Ambev Reports Third Quarter 2013 Results Under IFRS

             Ambev Reports Third Quarter 2013 Results Under IFRS

PR Newswire

SAO PAULO, Oct. 31, 2013

SAO PAULO, Oct. 31, 2013 /PRNewswire/ --Companhia de Bebidas das Americas –
Ambev [BOVESPA: AMBV4, AMBV3; NYSE: ABV, ABVc] announces today the results for
the 2013 third quarter. The following operating and financial information,
unless otherwise indicated, is presented in nominal Reais and prepared
according to International Financial Reporting Standards (IFRS), and should be
read together with our quarterly financial information for the three and nine
months period ended September 30, 2013 filed with the CVM and submitted to the

Operating and Financial Highlights

Top line performance: Our net revenues increased 4.0%, with a volume decline
of 3.1% being more than offset by 7.3% growth in net revenue per hectoliter
(NR/Hl). Accordingly, though industry softness in Brazil, Canada, and, to a
lesser extent, Argentina, continued to impact volume performance, this was
another quarter of top line growth in nearly all our divisions (Brazil Beer
+0.8%, Brazil CSD & NANC +5.4%, HILA-ex +10.7%, LAS +14.8%, while Canada
-0.1%) thanks to solid NR/Hl performance (Brazil Beer +6.0%, Brazil CSD & NANC
+7.6%, HILA-ex +10.9%, LAS +15.1% and Canada +2.2%).

Cost of Goods Sold (COGS): COGS grew at 5.8%, with COGS/Hl increasing 9.3%.
Such performance represents an improvement over our H1 2013 results (COGS
+9.0%; COGS/Hl +13.9%), and came mostly from our Brazilian business, where
commodity hedges (primarily barley and aluminum) helped to soften pressure
coming from currency hedges, higher industrial depreciation linked to capital
expenditures, as well as packaging mix in Brazil Beer.

Selling, General & Administrative (SG&A) expenses: SG&A expenses (excluding
depreciation and amortization) improved significantly and were down 0.5%.
Such improvement is explained by commercial spend growing at a lower pace than
H1 2013 (without compromising investments behind our brands and innovation)
and by the savings generated from our cost management initiatives around
"non-working money", also helped by lower provisions related to variable
compensation. Distribution expenses were higher due mainly to the greater
weight of direct distribution in Brazil and inflationary pressures in

EBITDA, Gross margin and EBITDA margin: Our Normalized EBITDA grew 9.4% and
corresponded to R$ 4,199.3 million, which also represents an important
improvement if compared to the YoY growth we delivered in the first half of
the year (+4.4%). Gross margin performance improved in Q3 2013 (ie, -60 basis
points vs. -120 bps in H1 2013) driven by less contraction in Brazil and
expansion in our international divisions, while we delivered strong EBITDA
margin expansion of 250 bps on the back of expansion across our business

Highlights –  3Q12               % As     %       YTD12               % As     %
Consolidated Reference                           Reference
R$ million    Base      3Q13     Reported Organic Base      YTD13     Reported Organic
Total volumes 40,530.2  39,266.2 -3.1%    -3.1%   120,139.1 116,180.6 -3.3%    -3.9%
Beer          29,371.7  28,202.6 -4.0%    -4.0%   86,487.8  83,543.5  -3.4%    -4.2%
CSD and NANC  11,158.4  11,063.6 -0.8%    -0.8%   33,651.3  32,637.1  -3.0%    -3.2%
Net sales     8,036.0   8,462.6  5.3%     4.0%    22,097.1  23,738.5  7.4%     4.8%
Gross profit  5,414.6   5,646.4  4.3%     3.1%    14,863.3  15,707.2  5.7%     3.2%
Gross margin  67.4%     66.7%    -70 bps  -60 bps 67.3%     66.2%     -110 bps -100
EBITDA        3,777.8   4,192.4  11.0%    9.5%    10,088.0  11,003.0  9.1%     6.5%
EBITDA margin 47.0%     49.5%    250 bps  250 bps 45.7%     46.4%      70    70
                                                                      bps      bps
Normalized    3,787.4   4,199.3  10.9%    9.4%    10,124.4  11,016.2  8.8%     6.2%
Normalized    47.1%     49.6%    250 bps  250 bps 45.8%     46.4%      60  70
EBITDA margin                                                         bps      bps
Profit -      2,476.9   2,280.3  -7.9%            6,695.0   6,506.2   -2.8%
Ambev holders
Profit -      2,486.5   2,287.2  -8.0%            6,731.4   6,519.4   -3.1%
Ambev holders
No. of share
outstanding   3,126.2   3,132.3                   3,126.2   3,132.3
EPS           0.79      0.73     -8.1%            2.14      2.08      -3.0%
Normalized    0.80      0.73     -8.2%            2.15      2.08      -3.3%

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

Operating Cash generation and Profit: Cash generated from our operations
improved 7.4%, totalling R$ 4,689.8 million. Our Normalized Profit was R$
2,287.2 million, declining 8.0% mostly impacted by higher net finance expenses
and a greater effective tax rate. Normalized Earnings Per Share (EPS)
corresponded to R$ 0.73 (-8.2% vs. Q3 2012).

CAPEX, Pay-out and Financial discipline: We invested approximately R$ 1
billion during the quarter in capex (R$ 2.3 billion thru September 30), of
which R$ 847 million were carried out in Brazil. In terms of pay-out, on
September 27 we paid out approximately R$ 2 billion in dividends, bringing our
pay-out this year to R$ 7.1 billion in dividends and IOC (vs. R$ 3.8 billion
during the same period in 2012), and we also reduced our net cash position to
R$ 2,399.7 million since December 31, 2012.

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 adjustments. 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 third quarter of 2012 (Q3 2012). Values in this release
may not add up due to rounding.


Contact: Fernando A. Robbi, +55 (11) 2122-1414
Press spacebar to pause and continue. Press esc to stop.