SAO PAULO, July 31, 2013 /PRNewswire/ -- Companhia de Bebidas das Americas – Ambev [BOVESPA: AMBV4, AMBV3; NYSE: ABV, ABVc] announces today its results for the 2013 second 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 six months period ended June 30, 2013 filed with the CVM and submitted to the SEC.
Top line performance: During the quarter we delivered 8.3% net revenue growth. Volumes declined 1.6% while net revenue per hectoliter (NR/Hl) grew 10.0%. Our Brazil Beer operations drove this improved performance: volumes were down 0.4% (with the Brazilian beer industry showing gradual improvement), and NR/Hl increased 10.0%, leading to 9.6% top line growth. We also delivered top line growth in nearly all our other divisions (Brazil CSD & NANC +5.0%, HILA-ex +3.7%, LAS +17.3% and Canada -2.5%) thanks primarily to our NR/Hl performance (Brazil CSD & NANC +10.2%, HILA-ex +6.6%, LAS +18.3% and Canada +1.3%), as volumes were still impacted by a soft industry in most markets.
Cost of Goods Sold (COGS): Our COGS increased 10.8%, and rose 12.5% on a per hectoliter basis. Although our currency hedges remained as the most relevant headwind given the Real depreciation since last year, our commodity hedges (mostly barley and aluminum) became an important tailwind. Moreover, our performance was also impacted by a tough comp in Brazil CSD & NANC, increased industrial depreciation tied to Brazil capital expenditures, as well as packaging mix in Brazil Beer.
Selling, General & Administrative (SG&A) expenses: SG&A expenses (excluding depreciation and amortization) were up 13.5%. This was mainly a product of continued sales and marketing investments to support our commercial strategy in Brazil, but also due to different phasing and higher commercial spend related to the FIFA Confederations Cup, which took place in June. Elsewhere, inflationary pressures in Argentina continued to generate higher distribution expenses in LAS, whereas in Canada, on the other hand, SG&A was positively impacted due to phasing.
EBITDA, Gross margin and EBITDA margin: We delivered a total of R$ 3,217.9 million of Normalized EBITDA (+6.8%), with gross margin contraction of 80 basis points (bps) and EBITDA margin contraction of 60 bps. By division, Brazil Beer's EBITDA performance was also the main highlight, totalling R$ 1,858 million (+9.2%). Our international operations all grew EBITDA (HILA-ex +36.5%, LAS +15.6% and Canada +0.7%), while Brazil CSD & NANC's EBITDA performance suffered from the higher COGS and SG&A in the quarter, declining 10.7%.
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 second quarter of 2012 (Q2 2012). Values in this release may not add up due to rounding.
| Financial Highlights – Ambev Consolidated |
2Q12 Reference |
% As |
% |
YTD12 Reference |
% As |
% |
||
| R$ million |
Base |
2Q13 |
Reported |
Organic |
Base |
YTD13 |
Reported |
Organic |
| Total volumes |
37,378.5 |
36,984.7 |
-1.1% |
-1.6% |
79,608.9 |
76,914.2 |
-3.4% |
-4.4% |
| Beer |
26,860.2 |
26,845.3 |
-0.1% |
-0.8% |
57,116.0 |
55,341.0 |
-3.1% |
-4.4% |
| CSD and NANC |
10,518.3 |
10,139.4 |
-3.6% |
-3.8% |
22,492.9 |
21,573.2 |
-4.1% |
-4.3% |
| Net sales |
6,825.4 |
7,503.1 |
9.9% |
8.3% |
14,061.1 |
15,275.9 |
8.6% |
5.2% |
| Gross profit |
4,525.4 |
4,910.9 |
8.5% |
7.0% |
9,448.8 |
10,060.8 |
6.5% |
3.4% |
| Gross margin |
66.3% |
65.5% |
-80 bps |
-80 bps |
67.2% |
65.9% |
-130 bps |
-120 bps |
| EBITDA |
2,934.3 |
3,212.6 |
9.5% |
7.5% |
6,310.2 |
6,810.6 |
7.9% |
4.7% |
| EBITDA margin |
43.0% |
42.8% |
-20 bps |
-30 bps |
44.9% |
44.6% |
-30 bps |
-20 bps |
| Normalized EBITDA |
2,961.1 |
3,217.9 |
8.7% |
6.8% |
6,337.0 |
6,816.9 |
7.6% |
4.4% |
| Normalized EBITDA margin |
43.4% |
42.9% |
-50 bps |
-60 bps |
45.1% |
44.6% |
-50 bps |
-40 bps |
| Profit - Ambev holders |
1,903.8 |
1,882.4 |
-1.1% |
4,218.1 |
4,226.0 |
0.2% |
||
| Normalized Profit - Ambev holders |
1,930.6 |
1,887.7 |
-2.2% |
4,244.9 |
4,232.2 |
-0.3% |
||
| No. of share outstanding (millions) |
3,118.4 |
3,123.3 |
3,118.4 |
3,132.3 |
||||
| EPS (R$/shares) |
0.61 |
0.60 |
-1.6% |
1.35 |
1.35 |
-0.3% |
||
| Normalized EPS |
0.62 |
0.60 |
-2.7% |
1.36 |
1.35 |
-0.7% |
||
| Note: Earnings per share calculation is based on outstanding shares (total existing shares excluding shares held in treasury). |
||||||||
Operating Cash generation and Profit: We delivered a total of R$ 2,570.6 million in terms of cash generated from our operations, which was 6.5% lower than the second quarter of 2012 primarily due working capital. Normalized Profit was down 2.2% and reached R$ 1,887.7 million as a result of greater net finance expenses combined with a higher effective tax rate. Normalized Earnings Per Share (EPS) declined 2.7% to R$ 0.60.
CAPEX, Pay-out and Financial discipline: CAPEX investments corresponded to R$ 756.4 million during the quarter, led by R$ 559 million of investments in Brazil. Pay-out thru June 30 totalled R$ 5.1 billion in dividends and IOC, and we ended the quarter with net cash position of R$ 1,913.2 million.
SOURCE Ambev
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