SA News • Wed, Jan. 21
- 2015 is likely to see even more rumor, speculation, and actual deals in the beer space as global players seek scale, operating leverage, and exposure to volume growth markets.
- SABMiller is seeing a lull in organic volume growth, but the company is well-placed to benefit from long-term consumer spending growth in Asia, Africa, and Latin America.
- SABMiller seems fairly valued today on its own merits (assuming mid-single digit revenue growth and further FCF leverage), but M&A activity could drive more value either as buyer or seller.
- The deal between Coca-Cola and SABMiller creates a bottling powerhouse in Africa.
- Soft drinks becoming more and more important to SABMiller.
- The potential of the soft drinks market in Africa is enormous.
- Expect more bottling deals between Coke and SABMiller across the continent.
Anheuser-Busch And SABMiller Merger: Don't Count On It
- The company currently carries $49.1 billion in debt, as a result of its 2008 bid to buy St. Louis-based Anheuser-Busch.
- It is expected that if the company would have to take on $60 billion in debt to buy SABMiller, it would make Anheuser-Busch a company with $100 billion in debt.
- Furthermore, anti-trust regulators would likely require significant shedding of SABMiller assets before such a deal ever materializes.
SABMiller Pretty Foamy, But With Great Emerging Market Leverage
- SABMiller's volume in FY2014 was a little sluggish, but margins grew more than expected and underlying cash flow growth was solid.
- SABMiller offers great emerging market exposure, with a particular focus on markets that currently under-consume beer on a per capita basis.
- M&A is a potential source of incremental value creation for SABMiller, but it's hard to call the shares cheap when double-digit FCF growth seems already priced in.
- Altria is SABMiller's largest shareholder, holding close to 27% of its equity.
- SABMiller is the world's second-largest beer company, having the largest exposure within its industry to high-growth markets.
- Its weight on Altria's earnings has increased over the past few years, and should continue on the same path going forward.
- Therefore, Altria's dividend growth is also supported by SABMiller's fundamentals, giving it additional flexibility on Altria's shareholder remuneration policy.
Key Points Of The SABMiller European Division ConferenceHardy Hunter • Feb. 13, 2014
There are no Transcripts on SBMRY.
Wed, Jan. 21, 6:51 AM
- SABMiller (OTCPK:SBMRY) reports sales rose 4% in FQ3 ending December 31.
- The company saw the highest growth rates in Africa and Latin America.
- Beer volume fell 1% during the quarter, led by a drop in China.
- Demand for Coors Light in North America was off in the low single digits. Blue Moon and the Leinekugel portfolio were level.
- Soft drink volume was up 4% during the period.
- SABMiller trading update
Thu, Jan. 8, 10:01 AM
- Beer stocks are getting some early run after Constellation Brands (STZ +4.8%) reports strong volume numbers for Q4.
- The company sells Corona Extra, Corona Light, Modelo Especial, Negra Modelo, and Pacifico in the U.S.
- Channel checks in the industry have tipped off an improvement in demand for the U.S. late in Q4.
- Gainers: Anheuser-Busch InBev (NYSE:BUD) +2.5%, Molson Coors (NYSE:TAP) +2.4%, SABMiller (OTCPK:SBMRY) +2.5%, Boston Beer (NYSE:SM) +1.0%.
- Related: Retail picks tied to lower gas prices.
Dec. 11, 2014, 8:08 AM
- Morgan Stanley thinks beer producers could see increased demand in the U.S. due to improved consumer spending trends.
- Lower gas prices and rising employment provide the right backdrop for an increase in beer purchasing, according to MS.
- On the global front, Euromonitor forecasts global beer sales will rise 2.6% to $740B by 2018 - compared to the sluggish 1.3% average growth pace seen in the industry since 2004.
- Beer stocks: BUD, OTCPK:SBMRY, TAP, OTCQX:HEINY, SAM, BREW, STZ.
Nov. 27, 2014, 4:52 AM
- SABMiller (OTCPK:SBMRY), Coca-Cola (NYSE:KO) and Gutsche Family Investments are merging their soft drinks bottling operations in South and East Africa to create the continent’s largest bottling operation with sales of $2.9B.
- "The opportunity is significant, with favorable demographics and economic development pointing to excellent growth prospects," says SABMiller CEO Alan Clark.
- Headquartered in South Africa, the new company will be 57% owned by the SABMiller, 31.7% by GFI and 11.3% owned by Coca-Cola.
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Oct. 14, 2014, 4:03 AM
- SABMiller's (OTCPK:SBMRF) FH1 net producer revenue (NPR) grew 5% on an underlying basis vs forecasts of +5.5%, while NPR per hectolitre rose 3%.
- The volume of beer sold dropped 1% vs expectations of +1%.
- Q2 NPR increased 3% and NPR per hectolitre grew 4%.
- SABMiller's African and Latin American businesses contributed to revenue growth, although currency movements and weaker Q2 trading conditions in China and Australia hurt the brewer's performance.
- SABMiller's shares are -0.55% in London. (PR)
Oct. 11, 2014, 11:31 AM
- The legalization of marijuana in Colorado and Washington hasn't had a negative impact on demand for beer as some analysts warned, notes Sanford Bernstein analyst Trevor Stirling.
- Data from the investment firm found that beer drinking on a per-capita basis increased by 50 bps in the ten states where medicinal marijuana is legal.
- The finding starkly contradicts an earlier study by academics which highlighted a crowding-out impact on the beer budget of consumers living where marijuana is legal.
- Stirling thinks the beer vs marijuana decision for consumers isn't an either/or proposition.
- Beer stocks: BUD, OTCPK:SBMRY, TAP, OTCQX:HEINY, SAM, BREW, STZ.
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Sep. 23, 2014, 9:12 AM
- Fitch Ratings says an acquisition of SABMiller (OTCPK:SBMRY) by Anheuser-Busch InBev (NYSE:BUD) that included equity funding would help the combined beer giant keep an investment grade rating.
- The ratings agency notes the tie-up would lead to only a few divestments due to the relatively limited overlap of beer brands.
- Currency risk would be increased for the brewer, notes Fitch, as a majority of the incoming cash comes in from Latin America, Africa, and eastern Europe - while the debit is denominated in euros and dollars.
Sep. 22, 2014, 9:44 AM
- The buzz from bankers at the LPC loan conference in New York City is that financing for a massive M&A deal shouldn't be a major issue in the current environment.
- The development coincides with ongoing speculation that Anheuser-Busch InBev (NYSE:BUD) is lining up an acquisition play for beer rival SABMiller (OTCPK:SBMRY).
- A bridge loan of $75B-$80B by A-B would be needed to swing the deal, according to some bankers.
Sep. 19, 2014, 9:09 AM
- If a mega-merger occurs inside the beer industry, it could advance the debate on the corporate tax law structure in the U.S., reasons WSJ's Ronald Barusch.
- Though Anheuser-Busch InBev (NYSE:BUD), Heineken (OTCQX:HEINY), and SABMiller (OTCPK:SBMRY) are all domiciled outside of the U.S., and any combination wouldn't involve a tax inversion move, Barush notes the heavy influence of the brewers in the U.S. will highlight again the advantage of setting up headquarters outside U.S.borders for global sellers.
Sep. 18, 2014, 8:16 AM
- It's rumor time again for SodaStream (NASDAQ:SODA).
- The Independent reports that SABMiller (OTCPK:SBMRY) and KKR could be interested in making a bid for the home carbonation system maker.
- Earlier this week, the buzz had SodaStream getting bought out by a British P-E firm at $40. This time around, a deal price of $46 is getting bandied around.
- SODA +3.4% premarket.
SBMRY vs. ETF Alternatives
SABMiller is one of the world's leading brewers with more than 200 beer brands and some 70,000 employees in over 75 countries. We also have growing businesses in soft drinks and we are one of the world's largest bottlers of Coca-Cola products.
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