| Thu 15 May 2008, 8:00 | | SAB - SABMiller Plc - Preliminary announcement |
|
SAB
SOSAB
SAB - SABMiller Plc - Preliminary announcement
SABMiller Plc
JSE Alpha Code: SAB
ISSUER Code: SOSAB
ISIN Code: GB0004835483
PRELIMINARY ANNOUNCEMENT
15 May 2008
SABMILLER REPORTS STRONG RISE IN EARNINGS
SABMiller plc, one of the world`s leading brewers with operations and
distribution agreements in over 60 countries across six continents, today
reports its preliminary (unaudited) results for the twelve months to 31 March
2008.
OPERATIONAL HIGHLIGHTS
- Group lager volumes up 11% to 239 million hectolitres (hl), organic growth of
7%
- EBITA up 15%, and 9% on an organic constant currency basis despite rising
input costs
- Mix benefits and strong pricing improve Miller EBITA in the US
- Volume, price and productivity gains drive excellent earnings growth in Europe
- EBITA up 30%
- Latin America lager volume growth of 5% despite exceptional prior year - EBITA
up 17%
- Africa organic volumes of lager up 6% - substantial investment programme to
capture growth opportunities
- CR Snow volume growth continues ahead of the China market - Snow brand up 63%
- South Africa lager volumes level - a satisfactory result given loss of a
premium brand
2008 2007 %
US$m US$m change
Revenue (a) 21,410 18,620 15
EBITA (b) 4,141 3,591 15
Adjusted profit before tax (c) 3,639 3,154 15
Profit before tax 3,264 2,804 16
Adjusted earnings (d) 2,147 1,796 20
Adjusted earnings per share (d)
- US cents 143.1 120.0 19
- UK pence 71.2 63.4 12
- SA cents 1,021.2 847.1 21
Basic earnings per share (US cents) 134.9 110.2 22
Dividends per share (US cents) 58.0 50.0 16
Net cash generated from operations 4,276 4,018 6
MEYER KAHN, CHAIRMAN OF SABMILLER, SAID:
"This strong outturn to the year is particularly pleasing given the scale of the
challenge we faced at its outset, with exceptional prior year comparatives,
rising input costs and an increasingly competitive environment in many of our
markets. It is a clear testament to the strength of our brands and the group`s
operational capability that we have been able to deliver such a good
performance."
(a) Revenue excludes the attributable share of associates` revenue of US$2,418
million (2007: US$2,025 million).
(b) Note 2 provides a reconciliation of operating profit to EBITA which is
defined as operating profit before exceptional items and amortisation of
intangible assets (excluding software) but includes the group`s share of
associates` operating profit, on a similar basis. As described in the Financial
Review, EBITA is used throughout the preliminary announcement.
(c) Adjusted profit before tax comprises EBITA less adjusted net finance costs
of US$491 million (2007: US$428 million) and share of associates` net finance
costs of US$11 million (2007: US$9 million).
(d) Reconciliation of adjusted earnings to the statutory measure of profit
attributable to equity shareholders is provided in note 6.
2008 Reported Organic,
EBITA growth constant
US$m % growth
%
Latin America 1,071 17 6
Europe 952 30 15
North America 477 27 27
Africa and Asia 568 22 16
South Africa: Beverages 1,026 (7) (6)
South Africa: Hotels and Gaming 141 41 42
Corporate (94) n/a n/a
Group 4,141 15 9
BUSINESS REVIEW
This strong result for the year has been achieved despite challenging
comparative growth rates across a number of markets in the prior year and a
substantial rise in input costs for the group as a whole. Total beverage
volumes were up 6%, to 288 million hl and total lager volumes were up 11% to 239
million hl, including the impact of acquisitions in China and Europe. A 15%
increase in group revenue translated into EBITA growth of 15% to US$4,141
million, or 9% on an organic constant currency basis. This reflects the benefit
of price increases, mix improvements and productivity gains, all of which have
offset the rise in input costs, in addition to favourable currency rates against
the US dollar. The group`s ability to recover these higher costs underlines the
strength of its brands and its operational capability in enhancing net revenue
per hectolitre through effective control of package mix and portfolio pricing.
The group EBITA margin remained level with the prior year at 17.4%. Earnings
benefited from currency strength and lower effective tax rates in certain
jurisdictions. Adjusted earnings and adjusted earnings per share grew 20% and
19% respectively on the prior year.
During the year, underlying consumer demand in the group`s developing markets
has remained strong, with high levels of fixed investment within Africa, Asia
and South America contributing to good GDP growth in these regions. Over the
course of the year the group has invested some US$1,978 million in additional
production capacity, new containers and distribution, to ensure the business
will be able to continue to take advantage of the growth in its markets. The
group`s premium brand strategy has driven mix benefits across a number of
markets, with significant investment behind new product and packaging
innovations.
Net cash generated from operations after working capital movements was 6% above
the prior year, reflecting an increase in working capital across the group as at
31 March 2008, due principally to the timing of Easter. Gearing increased
during the year to 49.7% from 45.8% principally as a result of increased
borrowings to fund the acquisition of the Grolsch business and the capital
expenditure programme. The Board has recommended a final dividend of 42 US
cents per share, which will be paid to shareholders on 7 August 2008. This
brings the total dividend to 58 US cents, a 16% increase.
These results demonstrate both the growth momentum in the business and the
substantial brand equity resulting from the investment made over many years in
the group`s portfolio of some 200 local and regional beer brands.
- Latin America achieved lager volume growth of 5%, following exceptionally high
growth in the prior year. Whilst a consumer slow-down in Colombia and price-
driven competitive pressure in Peru represent some challenges, the group has
continued its programme of investment and modernisation in the Andean region and
the full benefit of these activities is still to be realised. There have been
significant fixed cost productivity improvements. EBITA rose by 6% in organic
constant currency, or 17% on a reported basis.
- The group`s business in Europe delivered another excellent performance, with
organic lager growth of 8%, and EBITA growth of 15% in organic constant currency
and 30% on a reported basis. Strong volume growth in Poland, Romania and Russia
was complemented by market share gains in several countries.
Price increases, mix improvements and the introduction of new products and
packs, assisted by operational efficiencies, offset significant brewing raw
material and packaging cost increases. In the Czech Republic, the Kozel brand
grew by 19% in its domestic market and continues to establish itself as a
powerful regional brand, selling 2.8 million hl over the period. In Italy,
Birra Peroni was the fastest growing brewer in 2007, with a share gain of almost
100 basis points in a level market. The company`s core brands, Peroni and
Nastro Azzurro, grew volumes by 7% and 8% respectively, reflecting a successful
on-premise strategy in the north of the country.
- In the US, Miller continued to migrate its portfolio to higher margin and
higher growth segments with the launch of Miller Chill, a `chelada-style` light
beer brewed with lime and salt. One of the most successful brand launches in
SABMiller`s history, Miller Chill sold almost half a million barrels in its
first year, contributing to a 49% increase in Miller`s worthmore portfolio,
which includes Sparks, Peroni and Leinenkugel`s, all of which grew at double
digit rates. Whilst higher fuel costs and declining real estate prices impacted
consumer spending in the second half, Miller`s overall domestic sales to
retailers for the year were up 0.7% on an organic basis, with the company`s
flagship brand, Miller Lite, up 1.1%. To capture the continuing consumer
preference for light beers, Miller has test marketed new light beers, Miller
Genuine Draft 64 and the Miller Lite Brewer`s Collection, which will be rolled
out nationally in the next financial year.
- Robust economic conditions on the African continent, with high resource prices
and investment underpinning growth, contributed to organic lager volume growth
of 6% from the group`s Africa operations (excluding Zimbabwe). A significant
capital expenditure programme is underway in these markets, including the
construction of several new greenfield breweries to exploit anticipated future
volume growth. In Asia, the group`s associate in China, CR Snow, acquired a
further four breweries in the year and grew volumes by 15% on an organic basis,
ahead of the overall market. The Snow brand enjoyed exceptional growth of 63%,
cementing its position amongst the top three beer brands in the world by volume.
- In South Africa, where we began the year with the loss of a major premium
brand to a competitor in March 2007, overall volumes were level with the prior
year representing a satisfactory result. The decline in premium volumes was
partially mitigated by the successful launch of Hansa Marzen Gold and growth in
excess of 100% in Peroni Nastro Azzurro. The robust performance of Hansa
Pilsner and Castle Milk Stout underpinned mid single digit growth in the
mainstream category, whilst soft drinks grew 4% despite cycling tough
comparatives in the final quarter. EBITA for the period declined 6% on a
constant currency basis, reflecting the lower premium volumes, a large increase
in brewing raw material costs and a significant increase in distribution costs.
- In December 2007, SABMiller plc and Molson Coors Brewing Company signed a
definitive agreement to combine the US and Puerto Rican operations of their US
subsidiaries, Miller and Coors, in a joint venture. The transaction, which is
expected to generate approximately US$500 million of synergies in the third full
year of operation, is subject to US anti-trust clearance and is not expected to
complete before the middle of calendar year 2008. Following completion it will
create a stronger, brand-led US brewer with the scale, resources and
distribution platform necessary in the increasingly competitive US market.
- During the period the group also announced the acquisition of Royal Grolsch
NV, the iconic Dutch brewer with a rich heritage dating back to 1615. Grolsch`s
domestic market is in the Netherlands, but it has important international
positions in a number of markets including the United Kingdom and the US. This
international footprint will be expanded with plans to introduce the Grolsch
brand into a number of SABMiller`s markets in the course of the next financial
year. On 14 May 2008 the group announced that it had reached agreement in
principle to transfer the US importation rights for the Grolsch brand to Miller.
The group also completed the acquisition of Polish brewer Browar Belgia and the
Australian brewer Bluetongue in addition to announcing the future construction
of a brewery in New South Wales through Pacific Beverages, SABMiller`s joint
venture with Coca-Cola Amatil.
OUTLOOK
This has been another year of strong growth for the group. In the current year,
volume growth in the first half will be affected by high comparative growth
rates, and pressure on input costs will continue to increase although pricing
and mix benefits are again expected to compensate for these cost increases. The
economic outlook across our global footprint, which is biased towards growth
markets in developing countries, remains positive, and we will continue to
benefit from the strength of our brands, operational capability and investment
for growth.
ENQUIRIES:
SABMiller plc Tel: +44 20 7659 0100
Sue Clark Director of Corporate Affairs Mob: +44 7850 285471
Gary Leibowitz Senior Vice President, Investor Mob: +44 7717 428540
Relations
Nigel Fairbrass Head of Media Relations Mob: +44 7799 894265
A live webcast of the management presentation to analysts will begin at 9.30am
(BST) on 15 May 2008.
This announcement, a copy of the slide presentation and video interviews with
management are available on the SABMiller plc website at www.sabmiller.com.
Video interviews with management can also be found at www.cantos.com.
High resolution images are available for the media to view and download free of
charge from www.newscast.co.uk .
Copies of the press release and detailed Preliminary Announcement are available
from the Company Secretary at the Registered Office, or from 2 Jan Smuts Avenue,
Johannesburg, South Africa.
Registered office: SABMiller House, Church Street West, Woking, Surrey GU21 6HS
Incorporated in England and Wales (Registration Number 3528416)
Telephone: +44 1483 264000
Telefax: +44 1483 264117
OPERATIONAL REVIEW
LATIN AMERICA
Financial summary 2008 2007 %
Group revenue (including share of associates) 5,251 4,392 20
(US$m)
EBITA* (US$m) 1,071 915 17
EBITA margin (%) 20.4 20.9
Sales volumes (hl 000)
- Lager 36,846 34,948 5
- Soft drinks 18,484 19,474 (5)
- Soft drinks organic 18,484 18,564 (0)
*In 2008 before exceptional items of US$61 million (2007: US$64 million) being
restructuring costs in Latin America, partially offset by the net profit on the
sale of soft drink and juice businesses in Costa Rica and Colombia respectively.
In Latin America, execution of our strategy to renovate the beer category has
continued and has delivered underlying performance in line with our expectations
while laying a sound foundation for future growth. In the year, lager volumes
ended 5% up on the prior year despite high comparative volume growth,
particularly in the second half. Reported EBITA performance benefited from
strong local currencies, particularly the Colombian peso which strengthened by
15% against the US dollar (on a full year average basis). There have been
significant fixed cost productivity improvements across the business. Reported
EBITA margin was down on prior year due to rising raw material input costs and a
40 basis point negative impact as a result of changes to the basis of recovering
distribution costs. On an organic constant currency basis, EBITA growth was 6%,
while revenue per hectolitre increased by 4% on a like for like basis.
Significant capital investment was incurred to increase capacity, modernise
production and logistics assets, upgrade returnable containers and improve
product quality.
In COLOMBIA, the brand portfolio upgrade continued with the launch of Redd`s in
the premium segment and the relaunches of Aguila and Aguila Light in the
mainstream segment. Our Pony Malta brand was also relaunched with a new design
and a new 350ml PET container. Premium lager volumes grew by over 60% in the
year, largely due to the continued strong performance of Club Colombia. The new
500ml returnable bottle for Aguila and various PET packs for Pony Malta further
helped to modernise and widen the appeal of the product range.
Trading conditions softened in the second half, as consumer credit interest
rates continued to rise and inflationary cost pressures resulted in retail price
increases. Nevertheless revenue per hectolitre improved by 4% on a constant
currency basis with revenue management and a focus on price compliance assisting
price and mix improvements.
Lager growth rates slowed in the second half of the year, ending up 4% for the
full year. However, our share of the alcohol market increased by 190 basis
points to 64.7%, gaining share mostly from local spirits.
Further gains were made in operating efficiencies and reducing overhead costs,
in order to assist in offsetting rising input costs. The majority of the
structural changes to the route-to-market and the product quality investments
have now been implemented, while trade marketing capability has been enhanced,
establishing a solid platform for future growth.
The new Valle brewery was commissioned in March 2008, with an initial annual
capacity of 3.2 million hl, which will bring supply and demand into better
balance in the western region. Further capacity investment will be required at
the Barranquilla brewery and at maltings plants in the coming year. During the
year the juice business in Colombia was sold.
In PERU economic conditions have been favourable with annual GDP growth of
nearly 9%. Lager volumes were up 8% on prior year despite major disruptions to
distribution due to mudslides and a severe earthquake. The market has become
increasingly competitive with the entry of a second competitor in the economy
segment. Our Pilsen Trujillo brand has been successfully repositioned nationally
to combat low priced competition.
Premium volumes and share have improved with the relaunch of Cusquena in the
premium segment, which ended the year at 8% market share, partially offsetting
the mix impact of the growth of the economy segment including Pilsen Trujillo.
Revenue per hectolitre has improved 1% on a constant currency basis. Our overall
market share ended the fourth quarter at 84% and the beer market has gained
share of alcohol and now stands at 51%. The operation continues to enhance its
brand portfolio and invest for future demand with capacity and quality upgrades.
The renovation of containers and the distribution fleet is now largely complete
and the programme of trade marketing enhancements is being rolled out.
Our ECUADOR operations delivered a commendable performance despite lower
economic growth, political uncertainty and torrential rains in the fourth
quarter. The operation has focused on securing channel advocacy by the
installation of over 5,000 coolers and our market mapping to identify further
opportunities for growth is complete. The change in our route-to-market has
commenced with positive reception in the areas affected. Lager volume growth of
over 5% was driven by our flagship brand Pilsner, following its relaunch in
October 2007, and the implementation of national pricing in the same month. The
premium portfolio performed well led by the renovation of the Club brand, which
has been successfully repositioned in the premium segment, whilst maintaining
previous volumes. Beer`s share of alcohol remained in line with the prior year
at 41% and our lager market share improved by 80 basis points on a full year
basis to 96%, despite aggressive pricing campaigns from our main competitor.
Positive brand and pack mix and increased prices have boosted revenue.
In HONDURAS lager volume growth of 4% was fuelled by 10% growth in premium
segment volumes, led by our brands Barena and Port Royal. Price compliance
initiatives and our beer outlet and cooler expansion programmes contributed
positively to volume growth. Revenue management was supported by premium volumes
growing to over 50% of the portfolio. Renewed focus is now being placed on
affordability and the attractiveness of our mainstream brands. Soft drinks
reported growth of 9%, with our Tropical brand achieving growth of 23%,
following a renewed imaging campaign. Our market share of soft drinks improved
by 4% to 55% through improved sales execution activities, despite continuing
competition in the soft drink market and the shift in mix to family one way
packs.
In PANAMA lager volumes were up by 13% driven by the relaunch and upsizing of
our mainstream brands Balboa and Atlas, implemented with a simultaneous price
increase during October 2007. Share gains were strong and share of the beer
market increased by 120 basis points on a full year basis to 85%. The positive
impact of volume growth and price and mix benefits boosted revenue and were
partially offset by increases in raw material costs.
EL SALVADOR was impacted by tough economic conditions but total volumes grew by
1% with market share gains in both beer and soft drinks despite high levels of
competition and high comparatives. The operation has also seen success in its
premiumisation efforts with premium lager volumes up 9%, driven by Golden Light.
EUROPE
Financial summary 2008 2007 %
Group revenue (including share of associates)(US$m) 5,248 4,078 29
EBITA* (US$m) 952 733 30
EBITA margin (%)* 18.1 18.0
Sales volumes (hl 000)
- Lager 43,904 40,113 9
- Lager organic 43,401 40,113 8
- Soft drinks 57 27 111
*In 2007 before net exceptional costs of US$24 million being profit on disposal
of land in Italy of US$14 million less restructuring costs of US$7 million
primarily in Slovakia and an adjustment to goodwill on acquisition of US$31
million for Birra Peroni.
Europe delivered another excellent result with total lager volume growth of 9%
(organic 8%) within which premium volumes grew 11%. Volumes were particularly
strong in Poland, Romania and Russia and were assisted by warm weather in the
earlier months, but cycled an exceptionally mild winter in the second half of
the prior year. Brewing raw material and packaging costs increased
significantly. However, the pricing environment has shown some signs of
improvement and with positive brand mix has resulted in constant currency
revenue per hectolitre growing by 4%. This, together with productivity
improvements, has more than offset higher input costs and EBITA margin was up 10
basis points. Marketing expenditure has increased but has benefited from scale
economies. Reported EBITA growth of 30% was impacted by currency translation
gains and also included Royal Grolsch from mid February 2008. On an organic
constant currency basis, EBITA growth was 15%.
In POLAND, strong economic fundamentals underpinned growth of all alcoholic
beverages. Our organic domestic lager volumes increased 11% (with inorganic
growth of 12%) against industry growth of 7% and market share for the year was
up 220 basis points to 40.8%. Tyskie and Zubr, Poland`s two leading beer brands,
grew volumes by 9% and 17% respectively, assisted by national consumer
promotions, leveraging sponsorships and increasing on-premise distribution. Lech
grew 12% supported by strong trade activation, utilising music and leisure
associations. Premium brand Redd`s, with its three flavour variants, grew 21%
including sales of a new sleek can. We increased prices by an average of 3%
across the portfolio, with a similar increase in constant currency revenue per
hectolitre being achieved, continuing the trend started in the previous year.
Trade marketing support was enhanced by new automated data interchange with our
main distributors and the placement of additional coolers in the trade. Further
capacity expansion brought total capacity to over 17 million hl, while current
year sales volume was 14.4 million hl. In January 2008, we completed the
acquisition of Browar Belgia.
In CZECH, our strategy is to pursue value rather than volume in this mature
market. Beer industry volumes were up less than 1% and within this our domestic
volumes were marginally ahead. Focused channel segmentation, expansion in on-
premise, increased pricing and premiumisation led to an increase in constant
currency revenue per hectolitre of 5% and an EBITA increase despite
significantly higher commodity prices. In the premium segment our national
flagship brand Pilsner Urquell grew 3%, supported by exclusively branded on-
premise outlets and Beer theatre concepts in the modern off-premise channel. In
the specialty segment, we introduced the Master brand with super-premium
pricing, and the Frisco brand continued its growth, growing 23%. In mainstream,
Kozel`s 19% domestic volume growth offset Gambrinus` 5% decline as our average
6% price increase prompted some switching. Kozel continued developing as a
successful regional brand with annual volumes of 2.8 million hl, up 12%
regionally. Significant cost productivity has been achieved in marketing and
distribution by leveraging scale and rationalising media activities.
In RUSSIA beer industry volumes grew 10% and share of the total alcohol market
increased 3% to 32%. Rapid growth in real incomes is driving share gains for the
premium beer segment and our volumes were up 14% as we increased market share.
We expanded national retail coverage with an increase of 300 staff in the sales
force, and installed over 75,000 coolers. We achieved average price increases
of 11% across our portfolio over the year. Our biggest brand Zolotaya Bochka
grew 16% with strong marketing support. Miller Genuine Draft was up 9%, to
almost 1 million hl, driven by expanding distribution of the new half litre
bottle, and Kozel grew 13%. Redd`s has new primary and secondary packaging,
including a new can, and grew by 22%. The second production site at Ulyanovsk is
on track for commissioning in May 2009 and its initial capacity has been
increased to 4 million hl. Until then, with existing operations at full
capacity, contract brewing arrangements have been put in place over the summer
period.
In ITALY, Birra Peroni was the fastest growing brewer in 2007 with a share gain
of 100 basis points in a flat domestic market. Our branded volumes grew 5% with
Peroni and Nastro Azzurro up 7% and 8% respectively. This growth has come from
success in the on-premise channel in the North particularly with Peroni draught
and the 33cl Nastro Azzurro bottle. Both brands have leveraged national
sponsorships in sport, music and film festivals, while premiumisation has been
supported by international design events. Growth was achieved in all channels,
assisted by our own distribution, and two price increases were successfully
implemented, the latest being 8% in January 2008. The Rome and Bari breweries
are both being expanded to satisfy ongoing export demand and total capacity in
Italy will be 6.3 million hl.
In ROMANIA, industry volumes grew 9% supported by increased real wages and
disposable income, and our new mainstream PET offerings. Our volumes were up 28%
following capacity increases, and our share grew by 3.5% to 25.4%. Average price
increases of 5% were achieved and all brands enjoyed significant growth.
Timisoreana grew 43%, extending its reach in the off-premise channel with our
new PET packaging, and secured its number one position in the market with an
estimated 14% share. The Ursus Premium brand maintained its leadership in the
premium segment, with 8% growth, and has increased penetration in upscale on-
premise outlets. All brands benefited from better point of sale execution and a
new distributor incentive scheme, with intensive display and tailored service
packages in all channels. Current capacity expansions will bring overall
capacity to 6.8 million hl.
In HUNGARY, consumers have been hit hard by the fiscal austerity measures. The
beer market grew during the early summer months with the introduction of PET
offerings, but volumes were lower in the fourth quarter. In these conditions,
our volumes were level and our share was up 140 basis points. Our focus has been
on productivity and efficiencies which have improved profitability.
In the UNITED KINGDOM, Miller Brands` volumes grew 36% in a declining market,
driven by innovative marketing and increased distribution, with Peroni Nastro
Azzurro up 39%. Performance was also supported by double digit volume growth
for both our Polish brands, Lech and Tyskie.
In the NETHERLANDS, our integration activities for our recent acquisition, Royal
Grolsch, have commenced.
NORTH AMERICA
Financial summary 2008 2007 %
Revenue (US$m) 5,120 4,887 5
EBITA* (US$m) 477 375 27
EBITA margin (%) 9.3 7.7
Sales volumes (hl 000)
- Lager - excluding contract brewing 48,211 46,591 3
- contract brewing 7,489 8,907 (16)
- Soft drinks 87 84 4
Lager - domestic sales to retailers (STRs) 45,434 43,897 4
*Before exceptional costs of US$51 million in relation to retention arrangements
entered into following the announcement of the proposed joint venture with Coors
Brewing Company and other integration costs (2007: nil).
Miller Brewing Company made progress against all of its strategic objectives,
and delivered strong earnings growth for the fiscal year from increased volumes,
an industry-leading increase in revenue per barrel of 4.0%, and effective cost
reduction despite higher fuel and raw material input costs.
Miller continued to migrate its brand portfolio to higher margin, higher growth
segments of the market while enhancing value for distributors and retailers, and
its flagship Miller Lite brand posted volume gains with segment leading pricing.
Increased spending on core brand marketing and innovation was funded in part
from disciplined cost reduction and efficiency savings. Notably for the first
time, Miller was recognised as the number one supplier by distributors in the US
industry-wide Tamarron survey.
Total US domestic beer industry shipments to wholesalers (STWs) increased 1.1%,
while total import shipments were down 2.5% for the year. Craft beers continued
their strong growth, up 12% over prior year. Against this backdrop, Miller`s US
domestic shipments to retailers (STRs) were up 3.1% when adjusted for one
additional trading day against the prior year (up 3.5% unadjusted) and grew 0.7%
on an adjusted organic basis (excluding Sparks and Steel Reserve). Miller`s US
domestic sales to wholesalers (STWs) grew 3.9% on an unadjusted basis, and were
up 1.5% on an organic basis. International shipments fell slightly.
Miller Lite STRs increased by 1.1% (1.5% unadjusted) following a return to its
intrinsic brand marketing platform. Miller High Life sales increased 1.1% (1.5%
unadjusted) on the strength of its successful `Take Back the High Life`
campaign, which helped reverse a three-year decline in the franchise. Miller
Genuine Draft declined by 10.6% adjusted (10.2% unadjusted) for the year in a
declining segment. Milwaukee`s Best continued to experience declines in the
economy sector, while Icehouse and Mickey`s volumes grew, helping to offset
partially the declines of both MGD and Milwaukee`s Best.
The national launch of Miller Chill exceeded expectations with the brand selling
approximately 500,000 barrels during the year, and Miller`s worthmore portfolio
overall grew by nearly 50%. Sparks, Peroni and Leinenkugel`s delivered strong
full year double digit growth. To capture the continuing growth and consumer
shift towards light beers, Miller test marketed new light beer brands Miller
Genuine Draft 64 (MGD 64) and Miller Lite Brewers Collection, which, following a
positive reaction, will be rolled out nationally in the next year.
In line with its chain sales strategy, Miller strengthened its capabilities and
enjoyed a 4.6% increase in chain sales volume. The success of its "model
market" operations - an area autonomous management framework - in Texas and
Florida/Georgia contributed to share growth in Texas and share stabilisation in
the Southeast.
Total revenue grew 4.8% to US$5,120 million, while domestic revenue was up 7.4%
to US$4,578 million. Contract brewing revenue declined 15.8% due in part to the
purchase of Sparks and Steel Reserve from McKenzie River in 2006 (which were
previously brewed under contract). Domestic revenue per barrel increased 4.0%
due to price increases of 2.4% for the year complemented by the mix benefits
from the successful growth of the worthmore portfolio, including Miller Chill.
Through continued brewing efficiencies and cost savings derived from successful
projects, the company was able largely to offset commodity cost increases,
resulting in an increase in domestic cost of goods sold per barrel of low single
digits. Marketing spending increased upper single digits.
EBITA for the period increased 27% to US$477 million driven primarily by the
strong pricing, increased volume, effective management of fixed costs, and
includes a non-recurring gain of US$33 million from the October 2007 settlement
of a dispute with the Ball Metal Beverage Container Corporation. This resulted
in a one-time payment to Miller of some US$70 million, a portion of which is
attributable to our contract brewing partners. The gain includes an amount of
US$16 million relating to materials supplied to Miller during the prior year and
US$17 million for other non-recurring contractual matters.
In preparation for the proposed joint venture with Coors Brewing Company, which
remains subject to regulatory clearance, a charge of US$51 million has been
recorded by Miller for staff retention arrangements and certain integration
costs, and this has been treated as an exceptional item. The group expects to
record further charges up to completion of the transaction which is not
anticipated to occur before the middle of calendar year 2008. These amounts were
included in the previously announced estimates of costs associated with the
proposed joint venture.
AFRICA AND ASIA
Financial summary 2008 2007 %
Group revenue (including share of associates) 3,367 2,674 26
(US$m)
EBITA (US$m) 568 467 22
EBITA margin (%) 16.9 17.5
Sales volumes (hl 000)*
- Lager 83,998 68,067 23
- Lager organic 77,976 68,067 15
- Soft drinks 6,977 13,680 (49)
- Soft drinks organic 6,977 6,301 11
- Other alcoholic beverages 6,022 6,252 (4)
*Castel volumes of 17,845 hl 000 (2007: 15,407 hl 000) lager, 13,480 hl 000
(2007: 12,744 hl 000) soft drinks are not included. In China, the non-core
water business was disposed of in May 2007, impacting total soft drink volumes.
The strong growth in Africa and Asia continued, with lager volume growth of 23%
(organic growth of 15%) and reported EBITA growth of 22% (organic constant
currency growth of 16%). EBITA margin decreased from 17.5% to 16.9% as a result
of the faster growth in the lower margin Asia markets, notwithstanding an
increase in Africa margins.
AFRICA
Lager volumes for Africa, excluding Zimbabwe, grew 12% (organic growth of 6%)
for the year as did total volumes, benefiting from continued economic growth in
all countries, rising disposable incomes, and ongoing brand renovation.
TANZANIA posted lager volume growth of 8% in a competitive market and our brand
portfolio, sales force and route-to-market have been strengthened to capture
further growth. Growth has been led by Ndovu lager following its re-formulation
as a full malt beer. Eagle, our sorghum based lager, was launched in the North
East with early success and positive consumer response. Rising input costs were
mitigated by improved operating efficiencies and a stable local currency. We
have commenced construction of a new 0.5 million hl brewery in the Southern
region.
MOZAMBIQUE enjoyed its fourth consecutive year of strong growth, with lager
volumes advancing 8%. The brand portfolio is well balanced and differentiated
and affordable draught beer continues to deliver ahead of expectation by
reaching new consumers. Major capacity enhancements at both the Maputo and
Beira breweries were completed, with operating efficiencies improving, and
further depots were opened during the year. Construction of the new road
infrastructure along the Zambezi River will yield further growth opportunities
in the North and as a result we have started building a 0.5 million hl brewery
in Nampula.
BOTSWANA grew strongly after two disappointing years, with overall growth of 15%
in aggregate volumes of lager and soft drinks. Key to this result was the
successful renovation of St. Louis lager, the market leader, and the
introduction of a new 750ml returnable bottle. The returnable bottle has
delivered ahead of expectation in this predominantly one way pack market, and
offers the consumer better value for money.
UGANDA`S lager volumes grew 4% after three prior years of exceptional growth.
After excellent growth in recent years, volumes of our sorghum-based Eagle brand
declined following an excise increase, while our mainstream lager brands Nile
Special and Club grew in mid double digits. The market continues to grow and has
nearly doubled in the last four years, driven by the success of our portfolio
extensions.
ANGOLA`S economy continues to grow strongly at approximately 20% per annum. The
infrastructure, however, is unable to support the increasing demands for goods
and services and our total volume growth of just under 10% was constrained by
both the lack of infrastructure and limited capacity. Total volumes for lager
and soft drinks for the year were almost 3.5 million hl, including lager volumes
of the recently privatised Empresa De Cervejas N`gola in which we invested at
the end of last year. We continued to expand our lager and soft drinks
capacity, supported by new local manufacture of glass and cans by global
suppliers.
In the premium segment, we have launched Peroni Nastro Azzurro in five African
markets with good initial results and plan to roll out the brand to other
countries in due course. Grolsch will be launched in certain key markets.
Traditional sorghum-based beer (excluding Zimbabwe) returned to growth this
year, with excellent results from both Malawi and Botswana. The category
continues to play an important part in our African portfolio and is less
vulnerable than lager to international commodity cost increases given the
extensive use of local raw materials.
CASTEL enjoyed another strong year with total volumes up 11% - lager 16% and
soft drinks 6%. Ethiopia and Angola continued to provide above average growth
for the group, while further growth was captured in its key markets of Cameroon,
Gabon and Morocco. The growth in Angola is linked to underlying economic
prosperity, while in Ethiopia the growth has come largely from market place
activities including portfolio segmentation and pack innovations. Cameroon
volumes advanced in double digits in a competitive market. While underlying
EBITA growth was strong, the strength of the Euro further assisted reported
performance in US dollars.
EBITA margin for our Africa business advanced despite the impact of rising
commodity costs. These impacts on the business are limited due to significant
volume growth in soft drinks, and our sorghum beer, which is more dependent on
local supply.
ASIA
In CHINA, our associate CR Snow continued to outperform the industry with full
year lager volume growth of 25%, representing organic growth of 15%, and full
year market share improving to 18%. Momentum for the first half (where CR Snow`s
organic lager volume growth of 30% was well above the industry and peer group)
slowed in the second half due to the combined effect of a severe winter, reduced
discretionary spend and price increases in this period. The Snow brand is now
China`s largest lager brand and it enjoyed exceptional growth again this year at
63%.
EBITA grew but increases in commodity prices and the acquisition of a number of
breweries, which typically depresses profits in the initial years, reduced
margins. Capacity was further increased with the construction of greenfield
breweries and upgrades to existing plants. The non-core water business was
disposed of in May 2007 impacting total soft drink volumes.
INDIA grew strongly with lager volume growth of 23% (organic increase of 19%)
following strong growth in the prior year. Total volumes of 4.4 million hl were
achieved, with national market share gain of 1% despite having no meaningful
presence in the key Southern state of Tamil Nadu. The Foster`s business has
been fully integrated and the brand led our growth as it was rolled out more
widely. The strong beer segment continues to grow ahead of mild beer, with our
brands continuing to do well.
Our new Asia joint ventures are building momentum, with AUSTRALIA ahead of
expectation due to strong performances from Peroni Nastro Azzurro, MGD and the
recent successful launch of Miller Chill. We recently announced our intention
to build a greenfield brewery in New South Wales and we are integrating the
recently acquired Bluetongue brewery. In VIETNAM, volumes are improving with the
addition of Redd`s to the portfolio, and we have commissioned a can line to
expand our pack range.
SOUTH AFRICA: BEVERAGES
Financial summary 2008 2007 %
Group revenue (including share of associates) 4,446 4,274 4
(US$m)
EBITA (US$m) 1,026 1,102 (7)
EBITA margin (%) 23.1 25.8
Sales volumes (hl 000)
- Lager 26,526 26,543 -
- Soft drinks 16,657 15,986 4
Economic growth in South Africa slowed in the second half of the year as the
effects of higher fuel and food costs as well as increased levels of household
debt in a higher interest rate environment slowed consumer spending. Gross
domestic product growth for calendar year 2007 of 3.9% was down on the 5% growth
rate for 2006.
Volume performance was satisfactory with lager volumes in line with those of the
prior year, notwithstanding the loss of our licence for the Amstel brand in
March 2007 (9% of volumes in the year to March 2007). Soft drinks were 4% up
despite cycling tough comparatives in the prior year when volumes grew by 7% and
the carbon dioxide shortages experienced in the country over the fourth quarter
of this year, and despite a decline in volumes in the lower margin alternative
beverage category, primarily due to the discontinuation of the Bibo fruit
cordial and Milo brands.
Volumes grew in both the mainstream lager and flavoured alcoholic beverage (FAB)
categories. Robust growth in Hansa Pilsener and Castle Milk Stout underpinned
mid single digit growth in the mainstream category and strong growth across the
Brutal Fruit range contributed to the double digit increase in FAB volumes. In
the premium segment, we successfully launched our new brand, Hansa Marzen Gold,
Castle Lite grew strongly and Peroni Nastro Azzurro volumes more than doubled,
but this did not fully offset the anticipated loss of premium volumes as the
competing product re-entered the market.
Revenue grew by 6% on a constant currency basis. Price increases were at a level
somewhat below inflation for both lager and soft drinks, and revenue growth was
constrained by adverse mix effects in lager, driven by the swing out of higher
priced premium brands into mainstream.
Higher raw material input costs in the beer business placed margins under
pressure. Increasing international commodity prices led to a large increase in
key brewing raw materials, and packaging costs rose on the back of higher energy
and oil prices. Glass costs were also up significantly following the importation
of glass in the current year at a premium to local supply, due to capacity
constraints at local glass manufacturers.
Distribution costs rose by over 30% in the current year. Higher international
crude oil prices together with the depreciation of the rand drove South African
diesel costs up by some 47% in the year to March 2008. This was exacerbated by
incremental distribution costs associated with servicing the 16% increase in
main market outlets (totalling 23,400 outlets in the full year) which is in line
with our direct distribution initiative.
EBITA on a constant currency basis for the year was 6% lower than the prior
year, driven primarily by higher raw material input and distribution cost
increases. In addition, the EBITA impact of the loss of the Amstel licence is
estimated at approximately US$50 million for the year driven by adverse mix,
incremental investments in marketing and new products and packaging development.
This is after taking account of the competitor product having only re-entered
the South African market after the first quarter of the financial year. EBITA
benefited from some foreign currency gains on contracts related to procurement.
Overall EBITA margin decreased by 270 basis points to 23.1%.
Good progress was made on the phased replacement of the 750ml returnable bottle
population for our mainstream brands and by March 2008 all but two of our
breweries were producing product in the new bottle. The market has reacted
positively to the modernised new bottle, contributing to a resurgence in growth
of the mainstream category. This renovation programme is scheduled to be
complete by September 2008. The phased introduction of 430 million new bottles
has added complexity to the supply grid which has resulted in increased
transport expenditure.
There were a number of new product launches and pack renovations in the year.
The May 2007 launch of Hansa Marzen Gold proved to be very successful and
contributed over 23% of total premium sales in the year. Innovation in the FAB
category saw two new brands being launched in the last quarter of the financial
year. Sarita Ruby, a dry, red, apple-flavoured FAB and Skelter`s Straight, a
citrus flavoured offering, were launched in February 2008 and March 2008
respectively. Both the Hansa Pilsener and Castle brands received label redesigns
in the year to coincide with the introduction of the new 750ml returnable
bottle. In the premium segment, the Peroni Nastro Azzurro range was extended to
include draught, 330ml cans and a new 660ml returnable bulk pack.
Despite the slow progress by local authorities in the granting of retail liquor
licences, our Mahlasedi taverner programme trained some 3,400 taverners during
the year, bringing the total number to date to over 13,400. This is in line with
our commitment to invest US$14 million in this initiative over five years.
Administrative delays at local government level continue to hamper the progress
of liquor licensing across the country.
The Department of Trade and Industry issued final Broad Based Black Economic
Empowerment (BBBEE) Codes of Good Practice in early February 2007. The liquor
industry`s formulation of a Sector Code had been suspended pending the
publication of the BBBEE Codes, but resumed in mid 2007 with the active
involvement of the Department of Trade and Industry (DTI). The DTI has required
that the industry involve a very broad group of stakeholders in the process. It
is anticipated that the Sector Code will be finalised towards the end of
calendar year 2008.
APPLETISER continued to show strong volume growth of 18%, arising mainly from
its international markets.
DISTELL`S results benefited from improvements in both domestic and international
volumes. Domestic sales volume increases have been driven by cider brands and
the ready-to-drink categories, despite shortages in the supply of packaging
materials and carbon dioxide. Margins were also improved through operating
efficiencies.
SOUTH AFRICA: HOTELS AND GAMING
Financial summary 2008 2007 %
Revenue (share of associate) (US$m) 396 340 16
EBITA (US$m) 141 100 41
EBITA margin (%) 35.6 29.3
Revenue per available room (Revpar) - US$ $76.10 $62.21
SABMiller is a 49% shareholder in the Tsogo Sun group. The financial
performance of Tsogo Sun continues to be strong. The gaming industry in South
Africa has grown steadily, with real growth in casino win being experienced by
all participants. However, economic circumstances in recent months indicate a
slowdown in activity.
The South African hotel industry has again enjoyed strong Revpar growth as a
result of a robust local economy and growth in international arrivals.
Increased demand coupled with limited capacity growth, has assisted Tsogo Sun in
achieving a year on year increase in Revpar of 24% in constant currency.
The improved level of trading, assisted by control of costs, resulted in strong
growth in EBITA and margins.
FINANCIAL REVIEW
NEW ACCOUNTING STANDARDS AND RESTATEMENTS
The accounting policies followed are the same as those published within the
Annual Report and Accounts for the year ended 31 March 2007 amended for the
changes set out in note 1, which had no impact on group results. The Annual
Report and Accounts are available on the company`s website, www.sabmiller.com.
SEGMENTAL ANALYSIS
The group`s operating results on a segmental basis are set out in the segmental
analysis of operations, and the disclosures are in accordance with the basis on
which the businesses are managed and according to the differing risk and reward
profiles. SABMiller believes that the reported profit measures - before
exceptional items and amortisation of intangible assets (excluding software),
and including associates on a similar basis (i.e. before interest, tax and
minority interests) - provide to shareholders additional information on trends
and allow for greater comparability between segments. Segmental performance is
reported after the specific apportionment of attributable head office service
costs.
DISCLOSURE OF VOLUMES
In the determination and disclosure of reported sales volumes, the group
aggregates 100% of the volumes of all consolidated subsidiaries and its equity
accounted associates, other than associates where the group exercises
significant influence but primary responsibility for day to day management rests
with others (such as Castel and Distell). In these latter cases, the financial
results of operations are equity accounted in terms of IFRS but volumes are
excluded. Contract brewing volumes are excluded from total volumes, but revenue
from contract brewing is included within revenue. Reported volumes exclude
intra-group sales volumes.
ORGANIC, CONSTANT CURRENCY COMPARISONS
The group discloses certain results on an organic, constant currency basis, to
show the effects of acquisitions net of disposals and changes in exchange rates
on the group`s results. Organic results exclude the first twelve months`
results of acquisitions and investments and the last twelve months` results of
disposals. Constant currency results have been determined by translating the
local currency denominated results for the year ended 31 March 2008 at the
exchange rates for the comparable period in the prior year.
ACQUISITIONS AND DISPOSALS
In December 2007, SABMiller plc and Molson Coors Brewing Company announced that
they had signed a definitive transaction agreement to combine the US and Puerto
Rico operations of their respective subsidiaries, Miller and Coors, in a joint
venture to create a stronger, brand-led US brewer in the increasingly
competitive US marketplace. Closing of the transaction is subject to obtaining
clearances from the US competition authorities and certain regulatory clearances
and third party consents, as required, and is not expected before the middle of
calendar year 2008.
In January 2008 the group completed the acquisition of 99.96% of Browar Belgia
Sp. z.o.o., the fourth largest brewer in Poland.
In February 2008, the group completed the acquisition of 100% of Royal Grolsch
NV in the Netherlands.
In May 2008, SABMiller announced it had agreed to acquire a 99.84% interest in
the Ukrainian brewer, CJSC Sarmat. The transaction is subject to approval by
the Ukrainian competition authorities and other customary pre-closing
conditions.
During the first half, the group completed the disposals of its soft drinks
business in Costa Rica and the juice business in Colombia. Our associate in
China also completed the disposal of a non-core water business.
EXCEPTIONAL ITEMS
Items that are material either by size or incidence are classified as
exceptional items. Further details on the treatment of these items can be found
in note 3 to the financial statements.
Net exceptional charges of US$112 million were reported during the year (2007:
US$93 million). Of these, US$78 million relate to final restructuring costs
incurred in Latin America (2007: US$69 million), partially offset by a net
profit of US$17 million on the disposal of soft drinks businesses in Costa Rica
and Colombia. Miller has also recorded costs of US$51 million in relation to
retention accruals pending the completion of the MillerCoors joint venture and
certain integration costs. In 2007, Europe reported a net exceptional cost of
US$24 million. This comprises a profit on the disposal of land in Naples of
US$14 million less integration costs of US$7 million principally incurred in
Slovakia, and an adjustment to goodwill at Birra Peroni. As required under IFRS,
to the extent that a business is able to utilise, after an acquisition,
previously unrecognised deferred tax assets, an adjustment to goodwill is
required with a compensating adjustment to tax. During 2007 we recorded such an
adjustment for US$31 million in respect of Birra Peroni and this had been
included within exceptional items.
BORROWINGS AND NET DEBT
Gross debt at 31 March 2008, comprising borrowings together with the fair value
of derivative assets or liabilities held to manage interest rate and foreign
currency risk of borrowings, has increased to US$9,733 million from US$7,358
million at 31 March 2007. Net debt comprising gross debt net of cash and cash
equivalents has increased to US$9,060 million from US$6,877 million at 31 March
2007 reflecting payment from the acquisition of Royal Grolsch (US$1,182 million)
and the assumption of its borrowings (US$162 million) and the group`s increased
capital expenditure programme. An analysis of net debt is provided in note 10.
The group`s gearing (presented as a ratio of debt/equity) has increased to 49.7%
from 45.8% at 31 March 2007. The weighted average interest rate for the gross
debt portfolio at 31 March 2008 was 7.3% (2007: 7.6%).
In July 2007, the group`s South African holding company for its South African
operations raised R1,600 million (approximately US$230 million) in 5-year notes.
The notes, issued under a Domestic Medium Term Note programme, are guaranteed by
SABMiller plc and are listed on BESA, the South African Bond Exchange. The net
proceeds have been used to repay part of the existing loan facilities of The
South African Breweries Ltd.
FINANCE COSTS
Net finance costs increased to US$456 million, a 7% increase on the prior year`s
US$428 million. Finance costs in the current year include a net benefit from the
mark to market adjustments of various derivatives amounting to US$35 million
(2007: nil) which are of a capital nature and for which the group has been
unable to obtain hedge accounting. This benefit has been excluded from the
determination of adjusted earnings per share. Adjusted net finance costs were
US$491 million, up 15%, reflecting an increase in net debt following the
significant capital expenditure programme currently being undertaken by the
group and the recent Grolsch acquisition. Interest cover, based on pre-
exceptional profit before interest and tax and excluding the impact of the mark
to market movements noted above, has increased to 7.9 times from 7.8 times in
the prior year.
PROFIT BEFORE TAX
Adjusted profit before tax of US$3,639 million increased by 15% reflecting
performance improvements across the businesses and translation of results into
US dollars. On a statutory basis, profit before tax of US$3,264 million was up
16% on prior year including the impact of exceptional items and the mark to
market movements in finance costs as noted above.
TAXATION
The effective tax rate of 32.5% (2007: 34.5%) before amortisation of intangible
assets (other than software) and exceptional items and the adjustment to
interest noted above, is below that of the prior year, principally reflecting a
more favourable geographic mix of profits across the group, local statutory rate
reductions and ongoing initiatives to manage our effective tax rate.
EARNINGS PER SHARE
The group presents adjusted basic earnings per share to exclude the impact of
amortisation of intangible assets (other than software) and other non-recurring
items, which include post-tax exceptional items, in order to present a more
meaningful comparison for the years shown in the consolidated financial
statements. Adjusted basic earnings per share of 143.1 US cents were up 19% on
the prior year, reflecting the improved performance noted above. An analysis of
earnings per share is shown in note 6 to the financial statements and, on a
statutory basis, basic earnings per share is up 22%.
GOODWILL AND INTANGIBLE ASSETS
Additional goodwill has arisen primarily on the acquisition of Royal Grolsch NV
and the increase is also due to foreign exchange movements on goodwill balances
recognised in the local currency of the relevant operations.
CAPITAL EXPENDITURE
The group has continued to invest in the business, and capital expenditure for
the year has grown to some US$1,978 million (2007: US$1,191 million) including
additional production capacity, new containers and distribution to enable the
business to take advantage of the growth in its markets. Capital expenditure as
reflected in US dollars has also been increased by the strengthening of certain
currencies in key markets against the US dollar. Capital expenditure including
the capitalisation of intangible software costs is US$2,034 million (2007:
US$1,244 million).
CASH FLOW
Net cash generated from operating activities before working capital movements
(EBITDA) increased by 12% to US$4,518 million compared to the prior year. The
ratio of EBITDA to revenue is 21% (2007: 22%). Net cash generated from
operations, after working capital movements, of US$4,276 million is up 6%
reflecting an increase in working capital across the group as at 31 March 2008,
due principally to the timing of Easter within the financial year.
CURRENCIES: SOUTH AFRICAN RAND/COLOMBIAN PESO
The rand has declined against the US dollar during the year and ended the
financial year at R8.15 to the US dollar, while the weighted average rand/dollar
rate weakened by 1% to R7.13 compared with R7.06 in the prior year. The
Colombian peso (COP) strengthened by almost 17% against the US dollar compared
to the prior year and ended the financial year at COP1,822 to the US dollar,
while the weighted average COP/dollar rate improved by 15% to COP1,997 from
COP2,340.
DIVIDEND
The board has proposed a final dividend of 42 US cents per share for the year.
Shareholders will be asked to approve this recommendation at the annual general
meeting, which will be held on Thursday, 31 July 2008. If approved, the
dividend will be payable on Thursday, 7 August 2008 to shareholders registered
on the London and Johannesburg registers on Friday, 11 July 2008. The ex-
dividend trading dates will be Wednesday, 9 July 2008 on the London Stock
Exchange (LSE) and Monday, 7 July 2008 on the JSE Limited (JSE). As the group
reports in US dollars, dividends are declared in US dollars. They are payable in
South African rand to shareholders on the Johannesburg register, in US dollars
to shareholders on the London register with a registered address in the United
States (unless mandated otherwise), and in sterling to all remaining
shareholders on the London register.
The rate of exchange applicable on Thursday, 26 June 2008 will be used for US
dollar conversion into South African rand and the rate of exchange on Monday, 28
July 2008 will be used for US dollar conversion into sterling. Currency
conversion announcements will be made on the JSE`s Securities Exchange News
Service and on the LSE`s Regulatory News Service, indicating the rates of
exchange to be applied, on Friday, 27 June 2008 and on Tuesday, 29 July 2008,
respectively.
From the commencement of trade on Friday, 27 June 2008 until the close of
business on Friday, 11 July 2008, no transfers between the London and
Johannesburg registers will be permitted, and from the close of business on
Friday, 4 July 2008 until the close of business on Friday, 11 July 2008, no
shares may be dematerialised or rematerialised.
ANNUAL REPORT AND ACCOUNTS
The group`s unaudited condensed financial statements and certain significant
explanatory notes follow. The annual report will be mailed to shareholders in
early July 2008 and the annual general meeting of the company will be held at
the Intercontinental Park Lane Hotel in London at 11:00 on Thursday, 31 July
2008.
SABMiller plc
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March
2008 2007
Unaudited Audited
Notes US$m US$m
Revenue 2 21,410 18,620
Net operating expenses (17,962) (15,593)
Operating profit 2 3,448 3,027
Operating profit before exceptional items 3,560 3,120
Exceptional items 3 (112) (93)
Net finance costs 4 (456) (428)
Interest payable and similar charges (721) (668)
Interest receivable 265 240
Share of post-tax results of associates 272 205
Profit before taxation 3,264 2,804
Taxation 5 (976) (921)
Profit for the financial period 2,288 1,883
Profit attributable to minority interests 265 234
Profit attributable to equity 2,023 1,649
shareholders
2,288 1,883
Basic earnings per share (US cents) 6 134.9 110.2
Diluted earnings per share (US cents) 6 134.2 109.5
All operations are continuing.
SABMiller plc
CONDENSED CONSOLIDATED BALANCE SHEET
at 31 March
2008 2007
Unaudited Audited
Notes US$m US$m
Assets
Non-current assets
Goodwill 8 15,600 13,250
Intangible assets 8 4,383 3,901
Property, plant and equipment 9,037 6,750
Investments in associates 1,826 1,351
Available for sale investments 52 52
Derivative financial instruments 208 34
Trade and other receivables 240 181
Deferred tax assets 340 164
31,686 25,683
Current assets
Inventories 1,350 928
Trade and other receivables 1,871 1,471
Current tax assets 188 103
Derivative financial instruments 45 6
Cash and cash equivalents 10 673 481
4,127 2,989
Disposal groups held for sale - 64
4,127 3,053
Total assets 35,813 28,736
Liabilities
Current liabilities
Derivative financial instruments (34) (5)
Borrowings 10 (2,062) (1,711)
Trade and other payables (3,273) (2,746)
Current tax liabilities (534) (429)
Provisions (300) (266)
(6,203) (5,517)
Liabilities directly associated with - (19)
disposal groups held for sale
(6,203) (5,176)
Non-current liabilities
Derivative financial instruments (497) (204)
Borrowings 10 (7,596) (5,520)
Trade and other payables (338) (269)
Deferred tax liabilities (1,775) (1,393)
Provisions (1,160) (1,173)
(11,366) (8,559)
Total liabilities (17,569) (13,735)
Net assets 18,244 15,001
Equity
Total shareholders` equity 17,545 14,406
Minority interests 699 595
Total equity 18,244 15,001
SABMiller plc
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March
2008 2007
Unaudited Audited
Notes US$m US$m
Cash flows from operating activities
Cash generated from operations 9 4,276 4,018
Interest received 228 231
Interest paid (730) (719)
Tax paid (969) (801)
Net cash from operating activities 2,805 2,729
Cash flows from investing activities
Purchase of property, plant and equipment (1,978) (1,191)
Proceeds from sale of property, plant and 110 110
equipment
Purchase of intangible assets (59) (270)
Purchase of investments - (3)
Proceeds from sale of investments 5 1
Proceeds from sale of associates 2 81
Proceeds on disposal of shares in 71 7
subsidiaries
Acquisition of subsidiaries (net of cash (1,284) (131)
acquired)
Purchase of shares from minorities (49) (200)
Purchase of shares in associates (179) (186)
Dividends received from associates 91 102
Dividends received from other investments 1 1
Net cash used in investing activities (3,269) (1,679)
Cash flows from financing activities
Proceeds from the issue of shares 39 38
Purchase of own shares for share trusts (33) (30)
Proceeds from borrowings 6,492 5,126
Repayment of borrowings (5,038) (5,663)
Net repayments of capital element of (7) (7)
finance lease
Increase in loan participation deposit - 200
Net cash (payments) / receipts on net (16) 42
investment hedges
Dividends paid to shareholders of the (769) (681)
parent
Dividends paid to minority interests (197) (161)
Net cash generated / (used) in financing 471 (1,136)
activities
Net cash from operating, investing and 7 (86)
financing activities
Effects of exchange rate changes (113) (18)
Net decrease in cash and cash equivalents (106) (104)
Cash and cash equivalents at 1 April 294 398
Cash and cash equivalents at 31 March 10 188 294
SABMiller plc
CONSOLIDATED STATEMENTS OF RECOGNISED INCOME AND EXPENSE
for the year ended 31 March
2008 2007
Unaudited Audited
US$m US$m
Currency translation differences on foreign 2,029 362
currency net investments
Actuarial gains / (losses) on defined benefit 31 (5)
plans
Fair value moves on available for sale investments 2 7
Tax on items taken directly to equity (8) 2
Net investment and cash flow hedges (225) (2)
Net gains recognised directly in equity 1,829 364
Profit for the year 2,288 1,883
Total recognised income for the year 4,117 2,247
- attributable to equity shareholders 3,795 2,010
- attributable to minority interests 322 237
SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The preliminary announcement for the year ended 31 March 2008 has been prepared
in accordance with the International Accounting Standards and International
Financial Reporting Standards (collectively IFRS) and International Financial
Reporting Interpretation Committee (IFRIC) interpretations as adopted by the EU.
The financial information in this preliminary announcement is not audited and
does not constitute statutory accounts within the meaning of s240 of the
Companies Act 1985 (as amended). Group financial statements for 2008 will be
delivered to the Registrar of Companies in due course. The board of directors
approved this financial information on 14 May 2008. Statutory accounts for the
year ended 31 March 2007, which were prepared in accordance with the
International Accounting Standards and International Financial Reporting
Standards (collectively IFRS) and International Financial Reporting
Interpretation Committee (IFRIC) interpretations adopted by the EU, have been
filed with the Registrar of Companies. The auditors` report on those accounts
was unqualified and did not contain a statement made under s237(2) or (3) of the
Companies Act 1985.
ACCOUNTING POLICIES
The financial statements are prepared under the historical cost convention,
except for the revaluation to fair value of certain financial assets and
liabilities.
The accounting policies adopted are consistent with those of the previous
financial year except that the Group has adopted the following standards and
interpretations of published standards.
- IFRIC 8, `Scope of IFRS 2`, (effective from 1 May 2006) provides guidance on
the scope of IFRS 2.
- IFRIC 9, `Re-assessment of embedded derivatives`, (effective from 1 June 2006)
provides guidance as to the circumstances an embedded derivative can be
reassessed.
- IFRIC 10, `Interim financial reporting and impairment` (effective from 1
November 2006) prohibits the reversal of impairment losses recognised in an
interim period in the annual period.
- IFRIC 11, `IFRS 2 - Group and treasury share transactions` (effective from 1
March 2007) provides guidance on share based payment arrangements with a Group
of companies.
- IFRS 7, `Financial Instruments: Disclosures` and the amendment to IAS 1,
"Presentation of Financial Statements - Capital Disclosures", (effective from 1
January 2007), introduces new disclosures to improve the information about
financial instruments. It requires the disclosures of qualitative and
quantitative information about exposure to risks arising from financial
instruments, including specified minimum disclosures about credit risk,
liquidity risk and market risk, including sensitivity analysis to market risk.
It replaces disclosure requirements in IAS 32, `Financial Instruments:
Disclosure and Presentation`. This standard does not have any impact on the
classification and valuation of the group`s financial instruments.
The adoption of these interpretations and IFRS 7 has not had a material effect
on the consolidated results of operations or financial position of the group.
2. SEGMENTAL INFORMATION (UNAUDITED)
The segmental information presented below includes the reconciliation of GAAP
measures presented on the face of the income statement to non-GAAP measures
which are used by management to analyse the group`s performance.
Share of Group Share of Group
revenue revenue
Segment associates` (including Segment associates` (including
revenue revenue Associates) revenue revenue Associates)
2008 2008 2008 2007 2007 2007
Revenue US$m US$m US$m US$m US$m US$m
Latin 5,239 12 5,251 4,373 19 4,392
America
Europe 5,242 6 5,248 4,078 - 4,078
North 5,120 - 5,120 4,887 - 4,887
America
Africa 1,853 1,514 3,367 1,455 1,219 2,674
and Asia
South
Africa:
- 3,956 490 4,446 3,827 447 4,274
Beverages
- Hotels - 396 396 - 340 340
and
Gaming
South 3,956 886 4,842 3,827 787 4,614
Africa:
Total
21,410 2,418 23,828 18,620 2,025 20,645
Operating Operating
profit profit
before before
exceptional Exceptional
Operating Excep- Operating Excep-
tional tional
profit Items items profit items items
2008 2008 2008 2007 2007 2007
Operating US$m US$m US$m US$m US$m US$m
profit
Latin 892 61 953 746 64 810
America
Europe 947 - 947 706 24 730
North 411 51 462 366 - 366
America
Africa 330 - 330 272 - 272
and Asia
South 962 - 962 1,043 - 1,043
Africa:
Beverages
Corporate (94) - (94) 5 (101)
(106)
3,448 112 3,560 3,027 93 3,120
Operating Share of Amortisation EBITA
profit before associates` of intangible
exceptional operating assets
items profit (excluding
before software)
exceptional
items
2008 2008 2008 2008
EBITA US$m US$m US$m US$m
Latin America 953 - 118 1,071
Europe 947 1 4 952
North America 462 - 15 477
Africa and Asia 330 231 7 568
South Africa:
- Beverages 962 64 - 1,026
- Hotels and Gaming - 139 2 141
South Africa: Total 962 203 2 1,167
Corporate (94) - - (94)
Group 3,560 435 146 4,141
Operating Share of Amortisation EBITA
profit before associates` of intangible
exceptional operating assets
items profit (excluding
before software)
exceptional
items
2007 2007 2007 2007
EBITA US$m US$m US$m US$m
Latin America 810 - 105 915
Europe 730 - 3 733
North America 366 - 9 375
Africa and Asia 272 193 2 467
South Africa:
- Beverages 1,043 59 - 1,102
- Hotels and Gaming - 100 - 100
South Africa: Total 1,043 159 - 1,202
Corporate (101) - - (101)
Group 3,120 352 119 3,591
The group`s share of associates` operating profit is reconciled to the share of
post-tax results of associates in the income statement as follows:
2008 2007
US$m US$m
Share of associates` operating profit before 435 352
exceptional items
Share of associates` interest (11) (9)
Share of associates` tax (120) (102)
Share of associates` minority interests (32) (36)
272 205
The following table provides a reconciliation of EBITDA (the net cash inflow
from operating activities before working capital movements) before cash
exceptional items to EBITDA after cash exceptional items. A reconciliation of
profit for the year for the Group to EBITDA after cash exceptional items for the
Group can be found in note 9.
EBITDA Cash EBITDA EBITDA Cash EBITDA
before cash exceptional before cash exceptional
exceptional items exceptional items
items items
2008 2008 2008 2007 2007 2007
EBITDA US$m US$m US$m US$m US$m US$m
Latin 1,319 (17) 1,302 1,147 (25) 1,122
America
Europe 1,203 - 1,203 936 (7) 929
North 569 (2) 567 510 - 510
America
Africa 404 - 404 340 - 340
and Asia
South 1,073 - 1,073 1,200 - 1,200
Africa:
Beverages
Corporate (31) - (31) (65) (5) (70)
Group 4,537 (19) 4,518 4,068 (37) 4,031
Excise duties of US$4,353 million (2007: US$3,758 million) have been incurred
during the year as follows: Latin America US$1,334 million (2007: US$1,092
million); Europe US$995 million (2007: US$784 million); North America US$861
million (2007: US$856 million); Africa and Asia US$420 million (2007: US$321
million) and South Africa US$743 million (2007: US$705 million).
Segment Investment in Unallocated Total assets
assets associates assets* 2008
2008 2008 2008
Total assets US$m US$m US$m US$m
Latin America 15,314 2 - 15,316
Europe 7,419 12 - 7,431
North America 6,041 - - 6,041
Africa and Asia 1,906 1,475 - 3,381
South Africa 2,186 337 - 2,523
Corporate 470 - - 470
Unallocated assets - - 651 651
Group 33,336 1,826 651 35,813
Total assets Segment Investment in Unallocated Total assets
assets associates assets 2007
2007 2007 2007 US$m
US$m US$m US$m
Latin America 12,575 5 - 12,580
Europe 4,232 - - 4,232
North America 6,072 - - 6,072
Africa and Asia 1,562 1,045 - 2,607
South Africa 2,074 301 - 2,375
Corporate 575 - - 575
Unallocated assets - - 295 295
Group 27,090 1,351 295 28,736
* Unallocated assets include borrowing related derivative financial instrument
assets, current tax and deferred tax assets.
Segment Unallocated Total Segment Unallocated Total
liabi- liabi- liabi- liabi- liabi- liabi-
lities lities* lities lities lities lities
2008 2008 2008 2007 2007 2007
Total US$m US$m US$m US$m US$m US$m
liabilities
Latin 1,400 - 1,400 1,226 - 1,226
America
Europe 1,238 - 1,238 874 - 874
North 1,341 - 1,341 1,272 - 1,272
America
Africa and 323 - 323 329 - 329
Asia
South 569 - 569 592 - 592
Africa
Corporate 533 - 533 234 - 234
Unallocated - 12,165 12,165 - 9,208 9,208
liabilities
Group 5,404 12,165 17,569 4,527 9,208 13,735
* Unallocated liabilities include borrowings (including related derivative
financial instruments), current tax and deferred tax liabilities.
Capital Acqui- Total Capital Acqui- Total
expendi- sition capital expendi- sition capital
ture activity expendi- ture activity expendi-
excluding ture* excluding ture*
acquisi- acquisi-
tions tions
2008 2008 2008 2007 2007 2007
Capital US$m US$m US$m US$m US$m US$m
expenditure
Latin 730 - 730 372 - 372
America
Europe 565 534 1,099 374 7 381
North 166 - 166 155 215 370
America
Africa and 295 - 295 144 48 192
Asia
South 279 - 279 230 - 230
Africa
Corporate 26 - 26 12 - 12
Group 2,061 534 2,595 1,287 270 1,557
*Capital expenditure is defined as the acquisition and addition of intangible
assets (excluding goodwill) and property, plant and equipment.
3. EXCEPTIONAL ITEMS
2008 2007
Unaudited Audited
US$m US$m
Subsidiaries` exceptional items included in
operating profit:
Latin America (61) (64)
Bavaria integration and restructuring costs (78) (64)
Profit on sale of subsidiaries 17 -
Europe - (24)
Integration and restructuring costs - (7)
Profit on sale of land in Italy - 14
Adjustment to goodwill - (31)
North America
Integration and restructuring costs (51) -
Corporate -
Bavaria integration costs (5)
Exceptional items included within operating (112) (93)
profit
Taxation credit 40 30
2008
LATIN AMERICA
Restructuring costs associated with the consolidation of Bavaria S.A. of US$78
million were incurred during the year.
A net US$17 million profit on disposal has been recognised in Latin America on
the disposal of soft drinks businesses in Costa Rica and Colombia in the six
months ended 30 September 2007.
NORTH AMERICA
In preparation for the proposed joint venture, which remains subject to
regulatory clearance, a charge of US$51 million has been recorded by Miller for
staff retention arrangements and for certain integration costs.
2007
LATIN AMERICA AND CORPORATE
Integration and restructuring costs associated with the consolidation of Bavaria
S.A. of US$69 million were incurred during the year.
EUROPE
Integration and restructuring costs of US$7 million associated with the
consolidation of Pivovar Topvar a.s. and the relocation of the Europe hub office
to Zug were incurred during the year.
In November 2006, the Naples brewery site was sold for US$28 million giving rise
to a profit of US$14 million.
During the year the Group recognised deferred tax assets that had previously not
been recognised on the acquisition of Birra Peroni. In accordance with IAS12,
Income Taxes, when deferred tax assets on losses not previously recognised on
acquisition are subsequently recognised, both goodwill and deferred tax assets
are adjusted with corresponding entries to operating expense and taxation in the
income statement. This deferred tax asset has been substantially utilised
during the year.
4. NET FINANCE COSTS
2008 2007
Unaudited Audited
US$m US$m
a. Interest payable and similar charges
Interest payable on bank loans and overdrafts 292 289
Interest payable on corporate bonds 401 327
Interest element of finance leases payments 1 1
Losses on early settlement of bonds - 44
Net exchange gains on financing activities (39) (28)
Fair value losses on dividend related derivatives* 10 -
Fair value losses on standalone derivative financial 23 -
instruments
Other finance charges 33 35
Total interest payable and similar charges 721 668
b. Interest receivable
Interest receivable 198 177
Fair value gains (losses)/gains on financial
instruments:
- Fair value (losses)/gains on standalone derivative 19 17
financial instruments
- Interest rate swaps: designated as fair value 103 36
hedges
- Non-current borrowings designated as fair value (103) (36)
hedges
- Ineffectiveness of fair value hedges 3 2
- Ineffectiveness of net investment hedges* 45 -
- Other fair value gains on borrowings - 44
Total interest receivable 265 240
Net finance costs 456 428
* These items relate to mark to market adjustments on capital items for which
hedge accounting can not be applied. These items have been excluded from the
determination of adjusted earnings per share. Adjusted net finance costs are
therefore US$491 million (2007: US$428 million).
5. TAXATION
2008 2007
Unaudited Audited
US$m US$m
Current taxation 926 780
- Charge for the year (UK corporation tax: US$nil 935 833
million charge (2007: US$nil million charge))
- Adjustments in respect of prior years (9) (53)
Withholding tax and other remittance taxes 64 119
Total current taxation 990 899
Deferred taxation (14) 22
- Charge for the year (UK corporation tax: US$9 8 82
million credit (2007: US$9 million charge))
- Adjustments in respect of prior years (17) 5
- Recognition of deferred tax asset in connection - (31)
with the acquisition of Birra Peroni
- Rate change (5) (34)
976 921
Effective tax rate, before amortisation of intangibles 32.5 34.5
(excluding software) and exceptional items (%) *
* The effective tax rate is calculated including share of associates` operating
profit before exceptional items after adjusted net finance costs and share of
associates` tax before exceptional items. This calculation is on a basis
consistent with that used in prior years and is also consistent with other group
operating metrics.
6. EARNINGS PER SHARE
2008 2007
Unaudited Audited
US cents US cents
Basic earnings per share 134.9 110.2
Diluted earnings per share 134.2 109.5
Headline earnings per share* 133.0 111.3
Adjusted basic earnings per share 143.1 120.0
Adjusted diluted earnings per share 142.4 119.3
The weighted average number of shares
was:
2008 2007
Unaudited Audited
Millions of Millions of
shares shares
Ordinary shares 1,504 1,500
ESOP trust ordinary shares (4) (4)
Basic shares 1,500 1,496
Dilutive ordinary shares from share 8 9
options
Diluted shares 1,508 1,505
ADJUSTED AND HEADLINE EARNINGS
The group also presents an adjusted earnings per share figure to exclude the
impact of amortisation of intangible assets (excluding capitalised software) and
other non-recurring items in order to present a more useful comparison for the
years shown in the consolidated financial statements. Adjusted earnings per
share has been based on adjusted headline earnings for each financial year and
on the same number of weighted average shares in issue as the basic earnings per
share calculation. Headline earnings per share has been calculated in accordance
with the new South African Circular 8/2007 entitled "Headline Earnings" which
forms part of the listing requirements for the JSE Ltd (JSE). The adjustments
made to arrive at headline earnings and adjusted earnings are as follows:
2008 2007
Unaudited Audited
US$m US$m
Profit for the financial year attributable to 2,023 1,649
equity holders of the parent
Headline Adjustments
Impairment of property, plant and equipment 5 13
Profit on sale of property, plant and equipment (29) (20)
and investments
Adjustment to goodwill - 31
Tax effects of the above items (4) (10)
Minority interests` share of the above items - 2
Headline earnings* 1,995 1,665
Other Adjustments
Integration/reorganisation costs 129 76
Profit on fair value movements on capital items** (35) (10)
Amortisation of intangible assets (excluding 146 119
capitalised software)
Tax effects of the above items (88) (54)
Adjusted earnings 2,147 1,796
* 2007 re-presented to comply with the new Headline earnings definitions
contained within the South African Circular 8/2007.
** This does not include all fair value movements but includes those in relation
to capital items for which hedge accounting cannot be applied.
7. DIVIDENDS
Dividends paid are as follows:
2008 2007
Unaudited Audited
Equity US$m US$m
2007 Final dividend paid: 36.0 US cents (2006: 537 472
31.0 US cents) per ordinary share
2008 Interim dividend paid: 16.0 US cents (2007: 232 209
14.0 US cents) per ordinary share
769 681
In addition, the directors are proposing a final dividend of 42 US cents per
share in respect of the financial year ended 31 March 2008, which will absorb an
estimated US$632 million of shareholders` equity. The dividends will be paid on
7 August 2008 to shareholders registered on the London and Johannesburg
registers on 11 July 2008.
8. GOODWILL AND INTANGIBLE ASSETS
Goodwill Intangible
assets
Unaudited Unaudited
US$m US$m
Net book amount
At 1 April 2006 12,814 3,596
Exchange adjustments 278 159
Arising on increase in share of subsidiary 121 44
undertakings
Arising on acquisition of subsidiary 78 270
undertakings
Amortisation - (162)
Adjustment on recognition of deferred tax (31) -
assets in connection with the acquisition of
Birra Peroni
Transfers from other assets - 6
Transfer to disposal groups (10) (12)
At 31 March 2007 13,250 3,901
Exchange adjustments 1,406 573
Arising on increase in share of subsidiary 27 -
undertakings
Arising on acquisition of subsidiary 917 19
undertakings (provisional)
Additions - separately acquired - 60
Amortisation - (190)
Transfers from other assets - 20
At 31 March 2008 15,600 4,383
GOODWILL
2008
Additional goodwill arising on the acquisition of subsidiary undertakings has
resulted from the acquisition of Royal Grolsch NV and Browar Belgia zoo, both of
which occurred during the year. The fair value exercises in respect of these
acquisitions are not yet complete.
2007
Additional goodwill arising on the consolidation of subsidiary undertakings was
due to the acquisition of the Foster`s business in India and minority purchases
in Latin America.
INTANGIBLE ASSETS
2008
Brands acquired during the year through business combinations relate to Browar
Belgia zoo. The fair value exercise for Royal Grolsch NV is not yet complete.
2007
Brands acquired during the year include the Sparks and Steel Reserve brands in
the U.S. and the Foster`s brand in India.
9. RECONCILIATION OF PROFIT FOR THE YEAR TO NET CASH GENERATED FROM OPERATIONS
2008 2007
Unaudited Audited
US$m US$m
Profit for the financial period 2,288 1,883
Taxation 976 921
Share of post-tax results of associates (272) (205)
Interest receivable (265) (240)
Interest payable and similar charges 721 668
Operating profit 3,448 3,027
Depreciation:
Property, plant and equipment 633 550
Containers 215 187
Container breakages, shrinkage and write-offs 27 44
(Profit) / loss on sale of property, plant and (12) (6)
equipment
Exceptional profit on sale of property, plant and - (14)
equipment (Europe)
Impairment of property, plant and equipment 5 13
Amortisation of intangible assets 190 162
Unrealised net gain from derivatives (26) (2)
Exceptional profit on disposal of subsidiaries (17) -
Dividends received from other investments (1) (1)
Charge with respect to share options 58 31
Restructuring and integration costs (Latin - 10
America)
Adjustment to goodwill (Europe) - 31
Other non-cash movements (2) (1)
Net cash generated from operations before working 4,518 4,031
capital movements (EBITDA)
Increase in inventories (337) (73)
Increase in receivables (160) (294)
Increase in payables 282 319
(Decrease) / increase in provisions (5) 21
(Decrease) / Increase in post-retirement (22) 14
provisions
Net cash generated from operations 4,276 4,018
Cash generated from operations include cash flows relating to exceptional items
of US$19 million (2007: US$37 million).
10. ANALYSIS OF NET DEBT (UNAUDITED)
Cash and Overdrafts Borrowings Derivative Finance
cash financial leases
equivalents instruments
(excluding
overdrafts)
US$m US$m US$m US$m US$m
At 31 March 481 (187) (7,029) (127) (15)
2007
Exchange (72) (41) (388) - (1)
adjustments
Cash flow 254 (248) (1,454) (10) 7
Arising on 10 (9) (164) - -
acquisitions
Other non- - - (125) 62 (4)
cash
movements
At 31 March 673 (485) (9,160) (75) (13)
2008
Total gross Net
borrowings debt
US$m US$m
At 31 March 2007 (7,358) (6,877)
Exchange adjustments (430) (502)
Cash flow (1,705) (1,451)
Arising on acquisitions (173) (163)
Other non-cash movements (67) (67)
At 31 March 2008 (9,733) (9,060)
Cash and cash equivalents on the Balance Sheet are reconciled to cash and cash
equivalents on the Cash Flow as follows:
2008 2007
Unaudited Audited
US$m US$m
Cash and cash equivalents (Balance Sheet) 673 481
Overdrafts (485) (187)
Cash and cash equivalents (Cash Flow) 188 294
The group`s net debt is denominated in the following currencies:
US dollars SA rand Euro Colombian Other Total
peso currencies
US$m US$m US$m US$m US$m US$m
Total cash 129 19 36 77 220 481
and cash
equivalents
Total gross (4,580) (389) (267) (1,384) (738) (7,358)
borrowings
(4,451) (370) (231) (1,307) (518) (6,877)
Cross 1,400 (400) - (400) (600) -
currency
swaps
At 31 March (3,051) (770) (231) (1,707) (1,118) (6,877)
2007
Total cash 196 171 43 34 229 673
and cash
equivalents
Total gross (4,686) (439) (1,888) (1,807) (913) (9,733)
borrowings
(4,490) (268) (1,845) (1,773) (684) (9,060)
Cross 1,731 (400) (331) (400) (600) -
currency
swaps
Net debt at (2,759) (668) (2,176) (2,173) (1,284) (9,060)
31 March
2008
11. SHARE CAPITAL
During the year ended 31 March 2008 3,591,830 ordinary shares (2007: 4,342,988
ordinary shares) were allotted and issued in accordance with the group`s share
purchase, option and award schemes.
12. POST BALANCE SHEET EVENTS
In May 2008, SABMiller announced it had agreed to acquire a 99.84% interest in
the Ukrainian brewer, CJSC Sarmat. The transaction is subject to approval by
the Ukrainian competition authorities and other customary pre-closing
conditions.
FORWARD-LOOKING STATEMENTS
This announcement does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire ordinary shares in the capital of
SABMiller plc (the "Company") or any other securities of the Company in any
jurisdiction or an inducement to enter into investment activity.
This announcement includes `forward-looking statements`. These statements
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. Such 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. Such
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 document. The Company
expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statements contained herein
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.
ADMINISTRATION
SABMILLER PLC
(Registration No. 3528416)
COMPANY SECRETARY
John Davidson
REGISTERED OFFICE
SABMiller House
Church Street West
Woking
Surrey, England
GU21 6HS
Telefax +44 1483 264117
Telephone +44 1483 264000
HEAD OFFICE
One Stanhope Gate
London, England
W1K 1AF
Telefax +44 20 7659 0111
Telephone +44 20 7659 0100
INTERNET ADDRESS
http://www.sabmiller.com
Investor Relations
investor.relations@sabmiller.com
Telephone +44 20 7659 0100
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
1 Embankment Place
London, England
WC2N 6RH
Telefax +44 20 7822 4652
Telephone +44 20 7583 5000
REGISTRAR (UNITED KINGDOM)
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, England
BR3 4TU
Telefax +44 20 8658 3430
Telephone +44 20 8639 2157 (outside UK)
Telephone 0870 162 3100 (from UK)
REGISTRAR (SOUTH AFRICA)
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg
PO Box 61051
Marshalltown 2107
South Africa
Telefax +27 11 370 5487
Telephone +27 11 370 5000
UNITED STATES ADR DEPOSITARY
The Bank of New York
ADR Department
101 Barclay Street
New York, NY 10286
United States of America
Telefax +1 212 815 3050
Telephone +1 212 815 2051
Internet: http:// www.bankofny.com
Toll free +1 888 269 2377 (USA & Canada only)
Date: 15/05/2008 08:00:40 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
