Ambev Reports 2017 Fourth Quarter and Full Year Results Under IFRS
03/01/2018 | 02:01am EDT
SÃO PAULO, Brazil, March 01, 2018 (GLOBE NEWSWIRE) -- Ambev S.A. (B3:ABEV3) (NYSE:ABEV] announces today its results for the 2017 fourth quarter and full year. 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 financial information for the twelve-month period ended December 31, 2017 filed with the CVM and submitted to the SEC.
Operating and Financial Highlights
Top line performance: Top line was up by a solid 14.7% in 4Q17, driven by growth across all our operations: Brazil (+13.8%), Latin America South (LAS) (+22.6%), Central America and the Caribbean (CAC) (+15.0%), and Canada (+1.3%). In Brazil, volumes were up 2.9% while NR/hl up 10.7%. In LAS, volumes grew by a solid 5.8% and NR/hl rose by 15.9%. In CAC, NR/hl increased by 8.3% and, while organic volumes grew by 4.3%, reported volumes were up 30.1%, as a result of the swap of assets carried out with Anheuser-Busch InBev SA (ABI) and our operations in Panama. And, in Canada, volumes decline of 0.7% was more than offset by a NR/hl growth of 1.9%.
In the full year, net revenue increased by 9.6%, driven by growth in Brazil (+5.6%), LAS (+26.1%) and CAC (+8.8%) and a flattish performance in Canada (+0.2%). On a consolidated basis, volumes were up 0.9% and NR/hl grew by 8.5%.
Cost of Goods Sold (COGS): In 4Q17, COGS and cash COGS (excluding depreciation and amortization) increased, respectively, by 9.3% and by 10.3%. On a per hectoliter basis, COGS grew by 5.6% and cash COGS by 6.6%. In the full year, COGS and cash COGS were up 13.4% and 14.2%, respectively. On a per hectoliter basis, COGS rose by 12.2% while cash COGS by 13.0%, mainly due to unfavorable FX in Brazil and LAS.
Selling, General & Administrative (SG&A) expenses: In 4Q17, SG&A increased by 15.7% while cash SG&A (excluding depreciation and amortization) by 15.1%, mainly due to higher administrative costs. In the full year, SG&A and cash SG&A grew by 6.1% and 6.3%, respectively, in line with our weighted average inflation (around 6.1%).
EBITDA, Gross margin and EBITDA margin: Normalized EBITDA was R$ 7,296 million (+22.0%) in the quarter, with gross margin and EBITDA margin expansion of 170bps and 290bps, respectively. In the full year, EBITDA was R$ 20,148 million (+7.9%), with gross and EBITDA margins contracting 130bps and 70bps, respectively.
Net Profit, Normalized Net Profit and EPS: Net Profit reached R$ 3,299 million in the quarter, 31.7% below 4Q16, while, on a normalized basis, Net Profit grew by 23.2% to R$ 4,506 million. In the full year, Net Profit was down 40.0% to R$ 7,851 million, while adjusted by exceptional items, Net Profit was up 2.1% to R$ 12,200 million, as EBITDA increase and lower net finance results were partially impacted by a higher effective tax rate. EPS was R$ 0.47 and Normalized EPS was R$ 0.74 in the full year.
Cash Generation and CAPEX: Cash flow from operating activities reached R$ 8,901 million in the quarter and R$ 17,874 million in the full year, which represents an increase of 44.8% when compared to FY16. CAPEX totaled R$ 1,166 million in the quarter and R$ 3,204 in the full year, declining 22.5% year over year.
Pay-out and Financial discipline: In 2017, we have returned R$ 8,482 million to equity holders in dividends and interests on capital. As of December 31st, 2017 our net cash position was R$ 7,812 million. This figure does not include the dividend payment of R$ 0.07 per share (approximately R$ 1.1 billion) announced on December 21st, 2017, made as of February 22nd, 2018.
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 exceptional items adjustments. Exceptional 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 2016 (4Q16) or full year of 2016 (FY16). Values in this release may not add up due to rounding.
Financial highlights - Ambev consolidated
Normalized EBITDA margin
Note: Earnings per share calculation is based on outstanding shares (total existing shares excluding shares held in treasury).