SABMiller lager volumes up 2%, revenue up 5%

Releasing a trading update for the 12 month period, the group reported lager volumes up 2% on the prior year on an organic basis, with growth of 3% in the fourth quarter, while full year and fourth quarter soft drinks volumes grew 3% on an organic basis.

All the group's divisions other than North America grew volumes during the second half of the year.

Group revenue for the full year grew by 5% on an organic, constant currency basis, with group revenue per hectolitre growth of 3% on the same basis.

Compared to the prior year, raw material costs on a US dollar per hectolitre, constant currency basis, were marginally lower for the full year although they increased moderately in the second half, and sales and marketing investment grew year-on-year.

SABMiller's portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie.

The group is also one of the world's largest bottlers of Coca-Cola products.

In South Africa, lager volumes grew 2% as a result of the group's upweighted brand and market facing investment together with some improvement in consumer confidence.

Despite the absence of an Easter peak period this year lager volumes in the fourth quarter were level with the prior year.

"Our core power brand portfolio continued to gain momentum, with sustained strong growth from Castle Lite and good performances from Castle Lager and Hansa Pilsener," the group noted.

Soft drinks volumes grew 3% for the year reflecting early success for the new soft drinks growth strategy, notwithstanding a 3% decline in volumes in the fourth quarter due to wet and cold weather and the absence of an Easter period.

In Latin America, lager volumes were level with the prior year on an organic basis, following growth of 1% in the fourth quarter.

However Colombian full year lager volumes declined by 6% as a result of the emergency tax levied on the beer category and widespread flooding which impacted consumer demand and product availability.

Peru's full year lager volume growth of 10% was boosted by the country's continued strong economic recovery and SABMiller's ongoing brand development initiatives.

Soft drinks volumes were 1% lower due to price increases in Honduras and El Salvador.

In Europe, full year lager volumes declined by 3% reflecting a particularly challenging first half impacted by generally weak economic conditions.

Fourth quarter volumes were up 2% benefiting from a weak comparative period due to prior year excise increases in Russia and the Czech Republic.

Poland's volumes were down 4% for the year with the market impacted by widespread flooding and alcohol sales restrictions during a nine-day national mourning period, and in the Czech Republic volumes were down 6% due to continued weakness in the on-premise channel and further downtrading into lower value segments where the group was under-represented.

Russia's full year volumes were 1% ahead of the prior year as a result of a stronger second half supported by a gradual economic recovery, and despite competitor price reductions in the local premium segment.

Volumes in Romania were down 8% as the market remained in recession and continued to be impacted by government austerity measures.

MillerCoors' US domestic sales to retailers (STRs) were down 2.6%, with a 1.4% decline in the quarter to March in a market which remains challenging, the group said. Premium light STRs were level in the quarter as growth in Coors Light was accompanied by improved Miller Lite performance with volumes nearly level.

The below premium portfolio was down low-single digits in the quarter amid continued industry uptrading.

The Tenth and Blake craft and imports division saw double-digit growth, mainly driven by the strong performance of Blue Moon, Leinenkugel's and associated seasonal craft brand extensions.

Domestic sales to wholesalers (STWs) declined 2.7% for the year ended March 2011, with a 2.5% decline in the fourth quarter.

In Africa lager volumes for the full year grew 13% on an organic basis assisted by a strong final quarter. Excluding SABMiller's share of Zimbabwe's volumes, lager volume growth would have been 9%.

In Tanzania lager volumes grew by 5%, in Uganda volumes grew by 20% and in Mozambique volumes were up 7%,assisted by new capacity following the Nampula brewery commissioning in the third quarter of the previous year.

Lager volume growth in Angola moderated during the final quarter, but the new Luanda brewery enabled strong full year growth of 26%.

In Zimbabwe the group's associate saw robust growth in lager and soft drinks volumes.

After a very strong final quarter, Zambia lager volumes ended the year up 28% with growth fuelled by stronger prevailing economic conditions and the excise reduction at the start of the year.

"Our associate Castel delivered full year lager volume growth of 4%, driven by good volume performance in Nigeria, the Democratic Republic of Congo, Benin and Chad.

"Soft drinks volumes for the year grew by 8% (4% growth excluding Zimbabwe) on an organic basis," the group noted.

Lager volumes in Asia grew by 8% on an organic basis in the fourth quarter and by 10% for the year.

Full year lager volume growth of 10% in China on an organic basis was driven in part by share gains in a market that continued to grow.

In India volumes for the year were also 10% higher although restrained by regulatory issues in Andhra Pradesh, which have impacted performance since July 2010.

SABMiller is due to report its full year results on May 19.

The I-Net Bridge consensus among seven analysts is for full year diluted HEPS of 1342.9 cents and a total dividend of 560.9 cents.

In the year ended March 2010, the group reported $3.8 billion adjusted pre-tax profit and group revenue of $26.35 billion.

At 11am on the JSE, SABMiller's share price was up 1.75%, or R4.24, at R246.75.