AmBev Reports 2010 First Quarter Results Under IFRS

SAO PAULO, May 5 /PRNewswire-FirstCall/ -- Companhia de Bebidas das Americas – AmBev [BOVESPA: AMBV4, AMBV3; andNYSE: ABV, ABVc] announces today its results for the 2010 first quarter (Q1 2010). The following financial and operating information, unless otherwise indicated, is presented in nominal Reais and prepared in accordance with International Financial and Reporting Standards (IFRS), and should be read in conjunction with our quarterly financial information for the three months period ended March 31, 2010 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, monetary restatement for hyperinflationary economies, and the start-up or termination of activities. Otherwise stated, percentage changes in this press release are both organic and normalized in nature.  Whenever used in this document, the term "normalized" refers to performance measures (EBITDA, EBIT, Net income, EPS) before special items. Special 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 first quarter of 2009 (Q1 2009). Values in this release may not add up due to rounding.

OPERATING AND FINANCIAL HIGHLIGHTS

Top line performance: Net sales grew 16.5% driven by volume growth as well as price increases across our regions, which drove Net Revenue/hl growth of 6.8% in the period. Organic volume growth of 9.0% in the period was driven by a 14.1% volume growth in Brazil, 7.4% of volume growth in HILA-Ex and 2.3% of domestic volume growth in Canada, which was partly offset by volume contraction of 3.5% in Latin America South.

Cost of Goods Sold (COGS) and Selling, General & Administrative (SG&A) expenses: COGS/hl increased by 5.3% due to higher currency and sugar hedges as well as packaging costs, which were partly offset in the quarter by gains in aluminum and barley hedges, lower corn prices and productivity initiatives. SG&A (excl. depreciation & amortization) increased organically by 19.1% driven by volume growth, inflation, higher logistic costs and investments in the market to support our brands in advance to the World Cup.

EBITDA, Operating Cash generation and Net Income: Our Normalized EBITDA reached R$2,806.5 million in Q1 2010, an organic growth of +15.3%, while margin contracted 40bps in the period to 45.8%. Operating cash generation was R$2,415.7 million in Q1 2010, an increase of 26.1% as compared to 2009. Our Normalized Net income was R$1,716.6 million (+25.2%) in Q1 2010 while our Normalized Earnings per share (EPS) grew 24.7%.

Payout: We announced in the quarter a R$ 1.0 billion payment in dividends and interest on own capital (IOC) paid on April 1st. There were no share buybacks in the quarter.

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

http://www.ambev.com.br/investidores/

CONTACT: Investor Relations, Eduardo Salles, (5511) 2122-1415, [email protected], or Rafael Avila, (5511) 2122-1414, [email protected], both of AmBev

SOURCE Companhia de Bebidas das Americas - AmBev