AmBev Reports Second Quarter 2008 Results

SAO PAULO, Brazil, Aug. 14  /PRNewswire-FirstCall/ -- Companhia de Bebidas das Americas - AmBev (BOVESPA: AMBV4, AMBV3; and NYSE: ABV, ABVc), announces today its results for the second quarter 2008 (Q2 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 quarterly financial information for the three month period ending June 30, 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. Comparisons, unless otherwise stated, refer to the second quarter of 2007 (Q2 2007).  Values in this release may not add up due to rounding.

OPERATING AND FINANCIAL HIGHLIGHTS

Brazil's volumes recover while Quinsa and North America continue their strong performances.

Volume growth: Total volumes increased organically by 4.8% during Q2 2008. Brazilian Beer and CSD volumes recovered from a weak first quarter to post organic growth of 3.8% and 2.5%, respectively, although consumer spend continues to be under pressure from food inflation. Our operations in Quinsa delivered double-digit organic volume growth of 13.3%. North America volumes were flat with poor weather leading to a weaker Canadian industry.

Market Share improvement: We continue to make progress on market share. Argentina and Canada delivered market share growth for the quarter year over year while in Brazil, our average market share for the quarter was 67.3% for Beer and 17.4% for CSD, flat and 60 bps higher than second quarter 2007, respectively.

Top line growth: Net sales increased organically by 8.3% during Q2 2008. Net revenues per hectoliter (+3.3%) were impacted positively by price increases, our continued focus on revenue management best practices and the development of the premium segment in all of our major markets.

Cost of Goods Sold and SG&A: COGS per hectoliter increased 3.3% in the quarter due to higher commodity prices such as barley and corn, partly offset by gains arising from sugar hedges and currency appreciation. SG&A (excluding depreciation and amortization) increased organically by 6.0% during Q2 2008, due to: (i) labor cost increases in Argentina and (ii) general inflation, partly offset by positive phasings in North America.

EBITDA and EBITDA Margin: Our EBITDA reached R$1,978.7 million during Q2 2008, which represents an organic increase of 10.1%. Our EBITDA margin in the second quarter increased by 80 bps to 41.7%.

Payout and Financial Discipline: During the second quarter we paid dividends and interest on own capital totaling R$1,065.9 million and share buybacks amounting to R$ 95.6 million.

  Financial Highlights - AmBev Consolidated              % As         %
  R$ million                      2Q07       2Q08      Reported    Organic

  Total Volumes                 31,214.4   32,777.1       5.0 %      4.8 %
  Beer                          22,535.1   23,683.7       5.1 %      4.8 %
  CSD and Nanc                   8,679.3    9,093.3       4.8 %      4.8 %
  Net Sales                      4,525.1    4,739.4       4.7 %      8.3 %
  Gross Profit                   2,963.9    3,104.4       4.7 %      8.3 %
  Gross Margin                      65.5 %     65.5 %       bps        bps
  EBITDA                         1,842.4    1,978.7       7.4 %     10.1 %
  EBITDA margin                     40.7 %     41.7 %   100 bps     80 bps
  Net Income                       448.7      402.1     -10.4 %
  No. of shares outstanding
   (million)                       623.0      613.7      -1.5 %
  EPS (R$/shares)                   0.72       0.66      -9.0 %
  EPS excl. goodwill amortization
   (R$/shares)                      1.39       1.47       5.9 %


  Financial Highlights - AmBev Consolidated              % As         %
  R$ million                     YTD 07     YTD 08      Reported   Organic

  Total Volumes                 66,058.3   68,561.9       3.8 %      3.0 %
  Beer                          47,352.8   49,241.5       4.0 %      2.9 %
  CSD and Nanc                  18,705.4   19,320.4       3.3 %      3.1 %
  Net Sales                      9,180.1    9,587.2       4.4 %      7.7 %
  Gross Profit                   6,069.2    6,307.4       3.9 %      7.1 %
  Gross Margin                      66.1 %     65.8 %   -30 bps    -20 bps
  EBITDA                         3,885.0    4,052.8       4.3 %      7.4 %
  EBITDA margin                     42.3 %     42.3 %       bps        bps
  Net Income                     1,094.6    1,145.9       4.7 %
  No. of shares outstanding
   (million)                       623.0      613.7      -1.5 %
  EPS (R$/shares)                   1.76       1.87       6.3 %
  EPS excl. goodwill amortization
   (R$/shares)                      3.06       3.48      13.8 %




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

The full release is available at http://www.ambev-ir.com/ 

DATASOURCE: AmBev



CONTACT:  Myriam Bado of AmBev, [phone]



Web site:  http://www.ambev.com.br/

http://www.ambev-ir.com/ 

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