Ambev Reports 2012 First Quarter Results Under IFRS

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Companhia de Bebidas das Americas - Ambev

Apr 30, 2012, 01:00 ET

SAO PAULO, April 30, 2012 /PRNewswire/ -- Companhia de Bebidas das Américas – Ambev [BOVESPA: AMBV4, AMBV3; andNYSE: ABV, ABVc] announces today its results for the 2012 first quarter (Q1 2012). 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, 2012 filed with the CVM and submitted to the SEC.

OPERATING AND FINANCIAL HIGHLIGHTS

Top line performance: Net sales increased 9.8% in the first quarter, with organic volumes increasing 4.3% while Net revenue/hl grew 5.3%. Industry growth in Brazil, Argentina and Canada contributed favorably, as well as market share gains in Brazil in both beer and CSD/NANC, and price increases across our markets.

Cost of Goods Sold (COGS): COGS/hl increased by 5.4% in the quarter. This resulted primarily from increases in raw materials (especially sugar in Brazil CSD) and packaging costs (notably PET resin for Brazil and LAS CSD), which were partially offset in the quarter by gains in currency hedges and an easier comparison with 1Q11 due to the lack of can imports in Brazil Beer.

Selling, General & Administrative (SG&A) expenses: SG&A (excl. depreciation & amortization) expenses rose by 10.5% in Q1 2012 mainly due to general inflation, phasing of sales and marketing investments behind our brands in our key markets, as well as higher distribution expenses in Brazil and Argentina.

EBITDA, Gross margin and EBITDA margin: Our Normalized EBITDA reached R$ 3,390.3 million in Q1 2012, which represented an organic growth of 8.8%. Gross margin was roughly flat for the quarter, with expansion in Brazil Beer, HILA-ex, LAS CSD/NANC and Canada business units. EBITDA margin contracted by 40bps, reaching 46.9% despite margin expansion in all our divisions except Brazil CSD/NANC and LAS Beer.

Operating Cash generation and Profit: Cash generated from operations in Q1 2012 was R$ 1,258.2 million (a decrease of 36.6% as compared to 1Q11), while our Normalized Profit reached R$ 2,346.4 million (+12.3%) in the quarter through a combination of EBITDA growth and a lower income tax expense. Normalized Earnings per share (EPS) increased 11.8%.

CAPEX: In the first quarter we invested R$ 365.6 million as part of our investment plan for the year, the majority of which continued to be directed at improving our production capacity in Brazil regionally and by package.

Pay-out and Financial discipline: We paid a dividend and Interest on Own Capital of R$ 2.5 billion starting on April 10, 2012. Moreover, on April 16 we announced a transaction to create the leading beverages company in the Caribbean, which entails a cash payment of approximately R$ 2.3 billion expected for Q2 2012.

Financial Highlights – Ambev Consolidated				% As	%
*R$ million*		1Q11	1Q12	Reported	Organic
Total volumes		40,796.6	42,230.4	3.5%	4.3%
Beer		29,476.0	30,255.9	2.6%	3.7%
CSD and NANC		11,320.6	11,974.6	5.8%	5.8%

Net sales	6,562.1		7,235.7	10.3%	9.8%
Gross profit	4,455.0		4,923.0	10.5%	9.7%
Gross margin	67.9%		68.0%	10 bps	bps
EBITDA	3,098.0		3,390.3	9.4%	8.9%
EBITDA margin	47.2%		46.9%	-40 bps	-40 bps
Normalized EBITDA	3,098.5		3,390.3	9.4%	8.8%
Normalized EBITDA margin	47.2%		46.9%	-40 bps	-40 bps
Profit - Ambev holders	2,088.7		2,346.4	12.3%
Normalized Profit - Ambev holders	2,089.2		2,346.4	12.3%
No. of share outstanding (millions)	3,103.5		3,117.5
EPS (R$/shares)	0.67		0.75	11.8%
Normalized EPS		0.67	0.75	11.8%