SABMiller posts better than expected European volumes

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SABMiller has reported a three per cent increase lager volume in the third quarter, driven by better than expected volume in Europe and emerging markets.
The UK-listed brewer continued to benefit from its strong presence in emerging markets. Lager volumes were up 12 per cent on an organic basis in Asia, and in Africa quarterly lager volumes rose 12 per cent, boosted by the renewal of business activity in Zimbabwe.
The only negative point on the emerging market map came from Latin America, where lager volumes were down one per cent. Colombia was largely responsible for the decline as the country recorded a five per cent fall in lager volume, due to a new emergency sales tax on beer and exceptional bad weather.
SABMiller said: “Heavy rain and flooding throughout the quarter in Colombia caused large scale damage to housing and infrastructure, impacting consumer demand and product availability, and culminated in a national state of emergency in December.”
It is into this environment that Karl Lippert, takes over as president of SABMiller Latin America. The former president of Colombia-based brewery Bavaria S.A. replaces Barry Smith, who retired in December.
Meanwhile, in Europe, sales held steady in comparison to last year, thanks to continued strong growth in the UK and significantly higher volumes in the Ukraine. This result was well ahead of analyst expectations.
“Europe’s performance was blow-out,” said Simon Hales, an analyst at Evolution Securities in an investor note.
Meanwhile, in the US, where SABMiller operates the MillerCoors joint venture with Molson Coors, volumes continued to struggle.
The company said: “MillerCoors domestic sales to retailers in the quarter were down 2.5 per cent against the prior year, in an industry and economic environment which remain testing.”
Alongside the main brewing business, SABMiller said its soft drinks performed well in the quarter, with organic volumes up 5 per cent in the quarter.
Although the overall results for Q3 beat market analyst expectations, SABMiller said the group’s financial performance was in line with its expectations.