UPDATE: SABMiller Sales Boosted By Asia, Africa Volumes

SABMiller PLC (SBMRY), the FTSE 100 brewer pursuing a multi-billion dollar takeover of Australia's Foster's Group Ltd. (FGL.AU), Thursday posted a rise in first-quarter sales on higher volumes, driven by robust demand in emerging markets.

SABMiller, the world's second-biggest brewer by volume after Anheuser-Busch InBev NV (ABI.BT), benefited from a strong performance in Asia and Africa, where socio-economic improvement, rising incomes and a thirst for Western lifestyles are fuelling consumption. That helped offset sluggish growth in more mature markets which are suffering from a cutback in consumer spending, high unemployment levels and a saturated marketplace.

Sales, excluding acquisitions and disposals, rose 7% in the first three months of the fiscal year on a constant currency basis in line with expectations, boosted by price increases and more purchases of higher-priced products. Sales per hectoliter rose 2%.

Lager and soft drinks volumes rose 5%, compared with a 1% drop a year earlier.

The maker of Grolsch, Peroni Nastro Azzuro and Miller Lite continues to increase brand investment in developing economies, which include Latin America and Eastern Europe.

Asia and Africa lager volumes grew 11% and 15% respectively, while Latin America volumes increased 6%. Europe volumes rose 5%.

Still, MillerCoors LLC-- the North American joint venture between SABMiller and Molson Coors Brewing Co. (TAP); the second-largest U.S. brewer with market share of 30% -- recorded a 2.7% and 3.1% fall in first-quarter sales to domestic retailers and wholesalers respectively.

Emerging markets currently account for around 80% of the company's earnings, which has helped it outperform rivals in recent years. Sales in Western Europe and North America have weakened as government austerity measures hit the spending power of cash-strapped drinkers.

So the company's US$9.98 billion bid for Foster's Group has surprised some industry observers, given the Australian beermaker's presence in mature markets. The approach was rejected by the Melbourne-based group last month. Analysts expect SABMiller to return with a higher offer, although the company remained tightlipped on the topic Thursday.

SABMiller said raw material costs rose "modestly". Previously, the company, also one of the world's largest bottlers of Coca-Cola Co. (KO) products, guided for a low single digit increase in input costs in fiscal 2012.

At 1101GMT, the company's shares were down 21 pence, or 0.9%, at 2294 pence, in a lower London market. "We thought the update was a bit mixed. In North America, we were expecting a slightly negative performance," Jefferies analyst Alex Howson said, adding the lack of an update on the pursuit of Foster's was not unexpected.

By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410; simon.zekaria@dowjones.com

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