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SAB - SABMiller Plc - Annual financial report
JSEALPHA CODE: SAB
ISSUER CODE: SOSAB
ISIN CODE: GB0004835483
22 June 2011
SABMiller plc
Annual Financial Report
SABMiller plc has today submitted a copy of the 2011 Annual Report and Accounts,
Notice of the 2011 Annual General Meeting and Shareholder Proxy Form (UK) to the
National Storage Mechanism and they will shortly be available for inspection at
www.hemscott.com/nsm.do.
The Annual Report and Notice of Annual General Meeting are also available on the
Company`s website www.sabmiller.com
SABMiller plc`s Annual General Meeting will be held on Thursday, 21 July 2011 at
the InterContinental London Park Lane, One Hamilton Place, Park Lane, London W1J
7QY.
A condensed set of SABMiller`s financial statements and information on important
events that have occurred during the financial year and their impact on the
financial statements were included in SABMiller`s preliminary results
announcement released on 19 May 2011. That information, together with the
information set out below, which is extracted from the 2011 Annual Report,
constitutes the material required by Disclosure and Transparency Rule 6.3.5 to
be communicated to the media in unedited full text through a Regulatory
Information Service. This announcement is not a substitute for reading the full
2011 Annual Report. Page numbers and cross-references in the extracted
information below refer to page numbers and sections in the 2011 Annual Report.
PRINCIPAL RISKS AND UNCERTAINTIES (page 20 & 21)
Principal risks
Focused on managing our risks
The principal risks facing the group and considered by the board are detailed
below. The group`s well-developed risk management process is described in the
corporate governance section while financial risks are discussed in the Chief
Financial Officer`s review and in note 23 to the consolidated financial
statements.
Principal Context Specific Possible Mitigation Associated
risk risks we impact strategic
face priorities
Industry The global * Failing to Lower * Potential * Creating
consolidati brewing participate growth transactions a balanced
on industry is in value- rate, are subject and
expected to adding profitabili to rigorous attractive
continue to transactions ty and analysis. global
consolidate, * Paying too financial Only spread of
albeit more much to returns opportunitie businesses
slowly than acquire a s *
in the past. business with Constantly
There will * Not potential to raising
continue to implementing create value the
be integration are pursued. profitabil
opportunitie plans * Proven ity of
s to enter successfully integration local
attractive processes, businesses
growth procedures ,
markets, to and sustainabl
realise practices y
synergy are applied
benefits to ensure
from delivery of
integration expected
and to returns.
leverage our * Activities
global to deliver
scale. synergies,
embed best
operating
practices
and leverage
scale are in
place,
monitored
closely and
continuously
enhanced.
Change in Consumer * Failing to Market * Ongoing *
consumer tastes and ensure the positions evaluation Developing
preferences behaviours strength and come under of our brand strong,
are relevance of pressure; portfolios relevant
constantly our brands lower top in every brand
evolving and * Failing to line growth market to portfolios
competition keep rates and ensure that that win
is improving profitabili they target in the
increasing our ty current and local
and becoming commercial future market
more capabilities opportunitie *
sophisticate to deliver s for Constantly
d. brand profitable raising
propositions growth. the
that meet Building profitabil
consumer, our brand ity of
shopper and equities local
customer through businesses
needs innovation ,
and sustainabl
compelling y
marketing *
programmes. Leveraging
* Continued our skills
enhancement and global
of the scale
SABMiller
Marketing
Way which
sets out the
best
practice
approach for
our
commercial
processes.
* Focus on
monitoring
and
benchmarking
commercial
performance
and
developing
the critical
commercial
capabilities
that are
required in
order to win
in local
markets.
Management We believe * Failing to Lower long- * Further *
capability that our identify, term develop the Developing
people are develop and profitable group`s strong,
our enduring retain a growth leadership relevant
advantage sufficient talent brand
and pipeline of pipeline portfolios
therefore it talented through our that win
is essential managers for Global in the
that we the present Talent local
develop and and future Management market
maintain needs of the model and *
global group strategic Constantly
management people raising
capability. resourcing. the
* Sustaining profitabil
a strong ity
culture of of local
accountabili businesses
ty, ,
empowerment sustainabl
and personal y
development. *
* Leveraging
Standardisat our skills
ion of key and global
processes scale
and best
practices
across the
group
through the
roll-out of
the
SABMiller
Ways.
Regulatory With * Regulation Lower * Rigorous * Creating
changes increasing places growth, adherence to a balanced
debate over increasing lower the and
alcohol restrictions profitabili principle of attractive
consumption on the ty and self- global
in many availability reduced regulation spread of
markets, the and contributio backed by businesses
alcohol marketing of n to local appropriate *
industry is beer communities policies and Developing
coming under * Tax and in some management strong,
increasing excise countries review. relevant
pressure changes * brand
from cause Constructive portfolios
regulators, pressure on engagement that win
NGOs and tax pricing with in the
authorities. government local
and all market
external *
stakeholders Constantly
on alcohol- raising
related the
issues. profitabil
* Investment ity
to enhance of local
the economic businesses
and social ,
impact of sustainabl
our y
businesses
in local
communities
and working
in
partnership
with local
governments
and NGOs to
combat
alcohol
abuse.
Volatility Prices of * Failing to Lower * Developing *
in the our key raw manage price profitabili a strategic Constantly
price of materials volatility ty and sourcing and raising
raw remain * Not occasional procurement the
materials highly obtaining an supply capability. profitabil
volatile and adequate disruption * Further ity of
the level of supply of developing local
volatility brewing and our businesses
is packaging understandin ,
increasing. raw g of raw sustainabl
materials at material y
competitive price risks *
prices and our risk Leveraging
management our skills
approach. and global
* scale
Contractual
agreements
with
suppliers
covering
multiple
time
horizons,
combined
with an
active
hedging
programme.
Programmes
to support
development
of local
sourcing for
certain key
commodities,
such as
barley, in
Africa,
India and
Latin
America.
Economic The global Our Lower Regular Creating
environment economic marketing, growth management a balanced
recovery operating rates and forecasts and
remains and profitabili and reviews attractive
uneven. financial ty that focus global
Uncertainty responses on the spread of
around may not be actions businesses
consumer timely or required to
disposable adequate to deliver the Developing
income for respond to desired strong,
beer/other changing performance relevant
beverages consumer during the brand
due to demand balance of portfolios
continuing the year. that win
high Maintaining in the
unemployment and local
, rising extending market
food prices our local
and industry Constantly
increasing leadership raising
energy positions the
costs. through a profitabil
focus on ity
local of local
execution, businesses
appropriate ,
investments sustainabl
in our y
brands and
development
of
commercial
capability.
Continued
focus on
improving
productivity
, reducing
costs and
effective
capital and
cash flow
management.
Delivering The group is * Failing to Increased * Senior *
business executing a derive the programme leadership Constantly
transformat major expected costs, closely raising
ion business benefits delays in involved in the
capability from the benefit monitoring profitabil
programme projects realisation progress and ity of
that will currently , business in making local
simplify under way disruption key businesses
processes, Failing to decisions. ,
reduce costs contain * Structures sustainabl
and allow programme in place to y
local costs or track both *
management ensure costs and Leveraging
teams to execution is benefits. our skills
focus more in line with Rigorous and global
closely on planned programme scale
their timelines management
markets. and
governance
processes
with
dedicated
resources
and clear
accountabili
ty.
RELATED PARTY TRANSACTIONS
Note 33 to the consolidated financial statements on page 148 details the
following related party transactions.
33. Related party transactions
a. Parties with significant influence over the group: Altria Group, Inc.
(Altria) and the Santo Domingo Group (SDG)
Altria is considered to be a related party of the group by virtue of its 27.1%
equity shareholding. There were no transactions with Altria during the year.
SDG is considered to be a related party of the group by virtue of its 14.2%
equity shareholding in SABMiller plc. During the year the group made a donation
of US$32 million to the Fundacion Mario Santo Domingo (2010: US$30 million),
pursuant to the contractual arrangements entered into at the time of the Bavaria
transaction in 2005, under which it was agreed that the proceeds of the sale of
surplus non-operating property assets owned by Bavaria SA and its subsidiaries
would be donated to various charities, including the Fundacion Mario Santo
Domingo. At 31 March 2011, US$nil (2010: US$nil) was owing to the SDG.
b. Associates and joint ventures
Details relating to transactions with associates and joint ventures are analysed
below.
2011 2010
US$m US$m
Purchases from associates1 (211) (193)
Purchases from joint ventures2 (75) (72)
Sales to associates3 36 28
Sales to joint ventures4 31 44
Dividends receivable from associates5 89 109
Dividends received from joint ventures6 822 707
Royalties received from associates7 7 -
Royalties received from joint ventures8 2 2
Management fees and other recoveries received 10 -
from associates9 (2) (1)
Management and guarantee fees paid to joint
ventures10
1 The group purchased canned Coca-Cola products for resale from Coca-Cola
Canners of Southern Africa (Pty) Limited (Coca-Cola Canners); inventory
from Distell Group Ltd (Distell) and Associated Fruit Processors (Pty) Ltd
(AFP); and accommodation from Tsogo Sun Holdings (Pty) Ltd (Tsogo Sun), all
in South Africa.
2 The group purchased lager from MillerCoors LLC (MillerCoors).
3 The group made sales of lager to Tsogo Sun, Empresa Cervejas De N`Gola SARL
(ECN), Societe des Brasseries et Glacieres Internationales and Brasseries
Internationales Holding Ltd (Castel), Delta Corporation Ltd (Delta) and
Distell.
4 The group made sales to MillerCoors and Pacific Beverages (Pty) Ltd.
5 The group had dividends receivable from Castel of US$39 million (2010:
US$40 million), Kenya Breweries Ltd US$14 million (2010: US$11 million),
Coca-Cola Canners US$5 million (2010: US$5 million), Distell US$21 million
(2010: US$19 million), Tsogo Sun US$3 million (2010: US$28 million), ECN
US$3 million (2010: US$3 million), Delta US$2 million (2010: US$nil) and
Grolsch (UK) Ltd of US$2 million (2010: US$3 million).
6 The group received dividends from MillerCoors.
7 The group received royalties from Kenya Breweries Ltd and Delta.
8 The group received royalties from MillerCoors and Pacific Beverages (Pty)
Ltd.
9 The group received management fees from ECN and other recoveries from AFP.
10 The group paid management and guarantee fees to MillerCoors.
At 31 March 2011 2010
US$m US$m
Amounts owed by associates1 12 3
Amounts owed by joint ventures2 5 4
Amounts owed to associates3 (24) (38)
Amounts owed to joint ventures4 (16) (23)
1 Amounts owed by AFP, Distell, Tsogo Sun, Delta, ECN and Kenya Breweries Ltd.
2 Amounts owed by MillerCoors and Pacific Beverages (Pty) Ltd.
3 Amounts owed to Coca-Cola Canners and Tsogo Sun.
4 Amounts owed to MillerCoors.
c. Transactions with key management
The group has a related party relationship with the directors of the group and
members of the excom as key management. At 31 March 2011, there were 24 (2010:
25) members of key management. Key management compensation is provided in note
6c.
DIRECTORS` RESPONSIBILITY STATEMENT IN RESPECT OF THE CONSOLIDATED FINANCIAL
STATEMENTS (page 76)
The directors are responsible for preparing the consolidated financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare consolidated financial statements
for each financial year. The directors have prepared the consolidated financial
statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. The consolidated financial statements
are required by law to give a true and fair view of the state of affairs of the
group and of the profit or loss of the group for that year.
In preparing those financial statements, the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state that the financial statements comply with IFRSs as adopted by the
European Union; and
* prepare the consolidated financial statements on the going concern basis,
unless it is inappropriate to presume that the group will continue in business,
in which case there should be supporting assumptions or qualifications as
necessary.
The directors confirm that they have complied with the above requirements in
preparing the financial statements.
The directors are responsible for keeping adequate accounting records that
disclose with reasonable accuracy at any time the financial position of the
group and to enable them to ensure that the consolidated financial statements
comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are
also responsible for safeguarding the assets of the group and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
Each of the directors, whose names and functions are listed in the Governance
section of the Annual Report, confirms that, to the best of their knowledge:
* the consolidated financial statements, which have been prepared in accordance
with IFRSs as adopted by the EU, give a true and fair view of the assets,
liabilities, financial position and profit of the group; and
* the directors` report contained in the Governance section of the Annual Report
includes a fair review of the development and performance of the business and
the position of the group, together with a description of the principal risks
and uncertainties that it faces.
In addition, the Companies Act 2006 requires directors to provide the group`s
auditors with every opportunity to take whatever steps and undertake whatever
inspections the auditors consider to be appropriate for the purpose of enabling
them to give their audit report. Each of the directors, having made appropriate
enquiries, confirms that:
* so far as the director is aware, there is no relevant audit information of
which the group`s auditors are unaware; and
* each director has taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit information and
to establish that the group`s auditors are aware of that information.
The directors have reviewed the group`s budget and cash flow forecasts. On the
basis of this review, and in the light of the current financial position and
existing borrowing facilities, the directors are satisfied that SABMiller plc is
a going concern and have continued to adopt the going concern basis in preparing
the financial statements.
A copy of the financial statements of the group is placed on the company`s
website. The directors are responsible for the maintenance and integrity of
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 financial statements may differ from legislation in other
jurisdictions.
John Davidson
General Counsel and Group Company Secretary
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 is intended to provide information to shareholders.
It should not be relied upon by any other party or for any other purpose.
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 announcement.
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.
Date: 22/06/2011 12:30:01 Supplied by www.sharenet.co.za
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