Business News
AmBev Reports Fourth Quarter 2008 Results
Thursday 05. March 2009 - Companhia de Bebidas das Americas - AmBev (BOVESPA: AMBV4, AMBV3; and NYSE: ABV, ABVc), announces today its results for the fourth quarter 2008 (Q4 2008).
The following financial and operating information, unless otherwise indicated, is presented in nominal Reais and prepared in accordance with Brazilian GAAP and should be read in conjunction with our financial statements for twelve-months period ending December 31, 2008. Our press release segregates the impact of organic changes from those arising from changes in scope or currency translation. Scopes represent the impact of acquisitions and divestitures and the start-up or termination of activities. We have treated depreciation adjustments arising from changes in accounting practices as scope in Q4 2008. Comparisons, unless otherwise stated, refer to the fourth quarter of 2007 (Q4 2007). The year-to-date (YTD) changes in Reais were restated to properly reflect organic growth excluding currency changes. Values in this release may not add up due to rounding.
OPERATING AND FINANCIAL HIGHLIGHTS
Top line growth: Top line growth of +6.5% was driven by price increases across our regions and our continued focus on revenue management best practices. Our volumes increased organically by 0.6% in Q4 2008 despite very difficult comparisons from Q4 2007. Good performances by Quinsa and North America with +7.4% and 0.5% volume growth, respectively, were offset by weak volumes in Brazil with Brazil Beer and CSD & NANC volumes declining -1.4% and -2.2%, respectively.
Market Share: We continue to make progress on market share with both Argentina and Canada delivering share growth for the quarter. In Brazil, CSD market share in the quarter reached 17.8% (+60 bps yoy). Beer market share declined during the quarter and reached 67.5% (-100 bps yoy).
Cost of Goods Sold (COGS) and Selling, General & Administrative (SG&A) expenses: COGS per hectoliter increased 9.7% in the quarter due to inflation and higher commodity prices, principally in Quinsa and Labatt. Expected gains arising from sugar and currency hedges helped to partly offset these increases. SG&A (excl. depreciation & amortization) increased organically by 16.2% in Q4 2008 due to inflation, investments to support our innovations and a very tough comparison from Q4 2007, mainly in Brazil.
EBITDA and EBITDA Margin: Our EBITDA reached R$2,920.3 million during Q4 2008, which represents an organic decline of 0.8%. Our EBITDA margin in the fourth quarter decreased organically by 310 bps to 44.9%.
Net income and Operating Cash Flow: Net income was R$964.5 million in Q4 2008 totaling R$3,059.5 million for the full year (an increase of +8.6% yoy). Excluding changes in accounting practices adopted in the period, Earnings per share (EPS) increased +16.3% in Q408 and +21.3% YTD08. Operating cash flow was R$3,579.0 million in Q408 which represents an increase of +47.4%, totaling R$7,715.7 million for the year (a decline of -2.6% yoy).
Payout and Financial Discipline: In Q4 2008, we paid dividends and interest on own capital (IOC) totaling R$839.6 million and declared additional IOC of R$250.0 million, which was paid beginning January 30, 2009. There were no share buybacks in the quarter.