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    ABEV3   BRABEVACNOR1

AMBEV S.A.

(ABEV3)
  Report
Delayed Bolsa de Valores de Sao Paulo  -  04:07:53 2023-02-03 pm EST
12.98 BRL   -0.99%
02/03Ambev Denies Reports of Erroneous Tax Credit Calculations
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Ambev Reports 2021 Third Quarter Results

10/28/2021 | 02:14am EST

Page | 1

AMBEV REPORTS 2021 THIRD QUARTER RESULTS1

"After achieving all-time high rolling 12 months consolidated volumes in 2Q21, and lapping over a great 3Q20, in 3Q21 we saw continued commercial momentum drive our 7.7% top-line growth and 9.4% EBITDA growth compared to 2020, and 20.8% net revenue growth and 15.6% EBITDA growth against 2019" - Jean Jereissati,

CEO

Total Volume (organic)

+ 7.7% vs LY

Most of our markets delivered continued volume growth momentum: Brazil +8.0%, Central America and the Caribbean ("CAC") +8.9%, Latin America South ("LAS") +11.7%, while Canada declined 6.6%.

Net Revenue (organic)

+ 20.8% vs LY

Driven by volume performance and net revenue per hectoliter ("NR/hl") growth of 12.1%. Net revenue grew in Brazil by 17.1%, in CAC by 20.4%, in LAS2 by 54.5%, while in Canada it declined by 2.4%.

Normalized EBITDA (organic)

+ 9.4% vs LY

Top-line led recovery continues to drive our EBITDA performance, which remains pressed by FX and commodities, and higher SG&A, affected mostly by higher variable compensation accruals.

Normalized Profit

R$ 3,753.3 million

Normalized profit was R$ 3,753.3 million compared to R$ 2,495.9 million in 3Q20 (+50.4%). For YTD21 it totalized R$ 9,477.9 million compared to R$ 5,096.3 million in YTD20 (+86.0%).

Cash flow from operating activities

R$ 6,398.2 million

Cash flow from operating activities was R$ 6,398.2 million compared to R$ 7,079.4 million in 3Q20 (- 9.6%). For YTD21 it totaled R$ 11,075.5 million compared to R$ 10,462.2 million in YTD20 (+5.9%).

ESG

In September, we announced the first carbon neutral large brewery and malt plant in Brazil: Ponta Grossa Brewery (PR) and Passo Fundo Malt Plant (RS).

We were chosen as one of the 5 best places to work in Brazil according to Great Place to Work.

  1. The following operating and financial information, unless otherwise indicated, is presented in nominal Reais and prepared according to the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and to the accounting practices issued by the Brazilian Accounting Standards Committee ("CPC") and approved by the Brazilian Securities and Exchange Commission ("CVM"). The information herein should be read together with our financial information for the nine-month period ended September 30, 2021, filed with the CVM and submitted to the U.S. Securities and
    Exchange Commission ("SEC").
  2. The impacts resulting from applying Hyperinflation Accounting for our Argentinean subsidiaries, in accordance with IAS 29, are detailed in the section Financial Reporting in Hyperinflationary Economies - Argentina (page 15).

ambev.com.br

Press release - October 28, 2021

Page | 2

MANAGEMENT COMMENTS

Continued momentum driven by COVID-19 recovery and our consistent commercial strategy

We delivered another strong commercial performance in 3Q21, achieving the highest consolidated volumes in a third quarter on record, delivering strong topline growth of 20.8% on top of a challenging comparable in 3Q20, and 42.9% growth when compared to 3Q19. We continued to grow our volumes by 7.7% versus 3Q20 and 20.8% versus 3Q19, with eight of our top-ten markets already growing above 3Q19. NR/hl grew 12.1% driven by premiumization, innovation, and revenue management initiatives.

Top-line continued to recover ahead of bottom-line. COGS per hectoliter increased 18.5% due to expected FX and commodities impacts. SG&A grew by 19.3%, affected mostly by variable compensation accruals. As a result, Normalized EBITDA increased by 9.4%.

Financial highlights - Ambev

consolidated

% As

% As

R$ million

3Q20

3Q21

Reported

% Organic

YTD20

YTD21

Reported

% Organic

Volume ('000 hl)

42,378.8

45,655.4

7.7%

7.7%

114,855.9

128,993.2

12.3%

12.3%

Net revenue

15,604.5

18,492.6

18.5%

20.8%

39,822.4

50,843.5

27.7%

28.1%

Gross profit

8,181.3

9,239.5

12.9%

14.6%

20,954.2

25,679.8

22.6%

23.2%

% Gross margin

52.4%

50.0%

-240 bps

-270 bps

52.6%

50.5%

-210 bps

-200 bps

Normalized EBITDA

5,073.5

5,468.9

7.8%

9.4%

12,654.2

16,085.4

27.1%

18.8%

% Normalized EBITDA margin

32.5%

29.6%

-290 bps

-310 bps

31.8%

31.6%

-20 bps

-230 bps

Profit

2,359.0

3,712.7

57.4%

4,841.5

9,375.6

93.6%

Normalized profit

2,495.9

3,753.3

50.4%

5,096.3

9,477.9

86.0%

EPS (R$/shares)

0.14

0.23

56.1%

0.29

0.58

97.3%

Normalized EPS (R$/shares)

0.15

0.23

49.1%

0.31

0.58

89.1%

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

Looking at the rolling 12-month ("R12M") period for every quarter since 1Q11, our consolidated volumes have significantly recovered since 3Q20, and in 3Q21 achieved 180 million hectoliters, 8 million hectoliters above the historical peak in 2015. This reflects the continued success of our strategy, the attractiveness of our brand portfolio, and our investments in the long-term growth of our business:

ambev.com.br

Press release - October 28, 2021

Page | 3

Most countries are delivering continued momentum with beer volume growth above 3Q20 and 3Q19 levels, as shown below:

ESG

Ambev was awarded first place, for the ninth time, in the Food and Beverage sector of the "Valor 1000" yearbook, showcasing the best companies in 26 industries, as well as presenting the ranking of the 1,000 largest companies in Brazil.

Great Place to Work

Ambev was chosen as one of the top 5 places to work in Brazil among large companies, according to the Great Place to Work. Our technology branch, Ambev Tech, was also listed between the best 150 companies in Brazil.

Climate Action

In September, we announced the first carbon neutral large brewery and malt plant in Brazil: Ponta Grossa Brewery (PR) and Passo Fundo Malt Plant (RS). These two plants reached 90% reduction of CO2 emissions and had the remaining 10% emissions neutralized via carbon credits, reducing approximately 9,700 ton of CO2 annually, the equivalent of 1,300 cars removed from the streets in Brazil. We have also reached 100% renewable energy for our breweries in Panama, the Dominican Republic and Guatemala. This is part of our larger decarbonization plan, aiming at a net zero footprint in the coming years.

ambev.com.br

Press release - October 28, 2021

Page | 4

KEY MARKETS PERFORMANCES

Beer Brazil: solid volume performance over a challenging comparable, driven by COVID-19 recovery and commercial strategy

  • Operating performance: We outperformed the industry for the fifth consecutive quarter according to our estimates, growing volume by 7.5% versus 3Q20 and 34.8% versus 3Q19. We continue to seize our top line momentum with a solid performance in net revenue, growing 16.2%, and NR/hl, growing 8,2%, due primarily to revenue management initiatives and favorable brand mix. EBITDA fell by 8.5% as top-line growth was offset by anticipated transactional FX and commodity headwinds, variable compensation accruals, and sales and marketing investments (the latter with a hard comparable in 3Q20 due to COVID- 19 pandemic). In YTD21, our volumes grew by 11.8%, Net revenue increased by 23.6%, with a NR/hl growth of 10.6%, and Normalized EBITDA grew by 0.1%.
  • Commercial highlights: our innovations continue to represent over 20% of revenues, and we over-index in total beer innovations share. Our premium brands, with continued momentum, grew by high teens. We began to roll out Spaten, a Munich Helles style, pure-malt beer, established in 1397, within our Core Plus portfolio. Core brands once again showed their resilience as Skol, Brahma and Antarctica families grew volumes above 3Q20 and 3Q19. BEES continued expanding across the country: we already reach more than 85% of our active customers via the platform, while we once again reached all-time high beer buyers and NPS. Zé Delivery achieved an all-time-high number of operators and fulfilled more than 15 million orders in 3Q21, with a growth trend in the number of orders throughout the quarter. Donus TPV grew 3x versus 2Q21 as we doubled our customer base in 3Q21.

Beer Brazil

Currency

Organic

% As

%

R$ million

3Q20

Scope

Translation

Growth

3Q21

Reported

Organic

Volume ('000 hl)

21,846.9

1,628.5

23,475.4

7.5%

7.5%

Net revenue

6,650.5

1,080.3

7,730.8

16.2%

16.2%

Net revenue/hl (R$)

304.4

24.9

329.3

8.2%

8.2%

COGS

(3,295.6)

(810.4)

(4,106.0)

24.6%

24.6%

COGS/hl (R$)

(150.8)

(24.1)

(174.9)

15.9%

15.9%

COGS excl. deprec. & amort.

(2,963.7)

(725.0)

(3,688.7)

24.5%

24.5%

COGS/hl excl. deprec. & amort. (R$)

(135.7)

(21.5)

(157.1)

15.8%

15.8%

Gross profit

3,355.0

269.9

3,624.9

8.0%

8.0%

% Gross margin

50.4%

46.9%

-350 bps

-350 bps

SG&A excl. deprec. & amort.

(1,638.4)

(561.1)

(2,199.5)

34.2%

34.2%

SG&A deprec. & amort.

(301.0)

25.4

(275.6)

-8.4%

-8.4%

SG&A total

(1,939.4)

(535.7)

(2,475.1)

27.6%

27.6%

Other operating income/(expenses)

159.8

18.2

178.0

11.4%

11.4%

Normalized EBIT

1,575.3

(247.6)

1,327.7

-15.7%

-15.7%

% Normalized EBIT margin

23.7%

17.2%

-650 bps

-650 bps

Normalized EBITDA

2,208.2

(187.6)

2,020.6

-8.5%

-8.5%

% Normalized EBITDA margin

33.2%

26.1%

-710 bps

-710 bps

Beer Brazil

Currency

Organic

% As

%

R$ million

YTD20

Scope

Translation

Growth

YTD21

Reported

Organic

Volume ('000 hl)

58,380.0

6,869.4

65,249.4

11.8%

11.8%

Net revenue

17,233.7

4,071.1

21,304.9

23.6%

23.6%

Net revenue/hl (R$)

295.2

31.3

326.5

10.6%

10.6%

COGS

(8,270.6)

(2,680.5)

(10,951.0)

32.4%

32.4%

COGS/hl (R$)

(141.7)

(26.2)

(167.8)

18.5%

18.5%

COGS excl. deprec. & amort.

(7,291.9)

(2,541.9)

(9,833.7)

34.9%

34.9%

COGS/hl excl. deprec. & amort. (R$)

(124.9)

(25.8)

(150.7)

20.7%

20.7%

Gross profit

8,963.2

1,390.7

10,353.9

15.5%

15.5%

% Gross margin

52.0%

48.6%

-340 bps

-340 bps

SG&A excl. deprec. & amort.

(4,676.7)

(1,588.2)

(6,264.9)

34.0%

34.0%

SG&A deprec. & amort.

(908.7)

87.3

(821.4)

-9.6%

-9.6%

SG&A total

(5,585.4)

(1,500.9)

(7,086.3)

26.9%

26.9%

Other operating income/(expenses)

407.8

1,048.5

63.6

1,519.8

nm

15.6%

Normalized EBIT

3,785.6

1,048.5

(46.7)

4,787.4

26.5%

-1.2%

% Normalized EBIT margin

22.0%

22.5%

50 bps

-450 bps

Normalized EBITDA

5,673.0

1,048.5

4.7

6,726.1

18.6%

0.1%

% Normalized EBITDA margin

32.9%

31.6%

-130 bps

-630 bps

ambev.com.br

Press release - October 28, 2021

Page | 5

NAB Brazil: Strong commercial performance supported by BEES and our premium brands portfolio, with volumes above 3Q20 and 3Q19

  • Operating performance: Continued recovery of our non-alcoholic business, with net revenue growing 22.4% versus 3Q20 and 25.7% versus 3Q19. Volume grew 9.8% resulting in market share gains according to our estimates. NR/hl increased by 11.5%, driven by revenue management initiatives and favorable brand mix, supported by the gradual recovery of mobility. EBITDA declined by 20.8%, as strong top-line growth was offset by the anticipated transactional FX and commodity headwinds, as well as bonus accrual. In YTD21, our volumes grew by 11.2%. Net revenue increased by 21.5%, with a NR/hl growth of 9.3%, and Normalized EBITDA declined by 7.2%.
  • Commercial highlights: The continued return of out-of-home occasions supported volume growth of our premium brands, particularly in single-serve packaging, driving positive brand mix. Guaraná Antarctica turned 100 years and we announced that by December 2021, 100% of its bottles will be made of recycled PET. NAB portfolio continued to benefit from BEES adoption by our clients, allowing us to reach another all-time high number of buyers.

NAB Brazil

Currency

Organic

% As

%

R$ million

3Q20

Scope

Translation

Growth

3Q21

Reported

Organic

Volume ('000 hl)

6,602.7

646.0

7,248.6

9.8%

9.8%

Net revenue

1,034.0

231.7

1,265.6

22.4%

22.4%

Net revenue/hl (R$)

156.6

18.0

174.6

11.5%

11.5%

COGS

(527.2)

(255.2)

(782.3)

48.4%

48.4%

COGS/hl (R$)

(79.8)

(28.1)

(107.9)

35.2%

35.2%

COGS excl. deprec. & amort.

(481.5)

(246.3)

(727.8)

51.1%

51.1%

COGS/hl excl. deprec. & amort. (R$)

(72.9)

(27.5)

(100.4)

37.7%

37.7%

Gross profit

506.8

(23.5)

483.3

-4.6%

-4.6%

% Gross margin

49.0%

38.2%

-1080 bps

-1080 bps

SG&A excl. deprec. & amort.

(302.1)

(50.9)

(353.0)

16.9%

16.9%

SG&A deprec. & amort.

(37.8)

(0.2)

(38.0)

0.5%

0.5%

SG&A total

(339.8)

(51.1)

(391.0)

15.0%

15.0%

Other operating income/(expenses)

68.7

(0.8)

67.9

-1.1%

-1.1%

Normalized EBIT

235.7

(75.4)

160.2

-32.0%

-32.0%

% Normalized EBIT margin

22.8%

12.7%

-1010 bps

-1010 bps

Normalized EBITDA

319.1

(66.3)

252.7

-20.8%

-20.8%

% Normalized EBITDA margin

30.9%

20.0%

-1090 bps

-1090 bps

NAB Brazil

Currency

Organic

% As

%

R$ million

YTD20

Scope

Translation

Growth

YTD21

Reported

Organic

Volume ('000 hl)

18,184.2

2,040.8

20,225.0

11.2%

11.2%

Net revenue

2,830.6

609.7

3,440.3

21.5%

21.5%

Net revenue/hl (R$)

155.7

14.4

170.1

9.3%

9.3%

COGS

(1,483.5)

(536.8)

(2,020.3)

36.2%

36.2%

COGS/hl (R$)

(81.6)

(18.3)

(99.9)

22.4%

22.4%

COGS excl. deprec. & amort.

(1,340.1)

(524.9)

(1,865.0)

39.2%

39.2%

COGS/hl excl. deprec. & amort. (R$)

(73.7)

(18.5)

(92.2)

25.1%

25.1%

Gross profit

1,347.1

72.9

1,420.0

5.4%

5.4%

% Gross margin

47.6%

41.3%

-630 bps

-630 bps

SG&A excl. deprec. & amort.

(854.7)

(152.5)

(1,007.2)

17.8%

17.8%

SG&A deprec. & amort.

(117.5)

8.7

(108.7)

-7.4%

-7.4%

SG&A total

(972.2)

(143.7)

(1,115.9)

14.8%

14.8%

Other operating income/(expenses)

124.0

170.7

12.9

307.6

148.0%

10.4%

Normalized EBIT

498.9

170.7

(58.0)

611.6

22.6%

-11.6%

% Normalized EBIT margin

17.6%

17.8%

20 bps

-480 bps

Normalized EBITDA

759.8

170.7

(54.8)

875.7

15.3%

-7.2%

% Normalized EBITDA margin

26.8%

25.5%

-130 bps

-630 bps

ambev.com.br

Press release - October 28, 2021

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

AmBev SA published this content on 28 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2021 06:10:13 UTC.


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Analyst Recommendations on AMBEV S.A.
More recommendations
Financials
Sales 2022 81 158 M 15 835 M 15 835 M
Net income 2022 13 486 M 2 631 M 2 631 M
Net cash 2022 13 674 M 2 668 M 2 668 M
P/E ratio 2022 15,5x
Yield 2022 5,38%
Capitalization 204 B 39 868 M 39 868 M
EV / Sales 2022 2,35x
EV / Sales 2023 2,16x
Nbr of Employees 53 000
Free-Float 28,0%
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Technical analysis trends AMBEV S.A.
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Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 16
Last Close Price 12,98 BRL
Average target price 17,01 BRL
Spread / Average Target 31,0%
EPS Revisions
Managers and Directors
Jereissati Jean Neto Chief Sales & Marketing Officer
Fernando Mommensohn Tennenbaum Director
Lucas Machado Lira Chief Financial & Investor Relations Officer
Victˇrio Carlos de Marchi Co-Chairman
Michel Dimitrios Doukeris Co-Chairman
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