SABMiller Reports 11% Growth in Lager Volumes
Europe achieved organic growth in lager volumes of 12%. Sales in the first two months of the half year were particularly strong, assisted by warm weather, but volumes moderated somewhat in the later months.
17/10/07 SABMiller plc provided an update regarding trading during the six-month period to 30 September 2007, which is the first half of its financial year. The calculation of the organic growth rates included below excludes volumes for acquired businesses for the first 12 months after an acquisition.
As communicated on 24 September 2007 SABMiller has continued its strong start to the year, with organic growth in lager volumes of 11% for the six months ended 30 September 2007. The growth in revenue has been partially offset by higher input costs and increased investment across the business whilst financial performance for the six months remains in line with management’s expectations.
In Latin America, lager volumes rose by 8%. Whilst South America has enjoyed a period of high volume growth during the initial implementation of the group’s plans, this growth has moderated in recent months as expected. In Colombia, lager volumes have grown more than 7% in the half year. Slower growth was recorded in the latter part of the period, off a high base in the prior year. The Colombia operation continues with the major restructuring of its route to market network and the phased relaunch of the market leading Aguila brand. In Peru, volumes are up 10% in a market which remains highly competitive. The business continues its significant investments across the region in route to market, brand building and merchandising which are expected to constrain margins in the short term.
Europe achieved organic growth in lager volumes of 12%. Sales in the first two months of the half year were particularly strong, assisted by warm weather, but volumes moderated somewhat in the later months. Poland achieved growth of 13% across its portfolio, notwithstanding challenging comparatives. Volumes in Russia were up by 18% with all brands contributing to this growth. Romania grew by 37%, boosted by the increased capacity introduced in the prior year and driven by the ongoing success of the Timisoreana brand and its new PET packaging. In the Czech Republic good volume growth of 3% was achieved.
In North America, Miller’s domestic sales to retailers (STRs) increased by 5.9% over the prior year, and were up 1.4% on an organic basis (excluding Sparks and Steel Reserve, acquired in August 2006), with Miller Lite STRs up by 2.1%. Miller’s strategy to grow Miller Lite and to migrate its brand portfolio to higher margin segments has contributed to an increase of 3.9% in domestic net revenue per barrel. Miller Chill, the company’s new ‘chelada style’ light beer, continues to trade above expectations whilst volumes of the group’s international worthmore brand Peroni Nastro Azzurro and craft beer Leinenkugel’s are up by strong double digit percentages.
SABMiller’s Africa & Asia operations have again grown rapidly and achieved organic growth of some 20% in lager volumes, driven by China where volumes have increased by 22%. In Africa (excluding Zimbabwe), lager volumes grew by 6% on an organic basis, with 11% volume growth in Botswana after two difficult years and very good performances achieved in Tanzania and Mozambique.
In South Africa, our lager volumes were up 2% with stronger growth in the mainstream segment and following the successful launch of our premium brand, Hanza Marzen Gold, in early May. Recently volume performance has been somewhat constrained due to a combination of local supply shortages and reduced flexibility during new brand and pack introductions including the implementation of our mainstream renovation programme. Soft drink volumes grew by 9% reflecting favourable weather conditions and trade restocking in earlier months following some supply shortages at the end of the prior year.
