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SABMiller reports strong growth in first half

15 November 2007

SABMiller plc, one of the world’s leading brewers with operations and distribution agreements in over 60 countries across six continents, today reports its interim (unaudited) results for the six months to 30 September 2007.

Operational Highlights

  • Group lager volumes up 15% to 135 million hectolitres (hl), organic growth of 11%
  • EBITA up 14%, and 10% on an organic constant currency basis
  • Double digit volume growth in Europe with EBITA up 29%
  • Miller returns to growth in the US with organic sales to retailers up 1.4% - EBITA up 19%
  • Lager volumes in Latin America up 8%, in line with expectations - investment in brands and distribution depress margin in the current period
  • Africa & Asia lager volumes increase by 29% - driven by China and India
  • South Africa lager volume growth of 2% despite the expected loss of premium volumes
  • Increased capital investment to provide for continuing growth

Sept 2007

Sept 2006

% change

March 2007

Revenue (a)










Adjusted profit before tax (c)





Profit before tax





Adjusted earnings (d)





Adjusted earnings per share (d)


- US cents





- UK pence





- SA cents





Basic earnings per share (US cents)





Interim dividends per share (US cents)





(a) Revenue excludes the attributable share of associates’ revenue of US$1,242 million (2006: US$1,052 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’ operating profit, on a similar basis. EBITA is used throughout the interim announcement. 

(c) Adjusted profit before tax comprises EBITA less net finance costs of US$258 million (2006: US$242 million) and share of associates’ net finance costs of US$5 million (2006: US$6 million).

(d) A reconciliation of adjusted earnings to the statutory measure of profit attributable to equity shareholders is provided in note 5.

Graham Mackay, Chief Executive Officer of SABMiller, said:

"This has been a good start to the year, demonstrating the strength of our brand portfolio and the health of our businesses. We have delivered another excellent performance in Europe, a pleasing return to growth in North America, and our Asian businesses have continued their momentum and made market share gains. At the second anniversary of our Bavaria transaction, our volumes have grown strongly in Latin America and our investment plans remain on track." 

Segmental EBITA performance

2007 EBITA US$m

Reported growth %

Organic, constant currency growth %

Latin America








North America




Africa and Asia




South Africa: Beverages




South Africa: Hotels and Gaming












Business review

The start to the year reflects the momentum in SABMiller’s developing markets, which are demonstrating stronger and more sustainable growth than in previous economic cycles. Improving GDP levels and government finances and moderate rates of inflation are supporting greater local infrastructure investment, which in turn is enhancing consumer disposable income. The group’s premium portfolio strategy has also enabled it to capture value from the global drift to higher margin products in its developing and developed markets, as consumers continue to trade up. Despite challenging comparative growth rates during the comparable six months of last year and higher input costs in the current period, the business has reported organic growth in lager volumes of 11% and an increase in EBITA of 10% on an organic, constant currency basis.  As expected, the group EBITA margin decreased slightly to 16.9%, 20 basis points below the prior year, reflecting the change in mix of our segmental profits together with higher marketing investment and input costs. Industry wide commodity cost increases have been significant with the impact varying across regions reflecting differing currency strengths and local sourcing conditions. In aggregate, our price increases and productivity have offset these input cost rises.

These results, in aggregate, continue to demonstrate the value of the group’s diverse and strong brand portfolios, which include some 200 local and regional beers. Total beverage volumes were 159 million hectolitres (hl).  Total reported lager volumes were up 15% to 135 million hl, including the impact of acquisitions in China and India. 

  • Miller Brewing Company delivered improved results in the US as a result of its strategy to migrate the business’ brand portfolio to higher margin, higher growth segments.  EBITA for the period was 19% higher than the prior year, driven primarily by price increases and higher volumes, and includes a favourable cost adjustment of US$16 million in respect of the prior year. Total sales to retailers (STRs) grew by 1.4% on an organic basis and by 5.9% on a reported basis, against a US beer industry which, excluding imports, grew at 1.0%.  The flagship brand, Miller Lite, returned to solid growth, posting a 2.1% gain in STRs, at the same time increasing its average case pricing by 2.1%, some 50 basis points ahead of its largest light beer competitor. Miller’s worthmore brand portfolio also delivered a strong performance.
  • After six years of double digit EBITA growth, Europe has recorded another excellent performance with organic constant currency EBITA growth of 17%. This was driven by volume growth and market share gains in Poland, Russia and Romania, assisted by warm weather across Eastern Europe during the first quarter. Europe’s premium brands recorded 13% volume growth, reflecting successful initiatives to capture value from consumer trends towards premium products. This growth in higher margin brands, in addition to price increases and efficiency gains, mitigated the impact of significant increases in the cost of raw materials, real wage increases and the negative mix effect of the strong growth in cans in certain markets.
  • At the second anniversary of the Bavaria acquisition, the implementation of our strategy to renovate the beer category in Latin America remains on track, although the speed and scale of the initiatives being implemented has led to some inevitable market dislocation during the period.  Lager volume growth of 8% for the half year is in line with the group’s medium term expectations, notwithstanding the high comparatives in the prior period and a slowdown in spending on consumables in Colombia.  The group remains confident that the substantial activity underway to transform the category will deliver significant volume and margin growth in the medium term.
  • The group’s joint-venture in China, CR Snow, continued its very strong performance, with organic volume growth of 22%, well ahead of the wider Chinese beer market.  All regions posted growth, with market share gains in the Central and North Eastern provinces.  The national brand, Snow, which now accounts for over 70% of volumes, is expected to become the world’s second largest beer brand by volume within calendar year 2007.  In India, our business grew strongly, reporting lager volume growth of 28%.  Capacity expansion and the integration of last year’s Foster’s India acquisition represent key areas of progress during the period. Momentum within Africa continued, with favourable economic conditions driving good growth in Tanzania, Mozambique and Angola, supported by ongoing brand renovations and improved execution in both sales and distribution.
  • Lager volumes in South Africa grew by a pleasing 2% despite the termination of the Amstel brand licence in March 2007.  The expected loss of premium volumes was mitigated by strong growth in Castle Lite and the successful launch of a new premium brand offering, Hansa Marzen Gold, which already represents some 3% of volumes for the half year. Mainstream lager volumes grew by 5%, assisted by the absence of the National Lottery over the six month period. Total soft drink volumes were up an impressive 11% as the business also benefited from a robust economic environment, with GDP growing by 5%.
  • On 9 October 2007, SABMiller and Molson Coors Brewing Company announced that they had signed a letter of intent to combine the U.S. and Puerto Rico operations of their respective subsidiaries, Miller and Coors, in a joint venture.  The transaction will create a stronger, brand-led U.S. brewer with the scale, resources and distribution platform to compete more effectively in the increasingly competitive U.S. marketplace. Definitive agreements are expected to be signed in December 2007, but regulatory clearance is not expected before mid 2008.

Reported EBITA of US$2,036 million was up by 14% and included a 4% contribution from favourable weighted average currency rates. Net cash generated from operations before working capital movements was 13% above the prior year, illustrating the overall strength of the trading performance and our strong cash characteristics.  The group’s gearing decreased during the period to 43.5% from 45.8% at year end.  Earnings benefited from currency strength in some major markets and lower tax rates in certain jurisdictions. Adjusted earnings and adjusted earnings per share are up by 22%, to US$1,036 million and 69.1 US cents respectively for the first six month period.  An interim dividend of 16 US cents per share, a 14% increase, will be paid to shareholders on 21 December 2007.


We have delivered a good first half performance, benefiting from the weighting of our portfolio of businesses towards emerging markets, and a focus on developing our premium brands.  We are continuing to invest in our businesses to drive revenues, which, together with ongoing productivity gains, are offsetting industry wide cost pressures. We expect to make progress in the balance of the year but face a more challenging environment.

View the Interim Announcement news release PDF 0.14Mb


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 webcast of the management presentation to analysts will begin at 9.00am (GMT) on 15 November 2007.

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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