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Companhia de Bebidas das Americas News

AmBev Reports First Quarter 2008 Results

SAO PAULO, Brazil, May 8 PRNewswire-FirstCall — Companhia de Bebidas das Amdricas - AmBev [BOVESPA: AMBV4, AMBV3; and NYSE: ABV, ABVc], announces today its results for the first quarter 2008 (Q1 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 March 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. Comparisons, unless otherwise stated, refer to the first quarter of 2007 (Q1 2007). Values in this release may not add up due to rounding.

OPERATING AND FINANCIAL HIGHLIGHTS

Strong performances by Quinsa and North America not enough to offset weakness in the Brazilian beverage industry.

Volume growth: Total volumes increased organically by 1.4% during Q1 2008. Our operations in Quinsa delivered organic volume growth of 9.9% and North America reported good volume growth of 8.0% including the Lakeport acquisition, with volumes increasing organically by 0.8% against Q1 2007. However, Brazilian Beer and CSD operations faced volume decline in the quarter due to a slow down in the beverage industry driven by unexpected and unusually cold and wet weather, an early Carnival and a sharp increase in core food prices impacting consumer spend.

Market Share improvement: We gained market share in our main operations as both Quinsa in Argentina and North America delivered market share growth for the quarter year over year. In Brazil, our average market share for the quarter was 67.8% for Beer and 17.7% for CSD, 20 bps and 40 bps higher than first quarter 2007, respectively.

Top line growth: Net sales increased organically by 7.1% during Q1 2008. Net revenues per hectoliter (+5.6%) were impacted positively by price increases in Brazil at the end of 2007 and the start of 2008, 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 7.8% in the quarter due to higher commodity prices such as barley and corn and a less favorable fixed cost absorption. Gains arising from sugar and currency appreciation partly offset these increases. SG&A (excluding depreciation and amortization) increased organically by 8.8% during Q1 2008, due to: (i) the timing of marketing investments in Brazil; (ii) growth in our Brazilian direct distribution network; (iii) labor cost increases in Argentina; and (iv) general inflation.

EBITDA and EBITDA Margin: Our EBITDA reached R$2,074.1 million during Q1 2008, which represents an organic increase of 4.9%. Our EBITDA margin in the first quarter was 42.8%.

Payout and Financial Discipline: Share buybacks in the quarter amounted to R$514.7 million. Financial Highlights - AmBev Consolidated % As % R$ million 1Q07 1Q08 Reported Organic Total Volumes 34,843.8 35,784.8 2.7% 1.4% Beer 24,817.7 25,557.7 3.0% 1.2% CSD and Nanc 10,026.1 10,227.1 2.0% 1.7% Net Sales 4,655.0 4,847.8 4.1% 7.1% Gross Profit 3,105.2 3,202.9 3.1% 6.0% Gross Margin 66.7% 66.1% -60 bps -70 bps EBITDA 2,042.6 2,074.1 1.5% 4.9% EBITDA margin 43.9% 42.8% -110 bps -90 bps Net Income 645.9 743.8 15.2% No. of shares outstanding (million) 629.6 611.6 -2.9% EPS (R$/shares) 1.03 1.22 18.6% EPS excl. goodwill amortization (R$/shares) 1.66 2.02 22.1% Financial Highlights - AmBev Consolidated % As % R$ million YTD 07 YTD 08 Reported Organic Total Volumes 34,843.8 35,784.8 2.7% 1.4% Beer 24,817.7 25,557.7 3.0% 1.2% CSD and Nanc 10,026.1 10,227.1 2.0% 1.7% Net Sales 4,655.0 4,847.8 4.1% 7.1% Gross Profit 3,105.2 3,202.9 3.1% 6.0% Gross Margin 66.7% 66.1% -60 bps -70 bps EBITDA 2,042.6 2,074.1 1.5% 4.9% EBITDA margin 43.9% 42.8% -110 bps -90 bps Net Income 645.9 743.8 15.2% No. of shares outstanding (million) 629.6 611.6 -2.9% EPS (R$/shares) 1.03 1.22 18.6% EPS excl. goodwill amortization (R$/shares) 1.66 2.02 22.1%

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

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

SOURCE Companhia de Bebidas das Americas

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