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Good growth achieved despite difficult environment

13 November 2008

SABMiller plc, one of the world's leading brewers with operations and distribution agreements across six continents, today reports its interim (unaudited) results for the six months to 30 September 2008.

Operational Highlights

  • Lager volumes up 3%(1), with organic volumes slightly ahead of the high prior year base
  • Organic constant currency revenue growth of 10%, with leading brands enabling firm pricing
  • Reported EBITA up 9%; up 2% on an organic constant currency basis
  • Conditions and performance varied across business segments:
    • - Latin America performance mixed; EBITA(2) flat
    • - Europe organic lager volume growth of 2% on very high comparables; share gains in Poland and Romania; EBITA(2) down 6%
    • - North America EBITA(2) up 18%, MillerCoors' integration on track
    • - Africa and Asia EBITA(2) up 7%; Africa lager volume growth remains strong at 11%; firm pricing in China
    • - South Africa lager volumes down 1%; mix shifting towards mainstream

(1) Following the inception of the MillerCoors joint venture the group has revised its volume definitions.  Further details of these revised definitions can be found in the Financial review on page 15.

(2) EBITA growth is shown on an organic constant currency basis.

% change March
Revenue (a) 11,166 10,781 4 21,410
EBITA (b) 2,225 2,036 9 4,141
Adjusted profit before tax (c) 1,860 1,773 5 3,639
Profit before tax 2,020 1,579 28 3,264
Adjusted earnings (d) 1,128 1,036 9 2,147
Adjusted earnings per share (d)        
- US cents 75.2 69.1 9 143.1
- UK pence 38.9 34.5 13 71.2
- SA cents 585.8 492.0 19 1,021.2
Basic earnings per share (US cents) 94.8 63.9 48 134.9
Interim dividend per share (US cents) 16.0 16.0 -  

Graham Mackay, Chief Executive of SABMiller, said:

"Exceptional prior year volume growth and weakening consumer demand in certain markets presented a challenging start to the year.  However, we have continued to drive revenue growth and offset higher input costs through firm pricing while protecting volumes and increasing share in some key markets. This performance demonstrates the advantage of our diversified global footprint, the strength of our brands and operational capability. Our North American joint venture, MillerCoors, has made a promising start and is on track to deliver US$500 million per annum of cost savings by the third year of combined operations."

  • a) Revenue excludes the attributable share of associates' and joint ventures’ revenue of US$3,056 million (2007: US$1,242 million).
  • b) Note 2 provides a reconciliation of operating profit to EBITA which is defined as operating profit before exceptional items and amortisation of intangible assets (excluding software) but includes the group’s share of associates’ and joint ventures’ operating profit, on a similar basis. EBITA is used throughout the interim announcement. 
  • c) Adjusted profit before tax comprises EBITA less adjusted net finance costs of US$358 million (2007: US$258 million) and share of associates' and joint ventures’ net finance costs of US$7 million (2007: US$5 million).
  • d) A reconciliation of adjusted earnings to the statutory measure of profit attributable to equity shareholders is provided in note 5.
Segmental EBITA performance September
Organic, constant
Latin America 474 8 -
Europe 725 16 (6)
North America 355 18 18
Africa and Asia 311 12 7
South Africa: Beverages 332 (18) (10)
South Africa: Hotels and Gaming 61 3 13
Corporate (33) - -
Group 2,225 9 2

Business review

The first half year results reflect the high comparable growth rates achieved in the same period last year and the moderation of consumer demand in many of SABMiller’s markets.  However, across the group’s diversified global footprint there were areas of good growth, driven by enhanced operational execution and investment in brands.  Pricing was generally strong contributing to revenue growth of 10% on an organic constant currency basis.

  • The emphasis across the Latin America region on raising the appeal of the beer category continued to yield results, with the group’s share of the alcohol market in the region increasing steadily as investment in new packaging, coupled with improvements to sales and distribution infrastructure, gained traction. However, the on-going impact of higher lending rates on consumer confidence in Colombia has slowed volume growth. Earnings have been impacted by commodity cost pressures, competition in Peru and increased depreciation following our significant capital investment programme.
  • In Europe, performance was subdued following several years of strong growth in volume and profit. Total organic lager volumes grew by 2% but EBITA declined by 6% on an organic constant currency basis reflecting a mixed picture across the region. Poorer weather, high distributor stocks and stronger pricing constrained volume growth in most markets, particularly Russia and the Czech Republic. Volumes in Romania and the UK grew strongly. We have led industry pricing higher in most markets and our revenue per hectolitre was up 6% on an organic constant currency basis, but significant rises in input costs, general cost inflation, higher investment and depreciation impacted margins.
  • The North America segment delivered a strong performance with EBITA up 18% in the first half with a good contribution from Miller Brewing Company in the first quarter and pleasing initial results from MillerCoors following its inception on 1 July 2008. On a pro forma1 basis, MillerCoors’ US sales to retailers (STRs) rose by 0.7% over the three months to September after adjusting for an extra trading day.  Net revenue per barrel rose by 3% driven by robust growth of the Coors Light brand and a good performance from the craft and import portfolios incorporating Blue Moon, Leinenkugels and Peroni Nastro Azzurro.  MillerCoors is implementing its integration strategy across the business and is confident of delivering its stated goal of achieving US$500 million per annum of cost synergies by the third year of combined operations.
  • Lager volumes in Africa increased by 11% in markets that have so far been largely unaffected by the global financial conditions.  Angola, Botswana, Zambia, Tanzania and Mozambique all reported good volume growth as their economies continued to expand and sales execution was improved.  Traditional beer saw record organic volume growth of 35%, owing to good performances in Zambia, Malawi and Botswana.  In China, volume growth was ahead of the market as our associate, CR Snow, recovered from a slow start to the year following the earthquake in Sichuan and higher pricing.  In India, overall market share declined and in Australia our new venture is performing ahead of expectations.
  • Lager volumes in South Africa were down 1% against the prior year in which the group had less competition in the premium segment. Consumers continued to feel the effects of higher food and fuel prices.  Two price increases and growth in the mainstream segment from brands such as Hansa Pilsener and Castle Lager, have partially offset slower premium sales and the adverse mix effects.  However, continuing rises in raw material and distribution costs, an increase in depreciation as well as some losses on raw material forward exchange contracts contributed to a decline in EBITA margin of 360 basis points.  The company’s premium brand portfolio was enhanced by the successful launch of new brands into the market. Soft drinks volumes grew 2%.

1 MillerCoors pro forma figures are based on results for Miller and Coors' US and Puerto Rico operations reported under International Financial Reporting Standards (IFRS) and US GAAP respectively for the quarter ended 30 September 2007. Adjustments have been made to reflect both companies’ comparative data on a similar basis including amortisation of definite-life intangible assets, depreciation reflecting revisions to property, plant and equipment values and the exclusion of exceptional items.

Aggregated beverage volumes were 191 million hectolitres (hl).  Aggregated reported lager volumes were up 9% to 159 million hl including acquisitions in the Netherlands and China. Reported EBITA of US$2,225 million was up by 9% and included a benefit of 7% from favourable weighted average currency exchange rates. The group EBITA margin decreased to 15.6%, 130 basis points below the prior year, reflecting higher commodity costs and investment across the group. The capital investment programme continued, increasing capacity and operational efficiency with brewery expansions in Poland and Romania and the ongoing construction of new breweries in Russia, Angola and Mozambique. Net cash generated from operations before working capital movements (EBITDA) was 5.6% above the prior year, supporting the continued capital investment.  The group’s gearing increased during the period to 53.6% from 49.7% at year end. Adjusted earnings and adjusted earnings per share are up by 9%, to US$1,128 million and 75.2 US cents respectively for the first six month period.  An interim dividend of 16 US cents per share will be paid to shareholders on 5 December 2008.


We have achieved good growth over the period despite a difficult environment, with underlying performance enhanced by beneficial currency movements. The deterioration in global economic conditions is causing weakening consumer demand in many of our markets. Cost pressures will continue and the strength of the US dollar relative to the group’s major currencies is expected to adversely affect reported results.  

Our diversified geographical footprint and strong portfolio of brands puts us in a strong competitive position.  We are reviewing spending and investment plans in the light of the current uncertain environment but, given our sound financial position, we will continue to invest selectively to support future growth.

Download the full F09 H1 announcement PDF 0.78Mb

SABMiller plc Tel: +44 20 7659 0100
Sue Clark Director of Corporate Affairs Mob: +44 7850 285471
Gary Leibowitz Senior Vice President, Investor Relations Mob: +44 7717 428540
Nigel Fairbrass Head of Media Relations Mob: +44 7799 894265

A live audiocast of the management presentation to analysts will begin at 9.30am (GMT) on 13 November 2008.

This announcement, a copy of the slide presentation and video interviews with management are available on the SABMiller plc website at . Video interviews with management can also be found at

High resolution images are available for the media to view and download free of charge from .

Copies of the press release and detailed Interim Announcement are available from the Company Secretary at the Registered Office, or from 2 Jan Smuts Avenue, Johannesburg, South Africa.

Registered office: SABMiller House, Church Street West, Woking, Surrey GU21 6HS
Incorporated in England and Wales (Registration Number 3528416)

Telephone: +44 1483 264000
Telefax: +44 1483 264117

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