CERVECERIA NACIONAL DOMINICANA, C. POR A. & SUBSIDIARIE ( CND ) Fourth Quarter 2009 Results. Business Results

Transcription

1 CERVECERIA NACIONAL DOMINICANA, C. POR A. & SUBSIDIARIE ( CND ) Fourth Quarter 2009 Results FOURTH QUARTER HIGHLIGHTS DOP Net Sales down 0.3% DOP EBITDA down 8.5% Business Results MAIN FINANCIAL HIGHLIGHTS ACTUAL ACTUAL October - December Exchange Rate (P&L) - Average December Ending Exchange Rate (BS)

2 SALES VOLUME Sales Volume (in Thousand Htls) 4Q09 4Q08 Variation Fav / (unfav.) Variation % Local Beer % Malt (1.9) -4.0% Rums % Other (0.5) % Total Domestic Volume 1, % Export Beer % TOTAL VOLUME 1, , % Fourth quarter local volume of 1,051.5M htls was 66.7M htls above the same period in prior year due to aggressive price promotion of Bohemia and Bohemia Light. Export volume favorable of 1.0M hlts, mainly due to higher sales in Florida, Massachusetts and duty free area. NET SALES Net Sales (in Millions) 4Q09 DOP 4Q08 USD Variation Fav / (unfav.) 4Q09 4Q08 Variation Fav / (unfav.) Local Beer 4, , % % Malt % % Rums % % Other % % Total Domestic Sales 4, , % % Export Beer % % TOTAL SALES 4, , % % 2

3 Local domestic sales (-0.4%): Unfavorable due to 2008 Other reflects calling cards distribution that ran from July 2008 to March 2009, partially offset by higher Bohemia Light and Barceló rum sales. Export beer (+1.5%): Favorable sales related to higher sales in Florida, Massachusetts and duty free area. COST OF GOODS SOLD Cost of Sales (in Millions) 4Q09 DOP 4Q08 USD Variation Fav / (unfav.) 4Q09 4Q08 Variation Fav / (unfav.) Local Beer 1, , % % Malt % % Rums % % Other % % Total Domestic Cost 1, , % % Export Beer % % TOTAL SVC 1, , % % Sales Force & Distrib % % FME % % Depreciation % % Amortization % % TOTAL COST 2, , % % Standard Variable Cost (SVC): Unfavorable 1.8% (RD$33.3MM) driven by higher liquid cost (raw material price increase - mainly barely malt and sugar), higher rums cost (sales volume increase); partially offset by lower new bottle injection and conversion cost (lower energy cost, lower usage of caustic soda and lower headcount expenses). Sales & Distribution +0.1%: +RD$0.2MM favorable mainly due to lower personnel related expenses, partially offset by higher maintenance & repair expenses. Fixed Manufacturing Expenses (FME): Favorable 1.2% (RD$3.0MM) mainly lower personnel related and maintenance & repair expenses. Lower depreciation of +$38.9MM and amortization expenses of +$2.7MM. 3

4 MARKETING EXPENSES Trade expenses (RD$43MM) mainly driven by higher Presidente export trade expenses, higher Presidente and Malta Morena merchandising, Media +RD$16.4MM mainly due to lower TV advertising expenses of Barceló, The One and Exotonic (launch in 2008), partially offset by higher Malta Morena production and billboard expenses. Promotions unfavorable in (RD$10.3MM) mainly due to higher Presidente promotion expenses (2009 winter baseball Game and concerts sponsorship), and Presidente export promotion expenses; partially compensated by lower Barceló and Malta Morena promotion expenses. Indirect marketing +RD$41.3MM: Lower promotional activities and sales convention not carried out in 2009, partially offset by higher write-off of packaging materials. GENERAL & ADMINISTRATIVE EXPENSES 4

5 Administration (RD$105.6MM): One time expenses related to purchase agreement with Royal Unibrew (RD$69.1MM), higher contribution to pension funds, and higher consultant expenses. Corporate Affairs is favorable +RD$42MM driven by lower public relation and special events expenses. R&D +RD$15.6MM favorable. Other (RD$63.5MM): Higher revaluated fixed assets depreciation (RD$27.5MM), export markets employees related (RD$41.8MM) due to higher personnel related expenses, IT (RD$8.2MM) related to communication and consultant expenses; partially compensated by lower personnel training expenses +RD$10.8MM, and Other expenses +RD$3.2MM. OTHER INCOME / (EXPENSES) Foreign exchange loss is unfavorable due to higher average exchange rate (RD$35.4 in 4 th quarter 2008 vs. RD$36.15 in 4 th Qtr. 2009). Other Income is favorable mainly due to repayment related to rums products. Other Expenses unfavorable due to higher fixed assets disposals (mainly crates). Lower Interest Income driven by lower cash equivalent investments. Higher Interest Expenses (including other financial expenses, see attachment on page 12). 5

6 EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) EBITDA composition for Fourth quarter 2009 and changes as compared to 2008 are as follows: EBITDA decreased 8.5% mainly due to higher cost, TME and G&A expenses. BALANCE SHEET Total assets for the period ended December 31, 2009 were 0.1% lower than year ended December 31st, 2008 mainly due to lower PP&E (RD$784.4MM) related to higher depreciation, Inventories (RD$401.0MM) related to lower direct materials and finished goods; partially offset by higher Cash & Equivalents RD$1,112.4MM due to cash reserve to repay debt due in 2010, and Other RD$42.2MM. Total liabilities decreased 3.3% mainly driven by lower Accounts Payable Trade (RD$464.8MM) (mainly bottles and barely malts), Accrued Liabilities (RD$253.1MM) due to transfer of leasing provision to short and long debt payable, and Deferred Income Tax (RD$85.0MM); partially compensated by higher Debt RD$152.8MM related to leasing partially offset by syndicated loan amortizations, and Other RD$34.1MM. 6

7 CAPITAL EXPENDITURES (CAPEX) Capital expenditures as of December 31 were RD$494.0 millions, driven by freezer projects RD$118.4MM, packaging equipment RD$149.3MM, evaporators system for brew houses RD$41.2MM, new land for warehouse RD$36.1MM, CND Santiago D.C. RD$23.8MM, Operations production consolidation in CND $22.6MM, software related projects RD$44.1MM, other additions RD$58.5MM. As of December increase capacity capex was RD$395.3MM, the remaining replacement and maintenance capex was RD$98.7MM. Subsequent Events On February , Cervecería Nacional Dominicana (CND) finalized the US$31 Million Dollars purchase agreement for Royal Unibrew A/S controlling stakes in its beer, malt, soft drink and water operations in Saint Vincent, Antigua and Dominica announced on August Royal Unibrew A/S is a Danish publicly traded company with operations in Denmark, Poland, Lithuania, Latvia and the Caribbean. This transaction, which falls within CND s strategic plans, resulted in the acquisition of 76.5% of Saint Vincent Brewery Ltd, 93% of Antigua Brewery Ltd., 75% of Antigua PET Plant Ltd., and 58% of Dominica Brewery & Beverages Ltd. These companies, leaders in their respective markets, currently own or license beer brands such as Hairoun, Wadadli, and Kubuli, Guinness stout, Vitamalt, soft drinks, and Duna and Loubiere waters. The agreement also covers a license for the production and commercialization of Vitamalt, Royal Unibrew s global premium malt brand. This acquisition strengthens CND s position as a regional producer in the Caribbean. In addition, CND will continue to develop its operations in the Dominican Republic. 7

8 Investors Relations For additional information please contact the Investor Relations: Eduardo Curiel (809) The information contained in this Financial Report reflects the consolidated results of operations of Cervecería Nacional Dominicana, C. por A. ( CND ) and its subsidiaries, Cervecería Bohemia, S. A. and Presidente USA, Inc. for the periods ended December 31, 2009 and December 31, In this Financial Report references to DOP, pesos, Dominican pesos and RD$ are the currency of the Dominican Republic and references to dollars, USD, and US$ are the currency of the United Stated of America. Certain numbers included in this Financial Reports have been subject to rounding adjustments. Accordingly, numbers shown as totals in certain tables may not be an arithmetic aggregation of the numbers that precede them. 8

9 Attachments CERVECERIA NACIONAL DOMINICANA, C. POR A. & SUBSIDIARIE Audited Consolidated Balance Sheet RD$ Millions Assets December December Variation Current Assets Inc / Dec Cash & Cash Equivalent 2, % Accounts receivable-trade 1, , % Other receivables % Inventories , % Deferred income tax % Prepaid expenses 1, , % Total current assets 6, , % Investment in parent Company 12, , % Property, plant, and equipment, less accumulated depreciation 9, , % Deferred income tax % Other assets % 29, , % Liabilities and Stockholders Equity Current liabilities Short-term debt 1, % Accounts payable , % Other current liabilities 2, , % Dividends payable % Total Current Liabilities 4, , % Long-term debt 13, , % Deferred income tax % Other obligations % 18, , % Stockholders Equity 10, , % 29, , % 9

10 CERVECERIA NACIONAL DOMINICANA, C. POR A. & SUBSIDIARIE Audited Consolidated Income Statements for the Three Month Ended December 31, 2009 and 2008 (In Millions Dominican pesos) October - December Variation Fav./(Unfav.) January - December Net sales 4, , % 16, ,305.3 Cost of goods sold 2, , % 8, ,915.5 Gross profit 2, , % 7, ,389.8 Marketing expenses % 2, ,141.3 General and administrative exp % 2, ,020.6 Total Marketing and Adm. Exp. 1, , % 4, ,161.9 Income from operations % 3, ,227.9 Other income (expenses) Other income % Other expenses (69.1) (34.9) -98.0% (86.3) (158.0) Foreign exchange G/(L) % (104.4) (60.8) Interest inc./(exp.), net (467.0) (398.3) -17.2% (2,020.7) (2,179.1) Total Other Income/(Expenses) (502.2) (412.0) -21.9% (2,060.5) (2,138.5) Income before income tax % ,089.4 Dividend Income - Uncons. Affiliate % Income tax (148.7) % Net income % 1, ,

11 CERVECERIA NACIONAL DOMINICANA, C. POR A. & SUBSIDIARIE DECEMBER 2009 SOURCES AND USES Vs. DECEMBER 2008 DECEMBER 31st DECEMBER 31st BEGINNING FINANCIAL POSITION 1, OPERATIONAL SOURCES - Net Income /(Loss) 1, , Depreciation 1, , Amortization Loss on disposals of P, P & E Deferred income tax 32.3 (89.5) - Provision for severance payments (215.7) Other non cash sources - - TOTAL OPERATIONAL SOURCES 3, ,254.4 CASH FLOWS FROM OPERATING ACTIVITIES - Acct. Receivables - Trade (51.0) (76.5) - Acct. Receivables - Other (494.6) (645.2) - Inventories (355.4) Prepaid Expenses (361.5) (227.0) - Acct. Payable (464.8) - Other Current Liabilities (66.9) (558.9) TOTAL WORKING CAPITAL (1,123.1) (1,571.3) CASH FLOWS FROM INVESTMENT ACTIVITIES - Other Long Term Assets Proceeds from disposal of PP&E Adquisition of P, P & E. (1,098.0) (494.0) - Investment in Parent Company - - TOTAL CASH FROM INVESTMENT (1,020.1) (463.4) CASH FLOWS FROM FINANCING ACTIVITIES - Proceeds from borrowed funds (496.9) Dividends Paid (668.8) (260.6) TOTAL CASH FROM FINANCING ACTIVITIES (1,165.8) (107.7) EFFECT OF EXCHANGE RATE CHANGES & ADJS (1.9) 0.4 FREE CASH FLOW (68.7) 1,112.4 ENDING FINANCIAL POSITION ,104.3 DECEMBER 31st DECEMBER 31st Cash Equivalents / Investments ,104.3 ENDING FINANCIAL POSITION ,

12 Interest Expenses 4th Quarter 4th Quarter Variation Variation (RD$ in Millions) (US$ in Millions) Bank Loans Interests Expenses (56.5) (78.7) 22.2 (1.6) (2.2) 0.7 Other Financial Expenses - Banks (2.0) (1.9) (0.1) (0.1) (0.1) (0.0) Notes Interests Expenses (415.6) (464.6) 48.9 (11.5) (13.2) 1.7 Notes Premium Expenses (135.4) (3.9) Other Financial Expenses - Notes (8.7) (12.5) 3.8 (0.2) (0.4) 0.1 Other Non Debt Expenses (1.0) (0.4) (0.6) (0.0) (0.0) (0.0) Total (483.8) (422.7) (61.1) (13.4) (12.0) (1.3) Bank loans interests includes accrued interest from the syndicated DOP loan, from the bilateral DOP loan and Leasing. Notes Interests includes accrued interests from the USD issued Notes, the Peso-Linked issued Notes & the DR Market DOP issued Notes. Other Financial Expenses includes amortization of financial commission fees. 12