market share

2012
Statements contained in this presentation may contain information that is forward-looking
and reflects management's current view and estimates of future economic circumstances,
industry conditions, company performance, and financial results. Any statements,
expectations, capabilities, plans and assumptions contained in this presentations that do not
describe historical facts, such as statements regarding the declarations or payment of
dividends, the directions of future operations, the implementation of principal operating and
financing strategies and capital expenditure plans, the factors or trends affecting financial
condition, liquidity or results of operations are forward-looking statements and involve a
number of risks and uncertainties. There is no guarantee that these results will actually occur.
The statements are based on many assumptions and factors, including general economic and
market conditions, industry conditions, and operating factors. Any changes in such
assumptions or factors could cause actual results to differ materially from current
expectations.
Ambev Overview
Brazil deep dive
3
Where we operate: 13 countries through 4
business units…
CANADA
Market Leader in Canada
EBITDA Margin 10 - 41.1%
6 plants
HILA EX
Long-term strategy
Growth potential
5 plants
LAS
Market Leader in Argentina, Bolivia,
Paraguay and Uruguay
2nd player in Chile
EBITDA Margin 10 – 45.7%
25 plants
… and we have a world
EBITDA Margin benchmark
4
Sources: Company data, Nielsen, Bloomberg
BRAZIL
Market Leader in Brazil
EBITDA Margin 10 – 49.9%
2nd player Soft Drinks and Nanc
business
EBITDA Margin 10 – 47.8%
37 plants
2010 consolidated figures:
Sales Volumes – 165.1 mm Hl
EBITDA – R$ 11.7 billion
EBITDA Margin – 46.4%
Market cap – BRL 179.4 billion
(USD 104.1 billion) @09-Feb-12
Regional breakdown: although majority of our
results come from Brazil…
… we have relevant profitability
contributions from Canada and LAS
5
Sources: Company data
Our portfolio is comprised of 4 “Billion Dollar”
brands…
# 4 brand in the
world (volume)
# 7 brand in the
world (volume)
# 14 brand in the
world (volume)
... and other local jewels
6
Sources: Plato 2010
How we have grown over time: a mix of nonorganic growth…
LAN
LAS
CANADA
7
+
Brahma
Ambev
Quinsa
Hila-Ex
Canada
1989
1999
2002
2003
2004
… organic growth and operational
leverage
8
Sources: Company data
Brazil business
The largest market with ~1 million points of sale
68.9% Beer Market Share and 18.1% Soft Drinks Market Share (9M 2011)
Very fragmented market: Distribution is key (~1 million points of sale, visited in avg.
1.5 x a week)
Beer mostly consumed in on-premise outlets which represent ~65% of volume
- Main presentation: 600 ml returnable glass bottles
Supermarkets accounts for approx. 35% of volume
- Main presentation is 350 ml aluminum cans
Different realities within the same country
- Beer preference / Per Capita / Population
75 Distribution Centers (>60% volume)
174 Third Party Distributors
37 Plants
~28,000 employees
9
Sources: Nielsen, Company data
Strong operation in Latin America South
A more premium market
Beer and CSD&NANC business
Bolivia
Beer market (mm Hl): 3.7
Avg per capita (liters): 36.1
Market Share: 97.0% (3Q11)
Paraguay
Beer market (mm Hl): 2.7
Avg per capita (liters): 38.4
Market Share: 96.1% (3Q11)
Market Consumption: > 80% off premise &
> 90% returnable presentations
More than 70% distributed through
independent distributors
Market growth based on premium,
specialties and innovation
~7,000 employees
Uruguay
Beer market (mm Hl): 0.9
Avg per capita (liters): 26.4
Market Share: 97.3% (3Q11)
24 plants
USD CAGR
24,8%
LAS EBITDA
45,9% 45,7%
43,5%
998
Argentina
Beer market (mm Hl): 17.9
Avg per capita (liters): 44.0
Market Share: 76.6% (3Q11)
Chile
Beer market (mm Hl): 6.5
Avg per capita (liters): 38.3
Market Share: 17.1% (3Q11)
10
Source: Plato 2010, Company estimates, Nielsen
40,4%
40,2% 40,3%
803
871
37,8%
32,6% 288
212
2003
2004
384
2005
475
2006
EBITDA (USD MM)
552
2007
2008
2009
EBITDA MARGIN
2010
Highly profitable operation in Canada
A more mature market
Number one beer producer in Canada (40.7% Market Share in 3Q11)
Nearly 58% of volume of the market consumed in Ontario & Quebec
Highly regulated market (minimum prices)
Each province is governed by different regulatory and ownership of
distribution and retail systems
High contribution margin: 7% of Ambev volume and 13% of total EBITDA
~3,000 employees
6 plants
Labatt’s EBITDA (CAD MM)
846
872
869
2008
2009
881
779
725
622
2004
11
2005
2006
2007
2010
What we believe in:
Dream-People-Culture platform
DREAM
To be the best beverage company in a better world
Targets and results
Social Responsibility
PEOPLE
Competitive
Advantage
Compensation
Leadership development
Career development
Training
CULTURE
Consistency
Principles
Meritocracy
12
Ownership
Long term commitment
Candor
Ambev Overview
Brazil deep dive
13
Brazil Deep Dive
Market overview
2009-2011 – results and learnings
2012 and beyond
14
Market Overview
Brazil Beer market is ranked #3 and has grown
faster than global average...
World Beer Market
Country
16
Volume (M Hl) 5y CAGR
China
450
8,1%
USA
244
0,2%
Brazil
126
6,2%
Russia
97
2,1%
World
1851
3,2%
Sources: Plato 2010
We have a leadership position in the Brazilian
Beer market...
2011 9M Average Share of Value
2011 9M Average Market Share
73.5%
68.9%
10.9%
9.4%
10.3%
8.9%
8.4%
6.9%
1.5%
1.2%
32.7%
2011 9M Market Share per Brand
19.3%
15.7%
17
Sources: Nielsen
9.6%
7.2%
4.6%
And this leadership translates into a profitable
beer business
2011 9M
-0.2%
18
Source: Company data
2011 9M
+12.7%
2011 9M
+150bps
Our soft drinks business also shows a track
record of profitable growth
2011 9M
+40bps
2011 9M
+0.8%
19
Sources: Company data, Nielsen
2011 9M
+5.6%
2009-2011 – Results and Learnings
2009-2011 – New and “Old” Initiatives: creating
options for the future
Productivity
Commercial Strategy
• Cost/HI below inflation
• Sales force Execution
• Negative Working Capital
• Liquid & Packaging Innovation
• Sports Platform
• Brand Health
• NENO & RGB strategies
Relationship
Relationship
• Industry
• Governments
• Antitrust
• NGO’s
21
Commercial Strategy 2009-2011 Innovation Pipeline
1L Rollout
Brahma
Fresh
Rollout
1L Rollout
300ml
RGB
300ml
RGB
473 ml Sleek Skol
can 360
Brahma
Fresh LN
Brahma
Copaço
1L RGB 1L Rollout
Stella Bohemia
Artois 1L Oaken
Sub Zero
Budweiser
Bohemia
Swiss
Draft
Original
300ml
22
Commercial Strategy – Focus on sports platform
Strong Sports Agenda over the next years
Copa America
(Argentina)
2011
Olympics (London)/
World Cup Qualifying
2012
Confed Cup
(Brazil)
World Cup (Brazil)
Copa America
(Brazil)
Olympics
(Brazil)
2013
2014
2015
2016
Ambev Assets
Opportunity Size
12%
13%
25% of total
beer amount
sold in Brazil
are related to
sports
occasions
Media Pack Globo TV
5 Players +
National Coach
23
Source: Company data
FIFA
CBF
Engenhão Stadium RJ
America’s Cup
26 local
Teams
Relationship
Social Environmental Legacy
Cyan
Initiative
Legal
Drinking
Responsible
way to use
water
LDA POC
program
Industry
Governments
Antitrust
NGO´s
Brahma at
Community
Infrastructure,
professional training,
culture and legal
drinking to communities
through soccer
NGO
programs
Association with
NGOs
Ambev
Recycling
+ID
LDA drinking program
24
Recycling platform
in stadiums
2012 and beyond
2012: How to achieve our results
OFF Trade
ON Trade
Premium
Reach short-term economic
results sustaining market share
and brand-equity positions
26
Maintain balance and Influence
trends to keep results sustainable
in the long term
Where we are going to beyond 2012...
27
Premium Beer
Huge gap against other
developed countries and
below word index
% Weight in Overall Premium
28
Sources: Nielsen and Plato
Opportunity to develop
Core Plus with an
International Renowned
Brand
Argentina Case: delivering growth in the premium segment
# 1 international beer < 5 years after launch
Market Share Ratio – Heineken:Stella
100%
Stella Artois market
share in 2011 ~6%
80%
60%
40%
20%
0%
2004
2005
2006
Heineken
29
2007
2008
Stella Artois
Note: Market share figures are based upon each brand’s contribution (in Hl) to the overall market volume.
2009
2010
Where we are going to beyond 2012...
30
Per capita increase driven by income growth
2011E
31
Source: Plato 2011E
Per capita consumption by Region
29,8
48,7
64,8
80,4
74,9
65,4
Brazil
2010
Helped by minimum wage and social
programs, Northeast and North regions beer
market volume have grown ahead of other
regions...
32
Source: LCA, Plato, Internal data and calculation
... but still are underdeveloped when
compared to other regions in Brazil...
Wrapping up: we believe we have the people and
the plans in place…
 Continue to focus on innovations (new news and rollouts)
 Lead the way in growing premium
 Keep investing in the fastest growing regions in the
country (NENO)
 Maintain brand equity momentum
 Execute our pack price strategy
… so it’s time to focus on execution
Q&A