPS) grew 5.2% yoy.

Payout and Financial Discipline: In Q3 2009, we paid dividends and Interest on Own Capital (IOC) totaling around R$0.7 billion. Since then, we paid dividends and IOC of approximately R$1.0 billion on October 2, 2009 and announced a new IOC and dividend distribution totaling R$1.3 billion to be paid beginning December 18, 2009. There were no share buybacks in the quarter.

    Financial Highlights - AmBev Consolidated
                                                               % As       %
    R$ million                             3Q08      3Q09    Reported  Organic
    Total volumes                        34,445.1  36,345.1     5.5%     4.7%
    Beer                                 24,387.5  26,217.7     7.5%     7.5%
    CSD and NANC                         10,057.6  10,127.4     0.7%    -1.1%

    Net sales                             4,800.9   5,411.6    12.7%     9.8%
    Gross profit                          3,101.6   3,552.8    14.5%    11.8%
    Gross margin                            64.6%     65.7%  100 bps  120 bps
    EBITDA                                2,085.1   2,372.2    13.8%    11.1%
    EBITDA margin                           43.4%     43.8%   40 bps   70 bps
    Normalized EBITDA                     2,088.6   2,373.8    13.7%    11.0%
    Normalized EBITDA margin                43.5%     43.9%   40 bps   70 bps
    Net Income - AmBev holders            1,163.4   1,230.9     5.8%
    Normalized Net Income - AmBev
     holders                              1,167.0   1,232.5     5.6%
    No. of share outstanding (millions)     614.0     616.4
    EPS (R$/shares)                          1.89      2.00     5.4%
    Normalized EPS                           1.90      2.00     5.2%


    Financial Highlights - AmBev Consolidated

                                                               % As       %
    R$ million                           YTD 08     YTD 09   Reported  Organic
    Total volumes                      103,007.0  107,689.7     4.5%     4.7%
    Beer                                73,629.0   77,031.6     4.6%     5.3%
    CSD and NANC                        29,378.0   30,658.2     4.4%     2.8%

    Net sales                           14,347.7   16,415.4    14.4%     9.8%
    Gross profit                         9,329.7   10,935.1    17.2%    12.8%
    Gross margin                           65.0%      66.6%  160 bps  190 bps
    EBITDA                               6,196.6    7,539.9    21.7%    17.2%
    EBITDA margin                          43.2%      45.9%  270 bps  320 bps
    Normalized EBITDA                    6,208.5    7,339.8    18.2%    13.7%
    Normalized EBITDA margin               43.3%      44.7%  140 bps  180 bps
    Net Income - AmBev holders           3,418.0    4,195.2    22.7%
    Normalized Net Income - AmBev
     holders                             3,430.0    3,995.1    16.5%
    No. of share outstanding
     (millions)                            614.0      616.4
    EPS (R$/shares)                         5.57       6.81    22.3%
    Normalized EPS                          5.59       6.48    16.0%

Note: Earnings per share calculation is based on outstanding shares (total existing shares excluding shares held in treasury).

    Contact:
    Myriam Bado
    Investor Relations Department
    Email: ir@ambev.com.br
    Tel.: +55 11 2122 1414

SOURCE AmBev