SABMILLER PLC - SABMiller plc Trading Update

SABMiller plc Trading Update

SABMiller plc
JSEALPHA CODE: SAB
ISIN CODE: SOSAB
ISIN CODE: GB0004835483
SABMiller plc (the “Company”)

24 July 2014

SABMiller plc Trading Update

SABMiller plc today issues its Interim Management Statement for the group’s first quarter
ended 30 June 2014.

Alan Clark, Chief Executive of SABMiller, commented:
We continued to drive strong NPR growth across our businesses. This has been achieved
through our prolonged success in building local and global flagship brands across our broad
geographic footprint, together with innovations and improved trade execution. Strong growth
in Africa, South Africa and Europe was balanced by slower momentum in North America and
a reduction in NPR in Australia in difficult trading conditions. Latin America performed well
despite a number of one-off trading restrictions in Colombia.

First quarter highlights
 - Group NPR grew by 6% and group NPR per hectolitre (hl) grew by 3%, both on an
    organic, constant currency basis
 -  Total beverage volumes grew by 3% on an organic basis
 -  Lager volumes grew by 1% on an organic basis, driven by China, Europe and Africa
 -  Soft drinks volumes grew by 10% on an organic basis, reflecting strong growth in Latin
    America, Europe, South Africa and Africa
 -  The group’s financial performance is in line with expectations

Q1 growth                           Group NPR            Total beverage      Group NPR/hl
Organic, constant currency             growth            volume growth             growth
                                            %                         %                 %
Latin America                               5                         2                 3
Africa                                     11                         5                 5
South Africa: Beverages                    12                         6                 6
Asia Pacific                                1                         2                (1)
Europe                                      8                         5                 3
North America                               3                        (2)                4
Total                                       6                         3                 3

The calculation of the organic growth rates excludes the impact of acquisitions and
disposals. All growth rates are quoted on an organic basis for volumes and an organic,
constant currency basis for net producer revenue (NPR), except where otherwise stated.

Latin America
Group NPR growth reflecting strong pricing in the region offsetting softer volume
performance in Colombia
Latin America delivered group NPR growth of 5% driven by selective price increases and
favourable brand mix. Total beverage volumes increased by 2%. Although lager volumes
were 2% below the prior year as a result of numerous trading restrictions, soft drinks
volumes grew by 9% with strong performances across the region. In Colombia, group NPR
grew by 2% although lager volumes were down by 6%, impacted by the selective price
increase in April 2014 and dry laws for the two rounds of the Presidential elections and in
key cities during Colombia’s World Cup football matches. Peru delivered group NPR growth
of 6% underpinned by Pilsen Callao’s continued growth and reflecting the cycling of the May
2013 excise increase. In Ecuador, group NPR grew by 12% driven by firm pricing on the
Pilsener brand and positive brand mix. In Central America, group NPR increased by 3%
reflecting a strong performance in soft drinks volumes which grew by 6%, while lager
volumes increased by 1%.

Africa
Strong group NPR performance with lager volumes returning to growth
In Africa, group NPR grew by 11%, driven by pricing and total beverage volume growth of
5%. Lager volume growth of 3% was aided by market share gains. Total soft drinks volume
growth was 9%, with strong performance in Ghana, Zambia, Nigeria and Zimbabwe. In
Tanzania, group NPR grew by 11% and lager volumes recovered in June to end level for the
quarter after a slow start impacted by particularly heavy rainfall. Group NPR in Mozambique
grew by 15%, driven by the strong growth of Castle Lite and the return to lager volume
growth in the quarter. In Uganda, lager volumes returned to growth, helping to drive group
NPR growth of 7%. Group NPR in Zambia grew by 4% although lager volumes declined as
a result of the excise-related pricing in January. In Zimbabwe, group NPR grew by 6% while
lager volumes declined, reflecting poor economic fundamentals. Strong group NPR growth
continued in Nigeria assisted by the recently commissioned incremental capacity. In
Botswana, group NPR grew by 8% reflecting strong market execution in both lager and soft
drinks. High single digit group NPR growth at our associate, Castel, reflected lager volume
growth of 1% and soft drinks growth of 8%.

South Africa: Beverages
Strong group NPR growth buoyed by Easter trading
South Africa: Beverages group NPR grew by 12% reflecting price increases, the continuing
premiumisation of the portfolio, and total beverage volume growth of 6%, against a backdrop
of the challenging economic environment. Lager volume growth of 4% benefited from a
number of public holidays and favourable weather conditions throughout the country over
Easter. The premium lager portfolio performed well, with both Castle Lite and Castle Milk
Stout delivering double digit volume growth. Soft drinks volume grew 11% also benefiting
from public holidays at the start of the quarter, but driven further by effective in trade
execution, focus on the full brand portfolio, and price point management of bulk PET packs
in particular. The rand has continued to depreciate, and consequently reported group NPR
grew by only 1%.

Asia Pacific
Group NPR growth driven by China, with enduring category and price pressure in Australia
Asia Pacific group NPR grew by 1% for the quarter. In Australia, group NPR declined by 6%
reflecting a volume decline of 3% and a decline in NPR per hl. The soft volume and price
performance was driven by continuing category pressure, reflecting increased negative
consumer sentiment following the tough federal budget in May, along with continued
competitive intensity. The NPR per hl decline was exacerbated by price competition from
international premium brands. In China, group NPR grew by 8%, reflecting volume growth of
4% and favourable mix trends, primarily as a result of increasing premiumisation. In India,
group NPR declined by 3% reflecting a volume decline of 8%, partially offset by robust NPR
per hl growth of 6%. Volumes in India continued to be impacted by regulatory changes
imposed in the earlier part of the prior year in several key states, as well as trading
restrictions caused by the imposition of the election code of conduct during the national
elections in April and May.

Europe
Strong group NPR growth assisted by a soft volume comparative
In Europe, group NPR grew by 8% driven by total beverage volume growth of 5%, with lager
volumes up 3%. Performance in the quarter was assisted by cycling a comparative prior year
quarter with poor weather and which excluded an Easter trading period. In the recently
integrated businesses in the Czech Republic and Slovakia, group NPR was 6% ahead of the
prior year reflecting volume growth driven by better performance in the off-premise channel,
assisted by seasonal promotional activities, along with improved execution and an enhanced
focus in the on-premise channel. In Poland, increased sales through discounters and
selective brand price repositioning resulted in level group NPR while volumes grew by 7%.
The quarter also cycled a subdued prior year quarter which was impacted by the pre-quarter
stock build in the trade ahead of our global template deployment. Group NPR in the United
Kingdom was up by 23% driven by the continued growth of Peroni Nastro Azzurro, reflecting
improved distribution both in the off-premise and on-premise channels. Italy’s group NPR
grew by 5%, driven by higher volumes reflecting Peroni’s seasonal promotional activities in
the off-premise channel and the launch of its Peroni Lemon Chill radler. Anadolu Efes’ group
NPR grew strongly, with total beverage volume growth driven by the continued growth of soft
drinks volumes while lager volumes were negatively impacted by market regulatory
conditions in Turkey.

North America
Continued growth of the above premium segment
North America group NPR grew by 3%, driven by MillerCoors’ group NPR growth of 2%, with
lower volumes offset by positive sales mix and higher net pricing. US domestic sales volume
to retailers (STRs) declined 1.2% in the quarter. Premium light STRs declined low single
digits reflecting a low single digit decline in both Miller Lite and Coors Light, which benefited
from the launch of Coors Light Summer Brew. Premium regular brands declined low single
digits with high single digit growth of Coors Banquet offset by a double digit decline in Miller
Genuine Draft. In line with the strategy to improve above premium mix, total above premium
STRs grew double digits, driven by the Redd’s franchise and innovations such as Miller
Fortune and Smith & Forge Hard Cider. Within above premium, the Tenth and Blake division
declined low single digits with high single digit growth from the Leinenkugel’s portfolio, low
single digit growth of Blue Moon Belgian White and high single digit decline of Blue Moon
seasonals. The below premium portfolio declined mid single digits. Domestic sales volume
to wholesalers (STWs) declined 1.7% in the quarter.

Other
On 18 July 2014, the group announced that it had successfully placed approximately 67% of
its shareholding in Tsogo Sun Holdings Limited (Tsogo), a company listed on the
Johannesburg Stock Exchange, through an institutional placing for a total gross
consideration of ZAR 7.6 billion (approximately US$707 million). A further ZAR 200 million
(approximately US$19 million) worth of shares are expected to be purchased by members of
Tsogo’s executive management team, and the balance of the group’s shareholding will be
bought back by Tsogo for ZAR 2.8 billion (approximately US$261 million), subject to Tsogo
shareholder approval. On the basis that this approval is granted, the buy back is expected
to be completed on or about 5 September 2014, following which the SABMiller group would
no longer hold any ordinary shares in Tsogo.

On 7 April 2014, the group announced that its South Africa and Africa divisions would be
consolidated into one division for management purposes with effect from 1 July 2014. Mark
Bowman has been appointed as the Managing Director of that division.

ENDS


Notes to editors

SABMiller plc is in the beer and soft drinks business. We are the world’s second largest brewing company and are one of the
world’s largest bottlers of Coca-Cola drinks. We also produce a portfolio of wholly-owned soft drinks brands.

We are a FTSE-20 company, with shares trading on the London Stock Exchange, and we have a secondary listing on the
Johannesburg stock exchange. We operate in more than 80 countries with around 70,000 employees.

The group’s brand portfolio includes leading local brands such as Aguila (Colombia), Castle (South Africa), Miller Lite (USA),
Snow (China), Victoria Bitter (Australia) and Tyskie (Poland) as well as global brands such as Pilsner Urquell, Peroni Nastro
Azzurro, Miller Genuine Draft and Grolsch. Every minute of every day, more than 140,000 bottles of SABMiller beer are sold.

In the year ended 31 March 2014, the group sold 318 million hectolitres of lager, soft drinks and other alcoholic beverages,
generating group net producer revenue of US$26,719 million and EBITA of US$6,453 million.

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

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

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Enquiries

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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.


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

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