Johannesburg - Global brewing giant SABMiller plc on Thursday reported a 4% decline in adjusted headline earnings per share to US137.5c for the year ended March 2009 from US143.1c a year ago.
In UK currency EPS were up 4% to 79.7p, while in South African rands, EPS were up 19% to R1 218.6.
The board has recommended a final dividend of US42.0c per share, which will be paid to shareholders on August 29 2009. This brings the total dividend to US58.0c, unchanged from the prior year.
Group revenue was up 6% at $25.30bn and profit before tax was down 9% at $2.958bn.
Lager volumes were up 2% to 210 million hectolitres (hl), with organic lager volumes level with the prior year despite weakened consumer demand. Organic soft drinks volumes were up 5%. The group reported organic, constant currency group revenue growth of 9%, benefiting from strong pricing.
Aggregated beverage volumes were up 10% to 359 million hl with aggregated reported lager volumes up 11% to 292 million hl including acquisitions in Europe, Africa and Asia as well as the inclusion of 100% of volumes from MillerCoors. A 9% increase in group revenue for the year on an organic, constant currency basis reflected stronger pricing in most of the group's markets.
The group said it delivered resilient underlying results for the year against the difficult backdrop of the global economic downturn.
There was a slight rise in organic lager volumes in the first half, despite price increases, challenging comparatives and slowing growth across a number of markets. Demand weakened in the second half, particularly in the last quarter, and organic lager volumes declined 1% as the effects of the financial crisis began to be felt more directly by consumers. Organic lager volumes for the full year were level with the prior year.
"Many of our businesses achieved market share gains reflecting the strength of our brands and our local marketing and sales capabilities," it said.
Effective revenue and cost management delivered organic, constant currency EBITA growth of 5% with better underlying performance in the second half as cost trends improved, particularly in Latin America, and the contribution from soft drinks strengthened, it said.
However, on a reported basis, the second half results deteriorated year on year as a result of the significant weakening of SABMiller's major operating currencies against the US dollar leaving reported EBITA of $4.129bn - flat for the full year.
EBITA margin declined 110 basis points (bps) on the prior year to 16.3% reflecting continued increases in input costs, despite robust pricing and initiatives to reduce fixed costs across the group.
During the second half of the year, the group re-evaluated spending in light of the changing consumer environment and is selectively maintaining investment behind its brands and operations to support
future growth.
Despite EBITA being level with the prior year, adjusted earnings and adjusted earnings per share declined by 4% due to a significant increase in net finance costs which was partly offset by a lower effective tax rate of 30.2%.
Net debt at the year end was lower than at the prior year end, despite significant capital investment especially in the first half year. The group's leverage remains at a healthy level compared to its sector, with gearing of 54.1%.
During the year the group continued to expand its global portfolio, completing the acquisition of brewing companies in the Ukraine, Russia and Nigeria as well as taking full ownership of our Vietnamese associate. It also acquired water businesses in Ghana and Nigeria.
Water interests in Colombia and a soft drinks business in Bolivia were sold, realising a profit on disposal.
Following the global economic slowdown in the second half of the year, some of the group's operations in Latin America and Europe are being integrated and restructured resulting in charges of $82m for the year.
Restructuring in these regions is expected to provide pre tax benefits of approximately $37m per annum from the 2011 financial year. In addition, integration and restructuring relating to MillerCoors has resulted in charges of $61m during the year.
Looking ahead, the group said it delivered resilient underlying results, despite the strong headwinds. Global economic conditions and consumer demand weakened during the year and there remains little visibility as to the timing of any recovery.
"In the current year we expect commodity cost pressures to continue, given existing contractual arrangements. In addition, the currency translation effect of the stronger dollar will impact our reported results.
"However, the group remains confident in its medium term prospects.We are taking appropriate short-term mitigating actions in certain countries to reduce costs. Investment plans have been reviewed and curtailed where necessary in the light of expected economic conditions, but we continue to invest selectively to support growth.
"The group remains in a strong financial position, and we are confident that we will continue to benefit from the strength of our brands and our globally diversified and well balanced portfolio of businesses," t concluded.
- I-Net Bridge