Wrap Text
Preliminary (unaudited) results for the twelve
months to 31 March 2014.
SABMiller plc
Incorporated in England and Wales (Registration No. 3528416)
JSE SAB ISSUER CODE SOSAB
ISIN GB0004835483
Preliminary Announcement
Release date: 22 May 2014
SABMiller delivers strong margin expansion
SABMiller plc, one of the world's leading brewers, reports its preliminary (unaudited) results for the twelve
months to 31 March 2014.
Highlights
- Portfolio development and commercial execution drive group NPR
- Reported group NPR decline of 1% with organic, constant currency group NPR growth of 3%
- Lager volumes up 1% on both reported and organic bases with growth in Latin America, Africa and Asia
Pacific partially offset by declines in Europe and North America
- Reported EBITA growth of 1% and EBITA margin(1) improvement of 50 basis points (bps) to 24.2%, with
organic, constant currency EBITA growth of 7% and EBITA margin(1) expansion of 90 bps
- The depreciation of key currencies against the US dollar had a significant negative impact on the
translation of financial results, impacting reported EBITA by approximately US$400 million
- Adjusted earnings up 2%, with adjusted EPS also up 2% to 242.0 US cents per share
- Full year dividends per share up 4% to 105.0 US cents
(1)Expressed as a percentage of group NPR.
2014 2013(2) %
US$m US$m change
Group revenue(a) 34,084 34,487 (1)
Revenue(b) 22,311 23,213 (4)
Group net producer revenue(c) 26,719 26,932 (1)
EBITA(d) 6,453 6,379 1
Adjusted profit before tax(e) 5,712 5,597 2
Profit before tax(f) 4,823 4,679 3
Profit attributable to owners of the parent 3,381 3,250 4
Adjusted earnings(g) 3,865 3,772 2
Adjusted earnings per share
- US cents 242.0 237.2 2
- UK pence 152.1 150.2 1
- SA cents 2,451.7 2,018.9 21
Basic earnings per share (US cents) 211.8 204.3 4
Dividends per share (US cents) 105.0 101.0 4
Free cash flow 2,563 3,230 (21)
(2) As restated. Further details of the restatement are provided in the financial review and note 13.
a Group revenue includes the attributable share of associates' and joint ventures' revenue of US$11,773 million (2013: US$11,274 million).
b Revenue excludes the attributable 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) but includes the group's share of associates' and joint ventures' operating profit, on a similar basis.
EBITA is used throughout this preliminary announcement.
e Adjusted profit before tax comprises EBITA less adjusted net finance costs of US$645 million (2013: US$738 million, restated) and share of
associates' and joint ventures' net finance costs of US$96 million (2013: US$44 million).
f Profit before tax includes exceptional charges of US$202 million (2013: US$203 million). Exceptional items are explained in note 3.
g A reconciliation of adjusted earnings to the statutory measure of profit attributable to owners of the parent is provided in note 6.
CHIEF EXECUTIVE'S REVIEW
Alan Clark, Chief Executive of SABMiller, said:
"We have produced a resilient performance in the face of a number of headwinds, with organic, constant
currency EBITA growth of 7% and strong margin improvement. Group net producer revenue growth of 3% was
led by our developing market businesses in Africa and Latin America, together with our associate in China,
where we continued to build capacity, make selective price increases and grow our premium brand portfolios.
We continue to deliver operational cost efficiencies including the completion of the business capability
programme and have identified further areas where efficiencies can be targeted."
"As we look ahead, we will continue to innovate and rejuvenate our products, build on our position in growth
markets, and increase the efficiency of our operations. With this approach I believe we are well placed to
continue to deliver strong returns to shareholders."
Net Organic,
acquisitions constant
Reported and Currency Organic Reported currency Reported
2013 disposals translation growth 2014 growth growth
Group net producer revenue US$m US$m US$m US$m US$m % %
Latin America 5,802 (45) (305) 293 5,745 5 (1)
Europe 4,300 269 4 1 4,574 - 6
North America 4,656 - - 9 4,665 - -
Africa 3,290 9 (55) 180 3,424 5 4
Asia Pacific 4,005 9 (213) 143 3,944 4 (2)
South Africa: 4,879 24 (826) 290 4,367 6 (10)
- Beverages 4,475 17 (757) 262 3,997 6 (11)
- Hotels and Gaming 404 7 (69) 28 370 7 (8)
Total 26,932 266 (1,395) 916 26,719 3 (1)
Net
Reported acquisitions Organic Reported Organic Reported
2013 and disposals growth 2014 growth growth
Group volumes hl'000 hl'000 hl'000 hl'000 % %
Lager 241,940 787 2,110 244,837 1 1
Soft drinks 56,881 5,800 2,681 65,362 5 15
Other alcoholic beverages 7,452 223 41 7,716 1 4
Total 306,273 6,810 4,832 317,915 2 4
Net Organic,
acquisitions constant
Restated and Currency Organic Reported currency Reported
2013 disposals translation growth 2014 growth growth
EBITA US$m US$m US$m US$m US$m % %
Latin America 2,112 (11) (112) 203 2,192 10 4
Europe 784 33 7 (121) 703 (15) (10)
North America 740 - - 57 797 8 8
Africa 838 - (10) 111 939 13 12
Asia Pacific 854 (9) (72) 72 845 8 (1)
South Africa: 1,253 4 (211) 92 1,138 7 (9)
- Beverages 1,119 2 (188) 82 1,015 7 (9)
- Hotels and Gaming 134 2 (23) 10 123 8 (8)
Corporate (202) - 2 39 (161)
Total 6,379 17 (396) 453 6,453 7 1
EBITA Margin(1) (%) 23.7 24.2
(1) Expressed as a percentage of group NPR.
Business review
The group delivered earnings growth in the year, despite headwinds in several markets. The depreciation of
key currencies against the US dollar had a significant negative impact on the translation of financial results in
South Africa, Latin America and Australia, resulting in a decline of 1% in reported group NPR and a 1%
increase in reported EBITA.
Group NPR growth of 3% on an organic, constant currency basis was driven by our developing market
operations in Latin America, Africa, Asia Pacific and South Africa, through a combination of volume growth,
selective pricing and improved brand mix. Lager volumes grew by 1% on both reported and organic bases
reflecting robust growth in Latin America, Africa and China, partially offset by declines in Europe and North
America. Reported soft drinks volumes increased by 15%, benefiting from the full consolidation of Coca-Cola
Icecek in our associate Anadolu Efes, with soft drinks volume growth of 5% on an organic basis driven by Latin
America, Europe and Africa.
On an organic, constant currency basis EBITA grew by 7% as a result of higher group NPR, cost efficiencies
across most divisions and a reduction in performance-related share incentive charges, resulting in a 90 bps
increase in our organic, constant currency EBITA margin. Input cost increases were mitigated by procurement
savings, leaving raw material input costs in line with the prior year on a constant currency, per hl basis.
Production efficiencies also aided cost of goods sold, while a focus on cost management benefited fixed costs.
Marketing investment increased in some developing markets to support category development and the
expansion of our brand portfolios. On a reported basis EBITA margin increased by 50 bps, reflecting the
adverse impact of both currency and the inclusion of the acquisition of the Kingway brewery business in our
Chinese associate's results in the second half of the year, together with the full consolidation of Coca-Cola
Icecek in Anadolu Efes' results.
Adjusted earnings grew by 2% over the prior year, 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 year following a reduction in net debt including the
repayment of some higher interest bonds which matured in the year.
Due to the phasing of scheduled receipts from and payments to the Australian Tax Office and our increased
investment in our Chinese associate to partly fund the Kingway acquisition, free cash flow for the year was
lower by US$667 million at US$2,563 million. However, excluding these one-off items free cash flow increased
by 13% compared with the prior year. Adjusted EBITDA was adversely impacted by the depreciation of key
currencies against the US dollar in the year but still grew by 1%. Strong working capital cash inflows in Europe
and Latin America led to a working capital cash inflow of US$93 million. Capital expenditure at US$1,485
million was in line with the prior year, with continued investment in brewing capacity and capability, particularly
in Africa and Latin America.
The group's gearing ratio as at 31 March 2014 was 52.0%. Net debt reduced by US$1,297 million, ending the
year at US$14,303 million. A final dividend of 80.0 US cents per share is proposed, to be paid to shareholders
on 15 August 2014. This brings the total dividend for the year to 105.0 US cents per share, an increase of 4.0
US cents over the prior year.
- In Latin America, EBITA grew by 4% (10% on an organic, constant currency basis), adversely impacted
by the depreciation of the Colombian peso and Peruvian nuevo sol against the US dollar. Group NPR on
an organic, constant currency basis grew by 5% driven by selective price increases and favourable brand
mix, supported by our continued focus on market-facing activities and effective trade execution, despite
trading challenges in several markets. Reported EBITA margin improved by 180 bps through a
combination of group NPR growth, cost efficiencies and asset disposals.
- In Europe, EBITA was down by 10% with group NPR growth of 6%, both on a reported basis, which
includes the benefit of the full consolidation of Coca-Cola Icecek in Anadolu Efes' results. On an organic,
constant currency basis group NPR was in line with the prior year reflecting volume-led declines in Poland
and the Anadolu Efes beer business, offset by soft drinks volume growth in Anadolu Efes and lager volume
improvements in Romania, Slovakia, the Netherlands and the UK, while organic, constant currency EBITA
declined by 15%. Reported EBITA margin decreased by 280 bps driven by volume declines in Poland and
margin contraction in Anadolu Efes.
- In North America, EBITA increased by 8% as a result of increased profitability in MillerCoors. Group NPR
was level with the prior year, with a decline in lager volumes offset by higher group NPR per hl. Group
NPR per hl benefited from firm pricing and favourable brand mix resulting from the introduction of new
higher margin products such as the Redd's franchise, growth in the Tenth and Blake division and a decline
in the economy segment. The growth in sales of higher margin products, along with continued fixed cost
reduction and lower marketing spend helped drive a 120 bps improvement in EBITA margin.
- In Africa, EBITA grew by 12% (13% on an organic, constant currency basis) as a result of volume growth,
pricing, and market share gains across most of our subsidiaries. The group NPR growth of 4% (5% on an
organic, constant currency basis) was driven by good lager volume growth across our portfolios, as
mainstream brands performed well and Castle Lite continued to expand in the premium segment. Focus on
production efficiencies and increased local sourcing of raw materials helped contain variable cost
increases and deliver reported EBITA margin growth of 190 bps despite increased fixed costs related to
investment in capacity.
- In Asia Pacific, EBITA declined by 1% and group NPR declined by 2% on a reported basis following the
depreciation of the Australian dollar against the US dollar. On an organic, constant currency basis EBITA
grew by 8% driven by Australia and China. In Australia, continuing(1) domestic NPR on a constant currency
basis was level with the prior year, as pricing and a focus on premium growth platforms offset lager volume
declines resulting from continued category and competitor pressure. The integration programme continued
to progress ahead of schedule in terms of both synergy delivery and capability build. In China, organic,
constant currency group NPR growth of 17% was underpinned by higher volumes and the continued focus
on premiumisation, led by Snow Draft and Snow Brave the World. Reported EBITA in China benefited from
higher group NPR, but margins were diluted by investment in market-facing activities and the inclusion of
Kingway results in the second half of the financial year, following completion of the acquisition in
September 2013. As a result reported EBITA margin for the region increased by 10 bps.
(1) Continuing information basis adjusts for the impact of discontinued licensed brands in all comparative information.
- South Africa: Beverages was adversely impacted by the significant depreciation of the South African
rand against the US dollar, resulting in reported EBITA and group NPR decreases of 9% and 11%
respectively. On an organic, constant currency basis EBITA grew by 7% driven by the increase in group
NPR of 6% on the same basis. Lager volumes were level with the prior year, affected by the timing of
Easter and the slowing economy. Castle Lite and Castle Milk Stout performed strongly in the premium
segment which, along with firm pricing, helped to deliver a 6% increase in group NPR per hl. Despite
intense competition and challenging economic conditions, soft drinks volumes were level with the prior
year 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 owing to the deteriorating exchange rate
and the higher input costs but the impact was contained and offset through continued focus on increased
productivity, resulting in reported EBITA margin growth of 40 bps.
- The business capability programme concluded at the end of the year, having built our global
procurement and European manufacturing organisations, together with our standardised global template.
This template will now be rolled out across our businesses. We have achieved cumulative net operating
benefits of US$496 million per annum, with incremental operating benefits in the year of US$175 million,
which were in excess of the forecast issued in 2012 of net cumulative benefits of US$450 million by March
2014. Exceptional business capability programme costs in the year were US$79 million (2013: US$141
million).
- We have now launched a new programme in order to drive additional operational efficiencies and it is
expected to deliver savings of approximately US$500 million per annum by the financial year ending 31
March 2018. It will provide a global business services organisation delivering standardised finance, HR,
procurement and data analytics services to the group's operations, enabled by the global template, from
central locations and restructuring of the in-country back office teams. It will also expand the scope of our
supply chain activities including expanding the reach of our procurement organisation to in excess of 80%
spend under management, together with changes to its current delivery model. This programme will
involve restructuring costs of some US$350 million, of which US$59 million has been incurred in the year.
These costs exclude the further deployment of the global template and the running costs of the new global
business services organisation which will be embedded into business as usual costs.
Outlook
Trading conditions are expected to remain broadly unchanged from the year just ended, with growth
continuing to be driven by our developing markets. However, the business will continue to be impacted by
currency movements. Development of our brand and pack portfolios will continue, as we seek opportunities to
reach new consumers and enhance the beer category. Revenue growth will also be driven by selective price
increases and management of our price points across all brands and packs. Raw material unit input costs are
expected to rise in low single digits in constant currency terms. Investment in production capacity, capability
and strong commercial execution of existing and new consumer offerings will continue to drive growth. We will
implement our new programme to deliver efficiencies to invest in this growth and improve our margins.
Enquiries:
SABMiller plc Tel: +44 20 7659 0100
Catherine May Director of Corporate Affairs Tel: +44 20 7927 4709
Gary Leibowitz Senior Vice President, Internal and Investor Engagement Tel: +44 20 7659 0119
Christina Mills Director of Communications and Reputation Tel: +44 20 7659 0105
Richard Farnsworth Business Media Relations Manager Tel: +44 20 7659 0188
A live audio webcast of a presentation to the investor community by Chief Executive, Alan Clark, and Chief Financial Officer, Jamie
Wilson will begin at 9.30am (BST) on 22 May 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 Preliminary Announcement are available from the Company Secretary at the Registered
Office or from our website www.sabmiller.com.
Operational review
Latin America
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary 2013 disposals translation growth 2014 % %
Group revenue (including share
of associates) (US$m) 7,821 (45) (424) 460 7,812 6 -
Group NPR (including share of
associates) (US$m) 5,802 (45) (305) 293 5,745 5 (1)
EBITA(1) (US$m) 2,112 (11) (112) 203 2,192 10 4
EBITA margin (%) 36.4 38.2
Sales volumes (hl 000)
Lager 43,007 - 579 43,586 1 1
Soft drinks 17,866 (344) 992 18,514 6 4
(1) In 2014 before exceptional credits of US$47 million being the profit on disposal of the Panama milk and juice business (2013: US$63
million being business capability programme costs).
In Latin America, selective pricing and above mainstream brand momentum underpinned organic, constant
currency group NPR growth of 5%. Reported group NPR declined by 1%, following the depreciation of key
currencies against the US dollar and the disposal of our milk and juice business in Panama. Total beverage
volumes and lager volumes grew by 3% and 1% respectively on an organic basis, with alcohol share gains
across our markets, with the exception of Panama and Peru, where the excise increase in May 2013 impacted
the beer category. The continuing focus on market-facing activities and effective trade execution assisted in
driving our revenue growth despite trading disruptions and restrictions. We continue to see success with our
bulk pack offerings in Colombia, Honduras and El Salvador where we offer more affordable lager to low
income consumers. Our light beer segment has seen significant growth in key consumption occasions, driving
trading up and improving our brand mix. Profitability was further boosted by lower production and fixed costs,
as well as asset disposals, resulting in a reported EBITA margin increase of 180 bps to 38.2%.
In Colombia, lager volumes grew by 2% despite difficult trading conditions with social unrest and strikes during
the second quarter, as well as restrictions on retailer trading hours, the national ‘zero tolerance' drink and drive
legislation enforcement, and dry days. This favourable lager volume performance was underpinned by the
expansion of our bulk packs, improved distribution reach, and strong point of sale execution. Growth was
driven by our mainstream Poker brand and trading up in our Águila franchise to Águila Light, while our local
brand Club Colombia, with its recently introduced new proprietary packaging, and the international Miller range
performed well in the premium segment. Selective price increases also assisted our top line performance while
production costs reduced in real terms reflecting plant efficiencies, with distribution costs benefiting from the
insourcing of transport operations. Further fixed cost productivity and the disposal of surplus real estate
boosted margin growth. Our non-alcoholic malt brand, Pony Malta, performed well in a very competitive
category, assisted by the launch of a new multi-serve pack, resulting in soft drinks growth of 3% for the year.
In Peru, domestic lager volumes were marginally ahead of the prior year despite an excise-driven price
increase in May 2013 and a continuing shift in expenditure patterns, most notably to the communication and
transport sectors. However lager volumes returned to growth in the fourth quarter. Our lager portfolio, which
includes the newly introduced Backus Ice, continued to benefit from the upper mainstream brand Pilsen Callao
and its strong performance in the large Lima market, offsetting lower volumes of the Cristal and Cusqueña
brands. While beer's share of alcohol declined due to the excise increase, our lager market share improved by
150 bps. Our direct distribution model has allowed us to improve reach and capture more operational
efficiencies, which together with fixed cost productivity has assisted margin growth. Soft drinks volumes were
up by 14% with growth coming from sparkling soft drinks and water, assisted by pack innovations.
Ecuador achieved lager volume growth of 2% with extended distribution and increased availability offsetting
restrictions on alcohol sales and a ban on alcohol advertising. Our upper mainstream brand Pilsener Light
continued to grow at double digit rates with the trade up from Pilsener further boosting group NPR growth. This
was supported by the new sales service model, expanded market development and enhanced trade
execution, particularly at events and festivals. Our non-alcoholic malt brand, Pony Malta, saw volume growth
of 9% for the year, with continuing success of smaller PET packs introduced in the year.
In Panama, lager volume growth of 1% was underpinned by the premium segment where our international
brand Miller Lite continued to consolidate its position as one of the leading brands in the market with high
double digit growth. This helped offset declining volumes of our mainstream brands, reflecting a structural shift
within the category. Our soft drinks volumes also grew by 1% on an organic basis assisted by our non-
alcoholic malt brand, Malta Vigor, which recorded 12% growth with increased reach aiding performance, while
sparkling soft drinks volumes declined amid competitor discounting. The disposal of the milk and juice
business, which was in line with our strategy to restructure and simplify our business in Panama, was
completed in May 2013.
In Honduras, our operations felt the impact of a challenging social environment, security concerns, Sunday
trading restrictions, and an increase in sales and alcohol taxes. Against this backdrop, lager volumes declined
by 2%. Our premium brands, Barena and Miller Lite, performed well with the latter growing by double digits.
Our mainstream brand, Salva Vida, continued to see robust growth from the more affordable bulk pack and
helped solidify our market position and offset the decline of the Imperial brand. Soft drinks volumes grew by
2% aided by multi-serve packs, pack innovations and increased home consumption.
El Salvador saw lager volume growth of 2% driven by our flagship mainstream brand Pilsener, with bulk packs
continuing to drive growth and consumers trading up from economy brands. In the premium segment our local
brand Suprema grew by 25%, assisted by the launch of a red beer variant, Suprema Roja. Soft drinks volumes
grew by 8% over the prior year, with robust growth in non-alcoholic malt beverages and juices.
Europe
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary 2013 disposals translation growth 2014 % %
Group revenue (including share
of associates) (US$m) 5,767 269 (16) 25 6,045 - 5
Group NPR (including share of
associates) (US$m) 4,300 269 4 1 4,574 - 6
EBITA(1) (US$m) 784 33 7 (121) 703 (15) (10)
EBITA margin (%) 18.2 15.4
Sales volumes (hl 000)
Lager 45,331 - (1,741) 43,590 (4) (4)
Soft drinks 7,581 6,144 991 14,716 13 94
(1)In 2014 before exceptional charges of US$11 million (2013: US$64 million) being capability programme costs.
In Europe, reported group NPR increased by 6%, which included the benefit of the full consolidation of Coca-
Cola Icecek in Anadolu Efes' results. On an organic, constant currency basis, group NPR was in line with the
prior year, while group NPR per hl grew by 1%, driven by price increases. Total volumes were down 1% on an
organic basis, with lager volumes down 4% and soft drinks volumes up 13%. Volume performance improved in
the second half of the year following a first half performance which was impacted by poor weather in the first
quarter with a subsequent impact on our seasonal innovations. Across the region, economic uncertainty and
weaker consumer sentiment persisted, along with increased competitive pressure in our key markets.
Reported EBITA was down 10% including the benefit of the full consolidation of Coca-Cola Icecek in Anadolu
Efes' results. Organic, constant currency EBITA was down 15% compared with the prior year and margin
declined by 280 bps driven by volume declines in Poland and lower profitability of Anadolu Efes.
In the Czech Republic, lager volumes were down 4% with an improved performance in the second half of the
year compared with the first half, following better execution and focus on the on-premise channel where prices
remained unchanged. Adverse weather at the start of the year resulted in outlet closures and affected
distribution across the market, and particularly impacted the performance of our mainstream core brand,
Gambrinus 10, and seasonal innovation launches. The premium segment was boosted by the successful
launch of unpasteurised Gambrinus together with the continued growth of Kozel 11. With effect from 1 May
2014 our Czech and Slovak operations were consolidated for management purposes into a multi-country
operation with one leadership team.
In Poland, lager volumes were down 9%, while the beer market declined low single digits, further intensifying
competitive conditions. In addition, we cycled a strong prior year comparative associated with the Tyskie brand
activation during the Euro 2012 football tournament and were additionally impacted by the planned stock build
in the trade at the end of the prior year ahead of our global template deployment. Zubr, supported by
promotional activity, performed well within a declining mainstream segment. The decline of Lech volumes,
despite the growth of Lech Shandy, and decreased Redd's volumes due to an expansion of competitors'
brands in the flavoured segment, resulted in adverse brand mix. Channel mix was unfavourable as discounters
continued to grow. These mix effects together with the volume performance resulted in a significant margin
decline.
In Italy, domestic volumes were down 1%, outperforming a declining market, impacted by low consumer
confidence resulting from continued economic instability. This performance was primarily driven by Peroni,
with a particularly strong performance in our southern strongholds, supported by on-premise expansion.
Nastro Azzurro volumes declined, impacted by increased promotional pressure in the off-premise channel.
In the United Kingdom, domestic volume growth of 5% was the result of the continued growth of Peroni Nastro
Azzurro through on-premise expansion and effective execution, along with solid growth of our Polish brands,
partly offset by a decline in Miller Genuine Draft volumes due to reduced promotions. EBITA grew ahead of the
prior year with NPR per hl improvements, volume increases and optimisation of distribution costs.
Domestic lager volumes in the Netherlands grew by 2% with improved execution in the on-premise channel
and successful promotional activities in a highly competitive environment. Performance was boosted by
Grolsch premium extensions and innovations.
Lager volumes were up 2% in Romania, outperforming a declining market, predominantly through the
continued growth of our economy brand Ciucas in large PET packs. Volumes grew by 6% in Slovakia
benefiting from the launch of Birell and Saris radlers. In Hungary, volumes grew by 2% compared with the prior
year, in a declining market, driven by the strong performance of premium brand Dreher, in part due to the
successful introduction of seasonal variants. Volumes in the Canaries declined by 3% with intense price
competition in the economy segment, partly offset by growth of our on-premise business ahead of the market
through outlet expansion and innovations.
On an organic basis, Anadolu Efes' total volumes grew, driven by strong soft drinks performance, while lager
volumes declined predominantly in Turkey and Russia. The beer markets in both Turkey and Russia were
impacted significantly by the tightening of regulatory environments. Volume performance in Russia was
additionally affected by delisting in key accounts which were fully restored during the second half of the year.
In Turkey, beer volume performance was also affected by competitive pressures particularly in the first half of
the year. On a reported basis Anadolu Efes' soft drinks volumes benefited from the full consolidation of Coca-
Cola Icecek.
North America
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary 2013 disposals translation growth 2014 % %
Group revenue (including share
of joint ventures) (US$m) 5,355 - (1) (12) 5,342 - -
Group NPR (including share of
joint ventures) (US$m) 4,656 - - 9 4,665 - -
EBITA (US$m) 740 - - 57 797 8 8
EBITA(1) margin (%) 15.9 - 17.1
Sales volumes (hl 000)
- Lager – excluding
contract brewing 40,585 (1,185) 39,400 (3) (3)
MillerCoors' volumes
- Lager – excluding
contract brewing 39,268 - (1,217) 38,051 (3) (3)
- Sales to retailers (STRs) 38,818 n/a n/a 37,846 n/a (3)
- Contract brewing 4,760 n/a n/a 4,674 n/a (2)
(1) In 2014 before exceptional charges of US$5 million (2013: US$nil) being capability programme costs.
The North America segment includes our 58% share of MillerCoors and 100% of Miller Brewing International
and our North American holding companies. Total North America reported EBITA was 8% higher than the prior
year driven by growth in MillerCoors.
MillerCoors
For the year ended 31 March 2014, MillerCoors' group NPR was in line with the prior year as MillerCoors
continued to transform its brand portfolio to expand in the growing above premium segments. Domestic
volume sales to retailers (STRs) and sales to wholesalers (STWs) both declined by 3%. Group NPR per hl
grew by 3% as a result of firm pricing and favourable brand mix. EBITA increased by 8% on the prior year, as
improved NPR per hl and reduced fixed costs more than offset lower volumes and input cost inflation. The
business gained share in the higher-margin above premium segment.
Premium light volumes were down mid single digits, with Coors Light down low single digits and Miller Lite
down mid single digits. Coors Light gained market share within the premium light segment, while Miller Lite
share trends improved during the second half of the year. MillerCoors' above premium segment volumes grew
by double digits driven by the launch of Redd's Strawberry Ale and Miller Fortune, along with the full year
impact of Redd's Apple Ale and Third Shift Amber Ale, which were launched in the prior year. The Tenth and
Blake division delivered mid single digit volume growth, driven primarily by the nationwide distribution of the
Leinenkugel's range, the success of its Shandy variants, the continued growth of Blue Moon Belgian White,
and the launch of Batch 19. The economy segment declined mid single digits driven by Miller High Life and
Keystone Light, as economic conditions continued to adversely impact this segment's consumers, and
MillerCoors' share of this segment declined. The premium regular segment was down low single digits with a
double digit decline in Miller Genuine Draft, partly offset by high single digit growth in Coors Banquet, which
was fuelled by the introduction of a new size stubby bottle.
Input costs per hl increased by low single digits, driven by the higher cost of brewing and packaging materials,
and the increased unit cost of innovations. Marketing spend decreased mainly due to lower media investment.
The business continued to seek efficiencies in its cost base, achieving cost savings in the year primarily
related to procurement savings and brewery efficiencies, as well as lower fixed costs, which were driven in
part by an organisational restructuring undertaken in the second half of the year.
Africa
Organic,
Net constant
acquisitions currency Reported
Reported and Currency Organic Reported growth growth
Financial summary 2013 disposals translation growth 2014 % %
Group revenue (including share
of associates) (US$m) 3,853 16 (71) 260 4,058 7 5
Group NPR (including share of
associates) (US$m) 3,290 9 (55) 180 3,424 5 4
EBITA(1) (US$m) 838 - (10) 111 939 13 12
EBITA margin (%) 25.5 27.4
Sales volumes (hl 000)
Lager 18,445 - 1,078 19,523 6 6
Soft drinks 12,963 - 808 13,771 6 6
Other alcoholic beverages 5,726 236 (133) 5,829 (2) 2
(1) In 2014 before net exceptional credits of US$25 million (2013: US$79 million) being profit on disposal of a business.
In Africa, group NPR grew by 4% (5% on an organic, constant currency basis), driven by total volume growth
following effective in-trade execution and share gains across most of our subsidiary markets. Lager volumes
grew by 6% supported by growth in a number of markets, although growth was hampered by poor economic
fundamentals in South Sudan and Zimbabwe. Our portfolio continued to be relevant to our consumers with
Castle Lite volumes up 31%, supported by strong performance across our local mainstream brands, as well as
Eagle lager in the affordable segment. We continue to invest in capacity and capability, with brewery
expansion projects having commenced during the year in Nigeria and Ghana. Soft drinks volume growth of 6%
reflected good performances in Ghana and Zambia, and by our associates Castel and Delta in Zimbabwe.
Other alcoholic beverage volumes were 2% lower than the prior year, primarily as a result of lower sales in
Zambia. Chibuku Super, a traditional beer offering in PET packs which has a longer shelf life, is now available
in five markets, having been launched in Mozambique during the year and in Tanzania and Malawi recently.
EBITA growth of 12% (13% on an organic, constant currency basis) was underpinned by this volume growth,
pricing in numerous markets, and a strong focus on cost management. We continued to invest in our
mainstream brands across the region, while variable costs benefited from production efficiencies, increased
local sourcing of raw materials across a number of markets, and improved distribution networks. This resulted
in reported EBITA margin advancing by 190 bps compared with the prior year, despite increased fixed costs
related to incremental capacity.
In Tanzania, lager volumes grew by 4% aided by strong premium segment growth driven by Castle Lite,
together with growth in Kilimanjaro in the mainstream segment and Eagle in the affordable segment, partially
offset by poor weather in the fourth quarter. The volume growth was further supported by share gains in the
market. The price point for Castle Lager impacted volumes, but this was more than offset by the growth in
mainstream volumes. Our market execution continued to achieve results with improvements in our outlet
footprint and route to market. Tanzania delivered strong earnings growth for the year.
Political tensions in Mozambique negatively impacted consumer demand and resulted in our lager volumes
declining by 2%, mainly impacting mainstream brand Manica. Castle Lite continued its robust growth, while
Impala, our cassava-based affordable beer offering, performed to expectations. Growth in traditional beer
volumes of 90% was aided by increased capacity. On 2 December 2013, we acquired a local wines and spirits
business which is in the process of being integrated.
Double digit lager volume growth was delivered in Nigeria underpinned by 23% volume growth in Trophy
Lager, while Hero lager volumes more than doubled as we progressively increase capacity at the Onitsha
brewery. Non-alcoholic malt beverage volumes continued to grow strongly.
In Zambia, a decline in lager volumes in the fourth quarter due to the excise-related pricing taken in January
2014, resulted in full year growth being moderated to 6%. During the year, improved availability aided strong
growth in Mosi and Castle Lite. In the soft drinks category, the prior year price repositioning drove continued
double digit volume growth. Utility-related disruptions to production in Kitwe and pricing taken during the year
contributed to a decline in traditional beer volumes.
Total alcoholic beverage volumes in Botswana declined owing to the impact of the zoning legislation coupled
with lower consumer demand caused by another alcohol levy price increase. Soft drinks volumes declined by
4% compared with the prior year owing to intense competition.
Despite challenging market conditions, lager volumes in Ghana grew by 12% aided by market share gains with
Club lager performing particularly well. Our cassava-based beer has been launched in a number of regions
with good success. Soft drinks volumes grew by 12% driven by growth in water as a result of improved
availability following capacity upgrades.
Soft economic conditions led to a slow start to the year in Uganda, but we saw an improved trend in the fourth
quarter and market share gains, following utilisation of additional capacity at Mbarara. Lager volumes were
down 3%, driven by mainstream brands Nile Special and Club, partially offset by growth in the affordable
segment. Profitability was assisted by lower manufacturing costs, despite the incremental costs associated
with the new Mbarara brewery.
The economic environment in Zimbabwe hampered the performance of our associate, Delta, with lager
volumes declining by 18%. However, traditional beer volumes grew strongly at 12%, supported by the
innovative Chibuku Super, and soft drinks volumes also grew in the year.
Our associate, Castel, delivered lager volume growth of 6%, with strong growth in Angola, Gabon, Burkina
Faso, Ethiopia and the Democratic Republic of Congo. Castel's reported group NPR growth was lower than
the volume growth due to country mix, an excise increase in Cameroon and lower inflation-led pricing.
Asia Pacific
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary 2013 disposals translation growth 2014 % %
Group revenue (including share
of associates) (US$m) 5,685 1 (342) 107 5,451 2 (4)
Group NPR (including share of
associates) (US$m) 4,005 9 (213) 143 3,944 4 (2)
EBITA(1) (US$m) 854 (9) (72) 72 845 8 (1)
EBITA margin (%) 21.3 21.4
Sales volumes (hl 000)
Lager 67,292 787 3,414 71,493 5 6
(1) In 2014 before exceptional charges of US$103 million being integration and restructuring costs (2013: US$104 million being
integration and restructuring costs of US$74 million and impairments of US$30 million).
In Asia Pacific, organic, constant currency group NPR grew by 4%, with lager volume growth of 5% on an
organic basis. Reported group NPR declined by 2% driven by the depreciation of the Australian dollar against
the US dollar, together with the impact of the termination of discontinued brands in the prior year in Australia,
and the sale on 7 September 2012 of Foster's interest in its Fijian beverage business. Organic, constant
currency group NPR per hl improved in all the region's markets, but overall reported group NPR per hl for the
region declined, as China's growth, with a lower than average group NPR per hl, outpaced the rest of the
region. On an organic, constant currency basis, EBITA grew by 8%, driven by Australia and China, with
organic, constant currency EBITA margin improvement of 100 bps. Reported EBITA margin growth was
diluted by the inclusion of Kingway results in the second half of the financial year, following completion of the
acquisition of the brewery business in September 2013 by our associate CR Snow.
In Australia, continuing(2) domestic group NPR on a constant currency basis was in line with the prior year, with
a 3% volume decline (in a market which declined by 2%) offset by NPR per hl improvement of 3%, driven
predominantly by price increases, coupled with the execution of premium growth platforms along with more
disciplined and performance-based discounting.
Continuing(2) lager volumes were negatively impacted by persisting economic uncertainty and weak consumer
sentiment along with increased competitive intensity, which negatively impacted our lager volume share. The
strategy to restore the core portfolio and build a winning competitive position resulted in strong volume growth
of Carlton Dry and Carlton Mid, although Victoria Bitter declined by 1% off a higher base (while still
outperforming the beer market) and Crown Lager declined, reflecting both a strong prior year comparative and
price compression from imported brands. Carlton Draught was impacted by its exposure to the more
depressed on-premise channel. Focus on premium growth platforms delivered 10% volume growth in the
super premium portfolio, most notably Peroni Nastro Azzurro, and the craft brand Fat Yak. In addition, the
launch of Kopparberg added an international premium cider to the portfolio. Total reported volumes, including
discontinued brands and disposals, were down 9%.
The integration programme continued to be ahead of schedule in both synergy delivery and capability build,
delivering cumulative synergies of A$150 million in the year, and remains on track to deliver on an accelerated
timeline. In light of the excess capacity in the network, we announced in January 2014 the intended closure of
the Warnervale brewery. During the year we initiated the roll-out of our global template, which will assist with
value creation and investment in commercial capabilities.
A continuing focus on price realisation and effective cost control resulted in strong EBITA growth and margin
expansion on an organic, constant currency basis.
In India, group NPR on a constant currency basis declined by 3% as a result of lower volumes, partially offset
by robust NPR per hl growth of 4%. Lager volumes fell by 7%, impacted by adverse regulatory changes in a
number of our key states, including Maharashtra, together with an unusually intense and prolonged monsoon
earlier in the year. On a constant currency basis, EBITA was lower than the prior year and EBITA margin
declined, reflecting the volume decline coupled with inflationary and input cost increases which were in excess
of price realisation and state constrained pricing.
In China, strong group NPR growth of 17% on an organic, constant currency basis was underpinned by
volume growth of 8% and favourable mix. Our associate, CR Snow, further expanded its national market
leadership, with healthy volume growth achieved in key provinces including Anhui, Zhejiang and Sichuan.
Organic, constant currency group NPR per hl increased by 9% driven by growth in both premium brands and
packs. Due to the continuing focus on premiumisation, led by Snow Draft and Snow Brave the World, more
than 30% of volumes are now in the premium segment. CR Snow continued to invest in market-facing
activities in an extremely competitive environment, in order to support its premiumisation strategy and to
enhance its market leadership.
On 17 September 2013, CR Snow completed the acquisition of the brewery business of Kingway Brewery
Holdings Limited and the results of this business have been included in the results of CR Snow for the second
half of the financial year, diluting reported EBITA margin for the year. The Kingway integration is underway,
with the planned turnaround of the business expected to take two to three years.
(2)Continuing 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 2013 disposals translation growth 2014 % %
Group revenue (including share
of associates) (US$m) 5,540 20 (938) 329 4,951 6 (11)
Group NPR (including share of
associates) (US$m) 4,475 17 (757) 262 3,997 6 (11)
EBITA(1) (US$m) 1,119 2 (188) 82 1,015 7 (9)
EBITA margin (%) 25.0 25.4
Sales volumes (hl 000)
Lager 27,280 - (35) 27,245 - -
Soft drinks 18,368 - (59) 18,309 - -
Other alcoholic beverages 1,613 (4) 180 1,789 11 11
(1) In 2014 before exceptional charges of US$33 million being Broad-Based Black Economic Empowerment related charges (2013:
US$22 million being Broad-Based Black Economic Empowerment scheme charges of US$17 million, integration and restructuring
costs of US$17 million, net of business capability programme credits of US$12 million).
The South Africa: Beverages business reported a 6% increase in group NPR on an organic, constant currency
basis (declining by 11% on a reported basis), with group NPR per hl growing by 6% driven by price increases
and positive lager brand mix. Organic, constant currency EBITA grew by 7%, with improved EBITA margin,
driven by the strong performance of our beer operation, amid a weak consumer environment and the timing of
Easter. Reported EBITA declined by 9% due to the depreciation of the South African rand against the US
dollar.
Lager volumes were level with the prior year but we continued to take both beer volume and value market
share, driven by successful brand campaigns, pack and brand innovation and effective execution in the trade.
The local premium portfolio performed strongly, benefiting from our efforts in brand and retail execution, with
Castle Lite and Castle Milk Stout delivering combined growth of more than 10%. Castle Lite continued to build
on its 'Extra Cold' brand positioning and continued to take market share in the premium segment. In the
mainstream segment, Castle Lager grew and Carling Black Label continued to stabilise, while we targeted
investment in Hansa Pilsener to address the volume decline. Castle Lager grew through leveraging the "It all
comes together with a Castle' campaign and its association with national sports in South Africa. There was
noticeable activity towards the end of the year in relation to Hansa Pilsener, with the introduction of the
'Celebrating 20 years of freedom' campaign and new packs across the range. The year also saw the
introduction of a number of innovations, including Flying Fish, the first flavoured beer in the premium segment in
South Africa.
Brand campaigns were underpinned by improved sales execution and customer service, with particularly
pleasing results in the growing convenience channel. Initiatives included innovative channel specific incentive
schemes and targeted trade campaigns.
Our focus on social investment and tackling alcohol abuse remains a priority. ‘Kickstart', an entrepreneurship
programme which has created more than 21,000 jobs over the past two decades, shifted its focus to
transforming start-up youth-owned businesses into high growth businesses. It was chosen as one of the best
practice programmes by Harvard Business School. In addition, the next phase of the ‘You Decide' programme
to raise awareness of underage drinking was launched with a 13 part TV reality show.
Soft drinks volumes, including Appletiser, were also level with the prior year, amid challenging economic
conditions and particularly bad weather in the last quarter of the financial year, and the impact of the growing
intensity of sparkling B-brand competition in the marketplace. The business remained focused on portfolio
expansion, market penetration, retail execution, and productivity initiatives with the use of market logistics
partners and incentive structures. However, increased competition in the channels that focus on the sale of
economic offerings resulted in a decline of returnable glass bottle sales which offset the growth in PET packs.
The still drinks portfolio continued to show growth with strong contributions from the water brands and the Play
brand.
Implementation of our strategy strengthened our competitive advantage in our soft drinks business. Market
penetration was a key focus as we expanded into new outlets and transformed existing outlets. We invested in
market logistics partners to distribute our brands, allowing for greater flexibility and the ability to tailor delivery
services. The continued transformation of the supply chain, including the implementation of new technology
and improved processes, resulted in elevated customer service, reliability, and responsiveness, and drove
productivity as well as an increase in demand fulfilment. Further, all support functions have been centralised
through improved IT infrastructure and reporting tools.
Driven by increased volumes, our associate Distell reported double digit EBITA growth on an organic, constant
currency basis, after adjusting for the one-off excise charge included in the prior year's results.
We continued to focus on productivity while increasing investment in market-facing activities across the whole
business. Input costs came under significant pressure due to the weakening South African rand and rising fuel
rates. As a result, EBITA margin contracted in the soft drinks business where competitor activities continued to
inhibit pricing. However, both the beer and soft drinks businesses continued to leverage the noticeable
progress to date in optimising the fixed cost base to deliver further productivity during the year.
South Africa: Hotels and Gaming
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary 2013 disposals translation growth 2014 % %
Group revenue (share of
associates) (US$m) 466 7 (80) 32 425 7 (9)
Group NPR (share of
associates) (US$m) 404 7 (69) 28 370 7 (8)
EBITA (US$m) 134 2 (23) 10 123 8 (8)
EBITA margin (%) 33.1 33.2
Revenue per available room
(Revpar) – US$ 66.2 n/a n/a n/a 61.4 n/a (7)
SABMiller currently has an effective 39.6% shareholding in Tsogo Sun Holdings Limited, a company listed on
the Johannesburg Stock Exchange. This investment is not considered to be core to our beverage operations
and therefore we are reviewing our strategic options for the shareholding. However, there can be no certainty
that the review will result in any action being taken.
Our share of Tsogo Sun's reported group NPR decreased by 8% compared with the prior year (up 7% on an
organic, constant currency basis). Trading during the second half of the year was generally weaker than the
first half, with tough economic conditions putting pressure on the consumer.
In the gaming business, growth was varied across the major provinces with Gauteng, the largest in terms of
gaming win, reporting 3% growth and KwaZulu-Natal growing by 4%. Tsogo Sun's four large casinos in these
provinces outperformed market growth.
The South African hotel business recorded positive revenue per available room growth in local currency,
largely driven by growth in average room rates. Although demand is still constrained, occupancies ended the
year at 64%, in line with the prior year and above the South African industry average of 62%. Group-wide,
occupancies ended the year at 64% compared with 65% in the prior year.
Reported EBITA for the full year decreased by 8%, as a result of the depreciation of the South African rand,
with growth of 8% on an organic, constant currency basis driven by higher gaming and hotel revenues
together with cost savings.
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 financial statements.
The adoption of these new standards, interpretations and amendments has resulted in profit after tax for the
year ended 31 March 2013 being reduced by US$24 million, primarily due to the adoption of the amendment
to IAS 19 ‘Employee benefits'. The consolidated balance sheet and cash flow statement were unaffected.
Comparative information has been restated as detailed in note 13 of the financial statements. Additional
disclosures will be included in the consolidated financial statements in the Annual Report and Accounts for the
year ended 31 March 2014 as a result of adopting these new standards and amendments.
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
finance costs.
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 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 11c of the financial statements.
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.
Business combinations and similar transactions
On 17 September 2013, the group's Chinese associate, China Resources Snow Breweries Limited (CR Snow)
completed the acquisition of the brewery business of Kingway Brewery Holdings Ltd.
In December 2013 the group acquired the trade and assets of a wine and spirits business in Mozambique.
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 statements.
Net exceptional charges of US$202 million before finance costs and tax were reported during the year (2013:
US$203 million), including net exceptional charges of US$5 million (2013: US$3 million) related to the group's
share of associates' and joint ventures' exceptional items. The net exceptional charge included:
- US$133 million (2013: US$141 million) charge related to capability programme costs in Europe and
Corporate, including US$79 million in relation to the business capability programme and US$54 million
in relation to the new cost saving and efficiency programme;
- US$47 million gain, after associated costs, (2013: US$nil) on the disposal of the milk and juice
business in Panama in Latin America;
- US$103 million charge related to integration and restructuring costs incurred in Asia Pacific following
the Foster's and Pacific Beverages acquisitions (2013: US$91 million charge related to integration and
restructuring costs in Asia Pacific and South Africa: Beverages);
- US$25 million (2013: US$79 million) additional gain on the prior disposal of the group's Angolan
operations; and
- US$33 million (2013: US$17 million) in respect of Broad-Based Black Economic Empowerment
(BBBEE) related charges in South Africa including US$13 million in relation to the group's BBBEE
scheme, together with a dilution loss of US$20 million as a result of the exercise of BBBEE scheme
share options in our associate, Distell.
In addition to the amounts noted above, the net exceptional charge in 2013 included a US$30 million charge in
respect of the impairment of the group's business in Vietnam in Asia Pacific.
The group's share of associates' and joint ventures' exceptional items included US$5 million of charges
related to the restructuring in MillerCoors in North America, associated with the group's new cost saving
programme. The group's share of associates' and joint ventures' exceptional items in 2013 included an
impairment of US$3 million in Angola in Africa.
Finance costs
Net finance costs were US$645 million, an 11% decrease on the prior year's US$726 million (restated), mainly
as a result of the reduction in net debt over the course of the year as well as the repayment of some higher
interest bonds which matured in the year. Finance costs in 2013 included a net gain of US$12 million from the
mark to market adjustments of various derivatives on capital items for which hedge accounting could not be
applied which was excluded from the determination of adjusted net finance costs and adjusted earnings per
share. Adjusted net finance costs were US$645 million, down 13%.
Interest cover, as defined in the financial definitions section, has increased to 10.3 times from 8.9 times
(restated) in the prior year.
Profit before tax
Adjusted profit before tax of US$5,712 million increased by 2% over the restated prior year amount, primarily
as a result of favourable brand mix, selective pricing and volume growth in our developing market operations,
together with cost efficiencies offset in part by the negative impact of currency depreciation on the translation
of our results.
Profit before tax was US$4,823 million, up 3% on the restated prior year amount, including the impact of the
exceptional items and other adjusting finance items noted above. The principal differences between reported
and adjusted profit before tax relate to exceptional items, amortisation of intangible assets (excluding
computer software) and the group's share of associates' and joint ventures' tax and non-controlling interests.
Net exceptional charges were US$202 million compared with US$203 million in the prior year, as detailed
above. Amortisation, including the group's share of associates' and joint ventures' amortisation, amounted to
US$436 million in the year compared with US$483 million in the prior year, with the decrease mainly resulting
from the depreciation of the Australian dollar, Colombian peso and Turkish lira. The group's share of
associates' and joint ventures' tax and non-controlling interests was US$251 million (2013: US$242 million)
with the increase primarily resulting from the full consolidation of Coca-Cola Icecek into Anadolu Efes' results.
Taxation
The effective rate of tax for the year before amortisation of intangible assets (excluding computer software)
and exceptional items was 26.0% compared with a rate of 27.0% in the prior year. The group rate has been
impacted by a combination of factors including beneficial foreign exchange deductions on refinancing, the
resolution of various uncertain tax positions and a positive mix of profits across the group.
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 years shown in the consolidated financial statements.
Adjusted basic earnings per share of 242.0 US cents were up 2% on the prior year (restated), owing to higher
operating profit, lower finance costs and a lower tax charge, despite the adverse impact of foreign exchange
rate movements on the translation of results. An analysis of earnings per share is shown in note 6. On a
statutory basis, basic earnings per share were higher by 4% at 211.8 US cents (2013: 204.3 US cents,
restated), for the reasons given above together with a reduction in amortisation charges as a result of foreign
currency depreciation.
Adjusted EBITDA
Adjusted EBITDA of US$6,639 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 prior year (2013: US$6,564 million).
Cash flow and capital expenditure
Net cash generated from operations before working capital movements of US$5,677 million decreased by 1%
compared with the prior year (2013: US$5,758 million) as higher operating profit, despite the adverse impact of
foreign exchange movements, in the year included more non-cash gains than the prior year.
Net cash generated from operating activities of US$3,431 million was down US$670 million primarily reflecting
an increase in tax paid mainly as a result of the anticipated tax prepayment to the Australian Tax Office.
Capital expenditure on property, plant and equipment for the year of US$1,401 million increased compared
with the prior year (2013: US$1,335 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$1,485 million (2013: US$1,479 million).
Free cash flow deteriorated by 21% to US$2,563 million, reflecting the phasing of the Australian tax receipts
and payments, together with the increased investment in associates in the year to fund, in part, our Chinese
associate's acquisition of the Kingway brewery business. Free cash flow is detailed in note 11b, and defined in
the financial definitions section.
Borrowings and net debt
Gross debt at 31 March 2014, comprising borrowings together with the fair value of financing derivative assets
and liabilities, decreased to US$16,384 million from US$17,771 million at 31 March 2013 (restated and
reduced by US$101 million as a result of the change in net debt definition), primarily as a result of the
repayment in the year of US dollar and Colombian peso bonds and a portion of the three and five-year term
facilities used to finance the acquisition of Foster's. Net debt, comprising gross debt net of cash and cash
equivalents, decreased to US$14,303 million from US$15,600 million at 31 March 2013 (restated). An analysis
of net debt is provided in note 11c.
The group's gearing (presented as a ratio of net debt/equity) has decreased to 52.0% from 56.8% at 31 March
2013 (restated). The weighted average interest rate for the gross debt portfolio at 31 March 2014 was 3.9%
(2013: 4.1%).
At 31 March 2014 the group had undrawn committed borrowing facilities of US$3,274 million (2013: US$3,352
million).
Total equity
Total equity increased marginally from US$27,460 million at 31 March 2013 to US$27,482 million at 31 March
2014. The increase was primarily owing to profit for the year and share-based payment credits partly offset by
adverse currency translation movements and dividend payments.
Goodwill and intangible assets
Goodwill decreased to US$18,497 million (2013: US$19,862 million) primarily due to foreign exchange
movements. Intangible assets decreased in the year to US$8,532 million (2013: US$9,635 million) primarily as
a result of adverse foreign exchange movements and amortisation charges for the year, partly offset by
additions.
Currencies
The exchange rates to the US dollar used in preparing the consolidated financial statements are detailed in the
table below, with most of the major currencies in which we operate, other than the European currencies,
depreciating against the US dollar during the year.
Appreciation/ Appreciation/
Average rate (depreciation) Closing rate (depreciation)
Years ended 31 March 2014 2013 % 2014 2013 %
Australian dollar (AUD) 1.07 0.97 (10) 1.08 0.96 (11)
Colombian peso (COP) 1,920 1,796 (6) 1,965 1,832 (7)
Czech koruna (CZK) 19.68 19.65 - 19.90 20.07 1
Euro (EUR) 0.75 0.78 4 0.73 0.78 7
Peruvian nuevo sol (PEN) 2.77 2.61 (6) 2.81 2.59 (8)
Polish zloty (PLN) 3.15 3.26 3 3.03 3.26 8
South African rand (ZAR) 10.13 8.51 (16) 10.53 9.24 (12)
Turkish lira (TRY) 1.98 1.80 (9) 2.14 1.81 (16)
Dividend
The board has proposed a final dividend of 80.0 US cents per share for the year, an increase of 4%. This
brings the total dividend for the year to 105.0 US cents per share, an increase of 4.0 US cents over the prior
year. Shareholders will be asked to approve this recommendation at the annual general meeting, which will be
held on Thursday 24 July 2014. If approved, the dividend will be payable on Friday 15 August 2014 to
shareholders registered on the London and Johannesburg registers on Friday 8 August 2014. The ex-dividend
trading dates will be Wednesday 6 August 2014 on the London Stock Exchange (LSE) and Monday 4 August
2014 on the JSE Limited (JSE). The payment date is set, in part, with reference to JSE Listings Requirements.
As the group reports in US dollars, dividends are declared in US dollars. They are payable in South African
rand to shareholders on the Johannesburg register, in US dollars to shareholders on the London register with
a registered address in the United States (unless mandated otherwise), and in sterling to all remaining
shareholders on the London register. Further details relating to dividends are provided in note 7.
The rates of exchange applicable on Wednesday 23 July 2014 will be used for US dollar conversion into South
African rand and sterling. A currency conversion announcement will be made on the JSE's Securities
Exchange News Service and on the LSE's Regulatory News Service, indicating the rates of exchange to be
applied, on Thursday 24 July 2014.
Shareholders registered on the Johannesburg register are advised that dividend withholding tax will be
withheld from the gross final dividend amount of 80.0 US cents per share (as converted into South African
rand in accordance with the paragraphs above) 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 68.0 US cents per share (as converted into South African rand in
accordance with the paragraphs above).
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 24 July 2014 until the close of business on Friday 8 August
2014, no transfers between the London and Johannesburg registers will be permitted, and from Monday 4
August 2014 until Friday 8 August 2014, no shares may be dematerialised or rematerialised, both days
inclusive.
Annual report and accounts
The group’s unaudited condensed consolidated financial statements follow. The annual report will be mailed to
shareholders in late June 2014 and the annual general meeting of the company will be held at the
InterContinental London Park Lane Hotel in London at 11:00 on Thursday 24 July 2014.
SABMiller plc
CONSOLIDATED INCOME STATEMENT
for the year ended 31 March
2014 2013(1)
Unaudited Unaudited
Notes US$m US$m
Revenue 2 22,311 23,213
Net operating expenses (18,069) (19,021)
Operating profit 2 4,242 4,192
Operating profit before exceptional items 4,439 4,392
Exceptional items 3 (197) (200)
Net finance costs 4 (645) (726)
Finance costs (1,055) (1,186)
Finance income 410 460
Share of post-tax results of associates and joint ventures 2 1,226 1,213
Profit before taxation 4,823 4,679
Taxation 5 (1,173) (1,192)
Profit for the year 11a 3,650 3,487
Profit attributable to non-controlling interests 269 237
Profit attributable to owners of the parent 6 3,381 3,250
3,650 3,487
Basic earnings per share (US cents) 6 211.8 204.3
Diluted earnings per share (US cents) 6 209.1 202.0
(1) As restated (see note 13).
The notes form an integral part of these condensed consolidated financial statements.
SABMiller plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March
2014 2013(1)
Unaudited Unaudited
Notes US$m US$m
Profit for the year 3,650 3,487
Other comprehensive loss:
Items that will not be reclassified to profit or loss
Net remeasurements of defined benefit plans 22 (19)
Tax on items that will not be reclassified 5 (13) 19
Share of associates' and joint ventures' other comprehensive income/(loss) 23 (26)
Total items that will not be reclassified to profit or loss 32 (26)
Items that may be reclassified subsequently to profit or loss
Currency translation differences on foreign currency net investments (2,288) (700)
- Decrease in foreign currency translation reserve during the year (2,290) (700)
- Recycling of foreign currency translation reserve on disposals 2 -
Available for sale investments:
- Fair value losses arising during the year - (1)
Net investment hedges:
- Fair value gains arising during the year 102 63
Cash flow hedges: 34 (5)
- Fair value gains/(losses) arising during the year 33 (8)
- Fair value (gains)/losses transferred to inventory (1) 8
- Fair value losses/(gains) transferred to profit or loss 2 (5)
Tax on items that may be reclassified subsequently to profit or loss 5 1 6
Share of associates' and joint ventures' other comprehensive income/(loss) 122 (13)
- Share of associates' and joint ventures' other comprehensive income/(loss) during the
year 131 (13)
- Share of associates' and joint ventures' recycling of available for sale reserve on
disposal (9) -
Total items that may be reclassified subsequently to profit or loss (2,029) (650)
Other comprehensive loss for the year, net of tax (1,997) (676)
Total comprehensive income for the year 1,653 2,811
Attributable to:
Non-controlling interests 248 233
Owners of the parent 1,405 2,578
Total comprehensive income for the year 1,653 2,811
(1) As restated (see note 13).
The notes form an integral part of these condensed consolidated financial statements.
SABMiller plc
CONSOLIDATED BALANCE SHEET
at 31 March
2014 2013
Unaudited Audited
Notes US$m US$m
Assets
Non-current assets
Goodwill 8 18,497 19,862
Intangible assets 8 8,532 9,635
Property, plant and equipment 9,065 9,059
Investments in joint ventures 9 5,581 5,547
Investments in associates 10 5,787 5,416
Available for sale investments 22 22
Derivative financial instruments 628 732
Trade and other receivables 139 144
Deferred tax assets 115 71
Loan participation deposit - 100
48,366 50,588
Current assets
Inventories 1,168 1,175
Trade and other receivables 1,821 2,067
Current tax assets 174 159
Derivative financial instruments 141 111
Cash and cash equivalents 11c 2,081 2,171
5,385 5,683
Assets of disposal group classified as held for sale - 23
5,385 5,706
Total assets 53,751 56,294
Liabilities
Current liabilities
Derivative financial instruments (78) (34)
Borrowings 11c (4,519) (2,469)
Trade and other payables (3,847) (4,004)
Current tax liabilities (1,106) (1,460)
Provisions (450) (558)
(10,000) (8,525)
Liabilities of disposal group classified as held for sale - (1)
(10,000) (8,526)
Non-current liabilities
Derivative financial instruments (37) (52)
Borrowings 11c (12,528) (16,079)
Trade and other payables (25) (132)
Deferred tax liabilities (3,246) (3,507)
Provisions (433) (538)
(16,269) (20,308)
Total liabilities (26,269) (28,834)
Net assets 27,482 27,460
Equity
Share capital 167 167
Share premium 6,648 6,581
Merger relief reserve 4,321 4,586
Other reserves (702) 1,328
Retained earnings 15,885 13,710
Total shareholders' equity 26,319 26,372
Non-controlling interests 1,163 1,088
Total equity 27,482 27,460
The notes form an integral part of these condensed consolidated financial statements.
SABMiller plc
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March
2014 2013
Unaudited Audited
Notes US$m US$m
Cash flows from operating activities
Cash generated from operations 11a 5,770 5,554
Interest received 365 468
Interest paid (1,108) (1,238)
Tax paid (1,596) (683)
Net cash generated from operating activities 11b 3,431 4,101
Cash flows from investing activities
Purchase of property, plant and equipment (1,401) (1,335)
Proceeds from sale of property, plant and equipment 70 30
Purchase of intangible assets (84) (144)
Proceeds from sale of intangible assets - 4
Purchase of available for sale investments (1) -
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
Acquisition of businesses (net of cash acquired) (39) (6)
Investments in joint ventures 9 (188) (272)
Investments in associates (199) (23)
Dividends received from joint ventures 9 903 886
Dividends received from associates 10 224 113
Dividends received from other investments 1 1
Net cash used in investing activities (626) (663)
Cash flows from financing activities
Proceeds from the issue of shares 88 102
Proceeds from the issue of shares in subsidiaries to non-controlling interests 20 36
Purchase of own shares for share trusts (79) (53)
Purchase of shares from non-controlling interests (5) -
Proceeds from borrowings 2,585 2,318
Repayment of borrowings (3,829) (2,878)
Proceeds from associate in relation to loan participation deposit - 100
Capital element of finance lease payments (9) (6)
Net cash receipts/(payments) on derivative financial instruments 228 (5)
Dividends paid to shareholders of the parent (1,640) (1,517)
Dividends paid to non-controlling interests (194) (131)
Net cash used in financing activities (2,835) (2,034)
Net cash (outflow)/inflow from operating, investing and financing activities (30) 1,404
Effects of exchange rate changes (61) (51)
Net (decrease)/increase in cash and cash equivalents (91) 1,353
Cash and cash equivalents at 1 April 11c 1,959 606
Cash and cash equivalents at 31 March 11c 1,868 1,959
The notes form an integral part of these condensed consolidated financial statements.
SABMiller plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March
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 - - - (650) 3,228 2,578 233 2,811
Profit for the year(1) - - - - 3,250 3,250 237 3,487
Other comprehensive loss(1) - - - (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
subsidiaries to non-controlling interests - - - - - - 36 36
Non-controlling interests disposed of via
business disposal - - - - - - (13) (13)
Arising on business combinations - - - - - - 1 1
Payment for purchase of own shares for
share trusts - - - - (53) (53) - (53)
Credit entry relating to share-based
payments - - - - 189 189 - 189
At 31 March 2013 (unaudited) 167 6,581 4,586 1,328 13,710 26,372 1,088 27,460
Total comprehensive income - - - (2,030) 3,435 1,405 248 1,653
Profit for the year - - - - 3,381 3,381 269 3,650
Other comprehensive (loss)/income - - - (2,030) 54 (1,976) (21) (1,997)
Dividends paid - - - - (1,640) (1,640) (193) (1,833)
Issue of SABMiller plc ordinary shares - 67 - - 21 88 - 88
Proceeds from the issue of shares in
subsidiaries to non-controlling interests - - - - - - 20 20
Payment for purchase of own shares for
share trusts - - - - (79) (79) - (79)
Buyout of non-controlling interests - - - - (5) (5) - (5)
Utilisation of merger relief reserve - - (265) - 265 - - -
Credit entry relating to share-based
payments - - - - 178 178 - 178
At 31 March 2014 (unaudited) 167 6,648 4,321 (702) 15,885 26,319 1,163 27,482
(1) As restated (see note 13).
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 year ended 31 March 2014 the group transferred
US$265 million of the reserve relating to the Polish business to retained earnings upon realisation of qualifying consideration.
The notes form an integral part of these condensed consolidated financial statements.
SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
The preliminary announcement for the year ended 31 March 2014 has been prepared in accordance with the International Financial Reporting
Standards (collectively IFRS) as adopted by the EU.
The financial information in this preliminary announcement is not audited and does not constitute statutory accounts within the meaning of s434 of the
Companies Act 2006. Group financial statements for 2014 will be delivered to the Registrar of Companies in due course. The board of directors
approved this financial information on 21 May 2014. The annual financial statements for the year ended 31 March 2013, approved by the board of
directors on 11 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.
Items included in the financial information of each of the group's entities are measured using the currency of the primary economic environment in which
the entity operates (the functional currency). The consolidated financial information is presented in US dollars which is the group's presentational
currency.
Accounting policies
The financial statements are prepared under the historical cost convention, except for the revaluation to fair value of certain financial assets and
liabilities, and post-retirement assets and liabilities. The financial statements have been prepared on a going concern basis.
The accounting policies adopted are consistent with those of the previous financial year except for the following standards, interpretations and
amendments adopted by the group as of 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 13.
- 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.
- Amendment to IFRS 7, ‘Financial instruments: Disclosures', on asset and liability offsetting introduces new disclosure requirements to
facilitate comparison between entities that prepare IFRS financial statements to those that prepare financial statements in accordance with US
GAAP. The additional disclosures required by this standard will be included in the annual report.
- 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 will be included in the
annual report.
- Annual improvements to IFRS 2009-11. The application of the annual improvements has had no material impact on the consolidated results of
operations or financial position of the group.
- Amendment to IAS 36, ‘Impairment of assets' on recoverable amount disclosures has had no material impact on the consolidated results of
operations or financial position of the group.
The following standards, interpretations and amendments to existing standards that are mandatory for the group's accounting periods beginning on or
after 1 April 2014 are not yet effective and are not expected to have a material impact on the consolidated results of operations or financial position of
the group.
- Amendment to IAS 32, ‘Offsetting financial instruments asset and liability', is effective from 1 January 2014.
- Amendment to IAS 39, ‘Financial instruments: recognition and measurement', on novation of derivatives and hedge accounting, is effective
from 1 January 2014.
- IAS 27 (revised), ‘Separate financial statements', is effective from 1 January 2014.
- IAS 28 (revised), ‘Associates and joint ventures', is effective from 1 January 2014.
- IFRS 10, ‘Consolidated financial statements', is effective from 1 January 2014.
- IFRS 11, ‘Joint arrangements', is effective from 1 January 2014.
- IFRS 12, ‘Disclosures of interests in other entities', is effective from 1 January 2014.
- IFRIC 21, ‘Levies', is effective from 1 January 20141.
The group has yet to assess the full impact of the following standards and amendments to existing standards mandatory for the group's accounting
periods beginning on or after 1 April 2015 or later periods, which have not been early adopted.
- Amendment to IAS 19, ‘Employee benefits' on defined contribution plans, is effective from 1 July 20141.
- Annual improvements to IFRS 2012, are effective from 1 July 2014(1).
- Annual improvements to IFRS 2013, are effective from 1 July 2014(1).
- IFRS 9, ‘Financial Instruments', is effective from 1 January 2018(1).
(1) Not yet endorsed by the EU.
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 year,
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 13.
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
Group NPR EBITA Group NPR EBITA(1)
2014 2014 2013 2013
Unaudited Unaudited Unaudited Unaudited
US$m US$m US$m US$m
Latin America 5,745 2,192 5,802 2,112
Europe 4,574 703 4,300 784
North America 4,665 797 4,656 740
Africa 3,424 939 3,290 838
Asia Pacific 3,944 845 4,005 854
South Africa: 4,367 1,138 4,879 1,253
- Beverages 3,997 1,015 4,475 1,119
- Hotels and Gaming 370 123 404 134
Corporate - (161) - (202)
26,719 6,453 26,932 6,379
Amortisation of intangible assets (excluding computer software) – group and share of
associates' and joint ventures' (436) (483)
Exceptional items in operating profit – group and share of associates' and joint
ventures' (202) (205)
Net finance costs – group and share of associates' and joint ventures' (excluding
exceptional items) (741) (770)
Share of associates' and joint ventures' taxation (162) (164)
Share of associates' and joint ventures' non-controlling interests (89) (78)
Profit before taxation 4,823 4,679
(1) As restated (see note 13).
Group revenue and group NPR (including the group's share of associates and joint ventures)
With the exception of South Africa: Hotels and Gaming, all reportable segments derive their revenues from the sale of beverages. Revenues are derived
from a large number of customers which are internationally dispersed, with no customers being individually material.
Share of
associates' and
Share of joint ventures'
associates' and Excise duties excise duties
joint ventures' Group and other and other
Revenue revenue revenue similar taxes similar taxes Group NPR
2014 2014 2014 2014 2014 2014
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
US$m US$m US$m US$m US$m US$m
Latin America 7,812 - 7,812 (2,067) - 5,745
Europe 4,319 1,726 6,045 (1,009) (462) 4,574
North America 143 5,199 5,342 (4) (673) 4,665
Africa 2,405 1,653 4,058 (437) (197) 3,424
Asia Pacific 3,285 2,166 5,451 (1,235) (272) 3,944
South Africa: 4,347 1,029 5,376 (855) (154) 4,367
- Beverages 4,347 604 4,951 (855) (99) 3,997
- Hotels and Gaming - 425 425 - (55) 370
22,311 11,773 34,084 (5,607) (1,758) 26,719
2013 2013 2013 2013 2013 2013
Audited Audited Audited Unaudited Unaudited Unaudited
US$m US$m US$m US$m US$m US$m
Latin America 7,821 - 7,821 (2,019) - 5,802
Europe 4,292 1,475 5,767 (995) (472) 4,300
North America 141 5,214 5,355 (4) (695) 4,656
Africa 2,267 1,586 3,853 (420) (143) 3,290
Asia Pacific 3,797 1,888 5,685 (1,440) (240) 4,005
South Africa: 4,895 1,111 6,006 (950) (177) 4,879
- Beverages 4,895 645 5,540 (950) (115) 4,475
- Hotels and Gaming - 466 466 - (62) 404
23,213 11,274 34,487 (5,828) (1,727) 26,932
Operating profit and EBITA (segment result)
The following table provides a reconciliation of operating profit to operating profit before exceptional items, and to EBITA. EBITA comprises operating
profit before exceptional items, amortisation of intangible assets (excluding computer software) and includes the group's share of associates' and joint
ventures' operating profit on a similar basis.
Share of
associates'
Share of and joint
associates' ventures'
and joint Amortisation amortisation
ventures' of intangible of intangible
Operating operating assets assets
profit before profit before (excluding (excluding
Operating Exceptional exceptional exceptional computer computer
profit items items items software) software) EBITA
2014 2014 2014 2014 2014 2014 2014
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
US$m US$m US$m US$m US$m US$m US$m
Latin America 2,116 (47) 2,069 - 123 - 2,192
Europe 565 11 576 79 20 28 703
North America 9 - 9 746 - 42 797
Africa 560 (25) 535 398 6 - 939
Asia Pacific 365 103 468 165 212 - 845
South Africa: 910 33 943 190 - 5 1,138
- Beverages 910 33 943 72 - - 1,015
- Hotels and Gaming - - - 118 - 5 123
Corporate (283) 122 (161) - - - (161)
4,242 197 4,439 1,578 361 75 6,453
2013 2013 2013 2013 2013 2013 2013
Unaudited1 Audited Unaudited1 Unaudited1 Unaudited Unaudited Unaudited(1)
US$m US$m US$m US$m US$m US$m US$m
Latin America 1,920 63 1,983 - 129 - 2,112
Europe 588 64 652 76 21 35 784
North America 7 - 7 690 - 43 740
Africa 518 (79) 439 392 7 - 838
Asia Pacific 357 104 461 156 237 - 854
South Africa: 1,030 22 1,052 190 - 11 1,253
- Beverages 1,030 22 1,052 67 - - 1,119
- Hotels and Gaming - - - 123 - 11 134
Corporate (228) 26 (202) - - - (202)
4,192 200 4,392 1,504 394 89 6,379
(1) As restated (see note 13).
The group's share of associates' and joint ventures' operating profit is reconciled to the share of post-tax results of associates and joint ventures in the
income statement as follows.
2014 2013(1)
Unaudited Unaudited
US$m US$m
Share of associates' and joint ventures' operating profit (before exceptional items) 1,578 1,504
Share of associates' and joint ventures' exceptional items in operating profit (5) (5)
Share of associates' and joint ventures' net finance costs (96) (44)
Share of associates' and joint ventures' taxation (162) (164)
Share of associates' and joint ventures' non-controlling interests (89) (78)
Share of post-tax results of associates and joint ventures 1,226 1,213
(1) As restated (see note 13).
EBITDA
EBITA is reconciled to EBITDA as follows.
Share of Share of
associates' associates'
and joint and joint
ventures' ventures'
EBITA Depreciation depreciation EBITDA EBITA Depreciation depreciation EBITDA
2014 2014 2014 2014 2013(1) 2013 2013 2013(1)
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
US$m US$m US$m US$m US$m US$m US$m US$m
Latin America 2,192 328 - 2,520 2,112 337 - 2,449
Europe 703 222 92 1,017 784 205 70 1,059
North America 797 - 131 928 740 - 126 866
Africa 939 116 107 1,162 838 98 103 1,039
Asia Pacific 845 72 132 1,049 854 79 108 1,041
South Africa: 1,138 151 32 1,321 1,253 172 36 1,461
- Beverages 1,015 151 8 1,174 1,119 172 8 1,299
- Hotels and Gaming 123 - 24 147 134 - 28 162
Corporate (161) 31 - (130) (202) 28 - (174)
6,453 920 494 7,867 6,379 919 443 7,741
(1) As restated (see note 13).
Adjusted EBITDA
Adjusted EBITDA is comprised of the following. 2014 2013(1)
Unaudited Unaudited
US$m US$m
Subsidiaries' EBITDA 5,720 5,705
- Operating profit before exceptional items 4,439 4,392
- Depreciation (including amortisation of computer software) 920 919
- Amortisation (excluding computer software) 361 394
Group's share of MillerCoors' EBITDA 919 859
- Operating profit before exceptional items 746 690
- Depreciation (including amortisation of computer software) 131 126
- Amortisation (excluding computer software) 42 43
Adjusted EBITDA 6,639 6,564
(1) As restated (see note 13).
Other segmental information
Capital Capital
expenditure expenditure
excluding excluding
investment Investment investment Investment
activity(1) activity(2) Total activity(1) activity(2) Total
2014 2014 2014 2013 2013 2013
Unaudited Unaudited Unaudited Audited Audited Audited
US$m US$m US$m US$m US$m US$m
Latin America 413 (88) 325 528 - 528
Europe 252 - 252 216 - 216
North America 1 188 189 - 272 272
Africa 416 42 458 391 29 420
Asia Pacific 96 201 297 88 (78) 10
South Africa: Beverages 247 - 247 228 - 228
Corporate 60 1 61 28 (5) 23
1,485 344 1,829 1,479 218 1,697
(1) Capital expenditure includes additions of intangible assets (excluding goodwill) and property, plant and equipment.
(2)Investment activity includes acquisitions and disposals of businesses, net investments in associates and joint ventures, purchases of shares in non-
controlling interests and purchases and disposals of available for sale investments.
3. Exceptional items
2014 2013
Unaudited Audited
US$m US$m
Exceptional items included in operating profit:
Net profit on disposal of businesses 72 79
Capability programme costs (133) (141)
Integration and restructuring costs (103) (91)
Broad-Based Black Economic Empowerment related scheme charges (33) (17)
Impairments - (30)
Net exceptional losses included within operating profit (197) (200)
Share of associates' and joint ventures' exceptional items:
Capability programme costs (5) -
Impairments - (5)
Share of associates' and joint ventures' exceptional losses (5) (5)
Non-controlling interests share of associates' and joint ventures' exceptional losses - 2
Share of associates' and joint ventures' exceptional losses (5) (3)
Net taxation credits relating to subsidiaries' and the group's share of associates' and joint
ventures' exceptional items 27 20
Net profit on disposal of businesses
During 2014 a net profit of US$47 million, after associated costs, was realised on the disposal of the milk and juice business in Panama, Latin America
and an additional profit of US$25 million (2013: US$79 million) was realised in Africa in relation to the disposal in 2012 of the group's Angolan
operations in exchange for a 27.5% interest in BIH Angola, following the successful resolution of certain matters leading to the release of provisions.
Capability programme costs
The business capability programme streamlined finance, human resources and procurement activities through the deployment of global systems and
introduced common sales, distribution and supply chain management systems. Costs of US$79 million were incurred in the year (2013: US$141 million).
Costs of US$54 million (2013: US$nil) were incurred in the year in relation to the new cost saving and efficiency programme which will build upon and
extend what has been delivered under the business capability programme.
Integration and restructuring costs
During 2014 US$103 million (2013: US$74 million) of integration and restructuring costs were incurred in Asia Pacific following the Foster's and Pacific
Beverages acquisitions, including impairments relating to the closure of a brewery and the discontinuation of a brand.
In 2013 US$17 million of restructuring costs were incurred in South Africa: Beverages.
Broad-Based Black Economic Empowerment related charges
In 2014 US$13 million (2013: US$17 million) of charges have been incurred in relation to the Broad-Based Black Economic Empowerment (BBBEE)
scheme in South Africa. This represents the final year of IFRS 2 share-based payment charges in respect of the employee element of the scheme.
Additionally a US$20 million loss was incurred on the dilution of the group's investment in its associate, Distell Group Ltd, as a result of the exercise of
share options issued as part of its BBBEE scheme.
Impairments
In 2013 a US$30 million impairment charge was incurred in respect of the Vietnam business in Asia Pacific. The impairment charge comprised US$11
million against goodwill and US$19 million against property, plant and equipment.
Share of associates' and joint ventures' exceptional items
Capability programme costs
During 2014 restructuring costs associated with the group's new cost saving programme were incurred in MillerCoors, the group's share amounted to
US$5 million.
Impairments
In 2013 an impairment of a soft drinks plant in BIH Angola amounted to US$5 million. After taking account of non-controlling interests, the group's share
was US$3 million.
Net taxation credits relating to subsidiaries' and the group's share of associates' and joint ventures' exceptional items
Net taxation credits of US$27 million (2013: US$20 million) arose in relation to exceptional items during the year and include US$2 million (2013:
US$nil) in relation to MillerCoors although the tax credit is recognised in Miller Brewing Company (see note 5).
4. Net finance costs
2014 2013(1)
Unaudited Unaudited
US$m US$m
a. Finance costs
Interest payable on bank loans and overdrafts 110 183
Interest payable on derivatives 222 255
Interest payable on corporate bonds 647 677
Interest element of finance lease payments 3 1
Net fair value losses on financial instruments 34 -
Net exchange losses(2) - 23
Other finance charges 39 47
Total finance costs 1,055 1,186
b. Finance income
Interest receivable 24 39
Interest receivable on derivatives 338 355
Net fair value gains on financial instruments(3) - 62
Net exchange gains 36 -
Other finance income 12 4
Total finance income 410 460
Net finance costs 645 726
(1) As restated (see note 13).
(2) In 2013: net gains of US$2 million were excluded from the determination of adjusted earnings per share.
(3) In 2013: net gains of US$10 million were excluded from the determination of adjusted earnings per share.
Adjusted net finance costs are US$645 million (2013: US$738 million, restated).
5. Taxation
2014 2013(1)
Unaudited Unaudited
US$m US$m
Current taxation 1,096 1,118
- Charge for the year 1,086 1,131
- Adjustments in respect of prior years 10 (13)
Withholding taxes and other remittance taxes 188 170
Total current taxation 1,284 1,288
Deferred taxation (111) (96)
- Credit for the year (75) (37)
- Adjustments in respect of prior years (36) 5
- Rate change - (64)
Taxation expense 1,173 1,192
Tax credit relating to components of other comprehensive income is as follows:
Deferred tax charge/(credit) on remeasurements of defined benefit plans 13 (19)
Deferred tax credit on financial instruments (1) (6)
12 (25)
Effective tax rate (%) 26.0 27.0
UK taxation included in the above
Current taxation - -
Withholding taxes and other remittance taxes 102 133
Total current taxation 102 133
Deferred taxation - 24
UK taxation expense 102 157
(1) As restated (see note 13).
See the financial definitions section for the definition of the effective tax rate. The calculation is on a basis consistent with that used in prior years and is
also consistent with other group operating metrics. Tax on amortisation of intangible assets (excluding computer software) was US$123 million (2013:
US$135 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.
6. Earnings per share
2014 2013(1)
Unaudited Unaudited
US cents US cents
Basic earnings per share 211.8 204.3
Diluted earnings per share 209.1 202.0
Headline earnings per share 211.6 203.0
Adjusted basic earnings per share 242.0 237.2
Adjusted diluted earnings per share 239.0 234.5
(1) As restated (see note 13).
The weighted average number of shares was:
2014 2013
Unaudited Audited
Millions of shares Millions of shares
Ordinary shares 1,671 1,667
Treasury shares (67) (72)
EBT ordinary shares (7) (5)
Basic shares 1,597 1,590
Dilutive ordinary shares 20 19
Diluted shares 1,617 1,609
The calculation of diluted earnings per share excludes 6,044,130 (2013: 6,332,436) share options that were non-dilutive for the year because the
exercise price of the option exceeded the fair value of the shares during the year, 19,755,628 (2013: 21,226,441) share awards that were non-dilutive
for the year 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 years shown in the
consolidated financial statements. Adjusted earnings per share are based on adjusted earnings for each financial year and on the same number of
weighted average shares in issue as the basic earnings per share calculation. Headline earnings per share are 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.
2014 2013(1)
Unaudited Unaudited
US$m US$m
Profit for the year attributable to owners of the parent 3,381 3,250
Headline adjustments
Impairment of goodwill - 11
Impairment of intangible assets 8 -
Impairment of property, plant and equipment 52 39
Loss on disposal of property, plant and equipment - 13
Net profit on disposal of businesses (72) (79)
Loss/(gain) on dilution of investment in associate 20 (4)
Tax effects of these items (11) (14)
Non-controlling interests' share of the above items 1 (3)
Share of associates' and joint ventures' headline adjustments, net of tax and non-controlling interests - 15
Headline earnings 3,379 3,228
Capability programme costs 133 141
Broad-Based Black Economic Empowerment scheme charges 13 17
Integration and restructuring costs (excluding impairment) 43 71
Net gain on fair value movements on capital items(2) - (12)
Amortisation of intangible assets (excluding computer software) 361 394
Tax effects of the above items (133) (137)
Non-controlling interests' share of the above items (4) (8)
Share of associates' and joint ventures' other adjustments, net of tax and non-controlling interests 73 78
Adjusted earnings 3,865 3,772
(1) As restated (see note 13).
(2)This does not include all fair value movements but includes those in relation to capital items for which hedge accounting cannot be applied.
7. Dividends
2014 2013
Unaudited Audited
US$m US$m
Equity
2013 Final dividend paid: 77.0 US cents (2012: 69.5 US cents) per ordinary share 1,236 1,125
2014 Interim dividend paid: 25.0 US cents (2013: 24.0 US cents) per ordinary share 404 392
1,640 1,517
The directors are proposing a final dividend of 80.0 US cents per share in respect of the financial year ended 31 March 2014, which will absorb an
estimated US$1,280 million of shareholders' funds. If approved by shareholders, the dividend will be paid on 15 August 2014 to shareholders registered
on the London and Johannesburg registers as at 8 August 2014.
8. Goodwill and intangible assets
Intaangible
Goodwill assets
US$m US$m
Net book amount
At 1 April 2012 (audited) 20,171 9,958
Exchange adjustments (288) (17)
Additions - separately acquired - 149
Acquisitions - through business combinations 3 2
Amortisation - (450)
Impairment (11) -
Disposals - (5)
Transfers to disposal group classified as held for sale (13) (2)
At 31 March 2013 (audited) 19,862 9,635
Exchange adjustments (1,372) (773)
Additions - separately acquired - 84
Acquisitions - through business combinations 7 22
Amortisation - (427)
Impairment - (8)
Disposals - (1)
At 31 March 2014 (unaudited) 18,497 8,532
Goodwill
2014
Provisional goodwill arose on the acquisition of the trade and assets of a wine and spirits business in Mozambique. The residual value of the net assets
acquired has been recognised as goodwill of US$7 million in the financial statements. The fair value exercise in respect of this business combination
has yet to be completed.
2013
Goodwill arose on the acquisition through business combination in the year of Darbrew Limited in Tanzania. The fair value exercise in respect of this
business combination is now complete.
9. Investments in joint ventures
US$m
At 1 April 2012 (audited) 5,520
Investments in joint ventures 272
Share of results retained(1) 686
Share of other comprehensive loss(1) (45)
Dividends received (886)
At 31 March 2013 (unaudited) 5,547
Investments in joint ventures 188
Share of results retained 737
Share of other comprehensive income 12
Dividends received (903)
At 31 March 2014 (unaudited) 5,581
(1) As restated (see note 13).
10. Investments in associates
US$m
At 1 April 2012 (audited) 5,072
Exchange adjustments (161)
Investments in associates 106
Disposal of investments in associates (21)
Share of results retained 527
Share of gains recognised in other comprehensive loss 6
Dividends receivable (113)
At 31 March 2013 (audited) 5,416
Exchange adjustments (264)
Investments in associates 231
Share of results retained 489
Share of gains recognised in other comprehensive loss 133
Share of movements in other reserves 6
Dividends receivable (224)
At 31 March 2014 (unaudited) 5,787
11a. Reconciliation of profit for the year to net cash generated from operations
2014 2013(1)
Unaudited Unaudited
US$m US$m
Profit for the year 3,650 3,487
Taxation 1,173 1,192
Share of post-tax results of associates and joint ventures (1,226) (1,213)
Net finance costs 645 726
Operating profit 4,242 4,192
Depreciation:
- Property, plant and equipment 621 641
- Containers 233 226
Container breakages, shrinkages and write-offs 80 38
Net profit on disposal of businesses (72) (79)
Loss/(gain) on dilution of investment in associate 18 (4)
(Profit)/loss on disposal of property, plant and equipment (17) 13
Amortisation of intangible assets 427 450
Impairment of goodwill - 11
Impairment of intangible assets 8 -
Impairment of property, plant and equipment 52 39
Impairment of working capital balances 55 31
Amortisation of advances to customers 40 45
Dividends received from other investments (1) (1)
Charge with respect to share options 141 184
Charge with respect to Broad-Based Black Economic Empowerment scheme 13 17
Other non-cash movements (163) (45)
Net cash generated from operations before working capital movements 5,677 5,758
Increase in inventories (73) (14)
Decrease/(increase) in trade and other receivables 128 (107)
Increase in trade and other payables 113 82
Decrease in provisions (89) (177)
Increase in post-retirement benefit provisions 14 12
Net cash generated from operations 5,770 5,554
(1) As restated (see note 13).
11b. Reconciliation of net cash generated from operating activities to free cash flow
2014 2013
Unaudited Audited
US$m US$m
Net cash generated from operating activities 3,431 4,101
Purchase of property, plant and equipment (1,401) (1,335)
Proceeds from sale of property, plant and equipment 70 30
Purchase of intangible assets (84) (144)
Proceeds from sale of intangible assets - 4
Investments in joint ventures (188) (272)
Investments in associates (199) (23)
Dividends received from joint ventures 903 886
Dividends received from associates 224 113
Dividends received from other investments 1 1
Dividends paid to non-controlling interests (194) (131)
Free cash flow 2,563 3,230
11c. Analysis of net debt
Cash and cash equivalents on the balance sheet are reconciled to cash and cash equivalents on the cash flow statement as follows.
2014 2013
Unaudited Audited
US$m US$m
Cash and cash equivalents (balance sheet) 2,081 2,171
Overdrafts (213) (212)
Cash and cash equivalents (cash flow statement) 1,868 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$101 million at 31 March 2013.
Net debt is analysed as follows.
2014 2013(1)
Unaudited Unaudited
US$m US$m
Borrowings (16,783) (18,301)
Financing derivative financial instruments 663 777
Overdrafts (213) (212)
Finance leases (51) (35)
Gross debt (16,384) (17,771)
Cash and cash equivalents (excluding overdrafts) 2,081 2,171
Net debt (14,303) (15,600)
(1) As restated for the change in the definition of net debt.
The movement in net debt is analysed as follows.
Cash and cash
equivalents Derivative
(excluding financial Finance
overdrafts) Overdrafts Borrowings instruments leases Gross debt Net debt
US$m US$m US$m US$m US$m US$m US$m
At 1 April 2013(1) (unaudited) 2,171 (212) (18,301) 777 (35) (17,771) (15,600)
Exchange adjustments (65) 4 26 (24) 3 9 (56)
Cash flow (25) (5) 1,244 (188) 9 1,060 1,035
Other movements - - 248 98 (28) 318 318
At 31 March 2014 (unaudited) 2,081 (213) (16,783) 663 (51) (16,384) (14,303)
(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 at 31 March in respect of which all
conditions precedent had been met at that date.
2014 2013
Unaudited Audited
US$m US$m
Amounts expiring:
Within one year 214 281
Between one and two years 41 17
Between two and five years 3,019 554
In five years or more - 2,500
3,274 3,352
In May 2014 the group amended its existing US$2,500 million committed syndicated facility, shown as undrawn in the table above, extending the
maturity to May 2019 and re-instating the option of two one-year extensions. The group also entered into a five-year US$1,000 million committed
syndicated facility maturing in May 2019, with the option of two one-year extensions. This facility replaced the existing US$500 million committed
syndicated facility due to mature in September 2016, also shown as undrawn in the table above, which has been voluntarily cancelled.
12. Business combinations and similar transactions
Acquisitions
In December 2013 the group acquired the trade and assets of a wine and spirits business in Mozambique for consideration of US$42 million, of which
US$3 million is deferred. The business combination has been accounted for using the acquisition method. The residual value over the net assets
acquired has been recognised as goodwill of US$7 million.
On 17 September 2013, the group's associate CR Snow completed the acquisition of the brewery business of Kingway Brewery Holdings Limited and
the results of this business are included in the results of CR Snow for the second half of the financial year.
Disposals
In May 2013 the group completed the disposal of its non-core milk and juice business in Panama. The gain on disposal was US$47 million, which has
been recognised as an exceptional item.
13. Restatements
The amendment to IAS 19, ‘Employee benefits', was adopted retrospectively from 1 April 2013. The group has restated the consolidated financial
statements accordingly. The quantitative impact of adopting this standard on the prior year consolidated financial statements is detailed in the table
below.
As part of the regular review of accounting practices and policies, fair value gains and losses on financial instruments, and exchange gains and losses
on financing items have now been presented on a net basis within net finance costs. Comparatives have been restated for consistency. The quantitative
impact of this change in presentation is detailed in the table below.
Year ended
Year ended IAS 19 Finance costs 31 March 2013
31 March 2013 Adjustments Reclassification As restated
Audited Unaudited Unaudited Unaudited
US$m US$m US$m US$m
Consolidated income statement:
Operating profit 4,203 (11) - 4,192
Net finance costs (735) 9 - (726)
Finance costs (1,417) 9 222 (1,186)
Finance income 682 - (222) 460
Share of post-tax results of associates and joint ventures 1,244 (31) - 1,213
Profit before taxation 4,712 (33) - 4,679
Taxation (1,201) 9 - (1,192)
Profit for the year 3,511 (24) - 3,487
Consolidated statement of comprehensive income:
Profit for the year 3,511 (24) - 3,487
Items that will not be reclassified subsequently to profit or loss:
Net remeasurements of defined benefit plans (21) 2 - (19)
Tax on items that will not be reclassified 28 (9) - 19
Share of associates' and joint ventures' other comprehensive
income/(loss) (57) 31 - (26)
Total items that will not be reclassified subsequently to profit or loss (50) 24 - (26)
Total items that may be subsequently reclassified to profit or loss (650) - - (650)
Other comprehensive loss for the year, net of tax (700) 24 - (676)
Total comprehensive income for the year 2,811 - - 2,811
14. Share capital
During the year ended 31 March 2014 2,916,131 ordinary shares (2013: 5,408,316 ordinary shares) were allotted and issued in accordance with the
group's various share incentive plans.
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), exceptional 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 year ended 31 March at the exchange
rates for the prior year.
EBITA
This comprises operating profit before exceptional items, amortisation of intangible assets (excluding 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 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 global efficiency programmes; 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
Telephone +44 1483 264000
Head office
One Stanhope Gate
London, England
W1K 1AF
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
Telephone +44 20 7583 5000
Registrar (United Kingdom)
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex, England
BN99 6DA
Telephone 0871 384 2395 (from UK calls cost 8p per minute plus network extras)
Overseas telephone +44 121 415 7047 (outside UK)
www.equiniti.com
www.shareview.co.uk
Registrar (South Africa)
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg
PO Box 61051
Marshalltown 2107
South Africa
Telephone +27 11 370 5000
United States ADR Depositary
JP Morgan Depositary Bank
1 Chase Manhattan Plaza, Floor 58
New York, NY 10005
Telephone US: 866 JPM-ADRS
Outside the US: +1 866 576-2377
Email: adr@jpmorgan.com
Sponsor:
J.P. Morgan Equities South Africa (Pty) Ltd
Date: 22/05/2014 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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