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 Ambev Reports 2015 Fourth Quarter And Full Year Results Under IFRS
   Thursday, February 25, 2016 1:40:00 AM ET

Ambev S.A. [BOVESPA: ABEV3; NYSE: ABEV] announces today its results for the 2015 fourth quarter and full year 2015. 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 twelve-month period ended December 31, 2015 filed with the CVM and submitted to the SEC.

Top line performance: Top line was up 10.4% in the quarter, driven by growth in Brazil (+7.0%), CAC (+10.0%), LAS (+24.7%) and Canada (+4.0%). Volumes declined 3.3% while net revenue per hectoliter (NR/hl) was up by a solid 14.1%. In the full year, top line was up 12.0%, also explained by growth in all of our markets: (i) Brazil was up 8.0%, despite a volume decline of 2.7%, mainly driven by the tough comparable base of the 2014 FIFA World Cup and a challenging macroeconomic environment, more than offset by a solid 10.9% NR/hl increase; (ii) CAC top line was up 17.7%, as we continued to grow our business in Dominican Republic while expanding our presence in the region; (iii) LAS was up 29.7%, due to a strong NR/hl performance offsetting a low single digit volume decline in Argentina, along with a solid performance in Paraguay, Chile and Uruguay; and (iv) Canada was up 4.0%, as we accelerated our net revenue growth with a great balance between volume (+1.7%) and NR/hl (+2.2%). On a consolidated basis, volumes declined by 1.6% while NR/hl was up 13.8% in the year.

Cost of Goods Sold (COGS): Our COGS increased by 11.7% while, on a per hectoliter basis, the increase was 15.5%. In the full year, COGS increased by 13.2% while COGS/hl increased by 15.0% mainly driven by (i) inflationary pressures in Argentina, (ii) unfavorable currency movements and (iii) product mix, partially offset by the benefit of procurement savings initiatives, productivity gains and FX hedges.

Selling, General & Administrative (SG&A) expenses: SG&A (excluding depreciation and amortization) was up 15.7% in the quarter and 11.8% in the full year, as (i) higher overall inflation, (ii) higher distribution costs due to increased mix of direct distribution in Brazil and (iii) increased sales & marketing investments were partly offset by efficiency gains in Brazil and CAC.

EBITDA, Gross margin and EBITDA margin: Normalized EBITDA reached R$ 8,021 million (+7.0%) in 4Q15 with gross margin and EBITDA margin compression of 40bps and 170bps respectively. In the full year, EBITDA reached R$ 22,210 million (+12.4%) with gross margin down 30bps and EBITDA margin expansion of 20bps, driven by Brazil (+140bps) and CAC (+220bps), partly offset by LAS (-170bps) and Canada (-230bps).

Normalized Net Profit and EPS: Normalized Net Profit was R$ 4,349 million (-7.9%) in the quarter, as EBITDA growth was offset by (i) net interest expense, mainly due to a higher non cash accretion expense related to our investment in Dominican Republic and a higher carry cost of our hedges; and (ii) a higher effective tax rate, mainly due to higher tax provisions related to our international subsidiaries and a lower accrual from interest on shareholders’ equity in the quarter, with no impact in our cash benefit. In the full year, Normalized Net Profit was up +6.3% to R$ 13,236 million. Normalized EPS was R$ 0.27 in 4Q15 and R$ 0.81 in the full year.

Operating Cash Flow generation and CAPEX: While net profit declined in the quarter, operating cash flow was up 25% to R$ 10,988 million, due to nominal EBITDA growth (+18%), the non cash nature of some interest expenses, a similar cash tax outflow year over year and another quarter of working capital improvement. In the full year, we generated R$ 23,581 million (+48%) of operating cash flow, due to EBITDA growth (+22% in Brazilian Reais) and a significant improvement in working capital during all four quarters of 2015. CAPEX reached R$ 5,261 million, with Brazil flat yoy (R$ 3.1 billion), in line with our guidance.

Pay-out and Financial discipline: During 2015, we returned approximately R$ 12.1 billion to equity holders in dividends, interest on capital and buybacks. As of December 31st, 2015, our net cash position was R$ 10,233 million. This figure does not include the IOC payment of R$ 0.13 per share (approximately R$ 2.0 billion) announced on January 15th, 2016 to be paid starting on February 29th, 2016.

Financial Highlights - Ambev                   % As       %                            % As     %
R$ million                   4Q14     4Q15     Reported   Organic  YTD14     YTD15     Reported Organic
Total volumes                49,572.0 47,948.9 -3.3%      -3.3%    171,765.7 169,078.2 -1.6%    -1.6%
Beer                         36,084.7 35,848.0      -0.7% -0.7%    124,767.4 125,220.5 0.4%     0.4%
CSD and NANC                 13,487.3 12,100.8 -10.3%     -10.3%   46,998.3  43,857.7  -6.7%    -6.7%
Net sales                    12,232.9 15,296.2 25.0%      10.4%    38,079.8  46,720.1  22.7%    12.0%
Gross profit                 8,423.0  10,367.2 23.1%      9.8%     25,265.2  30,658.8  21.3%    11.4%
Gross margin                 68.9%    67.8%    -110 bps   -40 bps  66.3%     65.6%     -70 bps  -30 bps
Normalized EBITDA            6,801.1  8,021.4  17.9%      7.0%     18,275.8  22,209.7  21.5%    12.4%
Normalized EBITDA margin     55.6%    52.4%    -320 bps   -170 bps 48.0%     47.5%     -50 bps  20 bps
Normalized Profit            4,722.2  4,349.3  -7.9%               12,451.0  13,236.3  6.3%
Normalized EPS               0.29     0.27     -8.0%               0.77      0.81      4.8%

Note: Earnings per share calculation is based on outstanding shares (total existing shares excluding shares held in treasury).

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 fourth quarter of 2014 (4Q14). Values in this release may not add up due to rounding.

To view the original version on PR Newswire, visit:


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