SABMiller Sales Beat Estimates on East Europe Soccer Push
SABMiller Plc (SAB), the world’s second- biggest brewer by volume, said sales growth quickened in the first quarter as revenue unexpectedly rose in Europe, helped by the Euro 2012 soccer tournament.
So-called organic lager volume, which excludes acquisitions and disposals, increased 5 percent in the three months ended June 30, the London-based company said today in a statement. That compared with the 2.6 percent median estimate of 12 analysts surveyed by Bloomberg News and the previous quarter’s 3 percent growth.
The volume of beer sold in Europe rose 7 percent, SABMiller said, topping the median estimate of 10 analysts for unchanged sales on that basis. Sales rose 11 percent in Poland, one of the host countries of Euro 2012. Volume in Romania and the Czech Republic rose, aided by new packaging and products. Western European beer volume was “depressed” by economic turmoil and rainy weather, the brewer said.
“SABMiller posted an excellent growth performance,” with Europe the primary reason that sales exceeded analysts’ predictions, Anthony Bucalo, an analyst at Banco Santander in London, wrote in a research report today. “We would expect consensus estimates to increase 1 percent to 2 percent on this news and we would expect the stock to trade accordingly.”
SABMiller rose as much as 3.3 percent to 2,725 pence, the biggest intraday gain since June 6, and was trading up 2.9 percent at 12:29 p.m. in London. The shares have increased 20 percent this year.
The company, which owns the Grolsch and Peroni brands, is among brewers benefiting from growth in emerging markets as economic turmoil and waning consumer confidence weigh on demand in western Europe and the U.S. SABMiller, formed in South Africa, gets the majority of earnings from Latin America, where it sells beers including Aguila and where sales rose 6 percent.
The company bought Foster’s Group Ltd. last year for A$10.5 billion ($10.9 billion), winning about half the Australian beer market. Volumes on a pro-forma basis slid 13 percent at Foster’s, affected by the termination of some sales licenses, SABMiller said. Mexican brewer Grupo Modelo SAB ended Foster’s license to distribute Corona Extra in the country, SABMiller said in March.
SABMiller is holding its annual shareholders meeting today in Bagshot, England, where Chairman Meyer Kahn will step down and be succeeded by current Chief Executive Officer Graham Mackay. Alan Clark will become chief operating officer today and succeed Mackay as CEO at next year’s annual meeting.
Beer sales in Africa, which represented about 11 percent of revenue last year, rose 9 percent on an organic basis in the quarter. Sales in the Asia-Pacific region rose 7 percent, propelled by a 24 percent increase in India. South African volumes increased 1 percent.
The company’s MillerCoors LLC joint venture in the U.S. with Molson Coors Brewing Co. (TAP) reported sales to retailers that slid 1.4 percent as growing demand for craft-style beers including Blue Moon and Leinenkugel’s, as well as Coors Lite, failed to offset declines in Miller Lite sales.
The volume of soft drinks sold increased 6 percent on an organic basis.
Group organic revenue at constant exchange rates rose 8 percent as the company increased some prices and sold more expensive variants of beer, SAB said.
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