9th Oct 2015 08:24
LONDON (Alliance News) - SABMiller PLC Friday said it has increased its target annual run rate cost savings to USD1.05 billion by March 31, 2020, from USD500 million by March 31, 2018.
The drinks giant's cost and efficiency programme delivered USD221 million of annualised savings in its first year to March 31, 2015, and is expected to deliver in excess of USD430 million in its second year. The original target issued in 2014 was USD500 million annually by 2018.
SABMiller said the additional savings will come from its integrated supply chain, with approximately 70% coming from procurement and 30% from manufacturing and distribution.
"Our recent trading statement highlighted our accelerating growth in the second quarter. Another key plank of our strategy is to build a globally integrated organisation to optimise resource, win in market and reduce costs. The measures we are announcing today are a continuation of our existing cost saving programme," Chief Executive Alan Clark said in a statement.
"Whilst we are already a highly efficient business with strong Ebitda margins of 38% across our 20 largest managed beer markets, we are continuing to remove duplication across markets, bringing specialist expertise in areas like procurement under one roof, and standardising common processes. It results in our markets being freed up to concentrate on what they do best - growing revenue with local consumers and customers," he added.
SABMiller is currently in discussions with Anheuser-Busch InBev NV regarding a possible takeover by AB InBev of SAB. On Wednesday, SABMiller rejected an offer of GBP42.15 per share in cash plus a partial share alternative for up to 41% of SABMiller's shares, valuing the company at around GBP68.2 billion.
It said the offer "substantially undervalues" the business.
Shares in SABMiller were trading up 0.1% at 3,644.50 pence Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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