* Aims to save nearly $500 mln/yr by fiscal 2018
* Savings to fund investment and boost earnings
* Trading expected to remain unchanged
* Shares up 3 pct
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By Martinne Geller
LONDON, May 22 Global brewer SABMiller
announced a new cost-savings target on Thursday to help cushion
it against difficult trading in a range of markets, sending its
shares higher as investors anticipated a consequent boost to
The maker of Miller Lite and Peroni beers is struggling to
grow in Europe and North America - like many consumer goods
companies - and new revenues from an emerging middle-class in
developing markets have been dented by weak currencies in many
of those countries of late.
On Thursday, it announced full-year earnings up 1 percent at
$6.45 billion, narrowly passing analysts forecasts, and net
revenue down 1 percent to $26.72 billion, narrowly missing
forecasts. The weakening of the South African rand and Turkish
lira, among other currencies, shaved about $400 million from
In response, SABMiller said it would aim to hit $500 million
a year in savings by the fiscal year ending in 2018 "to deliver
efficiencies to invest ... and improve our margins."
The new programme builds on an earlier one whereby SABMiller
standardized its computer and procurement systems and aims to
make back-office processes more efficient as well as double the
amount of raw material purchasing handled by its central
procurement system to allow for more efficient buying.
Bernstein Research analyst Trevor Stirling estimated that if
half the company's savings were invested and half flowed through
to the bottom line, there could be a 3.9 percent boost to annual
earnings before interest, tax, depreciation and amortization
By 1115 GMT its shares were up 3.3 percent, versus a flat
FTSE 100 index. The shares had fallen to a 52-week low
in January on fears about slowing growth in emerging markets,
but those fears have since eased and through Wednesday, the
shares were up 23 percent since then.
SABMiller recently posted full-year sales volume growth of 2
percent, with lager volume up only 1 percent, hurt by volatility
in African markets including Zimbabwe, Mozambique and Zambia.
On Thursday it said trading in the new year fiscal year,
which began in April, should be broadly unchanged, with growth
driven by developing markets which would however continue to be
affected by currency movements.
SABMiller said it expects to continue to raise prices on
some products as raw material costs are expected to rise at a
low single-digit rate.
(Reporting by Martinne Geller in London; Editing by Sophie