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SABMILLER PLC - Trading statement

Release Date: 15/04/2014 08:00
Code(s): SAB     PDF:  
Wrap Text
Trading statement

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

15 April 2014

SABMiller plc Trading Update

SABMiller plc today issues an update on trading for the 12 months ended 31 March 2014.
The calculation of organic growth rates excludes the impact of acquisitions and disposals.

Alan Clark, Chief Executive of SABMiller, commented:
“We continued to deliver top line growth for the year, despite a number of headwinds and a
challenging fourth quarter. The combination of our global overview and deep local insights
enables us to fine tune our operations in each market and to deliver commercial progress,
which underpins our confidence in our ability to deliver higher revenue growth in the longer
term.”

Full year and fourth quarter highlights
- Group net producer revenue (NPR) for the full year grew by 3% and group NPR per
   hectolitre (hl) grew by 2%, both on an organic, constant currency basis
- In the fourth quarter, group NPR grew by 2% and group NPR per hl grew by 1%, both on
   an organic, constant currency basis
- Total beverage volumes grew by 2% for the full year 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

Latin America
Solid revenue growth despite difficult trading conditions
On an organic, constant currency basis, Latin America grew group NPR by 5% in the year,
underpinned by firmer pricing and above mainstream brand momentum. Total beverage
volumes and lager volumes were up 3% and 1% respectively on an organic basis for the full
year. In Colombia, stronger trading in the fourth quarter contributed to full year lager volume
growth of 2%, driven by growth in the Poker brand and trading up in our Águila franchise to
Águila Light. In Peru, full year domestic lager volumes were slightly ahead of the prior year,
despite the May 2013 excise increase, with growth in the fourth quarter. In Ecuador, Pilsener
Light volumes continued to grow in double digits, driving 2% lager volume growth for the
year, assisted by extended distribution reach. In Central America, lager volumes were level
with the prior year, as strong premium segment growth, particularly from Miller Lite, offset
slower mainstream performance and the impact of new trading restrictions and the recent
sales tax increase in Honduras. Soft drinks volumes on an organic basis grew by 6% across
Latin America, with a solid performance in all categories.

Europe
Improvement in trend but challenging market conditions remain
In Europe, group NPR on an organic, constant currency basis for the full year was in line
with the prior year with an improved growth trend in the fourth quarter. On an organic basis,
total volumes for the full year were down 1%, with lager volumes down 4%, following a
challenging first half adversely affected by poor weather in our key markets, which had a
particular impact on our innovation launches. Across the region, economic uncertainty and
weak consumer sentiment persisted. In the Czech Republic, full year lager volumes declined
by 4%. While the market environment continued to be challenging, our volume performance
improved in the second half, driven by better execution and a focus on the on-premise
channel where prices remained unchanged. In Poland, full year lager volumes were down
9%, with an associated effect on margin, impacted by the competitive environment and the
cycling of a strong prior year which included a planned stock build at the end of the year
ahead of the implementation in Poland of our global template. Italy’s domestic volumes were
down 1%, outperforming a declining market, despite a reduction of discounts. Domestic
lager volumes in the UK were up 5% with strong performance throughout the year from
Peroni Nastro Azzurro. In our other Central and Eastern European markets, lager volumes
were up low single digits for the full year on an organic basis. Anadolu Efes full year total
volumes grew on an organic basis, driven by the continued growth of soft drinks volumes
with lager volumes negatively impacted by regulatory conditions in Turkey and Russia. On a
reported basis, Anadolu Efes’ soft drinks volumes benefited from the full consolidation of the
Coca-Cola Icecek’s results.

North America
Innovations drive growth in above premium
For the 12 months ended 31 March 2014, MilllerCoors’ group NPR was level with the prior
year. Volume declines were offset by improved group NPR per hl driven by the above
premium portfolio’s increased share of sales and higher net pricing. On a trading day
adjusted basis, US domestic sales volume to retailers (STRs) declined 2.9% for the full year,
and by 3.4% in the fourth quarter. In the latest quarter, premium light STRs declined by mid
single digits as Coors Light and Miller Lite were both down by mid single digits. Premium
regular brands declined by low single digits in the quarter with mid single digit growth of
Coors Banquet offset by a double digit decline of Miller Genuine Draft. Total above premium
STRs grew by double digits for the quarter, delivering an increase in the overall above
premium proportion of MillerCoors’ NPR, driven by innovations including the notable success
of the Redd’s franchise. Within Tenth & Blake, Leinenkugel’s growth of double digits was
more than offset by declines in smaller brands. The below premium portfolio declined by
high single digits for the quarter. Domestic sales volume to wholesalers (STWs) declined
3.1% for the year ended 31 March 2014, with a 3.0% decline in the fourth quarter.

Africa
Moderate growth given a more challenging fourth quarter
Group NPR for the full year ended 5% ahead of the prior year on an organic, constant
currency basis, driven by total volume growth of 5% (lager growth of 6%) from effective in-
trade execution and share gains across the majority of our subsidiary markets. In Tanzania,
lager volumes grew by 4% for the full year driven by solid growth in the mainstream and
affordable segments partially offset by poor weather and weak market conditions in the
fourth quarter. Zambia encountered a challenging fourth quarter due to the excise-related
pricing taken in January 2014, limiting full year lager volume growth to 6%. Political tensions
in Mozambique continued to impact demand, and lager volumes ended down 2% for the
year. Nigeria and Ghana delivered strong double digit volume growth in spite of economic
challenges, supported by increased capacity progressively coming on-stream. In Uganda,
full year lager volumes declined 3%, although there was an improvement in the fourth
quarter. Soft economic conditions persisted in Zimbabwe, resulting in lager volumes
declining by 18%. Our associate Castel delivered lager volume growth of 6%, driven
principally by a strong performance in Angola. Soft drinks volume growth of 6% reflected
good performances in Zimbabwe, Ghana and Zambia, and by our associate Castel. Other
alcoholic beverage volumes ended 2% lower on an organic basis, primarily as a result of
lower sales in Zambia.
Asia Pacific
Group NPR driven by robust growth in China with continued category and competitor
pressure in Australia
Asia Pacific group NPR grew by 4% for the year on an organic, constant currency basis. In
Australia, continuing domestic lager group NPR on a constant currency basis for the full year
was in line with the prior year, as a volume decline of 3% was offset by a 3% improvement in
NPR per hl. The soft volume performance was driven by continuing category pressure
reflecting negative consumer sentiment, along with continued competitive intensity. Total
Australia volumes including discontinued brands were down 8% for the full year on an
organic basis. In China, group NPR grew by 17% on an organic basis for the full year, driven
by volume growth of 8% and with favourable mix trends, primarily as a result of increasing
premiumisation. In India, group NPR declined by 3% due to a volume decline of 7%, partially
offset by robust NPR per hl growth of 4%. Volumes were impacted by regulatory changes
made in the earlier part of the year in several key states, coupled with the prolonged
monsoon season during the year.

South Africa: Beverages
NPR growth in an increasingly challenging trading environment
South Africa: Beverages group NPR grew by 6% on an organic, constant currency basis for
the full year driven by group NPR per hl growth of 6%, which benefited from price increases
and positive lager brand mix. Lager volumes were level with the prior year, affected by the
timing of Easter and the slowing economy. The local premium portfolio performed strongly,
benefiting from significant efforts in brand and retail execution, with Castle Lite and Castle
Milk Stout delivering combined growth of more than 10%. In the mainstream segment,
Castle Lager grew and Carling Black Label continued to stabilise, while targeted investment
slowed the decline of Hansa Pilsener. Soft drinks volumes for the full year were level with
the prior year, amid challenging economic conditions and particularly bad weather in the last
quarter, and the impact of industrial action in Gauteng and KwaZulu-Natal. Given the
growing intensity of sparkling B-brand competition in the marketplace, the business has
remained focused on portfolio expansion, market penetration, retail execution and
productivity initiatives. The still beverage portfolio continued to show growth.

Other

SABMiller currently has an effective 39.6% shareholding in Tsogo Sun Holdings Limited, a
company listed on the Johannesburg Stock Exchange. The trading value of SABMiller’s
shareholding is approximately ZAR 10.9 billion (USD 1,042 million). This investment is not
considered to be core to the beverage operations of SABMiller and therefore SABMiller is
reviewing its strategic options for its shareholding, however, there can be no certainty that
the review will result in SABMiller taking any action.

ENDS

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
- B-roll footage is available for download from our broadcast footage library
- High resolution images are available to view and download free of charge from our media image library

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
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.

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