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SAB - SABMiller plc - Trading Update
SABMiller plc
JSE ALPHA CODE: SAB
ISSUER CODE: SOSAB
ISIN CODE: GB0004835483
SABMiller plc Trading Update
SABMiller plc (SABMiller) today issues its Interim Management Statement
for the group`s first quarter ended 30 June 2011. The calculation of
the organic growth rates below excludes the effects of acquisitions and
disposals.
On an organic basis, both lager and soft drinks volumes for the first
quarter grew 5%. Volume growth reflects the strength of our brand
portfolio and commercial execution, growth in consumer spending in many
developing markets, and a relatively weak comparative quarter in the
prior year. Increased volumes, combined with selective price increases
and some mix benefits, grew group revenue 7% on an organic, constant
currency basis for the quarter, with group revenue per hectolitre up 2%
on the same basis. We continued to increase investment behind our
brands and as expected, raw material costs rose moderately. The group`s
financial performance in the quarter was in line with our expectations.
In Latin America, lager volumes grew by 6% on an organic basis.
Colombia`s lager volumes increased 6% partially reflecting lower sales
in the prior year following the increase in VAT in February 2010, as
well as improved marketing effectiveness and in-trade execution. These
factors, together with fewer election "dry days" and the normalisation
of weather patterns in June, more than offset the adverse impact on
volumes of flooding and infrastructural damage. Lager volumes in Peru
were 11% higher, driven by our brand portfolio and sales service
initiatives to expand the beer category and capture share from the
informal alcohol sector, and benefited from the buoyant economy.
Ecuador lager volumes fell 1% due to government restrictions on alcohol
sales on Sundays introduced in June 2010, and three "dry days" for a
referendum over a peak consumption weekend. Soft drinks volumes across
the region were up 10%, with good performances in Honduras and El
Salvador, supported by expansion into new soft drinks categories.
In Europe, lager volumes were up 5%. Poland`s volumes were up 4%
cycling a weak comparative quarter that was impacted by widespread
flooding and alcohol sales restrictions during a nine day national
mourning period following the death of the president. The market
continued to be impacted by significant competitor discounting. In the
Czech Republic, domestic volumes grew by 4% supported by brand and
package innovations despite continued market pressures. Russia`s
volumes were up 11%, with improved market performance compared to a weak
quarter in the prior year, following the significant excise increase in
January 2010. Our volumes in Romania declined by 3% as the market
continued to suffer the effects of a fragile economic environment and
government austerity measures. The region`s volume performance
benefited from significantly higher volumes in Ukraine, while volumes in
the United Kingdom continued to grow. Volumes in Italy and the
Netherlands were marginally lower.
In the three months to 30 June 2011, MillerCoors` US domestic sales to
retailers (STRs) were down 2.7%, as a result of a continued weak
economic environment, ongoing high unemployment levels and subdued
consumer spending affected by high fuel prices and poor weather.
Premium light STRs were down low single digits, as Miller Lite declined
mid single digits and Coors Light volumes grew slightly. The Tenth and
Blake craft and imports division maintained its strong performance with
double digit growth, led by Blue Moon, including its seasonal brand
extensions, and Leinenkugel`s. Peroni Nastro Azzurro also delivered
good growth in the quarter. The below premium segment saw a mid single
digit volume decline as industry uptrading continued. Domestic sales to
wholesalers (STWs) were down 3.1% in the quarter.
Lager volumes in Africa grew by 15% on an organic basis boosted by
enhanced distribution, the strength of our local brand portfolios and
generally favourable economic conditions. Lager volumes in Tanzania
grew 23% against a prior year comparative period in which volumes
declined. In Uganda, lager volumes were up 28% driven by strong in-
trade execution. In Zambia, strong economic conditions, coupled with
our focus on availability and outlet price execution, helped grow lager
volumes by 29%. Lager volumes in Mozambique grew by 12% following a
successful renovation of the mainstream brand 2M and enhanced market
penetration in the north of the country. Angola`s lager volumes grew
19% aided by the commissioning of the new brewery in Luanda in the prior
year and increased availability in the north. Zimbabwe`s lager volumes
grew 28% on an organic basis following capacity upgrades in the prior
year. Our associate Castel delivered lager volume growth of 9%. Soft
drinks volumes grew by 9% on an organic basis with solid performances in
Ghana and Zimbabwe, and from our associate Castel.
Lager volumes in Asia grew 11% on an organic basis, led by a 14%
increase in China`s volumes. Further share gains and improved weather
conditions, compared to the severe storms that affected the prior year,
underpinned China`s growth with strong performances in the west and
central regions. In India, volumes for the quarter were 13% below the
prior year as we continued to be impacted by trading restrictions
introduced in July 2010 in Andhra Pradesh. Excise increases implemented
at the start of the quarter also limited overall market growth in a
number of key states.
In South Africa, lager volumes ended the first quarter level with the
prior year. Although volumes benefited from an Easter peak trading
period, this was partially offset by the positive impact of the 2010
FIFA World Cup in the prior year. Our core power brand portfolio
continued to benefit from targeted investment and enhanced retail
execution, with Castle Lite in particular growing strongly. Soft drinks
volumes declined by 3% during the quarter although retail execution
continued to show improvement. Both beer and soft drinks volumes were
affected by the cycling of the 2010 FIFA World Cup, unseasonably cold
and wet weather and subdued consumer demand.
In May 2011 SpA Birra Peroni agreed to sell its in-house distribution
business to the Tuo Group and the transaction was completed on 13 June
2011.
Also in May 2011, SABMiller Africa BV agreed to sell its 20%
shareholding in its associate, Kenya Breweries Limited (KBL), to East
African Breweries Limited (EABL) for a cash consideration of
approximately US$225 million, subject to EABL disposing of its 20%
shareholding in Tanzania Breweries Limited by way of a public offer
through the Dar-es-Salaam Stock Exchange. SABMiller International BV
also agreed to terminate a brewing and distribution agreement with KBL.
On 21 June 2011, the group announced that it had made a non-binding,
conditional proposal to the Board of Directors of Foster`s Group Limited
to acquire all of Foster`s shares for A$4.90 per fully paid share in
cash to be financed through existing resources and new debt facilities.
The group also confirmed that it had separately reached agreement to
acquire Coca-Cola Amatil Limited`s share of the Pacific Beverages Pty
Limited joint venture should SABMiller acquire a controlling interest in
Foster`s.
On 1 July 2011, the group announced that it had entered into a
distribution agreement with the Van Steenberge brewery in Ertvelde,
Belgium, to distribute SABMiller`s first Belgium beer in select markets.
In April 2011, the group entered into a five-year US$2,500 million
committed syndicated facility, with the option of two one-year
extensions. This facility replaced the existing US$2,000 million and
US$600 million committed syndicated facilities, which were both
voluntarily cancelled.
On 1 July 2011 a US$600m bond, issued in 2006, matured and was repaid
from cash resources.
Lesley Knox and Helen Weir joined the SABMiller board as independent non-
executive directors on 19 May 2011. Both new directors were appointed
to the audit committee, and Lesley Knox also joined the remuneration
committee.
Tom Long was appointed as the new chief executive officer of
MillerCoors, with effect from 1 June 2011, replacing Leo Kiely who had
successfully guided the integration and start-up of MillerCoors.
On 1 July 2011, Domenic De Lorenzo, the group`s Director of Corporate
Finance and Development, joined the SABMiller group executive committee.
After 25 years of service, Malcolm Wyman, Chief Financial Officer, will
retire at the end of August 2011, and stands down from the board
effective 21 July 2011. Malcolm will be replaced by Jamie Wilson,
previously the Finance Director for SABMiller Europe.
ENDS
Notes to editors
SABMiller plc is one of the world`s largest brewers with brewing
interests and distribution agreements across six continents. The group`s
wide portfolio includes global brands Pilsner Urquell, Peroni Nastro
Azzurro, Miller Genuine Draft and Grolsch, as well as leading local
brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller
is also one of the world`s largest bottlers of Coca-Cola products.
In the year ended 31 March 2011, the group reported US$4,491 million
adjusted pre-tax profit and group revenue of US$28,311 million.
SABMiller plc is listed on the London and Johannesburg stock exchanges.
High resolution images and broadcast footage are available for the media
to view and download free of charge from the News and media centre on
www.sabmiller.com
Supporting media materials
For a large selection of print quality images visit
www.sabmiller.com/imagelibrary
Broadcast and internet quality B-roll footage is available to view and
download at www.sabmiller.com/broadcastfootage
Enquiries
SABMiller plc
t: +44 20 7659 0100
Sue Clark
Director Corporate Affairs
SABMiller plc
t: +44 20 7659 0184
Gary Leibowitz
Senior VP, Investor Relations
SABMiller plc
t: +44 20 7659 0174
Nigel Fairbrass
Head of Media Relations
SABMiller plc
t: +44 7799 894265
This announcement does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire securities of SABMiller plc
(the "Company") or any of its affiliates in any jurisdiction or an
inducement to enter into investment activity.
This announcement includes "forward-looking statements". These
statements may contain the words "anticipate", "believe", "intend",
"estimate", "expect" and words of similar meaning. All statements other
than statements of historical facts included in this announcement,
including, without limitation, those regarding the Company`s financial
position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating
to the Company`s products and services) are forward-looking statements.
These forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual
results, performance or achievements of the Company to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. These forward-looking
statements are based on numerous assumptions regarding the Company`s
present and future business strategies and the environment in which the
Company will operate in the future. These forward-looking statements
speak only as at the date of this announcement. The Company expressly
disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained in this
announcement to reflect any change in the Company`s expectations with
regard thereto or any change in events, conditions or circumstances on
which any such statement is based. Any information contained in this
announcement on the price at which the Company`s securities have been
bought or sold in the past, or on the yield on such securities, should
not be relied upon as a guide to future performance.
Date: 21/07/2011 12:00:01 Supplied by www.sharenet.co.za
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