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 SEC.
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 Argentina.
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 units.
| Financial Highlights – Ambev |
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 bps |
| 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 bps |
70 bps |
| Normalized EBITDA |
3,787.4 |
4,199.3 |
10.9% |
9.4% |
10,124.4 |
11,016.2 |
8.8% |
6.2% |
| Normalized EBITDA margin |
47.1% |
49.6% |
250 bps |
250 bps |
45.8% |
46.4% |
60 bps |
70 bps |
| Profit - Ambev holders |
2,476.9 |
2,280.3 |
-7.9% |
6,695.0 |
6,506.2 |
-2.8% |
||
| Normalized Profit - Ambev holders |
2,486.5 |
2,287.2 |
-8.0% |
6,731.4 |
6,519.4 |
-3.1% |
||
| No. of share outstanding (millions) |
3,126.2 |
3,132.3 |
3,126.2 |
3,132.3 |
||||
| EPS (R$/shares) |
0.79 |
0.73 |
-8.1% |
2.14 |
2.08 |
-3.0% |
||
| Normalized EPS |
0.80 |
0.73 |
-8.2% |
2.15 |
2.08 |
-3.3% |
Note: Earnings per share calculation is based on outstanding shares (total existing shares excluding shares held in treasury).
Operating Cash generation and Profit: Cash generated from our operations improved 7.4%, totalling R$ 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.
SOURCE Ambev
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