SABMiller sales see solid boost in 2015 but currency headwinds continue to eat up revenue

Francesca Washtell
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SABMiller agreed to sell London-based brewer Meantime to Japan's Asahi this week if the megabrew deal goes through (Source: Getty)

SABMiller has posted healthy organic sales growth in its fourth quarter and full-year 2015 results, but the British drinks giant has suffered as a result of continuing currency headwinds against the dollar.

The figures

SABMiller has posted underlying growth, with organic sales growing by five per cent for the full-year to 31 March 2016. However, when you take into account currency fluctuations, sales were down eight per cent, the company said today in a trading statement.

The British brewing giant posted a growth in volumes of two per cent for the full year and four per cent in the final quarter.

The firm also registered a particularly strong volume performance in Latin America - boosted by growth in Colombia of eight per cent throughout the year - and Africa, excluding South Africa, where volumes were up 11 per cent.

However, currency headwinds struck hard against the UK brewing giant's results, as they did in the half-year results to 30 September. On a reported basis group revenues declined by five per cent in the fourth quarter and by eight per cent for the full year due to the adverse impacts of currency headwinds against the US dollar.

For the full-year, premium lager brand volume growth of six per cent, supported by global larger brands volume growth of nine per cent.

"We have seen increasing momentum in lager volumes over the year with growth of three per cent in the second half and fourth quarter. Subsidiary lager volumes grew by six per cent in the second half of the year," SABMiller said.

SABMiller SABMiller | mobile image

Why it's interesting

SABMiller's sales growth, especially in key areas such as the premium lager segment, show why it is an appetising company for AB InBev, with which SAB is in the process of tying up the so-called "megabrew" deal. Agreed last October for £71bn, AB InBev's takeover of the SABMiller will be the largest tie-up of a British company in corporate history.

Three of SAB's beer brands - Peroni, Grolsch and Meantime (which was only acquired in 2015) - were sold off earlier this week in an effort to assuage European competitors. The brands will be sold to Asahi only if the megabrew deal completes. AB InBev has also taken a number of other measures to help push the deal through.

Last week, in attempt to woo South African regulators, the brewer agreed to ensure jobs for five years and pay R1bn (£48m) in a package of commitments that included support to small-holder farmers, local enterprise development and manufacturing, as well as investments in green and water-saving technologies.

AB InBev embarked on a jumbo euro bond deal in mid-March, offering a six-tranche, euro-dominated deal with maturities ranging from four to 20 years in length at a minimum of $1bn each in size.

What SABMiller said

Chief executive Alan Clark said:

We have had a strong year and increased momentum in the second half across all our regions notwithstanding economic volatility and the potential distraction of the AB InBev offer.

Our results reflect our strategy to expand the beer category and to grow and premiumise our diverse brand portfolios.

In short

Although the firm has been hit by currency headwinds against the dollar, sales growth was positive for the British drinks giant in both the fourth quarter and throughout 2015, proving it's still an appetising target for AB InBev.

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