RNS Number:7716H
SABMiller PLC
15 November 2007
15 November 2007
SABMILLER REPORTS STRONG GROWTH IN FIRST HALF
SABMiller plc, one of the world's leading brewers with operations and
distribution agreements in over 60 countries across six continents, today
reports its interim (unaudited) results for the six months to 30 September 2007.
Operational Highlights
* Group lager volumes up 15% to 135 million hectolitres (hl), organic
growth of 11%
* EBITA up 14%, and 10% on an organic constant currency basis
* Double digit volume growth in Europe with EBITA up 29%
* Miller returns to growth in the US with organic sales to retailers up
1.4% - EBITA up 19%
* Lager volumes in Latin America up 8%, in line with expectations -
investment in brands and distribution depress margin in the current period
* Africa & Asia lager volumes increase by 29% - driven by China and India
* South Africa lager volume growth of 2% despite the expected loss of
premium volumes
* Increased capital investment to provide for continuing growth
-------------------------------- -------- -------- -------- --------
Sept Sept March
2007 2006 % 2007
US$m US$m change US$m
-------------------------------- -------- -------- -------- --------
Revenue (a) 10,781 9,344 15 18,620
EBITA (b) 2,036 1,781 14 3,591
Adjusted profit before tax (c) 1,773 1,533 15 3,154
Profit before tax 1,579 1,378 14 2,804
Adjusted earnings (d) 1,036 846 22 1,796
Adjusted earnings per share (d)
- US cents 69.1 56.6 22 120.0
- UK pence 34.5 30.5 13 63.4
- SA cents 492.0 385.2 28 847.2
Basic earnings per share (US cents) 63.9 52.9 20 110.2
Interim dividend per share (US cents) 16.0 14.0 14
-------------------------------- -------- -------- -------- --------
Graham Mackay, Chief Executive Officer of SABMiller, said:
"This has been a good start to the year, demonstrating the strength of our brand
portfolio and the health of our businesses. We have delivered another excellent
performance in Europe, a pleasing return to growth in North America, and our
Asian businesses have continued their momentum and made market share gains. At
the second anniversary of our Bavaria transaction, our volumes have grown
strongly in Latin America and our investment plans remain on track."
(a) Revenue excludes the attributable share of associates' revenue of
US$1,242 million (2006: US$1,052 million).
(b) Note 2 provides a reconciliation of operating profit to EBITA which is
defined as operating profit before exceptional items and amortisation of
intangible assets (excluding software) but includes the group's share of
associates' operating profit, on a similar basis. EBITA is used throughout the
interim announcement.
(c) Adjusted profit before tax comprises EBITA less net finance costs of
US$258 million (2006: US$242 million) and share of associates' net finance costs
of US$5 million (2006: US$6 million).
(d) A reconciliation of adjusted earnings to the statutory measure of profit
attributable to equity shareholders is provided in note 5.
-------------------- --------- --------- -------------
Segmental EBITA performance 2007 Reported Organic,
constant
EBITA growth currency
US$m % growth
%
-------------------- --------- --------- -------------
Latin America 438 13 2
Europe 622 29 17
North America 300 19 19
Africa and Asia 277 16 13
South Africa: Beverages 405 (2) 3
South Africa: Hotels and Gaming 58 32 38
Corporate (64) - -
--------- --------- -------------
Group 2,036 14 10
--------- --------- -------------
CHIEF EXECUTIVE'S REVIEW
Business review
The start to the year reflects the momentum in SABMiller's developing markets,
which are demonstrating stronger and more sustainable growth than in previous
economic cycles. Improving GDP levels and government finances and moderate rates
of inflation are supporting greater local infrastructure investment, which in
turn is enhancing consumer disposable income. The group's premium portfolio
strategy has also enabled it to capture value from the global drift to higher
margin products in its developing and developed markets, as consumers continue
to trade up. Despite challenging comparative growth rates during the comparable
six months of last year and higher input costs in the current period, the
business has reported organic growth in lager volumes of 11% and an increase in
EBITA of 10% on an organic, constant currency basis. As expected, the group
EBITA margin decreased slightly to 16.9%, 20 basis points below the prior year,
reflecting the change in mix of our segmental profits together with higher
marketing investment and input costs. Industry wide commodity cost increases
have been significant with the impact varying across regions reflecting
differing currency strengths and local sourcing conditions. In aggregate, our
price increases and productivity have offset these input cost rises.
These results, in aggregate, continue to demonstrate the value of the group's
diverse and strong brand portfolios, which include some 200 local and regional
beers. Total beverage volumes were 159 million hectolitres (hl). Total reported
lager volumes were up 15% to 135 million hl, including the impact of
acquisitions in China and India.
* Miller Brewing Company delivered improved results in the US as a
result of its strategy to migrate the business' brand portfolio to higher
margin, higher growth segments. EBITA for the period was 19% higher than the
prior year, driven primarily by price increases and higher volumes, and includes
a favourable cost adjustment of US$16 million in respect of the prior year.
Total sales to retailers (STRs) grew by 1.4% on an organic basis and by 5.9% on
a reported basis, against a US beer industry which, excluding imports, grew at
1.0%. The flagship brand, Miller Lite, returned to solid growth, posting a 2.1%
gain in STRs, at the same time increasing its average case pricing by 2.1%, some
50 basis points ahead of its largest light beer competitor. Miller's worthmore
brand portfolio also delivered a strong performance.
* After six years of double digit EBITA growth, Europe has recorded
another excellent performance with organic constant currency EBITA growth of
17%. This was driven by volume growth and market share gains in Poland, Russia
and Romania, assisted by warm weather across Eastern Europe during the first
quarter. Europe's premium brands recorded 13% volume growth, reflecting
successful initiatives to capture value from consumer trends towards premium
products. This growth in higher margin brands, in addition to price increases
and efficiency gains, mitigated the impact of significant increases in the cost
of raw materials, real wage increases and the negative mix effect of the strong
growth in cans in certain markets.
* At the second anniversary of the Bavaria acquisition, the
implementation of our strategy to renovate the beer category in Latin America
remains on track, although the speed and scale of the initiatives being
implemented has led to some inevitable market dislocation during the period.
Lager volume growth of 8% for the half year is in line with the group's medium
term expectations, notwithstanding the high comparatives in the prior period and
a slowdown in spending on consumables in Colombia. The group remains confident
that the substantial activity underway to transform the category will deliver
significant volume and margin growth in the medium term.
* The group's joint-venture in China, CR Snow, continued its very
strong performance, with organic volume growth of 22%, well ahead of the wider
Chinese beer market. All regions posted growth, with market share gains in the
Central and North Eastern provinces. The national brand, Snow, which now
accounts for over 70% of volumes, is expected to become the world's second
largest beer brand by volume within calendar year 2007. In India, our business
grew strongly, reporting lager volume growth of 28%. Capacity expansion and the
integration of last year's Foster's India acquisition represent key areas of
progress during the period. Momentum within Africa continued, with favourable
economic conditions driving good growth in Tanzania, Mozambique and Angola,
supported by ongoing brand renovations and improved execution in both sales and
distribution.
* Lager volumes in South Africa grew by a pleasing 2% despite the
termination of the Amstel brand licence in March 2007. The expected loss of
premium volumes was mitigated by strong growth in Castle Lite and the successful
launch of a new premium brand offering, Hansa Marzen Gold, which already
represents some 3% of volumes for the half year. Mainstream lager volumes grew
by 5%, assisted by the absence of the National Lottery over the six month
period. Total soft drink volumes were up an impressive 11% as the business also
benefited from a robust economic environment, with GDP growing by 5%.
* On 9 October 2007, SABMiller and Molson Coors Brewing Company
announced that they had signed a letter of intent to combine the U.S. and Puerto
Rico operations of their respective subsidiaries, Miller and Coors, in a joint
venture. The transaction will create a stronger, brand-led U.S. brewer with the
scale, resources and distribution platform to compete more effectively in the
increasingly competitive U.S. marketplace. Definitive agreements are expected to
be signed in December 2007, but regulatory clearance is not expected before mid
2008.
Reported EBITA of US$2,036 million was up by 14% and included a 4% contribution
from favourable weighted average currency rates. Net cash generated from
operations before working capital movements was 13% above the prior year,
illustrating the overall strength of the trading performance and our strong cash
characteristics. The group's gearing decreased during the period to 43.5% from
45.8% at year end. Earnings benefited from currency strength in some major
markets and lower tax rates in certain jurisdictions. Adjusted earnings and
adjusted earnings per share are up by 22%, to US$1,036 million and 69.1 US cents
respectively for the first six month period. An interim dividend of 16 US cents
per share, a 14% increase, will be paid to shareholders on 21 December 2007.
Outlook
We have delivered a good first half performance, benefiting from the weighting
of our portfolio of businesses towards emerging markets, and a focus on
developing our premium brands. We are continuing to invest in our businesses to
drive revenues, which, together with ongoing productivity gains, are offsetting
industry wide cost pressures. We expect to make progress in the balance of the
year but face a more challenging environment.
Enquiries:
---------------
SABMiller plc Tel: +44 20 7659 0100
Sue Clark Director of Corporate Affairs Mob: +44 7850 285471
Gary Leibowitz Senior Vice President, Investor Relations Mob: +44 7717 428540
Nigel Fairbrass Head of Media Relations Mob: +44 7799 894265
A live webcast of the management presentation to analysts will begin at 9.00am
(GMT) on 15 November 2007.
This announcement, a copy of the slide presentation and video interviews with
management are available on the SABMiller plc website at www.sabmiller.com.
Video interviews with management can also be found at www.cantos.com.
High resolution images are available for the media to view and download free of
charge from www.newscast.co.uk
Copies of the press release and detailed Interim Announcement are available from
the Company Secretary at the Registered Office, or from 2 Jan Smuts Avenue,
Johannesburg, South Africa
Registered office: SABMiller House, Church Street West, Woking, Surrey GU21 6HS
Incorporated in England and Wales (Registration Number 3528416)
Telephone: +44 1483 264000
Telefax: +44 1483 264117
--------------------------------------------------------------------------------
Operational review
Latin America
Sept Sept
2007 2006
Financial summary US$m US$m %
--------------------------- ------- ------- -------
Revenue 2,453 2,012 22
EBITA* 438 387 13
EBITA margin (%) 17.8 19.2
Sales volumes (hl 000
- Lager 17,757 16,460 8
- Soft drinks 9,144 9,730 (6)
- Soft drinks - organic 9,144 9,284 (2)
--------------------------- ------- ------- --------
* In 2007 before exceptional items of US$52 million (30/09/2006: US$24 million)
being integration and restructuring costs in Latin America, less the net profit
on the sale of soft drink and juice businesses in Costa Rica and Colombia
respectively.
The implementation of our strategy to renovate the beer category in the region
is on track with good initial signs of success. Lager volume growth of 8% for
the half year has been achieved, notwithstanding high comparatives in the prior
period, and we remain confident that our initiatives to transform the category
will deliver significant volume and profit margin growth in the medium term.
Reported EBITA performance for the first half has been aided by favourable
exchange rates. Organic constant currency EBITA growth was 2%, reflecting
substantial upfront investment in brand renovations and new brand launches.
Higher US dollar raw materials costs were offset by local currency appreciation,
pricing and productivity benefits. The EBITA margin declined by 140 basis
points, including 40 basis points from changes to invoicing of distribution
costs. These changes have also increased reported revenue growth by 200 basis
points but have no net effect on EBITA.
Lager volumes in Colombia increased by almost 8%, with slower growth recorded in
the latter part of the period, as higher consumer credit costs impacted spending
on consumables, and as the business started cycling high comparative growth
numbers. Beer's share of the alcohol market has increased steadily over the
period. Renovation of our brand portfolio has further widened the appeal of the
beer category and the recent upgrade of the market-leading Aguila brand,
re-launched with a new packaging design in an enlarged 330ml bottle, has led to
brand volumes increasing 9%. In the premium segment, volume growth has been
encouraging and Club Colombia grew by 50% in the half year. With the
introduction of the national pricing model in December last year, retail
mark-ups and regional pricing variability were reduced. Structural
route-to-market changes and an increase in the sales force numbers and trade
marketing capabilities are being implemented, with increased focus on extracting
operational efficiencies and improving service reliability. The speed and scale
of the initiatives being implemented including major changes to the
route-to-market has led to some market dislocation over the period and had a
minor impact on volumes. Investment in production capacity has progressed and
the new Valle brewery outside Cali will be commissioned by the end of the
calendar year, increasing capacity by 2.2 million hl. Further capital has been
invested in product quality, in distribution, and in upgrading bottles.
Our Peru operations have achieved lager volume growth of 10% despite
unseasonably cold weather and an earthquake in August which lowered volume
momentum towards the end of the period. There has been continuing strong price
discounting by competition especially with the entry of a low-priced brand from
a new competitor. Our flagship brand Cristal continues to show positive momentum
following its relaunch, but has been affected by the intense competition and our
overall market share fell to 88% in September, on a monthly basis, from 92% in
March 2007. The business continues to invest in marketing, brand renovation,
improving capability at the point of sale and capacity.
Trading at our Ecuador operation was difficult with the loss of six trading days
due to "dry" election days. Lager volumes grew by 4% with the flagship
mainstream brand Pilsener growing at 5% over very strong comparatives in the
prior period. Pilsener was relaunched in the latter part of September while
activities to improve visibility and availability continue. Our Club brand was
also relaunched and positioned in the premium segment.
In Panama our lager volumes grew by over 12% in a market that has grown by 10%.
Both our flagship brands Atlas and Balboa were successfully relaunched and prior
year above-inflation price increases have further boosted revenue. Minority
interests of 6.7% were acquired, increasing our effective interest to 95%.
Lager volumes in Honduras grew by 3%, aided by growth in the premium segment,
while soft drinks reported growth of 9%. In El Salvador our soft drink market
share has grown by nearly one percentage point to 47.7%. Lager volumes have
grown by nearly 4% off high growth in the prior period, driven by the premium
Golden Light brand, which continues to show double digit growth.
Our integration activities in the South America region are drawing to a close
with a final exceptional charge recorded in the period of US$52 million. This
includes a US$17 million net profit on the disposal of the juice business in
Colombia and soft drinks business in Costa Rica, which have been completed in
the period.
Europe
Sept Sept
2007 2006
Financial summary US$m US$m %
--------------------------- ------- ------- -------
Revenue 2,876 2,279 26
EBITA 622 485 29
EBITA margin (%) 21.6 21.3
Sales volumes (hl 000)
- Lager 25,715 23,041 12
--------------------------- ------- ------- -------
Europe achieved an excellent result with lager organic volumes up 12% and EBITA
growth of 29%. Volumes were assisted by warm weather in the earlier months, with
Poland, Russia and Romania all delivering strong double digit volume increases.
While volume growth moderated in the later months, most operations improved
market share over the half year. Reported EBITA growth of 29% was boosted by
currency translation gains and was 17% up on an organic constant currency basis.
There were significant increases in raw material costs, real wage increases and
the continued growth of can volumes in certain markets. The pricing environment
during the period under review has shown some signs of improvement.
In Poland, strong economic fundamentals as well as generally warmer weather
underpinned 8% growth in the beer market. Our domestic volumes were up 14% and
market share for the six month period improved. Tyskie, Poland's leading brand
with annual volumes of 5.7 million hectolitres and market share over 16%
continued its strong recovery and grew 11% while Zubr, the second biggest brand
in the market, was up 23% with upgraded brand imagery, new packaging and
increased media and trade presence. In the local premium segment, Lech was 12%
ahead with strong trade activation utilising associations with music and active
lifestyles. Our flavoured beer Redd's, with its three variants, is the fastest
growing brand in the premium segment. Expansion projects currently under way
will increase overall annual capacity to over 17 million hl by next summer.
Volumes in the Czech Republic were up 3%, slightly ahead of the market, and
market share improved slightly. Improved sales mix has been achieved reflecting
the continued focus on premium and mainstream brands. All brands have benefited
from a comprehensive packaging upgrade over the past 18 months including labels,
proprietary bottles, new crates, cans, multipacks and all secondary packaging.
Pilsner Urquell grew 5%, supported by a successful on-trade outlet expansion
programme focused on high visibility outlets, and tailored shopper activation in
hypermarkets. A new specialty beer, Master, introduced in draught in April has
been well accepted by the on-trade as a super premium to complement the existing
portfolio. Volumes of our largest brand, Gambrinus, were slightly down as we
deliberately withdrew from competitive rounds of discounting. Kozel continued
its strong momentum and was up by 21%. In order to address the sharp escalation
in the cost of brewing raw materials, price rises averaging 5.8% have been
announced.
In Russia volumes were up 18%, ahead of the beer market which grew by an
estimated 14%, reflecting the combined effects of warmer spring weather and
improving consumer spending. Real income growth is driving share gains for the
premium segment. Miller Genuine Draft was 21% ahead, driven by expanding
distribution of the new half litre bottle and Zolotaya Bochka, the fastest
growing local premium brand, was up 22% buoyed by focused marketing investment.
Redd's grew by 31% supported by strong brand communication targeted at female
consumers. New initiatives with distributors targeting smaller cities have
started to increase reach, with the sales force and cooler placements expanded
significantly to increase retail coverage in more than 120,000 outlets.
Construction of the new brewery at Ulyanovsk, 1,000 km east of Moscow, is on
schedule to open early in 2009 with an initial capacity of 3 million hl and the
ability to expand further as required.
In Italy, with generally warmer weather and a modestly improving economy, the
beer market grew by an estimated 1%. Against this, Birra Peroni has delivered
overall domestic volume growth of 2% as branded volumes gained 4% and private
label volumes were reduced by 24% with the continuation of the managed exit from
this segment. Focus on the on-trade, in the more affluent North, has led to
volume growth in this region of 7%. This performance has been achieved with
above-inflation price increases implemented early in the year. Our premium brand
Nastro Azzurro was up 8%, completing ten quarters of market share growth, and
premiumisation of the brand continues with selected prestige sponsorships and
the launch of limited edition packs. Peroni volumes were 6% higher than prior
year, with extensive activation of national football and rugby team
sponsorships, expansion of draught particularly in the Northern provinces, and
significant packaging renovation.
In Romania our volumes surged 37% with market share up 450 basis points to
24.9%, in a market up 12%, driven by a robust economy and growing consumer
spending. Now largely freed of the capacity constraints which applied during the
first half of last year, our portfolio is better matched to consumer demand
through mainstream and economy PET offerings supported by anchor distributors,
improved marketing and in trade execution. Our local premium brand Ursus Premium
grew by 15% and its on-premise share stands at 15%, while Timisoreana Lux was up
67% boosted by the new two litre PET pack, and is now the market leader with
annual sales of well over 2 million hl. These two brands are now the top two
brands in the important on-premise channel. Production capacity is being further
expanded to 6.3 million hl.
In Hungary the fiscal austerity measures continue to impact domestic
consumption, and there are no signs yet of an end to the intense price
discounting. Despite this, and the introduction of PET offerings by two
competitors, our volumes grew 4%, ahead of a declining market.
In the UK we continue to build on last year's success, with volumes up 42%
against an overall market where volumes have fallen. Peroni Nastro Azzurro grew
33% with new packs, a successful national advertising campaign, and a
significant increase in draught installations. Our Polish brands, Tyskie and
Lech, introduced last year, have been successfully integrated into the portfolio
and are performing very strongly.
North America
Sept Sept
2007 2006
Financial summary US$m US$m %
--------------------------- ------- ------- -------
Revenue 2,782 2,632 6
EBITA* 300 253 19
EBITA margin (%) 10.8 9.6
Sales volumes (hl 000)
- Lager - excluding contract brewing 26,191 24,693 6
- contract brewing 4,065 5,224 (22)
- Soft drinks 54 49 10
Lager - domestic sales to retailers (STRs) 24,556 23,177 6
--------------------------- ------- ------- -------
* In 2007 including an amount of US$16m from a settlement with Ball Metal
Beverage Container Corporation in respect of can purchases in the prior year
(2006: nil).
Miller Brewing Company drove improved results in the period through disciplined
execution of its strategy to migrate the brand portfolio to higher margin,
higher growth segments, while aggressively controlling costs to continue
investments in brand marketing and product innovation.
Solid volume and pricing performance for the flagship Miller Lite brand, strong
overall portfolio pricing and mix gains, with improved volume performance from
higher margin brands, combined to produce a 3.9% increase in domestic net
revenue per barrel.
During the period, US beer industry shipments to wholesalers (STWs) grew by
1.6%. Excluding imports, the US industry grew by 1.0%. Miller's US domestic
sales to retailers (STRs) increased by 5.9% over the six months and 1.4% on an
organic basis, while reported domestic STWs increased by 6.7%. Contract brewing
volumes were lower by 22%, due primarily to Miller's acquisition of the Sparks
and Steel Reserve brands last year which were previously brewed under contract,
and were down only 5% on an organic basis.
Miller Lite returned to solid growth in the period, posting a 2.1% increase in
STRs supported by a strong marketing campaign focused on product intrinsic
values. Miller Lite was up 3.3% in the on-premise channel and average case
pricing was up 2.1% across all channels, 50 basis points more than its largest
domestic light beer competitor.
After just six weeks of market testing, Miller decided in April to fast track a
national launch of Miller Chill, its new chelada-style light beer. The brand
reached 74% off-premise and 30% on-premise distribution by 1 August 2007 with
strong consumer trial and repeat purchase fuelling its success. Miller Chill
provided significant incremental volume and margin enhancement as it reached a
0.8% value share during the peak summer sales season. While the brand is
demonstrating expected seasonality, as at the end of October 2007 it had
achieved STRs of 380,000 barrels, and it is well on its way to exceeding the
first year retail volume target of 400,000 barrels.
Miller's worthmore brand portfolio grew volumes in the high-single digits. This
strong performance was driven by 27% growth of the Leinenkugel's franchise,
following the continued rollout of the Sunset Wheat variant, which is now
available in 42 states, as well as the regional launch of Summer Shandy. Peroni
Nastro Azzurro grew by 54% in the US using its global Italian style positioning.
Sparks volume grew by 10.8% on a proforma basis during its first full year in
the Miller system.
Miller High Life also returned to growth, with STRs up 1.0% on the back of a
strong national marketing campaign focused on common sense values and average
case prices were up 2.9% in supermarkets nationally. The Milwaukee's Best
franchise STRs declined 4.0% in the face of strong competitive pressure in the
economy segment. The declining trend for Miller Genuine Draft STRs continued
with volumes down 9.3%, in line with its market segment. Icehouse STRs were up
2.0%, a significant trend improvement following new brand positioning.
Total revenue increased by 5.8% versus the prior period, while US domestic
revenue excluding contract brewing increased by 10%. Brewing materials costs
were up compared to the prior year as grain, barley and other ingredient costs
increased.
EBITA for the period was 19% higher than the prior year, driven primarily by
price increases and higher volumes, and includes a retrospective cost
adjustment. In October 2007 Miller settled a dispute with the Ball Metal
Beverage Container Corporation, which will result in a one-time payment to
Miller of some $70 million, a portion of which is attributable to our contract
brewing partners. An amount of US$16 million relates to materials supplied to
Miller during the prior financial year and this benefit has been included in the
period under review. The settlement also includes a one-off gain of US$17
million which will be reported in the second half in respect of other
contractual changes. The balance attributable to Miller is being recognised as
normal costs of goods sold, across both halves of the current year.
Miller's EBITA margin increased to 10.8% from 9.6%, as unit revenue
improvements, favourable mix and the effect of the Ball settlement exceeded
increases in marketing and other costs. Marketing investment will remain at a
high level in the second half as we invest behind brand momentum and
innovations.
Africa & Asia
Sept Sept
2007 2006
Financial summary US$m US$m %
--------------------------- ------- ------- -------
Group revenue (including share of associates) 1,703 1,356 26
EBITA 277 240 16
EBITA margin (%) 16.3 17.7
Sales volumes (hl 000)*
- Lager 52,830 40,854 29
- Lager organic 49,406 40,854 21
- Soft drinks 4,193 6,914 (40)
- Soft drinks - organic 4,193 3,438 22
- Other alcoholic beverages 2,966 3,126 (5)
--------------------------- ------- ------- -------
* Excludes Castel lager volumes of 8,441 hl 000 (2006: 7,563 hl 000) and soft
drinks of 7,256 hl 000 (2006: 6,659 hl 000).
Soft drinks volumes include sparkling and non-sparkling beverages.
The strong growth in Africa & Asia continued in the period under review, with
lager volume growth of 29% (representing organic growth of 21%) and reported
EBITA growth of 16%, despite currency weakness in certain of our countries.
EBITA margin reduced from 17.7% to 16.3% as a result of the higher growth in
lower margin Asia markets and a slight reduction in Africa margins due to rising
costs.
Africa
Momentum within Africa continued in the first half with organic lager growth of
6% and total organic volume growth of 7%, both excluding Zimbabwe. Underlying
this performance is continued economic growth in most countries, improved
execution in both sales and distribution and ongoing brand renovations.
Tanzania achieved lager volume growth of 8% in the six months. Performance was
driven by an improving economy, improved distribution and market place
activities including the re-formulation of the premium Ndovu Lager to 100% malt,
the introduction of new long neck bottle for Kilimanjaro and the launch of Eagle
lager in the North East aimed at capturing share at the subsistence end of the
market. The launch of Eagle will be rolled out on a national basis later in the
year.
Mozambique continued its excellent performance by posting lager growth of 8%,
its fourth consecutive first half year period of similar growth. The performance
was underpinned by continued economic development, a stable currency and a well
balanced brand and pack portfolio that provides the consumer with multiple brand
and pack options at differing price points. A new brewhouse was commissioned
late in the prior year and a number of capacity projects have delivered improved
operating efficiencies.
Angola continues to grow rapidly with a buoyant economy and our soft drink
business continues its strong growth, recording 12% volume growth despite supply
side constraints. Profitability was impeded by the ending of an import tax
holiday and higher can volumes which carry lower margins. Results for this year
include our share of earnings from the recently privatised Empresa de Cervejas
N'gola, our brewery in Southern Angola, which is performing ahead of expectation
and is currently undergoing a capacity expansion.
Botswana has returned to growth in both lager and soft drinks operations. The
economic pressure and inflationary impacts that followed the 2005 devaluations
have largely been absorbed and are no longer impacting performance. Lager
volumes are up 11% and soft drinks up 19%. We have completed the brand
renovation of the market leading lager, St. Louis, and have recently launched a
new returnable lager bottle aimed at reducing the cost per serving to the
consumer.
Castel performed well with robust economic conditions in the countries in which
they operate underpinning 10% total volume growth, and strong growth was
recorded in its key markets of Cameroon, Ethiopia and Angola.
Asia
China continued its strong performance with underlying organic volume growth of
22%, ahead of industry growth. All regions posted growth over the prior period,
with the North East and Central regions out-performing the others despite
increased competitor activity. The Snow brand extended its position as China's
number one brand by volume with a 9% overall market share and it now represents
over 70% of the brand portfolio.
Input cost increases were evident and, while prices were increased in some
regions, this led to overall margin pressure during the period. In addition the
ongoing integration of new acquisitions and greenfield commissioning costs
further added to overall margin pressures.
The business disposed of its non core Southern region water business in May
2007, thus creating a focused lager beer business.
India once again grew strongly in the first six months posting lager volume
growth of 28%, (up 20% on an organic basis) with industry growth of 16%. Ongoing
capacity expansion, the development of a well balanced brand portfolio and the
integration of last year's Foster's India acquisition represent key areas of
progress over the period, with volumes of the Fosters' brand up 47% on a
proforma basis.
South Africa: Beverages
Sept Sept
2007 2006
Financial summary US$m US$m %
--------------------------- ------- ------- ------
Group revenue (including share of associates) 2,016 1,950 4
EBITA 405 411 (2)
EBITA margin (%) 20.1 21.1
Sales volumes (hl 000)
- Lager 12,478 12,237 2
- Soft drinks 7,253 6,506 11
--------------------------- ------- ------- ------
The South African economy continued its growth trend in the first six months of
the financial year, recording GDP growth of 5%. Consumer demand remained strong
and the suspension of the National Lottery was a favourable factor.
Lager volumes grew by 2% in the first half of the year. Total soft drink volumes
were up 11% as the soft drink business benefited from the positive economic
environment and some trade restocking in earlier months following carbon dioxide
shortages at the end of the prior year.
Our mainstream lager volumes grew by 5% and flavoured alcoholic beverages (FABs)
achieved strong growth. The expected loss in premium volumes was softened by the
strong growth in Castle Lite (up 74%) and the successful launch of a new premium
offering, Hansa Marzen Gold, in May 2007, which represents some 3% of volumes
for the half year, and the launch of Peroni Nastro Azzurro in draught format.
Volume growth was impacted by supply and production constraints experienced at
the end of the second quarter, compounded by reduced production flexibility
during new brand and pack introductions, including the implementation of our
mainstream renovation programme.
Price increases in January 2007 in lager and soft drinks, which were below
inflation, together with organic volume growth increased revenue by 8% in
constant currency. Revenue growth reflects negative sales mix in lager and the
faster growth of soft drinks.
Margins were adversely affected by higher raw material and packaging input
costs, driven by rising dollar commodity prices, exacerbated by a weaker rand
during the period, compared to the prior year. Input costs for the full year are
expected to show further increases as higher priced glass imports impact
packaging costs.
Distribution costs were higher as our direct delivery customer base increased in
line with our main market penetration initiative. Outlets serviced increased by
7% in the first half of this year to over 21,500. Despite significant progress
being made earlier in the year in licensing outlets, administrative delays at
local government level have slowed progress. Distribution costs also rose from
coastal breweries having to partially supply inland sales areas with
non-returnable packs.
Marketing investments were made in brand and pack renovations and new product
development. Castle received a packaging upgrade across all packs as did Hansa
Pilsner, which was renovated to match the contemporary Hansa Marzen Gold
packaging. Extensive new product development work undertaken in the first half
of the year will deliver further innovations in the market over the next twelve
months. The phased replacement of the 750ml returnable mainstream bottle
commenced in April 2007, and to date, three of our seven breweries are producing
mainstream brands in the new bottle and our consumers' response has been
positive.
Constant currency EBITA growth of 3% reflects the impact of higher raw material
and distribution costs as well as the investment in market facing initiatives.
EBITA margins are 100 basis points lower at 20.1%, also reflecting the change in
sales mix with lower premium lager volumes and higher mainstream lager volumes
in the period.
During the first six months the negative impact of the termination of the Amstel
brand on SA Beverages earnings has been mitigated by the unavailability of the
product in the market in the first quarter as well as the successful launch of
our new premium brand, Hansa Marzen Gold. Consequently, we have revised our
estimate of the impact on current year EBITA from US$80 million to between
US$40m and US$50m, which will impact EBITA and margin mainly in the second half
as the brand has recently returned to the market in bottle form.
Sales of Appletiser continued to show strong volume growth, up 25%, with double
digit growth recorded in South Africa and internationally. Distell has grown in
both its domestic and international markets, primarily in the cider, ready to
drink and spirits categories. Profitability has also been improved by operating
efficiencies.
South Africa: Hotels and Gaming
Sept Sept
2007 2006
Financial summary US$m US$m %
--------------------------- ------- ------- -------
Group revenue (share of associates) 193 167 16
EBITA 58 44 32
EBITA margin (%) 30.1 26.6
Revenue per available room (Revpar) - US$ 68.29 58.46 17
--------------------------- ------- ------- -------
The group is a 49% shareholder in the Tsogo Sun group, which reported a good
first half year result with an increase of 32% in EBITA over the prior period.
The South African economy continued to grow with consumer spending and demand
for hotel accommodation remaining high. The gaming division enjoyed robust
growth during the period with new gaming capacity and market growth influencing
results. Good occupancy levels continue to be achieved, with strong growth in
room rate improving revpar by 17% over the prior period.
Financial review
Accounting policies
The accounting policies followed are the same as those published within the
Annual Report and Accounts for the year ended 31 March 2007. The Annual report
and accounts for the year ended 31 March 2007 are available on the company's
website, www.sabmiller.com.
Segmental analysis
The group's operating results on a segmental basis are set out in the segmental
analysis of operations, and the disclosures are in accordance with the basis on
which the businesses are managed and according to the differing risk and reward
profiles. SABMiller believes that the reported profit measures - before
exceptional items and amortisation of intangible assets (excluding software),
and including associates on a similar basis (i.e. before interest, tax and
minority interests) - provide additional information on trends and allow for
greater comparability between segments. Segmental performance is reported after
the specific apportionment of attributable head office service costs.
Accounting for volumes
In the determination and disclosure of reported sales volumes, the group
aggregates 100% of the volumes of all consolidated subsidiaries and its equity
accounted associates, other than associates where the group exercises
significant influence but primary responsibility for day to day management rests
with others (such as Castel and Distell). In these latter cases, the financial
results of operations are equity accounted in terms of IFRS but volumes are
excluded. Contract brewing volumes are excluded from total volumes; however
revenue from contract brewing is included within revenue. Reported volumes
exclude intra-group sales volumes.
Organic, constant currency comparisons
The group discloses certain results on an organic, constant currency basis, to
show the effects of acquisitions net of disposals and changes in exchange rates
on the group's results. Organic results exclude the first twelve months' results
of acquisitions and the last twelve months' results of disposals. Constant
currency results have been determined by translating the local currency
denominated results for the period ended 30 September 2007 at the exchange rates
for the comparable period in the prior period.
Acquisitions and disposals
On 3 August, the group announced the acquisition of 99.96% of Browar Belgia Sp
zoo, the fourth largest brewer in Poland. The transaction is subject to approval
from the Office of Competition and Consumer Protection, which is expected during
December 2007.
On 9 October, SABMiller plc and Molson Coors Brewing Company announced that they
have signed a letter of intent to combine the US and Puerto Rico operations of
their respective subsidiaries, Miller and Coors, in a joint venture to create a
stronger, brand-led US brewer with the scale, resources and distribution
platform to compete more effectively in the increasingly competitive US
marketplace. The transaction is subject to negotiation of definitive agreements,
which is expected by the end of 2007. Closing of the transaction is also subject
to obtaining clearances from the US competition authorities and certain other
regulatory clearances and third-party consents, as required, and is not expected
before mid 2008.
During the period the group completed the disposals of its soft drinks business
in Costa Rica and the juice business in Colombia which were announced in the
prior year. Our associate in China also completed the disposal of a non-core
water business.
Exceptional items
Items that are material either by size or incidence are classified as
exceptional items. Further details on the treatment of these items can be found
in note 3. Net exceptional charges of US$52 million have been recorded (2006:
US$27 million) during the period. These relate to final restructuring costs of
US$69 million (2006: US$27 million) incurred in Latin America, partially offset
by a net profit of US$17 million on disposal of soft drink businesses in Costa
Rica and Colombia.
Borrowings and net debt
Gross debt, comprising borrowings of the group together with the fair value of
derivative assets or liabilities held to manage interest rate and foreign
currency risk of borrowings, has increased to US$7,555 million from US$7,358
million at 31 March 2007. Net debt comprising gross debt net of cash and cash
equivalents has increased to US$7,054 million from US$6,877 million at 31 March
2007. An analysis of net debt is provided in note 8. The group's gearing
(presented as a ratio of debt/equity) has decreased to 43.5% from 45.8% at 31
March 2007. On 16 July 2007, the group's holding company for its South African
operations raised R1,600 million (approximately US$230 million) in 5-year notes.
The notes, issued under a R4,000 million Domestic Medium Term Note Programme,
are guaranteed by SABMiller plc and are listed on BESA, the South African Bond
Exchange. The net proceeds of the bond issue have been used to repay part of
existing loan facilities that were utilised by The South African Breweries Ltd.
The average borrowing rate for the total debt portfolio at 30 September 2007 was
7.9% (2006: 6.9%), compared to 7.6% at 31 March 2007.
Finance costs
Net finance costs increased to US$258 million (2006: US$242 million), reflecting
the change in the composition in net debt with more non US dollar related debt,
funding of the acquisition of minority interests in the second half of the prior
year and the increased interest rates noted above.
Profit before tax
Profit before tax of US$1,579 million was up 14% on prior year, reflecting
performance improvements across the businesses, despite higher exceptional items
(as described above).
Taxation
Our effective tax rate, 33.5%, is lower than the prior year period under review
(35.7%), and also lower than the prior year full year rate (34.5%). This
reflects a more favourable geographic mix of profits across the group, local
statutory rate reductions and ongoing management of our effective tax rate.
Earnings per share
The group presents adjusted basic earnings per share to exclude the impact of
the amortisation of intangible assets (excluding software) and other
non-recurring items, which include post-tax exceptional items, in order to
present a more meaningful comparison for the years shown in the consolidated
financial statements. Adjusted basic earnings per share of 69.1 US cents were up
by 22% on the prior period, reflecting the improved performance noted above. An
analysis of earnings per share is shown in note 5 to the financial statements.
Cash flow
Net cash generated from operating activities before working capital movements
(EBITDA) increased by 13%, to US$2,229 million, compared to the prior period.
The ratio of EBITDA to revenue decreased slightly in the period to 20.7% (2007:
21.0%).
Risks and uncertainties
The principal risks and uncertainties for the first six months and remaining six
months of the financial year remain as reflected on page 9 of the 2007 Annual
Report. In addition there is a risk relating to the proposed joint venture
transaction concerning Miller and Coors in the US and Puerto Rico. The
transaction is subject to the receipt of consents and approvals from government
entities that could delay or prevent completion of the transaction or impose
conditions on the joint venture, which could result in an adverse effect on the
business or financial condition of the joint venture or on Miller if the
transaction does not proceed to completion, as well as on our business and
financial results.
Currencies: South African rand/Colombian peso
During the period, the rand strengthened by 5% against the US dollar and ended
at R6.89 to the US dollar compared to R7.29 at 31 March 2007, whilst the
weighted average rand/dollar rate weakened by 5% to R7.12 compared with R6.81 in
the prior period. The peso has strengthened by 8% against the US dollar ending
the period at COP2,023 to the US dollar, compared to COP2,190 at 31 March 2007
and the weighted average COP/dollar rate strengthened by 17% to COP2,030
compared with COP2,437 in the prior period.
Dividend
The board has declared a cash interim dividend of 16 US cents per share. The
dividend will be payable on 21 December 2007 to shareholders registered on the
London and Johannesburg registers on 30 November 2007. The ex-dividend trading
dates will be 28 November 2007 on the London Stock Exchange and 26 November 2007
on the JSE Limited. 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 both South African
rand and sterling was determined yesterday. The rate of exchange determined for
converting to South African rand was US$:ZAR = 6.6412 resulting in an equivalent
interim dividend of 106.2592 SA cents per share. The rate of exchange for
converting to sterling was GBP:US$ = 2.0752 resulting in an equivalent interim
dividend of 7.7101 UK pence per share.
From the commencement of trade on 15 November 2007 until the close of business
on 30 November 2007, no transfers between the London and Johannesburg registers
will be permitted, and from the close of business on 23 November 2007 until the
close of business on 30 November 2007, no shares may be dematerialised or
rematerialised.
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, set out on pages 18
to 33, 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 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 financial statements has been
prepared in accordance with IAS 34 as adopted by the European Union, and the
interim report herein includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8.
The directors of SABMiller plc are listed in the SABMiller plc Annual Report for
the year ended 31 March 2007. Ms Nancy De Lisi retired from office on 30 April
2007 and Mr Dinyar Devitre, nominated by Altria Group, Inc. to replace Ms De
Lisi was appointed to the board on 16 May 2007. A list of current directors is
maintained on the SABMiller plc website: www.sabmiller.com.
On behalf of the board
E A G Mackay M I Wyman
Chief executive Chief financial officer
15 November 2007
INDEPENDENT REVIEW REPORT OF HALF-YEARLY CONSOLIDATED FINANCIAL INFORMATION TO
SABMILLER plc
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007, which comprises the summarised income statement, summarised
balance sheet, statement of recognised income and expense, cash flow statement
and related notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
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
condensed set of financial statements included in this half-yearly 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 condensed
set of financial statements in the half-yearly 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 condensed set of financial statements in the half-yearly financial
report for the six months ended 30 September 2007 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 London
Chartered Accountants 15 November 2007
SABMiller plc
CONSOLIDATED INCOME STATEMENTS
for the six months ended 30 September
---------------------------- ----- --------- --------
--------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
Notes US$m US$m US$m
---------------------------- ----- --------- --------
--------
Revenue 2 10,781 9,344 18,620
Net operating expenses (9,091) (7,829) (15,593)
--------- -------- --------
Operating profit 2 1,690 1,515 3,027
--------- -------- --------
Operating profit before
exceptional items 1,742 1,542 3,120
Exceptional items 3 (52) (27) (93)
--------- -------- --------
Net finance costs (258) (242) (428)
--------- -------- --------
Interest payable and
similar charges (354) (388) (668)
Interest receivable 96 146 240
--------- -------- --------
Share of post-tax results
of associates 147 105 205
--------- -------- --------
Profit before taxation 1,579 1,378 2,804
Taxation 4 (497) (470) (921)
--------- -------- --------
Profit for the financial
period 1,082 908 1,883
--------- -------- --------
Profit attributable to
minority interests 124 118 234
Profit attributable to
equity shareholders 958 790 1,649
--------- -------- --------
1,082 908 1,883
--------- -------- --------
Basic earnings per share
(US cents) 5 63.9 52.9 110.2
Diluted earnings per share
(US cents) 5 63.5 52.6 109.5
--------- -------- --------
All operations are continuing.
SABMiller plc
CONSOLIDATED BALANCE SHEETS
at 30 September
--------------------------- ------ --------- -------- --------
30/9/07 30/9/06 31/3/07
Unaudited Unaudited Audited
Notes US$m US$m US$m
--------------------------- ------ --------- -------- --------
Assets
Non-current assets
Goodwill 13,783 12,678 13,250
Intangible assets 4,062 3,741 3,901
Property, plant and equipment 7 7,433 6,169 6,750
Investments in associates 1,524 1,049 1,351
Available for sale investments 50 42 52
Derivative financial instruments 37 72 34
Trade and other receivables 190 95 181
Deferred tax assets 142 359 164
--------- -------- --------
27,221 24,205 25,683
Current assets
Inventories 1,048 801 928
Trade and other receivables 1,822 1,304 1,471
Current tax assets 105 52 103
Derivative financial instruments 3 66 6
Loan participation deposit - 190 -
Cash and cash equivalents 8 501 657 481
--------- -------- --------
3,479 3,070 2,989
Assets in disposal groups held for sale - - 64
--------- -------- --------
3,479 3,070 3,053
--------- -------- --------
Total assets 30,700 27,275 28,736
--------- -------- --------
Liabilities
Current liabilities
Derivative financial instruments (21) (4) (5)
Borrowings 8 (1,227) (1,157) (1,711)
Trade and other payables (3,012) (2,493) (2,746)
Current tax liabilities (513) (354) (429)
Provisions (282) (205) (266)
--------- -------- --------
(5,055) (4,213) (5,157)
Liabilities directly associated with
disposal groups held for sale - - (19)
--------- -------- --------
(5,055) (4,213) (5,176)
--------- -------- --------
Non-current liabilities
Derivative financial instruments (310) (136) (204)
Borrowings 8 (6,174) (6,326) (5,520)
Trade and other payables (312) (61) (269)
Deferred tax liabilities (1,440) (1,537) (1,393)
Provisions (1,190) (1,265) (1,173)
--------- -------- --------
(9,426) (9,325) (8,559)
--------- -------- --------
Total liabilities (14,481) (13,538) (13,735)
--------- -------- --------
Net assets 16,219 13,737 15,001
--------- -------- --------
Equity
Share capital 9 158 158 158
Share premium 10 6,162 6,123 6,137
Merger relief reserve 10 3,395 3,395 3,395
Other reserves 10 1,177 (78) 466
Retained earnings 10 4,688 3,593 4,250
--------- -------- --------
Total shareholders' equity 15,580 13,191 14,406
Minority interests 10 639 546 595
--------- -------- --------
Total equity 16,219 13,737 15,001
--------- -------- --------
SABMiller plc
CONSOLIDATED CASH FLOW STATEMENTS
for the six months ended 30 September
-------------------------- ----- --------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
Notes US$m US$m US$m
-------------------------- ----- --------- -------- --------
Cash flows from operating
activities
Cash generated from
operations 11 2,128 2,152 4,018
Interest received 104 94 231
Interest paid (378) (347) (719)
Interest element of finance
lease payments - (1) -
Tax paid (447) (371) (801)
--------- -------- --------
Net cash from operating
activities 1,407 1,527 2,729
--------- -------- --------
Cash flows from investing
activities
Purchase of property, plant
and equipment (850) (462) (1,191)
Proceeds from sale of
property, plant and
equipment 42 25 110
Purchase of intangible
assets (34) (240) (270)
Purchase of investments (5) - (3)
Proceeds from sale of
investments - 1 1
Proceeds from sale of
associates - - 81
Proceeds on disposal of
share in subsidiaries 71 - 7
Acquisition of subsidiaries
(net of cash acquired) - (145) (131)
Purchase of shares from
minorities (2) (34) (200)
Purchase of shares in
associates (29) (8) (186)
Dividends received from
associates 47 73 102
Dividends received from
other investments - 1 1
--------- -------- --------
Net cash used in investing
activities (760) (789) (1,679)
--------- -------- --------
Cash flows from financing
activities
Proceeds from the issue of
shares 25 24 38
Purchase of own shares for
share trusts (9) (8) (30)
Proceeds from borrowings 2,679 3,710 5,126
Repayment of borrowings (2,725) (3,702) (5,663)
Capital element of finance
lease payments (2) (9) (7)
Decrease in loan
participation deposit - - 200
Net cash receipts on net
investment hedges 2 - 42
Dividends paid to
shareholders of the parent (537) (473) (681)
Dividends paid to minority
interests (87) (68) (161)
--------- -------- --------
Net cash used in financing
activities (654) (526) (1,136)
--------- -------- --------
Net cash from operating,
investing and financing
activities (7) 212 (86)
Effects of exchange rate
changes (18) 26 (18)
--------- -------- --------
Net (decrease) / increase
in cash and cash
equivalents (25) 238 (104)
Cash and cash equivalents
at 1 April 294 398 398
--------- -------- --------
Cash and cash equivalents
at period end 8 269 636 294
--------- -------- --------
SABMiller plc
CONSOLIDATED STATEMENTS OF RECOGNISED INCOME AND EXPENSES
for the six months ended 30 September
----------------------------- --------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
US$m US$m US$m
----------------------------- --------- -------- --------
Currency translation
differences on foreign
currency net investments 812 (302) 362
Actuarial gains/(loss) on
defined benefit plans - - (5)
Fair value moves on available
for sale investments - - 7
Tax on items taken directly to
equity - - 2
Net investment hedges (90) 106 (2)
--------- -------- --------
Net profits/(losses)
recognised directly in equity 722 (196) 364
Profit for the period 1,082 908 1,883
--------- -------- --------
Total recognised income for
the period 1,804 712 2,247
--------- -------- --------
- attributable to equity
shareholders 1,662 606 2,010
- attributable to minority
interests 142 106 237
--------- -------- --------
SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
The financial information comprises the unaudited results of SABMiller plc for
the six months ended 30 September 2007 and 30 September 2006, together with the
audited results for the year ended 31 March 2007. The financial information in
this report is not audited and does not constitute statutory accounts within the
meaning of s240 of the Companies Act 1985 (as amended). The board of directors
approved this financial information on 15 November 2007. The annual financial
statements for the year ended 31 March 2007, which represent the statutory
accounts for that year have been filed with the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain a
statement made under s237(2) or (3) of the Companies Act 1985.
The unaudited financial information in this interim announcement 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
2007, which have been prepared in accordance with IFRSs as adopted by the
European Union.
The subsidiary and associated undertakings in the group operate in the local
currency of the country in which they are based. From a presentational
perspective, the group regards these operations as being US dollar-based as the
transactions of these entities are, insofar as is possible, evaluated in US
dollars. In management accounting terms all companies report in US dollars. The
directors of the company regard the US dollar as the presentational currency of
the group, being the most representative currency of its operations. Therefore
the consolidated interim financial statements are presented in US dollars.
Accounting policies
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 March 2007, which were published in
June 2007, as described in those financial statements. The financial statements
are prepared under the historical cost convention, except for the revaluation to
fair value of certain financial assets and liabilities, share based payments,
and pension assets and liabilities.
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial year ending 31 March 2008.
- IFRS 7 Financial Instruments: Disclosures, IAS 1 Amendments to Capital
Disclosures, and IFRS 4 Insurance Contracts revised implementation
guidance. As this interim report contains only condensed financial
statements, and as there are no material financial instrument related
transactions in the period, full IFRS 7 disclosures are not required at
this stage. The full IFRS 7 disclosures, including the sensitivity analysis
to market risk and capital disclosures required by the amendment of IAS 1,
will be given in the annual financial statements.
- IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting
in Hyperinflationary Economies. This interpretation is not relevant for the
group.
- IFRIC 8 Scope of IFRS 2. This interpretation has not had any impact on the
recognition of share-based payments in the group.
- IFRIC 9 Reassessment of Embedded Derivatives. This interpretation has not
had any impact on the group.
- IFRIC 10 Interim Financial Reporting and Impairment. This interpretation
has not had any impact on the group.
2. Segmental information (unaudited)
Revenue
The following table provides a reconciliation of group revenue (including share
of associates' revenue) to segment revenue.
Share of Share of
Segment associates' Group Segment associates' Group
revenue revenue revenue revenue revenue revenue
Six months 2007 2007 2007 2006 2006 2006
ended 30 US$m US$m US$m US$m US$m US$m
September:
---------------- ------- -------- -------- --------- ---------
---------
Latin America 2,453 - 2,453 2,003 9 2,012
Europe 2,876 - 2,876 2,279 - 2,279
North America 2,782 - 2,782 2,632 - 2,632
Africa and Asia 869 834 1,703 681 675 1,356
South Africa:
------- -------- -------- --------- --------- ---------
- Beverages 1,801 215 2,016 1,749 201 1,950
- Hotels and
Gaming - 193 193 - 167 167
------- -------- -------- --------- --------- ---------
South Africa:
Total 1,801 408 2,209 1,749 368 2,117
------- -------- -------- --------- --------- ---------
10,781 1,242 12,023 9,344 1,052 10,396
------- -------- -------- --------- --------- ---------
Year ended 31
March: 2007 2007 2007
US$m US$m US$m
--------- --------- ---------
Latin America 4,373 19 4,392
Europe 4,078 - 4,078
North America 4,887 - 4,887
Africa and Asia 1,455 1,219 2,674
South Africa:
--------- --------- ---------
- Beverages 3,827 447 4,274
- Hotels and
Gaming - 340 340
--------- --------- ---------
South Africa:
Total 3,827 787 4,614
--------- --------- ---------
18,620 2,025 20,645
--------- --------- ---------
Operating profit
The following table provides a reconciliation of operating profit (segment
result) to operating profit before exceptional items.
Operating Operating
profit before profit before
Operating Exceptional exceptional Operating Exceptional exceptional
profit items items profit items items
Six months 2007 2007 2007 2006 2006 2006
ended 30 US$m US$m US$m US$m US$m US$m
September:
---------------- ------- -------- -------- --------- ---------
---------
Latin America 328 52 380 311 24 335
Europe 620 - 620 484 - 484
North America 293 - 293 251 - 251
Africa and Asia 133 - 133 124 - 124
South Africa:
Beverages 380 - 380 387 - 387
Corporate (64) - (64) (42) 3 (39)
------- -------- -------- --------- --------- ---------
1,690 52 1,742 1,515 27 1,542
------- -------- -------- --------- --------- ---------
Year ended 31
March: 2007 2007 2007
US$m US$m US$m
--------- --------- ---------
Latin America 746 64 810
Europe 706 24 730
North America 366 - 366
Africa and Asia 272 - 272
South Africa:
Beverages 1,043 - 1,043
Corporate (106) 5 (101)
--------- --------- ---------
3,027 93 3,120
--------- --------- ---------
EBITA
The following table provides a reconciliation of operating profit before
exceptional items to EBITA.
Six months Share of Amortisation Share of Amortisation
ended 30 Operating associates' of intangible Operating associates' of intangible
September: profit operating assets profit operating assets
before profit before (excluding before profit before (excluding
exceptional exceptional software) exceptional exceptional software)
items items EBITA items items EBITA
2007 2007 2007 2007 2006 2006 2006 2006
US$m US$m US$m US$m US$m US$m US$m US$m
---------- -------- -------- -------- ------ -------
------- -------- ------
Latin
America 380 - 58 438 335 - 52 387
Europe 620 - 2 622 484 - 1 485
North
America 293 - 7 300 251 - 2 253
Africa and
Asia 133 141 3 277 124 115 1 240
South
Africa: -------- -------- -------- ------ -------
------- -------- ------
- Beverages 380 25 - 405 387 24 - 411
- Hotels
and Gaming - 57 1 58 - 44 - 44
-------- -------- -------- ------ ------- ------- -------- ------
South
Africa: 380 82 1 463 387 68 - 455
Total
Corporate (64) - - (64) (39) - - (39)
-------- -------- -------- ------ ------- ------- -------- ------
Group 1,742 223 71 2,036 1,542 183 56 1,781
-------- -------- -------- ------ ------- ------- -------- ------
Year ended
31 March: 2007 2007 2007 2007
US$m US$m US$m US$m
------- ------- -------- ------
Latin
America 810 - 105 915
Europe 730 - 3 733
North
America 366 - 9 375
Africa and
Asia 272 193 2 467
South
Africa: ------- ------- -------- ------
- Beverages 1,043 59 - 1,102
- Hotels
and Gaming - 100 - 100
------- ------- -------- ------
South
Africa: 1,043 159 - 1,202
Total
Corporate (101) - - (101)
------- ------- -------- ------
Group 3,120 352 119 3,591
------- ------- -------- ------
The group's share of associates' operating profit is reconciled to the share of
post-tax results of associates in the income statement as follows:
Six months Six months Year
ended Ended ended
30/9/07 30/9/06 31/3/07
US$m US$m US$m
-------------------------- ------- ------- -------
Share of associates' operating profit 223 183 352
Share of associates' net finance cost (5) (6) (9)
Share of associates' tax (55) (52) (102)
Share of associates' minority interests (16) (20) (36)
------- ------- -------
147 105 205
------- ------- -------
Excise duties of US$2,187 million (2006: US$1,887 million) have been incurred
during the six months as follows: Latin America US$621 million (2006: US$497
million); Europe US$551 million (2006: US$442 million); North America US$468
million (2006: US$461 million); Africa and Asia US$201 million (2006: US$152
million) and South Africa US$346 million (2006: US$335 million).
Beer volumes increase during the summer months leading to higher revenues being
recognised in the first half of the year in the Europe and North America
segments. Due to the spread of the business between Northern and Southern
hemispheres, the results for the group as a whole are not highly seasonal in
nature.
The following table provides a reconciliation of EBITDA (the net cash inflow
from operating activities before working capital movements) before cash
exceptional items to EBITDA after cash exceptional items. A reconciliation of
group EBITDA after cash exceptional items can be found in note 11.
EBITDA EBITDA
before cash before cash
exceptional Exceptional exceptional Exceptional
Six months items items EBITDA items items EBITDA
ended 30
September: 2007 2007 2007 2006 2006 2006
US$m US$m US$m US$m US$m US$m
--------------- -------- -------- ------- --------- --------
-------
Latin America 545 (10) 535 493 (17) 476
Europe 732 - 732 577 - 577
North America 372 - 372 325 - 325
Africa and Asia 172 - 172 159 - 159
South Africa:
Beverages 453 - 453 458 - 458
Corporate (35) - (35) (28) (3) (31)
-------- -------- ------- --------- -------- -------
2,239 (10) 2,229 1,984 (20) 1,964
-------- -------- ------- --------- -------- -------
Year ended 31
March: 2007 2007 2007
US$m US$m US$m
--------- -------- -------
Latin America 1,147 (25) 1,122
Europe 936 (7) 929
North America 510 - 510
Africa and Asia 340 - 340
South Africa:
Beverages 1,200 - 1,200
Corporate (65) (5) (70)
--------- -------- -------
4,068 (37) 4,031
--------- -------- -------
3. Exceptional items
-------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
US$m US$m US$m
-------- -------- --------
Subsidiaries' exceptional items included in operating
profit:
Latin America (52) (24) (64)
-------- -------- --------
Integration
and
restructuring
costs (69) (24) (64)
Profit on sale
of
subsidiaries 17 - -
-------- -------- --------
Europe - - (24)
-------- -------- --------
Integration
and
restructuring
costs - - (7)
Profit on sale
of land in
Italy - - 14
Adjustment to
goodwill - - (31)
-------- -------- --------
Corporate
Bavaria
integration
costs - (3) (5)
Exceptional
items included
in operating
profit (52) (27) (93)
-------- -------- --------
-------- -------- --------
Taxation credit 20 8 30
-------- -------- --------
2007
Latin America and Corporate
Integration and restructuring costs associated with the consolidation of Bavaria
of US$69 million were incurred during the period (six months ended 30/09/06:
US$27 million; year ended 31/03/07: US$69 million).
A net US$17 million profit on disposal has been recognised in Latin America on
the disposal of soft drinks businesses in Costa Rica and Colombia in the six
months ended 30 September 2007.
4. Taxation
----------------------------- -------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
US$m US$m US$m
----------------------------- -------- -------- --------
Current
taxation 466 384 780
-------- -------- --------
- Charge for the period1 486 377 833
- Adjustments in respect of
prior years (20) 7 (53)
-------- -------- --------
Withholding
taxes and
other taxes 40 48 119
-------- -------- --------
Total current
taxation 506 432 899
Deferred
taxation (9) 38 22
-------- -------- --------
- Charge for the period2 (11) 33 82
- Adjustments in respect of
prior years 8 5 5
- Recognition of deferred
tax asset in connection
with the acquisition of
Birra Peroni - - (31)
- Rate change (6) - (34)
-------- -------- --------
Total taxation 497 470 921
-------- -------- --------
Effective tax rate, before
amortisation of intangibles
(excluding software) and
exceptional items (%) 33.5 35.7 34.5
-------- -------- --------
The effective tax rate is calculated including share of associates' operating
profit before exceptional items and share of associates' tax before exceptional
items. This calculation is on a basis consistent with that used in prior years
and is also consistent with other group operating metrics.
1 The current tax charge for the period includes a UK corporation tax charge of
US$Nil (six months ended 30/9/06: US$4 million; year ended 31/3/07: US$Nil).
2 The deferred tax charge for the period includes a UK corporation tax credit
of US$9.3 million (six months ended 30/9/06: US$5 million; year ended
31/3/07: US$9 million).
5. Earnings per share
-------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
US cents US cents US cents
-------- -------- --------
Basic earnings per share 63.9 52.9 110.2
Diluted earnings per share 63.5 52.6 109.5
Headline earnings per share 65.7 55.4 116.4
Adjusted basic earnings per
share 69.1 56.6 120.0
Adjusted diluted earnings per
share 68.7 56.3 119.3
-------- -------- --------
-------- -------- --------
30/9/07 30/9/06 31/3/07
Unaudited Unaudited Audited
Millions of Millions of Millions of
shares shares shares
-------- -------- --------
The weighted average number of shares was:
Ordinary shares 1,503 1,498 1,500
ESOP trust ordinary shares (4) (4) (4)
-------- -------- --------
Basic shares 1,499 1,494 1,496
Dilutive ordinary shares
from share options 10 9 9
-------- -------- --------
Diluted shares 1,509 1,503 1,505
-------- -------- --------
The calculation of diluted earnings per share excludes 6,046,925 (2007:
6,039,681) share options that were antidilutive for the year because the
exercise price of the option exceeds the fair value of the shares during the
period, and 6,818,498 (2007: 7,707,155) share options that were anti-dilutive
for the year because the performance conditions attached to the options have not
been met. These options could potentially dilute earnings per share in the
future.
324,374 share options and awards were granted after 30 September 2007 and before
the date of signing of these financial statements.
Adjusted and headline earnings
The group has also presented an adjusted earnings per share figure to exclude
the impact of amortisation of intangible assets (excluding capitalised software)
and other non-recurring items in order to present a more useful comparison for
the years shown in the consolidated financial statements. Adjusted earnings per
share has been based on adjusted headline earnings for each financial year and
on the same number of weighted average shares in issue as the basic earnings per
share calculation. Headline earnings per share has been calculated in accordance
with the UK Society of Investment Professionals (UKSIP) formerly the Institute
of Investment Management and Research Statement of Investment Practice No.1
entitled 'The Definition of Headline Earnings'. The adjustments made to arrive
at headline earnings and adjusted earnings are as follows:
-------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
US$m US$m US$m
-------- -------- --------
Profit for the financial
period attributable
to equity holders of the
parent 958 790 1,649
(Profit) / loss on
derivatives on
capital items1 - (1) (10)
Amortisation of intangible
assets (excluding
capitalised software) 71 56 119
Impairment of property,
plant and equipment - 2 13
Profit on sale
of subsidiaries (17) - -
Profit on sale
of property, plant and
equipment (4) (6) (20)
Adjustment to
goodwill - - 31
Tax effects of
the above items (23) (17) (43)
Minority interest
effects - 3 2
-------- -------- --------
Headline earnings (basic) 985 827 1,741
Integration /
reorganisation costs (net of
tax effects) 51 19 55
-------- -------- --------
Adjusted
earnings 1,036 846 1,796
-------- -------- --------
1 This does not include all derivative movements but includes those in relation
to capital items for which hedge accounting cannot be applied.
6. Dividends paid and proposed
Dividends paid are as follows:
-------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
US cents US cents US cents
-------- -------- --------
Prior year final dividend
paid per ordinary share 36.0 31.0 31.0
Current year interim
dividend paid per ordinary
share - - 14.0
-------- -------- --------
The interim dividend declared of 16.0 US cents per ordinary share is payable on
21 December 2007 to ordinary shareholders on the register as at 30 November 2007
and will absorb an estimated US$241 million of shareholders' funds.
7. Property, plant and equipment
Net book value at:
-------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/07 31/3/07
Unaudited Unaudited Audited
US$m US$m US$m
-------- -------- --------
At beginning of period 6,750 6,337 6,337
Exchange adjustments 355 (223) 98
Additions 795 450 1,232
Disposals (45) (19) (94)
Depreciation (410) (355) (737)
Other movements (12) (21) (86)
-------- -------- --------
At end of period 7,433 6,169 6,750
-------- -------- --------
Contracts placed for future capital expenditure not provided in the financial
statements amount to $606 million.
8a. Net debt
Net debt is analysed as follows:
-------- -------- --------
As at As at As at
30/9/07 30/9/06 31/3/07
Unaudited Unaudited Unaudited
US$m US$m US$m
-------- -------- --------
Borrowings (7,154) (7,260) (7,029)
Borrowings-related derivative financial
instruments (154) (96) (127)
Overdrafts (232) (206) (187)
Finance leases (15) (17) (15)
-------- -------- --------
Gross debt (7,555) (7,579) (7,358)
Loan participation deposit - 190 -
Cash and cash equivalents (excluding
overdrafts) 501 657 481
-------- -------- --------
Net debt (7,054) (6,732) (6,877)
-------- -------- --------
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
30/9/07 30/9/06 31/3/07
Unaudited Unaudited Audited
US$m US$m US$m
-------- -------- --------
Cash and cash equivalents (Balance Sheet) 501 657 481
Overdrafts (232) (206) (187)
Legal right of offset - 185 -
-------- -------- --------
Cash and cash equivalents (Cash Flow) 269 636 294
-------- -------- --------
8b. Analysis of net debt
Net debt is analysed as follows:
-------- -------- -------- ------- -------- --------
Total cash and Borrowings Derivative Financial Total gross Net debt
cash financial leases borrowings
equivalents instruments
US$m US$m US$m US$m US$m US$m
-------- -------- -------- ------- -------- --------
At 31 March
2007 294 (7,029) (127) (15) (7,171) (6,877)
Exchange
adjustments (18) (161) - (1) (162) (180)
Cash flow (7) 46 (9) 2 39 32
Other movements - (10) (18) (1) (29) (29)
-------- -------- -------- ------- -------- --------
At 30
September 2007 269 (7,154) (154) (15) (7,323) (7,054)
-------- -------- -------- ------- -------- --------
9. Share capital
-------- -------- -------- -------
Ordinary shares Non-voting Deferred shares Nominal value
of 10 US cents convertible of £1 each
each shares of
10 US cents
each
'000 '000 '000 US$m
-------- -------- -------- -------
At 1 April 2006 1,497,845 77,368 50 158
Issue of shares - share
purchase, option and
award scheme 2,823 - - -
-------- -------- -------- -------
At 30 September 2006 1,500,668 77,368 50 158
Issue of shares - share
purchase, option and
award scheme 1,520 - - -
-------- -------- -------- -------
At 31 March 2007 1,502,188 77,368 50 158
Issue of shares - share
purchase, option and
award scheme 2,018 - - -
-------- -------- -------- -------
At 30 September 2007 1,504,206 77,368 50 158
-------- -------- -------- -------
10. Statement of changes in shareholders' equity
Share Share Merger Safari Foreign Available Retained Total Minority Total
capital premium relief and currency for sale earnings interest equity
reserve EBT translation reserve*
shares reserve*
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
------ ------- ------- ------- -------- ------ ------- -------- ------- --------
At 1 April 158 6,099 3,395 (655) 102 - 3,944 13,043 542 13,585
2006
Currency
translation
movements on
foreign
currency
investments - - - - (290) - - (290) (12) (302)
Net
investment
hedges -
fair
value losses
in period - - - - 106 - - 106 - 106
Deferred tax
charge on
items taken
to
equity - - - - - - (9) (9) - (9)
Acquisitions -
minority
interests - - - - - - - - (10) (10)
Other
movements - - - - 4 - (10) (6) (2) (8)
Profit for
the
financial
year - - - - - - 790 790 118 908
Dividends
paid - - - - - - (473) (473) (90) (563)
Issued
capital - 24 - - - - - 24 - 24
Payment for
purchase of
own shares
for
share trusts - - - (8) - - - (8) - (8)
Equity
settled
share
incentive
plans - - - - - - 14 14 - 14
At 30
September ------ ------- ------- ------- -------- ------ -------
-------- ------- --------
2006 158 6,123 3,395 (663) (78) - 4,256 13,191 546 13,737
------ ------- ------- ------- -------- ------ ------- -------- ------- --------
------ ------- ------- ------- -------- ------ ------- -------- ------- --------
At 31 March
2007 158 6,137 3,395 (683) 459 7 4,933 14,406 595 15,001
Currency
translation
movements on
foreign
currency
investments - - - - 794 - - 794 18 812
Net
investment
hedges -
fair
value gains
in
period - - - - (90) - - (90) - (90)
Other
movements - - - - - - (2) (2) - (2)
Profit for
the
financial
year - - - - - - 958 958 124 1,082
Dividends - - - - - - (537) (537) (98) (635)
Issued
capital - 25 - - - - - 25 - 25
Payment for
purchase of
own shares
for
share trusts - - - (9) - - - (9) - (9)
Cash flow
hedge fair
value
deferred
to equity - - - - 7 - - 7 - 7
Equity
settled
share
incentive
plans - - - - - - 28 28 - 28
At 30
September ------ ------- ------- ------- -------- ------ -------
-------- ------- --------
2007 158 6,162 3,395 (692) 1,170 7 5,380 15,580 639 16,219
------ ------- ------- ------- -------- ------ ------- -------- ------- --------
* These are classified as 'Other Reserves' on the Group Consolidated Balance
Sheet.
11. Reconciliation of profit for the year to net cash generated from operations
-------- -------- --------
Six months Six months Year ended
ended 30/9/07 ended 30/9/06 31/3/07
Unaudited Unaudited Audited
US$m US$m US$m
-------- -------- --------
Profit for the year 1,082 908 1,883
Taxation 497 470 921
Share of
post-tax
results of
associates (147) (105) (205)
Interest
receivable (96) (146) (240)
Interest
payable and
similar
charges 354 388 668
-------- -------- --------
Operating
profit 1,690 1,515 3,027
Depreciation:
Property,
plant and
equipment 297 270 550
Containers 113 85 187
Container
breakages,
shrinkage and
write-offs 11 11 44
Loss/(profit)
on sale of
property,
plant and
equipment 8 (6) (6)
Exceptional
profit on sale
of property,
plant and
equipment
(Europe) - - (14)
Impairment of
property,
plant and
equipment - 2 13
Amortisation
of intangible
assets 94 81 162
Net (gain) /
loss from fair
value hedges 3 (8) (2)
(Gain) on
disposal of
subsidiaries (17) - -
Dividends
received from
other
investments (1) (1) (1)
Charge with
respect to
share options 28 14 31
Restructuring
and
integration
costs (Latin
America,
Corporate) - - 10
Adjustment to
goodwill
(Europe) - - 31
Other non-cash
movements 3 1 (1)
-------- -------- --------
Net cash
generated from
operations
before working
capital
movements
(EBITDA) 2,229 1,964 4,031
Net inflow /
(outflow) in
working
capital (101) 188 (13)
-------- -------- --------
Net cash
generated from
operations 2,128 2,152 4,018
-------- -------- --------
Cash generated from operations include cash outflows relating to exceptional
costs of US$10 million in respect of South America integration and restructuring
costs (six months ended 30/09/2006: US$20 million).
12. Business acquisitions and disposals
There have been no material acquisitions or disposals during the period under
review.
13. Related party transactions
The group's significant related parties are its associates as described in the
SABMiller plc Annual Report for the year ended 31 March 2007. There have been no
material changes to the type of related party transactions described therein.
14. Contingencies and commitments
A ZAR1.6 billion interest-bearing bond was issued during the period under
review. The interest rate applicable to this bond is 9.935% pa. The bond is a
five year, bullet repayment bond with a semi-annual coupon, commencing on 19
July 2007, maturing on 19 July 2012.
Other than the above, there have been no material changes in contingencies and
commitments for the period under review.
15. Subsequent events
On 9 October, SABMiller plc and Molson Coors Brewing Company announced that they
had signed a letter of intent to combine the US and Puerto Rico operations of
their respective subsidiaries, Miller and Coors, in a joint venture to create a
stronger, brand-led US brewer with the scale, resources and distribution
platform to compete more effectively in the increasingly competitive US
marketplace. The transaction is subject to negotiation of definitive agreements,
which is expected by the end of 2007. Closing of the transaction is also subject
to obtaining clearances from the US competition authorities and certain other
regulatory clearances and third-party consents, as required, and is not expected
before mid 2008.
SABMiller plc
ADMINISTRATION
SABMiller plc
(Registration No. 3528416)
Company Secretary
John Davidson
Registered Office
SABMiller House
Church Street West
Woking
Surrey, England
GU21 6HS
Telefax +44 1483 264103
Telephone +44 1483 264000
Head Office
One Stanhope Gate
London, England
W1K 1AF
Telefax +44 20 7659 0111
Telephone +44 20 7659 0100
Internet address
http://www.sabmiller.com
Investor Relations
investor.relations@sabmiller.com
Telephone +44 20 7659 0100
Independent Auditors
PricewaterhouseCoopers LLP
1 Embankment Place
London, England
WC2N 6RH
Telefax +44 20 7822 4652
Telephone +44 20 7583 5000
Registrar (United Kingdom)
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, England
BR3 4TU
Telefax +44 20 8658 3430
Telephone +44 20 8639 2157 (outside UK)
Telephone 0870 162 3100 (from UK)
Registrar (South Africa)
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg
PO Box 61051
Marshalltown 2107
South Africa
Telefax +27 11 370 5487
Telephone +27 11 370 5000
United States ADR Depositary
The Bank of New York
ADR Department
101 Barclay Street
New York, NY 10286
United States of America
Telefax +1 212 815 3050
Telephone +1 212 815 2051
Internet: http:// www.bankofny.com
Toll free +1 888 269 2377 (USA & Canada only)
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