Wrap Text
Interim results for Six Months Ended 30 September 2013
SABMiller plc
Incorporated in England and Wales (Registration No. 3528416)
JSE SAB ISSUER CODE SOSAB
ISIN GB0004835483
Interim Announcement
Release date: 21 November 2013
CONTINUING TO DRIVE REVENUE AND EARNINGS GROWTH
SABMiller plc, one of the world's leading brewers with operations and distribution agreements across six
continents, reports its interim (unaudited) results for the six months to 30 September 2013.
Highlights
- Continued growth in our developing markets, driven by increased capacity, consumer reach and
investment in brand portfolios
- Lager volume growth of 1% on an organic basis, with good growth in Africa partially offset by declines in
Europe and North America
- Organic, constant currency group net producer revenue (NPR) growth of 4%, with group NPR per
hectolitre (hl) up 2% driven by pricing and premiumisation initiatives
- The depreciation of key currencies against the US dollar has adversely impacted reported performance,
with organic, constant currency EBITA growth of 7%
- Reported EBITA margin(1) increase of 60 bps to 23.7%, with an improvement of 80 basis points (bps) on an
organic, constant currency basis
(1)Expressed as a percentage of group NPR.
6 months 6 months 12 months
to Sept to Sept to March
2013 2012(2) 2013(2)
US$m US$m % change US$m
Group revenue(a) 17,559 17,476 - 34,487
Revenue(b) 11,103 11,370 (2) 23,213
Group net producer revenue(c) 13,793 13,669 1 26,932
EBITA(d) 3,268 3,153 4 6,379
Adjusted profit before taxe 2,869 2,743 5 5,597
Profit before tax(f) 2,429 2,263 7 4,679
Profit attributable to owners of the parent 1,714 1,579 9 3,250
Adjusted earningsg 1,920 1,864 3 3,772
Adjusted earnings per share
- US cents 120.4 117.3 3 237.2
- UK pence 77.7 74.2 5 150.2
- SA cents 1,170.9 961.3 22 2,018.9
Basic earnings per share (US cents) 107.4 99.4 8 204.3
Interim dividend per share (US cents) 25.0 24.0 4
Free cash flow 894 1,684 (47) 3,230
(2)As restated. Further details of the restatement are provided in the financial review and in note 12.
a Group revenue includes the group's share of associates' and joint ventures' revenue of US$6,456 million (2012: US$6,106 million).
b Revenue excludes the group's share of associates' and joint ventures' revenue.
c Group net producer revenue (NPR) comprises group revenue less excise and similar taxes, including the group's share of associates' and joint
ventures' excise and similar taxes.
d 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 computer software) and includes the group's share of associates' and joint ventures' operating profit, on a similar
basis. EBITA is used throughout this interim announcement.
e Adjusted profit before tax comprises EBITA less adjusted net finance costs of US$345 million (2012: US$387 million, restated) and the group's
share of associates' and joint ventures' net finance costs of US$54 million (2012: US$23 million).
f Profit before tax includes exceptional charges of US$52 million (2012: US$127 million). Exceptional items are explained in note 3.
g A reconciliation of adjusted earnings to the statutory measure of profit attributable to owners of the parent is provided in note 5.
CHIEF EXECUTIVE'S REVIEW
Alan Clark, Chief Executive of SABMiller, said:
"We have continued to deliver on the potential of our businesses in both developed and developing markets,
with revenue and margin improvements amid mixed trading conditions. We have improved the reach of our
mainstream brands across most regions, and through initiatives such as the launch of Redd's Apple Ale in the
USA, the momentum behind Castle Lite across Africa, and the increasing appeal of Peroni Nastro Azzurro
from Europe to Australia, we are strengthening our premium propositions across the group and evolving our
high-end brand portfolios to appeal to an ever wider range of consumers and drinking occasions."
Net Organic,
acquisitions constant
Reported and Currency Organic Reported currency Reported
Sept 2012 disposals translation growth Sept 2013 growth growth
Group net producer revenue US$m US$m US$m US$m US$m % %
Latin America 2,740 (18) (105) 137 2,754 5 1
Europe 2,454 217 31 (18) 2,684 (1) 9
North America 2,518 - - (4) 2,514 - -
Africa 1,523 2 (31) 163 1,657 11 9
Asia Pacific 2,202 (19) (71) 47 2,159 2 (2)
South Africa: 2,232 8 (377) 162 2,025 7 (9)
- Beverages 2,031 6 (343) 145 1,839 7 (9)
- Hotels and Gaming 201 2 (34) 17 186 8 (8)
Total 13,669 190 (553) 487 13,793 4 1
Net
Reported acquisitions Organic Reported Organic Reported
Sept 2012 and disposals growth Sept 2013 growth growth
Group volumes hl m hl m hl m hl m % %
Lager 132 - 1 133 1 1
Soft drinks 27 5 1 33 5 23
Other alcoholic beverages 4 - - 4 (1) 1
Total 163 5 2 170 2 4
Net Organic,
acquisitions Reported constant
Restated and Currency Organic Sept currency Reported
Sept 2012 disposals translation growth 2013 growth growth
EBITA US$m US$m US$m US$m US$m % %
Latin America 920 (5) (36) 93 972 10 6
Europe 516 32 7 (43) 512 (8) (1)
North America 464 - - 14 478 3 3
Africa 355 - (5) 58 408 16 15
Asia Pacific 506 (1) (25) 60 540 12 7
South Africa: 486 1 (81) 37 443 8 (9)
- Beverages 421 1 (70) 34 386 8 (8)
- Hotels and Gaming 65 - (11) 3 57 4 (12)
Corporate (94) - 1 8 (85)
Total 3,153 27 (139) 227 3,268 7 4
EBITA margin(1) (%) 23.1 23.7
(1)Expressed as a percentage of group NPR.
Business review
The group delivered NPR and earnings growth in the first half of the year despite trading challenges in a
number of territories. Group NPR and volume growth remained strong in Africa, with the benefit of increased
capacity and operational capability, while performance was robust in South Africa despite economic
headwinds associated with the depreciation of the South African rand. Performance in Latin America was
impacted by an excise increase in Peru and national strikes and social unrest in Colombia, but favourable
pricing and a good performance from some premium brands continued to drive group NPR growth. Double
digit NPR growth in China along with good progress in Australia on brand restoration and the establishment of
premium growth platforms resulted in group NPR growth for the Asia Pacific region. Conditions in North
America and Europe remained challenging. EBITA and EBITA margin growth was delivered through higher
group NPR and a focus on operational efficiencies.
Group NPR growth of 4% on an organic, constant currency basis for the first half of the year was driven
equally by an increase in total beverage volumes and higher group NPR per hl. Lager volume growth of 1% on
an organic basis reflected strong growth in Africa and South Africa, partially offset by declines in Europe and
North America, although growth in sales of higher margin products helped to drive an improved EBITA margin
in North America. Soft drinks volumes increased by 23% in the period, benefiting from the full consolidation of
Coca-Cola Icecek in our associate Anadolu Efes in the period, while on an organic basis soft drinks volumes
grew by 5% reflecting growth in both Africa and Latin America. The growth in group NPR per hl was driven by
the benefits of pricing and improved brand mix.
EBITA grew by 4% on a reported basis as adverse foreign currency movements had a significant negative
impact on the translation of financial results in South Africa, Latin America and Australia. On an organic,
constant currency basis EBITA grew by 7% as a result of higher NPR and cost efficiencies across most
divisions, resulting in an 80 bps increase in our organic, constant currency EBITA margin. Procurement
savings helped limit growth in input costs, resulting in a low single digit increase in raw material input costs (on
a constant currency, per hl basis) at the lower end of expectations. Increased production efficiencies also
benefited the cost of goods sold. Fixed cost reductions were achieved through a continued focus on increased
productivity. Investment in marketing increased in some developing markets to support category development
and the expansion of our brand portfolios. Reported EBITA margin increased by 60 bps, reflecting currency
impacts and the inclusion of Coca-Cola Icecek in Anadolu Efes' results.
Adjusted earnings grew by 3% compared with the prior period, significantly impacted by the depreciation of
key currencies against the US dollar, principally the South African rand, Australian dollar, Colombian peso and
Peruvian Nuevo sol. Net finance costs were lower than in the prior period as the group benefited from lower
interest rates and the refinancing of higher cost debt in the current and prior period.
Underlying free cash flow for the period was at the same level as the prior year. Due to the phasing of
anticipated payments to the Australian Tax Office, free cash flow for the current half year was lower by
US$790 million. Adjusted EBITDA was adversely impacted by the depreciation of key currencies against the
US dollar in the period but still grew by 1%. Working capital registered a cash outflow in the period of US$67
million, with working capital cash inflows in most divisions offset by a cash outflow in Asia Pacific and a
reduction in provisions. Capital expenditure at US$670 million was in line with the prior period, with continued
investment in brewing capacity and capability, most notably in Africa and Latin America. Net interest paid was
lower than in the prior period in line with the reduction in the net finance charge.
The group's gearing ratio as at 30 September 2013 was 59.2%. Net debt increased by US$41 million, ending
the period at US$15,641 million. An interim dividend of 25.0 US cents per share will be paid to shareholders
on 13 December 2013.
- In Latin America, EBITA grew by 6% (10% on an organic, constant currency basis), adversely impacted
by the depreciation of the Colombian peso and Peruvian sol against the US dollar. Group NPR on an
organic, constant currency basis grew by 5%, with a 4% increase in group NPR per hectolitre driven by
selective price increases and some favourable brand mix, with the Miller brand family continuing to perform
well in the premium segment across the region. Lager volumes, which were up 1% compared with the prior
period, were adversely impact by national strikes and social unrest in Colombia and an excise increase in
Peru in the period. Effective development and extension of our brand portfolios, however, continued to
drive an increased share of total alcohol consumption across the region. Growth in soft drinks was driven
by pack innovations in Peru and Ecuador. A positive 170 bps improvement in reported EBITA margin was
achieved through a combination of NPR growth, cost reductions and the phasing of marketing spend.
- In Europe, EBITA declined by 1%, including the benefit of the full consolidation of Coca-Cola Icecek in the
Anadolu Efes' results (an 8% decline on an organic, constant currency basis). Group NPR grew by 9%,
driven by the addition of Coca-Cola Icecek soft drinks volumes, while organic, constant currency group
NPR declined by 1%. The group NPR decline on an organic, constant currency basis reflected volume led
declines in Poland and the Czech Republic, partially offset by volume led growth in Romania, the UK and
Slovakia. Reported EBITA margin declined by 190 bps due to the impact of adverse channel and brand
mix in Poland.
- In North America, EBITA increased by 3% as a result of increased profitability in MillerCoors. Group NPR
was level with the prior period, as a decline in lager volumes was offset by higher group NPR per hl due to
pricing and favourable brand mix. The growth in sales of higher margin products also helped drive a 60 bps
improvement in EBITA margin, along with lower fixed costs.
- In Africa, EBITA grew by 15% (16% on an organic, constant currency basis) as a result of the increase in
volumes, with good growth in Tanzania, Zambia, Nigeria and Ghana. The group NPR growth of 9% (11%
on an organic, constant currency basis) was driven by good lager volume growth across our portfolios, as
mainstream brands performed well while Castle Lite continued to expand in the premium segment. Focus
on production efficiencies and increased local sourcing of commodities helped contain variable cost
increases and deliver reported EBITA margin growth of 130 bps despite increased investment in capacity
and sales and distribution reach.
- In Asia Pacific, EBITA grew 7% (12% on an organic, constant currency basis) and EBITA margin by 200
bps driven by profit growth in both Australia and China. Reported group NPR for the region declined by
2%, due to adverse currency translation impacts (organic, constant currency group NPR grew by 2%). In
Australia, pricing and a focus on premium growth platforms drove a 2% growth in continuing domestic NPR
on a constant currency basis. Continuing domestic lager volumes were down 1%, reflecting the absence of
an Easter peak period and subdued consumer confidence, but core brands in the portfolio performed well.
The integration programme continued to progress ahead of schedule in synergy delivery and capability
build. In China, organic, constant currency NPR grew by 14% with the benefit of higher volumes and
favourable product mix, as sales of premium Snow brand variants increased, and beneficial geographic
mix reflecting increased sales in higher value provinces. EBITA in China benefited from increased focus on
efficiencies and fixed cost containment along with higher group NPR.
- South Africa: Beverages was adversely impacted by the significant depreciation of the South African
rand against the US dollar in the period, resulting in reported EBITA and group NPR decreases of 8% and
9% respectively. On an organic, constant currency basis EBITA grew by 8% driven by the increase in
organic, constant currency group NPR of 7%. Lager volumes grew by 3% despite the challenging
consumer environment, with both Castle Lite and Castle Milk Stout performing well in the premium
segment and helping to deliver, along with pricing, a 5% increase in group NPR per hl. Soft drinks volume
growth of 1% was driven by the two litre PET pack in the sparkling portfolio, while water brands and the
Play brand performed well in still drinks. EBITA margins were under pressure due to the deteriorating
exchange rate and the higher cost of diesel but the impact was contained and more than offset through
continued focus on increased productivity, resulting in reported EBITA margin growth of 30 bps.
- The business capability programme progressed in line with expectations, with cumulative net operating
benefits of US$225 million in the six months driven by global procurement initiatives. The exceptional costs
of the programme were US$79 million during the half year (2012: US$70 million).
Outlook
Trading conditions are expected to remain broadly unchanged, with growth continuing to be driven by our
developing markets. The depreciation of key currencies against the US dollar will adversely impact reported
results in the current financial year. Development of our brand and pack portfolios will continue, as we seek
opportunities to reach new consumers and enhance the beer category. Price increases will be taken
selectively and focus will remain on premiumisation. Raw material unit input costs are expected to rise in low
to mid single digits in constant currency terms. Investment in production capacity and capability will continue to
drive growth along with strong commercial execution of existing and new consumer offerings.
Enquiries:
SABMiller plc Tel: +44 20 7659 0100
Catherine May Director of Corporate Affairs Tel: +44 20 7927 4709
Gary Leibowitz Senior Vice President, Investor Relations Tel: +44 20 7659 0119
Richard Farnsworth Business Media Relations Manager Tel: +44 20 7659 0188
A live audio webcast of a presentation by Chief Executive, Alan Clark, and Chief Financial Officer, Jamie Wilson to the investment
community will begin at 9.30am (GMT) on 21 November 2013. To register for the webcast, download the slide presentation, view
management video interviews and download photography and b-roll, visit our online Results Centre at
www.sabmiller.com/resultscentre.
To monitor Twitter bulletins throughout the day follow www.twitter.com/sabmiller or #sabmillerresults.
Copies of the press release and detailed Interim Announcement are available from the Company Secretary at the Registered
Office or from our website at www.sabmiller.com.
Operational review
Latin America
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary Sept 2012 disposals translation growth Sept 2013 % %
Group revenue (including share
of associates) (US$m) 3,687 (18) (144) 216 3,741 6 1
Group NPR (including share of
associates) (US$m) 2,740 (18) (105) 137 2,754 5 1
EBITA(1) (US$m) 920 (5) (36) 93 972 10 6
EBITA margin (%) 33.6 35.3
Sales volumes (hl 000)
Lager 20,463 - 205 20,668 1 1
Soft drinks 8,879 (142) 227 8,964 3 1
(1)In 2013 before exceptional credits of US$47 million, being the profit on disposal of the Panama milk and juice business (2012: before
exceptional charges of US$45 million, being business capability programme costs).
In Latin America, group NPR grew by 5% on an organic, constant currency basis driven by selective pricing
and mix benefits from our premium brands. On a reported basis, group NPR grew by 1%, impacted by the
depreciation of key currencies against the US dollar and the disposal of our milk and juice business in
Panama. Alcohol market share gains were seen across all our businesses in Latin America through the appeal
of our strong portfolio of brands, further entrenchment of our direct sales service model and focus on trade
execution, while continuing to see high growth in the premium segment driven by our Miller range of products.
Lager volumes were up by 1%, impacted by national strikes and social unrest in Colombia and an excise
increase in Peru, against the backdrop of relatively softer economic conditions across the region. Latin
America delivered strong reported EBITA margin growth of 170 bps in the first half of the year with price
increases aided by cost reductions, mainly in raw material and fixed costs, and the phasing of marketing
spend.
Despite a difficult trading environment, Colombia saw volume growth of 1% with a gain in our share of the
alcohol market of 80 bps. Our easy to drink upper mainstream brand, Aguila Light, continued to perform
strongly in the period, growing by double digits, while bulk packs were further entrenched across our portfolio
resonating with our consumers as an affordable offering. In our mainstream brands softer trading of Águila
was largely offset by Poker, with trading conditions impacted by restrictions to retailer closing times, the
implementation of dry laws in response to increased security concerns, road closures and reduced access to
key cities across the country. In the premium segment, Redd's volume decline was partly offset by growth of
our local premium brand Club Colombia, cycling high comparatives, while Miller Genuine Draft (MGD) saw
double digit growth with increased reach and appeal to consumers. In the non-alcoholic malt category intense
competition resulted in a volume decline of 4%, although our value share remained stable.
In Peru, lager volumes declined by 1% following price increases to partially alleviate the excise tax increase
implemented in May. Although our mainstream brand Cristal declined 6%, this was more than offset by growth
of 16% in our upper mainstream brand, Pilsen Callao, which continued to develop its appeal to consumers.
The successful development of new and more frequent consumption occasions such as home and midweek
consumption with new packaging formats, together with our improved trade coverage and enhanced retail
execution, underpinned share of alcohol gains. In the premium segment, performance was more subdued
following a shift in consumption patterns to durable goods and services. The soft drinks category saw volume
growth of 4% driven by pack innovation and improved reach.
In Ecuador, Pilsener Light continued to grow strongly, driving lager volume growth of 2% and contributing
positively to mix, reflecting growing positive consumer sentiment towards easy-to-drink beers as well as
improved coverage. The successful implementation of our route to market model, coupled with retail and local
event activation, enabled us to grow sales volume despite economic headwinds and measures to restrict the
sale of alcohol. Our malt category saw robust double digit growth on the back of the launch of the Pony Malta
mini pack and the success of PET packaging.
In Panama, our lager volume grew by 2%, and our share of total alcohol grew by 200bps. Miller Lite volumes
almost doubled, continuing to boost mix as consumers traded-up from the mainstream segment, and aiding
strong group NPR growth. Our non-alcoholic malt brand recorded 11% volume growth reflecting consumer
acceptance of its differentiating attributes, while other soft drinks volumes declined due to discounting by
competitors and the disposal of our milk and juice business. The disposal was in line with our strategy to
restructure and simplify our business in Panama, with the transaction being completed in May 2013.
In Honduras, lager volumes were in line with the prior year, while our share of alcohol improved by 180 bps. In
the mainstream segment, our Salva Vida brand grew by 4% benefitting from the larger affordable pack, while
in the premium segment Miller Lite saw double digit volume growth. Although there has been some
improvement in conditions, the country remains dogged by security concerns and economic uncertainty,
affecting consumer patterns with a continuing shift to off-channel consumption. In the soft drink category,
volumes were in line with prior year, despite significant price competition.
El Salvador delivered domestic lager volume growth of 6% with bulk packs across our brand portfolio
continuing to grow strongly as we reached an expanded consumer base. Our revenue mix was assisted by
trading up from economy to mainstream and upper mainstream segments. In the premium lager segment our
local premium brand, Suprema, grew by double digits, aided by the launch of a new variant, while Miller Lite
gained traction through wider distribution. Soft drinks volumes grew 8% with a good performance in malt
beverages and juices.
Europe
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary Sept 2012 disposals translation growth Sept 2013 % %
Group revenue (including share
of associates) (US$m) 3,293 217 31 (9) 3,532 - 7
Group NPR (including share of
associates) (US$m) 2,454 217 31 (18) 2,684 (1) 9
EBITA(1) (US$m) 516 32 7 (43) 512 (8) (1)
EBITA margin (%) 21.0 19.1
Sales volumes (hl 000)
Lager 27,118 - (1,155) 25,963 (4) (4)
Soft drinks 3,661 4,817 506 8,984 14 145
(1)In 2013 before exceptional charges of US$4 million being business capability programme costs (2012: US$35 million being business
capability programme costs).
In Europe, group NPR improved by 9% (down 1% on organic constant currency basis) with our share of
Anadolu Efes' results benefiting from the full consolidation of Coca-Cola Icecek's results. Lager volumes in
Europe were down 4% compared with the prior year. The second quarter improved compared with a
challenging first quarter impacted by poor weather. Continued economic uncertainty and weak consumer
sentiment persisted across the region along with intensified competition. Organic, constant currency group
NPR per hl improved by 1% driven by annualised price increases taken in the second half of the prior year.
Reported EBITA was down 1% including the benefit of Anadolu Efes' soft drinks results with the full
consolidation of Coca-Cola Icecek. Organic, constant currency EBITA was down 8% compared with the prior
year with margin decline of 190 bps driven by competitive intensity along with channel and brand mix, most
notably in Poland.
In Poland, lager volumes were down 10% cycling a strong prior year comparative associated with the Euro
2012 football tournament, along with unfavourable weather conditions in the first quarter of this financial year.
Market performance has been subdued as the consumer environment continued to be challenging and
competitive activities intensified. Our business was also impacted by stock build in the trade at the end of the
prior financial year ahead of price increases in March 2013 and our global template deployment. Tyskie and
Lech volumes were down following successful advertising campaigns in the prior year. Zubr performed well
within the mainstream category, driven by effective promotional activities. EBITA declined as a result of the
volume performance together with increased investment in promotions and adverse channel mix.
In the Czech Republic, volumes were down 7% with improvements in the second quarter performance
compared with the first quarter. The on-premise channel showed some recovery in the second quarter
following severe flooding at the start of the year which resulted in outlet closure and affected distribution
across the market. This especially impacted the performance of our mainstream core brand Gambrinus 10.
Economy brand Klasik has been stifled by delisting in one of the major off-premise retailers. Seasonal
innovation launches this year were severely impacted by the weather conditions during the early summer
although the premium segment was boosted by the successful launch of unpasteurised Gambrinus and Kozel
11. Volume performance resulted in an EBITA decline.
In Romania, volumes grew by 6% led by the continued success of economy brand Ciucas in PET. Local
premium brand Ursus also grew, assisted by the launch of Ursus Cooler, and mainstream brand Timisoreana
maintained its volumes in a competitive segment. Despite volume growth and constant currency NPR per hl
improvement of 4%, profitability was impacted by higher input costs combined with marketing spend to support
product launches focused in the first half.
In Western European markets, our focus on selected territories and segments yielded solid performance.
Domestic lager volumes in Italy were level, despite continuing negative consumer sentiment, with a particularly
strong performance in the on-premise channel in our southern strongholds, and with mainstream brand Peroni
benefiting from the expansion of draught volumes. In the United Kingdom, Peroni Nastro Azzurro's
performance led domestic volume growth of 5% with a strong second quarter offsetting a weather-related first
quarter decline. Domestic lager volumes in the Netherlands were up 3% in a highly competitive environment
assisted by Grolsch premium extensions and innovations.
Volumes grew by 5% in Slovakia boosted by the launch of Birell and Saris radlers. In Hungary, volumes were
in line with the prior year, despite the impact of severe weather and floods on performance in the first quarter,
boosted by the successful introduction of Dreher summer variants.
On an organic basis, Anadolu Efes' total volumes grew driven by soft drinks performance with lager volumes
continuing to decline predominantly in Turkey and Russia. In Turkey an excise driven price increase in July
and ongoing competitive pressures held back volumes. In Russia while volumes in the second quarter
benefited from the resumed shipments to some key accounts disrupted in the prior year due to integration,
performance across the beer market continued to be impacted by the tightened regulatory environment. On a
reported basis Anadolu Efes' soft drinks volumes benefited from the full consolidation of the Coca-Cola Icecek
results.
North America
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary Sept 2012 disposals translation growth Sept 2013 % %
Group revenue (including share
of joint ventures) (US$m) 2,901 - - (16) 2,885 (1) (1)
Group NPR (including share of
joint ventures) (US$m) 2,518 - - (4) 2,514 - -
EBITA (US$m) 464 - - 14 478 3 3
EBITA margin (%) 18.4 19.0
Sales volumes (hl 000)
Lager – excluding
contract brewing 22,237 - (748) 21,489 (3) (3)
MillerCoors' volumes
Lager – excluding
contract brewing 21,539 - (755) 20,784 (4) (4)
Sales to retailers (STRs) 21,336 n/a n/a 20,819 n/a (2)
Contract brewing 2,538 n/a n/a 2,489 n/a (2)
The North America segment includes the group's 58% share in MillerCoors and 100% of Miller Brewing
International and various North American holding companies. Total North America EBITA increased by 3%, as
growth in MillerCoors was assisted by Miller Brewing International's improved profitability.
MillerCoors
In the six months to 30 September 2013, MillerCoors' group NPR was in line with the prior year. On a trading
day adjusted basis, US domestic sales to retailers (STRs) were down 3% (down 2% on an unadjusted basis).
Domestic sales to wholesalers (STWs) were down by 4%, following lower distributor inventory levels than in
the comparative period. EBITA increased by 2% on the restated base, as strong pricing along with favourable
brand mix and reduced fixed costs more than offset lower volumes and higher marketing spend.
Premium light volumes were down mid single digits, with Coors Light down low single digits and Miller Lite
down high single digits. The above premium portfolio grew double digits, driven by the launch of Third Shift
Amber Ale, Redd's Apple Ale and Redd's Strawberry Ale, and the continued strength of Tenth and Blake. The
Tenth and Blake division delivered high single digit volume growth, driven primarily by the nationwide
distribution of the Leinenkugel's franchise, including the strong success of Leinenkugel's Shandy variants, and
Blue Moon. The economy segment declined mid single digits driven by Keystone Light and Miller High Life, as
high unemployment continued to adversely impact this segment's consumers. The premium regular segment
was down mid single digits with a double digit decline in MGD, partly offset by high single digit growth in Coors
Banquet, which was fuelled by the introduction of a new 12oz. bottle. All STR volume rates presented in this
paragraph are on a trading day adjusted basis.
MillerCoors' group NPR per hl grew by 3% as a result of firm pricing and favourable brand mix resulting from
the introduction of new higher margin brands such as Redd's Apple Ale, growth in the Tenth and Blake division
and declines in the economy segment. Cost of goods sold per hl increased by low single digits, driven by the
increased cost of brewing materials, and the higher cost of innovations, partly offset by continuing cost savings
initiatives.
Marketing spend increased following investment behind the launch of new brands and the expansion of
existing brands in the above premium segment. General and administrative costs decreased primarily as a
result of lower employee benefit costs and lower information system costs.
Africa
Organic,
Net constant
acquisitions currency Reported
Reported and Currency Organic Reported growth growth
Financial summary Sept 2012 disposals translation growth Sept 2013 % %
Group revenue (including share
of associates) (US$m) 1,792 2 (42) 203 1,955 11 9
Group NPR (including share of
associates) (US$m) 1,523 2 (31) 163 1,657 11 9
EBITA (US$m) 355 - (5) 58 408 16 15
EBITA margin (%) 23.3 24.6
Sales volumes (hl 000)
Lager 8,709 - 785 9,494 9 9
Soft drinks 6,201 - 526 6,727 8 8
Other alcoholic beverages 2,969 100 (105) 2,964 (4) -
Group NPR grew by 9% (11% on an organic, constant currency basis), driven by higher volumes and the
impact of pricing. Lager volumes grew by 9%, with particularly strong growth in Tanzania, Nigeria, Zambia and
Ghana, partially offset by declines in Uganda and South Sudan due to softer economic conditions in these
countries. Lager volume growth was delivered across our portfolio as the Castle Lite brand continued to post
double digit volume growth in the premium segment, while core local brands also performed well, including
Kilimanjaro in Tanzania, 2M in Mozambique, Mosi in Zambia, and Club in Ghana. Investment in our brewing
and packaging capacity continued, with the commencement of expansions in Ghana and Nigeria following the
recently completed expansions in Uganda and Zambia. Consumer reach in the period expanded, supported by
enhanced sales capability and increased fridge penetration. Soft drinks volumes grew strongly at 8%,
underpinned by growth in the non-alcoholic malt category in Nigeria and sparkling soft drinks in Zambia, and in
our associates, Delta in Zimbabwe and Castel. Other alcoholic beverages declined by 4% on an organic basis
primarily due to the zoning legislation in Botswana hampering traditional beer volumes. Traditional beer is now
available in 11 of our markets while Chibuku Super, a PET offering which has a longer shelf life, has continued
to perform well with particularly good performances in Zimbabwe and Zambia.
Total volume growth of 7% resulted in reported EBITA growth of 15% (16% on an organic, constant currency
basis). This was achieved through a combination of the robust volume performance, group NPR per hl growth
assisted by pricing and positive category mix into lager, as well as a continuing focus on cost management.
Management's focus on production efficiencies together with increased local sourcing of commodities assisted
in containing variable cost growth. As a result, reported EBITA margin improved by a further 130 bps despite
capacity expansion-related cost pressures.
Lager volumes in Tanzania returned to growth, up 6%, after the prior year decline resulting from a significant
excise increase and consumer pricing pressures. Castle Lite grew by double digits supported by a solid
performance of Kilimanjaro in the mainstream segment.
Despite a softening economic climate in Mozambique, lager volumes grew by 4% with second quarter growth
of 6%, supported by growth of Castle Lite, which now accounts for 5% of our lager portfolio, and of 2M.
Impala, our cassava-based affordable offering, continued to grow by double digits as we expand our reach into
the south of the country.
Strong lager volume growth was delivered in Nigeria following the commissioning of a new brewery in the prior
year, supported strongly by our brands Hero and Trophy which continue to appeal to consumers in their
respective regions. Grand Malt is performing particularly well in the non-alcoholic malt beverages segment
with double digit growth.
Improved availability drove Zambia lager volume growth of 13% assisted by our key brands Castle Lager,
Mosi, and Castle Lite in the premium segment. Soft drinks posted strong volume growth of 18%. The
traditional beer category declined year on year underpinned by pricing as well as production disruptions.
However Chibuku Super continued its growth with strong consumer demand.
Club lager outperformed the market and helped drive lager volume growth of 16% in Ghana. Draught formats
of our brands as well as our recently launched cassava-based beer performed well. Soft drinks volumes grew
by 8% driven by growth in water as a result of improved availability following capacity upgrades.
Despite lower consumer demand in a weaker economy resulting in total volumes declining by 5% in Uganda,
we have gained share in a beer market that has declined. In Zimbabwe, our associate Delta's lager volumes
declined by 10% due to the current economic climate and the impact of excise-related pricing in the prior year.
This was offset by strong growth of 9% in traditional beer supported by a good performance by Chibuku Super.
Our associate Castel delivered overall lager volume growth of 8%, and with most territories in growth. Strong
growth was experienced in Angola, Gabon, Chad, Mali, Burkina Faso and the Democratic Republic of Congo.
In Angola, the business recorded good growth in volumes and synergy delivery from the January 2012
combination. Castel group NPR growth was lower than the volume growth due to country mix and lower
inflationary led pricing. In Cameroon and Ethiopia, growth in total volumes was delivered despite competitive
pressures.
Asia Pacific
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary Sept 2012 disposals translation growth Sept 2013 % %
Group revenue (including share
of associates) (US$m) 3,040 (32) (114) 40 2,934 1 (3)
Group NPR (including share of
associates) (US$m) 2,202 (19) (71) 47 2,159 2 (2)
EBITA(1) (US$m) 506 (1) (25) 60 540 12 7
EBITA margin (%) 23.0 25.0
Sales volumes (hl 000)
Lager 41,473 (107) 1,837 43,203 4 4
(1) In 2013 before exceptional charges of US$13 million, being integration and restructuring costs (2012: charges of US$47 million, being
integration and restructuring costs).
In Asia Pacific, group NPR grew by 2% on an organic, constant currency basis, reflecting underlying growth in
all key countries, with lager volume growth of 4% on an organic basis. Reported group NPR declined by 2%
following the depreciation of currencies against the US dollar, the loss of discontinued brands in Australia, and
the sale of Foster's interest in Foster's Group Pacific Limited, its Fijian beverage business, to Coca-Cola
Amatil Ltd on 7 September 2012. Although overall group NPR per hl on an organic, constant currency basis
declined, reflecting adverse country mix as China grew more quickly than the rest of the region, underlying
group NPR per hl improved in all the region's major operations. On an organic, constant currency basis,
EBITA grew by 12% and reported EBITA margin increased by 200 bps reflecting good improvements in both
Australia and China.
In Australia, continuing² domestic lager volumes for the half year were down 1% reflecting the absence of an
Easter period and subdued consumer confidence. Our strategy to restore the core portfolio has resulted in the
strong volume performance of Victoria Bitter, which delivered its fourth consecutive quarter of growth post
relaunch, and of both Crown Lager and Carlton Dry, partially offset by the decline of Carlton Draught. Focus
on premium growth platforms has delivered double digit volume growth in international premium brands, most
notably Peroni Nastro Azzurro, and growth in craft brands such as Fat Yak. The launch of new cider variants
to capture growth of this premium margin segment saw cider volume growth.
Despite a good performance from much of the portfolio, our lager share performance was slightly worse than
the market due to high levels of competitor discounting in the on-premise channel, reflected in the decline of
Carlton Draught. Total domestic volumes, including discontinued brands, were down by 7%.
Continuing² domestic group NPR on a constant currency basis grew by 2% despite the lower volumes, driven
by price increases, strong execution of premium growth platforms and the implementation of our promotional
and customer investment architecture strategies. The integration programme is ahead of schedule in terms of
both synergy delivery and capability build and remains on track to deliver ahead of stated targets. EBITA grew,
both including and excluding discontinued brands, with EBITA margin improving substantially.
In India, group NPR on a constant currency basis grew by 1% with favourable pricing more than offsetting the
impact of lower volumes. Lager volumes declined by 2%, impacted by a decline in the Indian beer market
reflecting an unusually intense and prolonged monsoon and adverse regulatory changes in a number of
states, although trends in the second quarter improved. Our business achieved above market performance in
most of our focus states except Karnataka, where our competitor has added capacity. On a constant currency
basis, EBITA was lower than the prior year and EBITA margin declined, reflecting inflationary and input cost
increases which were in excess of the industry inhibited NPR growth.
In China, group NPR grew by 14% on a constant currency basis reflecting volume growth of 6% and
favourable mix in a subdued industry. Our associate, CR Snow, further expanded its national market share
with particularly pleasing results coming from the premium segment, where CR Snow's efforts achieved
positive results. CR Snow's market share grew across the majority of provinces with notable increases
achieved in Liaoning, Anhui, Zhejiang, Jiangsu and Guizhou.
Group NPR per hl increased by 7% driven by a combination of favourable product mix, reflecting the premium
segment improvements led by Snow Draft and Snow Brave the World, and beneficial geographic mix.
CR Snow continued to invest in market-facing activity, including sustained national television exposure for the
first time, yet EBITA margin increased driven by contained fixed costs, more benign input cost trends and
efficiency initiatives with a double digit increase in EBITA as a result.
On 17 September 2013, CR Snow completed the acquisition of the brewery business of Kingway Brewery
Holdings Limited and the results of this business will be included in the results of CR Snow for the second half
of the financial year.
²Continuing information basis adjusts for the impact of discontinued licensed brands in all comparative information.
South Africa: Beverages
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary Sept 2012 disposals translation growth Sept 2013 % %
Group revenue (including share 2,530 6 (428) 189 2,297 7 (9)
of associates) (US$m)
Group NPR (including share of
2,031 6 (343) 145 1,839 7 (9)
associates) (US$m)
EBITA(1) (US$m) 421 1 (70) 34 386 8 (8)
EBITA margin (%) 20.7 21.0
Sales volumes (hl 000)
Lager 12,446 - 354 12,800 3 3
Soft drinks 7,810 - 103 7,913 1 1
Other alcoholic beverages 708 1 52 761 8 8
(1)In 2013 before exceptional charges of US$7 million, being charges incurred in relation to the Broad-Based Black Economic
Empowerment scheme (2012: US$12 million, being charges incurred in relation to the Broad-Based Black Economic Empowerment
scheme of US$10 million and business capability programme costs of US$2 million).
In South Africa, the continued execution of our market and customer focused strategy delivered solid growth
despite a deteriorating consumer environment. The depreciation of the South Africa rand against the US dollar
resulted in the reported group NPR decline of 9%. On an organic, constant currency basis, group NPR grew
by 7% driven by growth of 5% in group NPR per hl which benefited from improved brand mix. The beer
business was once again impacted by disproportionately higher excise taxes while our soft drinks business'
profitability was impacted by the very low single digit price increase.
Lager volumes were up 3% for the first half of the year. In the face of strong competition, our portfolio
performed above the market, driven by targeted brand campaigns and pack innovation, combined with
continued enhanced market-facing sales execution. Castle Lite and Castle Lager continued to perform well,
supported by growth in Carling Black Label and Castle Milk Stout, partially offset by a decline in Hansa
Pilsener volumes.
Soft drinks volumes grew by 1%, with the inclusion of Appletiser, while our main Coca-Cola soft drinks bottling
business' volume grew by 2% cycling the strong performance in the prior period, and benefiting from the
continued channel penetration strategy through the use of market logistics partners. Volume growth was
driven by the continued success of the two litre PET packs in key classes of trade. Packs designated for
immediate consumption also grew strongly, supported by the targeted placement of fridges as part of the
comprehensive in-market execution strategy. Growth in the still drinks portfolio was well above average, with
strong contributions from the water brands and the Play brand.
Driven by increased sales, our associate Distell reported mid single digit EBITA growth on an organic,
constant basis (after adjusting for the excise settlement included in last year's results).
The business continued its focus on productivity while increasing investment in market facing activities in all
the beverage businesses. Reported EBITA decreased by 8% (compared with growth of 8% on an organic,
constant currency basis) and EBITA margin improved by 30 bps.
South Africa: Hotels and Gaming
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary Sept 2012 disposals translation growth Sept 2013 % %
Group revenue (share of
associates) (US$m) 233 2 (39) 19 215 8 (8)
Group NPR (including share of
associates) (US$m) 201 2 (34) 17 186 8 (8)
EBITA (US$m) 65 - (11) 3 57 4 (12)
EBITA margin (%) 32.4 30.8
Revenue per available room
(Revpar) – US$ 66.0 n/a n/a n/a 60.7 n/a (8)
SABMiller is a 39.6% shareholder in the Tsogo Sun Group which is listed on the Johannesburg Stock
Exchange.
Our share of Tsogo Sun's reported net producer revenue was US$186 million, a decrease of 8% over the prior
period (up 8% on an organic, constant currency basis). The organic, constant currency growth was delivered
despite softer economic conditions in the period.
The gaming industry in the major provinces of South Africa experienced varying levels of growth over the prior
period with the largest province in terms of gaming win, Gauteng, reporting 4% growth and the KwaZulu-Natal
province growing by 3%. The majority of the Tsogo Sun casinos in these provinces outperformed the market
and grew their market shares through a combination of improved trading, gaming win and food and beverage
revenue.
The South African hotel industry recorded above inflation revenue per available room growth during the six
months ended September 2013, largely driven by growth in the average room rate and volumes from
corporate, government, groups and convention market segments. There was still constrained demand with
occupancies not exceeding 59% for the period.
Reported EBITA for the half year decreased by 12% with growth of 4% on an organic, constant currency basis,
driven by higher gaming and hotel revenues.
Financial review
New accounting standards and restatements
The accounting policies followed are the same as those published within the Annual Report and Accounts for
the year ended 31 March 2013 except for the new standards, interpretations and amendments adopted by the
group since 1 April 2013 as detailed in note 1 of the condensed consolidated financial information. As part of
the regular review of accounting practices and policies, fair value gains and losses on financial instruments,
and exchange gains and losses on financing items have now been presented on a net basis within net finance
costs.
The adoption of these new standards, interpretations and amendments has resulted in profit after tax for the
six months ended 30 September 2012 being reduced by US$11 million, primarily due to the adoption of the
amendment to IAS 19 ‘Employee benefits'. The consolidated balance sheet and cash flow were unaffected.
Comparative information has been restated as detailed in note 12 of the condensed consolidated financial
information. Additional disclosures have also been included in the financial information as a result of adopting
these new standards and amendments.
The consolidated balance sheet as at 30 September 2012 has been restated for further adjustments relating to
the initial accounting for business combinations, details of which are provided in note 12. The Annual Report
and Accounts for the year ended 31 March 2013 are available on the company's website: www.sabmiller.com.
New and revised reporting metrics
The non-GAAP metrics used to assess the group's performance have been revised in the current year to
reflect the changes in the way in which the performance of the group's operations is evaluated and resources
allocated by the group's chief operating decision maker, defined as the executive directors. In order to show
more clearly the group's underlying revenue performance, excluding the impact of excise duties and other
similar taxes charged to the group by tax authorities, the group has presented an additional new metric, group
net producer revenue (NPR), which is defined as group revenue less excise duties and other similar taxes
including the group's share of associates' and joint ventures' excise duties and other similar taxes. Following
the introduction of the group NPR metric, the group has calculated EBITA margin using group NPR as the
denominator rather than group revenue. This demonstrates the underlying margin progression without the
distortions of changes in excise duties and other similar taxes charged to the group.
The definition of EBITDA has also been amended. Historically the group used a cash flow-based EBITDA
metric, with a number of non-cash adjustments in addition to depreciation and amortisation. However, with an
increasing number of non-cash items, this measure has become more complicated. Consequently, in an effort
to simplify the calculation of the metric and to aid comparability with other beverage companies, the group has
presented an income statement-based EBITDA metric instead, which only adjusts for depreciation and
amortisation. EBITDA comprises EBITA plus depreciation and amortisation of computer software, including the
group's share of associates' and joint ventures' depreciation and amortisation of computer software.
Additionally the group has amended its net debt definition to include the fair value of derivative financial
instruments designated as net investment hedges as these hedges are considered to be inextricably linked to
the underlying borrowings because they are used to mitigate the foreign exchange risk arising from the group's
foreign currency borrowings. This enables a more appropriate presentation of the currency profile of the
group's borrowings. Further details are included in note 10c of the consolidated financial information.
Segmental analysis
The group's operating results on a segmental basis are set out in the segmental analysis of operations.
SABMiller uses group NPR and EBITA (as defined in the financial definitions section) to evaluate performance
and believes these measures provide stakeholders with additional information on trends and allow for greater
comparability between segments. Segmental performance is reported after the specific apportionment of
attributable head office costs.
Disclosure of volumes
In the determination and disclosure of sales volumes, the group aggregates 100% of the volumes of all
consolidated subsidiaries and its equity accounted percentage of all associates' and joint ventures' volumes.
Contract brewing volumes are excluded from volumes although revenue from contract brewing is included
within group revenue and group NPR. Volumes exclude intra-group sales volumes. This measure of volumes
is used in the segmental analyses as it closely aligns with the consolidated group revenue, group NPR and
EBITA disclosures.
Organic, constant currency comparisons
The group discloses certain results on an organic, constant currency basis, to show the effects of acquisitions
net of disposals and changes in exchange rates on the group's results. See the financial definitions section for
the definition.
Adjusted EBITDA
The group uses an adjusted EBITDA measure which provides a useful indication of the cash generated to
service the group's debt. This measure has been revised in light of the group's new EBITDA definition.
Adjusted EBITDA comprises operating profit before exceptional items, depreciation and amortisation (i.e.,
subsidiary EBITDA) together with the group's share of operating profit from the MillerCoors joint venture on a
similar basis. Given the significance of the MillerCoors business and the access to its cash generation, the
inclusion of MillerCoors' EBITDA provides a useful measure of the group's overall cash generation.
Disposals
In May 2013 the group completed the disposal of its non-core milk and juice business in Panama.
Exceptional items
Items that are material either by size or incidence are classified as exceptional items. Further details on the
treatment of these items can be found in note 3 to the financial information.
Net exceptional charges of US$52 million before finance costs and tax were reported during the period (2012:
US$127 million). The net exceptional charge included:
- US$79 million (2012: US$70 million) charge related to business capability programme costs in Europe
and Corporate;
- US$47 million gain, after associated costs, (2012: US$nil million) on the disposal of the milk and juice
business in Panama in Latin America;
- US$13 million (2012: US$47 million) charge related to integration and restructuring costs incurred in
Asia Pacific following the Foster's and the Pacific Beverages acquisitions; and
- US$7 million (2012: US$10 million) charge in respect of the Broad-Based Black Economic
Empowerment scheme in South Africa.
Finance costs
Net finance costs were US$345 million, an 8% decrease on the prior period's US$375 million (restated),
mainly as a result of debt repayments and refinancing decisions undertaken in 2013. Finance costs in 2012
included a net gain of US$12 million from the mark to market adjustments of various derivatives on capital
items for which hedge accounting cannot be applied. The mark to market gain was excluded from the
determination of adjusted net finance costs and adjusted earnings per share. Adjusted net finance costs for
the half year were also US$345 million, down 11%.
Interest cover, as defined in the financial definitions section, has increased to 9.3 times from 8.2 times
(restated) in the prior period.
Profit before tax
Adjusted profit before tax of US$2,869 million increased by 5% over the restated comparable period in the
prior year, primarily as a result of positive brand mix, favourable pricing and higher volumes leading to
increased group NPR, together with operational efficiencies and lower finance costs, despite the adverse
impact of foreign exchange rate movements.
Profit before tax was US$2,429 million, up 7%, including the impact of the exceptional and other adjusting
finance items noted above. The principal differences between reported and adjusted profit before tax relate to
the amortisation of intangible assets (excluding computer software), the group's share of associates' and joint
ventures' tax and non-controlling interests, and exceptional items. Amortisation amounted to US$223 million in
the half year (2012: US$229 million); the group's share of associates' and joint ventures' tax and non-
controlling interests was US$165 million (2012: US$136 million) with the increase primarily resulting from the
full consolidation of Coca-Cola Icecek into Anadolu Efes' results, and net exceptional charges were US$52
million (2012: US$127 million) as detailed above.
Taxation
The effective rate of tax for the half year before amortisation of intangible assets (excluding computer
software) and exceptional items was 26.8% compared with a rate of 27.5% in the prior year period. The
reduction in the rate primarily results from the resolution of various uncertain tax positions during the period.
Earnings per share
The group presents adjusted basic earnings per share, which excludes the impact of amortisation of intangible
assets (excluding computer software), certain non-recurring items and post-tax exceptional items, in order to
present an additional measure of performance for the periods shown in the consolidated interim financial
information. Adjusted basic earnings per share of 120.4 US cents were up 3% on the (restated) comparable
period in the prior year, as a result of higher profits and lower net finance costs, despite a marginal increase in
the tax charge and the adverse impact of foreign exchange rate movements. An analysis of earnings per share
is shown in note 5. On a statutory basis, basic earnings per share were 8% higher at 107.4 US cents (2012:
99.4 US cents, restated) for the reasons given above, together with lower net exceptional costs than in the
comparable prior year period.
Adjusted EBITDA
Adjusted EBITDA of US$3,202 million (comprising operating profit before exceptional items, depreciation and
amortisation, and the group's share of MillerCoors' operating profit on a similar basis) increased by 1%
compared with the same period in the prior year (2012: US$3,160 million).
Cash flow and capital expenditure
Net cash generated from operations before working capital movements of US$2,663 million was in line with
the prior year period (2012: US$2,657 million), as higher operating profit, despite the adverse impact of foreign
exchange movements, in the half year included more non-cash gains than in the prior period.
Net cash generated from operating activities of US$1,184 million decreased by US$691 million on the same
period in the prior year, primarily reflecting the anticipated tax payment to the Australian Tax Office in the half
year and the receipt of a non-recurring tax refund in Australia in the prior half year, partly offset by lower
working capital cash outflows and net interest paid.
Capital expenditure on property, plant and equipment for the six months of US$639 million has increased
compared with the same period in the prior year (2012: US$599 million), with continued investment in brewing
capacity and capability, principally in Africa and Latin America. Capital expenditure including the purchase of
intangible assets was US$670 million (2012: US$655 million).
Free cash flow reduced by 47% to US$894 million, reflecting the phasing of the Australian tax receipts and
payments, together with the increased investment in associates in the half year to fund, in part, our Chinese
associate's acquisition of the Kingway brewery business. Free cash flow is detailed in note 10b, and defined in
the financial definitions section.
Borrowings and net debt
Gross debt at 30 September 2013, comprising borrowings together with the fair value of financing derivative
financial assets and liabilities, decreased to US$16,927 million from US$17,771 million (restated and reduced
by US$101 million as a result of the change in net debt definition) at 31 March 2013, primarily as a result of the
repayment of the US$1,100 million bond in August 2013 partly offset by an increase in borrowings elsewhere
in the group. Net debt, comprising gross debt net of cash and cash equivalents, increased to US$15,641
million from US$15,600 million (restated) at 31 March 2013, as cash was utilised to pay the final dividend as
well as funding investments in group operations. An analysis of net debt is provided in note 10c.
The group's gearing (presented as a ratio of net debt/equity) has increased to 59.2% from 56.8% (restated) at
31 March 2013. The weighted average interest rate for the gross debt portfolio at 30 September 2013 was
4.0% (31 March 2013: 4.1%).
Total equity
Total equity decreased from US$27,460 million at 31 March 2013 to US$26,422 million at 30 September 2013.
The decrease was primarily a result of dividend payments and the currency translation movements on foreign
currency investments, partly offset by profit for the period.
Goodwill and intangible assets
Goodwill decreased to US$18,704 million (31 March 2013: US$19,862 million) wholly as a result of foreign
exchange movements in the period. Intangible assets decreased in the period to US$8,749 million (31 March
2013: US$9,635 million) primarily owing to foreign exchange movements and amortisation. The 30 September
2012 comparatives for goodwill have been restated to reflect adjustments to provisional fair values of business
combinations, further details of which are provided in note 12.
Currencies
The exchange rates to the US dollar used in preparing the consolidated interim financial information are
detailed in the table below, with most of the major currencies in which the group operates weakening against
the US dollar.
Appreciation/ Appreciation/
Six months ended Average rate (depreciation) Closing rate (depreciation)
30 September 2013 2012 % 2013 2012 %
Australian dollar (AUD) 1.05 0.98 (7) 1.07 0.96 (10)
South African rand (ZAR) 9.73 8.20 (16) 10.03 8.31 (17)
Colombian peso (COP) 1,886 1,792 (5) 1,915 1,801 (6)
Euro (EUR) 0.76 0.79 4 0.74 0.78 5
Czech koruna (CZK) 19.64 19.88 1 19.05 19.32 1
Peruvian nuevo sol (PEN) 2.73 2.64 (3) 2.79 2.60 (7)
Polish zloty (PLN) 3.21 3.32 3 3.12 3.20 3
Turkish lira (TRY) 1.90 1.81 (5) 2.02 1.80 (11)
Risks and uncertainties
The principal risks and uncertainties for the first six months and the remaining six months of the financial year
remain as described on pages 16 and 17 of the 2013 Annual Report. The risks are summarised as follows:
- The risk that, in light of the on-going consolidation of the brewing and beverages industry, the group's
ability to grow and increase profitability is limited. This may be the result of failing to participate in
value-adding transactions; overpaying for an acquisition; failing to implement integration plans
successfully; or failing to identify and develop new approaches to market and category entry.
- The risk that the group's market positions come under pressure and profitable growth opportunities
may not be realised. This may be a result of the group failing to ensure the development of strong and
relevant brands which resonate with consumers, shoppers and customers.
- The risk that the group's long-term profitable growth potential may be jeopardised due to a failure to
identify, develop and retain an appropriate pipeline of talented management.
- The risk that regulation places increasing restrictions on pricing (including tax), availability and
marketing of beer and drives changes in consumption behaviour. In affected countries the group's
ability to grow profitably and contribute to local communities could be adversely affected.
- The risk that following the Foster's acquisition, the group fails to deliver its specific, communicated
financial and value creation targets through its integration plans; this may limit the group's future
growth and profitability, as well as impacting its reputation for commercial capability and for making
value-creating acquisitions.
- The risk that the group fails to execute and derive benefits from the business capability projects,
resulting in increased project costs, business disruption and reduced competitive advantage in the
medium term.
Dividend
The board has declared a cash interim dividend of 25.0 US cents per share, an increase of 4%. The dividend
will be payable on Friday 13 December 2013 to shareholders registered on the London and Johannesburg
registers on Friday 6 December 2013. The ex-dividend trading dates will be Wednesday 4 December 2013 on
the London Stock Exchange (LSE) and Monday 2 December 2013 on the JSE Limited (JSE). As the group
reports in US dollars, dividends are declared in US dollars. They are payable in South African rand to
shareholders on the Johannesburg register, in US dollars to shareholders on the London register with a
registered address in the United States (unless mandated otherwise), and in sterling to all remaining
shareholders on the London register. Further details relating to dividends are provided in note 6.
The rates of exchange applicable for US dollar conversion into South African rand and sterling were
determined on Wednesday 20 November 2013. The rate of exchange determined for converting to South
African rand was US$:ZAR10.094432 resulting in an equivalent interim dividend of 252.36080 SA cents per
share. The rate of exchange determined for converting to sterling was GBP:US$1.614850 resulting in an
equivalent interim dividend of 15.4813 UK pence per share.
Shareholders registered on the Johannesburg register are advised that dividend withholding tax will be
withheld from the gross final dividend amount of 252.36080 SA cents per share at a rate of 15%, unless a
shareholder qualifies for an exemption. Shareholders registered on the Johannesburg register who do not
qualify for an exemption will therefore receive a net dividend of 214.50668 SA cents per share.
The company, as a non-resident of South Africa, was not subject to the secondary tax on companies (STC)
applicable before the introduction of dividend withholding tax on 1 April 2012, and accordingly, no STC credits
are available for set-off against the dividend withholding tax liability on the final net dividend amount. The
dividend is payable in cash as a ‘Dividend' (as defined in the South African Income Tax Act, 58 of 1962, as
amended) by way of a reduction of income reserves. The dividend withholding tax and the information
contained in this paragraph is only of direct application to shareholders registered on the Johannesburg
register, who should direct any questions about the application of the dividend withholding tax to
Computershare Investor Services (Pty) Limited, Tel: +27 11 373-0004.
From the commencement of trading on Thursday 21 November 2013 until the close of business on Friday 6
December 2013, no transfers between the London and Johannesburg registers will be permitted, and from
Monday 2 December 2013 until Friday 6 December 2013, no shares may be dematerialised or rematerialised,
both days inclusive.
Directors' responsibility for financial reporting
This statement, which should be read in conjunction with the independent review report of the auditors set out
below, is made to enable shareholders to distinguish the respective responsibilities of the directors and the
auditors in relation to the condensed consolidated interim financial information, which the directors confirm has
been prepared on a going concern basis. The directors consider that the group has used appropriate
accounting policies, consistently applied and supported by reasonable and appropriate judgements and
estimates.
A copy of the interim report of the group is placed on the company's website. The directors are responsible for
the maintenance and integrity of the statutory and audited information on the company's website. Information
published on the internet is accessible in many countries with different legal requirements. Legislation in the
United Kingdom governing the preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
The directors confirm that this condensed set of financial statements has been prepared in accordance with
IAS 34 as adopted by the European Union, and the interim management report herein includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8 of the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
At the date of this statement, the directors of SABMiller plc are those listed in the SABMiller plc Annual Report
at 31 March 2013 with the exception of Cyril Ramaphosa, who retired from the board on 25 July 2013, and
Guy Elliott, who was appointed to the board with effect from 1 July 2013. A list of current directors is
maintained on the SABMiller plc website: www.sabmiller.com.
On behalf of the board
Alan Clark Jamie Wilson
Chief executive Chief financial officer
20 November 2013
INDEPENDENT REVIEW REPORT OF CONSOLIDATED INTERIM FINANCIAL
INFORMATION TO SABMILLER PLC
Introduction
We have been engaged by the company to review the condensed set of financial statements in the interim
report for the six months ended 30 September 2013, which comprises the consolidated income statement,
consolidated statement of comprehensive income, consolidated balance sheet, consolidated cash flow
statement, consolidated statement of changes in equity and related notes. We have read the other information
contained in the interim 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 interim report is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct 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 interim 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 interim 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 Conduct 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 interim report for the six months ended 30 September 2013 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 Conduct Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
20 November 2013
SABMiller plc
CONSOLIDATED INCOME STATEMENT
for the period ended 30 September
Six months Six months Year
ended 30/9/13 ended 30/9/121 ended 31/3/131
Unaudited Unaudited Unaudited
Notes US$m US$m US$m
Revenue 2 11,103 11,370 23,213
Net operating expenses (9,132) (9,513) (19,021)
Operating profit 2 1,971 1,857 4,192
Operating profit before exceptional items 2,023 1,984 4,392
Exceptional items 3 (52) (127) (200)
Net finance costs (345) (375) (726)
Finance costs (578) (599) (1,186)
Finance income 233 224 460
Share of post-tax results of associates and joint ventures 2 803 781 1,213
Profit before taxation 2,429 2,263 4,679
Taxation 4 (598) (593) (1,192)
Profit for the period 1,831 1,670 3,487
Profit attributable to non-controlling interests 117 91 237
Profit attributable to owners of the parent 5 1,714 1,579 3,250
1,831 1,670 3,487
Basic earnings per share (US cents) 5 107.4 99.4 204.3
Diluted earnings per share (US cents) 5 106.0 98.4 202.0
(1)As restated (see note 12).
The notes are an integral part of this condensed interim financial information.
SABMiller plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 September
Six months Six months Year
ended 30/9/13 ended 30/9/121 ended 31/3/131
Unaudited Unaudited Unaudited
Notes US$m US$m US$m
Profit for the period 1,831 1,670 3,487
Other comprehensive loss:
Items that will not be reclassified to profit or loss
Net remeasurements of defined benefit plans - 1 (19)
Tax on items that will not be reclassified 4 (1) (7) 19
Share of associates' and joint ventures' other comprehensive
10 20 (26)
income/(loss)
Total items that will not be reclassified to profit or loss 9 14 (26)
Items that may be reclassified subsequently to profit or loss
Currency translation differences on foreign currency net investments:
- Decrease in foreign currency translation reserve during the period (1,850) (318) (700)
Available for sale investments:
- Fair value losses arising during the period - - (1)
Net investment hedges:
- Fair value gains arising during the period 108 15 63
Cash flow hedges: 50 (13) (5)
- Fair value gains/(losses) arising during the period 47 (15) (8)
- Fair value (gains)/losses transferred to inventory (1) 3 8
- Fair value losses/(gains) transferred to profit or loss 4 (1) (5)
Tax on items that may be reclassified subsequently to profit or loss 4 - (1) 6
Share of associates' and joint ventures' other comprehensive
46 - (13)
income/(loss):
- Share of associates' and joint ventures' other comprehensive
55 - (13)
income/(loss) during the period
- Share of associates' and joint ventures' recycling of available for sale
(9) - -
reserve on disposal
Total items that may be reclassified subsequently to profit or loss (1,646) (317) (650)
Other comprehensive loss for the period, net of tax (1,637) (303) (676)
Total comprehensive income for the period 194 1,367 2,811
Attributable to:
Non-controlling interests 110 93 233
Owners of the parent 84 1,274 2,578
Total comprehensive income for the period 194 1,367 2,811
(1)As restated (see note 12).
The notes are an integral part of this condensed interim financial information.
SABMiller plc
CONSOLIDATED BALANCE SHEET
at 30 September
30/9/13 30/9/12(1) 31/3/13
Unaudited Unaudited Audited
Notes US$m US$m US$m
Assets
Non-current assets
Goodwill 18,704 20,062 19,862
Intangible assets 7 8,749 9,790 9,635
Property, plant and equipment 8 8,973 9,087 9,059
Investments in joint ventures 5,526 5,528 5,547
Investments in associates 5,686 5,277 5,416
Available for sale investments 22 28 22
Derivative financial instruments 813 865 732
Trade and other receivables 125 137 144
Deferred tax assets 54 94 71
Loan participation deposit 100 100 100
48,752 50,968 50,588
Current assets
Inventories 1,260 1,296 1,175
Trade and other receivables 2,056 2,155 2,067
Current tax assets 220 221 159
Derivative financial instruments 77 40 111
Available for sale investments - 1 -
Cash and cash equivalents 10c 1,286 780 2,171
4,899 4,493 5,683
Assets of disposal group classified as held for sale - - 23
4,899 4,493 5,706
Total assets 53,651 55,461 56,294
Liabilities
Current liabilities
Derivative financial instruments (50) (50) (34)
Borrowings 10c (1,503) (2,122) (2,469)
Trade and other payables (3,957) (4,068) (4,004)
Current tax liabilities (1,041) (1,363) (1,460)
Provisions (479) (618) (558)
(7,030) (8,221) (8,525)
Liabilities of disposal group classified as held for sale - - (1)
(7,030) (8,221) (8,526)
Non-current liabilities
Derivative financial instruments (57) (89) (52)
Borrowings 10c (16,196) (16,499) (16,079)
Trade and other payables (130) (76) (132)
Deferred tax liabilities (3,316) (3,681) (3,507)
Provisions (500) (558) (538)
(20,199) (20,903) (20,308)
Total liabilities (27,229) (29,124) (28,834)
Net assets 26,422 26,337 27,460
Equity
Share capital 167 166 167
Share premium 6,610 6,526 6,581
Merger relief reserve 4,321 4,586 4,586
Other reserves (310) 1,657 1,328
Retained earnings 14,534 12,373 13,710
Total shareholders' equity 25,322 25,308 26,372
Non-controlling interests 1,100 1,029 1,088
Total equity 26,422 26,337 27,460
(1)As restated (see note 12).
The notes are an integral part of this condensed interim financial information.
SABMiller plc
CONSOLIDATED CASH FLOW STATEMENT
for the period ended 30 September
Six months Six months Year
ended 30/9/13 ended 30/9/12 ended 31/3/13
Unaudited Unaudited Audited
Notes US$m US$m US$m
Cash flows from operating activities
Cash generated from operations 10a 2,596 2,438 5,554
Interest received 227 243 468
Interest paid (592) (645) (1,238)
Tax paid (1,047) (161) (683)
Net cash generated from operating activities 10b 1,184 1,875 4,101
Cash flows from investing activities
Purchase of property, plant and equipment (639) (599) (1,335)
Proceeds from sale of property, plant and equipment 49 16 30
Purchase of intangible assets (31) (56) (144)
Proceeds from sale of intangible assets - 4 4
Proceeds from disposal of available for sale investments - - 5
Proceeds from disposal of associates - - 21
Proceeds from disposal of businesses (net of cash disposed) 88 57 57
Acquisition of businesses (net of cash acquired) - - (6)
Investments in joint ventures (23) (67) (272)
Investments in associates (196) - (23)
Dividends received from joint ventures 494 517 886
Dividends received from associates 157 54 113
Dividends received from other investments 1 1 1
Net cash used in investing activities (100) (73) (663)
Cash flows from financing activities
Proceeds from the issue of shares 41 46 102
Proceeds from the issue of shares in subsidiaries to non-controlling
interests 1 36 36
Purchase of own shares for share trusts (53) (53) (53)
Purchase of shares from non-controlling interests (5) - -
Proceeds from borrowings 1,877 656 2,318
Repayment of borrowings (2,493) (1,453) (2,878)
Proceeds from associate in relation to loan participation deposit - - 100
Capital element of finance lease payments (5) (3) (6)
Net cash receipts/(payments) on derivative financial instruments 107 20 (5)
Dividends paid to shareholders of the parent (1,236) (1,125) (1,517)
Dividends paid to non-controlling interests (102) (61) (131)
Net cash used in financing activities (1,868) (1,937) (2,034)
Net cash (outflow)/inflow from operating, investing and financing activities (784) (135) 1,404
Effects of exchange rate changes (39) (22) (51)
Net (decrease)/increase in cash and cash equivalents (823) (157) 1,353
Cash and cash equivalents at 1 April 10c 1,959 606 606
Cash and cash equivalents at end of period 10c 1,136 449 1,959
The notes are an integral part of this condensed interim financial information.
SABMiller plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ended 30 September
Called up Share Merger Total Non-
share premium relief Other Retained shareholders' controlling Total
capital account reserve reserves earnings equity interests equity
US$m US$m US$m US$m US$m US$m US$m US$m
At 1 April 2012 (audited) 166 6,480 4,586 1,978 11,863 25,073 959 26,032
Total comprehensive income - - - (321) 1,595 1,274 93 1,367
Profit for the period - - - - 1,579 1,579 91 1,670
Other comprehensive (loss)/income - - - (321) 16 (305) 2 (303)
Dividends paid - - - - (1,125) (1,125) (46) (1,171)
Issue of SABMiller plc ordinary shares - 46 - - - 46 - 46
Proceeds from the issue of shares in
- - - - - - 36 36
subsidiaries to non-controlling interests
Non-controlling interests disposed of via
- - - - - - (13) (13)
business disposal
Payment for purchase of own shares for share
- - - - (53) (53) - (53)
trusts
Credit entry relating to share-based payments - - - - 93 93 - 93
At 30 September 20121 (unaudited) 166 6,526 4,586 1,657 12,373 25,308 1,029 26,337
At 1 April 2012 (audited) 166 6,480 4,586 1,978 11,863 25,073 959 26,032
Total comprehensive income - - - (650) 3,228 2,578 233 2,811
Profit for the year - - - - 3,250 3,250 237 3,487
Other comprehensive loss - - - (650) (22) (672) (4) (676)
Dividends paid - - - - (1,517) (1,517) (128) (1,645)
Issue of SABMiller plc ordinary shares 1 101 - - - 102 - 102
Proceeds from the issue of shares in
- - - - - - 36 36
subsidiaries to non-controlling interests
Non-controlling interests disposed of via
- - - - - - (13) (13)
business disposal
Arising on business combinations - - - - - - 1 1
Payment for purchase of own shares for share
- - - - (53) (53) - (53)
trusts
Credit entry relating to share-based payments - - - - 189 189 - 189
At 31 March 20131 (unaudited) 167 6,581 4,586 1,328 13,710 26,372 1,088 27,460
At 1 April 20131 (unaudited) 167 6,581 4,586 1,328 13,710 26,372 1,088 27,460
Total comprehensive income - - - (1,638) 1,722 84 110 194
Profit for the period - - - - 1,714 1,714 117 1,831
Other comprehensive (loss)/income - - - (1,638) 8 (1,630) (7) (1,637)
Dividends paid - - - - (1,236) (1,236) (99) (1,335)
Issue of SABMiller plc ordinary shares - 29 - - 12 41 - 41
Proceeds from the issue of shares in
- - - - - - 1 1
subsidiaries to non-controlling interests
Payment for purchase of own shares for share
- - - - (53) (53) - (53)
trusts
Buyout of non-controlling interests - - - - (5) (5) - (5)
Utilisation of merger relief reserve - - (265) - 265 - - -
Credit entry relating to share-based payments - - - - 119 119 - 119
At 30 September 2013 (unaudited) 167 6,610 4,321 (310) 14,534 25,322 1,100 26,422
(1)As restated (see note 12).
Merger relief reserve
At 1 April 2013 the merger relief reserve comprised US$3,395 million in respect of the excess of value attributed to the shares issued as consideration
for Miller Brewing Company over the nominal value of those shares and US$1,191 million relating to the merger relief arising on the issue of SABMiller
plc ordinary shares for the buyout of non-controlling interests in the group's Polish business. In the six months ended 30 September 2013, the group
transferred US$265 million of the reserve relating to the Polish business to retained earnings upon realisation of qualifying consideration.
The notes are an integral part of this condensed interim financial information.
SABMiller plc
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The condensed consolidated interim financial information (the ‘financial information') comprises the unaudited results of SABMiller plc for the six months
ended 30 September 2013 and 30 September 2012, together with the unaudited results for the year ended 31 March 2013. The unaudited balance
sheet for the six months ended 30 September 2012 has been restated for adjustments relating to initial accounting for business combinations. The
results for the six months ended 30 September 2012, and the year ended 31 March 2013 have been restated as a result of the changes in accounting
policies detailed below. Further details of these adjustments are provided in note 12. The financial information in this report is not audited and does not
constitute statutory accounts within the meaning of s434 of the Companies Act 2006. The board of directors approved this financial information on 20
November 2013. The annual financial statements for the year ended 31 March 2013, approved by the board of directors on 5 June 2013, which
represent the statutory accounts for that year, have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified
and did not contain a statement made under s498(2) or (3) of the Companies Act 2006.
The unaudited financial information in this interim report has been prepared in accordance with the Disclosure and Transparency Rules of the Financial
Conduct Authority, and with IAS 34 ‘Interim Financial Reporting' as adopted by the European Union (EU). The interim financial information should be
read in conjunction with the annual financial statements for the year ended 31 March 2013, which have been prepared in accordance with International
Financial Reporting Standards as adopted by the EU.
Items included in the financial information of each of the group's entities are measured using the currency of the primary economic environment in which
the entity operates (the functional currency). The consolidated financial information is presented in US dollars which is the group's presentational
currency.
Accounting policies
The financial information is prepared under the historical cost convention, except for the revaluation to fair value of certain financial assets and liabilities,
and post-retirement assets and liabilities. The financial information has been prepared on a going concern basis. The accounting policies adopted are
consistent with those of the annual financial statements for the year ended 31 March 2013, which were published in June 2013, as described in those
financial statements, except for the following standards, interpretations and amendments that have been adopted by the group since 1 April 2013:
- Amendment to IAS 19, ‘Employee benefits'. The adoption of this revised standard retrospectively from 1 April 2013 has resulted in the interest
charge on retirement benefit liabilities and the expected return on plan assets being replaced by a net interest charge on net defined benefit
liabilities. This net charge is included within operating costs. Further details of these adjustments are provided in note 12.
- Amendment to IAS 1, ‘Financial statement presentation'. The adoption of this amendment has resulted in changes to the presentation of
certain items within other comprehensive income in the consolidated statement of comprehensive income.
- IFRS 13, ‘Fair value measurement'. This new standard provides a single source of fair value measurement and disclosure requirements. It
does not require restatement of historical information. The additional disclosures required as a result of this standard are included in note 9 of
the financial information.
As part of the regular review of accounting practices and policies, fair value gains and losses on financial instruments, and exchange gains and losses
on financing items have now been presented on a net basis within net finance costs. There has been no impact on net finance costs, profit for the
period, or the financial position of the group. The group believes this change in presentation provides more relevant information and aids comparability
with its peers in the industry. Comparatives have been restated for consistency. Further details of these adjustments are provided in note 12.
2. Segmental information
Operating segments reflect the management structure of the group and the way performance is evaluated and resources allocated based on group NPR
and EBITA by the group's chief operating decision maker, defined as the executive directors. The group is focused geographically and, while not
meeting the definition of reportable segments, the group reports separately as segments South Africa: Hotels and Gaming and Corporate as this
provides useful additional information.
The segmental information presented below includes the reconciliation of GAAP measures presented on the face of the income statement to non-GAAP
measures which are used by management to analyse the group's performance.
Income statement
Six months ended 30/9/13 Six months ended 30/9/12 Year ended 31/3/13
Group NPR EBITA Group NPR EBITA(1) Group NPR EBITA(1)
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
US$m US$m US$m US$m US$m US$m
Latin America 2,754 972 2,740 920 5,802 2,112
Europe 2,684 512 2,454 516 4,300 784
North America 2,514 478 2,518 464 4,656 740
Africa 1,657 408 1,523 355 3,290 838
Asia Pacific 2,159 540 2,202 506 4,005 854
South Africa: 2,025 443 2,232 486 4,879 1,253
- Beverages 1,839 386 2,031 421 4,475 1,119
- Hotels and Gaming 186 57 201 65 404 134
Corporate - (85) - (94) - (202)
13,793 3,268 13,669 3,153 26,932 6,379
Amortisation of intangible assets (excluding computer software) –
(223) (229) (483)
group and share of associates' and joint ventures'
Exceptional items in operating profit – group and share of
(52) (127) (205)
associates' and joint ventures'
Net finance costs – group and share of associates' and joint
(399) (398) (770)
ventures' (excluding exceptional items)
Share of associates' and joint ventures' taxation (103) (99) (164)
Share of associates' and joint ventures' non-controlling interests (62) (37) (78)
Profit before taxation 2,429 2,263 4,679
(1)As restated (see note 12).
Group revenue and group NPR (including the group's share of associates and joint ventures)
With the exception of South Africa: Hotels and Gaming, all reportable segments derive their revenues from the sale of beverages. Revenues are derived
from a large number of customers which are internationally dispersed, with no customers being individually material.
Share of
associates' and
Share of joint ventures'
associates' and Excise duties excise duties
joint ventures' Group and other and other
Revenue revenue revenue similar taxes similar taxes Group NPR
2013 2013 2013 2013 2013 2013
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Six months ended 30 September US$m US$m US$m US$m US$m US$m
Latin America 3,741 - 3,741 (987) - 2,754
Europe 2,487 1,045 3,532 (572) (276) 2,684
North America 75 2,810 2,885 (3) (368) 2,514
Africa 1,149 806 1,955 (210) (88) 1,657
Asia Pacific 1,617 1,317 2,934 (606) (169) 2,159
South Africa: 2,034 478 2,512 (416) (71) 2,025
- Beverages 2,034 263 2,297 (416) (42) 1,839
- Hotels and Gaming - 215 215 - (29) 186
11,103 6,456 17,559 (2,794) (972) 13,793
2012 2012 2012 2012 2012 2012
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Six months ended 30 September US$m US$m US$m US$m US$m US$m
Latin America 3,687 - 3,687 (947) - 2,740
Europe 2,468 825 3,293 (573) (266) 2,454
North America 74 2,827 2,901 (2) (381) 2,518
Africa 1,069 723 1,792 (201) (68) 1,523
Asia Pacific 1,821 1,219 3,040 (685) (153) 2,202
South Africa: 2,251 512 2,763 (443) (88) 2,232
- Beverages 2,251 279 2,530 (443) (56) 2,031
- Hotels and Gaming - 233 233 - (32) 201
11,370 6,106 17,476 (2,851) (956) 13,669
2013 2013 2013 2013 2013 2013
Audited Audited Audited Unaudited Unaudited Unaudited
Year ended 31 March US$m US$m US$m US$m US$m US$m
Latin America 7,821 - 7,821 (2,019) - 5,802
Europe 4,292 1,475 5,767 (995) (472) 4,300
North America 141 5,214 5,355 (4) (695) 4,656
Africa 2,267 1,586 3,853 (420) (143) 3,290
Asia Pacific 3,797 1,888 5,685 (1,440) (240) 4,005
South Africa: 4,895 1,111 6,006 (950) (177) 4,879
- Beverages 4,895 645 5,540 (950) (115) 4,475
- Hotels and Gaming - 466 466 - (62) 404
23,213 11,274 34,487 (5,828) (1,727) 26,932
Operating profit and EBITA (segment result)
The following table provides a reconciliation of operating profit to operating profit before exceptional items, and to EBITA. EBITA comprises operating
profit before exceptional items, amortisation of intangible assets (excluding computer software) and includes the group's share of associates' and joint
ventures' operating profit on a similar basis.
Share of
associates'
Share of and joint
associates' ventures'
and joint Amortisation amortisation
ventures' of intangible of intangible
Operating operating assets assets
profit before profit before (excluding (excluding
Operating Exceptional exceptional exceptional computer computer
profit items items items software) software) EBITA
Six months ended Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
30 September 2013 US$m US$m US$m US$m US$m US$m US$m
Latin America 957 (47) 910 - 62 - 972
Europe 379 4 383 104 9 16 512
North America 7 - 7 451 - 20 478
Africa 216 - 216 189 3 - 408
Asia Pacific 215 13 228 201 111 - 540
South Africa: 357 7 364 77 - 2 443
- Beverages 357 7 364 22 - - 386
- Hotels and Gaming - - - 55 - 2 57
Corporate (160) 75 (85) - - - (85)
1,971 52 2,023 1,022 185 38 3,268
Six months ended Unaudited(1) Unaudited Unaudited(1) Unaudited(1) Unaudited Unaudited Unaudited(1)
30 September 2012 US$m US$m US$m US$m US$m US$m US$m
Latin America 810 45 855 - 65 - 920
Europe 385 35 420 85 9 2 516
North America 4 - 4 439 - 21 464
Africa 171 - 171 180 4 - 355
Asia Pacific 175 47 222 163 121 - 506
South Africa: 394 12 406 73 - 7 486
- Beverages 394 12 406 15 - - 421
- Hotels and Gaming - - - 58 - 7 65
Corporate (82) (12) (94) - - - (94)
1,857 127 1,984 940 199 30 3,153
Year ended Unaudited(1) Audited Unaudited(1) Unaudited(1) Unaudited Unaudited Unaudited(1)
31 March 2013 US$m US$m US$m US$m US$m US$m US$m
Latin America 1,920 63 1,983 - 129 - 2,112
Europe 588 64 652 76 21 35 784
North America 7 - 7 690 - 43 740
Africa 518 (79) 439 392 7 - 838
Asia Pacific 357 104 461 156 237 - 854
South Africa: 1,030 22 1,052 190 - 11 1,253
- Beverages 1,030 22 1,052 67 - - 1,119
- Hotels and Gaming - - - 123 - 11 134
Corporate (228) 26 (202) - - - (202)
4,192 200 4,392 1,504 394 89 6,379
(1) As restated (see note 12).
The group's share of associates' and joint ventures' operating profit is reconciled to the share of post-tax results of associates and joint ventures in the
income statement as follows.
Six months Six months Year
ended ended ended
30/9/13 30/9/121 31/3/131
Unaudited Unaudited Unaudited
US$m US$m US$m
Share of associates' and joint ventures' operating profit (before exceptional items) 1,022 940 1,504
Share of associates' and joint ventures' exceptional items in operating profit - - (5)
Share of associates' and joint ventures' net finance costs (54) (23) (44)
Share of associates' and joint ventures' taxation (103) (99) (164)
Share of associates' and joint ventures' non-controlling interests (62) (37) (78)
Share of post-tax results of associates and joint ventures 803 781 1,213
(1)As restated (see note 12).
Beer volumes increase during the summer months leading to higher revenues being recognised in the first half of the year in the Europe and North
America segments. Due to the spread of the business between Northern and Southern hemispheres, the results for the group as a whole are not highly
seasonal in nature.
EBITDA
EBITA is reconciled to EBITDA as follows.
Share of Share of
associates' associates'
and joint and joint
ventures' ventures'
EBITA Depreciation depreciation EBITDA EBITA Depreciation depreciation EBITDA
2013 2013 2013 2013 2012(1) 2012 2012 2012(1)
Six months ended Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
30 September US$m US$m US$m US$m US$m US$m US$m US$m
Latin America 972 166 - 1,138 920 167 - 1,087
Europe 512 109 44 665 516 102 31 649
North America 478 - 61 539 464 - 64 528
Africa 408 57 58 523 355 50 51 456
Asia Pacific 540 36 62 638 506 36 56 598
South Africa: 443 81 17 541 486 86 20 592
- Beverages 386 81 4 471 421 86 4 511
- Hotels and Gaming 57 - 13 70 65 - 16 81
Corporate (85) 13 - (72) (94) 12 - (82)
3,268 462 242 3,972 3,153 453 222 3,828
2013(1) 2013 2013 2013(1)
Unaudited Unaudited Unaudited Unaudited
Year ended 31 March US$m US$m US$m US$m
Latin America 2,112 337 - 2,449
Europe 784 205 70 1,059
North America 740 - 126 866
Africa 838 98 103 1,039
Asia Pacific 854 79 108 1,041
South Africa: 1,253 172 36 1,461
- Beverages 1,119 172 8 1,299
- Hotels and Gaming 134 - 28 162
Corporate (202) 28 - (174)
6,379 919 443 7,741
(1) As restated (see note 12).
Adjusted EBITDA
Adjusted EBITDA is comprised of the following.
Six months Six months Year
ended ended ended
30/9/13 30/9/12(1) 31/3/13(1)
Unaudited Unaudited Unaudited
US$m US$m US$m
Subsidiaries' EBITDA 2,670 2,636 5,705
- Operating profit before exceptional items 2,023 1,984 4,392
- Depreciation (including amortisation of computer software) 462 453 919
- Amortisation (excluding computer software) 185 199 394
Group's share of MillerCoors' EBITDA 532 524 859
- Operating profit before exceptional items 451 439 690
- Depreciation (including amortisation of computer software) 61 64 126
- Amortisation (excluding computer software) 20 21 43
Adjusted EBITDA 3,202 3,160 6,564
(1)As restated (see note 12).
3. Exceptional items
Six months Six months Year
ended ended Ended
30/9/13 30/9/12 31/3/13
Unaudited Unaudited Audited
US$m US$m US$m
Exceptional items included in operating profit:
Net profit on disposal of businesses 47 - 79
Business capability programme costs (79) (70) (141)
Integration and restructuring costs (13) (47) (91)
Broad-Based Black Economic Empowerment scheme charges (7) (10) (17)
Impairments - - (30)
Net exceptional losses included within operating profit (52) (127) (200)
Share of associates' and joint ventures' exceptional items:
Impairments - - (5)
Share of associates' and joint ventures' exceptional losses - - (5)
Non-controlling interests' share of associates' and joint ventures' exceptional losses - - 2
Group's share of associates' and joint ventures' exceptional losses - - (3)
Net taxation credits relating to subsidiaries' and the group's share of
associates' and joint ventures' exceptional items 5 2 20
Exceptional items included in operating profit
Net profit on disposal of businesses
In 2013 a net profit of US$47 million, after associated costs, was realised on the disposal of the milk and juice business in Panama, in Latin America.
Business capability programme costs
The business capability programme will streamline finance, human resources and procurement activities through the deployment of global systems and
introduce common sales, distribution and supply chain management systems. Costs of US$79 million have been incurred in the period (2012: US$70
million).
Broad-Based Black Economic Empowerment scheme charges
US$7 million (2012: US$10 million) of charges have been incurred in relation to the Broad-Based Black Economic Empowerment (BBBEE) scheme in
South Africa. This represents the on-going IFRS 2 share-based payment charge in respect of the employee element of the scheme.
Integration and restructuring gain
In 2013 US$13 million (2012: US$47 million) of integration and restructuring costs were incurred in Asia Pacific following the Foster's and the Pacific
Beverages acquisitions.
Net taxation credits relating to subsidiaries' and the group's share of associates' and joint ventures' exceptional items
Net taxation credits of US$5 million (2012: US$2 million) arose in relation to exceptional items during the period.
4. Taxation
Six months Six months Year
ended ended ended
30/9/13 30/9/12(1) 31/3/13(1)
Unaudited Unaudited Unaudited
US$m US$m US$m
Current taxation 519 575 1,118
- Charge for the period 520 573 1,131
- Adjustments in respect of prior periods (1) 2 (13)
Withholding taxes and other remittance taxes 77 95 170
Total current taxation 596 670 1,288
Deferred taxation 2 (77) (96)
- Charge/(credit) for the period 1 (77) (37)
- Adjustments in respect of prior periods 1 - 5
- Rate change - - (64)
Taxation expense 598 593 1,192
Tax charge/(credit) relating to components of other comprehensive income is as follows:
Deferred tax charge/(credit) on remeasurements of defined benefit plans 1 7 (19)
Deferred tax charge/(credit) on financial instruments - 1 (6)
1 8 (25)
Effective tax rate (%) 26.8 27.5 27.0
UK taxation included in the above
Current taxation - - -
Withholding taxes and other remittance taxes 53 74 133
Total current taxation 53 74 133
Deferred taxation - - 24
UK taxation expense 53 74 157
(1) As restated (see note 12).
See the financial definitions section for the definition of the effective tax rate. This calculation is on a basis consistent with that used in prior periods and
is also consistent with other group operating metrics. Tax on amortisation of intangible assets (excluding computer software) was US$63 million (2012:
US$60 million).
MillerCoors is not a taxable entity. The tax balances and obligations therefore remain with Miller Brewing Company as a 100% subsidiary of the group.
This subsidiary's tax charge includes tax (including deferred tax) on the group's share of the taxable profits of MillerCoors and includes tax in other
comprehensive income on the group's share of MillerCoors' taxable items included within other comprehensive income.
5. Earnings per share
Six months Six months Year
ended ended ended
30/9/13 30/9/12(1) 31/3/13(1)
Unaudited Unaudited Unaudited
US cents US cents US cents
Basic earnings per share 107.4 99.4 204.3
Diluted earnings per share 106.0 98.4 202.0
Headline earnings per share 104.6 100.8 203.0
Adjusted basic earnings per share 120.4 117.3 237.2
Adjusted diluted earnings per share 118.8 116.1 234.5
(1) As restated (see note 12).
The weighted average number of shares was:
Six months Six months Year
ended ended ended
30/9/13 30/9/12 31/3/13
Unaudited Unaudited Audited
Millions of Millions of Millions of
shares shares shares
Ordinary shares 1,670 1,665 1,667
Treasury shares (67) (72) (72)
EBT ordinary shares (8) (5) (5)
Basic shares 1,595 1,588 1,590
Dilutive ordinary shares 22 17 19
Diluted shares 1,617 1,605 1,609
The calculation of diluted earnings per share excludes 7,105,465 (2012: 9,369,595) share options that were non-dilutive for the period because the
exercise price of the option exceeded the fair value of the shares during the period, and 21,939,292 (2012: 22,335,737) share awards that were non-
dilutive for the period because the performance conditions attached to the share awards have not been met. These share incentives could potentially
dilute earnings per share in the future.
Adjusted and headline earnings
The group presents an adjusted earnings per share figure which excludes the impact of amortisation of intangible assets (excluding computer software),
certain non-recurring items and post-tax exceptional items in order to present an additional measure of performance for the periods shown in the
consolidated interim financial information. Adjusted earnings per share has been based on adjusted earnings for each financial period and on the same
number of weighted average shares in issue as the basic earnings per share calculation. Headline earnings per share has been calculated in
accordance with the South African Circular 2/2013 entitled 'Headline Earnings' which forms part of the listing requirements for the JSE Ltd (JSE). The
adjustments made to arrive at headline earnings and adjusted earnings are as follows.
Six months Six months Year
ended ended ended
30/9/13 30/9/12(1) 31/3/13(1)
Unaudited Unaudited Unaudited
US$m US$m US$m
Profit for the period attributable to owners of the parent 1,714 1,579 3,250
Headline adjustments
Impairment of goodwill - - 11
Impairment of property, plant and equipment - 20 39
Loss on disposal of property, plant and equipment - 2 13
Net profit on disposal of businesses (47) - (79)
Gain on dilution of investment in associate - - (4)
Tax effects of these items - (8) (14)
Non-controlling interests' share of the above items 1 - (3)
Share of associates' and joint ventures' headline adjustments, net of tax and non-controlling interests - 9 15
Headline earnings 1,668 1,602 3,228
Business capability programme costs 79 70 141
Broad-Based Black Economic Empowerment scheme charges 7 10 17
Integration and restructuring costs 13 27 71
Net gain on fair value movements on capital items(2) - (12) (12)
Amortisation of intangible assets (excluding computer software) 185 199 394
Tax effects of the above items (64) (55) (137)
Non-controlling interests' share of the above items (2) (4) (8)
Share of associates' and joint ventures' other adjustments, net of tax and non-controlling interests 34 27 78
Adjusted earnings 1,920 1,864 3,772
(1)As restated (see note 12).
(2)This does not include all fair value movements but includes those in relation to capital items for which hedge accounting cannot be applied.
6. Dividends
Dividends paid were as follows.
Six months Six months Year
ended 30/9/13 ended 30/9/12 ended 31/3/13
Unaudited Unaudited Audited
US cents US cents US cents
Prior year final dividend paid per ordinary share 77.0 69.5 69.5
Current year interim dividend paid per ordinary share - - 24.0
The interim dividend declared of 25.0 US cents per ordinary share is payable on 13 December 2013 to ordinary shareholders on the register as at
6 December 2013 and will absorb an estimated US$399 million of shareholders' funds.
7. Intangible assets
Six months Six months Year
ended 30/9/13 ended 30/9/12 ended 31/3/13
Unaudited Unaudited Audited
US$m US$m US$m
Net book amount at beginning of period 9,635 9,958 9,958
Exchange adjustments (697) 5 (17)
Additions - separately acquired 27 56 149
Acquisitions - through business combinations - - 2
Amortisation (216) (224) (450)
Disposals - (5) (5)
Transfers to disposal group classified as held for sale - - (2)
Net book amount at end of period 8,749 9,790 9,635
8. Property, plant and equipment
Six months Six months Year
ended 30/9/13 ended 30/9/12 ended 31/3/13
Unaudited Unaudited Audited
US$m US$m US$m
Net book amount at beginning of period 9,059 9,162 9,162
Exchange adjustments (236) (197) (435)
Additions 628 603 1,365
Acquisitions - through business combinations - - 2
Disposals (19) (23) (80)
Impairment - (20) (39)
Depreciation (432) (429) (867)
Transfers to disposal group classified as held for sale - - (5)
Other movements (27) (9) (44)
Net book amount at end of period 8,973 9,087 9,059
9. Financial risk factors
In the normal course of business, the group is exposed to the following financial risks:
- Market risk
- Credit risk
- Liquidity risk
A full description of the group's exposure to the above risks and the group's policies and processes that are in place to manage the risks arising, aided
by quantitative disclosures, is included in note 22 of the 2013 annual report. There has been no significant change in the nature of the financial risks to
which the group is exposed, or the group's policies and processes to manage these risks, since 1 April 2013.
Fair value estimation
The following table presents the group's financial assets and liabilities that are measured at fair value.
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
2013 2013 2013 2013 2012 2012 2012 2012
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
At 30 September US$m US$m US$m US$m US$m US$m US$m US$m
Assets
Derivative financial instruments - 890 - 890 - 905 - 905
Available for sale investments - 10 12 22 - 17 12 29
Total assets - 900 12 912 - 922 12 934
Liabilities
Derivative financial instruments - (107) - (107) - (139) - (139)
Total liabilities - (107) - (107) - (139) - (139)
2013 2013 2013 2013
Audited Audited Audited Audited
At 31 March US$m US$m US$m US$m
Assets
Derivative financial instruments - 843 - 843
Available for sale investments - 10 12 22
Total assets - 853 12 865
Liabilities
Derivative financial instruments - (86) - (86)
Total liabilities - (86) - (86)
The levels of the fair value hierarchy and its application to the group's financial assets and liabilities are described in full in note 22 of the 2013 annual
report. The methods and techniques employed in determining fair values are consistent with those used at 31 March 2013 and are summarised below.
There were no transfers between Level 1, 2, or 3 in the six months to 30 September 2013.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The fair values of financial instruments that are not traded in an active market (for example, over the counter derivatives or infrequently traded listed
investments) are determined by using valuation techniques.
Level 3: Inputs for the asset or liability that are not based on observable market data.
The fair value of non-current borrowings at 30 September 2013 is US$16,505 million (31 March 2013: US$16,811 million). The fair values are based on
a combination of market quoted prices and cash flows discounted using prevailing interest rates. The fair values of all other financial assets and
liabilities are equivalent to their carrying values.
10a. Reconciliation of profit for the period to net cash generated from operations
Six months Six months Year
ended ended ended
30/9/13 30/9/12(1) 31/3/13(1)
Unaudited Unaudited Unaudited
US$m US$m US$m
Profit for the period 1,831 1,670 3,487
Taxation 598 593 1,192
Share of post-tax results of associates and joint ventures (803) (781) (1,213)
Net finance costs 345 375 726
Operating profit 1,971 1,857 4,192
Depreciation:
- Property, plant and equipment 314 317 641
- Containers 118 112 226
Container breakages, shrinkages and write-offs 14 13 38
Net profit on disposal of businesses (47) - (79)
Gain on dilution of investment in associate - - (4)
(Profit)/loss on disposal of property, plant and equipment (20) 2 13
Amortisation of intangible assets 216 224 450
Impairment of goodwill - - 11
Impairment of property, plant and equipment - 20 39
Impairment of working capital balances 6 1 31
Amortisation of advances to customers 20 24 45
Unrealised net gain from fair value hedges (10) (1) -
Dividends received from other investments (1) (1) (1)
Charge with respect to share options 95 86 184
Charge with respect to Broad-Based Black Economic Empowerment scheme 7 10 17
Other non-cash movements (20) (7) (45)
Net cash generated from operations before working capital movements 2,663 2,657 5,758
Net outflow in working capital (67) (219) (204)
Net cash generated from operations 2,596 2,438 5,554
(1)As restated (see note 12).
10b. Reconciliation of net cash generated from operating activities to free cash flow
Six months Six months Year
ended 30/9/13 ended 30/9/12 ended 31/3/13
Unaudited Unaudited Audited
US$m US$m US$m
Net cash generated from operating activities 1,184 1,875 4,101
Purchase of property, plant and equipment (639) (599) (1,335)
Proceeds from sale of property, plant and equipment 49 16 30
Purchase of intangible assets (31) (56) (144)
Proceeds from sale of intangible assets - 4 4
Investments in joint ventures (23) (67) (272)
Investments in associates (196) - (23)
Dividends received from joint ventures 494 517 886
Dividends received from associates 157 54 113
Dividends received from other investments 1 1 1
Dividends paid to non-controlling interests (102) (61) (131)
Free cash flow 894 1,684 3,230
10c. Analysis of net debt
Cash and cash equivalents on the balance sheet are reconciled to cash and cash equivalents on the cash flow statement as follows.
As at As at As at
30/9/13 30/9/12 31/3/13
Unaudited Unaudited Audited
US$m US$m US$m
Cash and cash equivalents (balance sheet) 1,286 780 2,171
Overdrafts (150) (331) (212)
Cash and cash equivalents (cash flow statement) 1,136 449 1,959
The group has amended its net debt definition to include derivative financial instruments designated as net investment hedges as these hedges are
considered to be inextricably linked to the underlying borrowings because they are used to mitigate the foreign currency exchange risk arising from the
group's foreign currency borrowings. The change in this definition has resulted in a reduction in net debt of US$50 million at 30 September 2012 and
US$101 million at 31 March 2013.
Net debt is analysed as follows.
As at As at As at
30/9/13 30/9/121 31/3/131
Unaudited Unaudited Unaudited
US$m US$m US$m
Borrowings (17,507) (18,273) (18,301)
Financing derivative financial instruments 772 779 777
Overdrafts (150) (331) (212)
Finance leases (42) (17) (35)
Gross debt (16,927) (17,842) (17,771)
Cash and cash equivalents (excluding overdrafts) 1,286 780 2,171
Net debt (15,641) (17,062) (15,600)
(1)As restated for the change in the definition of net debt.
The movement in net debt is analysed as follows.
Cash and
cash
equivalents Derivative
(excluding financial Finance Total gross
overdrafts) Overdrafts Borrowings instruments leases borrowings Net debt
US$m US$m US$m US$m US$m US$m US$m
At 1 April 20131 2,171 (212) (18,301) 777 (35) (17,771) (15,600)
Exchange adjustments (66) 27 29 (23) 3 36 (30)
Cash flow (819) 35 616 (86) 5 570 (249)
Other movements - - 149 104 (15) 238 238
At 30 September 2013 1,286 (150) (17,507) 772 (42) (16,927) (15,641)
(1)As restated for the change in the definition of net debt.
The group has sufficient headroom to enable it to comply with all covenants on its existing borrowings. The group has sufficient undrawn financing
facilities to service its operating activities and continuing capital investment for the foreseeable future and thus the directors have continued to adopt the
going concern basis of accounting. The group had the following undrawn committed borrowing facilities available in respect of which all conditions
precedent had been met at that date.
As at As at As at
30/9/13 30/9/12 31/3/13
Unaudited Unaudited Audited
US$m US$m US$m
Amounts expiring:
Within one year 176 340 281
Between one and two years 16 9 17
Between two and five years 2,522 3,028 554
In five years or more - - 2,500
2,714 3,377 3,352
11. Commitments, contingencies and guarantees
Except as stated below there have been no material changes to commitments, contingencies or guarantees as disclosed in the annual financial
statements for the year ended 31 March 2013.
Commitments
Contracts placed for future expenditure not provided in the financial information amount to US$3,414 million at 30 September 2013 (31 March 2013:
US$2,632 million). The increase in contracts placed for future expenditure primarily relates to an increase in minimum purchase commitments for raw
materials and packaging materials.
Contracts placed for future capital expenditure for property, plant and equipment not provided in the financial information amount to US$330 million at
30 September 2013 (31 March 2013: US$239 million).
12. Restatements
The initial accounting under IFRS 3, ‘Business Combinations', for the Foster's Group Ltd (Foster's), the Pacific Beverages Pty Ltd (Pacific Beverages)
and the International Breweries plc acquisitions had not been completed as at 30 September 2012. During the six months ended 31 March 2013,
adjustments to provisional fair values in respect of these acquisitions were made. As a result comparative information for the six months ended 30
September 2012 has been presented in this interim financial information as if the adjustments to provisional fair values had been made from the
respective transaction dates. The adjustments are detailed in the following tables. There have been no material adjustments to the income statement for
the period ended 30 September 2012 required as a result of the adjustments to provisional fair values. The fair value exercises in respect of these
acquisitions have now been completed.
The amendment to IAS 19, ‘Employee benefits', was adopted retrospectively from 1 April 2013. The group has restated the consolidated financial
statements accordingly. The quantitative impact of adopting these standards on the prior period consolidated financial statements is detailed in the table
below.
As part of the regular review of accounting practices and policies, fair value gains and losses on financial instruments, and exchange gains and losses
on financing items have now been presented on a net basis within net finance costs. Comparatives have been restated for consistency. The quantitative
impact of this change in presentation is detailed in the table below.
IAS 19
adjustments Finance costs Six months IAS 19 Finance costs
Six months six months reclassification ended adjustments reclassification Year ended
ended ended six months 30/09/12 Year ended year ended year ended 31/3/13
30/9/12 30/9/12 ended 30/9/12 As restated 31/3/13 31/3/13 31/3/13 As restated
Unaudited Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited
US$m US$m US$m US$m US$m US$m US$m US$m
Consolidated income statement:
Operating profit 1,862 (5) - 1,857 4,203 (11) - 4,192
Net finance costs (379) 4 - (375) (735) 9 - (726)
Finance costs (723) 4 120 (599) (1,417) 9 222 (1,186)
Finance income 344 - (120) 224 682 - (222) 460
Share of post-tax results of
796 (15) - 781 1,244 (31) - 1,213
associates and joint ventures
Profit before taxation 2,279 (16) - 2,263 4,712 (33) - 4,679
Taxation (598) 5 - (593) (1,201) 9 - (1,192)
Profit for the period 1,681 (11) - 1,670 3,511 (24) - 3,487
IAS 19
adjustments Six months IAS 19
Six months six months ended adjustments Year ended
ended ended 30/09/12 Year ended year ended 31/3/13
30/9/12 30/9/12 As restated 31/3/13 31/3/13 As restated
Unaudited Unaudited Unaudited Audited Unaudited Unaudited
US$m US$m US$m US$m US$m US$m
Profit for the period 1,681 (11) 1,670 3,511 (24) 3,487
Net remeasurements of defined benefit plans - 1 1 (21) 2 (19)
Tax on items that will not be reclassified (2) (5) (7) 28 (9) 19
Share of associates' and joint ventures' other
5 15 20 (57) 31 (26)
comprehensive income/(loss)
Total items that will not be reclassified subsequently to
3 11 14 (50) 24 (26)
profit or loss
Total items that may be subsequently reclassified to profit
(317) - (317) (650) - (650)
or loss
Other comprehensive loss for the period, net of tax (314) 11 (303) (700) 24 (676)
Total comprehensive income for the period 1,367 - 1,367 2,811 - 2,811
Adjustments
to provisional
At 30/9/12 fair values At 30/9/12
Unaudited Unaudited Unaudited
US$m US$m US$m
Consolidated balance sheet:
Goodwill 20,188 (126) 20,062
Other non-current assets 30,906 - 30,906
51,094 (126) 50,968
Current tax assets 202 19 221
Other current assets net of assets of disposal group held for sale 4,272 - 4,272
4,474 19 4,493
Total assets 55,568 (107) 55,461
Trade and other payables (4,071) 3 (4,068)
Current tax liabilities (1,362) (1) (1,363)
Provisions (671) 53 (618)
Other current liabilities (2,172) - (2,172)
(8,276) 55 (8,221)
Provisions (575) 17 (558)
Deferred tax liabilities (3,716) 35 (3,681)
Other non-current liabilities net of assets of disposal group held for sale (16,664) - (16,664)
(20,955) 52 (20,903)
Total liabilities (29,231) 107 (29,124)
Net assets 26,337 - 26,337
Retained earnings 12,373 - 12,373
Other shareholders' equity 12,935 - 12,935
Non-controlling interests 1,029 - 1,029
Total equity 26,337 - 26,337
13. Related party transactions
There have been no material changes to the nature or relative quantum of related party transactions as described in the 2013 Annual Report.
The following changes were made to key management during the period.
Cyril Ramaphosa retired from the board on 25 July 2013, and Guy Elliott was appointed to the board with effect from 1 July 2013.
Consequently as at 30 September 2013 there were 26 key management (31 March 2013: 26).
14. Post balance sheet events
There are no material post balance sheet events.
SABMiller plc
FINANCIAL DEFINITIONS
Adjusted earnings
Adjusted earnings are calculated by adjusting headline earnings (as defined below) for the amortisation of intangible assets (excluding computer
software), integration and restructuring costs, the fair value movements in relation to capital items for which hedge accounting cannot be applied and
other items which have been treated as exceptional but not included above or as headline earnings adjustments together with the group's share of
associates' and joint ventures' adjustments for similar items. The tax and non-controlling interests in respect of these items are also adjusted.
Adjusted EBITDA
This comprises operating profit before exceptional items, depreciation and amortisation, and includes the group's share of MillerCoors' operating profit
on a similar basis.
Adjusted net finance costs
This comprises net finance costs excluding fair value movements in relation to capital items for which hedge accounting cannot be applied and any
exceptional finance charges or income.
Adjusted profit before tax
This comprises EBITA less adjusted net finance costs and less the group's share of associates' and joint ventures' net finance costs on a similar basis.
Constant currency
Constant currency results have been determined by translating the local currency denominated results for the six months ended 30 September at the
exchange rates for the comparable period in the prior year.
EBITA
This comprises operating profit before exceptional items, amortisation of intangible assets (excluding computer software) and includes the group's share
of associates' and joint ventures' operating profit on a similar basis.
EBITA margin (%)
This is calculated by expressing EBITA as a percentage of group net producer revenue.
EBITDA
This comprises EBITA (as defined above) plus depreciation and amortisation of computer software including the group's share of associates' and joint
ventures' depreciation and amortisation of computer software.
EBITDA margin (%)
This is calculated by expressing EBITDA as a percentage of group net producer revenue.
Effective tax rate (%)
The effective tax rate is calculated by expressing tax before tax on exceptional items and on amortisation of intangible assets (excluding computer
software), including the group's share of associates' and joint ventures' tax on a similar basis, as a percentage of adjusted profit before tax.
Free cash flow
This comprises net cash generated from operating activities less cash paid for the purchase of property, plant and equipment, and intangible assets, net
investments in existing associates and joint ventures (in both cases only where there is no change in the group's effective ownership percentage) and
dividends paid to non-controlling interests plus cash received from the sale of property, plant and equipment and intangible assets and dividends
received.
Group revenue
This comprises revenue together with the group's share of revenue from associates and joint ventures.
Group net producer revenue (NPR)
This comprises group revenue less excise duties and other similar taxes, together with the group's share of excise duties and other similar taxes from
associates and joint ventures.
Headline earnings
Headline earnings are calculated by adjusting profit for the financial period attributable to owners of the parent for items in accordance with the South
African Circular 2/2013 entitled ‘Headline Earnings'. Such items include exceptional impairments of non-current assets and profits or losses on disposals
of non-current assets and their related tax and non-controlling interests. This also includes the group's share of associates' and joint ventures'
adjustments on a similar basis.
Interest cover
This is the ratio of adjusted EBITDA to adjusted net finance costs.
Net debt
This comprises gross debt (including borrowings, financing derivative financial instruments, overdrafts and finance leases) net of cash and cash
equivalents (excluding overdrafts).
Organic information
Organic results and volumes exclude the first 12 months' results and volumes relating to acquisitions and the last 12 months' results' and volumes
relating to disposals.
Sales volumes
In the determination and disclosure of sales volumes, the group aggregates 100% of the volumes of all consolidated subsidiaries and its equity
accounted percentage of all associates' and joint ventures' volumes. Contract brewing volumes are excluded from volumes although revenue from
contract brewing is included within group revenue. Volumes exclude intra-group sales volumes. This measure of volumes is used for lager volumes, soft
drinks volumes, other alcoholic beverage volumes and beverage volumes and is used in the segmental analyses as it more closely aligns with the
consolidated group net producer revenue and EBITA disclosures.
SABMiller plc
FORWARD-LOOKING STATEMENTS
This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire ordinary shares in the capital of SABMiller
plc (the "company") or any other securities of the company in any jurisdiction or an inducement to enter into investment activity.
This announcement 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. Factors which may cause differences between actual
results and those expected or implied by the forward-looking statements include, but are not limited to: material adverse changes in the economic and
business conditions in the markets in which SABMiller operates; increased competition and consolidation in the global brewing and beverages industry;
changes in consumer preferences; changes to the regulatory environment; failure to deliver the integration and cost-saving objectives in relation to the
Foster's acquisition; failure to derive the expected benefits from the business capability programme; and fluctuations in foreign currency exchange rates
and interest rates. The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking
statements contained herein to reflect any change in the company's expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. The past business and financial performance of SABMiller plc is not to be relied on as an
indication of its future performance.
SABMiller plc
ADMINISTRATION
SABMiller plc
Incorporated in England and Wales (Registration No. 3528416
General Counsel and Group Company Secretary
John Davidson
Registered office
SABMiller House
Church Street West
Woking
Surrey, England
GU21 6HS
Facsimile +44 1483 264103
Telephone +44 1483 264000
Head office
One Stanhope Gate
London, England
W1K 1AF
Facsimile +44 20 7659 0111
Telephone +44 20 7659 0100
Internet address
www.sabmiller.com
Investor relations
Telephone +44 20 7659 0100
Email: investor.relations@sabmiller.com
Sustainable development
Telephone +44 1483 264134
Email: sustainable.development@sabmiller.com
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
1 Embankment Place
London, England
WC2N 6RH
Facsimile +44 20 7822 4652
Telephone +44 20 7583 5000
Registrar (United Kingdom)
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent, England
BR3 4TU
Facsimile +44 20 8639 2342
Telephone +44 20 8639 3399 (outside UK)
Telephone 0871 664 0300 (from UK calls cost 10p per minute plus network extras, lines are open 8.30am-5.30pm Mon-Fri)
Email: ssd@capita.co.uk
www.capitaassetservices.com
Registrar (South Africa)
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg
PO Box 61051
Marshalltown 2107
South Africa
Facsimile +27 11 688 5238
Telephone +27 11 370 5000
United States ADR Depositary
J.P. Morgan Depositary Bank
1 Chase Manhattan Plaza, Floor 58
New York, NY 10005
U.S: 866 JPM-ADRS
Outside the U.S: +1 866 576-2377
Email: adr@jpmorgan.com
Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
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