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©AmBev
MBA PRESENTATIONJOAO CASTRO NEVES – AMBEV CEOSÃO PAULO, MAY 2009
NELSON JAMEL – AMBEV CFO
JUNE 2009
O conteúdo desta apresentação é de propriedade da AmBev.
• Beer and Soft Drinks
– Start up operations
–Growth potential
• Beer and Soft Drinks
– Market Leader in Argentina,
Bolivia, Paraguay and Uruguay
– EBITDA Margin 08 – 45.2%
• Beer
– EBITDA Margin 08 – 38.7%
– Market Share of 43%
• Beer
– 3 major brands
– EBITDA Margin 08 – 48%
– Market Share of 67.5%
• Soft Drinks and Nanc
– EBITDA Margin 08 – 43.5%
– Market Share of 17.7%
2008• Sales Volumes –147 mm Hl
• EBITDA – R$ 9.0 Billion
• EBITDA Margin – 43.1%
• Market cap – USD 30.8 billion (04/09)
2008
O conteúdo desta apresentação é de propriedade da AmBev.5
Brazil67.5% Market Share (FY08) Three leading brands within portfolioSkol is the fourth largest selling brand in the worldBrahma is the seventh largest selling brand in the worldAntarctica is 24th largest selling brand in the world 69.9 million hectoliters sold in 2008
ArgentinaApprox. 75% Market ShareLeading brands (Quilmes and Brahma)
Paraguay, Uruguay and BoliviaLeadership with Brahma, Pilsen and Paceña
CanadaApprox. 42.9% Market Share (FY08)Broad portfolio11.7 million hectoliters sold in 2008
Today, AmBev is the leader in 6 beer markets throughout the Americas...
O conteúdo desta apresentação é de propriedade da AmBev.
• Operations in 6 countries
-Brazil – Argentina – Uruguay – Bolivia – Peru – Dominican Republic
• Largest PepsiCo bottler outside the US
• EBITDA margin of 43.5% in 2008 for the Brazilian Operation (vs. 37.1% in
2007)
O conteúdo desta apresentação é de propriedade da AmBev.7
AmBev owns 4 U$1Bn+ brands (out of AB-InBev`s 14)
Billion dollar brands
Euro-USD exchange rate = 1.3
10.3
9.3
5.5
3.2 3.1 2.5 2.4
2.0 1.9 1.8 1.7 1.3 1.1 1.0
Bu
d L
igh
t
Bu
dw
eis
er
Glo
ba
l
Sko
l
Ste
lla A
rto
is
Glo
ba
l
Bra
hm
a
(Bra
zil)
Bu
sch
Be
cks
Glo
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l
Ca
ss
Mic
he
lob
An
tarc
tica
Na
tura
l Lig
ht
Se
dri
n
Qu
ilme
s
Jup
iler
O conteúdo desta apresentação é de propriedade da AmBev.
•To be the best beer company
in a better world
•Targets and results
•Social Responsibility
•Competitive Advantage
•Compensation
•Leadership development
•Career development
•Training
•Vision
•Mission
•Principles
•Meritocracy
•Ownership
•Consistency
•Long term commitment
•Candor
O conteúdo desta apresentação é de propriedade da AmBev.
10 Principles
1.Our shared dream energizes everyone to work in the same direction: to be the best beer
company in a better world. Economic development and market growth;
2.Great people, allowed to grow at the pace of their talent and compensated accordingly, are
the most valuable assets of our company
3.We must select people who, with the right development, challenges and encouragement, can
be better than ourselves. We will be judged by the quality of our teams
4.We are never completely satisfied with our results, which are the fuel of our company.
Focus and zero-complacency guarantee lasting competitive advantage.
5.The consumer is the Boss. We connect with our consumers through meaningful brand
experiences, balancing heritage and innovation, and always in a responsible way.
6.We are a company of owners. Owners take results personally.
7.We believe common sense and simplicity are usually better guidelines than unnecessary
sophistication and complexity.
8.We manage our costs tightly, to free up resources that will support top-line growth.
9.Leadership by personal example is the best guide to our culture. We do what we say.
10.We don’t take shortcuts. Integrity, hard work, quality and consistency are keys to building
our company.
O conteúdo desta apresentação é de propriedade da AmBev.
Pay-out – R$ billion
1.6
1.8
3.1 0.7
1.3
2.31.8 2.0
3.1
0.4
2004 2005 2006 2007 2008
Buy backs
Dividends
2.9 2.7
3.6
6,934
8,697 9,007
7,1025,985
4,1503,419
7,445
6,305
4,357
2004 2005 2006 2007 2008
Operational Cash FlowR$ MM* Cash Flow
EBITDA
* All figures in BR GAAP. In 2007 and 2008, interest paid started to be
presented as operating cash flow (consistent with IFRS).
5.13.8
O conteúdo desta apresentação é de propriedade da AmBev.
• First company in it’s industry to be certified by the United Nations for the
sale of carbon credits
O conteúdo desta apresentação é de propriedade da AmBev.15
283 364 286 292 403 582 662 667903
1,5051,990
2,710
4,535
6,305
7,445
8,6679,007
3,072
587
23.8%
27.8%28.7%30.5%
37.0%35.4%
37.8%39.5%
42.3%44.1%43.1%
21.1%22.6%
26.6%
20.8%
23.5%
20.4%
28.6%
24.7%
199
0
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
EBITDA (R$MM)
EBITDA margin
•1990 to 1999 figures refer to Brahma only
•BR Gaap figures
O conteúdo desta apresentação é de propriedade da AmBev.
AmBev Consolidated R$ million
1Q08 1Q09 % Org.
Volume (´000 hl) 35,785 37,268 5.1%
Net Revenue 4,833 5,656 10.7%
Net Revenue/Hl 135.1 151.8 5.4%
COGS / Hl (46.6) (50.9) 1.5%
SG&A exc. dep & amort. (1,303) (1,455) 5.9%
Normalized EBITDA 2,107 2,583 16.3%
EBITDA Margin 43.6% 45.7% 240bps
Good early start, but outlook remains unclear...
Positives / Achievements – Q1 2009
• Brazil industry volumes
• Pricing discipline
• Market share
• 2009 Hedges/ COGS
• Innovations’ performance
• Productivity initiatives
Challenges / Risks for H2 2009
• Brazil’s Economy/ Unemployment
• Competition / Market share
• Disciplined Execution of our plans
(Productivity and Innovations)
O conteúdo desta apresentação é de propriedade da AmBev.
Brazil – The EconomyTotal Consumer Income
(labor + social security, in inflation
adjusted (INPC) terms)
Sources: IBGE and MPAS. Preparation
and forecasts: LCA.
4.9 5.0 5.1
2.6
6.45.8 5.5
3.8
10.5
7.5
6.26.9
2006 2007 2008 2009 (f)
A/B (higher) C (medium) D/E (lower)
CPI 12m % Change
Total index X food and beverages
Source: IBGE. Prepared by LCA.
3.1
4.5
5.9
4.5
1.2
10.8 11.1
4.6
2006 - Dec 2007 - Dec 2008 - Dec 2009 - Dec (f)
CPI (IPCA)
Food and
Beverage
Family Debt Obligations as % of Monthly
Household IncomeSource: Central Bank and IBGE. Prepared by LCA
8
12
16
20
Ja
n-0
2A
pr-
02
Ju
l-02
Oc
t-02
Ja
n-0
3A
pr-
03
Ju
l-03
Oc
t-03
Ja
n-0
4A
pr-
04
Ju
l-04
Oc
t-04
Ja
n-0
5A
pr-
05
Ju
l-05
Oc
t-05
Ja
n-0
6A
pr-
06
Ju
l-06
Oc
t-06
Ja
n-0
7A
pr-
07
Ju
l-07
Oc
t-07
Ja
n-0
8A
pr-
08
Ju
l-08
Oc
t-08
Ja
n-0
9A
pr-
09
Consumer Confidence Index (Brazil)Source FGV. Prepared by LCA.
95
100
105
110
115
120
125
Ju
n-0
7
Ju
l-07
Au
g-0
7
Se
p-0
7
Oc
t-07
No
v-0
7
De
c-0
7
Ja
n-0
8
Fe
b-0
8
Ma
r-08
Ap
r-08
Ma
y-0
8
Ju
n-0
8
Ju
l-08
Au
g-0
8
Se
p-0
8
Oc
t-08
No
v-0
8
De
c-0
8
Ja
n-0
9
Fe
b-0
9
Ma
r-09
Ap
r-09
Ma
y-0
9
Month
3m moving average
O conteúdo desta apresentação é de propriedade da AmBev.
Core Food Basket x Minimum WageMinimum wage: purchasing power
Measured against basic consumption basket
% yoy. Sources: BC and Dieese. Prepared by LCA.
-25
-15
-5
5
15
25
35
45
Ja
n-0
4
Ap
r-04
Ju
l-04
Oc
t-04
Ja
n-0
5
Ap
r-05
Ju
l-05
Oc
t-05
Ja
n-0
6
Ap
r-06
Ju
l-06
Oc
t-06
Ja
n-0
7
Ap
r-07
Ju
l-07
Oc
t-07
Ja
n-0
8
Ap
r-08
Ju
l-08
Oc
t-08
Ja
n-0
9
Ap
r-09
Minimum wage: purchasing powerMeasured against basic consumption basket
% yoy. Sources: BC and Dieese; LCA forecasts.
Prepared by LCA.
14.1
0.8
11.317.1
13.36.6
-6.9
-14.1-14.5-8.6-7.2-6.2
2007
Q1
2007
Q2
2007
Q3
2007
Q4
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2 (f)
2009
Q3 (f)
2009
Q4 (f)
Food inflation x basic consumption basket
12m % change. Sources: IBGE and BC.
Prepared by LCA.
5.2
15.7
-5
0
5
10
15
20
25
30
Ja
n-0
6
Ap
r-06
Ju
l-06
Oc
t-06
Ja
n-0
7
Ap
r-07
Ju
l-07
Oc
t-07
Ja
n-0
8
Ap
r-08
Ju
l-08
Oc
t-08
Ja
n-0
9
Ap
r-09
INPC - Food & beverage
Basic consumption basket
Minimum wage: real increases (INPC)
% yoy. Sources: BC and IBGE.
Prepared by LCA.
18.6
13.4 13.613.1
4.8 3.8 3.66.2
2.4 1.8 2.0
7.86.6 7.2 7.0
10.4
Q1 Q2 Q3 Q4
2006 2007
2008 2009 (f)
O conteúdo desta apresentação é de propriedade da AmBev.
Uncertainties for 2009 but still long term organic growth opportunities
Opportunities:
1. Innovation;
2. Market share;
3. Productivity/ Efficiency gains;
4. ZBB next level;
5. Brazil Organic Growth;
Challenges
1. Adverse economic environment;
2. Competitive landscape + taxation;
3. Commodities’ prices + currency;
4. Industry regulation (drink and driving, advertising restrictions);
5. Venezuela;
O conteúdo desta apresentação é de propriedade da AmBev.
The Brazilian Beer Market
84.087.1
91.6 95.4101.0 102.9
2003 2004 2005 2006 2007 2008
Beer volume – Brazil (million HL)
The 4th largest beer market in the world and growing
(2nd largest profit pool behind only the US)
115 113
159
110
9587 84 82 79
58
Czech
Republic
Ireland Germany Austria Venezuela UK USA Spain Russia Brazil
Per Capita Beer Consumption 2008 (in liters)
O conteúdo desta apresentação é de propriedade da AmBev.
32%
47%
21%
40%
60%
The Brazilian Beer Market
Beer market is concentrated in AmBev’s strongholds
Grocery Stores
On premise (Bar)
Supermarkets
Volume contribution by chanel - 2008
Beer Blast Others
Volume contribution by Occasion - 2008
Returnable
Disposable
Volume contribution by Packaging - 2008
Source: Nielsen. Ipsos
65%
35%
O conteúdo desta apresentação é de propriedade da AmBev.
Beer Brazil Brand Preference
Growth potential driven by gap between consumerpreference and AmBev market share
Market Share
Ambev
68%
Schincariol
11%
Petrópolis
9%
Femsa
8%
Others
5%
Source: Nielsen. IPSOS
Consumer Preference AmBev Brands (2008)
AmBev
78%
Other´s;
22%
O conteúdo desta apresentação é de propriedade da AmBev.
Premium
5%
Low Price
10%
Core 85%
Segment Price IndexAmBev Market
Share
Premium > 115 87.8%
Core 85 < x < 115 74.1%
Low Price < 85 0.0%
Source: Nielsen
The Brazilian Beer Market
AmBev is the clear market leader with high opportunity to grow the premium segment
Volume contribution by market segment
O conteúdo desta apresentação é de propriedade da AmBev.
% of Premium vs. Total IndustryPremium segment (% Volume)
Brazil Beer - Premium Segment
2%
5%
Brazil - 1998 Brazil - 2008
2%5% 7%
15%
33%
45%
Brazil - 1998 Brazil - 2008 Ukraine USA France Belgium
7%
64%
11%
18%
Night Out Premium Pilsen Non Alcohol Dark
Category
AmBev Market
share Leading brand
Premium Pielsen 95% Bohemia
Dark 87% Caracu
Non-Alcohol 65% Liber
Nigh-out/Imported 45% Skol Beats
O conteúdo desta apresentação é de propriedade da AmBev.
0
20
40
60
80
100
120
okt/05
jan/
06
apr/06
jul/0
6
okt/06
jan/
07
apr/07
jul/0
7
okt/07
jan/
08
apr/08
jul/0
8
okt/08
jan/
09
apr/09
% r
ela
tive s
hare
Heineken Stella Artois
Stella Artois in Argentina:
# 1 international beer < 3 years after launch
28
UK: Market share gain in 2008 after 5 years of consistent declineOur premium experience in Argentina
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