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http://www.investegate.co.uk/Article.aspx?id=201205240700189931D
Strong growth in Latin America and Africa offset declines in crisis-torn Europe for lager brewer SABMIller last year. Group revenue in the 12 months to March 31st rose 11% to $31,388m from $28,311m the year before. Earnings before interest, tax and amortisation (EBITA) rose 12% to $5,634m from $5,044m a year earlier while adjusted profit before tax climbed 13% to $5,062m from $4,491m. Switzerland-based iron ore group Ferrexpo has assured investors that it continues to operate at full capacity and has seen 'good' demand for its iron ore pellets in the year to date. In the period to April 30th, own ore pellet production was 6.2% higher than the same period in 2011. However, sales were unchanged year-on-year as the average selling price fell 9% "reflecting customer mix and lower market prices", the company said.
In some ways it was curious that SABMiller (SAB) decided to go for a multibillion purchase of Australia’s Fosters brand when the driver of growth in the past year has clearly been of the emerging markets variety, especially in Latin America. It will be interesting to see whether what looks like something of a trophy purchase can pay off near term? Observers will also be looking to see whether the Q4 metrics have been beaten by organic growth. Lager volumes were 3% ahead of the previous year for both the quarter and the year, with soft drinks volumes 7% higher year on year, and 12% up in the final quarter.
SABMiller (SAB), especially in the wake of the recent Foster’s purchase where news as to how the new acquisition is bedding in is eagerly awaited. In fact, at the end of February, Nomura was happy to downgrade the shares on the basis that too much of the benefit of the Australian purchase was already in the price. But with EU zone worries currently to the fore it may be that Jefferies early April price target hike from 2,725p to 2,850p on the back of SAB’s emerging markets growth attractions is the view that wins the day in the wake of the forthcoming trading announcement.
Jefferies has raised its target price for drinks giant SABMiller from 2,725p to 2,850p and maintained its buy rating on the stock. "We remain fundamentally positive on the prospects for SABMiller and continue to highlight the company's strong growth profile driven by its peer-beating 70% profit exposure to emerging markets," the broker said.
Nomura has downgraded its rating on drinks giant SABMiller, saying that while the long-term story still looks appealing, the shares have travelled well. "We are downgrading our rating…after a strong run in the shares which leaves minimal upside to our revised target price (2,700p vs previous 2,600p). Although we still see a strong long-term growth story, we expect some consolidation of the shares at the current level," the broker said. Nevertheless, the increase in the target price reflects the positive impact from the Russian deal with Anadolu Efes, in addition to a more positive foreign exchange movement.
Mark Bowman, Managing Director of SABMiller Africa, said: "This is a tremendous development for Nile Breweries and demonstrates our commitment to further investing in Africa. The Mbarara Brewery will double our country-wide production capacity, create a significant number of jobs in the local economy and provide a secure revenue stream for local farmers. The development is also testament to the success of our local raw material sourcing strategy in Uganda, which has provided a blueprint for other operations across Africa, most recently with the world's first commercial cassava-based beer in Mozambique." The development site is on the banks of the River Rwizi which will provide the water source for the brewery. The project includes state-of-the-art water and effluent treatment and will support SABMiller's group-wide aim to increase its water efficiency.
SABMiller to double capacity in Uganda with construction of new US$80m brewery SABMiller plc [SAB:LSE/SAB:JNB] today announces a US$80m investment in a new brewery at its Ugandan subsidiary, Nile Breweries (NBL), doubling the company's design capacity to 3.6m hectolitres by 2013. The new brewery will be constructed in Mbarara in western Uganda, the fastest-growing regional beer market in the country, with the site chosen as the optimum location to meet the increasing local demand. The development of the new brewery follows a US$29m investment to expand capacity at the existing Jinja site in 2009 and a cumulative US$25.6m investment to develop maltings and effluent treatment plants in 2011, bringing the total capex for the country to over US$130m over the last three years. The total Ugandan beer market is also in significant growth, up 28% for the 12 months to the end of December 2011, driven by strong economic growth and population expansion. Average per capita beer consumption is still relatively low at around 8 litres per year, compared to an average of around 60 litres in South Africa. The Mbarara site will employ around 140 people directly and will brew the bulk of NBL's portfolio of beers, including Nile Special, Club Pilsener, Eagle Extra and Eagle Lager. Eagle beers are currently brewed using sorghum, a locally grown crop sourced from 9,000 smallholder farmers. The new brewery in Mbarara will provide an additional market opportunity for farmers in the Ankole and Kigezi regions, near Mbarara. It is anticipated that a total of 26,000 jobs will be supported in the wider economy[i] by the new brewery.
http://www.investegate.co.uk/Article.aspx?id=201202090700360743X
SABMILLER AND ANADOLU EFES SIGN DEFINITIVE AGREEMENT TO FORM STRATEGIC ALLIANCE SABMiller plc., Anadolu Group (Anadolu Endüstri Holding A.Ş., Yazıcılar Holding A.Ş. and Özilhan Sınai Yatırım A.Ş.), and Anadolu Efes (Anadolu Efes Biracılık ve Malt Sanayii A.Ş.) today announce that they have signed the definitive transaction agreement for the formation of their strategic alliance for Turkey, Russia, the CIS, Central Asia and the Middle East, which was originally announced on 19 October 2011. Completion of the transaction is subject to receipt of the necessary regulatory approvals.
http://www.investegate.co.uk/Article.aspx?id=201201240700160430W
Citigroup upgrades SABMiller from neutral to buy, target price raised from 2,360p to 2,700p.
CONT On 25 November 2011 SABMiller Africa BV disposed of its 20% interest (12% group effective economic interest) in its associate Kenya Breweries Limited to East African Breweries Limited for cash consideration of US$205 million. During November and December 2011 two of SABMiller's African subsidiaries, Zambian Breweries plc in Zambia and Nile Breweries Ltd in Uganda, launched rights issues to raise approximately US$70 million each, and in January 2012 the group's subsidiary in Mozambique, Cervejas de Moçambique SARL, launched a rights issue to raise approximately US$40 million, in each case primarily to fund recently announced capacity expansions. The rights issues in Uganda and Mozambique remain open, and, following closing of the rights issue in Zambia, SABMiller Africa BV's interest remains unchanged at 87% (group effective economic interest unchanged at 54%). With effect from 1 January 2012, the group and Castel implemented a number of organisation changes in their African operations as part of their strategic alliance agreement. The changes involve the combination of the operational management of the Castel and SABMiller businesses in Nigeria and Angola, with the Nigerian businesses being managed in future by SABMiller, and the Angolan businesses being managed by Castel. On 13 January 2012, the group completed the acquisition from Coca-Cola Amatil Limited (CCA) of CCA's 50% interest in the group's Australian joint venture, Pacific Beverages (Pte) Limited, for cash consideration of A$326 million. Pacific Beverages is now a wholly owned subsidiary of SABMiller. On 17 January 2012, the group successfully completed a US$7,000 million bond issue in four tranches: US$1,000 million 1.85% notes due 2015, US$2,000 million 2.45% notes due 2017, US$2,500 million 3.75% notes due 2022 and US$1,500 million 4.95% notes due 2042. The net proceeds were used to repay in part the bank borrowing incurred to finance the acquisition of Foster's. In December 2011 the group announced the appointment of Ari Mervis (who had been Managing Director, SABMiller Asia since 2007) as Managing Director, SABMiller Asia Pacific and Chief Executive Officer of Foster's, with effect from 16 December 2011. The group also announced the appointment of Harald Harvey as Managing Director Asia, with effect from 1 February 2012. Harald will report to Ari Mervis and will oversee SABMiller's businesses in India and Vietnam, and its ongoing regional business development and export operations, as well as providing support to CR Snow.
CONT On 16 December 2011, the group completed the acquisition of Foster's in Australia for a total cash consideration of approximately A$10,483 million (approximately US$10,465 million), and the Asia segment was renamed the Asia Pacific segment. Volumes for Foster's are not included in third quarter group or divisional results. On a pro forma basis, Foster's volumes for the quarter ended 31 December 2011 were 6% below the same period in the prior year. The beer category overall is estimated to have declined at a slightly slower rate in the quarter. In South Africa, in a challenging economic environment, lager volumes grew 2%. Growth was driven largely by momentum from our core power brands, particularly Castle Lite and Castle Lager, as we continued to make targeted investments in our portfolio and focused on improving retail execution and customer service. Soft drinks volumes increased 1% despite tough trading conditions and cycling strong growth of 9% in the comparative quarter. The performance was buoyed by growth in two litre PET and immediate consumption packs. On 19 October 2011, the group announced its intention to form a strategic alliance with Anadolu Efes. The group intends to transfer its Russian and Ukrainian beer business to Anadolu Efes, and to take a 24% equity stake in the enlarged group, which will be the vehicle for both groups' investments in Turkey, Russia, the CIS, Central Asia and the Middle East. The alliance will result in the enlarged Anadolu Efes strengthening its market position to become the number two brewer, in value terms, in the large Russian beer market. It is already the leading beverage producer in Turkey, with 89% of the beer market and a 69% share of the carbonated soft drinks market, and it has leading market positions in the growth beer markets of Kazakhstan, Moldova and Georgia. Subject to finalisation of the definitive legal agreements and relevant regulatory approvals, the group expects to complete the transaction before the end of the financial year ending 31 March 2012. On 4 November 2011, East African Breweries Limited launched a public offer through the Dar-es-Salaam Stock Exchange for the sale of its 20% interest in Tanzania Breweries Ltd, the group's subsidiary in Tanzania. The offer closed on 25 November 2011. SABMiller Africa BV applied for all of the shares offered, but the offer was substantially oversubscribed, and after priority allocations were made to applicants who were Tanzanian residents or East African residents in accordance with local securities laws, SABMiller Africa BV was allocated shares representing an additional 4.72% of Tanzania Breweries Limited, increasing its interest to 58% (36% group effective economic interest).
CONT.Europe's lager volumes were down 2%. Beer markets remain affected by intense competition, which continued negatively to impact mix, as well as fragile economic conditions. Volumes in Poland and Romania were both down by 6% reflecting the impact of planned de-stocking of wholesaler and distributor inventories as well as continuing competition in pricing and promotions. In the Czech Republic, domestic volumes grew by 2% reflecting the continued strong performance of brand and package innovations. Volumes were down 6% in Russia in a declining beer market. Strong growth continued in Ukraine where volumes increased by 20%. MillerCoors domestic sales to retailers (STRs) declined 3.3% in the quarter on a trading day adjusted basis. Premium light brand volumes fell by low single digits with Miller Lite down mid single digits and a low single digit decline for Coors Light. The Tenth and Blake division saw double digit growth driven by the success of craft brands and beer merchants' programmes. Below premium volumes were down mid single digits. Domestic sales to wholesalers (STWs) were down 1.6% in the quarter compared with the prior year. Lager volumes in Africa grew by 11%, despite cycling strong comparatives (third quarter volumes grew by 12% last year) and capacity constraints in a number of markets. In Tanzania lager volumes grew by 13% driven by both solid growth in premium brands and the strengthening of mainstream brands due to expanded and intensified sales and distribution. Continued extension of market penetration grew lager volumes in Uganda, up 17%. In Zambia lager volumes increased 16% underpinned by robust growth of our mainstream portfolio against a backdrop of strong economic conditions. Lager volumes in Mozambique grew by 8% benefiting from the launch of the Impala brand, a cassava based beer, and strong growth in the north of the country. In Zimbabwe our associate delivered lager volume growth of 19% supported by further improved product availability. Our associate Castel grew lager volumes by 9% with a strong performance in Cameroon and the Democratic Republic of Congo. Soft drinks volumes grew by 9% driven by solid performances from South Sudan, Ghana, Zimbabwe, and from our associate Castel. In Asia Pacific lager volumes grew by 7% on an organic basis. Volumes in China grew 5%, despite cycling a strong comparative period. Including the impact of regional acquisitions, China's volumes were up 11%. In India volumes were up 21% benefitting from the lifting of trading restrictions in Andhra Pradesh, which had constrained volumes in the same quarter of the prior year, as well as good growth in the focus states of Karnataka and Haryana.
SABMiller plc Trading Update SABMiller plc today issues its interim management statement for the group's third quarter ended 31 December 2011. The calculation of the growth rates in this update excludes the effects of acquisitions and disposals on volumes and revenues, unless otherwise stated. Lager volumes for the third quarter were 3% ahead of the prior year with good growth in all our regions with the exception of Europe and North America. Soft drinks volumes grew by 6% for the quarter with growth across all regions. Organic, constant currency group revenue grew 7% for the quarter. Group revenue per hectolitre grew 3% on the same basis supported principally by price benefits, with mix gains achieved in all regions except Europe. Overall, financial performance for the quarter was in line with our expectations. In Latin America, lager volumes continued to show robust growth with volumes up 8%. Colombia's lager volumes increased by 6% with premium lager growth in excess of 30% due to successful seasonal offerings and campaigns. Continuing price restraint, improved weather and economic growth also contributed. In Peru lager volumes grew by 9% as consumers traded up from the informal alcohol sector supported by the national roll-out of the renovated Pilsen Callao brand and successful Cusqueña campaigns. Ecuador's lager volumes increased by 15% supported by the implementation of the direct service model and a focus on festivals and events which encouraged consumers to move into the beer category. In Central America lager volumes were up 6% with a particularly strong performance in El Salvador following the introduction of larger packs as part of our "affordability strategy". Soft drinks volumes in Latin America grew by 8%, with our non-alcoholic malt brands up 21% and now rolled out into Central America.
http://www.investegate.co.uk/Article.aspx?id=201201190700117973V
Geoffrey Bible, a non-executive of drinks giant SAB Miller, has made his second purchase in the last fortnight, buying up a total of 8,950 shares in the firm. Bible, 74, bought 1,950 shares at £23.157 each on 4 January, and the other 7,000 at £22.7208. The stock is certainly appealing at the moment, with the share price up 4.52% during 2011 and 5.34% in the last month.
Nomura has reiterated its buy rating on drinks giant SABMiller, saying that that it expects the Foster's business to get off to a strong start following the completion of the acquisition last Friday. "We believe the company could look ‘smart’ in a year’s time, entering the Australia beer market at the bottom of the cycle during a period of market volatility," the broker said. "SABMiller should also pick up the summer trade plus easy comps in early calendar 2012 owing to poor weather, ensuring a good start for the acquisition." A 2,500p target price is given.
A SABMiller director has invested £164,766 in the beverages giant today, the same day it completed the acquisition of Australian brewer Foster’s. Geoffrey Bible, who joined the board of SABMiller in 2002 after the completion of the Miller Brewing Company transaction, acquired some 7,600 ordinary shares today at a price of 2,167.97p per share. He is currently part of the nomination committee on the board. SABMiller announced this morning that it had completed the acquisition of all of the shares in Foster's following the implementation of the Scheme of Arrangement on Friday.
Exane BNP Paribas upgrades SABMiller from underperform to neutral, target price raised from 1936p to 2300p.
Approval of Scheme of Arrangement for Acquisition of Foster's Group Limited SABMiller plc ("SABMiller") is pleased to announce that, following the approval by Foster's Group Limited ("Foster's") shareholders yesterday, the Supreme Court of Victoria has today approved the Scheme of Arrangement pursuant to which SABMiller will acquire all of the shares in Foster's. The Scheme will be implemented on 16 December 2011.
http://www.investegate.co.uk/Article.aspx?id=201112020700152231T
Lesley Knox, a non-executive director at SABMiller, the multi-national lager brewing company, has snapped up £63,225-worth of shares in the firm.
SABMiller (SAB) has announced a strategic alliance with Turkish beverage company Anadolu Efes. In exchange for receiving a 24% equity stake in Anadolu the brewer will transfer its Russian and Ukrainian beer business to its new partner. The firms believe that this will establish them as the second largest player, in terms of value, in the Russian beer market. Separately, SAB reported 3% growth in larger volumes for the sixth months ended 30th September, with strong growth in Latin American and Africa, but weakness in North America and Europe. The shares inched up 9.5p to 2,270.5p.