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SABMiller cuts target for Europe growth

World number two brewer SABMiller Plc cut its beer volume growth target for its European region due to the economic downturn and the rapid maturation of beer markets such as Poland and the Czech Republic.

The London-based brewer of Grolsch, Pilsner Urquell, Peroni and Tyksie said it was cutting its annual volume growth target to 2-4% over the medium term from 4-6% previously, but held its revenue and profit margin targets unchanged.

“This reflects the slowdown in the economies and the maturity of most of our markets,” managing director of SABMiller Europe Alan Clark said after an investor seminar on Thursday.

He added that he expects the group's European beer volumes to be flat in the current year to March 2010 in an overall market which he sees as declining, resulting in market share gains for the group. The following year he expects growth to pick up and its volumes to rise in line with its new target.

The beer maker's European region earns 22% of group profits with number one positions in Poland, the Czech Republic, and Slovakia, while it also has operations in Russia, Romania, Hungary, Italy the Netherlands and Canary Island.

SABMiller held its European medium term target to increase annual revenue per hectoliter by 2% to 4% and EBIT (earnings before interest and tax) margins to rise 30 to 50 basis points each year.

After recent strong growth, the group's European region showed flat underlying beer volumes in its year to March 2009 with underlying operating profits down five% and margins hit by higher raw material and distribution costs. (Reuters)