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SABMILLER PLC - SABMiller plc Trading Update

Release Date: 17/10/2013 08:00
Code(s): SAB     PDF:  
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SABMiller plc Trading Update

SABMiller plc
JSEALPHA CODE: SAB
ISIN CODE: SOSAB
ISIN CODE: GB0004835483

SABMiller plc Trading Update

SABMiller plc today provides an update on trading during the six months ended 30
September 2013. The calculation of the organic growth rates excludes the impact of
acquisitions and disposals on net producer revenue and volumes.

Alan Clark, Chief Executive of SABMiller, commented:
“We achieved a strong performance across our African business and made good progress in
building on our positions in Latin America, South Africa and the Asia-Pacific region.
Following a challenging start to the year, trading conditions in Europe and North America
saw a modest improvement in the second quarter, although the consumer environments
here are expected to remain under pressure. Despite current prevailing uncertainties about
developing market economies, we remain confident in the long term growth prospects for the
group.”

First half and second quarter highlights
 -  Group net producer revenue (NPR) for the first six months grew by 4% and group NPR
    per hectolitre (hl) grew by 2% both on an organic, constant currency basis
 -  For the second quarter group NPR grew by 6% and group NPR per hl grew by 3%, both
    on an organic, constant currency basis
 -  Total beverage volumes grew by 2% for the first six months on an organic basis, with
    lager volumes up 1% and soft drinks volumes up 5%
 -  Depreciation of key currencies against the US dollar will adversely impact reported
    results
 -  The group’s financial performance is in line with expectations

Our first half group NPR growth was driven by our Latin America, Africa and South Africa:
Beverages divisions, as we continued to expand our portfolios, the beer category and
consumer reach in these regions. In Asia Pacific we saw good group NPR growth in China,
while our brand restoration programme in Australia continues to deliver. Conditions
remained more challenging in Europe and North America.

Latin America
Lager volume growth despite disruptive events in Colombia and an excise increase in Peru
Group NPR grew by 5% in Latin America on an organic constant currency basis, on the back
of selective price increases. Lager volumes were up by 1%, with the second quarter
impacted by disruptive events in Colombia, together with relatively softer economic
conditions across the region. However, against this backdrop we continued gaining share of
alcohol across all markets. In Colombia lager volumes were affected by national strikes and
social unrest in July and August, constraining volume growth in the first half of the year to
1%. Águila Light continued to perform strongly in the period, growing by double digits, while
our bulk packs also continued to drive growth. In Peru lager volumes returned to growth in
the second quarter, despite the excise tax increase in May, although lager volumes declined
by 1% overall in the first half. In Ecuador, Pilsener Light continued to grow strongly driving
lager volume growth of 2% and making a positive contribution to brand mix. In Central
America, lager volumes grew by 1% supported by a strong performance in the premium
lager segment. Soft drinks volumes grew by 4% on an organic basis in Central America,
despite intense competition.
Europe
Mixed performance in a challenging environment
In Europe, group NPR on an organic, constant currency basis declined by 1% as a volume
decline of 2% on an organic basis was partially offset by an improvement in group NPR per
hl. Lager volumes were down by 4% on an organic basis. Although the second quarter trend
improved compared with the first quarter, continued economic uncertainty and weak
consumer sentiment persisted across the region. Weather impacted our innovation launches
and performance was also affected by the competitive environment. In Poland, volumes
were down by 10%, impacted by the cycling of a strong prior year comparative and
competitive intensity. Domestic volumes in the Czech Republic were down by 7% with the
off-premise channel cycling a strong prior year assisted by the 2012 launch of seasonally
focused Radlers. Volumes grew by 6% in Romania led by the continued strength of Ciucas
in the PET offering and premium brand Ursus assisted by the launch of Ursus Cooler.In the
UK, domestic volumes were up by 5% led by Peroni Nastro Azzurro with a strong second
quarter performance. Grolsch premium extensions and innovations helped drive 3%
domestic volume growth in the Netherlands. On an organic basis, Anadolu Efes volumes
grew driven by soft drinks performance with lager volumes continuing to decline,
predominantly in Turkey and Russia. On a reported basis Anadolu Efes soft drinks volumes
benefited from the full consolidation of the Coca-Cola Icecek results.

North America
Growth in above premium fuelled by innovation
For the six months ended 30 September 2013, MillerCoors group NPR was in line with the
prior year. Volume declines were offset by improved group NPR per hl driven by the
strategic intent to benefit from positive sales mix and higher net pricing. On a trading day
adjusted basis, US domestic sales to retailers (STRs) declined 3.2% for the half year, and by
1.9% in the second quarter. Premium light STRs declined mid-single digits in the quarter
with Coors Light down low-single digits and Miller Lite down mid-single digits. Premium
regular brands declined low-single digits in the quarter with double digit growth of Coors
Banquet offset by a double digit decline of Miller Genuine Draft. The above premium portfolio
grew by double digits driven by Redd’s and the continued strength of Tenth and Blake driven
by the success of Leinenkugel’s Shandy variants. The below premium portfolio declined by
mid-single digits. Domestic sales to wholesalers (STWs) for the second quarter were down
by 1.5% compared with the same period in the prior year and were 3.5% lower for the half
year.

Africa
Capacity expansions continue to drive growth
Group NPR in Africa grew by 11% on an organic, constant currency basis driven by total
volume growth of 7% on an organic basis and pricing impacts. Lager volume growth of 9%
on an organic basis was achieved through robust performances in a number of key markets.
In Tanzania, lager volumes grew by 6%, supported by double digit growth of Castle Lite.
Improved availability in Zambia assisted by the commissioning of the Ndola brewery
continued to drive strong lager volume growth of 13%. Trading in Mozambique improved in
the second quarter delivering lager volume growth for the first half of 4%. In Nigeria, capacity
expansions continued to drive strong growth, largely due to the continued success of Hero
Lager. Economic conditions in Uganda and South Sudan remained soft resulting in volumes
declining compared with the prior period. Our associate Castel continued to deliver robust
lager volume growth of 8% with Angola performing strongly during the period. Soft drinks
volume growth of 8% reflected good performances in Ghana and Zambia, and from our
associates Castel and Delta in Zimbabwe. Other alcoholic beverage volumes remained
under pressure, ending the half year down 4% on an organic basis, principally as a result of
the continuing impact of restrictive trading legislation in Botswana.

Asia Pacific
Group NPR growth driven by China
Asia Pacific group NPR grew by 2% on an organic, constant currency basis, despite being
adversely impacted by the loss of discontinued brands in Australia. In Australia, continuing
group NPR on a constant currency basis grew by 2% driven by a combination of price
increases and premiumisation of the portfolio. Continuing volumes were 1% below the prior
year reflecting the absence of an Easter period and subdued consumer confidence. CUB’s
largest brand, Victoria Bitter, continued to grow, up 5%, although this positive performance
was offset by a decline in Carlton Draught. Group NPR growth was also supported by the
positive performance of the premium portfolio: Crown Lager volumes grew by 10% and
Peroni Nastro Azzurro continued to grow strongly, up 25%. Total domestic volumes,
including discontinued brands, were down by 7%. In China, group NPR grew by 14% on a
constant currency basis reflecting relatively strong volume growth of 6% in a subdued
industry and favourable mix. In India, group NPR on a constant currency basis grew by 1%
with favourable pricing offsetting lower volumes, as a number of states introduced regulatory
changes which unfavourably impacted sales and much of India was impacted by both the
early onset and prolonged nature of the monsoon season.

South Africa: Beverages
Robust performance in a challenging trading environment
In South Africa, group NPR for the half year grew by 7% on an organic, constant currency
basis, driven by volume growth, improved brand mix and pricing. This performance came
against the absence of an Easter period and subdued consumer spending, partly due to
increased inflationary pressures. Lager volumes grew strongly, rising by 3% for the first six
months as a result of increased market facing activity and enhanced retail execution. Castle
Lite and Castle Lager continued to perform well along with Carling Black Label returning to
growth, although their volume gains were partially offset by a decline in Hansa Pilsener
volumes. Soft drinks volumes grew by 1% in a challenging trading environment. Increased
market penetration and a strong focus on customer service helped to drive higher volumes
driven by lower margin brands in the sparkling drinks portfolio and a good performance in
still soft drinks.

Other

The group has amended and expanded a number of its non-GAAP reporting metrics to
reflect more accurately how the business is managed, to reflect changes in accounting
standards and to aid comparability with other beverage companies. The revised metrics will
be used for the first time in the announcement of the group’s interim results for the six
months ended 30 September 2013 scheduled to be released on 21 November 2013.

A link to the new and revised reporting metrics is provided below:

www.sabmiller.com/reportingmetrics

ENDS

17 October 2013


Notes to editors

SABMiller plc is one of the world’s leading brewers with more than 200 beer brands and some 70,000 employees in over 75
countries. The group’s portfolio includes global brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft
and Grolsch; as well as leading local brands such as Aguila (Colombia), Castle (South Africa), Miller Lite (USA), Snow (China),
Victoria Bitter (Australia) and Tyskie (Poland). SABMiller also has growing soft drinks businesses and is one of the world’s
largest bottlers of Coca-Cola products.
In the year ended 31 March 2013 the group reported group lager volumes of 242 million hectolitres, group net producer
revenue* of US$26,932 million and EBITA* of US$6,379 million. SABMiller plc is listed on the London and Johannesburg stock
exchanges.

*On 17th October 2013 SABMiller announced new and revised reporting metrics in which a new reporting metric ‘group net
producer revenue’ and a restatement of the calculation of EBITA, among other things, were explained. These new and revised
metrics are included above for the year ended 31 March 2013.

This announcement is available on the company website: www.sabmiller.com

Further information is also available on:
www.sabmiller.com
www.facebook.com/sabmiller
www.twitter.com/sabmiller
www.youtube.com/sabmiller

Multi-media content
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Enquiries

SABMiller plc
t: +44 20 7659 0100

Catherine May
Director of Corporate Affairs
SABMiller plc
t: +44 20 7927 4709

Gary Leibowitz
Senior VP, Investor Relations
SABMiller plc
t: +44 20 7659 0174

Richard Farnsworth
Business Media Relations Manager
SABMiller plc
t: +44 20 7659 0188



Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd

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