SABMiller leads the field as volumes grow

Better results in South Africa helped SABMiller, the world's second-biggest brewer, to report a resumption of quarterly volume growth and outperform its global peers.

The company's share price rose more than 4% on the JSE yesterday after a trading update that was stronger than analysts expected.

Sales decline slowed in Europe and North America and the brewer steered clear of the emerging-market slowdown that has affected other consumer-goods companies, including Unilever and Danone.

Liquor makers Diageo and Remy Cointreau yesterday posted revenue statements that missed estimates because growth in developing regions was weaker than predicted.

"SAB has defied the more extreme emerging-market sceptics," Eddy Hargreaves, an analyst at Canaccord Genuity, in London, said.

"Improved execution, especially in South Africa, and launches in a number of regions, drove the quarter's performance."

SABMiller, with its primary listing in the UK, rose by as much as 5.1% in London trading, the steepest gain since November 2012.

Conditions in both Europe and North America made possible "a modest improvement" in the second quarter, SABMiller CEO Alan Clark said.

Sales to wholesalers at the brewer's Miller Coors unit, in the US, slid 1.5% in the second quarter, an improvement on the first quarter's 5.3% drop.

Declines in Coors Light and Miller Lite were partially offset by brands such as Redd's and Leinenkugel shandy, the company said.

SABMiller said it achieved "a strong performance" in Africa, where volume rose 9% in the first half, and "good progress" in Latin America, South Africa and the Asia-Pacific region. The brewer gets the largest proportion of its sales in emerging markets compared with its main rivals, helping it to compensate for declining beer sales in Europe and the US.

Volume rose 1% in Latin America, SABMiller's biggest region, in line with estimates. Civil unrest weighed on improvements in Colombia, but sales in Peru returned to growth in the second quarter after tax increases.

Diageo said it saw "headwinds" in some of the faster-growing economies and missed analysts' estimates for sales in both Asia and the Africa, Eastern Europe and Turkey region.

"Emerging market growth is decelerating fast, driven by a mix of weak demand and destocking," it said.

Diageo's total organic revenue in the three months to the end of September rose 3%.

The distiller said it expects net sales in Europe to show a "low single-digit" decline for the full year.

Remy reported a 3.6% decline in first-half sales.