13th Mar 2007 07:04
SABMiller PLC13 March 2007 13 March 2007 TERMINATION OF AMSTEL BRAND LICENCE SABMiller's subsidiary, The South African Breweries Limited, ("SAB" or "thecompany"), has been given notice by Heineken that it is terminating SAB'slicence to manufacture and distribute Amstel Lager with immediate effect. This move follows a private arbitration held recently to determine whetherHeineken was entitled to terminate the Amstel trade mark licence. Thearbitration panel found that SABMiller's transaction in South America in 2005constituted a material change in shareholding of the SABMiller group which couldbe regarded as inimical to the interests of the Heineken group, thus giving riseto the right to terminate the licence. SAB will consequently move to bolster its competitive position in the SouthAfrican premium segment by drawing upon SABMiller's global portfolio of brandsand the wealth of experience and expertise it has built up in the market. Thecompany is already pursuing a number of initiatives which will mitigate theimpact of the licence termination, including extending SAB's reach into directdistribution and broadening its premium offerings. The bulk of Amstel's sales,like most beer sales in South Africa, are in returnable bottles, requiring acapability which SAB is uniquely positioned to provide. Sales volumes of Amstel currently represent approximately 2.3mhl or 9% of beersales volumes in South Africa. The sales of the Amstel brand will constituteapproximately US$300m of SA Beverages' revenues for the year ending 31 March2007 based on an average exchange rate of ZAR7.03 = US$1.00. SABMiller estimatesthat any impact on the group's earnings in the current financial year will beimmaterial. For the 2008 financial year, and going forward, the company expects to mitigatethe financial impact on its earnings of the Amstel licence termination throughthe actions and initiatives referred to above. Nevertheless there will still bea negative financial impact. In the current financial year, on a pro-formabasis, SABMiller expects that this would have been some US$80m of EBITA,equivalent to pro-forma earnings of approximately 3.0 US cents per SABMillershare. SABMiller would expect the impact in the next financial year to be of thesame order. Commenting on the termination of the licence, Graham Mackay, SABMiller chiefexecutive, said: "Whilst we are surprised by the outcome of the arbitration, our consumers remainour first priority and we are confident of our continuing ability to providethem with a comprehensive choice of superior and differentiated brands, backedby our strong marketing and distribution capabilities." Ends Notes to editors: About SABMiller plc SABMiller plc is one of the world's largest brewers with brewing interests ordistribution agreements in over 60 countries across six continents. The group'sbrands include premium international beers such as Miller Genuine Draft, PeroniNastro Azzurro and Pilsner Urquell, as well as an exceptional range of marketleading local brands. Outside the USA, SABMiller plc is also one of the largestbottlers of Coca-Cola products in the world. In the year ended 31 March 2006, the group reported US$15,307 million in revenueand profit before tax of $2,453 million. SABMiller plc is listed on the Londonand Johannesburg stock exchanges. This announcement can be found on www.sabmiller.com Enquiries: SABMiller plc Tel: +44 20 7659 0100 Sue Clark Director of Corporate Affairs Tel: +44 20 7659 0184 Gary Leibowitz Senior VP, Investor Relations Tel: +44 20 7659 0119 Nigel Fairbrass Head of Media Relations Tel: +44 20 7659 0105 This announcement does not constitute an offer to sell or issue or thesolicitation of an offer to buy or acquire securities of SABMiller plc (the"Company") or any of its affiliates in any jurisdiction or an inducement toenter into investment activity. This document includes "forward-looking statements". These statements maycontain the words "anticipate", "believe", "intend", "estimate", "expect" andwords of similar meaning. All statements other than statements of historicalfacts included in this announcement, including, without limitation, thoseregarding the Company's financial position, business strategy, plans andobjectives of management for future operations (including development plans andobjectives relating to the Company's products and services) are forward-lookingstatements. These forward-looking statements involve known and unknown risks,uncertainties and other important factors that could cause the actual results,performance or achievements of the Company to be materially different fromfuture results, performance or achievements expressed or implied by suchforward-looking statements. These forward-looking statements are based onnumerous assumptions regarding the Company's present and future businessstrategies and the environment in which the Company will operate in the future.These forward-looking statements speak only as at the date of this announcement.The Company expressly disclaims any obligation or undertaking to disseminate anyupdates or revisions to any forward-looking statements contained in thisannouncement to reflect any change in the Company's expectations with regardthereto or any change in events, conditions or circumstances on which any suchstatement is based. Any information contained in this announcement on the price at which theCompany's securities have been bought or sold in the past, or on the yield onsuch securities, should not be relied upon as a guide to future performance. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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