Wendy Hall
19 May 2006
Johannesburg — GLOBAL brewer SABMiller reported a 19% increase in lager volumes to 176-million hectolitres, and a 19% rise in revenue to $15,3bn for the year for the year ended March.
The group said growth was driven by improved volumes in Europe and China and a "strong earnings contribution" from SA.
The results are the first to include contributions from Colombian brewer Bavaria, which helped the group enhance its strong cash flows for the year. Net cash generated from operations was up 18% to $3,2bn, from $2,7bn.
SABMiller chairman Meyer Kahn said the previous financial year was one of strategic importance for the group, with the purchase of Bavaria, which he called "a major new platform", and investments in China, India and Vietnam. He said the activity had strengthened the group's global portfolio of brands so that it now held "one of the most attractive portfolios in global beer internationally".
The group's European operations "continued with its run of excellent results for the fourth consecutive year", group chief financial officer Malcom Wyman said.
Volume growth in the region was up 5% on an organic basis, with growth driven by Poland, Romania and Russia. Volumes in Poland grew ahead of the market at 11%, and in Russia increased 14%, twice the growth of the market.
Lager volumes in the Latin American region, which includes central and South America, were up 7,5% for the six months to March this year, with Colombia and Peru contributing strong volume growth across all products, the group said.
Recently acquired Bavaria should take about five years to be fully integrated into the group, CE Graham Mackay said.
SABMiller's net interest-bearing debt increased significantly due to the inclusion of Bavaria, with gearing up to 52,1% from 25,2% for the previous financial year.
Mackay said the group's capital expenditure for the forthcoming financial year was estimated at $1,2bn, including projects in South America, which he said should account for $200m in spending.
The group's North American business continued to be affected by a competitive pricing environment and discounting activity due to a price war with Anheuser-Busch, which influenced volumes.
High energy and aluminium costs, which Wyman said were expected to continue into this financial year, also had an effect.
Mackay said the three-year turnaround of Miller was complete and the group would "be stepping up the pace" in the North American market by introducing brands such as Peroni Nastro Azzurro and Pilsner Urquell into the market during the summer holiday period.
Africa and Asia continued to grow lager volumes, with volumes up 17% on an organic basis in Asia and 3% in Africa. SABMiller's brand in China, Snow, grew volumes 52% to 17,3- million hectolitres.
Mackay said the group would continue to make "selective acquisitions when they become available at the correct price" in China.
Beer and soft drink volumes in SA were only 1% up, mainly due to the absence of Easter during the financial year, unseasonally cooler weather and slower wage growth.
However, premium brands such as Amstel, Castle Lite, Peroni Nastro Azzurro and Pilsner Urquell grew 45%, increasing the group's share of the premium market to 80%.
Mackay said while growth would come from beer increasing its share of the alcoholic drinks market and from consumers trading up to premium labels, innovation was to be a major driver of growth in the coming year. He said SABMiller would continue to capitalise on the migration to beer from spirits.
Be the first to Write a Comment!
Copyright © 2006 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
