SABMiller performed well in Europe overall despite tough conditions in many regions

SABMiller performed well in Europe overall despite tough conditions in many regions

SABMiller's Q1 volume growth in Europe was "much stronger than expected", but analysts remain cautious about future prospects for the brewer.

The brewer yesterday (26 July) announced an 8% rise in Q1 group revenue, with organic volume growth in Europe up 7%. But analysts Bernstein Research warned of reading too much into the Europe numbers. 

Poland, with 11% volume growth, benefited from its co-host status for the European Championships, the analysts said. Meanwhile Romania's performance, up 15%, was "primarily driven by the launch of an economy brand Ciucas in PET pack, which leads us to think mix was likely negative", Bernstein said in a note.

SABMiller did admit volumes were "depressed" in Western Europe, due to poor weather and economic conditions. 

In Australia, Bernstein noted that Foster's volumes are still under "severe pressure". Including the loss of the "very profitable" distribution of Corona, Stella and Asahi brands, volumes were down 13% year-on-year in the quarter. 

The analysts said it was a "robust" set of results overall, but warned "the quality of the beat may not be as good as it appears".  

"Though SABMiller delivered higher volume growth than expected, price-mix was also slightly lower than expected, suggesting the beat at profit level may not be as significant as at the revenue level," the note added. 

Meanwhile, UBS noted: "Despite a strong volume growth, we flag a slightly weaker revenue/hl and a negative country mix from Europe and Asia."