According to consensus estimates available on Bloomberg, Brazilian real GDP is expected to grow at 0.15% and 4.75% during 2009 and 2010, respectively. During the quarter, the Brazilian consumer confidence index increased 1.6 % to 117.2 from 115.4 in the previous quarter, being the highest over the past 7 quarters. Furthermore, during the quarter, the Brazilian consumer price index increased to 3.93% higher over the past 6 quarters. We expect this rate to increase over the next two years in light of continuous low interest rates amid loose monetary policy followed by the Brazilian central bank. In light of the above and considering the company’s policy to keep net revenues per hectoliter ahead of inflation, we expect Brazilian revenue growth to maintain its pace over the next two years. Conversely we anticipate volume growth in Quinsa to decline in face of declining growth volumes across the industry. We expect Cost of Goods Sold (COGS) as a percentage of revenues to rise over the next two years, as the company hedged its FY 2010 position at higher exchange rate compared to the previous year. In addition, Selling, General and Administrative (SG&A) expenses, as a percentage of revenues are also expected to rise in light of anticipated higher accruals for variable compensations going forward, negatively impacting EBITDA margin over the next two years.

From September 2009, the Research Oracle will begin to accept research submissions from readers – whether amateur or professional analysts – from around the globe. To receive notification of the launch and rules, contributors may register now at
http://www.iirgroup.com/researchoracle/researchoracleaward