Wrap Text
Annual Financial Report and notice of AGM
SABMiller plc
JSEALPHA CODE: SAB
ISSUER CODE: SOSAB
ISIN CODE: GB0004835483
20 June 2016
SABMiller plc
Annual Financial Report
SABMiller plc has today submitted a copy of the 2016 Annual Report and Accounts,
Notice of the 2016 Annual General Meeting and Shareholder Proxy Form (UK) to the
National Storage Mechanism and they will shortly be available for inspection at
www.morningstar.co.uk/uk/NSM.
The Annual Report and Notice of Annual General Meeting are also available on the
Company’s website www.sabmiller.com.
SABMiller plc’s Annual General Meeting will be held on Thursday, 21 July 2016 at
the InterContinental London Park Lane, One Hamilton Place, Park Lane, London
W1J 7QY.
A printed copy of the 2016 Annual Report and Accounts and Notice of Annual
General Meeting 2016 will be sent to those shareholders who have elected to receive
paper communications on 21 June 2016.
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 18 May 2016. That information, together with the information set out below, which
is extracted from the 2016 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 2016 Annual Report. Page numbers and cross-
references in the extracted information below refer to page numbers and sections in
the 2016 Annual Report.
PRINCIPAL RISKS (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 risk management process is described in
the corporate governance section while financial risks are discussed in the finance
review on page 47 and in note 21 to the consolidated financial statements.
Principal risk Context Specific risks Possible Mitigation Associated Comparison
we face impact strategic to previous
priorities year
Management We believe • Failing to • Failure to • Building the • Drive superior Risk
capability that our identify, develop deliver the group’s leadership topline growth. broadened
people are our and retain an group’s strategic talent pipeline due to the AB
enduring appropriate and financial through our Global • Build a globally InBev offer
advantage and pipeline of ambitions. Talent Management integrated
it is essential talented model, strategic organisation to
that we managers for • Lower long- people resourcing optimise
develop and the present and term profitable and long-term talent resources, win in
maintain future needs of growth. pipeline. market and
global the group. reduce costs.
management • Loss of • Sustaining a strong
capability. • Potential competitive culture of • Actively shape
disruption to advantage. accountability, our global mix to
Our people management empowerment, and drive a superior
are a source and staff arising personal growth profile.
of competitive from uncertainty development.
advantage and during the AB
will continue to InBev offer • Continuous
be in the new period and employee
enlarged exacerbated by engagement and
organisation or the complexity of communication to
in a potential promote retention of
standalone disposals to key talent and use of
business if the facilitate incentive
AB InBev regulatory programmes that
transaction approvals. support motivation
does not and retention.
complete.
• Aligned goal
setting focused on
current priorities.
Regulatory With an • Regulation • Lower growth, • Rigorous • Drive superior Risk
changes increasingly places profitability and adherence to the topline growth. broadened
high profile increasing reduced principle of self- due to the AB
debate over restrictions on contribution to regulation backed by • Actively shape InBev offer
alcohol the availability local appropriate policies our global mix to
consumption and marketing of communities in and management drive a superior
in many beer. some countries. review. growth profile.
markets, the
alcohol • Tax and excise • Loss of • Building licence to
industry is changes cause consumer trade capabilities
coming under pressure on goodwill and across the group to
more pressure pricing. public sentiment. facilitate sound risk
from national analysis and
and • Anti-alcohol mitigation plan
international advocates erode development.
regulators, industry
NGOs and reputation. • Constructive
local engagement with
governments. government and all
external
This risk has stakeholders on
broadened as alcohol-related
compared with issues.
the previous
year due to • Investment to
possible enhance the positive
increased economic and social
regulatory impact of our
scrutiny businesses in local
arising from communities and
the AB InBev working in
offer. partnership with
local governments
and local and global
NGOs.
• Driving our Prosper
shared imperatives
to make a
sustainable and
measurable
difference to the
communities and
ecosystems in which
we operate.
Consistent Consumer • Failing to • Topline growth • Pursuing a beer • Drive superior Risk
sustainable tastes and develop and progression category structure topline growth. broadened
revenue behaviours are ensure the does not meet that enables us to due to the AB
growth constantly strength and internal and grow both the value • Build a globally InBev offer
evolving, and relevance of our external of the beer category, integrated
at an brands with expectations. and our share of it. organisation to
increasingly consumers, optimise
rapid rate. shoppers and • Market • Ensuring we have resources, win in
customers. positions come a deep market and
Competition in under more understanding of reduce costs.
the beverage • Failing to pressure and changing consumer
industry is continue to market and industry • Actively shape
expanding and improve our opportunities are dynamics in key our global mix to
becoming commercial missed, leading markets, enabling us drive a superior
more capabilities to to lower to respond growth profile.
fragmented, deliver brand profitability. appropriately to
complex and propositions opportunities and
sophisticated. which respond issues which may
appropriately to impact our business
Potential changing performance.
actions of our consumer
competitors preferences. • Ongoing evaluation
and of our brand
stakeholders portfolios in every
during the market to ensure
offer period that they target
could impact current and future
the opportunities for
competitive profitable growth.
environment
and our • Building our brand
commercial equities through
performance. innovation and
compelling
marketing
programmes;
creating a pipeline of
opportunities to
support our premium
offering.
• Focus on
monitoring and
benchmarking
commercial
performance and
developing the
critical commercial
capabilities that are
required in order to
win in local markets.
• Active
management of key
relationships in local
markets to minimise
any potential
disruption arising
during the AB InBev
offer period.
Information There is • Disruption of • Loss of • Continued • Drive superior Risk
and cyber increasing information competitive development and topline growth. broadened
security sophistication technology advantage and implementation of due to the AB
of cyber-attack systems and a reputational information security • Build a globally InBev offer
capabilities. loss of valuable damage through policies. integrated
Business’s and sensitive the publicised organisation to
increasing information and loss of key • Increased optimise
demand for assets. operating investment to resources, win in
consumers’ systems and improve information market and
and • Significant confidential security awareness, reduce costs.
customers’ business data. intelligence and
personal data disruption. implementation of
means • Adverse effect sound security
legislators • Failing to of profitability, processes.
rightly comply with cash flows or
continue to tightening financial • Building and
impose tighter legislation poses position. enhancing
data a threat of processes to
management significant accelerate detection
control. financial of, and deal with, IT
penalties or security incidents.
There is a restrictions.
heightened
risk of
information
loss, cyber
security
attacks and
deliberate,
harmful acts
as a result of
possible
disruption and
business
distraction
during the AB
InBev offer
period.
Confidentialit The • Failure to • Loss of • Group-wide • Drive superior New Risk due
y and anti- business’s comply with anti- competitive communications and topline growth. to the AB
trust support for the trust legislation advantage and protocols developed InBev offer.
compliance AB InBev offer and information reputational and disseminated • Actively shape
and the post- security damage. throughout the our global mix to
transaction protocols results organisation. drive a superior
convergence in negative • Adverse effect growth profile.
planning reputational on profitability, • Engagement of
process impact, cash flows or external anti-trust
through to commercial financial counsel engaged at
change of implications, and position. global and local
control significant levels to ensure
requires clear financial SABMiller’s interests
and consistent penalties. are protected.
compliance
with anti-trust • Use of ‘clean
legislation and teams’ and
information associated protocols
security to manage
protocols with necessary
respect to information sharing
provision of as part of the
information to regulatory, disposals
AB InBev and and convergence
other parties. planning processes.
Transaction The AB InBev • Transaction • Loss of value. • Engagement with • Drive superior New Risk due
fails to offer is subject failure impacts AB InBev to support topline growth. to the AB
complete to multiple the organisation • Loss of short- timely transaction InBev offer.
approvals from resulting in loss term competitive completion including • Build a globally
regulatory of momentum advantage. support for disposal integrated
bodies and and short and processes and organisation to
shareholders. medium-term • Failure to convergence optimise
disruption to deliver the planning assistance. resources, win in
business group’s short market and
performance. and medium- • US$3 billion break reduce costs.
term strategic fee in place should
• Unsettled and financial the AB InBev offer • Actively shape
management ambitions. fail to complete. our global mix to
and staff. drive a superior
• Strong continued growth profile.
• Transaction focus on delivery of
failure poses strategy and
threat to financial
relationships performance, cost
with external control and budget
stakeholders discipline in place
including across the
shareholders, organisation.
customers,
suppliers, and • Management
joint venture and response plans in
associate place should the AB
partners. InBev offer fail to
complete.
RELATED PARTY TRANSACTIONS
Note 31 to the consolidated financial statements on page 167 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 26.7% 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. During the year the group made purchases of logistics
services and natural gas from SDG companies totalling US$5 million (2015: US$nil).
At 31 March 2016 US$1 million (2015: US$nil) was owing to SDG companies.
b. Associates and joint ventures
Details relating to transactions with associates and joint ventures are analysed
below.
2016 2015
US$m US$m
Purchases from associates1 (165) (173)
Purchases from joint ventures2 (103) (88)
Sales to associates3 38 9
Sales to joint ventures4 19 21
Dividends receivable from associates5 253 423
Dividends received from joint ventures6 998 976
Royalties received from associates7 16 18
Royalties received from joint ventures8 14 1
Management fees, guarantee fees and other recoveries received from associates 9 14 14
Marketing fees paid to associates10 (1) (1)
Management fees paid to joint ventures11 (2) (2)
Management fees received from joint ventures 12 1 -
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 in 2015 accommodation from Tsogo Sun Holdings Ltd (Tsogo Sun).
2 The group purchased lager from MillerCoors LLC (MillerCoors).
3 The group made sales of lager to Delta, Anadolu Efes Biracilik ve Malt Sanayii AS (Anadolu Efes), International
Trade and Supply Ltd (ITSL) and Distell, and in 2015 to Tsogo Sun.
4 The group made sales to MillerCoors.
5 The group had dividends receivable from China Resources Snow Breweries Ltd (CR Snow) of US$71 million
(2015: US$228 million), Castel of US$89 million (2015: US$108 million), Coca-Cola Canners of US$10 million (2015:
US$5 million), Distell of US$15 million (2015: US$18 million), Tsogo Sun of US$nil (2015: US$24 million), Delta of
US$19 million (2015: US$18 million), ITSL of US$24 million (2015: US$21 million), Grolsch (UK) Ltd of US$1 million
(2015: US$1 million) and Anadolu Efes US$24 million (2015: US$nil).
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, Anadolu Efes and Castel and other recoveries from AFP.
10 The group paid marketing fees to ITSL.
11 The group paid management fees to MillerCoors.
12 The group received management fees from MillerCoors.
At 31 March 2016 2015
US$m US$m
Amounts owed by associates1 15 28
Amounts owed by joint ventures2 8 4
Amounts owed to associates3 (36) (38)
Amounts owed to joint ventures4 (14) (18)
1 Amounts owed by AFP, Delta, Coca-Cola Canners, Castel 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 96)
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 position and performance, business model and
strategy.
Each of the directors, whose names and functions are listed on pages 54 and 55 of
this annual report, confirms 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 that 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
This document 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 document is intended to provide information to shareholders. It should not be relied upon by any other party or
for any other purpose. This document 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: the outcome
of the proposed transaction with Anheuser-Busch InBev SA/NV; material adverse changes in the economic and
business conditions in the markets in which SABMiller operates; increased competition in the global brewing and
beverages industry; changes in consumer preferences; changes to the regulatory environment; 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.
Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd
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