Beer volume rose 1 percent on a so-called organic basis in the three months through December, the company said in a statement today. That missed the 2 percent median estimate of 12 analysts surveyed by Bloomberg News.
“Beer volumes were a little softer than we expected in Europe, Africa and South Africa,” Mike Gibbs, an analyst at JPMorgan Cazenove in London wrote in a note, though revenue growth was “solid across all regions” excluding Europe.
SABMiller has more exposure than competitors to developing markets, where economies and demand for beer are growing at a faster pace than in western Europe and the U.S. The company’s first-half profit beat estimates on growth in regions including Latin America and Africa, offsetting declines in Europe, and it said in November that emerging markets would continue to drive improvements, even as other consumer-goods companies report a slowdown in sales in regions from India to China.
The stock fell 2.3 percent to 3,022.50 pence at 8:01 a.m. in London.
“Growth in the third quarter was driven by our emerging market businesses,” Chief Executive Officer Alan Clark said in the statement. “This was in spite of continued weakness in consumer sentiment, which particularly impacted our European and North American businesses.”
Beer volume in Africa rose 6 percent, less than a 9 percent anticipated improvement, and South African lager sales slid 2 percent amid a “weaker economic and consumer environment.” Political unrest in Mozambique and “soft economic conditions” in Uganda and Zimbabwe offset improvements in Tanzania, Zambia and Nigeria, SABMiller said.
Lager volumes in Europe plunged 5 percent, more than the 1 percent decline estimated, as weak consumer confidence and high competition in Poland, Italy and Romania offset an improvement in the U.K. Sales to retailers at its MillerCoors LLC U.S. unit slid 1.9 percent, in line with estimates, led by declines in Coors Light and Miller Lite purchases.
Latin American beer volume rose 2 percent, in line with estimates, aided by sales of Aguila Light in Colombia and Pilsen Callao in Peru. It’s the largest region for the company, representing about a third of sales last year.
Net producer revenue rose 4 percent, the company said, missing a median estimate for a 5 percent increase. The company is seeking to sell more expensive beer by innovating with new products and packaging in emerging markets as profitability wanes in the U.S. and Europe.
SABMiller’s “underlying financial performance” is in line with expectations, it said, though reported results were adversely affected by currencies including the South African rand, Australian dollar and Colombian peso depreciating against the dollar.
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