Andy Morton

Analysis - SABMiller outpaces rivals in FY but headwinds persist

By | 24 May 2013

SABMiller faces pressure in the US

SABMiller faces pressure in the US

SABMiller has delivered a strong set of full-year results but problems loom, such as pressure on Miller Lite in the US loom, an analyst has warned.

The UK-based brewer and soft drinks maker “compared very favourably” to rivals in yesterday's FY numbers, Bernstein analyst Trevor Stirling said in a note today (24 May). However, a high-single-digit decline for Miller Lite in North America was just one headwind for the year ahead, the analysts added.

Higher innovation costs as SABMiller focusses on price/mix instead of volumes will cut into margins while Latin America is unlikely to rebound to “normal” levels after a slowdown this year, Stirling said. 

SABMiller's exposure to high-growth emerging markets will also continue to lessen as its Foster's acquisition beds in, the analyst said.

“The 'growth-gap' compared to its peers has fallen post-Foster's, with now about 35% of underlying EBIT from mature markets and regions (Europe, US and Australia),” it said.

Analysts Nomura, meanwhile, said the Foster's unit, which suffered sharp volumes drops in the six months after SABMiller bought it in December 2011, is now “stabilising”.

“Fourth-quarter volumes were +3%, with strong progress in rebuilding of customer relationships and relaunching the VB brand,” Nomura said. “The company remains focussed on rebuilding the beer category in Australia to create value.”

In September, SABMiller revamped the formula for its Victoria Bitter brand in Australia, after the beer lost its market leadership status.

Expert analysis

SABMiller plc - SWOT, Strategy and Corporate Finance Report

SABMiller plc - SWOT, Strategy and Corporate Finance Report, is a source of comprehensive company data and information. The report covers the company’s structure, operation, SWOT analysis, product and service offerings, detailed financials, and corporate actions, providing a 360° view of the company.

Sectors: Beer & cider, Company results, Emerging markets – BRIC, Soft drinks

Companies: SABMiller, Foster’s

View next/previous articles

Currently reading -

Analysis - SABMiller outpaces rivals in FY but headwinds persist

There are currently no comments on this article

Be the first to comment on this article

Related research

SABMiller plc : Consumer Packaged Goods - Company Profile, SWOT & Financial Report

Canadean's "SABMiller plc : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and servic...

SABMiller Plc in Beer (World)

The world’s second largest brewer, SABMiller’s geographic profile provides a strong platform from which to exploit forecast volume growth in emerging markets. This profile analyses the company’s employment of strategic alliances and emphasis on local...

Foster's Group Ltd.: Consumer Packaged Goods - Company Profile & SWOT Report

"Foster's Group Ltd.: Consumer Packaged Goods - Company Profile & SWOT Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and services, SWOT analysis...

Related articles

Analysis - SABMiller set for slower developing markets growth

An analyst has forecast "more normalised" growth in SABMiller's developing markets, the brewer's main source of profit.

just For Subscribers - The week in drinks

Here are the ten most viewed, subscriber-only items on just-drinks this week:

just the Round-Up - The week in drinks

The top ten stories published on just-drinks this week:

Read more on this hot issue

Round Up - SABMiller's Full-Year Results 2012-13

In May, the UK's SABMiller released its results for the year to the end of March. Here's a round-up of just-drinks' coverage of the company's performance.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page