Wrap Text
Trading Update
SABMiller plc
JSEALPHA CODE: SAB
ISIN CODE: SOSAB
ISIN CODE: GB0004835483
14 October 2014
SABMiller plc Trading Update
SABMiller plc today issues the following update on trading for the six months ended 30
September 2014.
Alan Clark, Chief Executive of SABMiller, commented:
“We achieved resilient net producer revenue growth in the first half, powered by our Africa
and Latin America businesses. Our total beverage volume growth was impacted by weaker
lager volume performance in the second quarter, balanced by strong growth in soft drinks.
Financial performance has been affected by ongoing foreign currency movements as well as
weaker second quarter trading conditions in China and Australia.”
First half and second quarter highlights
- For the first six months, group net producer revenue (NPR) grew by 5% and group NPR
per hectolitre (hl) grew by 3%, both on an organic, constant currency basis
- For the second quarter, group NPR grew by 3% and group NPR per hectolitre (hl) grew
by 4%, both on an organic, constant currency basis
- Total beverage volumes grew by 1% for the first six months on an organic basis, driven
by strong performance across both lager and soft drinks in Latin America and Africa
- Ongoing top line weakness in Australia and softer second quarter lager volumes in China
and Europe impacted by poor summer peak weather following growth in the first quarter
Q2 H1
Q2 & H1 growth Group Total Group Group Total Group
Organic, constant NPR beverage NPR/hl NPR beverage NPR/hl
currency growth volume growth growth volume growth
growth growth
% % % % % %
Latin America 9 5 3 7 3 3
Africa* 8 4 4 10 5 5
Asia Pacific (3) (8) 6 (1) (3) 2
Europe (2) (1) (1) 3 2 1
North America 1 (2) 3 2 (2) 3
Total 3 (1) 4 5 1 3
*Africa including the South Africa beverages business
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 group NPR and group NPR per hl.
Latin America
Return to lager volume growth in the second quarter, with strong soft drinks volume growth
continuing
In Latin America, group NPR for the first six months grew by 7%, driven by price increases
and favourable brand mix together with total beverage volume growth of 3%. Lager volume
grew by 1% in the half year with trading restrictions impacting the first quarter. Soft drinks
volumes saw strong growth across the region with volumes up 10%, driven by our non-
alcoholic malt brands, together with further pack innovation. In Colombia, group NPR grew
by 6% reflecting selective price increases together with total beverage volume growth of 2%.
Colombia lager volumes for the first six months were level with the prior half year following a
return to growth in the second quarter which was boosted by the performance of our bulk
packs and Aguila Light. In Peru, group NPR grew by 4%, driven by soft drinks volume
growth together with continued positive momentum in lager from consumers trading up to
Pilsen Callao. In Ecuador, group NPR growth of 13% was driven by firm pricing and positive
brand mix from the robust growth of Pilsener Light, together with our sales service model
which continues to assist volume growth. In Central America, against a backdrop of security
concerns and trading restrictions impacting the on-premise channel, group NPR growth of
5% was driven by soft drinks volumes which were up by 7%.
Africa
Positive NPR growth in the newly integrated Africa region driven by premium lager mix and
soft drinks volume
In the Africa region, now including the South Africa beverages business, group NPR grew by
10%, underpinned by total beverage volume growth of 5%, together with pricing and
premiumisation in lager. Lager volumes grew by 2%, while total soft drinks volumes grew by
9% driven by South Africa, Ghana, Nigeria and Zambia, and our associate, Castel. In South
Africa, group NPR grew by 10%. Total South Africa beverage volumes grew by 4% with
lager volumes growing 1% owing to the softening economic environment, following a first
quarter buoyed by an Easter peak and a number of public holidays. Pricing and mix benefits
in lager, reflecting growth in our premium lager brands together with innovation, helped to
drive group NPR growth. In Tanzania, group NPR grew by 6% while lager volumes were
down 7% reflecting excise-related and other pricing taken in July 2014 and a weak
agricultural harvest. In Mozambique, group NPR grew by 16%, and lager volumes by 8%,
driven by our dual focus on affordability (through Impala) and premiumisation (with a strong
performance from Castle Lite), aided by a stable political environment. In Zambia, group
NPR grew by 4% although lager volumes were down 16%, impacted by excise-related price
increases taken in January 2014. In Nigeria, incremental capacity and strong market
execution drove group NPR growth of 41%. Positive group NPR growth continued in
Botswana and Uganda. Group NPR in Zimbabwe declined by 3% with total beverage
volumes declining due to the continued poor economic environment. High single digit group
NPR growth at Castel reflected lager volume growth of 4% and soft drinks volume growth of
11%.
Asia Pacific
Group NPR decline reflecting ongoing pressure in Australia and poor summer weather in
China
Asia Pacific group NPR declined by 1%, with the total beverage volume decline of 3% offset
by group NPR per hl growth of 2% primarily reflecting the impact of changes in geographical
mix. In Australia, group NPR declined by 4%, reflecting a 3% decline in group NPR per hl
together with a lager volume decline of 1%, which outperformed the market. Consumer
sentiment remains low following the federal budget in May. The NPR per hl decline was
impacted by increased trade investment activity and competitive price pressure. In China,
group NPR grew by 1% with a 3% lager volume decline offset by favourable mix, primarily as
a result of increasing premiumisation. Poor weather impacted most of the central provinces,
such that beer volumes declined markedly during the summer peak months of July and
August compared with the prior year. In India, group NPR grew by 5% with NPR per hl
growth of 4% driven largely by geographic mix and price increases in key states.
Europe
Lager volumes in line with the prior half year, even with a challenging second quarter
In Europe, group NPR grew by 3%, driven by total beverage volume growth of 2%, with lager
volumes level with the prior half year. For lager volumes, a strong first quarter was assisted
by cycling a soft volume comparative, followed by a more challenging second quarter, which
was affected by poor weather across much of the region during the peak months. In the
recently integrated businesses in the Czech Republic and Slovakia, group NPR was up by
3% and volumes grew 3% driven by the off-premise channel, which benefited from better
execution and successful promotional activities. Both the on and off-premise channels have
outperformed a stable market. Although volumes in Poland grew by 4%, group NPR was
down 2% reflecting key brand initiatives and adverse channel mix. In the United Kingdom,
group NPR grew by 11% led by the continued growth of Peroni Nastro Azzurro with
increased rate of sale, improved distribution in key outlets and assisted by good weather.
Group NPR in Italy was down 3% driven by a 4% volume decline in a market which was
impacted by particularly poor weather during the peak summer months together with the
effects of continued economic uncertainty on consumer confidence. Anadolu Efes’ group
NPR grew strongly with total beverage volumes up driven by the continued strong
performance of soft drinks. Lager volumes were down impacted by the continuing effect of
regulatory changes in the prior year in Turkey, although competitive performance in Russia
improved against a difficult market backdrop.
North America
Above premium brands continue to drive growth
North America group NPR grew by 2%, driven by MillerCoors’ group NPR growth of 2%.
Improved group NPR per hl, driven by higher net pricing and positive sales mix, offset
volume declines. US domestic sales volume to retailers (STRs) declined 2.5% for the half
year and by 3.7% in the second quarter. Premium light STRs declined low-single digits in the
half year with both Miller Lite and Coors Light down low-single digits. Premium regular
brands declined mid-single digits with low-single digit growth of Coors Banquet and a double
digit decline in Miller Genuine Draft. In line with the strategy to improve total above premium
mix, total above premium STRs grew by high-single digits, driven by the Redd’s franchise
and innovations such as Miller Fortune and Smith & Forge Hard Cider, together with
continued growth of Leinenkugel’s. Growth within the segment was partially offset by double
digit declines in strategically deprioritised brands. The below premium portfolio declined by
mid-single digits. Domestic sales to wholesalers (STWs) for the second quarter and the half
year were both down by 1.7% compared with the same periods in the prior year.
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:
www.sabmiller.com
www.facebook.com/sabmiller
www.twitter.com/sabmiller
www.youtube.com/sabmiller
Enquiries
SABMiller plc Catherine May Gary Leibowitz Richard Farnsworth
t: +44 20 7659 0100 Group Corporate Affairs Director, Internal & Business Media Relations
Director Investor Engagement Manager
SABMiller plc SABMiller plc SABMiller plc
t: +44 20 7927 4709 t: +44 20 7659 0119 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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