| Thu 20 May 2010, 8:00 | | SAB - SABMiller Plc - Preliminary announcement |
|
SAB
SOSAB
SAB - SABMiller Plc - Preliminary announcement
SABMiller Plc
JSEALPHA CODE: SAB
ISSUER CODE: SOSAB
ISIN CODE: GB0004835483
PRELIMINARY ANNOUNCEMENT
20 May 2010
STRONG PERFORMANCE IN CHALLENGING CONDITIONS
SABMiller plc, one of the world`s leading brewers with operations and
distribution agreements across six continents, reports its preliminary
(unaudited) results for the twelve months to 31 March 2010.
OPERATIONAL HIGHLIGHTS
- Lager volumes of 213 million hectolitres (hl), in line with the prior year on
an organic basis; share gains in many markets
- Group revenue up 4% and EBITA up 6% with margin growth of 30 basis points
(bps) driven by robust pricing and cost efficiencies
- EBITA1 increases in all regions except Asia:
- Latin America delivers strong EBITA1 growth of 17% through pricing and cost
productivity
- Solid pricing and cost management in Europe drive EBITA1 growth of 4% despite
lower volumes
- Cost synergies deliver EBITA1 growth of 7% in North America
- Resilient lager volume growth in Africa underpins EBITA1 growth of 4%
- Asia EBITA1 level as strong China growth is offset by constraints in India
- South Africa Beverages EBITA1 grows 2% despite increased market investment
- Adjusted EPS up 17% with operating performance enhanced by lower finance costs
and a reduced tax rate
- Strong free cash flow2 of US$2,010 million, with dividends per share up 17%
1 EBITA growth is shown on an organic, constant currency basis.
2 As defined in the financial definitions section. See also note 10b.
2010 2009 %
US$m US$m change
Group revenuea 26,350 25,302 4
Revenueb (excludes associates` and 18,020 18,703 (4)
joint ventures` revenue)
EBITAc 4,381 4,129 6
Adjusted profit before taxd 3,803 3,405 12
Profit before taxe 2,929 2,958 (1)
Adjusted earningsf 2,509 2,065 22
Adjusted earnings per share
- US cents 161.1 137.5 17
- UK pence 100.6 79.7 26
- SA cents 1,253.8 1,218.6 3
Basic earnings per share (US cents) 122.6 125.2 (2)
Dividends per share (US cents) 68.0 58.0 17
a Group revenue includes the attributable share of associates` and joint
ventures` revenue of US$8,330 million (i.e. including MillerCoors` revenue)
(2009: US$6,599 million).
b Revenue excludes the attributable share of associates` and joint ventures`
revenue.
c 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` and joint ventures` operating profit, on a similar basis. EBITA is
used throughout this preliminary announcement.
d Adjusted profit before tax comprises EBITA less adjusted net finance costs
of US$538 million (2009: US$699 million) and share of associates` and joint
ventures` net finance costs of US$40 million (2009: US$25 million).
e Profit before tax includes exceptional charges of US$507 million (2009:
US$69 million).
f A reconciliation of adjusted earnings to the statutory measure of profit
attributable to equity shareholders is provided in note 6.
Meyer Kahn, Chairman of SABMiller, said:
"In a year characterised by very difficult trading conditions, the business has
delivered another strong performance, capitalising on our excellent market
positions and unique portfolios of leading local and international brands.
Profits and cash flow have improved significantly, and at the same time, we have
continued to support current and future growth opportunities, particularly in
our developing market businesses."
Organic,
constant
2010 Reported currency
EBITA growth growth
US$m % %
Latin America 1,386 18 17
Europe 872 (8) 4
North America 619 7 7
Africa 565 1 4
Asia 71 (12) -
South Africa: Beverages 885 16 2
South Africa: Hotels and Gaming 122 1 (16)
Corporate (139) - -
Group 4,381 6 6
BUSINESS REVIEW
The group delivered a strong performance despite difficult economic and
operating conditions which began to moderate in some of our developing markets
in the final quarter of the year. Total beverage volumes of 261 million hl were
in line with the prior year on an organic basis, with lager volumes level and
soft drinks volumes up 2%. Sales were supported by share gains in many markets,
and group revenue grew 4% driven by price increases taken principally in the
prior year and selectively in the current year.
On an organic, constant currency basis, EBITA grew by 6% with margin up by 30
bps on the prior year to 16.7%. Raw material costs were marginally higher than
the prior year, with cost increases moderating during the second half. Brewing
raw material costs began to trend lower later in the year, although packaging
and sugar costs continued to rise. Focus was maintained on cost management and
productivity, with synergies and cost restructuring benefits offsetting
increases in depreciation, paycost inflation and, in some markets, increased
investment in brand and retail execution. EBITA also grew 6% on a reported
basis, with the significant adverse currency impact in the first half offset in
the second half as our major operating currencies appreciated against the US
dollar.
Adjusted earnings were 22% ahead of the prior year reflecting EBITA growth,
lower finance costs, a lower effective tax rate and reduced profit attributable
to minorities. The minority share of profit declined principally as a result of
our purchase of the 28.1% minority interest in our Polish subsidiary Kompania
Piwowarska in May 2009, in exchange for the issue of 60 million ordinary shares.
The group`s effective tax rate for the year was 28.5%, 170 bps lower than the
prior year. Adjusted earnings per share were up 17% to 161.1 US cents.
The group generated free cash flow of US$2,010 million, an improvement of
US$1,913 million compared with the prior year. Significant improvements were
made in working capital management, with a considerable contribution from the
business capability programme initiatives announced earlier in the year. Cash
inflow from working capital was US$563 million, compared with an outflow of
US$493 million in the prior year. Capital expenditure including the purchase of
intangible assets was US$1,528 million, US$619 million lower than the prior year
reflecting the completion of several major projects.
Net debt decreased by US$311 million to US$8,398 million, reflecting the strong
cash flow but partly offset by adverse currency translation. The group`s
gearing ratio fell to 41% from 54% in the prior year. The Board has recommended
a final dividend of 51 US cents per share, which will be paid to shareholders on
13 August 2010. This brings the total dividend per share to 68 US cents, an
increase of 10 US cents (17%) over the prior year.
- LATIN AMERICA delivered very strong EBITA growth of 18% on a reported basis
and 17% on an organic, constant currency basis through the combination of volume
growth, pricing and mix benefits, lower raw material costs and fixed cost
productivity. Despite challenging trading conditions for much of the year,
lager volumes grew 3%, supported by good growth in the final quarter as
economies showed signs of improvement. During the year we achieved further
share gains. In Colombia, lager volumes grew 3% during the year with robust
growth during the second half supported by strong market execution and a
strengthening economy. This was achieved notwithstanding a price increase to
recover higher beer sales taxes implemented in February 2010. In Peru, lager
volumes were in line with the prior year reflecting a return to growth in the
second half of the year due to improving economic conditions and ongoing market
share gains.
- EUROPE`S lager volumes declined 5% on an organic basis, as beer markets across
the region contracted under severe economic conditions compounded by significant
excise increases in some key markets. Against this backdrop, we gained market
share in Poland and Romania and held share in the Czech Republic and Russia.
Despite the volume decline, robust pricing taken predominantly in the prior
year, combined with cost efficiencies, supported constant currency EBITA growth
of 4% on an organic basis. Reported EBITA declined 8% reflecting a significant
weakening of central European currencies against the US dollar.
- NORTH AMERICA delivered EBITA growth of 7% for the year on a reported basis
compared to the previous year which included one quarter of Miller Brewing
Company operations prior to the formation of the MillerCoors joint venture.
MillerCoors delivered pro forma1 EBITA growth of 13% despite a sluggish US beer
market impacted by continued adverse economic conditions. On a pro forma basis,
MillerCoors domestic sales to wholesalers (STWs) and sales to retailers (STRs)
for the year were both down 2%. EBITA growth was driven by favourable pricing,
incremental synergy benefits and marketing and fixed cost savings, partly offset
by lower volumes and commodity cost pressures. During the year, incremental
synergy and cost savings of US$281 million were delivered resulting in total
annualised synergy and cost savings of US$409 million. MillerCoors remains on
track to deliver US$750 million in total annualised synergies and other cost
savings by the end of the calendar year 2012.
- In AFRICA, our beer markets were broadly resilient, with the majority
continuing to grow through the year albeit at a slower rate than in recent
years. Lager volumes grew 6% with Mozambique, Zambia and Uganda delivering
strong growth supported by improved geographical coverage following new brewery
investments, excise reductions and capacity expansion respectively. Botswana`s
lager volumes were severely impacted by the social levy on alcohol introduced in
November 2008, while volumes in Tanzania fell in line with a market affected by
unseasonable weather earlier in the year. Soft drinks volumes grew 4%
organically for the year. We continued to grow our beverage platforms with the
acquisition of water businesses in Ethiopia and Uganda and of a maheu business,
a non-alcoholic traditional beverage, in Zambia. During the year, we invested
in new breweries in Angola, Mozambique, Southern Sudan and Tanzania and upgraded
capacity in Uganda and Zambia. Currency weakness held back reported EBITA
growth to 1% while constant currency EBITA grew 4% on an organic basis
underpinned by volume growth and beneficial mix impact from the introduction of
local premium lager brands.
- In ASIA, lager volumes increased organically by 7% with growth of 10% in
China. China benefited from further share gains by the Snow brand supported by
the launch of the new premium variant, Snow Draft. India`s volumes fell 14%
with some market share loss due to regulatory issues and increased taxes across
certain states, although conditions improved towards the end of the year. In
Australia, the portfolio of premium brands continued to deliver strong growth
with lager volumes up 32%. Organic, constant currency EBITA was level, with
good growth in China offset by the impact of India`s volume decline. Reported
EBITA, which includes initial losses in recent Chinese acquisitions, fell 12%.
1 MillerCoors pro forma figures are based on results for Miller and Coors` US
and Puerto Rico operations reported under International Financial Reporting
Standards (IFRS) and US GAAP respectively for the twelve months ended 31 March
2009. Adjustments have been made to reflect both companies` comparative data on
a similar basis including amortisation of definite-life intangible assets,
depreciation reflecting revisions to property, plant and equipment values and
the exclusion of exceptional items.
- In SOUTH AFRICA, lager volumes were 1% below the prior year in a market that
grew marginally. The market was buoyed by the inclusion of two Easter buy-in
periods within the financial year although consumer spending remained generally
subdued. Our lager sales benefited from refreshed positioning and communication
for our core brands, together with increased investment in sales capability and
customer service. Soft drinks volumes declined 1% during the year due to the
weak economic environment and unfavourable weather conditions during the peak
summer trading period. Organic, constant currency EBITA grew 2% although margin
declined slightly as pricing benefits and fixed cost productivity were eroded by
higher input costs and intensified marketing spend. On a reported basis, EBITA
grew 16% benefiting from the strength of the rand relative to the US dollar over
the year. The broad based black economic empowerment transaction that was
announced on 1 July 2009 will be completed in June 2010. The deal will benefit
employees, soft drinks and liquor retailers and the wider South Africa community
by placing 8.45% of the equity of The South African Breweries Limited under
black ownership.
- As announced previously, the group has embarked on a major business capability
programme to simplify processes and reduce costs, enabling local management to
focus more on market-facing activities. Back office functions including
finance, human resources and procurement will be streamlined through standard
global information processes and applications, while front office processes
including sales, distribution and supply chain management, will benefit from
common regional platforms. The programme remains on track to be completed by
2014, delivering ongoing cost benefits of US$300 million per annum by 2014. In
the current financial year, we have realised substantial working capital
benefits of US$333 million while recognising exceptional costs of $342 million
relating to the programme. In addition, exceptional charges of US$165 million
were taken in respect of other projects, predominantly to raise efficiency
through brewery restructuring in Europe and Colombia (US$123 million) and the
integration of MillerCoors (US$18 million).
OUTLOOK
Although the economic environment began to improve for some of our emerging
market businesses in the latter part of the financial year under review, a
broader recovery in consumer spending is not expected before the second half of
the current financial year. Price increases will be taken selectively,
predominantly in the second half, and we expect raw material input costs for the
year to be level with, or marginally down on, the prior year. We will continue
to implement our cost productivity initiatives while increasing investment in
our brands.
The group`s brand equities and its financial position remain strong and we are
well positioned to take advantage of any improvement in trading conditions.
Enquiries:
SABMiller plc Tel: +44 20 7659 0100
Sue Clark Director of Corporate Tel: +44 20 7659 0184
Affairs
Gary Leibowitz Senior Vice President, Tel: +44 20 7659 0119
Investor Relations
Nigel Fairbrass Head of Media Relations Mob: +44 77 9989 4265
A live audiocast of the management presentation to the investment community will
begin at 9.30am (BST) on (20 May 2010).
Access details for this audiocast, video interviews with management and copies
of this announcement and the slide presentation are
available on the SABMiller plc website at www.sabmiller.com.
IMAGES: Our media image library has a large selection of images for use in print
and digital media.
Visit www.sabmiller.com/imagelibrary
BROADCAST FOOTAGE: Our broadcast footage library has stock footage for media
organisations to view and download for use in TV programmes or news websites.
Visit www.sabmiller.com/broadcastfootage
Copies of the press release and detailed Preliminary Announcement are available
from the Company Secretary at the Registered Office, or from 2 Jan Smuts Avenue,
Johannesburg, South Africa.
OPERATIONAL REVIEW
LATIN AMERICA
Financial summary 2010 2009 %
Group revenue (including share of 5,905 5,495 7
associates) (US$m)
EBITA (US$m) 1,386 1,173 18
EBITA margin (%) 23.5 21.4
Sales volumes (hl 000)
- Lager 38,075 37,138 3
- Soft drinks 15,895 18,509 (14)
- Soft drinks (organic) 15,895 15,071 5
In 2010 before exceptional charges of US$156 million being business capability
programme costs of US$97 million, restructuring and integration costs of US$14
million and impairments of US$45 million (2009: net exceptional credits of US$45
million being profits on disposal of the Colombian water business and the
Bolivian soft drinks operations of US$89 million, net of integration and
restructuring costs of US$31 million and a US$13 million charge in respect of
litigation).
In a year characterised by difficult economic and trading conditions across
Latin America, management delivered EBITA growth of 18% on a reported and 17% on
an organic constant currency basis. The year saw lager volume growth of 3%
benefiting from enhanced sales execution with a strong fourth quarter supported
by signs of improving economic conditions across the region. We grew or held
market share in most of our markets while revenue was boosted by strong pricing
taken last year and beneficial mix resulting in organic revenue per hectolitre
growth of 4% at constant currency. Margin was further enhanced by marketing
efficiencies and restructuring benefits.
In COLOMBIA we performed strongly, delivering a 270 basis point improvement in
EBITA margin on an organic, constant currency basis, and significantly improved
cash flow generation. Revenue was supported in the first half of the year by
price increases taken in the prior year while the second half benefited from
volume recovery and continued mix improvement. Full year lager volumes grew 3%,
with a particularly encouraging last quarter. Fourth quarter lager volumes grew
by 13%, albeit against a soft prior year comparative, assisted by Easter trading
and strong market execution, notwithstanding a price increase to recover the
beer tax rise imposed in February. Our share of the alcohol market remained in
line with the prior year at approximately 66%. Volumes benefited from our
balanced brand and pack portfolio and efforts to attract a wider consumer base
and drive consumption frequency. Premium brand volumes increased 29% aided by
strong growth of Club Colombia and Redd`s. Mainstream brand volumes grew 2%,
with Aguila Light continuing to outperform on the back of a trend to lighter
beer. We continued our focus on improving customer service and trade execution,
whilst working with retailers to increase affordability. Raw material costs
benefited from lower prices, while fixed costs improved in real terms following
restructuring and cost reductions. In February 2010, the business announced
plans to transfer production from its central Bogota brewery to the nearby
Tocancipa facility. As a result, a US$59 million exceptional charge has been
taken in the year, of which US$45 million relates to the impairment of asset
values. The initiative is expected to have a payback of less than two years.
In PERU we continued to gain beer market share with both volume and value share
growing to approximately 90%. Improved trading in the fourth quarter lifted
lager volumes to end the year in line with the prior year. Profitability grew
strongly benefiting from a national price increase in April 2009 and positive
sales mix resulting from growth of our premium brands and contraction of the
economy segment. Our local premium brand, Cusquena, grew volumes 7%.
Mainstream brands grew 1% as they recovered share from the economy segment led
by Pilsen Callao, which is priced at the upper mainstream in some markets.
Following the introduction of a new IT platform as part of the ongoing group
business capability programme, direct distribution now accounts for 76% of all
deliveries and management of trade receivables has improved. Fixed cost
control, more effective marketing spend and containment of raw material costs
further enhanced EBITA margin.
Our operations in ECUADOR saw robust growth with two increases in national
minimum wages supporting consumer spending. Lager volumes grew by 9% with 37%
growth from the premium segment reflecting the continued success of our local
premium brand, Club, following its relaunch in the prior year. Our flagship
mainstream brand, Pilsener, also grew strongly, assisted by the launch of a new
225ml returnable pack in January. In the non-alcoholic malt beverage category,
our brand Pony Malta saw growth of 19% following pack extensions. Continued
development of the sales and distribution model in the provincial areas led to
simultaneous improvements in service levels, efficiencies and reach resulting in
better outlet coverage and product availability. Outlet penetration rose 5% to
85%. In a highly dynamic market, our share of the alcohol market remained at
44%.
HONDURAS endured both deteriorating economic conditions following the global
financial crisis, and political turmoil, which continued for much of the year.
As the political situation deteriorated, our operations took action to protect
our route-to-market, secure supply and maintain customer service. Total volume
growth of 5% was achieved with growth of soft drinks offsetting lower lager
volumes. Sparkling soft drinks grew share to 56% with good growth by our
Tropical brand and the Coca-Cola brand. Despite lower lager volumes and
stronger pricing, we increased our share of the alcohol market from 40% to 49%
supported by increased outlet penetration and superior sales execution.
In PANAMA total volumes grew by 4%, with lager volumes up 1% in an increasingly
competitive environment. Soft drinks volume grew 7%, boosted by the excellent
performance of Malta Vigor following its re-launch in the prior year and higher
availability of non-carbonated soft drinks.
In EL SALVADOR total volumes grew 8% with strong soft drink sales in a fast
growing soft drinks market. We maintained our leadership in sparkling soft
drinks with a 55% market share. Our juice volumes grew 46% following the launch
of a new brand, Jugos del Valle Fresh, in August 2009, while lager volumes were
in line with the prior year.
EUROPE
Financial summary 2010 2009 %
Group revenue (including share of 5,577 6,145 (9)
associates) (US$m)
EBITA (US$m) 872 944 (8)
EBITA margin (%) 15.6 15.4
Sales volumes (hl 000)
- Lager 45,513 47,237 (4)
- Lager (organic) 44,872 47,237 (5)
In 2010 before exceptional charges of US$202 million being US$64 million of
integration and restructuring costs and US$138 million of business capability
programme costs (2009: US$452 million being the impairment of non-current assets
of US$392 million, integration and restructuring costs of US$51 million and the
unwind of fair value adjustments on inventory following the acquisition of
Grolsch of US$9 million).
In EUROPE, lager volumes declined 4% on a reported basis and 5% on an organic
basis as the beer market continued to be impacted by depressed consumer spending
as a result of increased unemployment and tighter credit across the region.
During the year, a number of markets also faced significant increases in excise,
which have been substantially passed on in price increases. Against this
backdrop, we grew or maintained market share in our key markets and increased
our share of the premium segment.
Organic, constant currency revenue per hectolitre grew 6% reflecting strong
pricing in the first half, which moderated in the second half. This, combined
with improved cost efficiency, drove an organic, constant currency EBITA
increase of 4% and organic margin expansion of 60 bps. Marketing expenditure
was lower than in the prior year which included local sponsorship of the Euro
2008 football championships and the Olympics. Fixed costs and depreciation
increased due to expanded sales and distribution reach and capacity in both
Russia and Romania. Central European currencies were considerably weaker than
in the prior year, impacting raw material costs, but we nevertheless achieved a
small improvement in variable production costs. Reported EBITA declined by 8%.
In POLAND, lager volumes were down 3% although we grew market share, reflecting
a sustained focus on sales execution and trade programmes. Brand activities
centred on Tyskie, Poland`s leading brand, as sponsor of the International Year
of Beer, driving an increase in brand market share for the third consecutive
year. Zubr also captured significant market share, growing volumes by 3%. In
the premium segment, we increased our value share, and Grolsch was successfully
launched in the super-premium segment. Revenue per hectolitre grew 4% in
constant currency terms. In September 2009 we announced the closure of the
Kielce brewery and three distribution centres.
In the CZECH REPUBLIC, the market was impacted by higher unemployment and
significant increases in VAT and excise in January 2010. Our domestic lager
volumes declined 5%, reflecting a 7% fall in the on-premise channel which has
been severely affected by economic pressures and lower tourism. Despite this,
we maintained market share with our brands now occupying the number one, two and
three market positions. Our combined super-premium and premium portfolio grew
over 6% with all key brands growing market share. The performance of Pilsner
Urquell, underpinned by strong and improving brand health, was particularly
noteworthy given its price premium. The market-leading brand, Gambrinus,
continued to be negatively affected by its significant exposure to the on-
premise channel; however the higher priced variant Gambrinus 11 performed well,
maintaining its leadership of the semi-premium segment. In the mainstream
segment, Kozel enjoyed another exceptional year, growing 5% and consolidating
its position as Czech`s number two brand. Improved overhead productivity led to
an EBITA margin expansion of over 100 basis points.
ROMANIA suffered a severe recession during the year and our lager volumes fell
13% on an organic basis in a market that declined 24%. We took market
leadership with share improving by 400 bps to reach 32% over the year. The
mainstream segment continued to grow at the expense of premium and economy
sectors as consumers sought brands with strong value propositions. Our largest
brand, Timisoreana, continued its strong performance with volume growth of 2%.
We increased our share in the off-premise channel with intensive 360 degree
brand activation and strong display support and took market leadership of the
growing key accounts sub-channel. We maintained our leadership of the declining
on-premise channel. Revenue per hectolitre grew 9% at constant currency,
although EBITA declined due to reduced volumes and increased depreciation
following investment in the prior year. During the year we strengthened our
economy segment with the acquisition of the Azuga operations and we closed the
acquired brewery, as planned.
In RUSSIA, a significant increase in excise in January 2010 and a sharp decline
in consumer disposable income led to a drop in industry beer production and
sales. Our lager volumes were down 5% but our market share was maintained.
Repositioning, renovation and line extensions on Zolotaya Bochka lifted the
brand to number two in the premium segment, while the Kozel brand delivered 13%
volume growth to become the number one licensed brand in Moscow. In September
2009, we launched Grolsch with brand equity indicators showing good growth
potential. In May 2009, we opened the new brewery in Ulyanovsk, in line with
our geographic expansion strategy; and launched the Tri Bogatyrya economy brand
in a new PET format leading to a doubling of the brand`s volume. Brand mix
partially diluted the strong pricing taken in the prior year but we still
achieved revenue per hectolitre growth of 7% at constant currency. In the
Ukraine, the Sarmat brand was relaunched but volume performance was severely
impacted by a 94% increase in excise in July 2009. Volume growth on licensed
brands Kozel and Zolotaya Bochka was very strong, benefiting mix and driving
revenue per hectolitre growth.
In ITALY, economic conditions remained negative, although the second half saw
some signs of stabilisation. Birra Peroni volumes declined 7% during the year as
we reduced promoted volume and stock in trade levels. Our market share of STRs
was marginally below the prior year while constant currency revenue per
hectolitre grew 4% reflecting strong pricing and improved channel mix. This
combined with refocused marketing investment behind core brands, production
efficiencies and fixed cost productivity drove an improvement in EBITA.
Domestic lager volumes in the NETHERLANDS declined 2%, in line with the branded
market; a solid result given heavy competitor discounting and off-premise
consolidation in the year. Restructuring initiatives taken in the prior year
began to deliver benefits with fixed costs down 5%.
In the UNITED KINGDOM, lager volumes grew 14% on a comparable basis, with Peroni
Nastro Azzurro sales up 29% following strong growth in on-premise channels and
in key national retailers. During the year, exports of Miller Genuine Draft to
Ireland were taken over by our UK business following the termination of the
previous licensing arrangement.
In HUNGARY, SLOVAKIA and the CANARIES, economic conditions remain difficult and
beer markets depressed. We grew market share in Hungary and maintained share in
Slovakia and the Canaries, despite the decline in the on-premise channel. In
November 2009 we announced the closure of the Topolcany brewery in Slovakia.
NORTH AMERICA
Financial summary 2010 2009 %
Group revenue (including share of joint 5,228 5,227Squared -
ventures) (US$m)
EBITA (US$m) 619 581Squared 7
EBITA margin (%) 11.8 11.1Squared
Sales volumes (hl 000)
- Lager - excluding contract brewing 43,472 45,629Squared (5)
- Soft drinks 37 54Squared (31)
MillerCoors` volumes (hl 000)
- Lager - excluding contract brewing 42,100 43,099Cubed (2)
- Sales to retailers (STRs) 41,865 42,836Cubed (2)
- Contract brewing 4,558 4,721Cubed (3)
In 2010 before exceptional charges of US$18 million being the group`s share of
MillerCoors` integration and restructuring costs of US$14 million and the
group`s share of the unwind of the fair value inventory adjustment of US$4
million (2009: net exceptional credit of US$325 million being the profit on the
deemed disposal of the Miller business of US$437 million and exceptional costs
of US$28 million in relation to the integration and restructuring costs for
MillerCoors, together with the group`s share of MillerCoors` integration and
restructuring costs of US$33 million, the group`s share of the unwind of the
fair value inventory adjustment of US$13 million and the group`s share of the
impairment of the Sparks brand of US$38 million).
Squared Volumes, group revenue and EBITA represent 100% of Miller Brewing
Company`s performance in the first quarter of the year ended
31 March 2009 and the group`s 58% share of MillerCoors` performance and 100% of
the retained wholly owned Miller Brewing Company business (principally Miller
Brewing International) for the balance of the year ended 31 March 2009.
Cubed MillerCoors pro forma figures are based on results for Miller`s and Coors`
US and Puerto Rico operations reported under International Financial Reporting
Standards (IFRS) and US GAAP respectively for the year ended 31 March 2009.
Adjustments have been made to reflect both companies` comparative data on a
similar basis including amortisation of definite-life intangible assets,
depreciation reflecting revisions to property, plant and equipment values and
the exclusion of exceptional items.
NORTH AMERICA lager volumes for the year (excluding contract brewing) were down
5%. EBITA grew 7% on a reported basis reflecting pro forma EBITA growth of 13%
in MillerCoors, partly offset by lower export sales, adjustments for pro-forma
calculations and additional costs in the North American holding companies.
MILLERCOORS
For the year ended 31 March 2010, MillerCoors STRs declined 2% on a pro forma
basis with continued weak economic conditions affecting the entire industry.
Domestic STWs also declined 2% on a pro forma basis. Despite the challenging
trading environment, EBITA grew 13% on a pro forma basis with firm pricing and
cost management offsetting volume softness.
Premium light brand volumes were down low single-digits with declines in Miller
Lite, and Coors Light partially offset by growth of MGD 64.
MillerCoors` craft and import portfolio grew marginally with growth from Blue
Moon and Peroni Nastro Azzurro, which outperformed a soft import category. The
domestic above premium portfolio, which includes Miller Chill, Sparks and
Killian`s Irish Red, continued to exhibit double-digit decline.
The below premium portfolio was up low single-digits with a decline in
Milwaukee`s Best offset by good growth of Keystone and continued growth of
Miller High Life.
MillerCoors` revenue per hectolitre grew 3% driven by sustained price increases
in the prior year and the second half of the current year.
Cost of goods sold (COGS) per hectolitre were driven up by increases in
commodity costs, with increases in brewing materials (malt and corn), packaging
materials (glass and aluminium), and higher fuel costs. COGS per hectolitre
were also negatively impacted by the absorption of fixed costs across lower
production volumes.
Marketing, general and administrative costs decreased primarily due to the
continued realisation of synergies.
In the year, MillerCoors delivered an incremental US$248 million of synergy
savings, largely through the elimination of duplicate and transitional positions
and specific marketing synergies. Network optimisation savings continued to be
realised from shifting production of Coors and Miller brands within the larger
MillerCoors brewery network. MillerCoors continued to integrate business
processes and systems across the enterprise to improve customer service and
capitalise on the scale of the business. An incremental US$33 million was
delivered from other cost initiatives and projects including efficiencies in
production costs, procurement, and marketing, general and administrative
expenses.
Total annualised synergies and other cost savings now stand at US$409 million,
comprising synergies of US$326 million and other cost savings of US$83 million.
MillerCoors remains on track to deliver US$750 million in total annualised
synergies and other cost savings by the end of the calendar year 2012.
AFRICA
Financial summary 2010 2009 %
Group revenue (including share of 2,716 2,567 6
associates) (US$m)
EBITA (US$m) 565 562 1
EBITA margin (%) 20.8 21.9
Sales volumes (hl 000)
- Lager 13,476 12,726 6
- Lager (organic) 13,443 12,726 6
- Soft drinks 10,442 8,352 25
- Soft drinks (organic) 8,687 8,352 4
- Other alcoholic beverages 3,922 4,079 (4)
In 2010 before net exceptional charges of US$3 million being business
capability programme costs (2009: US$nil).
AFRICA`S volumes continued to grow in a year in which economic growth slowed as
a result of the global economic recession, and which also resulted in weaker
currencies, increased cost of debt and higher inflation. Our multi beverage
portfolio proved resilient, with total organic volumes up 4% including lager
volume growth of 6% and soft drinks growth of 4%. During the year, we acquired
further non-alcoholic beverage businesses in Uganda, Ethiopia and Zambia,
invested in new breweries in Angola, Mozambique, Southern Sudan and Tanzania and
expanded capacity in Uganda and Zambia.
Brand and pack differentiation produced strong growth in the premium category
and further growth in the affordable segment. We made progress in driving
affordability by using local ingredients and supporting enterprise development
through farming initiatives and local sourcing.
Reported EBITA grew 1%, and by 4% in organic, constant currency terms. Margins
declined in the second half to end the year 90 bps below the prior year on an
organic, constant currency basis as the depreciation of some local currencies
increased the cost of imported raw materials. Fixed costs increased with
capacity expansion and supply chain difficulties in Angola negatively impacted
margin. Price increases across the region were generally at or below inflation
levels.
In TANZANIA lager volumes declined 4%, in line with the industry, as a result of
softer consumer spending and adverse weather conditions earlier in the year.
Marketing spend on all brands was increased with a focus on brand innovation.
Ndovu Special Malt and Castle Lite were both launched in the premium segment in
a new 375ml green bottle and volume performance was above initial expectations.
Safari Lager, Redd`s and Castle Milk Stout all benefited from packaging
renovations. Our new brewery in Mbeya was successfully commissioned during the
second half of the year allowing us to reduce distribution costs in the
southwest region. Our arrangement with East African Breweries Limited (EABL) to
brew and distribute their products in Tanzania was terminated in the final
quarter of the year.
MOZAMBIQUE returned to strong growth with lager volumes up 11%. This reflects
improved economic conditions and good growth in the north, aided by the
commissioning of our new brewery in Nampula. Both Laurentina Premium and
Laurentina Preta, a dark lager, grew strongly. The draught category performed
well in the on-premise channel. Profitability growth slowed reflecting
increased import costs driven up by the depreciation of the metical against the
rand.
UGANDA delivered strong lager growth of 24% assisted by newly upgraded capacity
and improved market execution. The launch of the new long neck bottle
invigorated the market and differentiated the Nile Special and Club brands. In
addition, the launch of Nile Gold, a premium malt lager, was well received. In
the final quarter, we completed the acquisition of the Rwenzori water business,
the market leader in bottled water in Uganda.
ZAMBIA lager volumes benefited from the reduction in excise at the beginning of
the financial year, driving growth of 17%. A further excise reduction was
announced in March 2010. The beer portfolio was expanded with the launch of the
local premium brand Mosi Gold in December 2009. Soft drinks volumes grew 1% on
an organic basis. The maheu business (a non-alcoholic traditional beverage),
acquired in September 2009, performed well, growing our non-alcoholic brand
portfolio and driving soft drinks volumes up 28% on a reported basis. EBITA
margin was impacted by unfavourable exchange rates as a result of the weak
kwacha, which drove up the cost of imported raw materials.
In ANGOLA, in a very challenging year, soft drinks volumes ended 5% below the
prior year, while lager volumes grew 5%. After years of strong economic growth,
Angola experienced negative GDP growth following a significant drop in oil
revenue. During the year, the kwanza was de-linked from the US dollar resulting
in a 15% depreciation and the imposition of severe currency restrictions. These
factors negatively impacted consumer spending. Capacity constraints,
exacerbated by difficult logistics, hampered production whilst the cost of
imported raw materials was adversely affected by the currency depreciation. A
new two million hectolitre soft drinks plant was commissioned in January 2010
and the new brewery in Luanda was commissioned in April 2010.
In BOTSWANA, the sale of alcoholic products continued to be adversely affected
by difficult economic conditions, the social levy introduced in November 2008
and restricted trading and drinking hours. Our lager volumes ended the year 35%
below the prior year. Soft drinks volumes grew by 9% driven by increased
returnable bottle sales, enhanced marketing and improved trade execution.
CASTEL delivered increased profits with lager volumes growing 11% supported by
new capacity in Angola and good growth in Cameroon, Ethiopia and the Republic of
Congo. Soft drinks volumes also grew 11% with good growth in Algeria, Tunisia
and Cameroon.
ASIA
Financial summary 2010 2009 %
Group revenue (including share of
associates
and joint ventures) (US$m) 1,741 1,565 11
EBITA (US$m) 71 80 (12)
EBITA margin (%) 4.1 5.1
Sales volumes (hl 000)
- Lager 46,279 41,714 11
- Lager (organic) 44,815 41,714 7
ASIA`s lager volumes grew 7% on an organic basis, with good growth in China,
Australia and Vietnam partly offset by volume decline in India due to regulatory
issues. Full year EBITA was level on an organic constant currency basis with
good underlying growth in China offset by difficult trading conditions in India.
Reported EBITA, which includes initial losses in recent Chinese start-ups and
acquisitions, declined 12%.
In CHINA lager volumes grew 10% on an organic basis and 13% on a reported basis
despite a slow-down in growth over the last quarter of the year. Additional
capacity of some 20 million hectolitres was added during the year including the
acquisition of three new breweries and the commissioning of four greenfield
breweries across both existing and new markets. Marketing efforts remained
focused on the Snow brand, which is now approaching 90% of volumes, particularly
behind the Snow Draft and Brave the World variants in the fast growing premium
segment. CR Snow`s market share continued to grow and is estimated to exceed
20%.
The central region contributed half of the volume growth with reported volumes
up 16% driven primarily by growth in the key provinces of Anhui and Zhejiang and
new operations in Shandong and Shanghai. The north eastern region delivered
strong volume growth as CR Snow gained share in the Jilin and Heilongjiang
areas. Good growth continued in the western region, particularly in the
provinces of Guizhou and Gansu and a return to growth in Sichuan.
Volumes in INDIA were down 14% and EBITA declined significantly reflecting
regulatory disputes in Andhra Pradesh and Uttar Pradesh, and excise increases in
Karnataka and Rajasthan. Trading conditions improved in the last quarter as
regulatory issues eased and price increases were implemented in the key states
of Andhra Pradesh, Karnataka and Maharashtra. During the year we introduced an
embossed proprietary bottle which will improve package presentation and drive
down costs.
In VIETNAM, which is reported as a subsidiary for the first time, Miller High
Life was launched to supplement the local Zorok brand resulting in a marked
increase in volumes. The Zorok brand is gaining acceptance regionally and a
sustainable export business has been created.
In AUSTRALIA, our portfolio of premium brands again delivered strong growth with
lager volumes up 32%. Peroni Nastro Azzurro continues to take share in the
premium segment and was supplemented during the year by Peroni Leggera, a low
carbohydrate variant. Bluetongue and Miller Genuine Draft continued to perform
well. Our greenfield brewery north of Sydney is on track to be commissioned in
June 2010, and local production will result in lower product costs.
SOUTH AFRICA: Beverages
Financial summary 2010 2009 %
Group revenue (including share of 4,777 3,955 21
associates) (US$m)
EBITA (US$m) 885 764 16
EBITA margin (%) 18.5 19.3
Sales volumes (hl 000)
- Lager 25,761 25,949 (1)
- Soft drinks 17,044 17,303 (1)
- Other alcoholic beverages 1,404 1,325 6
In 2010 before net exceptional charges of US$53 million being business
capability programme costs of US$42 million and costs associated with the
establishment of the broad-based black economic empowerment transaction of US$11
million (2009: US$nil).
The economic environment in South Africa remained challenging throughout the
year with declining consumer demand, despite a return to GDP growth during the
last quarter of calendar 2009.
Lager volumes declined by 1% for the year with 1% growth during the second half
peak offsetting a 3% decline during the first six months. The beer market grew
marginally during the year, and growth increased towards the end of the year,
benefiting somewhat from stock build up ahead of the Easter 2010 peak.
Soft drinks volumes declined 1% reflecting the difficult economic environment
and the unseasonably cold and wet weather during the summer peak. Sparkling
soft drinks sales were down 1% with increased consumption in PET packs offset by
a decline in can volumes. The impact of a seven-week strike, which took place
over the peak Christmas period, was mitigated by thorough contingency planning.
Revenue grew by 6% and revenue per hectolitre grew by 7% on a constant currency
basis driven by price increases in line with inflation in both beer and soft
drinks. Raw material costs remained under pressure as medium-term contractual
arrangements with key brewing raw material suppliers limited our ability to
benefit from the downturn in brewing commodity prices. Higher packaging
materials and sugar prices also contributed to increased input costs.
Organic, constant currency EBITA grew by 2%, but was up 16% on a reported basis
reflecting the strengthening of the rand over the year, relative to the US
dollar. Margins showed a modest decline with a fall in volumes, higher input
costs and greater investment in market-facing activities partly offset by price
increases and cost productivity. A continued focus on reducing non-market-
facing and distribution costs delivered savings of almost US$80 million during
the year. These savings were redirected into market-facing investments.
Much of the increase in marketing support was directed into our core power
brands; Carling Black Label, Hansa Pilsener and Castle Lager in the mainstream
segment and Castle Lite in the premium segment. Both Hansa Pilsener and Castle
Lager delivered high single-digit growth. Castle Lite, which already accounts
for one in every three premium beers purchased in South Africa, returned to
growth and is now performing strongly.
In the premium segment, we continued to establish our international premium
portfolio with the focused development of Miller Genuine Draft, Peroni Nastro
Azzurro and Grolsch.
During the year, we upgraded sales capability and customer service offerings to
retailers in all classes of trade, which resulted in both the number of outlets
serviced and the intensity of servicing increasing substantially.
The broad based black economic empowerment transaction that was announced during
the year, will benefit employees, soft drinks and liquor retailers and the wider
South African community by placing 8.45% of the equity of The South African
Breweries Limited under black ownership. The retail offer closed on 28 April
2010 and the transaction will be completed in June 2010.
DISTELL`s international and domestic sales continued to exhibit good performance
with strong sales of cider and ready-to-drink brands offsetting declines in
spirits and wine. Despite higher volumes, profitability declined due to
unfavourable sales mix and adverse transactional currency.
SOUTH AFRICA: Hotels and Gaming
Financial summary 2010 2009 %
Group revenue (share of associate) (US$m) 406 348 17
EBITA (US$m) 122 122 1
EBITA margin (%) 30.0 34.9
Revenue per available room (Revpar) - US$ 65.33 67.36 (3)
In 2009 before exceptional charges of US$7 million being the group`s share of
fair value mark to market losses on financial instruments.
SABMiller is a 49% shareholder of the Tsogo Sun group.
The South African hotel industry remained subdued during the year with lower
levels of corporate and government spending. A number of major sporting events
in South Africa during the first quarter of the year provided some uplift, but
occupancies remained depressed overall.
Our share of Tsogo Sun`s reported revenue was US$406 million, an increase of 17%
on a reported basis including the non-organic share of revenue of Tsogo Sun`s
associated company Gold Reef Resorts and the newly acquired Century Casinos
business. Excluding this incremental revenue, revenue decreased 4% against the
prior year at constant currency. Constant currency revenue per available room
(revpar) declined 15%, and was down 3% at reported rates reflecting the stronger
rand relative to the US dollar.
The gaming industry in South Africa contracted during the year with weak demand
affecting casino win, although the KwaZulu-Natal region demonstrated resilience.
Gauteng, the most significant gaming province, reported a 3% drop in market
size.
Despite the tough trading conditions, the Tsogo Sun Group concluded a number of
transactions during the year, positioning itself well to benefit from market
recovery in the future. On 30 June 2009, Tsogo Sun acquired 100% of the Century
Casinos business in Caledon and Newcastle, and in October 2009 increased its
stake in the Suncoast Casino in Durban by an additional 30%.
In February 2010, SABMiller announced its intention to merge the Tsogo Sun Group
with Gold Reef Resorts Limited, a Johannesburg Stock Exchange listed business,
through an all share reverse listing, which will result in SABMiller holding
39.7% of the listed merged entity. The newly merged company is expected to be
one of the top 10 listed Gaming and Hotel companies in the world. The
transaction was approved by Gold Reef Resort`s shareholders in April 2010 but
completion is still subject to the necessary regulatory and other approvals.
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 2009 as amended for the
changes set out in note 1, which had no material impact on the group`s results.
The consolidated balance sheet as at 31 March 2009 has been restated for further
adjustments relating to initial accounting for business combinations, further
details of which are provided in note 12. The Annual Report and Accounts for
the year ended 31 March 2009 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. The group has adopted IFRS 8, `Operating Segments`,
with effect from 1 April 2009 and this has resulted in a change to the segmental
information reported, with Africa and Asia now reported as separate segments.
Comparative information has been restated accordingly. Additional historical
information for each of the Africa and Asia segments is available on the
company`s website.
SABMiller uses group revenue and EBITA (as defined in the financial definitions
section) to evaluate performance and believes these measures provide
stakeholders with additional information on trends and allow for greater
comparability between segments. Segmental performance is reported after the
specific apportionment of attributable head office costs.
DISCLOSURE OF VOLUMES
In the determination and disclosure of sales volumes, the group aggregates 100%
of the volumes of all consolidated subsidiaries and its equity accounted
percentage of all associates` and joint ventures` volumes. Contract brewing
volumes are excluded from volumes although revenue from contract brewing is
included within group revenue. Volumes exclude intra-group sales volumes. This
measure of volumes is used in the segmental analyses as it closely aligns with
the consolidated group revenue and EBITA disclosures. See the financial
definitions section for the definition of aggregated 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. See the financial definitions section for the
definition.
In relation to the MillerCoors joint venture no adjustments have been made in
the calculation of organic results as the group`s share of the joint venture is
deemed to be comparable with 100% of the Miller business prior to the creation
of the joint venture.
BUSINESS COMBINATIONS AND ACQUISITIONS
On 10 April 2009 the group assumed control of a 70.56% interest in Bere Azuga SA
in Romania following receipt of clearance from the competition authorities and
has consolidated Bere Azuga from this date. Subsequently, further share
purchases were made, together with a mandatory public offer for the remainder of
shares. As at 31 March 2010, Bere Azuga was wholly owned by the group. The
brewing operations of Bere Azuga have been transferred to the group`s principal
Romanian business, Ursus Breweries SA.
On 1 July 2009 the group completed the acquisition of an effective 40% interest
in Ambo Mineral Water Share Company in Ethiopia. On 30 September 2009 the group
acquired an effective 62% interest in a maheu business, a non-alcoholic
traditional beverage, in Zambia. On 9 February 2010 the group acquired an
effective 80% interest in the assets of the Rwenzori water business in Uganda.
These acquisitions in Africa have all been made in partnership with Castel and
the effective interests are stated after taking account of Castel`s interests.
On 29 May 2009 SABMiller plc acquired the outstanding 28.1% minority interest in
its Polish subsidiary, Kompania Piwowarska SA, in exchange for 60 million
ordinary shares of SABMiller plc.
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$490 million before finance costs and tax were
reported during the year (2009: US$89 million), including net exceptional
charges of US$18 million (2009: US$91 million) related to the group`s share of
joint ventures` and associates` exceptional charges. The net exceptional
charges included US$325 million related to business capability programme costs
in Latin America, Europe, Africa, South Africa Beverages and Corporate, US$78
million related to integration and restructuring costs in Europe and Latin
America, US$45 million related to the impairment of property, plant and
equipment in Latin America and US$24 million related to transaction costs in
South Africa Beverages and Corporate.
The group`s share of joint ventures` and associates` exceptional items included
charges of US$14 million (2009: US$33 million) related to the group`s share of
MillerCoors` integration and restructuring costs, and US$4 million (2009: US$13
million) related to the group`s share of the unwinding of fair value adjustments
on inventory in MillerCoors.
In addition, within net finance costs, there was an exceptional charge in the
year of US$17 million related to the business capability programme (2009: US$20
million exceptional credit related to the early termination of financial
derivatives).
In 2009, net exceptional charges of US$89 million before finance costs and tax
were reported, including net exceptional charges of US$91 million related to the
group`s share of joint ventures` and associates` exceptional charges. The net
exceptional charges included US$110 million related to integration and
restructuring costs in Latin America, Europe and North America, US$392 million
related to impairments in Europe, US$9 million related to the unwinding of fair
value adjustments on inventory related to the acquisition of Grolsch, and US$13
million in relation to litigation in Latin America, partially offset by a US$437
million profit on the deemed disposal of 42% of the US and Puerto Rico
operations of Miller and a US$89 million profit on the disposal of soft drinks
businesses in Colombia and Bolivia. The group`s share of joint ventures` and
associates` exceptional items included, in addition to the amounts noted above,
charges of US$38 million related to the group`s share of impairment of the
Sparks brand in MillerCoors and US$7 million related to the group`s share of
fair value mark to market losses on financial instruments in Tsogo Sun.
FINANCE COSTS
Net finance costs were US$563 million, a 20% decrease on the prior year`s US$706
million, mainly due to lower interest rates. Finance costs in the year include
a net loss of US$8 million (2009: US$27 million) from the mark to market
adjustments of various derivatives on capital items for which hedge accounting
cannot be applied. Finance costs in the year also include a US$17 million
charge resulting from a change in valuation methodology of financial instruments
as part of the business capability programme. The mark to market loss and the
charge resulting from the change in valuation have been excluded from the
determination of adjusted finance costs and adjusted earnings per share.
Adjusted net finance costs were US$538 million, down 23%.
Interest cover, as defined in the financial definitions section, has increased
to 8.7 times from 6.6 times in the prior year.
PROFIT BEFORE TAX
Adjusted profit before tax of US$3,803 million increased by 12% over the prior
year, primarily as a result of stronger pricing, cost efficiencies and lower
finance costs. On a statutory basis, profit before tax of US$2,929 million was
down 1% including the impact of the exceptional and other adjusting finance
items noted above. The principal differences between the statutory and adjusted
profit before tax relate to exceptional items with net exceptional charges of
US$507 million in the year compared to US$69 million in the prior year.
TAXATION
The effective tax rate of 28.5% before amortisation of intangible assets (other
than software), exceptional items and the adjustments to finance costs noted
above, is below that of the prior year (30.2%). The rate has decreased as a
result of a more beneficial geographic mix of earnings, reduced levels of
withholding and local taxes and general efficiency initiatives in the management
of the group`s effective tax rate.
EARNINGS PER SHARE
The group presents adjusted basic earnings per share, which excludes the impact
of amortisation of intangible assets (other than software), certain non-
recurring items and post-tax exceptional items, in order to present an
additional measure of performance for the years shown in the consolidated
financial statements. Adjusted basic earnings per share of 161.1 US cents were
up 17% on the prior year, benefiting from higher EBITA, lower finance costs and
a lower effective tax rate as discussed above together with lower profit
attributable to minority interests partially offset by an increase in the
weighted average number of shares in issue. The reduction in profit
attributable to minority interests and the increase in shares in issue result
mainly from the buyout of the minority interests in our Polish business. An
analysis of earnings per share is shown in note 6. On a statutory basis, basic
earnings per share were lower at 122.6 US cents (2009: 125.2 US cents) as a
result of higher exceptional charges.
CASH FLOW AND CAPITAL EXPENDITURE
Net cash generated from operations before working capital movements (EBITDA) of
US$3,974 million decreased by 5% compared with the prior year. EBITDA excludes
cash contributions from joint ventures and was therefore affected by the
formation of the MillerCoors joint venture in the first half of the prior year.
To consider cash generation on a comparable basis, a normalised EBITDA measure
is used that includes the dividends received from MillerCoors of US$707 million
(2009: US$454 million). Normalised EBITDA grew 1% compared with the prior year,
including the adverse impact of the cash flows related to exceptional items of
US$339 million (2009: US$49 million).
Net cash generated from operating activities of US$3,277 million was up US$1,094
million reflecting a significant improvement in working capital, together with
lower tax and net interest payments partly offset by the reduction in EBITDA.
The working capital improvement of US$1,056 million compared with the prior year
reflects changes in process management practices applied to inventory,
receivables and payables, resulting in net working capital inflows in most major
operations.
The group has continued to invest in its operations, selectively maintaining
investment to support future growth, including new breweries in Russia, Angola,
Tanzania, Southern Sudan and Mozambique together with recently completed
capacity expansions in Poland, Romania, Ghana and Uganda. Capital expenditure
for the year was US$1,436 million (2009: US$2,073 million). With effect from 1
July 2008, the capital expenditure for the MillerCoors joint venture has been
excluded from the consolidated capital expenditure reported. Capital
expenditure including the purchase of intangible assets was US$1,528 million
(2009: US$2,147 million).
Free cash flow improved significantly by US$1,913 million to US$2,010 million,
reflecting improved working capital and lower capital expenditure.
BORROWINGS AND NET DEBT
Gross debt at 31 March 2010, comprising borrowings together with the fair value
of derivative assets or liabilities held to manage interest rate and foreign
currency risk of borrowings, increased to US$9,177 million from US$9,131 million
at 31 March 2009. Net debt comprising gross debt net of cash and cash
equivalents decreased to US$8,398 million from US$8,709 million (restated) at 31
March 2009. The level of net debt was lower owing to the improvement in free
cash flow, despite the strengthening of certain currencies in which the group`s
debt is denominated. An analysis of net debt is provided in note 10c.
The group`s gearing (presented as a ratio of net debt/equity) has decreased to
40.8% from 54.0% (restated) at 31 March 2009. The weighted average interest
rate for the gross debt portfolio at 31 March 2010 was 5.7% (2009: 7.1%).
On 1 July 2009 the US$300 million LIBOR +0.3% Notes issued by SABMiller plc
matured and were refinanced from existing facilities. On 17 July 2009 SABMiller
plc completed a Euro1,000 million bond issue which was issued under the US$5,000
million Euro Medium Term Note Programme. The notes were issued in a single
tranche of 5.5 year notes with a coupon of 4.5%. The net proceeds of the bond
have been used to repay existing indebtedness.
In October 2009 the US$1,000 million 364 day facility was voluntarily cancelled
in part, reducing the size of the facility to US$600 million. The facility was
subsequently extended from October 2009 to 6 October 2010 in the amount of
US$515 million, with a one year term-out option.
On 19 March 2010 SABMiller plc completed a Peruvian nuevo sol (PEN) 150 million
(US$53 million) bond issue which was issued under the PEN 1,500 million
Guaranteed Medium Term Note Programme. The notes were issued in a single
tranche of five year notes with a coupon of 6.75%. The net proceeds of the bond
have been used to repay existing indebtedness.
At 31 March 2010, the group had undrawn committed borrowing facilities of
US$3,579 million (2009: US$2,093 million).
TOTAL EQUITY
Total equity increased from US$16,117 million (restated) at 31 March 2009 to
US$20,599 million at 31 March 2010. The increase is primarily due to currency
translation movements on foreign currency investments, profit for the year and
the issue of shares for the Polish minority buyout, partly offset by dividend
payments and fair value moves on hedged items.
GOODWILL AND INTANGIBLE ASSETS
Goodwill has increased to US$11,584 million (2009: US$8,716 million) primarily
due to foreign exchange movements and goodwill arising on acquisitions in the
year, including the Polish minority buyout. Intangible assets have increased in
the year to US$4,354 million (2009: US$3,742 million) as a result of foreign
exchange movements and additions, primarily related to the business capability
programme, partially offset by amortisation. The prior year comparatives for
both goodwill and intangible assets have been restated to reflect adjustments to
provisional fair values of business combinations, further details of which are
provided in note 12.
CURRENCIES
The rand appreciated by 32% against the US dollar during the year and ended the
financial year at R7.30 to the US dollar, while the weighted average rand/dollar
rate strengthened by 14% to R7.78 compared with R8.87 in the prior year. The
Colombian peso (COP) strengthened by 33% against the US dollar compared with the
prior year and ended the financial year at COP1,929 to the US dollar compared
with COP2,561 at 31 March 2009. The weighted average COP/dollar rate
strengthened by 1% to COP2,031 compared with COP2,061 in the prior year.
DIVIDEND
The board has proposed a final dividend of 51US 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 22 July 2010. If approved, the dividend
will be payable on Friday 13 August 2010 to shareholders registered on the
London and Johannesburg registers on Friday 6 August 2010. The ex-dividend
trading dates will be Wednesday 4 August 2010 on the London Stock Exchange (LSE)
and Monday 2 August 2010 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. Further details relating to dividends are provided in note 7.
The rate of exchange applicable on Wednesday 21 July 2010 will be used for US
dollar conversion into South African rand and sterling. A currency conversion
announcement 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 Thursday 22 July 2010.
From the commencement of trading on Thursday 22 July 2010 until the close of
business on Friday 6 August 2010, no transfers between the London and
Johannesburg registers will be permitted, and from Monday 2 August 2010 until
Friday 6 August 2010, no shares may be dematerialised or rematerialised, both
days inclusive.
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
late June 2010 and the annual general meeting of the company will be held at the
Intercontinental Park Lane Hotel in London at 11:00 on Thursday 22 July 2010.
SABMiller plc
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March
2010 2009
Unaudited Audited
Notes US$m US$m
Revenue 2 18,020 18,703
Net operating expenses (15,401) (15,555)
Operating profit 2 2,619 3,148
Operating profit before exceptional 3,091 3,146
items
Exceptional items 3 (472) 2
Net finance costs 4 (563) (706)
Interest payable and similar charges (879) (1,301)
Interest receivable and similar income 316 595
Share of post-tax results of associates 2 873 516
and joint ventures
Profit before taxation 2,929 2,958
Taxation 5 (848) (801)
Profit for the financial year 2,081 2,157
Profit attributable to minority 171 276
interests
Profit attributable to equity 1,910 1,881
shareholders
2,081 2,157
Basic earnings per share (US cents) 6 122.6 125.2
Diluted earnings per share (US cents) 6 122.1 124.6
All operations are continuing.
The notes on pages 25 to 38 form an integral part of these condensed financial
statements.
SABMiller plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March
2010 2009
Unaudited Unaudited
Notes US$m US$m
Profit for the financial year 2,081 2,157
Other comprehensive income:
Currency translation differences on 2,431 (3,385)
foreign currency net investments
Actuarial losses on defined benefit (15) (18)
plans
Available for sale investments: 2 (8)
- Fair value gains/(losses) arising 4 (8)
during the year
- Fair value gains transferred to (2) -
profit or loss
Net investment hedges:
- Fair value (losses)/gains arising (310) 337
during the year
Cash flow hedges: (59) 28
- Fair value (losses)/gains arising (48) 24
during the year
- Fair value gains transferred to (17) -
inventory
- Fair value gains transferred to (1) -
property, plant and equipment
- Fair value losses transferred to 7 4
profit or loss
Tax on items included in other (36) 125
comprehensive income:
- Tax on cash flow hedges (46) 31
- Tax on actuarial losses on defined 10 94
benefit plans
Share of associates` and joint 9 136 (330)
ventures` gains/(losses) included in
other comprehensive income
Other comprehensive income for the 2,149 (3,251)
year, net of tax
Total comprehensive income for the year 4,230 (1,094)
Attributable to:
Equity shareholders 4,075 (1,345)
Minority interests 155 251
Total comprehensive income for the year 4,230 (1,094)
The notes on pages 25 to 38 form an integral part of these condensed financial
statements.
SABMiller plc
CONSOLIDATED BALANCE SHEET
at 31 March
2010 2009
Unaudited Unaudited
Notes US$m US$m
Assets
Non-current assets
Goodwill 8 11,584 8,716
Intangible assets 8 4,354 3,742
Property, plant and equipment 8,915 7,406
Investments in joint ventures 9 5,822 5,495
Investments in associates 9 2,213 1,787
Available for sale investments 31 29
Derivative financial instruments 409 695
Trade and other receivables 117 125
Deferred tax assets 164 161
33 609 28 156
Current assets
Inventories 1,295 1,241
Trade and other receivables 1,665 1,576
Current tax assets 135 168
Derivative financial instruments 20 54
Available for sale investments 1 11
Cash and cash equivalents 10c 779 422
3,895 3,472
Total assets 37,504 31,628
Liabilities
Current liabilities
Derivative financial instruments (174) (35)
Borrowings 10c (1,605) (2,148)
Trade and other payables (3,227) (2,400)
Current tax liabilities (616) (463)
Provisions (355) (299)
(5,977) (5,345)
Non-current liabilities
Derivative financial instruments (147) (107)
Borrowings 10c (7,809) (7,470)
Trade and other payables (145) (186)
Deferred tax liabilities (2,374) (2,030)
Provisions (453) (373)
(10,928) (10,166)
Total liabilities (16,905) (15,511)
Net assets 20,599 16,117
Equity
Share capital 165 159
Share premium 6,312 6,198
Merger relief reserve 4,586 3,395
Other reserves 1,322 (872)
Retained earnings 7,525 6,496
Total shareholders` equity 19,910 15,376
Minority interests in equity 689 741
Total equity 20,599 16,117
As restated (see note 12).
The notes on pages 25 to 38 form an integral part of these condensed financial
statements.
SABMiller plc
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March
2010 2009
Unaudited Unaudited
Notes US$m US$m
Cash flows from operating activities
Cash generated from operations 10a 4,537 3,671
Interest received 317 275
Interest paid (957) (997)
Tax paid (620) (766)
Net cash generated from operating 10b 3,277 2,183
activities
Cash flows from investing activities
Purchase of property, plant and (1,436) (2,073)
equipment
Proceeds from sale of property, plant 37 75
and equipment
Purchase of intangible assets (92) (74)
Purchase of available for sale (6) (14)
investments
Proceeds from disposal of available for 14 4
sale investments
Proceeds from disposal of businesses - 119
Acquisition of businesses (net of cash (78) (252)
acquired)
Overdraft disposed with businesses - 2
Cash disposed with businesses - (4)
Purchase of shares from minorities (5) (5)
Investments in joint ventures (353) (397)
Investments in associates (76) (4)
Repayment of investments by associates 3 3
Dividends received from joint ventures 9 707 454
Dividends received from associates 9 106 151
Dividends received from other 2 1
investments
Net cash used in investing activities (1,177) (2,014)
Cash flows from financing activities
Proceeds from the issue of shares 114 23
Purchase of own shares for share trusts (8) (37)
Proceeds from borrowings 5,110 4,960
Repayment of borrowings (5,714) (4,096)
Capital element of finance lease (4) (1)
payments
Net cash payments on net investment (137) (12)
hedges
Dividends paid to shareholders of the (924) (877)
parent
Dividends paid to minority interests (160) (217)
Net cash used in financing activities (1,723) (257)
Net cash inflow/(outflow) from 377 (88)
operating, investing and financing
activities
Effects of exchange rate changes 90 22
Net increase/(decrease) in cash and 467 (66)
cash equivalents
Cash and cash equivalents at 1 April 10c 122 188
Cash and cash equivalents at 31 March 10c 589 122
As restated (see note 12).
The notes on pages 25 to 38 form an integral part of these condensed financial
statements.
SABMiller plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March
Called Share Merger Other
up premium relief reserves
share account reserve
capital
US$m US$m US$m US$m
At 1 April 2008 (audited) 158 6,176 3,395 2,215
Total comprehensive income - - - (3,080)
Profit for the year - - - -
Other comprehensive income - - - (3,080)
Other movements - - - -
Contributed to joint ventures - - - (7)
Dividends paid - - - -
Issue of SABMiller plc ordinary 1 22 - -
shares
Payment for purchase of own - - - -
shares for share trusts
Arising on business combinations - - - -
Buyout of minority interests - - - -
Credit entry relating to share- - - - -
based payments
At 31 March 2009 (unaudited) 159 6,198 3,395 (872)
Total comprehensive income - - - 2,194
Profit for the year - - - -
Other comprehensive income - - - 2,194
Dividends paid - - - -
Issue of SABMiller plc ordinary 6 114 1,191 -
shares
Payment for purchase of own - - - -
shares for share trusts
Arising on business combinations - - - -
Buyout of minority interests - - - -
Credit entry relating to share- - - - -
based payments
At 31 March 2010 (unaudited) 165 6,312 4,586 1,322
SABMiller plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March
Retained Total Minority Total
earnings shareholders` interests equity
equity
US$m US$m US$m US$m
At 1 April 2008 (audited) 5,601 17,545 699 18,244
Total comprehensive income 1,735 (1,345) 251 (1,094)
Profit for the year 1,881 1,881 276 2,157
Other comprehensive income (146) (3,226) (25) (3,251)
Other movements (5) (5) - (5)
Contributed to joint - (7) (2) (9)
ventures
Dividends paid (877) (877) (221) (1,098)
Issue of SABMiller plc - 23 - 23
ordinary shares
Payment for purchase of own (37) (37) - (37)
shares for share trusts
Arising on business - - 17 17
combinations
Buyout of minority - - (3) (3)
interests
Credit entry relating to 79 79 - 79
share-based payments
At 31 March 2009 6,496 15,376 741 16,117
(unaudited)
Total comprehensive income 1,881 4,075 155 4,230
Profit for the year 1,910 1,910 171 2,081
Other comprehensive income (29) 2,165 (16) 2,149
Dividends paid (924) (924) (162) (1,086)
Issue of SABMiller plc - 1,311 - 1,311
ordinary shares
Payment for purchase of own (8) (8) - (8)
shares for share trusts
Arising on business - - 27 27
combinations
Buyout of minority - - (72) (72)
interests
Credit entry relating to 80 80 - 80
share-based payments
At 31 March 2010 7,525 19,910 689 20,599
(unaudited)
As restated (see note 12).
The notes on pages 25 to 38 form an integral part of these condensed financial
statements.
The US$1,191 million increase in the merger relief reserve in the year ended 31
March 2010 relates to the merger relief arising on the issue of SABMiller plc
ordinary shares for the buyout of minority interests in the group`s Polish
business.
SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The preliminary announcement for the year ended 31 March 2010 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 s434 of the
Companies Act 2006. Group financial statements for 2010 will be delivered to
the Registrar of Companies in due course. The board of directors approved this
financial information on 19 May 2010. The annual financial statements for the
year ended 31 March 2009, approved by the board of directors on 1 June 2009,
which represent the statutory accounts for that year, 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.
Items included in the financial information of each of the group`s entities are
measured using the currency of the primary economic environment in which the
entity operates (functional currency). The consolidated financial information
is presented in US dollars which is the group`s presentational currency.
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, and post-retirement 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 which
became mandatory for the first time in the financial year ended 31 March 2010.
- IAS 1 (revised), `Presentation of financial statements` requires the
presentation of a statement of changes in equity as a primary statement,
includes non-mandatory changes to the titles of primary statements and
introduces a statement of comprehensive income, but allows the presentation of a
two statement approach with a separate income statement and statement of
comprehensive income. The group has chosen to maintain existing primary
statement titles and to follow the two statement approach.
- Amendment to IFRS 7, `Financial Instruments: Disclosures` requires additional
disclosures about fair value measurement and liquidity risk.
- IFRS 8, `Operating Segments` requires separate reporting of segmental
information for operating segments. Operating segments reflect the management
structure of the group and the way performance is evaluated and resources
allocated based on group revenue and EBITA by the group`s chief operating
decision maker, defined as the executive directors. The group is focussed
geographically and as a result of the implementation of IFRS 8, Africa and Asia
are now presented as separate segments. Comparative information has been
restated accordingly. Whilst not meeting the definition of reportable segments,
the group reports separately as segments Asia, South Africa Hotels and Gaming,
and Corporate as this provides useful additional information.
On 23 March 2010, the EU endorsed Annual Improvements to IFRSs (2009), which
included an amendment to the disclosures required by IFRS 8, `Operating
Segments`. Although only mandatory for periods beginning on or after 1 January
2010, the group has chosen to adopt this amendment early. Following the
implementation of IFRS 8 and the early adoption of the subsequent amendment, the
group no longer discloses segment assets or liabilities, as these are not
reported to the group`s chief operating decision maker.
The following standards, interpretations and amendments have been adopted by the
group since 1 April 2009 with no significant impact on its consolidated results
or financial position:
- Annual improvements to IFRSs (2008)
- Amendment to IAS 23 (revised), `Borrowing Costs`
- Amendment to IFRS 2, `Share-based Payments` - Vesting Conditions and
Cancellations
- Amendment to IFRS 1, `First-time Adoption of IFRS` and IAS 27, `Consolidated
and Separate Financial Statements` on the `Cost of an Investment in a
Subsidiary, Jointly Controlled Entity or Associate`
- Amendment to IAS 32, `Financial Instruments: Presentation` and IAS 1,
`Presentation of Financial Statements` - `Puttable Financial Instruments and
Obligations Arising on Liquidation`
- IFRIC 12, `Service Concession Arrangements`
- IFRIC 13, `Customer Loyalty Programmes`
- Amendment to IFRIC 9 and IAS 39, `Reassessment of Embedded Derivatives`.
SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)
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.
Revenue Share of Group Revenue Share of Group
associates` revenue associates` revenue
and joint and joint
ventures` ventures`
revenue revenue
2010 2010 2010 2009 2009 2009
US$m US$m US$m US$m US$m US$m
Latin 5,894 11 5,905 5,484 11 5,495
America
Europe 5,558 19 5,577 6,118 27 6,145
North 107 5,121 5,228 1,553 3,674 5,227
America
Africa 1,774 942 2,716 1,615 952 2,567
Asia 473 1,268 1,741 470 1,095 1,565
South 4,214 969 5,183 3,463 840 4,303
Africa:
- Beverages 4,214 563 4,777 3,463 492 3,955
- Hotels and - 406 406 - 348 348
Gaming
Group 18,020 8,330 26,350 18,703 6,599 25,302
OPERATING PROFIT
The following table provides a reconciliation of operating profit to operating
profit before exceptional items.
Operating Excep- Operating Operating Excep- Operating
profit tional profit profit tional profit
items before items before
excep- excep-
tional tional
items items
2010 2010 2010 2009 2009 2009
US$m US$m US$m US$m US$m US$m
Latin 1,114 156 1,270 1,102 (45) 1,057
America
Europe 638 202 840 448 452 900
North 12 - 12 639 (409) 230
America
Africa 313 3 316 354 - 354
Asia (34) - (34) (2) - (2)
South 773 53 826 704 - 704
Africa:
Beverages
Corporate (197) 58 (139) (97) - (97)
Group 2,619 472 3,091 3,148 (2) 3,146
EBITA (segment result)
This comprises operating profit before exceptional items, amortisation of
intangible assets (excluding software) and includes the group`s share of
associates` and joint ventures` operating profit on a similar basis. The
following table provides a reconciliation of operating profit before exceptional
items to EBITA.
Operating Share of Amortisation EBITA
profit associates` of
before and joint intangible
exceptional ventures` assets
items operating (excluding
profit software) -
before group and
exceptional share of
items associates`
and joint
ventures`
2010 2010 2010 2010
US$m US$m US$m US$m
Latin America 1,270 - 116 1,386
Europe 840 3 29 872
North America 12 562 45 619
Africa 316 248 1 565
Asia (34) 98 7 71
South Africa: 826 180 1 1,007
- Beverages 826 59 - 885
- Hotels and Gaming - 121 1 122
Corporate (139) - - (139)
Group 3,091 1,091 199 4,381
Operating Share of Amortisation EBITA
profit associates` of
before and joint intangible
exceptional ventures` assets
items operating (excluding
profit software) -
before group and
exceptional share of
items associates`
and joint
ventures`
2009 2009 2009 2009
US$m US$m US$m US$m
Latin America 1,057 1 115 1,173
Europe 900 4 40 944
North America 230 314 37 581
Africa 354 208 - 562
Asia (2) 75 7 80
South Africa: 704 181 1 886
- Beverages 704 60 - 764
- Hotels and Gaming - 121 1 122
Corporate (97) - - (97)
Group 3,146 783 200 4,129
The group`s share of associates` and joint ventures` operating profit is
reconciled to the share of post-tax results of associates and joint ventures in
the income statement as follows:
2010 2009
US$m US$m
Share of associates` and joint ventures` 1,091 783
operating profit before exceptional items
Share of associates` and joint ventures` (18) (91)
exceptional items
Share of associates` and joint ventures` net (40) (25)
finance costs
Share of associates` and joint ventures` (118) (113)
taxation
Share of associates` and joint ventures` (42) (38)
minority interests
Share of post-tax results of associates and 873 516
joint ventures
Excise duties of US$3,825 million (2009: US$3,820 million) have been incurred
during the year as follows: Latin America US$1,517 million (2009: US$1,383
million); Europe US$1,075 million (2009: US$1,118 million); North America US$2
million (2009: US$239 million); Africa US$282 million (2009: US$270 million);
Asia US$181 million (2009: US$184 million) and South Africa US$768 million
(2009: US$626 million).
The following table provides a reconciliation of EBITDA (the net cash generated
from operations before working capital movements) before cash exceptional items
to EBITDA after cash exceptional items. A reconciliation of profit for the year
for the group to EBITDA after cash exceptional items for the group can be found
in note 10a.
EBITDA Cash EBITDA EBITDA Cash EBITDA
before excep- before excep-
cash tional cash tional
excep- items excep- items
tional tional
items items
2010 2010 2010 2009 2009 2009
US$m US$m US$m US$m US$m US$m
Latin America 1,710 (92) 1,618 1,418 (19) 1,399
Europe 1,203 (144) 1,059 1,239 (6) 1,233
North America 15 - 15 244 (24) 220
Africa 412 (3) 409 415 - 415
Asia (3) - (3) 26 - 26
South Africa: 984 (42) 942 883 - 883
Beverages
Corporate (8) (58) (66) (12) - (12)
Group 4,313 (339) 3,974 4,213 (49) 4,164
EBITDA excludes the results of associates and joint ventures and hence the
decline in EBITDA for North America is due to the US and Puerto Rico operations
of the Miller business being contributed into the MillerCoors joint venture
during the prior year.
Capital Investment Total Capital Investment Total
expenditure activity expenditure activity
excluding excluding
investment investment
activity1 activity1
2010 2010 2010 2009 2009 2009
US$m US$m US$m US$m US$m US$m
Capital
expenditure
Latin 357 (13) 344 552 (113) 439
America
Europe 346 8 354 753 197 950
North - 317 317 38 378 416
America
Africa 524 84 608 416 49 465
Asia 48 36 84 86 37 123
South 210 63 273 285 - 285
Africa:
- 210 - 210 285 - 285
Beverages
- Hotels - 63 63 - - -
and Gaming
Corporate 43 6 49 17 - 17
Group 1,528 501 2,029 2,147 548 2,695
Capital expenditure includes additions of intangible assets (excluding
goodwill) and property, plant and equipment.
2 Investment activity includes acquisitions and disposals of businesses, net
investments in associates and joint ventures, purchases of shares in minorities
and purchases and disposals of available for sale investments.
3. EXCEPTIONAL ITEMS
2010 2009
Unaudited Audited
US$m US$m
Exceptional items included in operating
profit
Business capability programme costs (325) -
Impairments (45) (392)
Integration and restructuring costs (78) (110)
Transaction costs (24) -
Profit on disposal of businesses - 526
Unwinding of fair value adjustments on - (9)
inventory
Litigation - (13)
Net exceptional (losses)/gains included (472) 2
within operating profit
Exceptional items included in net finance
costs
Business capability programme costs (17) -
Gain on early termination of financial - 20
derivatives
Net exceptional (losses)/gains included (17) 20
within net finance costs
Share of associates` and joint ventures`
exceptional items
Integration and restructuring costs (14) (33)
Unwinding of fair value adjustments on (4) (13)
inventory
Impairment of intangible assets - (38)
Fair value losses on financial instruments - (7)
Share of associates` and joint ventures` (18) (91)
exceptional items
Taxation credits relating to subsidiaries` 64 56
and the group`s share of associates` and
joint ventures` exceptional items
EXCEPTIONAL ITEMS INCLUDED IN OPERATING PROFIT
Business capability programme costs
Following the establishment of the business capability programme which will
streamline finance, human resources and procurement activities through the
deployment of global systems and, within regions, the introduction of common
sales, distribution and supply chain management systems, costs of US$325 million
have been incurred in the year (2009: US$nil).
Impairments
During 2010, an impairment charge of US$45 million was recorded in relation to
property, plant and equipment following the announcement of the closure of
production facilities at the Bogota brewery in Colombia.
In 2009, goodwill impairments were recorded in respect of the Grolsch business
and Sarmat in Ukraine of US$350 million and US$14 million respectively. Other
impairments principally related to intangible assets and property, plant and
equipment in Ukraine of US$28 million.
Integration and restructuring costs
In Europe US$64 million of integration and restructuring costs were incurred in
Romania following the acquisition of Bere Azuga, including the closure of a
brewery; in Poland including the closure of the Kielce brewery; in Slovakia
including the closure of the Topolcany brewery; and in Italy, the Netherlands
and the Canary Islands primarily associated with retrenchments. In Latin
America US$14 million was incurred in relation to restructuring following the
announcement of the closure of the production facilities at the Bogota brewery
in Colombia.
In 2009, US$51 million of integration and restructuring costs were incurred in
Grolsch, Poland, the Czech Republic, Russia and Ukraine in Europe; US$31
million of restructuring costs were incurred in Latin America, principally in
Colombia; and US$28 million of staff retention and certain integration costs
were recorded in North America relating to MillerCoors.
Transaction costs
During 2010, US$11 million of costs have been incurred in relation to the broad-
based black economic empowerment transaction in South Africa.
Additionally, costs of US$13 million were incurred in relation to an
unsuccessful potential transaction and have been treated as exceptional in the
Corporate division.
Profit on disposal of businesses
In 2009, a profit of US$437 million arose in North America on the disposal of
the US and Puerto Rico operations of the Miller business into the MillerCoors
joint venture. In Latin America a net US$89 million profit on disposal was
recorded on the disposal of the water business in Colombia and the soft drinks
business in Bolivia.
Unwinding of fair value adjustments on inventory
On the acquisition of Grolsch inventory was fair valued to market value. The
uplift was charged to the income statement as the inventory was sold. During
2009, US$9 million was charged to operating profit and treated as an exceptional
item.
Litigation
During 2009, a provision was booked in Latin America relating to ongoing
litigation amounting to US$13 million.
EXCEPTIONAL ITEMS INCLUDED IN NET FINANCE COSTS
Business capability programme costs
As a result of the business capability programme and resultant changes in
treasury systems used and their differing valuation methodologies, a charge of
US$17 million has been incurred to reflect differences on the fair valuation of
financial instruments (2009: US$nil).
Early termination of financial derivatives
During 2009, a US$20 million gain arose on the early termination of financial
derivatives.
SHARE OF ASSOCIATES` AND JOINT VENTURES` EXCEPTIONAL ITEMS
Integration and restructuring costs
During 2010, the group`s share of MillerCoors` integration and restructuring
costs was US$14 million, primarily related to relocation and severance costs
(2009: US$33 million).
Unwinding of fair value adjustments on inventory
In 2010, the group`s share of MillerCoors` charge to operating profit in the
year relating to the unwind of the fair value adjustment to inventory was US$4
million (2009: US$13 million).
Impairment of intangible assets
In 2009, this related to the group`s share of the impairment of the Sparks brand
recorded in MillerCoors.
Fair value losses on financial instruments
In 2009, the group`s share of losses related to fair value mark to market
adjustments on financial instruments at Hotels and Gaming amounted to US$7
million.
TAXATION CREDITS RELATING TO SUBSIDIARIES` AND THE GROUP`S SHARE OF ASSOCIATES`
AND JOINT VENTURES` EXCEPTIONAL ITEMS
Taxation credits of US$64 million (2009: US$56 million) arose in relation to
exceptional items during the year and include US$7 million (2009: US$31 million)
in relation to MillerCoors although the tax credit is recognised in Miller
Brewing Company (see note 5).
4. NET FINANCE COSTS
2010 2009
Unaudited Audited
US$m US$m
a. Interest payable and similar charges
Interest payable on bank loans and overdrafts 162 262
Interest payable on derivatives 216 253
Interest payable on corporate bonds 389 406
Interest element of finance leases payments 1 1
Net exchange (gains)/losses on financing (51) 288
activities
Fair value losses on financial instruments
- Fair value losses on dividend related 9 12
derivatives
- Fair value losses on standalone derivative 104 27
financial instruments
- Ineffectiveness of net investment hedges 8 22
Change in valuation methodology of financial 17 -
instruments
Other finance charges 24 30
Total interest payable and similar charges 879 1,301
b. Interest receivable and similar income
Interest receivable 60 66
Interest receivable on derivatives 217 201
Fair value gains on financial instruments
- Fair value gains on standalone derivative 28 291
financial instruments
- Ineffectiveness of fair value hedges - 10
- Fair value gains on dividend related - 7
derivatives
Gain on early termination of financial - 20
derivatives
Net exchange gains on dividends 9 -
Other finance income 2 -
Total interest receivable and similar income 316 595
Net finance costs 563 706
These items have been excluded from the determination of adjusted earnings per
share. Adjusted net finance costs are therefore US$538 million (2009: US$699
million).
5. TAXATION
2010 2009
Unaudited Audited
US$m US$m
Current taxation 725 670
- Charge for the year (UK corporation tax: US$6 755 693
million (2009: US$4 million))
- Adjustments in respect of prior years (30) (23)
Withholding taxes and other remittance taxes 77 67
Total current taxation 802 737
Deferred taxation 46 64
- Charge for the year (UK corporation tax: 71 81
US$nil (2009: US$nil))
- Adjustments in respect of prior years (14) (14)
- Rate change (11) (3)
Total taxation 848 801
Effective tax rate (%) 28.5 30.2
See the financial definitions section for the definition of the effective tax
rate. The calculation is on a basis consistent with that used in prior years
and is also consistent with other group operating metrics.
MillerCoors is not a taxable entity. The tax balances and obligations therefore
remain with Miller Brewing Company as a 100% subsidiary of the group. This
subsidiary`s tax charge includes tax (including deferred tax) on the group`s
share of the taxable profits of MillerCoors and includes tax on other
comprehensive.income on the group`s share of MillerCoors` taxable items included
within other comprehensive income.
6. EARNINGS PER SHARE
2010 2009
Unaudited Audited
US cents US cents
Basic earnings per share 122.6 125.2
Diluted earnings per share 122.1 124.6
Headline earnings per share 127.3 119.0
Adjusted basic earnings per share 161.1 137.5
Adjusted diluted earnings per share 160.4 136.8
The weighted average number of shares was:
2010 2009
Unaudited Audited
Millions of Millions of
shares shares
Ordinary shares 1,641 1,514
Treasury shares (77) (7)
ESOP trust ordinary shares (6) (5)
Basic shares 1,558 1,502
Dilutive ordinary shares from share options 6 8
Diluted shares 1,564 1,510
The calculation of diluted earnings per share excludes 6,920,802 (2009:
12,793,912) share options that were non-dilutive for the year because the
exercise price of the option exceeded the fair value of the shares during the
year and 10,485,166 (2009: 8,912,780) share awards that were non-dilutive for
the year because the performance conditions attached to the share awards have
not been met. These share awards could potentially dilute earnings per share in
the future.
ADJUSTED AND HEADLINE EARNINGS
The group presents an adjusted earnings per share figure, which excludes the
impact of amortisation of intangible assets (excluding capitalised software),
certain non-recurring items and post-tax exceptional items, in order to present
an additional measure of performance 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 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:
2010 2009
Unaudited Audited
US$m US$m
Profit for the financial year attributable to 1,910 1,881
equity holders of the parent
Headline adjustments
Impairment of goodwill - 364
Impairment of intangible assets - 14
Impairment of property, plant and equipment 45 16
Loss on disposal of property, plant and 39 10
equipment
Profit on disposal of businesses - (526)
Profit on disposal of available for sale (2) -
investments
Tax effects of the above items (17) (4)
Minority interests` share of the above items 9 (1)
Share of joint ventures` and associates`
headline adjustments, net of tax and minority
interests - 34
Headline earnings 1,984 1,788
Business capability programme costs 342 -
Integration and restructuring costs 41 108
Transaction costs 24 -
Net loss on fair value movements on capital 8 27
items
Unwind of fair value adjustments on inventory - 9
Gain on early termination of financial - (20)
derivatives
Litigation - 13
Amortisation of intangible assets (excluding 150 164
capitalised software)
Tax effects of the above items (101) (110)
Minority interests` share of the above items (6) (4)
Share of joint ventures` and associates` other 67 90
adjustments, net of tax and minority interests
Adjusted earnings 2,509 2,065
This does not include all fair value movements but includes those in relation
to capital items for which hedge accounting cannot be applied.
7. DIVIDENDS
Dividends paid were as follows:
2010 2009
Unaudited Audited
Equity US$m US$m
2009 Final dividend paid: 42.0 US cents (2008: 654 640
42.0 US cents) per ordinary share
2010 Interim dividend paid: 17.0 US cents (2009: 270 237
16.0 US cents) per ordinary share
924 877
In addition, the directors are proposing a final dividend of 51 US cents per
share in respect of the financial year ended 31 March 2010, which will absorb an
estimated US$812 million of shareholders` funds. The dividend will be paid on
13 August 2010 to shareholders registered on the London and Johannesburg
registers on 6 August 2010.
8. GOODWILL AND INTANGIBLE ASSETS
Goodwill Intangible
assets
Unaudited Unaudited
US$m US$m
Net book amount
At 1 April 2008 15,133 5,036
Exchange adjustments (2,181) (955)
Arising on increase in share of subsidiary 3 -
undertakings
Additions - separately acquired - 73
Acquisitions through business combinations 123 42
Contributed to joint ventures (3,998) (232)
Amortisation - (204)
Impairment (364) (14)
Transfers from property, plant and equipment - 15
Transfers to other assets - (13)
Disposals - (6)
At 31 March 2009 8,716 3,742
Exchange adjustments 1,671 657
Arising on increase in share of subsidiary 1,125 -
undertakings
Additions - separately acquired - 93
Acquisitions through business combinations 72 33
Amortisation - (203)
Transfers from property, plant and equipment - 32
At 31 March 2010 11,584 4,354
As restated (see note 12).
GOODWILL
2010
Provisional goodwill arose on the acquisition through business combinations in
the year of Ambo in Ethiopia, Rwenzori in Uganda, the maheu business in Zambia
and Azuga in Romania, together with goodwill arising on the increase in the
group`s share of subsidiary undertakings primarily related to the buyout of
minority interests in Poland.
2009
Additional goodwill arose on the acquisitions of Vladpivo in Russia, Sarmat in
Ukraine, Pabod in Nigeria, Voltic in Nigeria and Ghana and SABMiller Vietnam JV
Company Limited in Vietnam, which occurred in the year. The fair value exercises
in respect of these acquisitions are now complete.
Goodwill arising on the formation of the MillerCoors joint venture is recorded
within the investment in joint ventures.
Goodwill impairments were recorded in respect of the Grolsch business and Sarmat
in Ukraine of US$350 million and US$14 million respectively.
INTANGIBLE ASSETS
During 2010, no impairment charge was incurred (2009: An impairment charge of
US$14 million was made in respect of intangible assets in Ukraine).
9. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
Investments Investments
in joint in
ventures associates
Unaudited Unaudited
US$m US$m
At 1 April 2008 - 1,826
Exchange adjustments (10) (142)
Reclassification between joint ventures and 30 (30)
associates
Formation of the MillerCoors joint venture 5,804 -
Net increase in investments 235 1
Share of results retained 225 291
Share of (losses)/gains recognised in other (335) 5
comprehensive income
Dividends received (454) (151)
Transfer to subsidiary undertaking - (13)
At 31 March 2009 5,495 1,787
Exchange adjustments 11 90
Net increase in investments 353 73
Share of results retained 536 337
Share of gains recognised in other 134 2
comprehensive income
Dividends received (707) (109)
Transfer from other assets - 33
At 31 March 2010 5,822 2,213
As a result of SABMiller entering the MillerCoors joint venture, joint ventures
became a material item in the group`s financial statements. This meant that
investments in immaterial joint ventures previously classified as investments in
associates were reclassified as investments in joint ventures.
10A. RECONCILIATION OF PROFIT FOR THE YEAR TO NET CASH GENERATED FROM OPERATIONS
2010 2009
Unaudited Audited
US$m US$m
Profit for the year 2,081 2,157
Taxation 848 801
Share of post-tax results of associates and (873) (516)
joint ventures
Interest receivable and similar income (316) (595)
Interest payable and similar charges 879 1,301
Operating profit 2,619 3,148
Depreciation:
- Property, plant and equipment 655 626
- Containers 226 203
Container breakages, shrinkage and write- 40 7
offs
Loss on disposal of property, plant and 39 10
equipment
Profit on disposal of available for sale (2) -
investments
Amortisation of intangible assets 203 204
Impairment of goodwill - 364
Impairment of intangible assets - 14
Impairment of property, plant and equipment 45 16
Impairment of working capital balances 34 12
Amortisation of advances to customers 28 12
Unrealised net loss from fair value hedges 1 14
Profit on disposal of businesses - (526)
Dividends received from other investments (2) (1)
Charge with respect to share options 80 79
Other non-cash movements 8 (18)
Net cash generated from operations before 3,974 4,164
working capital movements (EBITDA)
Decrease/(increase) in inventories 78 (249)
Decrease/(increase) in receivables 48 (314)
Increase in payables 416 66
Increase/(decrease) in provisions 22 (7)
(Decrease)/increase in post-retirement (1) 11
provisions
Net cash generated from operations 4,537 3,671
Cash generated from operations before working capital movements includes cash
flows relating to exceptional items of US$301 million (2009: US$nil) in respect
of business capability programme costs, US$15 million (2009: US$49 million) in
respect of integration and restructuring costs and US$23 million (2009: US$nil)
in respect of transaction costs.
10B. RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES TO FREE CASH FLOW
2010 2009
Unaudited Unaudited
US$m US$m
Net cash from operating activities 3,277 2,183
Purchase of property, plant and equipment (1,436) (2,073)
Proceeds from sale of property, plant and 37 75
equipment
Purchase of intangible assets (92) (74)
Purchase of shares from minorities (5) (5)
Investments in joint ventures (353) (397)
Investments in associates (76) (4)
Repayment of investments by associates 3 3
Dividends received from joint ventures 707 454
Dividends received from associates 106 151
Dividends received from other investments 2 1
Dividends paid to minority interests (160) (217)
Free cash flow 2,010 97
10C. ANALYSIS OF NET DEBT
Net debt is analysed as follows:
2010 2009
Unaudited Unaudited
US$m US$m
Borrowings (9,212) (9,308)
Borrowings-related derivative financial 237 487
instruments
Overdrafts (190) (300)
Finance leases (12) (10)
Gross debt (9,177) (9,131)
Cash and cash equivalents (excluding 779 422
overdrafts)
Net debt (8,398) (8,709)
Cash and cash equivalents on the balance sheet are reconciled to cash and cash
equivalents on the cash flow as follows:
2010 2009
Unaudited Unaudited
US$m US$m
Cash and cash equivalents (balance sheet) 779 422
Overdrafts (190) (300)
Cash and cash equivalents (cash flow) 589 122
The movement in net debt is analysed as follows:
Cash and Over- Borrow- Deriva- Finance Total Net
cash drafts ings tive leases gross debt
equiva- finan- borrow-
lents cial ings
(exclud- instru-
ing over- ments
drafts)
US$m US$m US$m US$m US$m US$m US$m
At 1 April 422 (300) (9,308) 487 (10) (9,131) (8,709)
2009
Exchange 196 (106) (665) (8) (2) (781) (585)
adjustments
Cash flow 143 216 604 - 4 824 967
Acquisitions 18 - (13) - (1) (14) 4
Other - - 170 (242) (3) (75) (75)
movements
At 31 March 779 (190) (9,212) 237 (12) (9,177) (8,398)
2010
As restated (see note 12).
The group has sufficient headroom to enable it to comply with all covenants on
its existing borrowings. The group has sufficient undrawn financing facilities
to service its operating activities and ongoing capital investment. The group
has the following undrawn committed borrowing facilities available at 31 March
2010 in respect of which all conditions precedent have been met at that date:
2010 2009
Unaudited Audited
US$m US$m
Amounts expiring:
Within one year 441 716
Between one and two years 1,025 72
Between two and five years 2,112 1,272
In five years or more 1 33
3,579 2,093
During the year ended 31 March 2010, the US$1,000 million 364 day facility was
voluntarily cancelled in part, reducing the size of the facility to US$600
million. The facility was subsequently extended from October 2009 to 6 October
2010 in the amount of US$515 million, with a one year term out option.
The group`s net debt is denominated in the following currencies:
US SA Euro Colombian Other Total
dollars rand peso currencies
US$m US$m US$m US$m US$m US$m
Total cash and 352 134 49 48 196 779
cash
equivalents
Total gross (5,094) (526) (1,403) (1,253) (901) (9,177)
borrowings
(4,742) (392) (1,354) (1,205) (705) (8,398)
Cross currency 2,124 (384) (569) (557) (614) -
swaps
Net debt at 31 (2,618) (776) (1,923) (1,762) (1,319) (8,398)
March 2010
Total cash and 168 39 84 13 118 422
cash
equivalents
Total gross (5,712) (543) (669) (1,301) (906) (9,131)
borrowings
(5,544) (504) (585) (1,288) (788) (8,709)
Cross currency 2,695 (400) (1,232) (400) (663) -
swaps
Net debt at 31 (2,849) (904) (1,817) (1,688) (1,451) (8,709)
March 2009
As restated (see note 12).
11. BUSINESS COMBINATIONS
Acquisitions
The following business combinations took effect during the year:
In April 2009 control was assumed over Bere Azuga in Romania and the group had a
100% interest as at 31 March 2010.
In July 2009 the group acquired an effective 40% interest in Ambo Mineral Water
Share Company in Ethiopia.
In September 2009 the group acquired a maheu business, a non-alcoholic
traditional beverage in Zambia, in which it has an effective 62% interest.
In February 2010 the group acquired the Rwenzori water business in Uganda, in
which it has an effective 80% interest.
The following table represents the assets and liabilities acquired in respect of
all business combinations entered into during the year ended 31 March 2010:
Carrying values Provisional
pre-acquisition fair value
US$m US$m
Intangible assets - 33
Property, plant and equipment 47 37
Inventories 6 5
Trade and other receivables 2 2
Cash and cash equivalents 18 18
Borrowings (14) (14)
Trade and other payables (7) (11)
Deferred tax liabilities - (1)
Provisions - (5)
52 64
Minority interests (27)
Net assets acquired 37
Provisional goodwill 72
Consideration 109
Goodwill represents, amongst other things, tangible and intangible assets yet to
be recognised separately from goodwill as the fair value exercises are still in
progress, potential synergies and the value of the assembled workforce.
12. BALANCE SHEET RESTATEMENTS
Initial accounting
The initial accounting under IFRS 3, `Business Combinations`, for the Pabod and
Voltic acquisitions had not been completed as at 31 March 2009. During the year
ended 31 March 2010, adjustments to provisional fair values in respect of these
acquisitions were made. As a result comparative information for the year ended
31 March 2009 has been presented in the consolidated financial statements as if
the adjustments to provisional fair values had been made from the respective
transaction dates. The impact on the prior year income statement has been
reviewed and no material adjustments to the income statement are required as a
result of the adjustments to provisional fair values. The following table
reconciles the impact on the balance sheet reported as at 31 March 2009 to the
comparative balance sheet presented in the consolidated financial statements.
BALANCE SHEET
At 31/3/09 Adjustments to At 31/3/09
provisional As restated
fair values
Audited Unaudited Unaudited
US$m US$m US$m
Assets
Non-current assets
Goodwill 8,734 (18) 8,716
Intangible assets 3,729 13 3,742
Property, plant and equipment 7,404 2 7,406
Investments in joint ventures 5,495 - 5,495
Investments in associates 1,787 - 1,787
Other non-current assets 1,010 - 1,010
28,159 (3) 28,156
Current assets
Inventories 1,242 (1) 1,241
Trade and other receivables 1,576 - 1,576
Cash and cash equivalents 409 13 422
Other current assets 233 - 233
3,460 12 3,472
Total assets 31,619 9 31,628
Liabilities
Current liabilities
Trade and other payables (2,396) (4) (2,400)
Other current liabilities (2,945) - (2,945)
(5,341) (4) (5,345)
Non-current liabilities
Trade and other payables (186) - (186)
Deferred tax liabilities (2,029) (1) (2,030)
Provisions (373) - (373)
Other non-current liabilities (7,577) - (7,577)
(10,165) (1) (10,166)
Total liabilities (15,506) (5) (15,511)
Net assets 16,113 4 16,117
Total equity 16,113 4 16,117
13. SHARE CAPITAL
During the year ended 31 March 2010 9,382,883 ordinary shares (2009: 2,219,355
ordinary shares) were allotted and issued in accordance with the group`s share
purchase, option and award schemes.
In May 2009 60 million ordinary shares were issued as consideration for the
purchase of the 28.1% minority interest in the Polish business.
SABMiller plc
FINANCIAL DEFINITIONS
ADJUSTED EARNINGS
Adjusted earnings are calculated by adjusting headline earnings (as defined
below) for the amortisation of intangible assets (excluding software),
integration and restructuring costs, the fair value movements in relation to
capital items for which hedge accounting cannot be applied and other items which
have been treated as exceptional but not included above or as headline earnings
adjustments together with the group`s share of joint ventures` and associates`
adjustments for similar items. The tax and minority interests in respect of
these items are also adjusted.
ADJUSTED NET FINANCE COSTS
This comprises net finance costs excluding fair value movements in relation to
capital items for which hedge accounting cannot be applied and any exceptional
finance charges or income.
ADJUSTED PROFIT BEFORE TAX
This comprises EBITA less adjusted net finance costs and less the group`s share
of associates` and joint ventures` net finance costs on a similar basis.
CONSTANT CURRENCY
Constant currency results have been determined by translating the local currency
denominated results for the year ended 31 March at the exchange rates for the
prior year.
EBITA
This comprises operating profit before exceptional items, amortisation of
intangible assets (excluding software) and includes the group`s share of
associates` and joint ventures` operating profit on a similar basis.
EBITA MARGIN (%)
This is calculated by expressing EBITA as a percentage of group revenue.
EBITDA
This comprises the net cash generated from operations before working capital
movements. This includes cash flows relating to exceptional items.
EFFECTIVE TAX RATE (%)
The effective tax rate is calculated by expressing tax before tax on exceptional
items and on amortisation of intangible assets (excluding software), including
the groups share of associates` and joint ventures` tax on the same basis, as a
percentage of adjusted profit before tax.
FREE CASH FLOW
This comprises net cash generated from operating activities less cash paid for
the purchase of property, plant and equipment, intangible assets and shares from
minorities, net investments in associates and joint ventures and dividends paid
to minority interests plus cash received from the sale of property, plant and
equipment and intangible assets and dividends received.
GROUP REVENUE
This comprises revenue together with the group`s share of revenue from
associates and joint ventures.
HEADLINE EARNINGS
Headline earnings are calculated by adjusting profit for the financial period
attributable to equity holders of the parent for items in accordance with the
South African Circular 8/2007 entitled `Headline Earnings`. Such items include
impairments of non-current assets and profits or losses on disposals of non-
current assets and their related tax and minority interests. This also includes
the group`s share of associates` and joint ventures` adjustments on the same
basis.
INTEREST COVER
This is the ratio of normalised EBITDA to adjusted net finance costs.
NET DEBT
This comprises gross debt (including borrowings, borrowings-related derivative
financial instruments, overdrafts and finance leases) net of cash and cash
equivalents (excluding overdrafts).
NORMALISED EBITDA
This comprises EBITDA together with dividends received from MillerCoors.
ORGANIC INFORMATION
Organic results and volumes exclude the first 12 months` results and volumes
relating to acquisitions and the last 12 months` results and volumes relating to
disposals.
SALES VOLUMES
In the determination and disclosure of sales volumes, the group aggregates 100%
of the volumes of all consolidated subsidiaries and its equity accounted
percentage of all associates` and joint ventures` volumes. Contract brewing
volumes are excluded from volumes although revenue from contract brewing is
included within group revenue. Volumes exclude intra-group sales volumes. This
measure of volumes is used in the segmental analyses as it more closely aligns
with the consolidated group revenue and EBITA disclosures.
In the determination and disclosure of aggregated sales volumes, the group
aggregates 100% of the volumes of all consolidated subsidiaries, associated
companies and joint ventures. Contract brewing volumes are excluded from
aggregated volumes although revenue from contract brewing is included within
group revenue. Aggregated volumes exclude intra-group sales volumes.
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` with respect to certain
of SABMiller plc`s plans, current goals and expectations relating to its future
financial condition, performance and results. 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. The
past business and financial performance of SABMiller plc is not to be relied on
as an indication of its future performance.
SABMiller plc
ADMINISTRATION
SABMILLER PLC
Incorporated in England and Wales (Registration No. 3528416)
GENERAL COUNSEL AND GROUP COMPANY SECRETARY
John Davidson
REGISTERED OFFICE
SABMiller House
Church Street West
Woking
Surrey, England
GU21 6HS
Facsimile +44 1483 264103
Telephone +44 1483 264000
HEAD OFFICE
One Stanhope Gate
London, England
W1K 1AF
Facsimile +44 20 7659 0111
Telephone +44 20 7659 0100
INTERNET ADDRESS
http://www.sabmiller.com
INVESTOR RELATIONS
Telephone +44 20 7659 0100
Email: investor.relations@sabmiller.com
SUSTAINABLE DEVELOPMENT
Telephone +44 1483 264134
Email: sustainable.development@sabmiller.com
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
1 Embankment Place
London, England
WC2N 6RH
Facsimile +44 20 7822 4652
Telephone +44 20 7583 5000
REGISTRAR (UNITED KINGDOM)
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, England
BR3 4TU
Facsimile +44 20 8658 2342
Telephone +44 20 8639 3399 (outside UK)
Telephone 0871 664 0300 (from UK calls cost 10p per minute plus network extras,
lines are open 8.30am-5.30pm Mon-Fri)
Email: ssd@capitaregistrars.com
www.capitaregistrars.com
REGISTRAR (SOUTH AFRICA)
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg
PO Box 61051
Marshalltown 2107
South Africa
Facsimile +27 11 688 5248
Telephone +27 11 370 5000
UNITED STATES ADR DEPOSITARY
BNY Mellon
Shareholder Services
PO Box 358516
Pittsburgh PA 15252-8516
United States of America
Telephone +1 888 269 2377
Telephone +1 888 BNY ADRS (toll free within the USA)
Telephone: +1 201 680 6825 (outside USA)
Email: shrrelations@bnymellon.com
www.adrbnymellon.com
Date: 20/05/2010 08:00:14 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.
