Agenda. LAS Overview. LAS Strategy. LAS: Latin America South

Transcription

1 Latin America South

2 Agenda LAS Overview LAS Strategy LAS: Latin America South

3 LAS represents 20% of ambev s volume and around 15% of its EBITDA

4 with a successful operation in 5 countries LAS OVERVIEW Bolivia Beer market (mm Hl): 3.7 Avg per capita (liters): 36.7 Paraguay Beer market (mm Hl): 2.4 Avg per capita (liters): 37.7 Uruguay Beer market (mm Hl): 1.0 Avg per capita (liters): 28.7 Argentina Beer market (mm Hl): 17.2 Avg per capita (liters): 44.1 Number one beer producer in Argentina, Paraguay, Bolivia and Uruguay and growing business in Chilean market Recognized brand-power in all markets, with a solid portfolio Pepsi bottler in Argentina, Bolivia and Uruguay Most developed distribution system within the region Chile Beer market (mm Hl): 6.3 Avg per capita (liters): 34.7 Source: Internal as of 2010.

5 LAS OVERVIEW LAS Beer industry fundamentals Low per capita consumption Potential to grow High sales mix through independent distributors, principally in Argentina and Bolivia High proportion of returnable presentations Small number of players / Few brands with high market share Powerful local brands, no significant penetration of international brands with a few exceptions Main competitor for ambev: SAB and CCU in Argentina, and CCU in Chile

6 LAS leads 4 of the 5 beer markets in which it operates LAS OVERVIEW ARGENTINA 76% Market Share Quilmes and Brahma mainstream brands Strong regional brands Norte and Andes Stella Artois leading premium segment BOLIVIA Paceña and Taquiña mainstream brands Huari brand leading premium segment PARAGUAY Brahma brand absolute market leader Local brands Pilsen, Baviera Stella Artois leading premium segment URUGUAY Leadership with Pilsen and Patricia CHILE Growing market share with Brahma, Becker and Baltica

7 ...and has consolidated a strong SUPER PREMIUM SUPER PREMIUM and synergized CSD operation % % Operations in 3 countries Argentina and Uruguay since Baesa acquisition Bolivia bottling system acquired in 2009 EBITDA of US$ 121 MM in 2010 CORE PLUS 150-% PREMIUM % MAINSTREAM SUPER PREMIUM % % SUPER PREMIUM CORE PLUS 150-% % PREMIUM % CORE PLUS 150-% PREMIUM % SUPER PREMIUM % MAINSTREAM CORE PLUS 150-% PREMIUM % % MAINSTREAM % LAS OVERVIEW CORE PLUS 150-% MAINSTREAM VALUE PREMIUM % % SUPER PREMIUM 60-90% % SUPER PREMIUM % CORE PLUS 150-% PREMIUM % Exchange rate R$/USD = 1,67 VALUE LOW CORE VALUE PLUS 150-% 60% PREMIUM 60-90% % VALUE

8 Highlights of latest results in LAS Volumes growing due to industry performance and market share gains or stability in every country Increasing inflation, strategic revenue management and premium growth have resulted in opportunities to grow in NR/Hl In the costs side, inflation, labor costs and raw materials have hit our results but we benefited from better fixed costs absorption and higher efficiencies Regarding SG&A, higher labor costs have been partially offset by the ZBB control and rationalization projects implemented

9 Highlights of latest performance in LAS Leading marketing strategy with focus on innovation, communication and support of mainstream and premium brands High performance culture emphasizing ownership and meritocracy Track-record of consistent margin enhancement driven by economies of scale, global business processes and financial discipline

10 Despite the strong industry slowdown, LAS delivered solid double-digit organic growth rates LAS OVERVIEW Revenues +16.1% US$ 2,3 bn EBITDA +15.7% US$ 1,0 bn +15.4% +21.4% Exchange rate R$/USD = 1,67

11 Reaching an all-time record US dollar EBITDA in 2010 EBITDA (R$MM ) LAS OVERVIEW US$1 Billion US$85 Million Exchange rate R$/USD : 3,01 (2003) and 1,67 (2010)

12 Agenda LAS Overview LAS STRATEGY LAS: Latin America South

13 LAS STRATEGY Maximize profitability assuring our leadership position o In order to comply with this role, we focus in the following three main initiatives: Full Brand portfolio Full Trade programs portfolio Share of Throat Maximize operational efficiency External regulatory environment pro-business o People Engagement is a must in order to have a sustainable business

14 LAS STRATEGY Maximize profitability assuring our leadership position o In order to comply with this role, we focus in the following three main initiatives: Full Brand portfolio Full Trade programs portfolio Share of Throat Maximize operational efficiency External regulatory environment pro-business o People Engagement is a must in order to have a sustainable business

15 LAS has a strong mainstream and premium portfolio in Argentina Super Premium Premium Mainstream Value / Low Low Full Brand Portfolio 2010 Price segment Guinness Corona Heineken Warsteiner Imperial* Isenbeck Budweiser CCU Regionals Schneider / Córdoba Palermo / Bieckert* Diosa COMPETITORS Río II/San Carlos Source: Nielsen 2010 * Ex InBev brands (ICSA)

16 New Label and we keep developing our full portfolio strategy through innovation Premium Dark Thermo Sensitive Label Ice Tower Special Edition Anniversary Gift pack 120 Mainstream

17 Innovation: new liquids, new packaging, renewed communication Thermo sensitive label & Quilmes line extensions TV Spots

18 In Bolivia we have a strong presence in the different regions with solid local brands Paceña brand leading in main cities of La Paz and Santa Cruz, and Taquiña in Cochabamba. Premium segment growing throughout the country with Huari brand. 98% of beer sold through independent distributors. Among the top tax contributors to the national revenue service.

19 ...in Paraguay we are still enjoying strong growth with our portfolio... Our portfolio includes mainstream brands Pilsen and Ouro Fino, premium Baviera and our recently acquired Budweiser More than 80% of sales volume in returnable presentations, mainly in 1 liter Direct sales accounting for more than 50% of our sales

20 ...we have been delivering high volumes growth in Uruguay, both in beer and soft drinks... Strong portfolio with Pilsen and Patricia leading the market, complemented by regional Norteña and premium brands Zillertal and Stella Artois Beer per capita strongly recovering since 2004 after some years of contraction Returnable presentations accounting for more than 90%, mainly 1 liter Strong recovery in market shares in CSD and good results with H2Oh!

21 ...while Chile has been consistently growing in market share, reaching an all-time record Brahma and Becker, our mainstream brands in a highly competitive market With the premium segment expansion, we enjoyed good growth ratios through Stella Artois and dark Brahma launchings Strong direct sales force to serve a complex geography

22 Renovation of images and labels in Bolivia and Paraguay

23 LAS STRATEGY Maximize profitability assuring our leadership position o In order to comply with this role, we focus in the following three main initiatives: Full Brand portfolio Full Trade programs portfolio Share of Throat Maximize operational efficiency External regulatory environment pro-business o People Engagement is a must in order to have a sustainable business

24 Developing our full trade strategy with programs and targeted activations SMK Q SHELVES SS Q SHELVES BEER COOLERS PROGRAMON EVENTS ACTIVATION Summer Winter World Cup 24

25 to be leaders at the POC, shaping beer category profile INNOVATION Self Service Header with Back Light Bottle Lighting in each shelf Traditional Quality Improvement for price communication 25

26 Investing in state-of-the-art innovative shelves INNOVATION Supermarkets Quality End of the Isle Interactive Stopper Double Door Cooler with secuential Leds Touch Screen 26

27 LAS STRATEGY Maximize profitability assuring our leadership position o In order to comply with this role, we focus in the following three main initiatives: Full Brand portfolio Full Trade programs portfolio Share of Throat Maximize operational efficiency External regulatory environment pro-business o People Engagement is a must in order to have a sustainable business

28 Argentina s beer market has resumed the growth path... Beer Market MM Hl. 7.5% 8.6% 2.6% -0.3% 17,7 6.5% 17,3 17,2 4.3% 15,9 1.9% 14,8-1.0% 6.7% 2.9% -1.3% 13,9 12,7-2.1% 13,0 13,3 12,4 12,6 12,4 12, P.C Source: beer (ex factory volume) and own estimations

29 ... while continuing to outperform wine in share of throat Per Capita (Liters) BEER WINE SOURCE: Beer (Ex Factory Volume). Wine: Bodegas Argentinas.

30 Liters GERMANY VENEZUELA but still with room to keep growing in per capita terms UK USA Canada BRAZIL ARGENTINA PARAGUAY BOLIVIA CHILE URUGUAY Beer, Wine & Spirits /50 liters BEER WINE SPIRITS SOURCE: Wine Institute 2009 / LAS 2010

31 Shinning performance of Stella in the premium Volume Growth +20% +8% +60% Source: internal

32 with its globally known attributes

33 Promising outlook for superpremium brand Patagonia Super-premium brand brewed in Argentina, Great performance since launch, fostering premium segment expansion Targeted to high-end wine consumers Patagonia Meals

34 And innovating through the development of varieties across the zone

35 LAS STRATEGY Maximize profitability assuring our leadership position o In order to comply with this role, we focus in the following three main initiatives: Full Brand portfolio Full Trade programs portfolio Share of Throat Maximize operational efficiency External regulatory environment pro-business o People Engagement is a must in order to have a sustainable business

36 Q&A