RNS Number : 1375K
25 July 2013

25 July 2013


SABMiller plc Trading Update


SABMiller plc today issues its Interim Management Statement for the group's first quarter ended 30 June 2013. The calculation of the organic growth rates excludes the impact of acquisitions and disposals on revenues and volumes.


Alan Clark, Chief Executive of SABMiller, commented:

"Our first quarter revenue growth was held back by unseasonably cold and wet conditions in many of our northern hemisphere markets, which negatively impacted beer consumption. This was offset by continued growth in our Latin America and Africa divisions."


First quarter highlights

Ÿ Group revenue and group revenue per hl both grew by 2% on an organic, constant currency basis

Ÿ Total beverage volumes on an organic basis were level with the prior year

Ÿ Lager volumes on an organic basis declined 1%, with growth in Latin America and Africa offset by Europe and North America

Ÿ Soft drinks volumes on an organic basis grew by 8% reflecting growth in Latin America, Europe and Africa

Ÿ Depreciation of key currencies against the US dollar will adversely impact reported results

Ÿ The group's underlying financial performance is in line with expectations


Latin America

Volumes in Colombia grew, driven by the light beer segment and our affordability initiatives

Revenue growth continued in Latin America during the first quarter, with organic, constant currency group revenue increasing 6%. Lager volumes were up 2% on an organic basis, despite slower economic growth and price increases towards the end of the prior year in Colombia and Peru, and soft drinks grew by 5% on the same basis. Colombia's lager volumes grew 5% in the quarter, assisted by growth in Águila Light and the continued roll-out of bulk packs, as well as expanded distribution. Peru's lager volumes declined 3%, impacted by a further consumer price increase as a result of the 8% increase in excise tax during the quarter. In Ecuador lager volumes were up 3%, underpinned by strong growth of Pilsener Light and increased reach of our direct service model. In Central America lager volumes grew by 2%, with a strong performance in the premium segment in Panama, and soft drinks volumes increased 6% on an organic basis driven by El Salvador, and despite aggressive price competition in the region.



Unseasonably cold and wet weather and continued weak consumer sentiment

In Europe, group revenue on an organic, constant currency basis declined 1% as the 3% decline in total volumes on an organic basis was partially offset by an improvement in group revenue per hl. Lager volumes were down 7% on an organic basis marked by continuing weakness in consumer confidence and unusually cold and wet weather. This had a considerable effect on industry performance, especially in our larger markets, and impacted our seasonal offerings. In Poland, volumes were 14% lower as the industry cycled the prior year uplift associated with the Euro 2012 football tournament. Our business was also impacted by a combination of industry price discounting and the stock build in the trade in the previous quarter ahead of price increases in March 2013 and our global template deployment. In the Czech Republic, domestic volumes were down 11%, as the business cycled a positive off-premise performance in the prior year assisted by promotional activities and the launch of radlers. The on-premise channel in particular was adversely impacted by severe flooding which resulted in outlet closures, affected distribution and stifled the performance of innovations across the market. Volumes in Romania were up 13% with growth across the portfolio driven by our economy brand Ciucas along with Timisoreana and Ursus, with the latter assisted by the launch of Ursus Cooler. Domestic volumes declined by 4% in Italy as the industry continued to suffer from weak consumer spending. In the UK, domestic volumes were 8% down as management reduced discount levels on Miller Genuine Draft. On an organic basis Anadolu Efes volumes grew, with a decline in lager volumes more than offset by growth in soft drinks volumes. On a reported basis Anadolu Efes volumes benefited from the full consolidation of the Coca-Cola Icecek results.


North America

Evolving portfolio towards premium in a challenging environment

In a challenging environment with significantly cooler weather in most of the country, MillerCoors gained share in the premium light and above premium segments. MillerCoors' revenue decreased 3% with US domestic sales to retailers (STRs) down 4.4% and domestic sales to wholesalers (STWs) down 5.3% in the quarter. Premium light STRs declined high single digits in the quarter with Coors Light declining mid single digits and Miller Lite declining high single digits. MillerCoors' above premium portfolio grew double digits driven by new product offerings, including Redd's Apple Ale and Third Shift Amber Lager, as well the continued strength of Tenth and Blake led by the double digit growth of Leinenkugel's Summer Shandy. The economy portfolio was down mid single digits.



Africa volumes benefited from capacity expansion and Tanzania returned to growth

Group revenue in Africa grew by 10% on an organic, constant currency basis driven by increased volumes. Lager volumes grew by 8% on an organic basis despite cycling strong growth in the first quarter of the prior year. Tanzania returned to growth with lager volumes 8% ahead of the prior year and Castle Lite continued to drive growth in the premium segment. Zambia enjoyed lager volume growth of 14% assisted by the commissioning of the new Ndola brewery in November 2012. Nigeria continued to grow strongly, supported by the new capacity from the Onitsha greenfield brewery. In Mozambique lager volume growth of 1% was subdued after strong trade buy in during the final quarter of the prior year and some political disturbance in the latter part of the quarter. Softer economic conditions during the quarter impacted volumes in Uganda, Zimbabwe and South Sudan, which all experienced a contraction in lager volumes. Our associate Castel delivered lager volume growth of 9% underpinned by a strong performance in Angola. Soft drinks volumes continued to grow strongly, up 10%, with notable performances from Ghana and Zambia, and from our associates Castel and Delta in Zimbabwe. Other alcoholic beverage volumes ended the quarter 4% lower on an organic basis primarily as a result of tougher trading conditions in Botswana.


Asia Pacific

CUB delivered a third successive quarter of growth in Victoria Bitter

Asia Pacific group revenue on an organic, constant currency basis declined by 2%, adversely impacted by the loss of discontinued brands in Australia. Lager volumes in the region grew by 1% on an organic basis. In China, lager volume growth was 2% with demand impacted by poor weather across the country in April and May. In India, volumes declined 1%, as a number of states introduced regulatory changes which unfavourably impacted sales, while much of India was impacted by the early onset of the monsoon season. In Australia, continuing volumes were level compared with the prior year, despite a relatively weak consumer environment, and the adverse impact of the timing of Easter. Australia's largest brand, Victoria Bitter, delivered its third consecutive quarter of growth, up 8% compared with the prior year. Performance was also supported by robust premium portfolio growth, including both Crown Lager and Peroni Nastro Azzurro, the fastest growing international brand. This growth, however, was partially offset by a decline in Carlton Draught. Total domestic volumes, including discontinued brands, were down 7%.


South Africa: Beverages

Beer and soft drink volumes held up well despite a softening consumer environment

In South Africa, group revenue on a constant currency basis grew by 5%, driven by beer pricing and higher premium lager sales. Lager volumes were level with the prior year against a backdrop of softer consumer spending and the absence of an Easter peak period. In the face of strong competition, our portfolio performed well, with Castle Lite continuing to grow particularly strongly and Castle Lager also posting a good performance. We continued to improve our customer servicing and targeted brand investment. Soft drinks volumes rose 2%, driven by the continued success of the two litre PET pack and strong growth in still drinks, supported by increased market penetration.


Other Material Events


On 31 May 2013 the group completed the disposal of its non-core milk and juice business in Panama.


On 1 July 2013 Guy Elliott joined the board as an independent non-executive director and was appointed to the audit and remuneration committees. A further board change will become effective on 25 July 2013, when Cyril Ramaphosa will retire as an independent non-executive director.








Notes to editors


SABMiller plc is one of the world's leading brewers with more than 200 beer brands and some 70,000 employees in over 75 countries.  The group's portfolio includes global brands such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch; as well as leading local brands such as Águila (Colombia), Castle (South Africa), Miller Lite (USA), Snow  (China), Victoria Bitter (Australia) and Tyskie (Poland).  SABMiller also has growing soft drinks businesses and is one of the world's largest bottlers of Coca-Cola products.


In the year ended 31 March 2013 the group reported EBITA of US$6,421 million and group revenue of US$34,487 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.


This announcement is available on the company website: www.sabmiller.com


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SABMiller plc
t: +44 20 7659 0100

Catherine May
Director of Corporate Affairs
SABMiller plc
t: +44 20 7927 4709

Gary Leibowitz
Senior VP, Investor Relations
SABMiller plc
t: +44 20 7659 0174

Richard Farnsworth
Business Media Relations Manager
SABMiller plc
t: +44 20 7659 0188



This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of SABMiller plc (the "Company") or any of its affiliates in any jurisdiction or an inducement to enter into investment activity.


This announcement includes "forward-looking statements". These statements may contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services) are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Any information contained in this announcement on the price at which the Company's securities have been bought or sold in the past, or on the yield on such securities, should not be relied upon as a guide to future performance.


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