ABV.C Companhia de Bebidas Das Americas-Ambev CL C

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. 

Form 20-F ___X___ Form 40-F _______

  Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.  

AMBEV REPORTS THIRD QUARTER 2013 RESULTS UNDER IFRS

São Paulo, October 31, 2013 – Companhia de Bebidas das Américas – Ambev [BOVESPA: AMBV4, AMBV3; NYSE: ABV, ABVc] announces today the results for the 2013 third quarter. The following operating and financial information, unless otherwise indicated, is presented in nominal Reais  and prepared according to International Financial Reporting Standards (IFRS), and should be read together with our quarterly financial information for the three and nine months period ended September 30, 2013 filed with the CVM and submitted to the SEC.  For important disclaimers, please refer to page 4.

Top line performance: Our net revenues increased 4.0%, with a volume decline of 3.1% being more than offset by 7.3% growth in net revenue per hectoliter (NR/Hl).  Accordingly, though industry softness in Brazil, Canada, and, to a lesser extent, Argentina, continued to impact volume performance, this was another quarter of top line growth in nearly all our divisions (Brazil Beer +0.8%, Brazil CSD & NANC +5.4%, HILA-ex +10.7%, LAS +14.8%, while Canada -0.1%) thanks to solid NR/Hl performance (Brazil Beer +6.0%, Brazil CSD & NANC +7.6%, HILA-ex +10.9%, LAS +15.1% and Canada +2.2%).

Cost of Goods Sold (COGS): COGS grew at 5.8%, with COGS/Hl increasing 9.3%.  Such performance represents an improvement over our H1 2013 results (COGS +9.0%; COGS/Hl +13.9%), and came mostly from our Brazilian business, where commodity hedges (primarily barley and aluminum) helped to soften pressure coming from currency hedges, higher industrial depreciation linked to capital expenditures, as well as packaging mix in Brazil Beer. 

Selling, General & Administrative (SG&A) expenses: SG&A expenses (excluding depreciation and amortization) improved significantly and were down 0.5%.  Such improvement is explained by commercial spend growing at a lower pace than H1 2013 (without compromising investments behind our brands and innovation) and by the savings generated from our cost management initiatives around “non-working money”, also helped by lower provisions related to variable compensation.  D istribution expenses where higher due mainly to the  greater weight of direct distribution in Brazil and inflationary pressures in Argentina.   

EBITDA, Gross margin and EBITDA margin: Our Normalized EBITDA grew 9.4% and corresponded to R$ 4,199.3 million, which also represents an important improvement if compared to the YoY growth we delivered in the first half of the year (+4.4%).  Gross margin performance improved in Q3 2013 (ie, -60 basis points vs. -120 bps in H1 2013) driven by less contraction in Brazil and expansion in our international divisions, while we delivered strong EBITDA margin expansion of 250 bps on the back of expansion across our business units.

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

Operating Cash generation and Profit: Cash generated from our operations improved 7.4%, totalling R$ 4,689.8 million.  Our Normalized Profit was R$ 2,287.2 million, declining 8.0% mostly impacted by higher net finance expenses and a greater effective tax rate. Normalized Earnings Per Share (EPS) corresponded to R$ 0.73 (-8.2% vs. Q3 2012).

CAPEX, Pay-out and Financial discipline: We invested approximately R$ 1 billion during the quarter in capex (R$ 2.3 billion thru September 30), of which R$ 847 million were carried out in Brazil.  In terms of pay-out, on September 27 we paid out approximately R$ 2 billion in dividends, bringing our pay-out this year to R$ 7.1 billion in dividends and IOC (vs. R$ 3.8 billion during the same period in 2012), and we also reduced our net cash position to R$ 2,399.7 million since December 31, 2012.

If the second quarter was a good first step, our third quarter performance confirms that we are on the right track towards our objective of improving EBITDA performance for the remainder of 2013.  Our consolidated EBITDA was up 9.4% in the quarter (following growth of 4.4% in H1 2013), with Brazil Beer EBITDA up 7.3% (after 4.4% growth in the first half).  Industry volumes did indeed remain challenging across our main markets, particularly Brazil.  On the other hand, however, solid net revenue per hectoliter results, coupled with better COGS/Hl and SG&A performance as compared to the first half of the year enabled us to deliver stronger EBITDA growth and EBITDA margin expansion for the year.

Breaking down the results by division:

·          Brazil .  Our Brazilian operations delivered an EBITDA of R$ 2,820.7 million (+8.0%).  Gross margin contracted 80 bps, which marks an improvement against the first half of the year, while EBITDA margin expanded 330 bps, reaching 54.2%.

o     Brazil Beer net revenue grew 0.8%, with volumes declining 5.0% but NR/Hl performance remaining solid by growing 6.0%. 

§   We estimate the Brazilian beer industry declined 4.3% in the third quarter, which is evidence of the fact that even though there was some continued improvement in terms of food inflation and disposable income, the consumer environment remains challenging.  In addition, we lacked the incremental volumes from the FIFA Confederations Cup in Q2 and weather was also not helpful during the quarter.

§   The average market share for the quarter was 68.0%, which represents a sequential loss of 10 bps (and a 50 bps decline YoY, as we still faced a difficult comp against last year). 

§   Net revenue per hectoliter increased 6.0% against a very tough comp (+18.3% in Q3 2012), positively impacted by pricing, increased weight of direct distribution as well as greater weight of premium volumes.

§   Our commercial plan continued to make steady progress:

·          the top four commercial priorities all performed well, with volumes related to our innovation (led by the 550 ml can and aluminum bottles for Skol and Brahma, as well as the Brahma zero alcohol line extension) and premiumization (led by Budweiser, Stella Artois and Original) strategies growing well ahead of the industry (volumes for the 1 liter and the 300 ml returnable glass bottles likewise), while our market share in the North & Northeast posted another quarter of growth; and,

·          our pack price strategy once again delivered great results as we try to deliver to consumers different pack sizes and price propositions in a profitable way: for instance, growth of the 1 liter and the 300 ml returnable glass bottles helped us increase the weight of returnables in the off-premise channel for another quarter, and the execution of our revenue management initiatives continued to make progress as planned.

o     As for Brazil CSD & NANC, net revenue grew 5.4%, with an industry driven 2.0% decline in volumes being offset by a 7.6% growth in NR/Hl.  In terms of our commercial hightlights, Guaraná Antarctica reached an all-time high market share of 10% during the quarter, which clearly shows that the positive momentum for the brand continues thanks to continued investment on innovation behind the brand. 

o     On the costs side, Brazil COGS/hl grew 8.7% in Q3 2013 (Brazil Beer: +8.5%; Brazil CSD&NANC: +10.0%).  Brazil Beer COGS/hl results improved when compared to the first half of the year as a result of the continued tailwind of our commodity hedges helping offset the adverse effect coming from our currency hedges, higher industrial depreciation and changes in package mix.  In Brazil CSD & NANC, with the tough comparison we faced in Q2 2013 no longer a factor, COGS/Hl also grew less than in H1 2013. 

o     SG&A (excluding depreciation and amortization) was 2.4% lower than in the third quarter of 2012, which shows we are headed in the right direction in terms of our initiatives to protect the profitability of our business.  Our sales and marketing investments in the third quarter declined slightly, though we did not refrain from investing in our top commercial priorities, such as premium and innovation.  Also, the combination of cost saving initiatives around “non-working money” delivering as planned and lower variable compensations accruals as compared to last year led to lower administrative expenses, while the higher distribution expenses resulted primarily from the increased weight of direct distribution.   

·          HILA-ex .  In our Caribbean and Central American operations EBITDA totalled R$ 121.8 million (+37.5%), with gross margin expansion of 40 bps, and EBITDA margin expanding 630 bps to 32.2%.   

o     Our HILA-ex business continues to deliver great results: we continued to find further synergies in the Dominican Republic, while continuing to invest behind Presidente, innovating in the marketplace and working around premiumization, and in Guatemala, the third quarter was another quarter marked by consistent volume and market share, which once more reached new heights.  Top line grew 10.7% thanks to net revenue per hectoliter improving 10.9% versus Q3 2012.  These results were more than enough to offset the slight volumes decline (-0.2%) given the tougher industry in the Dominican Republic. 

·          LAS .  Our operations in LAS delivered EBITDA of R$ 674.8 million in Q3 2013 (+20.3%).  Gross margin expanded 60 bps and EBITDA margin expanded 190 bps to arrive at 41.5%.

o     Our year-over-year volume performance in LAS continued to improve in the third quarter: -0.3% as compared to -6.4% during H1 2013 despite the challenging environment in Argentina.  LAS Beer volumes were down 2.0% as compared to last year (vs. -5.3% in the first half), but LAS CSD volumes actually grew 2.2% (which compares to -7.8% in the first six months of the year).  Meanwhile, net revenue performance remained solid, increasing 14.8% (+14.6% for LAS Beer; +15.1% for LAS CSD & NANC).  On the commercial side, premium and innovation continued to lead the way with line extensions for the Quilmes family (eg, Quilmes 1890) and Stella Artois (eg, Stella Artois Noire) helping us deliver improved market share in Argentin a while brand preference remains healthy.

·          Canada .  EBITDA increased by 0.6% in the quarter, reaching R$ 582 million.  Labatt also delivered both gross and EBITDA margins expansion, 20 bps and 30 bps, respectively.  EBITDA margin was 46.6%.

o     Our Canadian business also showed improved performance as compared to the first half of the year: though volumes declined 2.2% in the quarter predominantly driven by continued industry softness (driven primarly by poor weather and the Quebec taxation hikes), market share remained sequentially flat and NR/Hl grew 2.2%, highlighting that the strength of our brands is allowing us to maintain share while implementing our revenue management strategy.  Innovation behind our focus brands proved once again to be a key component of our commercial strategy: the launch of Budweiser Black Crown, combined with the continued contributions from earlier innovation such as Bud Light Platinum and Bud Lime Lime-a-Rita, led to market share improvements for both the Budweiser and Bud Light families.

The execution during the third quarter of our revised plan for the year allowed us to improve our year-over-year EBITDA performance as compared to Q1 and Q2 2013 despite an environment that remains challenging. 

As we set out to deliver a strong finish for the year, the resolve of our team and the disciplined execution of the commercial initiatives such as the pack price strategy, which has delivered great results since the first quarter, will once again be decisive.  In addition, the Brazilian Federal Government’s decision not to further increase excise taxes in 2013 is great news, as it should be supportive, for volumes and creates a more appropriate environment for us to keep our record CAPEX investment plans in place.

Our expectations for the year in Brazil remain mostly unchanged: given volume performance in the quarter and our outlook for Q4 2013, we now expect the beer industry to be at the lower end of the flat to low single-digit range we expected for the year; on the other hand, our expectations for net revenue/Hl (ie, high-single digits for the year), COGS/Hl (ie, high-single or low double-digits as mentioned before, with “high teens” in Brazil CSD & NANC), cash SG&A (below inflation for the year), and capital expenditures (around R$ 3.0 billion of capital expenditures) all stand.

DISCLAIMERS

In view of the stock swap merger involving Companhia de Bebidas das Américas – Ambev and Ambev S.A., which was approved by shareholders on July 30, 2013, we have also prepared the consolidated financial statements of Ambev S.A., including Companhia de Bebidas das Américas – Ambev as Ambev S.A.’s wholly-owned subsidiary.  Moreover, since the stock swap merger involved entities under common control, the predecessor cost accounting method was applied to all periods presented for comparability purposes.  For further information, please refer to footnote 1(c) to the quarterly financial information of Ambev S.A.

The operational and financial information contained herein refer to Companhia de Bebidas das Américas – Ambev (unless otherwise expressly stated herein ) .  The quarterly financial information related to Ambev S.A. for the period ending on September 30, 2013 were also filed with the CVM and submitted to the SEC.  For further information on Ambev S.A.’s operational and financial information, please refer to the CVM’s Sistema de Envio de Informações Periódicas e Eventuais – IPE at www.cvm.gov.br or the SEC’s EDGAR at www.sec.gov .  

The combination of Ambev’s operations in Latin America North (LAN), Latin America South (LAS) and Canada’s business units, eliminating intercompany transactions, comprises our consolidated financial statements. The figures shown below are on an as-reported basis.

We delivered during the quarter R$ 4,199.3 million of Normalized EBITDA (+9.4%), with net revenues growing 4.0%, COGS rising 5.8% and SG&A (excluding depreciation and amortization) actually declining 0.5%.  Gross margins contracted 60 bps to 66.7%, but EBITDA margin expanded 250 bps to 49.6%.  Year to date, EBITDA grew 6.2%.

Our LAN region i-ncludes Beer Brazil, CSD & NANC Brazil and HILA-ex operations.  LAN EBITDA for the quarter totalled R$ 2,942.5 million (+8.9%), with an EBITDA margin expansion of 330 bps to 52.7%.  This improvement in results comes from solid net revenue per hectoliter growth (+6.3%), lower growth rate for COGS and COGS/Hl versus H1 2013 (+4.6% and +9.0%, respectively) and declining SG&A (-2.3%), with Brazil CSD & NANC EBITDA resuming growth in a relevant way, as well as important contributions from HILA-ex.  For the first nine months of the year LAN delivered an EBITDA of R$ 7,784.3 million (+5.7%).

As previously mentioned, as from January 1, 2013 the results of our Peruvian and Ecuadorian operations are reported as part of Latin America South.  To that effect, we have included restated figures for LAN and LAS, as if this change had been in place since January 1, 2012.  

We delivered R$ 2,820.7 million (+8.0%) of Normalized EBITDA in Brazil, with an EBITDA margin expansion of 330 bps to 54.2%.  Year to date, EBITDA has grown 5.1% and EBITDA margin corresponded to 50.4%, which represents an expansion of 80 bps.

Brazil’s top line performance remained under pressure in terms of volumes (-4.2%; YTD: -4.1%) given the challenging environment that remains despite some continued improvements in food inflation and disposable income, as well as unhelpful weather.  Our NR/Hl results, however, continued to deliver strong results and grew 5.9%, giving us 7.9% so far this year, which falls within our high single-digit guidance for FY 2013.

COGS/Hl continued to grow by less year-over-year than prior quarters, posting an increase of 8.7% (vs. 15.9% in H1 2013) bringing the YTD performance to 13.3%, which is slightly above our guidance of high single to low double-digit growth for the full year.  SG&A (excluding depreciation and amortization) performance also improved, declining by 2.4%, which is consistent with our expectation of cash SG&A growing below inflation for the year.  Year-to-date, SG&A (excluding depreciation and amortization) is up 7.7%.

EBITDA for Beer Brazil during the quarter totalled R$ 2,348.0 million (+7.3%) and EBITDA margin was 54.2% (+330 bps), while for the year, EBITDA increased 5.5% and EBITDA margin reached 51.3% (+120 bps).

The beer industry fell 4.3%, still impacted by food inflation growing ahead of general inflation and disposable income increasing by less than the previous year, though in both cases to a lesser extent than what we witnessed in H1 2013, a nd weather was not helpful.  Our average market share for the quarter was nearly flat sequentially (-10 bps) at 68.0% (-50 bps vs. Q3 2012), and NR/Hl remained strong against the toughest comp of the year (+6.0% vs. +18.3% in Q3 2012) thanks to pricing, premium volume mix and greater weight of direct distribution, allowing us to offset the short term volume softness and still deliver net revenue growth (+0.8%) in the quarter. 

COGS/Hl performance improved by rising 8.5% (as compared to +15.9% in H1 2013) thanks to commodity hedges offsetting more of the headwinds from currency hedges, changes in package mix and higher industrial depreciation.  And SG&A (excl. depreciation and amortization) expenses were 0.1% lower than Q3 2012, favorably impacted by phasing of sales and marketing investments (ie, frontloading into H1), lower variable compensation accruals and successful implementation of our “non-working money” savings initiatives, though distribution expenses were higher due to the higher weight of direct distribution.

In Brazil CSD & NANC, EBITDA  was R$ 472.7 million (+11.3%) in the quarter, with an expansion of 290 bps in EBITDA margin to 53.9%.  Year-to-date, EBITDA is up 3.2% and EBITDA margin is 46.2% (-100 bps).

Top line growth remained steady (+5.4%) and in line with the first half of the year (+5.8%) despite volume decline of 2.0% for the most part because of the challenging environment that also impacted the beer industry.  Market share grew 30 bps sequentially, averaging 18.4% for the quarter (-10 bps YoY) thanks to Guaraná Antarctica’s performance.  The brand’s equity and market share have consistently improved as a result of innovation (eg, 1 liter returnable glass bottle) and investments behind the brand (eg, targeted promotions). NR/Hl remained solid, posting 7.6% growth. 

As far as costs and expenses are concerned, COGS/Hl and SG&A results were also better than H1 2013, with COGS/Hl up 10.0% (+14.1% YTD) and SG&A (excluding depreciation and amortization) falling 18.4% (+5.7% year-to-date).  In terms of costs, we no longer faced the tough comp from Q2 2013 and commodity hedges helped offset currency hedge headwinds.  As for SG&A, phasing of commercial spend, lower variable compensation accruals and “non-working money” initiatives were the primary factors behind the results.

Our operations in HILA-ex delivered an EBITDA of R$ 121.8 million (+37.5%).  EBITDA margin expanded 630 bps to 32.2%.  Thru September 30, 2013, HILA-ex generated R$ 283.6 million of EBITDA (+42.2%), with an EBITDA margin of 29.4% (+530 bps).

This was another quarter of improvement for HILA-ex: our business in the Dominican Republic delivered strong top line growth despite the challenging industry environment, our Guatemalan operations continued to deliver consistent volume and market share growth, and our plans for further expanding into other islands in the Caribbean remains on track.  NR/Hl grew 10.9%, COGS per hectoliter rose 10.1%, while SG&A (excluding depreciation and amortization) declined 10.5%.