GLOBAL: SABMiller lifts sales, profits in H1

• Price rises boost net sales
• Cost savings lift earnings
• Europe is a blackspot 

Price rises and lower costs have significantly boosted SABMiller's half-year profits and net sales, even though global demand for its beers only rose slightly during the period.

SABMiller said today (18 November) that net sales rose by 7% for the six months to the end of September, to US$14.2bn. Sales rose by 4% if currency gains are stripped out. Price rises across the Americas, as well as in other key markets, helped the brewer overshadow a mixed performance on beer sales by volume, which only rose by 1% globally.

Lower raw materials costs and cost savings, particularly synergies achieved at MillerCoors in North America, boosted profits for the half-year. Earnings before interest, tax and amortisation (EBITA), increased by 13% on the same period of last year, to $2.46bn. This represents a 10% increase on a constant currency basis.

Europe proved the only blackspot for the Peroni Nastro Azzurro brewer. EBITA for the region fell by 4% as volume sales declined significantly in parts of Eastern Europe, particulary Romania, and consumers traded down to cheaper beers.

Net profits (adjusted earnings) jumped by 19% to $1.46bn for the half-year. "In trading conditions which remained mixed across our markets, the group benefited from its global spread of businesses, delivering a strong financial performance," said SABMiller's CEO Graham Mackay.

"Cost reductions, driven by lower raw material input costs and further fixed cost efficiencies, helped to finance increased investment behind our brand portfolios and assisted margin enhancement," he said.

Free cashflow rose by $234m to $1.24bn at the end of the six-month period, which may amplify speculation that SABMiller is saving up for an acquisition.

For the full announcement, click here.

Click here to view an interview with Mackay on SABMiller's H1 performance.