21st Jan 2014 08:43
LONDON (Alliance News) - Brewer SABMiller PLC Tuesday said growth in the third quarter continued to be driven by its emerging markets business, which drove sales higher, despite continued weakness in its European and North American businesses, and currency headwinds.
SABMiller, the brewer of more than 200 beer brands, including Peroni, Grolsch and Pilsner Urquell, said that group net producer revenue for the third quarter grew by 4%, driven by combination of pricing and volume growth, particularly in Africa, Latin America and China. It said group net producer revenue per hectolitre grew by 2% both on a constant currency basis. Organic growth rates exclude the impact of acquisitions and disposals.
SABMiller said the group's underlying performance is in line with expectations, although the depreciation of key currencies against the US dollar, notably the South African rand, Australian dollar, Peruvian nuevo sol and Colombian peso, hurt its reported financial results.
The brewer said that total beverage volumes grew by 2% for the third quarter on an organic basis, with lager volumes up 1% and soft drinks volumes up 7%.
SABMiller said that trading conditions continued to be more challenging in North America and Europe, with group net producer revenue declining in Europe in the quarter.
It said that Latin America group net producer revenue grew by 5% in the third quarter, with beverage volumes up 3% and larger volumes up 2% on an organic basis. Soft drinks grew by 8% across the region on an organic basis, with pack innovations supporting growth, particularly in Colombia and Peru.
In Africa, group net producer revenue grew by 8% on an organic, constant currency basis, supported by pricing and total volume growth of 5%, with lager growth of 6%, SABMiller said.
The Asia Pacific region was driven by strong net producer revenue in China, which grew by double digits on an organic basis, reflecting strong volume growth of 13% and favourable mix.
In South Africa, the group said that pricing and brand mix in beer, and volume growth in soft drinks, drove group growth in a softer consumer environment during the quarter. It said that net producer revenue for the quarter grew by 7% on an organic and constant currency basis.
It said that lager volumes declined by 2% in the weaker economic and consumer environment in South Africa, although its local premium portfolio continued to perform strongly, with Castle Lite and Castle Milk Stout delivering combined growth in excess of 10%.
Soft drinks volumes grew by 5% in South Africa, helped by weak comparatives in the prior year and by targeted market penetration programmes and continued good performance in still soft drinks, the company said.
However, SABMiller said that its European business delivered a poor performance due to challenging market conditions. It said that in Europe, group net producer revenue declined by 6%, as a volume decline of 2% was coupled with deterioration in group net producer revenues per hectolitre, due to adverse category mix. Lager volumes were down by 5%.
In North America, MilllerCoors' group net producer revenue grew by 1%, with lower volumes offset by positive sales mix and higher net pricing. US domestic sales to retailers declined 1.9% in the quarter.
In December, Chairman Graham Mackay died following a long illness. The board appointed acting Chairman John Manser as chairman with immediate effect, and appointed Guy Elliott as senior independent sirector in succession to Manser.
SABMiller shares were down 2.2% Tuesday morning, trading at 3,025.50 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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