SABMiller plc Trading Update
12 April 2007
SABMiller plc today issued the following update on trading for the 12 months to 31 March 2007. The calculation of the group’s organic growth includes volumes for South America from 12 October 2006, 12 months after it became part of the group.
For the year to 31 March 2007, the group recorded 23% growth in lager volumes, with strong organic growth of some 10%. Group financial performance was in line with management’s expectations as good revenue growth was partially offset by higher input costs and increased investment across the business.
On a pro forma basis, South America lager volumes for the year rose by 12% with growth accelerating in the final quarter to 14%. Strong performances across the region reflect good economic conditions, improved market shares and the impact of initiatives to rejuvenate the beer category. These initiatives include brand renovations and launches, the introduction of new containers and significantly increased investment in marketing and merchandising at the point of sale. In Colombia, improved retail price discipline has underpinned accelerating sales. In Peru, Cristal was relaunched in December 2006 and has led our share gains in a market that remains competitive. In Central America, carbonated soft drink (CSD) volumes were up 6% and lager volumes up 8% on an organic basis for the year.
In Europe, lager volumes for the year grew by 11% on an organic basis with the final quarter up by 15%. This has been driven by continuing good performances from Poland, Russia and Romania, influenced by a mild winter, and has resulted in market share gains in most countries. Poland has achieved strong growth of 13% notwithstanding challenging comparatives, reflecting particularly strong market execution and good growth of our Zubr brand. Russia recorded volume growth of 24% across our portfolio of premium brands, assisted by improved national distribution. Romania reported growth of 23%, driven by our Timisoreana brand and its successful introduction into PET packaging. Czech Republic achieved growth in volumes of 1%, led by our Pilsner Urquell and Kozel brands. Branded volumes in Italy were up 5% within our total domestic volume increase of 2%, reflecting our managed exit from private label volumes. In North America, Miller’s full-year domestic sales to retailers (“STRs”) were level with the prior year and down some 3% on an organic basis (excluding Sparks and Steel Reserve), in line with Miller’s shipments to wholesalers over the same period. In the fourth quarter, Miller’s STRs 2 of 3 declined by 2.3% on an organic basis. For the full year, Miller Lite STRs declined 1%, and STRs of Miller’s worthmore portfolio, including Sparks, grew by 21% with acceleration in the fourth quarter. While pricing improved, profitability was impacted by significantly higher raw material and packaging costs.
Our Africa and Asia business delivered organic growth of 27% in lager volumes for the year, reflecting particularly strong lager volume growth in China of 30% driven by our national brand, Snow. In Africa (excluding Zimbabwe), lager volumes grew by 7% for the full year, with Tanzania advancing 8%, helped by the launch of new packaging for Castle, and Mozambique up 10%, benefiting from wider distribution and a strong economy. Lager volumes declined a further 4% in Botswana which experienced difficult economic conditions. CSD growth in Africa (excluding Zimbabwe) was 23%, led by strong growth in Angola. In India, volumes increased by 36% on a pro forma basis, benefiting from market deregulation in certain states. Our joint ventures in Vietnam and Australia commenced operations in the fourth quarter of the financial year.
In South Africa, lager volumes for the year increased by 2%, with fourth quarter growth in volumes of 8% benefiting from particularly favourable weather conditions. As noted in our statement of 13 March, SA Beverages is no longer brewing, marketing or distributing the Amstel brand in South Africa, but this has not had an impact in the current year. Soft drinks volumes grew by 7% for the full year, benefiting from an increase in volumes of 33% in the final quarter following an improvement in the supply of carbon dioxide to our plants.
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 2006, the group reported US$15,307 million in revenue and profit before tax of $2,453 million. SABMiller plc is listed on the London and Johannesburg stock exchanges.
This announcement is available on the company website: www.sabmiller.com
Tel: +44 20 7659 0100
Director of Corporate Affairs
Tel: +44 20 7659 0184
Senior Vice President, Investor Relations
Tel: +44 20 7659 0174
Head of Media Relations
Tel: +44 7799 894265
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 document 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.