Currency headwinds, excise duty increases and regulatory change helped drain profits out of beer group SABMiller (SAB) last year. But the underlying performance was reasonably robust as faster-growing emerging markets offset declines in Europe and the US.
Net producer revenue, which excludes excise and other taxes, rose 3 per cent year-on-year at constant currencies. Combined with cost efficiencies, this boosted group trading profit by 7 per cent. Latin America, Africa and Asia Pacific were the main engines of growth, reflecting volume increases, higher pricing and better product mix.
Africa was particularly strong and profits there jumped 12 per cent, thanks to higher volumes - notably in lager - and market share gains. Sales in China, where the growing middle classes are increasingly trading up, surged 17 per cent, underpinned by volume growth and a focus on premium brands. Profit in Europe, meanwhile, dipped 15 per cent as sales weakened. Moreover, currency headwinds were particularly acute in South Africa, where the rand depreciated significantly against the US dollar. However, underlying sales there grew 6 per cent, driving profit up 7 per cent.
Management announced a new cost-cutting programme that should deliver $500m (£298m) of savings a year by 2018. That will involve restructuring costs of $350m, $59m of which was incurred last year.
Numis Securities expects pre-tax profit of $5.56bn for 2015, giving EPS of 251¢ (from 242¢ in 2014).
| SABMILLER (SAB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,304p | MARKET VALUE: | £53bn | |
| TOUCH: | 3,303-3,304p | 12-MONTH HIGH: | 3,520p | LOW: 2,650p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 1,638¢* | NET DEBT: | 52% | |
| Year to 31 Mar | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 18.0 | 2.93 | 123 | 68 |
| 2011 | 19.4 | 3.63 | 153 | 81 |
| 2012 | 21.7 | 5.60 | 267 | 91 |
| 2013 | 23.2 | 4.68 | 204 | 101 |
| 2014 | 22.3 | 4.82 | 212 | 105 |
| % change | -4 | +3 | +4 | +4 |
Ex-div: 6 Aug Payment: 15 Aug £1=$1.68 *Includes intangible assets of $27bn, or 1,682¢ share | ||||
