Wrap Text
Interim Announcement
SABMiller plc
Incorporated in England and Wales (Registration No. 3528416)
JSE SAB ISSUER CODE SOSAB
ISIN GB0004835483
Interim Announcement
Release date: 13 November 2014
SABMiller delivers top-line and earnings growth
SABMiller plc, the world's second largest brewing company and one of the largest bottlers of Coca-Cola
drinks, reports its interim (unaudited) results for the six months to 30 September 2014.
Highlights
- Resilient top line growth powered by our Africa and Latin America businesses, but impacted by weaker
second quarter trading conditions in China and Australia
- Organic, constant currency group net producer revenue (NPR) growth of 5%, with group NPR per
hectolitre (hl) up 3% driven by pricing and premiumisation initiatives. Reported NPR growth was 2%
- Total beverage volumes grew by 1% on an organic basis, with lager volumes down 1%. Organic soft
drinks growth of 9% driven by Africa, Latin America and Europe
- Organic, constant currency EBITA growth of 3% and constant currency adjusted earnings per share
growth of 5% were impacted by the depreciation of key currencies against the US dollar such that reported
EBITA is in line with the prior period
- Reported EBITA is in line with the prior period, impacted by the depreciation of key currencies against the
US dollar. Adverse translational foreign exchange impact on EBITA in the period of US$71 million
- EBITA margin(1) declined 30 bps to 23.4% on both reported and organic, constant currency bases reflecting
an EBITA decline in Asia Pacific
- Strong cash flow performance with free cash flow up 6% on an underlying basis. Free cash flow excludes
the receipt of the proceeds from the sale of the group's hotel and gaming investment
1 Expressed as a percentage of group NPR.
6 months 6 months 12 months
to Sept to Sept to March
2014 2013(2) 2014(2)
US$m US$m % change US$m
Revenue(a) 11,366 11,103 2 22,311
Group net producer revenue(b) 14,002 13,793 2 26,719
EBITA(c) 3,277 3,272 - 6,460
Adjusted profit before tax(d) 2,935 2,873 2 5,719
Profit before tax(e) 2,827 2,429 16 4,823
Profit attributable to owners of the parent 1,974 1,714 15 3,381
Adjusted earnings(f) 1,981 1,920 3 3,865
Adjusted EPS (US cents) 123.6 120.4 3 242.0
Adjusted EPS in constant currency (US cents) 126.0 120.4 5
Basic EPS (US cents) 123.2 107.4 15 211.8
Interim dividend per share (US cents) 26.0 25.0 4 105.0
Free cash flow 1,485 894 66 2,563
2 As restated. Further details of the restatement are provided note 1.
a Revenue excludes the group's share of associates' and joint ventures' revenue.
b Group net producer revenue (NPR) comprises group revenue, including the group's share of associates' and joint ventures' revenue, less excise
and similar taxes, including the group's share of associates' and joint ventures' excise and similar taxes.
c Note 2 provides a reconciliation of operating profit to EBITA which is defined as operating profit before exceptional items and amortisation of
intangible assets (excluding computer software) and includes the group's share of associates' and joint ventures' operating profit, on a similar
basis. EBITA is used throughout this interim announcement.
d Adjusted profit before tax comprises EBITA less adjusted net finance costs of US$331 million (2013: US$345 million) and the group's share of
associates' and joint ventures' net finance costs of US$11 million (2013: US$54 million).
e Profit before tax includes net exceptional credits of US$285 million (2013: charges of US$52 million). Exceptional items are explained in note 3.
f A reconciliation of adjusted earnings to the statutory measure of profit attributable to owners of the parent is provided in note 5.
SABMiller plc
CHIEF EXECUTIVE'S REVIEW
Alan Clark, Chief Executive of SABMiller, said:
"We continued to grow earnings in the first half with challenging trading conditions mitigated by ongoing
efficiencies. Group net producer revenue was driven by lager growth in Africa and Latin America and strong
performance in our soft drinks businesses in Africa, Latin America and Europe. Lower lager sales in parts of
Europe and Asia Pacific resulted in a small group EBITA margin decline during the half year. We are well-
placed to capture future top line growth opportunities in both emerging and developed markets and are making
good initial progress on our plan to realise US$500 million from operational efficiencies and cost savings."
Net Organic,
acquisitions constant
Reported and Currency Organic Reported currency Reported
Sept 2013 disposals translation growth Sept 2014 growth growth
Group net producer revenue US$m US$m US$m US$m US$m % %
Latin America 2,754 (9) (55) 184 2,874 7 4
Africa 3,496 1 (236) 331 3,592 10 3
Asia Pacific 2,159 33 (26) (12) 2,154 (1) -
Europe 2,684 - (49) 78 2,713 3 1
North America 2,514 - - 39 2,553 2 2
Retained operations 13,607 25 (366) 620 13,886 5 2
South Africa: Hotels and Gaming 186 (59)(2) (11) - 116 - (38)
Total 13,793 (34) (377) 620 14,002 5 2
Net
Reported acquisitions Organic Reported Organic Reported
Sept 2013 and disposals growth Sept 2014 growth growth
Group volumes hl 000 hl 000 hl 000 hl 000 % %
Lager 133,617 1,419 (1,162) 133,874 (1) -
Soft drinks 32,621 (69) 2,981 35,533 9 9
Other alcoholic beverages 3,776 (2) 101 3,875 3 3
Total 170,014 1,348 1,920 173,282 1 2
Net Organic,
acquisitions Reported constant
Restated and Currency Organic Sept currency Reported
Sept 2013 disposals translation growth 2014 growth growth
EBITA US$m US$m US$m US$m US$m % %
Latin America 972 (2) (8) 74 1,036 8 7
Africa 794 (1) (46) 71 818 9 3
Asia Pacific 540 1 (8) (83) 450 (15) (17)
Europe 512 - (7) (3) 502 - (2)
North America(1) 482 - - 33 515 7 7
Corporate (85) - 1 7 (77)
Retained operations 3,215 (2) (68) 99 3,244 3 1
South Africa: Hotels and Gaming 57 (18)(2) (3) (3) 33 (8) (42)
Total 3,272 (20) (71) 96 3,277 3 -
EBITA margin(3) (%) 23.7 23.4
1 As restated. Further details of the restatement are provided in note 1.
2 Disposal activity reflects the removal of the results between 31 July 2013 and 30 September 2013 (as the effective date of disposal
was 31 July 2014), so that the base is restated for comparability purposes.
3 Expressed as a percentage of group NPR.
Business review
The group delivered constant currency group NPR, EBITA and adjusted earnings growth in the half year,
despite trading challenges in a number of markets. The depreciation of key currencies against the US dollar
continues to have a negative impact on the translation of financial results in South Africa, Australia and Latin
America, resulting in growth of 2% in reported group NPR and reported EBITA level with the prior half year.
Group NPR growth of 5% on an organic, constant currency basis for the first half of the year was driven by our
developing market operations in Latin America and Africa through a combination of total beverage volume
growth, selective pricing and improved brand mix. Lager volumes declined by 1% on an organic basis
reflecting robust growth in Latin America and Africa that only partially offset declines in Asia Pacific and North
America, with Europe level with the prior period, outperforming the market. Soft drinks volumes increased by
9%, driven by Africa, Latin America and Europe.
On an organic, constant currency basis EBITA grew by 3%, while organic, constant currency EBITA margin
declined by 30 bps reflecting reinvestment into key customer trading terms in Australia, together with the
significant negative impact on profitability resulting from a decline in lager volumes in China and parts of
Europe. Input cost increases were mitigated by procurement savings, resulting in a low single digit increase in
raw material input costs compared with the prior half year (on a constant currency per hl basis), in line with
guidance. Marketing investment increased to support category development such as capturing new occasions,
the continuing renovation of our core brands and expansion of our brand portfolios through innovation such as
flavoured beer offerings and cider. On a reported basis, EBITA margin also decreased by 30 bps, reflecting
the inclusion of the acquisition of the Kingway brewery business in our Chinese associate's results.
On a constant currency basis, adjusted EPS grew by 5% compared with the prior period, and by 3% on a
reported basis reflecting the continuing impact of the depreciation of key currencies against the US dollar,
principally the South African rand, Australian dollar, Peruvian nuevo sol, Czech koruna and Turkish lira. Net
finance costs were lower than in the prior period, reflecting the repayment of some higher interest bonds which
matured in the second half of the prior year. The effective tax rate of 26.0% is in line with that for the prior
year but below the 26.8% in the prior half year. The reduction in rate primarily results from the resolution
during the period of a number of uncertain tax positions.
Free cash flow for the half year was higher by US$591 million at US$1,485 million, positively impacted by
some one-off items in the prior half year, such as funding for the Kingway acquisition and the phasing of
payments to the Australian Tax Office. On an underlying basis, free cash flow increased by 6% compared with
the prior half year. Adjusted EBITDA was adversely impacted by the depreciation of key currencies against the
US dollar in the half year but still grew by 3%. Working capital registered a cash outflow in the period of
US$82 million (compared with an outflow of US$67 million in the prior period). Capital expenditure at US$696
million was slightly ahead of the prior period, with continued investment in brewing capacity and capability,
most notably in Africa and Latin America. Net interest paid was lower than in the prior period in line with the
reduction in the net finance charge. Tax paid was lower than the prior period reflecting the tax prepayment to
the Australian Tax Office in the prior half year.
The group's gearing ratio as at 30 September 2014 decreased to 46.5% from 52.0% at 31 March 2014. Net
debt has reduced by US$1,621 million since 31 March 2014, ending at US$12,682 million, driven by the
receipt of the proceeds from the sale of the group's interest in its hotel and gaming associate in South Africa
as well as strong operating cash flow. An interim dividend of 26.0 US cents per share is proposed, to be paid
to shareholders on 5 December 2014, an increase of 4% over the prior year.
- In Latin America, EBITA grew by 7% (8% on an organic, constant currency basis). Group NPR on an
organic, constant currency basis grew by 7% driven by selective price increases and favourable brand mix,
supported by our continued focus on market-facing activities and effective trade execution, and a return to
lager volume growth in the second quarter, with strong soft drinks volume growth continuing. Reported
EBITA margin improved by 70 bps through a combination of group NPR growth, softer commodity prices,
cost efficiencies and asset disposals.
- In Africa, now including the South Africa beverages business, EBITA grew by 3% (9% on an organic,
constant currency basis) as a result of volume growth, pricing and a focus on cost productivity. The group
NPR growth of 3% (10% on an organic, constant currency basis) was driven by share gains, growth in the
premium lager segment, strong soft drinks volume growth and pricing. Castle Lite led the robust premium
performance and we also grew strongly in the affordable segment. Focus on production efficiencies helped
contain variable cost increases as a result of currency weakness and deliver reported EBITA margin
growth of 10 bps.
- In Asia Pacific, EBITA declined by 17% and group NPR was level with the prior half year on a reported
basis as the inclusion of the Kingway results in China offset the depreciation of currencies against the US
dollar at the top line. On an organic, constant currency basis EBITA declined by 15% driven by Australia
and China, with the organic volume decline having a significant impact on profitability. In Australia, NPR on
a constant currency basis was 4% below the prior period as a result of increased trade investment activity
and competitive price pressure. The integration programme is on track in terms of both synergy delivery
and capability build. In China, organic, constant currency group NPR growth of 1% was impacted by a 3%
lager volume decline driven by poor weather during the summer peak months in the central provinces
offset by favourable mix from the continued focus on premiumisation. Reported EBITA in China declined
as a result, diluted by investment in market-facing activities and the inclusion of Kingway. As a result,
reported EBITA margin for the region decreased by 410 bps.
- In Europe, EBITA was down by 2% and group NPR was up by 1%, both on a reported basis. On a
constant currency basis, group NPR was 3% higher than the prior half year, reflecting soft drinks volume
growth in Anadolu Efes and lager volumes level with the prior period, with a challenging second quarter
affected by poor weather across much of the region during the summer months. Lager volume growth in
Poland, the combined Czech Republic and Slovakia business and the UK was offset by declines in
Romania, Italy and Anadolu Efes. Organic, constant currency EBITA was level with the prior period and
reported EBITA margin declined by 60 bps, driven by lower volume in Italy and Romania, along with
restructuring activities in Anadolu Efes.
- In North America, EBITA increased by 7% as a result of increased profitability in MillerCoors. Group NPR
was 2% higher than the prior period, with a decline in lager volumes offset by higher group NPR per hl,
driven by firm pricing and positive sales mix resulting from the introduction and success of new higher
margin products such as the Redd's franchise, Miller Fortune and Smith & Forge Hard Cider. The growth in
sales of higher margin products, along with continued cost saving initiatives and maintained marketing
spend, helped drive a 100 bps improvement in EBITA margin.
- The group completed the sale of its investment in Tsogo Sun Holdings Limited (Tsogo Sun), its hotels and
gaming associate listed on the Johannesburg Stock Exchange, in August 2014 through an institutional
placing and share buyback. The group received net proceeds of US$971 million, and realised a post-tax
profit of US$232 million which has been treated as an exceptional item. Since August, the disposal of
Tsogo Sun has reduced adjusted earnings by around US$10 million in the final two months of the first half
of the year. Following the receipt of the net proceeds of this disposal, the group has recently announced
that it is exercising its issuer call option to redeem in full its US$850 million 6.5% notes, due 2016.
- The new business efficiency programme is on schedule and is expected to deliver operational
efficiencies and savings of approximately US$500 million per annum by the financial year ending 31 March
2018. During the first half of this year we continued to expand the scope of our supply chain activities,
including expanding the reach of our procurement organisation. Our global business services organisation,
which will deliver 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, is at an early stage of development. The new programme incurred exceptional costs of
US$39 million in the half year (excluding any costs relating to the further deployment of the global template
and the running costs of the new global business services organisation, which are now embedded into
business as usual costs).
Outlook
We anticipate that trading conditions will remain challenging but we expect to continue to grow volume and
NPR. As part of our strategy we will continue to drive efficiency across our business and invest in the front line
so we can win in local markets. Raw material unit input costs are expected to increase by low single digits in
constant currency terms with some markets continuing to be impacted by foreign exchange movements on
imported raw materials.
Enquiries:
SABMiller plc Tel: +44 20 7659 0100
John Davidson General Counsel and Corporate Affairs Director Tel: +44 20 7659 0127
Gary Leibowitz Director, Investor Engagement Tel: +44 20 7659 0119
Christina Mills Director, Group Communications and Reputation Tel: +44 20 7659 0105
Richard Farnsworth Business Media Relations Manager Tel: +44 20 7659 0188
A live audio webcast of a presentation by Chief Executive, Alan Clark, and Chief Financial Officer, Jamie Wilson to the investment
community will begin at 9.30am (GMT) on 13 November 2014. To register for the webcast, download the slide presentation, view
management video interviews and download photography and b-roll, visit our online Results Centre at
www.sabmiller.com/resultscentre.
To monitor Twitter bulletins throughout the day follow www.twitter.com/sabmiller or #sabmillerresults.
Copies of the press release and detailed Interim Announcement are available from the Company Secretary at the Registered Office or
from our website at www.sabmiller.com.
Operational review
Latin America
Organic,
Net constant
acquisitions currency Reported
Reported and Currency Organic Reported growth growth
Financial summary Sept 2013 disposals translation growth Sept 2014 % %
Group NPR (including share of
associates) (US$m) 2,754 (9) (55) 184 2,874 7 4
EBITA(1) (US$m) 972 (2) (8) 74 1,036 8 7
EBITA margin (%) 35.3 36.0
Sales volumes (hl 000)
Lager 20,668 - 150 20,818 1 1
Soft drinks 8,964 (70) 871 9,765 10 9
Total beverages 29,632 (70) 1,021 30,583 3 3
1 In 2013: before exceptional credits of US$47 million, being the profit on disposal of the Panama milk and juice business.
In Latin America, group NPR for the first six months grew by 4% on a reported basis and 7% on an organic,
constant currency basis, driven by price increases and favourable brand mix, together with total beverage
volume growth of 3% on an organic basis. Lager volume grew by 1% in the half year held back by trading
restrictions and market disruptions. Our above mainstream brands performed well in a number of markets
driven by the appeal of the easier drinking segment. Soft drinks saw strong growth across the region with
volumes up 10% on an organic basis, driven mostly by our non-alcoholic malt brands, together with further
pack innovation. In line with our strategy of capturing growth from innovation and new occasions, we have
increased the investment behind our brands, funded from continuing real fixed cost productivity. Softer
commodity prices, manufacturing efficiencies, distribution productivity and asset disposals further assisted our
cost leverage, with reported margin improving by 70 bps.
In Colombia, group NPR grew by 6% on a constant currency basis reflecting selective price increases
combined with total beverage volume growth of 2%. Although Colombia experienced market disruptions and
trading restrictions, lager volumes returned to growth in the second quarter, boosted by the ongoing success
of our bulk packs. Consequently, lager volumes for the first six months were level with the prior year. The
premium segment saw growth of 8% underpinned by our local premium brand, Club Colombia, following
increased market activation behind the proprietary bottle launched earlier in the year, while the rollout of Miller
Lite also assisted brand mix. Above mainstream performance was also supported by consumers trading up
into Aguila Light. Our business continues to make progress on capturing more consumers on more occasions
and expanding our reach with new outlets, as evidenced by a 130 bps improvement in our share of the alcohol
market. Our non-alcoholic malt brand Pony Malta saw strong growth fuelled by the success of new bulk
packs. Despite currency headwinds towards the end of the first six months, cost productivity was driven across
all areas which aided strong margin growth.
In Peru, against a backdrop of a softer economy, group NPR improved by 4% on a constant currency basis,
driven by double digit soft drinks volume growth. Total beverage volumes grew by 5% and lager volumes grew
by 2% with continued positive momentum from consumers trading up to Pilsen Callao, and strong growth from
our mainstream brand San Juan. While the overall lager category has seen a 300 bps decline in share of
alcohol following the excise increase in May 2013, our execution in the trade continues to be enhanced
through retailer training together with expanded trade and fridge coverage. In the premium segment, our brand
Cusqueña declined, although new pack innovations such as the one litre offering and the special edition
Cusqueña Roja Oktoberfest are showing encouraging results. Our soft drinks volumes expanded by 25%
driven by our sparkling soft drink brand, Guarana, as well as by our malt brand, Maltin Power, following the
launch of new packs. Further optimisation of our production grid, as well as distribution and sales efficiencies,
has improved productivity across the business.
Ecuador delivered group NPR growth of 13% driven by firm pricing and positive brand mix, with lager volume
growth of 1% reflecting trading up to the above mainstream Pilsener Light brand, in a smaller bottle. While
advertising and distribution restrictions have been in place in the half year, new occasions such as events and
midweek outlet activation, together with pack innovation, have benefited lager growth. Volume growth of 4%
for our local premium brand Club further assisted our mix while lower input costs improved margins.
In Panama, group NPR grew by 6% on an organic, constant currency basis following selective price increases
in the lager category as well as strong volume growth in soft drinks. Total beverage volume growth of 2% on
an organic basis was driven by soft drinks. While lager volumes were level with the prior half year, favourable
brand mix from above premium brands boosted revenue. Soft drinks volumes showed growth of 7% on an
organic basis with our non-alcoholic malt brands growing by 13%, driven by the success of the smaller packs.
In Honduras, we grew group NPR by 4% on a constant currency basis underpinned by the performance of
soft drinks, which grew by 6% aided by multi-serve packs and strong growth of juices and teas. In the lager
category, security concerns and trading restrictions impacted on-premise consumption with volumes declining
3%. However, our share of the alcohol market continues to grow strongly increasing by over 380 bps.
El Salvador delivered group NPR growth of 5%. Lager volumes grew by 4% with the continuing success of
our affordable bulk packs as well as growth in the premium segment driven by our local premium brand
Suprema. Soft drinks volumes grew by 7% from sparkling soft drinks in cans as well as robust growth in the
water category, underpinned by further outlet expansion and reach.
Africa
Organic,
Net constant
acquisitions currency Reported
Reported and Currency Organic Reported growth growth
Financial summary Sept 2013 disposals translation growth Sept 2014 % %
Group NPR (including share of
associates) (US$m) 3,496 1 (236) 331 3,592 10 3
EBITA(1) (US$m) 794 (1) (46) 71 818 9 3
EBITA margin (%) 22.7 22.8
Sales volumes (hl 000)
Lager 22,294 - 399 22,693 2 2
Soft drinks 14,640 1 1,345 15,986 9 9
Other alcoholic beverages 3,725 (2) 104 3,827 3 3
Total beverages 40,659 (1) 1,848 42,506 5 5
1 In 2013: before exceptional charges of US$7 million, being charges incurred in relation to the Broad-Based Black Economic
Empowerment scheme.
Following the integration of the Africa region and South Africa beverages business into one region, group NPR
in Africa, now including South Africa, grew by 3% on a reported basis and 10% on an organic, constant
currency basis. This reflected share gains, growth in the premium lager segment, strong soft drinks volume
growth, and pricing. Lager volume growth at 2% was subdued by excise-related pricing in Zambia and
Tanzania and soft economic fundamentals in South Africa and Zimbabwe. Our other markets performed in line
with our strategy to drive strong local portfolios, extend our sales and distribution, and undertake further local
stakeholder engagement. Castle Lite led the robust premium performance with growth of over 20% in the
combined region. In the affordable category, Impala, a cassava-based beer in Mozambique, grew strongly.
Soft drinks volume growth of 9% was geographically broad-based driven by increased availability, strong retail
execution and our continued channel penetration strategy which offset sparkling B-brand competition and price
restraint in some markets. Other alcoholic beverages volumes grew 3% supported by good growth in the
traditional beer category, particularly in Zimbabwe and Botswana, and in wines and spirits in Tanzania. In
addition, a number of capacity and capability projects across the continent are in progress including brewery
expansions in Nigeria, Ghana, our new brewery in Namibia and the maltings project in South Africa.
EBITA growth of 3% on a reported basis and 9% on an organic, constant currency basis, was assisted by
volume growth, pricing and a focus on cost productivity. Investment continued to support the continuing
refresh of our core brands, the development of our innovation pipeline, and execution around price and pack
architecture. Increased variable production cost pressure as a result of currency weakness was offset by
production efficiencies and sustainable development initiatives. All of the above contributed to margin
enhancement of 10 bps on a reported basis.
In South Africa, group NPR growth of 10% on an organic, constant currency basis was driven by volume
growth, pricing and mix benefits realised from our premium lager segment, together with innovation, partially
offset by soft drinks which were impacted by the intensely competitive price environment. Within a weak
consumer environment and with sluggish GDP growth for the half year, our performance reflected a 1% growth
in lager volume with continued market share gains, some pricing and significantly improved mix from both
premium lager, brand and pack innovation. Castle Lite, Castle Milk Stout and Castle Lager performed well,
delivering volume growth of 21%, 9% and 4%, respectively, and were supported by strong growth in
convenience packs, partially offset by a decline in Hansa Pilsener. In line with our innovation strategy, we
launched Castle Lite Lime and we delivered strong growth in Flying Fish. Soft drinks volume growth of 9% was
underpinned by price restraint and pack innovation, including the launch of bulk PET offerings at targeted price
points, and the launch of a low priced immediate consumption offering. Focus on cost efficiencies continues
and the benefits of cost saving measures taken in the prior year are being realised, although these have been
offset to some extent by the impact of currency on variable production costs, resulting in subdued margin
growth.
Lager volumes in Tanzania were dampened in the second quarter by a 20% excise increase effective from
1 July and a weak agricultural harvest. Consequently lager volumes were down 7% in the half year, although we
gained market share. NPR growth of 6% on a constant currency basis was driven by positive lager segment
mix driven by Castle Lite, pricing and growth in wines and spirits. The growth in wines and spirits was aided by
investment in our sales force.
In Mozambique, lager volume grew by 8% for the six months, reflecting the expansion of Impala into the south
of the country, the continued success of Castle Lite, and a more stable political environment. These volume
growth drivers, and pricing taken in the prior year on mainstream brands, resulted in NPR growth of 16% on an
organic, constant currency basis. Traditional beer volume growth of 8% was achieved with Chibuku Super
performing to expectation. The integration into our existing operation of the wines and spirits business
acquired last year has progressed well.
NPR growth in Nigeria of 41% on a constant currency basis was delivered through robust lager volume
growth, expansion into new markets and improved availability as additional capacity comes on-stream. Hero
Lager and Trophy Lager remain our top selling brands, with Eagle also performing well in the affordable
category. Non-alcoholic malt momentum remains strong with volumes growing in double digits.
Trading conditions in Zambia remain challenging following the excise-related price increase taken in January,
resulting in a 16% decline in lager volumes for the half year. The mainstream brand Carling Black Label and
affordable brand Eagle took share from Castle Lager as consumers moved towards cheaper alternatives. Soft
drinks volumes grew by 7% driven by promotional activity around the Fanta brand to counter competition.
Traditional beer volumes returned to growth in the half year aided by a consumer trade down from lager. NPR
and profitability were negatively impacted as a result.
In Botswana, total beverage volumes grew by 10% aided by market share gains and strong performance of
bulk packs, which benefited from successful brand campaigns and effective trade execution. Soft drinks
volumes grew by 10% in the period driven by the strong performance of the two litre PET packs, aided by
targeted price points.
In Zimbabwe, consumers' disposable income remained under pressure resulting in lager volumes declining by
25%. Chibuku Super continued to perform well in the traditional beer category and is now available throughout
the country while soft drinks volumes declined by 5%.
Castel, our associate, delivered strong volume performance in both lager and soft drinks in the first six months
aided by a strong second quarter, with notable performances in lager achieved in the competitive markets of
DRC and Ethiopia as well as Burkina Faso and Cameroon. This was supported by soft drinks growth in
Angola, Algeria, DRC, Benin and Burkina Faso. All these factors assisted NPR growth during the half year.
Our associate Distell's volume performance was down 1% on an organic basis with the half year impacted by
tough trading conditions, lower disposable income and reduced consumer confidence in the markets in which
it operates. In South Africa principally, the challenging economic environment which continued to slow down
consumer demand, coupled with steep increase in excise duties on spirits, had an impact on the volume
performance.
Asia Pacific
Organic,
Net constant
acquisitions currency Reported
Reported and Currency Organic Reported growth growth
Financial summary Sept 2013 disposals translation growth Sept 2014 % %
Group NPR (including share of
associates) (US$m) 2,159 33 (26) (12) 2,154 (1) -
EBITA(1) (US$m) 540 1 (8) (83) 450 (15) (17)
EBITA margin (%) 25.0 20.9
Sales volumes (hl 000)
Lager 43,203 1,419 (1,231) 43,391 (3) -
Other beverages 62 - (14) 48 (23) (23)
Total beverages 43,265 1,419 (1,245) 43,439 (3) -
1 In 2014 before exceptional charges of US$64 million (2013: US$13 million), being integration and restructuring costs.
In Asia Pacific, group NPR declined by 1% on an organic, constant currency basis, with a lager volume
decline of 3% on an organic basis. Reported group NPR was level with the prior half year as the inclusion of
the Kingway results offset the depreciation of currencies against the US dollar. Organic, constant currency
group NPR per hl improved by 2%, primarily reflecting the impact of changes in geographical mix. Reported
EBITA declined by 17% and on an organic, constant currency basis by 15%, driven by both Australia and
China, where the volume decline had a significant impact on profitability. Reported EBITA margin declined by
410 bps.
In Australia, group NPR on a constant currency basis declined by 4%, driven by a 3% group NPR per hl
decline. Volumes declined by 1%, outperforming the market. Consumer sentiment remained negative with
persistent concerns over the economic outlook. The continued pressure on consumer spending resulted in the
beer category declining in the half year. The on premise was disproportionately affected by reduced consumer
spending, and price reductions in international offerings adversely impacted domestic offerings, resulting in a
decline in volumes of Victoria Bitter and Carlton Draught. Volumes were however supported by strong
performance of easy drinking brands including Carlton Dry and Great Northern. While the relaunch of Crown
Lager has been impacted by price compression from international offerings and has not performed in line with
expectations, it has been supported by the launch during the period of Crown Golden Ale, at higher average
selling prices. Overall, the premium segment continues to perform well, led by sustained double digit growth
from Peroni Nastro Azzurro, Miller Chill and Miller Genuine Draft. Cider volumes declined in an increasingly
fragmented and competitive segment.
The 3% decline in group NPR per hl was a result of a considerable increase in investment in promotions and
key customer trading terms in a highly competitive trading environment. This has resulted in an improved
share and execution standard, impacting overall market share positively in the half year. On-premise
investment rates continue to reflect increased competitive investment.
The integration programme is on track to be completed and to deliver the planned benefits by the end of this
financial year. To address excess capacity, we realigned our brewery network and production scheduling with
the closure of the Warnervale brewery in May, which resulted in a marginal adverse impact on cost of goods
sold in the half year.
EBITA and EBITA margin declined, due to the volume decline, pricing pressure and increased investment in
trade terms.
In China, group NPR grew by 1% on an organic, constant currency basis, while volumes declined by 3%.
Lager volumes were sharply down in the central provinces during the summer peak months of July and August
mainly due to particularly cold and wet weather. Our associate, CR Snow, was especially affected by these
adverse conditions in Anhui, Jiangsu and Zhejiang where it is disproportionately well represented.
Organic, constant currency group NPR per hl increased by 4% driven by a continued focus on the premium
segment. CR Snow's premium portfolio continues to grow and now represents over a quarter of the total
portfolio, in line with the industry. Continued through-the-line activation of the super premium Snow Draft
brand, celebrating pride in ancient Chinese architectural origins, and Snow Brave the World in the 'medium'
segment, celebrating the re-emergence of a youthful Chinese spirit of exploration and achievement, have
helped to build the Snow brand image in the faster growing high end outlets.
Despite excellent performances in volume, group NPR and EBITA growth from the established markets in the
north and west, continued investment in market-facing activities in an extremely competitive environment
together with the volume downturn in the central provinces due to poor weather during the critical summer
peak months resulted in an overall EBITA decline.
The Kingway acquisition added 4% to organic volumes but slightly diluted group NPR per hl and accounted for
part of the decline in reported EBITA. The integration of the distribution channels is now mostly complete.
In India, group NPR on a constant currency basis increased by 5%, as a result of NPR per hl growth of 4%
driven by approved price increases taken across key states. Following a decline in lager volumes in the first
quarter due to regulatory changes imposed in key states and trading restrictions caused by the imposition of
the election code of conduct, lager volumes in the second quarter grew by 16% reflecting the later monsoon
season this half year compared with heavy monsoons in the prior period. On a constant currency basis, EBITA
was marginally lower than the prior year due to inflationary and input cost increases which were in excess of
state constrained pricing, as well as the imposition of inter-state taxes after the bifurcation of the key state of
Andhra Pradesh.
Europe
Organic,
Net constant
acquisitions currency Reported
Reported and Currency Organic Reported growth growth
Financial summary Sept 2013 disposals translation growth Sept 2014 % %
Group NPR (including share of
associates) (US$m) 2,684 - (49) 78 2,713 3 1
EBITA(1) (US$m) 512 - (7) (3) 502 - (2)
EBITA margin (%) 19.1 18.5
Sales volumes (hl 000)
Lager 25,963 - (100) 25,863 - -
Soft drinks 8,984 - 777 9,761 9 9
Total beverages 34,947 - 677 35,624 2 2
1 In 2013: before exceptional charges of US$4 million being business capability programme costs.
In Europe, reported group NPR increased by 1% and on a constant currency basis grew by 3%. Total
beverage volumes were up 2%, with soft drinks volumes up 9% and lager volumes level with the prior half
year. Performance across the region has been boosted by an enhanced focus on sales execution and
efficiencies. Core brand renovations and innovations have focused on improving our offerings to meet evolving
consumer preferences and occasions. This supported strong lager volume performance in the first quarter
assisted by cycling a soft volume comparative. The second quarter was more challenging, with many markets
affected by poor weather during the peak summer months, but our commercial focus resulted in market
outperformance across much of the region.
Reported EBITA was down by 2%, and was level with the prior period on a constant currency basis, with a
reported margin decline of 60 bps driven by lower volume in Italy and Romania, along with restructuring
activities in Efes.
In the recently integrated businesses in the Czech Republic and Slovakia, both group NPR on a constant
currency basis and volume were up 3% with the on-premise as well as the off-premise channels performing
ahead of the market. Volume growth was driven by the off-premise channel due to improved execution and
successful promotional activities, while increased focus in the on-premise channel resulted in market
outperformance, although in line with the prior half year. The super premium segment grew strongly, boosted
by the performance of Pilsner Urquell, which benefited from cycling a prior half year which excluded an Easter
trading period, which is one of the brand's key occasions. Our mainstream core brand Gambrinus 10
continued to decline, while the premium segment benefited from the continued growth of Kozel 11.
In Poland, although volumes grew by 4%, group NPR on a constant currency basis was down 2% reflecting
selective brand price repositioning and adverse channel mix. The mainstream segment grew as Zubr
performed well, supported by a successful campaign and promotional activity, partly offset by the decline of
Tyskie. Lech grew strongly, supported by a successful campaign along with strategic price repositioning.
Adverse channel mix continues as traditional trade key accounts and modern trade retailers increase their
share of the overall market.
In the United Kingdom, we grew group NPR by 11% on a constant currency basis, driven by continued
growth of Peroni Nastro Azzurro along with positive NPR per hl which benefited from mix improvements.
Volume growth resulted from increased rates of sale, and improved distribution in key outlets, assisted by
good weather.
Group NPR in Italy was down by 3% on a constant currency basis driven by a 4% volume decline in a market
which was negatively impacted by particularly poor weather during the peak summer months, along with the
effects on consumer confidence of continued economic uncertainty. Both Peroni and Nastro Azzurro
performance was impacted by these market dynamics, primarily in the on-premise channel, partly offset by the
performance of recently launched Peroni Chill Lemon radler. In Romania, group NPR was down 7% on a
constant currency basis with volumes down 6% outperforming a declining market reflecting the growth of our
economy brand, Ciucas.
Anadolu Efes' group NPR on a constant currency basis grew strongly with total beverage volumes growth
driven by the continued strong performance of soft drinks. Lager volumes were down, impacted by the
continuing effect of regulatory changes in the prior year in Turkey, although competitive performance in Russia
improved against a difficult market background. Underlying profitability benefited from cost optimisation
programmes, but was offset by a portfolio of restructuring activities, which included costs associated with the
closure of a brewery in Turkey along with cycling net income from asset disposals in the prior year.
North America
Organic,
Net constant
acquisitions currency Reported
Restated and Currency Organic Reported growth growth
Financial summary Sept 2013 disposals translation growth Sept 2014 % %
Group NPR (including share of
joint ventures) (US$m) 2,514 - - 39 2,553 2 2
EBITA(1) (US$m) 482 - - 33 515 7 7
EBITA margin(1) (%) 19.2 20.2
Sales volumes (hl 000)
Lager – excluding
contract brewing 21,489 - (380) 21,109 (2) (2)
Soft drinks 22 - (1) 21 - -
Total beverages 21,511 - (381) 21,130 (2) (2)
MillerCoors' volumes
Lager – excluding
contract brewing 20,784 - (359) 20,425 (2) (2)
Sales to retailers (STRs) 20,819 n/a n/a 20,306 n/a (2)
1 As restated (see note 1).
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 increased by 7%, driven by
growth in MillerCoors.
MillerCoors
MillerCoors' group NPR grew by 2% compared with the prior half year. US domestic sales to retailers (STRs)
were down 2.5% and domestic sales to wholesalers (STWs) were down by 1.7%. EBITA growth was driven by
strong pricing, along with favourable brand mix and cost savings, which more than offset lower volumes and
cost inflation.
Premium light STRs declined low single digits in the half year with both Miller Lite and Coors Light down low
single digits. Miller Lite trends improved materially in the half year as the brand reverted back to the original
Lite packaging design which communicates the brand's authenticity and heritage. Coors Light results include
its new seasonal line extension, Coors Light Summer Brew. Premium regular brands declined mid single digits
with a double digit decline in Miller Genuine Draft partly offset by low single digit growth of Coors Banquet. In
line with the portfolio strategy to improve total above premium mix, total above premium STRs grew by high
single digits. This was driven by the Redd's franchise and innovations such as Miller Fortune and Smith &
Forge Hard Cider. Growth within the segment was partially offset by double digit declines in strategically
deprioritised brands, including Henry Weinhard's and Batch 19. Despite an improving trend in Miller High Life
which benefited from the new national advertising campaign and packaging innovation, the below premium
portfolio declined by mid single digits.
MillerCoors' group NPR per hl grew by 3% as a result of firm pricing and favourable brand mix resulting from
the success of the Redd's franchise, the Leinenkugel's shandy range, and the introduction of new higher
revenue brands such as Miller Fortune and Smith & Forge Hard Cider.
Continuing cost saving initiatives were offset by the increased cost of packaging materials and the higher cost
of premium, high margin innovations, resulting in a low single digit increase in cost of goods sold per hl.
Marketing costs were in line with the prior year, while general and administrative costs increased marginally.
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 2014 except for the new standards, interpretations and amendments adopted by the
group since 1 April 2014 as detailed in note 1 to the condensed consolidated financial information.
The Annual Report and Accounts for the year ended 31 March 2014 are available on the company's website:
www.sabmiller.com.
Segmental analysis
The group's operating results on a segmental basis are set out in the segmental analysis of operations.
SABMiller uses group 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.
Following management changes effective 1 July 2014, the group's Africa and South Africa: Beverages
divisions have been consolidated into one division for management purposes. The results of the new
combined Africa division have therefore been presented as a single segment.
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 NPR and EBITA disclosures.
Organic, constant currency comparisons
The group discloses certain results on an organic, constant currency basis, to show the effects on the group's
results of acquisitions net of disposals and changes in exchange rates. See the financial definitions section for
the definition.
Disposals
In August 2014, in line with its strategy to focus on its core beverage operations, the group completed the
disposal of its investment in the Tsogo Sun hotels and gaming business for net cash consideration of US$971
million after transaction costs, generating a post-tax profit on disposal of US$232 million.
Exceptional items
Items that are material either by size or incidence are classified as exceptional items. Further details on the
treatment of these items can be found in note 3 to the financial information.
A net exceptional credit of US$285 million before finance costs and tax was reported for the period (2013: net
charge of US$52 million). The net exceptional credit included:
- US$388 million gain, after associated costs, (2013: US$nil million) on the disposal of the group's
investment in Tsogo Sun;
- US$39 million (2013: US$79 million) charge related to cost and efficiency programme costs in
Corporate; and
- US$64 million (2013: US$13 million) charge related to integration and restructuring costs incurred in
Asia Pacific following the Foster's and Pacific Beverages acquisitions.
In addition to the items noted above, the net exceptional charges in 2013 included a US$47 million gain, after
associated costs, on the disposal of the milk and juice business in Panama in Latin America, and a US$7
million charge in respect of the Broad-Based Black Economic Empowerment scheme in South Africa.
Finance costs
Net finance costs were US$331 million, a 4% decrease on the prior period's US$345 million, mainly as a result
of debt repayments in the course of the prior year. Adjusted net finance costs for the half year were also
US$331 million, down 4%.
Interest cover, as defined in the financial definitions section, has increased to 9.9 times from 9.3 times in the
prior period.
Profit before tax
Adjusted profit before tax of US$2,935 million increased by 2% over the restated comparable period in the
prior year, primarily as a result of pricing and premiumisation initiatives driving group NPR growth, together
with cost savings, operational efficiencies and lower finance costs, and despite the translational effect of
currency depreciation.
Profit before tax was US$2,827 million, up by 16%, including the impact of the exceptional items noted above.
The principal differences between reported and adjusted profit before tax relate to the amortisation of
intangible assets (excluding computer software), the group's share of associates' and joint ventures' tax and
non-controlling interests, and exceptional items. Amortisation amounted to US$226 million in the half year
(2013: US$223 million); the group's share of associates' and joint ventures' tax and non-controlling interests
was US$167 million (2013: US$169 million (restated)); and net exceptional credits were US$285 million (2013:
net charges of US$52 million) as detailed above.
Taxation
The effective rate of tax for the half year before amortisation of intangible assets (excluding computer
software) and exceptional items was 26.0% compared with a rate of 26.8% in the prior year period. The lower
rate is consistent with that reported for the last full year and follows the closure of a number of tax audits
during the period.
Earnings per share
The group presents adjusted basic earnings per share, which excludes the impact of amortisation of intangible
assets (excluding computer software) and post-tax exceptional items, in order to present an additional
measure of performance for the periods shown in the consolidated interim financial information. Adjusted basic
earnings per share of 123.6 US cents were up 3% on the comparable period in the prior year, as a result of
increased EBITA, lower finance costs and a lower effective tax rate, partially offset by the adverse impact of
foreign exchange movements on translation. An analysis of earnings per share is shown in note 5. On a
statutory basis, basic earnings per share were 15% higher at 123.2 US cents (2013: 107.4 US cents) for the
reasons given above, together with the net exceptional credits in the period compared with net exceptional
charges in the prior half year.
Cash flow and capital expenditure
The group uses an adjusted EBITDA measure which provides a useful indication of the cash generated to
service the group's debt. 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. Adjusted EBITDA of US$3,300 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 3% compared with the same period in the prior year (2013: US$3,211 million (restated)).
Net cash generated from operations before working capital movements of US$2,733 million increased by 3%
compared with the prior year period (2013: US$2,663 million), in line with the growth in pre-exceptional
operating profit.
Net cash generated from operating activities of US$1,545 million increased by US$361 million on the same
period in the prior year, primarily reflecting lower interest payments as a result of the repayment of debt in the
prior year, together with lower tax payments following the tax prepayment to the Australian Tax Office in the
prior half year.
Capital expenditure on property, plant and equipment for the six months of US$643 million was level with the
same period in the prior year (2013: US$639 million), with continued investment in brewing capacity and
capability, most notably in Africa and Latin America. Capital expenditure including the purchase of intangible
assets was US$696 million (2013: US$670 million).
Free cash flow increased by 66% to US$1,485 million, primarily as the prior half year included a number of
one-off payments including the funding of our Chinese associate for the Kingway acquisition and the tax
prepayment to the Australian Tax Office. Free cash flow is detailed in note 10b, and defined in the financial
definitions section.
Borrowings and net debt
Gross debt at 30 September 2014, comprising borrowings together with the fair value of financing derivative
financial assets and liabilities, decreased to US$15,697 million from US$16,384 million at 31 March 2014,
primarily as a result of the repayment of a COP 640,000 million bond in May 2014 and a number of other
smaller facilities. Net debt, comprising gross debt net of cash and cash equivalents, decreased to US$12,682
million from US$14,303 million at 31 March 2014, following the receipt of proceeds from the sale of the group's
investment in Tsogo Sun together with strong operating cash flow, partially offset by the payment of the final
dividend in August 2014. An analysis of net debt is provided in note 10c.
The group's gearing (presented as a ratio of net debt/equity) has decreased to 46.5% from 52.0% at 31 March
2014. The weighted average interest rate for the gross debt portfolio at 30 September 2014 was 3.7% (31
March 2014: 3.9%).
The group's credit rating from Standard and Poor's was lifted from BBB+ to A- with a stable outlook in July
2014. Subsequent to the end of the half year, Moody's Investor's Services changed its outlook on the group's
Baa1 rating from stable to positive.
Total equity
Total equity decreased slightly from US$27,482 million at 31 March 2014 to US$27,253 million at 30
September 2014, primarily as a result of the payment of the final dividend for the year ended 31 March 2014
and currency translation movements on foreign currency investments, offset by the profit for the period.
Goodwill and intangible assets
Goodwill decreased to US$17,612 million (31 March 2014: US$18,497 million) as a result of foreign exchange
movements in the period. Intangible assets decreased in the period to US$8,009 million (31 March 2014:
US$8,532 million) primarily because of foreign exchange movements and amortisation.
Currencies
The exchange rates to the US dollar used in preparing the consolidated interim financial information are
detailed in the table below, with most of the major currencies in which the group operates weakening against
the US dollar during the period.
Appreciation/ Appreciation/
Six months ended Average rate (depreciation) Closing rate (depreciation)
30 September 2014 2013 % 2014 2013 %
Australian dollar (AUD) 1.08 1.05 (3) 1.14 1.07 (6)
South African rand (ZAR) 10.66 9.73 (9) 11.29 10.03 (11)
Colombian peso (COP) 1,909 1,886 (1) 2,028 1,915 (6)
Euro (EUR) 0.74 0.76 2 0.79 0.74 (7)
Czech koruna (CZK) 20.40 19.64 (4) 21.85 19.05 (13)
Peruvian nuevo sol (PEN) 2.81 2.73 (3) 2.89 2.79 (4)
Polish zloty (PLN) 3.09 3.21 4 3.31 3.12 (6)
Turkish lira (TRY) 2.13 1.90 (11) 2.28 2.02 (11)
Risks and uncertainties
The principal risks and uncertainties for the first six months and the remaining six months of the financial year
remain as described on pages 18 and 19 of the 2014 Annual Report. The risks are summarised as follows:
- The risk that, in light of the expected continued consolidation of the brewing and beverages industry,
the group's ability to grow and increase profitability is limited. This may be the result of failing to
participate in the right opportunities; overpaying for an acquisition; failing to implement integration plans
successfully; or failing to identify and develop the capabilities necessary to facilitate market and
category entry.
- The risk that the group's market positions come under pressure and profitable growth opportunities
may not be realised. This may be a result of the group failing to develop and ensure the strength and
relevance of our brands with consumers, shoppers and customers.
- The risk that the group's long-term profitable growth potential may be jeopardised due to a failure to
identify, develop and retain an appropriate pipeline of talented management.
- The risk that regulation places increasing restrictions on pricing (including tax), availability and
marketing of beer and drives changes in consumption behaviour. In affected countries the group's
ability to grow profitably and contribute to local communities could be adversely affected.
- The risk that following the Foster's acquisition, the group fails to deliver its specific, communicated
financial and value creation targets through its integration plans; this may limit the group's future
growth and profitability, as well as impacting its reputation for commercial capability and for making
value-creating acquisitions.
- The risk that the group fails to execute and derive benefits from the major cost savings and efficiency
projects, resulting in increased project costs, delays in benefit realisation, business disruption and
reduced competitive advantage in the medium term.
- The risk that the group suffers from a cyber-attack or the failure to comply with tighter data control
legislation to combat cyber-attacks, which may lead to business disruption, financial penalties or
restrictions.
Dividend
The board has declared a cash interim dividend of 26.0 US cents per share, an increase of 4%. The dividend
will be payable on Friday 5 December 2014 to shareholders registered on the London and Johannesburg
registers on Friday 28 November 2014. The last date to trade cum dividend will be Wednesday 26 November
2014 on the London Stock Exchange and Friday 21 November 2014 on the JSE Limited. The ex-dividend
trading dates will be Thursday 27 November 2014 on the London Stock Exchange and Monday 24 November
2014 on the JSE Limited. As the group reports in US dollars, dividends are declared in US dollars. They are
payable in South African rand to shareholders on the Johannesburg register, in US dollars to shareholders on
the London register with a registered address in the United States (unless mandated otherwise), and in
sterling to all remaining shareholders on the London register. Further details relating to dividends are provided
in note 6.
The rates of exchange applicable for US dollar conversion into South African rand and sterling were
determined on Wednesday 12 November 2014. The rate of exchange determined for converting to South
African rand was US$:ZAR11.267809 resulting in an equivalent interim dividend of 292.96303 SA cents per
share. The rate of exchange determined for converting to sterling was GBP:US$1.587965 resulting in an
equivalent interim dividend of 16.3732 UK pence per share.
Shareholders registered on the Johannesburg register are advised that dividend withholding tax will be
withheld from the gross final dividend amount of 292.96303 SA cents per share at a rate of 15%, unless a
shareholder qualifies for an exemption. Shareholders registered on the Johannesburg register who do not
qualify for an exemption will therefore receive a net dividend of 249.01858 SA cents per share.
The company, as a non-resident of South Africa, was not subject to the secondary tax on companies (STC)
applicable before the introduction of dividend withholding tax on 1 April 2012, and accordingly, no STC credits
are available for set-off against the dividend withholding tax liability on the final net dividend amount. The
dividend is payable in cash as a 'Dividend' (as defined in the South African Income Tax Act, 58 of 1962, as
amended) by way of a reduction of income reserves. The dividend withholding tax and the information
contained in this paragraph is only of direct application to shareholders registered on the Johannesburg
register, who should direct any questions about the application of the dividend withholding tax to
Computershare Investor Services (Pty) Limited, Tel: +27 11 373-0004.
From the commencement of trading on Thursday 13 November 2014 until the close of business on Friday 28
November 2014, no transfers between the London and Johannesburg registers will be permitted, and from
Monday 24 November 2014 until Friday 28 November 2014, no shares may be dematerialised or
rematerialised, both days inclusive.
Senior management changes
During the period, with effect from 1 July 2014, the group's South African and African regions were
consolidated into one region for management purposes, and Mark Bowman, previously Managing Director of
SABMiller Africa, became Managing Director of the combined SABMiller Africa region, with Norman Adami
standing down as Chairman of SABMiller Beverages South Africa with effect from 1 July 2014, and retiring
from the group with effect from 31 July 2014.
Following the end of the period, the group announced a further realignment of responsibilities within the
group's executive committee, with Chief Financial Officer, Jamie Wilson, assuming responsibility for investor
relations, General Counsel, John Davidson, assuming responsibility for regulatory affairs, communications and
sustainable development, in addition to legal and company secretarial, and becoming General Counsel and
Corporate Affairs Director, and Group Director of Corporate Finance and Development, Domenic De Lorenzo,
assuming additional responsibility for group strategy. As a result of this realignment, Catherine May, the
group's Director of Corporate Affairs, left the group with effect from 31 October 2014.
With effect from 1 November 2014, Stephen Shapiro was appointed as Company Secretary, with John
Davidson relinquishing this role in light of his additional responsibilities.
Directors' responsibility for financial reporting
This statement, which should be read in conjunction with the independent review report of the auditors set out
below, is made to enable shareholders to distinguish the respective responsibilities of the directors and the
auditors in relation to the condensed consolidated interim financial information, set out on pages 23 to 40,
which the directors confirm has been prepared on a going concern basis. The directors consider that the group
has used appropriate accounting policies, consistently applied and supported by reasonable and appropriate
judgements and estimates.
A copy of the interim report of the group is placed on the company's website. The directors are responsible for
the maintenance and integrity of the statutory and audited information on the company's website. Information
published on the internet is accessible in many countries with different legal requirements. Legislation in the
United Kingdom governing the preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
The directors confirm that this condensed set of financial statements has been prepared in accordance with
IAS 34 as adopted by the European Union, and the interim management report herein includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8 of the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
At the date of this statement, the directors of SABMiller plc are those listed in the SABMiller plc Annual Report
at 31 March 2014 with the exception of Miles Morland who retired from the board at the conclusion of the
annual general meeting on 24 July 2014, and Jan du Plessis who was appointed to the board with effect from
1 September 2014. A list of current directors is maintained on the SABMiller plc website: www.sabmiller.com.
On behalf of the board
Alan Clark Jamie Wilson
Chief executive Chief financial officer
12 November 2014
INDEPENDENT REVIEW REPORT TO SABMILLER PLC
Report on the condensed consolidated interim financial information
Our conclusion
We have reviewed the condensed consolidated interim financial information, defined below, in the interim
report of SABMiller plc for the six months ended 30 September 2014. Based on our review, nothing has come
to our attention that causes us to believe that the condensed consolidated interim financial information is not
prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
This conclusion is to be read in the context of what we say in the remainder of this report.
What we have reviewed
The condensed consolidated interim financial information, which is prepared by SABMiller plc, comprises:
- the consolidated balance sheet as at 30 September 2014;
- the consolidated income statement and consolidated statement of comprehensive income for the
period then ended;
- the consolidated cash flow statement for the period then ended;
- the consolidated statement of changes in equity for the period then ended; and
- the explanatory notes to the condensed consolidated interim financial information.
As disclosed in note 1, the financial reporting framework that has been applied in the preparation of the full
annual financial statements of the group is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
The condensed consolidated interim financial information included in the interim report has been prepared in
accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the
European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct
Authority.
What a review of condensed consolidated financial information involves
We conducted our review in accordance with International Standard on Review Engagements (UK and
Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'
issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures.
A review is substantially less in scope than an audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the interim report and considered whether it contains any
apparent misstatements or material inconsistencies with the information in the condensed consolidated interim
financial information.
Responsibilities for the condensed consolidated interim financial information and the review
Our responsibilities and those of the directors
The interim report, including the condensed consolidated interim financial information, is the responsibility of,
and has been approved by, the directors. The directors are responsible for preparing the interim report in
accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Our responsibility is to express to the company a conclusion on the condensed consolidated interim financial
information in the interim report based on our review. This report, including the conclusion, has been prepared
for and only for the company for the purpose of complying with the Disclosure and Transparency Rules of the
Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it
may come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
12 November 2014
SABMiller plc
CONSOLIDATED INCOME STATEMENT
for the period ended 30 September
Six months Six months Year
ended 30/9/14 ended 30/9/13 ended 31/3/14
Unaudited Unaudited Audited
Notes US$m US$m US$m
Revenue 2 11,366 11,103 22,311
Net operating expenses (8,999) (9,132) (18,069)
Operating profit 2 2,367 1,971 4,242
Operating profit before exceptional items 2,082 2,023 4,439
Exceptional items 3 285 (52) (197)
Net finance costs (331) (345) (645)
Finance costs (531) (578) (1,055)
Finance income 200 233 410
Share of post-tax results of associates and joint ventures 2 791 803 1,226
Profit before taxation 2,827 2,429 4,823
Taxation 4 (730) (598) (1,173)
Profit for the period 2,097 1,831 3,650
Profit attributable to non-controlling interests 123 117 269
Profit attributable to owners of the parent 5 1,974 1,714 3,381
2,097 1,831 3,650
Basic earnings per share (US cents) 5 123.2 107.4 211.8
Diluted earnings per share (US cents) 5 121.6 106.0 209.1
The notes are an integral part of this condensed interim financial information.
SABMiller plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the period ended 30 September
Six months Six months Year
ended 30/9/14 ended 30/9/13 ended 31/3/14
Unaudited Unaudited Audited
Notes US$m US$m US$m
Profit for the period 2,097 1,831 3,650
Other comprehensive loss:
Items that will not be reclassified to profit or loss
Net remeasurements of defined benefit plans - - 22
Tax on items that will not be reclassified 4 - (1) (13)
Share of associates' and joint ventures' other comprehensive
(loss)/income (2) 10 23
Total items that will not be reclassified to profit or loss (2) 9 32
Items that may be reclassified subsequently to profit or loss
Currency translation differences on foreign currency net investments: (1,267) (1,850) (2,288)
- Decrease in foreign currency translation reserve during the period (1,463) (1,850) (2,290)
- Recycling of foreign currency translation reserve on disposals 196 - 2
Net investment hedges:
- Fair value gains arising during the period 232 108 102
Cash flow hedges: (8) 50 34
- Fair value gains arising during the period 2 47 33
- Fair value losses/(gains) transferred to inventory 8 (1) (1)
- Fair value (gains)/losses transferred to profit or loss (18) 4 2
Tax on items that may be reclassified subsequently to profit or loss 4 (8) - 1
Share of associates' and joint ventures' other comprehensive (loss)/
income: (28) 46 122
- Share of associates' and joint ventures' other comprehensive
(loss)/income during the period (28) 55 131
- Share of associates' and joint ventures' recycling of available for sale
reserve on disposal - (9) (9)
Total items that may be reclassified subsequently to profit or loss (1,079) (1,646) (2,029)
Other comprehensive loss for the period, net of tax (1,081) (1,637) (1,997)
Total comprehensive income for the period 1,016 194 1,653
Attributable to:
Non-controlling interests 108 110 248
Owners of the parent 908 84 1,405
Total comprehensive income for the period 1,016 194 1,653
The notes are an integral part of this condensed interim financial information.
SABMiller plc
CONSOLIDATED BALANCE SHEET
at 30 September
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
Notes US$m US$m US$m
Assets
Non-current assets
Goodwill 17,612 18,704 18,497
Intangible assets 7 8,009 8,749 8,532
Property, plant and equipment 8 8,764 8,973 9,065
Investments in joint ventures 5,526 5,526 5,581
Investments in associates 5,370 5,686 5,787
Available for sale investments 20 22 22
Derivative financial instruments 593 813 628
Trade and other receivables 137 125 139
Deferred tax assets 110 54 115
Loan participation deposit - 100 -
46,141 48,752 48,366
Current assets
Inventories 1,175 1,260 1,168
Trade and other receivables 1,933 2,056 1,821
Current tax assets 188 220 174
Derivative financial instruments 367 77 141
Cash and cash equivalents 10c 3,015 1,286 2,081
6,678 4,899 5,385
Total assets 52,819 53,651 53,751
Liabilities
Current liabilities
Derivative financial instruments (60) (50) (78)
Borrowings 10 (4,652) (1,503) (4,519)
Trade and other payables (3,893) (3,957) (3,847)
Current tax liabilities (1,152) (1,041) (1,106)
Provisions (397) (479) (450)
(10,154) (7,030) (10,000)
Non-current liabilities
Derivative financial instruments (26) (57) (37)
Borrowings 10c (11,929) (16,196) (12,528)
Trade and other payables (23) (130) (25)
Deferred tax liabilities (3,026) (3,316) (3,246)
Provisions (408) (500) (433)
(15,412) (20,199) (16,269)
Total liabilities (25,566) (27,229) (26,269)
Net assets 27,253 26,422 27,482
Equity
Share capital 167 167 167
Share premium 6,701 6,610 6,648
Merger relief reserve 3,963 4,321 4,321
Other reserves (1,720) (310) (702)
Retained earnings 16,935 14,534 15,885
Total shareholders' equity 26,046 25,322 26,319
Non-controlling interests 1,207 1,100 1,163
Total equity 27,253 26,422 27,482
The notes are an integral part of this condensed interim financial information.
SABMiller plc
CONSOLIDATED CASH FLOW STATEMENT
for the period ended 30 September
Six months Six months Year
ended 30/9/14 ended 30/9/13 ended 31/3/14
Unaudited Unaudited Audited
Notes US$m US$m US$m
Cash flows from operating activities
Cash generated from operations 10a 2,651 2,596 5,770
Interest received 189 227
Interest paid (484) (592)
Tax paid (811) (1,047) (1,596)
Net cash generated from operating activities 10b 1,545 1,184 3,431
Cash flows from investing activities
Purchase of property, plant and equipment (643) (639) (1,401)
Proceeds from sale of property, plant and equipment 38 49 70
Purchase of intangible assets (53) (31)
Purchase of available for sale investments - - (1)
Proceeds from disposal of available for sale investments 1 - -
Proceeds from disposal of associates 971 -
Proceeds from disposal of businesses (net of cash disposed) - 88 88
Acquisition of businesses (net of cash acquired) (7) - (39)
Investments in joint ventures (18) (23)
Investments in associates - (196) (199)
Dividends received from joint ventures 568 494
Dividends received from associates 139 157
Dividends received from other investments 1 1 1
Net cash generated from/(used in) investing activities 997 (100) (626)
Cash flows from financing activities
Proceeds from the issue of shares 126 41 88
Proceeds from the issue of shares in subsidiaries to non-controlling
interests 29 1 20
Purchase of own shares for share trusts (104) (53) (79)
Purchase of shares from non-controlling interests - (5) (5)
Proceeds from borrowings 561 1,877 2,585
Repayment of borrowings (794) (2,493) (3,829)
Capital element of finance lease payments (8) (5) (9)
Net cash receipts on derivative financial instruments 2 107 228
Dividends paid to shareholders of the parent (1,289) (1,236) (1,640)
Dividends paid to non-controlling interests (92) (102) (194)
Net cash used in financing activities (1,569) (1,868) (2,835)
Net cash inflow/(outflow) from operating, investing and financing activities 973 (784) (30)
Effects of exchange rate changes (40) (39) (61)
Net increase/(decrease) in cash and cash equivalents 933 (823) (91)
Cash and cash equivalents at 1 April 10c 1,868 1,959 1,959
Cash and cash equivalents at end of period 10c 2,801 1,136 1,868
The notes are an integral part of this condensed interim financial information.
SABMiller plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ended 30 September
Called up Share Merger Total Non-
share premium relief Other Retained shareholders' controlling Total
capital account reserve reserves earnings equity interests equity
US$m US$m US$m US$m US$m US$m US$m US$m
At 1 April 2013 (audited) 167 6,581 4,586 1,328 13,710 26,372 1,088 27,460
Total comprehensive income - - - (1,638) 1,722 84 110 194
Profit for the period - - - - 1,714 1,714 117 1,831
Other comprehensive (loss)/income - - - (1,638) 8 (1,630) (7) (1,637)
Dividends paid - - - - (1,236) (1,236) (99) (1,335)
Issue of SABMiller plc ordinary shares - 29 - - 12 41 - 41
Proceeds from the issue of shares in
subsidiaries to non-controlling interests - - - - - - 1 1
Payment for purchase of own shares for share
trusts - - - - (53) (53) - (53)
Buyout of non-controlling interests - - - - (5) (5) - (5)
Utilisation of merger relief reserve - - (265) - 265 - - -
Credit entry relating to share-based payments - - - - 119 119 - 119
At 30 September 2013 (unaudited) 167 6,610 4,321 (310) 14,534 25,322 1,100 26,422
At 1 April 2013 (audited) 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 (audited) 167 6,648 4,321 (702) 15,885 26,319 1,163 27,482
At 1 April 2014 (audited) 167 6,648 4,321 (702) 15,885 26,319 1,163 27,482
Total comprehensive income - - - (1,018) 1,926 908 108 1,016
Profit for the period - - - - 1,974 1,974 123 2,097
Other comprehensive loss - - - (1,018) (48) (1,066) (15) (1,081)
Dividends paid - - - - (1,290) (1,290) (93) (1,383)
Issue of SABMiller plc ordinary shares - 53 - - 73 126 - 126
Proceeds from the issue of shares in
subsidiaries to non-controlling interests - - - - - - 29 29
Payment for purchase of own shares for share
trusts - - - - (104) (104) - (104)
Utilisation of merger relief reserve - - (358) - 358 - - -
Credit entry relating to share-based payments - - - - 87 87 - 87
At 30 September 2014 (unaudited) 167 6,701 3,963 (1,720) 16,935 26,046 1,207 27,253
Merger relief reserve
At 1 April 2014 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$926 million (2013: 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 period ended 30 September
2014 the group transferred US$358 million (2013: US$265 million) of the reserve relating to the Polish business to retained earnings upon realisation of
qualifying consideration.
The notes are an integral part of this condensed interim financial information.
SABMiller plc
NOTES TO THE FINANCIAL INFORMATION
1. Basis of preparation
The condensed consolidated interim financial information (the 'financial information') comprises the unaudited results of SABMiller plc for the six months
ended 30 September 2014 and 30 September 2013, together with the unaudited results for the year ended 31 March 2014. The financial information in
this report is not audited and does not constitute statutory accounts within the meaning of s434 of the Companies Act 2006. The board of directors
approved this financial information on 12 November 2014. The annual financial statements for the year ended 31 March 2014, approved by the board of
directors on 2 June 2014, which represent the statutory accounts for that year, have been filed with the Registrar of Companies. The auditors' report on
those accounts was unqualified and did not contain a statement made under s498(2) or (3) of the Companies Act 2006.
The unaudited financial information in this interim report has been prepared in accordance with the Disclosure and Transparency Rules of the Financial
Conduct Authority, and with IAS 34 'Interim Financial Reporting' as adopted by the European Union (EU). The interim financial information should be
read in conjunction with the annual financial statements for the year ended 31 March 2014, which were prepared in accordance with applicable law and
International Financial Reporting Standards as adopted by the EU.
Items included in the financial information of each of the group's entities are measured using the currency of the primary economic environment in which
the entity operates (the functional currency). The consolidated financial information is presented in US dollars which is the group's presentational
currency.
Accounting policies
The financial information is prepared under the historical cost convention, except for the revaluation to fair value of certain financial assets and liabilities,
and post-retirement assets and liabilities. The financial information has been prepared on a going concern basis. The accounting policies adopted are
consistent with those of the annual financial statements for the year ended 31 March 2014, which were published in June 2014, as described in those
financial statements, except for the following standards, interpretations and amendments that have been adopted by the group since 1 April 2014:
- IFRS 10, 'Consolidated financial statements', IFRS 11, 'Joint Arrangements' and IFRS 12, 'Disclosure of interests in other entities' with
effect from 1 April 2013, along with the revised versions of IAS 27, 'Separate financial statements' and IAS 28, 'Investments in
Associates and Joint Ventures'. The adoption of these new standards has had no impact on attributable profit, total comprehensive
income, or net assets attributable to owners, but has resulted in an increase in EBITA for the six months ended 30 September 2013 of
US$4 million, and a similar increase in the group's share of associates' and joint ventures' non-controlling interests for the same period of
US$4 million. Comparative information has been restated. The requirements of IFRS 12 include additional disclosures which will be
included in the annual report.
- Amendment to IAS 32, 'Offsetting financial instruments asset and liability', has had no material impact on the consolidated results of
operations or financial position of the group.
- Amendment to IAS 39, 'Financial instruments: recognition and measurement', on novation of derivatives and hedge accounting has had
no material impact on the consolidated results of operations or financial position of the group.
2. Segmental information
Operating segments reflect the management structure of the group and the way performance is evaluated and resources allocated based on group NPR
and EBITA by the group's chief operating decision maker, defined as the executive directors. Following management changes effective 1 July 2014 the
group's Africa and South Africa: Beverages divisions have been consolidated into one division for management purposes. The results of the new
combined Africa division have therefore been presented as a single reportable segment and comparatives have been restated accordingly. The group is
focused geographically and, while not meeting the definition of reportable segments, the group reports separately as segments Corporate and South
Africa: Hotels and Gaming as this provides useful additional information.
The segmental information presented below includes the reconciliation of GAAP measures presented on the face of the income statement to non-GAAP
measures which are used by management to analyse the group's performance.
Income statement
Six months ended 30/9/14 Six months ended 30/9/13 Year ended 31/3/14
Group NPR EBITA Group NPR EBITA(1) Group NPR EBITA(1)
Unaudited Unaudited Unaudited Unaudited Audited Unaudited
US$m US$m US$m US$m US$m US$m
Latin America 2,874 1,036 2,754 972 5,745 2,192
Africa 3,592 818 3,496 794 7,421 1,954
Asia Pacific 2,154 450 2,159 540 3,944 845
Europe 2,713 502 2,684 512 4,574 703
North America 2,553 515 2,514 482 4,665 804
Corporate - (77) - (85) - (161)
Retained operations 13,886 3,244 13,607 3,215 26,349 6,337
South Africa: Hotels and Gaming 116 33 186 57 370 123
14,002 3,277 13,793 3,272 26,719 6,460
Amortisation of intangible assets (excluding computer software) –
group and share of associates' and joint ventures' (226) (223) (436)
Exceptional items in operating profit – group and share of
associates' and joint ventures' 285 (52) (202)
Net finance costs – group and share of associates' and joint
ventures' (excluding exceptional items) (342) (399) (741)
Share of associates' and joint ventures' taxation (102) (103) (162)
Share of associates' and joint ventures' non (65) (66) (96)
Profit before taxation 2,827 2,429 4,823
1 As restated (see note 1).
Group revenue and group NPR (including the group's share of associates and joint ventures)
With the exception of South Africa: Hotels and Gaming, all reportable segments derive their revenues from the sale of beverages. Revenues are derived
from a large number of customers which are internationally dispersed, with no customers being individually material.
Share of
associates' and
Share of joint ventures'
associates' and Excise duties excise duties
joint ventures' Group and other and other
Revenue revenue revenue similar taxes similar taxes Group NPR
2014 2014 2014 2014 2014 2014
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Six months ended 30 September US$m US$m US$m US$m US$m US$m
Latin America 3,900 - 3,900 (1,026) - 2,874
Africa 3,253 1,119 4,372 (643) (137) 3,592
Asia Pacific 1,575 1,360 2,935 (610) (171) 2,154
Europe 2,563 1,046 3,609 (618) (278) 2,713
North America 75 2,843 2,918 (2) (363) 2,553
Retained operations 11,366 6,368 17,734 (2,899) (949) 13,886
South Africa: Hotels and Gaming - 133 133 - (17) 116
11,366 6,501 17,867 (2,899) (966) 14,002
2013 2013 2013 2013 2013 2013
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Six months ended 30 September US$m US$m US$m US$m US$m US$m
Latin America 3,741 - 3,741 (987) - 2,754
Africa 3,183 1,069 4,252 (626) (130) 3,496
Asia Pacific 1,617 1,317 2,934 (606) (169) 2,159
Europe 2,487 1,045 3,532 (572) (276) 2,684
North America 75 2,810 2,885 (3) (368) 2,514
Retained operations 11,103 6,241 17,344 (2,794) (943) 13,607
South Africa: Hotels and Gaming - 215 215 - (29) 186
11,103 6,456 17,559 (2,794) (972) 13,793
2014 2014 2014 2014 2014 2014
Audited Audited Audited Audited Audited Audited
Year ended 31 March US$m US$m US$m US$m US$m US$m
Latin America 7,812 - 7,812 (2,067) - 5,745
Africa 6,752 2,257 9,009 (1,292) (296) 7,421
Asia Pacific 3,285 2,166 5,451 (1,235) (272) 3,944
Europe 4,319 1,726 6,045 (1,009) (462) 4,574
North America 143 5,199 5,342 (4) (673) 4,665
Retained operations 22,311 11,348 33,659 (5,607) (1,703) 26,349
South Africa: Hotels and Gaming - 425 425 - (55) 370
22,311 11,773 34,084 (5,607) (1,758) 26,719
Operating profit and EBITA (segment result)
The following table provides a reconciliation of operating profit to operating profit before exceptional items, and to EBITA. EBITA comprises operating
profit before exceptional items, amortisation of intangible assets (excluding computer software) and includes the group's share of associates' and joint
ventures' operating profit on a similar basis.
Share of
associates'
Share of and joint
associates' ventures'
and joint Amortisation amortisation
ventures' of intangible of intangible
Operating operating assets assets
profit before profit before (excluding (excluding
Operating Exceptional exceptional exceptional computer computer
profit items items items software) software) EBITA
Six months ended Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
30 September 2014 US$m US$m US$m US$m US$m US$m US$m
Latin America 975 - 975 - 61 - 1,036
Africa 597 - 597 216 5 - 818
Asia Pacific 125 64 189 162 99 - 450
Europe 386 - 386 77 10 29 502
North America 12 - 12 482 - 21 515
Corporate (116) 39 (77) - - - (77)
Retained operations 1,979 103 2,082 937 175 50 3,244
South Africa: Hotels
and Gaming 388 (388) - 32 - 1 33
2,367 (285) 2,082 969 175 51 3,277
Six months ended Unaudited Unaudited Unaudited Unaudited(1) Unaudited Unaudited Unaudited(1)
30 September 2013 US$m US$m US$m US$m US$m US$m US$m
Latin America 957 (47) 910 - 62 - 972
Africa 573 7 580 211 3 - 794
Asia Pacific 215 13 228 201 111 - 540
Europe 379 4 383 104 9 16 512
North America 7 - 7 455 - 20 482
Corporate (160) 75 (85) - - - (85)
Retained operations 1,971 52 2,023 971 185 36 3,215
South Africa: Hotels
and Gaming - - - 55 - 2 57
1,971 52 2,023 1,026 185 38 3,272
Year ended Audited Audited Audited Unaudited(1) Audited Audited Unaudited(1)
31 March 2014 US$m US$m US$m US$m US$m US$m US$m
Latin America 2,116 (47) 2,069 - 123 - 2,192
Africa 1,470 8 1,478 470 6 - 1,954
Asia Pacific 365 103 468 165 212 - 845
Europe 565 11 576 79 20 28 703
North America 9 - 9 753 - 42 804
Corporate (283) 122 (161) - - - (161)
Retained operations 4,242 197 4,439 1,467 361 70 6,337
South Africa: Hotels
and Gaming - - - 118 - 5 123
4,242 197 4,439 1,585 361 75 6,460
1 As restated (see note 1).
The group's share of associates' and joint ventures' operating profit is reconciled to the share of post-tax results of associates and joint ventures in the
income statement as follows.
Six months Six months Year
ended ended ended
30/9/14 30/9/13(1) 31/3/14(1)
Unaudited Unaudited Unaudited
US$m US$m US$m
Share of associates' and joint ventures' operating profit (before exceptional items) 969 1,026 1,585
Share of associates' and joint ventures' exceptional items in operating profit - - (5)
Share of associates' and joint ventures' net finance costs (11) (54) (96)
Share of associates' and joint ventures' taxation (102) (103) (162)
Share of associates' and joint ventures' non-controlling interests (65) (66) (96)
Share of post-tax results of associates and joint ventures 791 803 1,226
1 As restated (see note 1).
Beer volumes increase during the summer months leading to higher revenues being recognised in the first half of the year in the Europe and North
America segments. Due to the spread of the business between Northern and Southern hemispheres, the results for the group as a whole are not highly
seasonal in nature.
EBITDA
EBITA is reconciled to EBITDA as follows.
Share of Share of
associates' associates'
and joint and joint
ventures' ventures'
EBITA Depreciation depreciation EBITDA EBITA Depreciation depreciation EBITDA
2014 2014 2014 2014 2013(1) 2013 2013(1) 2013
Six months ended Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
30 September US$m US$m US$m US$m US$m US$m US$m US$m
Latin America 1,036 159 - 1,195 972 166 - 1,138
Africa 818 141 64 1,023 794 138 62 994
Asia Pacific 450 34 72 556 540 36 62 638
Europe 502 116 42 660 512 109 44 665
North America 515 - 73 588 482 - 66 548
Corporate (77) 17 - (60) (85) 13 - (72)
Retained operations 3,244 467 251 3,962 3,215 462 234 3,911
South Africa: Hotels and
Gaming 33 - 9 42 57 - 13 70
3,277 467 260 4,004 3,272 462 247 3,981
2014(1) 2014 2014(1) 2014(1)
Unaudited Audited Unaudited Unaudited
Year ended 31 March US$m US$m US$m US$m
Latin America 2,192 328 - 2,520
Africa 1,954 267 115 2,336
Asia Pacific 845 72 132 1,049
Europe 703 222 92 1,017
North America 804 - 141 945
Corporate (161) 31 - (130)
Retained operations 6,337 920 480 7,737
South Africa: Hotels and
Gaming 123 - 24 147
6,460 920 504 7,884
1 As restated (see note 1).
Adjusted EBITDA
Adjusted EBITDA is comprised of the following.
Six months Six months Year
ended ended ended
30/9/14 30/9/13(1) 31/3/14(1)
Unaudited Unaudited Unaudited
US$m US$m US$m
Subsidiaries' EBITDA 2,724 2,670 5,720
- Operating profit before exceptional items 2,082 2,023 4,439
- Depreciation (including amortisation of computer software) 467 462 920
- Amortisation (excluding computer software) 175 185 361
Group's share of MillerCoors' EBITDA 576 541 936
- Operating profit before exceptional items 482 455 753
- Depreciation (including amortisation of computer software) 73 66 141
- Amortisation (excluding computer software) 21 20 42
Adjusted EBITDA 3,300 3,211 6,656
1 As restated (see note 1).
3. Exceptional items
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Exceptional items included in operating profit:
Profit on disposal of investment in associate 388 - -
Profit on disposal of businesses - 47 72
Cost and efficiency programme costs (39) (79) (133)
Integration and restructuring (64) (13) (103)
Broad-Based Black Economic Empowerment scheme charges - (7) (33)
Net exceptional gains/(losses) included within operating profit 285 (52) (197)
Share of associates' and joint ventures' exceptional items:
Capability programme costs - - (5)
Group's share of associates' and joint ventures' exceptional losses - - (5)
Net taxation (charges)/credits relating to subsidiaries' and the group's share of
associates' and joint ventures' exceptional items (131) 5 27
Exceptional items included in operating profit
Profit on disposal of investment in associate
In 2014 a profit of US$388 million, after associated costs, was realised on the disposal of the group's interests in the Tsogo Sun hotels and gaming
business in South Africa.
Profit on disposal of businesses
During 2013 a profit of US$47 million, after associated costs, was realised on the disposal of the milk and juice business in Panama, in Latin America.
Cost and efficiency programme costs
In 2014 costs of US$39 million were incurred in relation to the cost and efficiency programme which will realise further benefits from the group's scale
through the creation of a global business services function, that will consolidate many back office and specialist functions, and the expansion of the
global procurement organisation. In 2013 costs of US$79 million were incurred in relation to the business capability programme which streamlined
finance, human resources and procurement activities through the deployment of global systems and introduced common sales, distribution and supply
chain management systems.
Integration and restructuring costs
In 2014 US$64 million (2013: US$13 million) of integration and restructuring costs were incurred in Asia Pacific following the Foster's and the Pacific
Beverages acquisitions, including impairments relating to the closure of a brewery.
Broad-Based Black Economic Empowerment scheme charges
In 2013 US$7 million of charges were incurred in relation to the Broad-Based Black Economic Empowerment (BBBEE) scheme in South Africa. This
represented the IFRS 2 share-based payment charge in respect of the employee element of the scheme.
Net taxation credits relating to subsidiaries' and the group's share of associates' and joint ventures' exceptional items
Net taxation charges of US$131 million (2013: credits of US$5 million) arose in relation to exceptional items during the period.
4. Taxation
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Current taxation 737 519 1,096
- Charge for the period 737 520 1,086
- Adjustments in respect of prior periods - (1) 10
Withholding taxes and other remittance taxes 122 77 188
Total current taxation 859 596 1,284
Deferred taxation (129) 2 (111)
- (Credit)/charge for the period (129) 1 (75)
- Adjustments in respect of prior periods - 1 (36)
Taxation expense 730 598 1,173
Tax charge/(credit) relating to components of other comprehensive income is as follows:
Deferred tax charge on remeasurements of defined benefit plans - 1 13
Deferred tax charge/(credit) on financial instruments 8 - (1)
8 1 12
Effective tax rate (%) 26.0 26.8 26.0
UK taxation included in the above
Current taxation - - -
Withholding taxes and other remittance taxes 41 53 102
Total current taxation 41 53 102
Deferred taxation - - -
UK taxation expense 41 53 102
See the financial definitions section for the definition of the effective tax rate. This calculation is on a basis consistent with that used in prior periods and
is also consistent with other group operating metrics. Tax on amortisation of intangible assets (excluding computer software) was US$63 million (2013:
US$63 million).
MillerCoors is not a taxable entity. The tax balances and obligations therefore remain with Miller Brewing Company as a 100% subsidiary of the group.
This subsidiary's tax charge includes tax (including deferred tax) on the group's share of the taxable profits of MillerCoors and includes tax in other
comprehensive income on the group's share of MillerCoors' taxable items included within other comprehensive income.
5. Earnings per share
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US cents US cents US cents
Basic earnings per share 123.2 107.4 211.8
Diluted earnings per share 121.6 106.0 209.1
Headline earnings per share 109.6 104.6 211.6
Adjusted basic earnings per share 123.6 120.4 242.0
Adjusted diluted earnings per share 122.0 118.8 239.0
The weighted average number of shares was:
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
Millions of Millions of Millions of
shares shares shares
Ordinary shares 1,673 1,670 1,671
Treasury shares (65) (67) (67)
EBT ordinary shares (6) (8) (7)
Basic shares 1,602 1,595 1,597
Dilutive ordinary shares 21 22 20
Diluted shares 1,623 1,617 1,617
The calculation of diluted earnings per share excludes 9,161,765 (2013: 7,105,465) share options that were non-dilutive for the period because the
exercise price of the option exceeded the fair value of the shares during the period, and 19,364,157 (2013: 21,939,292) share awards that were non-
dilutive for the period because the performance conditions attached to the share awards have not been met. These share incentives could potentially
dilute earnings per share in the future.
Adjusted and headline earnings
The group presents an adjusted earnings per share figure which excludes the impact of amortisation of intangible assets (excluding computer software),
certain non-recurring items and post-tax exceptional items in order to present an additional measure of performance for the periods shown in the
consolidated interim financial information. Adjusted earnings per share has been based on adjusted earnings for each financial period and on the same
number of weighted average shares in issue as the basic earnings per share calculation. Headline earnings per share has been calculated in
accordance with the South African Circular 2/2013 entitled 'Headline Earnings' which forms part of the listing requirements for the JSE Ltd (JSE). The
adjustments made to arrive at headline earnings and adjusted earnings are as follows.
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Profit for the period attributable to owners of the parent 1,974 1,714 3,381
Headline adjustments
Impairment of property, plant and equipment 19 - 52
Impairment of intangible assets - - 8
Profit on disposal of investment in associate (388) - -
Profit on disposal of businesses - (47) (72)
Loss on dilution of investment in associate - - 20
Tax effects of these items 151 - (11)
Non-controlling interests' share of the above items - 1 1
Headline earnings 1,756 1,668 3,379
Cost and efficiency programme costs 39 79 133
Integration and restructuring costs 45 13 43
Broad-Based Black Economic Empowerment scheme charges - 7 13
Amortisation of intangible assets (excluding computer software) 175 185 361
Tax effects of the above items (76) (64) (133)
Non-controlling interests' share of the above items (3) (2) (4)
Share of associates' and joint ventures' other adjustments, net of tax and non-controlling interests 45 34 73
Adjusted earnings 1,981 1,920 3,865
6. Dividends
Dividends paid were as follows.
Six months Six months Year
ended 30/9/14 ended 30/9/13 ended 31/3/14
Unaudited Unaudited Audited
US cents US cents US cents
Prior year final dividend paid per ordinary share 80.0 77.0 77.0
Current year interim dividend paid per ordinary share - - 25.0
The interim dividend declared of 26.0 US cents per ordinary share is payable on 5 December 2014 to ordinary shareholders on the register as at
28 November 2014 and will absorb an estimated US$417 million of shareholders' funds.
7. Intangible assets
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Net book amount at beginning of period 8,532 9,635 9,635
Exchange adjustments (381) (697) (773)
Additions - separately acquired 68 27 84
Acquisitions - through business combinations - - 22
Amortisation (210) (216) (427)
Impairment - - (8)
Disposals - - (1)
Net book amount at end of period 8,009 8,749 8,532
8. Property, plant and equipment
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Net book amount at beginning of period 9,065 9,059 9,059
Exchange adjustments (424) (236) (408)
Additions 616 628 1,449
Acquisitions - through business combinations 1 - 12
Disposals (27) (19) (55)
Impairment (19) - (52)
Depreciation (432) (432) (854)
Other movements (16) (27) (86)
Net book amount at end of period 8,764 8,973 9,065
9. Financial risk factors
In the normal course of business, the group is exposed to the following financial risks:
- Market risk
- Credit risk
- Liquidity risk
A full description of the group's exposure to the above risks and the group's policies and processes that are in place to manage the risks arising, aided
by quantitative disclosures, is included in note 21 to the consolidated financial statements included in the 2014 annual report. There has been no
significant change in the nature of the financial risks to which the group is exposed, or the group's policies and processes to manage these risks, since 1
April 2014.
Fair value estimation
The following table presents the group's financial assets and liabilities that are measured at fair value.
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
2014 2014 2014 2014 2013 2013 2013 2013
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
At 30 September US$m US$m US$m US$m US$m US$m US$m US$m
Assets
Derivative financial instruments - 960 - 960 - 890 - 890
Available for sale investments - 8 12 20 - 10 12 22
Total assets - 968 12 980 - 900 12 912
Liabilities
Derivative financial instruments - (86) - (86) - (107) - (107)
Total liabilities - (86) - (86) - (107) - (107)
2014 2014 2014 2014
Audited Audited Audited Audited
At 31 March US$m US$m US$m US$m
Assets
Derivative financial instruments - 769 - 769
Available for sale investments - 10 12 22
Total assets - 779 12 791
Liabilities
Derivative financial instruments - (115) - (115)
Total liabilities - (115) - (115)
The levels of the fair value hierarchy and its application to the group's assets and liabilities are described in full in note 21 to the consolidated financial
statements included in the 2014 annual report. The methods and techniques employed in determining fair values are consistent with those used at 31
March 2014 and are summarised below. There were no transfers between Level 1, 2, or 3 in the six months to 30 September 2014.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The fair values of financial instruments that are not traded in an active market (for example, over the counter derivatives or infrequently traded listed
investments) are determined by using valuation techniques.
Level 3: Inputs for the asset or liability that are not based on observable market data.
The fair value of borrowings at 30 September 2014 is US$17,021 million (31 March 2014: US$17,867 million). The fair values are based on a
combination of market quoted prices and cash flows discounted using prevailing interest rates. The fair values of all other financial assets and liabilities
are equivalent to their carrying values.
10a. Reconciliation of profit for the period to net cash generated from operations
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Profit for the period 2,097 1,831 3,650
Taxation 730 598 1,173
Share of post-tax results of associates and joint ventures (791) (803) (1,226)
Net finance costs 331 345 645
Operating profit 2,367 1,971 4,242
Depreciation:
- Property, plant and equipment 315 314 621
- Containers 117 118 233
Container breakages, shrinkages and write-offs 4 14 80
Profit on disposal of investment in associate (388) - -
Profit on disposal of businesses - (47) (72)
Gain on dilution of investment in associate - - 18
Profit on disposal of property, plant and equipment (13) (20) (17)
Amortisation of intangible assets 210 216 427
Impairment of intangible assets - - 8
Impairment of property, plant and equipment 19 - 52
Impairment of working capital balances 12 6 55
Amortisation of advances to customers 19 20 40
Unrealised net gain from fair value hedges (4) (10) -
Dividends received from other investments (1) (1) (1)
Charge with respect to share options 86 95 141
Charge with respect to Broad-Based Black Economic Empowerment costs 1 7 13
Other non-cash movements (11) (20) (163)
Net cash generated from operations before working capital movements 2,733 2,663 5,677
Net (outflow)/inflow in working capital (82) (67) 93
Net cash generated from operations 2,651 2,596 5,770
10b. Reconciliation of net cash generated from operating activities to free cash flow
Six months Six months Year
ended ended ended
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Net cash generated from operating activities 1,545 1,184 3,431
Purchase of property, plant and equipment (643) (639) (1,401)
Proceeds from sale of property, plant and equipment 38 49 70
Purchase of intangible assets (53) (31) (84)
Investments in joint ventures (18) (23) (188)
Investments in associates - (196) (199)
Dividends received from joint ventures 568 494 903
Dividends received from associates 139 157 224
Dividends received from other investments 1 1 1
Dividends paid to non-controlling interests (92) (102) (194)
Free cash flow 1,485 894 2,563
10c. Analysis of net debt
Cash and cash equivalents on the balance sheet are reconciled to cash and cash equivalents on the cash flow statement as follows.
As at As at As at
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Cash and cash equivalents (balance sheet) 3,015 1,286 2,081
Overdrafts (214) (150) (213)
Cash and cash equivalents (cash flow statement) 2,801 1,136 1,868
Net debt is analysed as follows.
As at As at As at
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Borrowings (16,325) (17,507) (16,783)
Financing derivative financial instruments 884 772 663
Overdrafts (214) (150) (213)
Finance leases (42) (42) (51)
Gross debt (15,697) (16,927) (16,384)
Cash and cash equivalents (excluding overdrafts) 3,015 1,286 2,081
Net debt (12,682) (15,641) (14,303)
The movement in net debt is analysed as follows.
Cash and
cash
equivalents Derivative
(excluding financial Finance
overdrafts) Overdrafts Borrowings instruments leases Gross debt Net debt
US$m US$m US$m US$m US$m US$m US$m
At 1 April 2014 2,081 (213) (16,783) 663 (51) (16,384) (14,303)
Exchange adjustments (49) 9 283 (16) 1 277 228
Principal related cash flows 983 (10) 233 (2) 8 229 1,212
Other movements - - (58) 239 - 181 181
At 30 September 2014 3,015 (214) (16,325) 884 (42) (15,697) (12,682)
The group has sufficient headroom to enable it to comply with all covenants on its existing borrowings. The group has sufficient undrawn financing
facilities to service its operating activities and continuing capital investment for the foreseeable future and thus the directors have continued to adopt the
going concern basis of accounting. The group had the following undrawn committed borrowing facilities available in respect of which all conditions
precedent had been met at that date.
As at As at As at
30/9/14 30/9/13 31/3/14
Unaudited Unaudited Audited
US$m US$m US$m
Amounts expiring:
Within one year 154 176 214
Between one and two years 37 16 41
Between two and five years 3,664 2,522 3,019
3,855 2,714 3,274
11. Commitments, contingencies and guarantees
Except as stated below there have been no material changes to commitments, contingencies or guarantees as disclosed in the annual financial
statements for the year ended 31 March 2014.
Commitments
Contracts placed for future expenditure not provided in the financial information amount to US$2,190 million at 30 September 2014 (31 March 2014:
US$3,736 million). The decrease in contracts placed for future expenditure primarily relates to a decrease in minimum purchase commitments for raw
materials and packaging materials.
Contracts placed for future capital expenditure for property, plant and equipment not provided in the financial information amount to US$206 million at
30 September 2014 (31 March 2014: US$271 million).
12. Related party transactions
There have been no material changes to the nature or relative quantum of related party transactions as described in the 2014 Annual Report.
The following changes were made to key management during the period.
Miles Morland retired from the board with effect from 24 July 2014 and Norman Adami stood down as Chairman of SABMiller Beverages South Africa
with effect from 1 July 2014, and retired from the group with effect from 31 July 2014. Meanwhile, Jan du Plessis joined the SABMiller board as an
independent non-executive director and chairman designate with effect from 1 September 2014.
Consequently as at 30 September 2014 there were 24 key management (31 March 2014: 25).
13. Post balance sheet events
In October 2014 the group settled the litigation in Canada with Molson Coors relating to the licence agreement for Miller trademark brands in Canada.
As a result of the settlement, the rights to distribute Miller trademark brands in Canada will revert to SABMiller with effect from 1 April 2015.
In November 2014 the group gave notice to the holders of its US$ 850 million 6.50% notes due 2016 that it was exercising its rights to redeem the notes
in full on 8 December 2014.
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, 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 any exceptional finance charges or income.
Adjusted profit before tax
This comprises EBITA less adjusted net finance costs and less the group's share of associates' and joint ventures' net finance costs on a similar basis.
Constant currency
Constant currency results have been determined by translating the local currency denominated results for the six months ended 30 September at the
exchange rates for the comparable period in the prior year.
EBITA
This comprises operating profit before exceptional items, and amortisation of intangible assets (excluding computer software) and includes the group's
share of associates' and joint ventures' operating profit on a similar basis.
EBITA margin (%)
This is calculated by expressing EBITA as a percentage of group net producer revenue.
EBITDA
This comprises EBITA (as defined above) plus depreciation and amortisation of computer software, including the group's share of associates' and joint
ventures' depreciation and amortisation of computer software.
EBITDA margin (%)
This is calculated by expressing EBITDA as a percentage of group net producer revenue.
Effective tax rate (%)
The effective tax rate is calculated by expressing tax before tax on exceptional items and on amortisation of intangible assets (excluding computer
software), including the group's share of associates' and joint ventures' tax on a similar basis, as a percentage of adjusted profit before tax.
Free cash flow
This comprises net cash generated from operating activities less cash paid for the purchase of property, plant and equipment, and intangible assets, net
investments in existing associates and joint ventures (in both cases only where there is no change in the group's effective ownership percentage) and
dividends paid to non-controlling interests plus cash received from the sale of property, plant and equipment and intangible assets and dividends
received.
Group revenue
This comprises revenue together with the group's share of revenue from associates and joint ventures.
Group net producer revenue (NPR)
This comprises group revenue less excise duties and other similar taxes, together with the group's share of excise duties and other similar taxes from
associates and joint ventures.
Headline earnings
Headline earnings are calculated by adjusting profit for the financial period attributable to owners of the parent for items in accordance with the South
African Circular 2/2013 entitled 'Headline Earnings'. Such items include exceptional impairments of non-current assets and profits or losses on disposals
of non-current assets and their related tax and non-controlling interests. This also includes the group's share of associates' and joint ventures'
adjustments on a similar basis.
Interest cover
This is the ratio of adjusted EBITDA to adjusted net finance costs.
Net debt
This comprises gross debt (including borrowings, financing derivative financial instruments, overdrafts and finance leases) net of cash and cash
equivalents (excluding overdrafts).
Organic information
Organic results and volumes exclude the first 12 months' results and volumes relating to acquisitions and the last 12 months' results and volumes
relating to disposals.
Sales volumes
In the determination and disclosure of sales volumes, the group aggregates 100% of the volumes of all consolidated subsidiaries and its equity
accounted percentage of all associates' and joint ventures' volumes. Contract brewing volumes are excluded from volumes although revenue from
contract brewing is included within group revenue. Volumes exclude intra-group sales volumes. This measure of volumes is used for lager volumes, soft
drinks volumes, other alcoholic beverage volumes and beverage volumes and is used in the segmental analyses as it more closely aligns with the
consolidated group net producer revenue and EBITA disclosures.
SABMiller plc
FORWARD-LOOKING STATEMENTS
This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire ordinary shares in the capital of SABMiller
plc (the "company") or any other securities of the company or its subsidiaries or associates 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 document, including, without limitation, those regarding the
company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives
relating to the company's products and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results, performance or achievements of the company to be materially different
from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based
on numerous assumptions regarding the company's present and future business strategies and the environment in which the company will operate in
the future. These forward-looking statements speak only as at the date of this document. 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)
Group Company Secretary
Stephen Shapiro
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
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 U.S: 866 JPM-ADRS
Outside the U.S: +1 866 576-2377
Email: adr@jpmorgan.com
Sponsor:
J.P. Morgan Equities South Africa (Pty) Ltd
Date: 13/11/2014 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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