Ambev Reports 2010 Second Quarter Results Under IFRS

SAO PAULO, Aug. 12 /PRNewswire-FirstCall/ -- Companhia de Bebidas das Americas – Ambev (NYSE: ABV, ABVc and BOVESPA: AMBV4, AMBV3) announces today its results for the 2010 second quarter (Q2 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 and six months period ended June 30, 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. Unless 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, Profit, 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 second quarter of 2009 (Q2 2009). Values in this release may not add up due to rounding.

OPERATING AND FINANCIAL HIGHLIGHTS

Top line performance: Net sales grew 11.5% driven by volume growth as well as price increases across our regions, with Net Revenue/hl growing 3.0% in the period. Organic volume growth of 8.3% in the period was driven by a 12.6% volume growth in Brazil, 1.5% volume growth in HILA-Ex and 2.2% volume growth in Latin America South, which was partly offset by volume contraction of -5.5% in Canada.

Cost of Goods Sold (COGS) and Selling, General & Administrative (SG&A) expenses: COGS/hl increased by 11.2% 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 11.4% 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 Profit: Our Normalized EBITDA reached R$2,422.9 million in Q2 2010, an organic growth of +4.7%, while margin contracted 270bps in the period to 42.7%. Cash generated from operations was R$2,552.9 million in Q2 2010, an increase of 8.9% as compared to 2009. Our Normalized Profit was R$1,525.5 million (+9.6%) in Q2 2010 while our Normalized Earnings per share (EPS) grew 9.1%.

Payout and Financial discipline: In Q2 2010 there was no announcement regarding dividends or IOC payment and the company did not buyback any shares. We filed a request for an approximately R$ 50 MM public share offer estimated to be concluded by September and, as announced, following the conclusion of this Offer a Board Meeting will deliberate with respect to the payment of dividends and interest on own capital of approximately R$ 2 billion.

SOURCE Companhia de Bebidas das Americas - Ambev