LUXEMBOURG, Feb. 27 /PRNewswire-FirstCall/ -- Quilmes Industrial
(Quinsa) S.A. (NYSE:LQU) ("Quinsa" or the "Company") today
announced its results for the six months and full year ended
December 31, 2005. The Company is listed on the Luxembourg Stock
Exchange and is therefore required by the European Commission to
fully comply with International Financial Reporting Standards
("IFRS") as of January 1, 2005. As a result, the Company's primary
accounting principles will no longer be Luxembourg GAAP. The
captions where differences between both accounting conventions are
most significant are Tangible Fixed Assets, Intangible Assets and
Deferred Income Taxes. Also, under Luxembourg GAAP, repurchased own
shares were accounted for at cost and classified as financial
assets, while under IFRS they are reported as a separate component
of shareholders' equity. The Company has included "Normalized
Operating Profit" and "Normalized EBITDA" captions in its Profit
and Loss Statement that reflect the actual performance of the
business before the sale of fixed assets and management's bonus
pool. Figures for 2004 have been restated to comply with IFRS and
to allow for comparisons with figures for 2005. As a result of the
change in accounting standards, net profit after tax was
approximately US$ 16 million more for full year 2005 than it would
have been under the Luxembourg GAAP. Highlights -- second half 2005
Normalized EBITDA increased 49.6% to US$ 212.7 million for the
period. This allowed the Company to post record normalized EBITDA
and EBITDA margin figures for the full year, of US$ 385.0 million
and 40.3%, respectively. Beer sales volumes increased 6.2% to 8.7
million hectoliters. Soft drink sales volumes increased 28.9% to
4.8 million hectoliters. Net profit after tax increased 86.2% to
US$ 75.6 million, or US$ 0.697 per share for the second half and
62.5% to US$ 129.5 million, or US$ 1.195 per share, for the full
year 2005. Financial review -- Second half 2005 Beer volume sales
increased to 8,682,000 hectoliters from 8,171,000 hectoliters a
year earlier, due to improvements in all of the Company's markets
and particularly in Chile, Bolivia and Paraguay. Volumes for soft
drinks increased 29% to 4,764,000 hectoliters, reflecting very
strong performances in both Argentina and Uruguay. Domestic volume
breakdown (thousands of hectoliters) Six months to Twelve months to
December December December December 31, 2005 31, 2004 31, 2005 31,
2004 Argentina beer 5,589 5,421 10,821 10,396 Argentina CSD, and
other beverages 4,550 3,544 8,155 6,490 Bolivia 1,299 1,205 2,299
2,129 Chile 331 204 550 379 Paraguay beer 1,051 968 2,040 1,836
Uruguay beer 381 334 673 584 Uruguay (CSD&W) 213 152 376 281
Interco. sales, net of exports 32 38 83 50 TOTAL 13,446 11,866
24,997 22,145 Net sales increased approximately 27% to US$ 528.3
million, from US$ 415.1 million in the second half 2004. This was
principally the result of higher average prices for beer measured
in dollar terms, particularly in Argentina and Paraguay, and for
soft drinks in Argentina. Local currency prices, on the other hand,
were virtually flat in real terms (i.e. compared to inflation) in
all of our markets except Paraguay, where they were slightly
positive. An increase in soft drink volumes in both Argentina and
Uruguay, and in beer volumes, particularly in Chile, Argentina and
Bolivia, also contributed to the improvement in revenues. The
following is a breakdown of sales by business: Revenues breakdown
(millions of dollars) Six months to Twelve months to December
December December December 31, 2005 31, 2004 31, 2005 31, 2004
Argentina beer (incl. agribusiness) 222.9 183.9 416.1 345.4
Argentina CSD, and other beverages 128.4 90.8 227.4 167.9 Bolivia
71.5 61.9 125.1 108.0 Chile 22.5 12.2 35.6 23.0 Paraguay beer 59.4
48.3 108.5 90.6 Uruguay beer 21.9 16.3 37.7 27.4 Uruguay
(CSD&W) 8.1 5.2 14.3 9.3 Other (net) (6.4) (3.5) (10.4) (6.4)
TOTAL 528.3 415.1 954.3 765.2 Gross profit increased to US$ 307.9
million from US$ 223.8 million a year earlier. This was largely the
result of higher volume sales in all of the Company's markets and
also price increases, particularly in the Argentine beer and soft
drink businesses and in Paraguay. Also contributing to the increase
in gross profit were continuing cost reductions and improvements to
the Company's industrial efficiency. Partially offsetting these
improvements were certain cost increases, such as: (i) labor, that
increased 30% principally due to increased costs in Argentina, (ii)
utility rates, as energy costs increased 25% mostly as a result of
increases in Argentina, and (iii) PET for the soft drinks
businesses. The following is a breakdown of industrial costs for
the second halves of 2005 and 2004: Raw Materials Labor
Depreciation Energy Maintenance Other 2005 62.50% 14.50% 12.80%
3.70% 2.80% 3.70% 2004 60.20% 12.50% 16.30% 3.30% 3.10% 4.60% Gross
margin was 58.3% compared to 53.9% for the second half of 2004,
although the latter included a one-time charge related to barley
inventories. Barring the one-time effect of the barley charge,
gross margin would have been 55.8% in 2004. The significant
improvement in gross margin was the result of larger volume sales
and improved pricing, both of which helped dilute fixed costs, as
well as improvements to the Company's industrial efficiency.
Selling and marketing expenses increased 26% to US$ 109.6 million,
largely as a result of the increase in volumes and also higher
freight costs, particularly in Argentina, related to increases in
labor and fuel costs. Further, expenses increased significantly in
Chile as a result of the launching of the Brahma brand in September
2005. Advertising expenses increased approximately 17%, and
represented approximately 7% of consolidated sales. Overall,
selling and marketing expenses remained virtually flat as a
percentage of sales, at 20.7%. Administrative and general expenses
increased 15% to US$ 21.7 million, principally as a result of
increased personnel costs in Argentina and Uruguay, although they
declined to 4.1% as a percentage of sales, compared to 4.5% for the
second half of 2004. Other operating income (loss) improved from
(US$ 16.9) million to (US$ 9.0) million. Contributing to this
improvement were a decline in severance payments and a significant
decline in restructuring expenses, principally in Argentina,
Bolivia and Uruguay. As a result of these variations, normalized
operating profit for the second half of 2005 increased to US$ 160.4
million, from US$ 94.5 million for the same period in 2004.
Normalized EBITDA increased approximately 50% to US$ 212.7 million,
from US$ 142.2 million in 2004. Consolidated normalized EBITDA
margin was 40.3%, compared to 34.3% for the previous year. The net
charge for the sale of fixed assets and management's bonus pool
declined to US$ 7.3 million from US$ 9.9 million in 2004,
principally due to higher income from the sale of fixed assets in
Argentina during the second half 2005. Operating profit after these
expenses was US$ 153.1 million for the second half of 2005,
compared to US$ 84.6 million for the same period in 2004. Net
interest expense increased to US$ 21.1 million, from US$ 15.1
million in the second half of 2004. This was principally the result
of a higher net debt position, which included the raising of US$
150 million in international capital markets by the Company's
Argentine subsidiary, Cerveceria Quilmes S.A. in March 2005. The
debt raised throughout 2005 was principally used to finance the
acquisition of the Company's own shares and the acquisition of
5.32% in its subsidiary, Quilmes International (Bermuda) Ltd., from
Beverage Associates Corporation. A higher turnover in Argentina and
Bolivia, where taxes are imposed on bank account movements, led to
an increase in these taxes which also contributed to the higher
interest expense. Exchange rate loss for the second half of 2005
was US$ 2.0 million, principally due to the depreciation of the
Argentine peso and the Uruguayan peso relative to the US dollar
since June 2005. Other income (expense) net, was (US$ 3.0) million
in 2005, compared to (US$ 3.1) million in 2004. The charge for
income tax increased to US$35.2 million in 2005, from US$ 9.0
million in 2004. This was due to a higher Net profit Before Tax and
also to tax adjustments that resulted from the conversion to IFRS.
Net profit after tax increased 86% to US$ 75.6 million, compared to
US$ 40.6 million in 2004. Net profit per share increased to US$
0.697, compared to US$ 0.360 the previous year. Capital
expenditures, excluding acquisitions, reached US$ 80.6 million
during the second half of 2005 and US$ 52.4 million for the same
period in 2004. Approximately 13% of these investments were related
to the increase in capacity at the malting plant in Argentina and
the new glass bottle plant in Paraguay. A further 21% of
investments were related to the acquisition of bottles and crates.
Other industrial initiatives included the installation of a new
bottling line for soft drinks in Argentina, a filling line for cans
in Uruguay, a new bottling line for non-returnable bottles in
Paraguay, and an increase in production capacity also in Paraguay,
among many other projects. Financial Review -- Fiscal Year 2005 For
the twelve months ended December 31, 2005 beer volumes increased
7.1% to 16,465,000 hectoliters, reflecting strong volume growth in
all of our markets. Beer volume growth was particularly strong in
Argentina, Bolivia and Paraguay. Chile also experienced very
significant volume growth following the launch of the Brahma brand
in September 2005 while Uruguay posted the second largest increase,
in percentage terms, across the Company. Soft drink volumes
increased 26.0% to 8,532,000 hectoliters as a result of continued
market growth in Argentina, and of a very strong recovery in
Uruguay. Net sales were US$ 954.3 million compared to US$ 765.2
million for the same period in 2004. This was principally the
result of higher pricing, particularly in Argentina. Also
contributing to the increase in revenues were the higher volumes in
every market. Gross profit for full year 2005 was US$ 550.1
million, a 33% increase on the US$ 414.1 million of 2004. This was
principally the result of a substantial increase in revenues, and
also of cost savings due to improvements in industrial efficiency.
These improvements allowed the Company to absorb increases in the
cost of certain raw materials and inputs such as resin for PET
bottles, labor and energy. Gross margin for 2005 fiscal year was
57.6%, compared to 54.1% in 2004. Excluding the one-time charge
related to barley inventories which is mentioned above, gross
margin for 2004 would have been 55.0%. Selling and marketing
expenses increased 23.2% to US$ 196.4 million from US$ 159.4
million a year earlier, reflecting an increase in volumes and
higher freight and labor costs, particularly in Argentina.
Administrative expenses increased to US$ 40.6 million from US$ 36.4
million in 2004, principally as a result of an increase in
personnel-related costs in Argentina. Other operating income (loss)
improved from (US$ 21.5) million to (US$12.9) million. Contributing
to this improvement were a decline in severance payments and a
significant decline in restructuring expenses, principally in
Argentina, Bolivia and Uruguay. Normalized operating profit for the
year 2005 was US$ 286.3 million, compared to US$ 183.0 million in
2004. The net charge for the sale of fixed assets and management's
bonus pool declined to US$ 9.8 million from US$ 10.5 million in
2004. This was the result of higher income from the sale of fixed
assets in Argentina, which was partially offset by an increase in
management's bonus pool, in turn the result of the Company's
improved financial performance. Operating profit after these
expenses was US$ 276.5 million for 2005, compared to US$ 172.5
million for 2004. Net interest expense increased to US$ 38.0
million, compared to US$ 28.6 million for the year 2004. This was a
result of a higher net debt position, which included the raising of
US$ 150 million in international capital markets by the Company's
Argentine subsidiary, Cerveceria Quilmes S.A. in March 2005. The
debt raised throughout 2005 was principally used to finance the
acquisition of the Company's own shares and the acquisition of
5.32% in its subsidiary, Quilmes International (Bermuda) Ltd., from
Beverage Associates Corporation. A higher turnover in Argentina and
Bolivia, where taxes are imposed on bank account movements, led to
an increase in these taxes which also contributed to the higher
interest expense. The exchange rate loss for 2005 was US$ 2.1
million, compared to a loss of US$ 1.9 million last year. This was
the result of a depreciation of the Paraguayan guarani, and to a
lesser extent, of the Chilean and Uruguayan peso. These offset the
results of currency appreciations in Argentina and Bolivia. Other
income (expense) was (US$ 2.8) million in 2005, compared to (US$
3.4) million in 2004. Net profit after tax for 2005 was US$ 129.5
million, or US$ 1.195 per share, compared to US$ 79.7 million, or
US$ 0.706 per share for 2004. Total shareholders' equity increased
to US$ 473.0 million from US$ 436.0 million in 2004. This increase
was due to the net profit for the period, which was partially
offset by the repurchase of own shares and dividends. Minority
interest declined to US$ 78.8 million as of December 31, 2005 from
US$ 135.3 million as of December 31, 2004, as a consequence of the
acquisition of 5.32% in Quilmes International (Bermuda) Ltd.
("QIB") from Beverage Associates Corporation. Goodwill increased
from US$ 262.1 in 2004 to US$ 330.8 million principally due to the
acquisition of QIB shares. The Company's net debt position - total
bank debt net of cash and short-term investments - was US$ 187.2
million as of December 31, 2005, compared to US$ 142.3 million a
year earlier. The increase in net debt was principally related to
the acquisition QIB and the repurchase of own shares. Long term
debt portion of total bank debt was US$ 295.5 million, compared to
US$ 257.7 million a year earlier. MARKETS ARGENTINA: Beer: Total
volume sales, including exports, increased 4% compared to the
second half 2004, reaching 5.7 million hectoliters. The Company's
market share reached 78.6% for the full year, according to Nielsen.
The Company continued strengthening its brand portfolio, providing
advertising support for all of its brands. This included new
television campaigns for its flagship Quilmes brand, the latest of
which was extremely well received and has already won several
advertising awards. Quinsa also continued with its strategy of
developing its presence in the premium segment of the market. In
line with this objective, and after the successful launch of the
Stella Artois long-neck bottle in November 2004, the Company
introduced a liter bottle for the brand during the fourth quarter
2005. It also developed a new advertisement for its other premium
brand, Iguana. As a result of these actions, the Company is already
a leader in the segment, with a market share of 46.8% for December
2005, according to Nielsen. In line with the Company's vertical
integration strategy, capacity at the Tres Arroyos malting plant is
being doubled. This will allow Quinsa to supply its businesses with
all of their malting requirements and to produce excess malt for
exporting, principally to Brazil. The first stage of this project,
which has expanded original capacity by one third, has already been
completed. The balance of the additional capacity will become fully
operational in May 2006. Total investments in this project will
have reached US$ 25.0 million once it is completed. Net revenues
increased 21% to US$ 215.6 million for the second half of 2005
compared to US$ 177.8 million in 2004. This improvement largely
reflects price increases introduced during the year to match
consumer price inflation, in the context of a relative stable
exchange rate. This led to a 17% increase in average pricing for
the second half 2005, compared to the second half 2004, measured in
dollars. Higher volumes also contributed to the increase in
revenues. The combination of higher revenues and strong cost
controls resulted in a much improved financial performance. Thus,
despite significant increases in freight, in turn the result of
larger sales and higher unitary costs, and in the cost of
industrial labor, EBITDA increased to US$ 104.2 million for the
second half 2005, compared to US$ 79.8 million for 2004, while
EBITDA margin was 48.3%. Operating Highlights 2 H 2005 2 H 2004 FY
2005 FY 2004 Total volumes (hectoliters) (") 5,693,000 5,475,000
10,996,000 10,480,000 Net revenues (US$ mm) (*) 215.6 177.8 401.9
335.7 Operating profit (US$ mm) (*) 80.2 53.1 153.9 106.0
Normalized EBITDA (US$ mm) (*) 104.2 79.8 197.9 152.6 Normalized
EBITDA margin (*) 48.3% 44.9% 49.2% 45.4% (") These figures include
exports and inter-company sales. (*) Excludes agribusiness Soft
Drinks: Volumes for soft drinks and other beverages increased 28.4%
to 4,550,000 hectoliters, compared to the second half of 2004. This
remarkable performance was the result of both market expansion and
market share growth. Also, during the last quarter of 2005, the
Company incorporated the Pepsi license to sell soft drinks in the
last remaining region it did not already operate, in the
northwestern part of the country. This region represents an
estimated 11% of Pepsi's total sales in the country. Quinsa
achieved a total market share of 19.6% and, more importantly, a
29.5% of the A-brand segment for the full year 2005, which compares
to 28.3% in 2004. Market share growth was achieved as a result of
several factors, including a strong performance of the Pepsi brand,
expanded distribution of the 1.25-liter returnable glass bottle and
an improved performance of the Company's distributors in the soft
drinks category. In terms of its marketing and promotional
activities, the October 2005 Pepsi Music rock festival in Buenos
Aires was hugely successful, since it was attended by more than
160,000 people and it received massive media coverage. The Company
continued to rely on modern and innovative introductions to support
the success of its business. During the second half of the year it
introduced H2Oh!, a lightly carbonated, calorie free flavored
beverage that is marketed under the umbrella of the 7-Up brand.
This introduction has been extremely successful, and already
accounted for 12% of its market segment in December 2005. Volume
sales performance has been so consistently solid that the Company
has had to invest in two bottling lines, one in Mendoza and another
in Buenos Aires. Net sales were US$ 128.5 million, compared to US$
90.8 million in the second half of 2004. This was due to both
higher volume sales and price increases introduced over the past
twelve months. In fact, average prices were approximately 10%
higher than for the same period in 2004, measured in dollar terms.
Regarding the business' financial performance, production costs
increased slightly during the second half of 2004 as the cost of
concentrate (which is a function of selling prices), resin for PET
bottles and cans all increased. Higher revenues, however, offset
these effects, allowing for a remarkable 188% increase in EBITDA,
to US$19.3 million. Operating Highlights 2 H 2005 2 H 2004 FY 2005
FY 2004 Total volumes (SD&W, and functional beverages -- in hl)
4,550,000 3,544,000 8,155,000 6,490,000 Net revenues (US$ mm) 128.5
90.8 227.5 167.9 Operating profit (US$ mm) 8.9 (2.3) 13.2 (0.8)
Normalized EBITDA (US$ mm) 19.3 6.7 32.6 17.1 Normalized EBITDA
margin 15.0% 7.4% 14.3% 10.2% BOLIVIA: Domestic volume sales
increased 7.8% during the second half of 2005, reaching 1,299,000
hectoliters compared to 1,205,000 hectoliters for the same period
in 2004. This performance reflects strong market growth, since
market share was stable. The Company continued to focus on
enhancing the brand equity of its portfolio, introducing innovative
packaging and limited edition bottles for its principal brands, and
on strengthening its distribution network. Net revenues increased
16.2% to US$ 71.9 million, as a result of the increase in both
volumes and average prices. The latter increased approximately 8%
as a result of regional price increases introduced to keep pace
with inflation, and of improvements in the value chain. The Company
continued to focus on cost reductions, as fixed cash costs
(excluding advertising) continued to decline. These were 3% lower
for full year 2005 than they were for 2004. It has also completed
minor capacity expansions in both Santa Cruz and La Paz, in order
to better cater for the strong demand. As a result of these
actions, EBITDA increased to US$ 42.2 million from US$ 32.9 million
a year earlier. Operating Highlights 2 H 2005 2 H 2004 FY 2005 FY
2004 Total volumes (hectoliters) (*) 1,316,000 1,215,000 2,326,000
2,143,000 Net revenues (US$ mm) 71.9 61.9 125.7 108.0 Operating
profit (US$ mm) 34.1 27.0 57.4 43.1 Normalized EBITDA (US$ mm) 42.2
32.9 73.3 57.6 Normalized EBITDA margin 58.7% 53.2% 58.3% 53.3% (*)
Includes exports and inter-company sales CHILE: Quinsa's domestic
beer volumes increased a remarkable 62.2% to 331,000 hectoliters
from 204,000 last year. This was the result of the very good
performance of the Company's established brands and the
introduction of the Brahma brand in September 2005. Market share
has increased to 15.5% in December, according to Nielsen, which is
4 percentage points higher than it was a year earlier. Thus, the
Brahma brand achieved a market share of 4%, according to Nielsen,
while the rest of the portfolio held its ground and maintained its
share. Net revenues increased to US$ 22.5 million, compared to US$
12.2 million last year as a result of the higher volume sales. Also
contributing to this increase was an appreciation of the Chilean
peso, that resulted in average prices for the second half of 2005
being approximately 14% higher than in 2004, measured in dollar
terms. Higher commercial costs, related to the launch of Brahma,
and higher fixed costs resulting from an upgrade of the entire
organization to better face increasing levels of competition, both
offset the effect of higher prices and revenues. This was not fully
reflected in the EBITDA figure for the second half 2005 which was
significantly benefited by an appreciation of the local currency,
thus increasing to US$ 0.9 million from US$ 0.1 million in 2004.
The EBITDA figure for the full year, however, was US$ 0.1 million
compared to US$ 0.9 million the previous year. Operating Highlights
2 H 2005 2 H 2004 FY 2005 FY 2004 Total volumes (hectoliters) (*)
331,000 205,000 550,000 380,000 Net revenues (US$ mm) 22.5 12.2
35.6 23.0 Operating loss (US$ mm) (0.9) (0.6) (2.7) (0.8)
Normalized EBITDA (US$ mm) 0.9 0.1 0.1 0.9 Normalized EBITDA margin
4.1% 1.2% 0.2% 3.8% (*) Includes exports and inter-company sales
PARAGUAY: Quinsa continued to experience the recovery that had
started during the fourth quarter of 2003, with volumes increasing
8.6% to 1,051,000 hectoliters for the second half of 2004, compared
to 968,000 hectoliters for 2004. Average pricing increased
approximately 13% in dollar terms as a result of local price
increases introduced in anticipation of projected inflation, a
better brand mix and improvements in the value chain. Solid demand
has led the Company to increase capacity slightly by switching to a
high-gravity fermentation process. Net revenues increased 23.0% to
US$ 59.4 million, principally as a result of higher volume sales
and improvements in terms of the value chain. The second half
continues to reflect the success of our cost control culture, as
administrative expenses declined 14% compared to 2004. These
effects resulted in a 26.3% increase in EBITDA, to US$ 34.6
million. The Company has completed the construction of a new
100-ton/day, glass bottle production facility on schedule and on
budget. The plant is already in its testing period, which is
expected to conclude shortly in order to commence production in
earnest. Once fully operational, it will have the potential to
supply up to 25% of Quinsa's regional needs. Operating Highlights
(beer business) 2 H 2005 2 H 2004 FY 2005 FY 2004 Total volumes
(hectoliters) 1,051,000 968,000 2,040,000 1,836,000 Net revenues
(US$ mm) 59.4 48.3 108.5 90.6 Operating profit (US$ mm) 32.4 25.7
56.7 44.5 Normalized EBITDA (US$ mm) 34.6 27.4 62.3 51.4 Normalized
EBITDA margin 58.2% 56.8% 57.4% 56.7% URUGUAY: Beer: Domestic beer
volume sales have consistently been posting solid growth. For the
second half of 2005, they increased 14.1% compared to 2004,
reaching 381,000 hectoliters. The Company has followed a
conservative price policy over the past three years, to the extent
that the retail price of its flagship brand, Pilsen, has not
increased since the end of 2002. This strategy has resulted in
remarkable growth for the beer market, particularly in the context
of a healthy economy. Remarkably, though, despite this policy
average prices increased 19% for the period, as a consequence of an
appreciation of the peso, improvements in the margin pool and a
better brand mix. The Company completed a series of marketing
initiatives during the second half of 2005, including the
re-launching of the premium Zillertal brand. Soft Drinks: Domestic
soft drink volumes also posted strong growth, reaching 213,000
hectoliters compared to 152,000 hectoliters for the second half of
2004. The soft drinks business has benefited from the introduction
of the 1.25-liter glass returnable bottle, which already accounts
for 29% of the business' sales. Market share has increased from
12.8% to 15.7% for the second halves of 2004 and 2005,
respectively. Exports of soft drinks were 79,000 and 80,000
hectoliters during the second half and full year 2005,
respectively. These represented exports of the H2Oh! brand to
Argentina, until production started in that country. The Company
also completed the reorganization of its distribution network.
During 2004 it had concentrated on distribution in Montevideo,
while during 2005 the focus was on the interior of the country.
This should result in reductions in the cost of distribution, as
drop-sizes increase and improvements are made to the value chain.
In terms of industrial investments, the beer business has increased
capacity by switching to a high-gravity process. It has also
installed the first canning line in the country. The line was
imported from our business in Bolivia. Prior to this investment,
cans were filled in Argentina and imported. Net revenues increased
to US$ 30.0 million compared to US$ 21.5 million last year,
principally due to the increase in volumes and beer prices. Despite
the impressive increase in volumes for both the soft drink and beer
businesses, fixed cash costs (excluding advertising) declined in
local currency, compared to 2004. The increase in volumes and
revenues combined with strict cost controls have allowed the
business to post a very significant improvement in EBITDA, reaching
US$ 10.5 million during the second half of 2005, compared to US$
3.9 million in 2004. Operating Highlights 2 H 2005 2 H 2004 FY 2005
FY 2004 Total volumes (beer, hectoliters) (*) 387,000 342,000
683,000 593,000 Total volumes (CSD&W, hectoliters) 292,000
152,000 456,000 281,000 Net revenues (US$ mm) 30.0 21.5 52.0 36.7
Operating profit (US$ mm) 9.0 3.0 14.4 6.2 Normalized EBITDA (US$
mm) 10.5 3.9 17.8 8.1 Normalized EBITDA margin 35.1% 18.3% 34.2%
22.1% (*) Includes exports and inter-company sales OTHER MATTERS
Share buy-back programs: The balance of the Company's own shares
held in Treasury as of the date of this release is the following:
Class A shares 17,081,163 Class B shares 1,843,349 Shares
outstanding, net of Treasury stock, are: Class A shares 614,691,530
Class B shares 46,924,892 ABOUT QUINSA Quinsa is a Luxembourg-based
holding company that controls 93% of Quilmes International
(Bermuda) ("QIB"). The remaining stake is held by Companhia de
Bebidas das Americas - AmBev ("AmBev"). Quinsa, through QIB,
controls beverage and malting businesses in five Latin American
countries. Its beer brands are strong market leaders in Argentina,
Bolivia, Paraguay and Uruguay and have a presence in Chile.
Further, pursuant to the Company's strategic alliance with AmBev,
it has entered into license and distribution agreements to produce
and sell in Argentina, Bolivia, Chile, Paraguay and Uruguay the
AmBev brands. Similarly, under the agreements AmBev may produce and
distribute Quinsa's brands in Brazil. The Company also has bottling
and franchise agreements with PepsiCo, and thus accounts for 100%
of PepsiCo beverage sales in both Argentina and Uruguay. Quinsa's
Class A and Class B shares are listed on the Luxembourg Stock
Exchange (Reuters codes: QUIN.LU and QUINp.LU). Quinsa's American
Depositary Shares, representing the Company's B shares, are listed
on the New York Stock Exchange (NYSE:LQU). Quinsa's web address:
http://www.quinsa.com/ Quilmes Industrial (Quinsa) S.A. UNAUDITED
CONSOLIDATED PROFIT AND LOSS STATEMENT SUMMARY (U.S. Dollars in
millions, except per share amounts) Six months Twelve months ended
Dec. 31st, ended Dec. 31st, 2005 2004 2005 2004 Net sales 528.3
415.1 954.3 765.2 Cost of goods sold (220.5) (191.3) (404.2)
(351.1) Gross profit 307.8 223.8 550.1 414.1 Selling and marketing
expenses (109.6) (86.7) (196.4) (159.4) Administrative and general
expenses (21.7) (18.8) (40.6) (36.4) Goodwill amortization (7.1)
(6.9) (13.9) (13.8) Other operating income (loss) (9.0) (16.9)
(12.9) (21.5) Normalized operating profit 160.4 94.5 286.3 183.0
Sale of fixed assets and management bonus (7.3) (9.9) (9.8) (10.5)
Operating profit 153.1 84.6 276.5 172.5 Interest income 4.3 5.1 9.6
8.1 Interest expense (25.4) (20.2) (47.6) (36.7) Exchange rate gain
(loss) (2.0) (3.1) (2.1) (1.9) Other income (expense) (net) (3.0)
(3.1) (2.8) (3.4) Earnings (losses) before taxes & minority
interest 127.0 63.3 233.6 138.6 Income taxes (35.2) (9.0) (73.9)
(36.0) Minority interest (16.2) (13.7) (30.2) (22.9) Net income
(loss) 75.6 40.6 129.5 79.7 Net income (loss) per share(*) 0.697
0.360 1.195 0.706 Net income (loss) per ADR(*) 1.395 0.720 2.389
1.413 Depreciation and amortization 52.3 47.7 98.8 96.5 Normalized
EBITDA 212.7 142.2 385.0 279.5 Normalized EBITDA margin 40.3% 34.3%
40.3% 36.5% EBITDA 205.4 132.3 375.2 269.0 (*) Net income per share
has been calculated on the basis of Actual Shares Outstanding at
the end of each relevant period, net of shares repurchased by the
Company. Actual Shares Outstanding are the sum of: (i) all Class B
shares, and (ii) all Class A shares divided by ten, reflecting this
Class' claim on dividends and assets. As calculated in this way,
the number of net shares outstanding were 108,394,045 and
112,827,310 as of December 31, 2005 and December 31, 2004,
respectively. Net income per ADR is calculated on the basis of two
net shares outstanding per ADR. Quilmes Industrial (Quinsa) S.A.
UNAUDITED GEOGRAPHIC INFORMATION - SUMMARY (U. S. Dollars in
millions) Six months Twelve months ended Dec. 31st, ended Dec.
31st, 2005 2004 2005 2004 NET SALES Argentina (beer & agribs.)
222.9 183.9 416.1 345.4 Argentina (CSD & other) 128.4 90.8
227.4 167.9 Bolivia 71.5 61.9 125.1 108.0 Chile 22.5 12.2 35.6 23.0
Paraguay (beer) 59.4 48.3 108.5 90.6 Uruguay 30.0 21.5 52.0 36.7
Interarea sales and other adjustments (6.4) (3.5) (10.4) (6.4)
Total 528.3 415.1 954.3 765.2 Six months Twelve months ended Dec.
31st, ended Dec. 31st, 2005 2004 2005 2004 EBITDA Argentina (beer 6
agribs.) 106.7 74.4 203.4 149.5 Argentina (CSD & other) 19.3
6.7 32.6 17.1 Bolivia 42.2 32.9 73.3 57.6 Chile 0.9 0.1 0.1 0.9
Paraguay (beer) 34.6 27.4 62.3 51.4 Uruguay 10.5 3.9 17.8 8.1 Other
(1.5) (3.2) (4.5) (5.1) Total 212.7 142.2 385.0 279.5 Quilmes
Industrial (Quinsa) S.A. UNAUDITED CONSOLIDATED BALANCE SHEET -
SUMMARY (U. S. Dollars in millions) As of December 31st, 2005 2004
ASSETS Cash, Cash Equivalents and Government 164.0 120.6 Securities
Inventories 103.6 85.6 Accounts receivable 55.6 45.7 Other Current
Assets 53.5 26.2 Total Current Assets 376.7 278.1 Property, Plant
and Equipment, Net 612.7 583.8 Goodwill 330.8 262.1 Long term cash
investments 42.8 101.4 Other Assets 50.5 81.3 Total Assets 1,413.5
1,306.7 LIABILITIES AND SHAREHOLDERS' EQUITY Short-Term Bank Debt
98.5 106.6 Long-Term Bank Debt 295.5 257.7 Other Liabilities 467.7
371.1 Total Liabilities 861.7 735.4 Minority Interest 78.8 135.3
Shareholders' Equity 473.0 436.0 Total Liabilities and Shareholders
Equity 1413.5 1,306.7 First Call Analyst: FCMN Contact:
cipajon@bemberg.com.ar DATASOURCE: Quilmes Industrial (Quinsa) S.A.
CONTACT: Francis Cressall, Quilmes Industrial (Quinsa) S.A.,
+011-54-11-4349-1846
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