Interim Results

15th Nov 2007 07:02

SABMiller PLC15 November 2007 15 November 2007 SABMILLER REPORTS STRONG GROWTH IN FIRST HALF SABMiller plc, one of the world's leading brewers with operations anddistribution agreements in over 60 countries across six continents, todayreports its interim (unaudited) results for the six months to 30 September 2007. Operational Highlights • Group lager volumes up 15% to 135 million hectolitres (hl), organic growth of 11% • EBITA up 14%, and 10% on an organic constant currency basis • Double digit volume growth in Europe with EBITA up 29% • Miller returns to growth in the US with organic sales to retailers up 1.4% - EBITA up 19% • Lager volumes in Latin America up 8%, in line with expectations - investment in brands and distribution depress margin in the current period • Africa & Asia lager volumes increase by 29% - driven by China and India • South Africa lager volume growth of 2% despite the expected loss of premium volumes • Increased capital investment to provide for continuing growth -------------------------------- -------- -------- -------- -------- Sept Sept March 2007 2006 % 2007 US$m US$m change US$m -------------------------------- -------- -------- -------- -------- Revenue (a) 10,781 9,344 15 18,620 EBITA (b) 2,036 1,781 14 3,591 Adjusted profit before tax (c) 1,773 1,533 15 3,154 Profit before tax 1,579 1,378 14 2,804 Adjusted earnings (d) 1,036 846 22 1,796 Adjusted earnings per share (d) - US cents 69.1 56.6 22 120.0 - UK pence 34.5 30.5 13 63.4 - SA cents 492.0 385.2 28 847.2 Basic earnings per share (US cents) 63.9 52.9 20 110.2 Interim dividend per share (US cents) 16.0 14.0 14 -------------------------------- -------- -------- -------- -------- Graham Mackay, Chief Executive Officer of SABMiller, said: "This has been a good start to the year, demonstrating the strength of our brandportfolio and the health of our businesses. We have delivered another excellentperformance in Europe, a pleasing return to growth in North America, and ourAsian businesses have continued their momentum and made market share gains. Atthe second anniversary of our Bavaria transaction, our volumes have grownstrongly in Latin America and our investment plans remain on track." (a) Revenue excludes the attributable share of associates' revenue ofUS$1,242 million (2006: US$1,052 million). (b) Note 2 provides a reconciliation of operating profit to EBITA which isdefined as operating profit before exceptional items and amortisation ofintangible assets (excluding software) but includes the group's share ofassociates' operating profit, on a similar basis. EBITA is used throughout theinterim announcement. (c) Adjusted profit before tax comprises EBITA less net finance costs ofUS$258 million (2006: US$242 million) and share of associates' net finance costsof US$5 million (2006: US$6 million). (d) A reconciliation of adjusted earnings to the statutory measure of profitattributable to equity shareholders is provided in note 5. -------------------- --------- --------- -------------Segmental EBITA performance 2007 Reported Organic, constant EBITA growth currency US$m % growth %-------------------- --------- --------- ------------- Latin America 438 13 2Europe 622 29 17North America 300 19 19Africa and Asia 277 16 13South Africa: Beverages 405 (2) 3South Africa: Hotels and Gaming 58 32 38Corporate (64) - - --------- --------- -------------Group 2,036 14 10 --------- --------- ------------- CHIEF EXECUTIVE'S REVIEW Business review The start to the year reflects the momentum in SABMiller's developing markets,which are demonstrating stronger and more sustainable growth than in previouseconomic cycles. Improving GDP levels and government finances and moderate ratesof inflation are supporting greater local infrastructure investment, which inturn is enhancing consumer disposable income. The group's premium portfoliostrategy has also enabled it to capture value from the global drift to highermargin products in its developing and developed markets, as consumers continueto trade up. Despite challenging comparative growth rates during the comparablesix months of last year and higher input costs in the current period, thebusiness has reported organic growth in lager volumes of 11% and an increase inEBITA of 10% on an organic, constant currency basis. As expected, the groupEBITA margin decreased slightly to 16.9%, 20 basis points below the prior year,reflecting the change in mix of our segmental profits together with highermarketing investment and input costs. Industry wide commodity cost increaseshave been significant with the impact varying across regions reflectingdiffering currency strengths and local sourcing conditions. In aggregate, ourprice increases and productivity have offset these input cost rises. These results, in aggregate, continue to demonstrate the value of the group'sdiverse and strong brand portfolios, which include some 200 local and regionalbeers. Total beverage volumes were 159 million hectolitres (hl). Total reportedlager volumes were up 15% to 135 million hl, including the impact ofacquisitions in China and India. • Miller Brewing Company delivered improved results in the US as aresult of its strategy to migrate the business' brand portfolio to highermargin, higher growth segments. EBITA for the period was 19% higher than theprior year, driven primarily by price increases and higher volumes, and includesa favourable cost adjustment of US$16 million in respect of the prior year.Total sales to retailers (STRs) grew by 1.4% on an organic basis and by 5.9% ona reported basis, against a US beer industry which, excluding imports, grew at1.0%. The flagship brand, Miller Lite, returned to solid growth, posting a 2.1%gain in STRs, at the same time increasing its average case pricing by 2.1%, some50 basis points ahead of its largest light beer competitor. Miller's worthmorebrand portfolio also delivered a strong performance. • After six years of double digit EBITA growth, Europe has recordedanother excellent performance with organic constant currency EBITA growth of17%. This was driven by volume growth and market share gains in Poland, Russiaand Romania, assisted by warm weather across Eastern Europe during the firstquarter. Europe's premium brands recorded 13% volume growth, reflectingsuccessful initiatives to capture value from consumer trends towards premiumproducts. This growth in higher margin brands, in addition to price increasesand efficiency gains, mitigated the impact of significant increases in the costof raw materials, real wage increases and the negative mix effect of the stronggrowth in cans in certain markets. • At the second anniversary of the Bavaria acquisition, theimplementation of our strategy to renovate the beer category in Latin Americaremains on track, although the speed and scale of the initiatives beingimplemented has led to some inevitable market dislocation during the period.Lager volume growth of 8% for the half year is in line with the group's mediumterm expectations, notwithstanding the high comparatives in the prior period anda slowdown in spending on consumables in Colombia. The group remains confidentthat the substantial activity underway to transform the category will deliversignificant volume and margin growth in the medium term. • The group's joint-venture in China, CR Snow, continued its verystrong performance, with organic volume growth of 22%, well ahead of the widerChinese beer market. All regions posted growth, with market share gains in theCentral and North Eastern provinces. The national brand, Snow, which nowaccounts for over 70% of volumes, is expected to become the world's secondlargest beer brand by volume within calendar year 2007. In India, our businessgrew strongly, reporting lager volume growth of 28%. Capacity expansion and theintegration of last year's Foster's India acquisition represent key areas ofprogress during the period. Momentum within Africa continued, with favourableeconomic conditions driving good growth in Tanzania, Mozambique and Angola,supported by ongoing brand renovations and improved execution in both sales anddistribution. • Lager volumes in South Africa grew by a pleasing 2% despite thetermination of the Amstel brand licence in March 2007. The expected loss ofpremium volumes was mitigated by strong growth in Castle Lite and the successfullaunch of a new premium brand offering, Hansa Marzen Gold, which alreadyrepresents some 3% of volumes for the half year. Mainstream lager volumes grewby 5%, assisted by the absence of the National Lottery over the six month period. Total soft drink volumes were up an impressive 11% as the business alsobenefited from a robust economic environment, with GDP growing by 5%. • On 9 October 2007, SABMiller and Molson Coors Brewing Companyannounced that they had signed a letter of intent to combine the U.S. and PuertoRico operations of their respective subsidiaries, Miller and Coors, in a jointventure. The transaction will create a stronger, brand-led U.S. brewer with thescale, resources and distribution platform to compete more effectively in theincreasingly competitive U.S. marketplace. Definitive agreements are expected tobe signed in December 2007, but regulatory clearance is not expected before mid2008. Reported EBITA of US$2,036 million was up by 14% and included a 4% contributionfrom favourable weighted average currency rates. Net cash generated fromoperations before working capital movements was 13% above the prior year,illustrating the overall strength of the trading performance and our strong cashcharacteristics. The group's gearing decreased during the period to 43.5% from45.8% at year end. Earnings benefited from currency strength in some majormarkets and lower tax rates in certain jurisdictions. Adjusted earnings andadjusted earnings per share are up by 22%, to US$1,036 million and 69.1 US centsrespectively for the first six month period. An interim dividend of 16 US centsper share, a 14% increase, will be paid to shareholders on 21 December 2007. Outlook We have delivered a good first half performance, benefiting from the weightingof our portfolio of businesses towards emerging markets, and a focus ondeveloping our premium brands. We are continuing to invest in our businesses todrive revenues, which, together with ongoing productivity gains, are offsettingindustry wide cost pressures. We expect to make progress in the balance of theyear but face a more challenging environment. Enquiries:--------------- SABMiller plc Tel: +44 20 7659 0100 Sue Clark Director of Corporate Affairs Mob: +44 7850 285471 Gary Leibowitz Senior Vice President, Investor Relations Mob: +44 7717 428540 Nigel Fairbrass Head of Media Relations Mob: +44 7799 894265 A live webcast of the management presentation to analysts will begin at 9.00am (GMT) on 15 November 2007. This announcement, a copy of the slide presentation and video interviews with management are available on the SABMiller plc website at www.sabmiller.com. Video interviews with management can also be found at www.cantos.com. High resolution images are available for the media to view and download free ofcharge from www.newscast.co.uk Copies of the press release and detailed Interim Announcement are available fromthe Company Secretary at the Registered Office, or from 2 Jan Smuts Avenue,Johannesburg, South Africa Registered office: SABMiller House, Church Street West, Woking, Surrey GU21 6HS Incorporated in England and Wales (Registration Number 3528416) Telephone: +44 1483 264000 Telefax: +44 1483 264117 -------------------------------------------------------------------------------- Operational review Latin America Sept Sept 2007 2006Financial summary US$m US$m %--------------------------- ------- ------- ------- Revenue 2,453 2,012 22 EBITA* 438 387 13 EBITA margin (%) 17.8 19.2 Sales volumes (hl 000- Lager 17,757 16,460 8- Soft drinks 9,144 9,730 (6)- Soft drinks - organic 9,144 9,284 (2)--------------------------- ------- ------- -------- * In 2007 before exceptional items of US$52 million (30/09/2006: US$24 million)being integration and restructuring costs in Latin America, less the net profiton the sale of soft drink and juice businesses in Costa Rica and Colombiarespectively. The implementation of our strategy to renovate the beer category in the regionis on track with good initial signs of success. Lager volume growth of 8% forthe half year has been achieved, notwithstanding high comparatives in the priorperiod, and we remain confident that our initiatives to transform the categorywill deliver significant volume and profit margin growth in the medium term.Reported EBITA performance for the first half has been aided by favourableexchange rates. Organic constant currency EBITA growth was 2%, reflectingsubstantial upfront investment in brand renovations and new brand launches.Higher US dollar raw materials costs were offset by local currency appreciation,pricing and productivity benefits. The EBITA margin declined by 140 basispoints, including 40 basis points from changes to invoicing of distributioncosts. These changes have also increased reported revenue growth by 200 basispoints but have no net effect on EBITA. Lager volumes in Colombia increased by almost 8%, with slower growth recorded inthe latter part of the period, as higher consumer credit costs impacted spendingon consumables, and as the business started cycling high comparative growthnumbers. Beer's share of the alcohol market has increased steadily over theperiod. Renovation of our brand portfolio has further widened the appeal of thebeer category and the recent upgrade of the market-leading Aguila brand,re-launched with a new packaging design in an enlarged 330ml bottle, has led tobrand volumes increasing 9%. In the premium segment, volume growth has beenencouraging and Club Colombia grew by 50% in the half year. With theintroduction of the national pricing model in December last year, retailmark-ups and regional pricing variability were reduced. Structuralroute-to-market changes and an increase in the sales force numbers and trademarketing capabilities are being implemented, with increased focus on extractingoperational efficiencies and improving service reliability. The speed and scaleof the initiatives being implemented including major changes to theroute-to-market has led to some market dislocation over the period and had aminor impact on volumes. Investment in production capacity has progressed andthe new Valle brewery outside Cali will be commissioned by the end of thecalendar year, increasing capacity by 2.2 million hl. Further capital has beeninvested in product quality, in distribution, and in upgrading bottles. Our Peru operations have achieved lager volume growth of 10% despiteunseasonably cold weather and an earthquake in August which lowered volumemomentum towards the end of the period. There has been continuing strong pricediscounting by competition especially with the entry of a low-priced brand froma new competitor. Our flagship brand Cristal continues to show positive momentumfollowing its relaunch, but has been affected by the intense competition and ouroverall market share fell to 88% in September, on a monthly basis, from 92% inMarch 2007. The business continues to invest in marketing, brand renovation,improving capability at the point of sale and capacity. Trading at our Ecuador operation was difficult with the loss of six trading daysdue to "dry" election days. Lager volumes grew by 4% with the flagshipmainstream brand Pilsener growing at 5% over very strong comparatives in theprior period. Pilsener was relaunched in the latter part of September whileactivities to improve visibility and availability continue. Our Club brand wasalso relaunched and positioned in the premium segment. In Panama our lager volumes grew by over 12% in a market that has grown by 10%.Both our flagship brands Atlas and Balboa were successfully relaunched and prioryear above-inflation price increases have further boosted revenue. Minorityinterests of 6.7% were acquired, increasing our effective interest to 95%. Lager volumes in Honduras grew by 3%, aided by growth in the premium segment,while soft drinks reported growth of 9%. In El Salvador our soft drink marketshare has grown by nearly one percentage point to 47.7%. Lager volumes havegrown by nearly 4% off high growth in the prior period, driven by the premiumGolden Light brand, which continues to show double digit growth. Our integration activities in the South America region are drawing to a closewith a final exceptional charge recorded in the period of US$52 million. Thisincludes a US$17 million net profit on the disposal of the juice business inColombia and soft drinks business in Costa Rica, which have been completed inthe period. Europe Sept Sept 2007 2006Financial summary US$m US$m %--------------------------- ------- ------- ------- Revenue 2,876 2,279 26 EBITA 622 485 29 EBITA margin (%) 21.6 21.3 Sales volumes (hl 000)- Lager 25,715 23,041 12--------------------------- ------- ------- ------- Europe achieved an excellent result with lager organic volumes up 12% and EBITAgrowth of 29%. Volumes were assisted by warm weather in the earlier months, withPoland, Russia and Romania all delivering strong double digit volume increases.While volume growth moderated in the later months, most operations improvedmarket share over the half year. Reported EBITA growth of 29% was boosted bycurrency translation gains and was 17% up on an organic constant currency basis.There were significant increases in raw material costs, real wage increases andthe continued growth of can volumes in certain markets. The pricing environmentduring the period under review has shown some signs of improvement. In Poland, strong economic fundamentals as well as generally warmer weatherunderpinned 8% growth in the beer market. Our domestic volumes were up 14% andmarket share for the six month period improved. Tyskie, Poland's leading brandwith annual volumes of 5.7 million hectolitres and market share over 16%continued its strong recovery and grew 11% while Zubr, the second biggest brandin the market, was up 23% with upgraded brand imagery, new packaging andincreased media and trade presence. In the local premium segment, Lech was 12%ahead with strong trade activation utilising associations with music and activelifestyles. Our flavoured beer Redd's, with its three variants, is the fastestgrowing brand in the premium segment. Expansion projects currently under waywill increase overall annual capacity to over 17 million hl by next summer. Volumes in the Czech Republic were up 3%, slightly ahead of the market, andmarket share improved slightly. Improved sales mix has been achieved reflectingthe continued focus on premium and mainstream brands. All brands have benefitedfrom a comprehensive packaging upgrade over the past 18 months including labels,proprietary bottles, new crates, cans, multipacks and all secondary packaging.Pilsner Urquell grew 5%, supported by a successful on-trade outlet expansionprogramme focused on high visibility outlets, and tailored shopper activation inhypermarkets. A new specialty beer, Master, introduced in draught in April hasbeen well accepted by the on-trade as a super premium to complement the existingportfolio. Volumes of our largest brand, Gambrinus, were slightly down as wedeliberately withdrew from competitive rounds of discounting. Kozel continuedits strong momentum and was up by 21%. In order to address the sharp escalationin the cost of brewing raw materials, price rises averaging 5.8% have beenannounced. In Russia volumes were up 18%, ahead of the beer market which grew by anestimated 14%, reflecting the combined effects of warmer spring weather andimproving consumer spending. Real income growth is driving share gains for thepremium segment. Miller Genuine Draft was 21% ahead, driven by expandingdistribution of the new half litre bottle and Zolotaya Bochka, the fastestgrowing local premium brand, was up 22% buoyed by focused marketing investment.Redd's grew by 31% supported by strong brand communication targeted at femaleconsumers. New initiatives with distributors targeting smaller cities havestarted to increase reach, with the sales force and cooler placements expandedsignificantly to increase retail coverage in more than 120,000 outlets.Construction of the new brewery at Ulyanovsk, 1,000 km east of Moscow, is on schedule to open early in 2009 with an initial capacity of 3 million hl and the ability to expand further as required. In Italy, with generally warmer weather and a modestly improving economy, thebeer market grew by an estimated 1%. Against this, Birra Peroni has deliveredoverall domestic volume growth of 2% as branded volumes gained 4% and privatelabel volumes were reduced by 24% with the continuation of the managed exit fromthis segment. Focus on the on-trade, in the more affluent North, has led tovolume growth in this region of 7%. This performance has been achieved withabove-inflation price increases implemented early in the year. Our premium brandNastro Azzurro was up 8%, completing ten quarters of market share growth, andpremiumisation of the brand continues with selected prestige sponsorships andthe launch of limited edition packs. Peroni volumes were 6% higher than prioryear, with extensive activation of national football and rugby teamsponsorships, expansion of draught particularly in the Northern provinces, andsignificant packaging renovation. In Romania our volumes surged 37% with market share up 450 basis points to24.9%, in a market up 12%, driven by a robust economy and growing consumerspending. Now largely freed of the capacity constraints which applied during thefirst half of last year, our portfolio is better matched to consumer demandthrough mainstream and economy PET offerings supported by anchor distributors,improved marketing and in trade execution. Our local premium brand Ursus Premiumgrew by 15% and its on-premise share stands at 15%, while Timisoreana Lux was up67% boosted by the new two litre PET pack, and is now the market leader withannual sales of well over 2 million hl. These two brands are now the top twobrands in the important on-premise channel. Production capacity is being furtherexpanded to 6.3 million hl. In Hungary the fiscal austerity measures continue to impact domesticconsumption, and there are no signs yet of an end to the intense pricediscounting. Despite this, and the introduction of PET offerings by twocompetitors, our volumes grew 4%, ahead of a declining market. In the UK we continue to build on last year's success, with volumes up 42%against an overall market where volumes have fallen. Peroni Nastro Azzurro grew33% with new packs, a successful national advertising campaign, and asignificant increase in draught installations. Our Polish brands, Tyskie andLech, introduced last year, have been successfully integrated into the portfolioand are performing very strongly. North America Sept Sept 2007 2006Financial summary US$m US$m %--------------------------- ------- ------- ------- Revenue 2,782 2,632 6 EBITA* 300 253 19 EBITA margin (%) 10.8 9.6 Sales volumes (hl 000)- Lager - excluding contract brewing 26,191 24,693 6 - contract brewing 4,065 5,224 (22)- Soft drinks 54 49 10 Lager - domestic sales to retailers (STRs) 24,556 23,177 6 --------------------------- ------- ------- ------- * In 2007 including an amount of US$16m from a settlement with Ball MetalBeverage Container Corporation in respect of can purchases in the prior year(2006: nil). Miller Brewing Company drove improved results in the period through disciplinedexecution of its strategy to migrate the brand portfolio to higher margin,higher growth segments, while aggressively controlling costs to continueinvestments in brand marketing and product innovation. Solid volume and pricing performance for the flagship Miller Lite brand, strongoverall portfolio pricing and mix gains, with improved volume performance fromhigher margin brands, combined to produce a 3.9% increase in domestic netrevenue per barrel. During the period, US beer industry shipments to wholesalers (STWs) grew by1.6%. Excluding imports, the US industry grew by 1.0%. Miller's US domesticsales to retailers (STRs) increased by 5.9% over the six months and 1.4% on anorganic basis, while reported domestic STWs increased by 6.7%. Contract brewingvolumes were lower by 22%, due primarily to Miller's acquisition of the Sparksand Steel Reserve brands last year which were previously brewed under contract,and were down only 5% on an organic basis. Miller Lite returned to solid growth in the period, posting a 2.1% increase inSTRs supported by a strong marketing campaign focused on product intrinsicvalues. Miller Lite was up 3.3% in the on-premise channel and average casepricing was up 2.1% across all channels, 50 basis points more than its largestdomestic light beer competitor. After just six weeks of market testing, Miller decided in April to fast track anational launch of Miller Chill, its new chelada-style light beer. The brandreached 74% off-premise and 30% on-premise distribution by 1 August 2007 withstrong consumer trial and repeat purchase fuelling its success. Miller Chillprovided significant incremental volume and margin enhancement as it reached a0.8% value share during the peak summer sales season. While the brand isdemonstrating expected seasonality, as at the end of October 2007 it hadachieved STRs of 380,000 barrels, and it is well on its way to exceeding thefirst year retail volume target of 400,000 barrels. Miller's worthmore brand portfolio grew volumes in the high-single digits. Thisstrong performance was driven by 27% growth of the Leinenkugel's franchise,following the continued rollout of the Sunset Wheat variant, which is nowavailable in 42 states, as well as the regional launch of Summer Shandy. PeroniNastro Azzurro grew by 54% in the US using its global Italian style positioning.Sparks volume grew by 10.8% on a proforma basis during its first full year inthe Miller system. Miller High Life also returned to growth, with STRs up 1.0% on the back of astrong national marketing campaign focused on common sense values and averagecase prices were up 2.9% in supermarkets nationally. The Milwaukee's Bestfranchise STRs declined 4.0% in the face of strong competitive pressure in theeconomy segment. The declining trend for Miller Genuine Draft STRs continuedwith volumes down 9.3%, in line with its market segment. Icehouse STRs were up2.0%, a significant trend improvement following new brand positioning. Total revenue increased by 5.8% versus the prior period, while US domesticrevenue excluding contract brewing increased by 10%. Brewing materials costswere up compared to the prior year as grain, barley and other ingredient costsincreased. EBITA for the period was 19% higher than the prior year, driven primarily byprice increases and higher volumes, and includes a retrospective costadjustment. In October 2007 Miller settled a dispute with the Ball MetalBeverage Container Corporation, which will result in a one-time payment toMiller of some $70 million, a portion of which is attributable to our contractbrewing partners. An amount of US$16 million relates to materials supplied toMiller during the prior financial year and this benefit has been included in theperiod under review. The settlement also includes a one-off gain of US$17million which will be reported in the second half in respect of othercontractual changes. The balance attributable to Miller is being recognised asnormal costs of goods sold, across both halves of the current year. Miller's EBITA margin increased to 10.8% from 9.6%, as unit revenueimprovements, favourable mix and the effect of the Ball settlement exceededincreases in marketing and other costs. Marketing investment will remain at ahigh level in the second half as we invest behind brand momentum andinnovations. Africa & Asia Sept Sept 2007 2006Financial summary US$m US$m %--------------------------- ------- ------- ------- Group revenue (including share of associates) 1,703 1,356 26 EBITA 277 240 16 EBITA margin (%) 16.3 17.7 Sales volumes (hl 000)*- Lager 52,830 40,854 29- Lager organic 49,406 40,854 21- Soft drinks 4,193 6,914 (40)- Soft drinks - organic 4,193 3,438 22- Other alcoholic beverages 2,966 3,126 (5)--------------------------- ------- ------- ------- * Excludes Castel lager volumes of 8,441 hl 000 (2006: 7,563 hl 000) and softdrinks of 7,256 hl 000 (2006: 6,659 hl 000). Soft drinks volumes include sparkling and non-sparkling beverages. The strong growth in Africa & Asia continued in the period under review, withlager volume growth of 29% (representing organic growth of 21%) and reportedEBITA growth of 16%, despite currency weakness in certain of our countries.EBITA margin reduced from 17.7% to 16.3% as a result of the higher growth inlower margin Asia markets and a slight reduction in Africa margins due to risingcosts. Africa Momentum within Africa continued in the first half with organic lager growth of6% and total organic volume growth of 7%, both excluding Zimbabwe. Underlyingthis performance is continued economic growth in most countries, improvedexecution in both sales and distribution and ongoing brand renovations. Tanzania achieved lager volume growth of 8% in the six months. Performance wasdriven by an improving economy, improved distribution and market placeactivities including the re-formulation of the premium Ndovu Lager to 100% malt,the introduction of new long neck bottle for Kilimanjaro and the launch of Eaglelager in the North East aimed at capturing share at the subsistence end of themarket. The launch of Eagle will be rolled out on a national basis later in theyear. Mozambique continued its excellent performance by posting lager growth of 8%,its fourth consecutive first half year period of similar growth. The performancewas underpinned by continued economic development, a stable currency and a wellbalanced brand and pack portfolio that provides the consumer with multiple brandand pack options at differing price points. A new brewhouse was commissionedlate in the prior year and a number of capacity projects have delivered improvedoperating efficiencies. Angola continues to grow rapidly with a buoyant economy and our soft drinkbusiness continues its strong growth, recording 12% volume growth despite supplyside constraints. Profitability was impeded by the ending of an import taxholiday and higher can volumes which carry lower margins. Results for this yearinclude our share of earnings from the recently privatised Empresa de CervejasN'gola, our brewery in Southern Angola, which is performing ahead of expectationand is currently undergoing a capacity expansion. Botswana has returned to growth in both lager and soft drinks operations. Theeconomic pressure and inflationary impacts that followed the 2005 devaluationshave largely been absorbed and are no longer impacting performance. Lagervolumes are up 11% and soft drinks up 19%. We have completed the brandrenovation of the market leading lager, St. Louis, and have recently launched anew returnable lager bottle aimed at reducing the cost per serving to theconsumer. Castel performed well with robust economic conditions in the countries in whichthey operate underpinning 10% total volume growth, and strong growth wasrecorded in its key markets of Cameroon, Ethiopia and Angola. Asia China continued its strong performance with underlying organic volume growth of22%, ahead of industry growth. All regions posted growth over the prior period,with the North East and Central regions out-performing the others despiteincreased competitor activity. The Snow brand extended its position as China'snumber one brand by volume with a 9% overall market share and it now representsover 70% of the brand portfolio. Input cost increases were evident and, while prices were increased in someregions, this led to overall margin pressure during the period. In addition theongoing integration of new acquisitions and greenfield commissioning costsfurther added to overall margin pressures. The business disposed of its non core Southern region water business in May2007, thus creating a focused lager beer business. India once again grew strongly in the first six months posting lager volumegrowth of 28%, (up 20% on an organic basis) with industry growth of 16%. Ongoingcapacity expansion, the development of a well balanced brand portfolio and theintegration of last year's Foster's India acquisition represent key areas ofprogress over the period, with volumes of the Fosters' brand up 47% on aproforma basis. South Africa: Beverages Sept Sept 2007 2006Financial summary US$m US$m %--------------------------- ------- ------- ------ Group revenue (including share of associates) 2,016 1,950 4 EBITA 405 411 (2) EBITA margin (%) 20.1 21.1 Sales volumes (hl 000)- Lager 12,478 12,237 2- Soft drinks 7,253 6,506 11 --------------------------- ------- ------- ------ The South African economy continued its growth trend in the first six months ofthe financial year, recording GDP growth of 5%. Consumer demand remained strongand the suspension of the National Lottery was a favourable factor. Lager volumes grew by 2% in the first half of the year. Total soft drink volumeswere up 11% as the soft drink business benefited from the positive economicenvironment and some trade restocking in earlier months following carbon dioxideshortages at the end of the prior year. Our mainstream lager volumes grew by 5% and flavoured alcoholic beverages (FABs)achieved strong growth. The expected loss in premium volumes was softened by thestrong growth in Castle Lite (up 74%) and the successful launch of a new premiumoffering, Hansa Marzen Gold, in May 2007, which represents some 3% of volumesfor the half year, and the launch of Peroni Nastro Azzurro in draught format.Volume growth was impacted by supply and production constraints experienced atthe end of the second quarter, compounded by reduced production flexibilityduring new brand and pack introductions, including the implementation of ourmainstream renovation programme. Price increases in January 2007 in lager and soft drinks, which were belowinflation, together with organic volume growth increased revenue by 8% inconstant currency. Revenue growth reflects negative sales mix in lager and thefaster growth of soft drinks. Margins were adversely affected by higher raw material and packaging inputcosts, driven by rising dollar commodity prices, exacerbated by a weaker randduring the period, compared to the prior year. Input costs for the full year areexpected to show further increases as higher priced glass imports impactpackaging costs. Distribution costs were higher as our direct delivery customer base increased inline with our main market penetration initiative. Outlets serviced increased by7% in the first half of this year to over 21,500. Despite significant progressbeing made earlier in the year in licensing outlets, administrative delays atlocal government level have slowed progress. Distribution costs also rose fromcoastal breweries having to partially supply inland sales areas withnon-returnable packs. Marketing investments were made in brand and pack renovations and new productdevelopment. Castle received a packaging upgrade across all packs as did HansaPilsner, which was renovated to match the contemporary Hansa Marzen Goldpackaging. Extensive new product development work undertaken in the first halfof the year will deliver further innovations in the market over the next twelvemonths. The phased replacement of the 750ml returnable mainstream bottlecommenced in April 2007, and to date, three of our seven breweries are producingmainstream brands in the new bottle and our consumers' response has beenpositive. Constant currency EBITA growth of 3% reflects the impact of higher raw materialand distribution costs as well as the investment in market facing initiatives.EBITA margins are 100 basis points lower at 20.1%, also reflecting the change insales mix with lower premium lager volumes and higher mainstream lager volumesin the period. During the first six months the negative impact of the termination of the Amstelbrand on SA Beverages earnings has been mitigated by the unavailability of theproduct in the market in the first quarter as well as the successful launch ofour new premium brand, Hansa Marzen Gold. Consequently, we have revised ourestimate of the impact on current year EBITA from US$80 million to betweenUS$40m and US$50m, which will impact EBITA and margin mainly in the second halfas the brand has recently returned to the market in bottle form. Sales of Appletiser continued to show strong volume growth, up 25%, with doubledigit growth recorded in South Africa and internationally. Distell has grown inboth its domestic and international markets, primarily in the cider, ready todrink and spirits categories. Profitability has also been improved by operatingefficiencies. South Africa: Hotels and Gaming Sept Sept 2007 2006Financial summary US$m US$m %--------------------------- ------- ------- ------- Group revenue (share of associates) 193 167 16 EBITA 58 44 32 EBITA margin (%) 30.1 26.6 Revenue per available room (Revpar) - US$ 68.29 58.46 17 --------------------------- ------- ------- ------- The group is a 49% shareholder in the Tsogo Sun group, which reported a goodfirst half year result with an increase of 32% in EBITA over the prior period.The South African economy continued to grow with consumer spending and demandfor hotel accommodation remaining high. The gaming division enjoyed robustgrowth during the period with new gaming capacity and market growth influencingresults. Good occupancy levels continue to be achieved, with strong growth inroom rate improving revpar by 17% over the prior period. Financial review Accounting policies The accounting policies followed are the same as those published within theAnnual Report and Accounts for the year ended 31 March 2007. The Annual reportand accounts for the year ended 31 March 2007 are available on the company'swebsite, www.sabmiller.com. Segmental analysis The group's operating results on a segmental basis are set out in the segmentalanalysis of operations, and the disclosures are in accordance with the basis onwhich the businesses are managed and according to the differing risk and rewardprofiles. SABMiller believes that the reported profit measures - beforeexceptional items and amortisation of intangible assets (excluding software),and including associates on a similar basis (i.e. before interest, tax andminority interests) - provide additional information on trends and allow forgreater comparability between segments. Segmental performance is reported afterthe specific apportionment of attributable head office service costs. Accounting for volumes In the determination and disclosure of reported sales volumes, the groupaggregates 100% of the volumes of all consolidated subsidiaries and its equityaccounted associates, other than associates where the group exercisessignificant influence but primary responsibility for day to day management restswith others (such as Castel and Distell). In these latter cases, the financialresults of operations are equity accounted in terms of IFRS but volumes areexcluded. Contract brewing volumes are excluded from total volumes; howeverrevenue from contract brewing is included within revenue. Reported volumesexclude intra-group sales volumes. Organic, constant currency comparisons The group discloses certain results on an organic, constant currency basis, toshow the effects of acquisitions net of disposals and changes in exchange rateson the group's results. Organic results exclude the first twelve months' resultsof acquisitions and the last twelve months' results of disposals. Constantcurrency results have been determined by translating the local currencydenominated results for the period ended 30 September 2007 at the exchange ratesfor the comparable period in the prior period. Acquisitions and disposals On 3 August, the group announced the acquisition of 99.96% of Browar Belgia Spzoo, the fourth largest brewer in Poland. The transaction is subject to approvalfrom the Office of Competition and Consumer Protection, which is expected duringDecember 2007. On 9 October, SABMiller plc and Molson Coors Brewing Company announced that theyhave signed a letter of intent to combine the US and Puerto Rico operations oftheir respective subsidiaries, Miller and Coors, in a joint venture to create astronger, brand-led US brewer with the scale, resources and distributionplatform to compete more effectively in the increasingly competitive USmarketplace. The transaction is subject to negotiation of definitive agreements,which is expected by the end of 2007. Closing of the transaction is also subjectto obtaining clearances from the US competition authorities and certain otherregulatory clearances and third-party consents, as required, and is not expectedbefore mid 2008. During the period the group completed the disposals of its soft drinks businessin Costa Rica and the juice business in Colombia which were announced in theprior year. Our associate in China also completed the disposal of a non-corewater business. Exceptional items Items that are material either by size or incidence are classified asexceptional items. Further details on the treatment of these items can be foundin note 3. Net exceptional charges of US$52 million have been recorded (2006:US$27 million) during the period. These relate to final restructuring costs ofUS$69 million (2006: US$27 million) incurred in Latin America, partially offsetby a net profit of US$17 million on disposal of soft drink businesses in CostaRica and Colombia. Borrowings and net debt Gross debt, comprising borrowings of the group together with the fair value ofderivative assets or liabilities held to manage interest rate and foreigncurrency risk of borrowings, has increased to US$7,555 million from US$7,358million at 31 March 2007. Net debt comprising gross debt net of cash and cashequivalents has increased to US$7,054 million from US$6,877 million at 31 March2007. An analysis of net debt is provided in note 8. The group's gearing(presented as a ratio of debt/equity) has decreased to 43.5% from 45.8% at 31March 2007. On 16 July 2007, the group's holding company for its South Africanoperations raised R1,600 million (approximately US$230 million) in 5-year notes.The notes, issued under a R4,000 million Domestic Medium Term Note Programme,are guaranteed by SABMiller plc and are listed on BESA, the South African BondExchange. The net proceeds of the bond issue have been used to repay part ofexisting loan facilities that were utilised by The South African Breweries Ltd. The average borrowing rate for the total debt portfolio at 30 September 2007 was7.9% (2006: 6.9%), compared to 7.6% at 31 March 2007. Finance costs Net finance costs increased to US$258 million (2006: US$242 million), reflectingthe change in the composition in net debt with more non US dollar related debt,funding of the acquisition of minority interests in the second half of the prioryear and the increased interest rates noted above. Profit before tax Profit before tax of US$1,579 million was up 14% on prior year, reflectingperformance improvements across the businesses, despite higher exceptional items(as described above). Taxation Our effective tax rate, 33.5%, is lower than the prior year period under review(35.7%), and also lower than the prior year full year rate (34.5%). Thisreflects a more favourable geographic mix of profits across the group, localstatutory rate reductions and ongoing management of our effective tax rate. Earnings per share The group presents adjusted basic earnings per share to exclude the impact ofthe amortisation of intangible assets (excluding software) and othernon-recurring items, which include post-tax exceptional items, in order topresent a more meaningful comparison for the years shown in the consolidatedfinancial statements. Adjusted basic earnings per share of 69.1 US cents were upby 22% on the prior period, reflecting the improved performance noted above. Ananalysis of earnings per share is shown in note 5 to the financial statements. Cash flow Net cash generated from operating activities before working capital movements(EBITDA) increased by 13%, to US$2,229 million, compared to the prior period.The ratio of EBITDA to revenue decreased slightly in the period to 20.7% (2007:21.0%). Risks and uncertainties The principal risks and uncertainties for the first six months and remaining sixmonths of the financial year remain as reflected on page 9 of the 2007 AnnualReport. In addition there is a risk relating to the proposed joint venturetransaction concerning Miller and Coors in the US and Puerto Rico. Thetransaction is subject to the receipt of consents and approvals from governmententities that could delay or prevent completion of the transaction or imposeconditions on the joint venture, which could result in an adverse effect on thebusiness or financial condition of the joint venture or on Miller if thetransaction does not proceed to completion, as well as on our business andfinancial results. Currencies: South African rand/Colombian peso During the period, the rand strengthened by 5% against the US dollar and endedat R6.89 to the US dollar compared to R7.29 at 31 March 2007, whilst theweighted average rand/dollar rate weakened by 5% to R7.12 compared with R6.81 inthe prior period. The peso has strengthened by 8% against the US dollar endingthe period at COP2,023 to the US dollar, compared to COP2,190 at 31 March 2007and the weighted average COP/dollar rate strengthened by 17% to COP2,030compared with COP2,437 in the prior period. Dividend The board has declared a cash interim dividend of 16 US cents per share. The dividend will be payable on 21 December 2007 to shareholders registered on the London and Johannesburg registers on 30 November 2007. The ex-dividend trading dates will be 28 November 2007 on the London Stock Exchange and 26 November 2007on 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 rate of exchange applicable for US dollar conversion into both South African rand and sterling was determined yesterday. The rate of exchange determined for converting to South African rand was US$:ZAR = 6.6412 resulting in an equivalent interim dividend of 106.2592 SA cents per share. The rate of exchange for converting to sterling was GBP:US$ = 2.0752 resulting in an equivalent interim dividend of 7.7101 UK pence per share. From the commencement of trade on 15 November 2007 until the close of businesson 30 November 2007, no transfers between the London and Johannesburg registerswill be permitted, and from the close of business on 23 November 2007 until theclose of business on 30 November 2007, no shares may be dematerialised orrematerialised. DIRECTORS' RESPONSIBILITY FOR FINANCIAL REPORTING This statement, which should be read in conjunction with the independent reviewreport of the auditors set out below, is made to enable shareholders todistinguish the respective responsibilities of the directors and the auditors inrelation to the consolidated interim financial information, set out on pages 18to 33, 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 andestimates. 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 informationon the company's website. Information published on the internet is accessible inmany countries with different legal requirements. Legislation in the UnitedKingdom governing the preparation and dissemination of the financial statementsmay differ from legislation in other jurisdictions. The directors confirm that this condensed set of financial statements has beenprepared in accordance with IAS 34 as adopted by the European Union, and theinterim report herein includes a fair review of the information required by DTR4.2.7 and DTR 4.2.8. The directors of SABMiller plc are listed in the SABMiller plc Annual Report forthe year ended 31 March 2007. Ms Nancy De Lisi retired from office on 30 April2007 and Mr Dinyar Devitre, nominated by Altria Group, Inc. to replace Ms DeLisi was appointed to the board on 16 May 2007. A list of current directors ismaintained on the SABMiller plc website: www.sabmiller.com. On behalf of the board E A G Mackay M I WymanChief executive Chief financial officer 15 November 2007 INDEPENDENT REVIEW REPORT OF HALF-YEARLY CONSOLIDATED FINANCIAL INFORMATION TOSABMILLER plc Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 30September 2007, which comprises the summarised income statement, summarisedbalance sheet, statement of recognised income and expense, cash flow statementand related notes. We have read the other information contained in thehalf-yearly financial report and considered whether it contains any apparentmisstatements or material inconsistencies with the information in the condensedset of financial statements. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, "Interim Financial Reporting", as adopted by the European Union. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. This report, including the conclusion, has been prepared for and onlyfor the company for the purpose of the Disclosure and Transparency Rules of theFinancial Services Authority and for no other purpose. We do not, in producingthis report, accept or assume responsibility for any other purpose or to anyother person to whom this report is shown or into whose hands it may come savewhere expressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 30 September 2007 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asadopted by the European Union and the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. PricewaterhouseCoopers LLP LondonChartered Accountants 15 November 2007 SABMiller plcCONSOLIDATED INCOME STATEMENTSfor the six months ended 30 September ---------------------------- ----- --------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited Notes US$m US$m US$m ---------------------------- ----- --------- -------- -------- Revenue 2 10,781 9,344 18,620 Net operating expenses (9,091) (7,829) (15,593) --------- -------- -------- Operating profit 2 1,690 1,515 3,027 --------- -------- --------Operating profit beforeexceptional items 1,742 1,542 3,120Exceptional items 3 (52) (27) (93) --------- -------- -------- Net finance costs (258) (242) (428) --------- -------- --------Interest payable andsimilar charges (354) (388) (668)Interest receivable 96 146 240 --------- -------- -------- Share of post-tax resultsof associates 147 105 205 --------- -------- -------- Profit before taxation 1,579 1,378 2,804Taxation 4 (497) (470) (921) --------- -------- -------- Profit for the financialperiod 1,082 908 1,883 --------- -------- -------- Profit attributable tominority interests 124 118 234Profit attributable toequity shareholders 958 790 1,649 --------- -------- -------- 1,082 908 1,883 --------- -------- -------- Basic earnings per share(US cents) 5 63.9 52.9 110.2Diluted earnings per share(US cents) 5 63.5 52.6 109.5 --------- -------- -------- All operations are continuing. SABMiller plcCONSOLIDATED BALANCE SHEETSat 30 September --------------------------- ------ --------- -------- -------- 30/9/07 30/9/06 31/3/07 Unaudited Unaudited Audited Notes US$m US$m US$m --------------------------- ------ --------- -------- --------AssetsNon-current assetsGoodwill 13,783 12,678 13,250Intangible assets 4,062 3,741 3,901Property, plant and equipment 7 7,433 6,169 6,750Investments in associates 1,524 1,049 1,351Available for sale investments 50 42 52Derivative financial instruments 37 72 34Trade and other receivables 190 95 181Deferred tax assets 142 359 164 --------- -------- -------- 27,221 24,205 25,683Current assetsInventories 1,048 801 928Trade and other receivables 1,822 1,304 1,471Current tax assets 105 52 103Derivative financial instruments 3 66 6Loan participation deposit - 190 -Cash and cash equivalents 8 501 657 481 --------- -------- -------- 3,479 3,070 2,989Assets in disposal groups held for sale - - 64 --------- -------- -------- 3,479 3,070 3,053 --------- -------- --------Total assets 30,700 27,275 28,736 --------- -------- -------- LiabilitiesCurrent liabilitiesDerivative financial instruments (21) (4) (5)Borrowings 8 (1,227) (1,157) (1,711)Trade and other payables (3,012) (2,493) (2,746)Current tax liabilities (513) (354) (429)Provisions (282) (205) (266) --------- -------- -------- (5,055) (4,213) (5,157)Liabilities directly associated withdisposal groups held for sale - - (19) --------- -------- -------- (5,055) (4,213) (5,176) --------- -------- --------Non-current liabilitiesDerivative financial instruments (310) (136) (204)Borrowings 8 (6,174) (6,326) (5,520)Trade and other payables (312) (61) (269)Deferred tax liabilities (1,440) (1,537) (1,393)Provisions (1,190) (1,265) (1,173) --------- -------- -------- (9,426) (9,325) (8,559) --------- -------- --------Total liabilities (14,481) (13,538) (13,735) --------- -------- --------Net assets 16,219 13,737 15,001 --------- -------- -------- EquityShare capital 9 158 158 158Share premium 10 6,162 6,123 6,137Merger relief reserve 10 3,395 3,395 3,395Other reserves 10 1,177 (78) 466Retained earnings 10 4,688 3,593 4,250 --------- -------- --------Total shareholders' equity 15,580 13,191 14,406Minority interests 10 639 546 595 --------- -------- --------Total equity 16,219 13,737 15,001 --------- -------- -------- SABMiller plcCONSOLIDATED CASH FLOW STATEMENTSfor the six months ended 30 September -------------------------- ----- --------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited Notes US$m US$m US$m -------------------------- ----- --------- -------- -------- Cash flows from operatingactivitiesCash generated fromoperations 11 2,128 2,152 4,018Interest received 104 94 231Interest paid (378) (347) (719)Interest element of financelease payments - (1) -Tax paid (447) (371) (801) --------- -------- --------Net cash from operatingactivities 1,407 1,527 2,729 --------- -------- -------- Cash flows from investingactivitiesPurchase of property, plantand equipment (850) (462) (1,191)Proceeds from sale ofproperty, plant andequipment 42 25 110Purchase of intangibleassets (34) (240) (270)Purchase of investments (5) - (3)Proceeds from sale ofinvestments - 1 1Proceeds from sale ofassociates - - 81Proceeds on disposal ofshare in subsidiaries 71 - 7Acquisition of subsidiaries(net of cash acquired) - (145) (131)Purchase of shares fromminorities (2) (34) (200)Purchase of shares inassociates (29) (8) (186)Dividends received fromassociates 47 73 102Dividends received fromother investments - 1 1 --------- -------- --------Net cash used in investingactivities (760) (789) (1,679) --------- -------- -------- Cash flows from financingactivitiesProceeds from the issue ofshares 25 24 38Purchase of own shares forshare trusts (9) (8) (30)Proceeds from borrowings 2,679 3,710 5,126Repayment of borrowings (2,725) (3,702) (5,663)Capital element of financelease payments (2) (9) (7)Decrease in loanparticipation deposit - - 200Net cash receipts on netinvestment hedges 2 - 42Dividends paid toshareholders of the parent (537) (473) (681)Dividends paid to minorityinterests (87) (68) (161) --------- -------- --------Net cash used in financingactivities (654) (526) (1,136) --------- -------- -------- Net cash from operating,investing and financingactivities (7) 212 (86)Effects of exchange ratechanges (18) 26 (18) --------- -------- --------Net (decrease) / increasein cash and cashequivalents (25) 238 (104) Cash and cash equivalentsat 1 April 294 398 398 --------- -------- --------Cash and cash equivalentsat period end 8 269 636 294 --------- -------- -------- SABMiller plcCONSOLIDATED STATEMENTS OF RECOGNISED INCOME AND EXPENSESfor the six months ended 30 September ----------------------------- --------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited US$m US$m US$m ----------------------------- --------- -------- -------- Currency translationdifferences on foreigncurrency net investments 812 (302) 362Actuarial gains/(loss) ondefined benefit plans - - (5)Fair value moves on availablefor sale investments - - 7Tax on items taken directly toequity - - 2Net investment hedges (90) 106 (2) --------- -------- --------Net profits/(losses)recognised directly in equity 722 (196) 364 Profit for the period 1,082 908 1,883 --------- -------- -------- Total recognised income forthe period 1,804 712 2,247 --------- -------- --------- attributable to equity shareholders 1,662 606 2,010- attributable to minority interests 142 106 237 --------- -------- -------- SABMiller plcNOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation The financial information comprises the unaudited results of SABMiller plc forthe six months ended 30 September 2007 and 30 September 2006, together with theaudited results for the year ended 31 March 2007. The financial information inthis report is not audited and does not constitute statutory accounts within themeaning of s240 of the Companies Act 1985 (as amended). The board of directorsapproved this financial information on 15 November 2007. The annual financialstatements for the year ended 31 March 2007, which represent the statutoryaccounts for that year have been filed with the Registrar of Companies. Theauditors' report on those accounts was unqualified and did not contain astatement made under s237(2) or (3) of the Companies Act 1985. The unaudited financial information in this interim announcement has beenprepared in accordance with the Disclosure and Transparency Rules of theFinancial Services Authority, and with IAS 34 'Interim Financial Reporting' asadopted by the European Union. The interim financial information should be readin conjunction with the annual financial statements for the year ended 31 March2007, which have been prepared in accordance with IFRSs as adopted by theEuropean Union. The subsidiary and associated undertakings in the group operate in the localcurrency of the country in which they are based. From a presentationalperspective, the group regards these operations as being US dollar-based as thetransactions of these entities are, insofar as is possible, evaluated in USdollars. In management accounting terms all companies report in US dollars. Thedirectors of the company regard the US dollar as the presentational currency ofthe group, being the most representative currency of its operations. Thereforethe consolidated interim financial statements are presented in US dollars. Accounting policies The accounting policies adopted are consistent with those of the annualfinancial statements for the year ended 31 March 2007, which were published inJune 2007, as described in those financial statements. The financial statementsare prepared under the historical cost convention, except for the revaluation tofair value of certain financial assets and liabilities, share based payments,and pension assets and liabilities. The following new standards, amendments to standards or interpretations aremandatory for the first time for the financial year ending 31 March 2008. - IFRS 7 Financial Instruments: Disclosures, IAS 1 Amendments to Capital Disclosures, and IFRS 4 Insurance Contracts revised implementation guidance. As this interim report contains only condensed financial statements, and as there are no material financial instrument related transactions in the period, full IFRS 7 disclosures are not required at this stage. The full IFRS 7 disclosures, including the sensitivity analysis to market risk and capital disclosures required by the amendment of IAS 1, will be given in the annual financial statements. - IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies. This interpretation is not relevant for the group. - IFRIC 8 Scope of IFRS 2. This interpretation has not had any impact on the recognition of share-based payments in the group. - IFRIC 9 Reassessment of Embedded Derivatives. This interpretation has not had any impact on the group. - IFRIC 10 Interim Financial Reporting and Impairment. This interpretation has not had any impact on the group. 2. Segmental information (unaudited) Revenue The following table provides a reconciliation of group revenue (including shareof associates' revenue) to segment revenue. Share of Share of Segment associates' Group Segment associates' Group revenue revenue revenue revenue revenue revenueSix months 2007 2007 2007 2006 2006 2006ended 30 US$m US$m US$m US$m US$m US$mSeptember: ---------------- ------- -------- -------- --------- --------- ---------Latin America 2,453 - 2,453 2,003 9 2,012Europe 2,876 - 2,876 2,279 - 2,279North America 2,782 - 2,782 2,632 - 2,632Africa and Asia 869 834 1,703 681 675 1,356South Africa: ------- -------- -------- --------- --------- ---------- Beverages 1,801 215 2,016 1,749 201 1,950- Hotels andGaming - 193 193 - 167 167 ------- -------- -------- --------- --------- ---------South Africa:Total 1,801 408 2,209 1,749 368 2,117 ------- -------- -------- --------- --------- --------- 10,781 1,242 12,023 9,344 1,052 10,396 ------- -------- -------- --------- --------- --------- Year ended 31March: 2007 2007 2007 US$m US$m US$m --------- --------- --------- Latin America 4,373 19 4,392Europe 4,078 - 4,078North America 4,887 - 4,887Africa and Asia 1,455 1,219 2,674South Africa: --------- --------- ---------- Beverages 3,827 447 4,274- Hotels andGaming - 340 340 --------- --------- ---------South Africa:Total 3,827 787 4,614 --------- --------- --------- 18,620 2,025 20,645 --------- --------- --------- Operating profit The following table provides a reconciliation of operating profit (segmentresult) to operating profit before exceptional items. Operating Operating profit before profit before Operating Exceptional exceptional Operating Exceptional exceptional profit items items profit items itemsSix months 2007 2007 2007 2006 2006 2006ended 30 US$m US$m US$m US$m US$m US$mSeptember: ---------------- ------- -------- -------- --------- --------- ---------Latin America 328 52 380 311 24 335Europe 620 - 620 484 - 484North America 293 - 293 251 - 251Africa and Asia 133 - 133 124 - 124South Africa:Beverages 380 - 380 387 - 387Corporate (64) - (64) (42) 3 (39) ------- -------- -------- --------- --------- --------- 1,690 52 1,742 1,515 27 1,542 ------- -------- -------- --------- --------- --------- Year ended 31March: 2007 2007 2007 US$m US$m US$m --------- --------- --------- Latin America 746 64 810Europe 706 24 730North America 366 - 366Africa and Asia 272 - 272South Africa:Beverages 1,043 - 1,043Corporate (106) 5 (101) --------- --------- --------- 3,027 93 3,120 --------- --------- --------- EBITA The following table provides a reconciliation of operating profit beforeexceptional items to EBITA. Six months Share of Amortisation Share of Amortisation ended 30 Operating associates' of intangible Operating associates' of intangibleSeptember: profit operating assets profit operating assets before profit before (excluding before profit before (excluding exceptional exceptional software) exceptional exceptional software) items items EBITA items items EBITA 2007 2007 2007 2007 2006 2006 2006 2006 US$m US$m US$m US$m US$m US$m US$m US$m---------- -------- -------- -------- ------ ------- ------- -------- ------ Latin America 380 - 58 438 335 - 52 387Europe 620 - 2 622 484 - 1 485North America 293 - 7 300 251 - 2 253Africa and Asia 133 141 3 277 124 115 1 240SouthAfrica: -------- -------- -------- ------ ------- ------- -------- ------- Beverages 380 25 - 405 387 24 - 411- Hotelsand Gaming - 57 1 58 - 44 - 44 -------- -------- -------- ------ ------- ------- -------- ------SouthAfrica: 380 82 1 463 387 68 - 455TotalCorporate (64) - - (64) (39) - - (39) -------- -------- -------- ------ ------- ------- -------- ------Group 1,742 223 71 2,036 1,542 183 56 1,781 -------- -------- -------- ------ ------- ------- -------- ------ Year ended31 March: 2007 2007 2007 2007 US$m US$m US$m US$m ------- ------- -------- ------ Latin America 810 - 105 915Europe 730 - 3 733North America 366 - 9 375Africa and Asia 272 193 2 467SouthAfrica: ------- ------- -------- ------- Beverages 1,043 59 - 1,102- Hotelsand Gaming - 100 - 100 ------- ------- -------- ------SouthAfrica: 1,043 159 - 1,202TotalCorporate (101) - - (101) ------- ------- -------- ------Group 3,120 352 119 3,591 ------- ------- -------- ------ The group's share of associates' operating profit is reconciled to the share ofpost-tax results of associates in the income statement as follows: Six months Six months Year ended Ended ended 30/9/07 30/9/06 31/3/07 US$m US$m US$m -------------------------- ------- ------- ------- Share of associates' operating profit 223 183 352Share of associates' net finance cost (5) (6) (9)Share of associates' tax (55) (52) (102)Share of associates' minority interests (16) (20) (36) ------- ------- ------- 147 105 205 ------- ------- ------- Excise duties of US$2,187 million (2006: US$1,887 million) have been incurredduring the six months as follows: Latin America US$621 million (2006: US$497million); Europe US$551 million (2006: US$442 million); North America US$468million (2006: US$461 million); Africa and Asia US$201 million (2006: US$152million) and South Africa US$346 million (2006: US$335 million). Beer volumes increase during the summer months leading to higher revenues beingrecognised in the first half of the year in the Europe and North Americasegments. Due to the spread of the business between Northern and Southernhemispheres, the results for the group as a whole are not highly seasonal innature. The following table provides a reconciliation of EBITDA (the net cash inflowfrom operating activities before working capital movements) before cashexceptional items to EBITDA after cash exceptional items. A reconciliation ofgroup EBITDA after cash exceptional items can be found in note 11. EBITDA EBITDA before cash before cash exceptional Exceptional exceptional ExceptionalSix months items items EBITDA items items EBITDAended 30September: 2007 2007 2007 2006 2006 2006 US$m US$m US$m US$m US$m US$m--------------- -------- -------- ------- --------- -------- -------Latin America 545 (10) 535 493 (17) 476Europe 732 - 732 577 - 577North America 372 - 372 325 - 325Africa and Asia 172 - 172 159 - 159South Africa:Beverages 453 - 453 458 - 458Corporate (35) - (35) (28) (3) (31) -------- -------- ------- --------- -------- ------- 2,239 (10) 2,229 1,984 (20) 1,964 -------- -------- ------- --------- -------- ------- Year ended 31March: 2007 2007 2007 US$m US$m US$m --------- -------- ------- Latin America 1,147 (25) 1,122Europe 936 (7) 929North America 510 - 510Africa and Asia 340 - 340South Africa:Beverages 1,200 - 1,200Corporate (65) (5) (70) --------- -------- ------- 4,068 (37) 4,031 --------- -------- ------- 3. Exceptional items -------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited US$m US$m US$m -------- -------- -------- Subsidiaries' exceptional items included in operatingprofit: Latin America (52) (24) (64) -------- -------- --------Integrationandrestructuringcosts (69) (24) (64)Profit on saleofsubsidiaries 17 - - -------- -------- -------- Europe - - (24) -------- -------- --------Integrationandrestructuringcosts - - (7)Profit on saleof land inItaly - - 14Adjustment togoodwill - - (31) -------- -------- -------- CorporateBavariaintegrationcosts - (3) (5) Exceptionalitems includedin operatingprofit (52) (27) (93) -------- -------- -------- -------- -------- --------Taxation credit 20 8 30 -------- -------- -------- 2007 Latin America and Corporate Integration and restructuring costs associated with the consolidation of Bavariaof US$69 million were incurred during the period (six months ended 30/09/06:US$27 million; year ended 31/03/07: US$69 million). A net US$17 million profit on disposal has been recognised in Latin America onthe disposal of soft drinks businesses in Costa Rica and Colombia in the sixmonths ended 30 September 2007. 4. Taxation ----------------------------- -------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited US$m US$m US$m ----------------------------- -------- -------- --------Currenttaxation 466 384 780 -------- -------- --------- Charge for the period1 486 377 833- Adjustments in respect ofprior years (20) 7 (53) -------- -------- --------Withholdingtaxes andother taxes 40 48 119 -------- -------- --------Total currenttaxation 506 432 899 Deferredtaxation (9) 38 22 -------- -------- --------- Charge for the period2 (11) 33 82- Adjustments in respect ofprior years 8 5 5- Recognition of deferredtax asset in connectionwith the acquisition ofBirra Peroni - - (31)- Rate change (6) - (34) -------- -------- -------- Total taxation 497 470 921 -------- -------- -------- Effective tax rate, beforeamortisation of intangibles(excluding software) andexceptional items (%) 33.5 35.7 34.5 -------- -------- -------- The effective tax rate is calculated including share of associates' operatingprofit before exceptional items and share of associates' tax before exceptionalitems. This calculation is on a basis consistent with that used in prior yearsand is also consistent with other group operating metrics. 1 The current tax charge for the period includes a UK corporation tax charge of US$Nil (six months ended 30/9/06: US$4 million; year ended 31/3/07: US$Nil). 2 The deferred tax charge for the period includes a UK corporation tax credit of US$9.3 million (six months ended 30/9/06: US$5 million; year ended 31/3/07: US$9 million). 5. Earnings per share -------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited US cents US cents US cents -------- -------- -------- Basic earnings per share 63.9 52.9 110.2Diluted earnings per share 63.5 52.6 109.5Headline earnings per share 65.7 55.4 116.4Adjusted basic earnings pershare 69.1 56.6 120.0Adjusted diluted earnings pershare 68.7 56.3 119.3 -------- -------- -------- -------- -------- -------- 30/9/07 30/9/06 31/3/07 Unaudited Unaudited Audited Millions of Millions of Millions of shares shares shares -------- -------- --------The weighted average number of shares was:Ordinary shares 1,503 1,498 1,500ESOP trust ordinary shares (4) (4) (4) -------- -------- --------Basic shares 1,499 1,494 1,496Dilutive ordinary sharesfrom share options 10 9 9 -------- -------- --------Diluted shares 1,509 1,503 1,505 -------- -------- -------- The calculation of diluted earnings per share excludes 6,046,925 (2007:6,039,681) share options that were antidilutive for the year because theexercise price of the option exceeds the fair value of the shares during theperiod, and 6,818,498 (2007: 7,707,155) share options that were anti-dilutivefor the year because the performance conditions attached to the options have notbeen met. These options could potentially dilute earnings per share in thefuture. 324,374 share options and awards were granted after 30 September 2007 and beforethe date of signing of these financial statements. Adjusted and headline earnings The group has also presented an adjusted earnings per share figure to excludethe impact of amortisation of intangible assets (excluding capitalised software)and other non-recurring items in order to present a more useful comparison forthe years shown in the consolidated financial statements. Adjusted earnings pershare has been based on adjusted headline earnings for each financial year andon the same number of weighted average shares in issue as the basic earnings pershare calculation. Headline earnings per share has been calculated in accordancewith the UK Society of Investment Professionals (UKSIP) formerly the Instituteof Investment Management and Research Statement of Investment Practice No.1entitled 'The Definition of Headline Earnings'. The adjustments made to arriveat headline earnings and adjusted earnings are as follows: -------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited US$m US$m US$m -------- -------- -------- Profit for the financialperiod attributableto equity holders of theparent 958 790 1,649(Profit) / loss onderivatives oncapital items1 - (1) (10)Amortisation of intangibleassets (excludingcapitalised software) 71 56 119Impairment of property,plant and equipment - 2 13Profit on saleof subsidiaries (17) - -Profit on saleof property, plant andequipment (4) (6) (20)Adjustment togoodwill - - 31Tax effects ofthe above items (23) (17) (43)Minority interesteffects - 3 2 -------- -------- --------Headline earnings (basic) 985 827 1,741Integration /reorganisation costs (net oftax effects) 51 19 55 -------- -------- --------Adjustedearnings 1,036 846 1,796 -------- -------- -------- 1 This does not include all derivative movements but includes those in relation to capital items for which hedge accounting cannot be applied. 6. Dividends paid and proposed Dividends paid are as follows: -------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited US cents US cents US cents -------- -------- -------- Prior year final dividendpaid per ordinary share 36.0 31.0 31.0Current year interimdividend paid per ordinaryshare - - 14.0 -------- -------- -------- The interim dividend declared of 16.0 US cents per ordinary share is payable on21 December 2007 to ordinary shareholders on the register as at 30 November 2007and will absorb an estimated US$241 million of shareholders' funds. 7. Property, plant and equipment Net book value at: -------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/07 31/3/07 Unaudited Unaudited Audited US$m US$m US$m -------- -------- -------- At beginning of period 6,750 6,337 6,337Exchange adjustments 355 (223) 98Additions 795 450 1,232Disposals (45) (19) (94)Depreciation (410) (355) (737)Other movements (12) (21) (86) -------- -------- --------At end of period 7,433 6,169 6,750 -------- -------- -------- Contracts placed for future capital expenditure not provided in the financialstatements amount to $606 million. 8a. Net debt Net debt is analysed as follows: -------- -------- -------- As at As at As at 30/9/07 30/9/06 31/3/07 Unaudited Unaudited Unaudited US$m US$m US$m -------- -------- -------- Borrowings (7,154) (7,260) (7,029)Borrowings-related derivative financialinstruments (154) (96) (127)Overdrafts (232) (206) (187)Finance leases (15) (17) (15) -------- -------- --------Gross debt (7,555) (7,579) (7,358) Loan participation deposit - 190 -Cash and cash equivalents (excludingoverdrafts) 501 657 481 -------- -------- --------Net debt (7,054) (6,732) (6,877) -------- -------- -------- Cash and cash equivalents on the Balance Sheet are reconciled to cash and cashequivalents on the Cash Flow as follows: -------- -------- -------- As at As at As at 30/9/07 30/9/06 31/3/07 Unaudited Unaudited Audited US$m US$m US$m -------- -------- -------- Cash and cash equivalents (Balance Sheet) 501 657 481Overdrafts (232) (206) (187)Legal right of offset - 185 - -------- -------- --------Cash and cash equivalents (Cash Flow) 269 636 294 -------- -------- -------- 8b. Analysis of net debt Net debt is analysed as follows: -------- -------- -------- ------- -------- -------- Total cash and Borrowings Derivative Financial Total gross Net debt cash financial leases borrowings equivalents instruments US$m US$m US$m US$m US$m US$m -------- -------- -------- ------- -------- -------- At 31 March2007 294 (7,029) (127) (15) (7,171) (6,877)Exchangeadjustments (18) (161) - (1) (162) (180)Cash flow (7) 46 (9) 2 39 32Other movements - (10) (18) (1) (29) (29) -------- -------- -------- ------- -------- --------At 30September 2007 269 (7,154) (154) (15) (7,323) (7,054) -------- -------- -------- ------- -------- -------- 9. Share capital -------- -------- -------- ------- Ordinary shares Non-voting Deferred shares Nominal value of 10 US cents convertible of £1 each each shares of 10 US cents each '000 '000 '000 US$m -------- -------- -------- -------At 1 April 2006 1,497,845 77,368 50 158Issue of shares - sharepurchase, option andaward scheme 2,823 - - - -------- -------- -------- -------At 30 September 2006 1,500,668 77,368 50 158Issue of shares - sharepurchase, option andaward scheme 1,520 - - - -------- -------- -------- -------At 31 March 2007 1,502,188 77,368 50 158Issue of shares - sharepurchase, option andaward scheme 2,018 - - - -------- -------- -------- -------At 30 September 2007 1,504,206 77,368 50 158 -------- -------- -------- ------- 10. Statement of changes in shareholders' equity Share Share Merger Safari Foreign Available Retained Total Minority Total capital premium relief and currency for sale earnings interest equity reserve EBT translation reserve* shares reserve* US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m ------ ------- ------- ------- -------- ------ ------- -------- ------- -------- At 1 April 158 6,099 3,395 (655) 102 - 3,944 13,043 542 13,585 2006 Currency translation movements on foreign currency investments - - - - (290) - - (290) (12) (302) Net investment hedges - fair value losses in period - - - - 106 - - 106 - 106 Deferred tax charge on items taken to equity - - - - - - (9) (9) - (9) Acquisitions - minority interests - - - - - - - - (10) (10) Other movements - - - - 4 - (10) (6) (2) (8) Profit for the financial year - - - - - - 790 790 118 908 Dividends paid - - - - - - (473) (473) (90) (563) Issued capital - 24 - - - - - 24 - 24 Payment for purchase of own shares for share trusts - - - (8) - - - (8) - (8) Equity settled share incentive plans - - - - - - 14 14 - 14 At 30 September ------ ------- ------- ------- -------- ------ ------- -------- ------- -------- 2006 158 6,123 3,395 (663) (78) - 4,256 13,191 546 13,737 ------ ------- ------- ------- -------- ------ ------- -------- ------- -------- ------ ------- ------- ------- -------- ------ ------- -------- ------- -------- At 31 March 2007 158 6,137 3,395 (683) 459 7 4,933 14,406 595 15,001 Currency translation movements on foreign currency investments - - - - 794 - - 794 18 812 Net investment hedges - fair value gains in period - - - - (90) - - (90) - (90) Other movements - - - - - - (2) (2) - (2) Profit for the financial year - - - - - - 958 958 124 1,082 Dividends - - - - - - (537) (537) (98) (635) Issued capital - 25 - - - - - 25 - 25 Payment for purchase of own shares for share trusts - - - (9) - - - (9) - (9) Cash flow hedge fair value deferred to equity - - - - 7 - - 7 - 7 Equity settled share incentive plans - - - - - - 28 28 - 28 At 30 September ------ ------- ------- ------- -------- ------ ------- -------- ------- -------- 2007 158 6,162 3,395 (692) 1,170 7 5,380 15,580 639 16,219 ------ ------- ------- ------- -------- ------ ------- -------- ------- -------- * These are classified as 'Other Reserves' on the Group Consolidated Balance Sheet. 11. Reconciliation of profit for the year to net cash generated from operations -------- -------- -------- Six months Six months Year ended ended 30/9/07 ended 30/9/06 31/3/07 Unaudited Unaudited Audited US$m US$m US$m -------- -------- -------- Profit for the year 1,082 908 1,883Taxation 497 470 921Share ofpost-taxresults ofassociates (147) (105) (205)Interestreceivable (96) (146) (240)Interestpayable andsimilarcharges 354 388 668 -------- -------- --------Operatingprofit 1,690 1,515 3,027Depreciation:Property,plant andequipment 297 270 550Containers 113 85 187Containerbreakages,shrinkage andwrite-offs 11 11 44Loss/(profit)on sale ofproperty,plant andequipment 8 (6) (6)Exceptionalprofit on saleof property,plant andequipment(Europe) - - (14)Impairment ofproperty,plant andequipment - 2 13Amortisationof intangibleassets 94 81 162Net (gain) /loss from fairvalue hedges 3 (8) (2)(Gain) ondisposal ofsubsidiaries (17) - -Dividendsreceived fromotherinvestments (1) (1) (1)Charge withrespect toshare options 28 14 31Restructuringandintegrationcosts (LatinAmerica,Corporate) - - 10Adjustment togoodwill(Europe) - - 31Other non-cashmovements 3 1 (1) -------- -------- --------Net cashgenerated fromoperationsbefore workingcapitalmovements(EBITDA) 2,229 1,964 4,031Net inflow /(outflow) inworkingcapital (101) 188 (13) -------- -------- --------Net cashgenerated fromoperations 2,128 2,152 4,018 -------- -------- -------- Cash generated from operations include cash outflows relating to exceptionalcosts of US$10 million in respect of South America integration and restructuringcosts (six months ended 30/09/2006: US$20 million). 12. Business acquisitions and disposals There have been no material acquisitions or disposals during the period underreview. 13. Related party transactions The group's significant related parties are its associates as described in theSABMiller plc Annual Report for the year ended 31 March 2007. There have been nomaterial changes to the type of related party transactions described therein. 14. Contingencies and commitments A ZAR1.6 billion interest-bearing bond was issued during the period underreview. The interest rate applicable to this bond is 9.935% pa. The bond is afive year, bullet repayment bond with a semi-annual coupon, commencing on 19July 2007, maturing on 19 July 2012. Other than the above, there have been no material changes in contingencies andcommitments for the period under review. 15. Subsequent events On 9 October, SABMiller plc and Molson Coors Brewing Company announced that theyhad signed a letter of intent to combine the US and Puerto Rico operations oftheir respective subsidiaries, Miller and Coors, in a joint venture to create astronger, brand-led US brewer with the scale, resources and distributionplatform to compete more effectively in the increasingly competitive USmarketplace. The transaction is subject to negotiation of definitive agreements,which is expected by the end of 2007. Closing of the transaction is also subjectto obtaining clearances from the US competition authorities and certain otherregulatory clearances and third-party consents, as required, and is not expectedbefore mid 2008. SABMiller plc ADMINISTRATION SABMiller plc (Registration No. 3528416) Company Secretary John Davidson Registered Office SABMiller House Church Street West Woking Surrey, England GU21 6HS Telefax +44 1483 264103 Telephone +44 1483 264000 Head Office One Stanhope Gate London, England W1K 1AF Telefax +44 20 7659 0111 Telephone +44 20 7659 0100 Internet address http://www.sabmiller.com Investor Relations [email protected] Telephone +44 20 7659 0100 Independent Auditors PricewaterhouseCoopers LLP 1 Embankment Place London, England WC2N 6RH Telefax +44 20 7822 4652 Telephone +44 20 7583 5000 Registrar (United Kingdom) Capita Registrars The Registry 34 Beckenham Road Beckenham Kent, England BR3 4TU Telefax +44 20 8658 3430 Telephone +44 20 8639 2157 (outside UK) Telephone 0870 162 3100 (from UK) Registrar (South Africa) Computershare Investor Services 2004 (Pty) Limited 70 Marshall Street, Johannesburg PO Box 61051 Marshalltown 2107 South Africa Telefax +27 11 370 5487 Telephone +27 11 370 5000 United States ADR Depositary The Bank of New York ADR Department 101 Barclay Street New York, NY 10286 United States of America Telefax +1 212 815 3050 Telephone +1 212 815 2051 Internet: http:// www.bankofny.com Toll free +1 888 269 2377 (USA & Canada only) This information is provided by RNS The company news service from the London Stock Exchange

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