2013

JOO CASTRO NEVES

Chief Executive Officer

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.

Brazil: #1 Organic Growth Opportunity

AGENDA

Brazil: #1 Organic Growth Opportunity

AGENDA

BRAZIL HAS IMPROVED CONSIDERABLY IN THE LAST DECADE, BUT REMAINS AS A COUNTRY OF DISPARITIES
Lower Index: 0,21 Aroeiras (PI)
Lower Index: 0,41 Melgao (PA) (same as Afghanistan) Lower Index: 0,41
Melgao (PA) (same as Afghanistan)

Different realities within neighborhood Different

realities within neighborhood

Higher Index: 0,82 So Caetano do Sul (SP)

HigherIndex: Index: 0,86 Higher 0,86 So Caetano do do Sul (same So Caetano Sul (SP) (SP) as United Kingdom) (same as United Kingdom)

Source: PNUD, 2012 (Programa das Naes Unidas para o Desenvolvimento)

CONSIDERABLE SOCIAL MOBILITY HAS DRIVEN (AND SHOULD CONTINUE TO DRIVE) INCREASING CONSUMPTION

Source: LCA, BCG

A/B: >5K R$

C1: 2,5K 5K R$

C2/D: 0,5K - 2,5K R$

AND WE ARE NOT EVEN HALF WAY THROUGH THE COUNTRYS DEMOGRAPHIC BOOM
Population Bonus - Source: IBGE Elaboration LCA

Population Bonus

BRAZIL DEMOGRAPHIC BOOM 2000-2034

Population under 14 years

Population over 65 years

Population 15 to 64 years

Source: IBGE, IPEA and FGV Study Demographic Boom and Economic Growth

AS SOCIAL & ECONOMIC INDICATORS EVOLVED, BEER PER CAPITA CONSUMPTION & SHARE OF THROAT HAVE BEEN POSITIVELY IMPACTED
PER CAPITA (L) BRAZILIAN BEER SOT EVOLUTION

57.7

60.8

65.4

67.0

68.5
88.8% 87.1%

89.2%

89.5%

87.7%

2008 Source: Plato

2009

2010

2011

2012

2008 Source: Euromonitor

2009

2010

2011

2012

 WITH REGIONAL OPPORTUNITIES TO REMAIN AS KEY PER CAPITA GROWTH DRIVERS

0.85

HDI VS. TOTAL PER CAPITA CONSUMPTION

0.80

0.75

SE MW SE MW S S
10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

0.0 0.70

NO NO
0.65

NE NE

0.60
Source: Company estimates

AND DESPITE THE SHORT TERM CHALLENGES THE BRAZILIAN CONSUMER REMAINS CONFIDENT WITH THE FUTURE
NEGATIVE EVENTS
Difficulty paying off credit/debit Difficulty paying monthly bills 20 49 24

CONSUMER CONFIDENCE
3 11 27 36 54 23
Global (25) Brazil

2 2 12 30

Dont Know Not at all confident Not very confident More confident than not Very confident

56

CUTBACKS
Dining out at restaurants
Going out for entertainment (movies,
sports events, concerts, etc.)

PURCHASE INTENT
44 57 35 27 26 42 40 47 Home Fine Watch / Jewelry Special Vacation Car / Other Vehicle Home Appliances Homes Electronics Personal Electronics
10 11 19 22 23 25 32 39 41 52 54

28

Going out for a drink Global Brazil

Source: Roper 2013

Household energy use

67
66

10

..AND SO DOES THE INDUSTRY THAT CONTINUES TO INVEST HEAVILY FOR THE FUTURE
COLD BEVERAGES INDUSTRY CAPEX (BRL BILLION)

7.9

7.5
6.2

Cold beverages industry represents 3% of Brazils GDP Generates over 3 million jobs (direct and indirect)

2.0

2.2

Biggest GDP multiplier in the economy

Source: PWC, IBGE, BNDES, FGV

Source: CERVBRASIL, ABIR

11

AGAINST THIS BACKDROP, WE HAVE MANAGED TO DELIVER SOLID RESULTS UNDER DIFFERENT AND CHANGING SCENARIOS
Brazil Beer
EBITDA margin

48.8%

49.9%
18.4% 18.0%

52.4%

53.2%

17.3% 13.9%

12.5%
8.0% 10.9% 8.5% 9.7% 1.8%

12.3%
9.7%

3.2%

2009
INDUSTRY GROWTH VS. LY
Source: Company data

2010
NET REVENUE GROWTH VS. LY

2011
EBITDA GROWTH VS. LY

2012

12

THE EXECUTION OF OUR COMMERCIAL STRATEGIES AND THE CONTINUED FOCUS ON OUR CORE CAPABILITIES HAVE MADE (AND WILL CONTINUE TO MAKE) THE DIFFERENCE
COMMERCIAL STRATEGIES BUILDING BLOCKS

World Cup Legacy

13

AND IT ALL STARTS WITH HAVING THE BEST PRODUCTS TO THE VARIOUS TYPES OF CONSUMERS IN THEIR DIFFERENT NEED STATES

Needstate

Consumer Type

Source: Segmentation

14

INNOVATION AND PREMIUM WILL BE KEY DRIVERS TO CAPTURE THE OPPORTUNITIES ACROSS THE DEMAND LANDSCAPE...

15

INNOVATION AND PREMIUM WILL BE KEY DRIVERS TO CAPTURE THE OPPORTUNITIES ACROSS THE DEMAND LANDSCAPE...

16

17

INNOVATION HAS BEEN ONE OF THE MOST CONSISTENT GROWTH DRIVERS SINCE 2008
20,0%
20,4%

10,3% 12,1% 4,8%

10,6% 11,8% 11,8%

5,4%
5,2% 2008 7,3% 2009

9,7%

9,8%

2010

2011

2012

Weight (ex RGB 1L)

Source: Segmentation

Weight RGB 1L
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 AND OUR TARGETED INNOVATION CONTINUES: BRAHMA 0.0

Refresh Myself Out Of Home occasions

Brahma 0.0 launch
Industry Non alcohol volume NA MS

+33.6%

+6.7pp

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sep12

Sep13

2012
Source: Nielsen

2013

19

 AND OUR TARGETED INNOVATION CONTINUES: SKOL BEATS EXTREME

Amp Up Night Out
Beats relaunch Extreme launch

NEW BOTTLE NEW LIQUID 6.9% ABV

20

INNOVATION AND PREMIUM WILL BE KEY DRIVERS TO CAPTURE THE OPPORTUNITIES ACROSS THE DEMAND LANDSCAPE...

21

PREMIUM PRODUCTS HAVE BEEN INCREASING WEIGHT IN SEVERAL CONSUMER PRODUCTS CATEGORIES

Yogurt
22.3 19.4 20.1

Biscuit
10.9 10.6 10.2

Vodka
20.1 19.4 22.3

Cleaners
32.9 30.6 30.8

2011 2012 2013

2011 2012 2013

2011 2012 2013

2011 2012 2013

22

WHICH HAS ALSO BEEN THE CASE FOR BEER, WITH VOLUMES SHOWING STEADY INCREASE SINCE 2011

5.5% 4.8% 4.1% 4.1% 4.7%

5.5%

2008

2009

2010

2011

2012

2013 YTD

23

WHILE DATA SHOWS THERE IS STILL PLENTY OF ROOM FOR GROWTH

Premium brand preference 19.1 %

5.5 %

Premium Vol Mix

Premium Pref

Premium weight vs. Other beer markets

Remium vol. Mix

Premium Vol. Mix

High HDI LOWHDI

48.4%

24.9%

7.5 % 5.6 % 4.3 % 2.7 %

South East SouthEast Midle West North North East

28.3%

13.2%

1.6 %
0.68 HDI

22.9%

21.9%

0.76
Source: Company Data

South

0.75

0.75

0.66

24

GROWTH HAS BEEN DRIVEN PRIMARILY BY INTERNATIONAL BRANDS

WEIGHT WITHIN PREMIUM VOLUMES (%)

99%

98%

91%

87%

77%

61%

59%

1%
2007

2%
2008

9%
2009

13%
2010

23%
2011

39%

41%

2012

YTD13

Domestic

International

Source: Nielsen

25

 ALLOWING US TO LEAD THE GROWTH AMONG INTERNATIONAL BRANDS

70 60

67 59 51

50 40 30 20

48 41
Competition

29

J08

J09

J10

J11

J12

J13 M M J

Source: Nielsen Retail Index

26

 BUT THERE IS MORE TO COME WHEN WE LOOK AT THE NEED STATES OF THE BRAZILIAN CONSUMER
Savor the Moment Ritual & Specialties

Activate Stella Artois

Chalice & Fine dinings

(harmonization & specialties)

Bohemia

27

 BUT THERE IS MORE TO COME WHEN WE LOOK AT THE NEED STATES OF THE BRAZILIAN CONSUMER
Amp Up International Premium
Budweiser

Lead the international Segment

+47%

YTD 12

YTD 13

28

OUR APPROACH IN NON-ALCOHOLIC BEVERAGES IS SIMILAR AND CONTINUES TO DRIVE BETTER PERFORMANCE
FULL PORTFOLIO INVESTING BEHIND BRAND EQUITY

BLOCKBUSTER PROMOTIONS

DIGITAL CONNECTIONS

29

OUR APPROACH IN NON-ALCOHOLIC BEVERAGES IS SIMILAR AND CONTINUES TO DRIVE BETTER PERFORMANCE
CLOSING GAPS THROUGH INNOVATION
Consistent Guaran Antarctica Market SHARE GROWTH
9,0 8,6 9,6

INCREASING PRESENCE IN New Categories

10,7
2x

7,4

7,7

8,1

2008

2009

2010

2011

2012

YTD 13

Oct 13

2012 2012

2013 2013

Volume OCT13 YTD

Source: Nielsen Source: Company data

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Brazil: #1 Organic Growth Opportunity

AGENDA

31

CONNECTING WITH CONSUMERS BEFORE, DURING & AFTER THE FIFA 2014 WORLD CUP...
In order to build a strong soccer platform, we have developed relevant assets ranging from local teams to the FIFA 2014 World Cup

32

CONNECTING WITH CONSUMERS BEFORE, DURING & AFTER THE FIFA 2014 WORLD CUP...

33

SINCE 2011 BRAHMA HAS BEEN INNOVATING ON HOW TO CONNECT WITH CONSUMERS THROUGH THE SPONSORSHIP OF LOCAL TEAMS...
STRUCTURAL INVESTMENTS REACHING OUT TO FANS VIA DIGITAL MEDIA BRAND ACTIVATION

STADIUM ACTIVATION

34

... AND IS ALSO LEADING AN INITIATIVE TO TRANSFORM SOCCER IN BRAZIL...

Fan Membership Program

Program Evolution (# of fans)

BRAND ACTIVATION

3MM

600K 157K
Jan 13 Oct13 Launch Dream

35

CONNECTING WITH CONSUMERS BEFORE, DURING & AFTER THE FIFA 2014 WORLD CUP...

36

FIFA CONFEDERATIONS CUP WAS A UNIQUE OPPORTUNITY TO RAMP UP OUR INITIATIVES AROUND BRAND EQUITY, INCREMENTAL VOLUME & CORPORATE IMAGE AS WE GET READY FOR 2014... EVENT HIGHLIGHTS
JUNE 15-30 16 MATCHES 6 HOST CITIES
Zero Alcohol

INNOVATION
Special Edition Aluminum Bottle Confederations Cup Special Edition Promo Pack

37

CONNECTING WITH CONSUMERS BEFORE, DURING & AFTER THE FIFA 2014 WORLD CUP...
On Trade Off Trade

Stadium

Experiential

Media

CSR

Airports
38

CONNECTING WITH CONSUMERS BEFORE, DURING & AFTER THE FIFA 2014 WORLD CUP...
In order to build a strong soccer platform, we have developed relevant assets ranging from local teams to the FIFA 2014 World Cup

39

MAKING THE MOST OF OUR ASSETS AND EXECUTION WITH SCALE WILL BE KEY FOR THE FIFA 2014 WORLD CUP...
EVENT HIGHLIGHTS FOCUS BRANDS

JUNE 12 JULY 13 64 MATCHES 12 HOST CITIES

MICRO EVENTS

40

WORLD CUP FOR ALL

41

Q&A
42