| Tue 13 Mar 2007, 9:01 | | SAB - SABMiller Plc - Termination of Amstel Brand |
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SAB
SOSAB
SAB - SABMiller Plc - Termination of Amstel Brand License
SABMiller Plc
JSE ALPHA CODE: SAB
ISSUER CODE: SOSAB
ISIN CODE: GB0004835483
Ref 06/2007
13 March 2007
TERMINATION OF AMSTEL BRAND LICENSE
SABMiller`s subsidiary, The South African Breweries Limited, ("SAB" or "the
company"), has been given notice by Heineken that it is terminating SAB`s
licence to manufacture and distribute Amstel Lager with immediate effect.
This move follows a private arbitration held recently to determine whether
Heineken was entitled to terminate the Amstel trade mark licence. The
arbitration panel found that SABMiller`s transaction in South America in 2005
constituted a material change in shareholding of the SABMiller group which
could be regarded as inimical to the interests of the Heineken group, thus
giving rise to the right to terminate the licence.
SAB will consequently move to bolster its competitive position in the South
African premium segment by drawing upon SABMiller`s global portfolio of
brands and the wealth of experience and expertise it has built up in the
market. The company is already pursuing a number of initiatives which will
mitigate the impact of the licence termination, including extending SAB`s
reach into direct distribution and broadening its premium offerings. The bulk
of Amstel`s sales, like most beer sales in South Africa, are in returnable
bottles, requiring a capability which SAB is uniquely positioned to provide.
Sales volumes of Amstel currently represent approximately 2.3mhl or 9% of
beer sales volumes in South Africa. The sales of the Amstel brand will
constitute approximately US$300m of SA Beverages` revenues for the year
ending 31 March 2007 based on an average exchange rate of ZAR7.03 = US$1.00.
SABMiller estimates that any impact on the group`s earnings in the current
financial year will be immaterial.
For the 2008 financial year, and going forward, the company expects to
mitigate the financial impact on its earnings of the Amstel licence
termination through the actions and initiatives referred to above.
Nevertheless there will still be a negative financial impact. In the current
financial year, on a pro-forma basis, SABMiller expects that this would have
been some US$80m of EBITA, equivalent to pro-forma earnings of approximately
3.0 US cents per SABMiller share. SABMiller would expect the impact in the
next financial year to be of the same order.
Commenting on the termination of the licence, Graham Mackay, SABMiller chief
executive, said:
"Whilst we are surprised by the outcome of the arbitration, our consumers
remain our first priority and we are confident of our continuing ability to
provide them with a comprehensive choice of superior and differentiated
brands, backed by our strong marketing and distribution capabilities."
Ends
Notes to editors:
About SABMiller plc
SABMiller plc is one of the world`s largest brewers with brewing interests or
distribution agreements in over 60 countries across six continents. The
group`s brands include premium international beers such as Miller Genuine
Draft, Peroni Nastro Azzurro and Pilsner Urquell, as well as an exceptional
range of market leading local brands. Outside the USA, SABMiller plc is also
one of the largest bottlers of Coca-Cola products in the world.
In the year ended 31 March 2006, the group reported US$15,307 million in
revenue and profit before tax of $2,453 million. SABMiller plc is listed on
the London and Johannesburg stock exchanges.
This announcement can be found on www.sabmiller.com
Enquiries
SABMiller plc
Tel: +44 20 7659 0100
Sue Clark
Director of Corporate Affairs
Tel: +44 20 7659 0184
Gary Leibowitz
Senior VP, Investor Relations
Tel: +44 20 7659 0119
Nigel Fairbrass
Head of Media Relations
Tel: +44 20 7659 0105
This announcement does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire securities of SABMiller plc (the
"Company") or any of its affiliates in any jurisdiction or an inducement to
enter into investment activity.
This document includes "forward-looking statements". These statements may
contain the words "anticipate", "believe", "intend", "estimate", "expect" and
words of similar meaning. All statements other than statements of historical
facts included in this announcement, including, without limitation, those
regarding the Company`s financial position, business strategy, plans and
objectives of management for future operations (including development plans
and objectives relating to the Company`s products and services) are forward-
looking statements. These forward-looking statements involve known and
unknown risks, uncertainties and other important factors that could cause the
actual results, performance or achievements of the Company to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. These forward-looking statements
are based on numerous assumptions regarding the Company`s present and future
business strategies and the environment in which the Company will operate in
the future. These forward-looking statements speak only as at the date of
this announcement. The Company expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward-looking
statements contained in this announcement to reflect any change in the
Company`s expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
Any information contained in this announcement on the price at which the
Company`s securities have been bought or sold in the past, or on the yield on
such securities, should not be relied upon as a guide to future performance.
Date: 13/03/2007 09:01:01 Produced by the JSE SENS Department.
