Demand for higher-priced beers helped SABMiller to report a pick-up in quarterly underlying sales despite currency headwinds, a day after it formally received a $100-billion-plus takeover bid from industry leader Anheuser-Busch InBev.
The maker of beers such as Peroni and Grolsch said its performance accelerated in the second quarter, with underlying revenue rising 6 per cent and beverage volume up 2 per cent from the prior year. Fuelled by strong gains in Africa and Latin America, and success in selling more higher-priced drinks, the results are an improvement from a 3 per cent rise in revenue and flat volumes in the first quarter.
Yet SABMiller is being hammered by the weakness of various operating currencies including the Colombian peso, Australian dollar and South African rand.On a reported basis, including the currency impact, revenue fell 12 per cent to $10 billion and earnings before interest, tax and amortisation (Ebita) fell 11 per cent to $2.9 billion in the six months to end-September.
Raw material costs
SABMiller said growth would continue to be driven by developing markets and its focus on more premium drinks, though foreign exchange and higher raw material costs would still weigh on results.
It said it planned to deliver more than $430 million in annual savings by the end of its fiscal year, on 31 March 2016. That is ahead of its original target, for savings of $500 million by 2018.
“The SABMiller board does believe that our strategy would have delivered further value to our shareholders over the long term. However, AB InBev’s offer secures that value today, which is why the board unanimously recommended it,” SABMiller Chief Executive Alan Clark said on a conference call.
The takeover of the company, one of the largest in corporate history, is not expected to close until the second half of 2016, due to various antitrust approvals needed.
In the meantime, SABMiller said it was committed to keeping employees motivated, despite what Clark described as a general tone of uncertainty among staff around future job security.
– (Reuters)
