SABMiller plc Interim Management Statement
31 July 2007
At the Annual General Meeting of SABMiller plc (SABMiller) today, Graham Mackay, chief executive of SABMiller, commented on the group's performance for the three months ended 30 June 2007. The calculation of the organic growth rates included below excludes volumes for acquired businesses for the first 12 months after an acquisition.
Mr Mackay said: "The group has made a strong start to the year, recording 17% growth in lager volumes, with organic growth of 13%, and achieved a good financial performance in the first quarter, in which revenue growth was partially offset by higher input costs and increased investment across the business.
"In Latin America, lager volumes for the quarter rose by 12%. Strong volume performances in Colombia and Peru reflect continuing favourable economic conditions and the ongoing impact of our initiatives to rejuvenate the beer category. These initiatives include the introduction of new containers and brands and increased investment in marketing as well as in merchandising. In Colombia, our biggest brand, Aguila, has been relaunched successfully in the quarter and we are restructuring our route to market. In Peru, volumes of our leading brand, Cristal, remain strong following the recent packaging changes and have led to continuing share gains.
"Our Europe business once again performed strongly, with volume growth of 17% and share gains in most markets. April and May sales were particularly strong, assisted by warm weather across the region, although June experienced wetter weather resulting in lower volume growth in the month. Poland achieved growth of 20% across the portfolio, notwithstanding challenging comparatives which included the benefits of the soccer World Cup. Volumes in Russia were also up by 20% led by Zolotaya Bochka, MGD and Redds, although this strong growth is leading to some capacity constraints. Romania grew by 52%, driven by our Timisoreana brand and the success of its new PET packaging, and benefiting from increased capacity introduced in the first half of the prior year. Czech Republic achieved domestic growth in volumes of 10%, led by our Gambrinus and Kozel brands. In Italy, branded domestic volume increased by 3%.
"In North America, Miller's US domestic sales to retailers (STRs) increased by 4.6% compared to the prior year, but were down 0.7% on an organic basis (excluding Sparks and Steel Reserve, acquired in August 2006) as Miller drove higher pricing across its portfolio. Miller Lite brand volumes were level with the prior year and STRs of the worthmore portfolio, including Sparks, were up 63%. As Miller continues to migrate its brand portfolio to higher growth worthmore brands, the Peroni, Leinenkugel's and Sparks brands all delivered double digit volume growth. Early in its national rollout, Miller Chill delivered strong volume growth well ahead of target.
"The Africa & Asia business achieved organic growth of 23% in lager volumes, with China continuing to record strong growth. In Africa (excluding Zimbabwe), lager volumes grew by 5% on an organic basis, with a good start to the year in Tanzania and Mozambique and growth in Botswana after two difficult years.
"In South Africa, our lager volumes were up 4%. This performance reflects growth across all of our brands, with good growth in the mainstream segment and the successful launch of our premium brand, Hanza Marzen Gold, in early May. Soft drink volumes grew by 13% reflecting the favourable weather conditions prevailing in April and May, and ongoing trade restocking following some carbon dioxide shortages at the end of the prior year.
"Our South African holding company has recently raised R1,600 million (approximately US$230 million) in 5-year notes. The notes, issued under a R4,000 million Domestic Medium Term Note Programme, are guaranteed by SABMiller plc and are listed on BESA, the South African Bond Exchange. The net proceeds of the bond issue have been used to repay part of existing loan facilities that were utilised by The South African Breweries Ltd”
Notes to editors:
SABMiller plc is one of the world’s largest brewers with brewing interests or distribution agreements in over 60 countries across six continents. The group’s brands include premium international beers such as Miller Genuine Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional range of market leading local brands. Outside the USA, SABMiller plc is also one of the largest bottlers of Coca-Cola products in the world.
In the year ended 31 March 2007, the group reported US$3,154 million adjusted pre-tax profit and revenue of US$18,620 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
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