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SABMiller reports strong rise in earnings

15 May 2008

SABMiller plc, one of the world’s leading brewers with operations and distribution agreements in over 60 countries across six continents, today reports its preliminary (unaudited) results for the twelve months to 31 March 2008.

Operational Highlights

  • Group lager volumes up 11% to 239 million hectolitres (hl), organic growth of 7%
  • EBITA up 15%, and 9% on an organic constant currency basis despite rising input costs
  • Mix benefits and strong pricing improve Miller EBITA in the US
  • Volume, price and productivity gains drive excellent earnings growth in Europe - EBITA up 30%
  • Latin America lager volume growth of 5% despite exceptional prior year - EBITA up 17%
  • Africa organic volumes of lager up 6% - substantial investment programme to capture growth opportunities
  • CR Snow volume growth continues ahead of the China market - Snow brand up 63%
  • South Africa lager volumes level - a satisfactory result given loss of a premium brand
% change
Revenue (a) 21,410 18,620 15
EBITA (b) 4,141 3,591 15
Adjusted profit before tax (c) 3,639 3,154 15
Profit before tax 3,264 2,804 16
Adjusted earnings (d) 2,147 1,796 20
Adjusted earnings per share (d)      
- US cents 143.1 120.0 19
- UK pence 71.2 63.4 12
- SA cents 1,021.2 847.1 21
Basic earnings per share (US cents) 134.9 110.2 22
Interim dividends per share (US cents) 58.0 50.0 16
Net cash generated from operations 4,276 4,018 6

(a) Revenue excludes the attributable share of associates’ revenue of US$2,418 million (2007: US$2,025 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. As described in the Financial Review, EBITA is used throughout the preliminary announcement.   

(c) Adjusted profit before tax comprises EBITA less adjusted net finance costs of US$491 million (2007: US$428 million) and share of associates’ net finance costs of US$11 million (2007: US$9 million).

(d) Reconciliation of adjusted earnings to the statutory measure of profit attributable to equity shareholders is provided in note 6.

Meyer Kahn, Chairman of SABMiller, said:
"This strong outturn to the year is particularly pleasing given the scale of the challenge we faced at its outset, with exceptional prior year comparatives, rising input costs and an increasingly competitive environment in many of our markets.  It is a clear testament to the strength of our brands and the group’s operational capability that we have been able to deliver such a good performance."

2008 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

This strong result for the year has been achieved despite challenging comparative growth rates across a number of markets in the prior year and a substantial rise in input costs for the group as a whole.  Total beverage volumes were up 6%, to 288 million hl and total lager volumes were up 11% to 239 million hl, including the impact of acquisitions in China and Europe.  A 15% increase in group revenue translated into EBITA growth of 15% to US$4,141 million, or 9% on an organic constant currency basis. This reflects the benefit of price increases, mix improvements and productivity gains, all of which have offset the rise in input costs, in addition to favourable currency rates against the US dollar.  The group’s ability to recover these higher costs underlines the strength of its brands and its operational capability in enhancing net revenue per hectolitre through effective control of package mix and portfolio pricing.  The group EBITA margin remained level with the prior year at 17.4%.  Earnings benefited from currency strength and lower effective tax rates in certain jurisdictions. Adjusted earnings and adjusted earnings per share grew 20% and 19% respectively on the prior year.

During the year, underlying consumer demand in the group’s developing markets has remained strong, with high levels of fixed investment within Africa, Asia and South America contributing to good GDP growth in these regions.  Over the course of the year the group has invested some US$1,978 million in additional production capacity, new containers and distribution, to ensure the business will be able to continue to take advantage of the growth in its markets.  The group’s premium brand strategy has driven mix benefits across a number of markets, with significant investment behind new product and packaging innovations.

Net cash generated from operations after working capital movements was 6% above the prior year, reflecting an increase in working capital across the group as at 31 March 2008, due principally to the timing of Easter.  Gearing increased during the year to 49.7% from 45.8% principally as a result of increased borrowings to fund the acquisition of the Grolsch business and the capital expenditure programme.  The Board has recommended a final dividend of 42 US cents per share, which will be paid to shareholders on 7 August 2008. This brings the total dividend to 58 US cents, a 16% increase.

These results demonstrate both the growth momentum in the business and the substantial brand equity resulting from the investment made over many years in the group’s portfolio of some 200 local and regional beer brands.

  • Latin America achieved lager volume growth of 5%, following exceptionally high growth in the prior year.  Whilst a consumer slow-down in Colombia and price-driven competitive pressure in Peru represent some challenges, the group has continued its programme of investment and modernisation in the Andean region and the full benefit of these activities is still to be realised.  There have been significant fixed cost productivity improvements. EBITA rose by 6% in organic constant currency, or 17% on a reported basis.

  • The group’s business in Europe delivered another excellent performance, with organic lager growth of 8%, and EBITA growth of 15% in organic constant currency and 30% on a reported basis.  Strong volume growth in Poland, Romania and Russia was complemented by market share gains in several countries.

    Price increases, mix improvements and the introduction of new products and packs, assisted by operational efficiencies, offset significant brewing raw material and packaging cost increases.  In the Czech Republic, the Kozel brand grew by 19% in its domestic market and continues to establish itself as a powerful regional brand, selling 2.8 million hl over the period.  In Italy, Birra Peroni was the fastest growing brewer in 2007, with a share gain of almost 100 basis points in a level market.  The company’s core brands, Peroni and Nastro Azzurro, grew volumes by 7% and 8% respectively, reflecting a successful on-premise strategy in the north of the country.

  • In the US, Miller continued to migrate its portfolio to higher margin and higher growth segments with the launch of Miller Chill, a ‘chelada-style’ light beer brewed with lime and salt.  One of the most successful brand launches in SABMiller’s history, Miller Chill sold almost half a million barrels in its first year, contributing to a 49% increase in Miller’s worthmore portfolio, which includes Sparks, Peroni and Leinenkugel's, all of which grew at double digit rates.  Whilst higher fuel costs and declining real estate prices impacted consumer spending in the second half, Miller’s overall domestic sales to retailers for the year were up 0.7% on an organic basis, with the company’s flagship brand, Miller Lite, up 1.1%.  To capture the continuing consumer preference for light beers, Miller has test marketed new light beers, Miller Genuine Draft 64 and the Miller Lite Brewer’s Collection, which will be rolled out nationally in the next financial year.

  • Robust economic conditions on the African continent, with high resource prices and investment  underpinning growth, contributed to organic lager volume growth of 6% from the group’s Africa operations (excluding Zimbabwe).  A significant capital expenditure programme is underway in these markets, including the construction of several new greenfield breweries to exploit anticipated future volume growth.  In Asia, the group’s associate in China, CR Snow, acquired a further four breweries in the year and grew volumes by 15% on an organic basis, ahead of the overall market.  The Snow brand enjoyed exceptional growth of 63%, cementing its position amongst the top three beer brands in the world by volume.

  • In South Africa, where we began the year with the loss of a major premium brand to a competitor in March 2007, overall volumes were level with the prior year representing a satisfactory result.  The decline in premium volumes was partially mitigated by the successful launch of Hansa Marzen Gold and growth in excess of 100% in Peroni Nastro Azzurro.  The robust performance of Hansa Pilsner and Castle Milk Stout underpinned mid single digit growth in the mainstream category, whilst soft drinks grew 4% despite cycling tough comparatives in the final quarter.  EBITA for the period declined 6% on a constant currency basis, reflecting the lower premium volumes, a large increase in brewing raw material costs and a significant increase in distribution costs. 

  • In December 2007, SABMiller plc and Molson Coors Brewing Company signed a definitive agreement to combine the US and Puerto Rican operations of their US subsidiaries, Miller and Coors, in a joint venture.  The transaction, which is expected to generate approximately US$500 million of synergies in the third full year of operation, is subject to US anti-trust clearance and is not expected to complete before the middle of calendar year 2008.  Following completion it will create a stronger, brand-led US brewer with the scale, resources and distribution platform necessary in the increasingly competitive US market. 

  • During the period the group also announced the acquisition of Royal Grolsch NV, the iconic Dutch brewer with a rich heritage dating back to 1615.  Grolsch’s domestic market is in the Netherlands, but it has important international positions in a number of markets including the United Kingdom and the US.  This international footprint will be expanded with plans to introduce the Grolsch brand into a number of SABMiller’s markets in the course of the next financial year.  On 14 May 2008 the group announced that it had reached agreement in principle to transfer the US importation rights for the Grolsch brand to Miller. The group also completed the acquisition of Polish brewer Browar Belgia and the Australian brewer Bluetongue in addition to announcing the future construction of a brewery in New South Wales through Pacific Beverages, SABMiller’s joint venture with Coca-Cola Amatil.


This has been another year of strong growth for the group. In the current year, volume growth in the first half will be affected by high comparative growth rates, and pressure on input costs will continue to increase although pricing and mix benefits are again expected to compensate for these cost increases.  The economic outlook across our global footprint, which is biased towards growth markets in developing countries, remains positive, and we will continue to benefit from the strength of our brands, operational capability and investment for growth.

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 9.30am (BST) on 15 May 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 Preliminary 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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