| Thu 18 Nov 2010, 9:00 | | SAB - SABMillier Plc - Interim results announcement |
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SAB
SOSAB
SAB - SABMillier Plc - Interim results announcement
SABMillier Plc
JSEALPHA CODE: SAB
ISSUER CODE: SOSAB
ISIN CODE: GB0004835483
Interim results announcement
18 November 2010
STRONG FINANCIAL PERFORMANCE AND MARGIN IMPROVEMENT
SABMiller plc, one of the world`s leading brewers with operations and
distribution agreements across six continents, today reports its interim
(unaudited) results for the six months to 30 September 2010.
OPERATIONAL HIGHLIGHTS
- Lager volumes increase 1% on an organic basis with growth in Asia, Africa
and South Africa
- Reported group revenue up 7%, with organic, constant currency revenue
growth of 4%
- EBITA margin increases by 90 basis points (bps) to 17.3%
- Reported EBITA up 13%, with organic, constant currency EBITA growth of 10%:
- Latin America EBITA1 growth of 10% due to lower raw material and fixed
costs
- Europe EBITA1 falls by 4% due to volume decline and downtrading
- North America EBITA1 grows 27% as firm pricing and synergies more than
offset volume declines
- Africa EBITA1 up 11% benefiting from volume growth following capacity
expansion
- Asia EBITA1 up 22% as strong CR Snow volumes in China grow ahead of the
market
- South Africa Beverages EBITA1 up 8% due to volume growth and raw
material cost benefits
- Adjusted earnings up 19%, with adjusted EPS up 16%
- Continued improvement in free cash flow2, up 23% to US$1,244 million
1 EBITA growth is shown on an organic, constant currency basis.
2 As defined in the financial definitions section. See also note 10b.
6 months 6 months % 12 months
to Sept to Sept change to March
2010 2009 2010
US$m US$m US$m
Group revenuea 14,236 13,355 7 26,350
Revenueb (excludes 9,451 8,846 7 18,020
associates` and joint
ventures` revenue)
EBITAc 2,466 2,187 13 4,381
Adjusted profit before taxd 2,167 1,920 13 3,803
Profit before taxe 1,690 1,498 13 2,929
Adjusted earningsf 1,465 1,236 19 2,509
Adjusted earnings per share
- US cents 93.0 80.0 16 161.1
- UK pence 61.3 49.9 23 100.6
- SA cents 690.4 648.9 6 1,253.8
Basic earnings per share 71.2 63.0 13 122.6
(US cents)
Interim dividend per share 19.5 17.0 15
(US cents)
Free cash flow 1,244 1,010 23 2,028
a Group revenue includes the attributable share of associates` and joint
ventures` revenue of US$4,785 million (i.e. including MillerCoors` revenue)
(2009: US$4,509 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 interim announcement.
d Adjusted profit before tax comprises EBITA less adjusted net finance costs
of US$282 million (2009: US$253 million) and share of associates` and joint
ventures` net finance costs of US$17 million (2009: US$14 million).
e Profit before tax includes exceptional charges of US$285 million (2009:
US$239 million). Exceptional items are explained in note 3.
f A reconciliation of adjusted earnings to the statutory measure of profit
attributable to equity shareholders is provided in note 5.
CHIEF EXECUTIVE`S REVIEW
Graham Mackay, Chief Executive of SABMiller, said:
"In trading conditions which remained mixed across our markets, the group
benefited from its global spread of businesses, delivering a strong financial
performance. The strength of our brands, which supported price increases
taken largely in the prior year, contributed to good revenue growth. Cost
reductions, driven by lower raw material input costs and further fixed cost
efficiencies, helped to finance increased investment behind our brand
portfolios and assisted margin enhancement. Our financial position remains
robust, with a further improvement in free cash flow."
Sept 2010 Reported Organic,
EBITA growth constant
currency
growth
US$m % %
Latin America 676 19 10
Europe 549 (7) (4)
North America 480 27 27
Africa 258 5 11
Asia 110 22 22
South Africa: Beverages 394 18 8
South Africa: Hotels and Gaming 63 19 7
Corporate (64) - -
Group 2,466 13 10
BUSINESS REVIEW
While trading and economic conditions across our markets remained mixed
during the first half of the financial year, our financial performance was
strong. Lager volumes were up 1% on an organic basis with good volume growth
in Africa, China and South Africa, predominantly in the second quarter. Group
revenue increased by 7%, 4% on an organic, constant currency basis,
benefiting from higher sales volumes and price increases mainly taken in the
second half of the prior year.
EBITA of US$2,466 million represented growth of 13%, 10% on an organic,
constant currency basis, as key operating currencies strengthened against the
US dollar compared to the equivalent period in the prior year. The group`s
EBITA margin expanded by 90 bps to 17.3%. In addition to the pricing benefits
noted above, the group`s half year results benefited from a reduction in
overall raw material input costs, largely as a result of lower brewing raw
material costs and favourable year on year foreign currency movements in some
key markets. Marketing costs were higher as we continued to invest to build
and support our brands, but we benefited from fixed cost efficiencies.
Adjusted earnings were 19% higher than the same period last year. Finance
costs were up on the prior year but the group`s effective tax rate for the
period of 29.0% was 40 bps lower than the prior year. Profit attributable to
non-controlling interests was reduced by the purchase in May 2009 of the
28.1% non-controlling interest in our Polish subsidiary Kompania Piwowarska
SA.
Free cash flow of US$1,244 million was US$234 million ahead of a strong prior
year comparative. Capital expenditure of US$565 million was US$163 million
lower mainly as a result of the completion of capacity expansion projects in
Africa and reduced capital expenditure in Europe. Good working capital
management generated an inflow of US$90 million. Normalised EBITDA margin
which includes revenue and dividends from MillerCoors, and the cash impact of
exceptional charges, improved 130 bps during the period.
The group`s gearing ratio at 30 September 2010 reduced to 36.8% from 40.8% at
31 March 2010. Group net debt fell by US$460 million to US$7,938 million. An
interim dividend of 19.5 US cents per share, up 2.5 US cents from the prior
year, will be paid to shareholders on 10 December 2010.
- In Latin America, EBITA grew by 19% (10% on an organic constant currency
basis), as reported results benefited from the strengthening of key regional
currencies, with lager volumes marginally lower than the prior year. Price
increases implemented mainly in the second half of the prior year, reduced
raw material input costs and ongoing focus on reducing fixed costs were key
contributors to the EBITA growth. We continued to develop our brand
portfolio, identify new consumption occasions and increase the appeal of the
lager category, as well as enhancing our route to market and geographic
coverage. Colombia lager volumes fell by 7% following the February 2010 price
increase to recover the emergency sales tax increase on beer, along with poor
weather and five `dry days` around presidential elections during the half
year. Peru saw lager volume growth of 11% driven by effective sales execution
and brand marketing activations in a strong economy.
- In Europe, lager volumes fell 5%, with a very challenging first quarter
partly offset by the benefit of favourable weather conditions in the second
quarter. Economic and industry conditions remained difficult across most of
the region, adversely impacting consumer spending and beer consumption, as
well as driving further downtrading. EBITA was down 7% (4% in constant
currency) due mainly to the volume decline and some adverse sales mix and
higher marketing investment, partially offset by cost efficiencies and
reduced raw material costs.
- In North America EBITA grew by 27% despite a 3% decline in MillerCoors`
sales to wholesalers (STWs) compared to the prior year. MillerCoors` domestic
sales to retailers (STRs) were also down 3% as declines in the premium light
and below premium segments were only partially offset by good growth in the
recently established Tenth and Blake crafts and imports division. The impact
of revenue management benefits, innovation and continued realisation of
synergies and cost savings drove MillerCoors EBITA up by 21%.
- Lager volumes in Africa grew by 11% on an organic basis, and by 7%
excluding Zimbabwe1. Uganda, Mozambique, Zambia and Angola all saw strong
lager volume growth following capacity expansions, with Tanzania volumes
level with the prior period even though the comparable period included other
licensed brands which have now been withdrawn. Soft drinks volumes grew by 5%
(1% excluding Zimbabwe) on an organic basis, with volumes level in Angola.
EBITA was 5% higher (11% on an organic, constant currency basis) due to the
strong volume performance, partially offset by the impact of weaker local
currencies on raw material costs and higher capacity-related fixed costs. Our
strategy to further diversify the range and mix of beverages continues, and
we have seen good performances from local and regional premium brands, as
well as our water and other non-alcohol categories.
- Asia lager volumes grew 10% on an organic basis, with both reported and
organic, constant currency EBITA growing by 22%. Our China associate CR Snow
saw strong growth with lager volumes up 9% on an organic basis, which was
ahead of the market. Particularly good growth came from CR Snow`s two largest
regions, the north-east and central, as the Snow brand continues its
momentum. India saw strong lager volume growth, cycling a low prior year base
impacted by regulatory issues in Andhra Pradesh and Uttar Pradesh, although
new trading restrictions have arisen in the current year.
- South Africa benefited from strong brand building and retail execution
activities, with lager volumes increasing by 3% in a growing market. The lack
of an Easter peak in the current year was partially offset by higher volumes
around the FIFA World Cup. Soft drinks volumes also increased by 3%, driven
by our refocused growth strategy and favourable weather conditions in the
latter part of the first half of the year. EBITA grew by 18%, and was up 8%
in constant currency. EBITA growth was driven primarily by volume growth
across both the beer and soft drinks businesses. Lower brewing raw material
costs and the stronger rand also contributed to the EBITA expansion. We have
grown our sales capability and marketing investment in order to support and
build our key lager brands in a competitive environment, with specific
campaigns having been focused around the 2010 FIFA World Cup period.
- We have made good progress across the range of our business capability
initiatives including global procurement, regional manufacturing and the
design and first implementations of major systems platforms. The outlook for
cost savings and efficiency benefits is in line with original expectations.
However, higher design and implementation costs, an extension to the
programme timeline and enhanced scope will increase exceptional costs by
approximately US$160 million, with potentially a further US$40 million from
adverse exchange rate movements. Following an exceptional charge of US$342
million last year, we expect the charge in the current year to decline by
about 15%. Charges will decline from this level by about 40% year on year in
each of the financial years 2012 and 2013, with a final charge in financial
year 2014 similar to that in the 2013 financial year. The factors above are
also expected to result in additional capital expenditure of about US$100
million over the five years of the programme, however programme working
capital inflows have already exceeded the US$350 million target originally
expected to be met in financial year 2012.
1 We have included our share of Delta, our associate in Zimbabwe, within our
results effective 1 April 2010 following the effective "dollarisation" of the
economy in 2009, the end of hyper-inflation and the stabilisation of the
local economy.
OUTLOOK
Although consumer spending remains subdued, the trend of incremental
improvement in economic conditions across most of our emerging markets is
expected to be maintained. We will continue to increase prices selectively,
and will benefit from lower raw material costs and our productivity and
efficiency initiatives but at a more moderate rate than in the first six
months of the year. We are increasing investment behind our brands to ensure
that we are well placed to benefit from an 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 (GMT) on 18 November 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 Interim 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 Sept Sept
2010 2009 %
Group revenue (including share of 2,971 2,746 8
associates) (US$m)
EBITA (US$m) 676 566 19
EBITA margin (%) 22.7 20.6
Sales volumes (hl 000)
- Lager 17,973 18,053 -
- Soft drinks 7,687 7,812 (2)
In 2010 before exceptional charges of US$44 million being business
capability programme costs (2009: US$51 million).
LATIN AMERICA delivered strong EBITA growth in the first half of the year
despite lager volumes in the region being marginally down on the prior year.
Robust volume growth in Peru was offset by lower volumes in Colombia, while
volume performance in other markets was mixed. Revenue growth was assisted by
price increases taken in the second half of last year while the benefits of
lower raw material costs and a reduction in fixed costs further enhanced our
margin which improved by 210 bps.
In COLOMBIA lager volumes have been under pressure following the February
2010 price increase to recover the sales tax increase on beer. Five days of
`dry laws` during the two rounds of presidential elections, persistent heavy
rainfall, as well as a shift in consumer expenditure towards durable goods,
further contributed to the unusually tough trading conditions. As a result
lager volumes declined by 7% compared to the prior year. Our share of the
alcohol market has recently shown an improvement, but has remained below
prior year mainly due to the growth of aguardiente. We have continued to
develop our brand portfolio and during the past six months launched Poker
Ligera, a light, upper mainstream variant of our Poker brand, and started
seeding Miller Genuine Draft in the super premium category in key outlets in
two main cities. The Aguila brand family saw a further shift toward Aguila
Light, which has shown growth well ahead of the market. We have further
optimised our service model and route to market, as well as realising
additional fixed cost productivity improvements, contributing to the
increased EBITA margin.
In PERU our operations performed exceptionally well with improved earnings
driven by lager volume growth of 11% and robust economic growth in the
country. Our differentiated brand portfolio and strong in-trade execution,
together with the good progress made in improving beer availability across
new occasions and channels, lifted our market share by 260 bps on a year on
year basis. Market segment opportunities such as the female category and the
malt category show good potential with the latter more than doubling in
volume. Our lower mainstream brand Pilsen Trujillo grew by 26% reflecting
consumer preference for beer over informal alcohol products and growing
income per capita. Our flagship mainstream brand Cristal grew by 5% and our
upper mainstream brand Pilsen Callao grew by 20%. The increase in volumes has
necessitated some incremental capacity upgrades at three plants across the
country. Benefits were achieved through lower commodity prices, and economies
of scale allowed for real fixed cost productivity, enhancing our margin for
the period.
In ECUADOR lager volumes increased by 4%, despite government restrictions on
the sale of alcohol implemented at the end of the first quarter. This growth
shows the positive outcome of activities initiated to mitigate the impact of
these restrictions, including the expansion of the Pilsener 225ml pack
launched in January 2010, an increase in outlet coverage and improved product
availability. Premium brand performance was strong with a solid increase in
the proportion of premium brand volumes in our portfolio. Revenue was boosted
by price increases taken in the first quarter of this year, further assisted
by improvements in brand and pack mix. In addition, our commercial
initiatives have had a positive impact on our share of the alcohol market,
which has increased by 200 bps on a year on year basis.
Results in HONDURAS reflect our operation`s strong position in the market,
with alcohol and sparkling soft drinks share gains of 200 bps and 260 bps
respectively, although both lager and soft drinks saw volumes decline by 4%.
This was partly due to the difficult trading conditions experienced in the
country, exacerbated by the highest levels of rainfall seen in the last 30
years. Within the lager category, our super premium segment grew driven
mainly by Miller Lite. Price increases were taken on selected sparkling soft
drink packs following an excise increase. Del Valle Fresh juice was launched
recently as part of our strategy to continue expanding into profitable
categories and increase total share of beverages in the country.
In EL SALVADOR both lager and soft drinks volumes were affected by
significantly higher rainfall as well as the impact of price increases taken
in the second half of last year. Both categories declined by 6%, however our
market share in sparkling soft drinks continued to improve with an increase
of 80 bps compared with the prior year, while revenue per hectolitre improved
by 3% benefiting from better pricing.
In PANAMA total volumes were up by 2%, driven by soft drinks volume growth of
5% boosted by our Malta Vigor brand, while lager volumes were in line with
the prior year, in a competitive environment. Increased competition in the
market saw a decrease in our beer market share of 180 bps on a year on year
basis.
EUROPE
Financial summary Sept Sept
2010 2009 %
Group revenue (including share of 3,040 3,211 (5)
associates) (US$m)
EBITA (US$m) 549 590 (7)
EBITA margin (%) 18.0 18.4
Sales volumes (hl 000)
- Lager 25,633 27,125 (5)
In 2010 before exceptional charges of US$60 million being business
capability programme costs (2009: US$123 million being US$41 million of
integration and restructuring costs and US$82 million of business capability
programme costs).
In EUROPE, lager volumes declined 5% as the beer industry continued to be
impacted by generally weak economic conditions across the region. The first
quarter was particularly challenging, however this was followed by a better
second quarter with good summer weather in central and eastern Europe
boosting sales in July and August.
Group revenue declined 5% and reported EBITA declined 7%, due in part to the
weakening of major central and eastern Europe currencies against the US
dollar compared to the prior year. On a constant currency basis, EBITA
decreased 4%. Revenue per hectolitre grew 4%, largely reflecting excise-
related price increases in the second half of the prior year. The impact of
reduced volumes and ongoing downtrading was partially offset by cost
efficiencies and lower commodity costs. Marketing expenditure was higher than
the prior year with more activity phased into the first half of the year.
In POLAND volumes were down 6% as the beer market continued to decline.
However macro economic conditions are improving with real wage growth and
decreasing unemployment becoming evident. The rate of volume decline has
slowed significantly following a particularly challenging first quarter where
volumes were impacted by widespread flooding and alcohol sales restrictions
during a nine day period of national mourning following the death of the
president. The economy and super premium segments have grown reflecting a
move towards more occasion-specific consumer choices. The shift to economy
brands has been led by competitor discounting and the growth of discounter
and modern trade channels, and we have seen a marginal loss in overall market
share.
In the CZECH REPUBLIC volumes declined 9% as the industry continued to be
impacted by weakness in the on-premise sector, downtrading and excise
increases. Lower disposable income, driven by higher levels of unemployment
and higher taxation, as well as inclement weather, reduced consumption in the
on-premise channel, where volumes saw a double digit decline. Our strong
brand portfolio and promotional activities in this high value channel
resulted in our share growing marginally. The off-premise channel declined at
a slower pace (low single digit) as a combination of the economic crisis,
heavy promotional activity and an expanding PET segment drove greater in-home
consumption, which in turn led to a slight loss in our overall market share.
Our premium brands outperformed the market and Pilsner Urquell held share
despite its on-premise bias, as it benefited from strengthening equity,
expanded tank beer distribution and more recently the launch of a new pack
offering. Non-alcoholic brand Birell grew 3% benefiting from renovated
packaging and the introduction of a new semi-dark variant, while Master
volumes doubled as it was launched in the off-premise channel. Mainstream
brands, in particular Gambrinus, remained under pressure, although a
significant increase in investment behind Gambrinus has shown encouraging
results.
In ROMANIA volumes were down 11% in a market which declined even faster, with
disposable income and consumer confidence severely impacted following the
government`s introduction of austerity measures including a 5% increase in
the VAT rate in July 2010 and a significant reduction in public sector wages.
Our market share gains were underpinned by Timisoreana, the market-leading
brand with over 17% market share. While the premium segment declined as
consumers downtraded, Ursus our premium offering maintained its market share
in this segment. In these conditions the economy segment was the only segment
to grow with our economy offerings Azuga gaining share and Ciucas` share
remaining level with the prior period.
In RUSSIA volumes declined by 1% in the first half, with growth in the second
quarter aided by exceptionally warm weather in July and August. The beer
market in Russia continues to be significantly affected by the 200% excise
increase in January 2010 which has resulted in volume declines and
downtrading. Premium and super premium segments were down 8% somewhat offset
by growth in the economy segment. In this context our market share
performance was solid, as our share remained level with the prior period. Our
premium portfolio has leadership in its segment in Moscow and the Zolotaya
Bochka brand took the number 1 position in that segment due to pack and
product innovations. Following double digit growth in the prior year, Kozel
grew 4%. Our overall volume performance was assisted by the strong growth in
the 3 litre PET Tri Bogatyrya pack launched in the prior year. In the Ukraine
volumes declined 5% in a market challenged by the economic crisis and
significant excise increases. Our premium brands Kozel and Zolotaya Bochka
have taken a strong share in the premium segment.
In ITALY economic conditions remained difficult, although there have been
recent signs of a recovery in consumer confidence and employment. In this
context the beer market declined 1%, although the on-premise channel, which
was down 3%, continued to be negatively impacted by the weak economy and poor
weather. Birra Peroni domestic volumes declined 3% but our market share of
STRs was level with the prior year and our value share grew steadily as we
continued to reduce distributor inventory volumes.
Domestic lager volumes in the Netherlands fell 1%, taking some share in a
declining market. We launched Peroni Nastro Azzurro and Pilsner Urquell in
our tied on-premise channel.
In the UNITED KINGDOM lager volumes grew 25% in a market that continues to
decline, although the premium segment grew 1%. All of our premium brands grew
with notable results for Miller Genuine Draft, Tyskie and Pilsner Urquell.
Peroni Nastro Azzurro enjoyed another strong period of growth, with volumes
up 22% driven by improved rate of sale and significant distribution gains in
the on-premise channel.
In HUNGARY, SLOVAKIA and the CANARIES, economic conditions remained difficult
and beer markets depressed. We maintained market share in Hungary and
Slovakia despite strong competitor activity and downtrading. In Slovakia we
realised the cost benefits of closing the Topolcany brewery in the prior
year.
NORTH AMERICA
Financial summary Sept Sept
2010 2009 %
Group revenue (including share of 2,865 2,870 -
joint ventures) (US$m)
EBITA (US$m) 480 379 27
EBITA margin (%) 16.8 13.2
Sales volumes (hl 000)
- Lager - excluding contract 23,423 24,116 (3)
brewing
MillerCoors` volumes
- Lager - excluding contract 22,654 23,370 (3)
brewing
- Sales to retailers (STRs) 22,436 23,179 (3)
- Contract brewing 2,437 2,456 (1)
In 2010 before exceptional charges of US$4 million being the group`s share
of MillerCoors` integration and restructuring costs (2009: US$11 million
being the group`s share of MillerCoors` integration and restructuring costs
of US$7 million and the group`s share of the unwind of the fair value
inventory adjustment of US$4 million).
The North America segment includes the group`s 58% share in MillerCoors and
100% of Miller Brewing International. Strong revenue management, innovation
and continued delivery of synergies and cost savings in MillerCoors more than
offset the impact of lower volumes in a sluggish US beer market, driving
total North America EBITA up 27% for the half year. Lager volumes, excluding
contract brewing, declined 3%.
MillerCoors
In the six months to 30 September 2010, MillerCoors` US domestic volume STRs
were down 3% in a market which continued to be impacted by economic
uncertainty and high levels of unemployment. Domestic STWs were also down 3%,
in line with the reduced STRs. EBITA grew 21% as a result of strong frontline
pricing, ongoing cost management and delivery of synergies, which more than
offset the impact of the lower volumes.
Premium light brand volumes were down low single digit with both Miller Lite
and Coors Light experiencing low single digit declines. MillerCoors` Tenth
and Blake crafts and imports division saw double digit growth, driven by Blue
Moon and Leinenkugel`s, in an expanding market category. The below premium
segment declined mid single digits, as growth in Keystone was more than
offset by declines in Miller High Life and Milwaukee`s Best. The above
premium portfolio, which includes Miller Chill, Sparks and Killian`s Irish
Red, experienced a double digit decline.
MillerCoors` revenue per hectolitre grew by 3% as a result of firm net
pricing and favourable sales mix. Cost of goods sold per hectolitre were
marginally higher, driven by higher freight rates and product mix, largely
offset by the continued delivery of synergies and cost savings.
Marketing, general and administrative costs decreased as a result of
realisation of synergies and other cost savings.
MillerCoors delivered US$119 million of incremental synergies in the six
months to 30 September 2010, mainly from marketing and media, freight, and
brewing and packaging materials. Other cost savings of US$36 million in the
first half of the year came from various initiatives within the integrated
supply chain function.
Total annualised synergies and other cost savings of US$564 million have now
been achieved since the joint venture operations commenced on 1 July 2008,
comprising synergies of US$445 million and other savings of US$119 million.
MillerCoors remains on track to achieve US$750 million in total annualised
synergies and other cost savings by the end of the calendar year 2012.
AFRICA
Financial summary Sept Sept
2010 2009 %
Group revenue (including share of 1,506 1,263 19
associates) (US$m)
EBITA (US$m) 258 246 5
EBITA margin (%) 17.2 19.5
Sales volumes (hl 000)
- Lager 7,154 6,392 12
- Lager (organic) 7,124 6,392 11
- Soft drinks 5,899 5,037 17
- Soft drinks (organic) 5,292 5,037 5
- Other alcoholic beverages 2,646 1,978 34
In 2010 before exceptional charges of US$2 million being business capability
programme costs (2009: US$4 million).
Lager volumes grew by 11% on an organic basis including Zimbabwe and 7%
excluding Zimbabwe1, aided by the recent capacity expansion projects in
Tanzania, Mozambique, Angola, Zambia and Uganda. Our strategy to further
diversify the range and mix of beverages continued to deliver encouraging
results. There were good performances from local and regional premium brands
while more affordable beverage offerings were introduced across a number of
markets, utilising local ingredients and supply chains to expand enterprise
development. We continued our sales and distribution initiatives to increase
geographic coverage and enhance the on-premise consumption experience. Our
new ventures in Southern Sudan and Nigeria continued to gain momentum. Soft
drinks contributed volume growth of 5% on an organic basis including Zimbabwe
and 1% excluding Zimbabwe. Other alcoholic beverages delivered volume growth
of 34% including Zimbabwe and 5% excluding Zimbabwe.
EBITA grew by 5%, and by 11% in organic, constant currency. As expected,
EBITA margin for the half year declined relative to the same period last
year, as our fixed cost base stepped up due to investments in capacity which
are not yet fully utilised. In addition, marketing spend has risen to support
growth in competitive markets in East and West Africa, and adverse currency
movements increased our imported commodity costs.
1 We have included our share of Delta, our associate in Zimbabwe, within our
results effective 1 April 2010 following the effective "dollarisation" of the
economy in 2009, the end of hyper-inflation and the stabilisation of the
local economy.
In UGANDA lager volumes grew 23% due to additional capacity and good momentum
behind the Club and Nile Special brands. Eagle continues to show strong
growth while Nile Gold, a premium lager which was launched in the previous
year, is making good progress in the local premium segment.
In TANZANIA lager volumes were level with the prior year, despite the loss of
the licensed East African Breweries Limited (EABL) brand portfolio. The
brewing and distribution agreement with EABL was terminated in the last
quarter of the previous financial year. The underlying momentum of our
SABMiller brand portfolio has been gratifying with good growth particularly
in the premium segment, comprising Ndovu Special Malt and Castle Lite, which
are both performing above expectations. In addition the brewery in Mbeya,
commissioned a year ago, has brought growth to the far south region.
MOZAMBIQUE performed well with lager volumes advancing 10% driven by the new
brewery in the north and economic recovery in the south. Laurentina Preta, a
local premium brand, recorded growth of 85% and is fulfilling the role of a
credible alternative to imported premium beers.
The reduction in excise in ZAMBIA in March 2010 as well as increased capacity
has resulted in 15% lager volume growth. Castle Lager and Mosi have both
shown strong growth and Mosi Gold, a local premium offering launched in
December 2009, continued to improve the portfolio. Traditional beer grew by
22% as a result of improved distribution channels and availability, and we
gained market share in this segment. Our recently acquired maheu business is
performing to expectations.
In ANGOLA soft drinks volumes ended level with the prior year due to a
slowdown in the economy which resulted in lower disposable income for
consumers. However, our market share has been assisted by improved
availability following the commissioning of the new soft drinks plant in
Luanda North. The new Luanda brewery enabled the launch of N`gola in Luanda
and the northern regions, which assisted lager volume growth of 26%.
CASTEL lager volumes grew by 4% on an organic basis aided by strong growth in
the Democratic Republic of Congo and the Ivory Coast. Soft drinks volumes
grew by 10% with good growth in the Ivory Coast and Cameroon.
ASIA
Financial summary Sept Sept
2010 2009 %
Group revenue (including share of 1,193 1,021 17
associates and joint ventures) (US$m)
EBITA (US$m) 110 90 22
EBITA margin (%) 9.2 8.8
Sales volumes (hl 000)
- Lager 32,532 29,229 11
- Lager (organic) 32,207 29,229 10
In 2010 before exceptional charges of US$nil (2009: US$1 million being
business capability programme costs).
ASIA`s lager volumes grew 10% on an organic basis, with strong growth in
China, India and Vietnam. EBITA increased 22% on both reported and organic,
constant currency bases reflecting good increases in both China and India and
improved results in Vietnam. EBITA margin increased by 40bps to 9.2%.
In CHINA lager volumes grew by 10% (9% on an organic basis) despite a
challenging first quarter in which adverse weather conditions suppressed
volumes. CR Snow`s two largest regions, north-east and central, contributed
most to the growth although a good result was also achieved in the south-east
as CR Snow continued to expand its presence in Guangdong.
Revenue per hectolitre increased as the Snow brand continued to expand its
presence in the premium segment through the Snow Draft and Brave the World
variants. Increased investment in sales and marketing contributed to CR
Snow`s continued market share growth, with particularly good performances in
Anhui, Zhejiang, Liaoning and Guizhou.
INDIA experienced strong growth in both volume and EBITA, in particular in
the key states of Andhra Pradesh, Uttar Pradesh, Karnataka and Maharashtra.
Volumes in Andhra Pradesh and Uttar Pradesh benefited from cycling adverse
regulatory issues in the prior year. However, in Andhra Pradesh, volumes were
constrained in the second quarter by new purchasing quotas imposed by the
state distributor.
Volumes in VIETNAM more than doubled as the business increased its share of
the Vietnamese market through strong growth of the Zorok brand while also
seeing strong growth continuing from its export operations.
Following strong growth in the prior year, our joint venture in AUSTRALIA saw
a fall in volumes as competition intensified in the premium segment. The
business made some gains in the high margin on-premise channel through the
introduction of draught Peroni Nastro Azzurro. In June a new brewery was
commissioned north of Sydney, which should further enhance performance
through lower production costs.
SOUTH AFRICA: BEVERAGES
Financial summary Sept Sept
2010 2009 %
Group revenue (including share of 2,432 2,051 19
associates) (US$m)
EBITA (US$m) 394 333 18
EBITA margin (%) 16.2 16.3
Sales volumes (hl 000)
- Lager 12,274 11,973 3
- Soft drinks 7,467 7,248 3
- Other alcoholic beverages 634 594 7
In 2010 before exceptional charges of US$149 million being US$23 million of
business capability programme costs and US$126 million of costs associated
with the Broad-Based Black Economic Empowerment transaction (2009: US$21
million being business capability programme costs).
Despite uncertainty about the outlook for the South African economy, there
were tentative signs of recovery during the first half of the year. Retail
sales for the half year grew by 7.1% compared to the same period last year,
assisted by the 2010 FIFA World Cup. However, the consumer outlook remains
cautious due to relatively high levels of personal debt and unemployment.
Lager volumes grew by 3% in a growing market, with the lack of an Easter peak
partially offset by the positive impact of the 2010 FIFA World Cup. The
strong growth in lager volumes was the result of a continued focus on
building the strength of our core brands and enhanced retail execution. Soft
drinks volumes also grew by 3%, benefiting from our refocused growth strategy
as well as warm and dry weather conditions in the second quarter. Sparkling
soft drinks grew by 2%, driven mainly by the PET pack and returnable glass
bottle offerings, while alternative beverages grew by 14% with particularly
strong growth from Powerade and Glaceau.
Group revenue grew by 19%, 8% in constant currency, mainly driven by volume
growth in both the beer and soft drinks businesses. Lager raw material costs
were level with the prior period as lower brewing raw material costs were
offset by higher packaging costs. Soft drinks cost of goods sold per
hectolitre increased in line with inflation. Constant currency EBITA grew by
8% and margins were marginally below the prior year.
Increased investment in sales and marketing on our core brands helped lift
lager`s share of total alcohol during the first half of the year and we
continued to develop innovative new product and packaging offerings.
The core power brand portfolio of Castle Lager, Hansa Pilsener, Carling Black
Label and Castle Lite gained further momentum as a result of the focused
marketing campaigns. Castle Lager also benefited from a campaign centred on
the 2010 FIFA World Cup and the brand`s association with football. Castle
Lite performed strongly in the first half supported by intensified in-trade
execution focused on the brand`s `Extra cold` characteristics, facilitated by
the placement of additional specialised refrigeration equipment. We also
continued with our strategy to establish our international premium lager
portfolio as a longer term contributor to growth. Soft drinks margins
benefited from improved discount management and trade execution focused on
higher margin packs.
The offer of shares in the company`s Broad-Based Black Economic Empowerment
transaction attracted over 33,000 applications and was 29% oversubscribed
when it closed in June 2010. A total of 46.2 million new shares in The South
African Breweries Limited (SAB), representing 8.45% of SAB`s enlarged issued
share capital, have been issued.
DISTELL continued to deliver strong domestic and international volume growth,
which converted into good revenue and the strength of the rand also
contributed to EBITA growth.
SOUTH AFRICA: HOTELS AND GAMING
Financial summary Sept Sept
2010 2009 %
Group revenue (share of associates) 229 193 19
(US$m)
EBITA (US$m) 63 53 19
EBITA margin (%) 27.8 27.8
Revenue per available room (Revpar) 76.18 63.44 20
- US$
SABMiller is a 49% shareholder of the Tsogo Sun Group.
The half year results reflected growth on the prior year assisted by the 2010
FIFA World Cup.
Our share of Tsogo Sun`s revenue was US$229 million, an increase of 19% (up
9% on a constant currency basis). On an organic, constant currency basis,
revenue was 7% higher.
Total gaming revenues, including inorganic revenues from Century Casinos,
were 19% up (17% higher on an organic basis). Outside of the peak FIFA World
Cup period, the gaming industry experienced low levels of growth in the major
gaming provinces. The most significant gaming province, Gauteng, saw a 4%
growth in market size with the largest gaming unit, Montecasino, reporting
revenue increases in line with the market. The KwaZulu-Natal province grew by
3% with the Suncoast Casino growing game win at a similar rate.
The South African hotel industry continues to experience weak demand, mainly
from the key government and corporate sectors, although the impact of the
FIFA World Cup saw revpar increase by 20%.
EBITA was US$10 million ahead of the prior year, with margins remaining in
line with last year as the benefits of increased revenue were offset by a
higher cost base.
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 merger, which will result in SABMiller holding
39.7% of the listed merged entity. Completion of the transaction is still
subject to regulatory approvals including the competition and gaming
authorities.
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 2010 as amended for
the changes set out in note 1, which have had no material impact on group
results. The consolidated balance sheets as at 30 September 2009 and as at 31
March 2010 have 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 2010
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.
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.
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.
Normalised EBITDA
The group uses a normalised EBITDA measure of cash generation which adjusts
EBITDA (as defined in the financial definitions section) to include the
dividends received from the MillerCoors joint venture. This measure is
adopted because the partnership and funding structure of the joint venture
result in a distribution of dividends which approximate to the EBITDA of
MillerCoors. Given the significance of the MillerCoors business to the group
and the access to its cash generation, inclusion of the dividends from
MillerCoors provides a useful measure of the group`s overall cash generation.
Business combinations and acquisitions
The group has made no acquisitions during the course of the half year ended
30 September 2010.
Recommencement of reporting of Zimbabwe operations
Following the effective `dollarisation` of the Zimbabwean economy in 2009,
the end of hyperinflation and the stabilisation of the Zimbabwean economy,
the group has included its share of the volumes and the results of its
Zimbabwean associate, Delta Corporation Limited, with effect from 1 April
2010.
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 information.
Net exceptional charges of US$285 million before finance costs and tax were
reported during the period (2009: net exceptional charges of US$222 million)
including net exceptional charges of US$4 million (2009: US$11 million)
related to the group`s share of joint ventures` and associates` exceptional
charges. The net exceptional charge included US$155 million (2009: US$170
million) related to business capability programme costs in Latin America,
Europe, Africa, Asia, South Africa Beverages and Corporate. A charge of
US$126 million has been recognised in respect of the Broad-Based Black
Economic Empowerment transaction in South Africa; this includes the one-off
IFRS 2 `Share-based Payment Transactions` charge in respect of the retailer
element of the transaction and the ongoing IFRS 2 charge in respect of the
employee element, together with the costs of the transaction.
The group`s share of joint ventures` and associates` exceptional items
included a charge of US$4 million (2009: US$7 million) related to the group`s
share of MillerCoors` integration and restructuring costs.
In addition to the amounts noted above, the net exceptional charge in 2009
included a cost of US$41 million related to integration and restructuring
costs in Europe; the group`s share of joint ventures` and associates`
exceptional items included a charge of US$4 million related to the group`s
share of the unwinding of fair value adjustments on inventory in MillerCoors;
and in addition, within net finance costs, there was an exceptional charge in
the period of US$17 million related to the business capability programme.
Finance costs
Net finance costs were US$283 million, a 6% increase on the prior period`s
US$266 million, mainly as a result of adverse foreign exchange movements
partially offset by a reduction in net interest charges due to lower net
debt. Finance costs in the current period include a net loss of US$1 million
(2009: net gain of US$3 million) from the mark to market adjustments of
various derivatives on capital items for which hedge accounting cannot be
applied. Finance costs in the prior period also included an exceptional
charge of US$17 million resulting from a change in valuation methodology of
financial instruments as part of the business capability programme. The mark
to market adjustments, and in the prior year 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$282 million, up 12%.
Interest cover, as defined in the financial definitions section, was 9.1
times, level with the comparable prior year period.
Profit before tax
Adjusted profit before tax of US$2,167 million increased by 13% over the
comparable period in the prior year, owing to increased volumes, the benefit
of price increases predominantly taken in the second half of the prior year,
reductions in raw material input costs and favourable foreign currency moves.
Profit before tax was US$1,690 million, up 13%, including the impact of the
exceptional and other adjusting finance items noted above. The principal
differences between the reported and adjusted profit before tax relate to
exceptional items, with net exceptional charges of US$285 million in the half
year compared to net exceptional charges of US$239 million in the prior
period.
Taxation
The effective tax rate of 29.0% before amortisation of intangible assets
(other than software), exceptional items and the adjustments to finance costs
noted above, was below that of the prior year (29.4%). The decreased rate has
been driven by changes in the geographic mix of profits and ongoing
management of the group`s tax profile through improved access to tax credits
on foreign income and general tax efficiencies throughout the group.
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 periods shown in the consolidated
financial information. Adjusted basic earnings per share of 93.0 US cents
were up 16% on the comparable period in the prior year, benefiting from
improved operating profitability, the lower effective tax rate and lower
profits attributable to non-controlling interests following the acquisition
of the Polish non-controlling interests in the prior year. An analysis of
earnings per share is shown in note 5. On a statutory basis, basic earnings
per share were 13% higher at 71.2 US cents (2009: 63.0 US cents) as a result
of higher exceptional charges this half year due to the non-cash IFRS2 charge
in respect of our Broad-Based Black Economic Empowerment transaction.
Cash flow and capital expenditure
Net cash generated from operations before working capital movements (EBITDA)
of US$2,062 million increased by 11% compared to the prior year period (2009:
US$1,865 million). This increase was primarily due to increased operating
profit and lower cash expenditure on exceptional items. Dividends received
from the MillerCoors joint venture (reported within cash flows from investing
activities) amounted to US$515 million (2009: US$427 million).
Normalised EBITDA of US$2,577 million (comprising EBITDA of US$2,062 million
and dividends received from MillerCoors of US$515 million) increased by 12%
on the same period in the prior year (2009: US$2,292 million), reflecting the
increase in dividends from MillerCoors and the increase in EBITDA.
Net cash generated from operating activities of US$1,346 million was down 10%
on the same period in the prior year, reflecting a lower level of cash inflow
from working capital and increases in tax and net interest payments,
partially offset by the improvement in EBITDA. While not as significant as in
the prior year, there have been continued working capital improvements from
changed working capital management processes which generated a cash inflow of
US$90 million in the half year. The increase in tax paid reflected the timing
of payments.
As expected, capital expenditure for the six months of US$565 million has
reduced compared with the same period in the prior year (2009: US$728
million). The group has continued to invest in its operations, selectively
maintaining investment to support future growth, including the new brewery in
Angola, and capacity extensions in Peru and Uganda. Capital expenditure
including the purchase of intangible assets was US$614 million (2009: US$739
million).
Free cash flow improved by 23% to US$1,244 million, reflecting lower capital
expenditure and investments in joint ventures, increased dividends from
MillerCoors and a reduction in dividends paid to non-controlling interests
following the acquisition of the non-controlling interests in our Polish
business in May 2009. Free cash flow is detailed in note 10b, and defined in
the financial definitions section.
Borrowings and net debt
Gross debt at 30 September 2010, comprising borrowings together with the fair
value of derivative assets or liabilities held to manage interest rate and
foreign currency risk of borrowings, decreased to US$8,416 million from
US$9,177 million at 31 March 2010, primarily as a result of cash generation
and the repayment of short-term debt. Net debt, comprising gross debt net of
cash and cash equivalents, decreased to US$7,938 million from US$8,398
million at 31 March 2010. 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 36.8% from 40.8% at 31 March 2010. The weighted average interest rate for
the gross debt portfolio at 30 September 2010 was 6.1% (31 March 2010: 5.7%).
On 10 September 2010 a consent solicitation relating to SABMiller plc`s
US$300 million 6.625% Guaranteed Notes due August 2033 was successfully
completed. As a result, MillerCoors was released from its guarantee of
payment of principal and interest on the Notes and certain financial
thresholds were amended to align with the terms of recently issued SABMiller
plc notes.
Subsequent to 30 September 2010 the US$515 million 364 day facility expired
and was not renewed.
Total equity
Total equity increased from US$20,593 million (restated - see note 12) at 31
March 2010 to US$21,573 million at 30 September 2010. The increase was
principally due to profit for the period and currency translation movements
on foreign currency investments, partly offset by dividend payments.
Goodwill and intangible assets
Goodwill increased to US$11,962 million (31 March 2010: US$11,578 million)
wholly due to foreign exchange movements in the period. Intangible assets
increased in the period to US$4,469 million (31 March 2010: US$4,354 million)
as a result of foreign exchange movements and additions primarily related to
the business capability programme, partially offset by amortisation. The
comparative for goodwill has 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 5% against the US dollar during the six months to 30
September 2010 and ended the period at R6.96 to the US dollar, while the
weighted average rand/dollar rate strengthened by 9% to R7.42 compared with
R8.12 in the comparable period. The Colombian peso (COP) strengthened by 7%
against the US dollar during the six months and ended the period at COP1,800
to the US dollar compared with COP1,929 at 31 March 2010. The weighted
average COP/dollar rate strengthened by 12% to COP1,887 compared with
COP2,113 in the comparable period. The euro strengthened by 1% against the US
dollar during the six months and ended the period at Euro0.73 to the US
dollar compared with Euro0.74 at 31 March 2010. The weighted average
euro/dollar rate weakened by 8% to Euro0.78 compared with Euro0.72 in the
comparable period. The Czech koruna (CZK) strengthened by 5% against the US
dollar during the half year and ended the period at CZK18.03 to the US dollar
compared with CZK18.87 at 31 March 2010. The weighted average CZK/dollar rate
weakened by 6% to CZK19.83 compared with CZK18.64 in the comparable period.
The Polish zloty (PLN) weakened by 2% against the US dollar during the six
months and ended the period at PLN2.91 to the US dollar compared with PLN2.86
at 31 March 2010. The weighted average PLN/dollar rate remained level with
the rate of PLN3.09 in the comparable period.
Risks and uncertainties
The principal risks and uncertainties for the first six months and the
remaining six months of the financial year remain as described on pages 24
and 25 of the 2010 Annual Report. These are summarised as follows:
The risk that, as the industry continues to consolidate, failure to
participate in attractive value-adding transactions, overpaying for a
transaction, or failure to implement integration plans successfully after
transactions are completed, may inhibit the group`s ability to grow and
increase profitability.
The risk that market positions come under pressure and opportunities for
profitable growth may not be realised should the group fail to ensure the
attractiveness of its brands, and continuously improve its marketing and
related sales capability to deliver consumer relevant propositions.
The risk that the group`s long-term profitable growth potential may be
jeopardised due to a failure to develop and maintain a sufficient cadre of
talented management.
The risk that regulation places increasing restrictions on pricing (including
tax), availability and marketing of beer and drives changes in consumption
behaviour. In affected countries the group`s ability to grow profitably and
contribute to local communities could be adversely affected.
The risk that profitability could fall and supply be disrupted because the
group fails to ensure an adequate supply of brewing and packaging raw
materials at competitive prices.
The risk that the group`s marketing, operating and financial responses to
changes in global economic conditions may not be timely or adequate to
respond to changing consumer demand.
The risk that the group fails to execute and derive benefits from the
business capability projects, resulting in increased project costs, business
disruption and reduced competitive advantage in the medium term.
Dividend
The board has declared a cash interim dividend of 19.5 US cents per share, an
increase of 15%. The dividend will be payable on Friday 10 December 2010 to
shareholders registered on the London and Johannesburg registers on Friday 3
December 2010. The ex-dividend trading dates will be Wednesday 1 December
2010 on the London Stock Exchange (LSE) and Monday 29 November 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 6.
The rate of exchange applicable for US dollar conversion into South African
rand and sterling was determined yesterday. The rate of exchange determined
for converting to South African rand was US$:ZAR7.017350 resulting in an
equivalent interim dividend of 136.838325 SA cents per share. The rate of
exchange determined for converting to sterling was GBP:US$1.5920 resulting in
an equivalent interim dividend of 12.2487 UK pence per share.
From the commencement of trading on Thursday 18 November 2010 until the close
of business on Friday 3 December 2010, no transfers between the London and
Johannesburg registers will be permitted, and from Monday 29 November 2010
until Friday 3 December 2010, no shares may be dematerialised or
rematerialised, both days inclusive.
Directors` responsibility for financial reporting
This statement, which should be read in conjunction with the independent
review report of the auditors set out below, is made to enable shareholders
to distinguish the respective responsibilities of the directors and the
auditors in relation to the consolidated interim financial information which
the directors confirm has been prepared on a going concern basis. The
directors consider that the group has used appropriate accounting policies,
consistently applied and supported by reasonable and appropriate judgements
and estimates.
A copy of the interim report of the group is placed on the company`s website.
The directors are responsible for the maintenance and integrity of the
statutory and audited information on the company`s website. Information
published on the internet is accessible in many countries with different
legal requirements. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
The directors confirm that this condensed set of interim financial
information has been prepared in accordance with IAS 34 as adopted by the
European Union, and the interim management report herein includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8 of the
Disclosure and Transparency Rules of the United Kingdom`s Financial Services
Authority.
At the date of this statement, the directors of SABMiller plc are those
listed in the SABMiller plc Annual Report for the year ended 31 March 2010
with the exception of Lord Fellowes, who retired from the board with effect
from 22 July 2010. A list of current directors is maintained on the SABMiller
plc website: www.sabmiller.com.
On behalf of the board
EAG Mackay MI Wyman
Chief executive Chief financial officer
18 November 2010
INDEPENDENT REVIEW REPORT OF CONSOLIDATED INTERIM FINANCIAL INFORMATION TO
SABMILLER PLC
Introduction
We have been engaged by the company to review the consolidated interim
financial information in the interim financial report for the six months
ended 30 September 2010, which comprises the consolidated income statement,
consolidated statement of comprehensive income, consolidated balance sheet,
consolidated cash flow statement, consolidated statement of changes in equity
and related notes. We have read the other information contained in the
interim financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the
consolidated interim financial information.
Directors` responsibilities
The interim financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the interim
financial report in accordance with the Disclosure and Transparency Rules of
the United Kingdom`s Financial Services Authority.
As disclosed in note 1, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
consolidated interim financial information included in this interim financial
report has been prepared in accordance with International Accounting Standard
34, `Interim Financial Reporting`, as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the
consolidated interim financial information in the interim financial report
based on our review. This report, including the conclusion, has been prepared
for and only for the company for the purpose of the Disclosure and
Transparency Rules of the Financial Services Authority and for no other
purpose. We do not, in producing this report, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent
in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, `Review of Interim Financial Information
Performed by the Independent Auditor of the Entity` issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible
for financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance that we
would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the consolidated interim financial information in the interim
financial report for the six months ended 30 September 2010 is not prepared,
in all material respects, in accordance with International Accounting
Standard 34 as adopted by the European Union and the Disclosure and
Transparency Rules of the United Kingdom`s Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
18 November 2010
SABMiller plc
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 September
Six months Six months Year
ended ended ended
30/9/10 30/9/09 31/3/10
Unaudited Unaudited Audited
Notes US$m US$m US$m
Revenue 2 9,451 8,846 18,020
Net operating expenses (8,136) (7,632) (15,401)
Operating profit 2 1,315 1,214 2,619
Operating profit before 1,596 1,425 3,091
exceptional items
Exceptional items 3 (281) (211) (472)
Net finance costs (283) (266) (563)
Interest payable and (489) (425) (879)
similar charges
Interest receivable and 206 159 316
similar income
Share of post-tax results 2 658 550 873
of associates and joint
ventures
Profit before taxation 1,690 1,498 2,929
Taxation 4 (523) (436) (848)
Profit for the period 1,167 1,062 2,081
Profit attributable to non- 45 89 171
controlling interests
Profit attributable to 5 1,122 973 1,910
equity shareholders
1,167 1,062 2,081
Basic earnings per share 5 71.2 63.0 122.6
(US cents)
Diluted earnings per share 5 70.8 62.6 122.1
(US cents)
All operations are continuing.
The notes form an integral part of this condensed interim financial
information.
SABMiller plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September
Six months Six months Year
ended ended ended
30/9/10 30/9/09 31/3/10
Unaudited Unaudited Audited
Notes US$m US$m US$m
Profit for the period 1,167 1,062 2,081
Other comprehensive income:
Currency translation 552 2,590 2,431
differences on foreign
currency net investments
Actuarial losses on defined - - (15)
benefit plans
Available for sale - 2 2
investments:
- Fair value gains arising - 2 4
during the period
- Fair value gains - - (2)
transferred to profit or
loss
Net investment hedges:
- Fair value losses arising (60) (367) (310)
during the period
Cash flow hedges: 7 (46) (59)
- Fair value losses arising (3) (47) (48)
during the period
- Fair value losses/(gains) 8 - (17)
transferred to inventory
- Fair value losses/(gains) 1 - (1)
transferred to property,
plant and equipment
- Fair value losses 1 1 7
transferred to profit or
loss
Tax on items included in 4 26 (26) (36)
other comprehensive income
Share of associates` and (75) 85 136
joint ventures`
(losses)/gains included in
other comprehensive income
Other comprehensive income 450 2,238 2,149
for the period, net of tax
Total comprehensive income 1,617 3,300 4,230
for the period
Attributable to:
Equity shareholders 1,585 3,222 4,075
Non-controlling interests 32 78 155
Total comprehensive income 1,617 3,300 4,230
for the period
The notes form an integral part of this condensed interim financial
information.
SABMiller plc
CONSOLIDATED BALANCE SHEET
at 30 September
30/9/10 30/9/09 31/3/10
Unaudited Unaudited Unaudited
Notes US$m US$m US$m
Assets
Non-current assets
Goodwill 7 11,962 11,625 11,578
Intangible assets 8 4,469 4,372 4,354
Property, plant and 9 9,122 8,885 8,916
equipment
Investments in joint 5,685 5,638 5,822
ventures
Investments in associates 2,445 2,136 2,213
Available for sale 33 34 31
investments
Derivative financial 596 413 409
instruments
Trade and other 120 155 117
receivables
Deferred tax assets 169 175 164
34,601 33,433 33,604
Current assets
Inventories 1,308 1,424 1,295
Trade and other 1,731 1,711 1,665
receivables
Current tax assets 140 143 135
Derivative financial 24 12 20
instruments
Available for sale 1 - 1
investments
Cash and cash equivalents 10c 478 464 779
3,682 3,754 3,895
Total assets 38,283 37,187 37,499
Liabilities
Current liabilities
Derivative financial (177) (128) (174)
instruments
Borrowings 10c (1,676) (1,172) (1,605)
Trade and other payables (3,443) (3,049) (3,228)
Current tax liabilities (672) (561) (616)
Provisions (347) (318) (355)
(6,315) (5,228) (5,978)
Non-current liabilities
Derivative financial (105) (212) (147)
instruments
Borrowings 10c (7,235) (8,844) (7,809)
Trade and other payables (142) (235) (145)
Deferred tax liabilities (2,439) (2,322) (2,374)
Provisions (474) (459) (453)
(10,395) (12,072) (10,928)
Total liabilities (16,710) (17,300) (16,906)
Net assets 21,573 19,887 20,593
Equity
Share capital 165 165 165
Share premium 6,340 6,255 6,312
Merger relief reserve 4,586 4,586 4,586
Other reserves 1,825 1,377 1,322
Retained earnings 7,962 6,831 7,525
Total shareholders` equity 20,878 19,214 19,910
Non-controlling interests 695 673 683
Total equity 21,573 19,887 20,593
As restated (see note 12).
The notes form an integral part of this condensed interim financial
information.
SABMiller plc
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 September
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Audited
Notes US$m US$m US$m
Cash flows from operating
activities
Cash generated from 10a 2,152 2,165 4,537
operations
Interest received 138 170 317
Interest paid (495) (499) (957)
Tax paid (449) (337) (620)
Net cash generated from 10b 1,346 1,499 3,277
operating activities
Cash flows from investing
activities
Purchase of property, (565) (728) (1,436)
plant and equipment
Proceeds from sale of 17 20 37
property, plant and
equipment
Purchase of intangible (49) (11) (92)
assets
Purchase of available for - - (6)
sale investments
Proceeds from disposal of - 2 14
available for sale
investments
Acquisition of businesses (6) (30) (78)
(net of cash acquired)
Purchase of shares from (3) (3) (5)
non-controlling interests
Investments in joint (21) (142) (353)
ventures
Investments in associates (5) (9) (76)
Repayment of investments - - 3
by associates
Dividends received from 515 427 707
joint ventures
Dividends received from 53 39 106
associates
Dividends received from 1 1 2
other investments
Net cash used in investing (63) (434) (1,177)
activities
Cash flows from financing
activities
Proceeds from the issue of 28 57 114
shares
Proceeds from the issue of 19 - -
shares in subsidiaries to
non-controlling interests
Purchase of own shares for - (8) (8)
share trusts
Proceeds from borrowings 826 3,623 5,110
Repayment of borrowings (1,654) (3,857) (5,714)
Capital element of finance (3) (1) (4)
lease payments
Net cash payments on net (12) (109) (137)
investment hedges
Dividends paid to (806) (654) (924)
shareholders of the parent
Dividends paid to non- (49) (95) (160)
controlling interests
Net cash used in financing (1,651) (1,044) (1,723)
activities
Net cash (outflow)/inflow (368) 21 377
from operating, investing
and financing activities
Effects of exchange rate 21 56 90
changes
Net (decrease)/increase in (347) 77 467
cash and cash equivalents
Cash and cash equivalents 10c 589 122 122
at 1 April
Cash and cash equivalents 10c 242 199 589
at end of period
The notes form an integral part of this condensed interim financial
information.
SABMiller plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September
Called up Share Merger Other
share premium relief reserves
capital account reserve
US$m US$m US$m US$m
At 1 April 2009 159 6,198 3,395 (872)
(audited)
Total comprehensive - - - 2,249
income
Profit for the period - - - -
Other comprehensive - - - 2,249
income
Other movements - - - -
Dividends paid - - - -
Issue of SABMiller plc 6 57 1,191 -
ordinary shares
Payment for purchase of - - - -
own shares for share
trusts
Arising on business - - - -
combinations
Buyout of non- - - - -
controlling interests
Credit entry relating - - - -
to share-based payments
At 30 September 2009 165 6,255 4,586 1,377
(unaudited)
At 1 April 2009 159 6,198 3,395 (872)
(audited)
Total comprehensive - - - 2,194
income
Profit for the period - - - -
Other comprehensive - - - 2,194
income
Dividends paid - - - -
Issue of SABMiller plc 6 114 1,191 -
ordinary shares
Payment for purchase of - - - -
own shares for share
trusts
Arising on business - - - -
combinations
Buyout of non- - - - -
controlling interests
Credit entry relating - - - -
to share-based payments
At 31 March 2010 165 6,312 4,586 1,322
(unaudited)
At 1 April 2010 165 6,312 4,586 1,322
(unaudited)
Total comprehensive - - - 503
income
Profit for the period - - - -
Other comprehensive - - - 503
income
Dividends paid - - - -
Issue of SABMiller plc - 28 - -
ordinary shares
Proceeds from the issue - - - -
of shares in
subsidiaries to non-
controlling interests
Credit entry relating - - - -
to share-based payments
At 30 September 2010 165 6,340 4,586 1,825
(unaudited)
Retained Total Non- Total
earnings shareholders` controlling equity
equity interests
US$m US$m US$m US$m
At 1 April 2009 6,496 15,376 741 16,117
(audited)
Total comprehensive 973 3,222 78 3,300
income
Profit for the period 973 973 89 1,062
Other comprehensive - 2,249 (11) 2,238
income
Other movements (4) (4) - (4)
Dividends paid (663) (663) (88) (751)
Issue of SABMiller plc - 1,254 - 1,254
ordinary shares
Payment for purchase of (8) (8) - (8)
own shares for share
trusts
Arising on business - - 21 21
combinations
Buyout of non- - - (79) (79)
controlling interests
Credit entry relating 37 37 - 37
to share-based payments
At 30 September 2009 6,831 19,214 673 19,887
(unaudited)
At 1 April 2009 6,496 15,376 741 16,117
(audited)
Total comprehensive 1,881 4,075 155 4,230
income
Profit for the period 1,910 1,910 171 2,081
Other comprehensive (29) 2,165 (16) 2,149
income
Dividends paid (924) (924) (162) (1,086)
Issue of SABMiller plc - 1,311 - 1,311
ordinary shares
Payment for purchase of (8) (8) - (8)
own shares for share
trusts
Arising on business - - 21 21
combinations
Buyout of non- - - (72) (72)
controlling interests
Credit entry relating 80 80 - 80
to share-based payments
At 31 March 2010 7,525 19,910 683 20,593
(unaudited)
At 1 April 2010 7,525 19,910 683 20,593
(unaudited)
Total comprehensive 1,082 1,585 32 1,617
income
Profit for the period 1,122 1,122 45 1,167
Other comprehensive (40) 463 (13) 450
income
Dividends paid (809) (809) (39) (848)
Issue of SABMiller plc - 28 - 28
ordinary shares
Proceeds from the issue - - 19 19
of shares in
subsidiaries to non-
controlling interests
Credit entry relating 164 164 - 164
to share-based payments
At 30 September 2010 7,962 20,878 695 21,573
(unaudited)
As restated (see note 12).
The notes form an integral part of this condensed interim financial
information.
SABMiller plc
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The condensed consolidated interim financial information (the `financial
information`) comprises the unaudited results of SABMiller plc for the six
months ended 30 September 2010 and 30 September 2009, together with the
audited results for the year ended 31 March 2010, restated for further
unaudited adjustments relating to initial accounting for business
combinations. Further details of these adjustments are provided in note 12.
The financial information in this report is not audited and does not
constitute statutory accounts within the meaning of s434 of the Companies Act
2006. The board of directors approved this financial information on 17
November 2010. The annual financial statements for the year ended 31 March
2010, approved by the board of directors on 3 June 2010, 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 s498(2) or (3) of the Companies Act 2006.
The unaudited financial information in this interim report has been prepared
in accordance with the Disclosure and Transparency Rules of the Financial
Services Authority, and with IAS 34 `Interim Financial Reporting` as adopted
by the European Union. The interim financial information should be read in
conjunction with the annual financial statements for the year ended 31 March
2010, which have been prepared in accordance with IFRS as adopted by the
European Union.
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 (the 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 annual
financial statements for the year ended 31 March 2010, which were published
in June 2010, as described in those financial statements except as set out
below.
The following standards are mandatory for the first time in the financial
year ending 31 March 2011 and are relevant for the group.
- IFRS 3 (revised), `Business Combinations` requires all acquisition related
costs to be expensed and adjustments to contingent consideration to be
recognised in profit or loss rather than as an adjustment to goodwill. It
allows the choice on an acquisition by acquisition basis of measuring the non-
controlling interest in the acquiree either at fair value or at the non-
controlling interest`s share of the acquiree`s net assets. The group has
applied the revised standard prospectively from 1 April 2010 for combinations
completed after that date with no material impact in the six months ended 30
September 2010.
- IAS 27 (revised), `Consolidated and Separate Financial Statements` requires
the effects of all transactions with non-controlling interests to be recorded
in equity if there is no change in control. These transactions no longer
result in the recognition of goodwill or gains and losses. When control is
lost, any remaining interest in the entity is re-measured to fair value, and
a gain or loss is recognised in profit or loss. The group has applied the
revised standard prospectively from 1 April 2010 with no material impact in
the six months ended 30 September 2010.
The following standards and interpretations have been adopted by the group
since 1 April 2010 with no significant impact on its consolidated results or
financial position:
- IFRS 1 (revised), `First-time Adoption` and Amendment to IFRS 1 for
Additional Exemptions.
- Amendment to IAS 39, `Financial Instruments: Recognition and Measurement` -
Eligible Hedged Items.
- IFRIC 15, `Agreements for the Construction of Real Estate`.
- IFRIC 16, `Hedges of a Net Investment in a Foreign Operation`.
- IFRIC 17, `Distribution of Non-cash Assets to Owners`.
- IFRIC 18, `Transfers of Assets from Customers`.
- Amendment to IFRS 2, `Group Cash-settled Share-based Payment Transactions`.
- Amendment to IAS 32, `Financial Instruments: Presentation` - Classification
of Rights Issues.
- Annual improvements to IFRSs (2009).
The following standards, interpretations and amendments to existing standards
have been published and are mandatory for the group`s accounting periods
beginning on or after 1 April 2011 or later periods, but which have not been
early adopted by the group:
- IFRIC 19, `Extinguishing Financial Liabilities with Equity Instruments`, is
effective from 1 July 2010.
- Amendment to IFRS 1, `Limited Exemption from Comparative IFRS 7 Disclosures
for First-time Adopters`, is effective from 1 July 2010.
- Amendment to IAS 24, `Related Party Disclosures`, is effective from 1
January 2011.
- Amendment to IFRIC 14, `Pre-payments of a Minimum Funding Requirement`, is
effective from 1 January 2011.
- Annual improvements to IFRSs (2010), is effective from 1 January 2011.
- Amendment to IFRS 7, `Financial Instrument Disclosures: Transfers of
Financial Assets`, is effective from 1 July 2011.
- IFRS 9, `Financial Instruments`, is effective from 1 January 2013.
Not yet endorsed by the EU.
The adoption of these standards, interpretations and amendments is not
anticipated to have a material effect on the consolidated results of
operations or financial position of the group.
2. Segmental information
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.
INCOME STATEMENT
Six months Six months Six months
ended ended ended
30/9/10 30/9/10 30/9/10
Group EBITA Group
revenue Unaudited revenue
Unaudited Unaudited
US$m US$m US$m
Latin America 2,971 676 2,746
Europe 3,040 549 3,211
North America 2,865 480 2,870
Africa 1,506 258 1,263
Asia 1,193 110 1,021
South Africa: 2,661 457 2,244
- Beverages 2,432 394 2,051
- Hotels and Gaming 229 63 193
Corporate - (64) -
Group 14,236 2,466 13,355
Amortisation of intangible assets
(excluding software) - group and
share of associates` and joint (103)
ventures`
Exceptional items - group and
share of associates` and joint
ventures` (285)
Net finance costs - group and
share of associates` and joint
ventures` (excluding exceptional (300)
items)
Share of associates` and joint (64)
ventures` taxation
Share of associates` and joint (24)
ventures` non-controlling
interests
Profit before tax 1,690
Six months Year ended Year ended
ended 31/3/10 31/3/10
30/9/09 Group EBITA
EBITA revenue Audited
Unaudited Audited
US$m US$m US$m
Latin America 566 5,905 1,386
Europe 590 5,577 872
North America 379 5,228 619
Africa 246 2,716 565
Asia 90 1,741 71
South Africa: 386 5,183 1,007
- Beverages 333 4,777 885
- Hotels and Gaming 53 406 122
Corporate (70) - (139)
Group 2,187 26,350 4,381
Amortisation of intangible assets
(excluding software) - group and
share of associates` and joint (97) (199)
ventures`
Exceptional items - group and
share of associates` and joint
ventures` (239) (507)
Net finance costs - group and
share of associates` and joint
ventures` (excluding exceptional (263) (586)
items)
Share of associates` and joint (63) (118)
ventures` taxation
Share of associates` and joint (27) (42)
ventures` non-controlling
interests
Profit before tax 1,498 2,929
Group revenue (including associates and joint ventures)
With the exception of South Africa Hotels and Gaming, all reportable segments
derive their revenues from the sale of beverages. Revenues are derived from a
large number of customers which are internationally dispersed, with no
customers being individually material.
Revenue 2010 Share of Group
associates` revenue
and joint 2010
ventures`
revenue
2010
Six months ended Unaudited Unaudited Unaudited
30 September: US$m US$m US$m
Latin America 2,966 5 2,971
Europe 3,031 9 3,040
North America 64 2,801 2,865
Africa 915 591 1,506
Asia 305 888 1,193
South Africa: 2,170 491 2,661
- Beverages 2,170 262 2,432
- Hotels and Gaming - 229 229
Group 9,451 4,785 14,236
Year ended 31 March:
Latin America
Europe
North America
Africa
Asia
South Africa:
- Beverages
- Hotels and Gaming
Group
Revenue Share of Group
associates` revenue
and joint
ventures`
revenue
2009 2009 2009
Six months ended Unaudited Unaudited Unaudited
30 September: US$m US$m US$m
Latin America 2,741 5 2,746
Europe 3,201 10 3,211
North America 57 2,813 2,870
Africa 802 461 1,263
Asia 226 795 1,021
South Africa: 1,819 425 2,244
- Beverages 1,819 232 2,051
- Hotels and Gaming - 193 193
Group 8,846 4,509 13,355
2010 2010 2010
Audited Audited Audited
Year ended 31 March: US$m US$m US$m
Latin America 5,894 11 5,905
Europe 5,558 19 5,577
North America 107 5,121 5,228
Africa 1,774 942 2,716
Asia 473 1,268 1,741
South Africa: 4,214 969 5,183
- Beverages 4,214 563 4,777
- Hotels and Gaming - 406 406
Group 18,020 8,330 26,350
Operating profit
The following table provides a reconciliation of operating profit to
operating profit before exceptional items.
Operating Exceptional Operating
profit items profit
before
exceptional
items
2010 2010 2010
Unaudited Unaudited Unaudited
Six months ended 30 September: US$m US$m US$m
Latin America 571 44 615
Europe 475 60 535
North America 17 - 17
Africa 127 2 129
Asia (6) - (6)
South Africa: Beverages 221 149 370
Corporate (90) 26 (64)
Group 1,315 281 1,596
Year ended 31 March:
Latin America
Europe
North America
Africa
Asia
South Africa: Beverages
Corporate
Group
Six months ended 30 September: Operating Exceptional Operating
profit items profit before
exceptional
items
2009 2009 2009
Unaudited Unaudited Unaudited
US$m US$m US$m
Latin America 458 51 509
Europe 452 123 575
North America (3) - (3)
Africa 115 4 119
Asia (17) 1 (16)
South Africa: Beverages 290 21 311
Corporate (81) 11 (70)
Group 1,214 211 1,425
Year ended 31 March: 2010 2010 2010
Audited Audited Audited
US$m US$m US$m
Latin America 1,114 156 1,270
Europe 638 202 840
North America 12 - 12
Africa 313 3 316
Asia (34) - (34)
South Africa: Beverages 773 53 826
Corporate (197) 58 (139)
Group 2,619 472 3 091
EBITA (segment result)
This comprises operating profit before exceptional items, amortisation of
intangible assets (excluding software) and includes the group`s share of
associates` and joint ventures` operating profit on a similar basis. The
following table provides a reconciliation of operating profit before
exceptional items to EBITA.
Operating Share of Amortisation EBITA
profit associates` of
before and joint intangible
exceptional ventures` assets
items operating (excluding
profit software) -
before group and
exceptional share of
items associates`
and joint
ventures`
2010 2010 2010 2010
Six months ended Unaudited Unaudited Unaudited Unaudited
30 September: US$m US$m US$m US$m
Latin America 615 - 61 676
Europe 535 1 13 549
North America 17 440 23 480
Africa 129 127 2 258
Asia (6) 112 4 110
South Africa: 370 87 - 457
- Beverages 370 24 - 394
- Hotels and Gaming - 63 - 63
Corporate (64) - - (64)
Group 1,596 767 103 2,466
Year ended 31 March:
Latin America
Europe
North America
Africa
Asia
South Africa:
- Beverages
- Hotels and Gaming
Corporate
Group
Operating Share of Amortisation EBITA
profit associates` of
before and joint intangible
exceptional ventures` assets
items operating (excluding
profit software) -
before group and
exceptional share of
items associates`
and joint
ventures`
2009 2009 2009 2009
Six months ended Unaudited Unaudited Unaudited Unaudited
30 September: US$m US$m US$m US$m
Latin America 509 - 57 566
Europe 575 1 14 590
North America (3) 360 22 379
Africa 119 126 1 246
Asia (16) 103 3 90
South Africa: 311 75 - 386
- Beverages 311 22 - 333
- Hotels and Gaming - 53 - 53
Corporate (70) - - (70)
Group 1,425 665 97 2,187
2010 2010 2010 2010
Year ended 31 March: Audited Audited Audited Audited
US$m US$m US$m US$m
Latin America 1,270 - 116 1,386
Europe 840 3 29 872
North America 12 562 45 619
Africa 316 248 1 565
Asia (34) 98 7 71
South Africa: 826 180 1 1,007
- Beverages 826 59 - 885
- Hotels and Gaming - 121 1 122
Corporate (139) - - (139)
Group 3,091 1,091 199 4,381
The group`s share of associates` and joint ventures` operating profit is
reconciled to the share of post-tax results of associates and joint ventures
in the income statement as follows:
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Audited
US$m US$m US$m
Share of associates` and joint 767 665 1,091
ventures` operating profit
(before exceptional items)
Share of associates` and joint (4) (11) (18)
ventures` exceptional items
Share of associates` and joint (17) (14) (40)
ventures` net finance costs
Share of associates` and joint (64) (63) (118)
ventures` taxation
Share of associates` and joint (24) (27) (42)
ventures` non-controlling
interests
Share of post-tax results of 658 550 873
associates and joint ventures
Excise duties of US$2,089 million (2009: US$1,859 million) have been incurred
during the six months as follows: Latin America US$769 million (2009: US$698
million); Europe US$648 million (2009: US$602 million); North America US$1
million (2009: US$1 million); Africa US$142 million (2009: US$129 million);
Asia US$118 million (2009: US$89 million) and South Africa US$411 million
(2009: US$340 million).
Beer volumes increase during the summer months leading to higher revenues
being recognised in the first half of the year in the Europe and North
America segments. Due to the spread of the business between Northern and
Southern hemispheres, the results for the group as a whole are not highly
seasonal in nature.
EBITDA
The following table provides a reconciliation of EBITDA (the net cash
generated from operating activities before working capital movements) before
cash exceptional items to EBITDA after cash exceptional items. A
reconciliation of profit for the period for the group to EBITDA after cash
exceptional items for the group can be found in note 10a.
Six months ended 30 September: EBITDA Cash EBITDA
before cash exceptional
exceptional items
items
2010 2010 2010
Unaudited Unaudited Unaudited
US$m US$m US$m
Latin America 846 (39) 807
Europe 680 (58) 622
North America 15 - 15
Africa 197 (2) 195
Asia 14 - 14
South Africa: Beverages 455 (24) 431
Corporate 4 (26) (22)
Group 2,211 (149) 2,062
Year ended 31 March:
Latin America
Europe
North America
Africa
Asia
South Africa: Beverages
Corporate
Group
Six months ended 30 September: EBITDA Cash EBITDA
before cash exceptional
exceptional items
items
2009 2009 2009
Unaudited Unaudited Unaudited
US$m US$m US$m
Latin America 712 (50) 662
Europe 693 (90) 603
North America (2) - (2)
Africa 168 (4) 164
Asia - (1) (1)
South Africa: Beverages 397 (20) 377
Corporate 73 (11) 62
Group 2,041 (176) 1,865
Year ended 31 March: 2010 2010 2010
Audited Audited Audited
US$m US$m US$m
Latin America 1,710 (92) 1,618
Europe 1,203 (144) 1,059
North America 15 - 15
Africa 412 (3) 409
Asia (3) - (3)
South Africa: Beverages 984 (42) 942
Corporate (8) (58) (66)
Group 4,313 (339) 3,974
Normalised EBITDA, including dividends received from the MillerCoors joint
venture, was US$2,577 million (2009: US$2,292 million).
3. EXCEPTIONAL ITEMS
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Audited
US$m US$m US$m
Exceptional items included in
operating profit:
Business capability programme (155) (170) (325)
costs
Broad-Based Black Economic (126) - (11)
Empowerment scheme costs
Transaction costs - - (13)
Impairments - - (45)
Integration and restructuring - (41) (78)
costs
Net exceptional losses included (281) (211) (472)
within operating profit
Exceptional items included in net
finance costs:
Business capability programme - (17) (17)
costs
Net exceptional losses included - (17) (17)
within net finance costs
Share of associates` and joint
ventures` exceptional items:
Integration and restructuring (4) (7) (14)
costs
Unwinding of fair value - (4) (4)
adjustments on inventory
Share of associates` and joint (4) (11) (18)
ventures` exceptional losses
Taxation credits relating to 13 31 64
subsidiaries` and the group`s
share of associates` and joint
ventures` exceptional items
Exceptional items included in operating profit
Business capability programme costs
The business capability programme will streamline finance, human resources
and procurement activities through the deployment of global systems and
introduce common sales, distribution and supply chain management systems.
Costs of US$155 million have been incurred in the period (2009: US$170
million).
Broad-Based Black Economic Empowerment scheme costs
During 2010, US$126 million of costs have been incurred in relation to the
Broad-Based Black Economic Empowerment (BBBEE) transaction in South Africa.
These were IFRS 2 share-based payment charges in relation to the retailer and
employee components of the scheme and the costs associated with the scheme
(2009: US$nil).
Integration and restructuring costs
In 2009, in Europe a total of US$41 million of integration and restructuring
costs were incurred in Romania and Poland.
Exceptional items included within net finance costs
Business capability programme costs
In 2009, a charge of US$17 million was incurred to reflect differences on the
fair valuation of financial instruments.
Share of associates` and joint ventures` exceptional items
Integration and restructuring costs
In 2010, the group`s share of MillerCoors` integration and restructuring
costs was US$4 million, primarily related to severance costs (2009: US$7
million primarily related to relocation and severance costs).
Unwinding of fair value adjustments on inventory
In 2009, the group`s share of MillerCoors` charge to operating profit in the
period relating to the unwind of the fair value adjustment to inventory was
US$4 million.
Taxation credits
Taxation credits of US$13 million (2009: US$31 million) arose in relation to
exceptional items during the period and include US$2 million (2009: US$4
million) in relation to MillerCoors although the tax credit is recognised in
Miller Brewing Company (see note 4).
4. TAXATION
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Audited
US$m US$m US$m
Current taxation 464 425 725
- Charge for the period (UK 465 441 755
corporation tax: US$nil (2009:
US$nil))
- Adjustments in respect of (1) (16) (30)
prior years
Withholding taxes and other 37 35 77
remittance taxes
Total current taxation 501 460 802
Deferred taxation 22 (24) 46
- Charge/(credit) for the 22 (24) 71
period (UK corporation tax:
US$nil (2009: US$nil))
- Adjustments in respect of - - (14)
prior years
- Rate change - - (11)
Taxation expense 523 436 848
Tax (credit)/charge relating to
components of other
comprehensive income is as
follows:
Deferred tax credit on (25) - (10)
actuarial gains and losses
Deferred tax (credit)/charge on (1) 26 46
financial instruments
(26) 26 36
Effective tax rate (%) 29.0 29.4 28.5
See the financial definitions section for the definition of the effective tax
rate. This calculation is on a basis consistent with that used in prior
periods 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 in
other comprehensive income on the group`s share of MillerCoors` taxable items
included within other comprehensive income.
5. EARNINGS PER SHARE
Six months Six months Year ended
ended ended 30/9/09 31/3/10
30/9/10
Unaudited Unaudited Audited
US cents US cents US cents
Basic earnings per share 71.2 63.0 122.6
Diluted earnings per share 70.8 62.6 122.1
Headline earnings per share 71.1 64.6 127.3
Adjusted basic earnings per 93.0 80.0 161.1
share
Adjusted diluted earnings per 92.5 79.5 160.4
share
The weighted average number of shares was:
Six months Six months Year ended
ended ended 30/9/09 31/3/10
30/9/10
Unaudited Unaudited Audited
Millions of Millions of Millions of
shares shares shares
Ordinary shares 1,655 1,627 1,641
Treasury shares (72) (77) (77)
EBT ordinary shares (8) (5) (6)
Basic shares 1,575 1,545 1,558
Dilutive ordinary shares from 9 9 6
share options
Diluted shares 1,584 1,554 1,564
The calculation of diluted earnings per share excludes 6,812,050 (2009:
12,672,482) share options that were non-dilutive for the period because the
exercise price of the option exceeded the fair value of the shares during the
period and 13,242,372 (2009: 6,569,614) share awards that were non-dilutive
for the period 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 periods shown in the
consolidated financial information. Adjusted earnings per share has been
based on adjusted earnings for each financial period 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 3/2009 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:
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Audited
US$m US$m US$m
Profit for the period 1,122 973 1,910
attributable to equity holders
of the parent
Headline adjustments
Impairment of property, plant 1 - 45
and equipment
(Profit)/loss on disposal of (5) 28 39
property, plant and equipment
Profit on disposal of available - - (2)
for sale investments
Tax effects of the above items - (6) (17)
Non-controlling interests` share 1 3 9
of the above items
Headline earnings 1,119 998 1,984
Business capability programme 155 187 342
costs
Integration and restructuring - 9 41
costs
Broad-Based Black Economic 126 - 11
Empowerment scheme costs
Transaction costs - - 13
Net loss/(gain) on fair value 1 (3) 8
movements on capital items
Amortisation of intangible 79 73 150
assets (excluding capitalised
software)
Tax effects of the above items (41) (59) (101)
Non-controlling interests` share (3) (3) (6)
of the above items
Share of joint ventures` and 29 34 67
associates` other adjustments,
net of tax and non-controlling
interests
Adjusted earnings 1,465 1,236 2,509
This does not include all fair value movements but includes those in
relation to capital items for which hedge accounting cannot be applied.
6. DIVIDENDS
Dividends paid were as follows:
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Audited
US cents US cents US cents
Prior year final dividend paid 51.0 42.0 42.0
per ordinary share
Current year interim dividend - - 17.0
paid per ordinary share
The interim dividend declared of 19.5 US cents per ordinary share is payable
on 10 December 2010 to ordinary shareholders on the register as at 3 December
2010 and will absorb an estimated US$307 million of shareholders` funds.
7. GOODWILL
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Unaudited
US$m US$m US$m
Net book amount at beginning of 11,578 8,716 8,716
period
Exchange adjustments 384 1,742 1,671
Arising on increase in share of - 1,122 1,125
subsidiary undertakings
Acquisitions - through business - 45 66
combinations
Net book amount at end of 11,962 11,625 11,578
period
As restated (see note12).
8. INTANGIBLE ASSETS
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Audited
US$m US$m US$m
Net book amount at beginning of 4,354 3,742 3,742
period
Exchange adjustments 172 694 657
Additions - separately acquired 49 10 93
Acquisitions - through business - 12 33
combinations
Amortisation (108) (92) (203)
Transfers from other assets 2 6 32
Net book amount at end of 4,469 4,372 4,354
period
As restated (see note 12).
9. PROPERTY, PLANT AND EQUIPMENT
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited
US$m US$m
Net book amount at beginning of 8,916 7,406 7,406
period
Exchange adjustments 147 1,257 1,137
Additions 554 701 1,440
Acquisitions - through business - 25 38
combinations
Disposals (21) (50) (107)
Impairment (1) - (45)
Depreciation (451) (431) (881)
Other movements (22) (23) (72)
Net book amount at end of 9,122 8,885 8,916
period
As restated (see note 12).
10A. RECONCILIATION OF PROFIT FOR THE PERIOD TO NET CASH GENERATED FROM
OPERATIONS
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Audited
US$m US$m US$m
Profit for the period 1,167 1,062 2,081
Taxation 523 436 848
Share of post-tax results of (658) (550) (873)
associates and joint ventures
Interest receivable and similar (206) (159) (316)
income
Interest payable and similar 489 425 879
charges
Operating profit 1,315 1,214 2,619
Depreciation:
Property, plant and equipment 337 318 655
Containers 114 113 226
Container breakages, shrinkages 11 22 40
and write-offs
(Profit)/loss on disposal of (5) 28 39
property, plant and equipment
Profit on disposal of available - - (2)
for sale investments
Amortisation of intangible 108 92 203
assets
Impairment of property, plant 1 - 45
and equipment
Impairment of working capital 6 12 34
balances
Amortisation of advances to 12 11 28
customers
Unrealised net loss from fair - 12 1
value hedges
Dividends received from other (1) (1) (2)
investments
Charge with respect to share 40 37 80
options
Charge with respect to Broad- 124 - -
Based Black Economic Empowerment
scheme
Other non-cash movements - 7 8
Net cash generated from 2,062 1,865 3,974
operations before working
capital movements (EBITDA)
Net inflow in working capital 90 300 563
Net cash generated from 2,152 2,165 4,537
operations
Cash generated from operations before working capital movements includes cash
flows relating to exceptional items of US$147 million (2009: US$168 million)
in respect of business capability programme costs, US$2 million (2009:
US$nil) in respect of Broad-Based Black Economic Empowerment scheme costs and
US$nil (2009: US$8 million) in respect of integration and restructuring
costs.
Normalised EBITDA, including dividends received from the MillerCoors joint
venture, was US$2,577 million (2009: US$2,292 million).
10B. RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES TO FREE CASH FLOW
Six months Six months Year ended
ended ended 31/3/10
30/9/10 30/9/09
Unaudited Unaudited Unaudited
US$m US$m US$m
Net cash generated from operating 1,346 1,499 3,277
activities
Purchase of property, plant and (565) (728) (1,436)
equipment
Proceeds from sale of property, 17 20 37
plant and equipment
Purchase of intangible assets (49) (11) (92)
Investments in joint ventures (21) (142) (353)
Investments in associates (4) - (63)
Repayment of investments by - - 3
associates
Dividends received from joint 515 427 707
ventures
Dividends received from associates 53 39 106
Dividends received from other 1 1 2
investments
Dividends paid to non-controlling (49) (95) (160)
interests
Free cash flow 1,244 1,010 2,028
10C. ANALYSIS OF NET DEBT
Net debt is analysed as follows:
As at As at As at
30/9/10 30/9/09 31/3/10
Unaudited Unaudited Audited
US$m US$m US$m
Borrowings (8,664) (9,738) (9,212)
Borrowings-related derivative 495 207 237
financial instruments
Overdrafts (236) (265) (190)
Finance leases (11) (13) (12)
Gross debt (8,416) (9,809) (9,177)
Cash and cash equivalents 478 464 779
(excluding overdrafts)
Net debt (7,938) (9,345) (8,398)
Cash and cash equivalents on the balance sheet are reconciled to cash and
cash equivalents on the cash flow as follows:
As at As at As at
30/9/10 30/9/09 31/3/10
Unaudited Unaudited Audited
US$m US$m US$m
Cash and cash equivalents (balance 478 464 779
sheet)
Overdrafts (236) (265) (190)
Cash and cash equivalents (cash 242 199 589
flow)
The movement in net debt is analysed as follows:
Cash and cash Overdrafts Borrowings
equivalents
(excluding
overdrafts)
US$m US$m US$m
At 1 April 2010 779 (190) (9,212)
Exchange adjustments 4 17 (99)
Cash flow (305) (63) 828
Other movements - - (181)
At 30 September 2010 478 (236) (8,664)
Derivative Finance Total Net debt
financial leases gross
instruments borrowings
US$m US$m US$m US$m
At 1 April 2010 237 (12) (9,177) (8,398)
Exchange adjustments (7) - (89) (85)
Cash flow 93 3 861 556
Other movements 172 (2) (11) (11)
At 30 September 2010 495 (11) (8,416) (7,938)
The group has sufficient headroom to enable it to conform to covenants on its
existing borrowings. The group has sufficient undrawn financing facilities to
service its operating activities and ongoing capital investment. The group
has the following undrawn committed borrowing facilities available at 30
September 2010 in respect of which all conditions precedent have been met at
that date:
As at As at As at
30/9/10 30/9/09 31/3/10
Unaudited Unaudited Audited
US$m US$m US$m
Amounts expiring:
Within one year 1,383 973 441
Between one and two years 88 398 1,025
Between two and five years 2,099 1,769 2,112
In five years or more - 57 1
3,570 3,197 3,579
Subsequent to 30 September 2010 the US$515 million 364 day facility expired
and was not renewed.
11. COMMITMENTS, CONTINGENCIES AND GUARANTEES
Except as stated below there have been no material changes to commitments,
contingencies or guarantees as disclosed in the annual financial statements
for the year ended 31 March 2010.
Commitments
Contracts placed for future capital expenditure for property, plant and
equipment not provided in the financial statements amount to US$180 million
at 30 September 2010 (2009: US$292 million).
12. BALANCE SHEET RESTATEMENTS
Initial accounting
The initial accounting under IFRS 3, `Business Combinations`, for the Ambo
Mineral Water Share Company, maheu, Bere Azuga and Voltic acquisitions had
not been completed as at 30 September 2009. During the six months ended 31
March 2010, adjustments to provisional fair values in respect of these
acquisitions were made. As a result comparative information for the six
months ended 30 September 2009 has been presented in this interim financial
information as if the adjustments to provisional fair values had been made
from the respective transaction dates. The impact on the prior period income
statement has been reviewed and no material adjustments to the income
statement are required as a result of the adjustments to provisional fair
values. The following table reconciles the impact on the balance sheet
reported as at 30 September 2009 to the comparative balance sheet presented
in this interim financial information.
The initial accounting under IFRS 3, `Business Combinations`, for the maheu
and Rwenzori acquisitions had not been completed as at 31 March 2010. During
the six months ended 30 September 2010, adjustments to provisional fair
values in respect of these acquisitions were made. As a result comparative
information for the year ended 31 March 2010 has been presented in this
interim financial information as if the adjustments to provisional fair
values had been made from the respective transaction dates. The impact on the
prior period income statement has been reviewed and no material adjustments
to the income statement are required as a result of the adjustments to
provisional fair values. The following table reconciles the impact on the
balance sheet reported as at 31 March 2010 to the comparative balance sheet
presented in this interim financial information.
BALANCE SHEET
At 30/9/09 Adjustments At 30/9/09
to As restated
provisional
fair values
Unaudited Unaudited Unaudited
US$m US$m US$m
Assets
Non-current assets
Goodwill 11,608 17 11,625
Intangible assets 4,369 3 4,372
Property, plant and equipment 8,883 2 8,885
Investments in joint ventures 5,638 - 5,638
Other non-current assets 2,913 - 2,913
33,411 22 33,433
Current assets
Inventories 1,424 - 1,424
Trade and other receivables 1,711 - 1,711
Other current assets 619 - 619
3,754 - 3,754
Total assets 37,165 22 37,187
Liabilities
Current liabilities
Trade and other payables (3,040) (9) (3,049)
Other current liabilities (2,174) (5) (2,179)
(5,214) (14) (5,228)
Non-current liabilities
Trade and other payables (235) - (235)
Provisions (459) - (459)
Deferred tax liabilities (2,321) (1) (2,322)
Other non-current liabilities (9,056) - (9,056)
(12,071) (1) (12,072)
Total liabilities (17,285) (15) (17,300)
Net assets 19,880 7 19,887
Total equity 19,880 7 19,887
At 31/3/10 Adjustments At 31/3/10
to As restated
provisional
fair values
Audited Unaudited Unaudited
US$m US$m US$m
Assets
Non-current assets
Goodwill 11,584 (6) 11,578
Intangible assets 4,354 - 4,354
Property, plant and equipment 8,915 1 8,916
Investments in joint ventures 5,822 - 5,822
Other non-current assets 2,934 - 2,934
33,609 (5) 33,604
Current assets
Inventories 1,295 - 1,295
Trade and other receivables 1,665 - 1,665
Other current assets 935 - 935
3,895 - 3,895
Total assets 37,504 (5) 37,499
Liabilities
Current liabilities
Trade and other payables (3,227) (1) (3,228)
Other current liabilities (2,750) - (2,750)
(5,977) (1) (5,978)
Non-current liabilities
Trade and other payables (145) - (145)
Provisions (453) - (453)
Deferred tax liabilities (2,374) - (2,374)
Other non-current liabilities (7,956) - (7,956)
(10,928) - (10,928)
Total liabilities (16,905) (1) (16,906)
Net assets 20,599 (6) 20,593
Total equity 20,599 (6) 20,593
13. RELATED PARTY TRANSACTIONS
There have been no material changes to the nature or relative quantum of
related party transactions as described in the 2010 Annual Report.
The only changes to key management during the period were the appointment to
the board of Mark Armour on 1 May 2010 and the retirement from the board of
Lord Fellowes on 22 July 2010. Consequently as at 30 September 2010 there
were 25 key management (31 March 2010: 25).
14. POST BALANCE SHEET EVENTS
Subsequent to 30 September 2010 the US$515 million 364 day facility expired
and was not renewed.
On 4 November 2010 Tsogo Sun Gaming (Pty) Ltd, a wholly owned subsidiary of
the group`s associate, Tsogo Sun Holdings Ltd, repaid the R490 million (US$67
million) preference shares issued to SABSA Holdings Pty Ltd, a wholly owned
subsidiary of the group.
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 non-controlling
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 six months ended 30 September at the
exchange rates for the comparable period in 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 incurred in
the period.
EBITDA margin (%)
This is calculated by expressing EBITDA as a percentage of revenue.
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 group`s 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, and intangible assets, net
investments in existing associates and joint ventures (in both cases only
where there is no change in the group`s effective ownership percentage) and
dividends paid to non-controlling interests plus cash received from the sale
of property, plant and equipment and intangible assets and dividends
received.
The definition of free cash flow has been refined to exclude the purchase of
shares from minorities and net investments in associates and joint ventures
which result in a change in the group`s effective ownership percentage, as
these are deemed to be discretionary expenditure. Comparatives have been
restated accordingly.
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 3/2009 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 non-controlling 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 our joint venture
MillerCoors. Dividends received from MillerCoors approximate to the group`s
share of the EBITDA of the MillerCoors joint venture.
Normalised EBITDA margin
This is calculated by expressing normalised EBITDA as a percentage of revenue
plus the group`s share of MillerCoors` revenue.
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 for lager volumes, soft drinks volumes, other
alcoholic beverage volumes and beverage volumes and is used in the segmental
analyses as it more closely aligns with the consolidated group revenue and
EBITA disclosures.
SABMiller plc
FORWARD-LOOKING STATEMENTS
This announcement does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire ordinary shares in the capital of
SABMiller plc (the "company") or any other securities of the company in any
jurisdiction or an inducement to enter into investment activity.
This announcement includes `forward-looking statements` 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: 18/11/2010 09:00:11 Produced by the JSE SENS Department.
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