UK: SABMiller delivers strong full year
Strong demand in its developing markets has helped SABMiller deliver a robust set of full year results, despite rising costs pressures and increased competition.
The world's third largest brewer said today (May 15) that its total beverage volumes were up 6%, to 288 million hl and total lager volumes were up 11% to 239m hl, including the impact of acquisitions in China and Europe.
The year saw a 15% increase in group revenue, which translated into EBITA growth of 15% to US$4,141m, or 9% on an organic constant currency basis.
"This reflects the benefit of price increases, mix improvements and productivity gains, all of which have offset the rise in input costs, in addition to favourable currency rates against the US dollar," the company said.
Meyer Kahn, chairman of SABMiller, said: "This strong outturn to the year is particularly pleasing given the scale of the challenge we faced at its outset, with exceptional prior year comparatives, rising input costs and an increasingly competitive environment in many of our markets. It is a clear testament to the strength of our brands and the group's operational capability that we have been able to deliver such a good performance."
Latin America achieved lager volume growth of 5%, which followed high growth in the prior year.
"Whilst a consumer slow-down in Colombia and price-driven competitive pressure in Peru represent some challenges, the group has continued its programme of investment and modernisation in the Andean region and the full benefit of these activities is still to be realised," a statement said. "There have been significant fixed cost productivity improvements. EBITA rose by 6% in organic constant currency, or 17% on a reported basis."
The group's business in Europe delivered organic lager growth of 8%, and EBITA growth of 15% in organic constant currency and 30% on a reported basis. Strong volume growth in Poland, Romania and Russia was complemented by market share gains in several countries.
In the US, the company said the launch of Miller Chill, a 'chelada-style' light beer brewed with lime and salt had become one of the most successful brand launches in SABMiller's history, selling almost half a million barrels in its first year.
"Whilst higher fuel costs and declining real estate prices impacted consumer spending in the second half, Miller's overall domestic sales to retailers for the year were up 0.7% on an organic basis, with the company's flagship brand, Miller Lite, up 1.1%," the statement said.
It added that to capture the continuing consumer preference for light beers, Miller has test marketed new light beers, Miller Genuine Draft 64 and the Miller Lite Brewer's Collection, which will be rolled out nationally in the next financial year.
Meanwhile, robust economic conditions on the African continent helped contribute to organic lager volume growth of 6% from the group's Africa operations (excluding Zimbabwe).
In South Africa, where the company began the year with the loss of a major premium brand to a competitor in March 2007, overall volumes were level with the prior year.
"This has been another year of strong growth for the group. In the current year, volume growth in the first half will be affected by high comparative growth rates, and pressure on input costs will continue to increase although pricing and mix benefits are again expected to compensate for these cost increases. The economic outlook across our global footprint, which is biased towards growth markets in developing countries, remains positive, and we will continue to benefit from the strength of our brands, operational capability and investment for growth," the company concluded.
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