Brazil: AmBev Reports Second Quarter 2005 Results
Companhia de Bebidas das Americas - AmBev , the world's fifth largest brewer and the leading brewer in Latin America, announced on August 10 its results for the second quarter 2005 (2Q05). The following financial and operating information, unless otherwise indicated, is presented in nominal Reais pursuant to Brazilian Corporate Law.
AmBev's consolidated results are the sum of the three following business units:
-Brazil: comprised of (i) Beer Brazil; (ii) CSD & Nanc (Carbonated Soft Drinks and Nanc - non-alcoholic, non-carbonated beverages); and (iii) Malt and By-Products Sales;
-Hispanic Latin America (HILA): comprising (i) AmBev's average 55.2% economic stake in Quinsa; and (ii) HILA-ex (which corresponds to AmBev's controlled franchises in Northern Latin America); and
-North America: representing the operations of the Canadian franchise Labatt Brewing Company Limited ("Labatt"). Comparisons, unless otherwise stated, refer to the second quarter 2004 (2Q04).
Operating and financial highlights:
-Consolidated EBITDA reached R$1,418.2 million (+92.9%); EBITDA margin reached 38.3% (+460 bps).
-Solid growth in volumes and net revenues per hectoliter in Brazil; total net revenues of this business unit grew by 23.1%.
-HILA's sales volumes increased by 11.5%; in June AmBev reached its all time high market share in Venezuela, of 14.5%.
-Labatt's EBITDA margin reached 35.0%; EBITDA was of R$384.1 million (CAD$198.2 million).
Earnings before goodwill per share increased by 27.8%, reaching R$9.74.
The AmBev management said : Second quarter results confirm our enthusiasm on the positive outlook for AmBev in 2005. The Company reached a 92.9% growth in its consolidated EBITDA and a 15.1% increase in its net income. All our three business units delivered a promising performance. The strong growth in sales volumes, both in beer and soft drinks, was the highlight of Brazilian operations. In our beer business, we enphasize the merits of our sales and marketing team, which maintained, for the first time, our market share stable after a price increase”.
Commenting on AmBev’s performance in Brazil, Luiz Fernando Edmond, General Executive Officer for Latin America, affirmed: “The combination of a favorable economic environment with the great dedication of all our AmBev team brought impressive results to the Company in the second quarter”. In our operations in Hispanic Latin America we have reached several important achievements. Among them we highlight the 34.5% increase in volumes in Venezuela, where we reached our all time high market share, of 14.5%, as well as the highly expected Brahma’s launch in Peru. “
“The beer markets in Latin American are among the world’s most attractive ones. We are currently the leaders in the South of the continent, and we reaffirm our vision of reaching throughout the next years the same performance in the other Latin American countries”, said Juan Vergara, Executive Officer for Hispanic Latin America. In North America we remain dedicated to improving our knowledge and understanding of the Canadian consumer. We are continually fine tuning and enhancing our strategy to enable Labatt to overcome the challenging competitive environment in Canadá. Meanwhile, the implementation of Zero Based Budgeting at Labatt continues at full speed, ensuring that all cost reduction opportunities envisaged are captured. Carlos Brito, General Executive Officer for North America, commented "We face a tough competitive scenario in Canada. I know I can count on Labatt's highly qualified and motivated team to be a competitive advantage in this market."
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