SÃO PAULO, July 29, 2016 /PRNewswire/ -- Ambev S.A. [BOVESPA: ABEV3; NYSE: ABEV] announces today its results for the 2016 second quarter. 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 six-month period ended June 30, 2016 filed with the CVM and submitted to the SEC
Operating and Financial Highlights
Top line performance: Net revenue (NR) was up 3.2% in the quarter, explained by growth in all of our operations (Brazil +1.7%, CAC +19.9%, LAS +2.6% and Canada +1.6%). Volumes were down 6.7% mainly driven by a decline in Brazil and Argentina as economic and political volatility in these countries continued to put pressure on beverage consumption. This decline was more than offset by a solid net revenue per hectoliter (NR/hl) increase of 10.6%, due to our revenue management initiatives and premium mix in most of the countries we operate.
Cost of Goods Sold (COGS): Our COGS increased by 0.6% while, on a per hectoliter basis, the increase was 7.8% mainly driven by inflationary pressures and unfavorable currency movements, partly offset, among other factors, by FX and commodity hedges, the growth of 300ml returnable glass bottles and the benefit of procurement savings.
Selling, General & Administrative (SG&A) expenses: SG&A (excluding depreciation and amortization) was up 7.8%, below our weighted average inflation (around 9.3%), mainly due to efficiency gains in sales & marketing and cost savings in administrative expenses, while distribution expenses grew in line with inflation.
EBITDA, Gross margin and EBITDA margin: Normalized EBITDA reached R$ 4,204.6 million (+1.8%) in 2Q16 with gross margin expansion of 100bps and EBITDA margin compression of 60bps.
Normalized Net Profit and EPS: Normalized Net Profit was R$ 2,194.7 million (-22.4%) in the quarter due to a higher net finance expense mainly driven by (i) higher carry cost of our COGS hedges, (ii) mark to market losses of CAPEX hedges, (iii) a non cash impact driven by accretion expense related to our investment in Dominican Republic (around R$ 150 million in the quarter) and (iv) a non cash impact due to foreign exchange translation losses on intercompany loans (around R$ 90 million in the quarter). Effective tax rate was 9.4% versus 6.1% last year. Normalized EPS was R$ 0.13 in 2Q16.
Operating Cash Generation and CAPEX: In the quarter, cash generated from operations was R$ 2.5 billion while CAPEX reached R$ 1.1 billion. Year to date, we generated R$ 4.7 billion in cash from operations while CAPEX reached R$ 1.8 billion. In Brazil, CAPEX year to date is R$ 930 million.
Pay-out and Financial discipline: In 2Q16, we announced a R$ 2 billion dividend to be paid as from July 29th, 2016. Year to date, we have paid/announced R$ 4.2 billion in interest on capital and dividends. As of June 30th, 2016, our net cash position was R$ 2,182.9 million.
Financial highlights - Ambev consolidated |
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| % As | % |
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| % As | % |
R$ million | 2Q15 | 2Q16 | Reported | Organic | YTD15 | YTD16 | Reported | Organic |
Total volumes | 37,960.0 | 35,667.8 | -6.0% | -6.7% | 81,141.0 | 75,625.1 | -6.8% | -7.2% |
Net sales | 9,910.0 | 10,377.2 | 4.7% | 3.2% | 20,678.8 | 21,942.3 | 6.1% | 2.9% |
Gross profit | 6,135.4 | 6,482.6 | 5.7% | 4.8% | 13,290.3 | 14,087.4 | 6.0% | 3.5% |
Gross margin | 61.9% | 62.5% | 60 bps | 100 bps | 64.3% | 64.2% | -10 bps | 40 bps |
Normalized EBITDA | 4,123.3 | 4,204.6 | 2.0% | 1.8% | 9,196.3 | 9,469.0 | 3.0% | 1.4% |
Normalized EBITDA margin | 41.6% | 40.5% | -110 bps | -60 bps | 44.5% | 43.2% | -130 bps | -60 bps |
Normalized Profit | 2,829.7 | 2,194.7 | -22.4% |
| 5,800.4 | 5,095.0 | -12.2% |
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Normalized EPS | 0.17 | 0.13 | -24.7% |
| 0.35 | 0.31 | -13.2% |
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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 second quarter of 2015 (2Q15). Values in this release may not add up due to rounding.
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SOURCE Ambev S.A.