SABMiller’s sales hit hard by plunging emerging market currencies ahead of megabrew deal with AB InBev
Currency headwinds are still causing SABMiller headaches ahead of its £71bn takeover by rival AB InBev, but the brewer is on a tear in emerging markets.
The figures
SABMIller’s revenue was down eight per cent in the three months to the end of December, and nine per cent in the year to date.
On an underlying basis however, the FTSE-listed brewing giant reported seven per cent growth in its net producer revenue, and beverage volume up four per cent over the same period.
Latin America and Africa are growing particularly rapidly, with underlying revenue up by eight and 12 per cent, respectively.
Why it’s interesting
SABMiller has a strong presence in emerging markets, where currencies, which have spent the past few months merrily plunging against the strong dollar, are taking a big bite out of the firm’s results.
The brewer’s continued strong growth in emerging markets, with double-digit sales growth in Africa, will give AB InBev a significant foothold on a new market once the so-called Megabrew takeover is complete. Today the giant has essentially no presence in Africa and little in Latin America.
AB InBev’s £71bn takeover of SAB was formally agreed in November after months of negotiations and extended deadlines from UK regulators, as the brewers ironed out the details of the biggest ever corporate merger in British history.
The deal, which has yet to clear regulatory hurdles, will create the world’s biggest brewing company by far, but is expected to result in thousands of job cuts, closing SABMiller’s London headquarters and de-listing it from the London Stock Exchange.
What they said
Chief executive Alan Clark said:
Our reported results are materially impacted by the significant depreciation of our key operating currencies against the US dollar but the underlying performance we are reporting today reflects the strength of our business and the dedication of our people.