Ambev Reports 2012 Second Quarter Results Under IFRS

Tue Jul 31, 2012 1:00am EDT

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Ambev Reports 2012 Second Quarter Results Under IFRS

PR Newswire

SAO PAULO, July 31, 2012 /PRNewswire/ -- Companhia de Bebidas das Americas – Ambev [BOVESPA: AMBV4, AMBV3; NYSE: ABV, ABVc] announces today its results for the 2012 second quarter (Q2 2012). The following operating and financial information, unless otherwise indicated, is presented in nominal Reais and prepared according to International Financial and Reporting Standards (IFRS), and should be read together with our quarterly financial information for the three and six month period ended June 30, 2012 filed with the CVM and submitted to the SEC.

OPERATING AND FINANCIAL HIGHLIGHTS

Top line performance: Consolidated volumes grew 2.4% in Q2 2012 driven by a 3.9% increase in Brazil.  A tougher industry in most of the Southern Cone and a flat industry in Canada affected volume performance in LAS and Labatt, respectively.  Meanwhile, HILA-ex volumes step changed thanks to the closing of the strategic alliance in the Caribbean, exceeding 2 million hectoliters in the period (versus roughly 1.5 million in Q2 2011).  Net sales increased 10.4% and net revenue/hl grew 7.7%, above average inflation for our country footprint, mainly thanks to our performance in Brazil (+7.4%).

Cost of Goods Sold (COGS): COGS/hl grew below inflation at 3.4% in Q2 2012.  Gains in currency hedges once again helped offset input cost pressure from raw materials, packaging and labor in some of our operations.

Selling, General & Administrative (SG&A) expenses: SG&A (excluding depreciation and amortization) expenses rose by 18.7% in the quarter.  In addition to general inflation, our results were impacted by higher administrative expenses (mainly bonus accruals) in Brazil and greater distribution expenses in Brazil and LAS.  In terms of commercial spend, LAS invested more to support innovation launches, Canada likewise, while in Brazil expenses grew less due to the phasing which took place in Q1 2012, as anticipated.

EBITDA, Gross margin and EBITDA margin: Normalized EBITDA increased 9.3% organically in the second quarter, reaching R$ 2,975.7 million.  Gross margin expanded 140 bps due to margin expansion in all our business units except HILA-ex, which posted a positive EBITDA of R$ 37.2 million.  EBITDA margin reached 43.6%, with a margin contraction of 40 bps.

Operating Cash generation and Profit: Cash generated from our operations was R$ 2,749.0 million in Q2 2012, which represents an increase of 6.2%.  Normalized Profit reached R$ 1,959.2 million (+6.6%) in the quarter against a very tough comparison due to a lower income tax expense in Q2 2011, and normalized Earnings per share (EPS) increased 6.1%.

CAPEX: We invested R$ 628.2 million during the second quarter, the majority of which continued to be dedicated to the improvement of our supply and warehousing footprint in Brazil.

Pay-out and Financial discipline: In Q2 2012 we paid a dividend and IOC of R$ 2.5 billion, and we also made a cash payment of around R$ 2.5 billion upon closing of the strategic alliance in the Caribbean in mid-May.  In addition, on May 30 we declared a dividend and IOC payment of approximately R$ 1.2 billion paid as from July 27.

 

Financial Highlights – Ambev Consolidated 


% As

%



% As

%

R$ million

2Q11

2Q12

Reported

Organic

YTD 11

YTD 12

Reported

Organic

Total volumes

36,181.7

37,378.5

3.3%

2.4%

76,978.3

79,608.9

3.4%

3.4%

Beer

26,093.1

26,860.2

2.9%

1.7%

55,569.1

57,116.0

2.8%

2.7%

CSD and NANC

10,088.6

10,518.3

4.3%

4.0%

21,409.2

22,492.9

5.1%

4.9%










Net sales

5,811.6

6,825.4

17.4%

10.4%

12,373.7

14,061.1

13.6%

10.1%

Gross profit

3,793.0

4,525.0

19.3%

12.7%

8,248.1

9,448.0

14.5%

11.1%

Gross margin

65.3%

66.3%

100 bps

140 bps

66.7%

67.2%

50 bps

60 bps

EBITDA

2,578.9

2,948.9

14.3%

8.7%

5,676.8

6,339.1

11.7%

8.8%

EBITDA margin

44.4%

43.2%

-120 bps

-70 bps

45.9%

45.1%

-80 bps

-50 bps

Normalized EBITDA

2,583.6

2,975.7

15.2%

9.3%

5,682.1

6,365.9

12.0%

9.0%

Normalized EBITDA margin

44.5%

43.6%

-90 bps

-40 bps

45.9%

45.3%

-60 bps

-40 bps

Profit - Ambev holders

1,832.6

1,932.4

5.4%


3,921.2

4,278.8

9.1%


Normalized Profit - Ambev holders

1,837.3

1,959.2

6.6%


3,926.5

4,305.6

9.7%


No. of share outstanding (millions)

3,104.2

3,118.4



3,104.2

3,118.4



EPS (R$/shares)

0.59

0.62

5.0%


1.26

1.37

8.6%


Normalized EPS

0.59

0.63

6.1%


1.26

1.38

9.2%












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

This press release segregates the impact of organic changes from those arising from changes in scope or currency translation. Scope changes represent the impact of acquisitions and divestitures, the start up or termination of activities or the transfer of activities between segments, curtailment gains and losses and year over year changes in accounting estimates and other assumptions that management does not consider as part of the underlying performance of the business. 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 indicators of the Company's performance. Comparisons, unless otherwise stated, refer to the second quarter of 2011 (Q2 2011), as the case may be. Values in this release may not add up due to rounding.

SOURCE Ambev

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