News Column

Thirsty Emerging Markets Continue To Drive Growth For SABMiller

May 22, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Brewing giant SABMiller PLC Thursday reported a higher pretax profit for its last financial year, despite a dip in revenues, supported by volume increases and demand driven by its emerging markets businesses, which continue to offset weakness in North America and Europe.

The brewer of brands including Peroni, Pilsner Urquell and Grolsch, said it continues to see good growth coming out of emerging markets. It reported pretax profit of USD4.82 billion for the year ended March 31, a 3% increase on the USD4.68 billion reported a year earlier.

The group declared a full-year dividend per share of 105.0 US cents, up 4% on the prior year.

"The business will continue to be impacted by currency movements. Development of our brand and pack portfolios will continue, as we seek opportunities to reach new consumers and enhance the beer category. Revenue growth will also be driven by selective price increases and management of our price points across all brands and packs, " said Chief Executive Alan Clark in a statement.

The group said it has now launched a new cost-savings programme in order to drive additional operational efficiencies, and said it expects to make savings of around USD500 million a year by the financial year ending March 31, 2018. It said the programme will involve some USD350 million in restructuring costs.

SABMiller said that strong growth in Latin America, Africa and Asia Pacific is still being partially offset by declines in Europe and North America.

The brewer said that as well as being hit by continued weakness in North America and Europe, the depreciation of key currencies against the US dollar, wiped around USD400 million off its earnings before interest, taxes and amortisation.

Revenues for the year fell by 4% to USD22.31 billion, down from USD23.31 billion the prior year.

Group revenue, which includes the attributable share of associates' and joint ventures, dipped by 1% to USD34.08 billion.

SABMiller said group net producer revenue in the year declined by 1%, whilst organic net producer revenue grew by 3% on a constant currency basis, led by its developing market businesses in Africa, Latin America and its associate in China, on the back of price increases and growth in its premium brand portfolios there.

Organic growth rates exclude the impact of acquisitions and disposals.

Total beverage volumes for the full-year to March 31, rose 2% on an organic basis, with lager volumes up 1% and soft drinks volumes up 5%.

SABMiller shares rose to the top of the FTSE 100 in early trading Thursday, up 3.9% at 3,385.00 pence.

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Source: Alliance News

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