SABMiller performs well due to African and European markets - CNBC Africa

SABMiller performs well due to African and European markets

Earnings

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SABMiller profits driven by African and European markets. PHOTO: Beer-Universe

“We continued to drive strong NPR growth across our businesses. This has been achieved through our prolonged success in building local and global flagship brands across our broad geographic footprint, together with innovations and improved trade execution,” said Alan Clark, chief executive of [DATA SAB:SABMiller plc], the world’s second largest brewer.

(WATCH VIDEO: Video: SABMiller FY HEPS up 4% )

Clark added that for the first quarter ended 30 June 2014, strong growth was reported in their African, South African and European markets which were balanced by slower momentum in its North American and Australian operations.

Total beverage volumes grew by three per cent on an organic basis while lager volumes increased one per cent, driven by China, Europe and Africa.

Soft drinks volumes rose by 10 per cent reflecting strong growth in Latin America, Europe, South Africa and Africa.

(READ MORE: Political tensions drives down SABMiller revenue)

In Latin America, NPR increased by five per cent driven by price increases and favourable brand mix. Total beverage volumes grew by two per cent while lager volumes were two per cent lower compared to the prior year due to numerous trading restrictions.

In Colombia, while group NPR rose two per cent, lager volumes were down six per cent as a result of price increases in April 2014 and dry laws being implemented for two rounds of the country’s presidential elections as well as during Columbia’s World Cup football matches.

The company’s NPR at operations in Peru, Ecuador and Central America grew by six per cent, 12 per cent and three per cent respectively.

In Africa, the group’s NPR grew by 11 per cent with lager volumes three per cent higher. Total soft drinks volume also increased by nine per cent with strong performances by its operations in Ghana, Zambia, Nigeria and Zimbabwe.

(READ MORE: SABMiller to invest $110 million in Nigerian brewery)

In South Africa, group NPR increased by 12 per cent reflecting price increases while total beverage volume rose by six per cent despite the challenging domestic market conditions. Lager volume growth rose by four per cent, mostly due to the number of public holidays and favourable weather conditions throughout the country over the Easter period.  

In Europe, NPR increased by eight per cent drive by total beverage volume growth of five per cent and a three per cent hike in lager volumes. The growth was due to a number of initiatives SABMiller embarked upon such as integrating their Czech Republic and Slovakia businesses and seasonal promotional activities.

In the United Kingdom, group NPR rose significantly by 23 per cent due to continued growth of their Peroni Nastro Azzurro brand.

On the other hand, group NPR declined by six per cent in Australia due to a volume decline of three per cent and a decline in NPR per hectolitre as international premium brands increase price competition in the country.

In North America, group NPR grew by three per cent driven by MillerCoor’s NPR growth of two per cent, with lower volumes offset by positive sales mix and higher net pricing.

As announced on the 18 July 2014, SABMiller sold 67 per cent of its shareholding in hotel chain, [DATA TSH:Tsogo Sun Holdings Limited], for a total gross consideration of 7.6 billion rand with a further 200 million rand worth of shares expected to be purchased by Tsogo’s executive team.

SABMiller will officially no longer be a shareholder of Tsogo Sun around the 5 September 2014 once the rest of the shares are bought back by Tsogo for 2.8 billion rand.

(READ MORE: SABMiller to dispose of Tsogo Sun shareholding)

Also, the group announced that its South Africa and Africa divisions would be consolidated into one division for management purposes as of the 1 July 2014. 

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