Ambev Reports 2013 Fourth Quarter And Full Year Results Under IFRS

      Ambev Reports 2013 Fourth Quarter And Full Year Results Under IFRS

PR Newswire

SAO PAULO, Feb. 26, 2014

SAO PAULO, Feb. 26, 2014 /PRNewswire/ --Ambev S.A. [BOVESPA: ABEV3; NYSE:
ABEV] announces today its results for the fourth quarter and full year 2013
results. 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 twelve-month period
ended December 31, 2013 filed with the CVM and submitted to the SEC.

Operating and Financial Highlights

Top line performance: Net revenues accelerated when compared to the first
three quarters of the year and grew 10.0% in 4Q 2013, leading to a 6.4% growth
in the FY 2013. Volumes declined 1.4% (-3.2% in the full year) being more than
offset by a 11.6% growth in net revenue per hectoliter (NR/hl) during the
quarter (+9.9% for FY 2013), mainly driven by our revenue management
initiatives across our operations, greater weight of direct distribution and
higher share of premium in Brazil. Albeit consolidated volumes remained in
negative territory, we saw an improvement versus last quarter trends in all
divisions and, thanks to a solid NR/hl performance, (Brazil Beer +11.7%,
Brazil CSD & NANC +13.1%, HILA-ex +5.5%, LAS +16.2% and Canada +2.5%), this
was a quarter of top line growth in all our divisions (Brazil Beer +7.9%,
Brazil CSD & NANC +11.8%, HILA-ex +20.9%, LAS +16.5%, while Canada +2.1%).

Cost of Goods Sold (COGS): COGS was up 6.8% in 4Q 2013 and 7.0% for the full
year, whereas on a per hectoliter basis, costs increased 8.4% and 10.5%,
respectively. Although currency hedges continued to be a headwind, our
aluminum, barley, sugar and corn hedges once again helped to soften this
pressure. The fourth quarter confirmed the improvement already seen in 3Q,
with COGS/hl growing 8.5% in H2 versus 13.9% in H1.

Selling, General & Administrative (SG&A) expenses: SG&A expenses (excluding
depreciation and amortization) were up 10.8% in the quarter and 7.9% in FY
2013. Given our front loaded commercial investments in the year, mainly during
the FIFA Confederations Cup, our 4Q 2013 performance was positively impacted
by lower year over year sales and marketing expenses, while administrative
expenses were impacted by timing of variable compensation accruals, partially
offset by our cost savings initiatives. Distribution costs were impacted by a
higher weight of direct distribution in Brazil, which reached c.70% in 4Q this
year and c.67% for FY 2013.

EBITDA, Gross margin and EBITDA margin: Our Normalized EBITDA grew 18.0% in 4Q
2013, reaching R$ 6,453.7 million, which represents another improvement on the
pace of year over year growth seen along the first three quarters of 2013 (1Q
+2.6%, 2Q +6.8%, 3Q +9.5%), leading to a 10.5% growth in FY 2013, reaching R$
17,485.1 million. Gross margin performance significantly improved in 4Q 2013
(ie, +90 basis points versus contraction in the first three quarters of the
year), driven by expansion in Brazil Beer and all of our international
divisions. Our strong finish to the year allowed us to achieve a Normalized
EBITDA margin of 58.4% in the quarter (+400 bps expansion) and 50.3% for FY
2013 (+180 bps), also helped by a one-time gain of R$ 300 million in other
operating income related to recovery of restricted funds in Brazil.

Operating Cash generation and Profit: Cash generated from our operations in 4Q
2013 improved 13.1% when compared to the same period last year, totalling R$
8,386.3 million (R$ 17,377.3 million for the full year, was an increase of
10.1% when compared to 2012). Our Normalized Profit was R$ 4,766.6 million in
the quarter, positively impacted by our operational performance and lower
effective tax rate, reaching R$ 11,383.3 million in the full year. Normalized
Earnings Per Share (EPS) corresponded to R$ 0.30 in the quarter and R$ 0.75
for FY 2013.

Highlights –  4Q12               % As     %       FY12                % As     %
Consolidated Reference                           Reference
R$ million    Base      4Q13     Reported Organic Base      FY13      Reported Organic
Total volumes 49,700.3  48,988.6 -1.4%    -1.4%   169,839.4 165,169.2 -2.7%    -3.2%
Beer          35,990.8  35,267.7 -2.0%    -2.0%   122,478.6 118,811.3 -3.0%    -3.6%
CSD and NANC  13,709.5  13,720.8 0.1%     0.1%    47,360.8  46,357.9  -2.1%    -2.2%
Net sales     10,133.9  11,052.8 9.1%     10.0%   32,231.0  34,791.4  7.9%     6.4%
Gross profit  7,045.2   7,778.6  10.4%    11.4%   21,771.2  23,393.6  7.5%     6.1%
Gross margin  69.5%     70.4%    90 bps   90 bps  67.5%     67.2%     -30 bps  -10 bps
EBITDA        5,482.9   6,437.7  17.4%    18.0%   15,569.8  17,455.9  12.1%    10.6%
EBITDA margin 54.1%     58.2%    410 bps  390 bps 48.3%     50.2%     190 bps  190 bps
Normalized    5,496.9   6,453.7  17.4%    18.0%   15,620.1  17,485.1  11.9%    10.5%
Normalized    54.2%     58.4%    420 bps  400 bps 48.5%     50.3%     180 bps  180 bps
EBITDA margin
Profit        3,733.5   4,750.6  27.2%            10,420.6  11,354.1  9.0%
Normalized    3,747.5   4,766.6  27.2%            10,470.9  11,383.3  8.7%
No. of share
outstanding   9,693.6   15,661.9                  9,693.6   12,677.6
EPS           0.23      0.30     27.6%            0.65      0.75      15.2%
Normalized    0.23      0.30     27.3%            0.66      0.75      15.0%

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

CAPEX, Pay-out and Financial discipline: During the fourth quarter of 2013 we
invested R$ 1.4 billion in capital expenditures, totalling R$ 3.8 billion for
the year, of which R$ 2.8 billion were invested in Brazil. During the year we
increased our net cash position to R$ 8,680.4 million. Such position, however,
does not account for the dividends and IOC payments of approximately R$ 4
billion announced on January 6, 2014 and paid as from January 23, 2014. 

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
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