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Ambev Reports 2012 Fourth Quarter And Full Year Results Under IFRS

Stocks in this article: ABV ABV.C

SAO PAULO, Feb. 27, 2013 /PRNewswire/ -- Companhia de Bebidas das AmFicas – Ambev [BOVESPA: AMBV4, AMBV3; NYSE: ABV, ABVc] announces today its results for the fourth quarter and full year 2012 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 financial information for the twelve-month period ended December 31, 2012 filed with the CVM and submitted to the SEC.

Operating and Financial Highlights

Top line performance: Net revenues were up 13.7% in the quarter, leading to 12.4% better top line results for FY 2012, which represents an improvement versus 2011, when top line grew 9.9%.  Likewise, total volumes were above last year's performance (+2.0% for FY 2012, up from +0.8% in 2011) while also resuming growth in the short-term (+1.7% during Q4 2012) thanks primarily to a quick volume recovery in our Brazilian operations following our Q3 2012 price increases.  Net revenue per hectoliter (NR/Hl) ended the year up 11.5% as compared to Q4 2011 (+10.0% in FY 2012) given better pricing performance in Brazil, but also in LAS and Canada, helping offset low-single digit negative volumes in these two international operations.  Meanwhile, HILA-ex wrapped up its game-changing year with the acquisition of Cerveceria Nacional Dominicana by also delivering 7.7% organic top line growth for the year.

Cost of Goods Sold (COGS): COGS increased 13.4% in Q4 2012 and 10.2% for the year, whereas on a per hectoliter basis, costs grew 11.1% and 7.9%, respectively.  In the fourth quarter we continued to suffer from greater barley, aluminum and sugar costs, as well as negative package mix, while currency hedges were less of a tailwind.  In addition, increased industrial depreciation resulting from capital expenditures in Brazil was once again a relevant factor.  Accordingly, COGS/Hl (excluding depreciation) rose by 9.8% in Q4 2012 and 7.1% in FY 2012, which was in line with the average inflation in the countries where we operate.

Selling, General & Administrative (SG&A) expenses: SG&A (excluding depreciation and amortization) growth decelerated as compared to the first three quarters of the year, and grew 7.7% in the quarter (+13.0% for the year).  Q4 2012 performance was positively impacted by lower administrative expenses (mainly bonus accruals due to a favorable comparison with Q4 2011) primarily in Brazil, combined with lower commercial spend in Canada versus prior quarters.  On the other hand, we continued to witness labor-related inflationary pressures on our distribution expenses in Argentina and Brazil, while we also decided to continue investing behind our brands to support our commercial initiatives during peak season in Brazil and LAS.

EBITDA, Gross margin and EBITDA margin: Normalized EBITDA grew 15.7% in the quarter, reaching R$ 5,511.6 million.  As a result, we delivered R$ 15,679.0 million of Normalized EBITDA in FY 2012, which represents a 13.6% improvement against FY 2011.  EBITDA performance in the quarter was mostly driven by Brazil and LAS' double-digit, top line-led growth, though Canada managed to deliver positive EBITDA growth despite negative volumes, and HILA contributed with R$ 117.7 million of EBITDA ( R$ 204.9 million for FY 2012 as compared to - R$ 24.5 million during 2011).  Moreover, our strong finish to the year allowed us to achieve expansion in both Gross and EBITDA margins for the quarter (+10 bps and +90 bps, respectively) and for the year (+60 bps and +50 bps, respectively). 

Operating Cash generation and Profit: Cash generated from our operations in Q4 2012 rose 27.8% versus the same period last year, totaling R$ 7,401.4 million ( R$ 15,774.2 for the year, which was 14.4% higher than FY 2011).  In terms of profits, through the combination of the aforementioned EBITDA growth and a lower effective tax rate, our Normalized Profit in the quarter reached R$ 3,734.4 million and Normalized Earnings Per Share (EPS) were R$ 1.19.  For the full year, Normalized Profit totaled R$ 10,558.5 million and Normalized EPS were R$ 3.38.



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