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News – 2013

SABMiller continues to drive revenue and growth

21 November 2013

SABMiller plc, one of the world's leading brewers with operations and distribution agreements across six continents, reports its interim (unaudited) results for the six months to 30 September 2013.

Highlights

1 Expressed as a percentage of group NPR.

  6 months to
Sept 2013
US$m
6 months to
Sept 20122
US$m
% change 12 months to
March 20132
US$m

2 As restated. Further details of the restatement are provided in the financial review and in note 12.

  1. Group revenue includes the group's share of associates' and joint ventures' revenue of US$6,456 million (2012: US$6,106 million).
  2. Revenue excludes the group's share of associates' and joint ventures' revenue.
  3. Group net producer revenue (NPR) comprises group revenue less excise and similar taxes, including the group's share of associates' and joint ventures' excise and similar taxes.
  4. 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 computer software) and includes the group's share of associates' and joint ventures' operating profit, on a similar basis. EBITA is used throughout this interim announcement.
  5. Adjusted profit before tax comprises EBITA less adjusted net finance costs of US$345 million (2012: US$387 million, restated) and the group's share of associates' and joint ventures' net finance costs of US$54 million (2012: US$23 million).
  6. Profit before tax includes exceptional charges of US$52 million (2012: US$127 million). Exceptional items are explained in note 3.
  7. A reconciliation of adjusted earnings to the statutory measure of profit attributable to owners of the parent is provided in note 5.
Group revenuea 17,559 17,476 - 34,487
Revenueb 11,103 11,370 (2) 23,213
Group net producer revenuec 13,793 13,669 1 26,932
EBITAd 3,268 3,153 4 6,379
Adjusted profit before taxe 2,869 2,743 5 5,597
Profit before taxf 2,429 2,263 7 4,679
Profit attributable to owners of the parent 1,714 1,579 9 3,250
Adjusted earningsg 1,920 1,864 3 3,772
Adjusted earnings per share        
- US cents 120.4 117.3 3 237.2
- UK pence 77.7 74.2 5 150.2
- SA cents 1,170.9 961.3 22 2,018.9
Basic earnings per share (US cents) 107.4 99.4 8 204.3
Interim dividend per share (US cents) 25.0 24.0 4  
Free cash flow 894 1,684 (47) 3,230

Chief Executive's review

Alan Clark, Chief Executive of SABMiller, said:

“We have continued to deliver on the potential of our businesses in both developed and developing markets, with revenue and margin improvements amid mixed trading conditions. We have improved the reach of our mainstream brands across most regions, and through initiatives such as the launch of Redd’s Apple Ale in the USA, the momentum behind Castle Lite across Africa, and the increasing appeal of Peroni Nastro Azzurro from Europe to Australia, we are strengthening our premium propositions across the group and evolving our high-end brand portfolios to appeal to an ever wider range of consumers and drinking occasions.”

Group net producer revenue Reported Sept 2012 US$m Net acquisi-tions and dispo-sals US$m Currency translation US$m Organic growth US$m Reported Sept 2013 US$m Organic, constant currency growth % Reported growth %
Latin America 2,740 (18) (105) 137 2,754 5 1
Europe 2,454 217 31 (18) 2,684 (1) 9
North America 2,518 - - (4) 2,514 - -
Africa 1,523 2 (31) 163 1,657 11 9
Asia Pacific 2,202 (19) (71) 47 2,159 2 (2)
South Africa: 2,232 8 (377) 162 2,025 7 (9)
- Beverages 2,031 6 (343) 145 1,839 7 (9)
- Hotels and Gaming 201 2 (34) 17 186 8 (8)
               
Total 13,669 190 (553) 487 13,793 4 1

 

Group volumes Reported
Sept 2012
hl m
Net acquisi-tions and disposals
hl m
Organic growth
hl m
Reported
Sept 2013
hl m
Organic growth
%
Reported growth
%
Lager 132 - 1 133 1 1
Soft drinks 27 5 1 33 5 23
Other alcoholic beverages 4 - - 4 (1) 1
Total 163 5 2 170 2 4

 

EBITA Reported Sept 2012 US$m Net acquisi-tions and dispo-sals US$m Currency translation US$m Organic growth US$m Reported Sept 2013 US$m Organic, constant currency growth % Reported growth %
Latin America 920 (5) (36) 93 972 10 6
Europe 516 32 7 (43) 512 (8) (1)
North America 464 - - 14 478 3 3
Africa 355 - (5) 58 408 16 15
Asia Pacific 506 (1) (25) 60 540 12 7
South Africa: 486 1 (81) 37 443 8 (9)
- Beverages 421 1 (70) 34 386 8 (8)
- Hotels and Gaming 65 - (11) 3 57 4 (12)
Corporate (94) - 1 8 (85)    
Total 3,153 27 (139) 227 3,268 7 4
               
EBITA margin¹ (%) 23.1       23.7    

1 Expressed as a percentage of group NPR.

Business review

The group delivered NPR and earnings growth in the first half of the year despite trading challenges in a number of territories. Group NPR and volume growth remained strong in Africa, with the benefit of increased capacity and operational capability, while performance was robust in South Africa despite economic headwinds associated with the depreciation of the South African rand. Performance in Latin America was impacted by an excise increase in Peru and national strikes and social unrest in Colombia, but favourable pricing and a good performance from some premium brands continued to drive group NPR growth. Double digit NPR growth in China along with good progress in Australia on brand restoration and the establishment of premium growth platforms resulted in group NPR growth for the Asia Pacific region. Conditions in North America and Europe remained challenging. EBITA and EBITA margin growth was delivered through higher group NPR and a focus on operational efficiencies.

Group NPR growth of 4% on an organic, constant currency basis for the first half of the year was driven equally by an increase in total beverage volumes and higher group NPR per hl. Lager volume growth of 1% on an organic basis reflected strong growth in Africa and South Africa, partially offset by declines in Europe and North America, although growth in sales of higher margin products helped to drive an improved EBITA margin in North America. Soft drinks volumes increased by 23% in the period, benefiting from the full consolidation of Coca-Cola Icecek in our associate Anadolu Efes in the period, while on an organic basis soft drinks volumes grew by 5% reflecting growth in both Africa and Latin America. The growth in group NPR per hl was driven by the benefits of pricing and improved brand mix.

EBITA grew by 4% on a reported basis as adverse foreign currency movements had a significant negative impact on the translation of financial results in South Africa, Latin America and Australia. On an organic, constant currency basis EBITA grew by 7% as a result of higher NPR and cost efficiencies across most divisions, resulting in an 80 bps increase in our organic, constant currency EBITA margin. Procurement savings helped limit growth in input costs, resulting in a low single digit increase in raw material input costs (on a constant currency, per hl basis) at the lower end of expectations. Increased production efficiencies also benefited the cost of goods sold. Fixed cost reductions were achieved through a continued focus on increased productivity. Investment in marketing increased in some developing markets to support category development and the expansion of our brand portfolios. Reported EBITA margin increased by 60 bps, reflecting currency impacts and the inclusion of Coca-Cola Icecek in Anadolu Efes' results.

Adjusted earnings grew by 3% compared with the prior period, significantly impacted by the depreciation of key currencies against the US dollar, principally the South African rand, Australian dollar, Colombian peso and Peruvian Nuevo sol. Net finance costs were lower than in the prior period as the group benefited from lower interest rates and the refinancing of higher cost debt in the current and prior period.

Underlying free cash flow for the period was at the same level as the prior year. Due to the phasing of anticipated payments to the Australian Tax Office, free cash flow for the current half year was lower by US$790 million. Adjusted EBITDA was adversely impacted by the depreciation of key currencies against the US dollar in the period but still grew by 1%. Working capital registered a cash outflow in the period of US$67 million, with working capital cash inflows in most divisions offset by a cash outflow in Asia Pacific and a reduction in provisions. Capital expenditure at US$670 million was in line with the prior period, with continued investment in brewing capacity and capability, most notably in Africa and Latin America. Net interest paid was lower than in the prior period in line with the reduction in the net finance charge.

The group's gearing ratio as at 30 September 2013 was 59.2%. Net debt increased by US$41 million, ending the period at US$15,641 million. An interim dividend of 25.0 US cents per share will be paid to shareholders on 13 December 2013.

Outlook

Trading conditions are expected to remain broadly unchanged, with growth continuing to be driven by our developing markets. The depreciation of key currencies against the US dollar will adversely impact reported results in the current financial year. Development of our brand and pack portfolios will continue, as we seek opportunities to reach new consumers and enhance the beer category. Price increases will be taken selectively and focus will remain on premiumisation. Raw material unit input costs are expected to rise in low to mid single digits in constant currency terms. Investment in production capacity and capability will continue to drive growth along with strong commercial execution of existing and new consumer offerings.

Download the F14 half year results announcement PDF 0.58MB


Enquiries:
   
  SABMiller plc Tel: +44 20 7659 0100
Catherine May Director of Corporate Affairs Tel: +44 20 7927 4709
Gary Leibowitz Senior Vice President, Investor Relations Tel: +44 20 7659 0119
Richard Farnsworth Business Media Relations Manager Tel: +44 20 7659 0188

A live audio webcast of a presentation by Chief Executive, Alan Clark, and Chief Financial Officer, Jamie Wilson to the investment community will begin at 9.30am (GMT) on 21 November 2013. 

To register for the webcast, download the slide presentation, view management video interviews and download photography and b-roll, visit our online Results Centre at www.sabmiller.com/resultscentre.

To monitor Twitter bulletins throughout the day follow www.twitter.com/sabmiller or #sabmillerresults.

Copies of the press release and detailed Interim Announcement are available from the Company Secretary at the Registered Office or from our website at www.sabmiller.com.

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