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    ABEV3   BRABEVACNOR1

AMBEV S.A.

(ABEV3)
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Ambev S A : Reports 2021 Second Quarter Results

07/29/2021 | 01:27am EDT

Page | 1

AMBEV REPORTS 2021 SECOND QUARTER RESULTS1

"Our commercial strategy, innovations, tech platforms and operational excellence delivered the highest consolidated volumes in a second quarter on record. When looking at rolling 12 months consolidated volumes, we are now at all-time high levels, 5 million hectoliters above our peak in 2015" - Jean Jereissati, CEO

Total Volume (organic)

+ 19.0% vs LY

Most of our markets delivered continued volume growth momentum: Brazil +15.7%, Central America and the Caribbean ("CAC") +62.7%, Latin America South ("LAS") +26.8%, and Canada -0.9%.

Net Revenue (organic)

+ 36.2% vs LY

Driven by volume performance and net revenue per hectoliter ("NR/hl") growth of 14.5%. Net revenue grew in Brazil by 28.5%, in CAC by 71.6%, in LAS2 by 78.9%, and in Canada by 3.3%.

Normalized EBITDA (organic)

Normalized Profit

+ 24.0% vs LY

R$ 2,962.7 million

As anticipated, top-line is recovering ahead of

Normalized profit was R$ 2,962.7 million compared

bottom-line due to ongoing commercial momentum

to R$ 1,372.6 million in 2Q20 (+115.9%). For HY21 it

combined with persistent pressure on COGS, due to

was R$ 5,724.7 million compared to R$ 2,600.4

commodities and FX, and SG&A, affected by higher

million in HY20 (+120.1%).

variable compensation accruals, distribution

expenses, and sales and marketing investments.

Cash flow from operating activities

R$ 1,873.5 million

Cash flow from operating activities was R$ 1,873.5 million compared to R$ 1,838.8 million in 2Q20 (+1.9%). For HY21 it was R$ 4,677.3 million compared to R$ 3,382.8 million in HY20 (+38.3%).

ESG Update

On June 28th we hosted our first ESG Update, in which we presented our ESG strategy, targets, progress and challenges. All materials are available on our website, including our Q&A session (at ri.ambev.com.br).

  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 six-month period ended June 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 14).

ambev.com.br

Press release - July 29, 2021

Page | 2

MANAGEMENT COMMENTS

Continued momentum with double-digit consolidated volume growth versus 2Q20 (and high single digit above 2Q19)

Ambev delivered another strong commercial performance in 2Q21, achieving the highest consolidated volumes in a second quarter on record. This was driven by consistent implementation of our strategy based on innovation, tech platforms, and operational excellence. In addition to being better prepared to navigate some persisting COVID-19 headwinds, we are working to support our customers through economic reopening as vaccination progresses and restrictions are gradually lifted in the countries in which we operate. In 2Q21, we continued to grow our volumes by 19.0% versus 2Q20 and 8.0% versus 2Q19, with 7 of our top-ten markets already growing above 2Q19. Net revenue grew 36.2% and NR/hl 14.5% driven by premiumization, innovation and revenue management initiatives. Our above core brands continue to gain relevance within our portfolio in our top 5 markets.

COGS per hectoliter increased 15.7%, due to expected FX and commodities impacts. SG&A grew by 35.6%, affected by variable compensation accruals, distribution expenses, and sales and marketing investments. As a result, Normalized EBITDA increased by 24.0%.

In HY21, our volumes grew by 15.0%. Net revenue increased by 32.5%, with a NR/ hl growth of 15.2%. Normalized EBITDA grew by 24.8%. As noted in our 1Q21 Earnings Release, we still expect top-line recovery ahead of bottom- line recovery this year.

Financial highlights - Ambev

consolidated

% As

% As

R$ million

2Q20

2Q21

Reported

% Organic

YTD20

YTD21

Reported

% Organic

Volume ('000 hl)

33,465.6

39,807.6

19.0%

19.0%

72,477.1

83,337.8

15.0%

15.0%

Net revenue

11,615.3

15,711.1

35.3%

36.2%

24,217.9

32,350.9

33.6%

32.5%

Gross profit

5,813.5

7,745.9

33.2%

34.7%

12,772.9

16,440.3

28.7%

28.4%

% Gross margin

50.0%

49.3%

-70 bps

-50 bps

52.7%

50.8%

-190 bps

-160 bps

Normalized EBITDA

3,348.3

5,289.2

58.0%

24.0%

7,580.8

10,616.4

40.0%

24.8%

% Normalized EBITDA margin

28.8%

33.7%

490 bps

-260 bps

31.3%

32.8%

150 bps

-180 bps

Profit

1,271.3

2,929.6

130.4%

2,482.6

5,662.9

128.1%

Normalized profit

1,372.6

2,962.7

115.9%

2,600.4

5,724.7

120.1%

EPS (R$/shares)

0.08

0.18

135.2%

0.15

0.35

137.6%

Normalized EPS (R$/shares)

0.08

0.19

119.8%

0.15

0.35

128.8%

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

Most countries are delivering continued momentum with volume growth in 2Q21 and HY21 above 2020 and 2019 levels, as shown below:

ambev.com.br

Press release - July 29, 2021

Page | 3

Looking at the rolling 12-month ("R12M") period for every quarter since 1Q11, our consolidated volumes have significantly recovered since 3Q20, even above record 2015 volumes, reflecting the success of our strategy and our investments in the long-term growth of our business:

Initiatives such as BEES, our B2B platform, continued to rapidly expand across different countries. In Brazil, BEES is now used by more than 70% of our active customers - and it also helped us to reach an all-time high number of both Beer and NAB buyers in June. In our international operations, we started to implement BEES in Argentina, Paraguay and Panama.

Donus, our fintech focused on empowering small and medium customers in Brazil, continued growing and reached 80 thousand customers, with over 1 million monthly transactions. Our direct-to-consumer platform in Brazil, Zé Delivery, delivered over 15 million orders, tripling volume vs. 2Q20.

ESG Update

The June 28th event was hosted by Jean Jereissati, CEO, Leticia Kina, Ambev Chief Legal & Compliance Officer, Rodrigo Figueiredo, Ambev Chief Sustainability and Procurement Officer, and Carla Crippa, Corporate Affairs Vice-President for Brazil.

We started with Governance since we consider it to be the overarching to every other initiative. Leticia Kina presented the three Committees in which our Leadership engages: Ethics, Digital Privacy and ESG. She also introduced our new Board members who brought more gender and experiences diversity: Claudia Woods, Lia Matos and Fabio Barbosa. In addition to complementing the skills of our Board, with this new composition, Ambev received the Women on Board certification, issued by UN Women.

In the Environmental section, Rodrigo Figueiredo focused on three out of five pillars we work on: Water Stewardship, Climate Action and Circular Packaging. He highlighted our Watersheds and Forests Program and our water efficiency target for 2025, with less than two liters of water per liter of beer produced in water stressed areas. On Circular Packaging, he presented the status of our goal, which by 2025, 100% of Ambev products must be packed in returnable or made from majority-recycled packaging materials; and in Brazil, we will eliminate 100% plastic pollution from our packaging. Finally, on Climate Action, Rodrigo highlighted the main initiatives to achieve our 2025 goals, that are 25% reduction in carbon emissions in our entire value chain (Scopes 1, 2 and 3) and 100% of electricity coming from renewable sources. Since 2003 we reduced our carbon emissions by 63%.

Finally, on the Social front, Carla Crippa presented our impact in our communities. Starting by COVID-19 initiatives, Carla covered our various social impact programs. Among others, "VOA", our corporate volunteer program to mentor NGO´s development, and our water "Ama", a social business reverting 100% of its profit to guarantee access to safe water for 1 million Brazilians until 2025. On the Smart Drinking initiatives, the main objective is to reduce harmful alcohol consumption by 10% until 2025, and we are working closely with governments to save lives in traffic. Finally, we presented the D&I and Mental Health initiatives we have for our teams.

ambev.com.br

Press release - July 29, 2021

Page | 4

KEY MARKETS PERFORMANCES

Beer Brazil: double-digit volume growth versus 2Q20 and 2Q19, and strong NR/hl driving top-line momentum, while anticipated cost headwinds still impacting bottom-line.

  • Operating performance: Following a strong start to the year, we once again delivered well-balanced net revenue growth of 25.8%. We continued outperforming the industry according to our estimates, growing volume by 12.7% versus 2Q20 and 10.9% versus 2Q19 levels, mainly driven by our above core and core brand portfolios. NR/hl increased by 11.6%, due primarily to revenue management initiatives and favorable brand and pack mix. EBITDA fell by 12.8% as top-line growth was offset by anticipated transactional FX and commodity headwinds -partially offset by improved pack mix-, variable compensation accruals, higher distribution costs, and sales and marketing investments. Our nominal EBITDA was positively impacted by tax credits (R$1,048.5 million), which were scoped out from our organic performance (further details on page 6). In HY21, our volumes grew by 14.3%. Net revenue increased by 28.3%, with a NR/hl growth of 12.2%. Normalized EBITDA grew by 5.5%.
  • Commercial highlights: Our innovations are enhancing our growth, representing over 20% of revenues, led by Brahma Duplo Malte. Our premium brands portfolio grew by approximately 35%, with strong momentum from Corona, Becks, Stella Artois and Original. BEES reached R$ 9.0 billion in GMV this quarter and is rapidly expanding across the country, with currently over 70% of our active customer base purchasing through the platform, enabling us to reach an all-time high number of total buyers and all-time high customer NPS rating in June. Our direct-to-consumer platform, Zé Delivery, fulfilled over 15 million orders, tripling volume vs. 2Q20. In addition, our fintech, Donus, which is focused on empowering small and medium customers, reached 80 thousand customers.

Beer Brazil

Currency

Organic

% As

%

R$ million

2Q20

Scope

Translation

Growth

2Q21

Reported

Organic

Volume ('000 hl)

17,951.6

-

2,274.0

20,225.6

12.7%

12.7%

Net revenue

5,128.6

-

-

1,320.7

6,449.3

25.8%

25.8%

Net revenue/hl (R$)

285.7

-

-

33.2

318.9

11.6%

11.6%

COGS

(2,573.6)

-

-

(869.9)

(3,443.6)

33.8%

33.8%

COGS/hl (R$)

(143.4)

-

-

(26.9)

(170.3)

18.8%

18.8%

COGS excl. deprec. & amort.

(2,226.7)

-

-

(852.7)

(3,079.5)

38.3%

38.3%

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

(124.0)

-

-

(28.2)

(152.3)

22.7%

22.7%

Gross profit

2,555.0

-

-

450.7

3,005.7

17.6%

17.6%

% Gross margin

49.8%

46.6%

-320 bps

-320 bps

SG&A excl. deprec. & amort.

(1,420.5)

-

-

(697.3)

(2,117.8)

49.1%

49.1%

SG&A deprec. & amort.

(305.3)

-

-

24.8

(280.6)

-8.1%

-8.1%

SG&A total

(1,725.8)

-

-

(672.5)

(2,398.4)

39.0%

39.0%

Other operating income/(expenses)

117.2

1,048.5

-

24.0

1,189.6

nm

20.5%

Normalized EBIT

946.3

1,048.5

-

(197.8)

1,797.0

89.9%

-20.9%

% Normalized EBIT margin

18.5%

27.9%

940 bps

-690 bps

Normalized EBITDA

1,598.5

1,048.5

-

(205.4)

2,441.6

52.7%

-12.8%

% Normalized EBITDA margin

31.2%

37.9%

670 bps

-960 bps

Beer Brazil

Currency

Organic

% As

%

R$ million

YTD20

Scope

Translation

Growth

YTD21

Reported

Organic

Volume ('000 hl)

36,533.1

-

5,240.9

41,774.0

14.3%

14.3%

Net revenue

10,583.2

-

-

2,990.9

13,574.1

28.3%

28.3%

Net revenue/hl (R$)

289.7

-

-

35.3

324.9

12.2%

12.2%

COGS

(4,975.0)

-

-

(1,870.1)

(6,845.1)

37.6%

37.6%

COGS/hl (R$)

(136.2)

-

-

(27.7)

(163.9)

20.3%

20.3%

COGS excl. deprec. & amort.

(4,328.2)

-

-

(1,816.8)

(6,145.0)

42.0%

42.0%

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

(118.5)

-

-

(28.6)

(147.1)

24.2%

24.2%

Gross profit

5,608.2

-

-

1,120.8

6,729.0

20.0%

20.0%

% Gross margin

53.0%

49.6%

-340 bps

-340 bps

SG&A excl. deprec. & amort.

(3,038.3)

-

-

(1,027.1)

(4,065.4)

33.8%

33.8%

SG&A deprec. & amort.

(607.7)

-

-

61.9

(545.8)

-10.2%

-10.2%

SG&A total

(3,646.0)

-

-

(965.2)

(4,611.2)

26.5%

26.5%

Other operating income/(expenses)

248.0

1,048.5

-

45.4

1,341.9

nm

18.3%

Normalized EBIT

2,210.3

1,048.5

-

200.9

3,459.7

56.5%

9.1%

% Normalized EBIT margin

20.9%

25.5%

460 bps

-310 bps

Normalized EBITDA

3,464.8

1,048.5

-

192.3

4,705.5

35.8%

5.5%

% Normalized EBITDA margin

32.7%

34.7%

200 bps

-580 bps

ambev.com.br

Press release - July 29, 2021

Page | 5

NAB Brazil: strong commercial performance supported by BEES, with volumes above 2Q20 and 2Q19

  • Operating performance: We are seeing a healthy recovery of our non-alcoholic business, with net revenue growing 47.9% versus 2Q20 and 9.6% versus 2Q19. Almost all our brands grew volumes year- over-year, led by strong performances from our premium portfolio. NR/hl increased by 17.4%, driven by revenue management initiatives and favorable brand mix, supported by the gradual recovery of mobility. EBITDA grew by 21.9%, as strong top-line growth was partially offset by anticipated transactional FX and commodity headwinds, adverse packaging mix and higher distribution costs. Our nominal EBITDA was positively impacted by tax credits (R$170.7 million), which were scoped out from our organic performance (further details on page 6). In HY21, our volumes grew by 12.0%. Net revenue increased by 21.0%, with a NR/hl growth of 8.0%. Normalized EBITDA grew by 2.6%.
  • Commercial highlights: The gradual return of out-of-home consumption occasions supported volume growth of our premium brands, particularly in single-serve packaging, driving positive brand mix. Our BEES platform continued to expand and connect us with more customers, allowing us to reach an all-time high number of NAB buyers. We continue to invest behind the Health & Wellness trend, testing and launching new products such as For/Me and do bem™️ Super Infusões.

NAB Brazil

Currency

Organic

% As

%

R$ million

2Q20

Scope

Translation

Growth

2Q21

Reported

Organic

Volume ('000 hl)

5,151.6

-

1,342.3

6,493.9

26.1%

26.1%

Net revenue

726.1

-

-

348.1

1,074.2

47.9%

47.9%

Net revenue/hl (R$)

140.9

-

-

24.5

165.4

17.4%

17.4%

COGS

(407.6)

-

-

(250.4)

(658.0)

61.4%

61.4%

COGS/hl (R$)

(79.1)

-

-

(22.2)

(101.3)

28.1%

28.1%

COGS excl. deprec. & amort.

(356.9)

-

-

(247.9)

(604.8)

69.4%

69.4%

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

(69.3)

-

-

(23.8)

(93.1)

34.4%

34.4%

Gross profit

318.4

-

-

97.7

416.2

30.7%

30.7%

% Gross margin

43.9%

38.7%

-520 bps

-520 bps

SG&A excl. deprec. & amort.

(263.9)

-

-

(77.9)

(341.9)

29.5%

29.5%

SG&A deprec. & amort.

(36.3)

-

-

8.3

(28.0)

-22.8%

-22.8%

SG&A total

(300.2)

-

-

(69.6)

(369.9)

23.2%

23.2%

Other operating income/(expenses)

23.7

170.7

-

5.9

200.3

nm

25.0%

Normalized EBIT

41.9

170.7

-

34.0

246.6

nm

81.1%

% Normalized EBIT margin

5.8%

23.0%

1720 bps

130 bps

Normalized EBITDA

129.0

170.7

-

28.2

327.9

154.3%

21.9%

% Normalized EBITDA margin

17.8%

30.5%

1270 bps

-320 bps

NAB Brazil

Currency

Organic

% As

%

R$ million

YTD20

Scope

Translation

Growth

YTD21

Reported

Organic

Volume ('000 hl)

11,581.5

-

1,394.9

12,976.4

12.0%

12.0%

Net revenue

1,796.6

-

-

378.1

2,174.7

21.0%

21.0%

Net revenue/hl (R$)

155.1

-

-

12.5

167.6

8.0%

8.0%

COGS

(956.3)

-

-

(281.7)

(1,238.0)

29.5%

29.5%

COGS/hl (R$)

(82.6)

-

-

(12.8)

(95.4)

15.5%

15.5%

COGS excl. deprec. & amort.

(858.6)

-

-

(278.6)

(1,137.2)

32.5%

32.5%

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

(74.1)

-

-

(13.5)

(87.6)

18.2%

18.2%

Gross profit

840.2

-

-

96.4

936.7

11.5%

11.5%

% Gross margin

46.8%

43.1%

-370 bps

-370 bps

SG&A excl. deprec. & amort.

(552.6)

-

-

(101.5)

(654.2)

18.4%

18.4%

SG&A deprec. & amort.

(79.7)

-

-

8.9

(70.8)

-11.2%

-11.2%

SG&A total

(632.3)

-

-

(92.6)

(724.9)

14.6%

14.6%

Other operating income/(expenses)

55.3

170.7

-

13.6

239.7

nm

24.6%

Normalized EBIT

263.3

170.7

-

17.4

451.4

71.5%

6.6%

% Normalized EBIT margin

14.7%

20.8%

610 bps

-180 bps

Normalized EBITDA

440.7

170.7

-

11.6

623.0

41.4%

2.6%

% Normalized EBITDA margin

24.5%

28.6%

410 bps

-370 bps

ambev.com.br

Press release - July 29, 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 29 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2021 05:26:06 UTC.


© Publicnow 2021
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Financials
Sales 2021 67 398 M 12 814 M 12 814 M
Net income 2021 10 955 M 2 083 M 2 083 M
Net cash 2021 15 735 M 2 992 M 2 992 M
P/E ratio 2021 23,2x
Yield 2021 3,18%
Capitalization 252 B 47 986 M 47 933 M
EV / Sales 2021 3,51x
EV / Sales 2022 3,27x
Nbr of Employees 50 000
Free-Float 27,9%
Chart AMBEV S.A.
Duration : Period :
Ambev S.A. Technical Analysis Chart | ABEV3 | BRABEVACNOR1 | MarketScreener
Technical analysis trends AMBEV S.A.
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 16
Last Close Price 16,02 BRL
Average target price 17,64 BRL
Spread / Average Target 10,1%
EPS Revisions
Managers and Directors
Jereissati Jean Neto Chief Executive Officer
Fernando Mommensohn Tennenbaum Director
Lucas Machado Lira Chief Financial & Investor Relations Officer
Victório Carlos de Marchi Co-Chairman
Michel Dimitrios Doukeris Co-Chairman
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