Bloomberg News

SABMiller Revenue Beats Estimates on Premium Beer Demand

January 22, 2013

SABMiller Plc (SAB), the world’s second- biggest brewer, reported organic revenue that beat estimates for the third quarter as consumers opted for pricier beers.

Revenue at the maker of Grolsch and Peroni rose 8 percent on an organic basis, which excludes the effects of acquisitions and disposals, the London-based company said today in a statement. That was ahead of the 6.5 percent median estimate of 11 analysts surveyed by Bloomberg News.

The report shows price increases and an appetite for more premium tipples buoyed sales in Latin America, one of SABMiller’s biggest regions, even as cold weather in China and lackluster consumer spending in Europe damped demand for thirst- quenching lagers, causing volume growth to miss analyst estimates. SABMiller’s shares rose as much as 1.4 percent in London trading to 3,000.5 pence.

“We think the revenue beat will offset the volume miss,” Anthony Bucalo, an analyst at Banco Santander SA in London, wrote in a note today. Santander recommends buying the stock.

SABMiller gets most of its revenue from emerging markets including Latin America and Africa, where volume rose 6 percent and 4 percent, respectively. The brewer said in November that it had seen “moderation of economic growth” in some countries, though emerging-market growth potential remained strong.

“The positive surprises come in high-margin areas and the misses in low ones” in the report, analysts at JPMorgan Chase & Co. in London wrote in a note.

Wet Weather

So-called organic lager volume increased 2 percent in the third quarter, lower than the 3 percent median estimate of analysts surveyed by Bloomberg News.

Volume in Europe gained 1 percent, less than the 5 percent median analyst estimate, as markets including Poland and the Czech Republic suffered “depressed consumer confidence,” the company said. Volume in the Asia-Pacific region showed an unexpected 1 percent decline, missing the median estimate for a 5 percent gain, as China’s wet weather depressed spending. China represents about 20 percent of group volume, but only 2 percent of profit, according to analysis by UBS AG.

SABMiller bought Foster’s Group Ltd. in 2011 for about A$10.5 billion ($11.1 billion), which boosted first-half earnings in Asia. The Australian brewer has higher margins than SABMiller, which is aiming to increase sales of pricier, more profitable beers in that country as volumes wane.

Australian volume slid 4 percent in the quarter, an improvement from the first half’s 8 percent decline. Volume fell 15 percent including the loss of some discontinued brands.

Sales to wholesalers at the company’s U.S. joint venture MillerCoors LLC dropped 1.4 percent, according to the statement. South Africa, where the brewer was founded, showed a 3 percent increase in volume, ahead of estimates.

To contact the reporters on this story: Clementine Fletcher in London at cfletcher5@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net


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