SABMILLER PLC - SABMiller plc Trading Update

SABMiller plc Trading Update

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

SABMiller plc Trading Update


SABMiller plc today issues its trading update for the group’s third quarter ended 31
December 2014.

Alan Clark, Chief Executive of SABMiller, commented:
“We continued to drive steady net producer revenue growth, notwithstanding varied local
market performances, as we benefited from the breadth of our global portfolio of businesses.
During the quarter, our Latin America and Africa businesses continued to grow both volumes
and revenues, together with Europe, while more difficult trading conditions, particularly in
China, held back the overall group performance.”

Third quarter highlights
- Group net producer revenue (NPR) for the third quarter grew by 4%, with group NPR per
   hectolitre (hl) growth in all regions
- Lager volume was down 1%, reflecting continuing volume weakness in China and in US
   shipments
- Continuing growth in soft drinks across the group, with volumes up 4% in the quarter

                                                      Q3                                YTD
Organic,                         Group          Beverage          Group    Group   Beverage    Group
constant currency                  NPR           volume          NPR/hl     NPR     volume    NPR/hl
                               growth**           growth         growth   growth     growth   growth
                                                       %                                  %
                                         %                           %        %                   %
Latin America                            5                2          4        6          3        3
Africa*                                  7                4          3        9          4        4
Asia Pacific                            (2)              (7)         6       (1)        (4)       3
Europe                                   3                2          1        3          2        1
North America                           (1)              (3)         3        1         (2)       3
Total                                    4                   -       3        4          1        3
*Africa including the South Africa beverages business
** Reported Group NPR for the third quarter declined by 5%


The calculation of the organic growth rates excludes the impact of acquisitions and
disposals. All growth rates are over the prior year comparative period and are quoted on an
organic basis for volumes and an organic, constant currency basis for group NPR and group
NPR per hl.

Latin America
Continued NPR growth through affordability and premiumisation
In Latin America, group NPR grew by 5% in the third quarter. Beverage volumes increased
by 2%, with soft drink volumes up 4%, driven by our non-alcoholic malt brands, and lager
volumes up 1%. In Colombia, group NPR grew by 5% with beverage volumes increasing by
1% and lager volumes decreasing by 1%. Lager volume performance was impacted by a
shift in consumer spending patterns, along with pressure on disposable income driven by
increased levels of household debt and rising inflation. This was partially offset by strong
trading over the peak December period. Sales of our above mainstream brand Aguila Light,
particularly in bulk packs, continued to grow, offsetting softer performance in other
mainstream brands. Our local premium Club Colombia range also contributed positively to
mix. In Peru, group NPR growth of 5% was supported by beverage volume growth of 3%
with consumers continuing to trade up to our above mainstream brand Pilsen Callao, which
grew by double digits, offsetting a decline in our premium Cusqueña brand. In Ecuador,
beverage volumes were level while group NPR grew by 8%, driven by positive mix from the
continued strong growth of our above mainstream brand Pilsener Light, and the benefit of
the prior year price increase. In Central America, group NPR grew by 1% driven by
beverage volume growth.

Africa
Group NPR growth in Africa through our balanced portfolio
Group NPR in Africa grew by 7% in the quarter driven by beverage volume growth of 4%,
together with pricing and continued improvement in the premium category. Lager volumes
increased by 3%, while soft drinks volumes grew by 5%. In South Africa, group NPR grew by
6% driven by positive pack and brand mix in lager which grew NPR by 8%. Both lager and
soft drinks volumes grew by 2%, with continued strong growth in Castle Lite. Group NPR in
Tanzania grew by 5% underpinned by pricing, positive lager segment mix and growth in
wines and spirits, while lager volumes declined by 9% reflecting excise-related and other
pricing in July 2014. In Mozambique, group NPR grew by 26%, and lager volumes by 21%,
supported by strong performance of Castle Lite and a focus on affordability through the
Impala brand. Group NPR in Zambia grew by 2% reflecting price increases in both lager and
soft drinks. Lager volumes declined by 11% due to the continuing impact of the excise-
related price increases in January 2014. In Nigeria, strong group NPR growth continued, up
33%, driven by volume growth of 27% supported by market execution and incremental
capacity. Group NPR in Zimbabwe declined by 10% reflecting continued economic
challenges. Castel delivered high-single digit growth in group NPR, supported by mid-single
digit volume growth in both lager and soft drinks. Soft drinks volume growth in Africa was
driven by South Africa, Ghana, Nigeria, Zambia and our associate Castel.

Asia Pacific
Group NPR decline driven by softer lager volumes in China
Asia Pacific group NPR declined by 2%. The beverage volume decline of 7% was partially offset by
group NPR per hl growth of 6%, which principally reflected the impact of changes in geographic mix.
In Australia, group NPR was level as growth in group NPR per hl of 1% was offset by a volume decline
of 1%, outperforming the market. Volumes continue to be adversely impacted by competitive price
pressure and reduced consumer spending due to negative sentiment. Continuing positive
momentum in the contemporary and premium segments supported group NPR growth, together
with price increases. In China, group NPR declined by 7% driven by a volume decline of 9%, with
double digit declines in the northeast and central provinces with the continuing impact of the
previous quarter’s adverse weather conditions in key regions. Group NPR per hl growth of 2% was
driven by favourable brand mix resulting from the strong growth in premium lager volumes. In
India, group NPR grew by 3% driven by group NPR per hl growth of 8% partially offset by a volume
decline of 5%, reflecting some trade destocking.

Europe
A solid quarter in Europe
In Europe, group NPR grew by 3%, driven by beverage volume growth of 2% with lager
volumes also up 2%. Group NPR growth was achieved despite a low inflationary
environment, although assisted by cycling a soft comparative prior year quarter. In the
integrated Czech Republic and Slovakia business, group NPR was up by 4% with volume
growth of 5% reflecting good performance in both countries, although channel mix and price
promotion trends were adverse. In Poland, volumes grew by 2%, although group NPR
declined by 4% due to higher levels of trade investment together with adverse brand and
channel mix. In the United Kingdom, group NPR declined by 5% reflecting declines in the
Polish brand portfolio, together with a decline in Ireland of Miller Genuine Draft, while Peroni
Nastro Azzurro continued to grow by double digits. Group NPR growth was delivered in Italy
and Romania against a subdued prior year quarter although market conditions continued to
be challenging. Anadolu Efes’ soft drinks volumes were suppressed by a sharp decline in
consumer confidence in the Turkish market in the quarter. Lager volumes continue to be
adversely impacted primarily by the declining beer market in Russia.

North America
Soft overall volumes, but with trend improvement in Miller Lite and Miller High Life
North America group NPR declined by 1%, reflecting a 1% decline in MillerCoors’ group
NPR. While MillerCoors’ volumes were lower, this was partially offset by higher net pricing
and favourable brand mix. US domestic sales to retailers (STRs) declined by 1.7%.
Premium light STRs declined low-single digits. Miller Lite continued to benefit from the
return to its original iconography and intrinsic-focused marketing campaign, posting its first
quarter of volume growth since 2007, with low-single digit growth in STRs. Coors Light
volumes declined low-single digits. Within above premium, STRs increased by low-single
digits driven by high-single digit growth for the Redd’s franchise and brand innovations such
as Miller Fortune and Smith & Forge Hard Cider. STRs for Blue Moon and the Leinenkugel’s
portfolio, together, were level. The below premium portfolio declined mid-single digits. Miller
High Life was down low-single digits, an improved quarterly trend on the strength of its
current marketing campaign and associated packaging. Steel Reserve grew mid-single
digits due to the performance of its “Alloy” series. Domestic sales to wholesalers (STWs)
declined by 3.7%.

Other
Following the receipt of the net proceeds of the disposal of our investment in Tsogo Sun
Holdings Limited, we announced on 7 November 2014 that we were exercising our issuer
call option to redeem in full our US$850 million 6.5% notes, due 2016. The redemption was
completed on 8 December 2014 and resulted in net early redemption costs of approximately
US$48 million.

On 27 November 2014, we announced, together with The Coca-Cola Company and Coca-Cola Sabco,
our agreement to combine our soft drinks bottling operations in eastern and southern Africa into a
new company, to be named Coca-Cola Beverages Africa (CCBA). It will be the largest Coca-Cola
bottler in Africa, with operations in 12 countries, including South Africa. Completion of the
transaction is subject to a number of customary closing conditions, including regulatory approvals in
South Africa and other African jurisdictions, and is expected to take place in two phases.

ENDS

21 January 2015
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.

Our 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, we 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$6,4601 million.
1
    As restated


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                     Christina Mills                        Gary Leibowitz                      Richard Farnsworth
t: +44 20 7659 0100               Director, Communications               Director,                           Business Media Relations
                                  and Reputation                         Investor Engagement                 Manager
                                  SABMiller plc                          SABMiller plc                       SABMiller plc
                                  t: +44 20 7659 0105                    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-
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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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