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SABMiller's four-year plan to save US$300m annually will not include significant job cuts, group CEO Graham Mackay told just-drinks following the group's half-year results announcement.

SABMiller used its half-year results today (19 November) to announce that it has begun a four-year restructuring programme to "streamline" finance, human resources and procurement activities.

Job cuts are expected across the SABMiller's global business. But, Mackay insisted to just-drinks in a conference call for media that cuts "will not be significant" and are not the main focus of the plan, which aims to save the brewer $300m annually from 2014.

The move will involve "retraining staff to act in a different way" and will give them more of a commercial focus, he said. 

Savings will be achieved by "deploying global information systems, establishing a global procurement operation and selectively outsourcing certain activities", said the brewer, which owns Miller Genuine Draft and Peroni Nastro Azzurro beers.

Mackay said that "most regions will be affected" by the programme.

Unfavourable currency rates saw SABMiller net sales for six months to the end of September slip 6% on the same period a year earlier, to $13.3bn from $14.2bn. Pre-tax profits fell by 26% for the half-year, but adjusted net earnings for the period rose to $1.2bn from $1.1bn last year.

SABMiller's share price rose by 4% on the London Stock Exchange following today's announcement.

Analyst group Sanford C Bernstein said in a note that sales were "slightly below expectations" but that like-for-like operating profits growth of 11% was ahead of analysts' consensus prediction.

SABMiller dampened hopes of a quick economic recovery in its main markets with a cautious outlook on beer sales. "We expect the current trading conditions to continue in the second half, as unemployment, retail spending and other consumer indicators lag the reported stabilisation of gross domestic product in many of our markets," it said.

Global lager sales by volume fell 1% for the half-year on a like-for-like basis, with growth in Asia and Africa unable to offset falls of 6% in Europe, 5% in North America, 3% in South Africa and 1% in Latin America.

In Europe, Russia was particularly tough, as it has been for other brewers in 2009. SABMiller said it lost both volume and market share in Russia as consumers traded down from its premium beer portfolio.

Speaking to just-drinks on the Russian Government's plan to triple duty tax on beer in Russia from 2010, Mackay said SABMiller has been actively involved in lobbying efforts alongside other brewers.

However, he said SABMiller was likely to fare better than some. "Of course, it is not a positive development, but our business in Russia is relatively small," said Mackay, adding that the rise will hit cheaper brands hardest.


Sectors: Beer & cider

Companies: SABMiller

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