Wrap Text
Annual Financial Report
SABMiller plc
JSEALPHA CODE: SAB
ISIN CODE: SOSAB
ISIN CODE: GB0004835483
23 June 2015
Annual Financial Report
SABMiller plc has today submitted a copy of the 2015 Annual Report and Accounts, Notice of
the 2015 Annual General Meeting and Shareholder Proxy Form (UK) to the National Storage
Mechanism and they will shortly be available for inspection at www.hemscott.com/nsm.do.
The Annual Report and Notice of Annual General Meeting are also available on the
Company’s website www.sabmiller.com.
SABMiller plc’s Annual General Meeting will be held on Thursday, 23 July 2015 at the
InterContinental London Park Lane, One Hamilton Place, Park Lane, London W1J 7QY.
A condensed set of SABMiller’s financial statements and information on important events
that have occurred during the financial year and their impact on the financial statements
were included in SABMiller’s preliminary results announcement released on 13 May 2015.
That information, together with the information set out below, which is extracted from the
2015 Annual Report, constitutes the material required by Disclosure and Transparency Rule
6.3.5 to be communicated to the media in unedited full text through a Regulatory
Information Service. This announcement is not a substitute for reading the full 2015 Annual
Report. Page numbers and cross-references in the extracted information below refer to page
numbers and sections in the 2015 Annual Report.
PRINCIPAL RISKS AND UNCERTAINTIES (page 16 & 17)
Principal risks
Focused on managing our risks
The principal risks facing the group and considered by the board and the executive
committee are detailed below. The group’s well-developed risk management process is
described in the corporate governance section while financial risks are discussed in the
finance review on page 45 and in note 21 to the consolidated financial statements.
Principal risk Context Specific risks we Possible impact Mitigation Associated strategic
face priorities
Consistent Consumer tastes • Failing to Topline growth • Continuous evaluation of • Drive superior
sustainable and behaviours develop and progression does our brand portfolios in every topline growth.
revenue growth are constantly ensure the not meet internal market to ensure that they • Actively shape our
evolving, and at strength and and external target current and future global mix to drive a
an increasingly relevance of our expectations. opportunities for profitable superior growth
rapid rate. brands with growth. profile.
consumers, Market positions • Developing a beer category • Build a globally
Competition in shoppers and come under structure that enables us to integrated
the beverage customers. pressure, market grow both the value of the organisation to
industry is • Failing to opportunities are beer category, and our share optimise resources,
expanding and continue to missed and lower of it. win in market and
becoming more improve our profitability. • Ensuring we have deep reduce costs.
fragmented, commercial understanding of changing
complex and capabilities to consumer and industry
sophisticated. deliver brand dynamics in key markets,
propositions that enabling us to respond
respond appropriately to
appropriately to opportunities and issues
changing which may impact our
consumer business performance.
preferences. • Building our brand equities
through innovation and
compelling marketing
programmes; creating a
pipeline of opportunities to
support our premium
offering.
• Focusing on monitoring
and benchmarking
commercial performance
and developing the critical
commercial capabilities that
are required in order to win
in local markets.
Industry The global • Failing to Lower growth rate, • Continued competitor and • Actively shape our
consolidation brewing and participate in the profitability and target analysis to consider global mix to drive a
beverages right financial returns. strategic and financial superior growth
industry is opportunities. implications of potential profile.
expected to • Paying too Failure to maintain transactions. • Drive superior
continue to much to acquire a our competitive • Potential transactions are topline growth.
consolidate. business. position relative to subject to continual and
There will • Not our peers. rigorous analysis. Only
continue to be implementing opportunities with potential
opportunities to integration plans to create value are pursued.
enter attractive successfully. • Proven integration
growth markets, • Failing to processes, procedures and
to realise synergy identify and practices are applied to
benefits from develop the ensure delivery of expected
integration and to capabilities returns.
leverage our necessary to • Activities to deliver
global scale. facilitate market synergies and leverage scale
and category are in place, monitored
entry. closely and continuously
enhanced.
• Development of non-
traditional capabilities to
enter and grow profitably in
new markets.
Regulatory With an • Unreasonable Lower growth, • Rigorous adherence to the • Drive superior
changes increasingly high regulation places profitability and principle of self-regulation topline growth.
profile debate increasing reduced backed by appropriate • Actively shape our
over alcohol restrictions on the contribution to local policies and management global mix to drive a
consumption in availability and communities in review. superior growth
many markets, marketing of some countries. • Building and maintaining profile.
the alcohol beer. licence to trade capabilities • Build a globally
industry is coming • Tax and excise Loss of consumer across the group to facilitate integrated
under more changes cause goodwill and public sound risk analysis and organisation to
pressure from pressure on sentiment. mitigation plan optimise resources,
national and pricing. development. win in market and
international • Anti-alcohol • Constructive engagement reduce costs.
regulators, NGOs advocates erode with government and all
and local industry external stakeholders on
governments. reputation. alcohol-related issues.
Working collaboratively with
them to address the harmful
use of alcohol.
• Investment to improve the
economic and social impact
of our businesses in local
communities and working in
partnership with local
governments and NGOs.
• Driving our Prosper shared
imperatives to make a
sustainable and measurable
difference to the
communities and
ecosystems in which we
operate.
Management We believe that • Failing to Failure to deliver • Building the group’s • Build a globally
capability our people are identify, develop the group’s strategic leadership talent pipeline integrated
our enduring and retain an and financial through our Global Talent organisation to
advantage and appropriate ambitions. Management model, optimise resources,
therefore it is pipeline of strategic people resourcing win in market and
essential that we talented Lower long-term and long-term talent reduce costs.
develop and managers for the profitable growth. pipeline. • Drive superior
maintain global present and • Sustaining a strong culture topline growth.
management future needs of of accountability,
capability. the group. empowerment and personal
development.
Delivering We continue to • Failing to derive Increased • Senior leadership closely • Build a globally
business execute major the expected programme costs, involved in monitoring integrated
transformation efficiency benefits from the lower benefits than progress and in making key organisation to
programmes that projects currently planned, delays in decisions. optimise resources,
will simplify under way. benefit realisation • Mechanisms in place to win in market and
processes, reduce • Failing to and business track both costs and reduce costs.
costs and allow contain disruption. benefits. • Actively shape our
local programme costs • Rigorous programme global mix to drive a
management or ensure Reputational management and superior growth
teams to focus execution is in damage and governance processes profile.
more closely on line with planned reduced (including independent
their markets. timelines. competitive programme assurance) with
advantage in the dedicated resources and
medium term. clear accountability.
Information and There is • Disruption of Loss of competitive • Continued development, • Build a globally
cyber security increasing information advantage and articulation and integrated
sophistication of technology (IT) reputational implementation of organisation to
cyber-attack systems and a loss damage through the information security policies. optimise resources,
capabilities. of valuable and publicised loss of • Increased investment to win in market and
Business’s sensitive key operating improve information security reduce costs.
increasing information and systems and awareness, intelligence and
demand for assets. confidential data. implementation of sound
consumers’ and • Significant security processes.
customers’ business Adverse effect of • Building and enhancing
personal data disruption. profitability, cash processes to deal with IT
means legislators • Failing to flows or financial security incidents.
rightly continue comply with position.
to impose tighter tightening
data management legislation poses a
control. threat of
significant
financial penalties
or restrictions.
Acquisition A key aspect of • Failing to deliver Lower growth rates, • Embedding of the • Actively shape our
of CUB the CUB integration profitability and SABMiller Ways (its global mix to drive a
acquisition was objectives and asset values. processes, systems and superior growth
the delivery of a commercial and tools) throughout the CUB profile.
turnaround plan operational Damage to the business. • Build a globally
with specific and excellence targets group’s reputation • Commercial efforts in integrated
communicated communicated as for strong market to effectively deliver organisation to
financial value part of the commercial volume, value and market optimise resources,
creation. turnaround plan. capability and for share gains. win in market and
• Failing to making value • Continued monitoring of reduce costs.
achieve the creating progress to complete the
synergy and cost acquisitions. integration objectives,
saving including frequent and
commitments of regular tracking of key
the transaction. performance indicators.
RELATED PARTY TRANSACTIONS
Note 31 to the consolidated financial statements on page 171 details the following related
party transactions.
31. Related party transactions
a. Parties with significant influence over the group: Altria Group, Inc. (Altria) and the Santo
Domingo Group (SDG)
Altria is considered to be a related party of the group by virtue of its 26.8% equity
shareholding. There were no transactions with Altria during the year.
SDG is considered to be a related party of the group by virtue of its 14.0% equity
shareholding in SABMiller plc. There were no transactions with SDG during the year ended
31 March 2015. During the year ended 31 March 2014 Bavaria SA and its subsidiaries made
donations of US$14 million to the Fundación Mario Santo Domingo, pursuant to the
contractual arrangements entered into at the time of the Bavaria transaction in 2005, under
which it was agreed that the proceeds of the sale of surplus non-operating property assets
owned by Bavaria SA and its subsidiaries would be donated to various charities, including
the Fundación Mario Santo Domingo. There were no balances owing to the SDG at 31 March
2015 and 31 March 2014.
b. Associates and joint ventures
Details relating to transactions with associates and joint ventures are analysed below.
2015 2014
US$m US$m
Purchases from associates1 (173) (168)
Purchases from joint ventures2 (88) (93)
Sales to associates3 9 9
Sales to joint ventures4 21 23
Dividends receivable from associates5 423 224
Dividends received from joint ventures6 976 903
Royalties received from associates7 18 25
Royalties received from joint ventures8 1 2
Management fees, guarantee fees and other recoveries received from associates9 14 11
Marketing fees paid to associates10 (1) -
Management fees paid to joint ventures11 (2) (2)
1 The group purchased canned Coca-Cola products for resale from Coca-Cola Canners of Southern Africa (Pty) Limited (Coca-
Cola Canners); inventory from Distell Group Ltd (Distell), Associated Fruit Processors (Pty) Ltd (AFP); and Delta Corporation
(Delta); and accommodation from Tsogo Sun.
2 The group purchased lager from MillerCoors LLC (MillerCoors).
3 The group made sales of lager to Tsogo Sun, Delta, Anadolu Efes Birac?l?k ve Malt Sanayii A? (Anadolu Efes), International
Trade and Supply Ltd (ITSL) and Distell.
4 The group made sales to MillerCoors.
5 The group had dividends receivable from China Resources Snow Breweries Ltd (CR Snow) of US$228 million (2014: US$nil),
Castel of US$108 million (2014: US$97 million), Coca-Cola Canners of US$5 million (2014: US$5 million), Distell of US$18 million
(2014: US$20 million), Tsogo Sun of US$24 million (2014: US$34 million), Delta of US$18 million (2014: US$17 million),
International Trade and Supply Limited of US$21 million (2014: US$18 million), Grolsch (UK) Ltd of US$1 million (2014: US$1
million) and Anadolu Efes US$nil (2014: US$32 million).
6 The group received dividends from MillerCoors.
7 The group received royalties from Delta and Anadolu Efes.
8 The group received royalties from MillerCoors.
9 The group received management fees from Delta, consulting fees from Anadolu Efes and other recoveries from AFP.
10 The group paid marketing fees to ITSL.
11 The group paid management fees to MillerCoors.
At 31 March 2015 2014
US$m US$m
Amounts owed by associates – trade1 28 42
Amounts owed by joint ventures2 4 5
Amounts owed to associates3 (38) (39)
Amounts owed to joint ventures4 (18) (16)
1 Amounts owed by AFP, Delta, Coca-Cola Canners, Castel, ITSL, and Anadolu Efes.
2 Amounts owed by MillerCoors.
3 Amounts owed to AFP and Castel.
4 Amounts owed to MillerCoors.
Guarantees provided in respect of associates’ bank facilities are detailed in note 21.
c. Transactions with key management
The group has a related party relationship with the directors of the group and members of
the excom as key management. Key management compensation is provided in note 6c.
DIRECTORS’ RESPONSIBILITY STATEMENT IN RESPECT OF THE CONSOLIDATED FINANCIAL
STATEMENTS (page 100)
The directors are responsible for preparing the annual report, the directors’ remuneration
report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year.
The directors have prepared the consolidated financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European Union, and
the parent company financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards) and applicable law.
Under company law the directors must not approve the consolidated financial statements
unless they are satisfied that they give a true and fair view of the state of affairs of the group
and company and of the profit or loss of the group for that period.
In preparing those financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether IFRSs as adopted by the European Union and applicable UK Accounting
Standards have been followed, subject to any material departures disclosed and explained in
the group and parent company financial statements respectively; and
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the group and the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the transactions of the company and group and disclose with reasonable
accuracy at any time the financial position of the company and group and enable them to
ensure that the company and consolidated financial statements and the directors’
remuneration report comply with the Companies Act 2006 and, as regards the consolidated
financial statements, Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the company and the group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
A copy of the consolidated and company financial statements 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. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
The directors consider that the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for shareholders to
assess the group’s performance, business model and strategy.
Each of the directors, whose names and functions are listed on pages 52 and 53 of this
annual report, confirm that, to the best of his or her knowledge:
• the consolidated financial statements, which have been prepared in accordance with IFRSs
as adopted by the EU, the Companies Act 2006 and Article 4 of the IAS Regulation, give a
true and fair view of the assets, liabilities, financial position and profit of the group; and
• the management report contained in this annual report includes a fair review of the
development and performance of the business and the position of the group, together with
a description of the principal risks and uncertainties that it faces.
The directors in office at the date of this report have each confirmed that:
• so far as the director is aware, there is no relevant audit information of which the group’s
auditors are unaware; and
• he or she has taken all the steps he or she ought to have taken as a director in order to
make himself or herself aware of any relevant audit information and to establish that the
group’s auditors are aware of that information.
Stephen Shapiro
Group Company Secretary
Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
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 announcement, including, without limitation, those regarding the company’s
financial position, business strategy, plans and objectives of management for future operations (including development plans
and objectives relating to the company’s products and services) are forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results,
performance or achievements of the company to be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous
assumptions regarding the company’s present and future business strategies and the environment in which the company will
operate in the future. These forward-looking statements speak only as at the date of this announcement. Factors which may
cause differences between actual results and those expected or implied by the forward-looking statements include, but are not
limited to: material adverse changes in the economic and business conditions in the markets in which SABMiller operates;
increased competition and consolidation in the global brewing and beverages industry; changes in consumer preferences;
changes to the regulatory environment; failure to deliver the integration and cost-saving objectives in relation to the Foster’s
acquisition; failure to derive the expected benefits from the global efficiency programmes; and fluctuations in foreign currency
exchange rates and interest rates.
The company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking
statements contained herein to reflect any change in the company’s expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based. The past business and financial performance of SABMiller
plc is not to be relied on as an indication of its future performance.
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