SABMiller's Emerging Markets Continue to Shine

SABMiller's third-quarter update showed continued strength in emerging markets but the shares remain slightly overvalued

Thomas Mullarkey, CFA 23 January, 2012 | 1:22PM
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SABMiller's (SAB) fiscal third-quarter trading update showed continued strength in emerging markets that more than offset dreary results in the more developed economies of Europe and North America. Overall, the company increased lager volume 3% from the prior year, with revenue per hectoliter climbing 3%. The firm's soft drink volume, which is concentrated in emerging markets, was up 6%. We expect that SABMiller will look to expand its business via selective acquisitions and partnerships and by continuing to invest in the faster-growing regions of Africa, Asia, and South America to drive internal growth. We think that optimizing the company's operations in mature markets will remain a top priority as well.

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Thomas Mullarkey, CFA  is an equity analyst at Morningstar.

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