Preliminary Announcement

18th May 2006 07:02

SABMiller PLC18 May 2006 Preliminary Announcement Strong growth profile drives earnings London and Johannesburg, 18 May 2006. SABMiller plc today announces itspreliminary (unaudited) IFRS results for the year to 31 March 2006. Highlightsare: 2006 2005 % US$m US$m change Revenue (a) 15,307 12,901 19% EBITA (b) 2,941 2,389 23% Adjusted profit before tax (c) 2,626 2,222 18% Profit before tax 2,453 2,552 (4%)(including net exceptional credits of US$415 million in prior year) Adjusted earnings (d) 1,497 1,224 22% Adjusted earnings per share (d)- US cents 109.1 101.0 8%- US cents on a comparable basis (see note 5) 109.1 98.4 11%- UK pence (up 12%) 61.0 54.7- SA cents (up 11%) 699.2 628.2 Basic earnings per share (US cents) 105.0 125.5 (16%) Dividends per share (US cents) 44.0 38.0 16% Net cash generated from operations 3,291 2,792 18% • Group lager volumes up 19% to 176 million hectolitres (hl), organic growth of 5% • New growth platform in South America through Bavaria • Growth in Europe continues with market share gains and mix improvements• South African profit increase driven by premium sales growth • Volume growth in China supports good Africa and Asia contribution • Resilient performance by Miller despite intense competitive pricing environment • Strong cash flows support dividend increase of 16% (a) Revenue excludes the attributable share of associates' revenue of US$1,774million (2005: US$1,642 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 thepreliminary announcement. (c) Adjusted profit before tax comprises EBITA less net finance costs ofUS$299 million (2005: US$143 million), and share of associates' net financecosts of US$16 million (2005: US$24 million). (d) A reconciliation of adjusted earnings to the statutory measure of profitattributable to equity shareholders is provided in note 5. Organic, 2006 Reported constant EBITA growth currency US$m % growth % North America 454 (7) (7) Latin America (1) 436 385 (12) Europe 569 18 14 Africa and Asia 422 10 11 South Africa: Beverages 1,062 11 14 South Africa: Hotels and 84 14 18 Gaming Corporate (86) - - Group 2,941 23 9 (1) Organic, constant currency growth relates only to Central America and excludes Bavaria. Reported results include Bavaria from 12 October 2005. Statement from Meyer Kahn, Chairman "This was another year of good growth in volumes, margins and earningsreflecting the growth profile that the group has built over the years. Our trackrecord reflects well-judged acquisitions and investments, successful integrationand subsequent operational improvements. "It was also a year of strategic progress for the group as it completed theinitial turnaround of Miller notwithstanding the challenging market conditions.The group has continued to improve its access to long term growth markets,establishing a major new platform in South America through the Bavariatransaction, whilst making further significant investments in China, India andVietnam. "SABMiller now has a stronger global portfolio of businesses and brands.Looking forward a key focus will be on ensuring that we continue to nurture andbuild brands which are the first choice of consumers." 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 Philip Gawith The Maitland Consultancy Ltd Tel: +44 20 7379 5151 A live webcast of the management presentation to analysts will begin at 9.30am (BST) on 18 May 2006.This announcement, a copy of the slide presentation and video interviews with management are available on the SABMiller plc website at http://www.sabplc.com/ . Video interviews with management can also be found at http://www.cantos.com/. High resolution images are available for the media to view and download free of charge from http://www.vismedia.co.uk/ Copies of the press release and the detailed Preliminary Announcement are available from the 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 CHIEF EXECUTIVE'S REVIEW Business review After two years of outstanding results, we have completed another twelve monthsof good performance with the group also continuing to access and develop newlong term growth positions in the global beer market. Our portfolio ofdeveloped and developing market operations generated organic growth in overalllager volumes of 5% and in EBITA growth of 9% on a constant currency basis. Thegroup EBITA margin increased to 17.2%, an 80 basis point improvement over theprior year. Overall, these strong results demonstrate SABMiller's superior growth profileand exposure to attractive beer and soft drinks markets, with total beveragevolumes up by 5% on an organic basis, and 18% above last year on a reportedbasis at 221 million hl. Total lager volumes were 176 million hl. We sawparticularly strong lager volume growth from Europe and China, and a strongearnings contribution from South Africa where despite a subdued volumeperformance our efforts to expand our premium brand offering are improving mix.Our new businesses in South America are trading in line with our expectations,and despite a challenging pricing environment our Miller business is benefitingfrom the investment made during the three-year turnaround. The group has continued to enter new markets to strengthen further its existingpositions through additional acquisitions and investments. During the periodthe group purchased the balance of its joint venture, Shaw Wallace Breweries, inIndia; announced its first move into Vietnam through a local joint-venture;completed its agreement in Slovakia to buy into the brewer, Topvar a.s.(Topvar); and made further acquisitions through its Chinese associate in theprovinces of Anhui and Fujian. Following its entry into South America inOctober 2005, the group has carried out further purchases of shares in BavariaS.A. (Bavaria) in Colombia, and Union de Cervecerias Peruanas Backus y JohnstonS.A.A. (Backus) in Peru. The group has also increased its investment in LatinAmerica by acquiring the minorities in Central America. In the UK, we launched anew operating company called Miller Brands to manage the sales, marketing anddistribution of our key international premium brands in the UK market. Net cash generated from operations was 18% above the prior year, reflecting theoverall strength of the trading performance and our strong cash characteristics.The group's gearing increased at the year-end to 52.1% from last year's 25.2%,principally as a result of the increase in debt following the Bavariatransaction in South America. The board has proposed a final dividend of 31 US cents per share, making a totalof 44 US cents per share for the year, an increase of 16% over the prior year.The dividend is covered 2.5 times by adjusted earnings per share. North America Miller has concluded its initial three-year turnaround programme and all aspectsof its business have been substantially re-shaped to ensure it is a more ableand vigorous competitor in the US market, evidence of which is continued growthof Miller Lite. Against this, the industry pricing environment has deterioratedover the past twelve months following sustained levels of discounting. Commoditycosts, such as that for aluminium, have risen significantly. Within thiscontext, Miller maintained firmer year-on-year pricing than its domesticcompetitors to protect its brand equity. Domestic sales to retailers (STRs)decreased by 1.0% over the year whilst EBITA fell 7%. Latin America For the period from 12 October 2005 to 31 March 2006, the South America businesshas performed in line with our expectations, with lager volumes for a pro formasix months to 31 March 2006 up 7.5% to 15.3 million hl. The Andean region hascontinued to experience positive economic conditions, with Colombia and Peru inparticular showing strong GDP growth. We have completed initial reviews of allthe businesses in the Bavaria group and an integration programme is beingrolled-out. Priority will be given to new portfolio and channel marketingstrategies. In Central America, CSD volumes were 6% above the prior year butbeer volumes continued to be adversely impacted by last year's significantincrease in excise tax in El Salvador. Europe Europe delivered another excellent performance. Lager volumes were up by 5% onan organic basis and this growth was driven principally by Poland, Romania andRussia. In Poland, our volumes grew well ahead of the market at 11%, benefitingfrom a number of new product launches and pack innovations. Overall market shareincreased to an estimated 37.5%. In Russia volumes were up 14%, twice the growthof the market and our Czech beer, Kozel, grew 55% to become the largest licensedbrand in Russia. Additional capacity has been installed in Russia and plans arein place to expand the Kaluga brewery's annual capacity to six million hl. OurCzech business increased its market share, and drove strong EBITA marginimprovements from production efficiencies. Volumes grew 5% in Romania on anorganic basis where we are now expanding capacity, and in Italy our Birra Peronibranded volumes were up 1%, leading to an improvement in profitability. Africa and Asia Africa and Asia continued its strong volume growth, with our associate CR Snowin China maintaining its excellent first half performance with volumes up 17%for the year on an organic basis. The Snow brand grew 52% to 17.3 million hl,and is now China's number one brand by volume. In Africa, the continuingdevaluation of the Pula negatively impacted clear beer and CSD volumes inBotswana, but the business portfolio benefited from strong underlying growth inMozambique, Tanzania and Uganda, driven by good economic fundamentals andimproved product availability. Our clear sorghum beers, Eagle and Eagle Extra,which were developed with the participation of local cereal farmers, havecontributed to the 39% increase in volumes in Uganda. Reported Africa lagervolume growth was 3%. South Africa: Beverages Lager and soft drinks continued their positive volume growth trends, despite theabsence of an Easter period. However, buoyant first half volume growth wasfollowed by cooler weather and slower wage growth in the second half, leavinglager volumes up 1% on a comparable basis. Our premium brands, which includethe new 660 ml packs for Miller Genuine Draft and Brutal Fruit, grew by 45% andour share of the premium segment increased to almost 80%. Total soft drinksvolumes increased by 5%, driven by strong growth in non-CSD beverages. Thispositive sales volume performance in both lager and soft drinks, combined withthe favourable mix benefits afforded by the growth of our premium portfolio,contributed to a good increase in constant currency EBITA. Outlook The 2006 results represent a year of good performance following two years ofoutstanding growth. The group's global footprint and its portfolio of businessesand brands, which have been enhanced by the Bavaria transaction, position itwell to make further progress in the current year. Operational review North America 2006 2005Financial summary US$m US$m % Revenue 4,912 4,892 - EBITA* 454 487 (7) EBITA margin (%)* 9.3 10.0 Sales volumes (hl 000)- Lager - excluding contract brewing 47,059 47,380 (1) - contract brewing 10,246 10,583 (3)- Carbonated soft drinks (CSDs) 74 75 (1) Lager - domestic sales to retailers (STRs) 43,964 44,380 (1) * In 2005 before exceptional credits of US$111 million being a US$104 milliongain in relation to changes to post-retirement plans, an exceptional profit onthe sale of Tumwater brewery of US$4 million, Tumwater brewery closure costsreversal of US$1 million and integration and restructuring cost reversal of US$2million. Miller has successfully completed its initial three-year turnaround programme,continued growth in its flagship Miller Lite brand and established a platformfor sustained future growth. Despite headwinds earlier in the year and market share gains by the spirits andwine industries in the total alcoholic beverage market, the US beer industryimproved late in the fiscal year to finish with domestic shipments towholesalers (STWs) up 1.2% and sales to retailers (STRs) up some 1% for the fullyear. STRs for the major domestic brewers were up by 0.2%. However, Miller'sprimary competitor eliminated its long-held price premiums in a number of marketsegments, driving pricing down across the industry. In this context, as Millermaintained firmer year-on-year pricing than its domestic competitors, Miller'sSTRs decreased by 1.0% in the reporting period, while Miller's domestic STWsdeclined by 0.1%. Export sales continued to be depressed by difficult tradingconditions in key markets, and contract brewing volumes decreased by 3.2%compared to the prior year. Although cycling strong prior year volume growth and facing aggressivecompetitor discounting, Miller Lite continued its 30-month resurgence, postinglow single-digit growth for the fiscal year and demonstrating sustained consumerequity. Marketing for Miller Lite, which emphasises its intrinsic strengths,together with significant investment in on-premise activities, has beensuccessful in maintaining continuing momentum for the brand. Increased marketing investment to revitalise the Miller High Life andMilwaukee's Best Light franchises mitigated the impact of price pressure on itskey economy segment brands, such that the decline of these was limited to lowsingle-digit rates. Miller Genuine Draft (MGD) was re-launched late in thefourth quarter with a new positioning targeted at "mainstream sophisticate"consumers seeking to trade up to affordable luxury. A comprehensive newmarketing campaign has been deployed including new graphics, packaging,advertising, point-of-sale targeting and promotional activities. Miller has commenced a significant programme in support of the marketing andselling of its international worthmore brands. Peroni Nastro Azzurro recordedimpressive results in its launch year while Pilsner Urquell's growth hascontinued. Total revenue grew by 0.4% to US$4,912 million, while US domestic revenueexcluding contract brewing increased by 1.0%. These increases were driven byfront-line pricing, partially offset by higher price promotions. Favourablebrand mix resulting from the improvement in Miller Lite sales was partiallyoffset by unfavourable pack and geographic mix. Contract brewing revenuesincreased as a result of favourable mix impacts and despite volume declines. Miller continued to extract operational efficiencies in its breweries andrealise cost savings on brewing materials, waste reduction and procurement.These gains were more than offset by significantly higher aluminium, fuel andenergy costs, resulting in an increase in domestic costs of goods sold perhectolitre slightly below the US Consumer Price Index. Efforts to improve themanagement of health care and retirement costs began to produce positive resultsin the reporting period. In the face of these challenges, Miller continued to invest in theorganisational capabilities necessary to drive future growth. The acquisitionof new marketing talent, development of specialised sales forces, and increasedpromotional and alliance marketing programmes resulted in an increase inmarketing costs despite continued marketing efficiency savings. EBITA for the year of US$454 million was 7% lower than in the prior year, drivenby the highly competitive pricing environment and higher commodity, fuel andenergy costs. EBITA margin decreased to 9.3%. Miller is entering a new phase ofits business strategy with an emphasis on stepping up its organisational andmanagement capabilities and creating a strong and highly differentiatedportfolio of brands capable of capturing consumer preference. New marketingcampaigns for Miller Lite recently debuted with the aim of retaining core users,attracting new consumers and increasing the impact of the successful on-premiseactivities of the past three years. With its comprehensive re-launch, Millerwill focus on stabilising the share of Miller Genuine Draft, and will continueto invest in creating brand equity for the Miller High Life and Milwaukee's Bestfranchises. Finally, Miller will continue to maximise the long-term growthpotential of Peroni Nastro Azzurro and Pilsner Urquell at superior price pointswith a new systemic focus on a differentiated approach to marketing and sales inthe international worthmore premium segment. Given the significantly higher level of aluminium costs, uncertainty in thepricing environment and Miller's commitment to invest in production, marketingand sales capabilities to fuel future growth, both volume and profitability aredifficult to predict for the year ahead. In this environment, short-termfluctuations in both competitive price gaps and market segment share positionsare to be expected. However, Miller remains confident that its brand-led,consumer-focused approach will allow it to achieve sustainable growth over time. Latin America 2005 Organic Bavaria Currency 2006 growthFinancial summary US$m US$m US$m US$m US$m Group revenue 521 18 1,634 (8) 2,165(including share of associates) 3%EBITA* 90 (10) 358 (2) 436 (12%)EBITA margin (%) 17.2 21.9 20.1 Sales volumes (hl 000)- Lager 1,828 (88) 14,423 - 16,163 (5%)- Carbonated soft drinks (CSDs) 5,622 324 1,389 - 7,335 6%- Other beverages 2,749 177 3,123 - 6,049 6% * In 2006 before exceptional items of US$11 million being integration andrestructuring costs Latin America includes the results of the operations in Central America as wellas those in South America for the period since the transaction involving Bavariawas completed on 12 October 2005. Following the initial investment in a 71.42%controlling effective interest in Bavaria, the group carried out furtherpurchases of shares in Bavaria and also in its subsidiary companies. At the yearend, the group held a 97.2% effective interest in Bavaria and had increased itseffective economic interest in Backus in Peru to 93.3%. During the year thegroup also acquired the remaining 41.8% minority interest in the CentralAmerican business. The results of the South America operations have been included for the firsttime. Since 12 October the units have performed according to our expectations atthe time of the transaction. The Andean region as a whole has continued showingpositive economic conditions with Colombia and Peru in particular experiencingstrong GDP growth. Lager volumes of 15.3 million hl for the 6 month period toMarch 2006 were up by 7.5% over the comparable prior year period, while otherbeverage volumes of 4.8 million hl (comprising malt beverages, carbonated softdrinks, water and juices) were up by 10% over the same period. In Colombia, total beverage volume increased by 5% with beer volumes growing by6% over the 6 month period despite the loss of three days of sales because ofthe "dry law" during the elections and the absence of an Easter period. Pricingwas raised some 5%, on average, in the period. The results include the impact ofinitiatives that were already underway at the time of the transaction includinga broader focus on the Costenita brand, which included a new bottle, and therelaunch of Poker and Aguila in parts of the country. Major marketing activitieshave focused on trade initiatives such as refrigeration. In Peru, the beer market grew in volume terms by 24%, however industry revenuegrowth was only 9% as a competitor entered at a price discount to the market andthen subsequently implemented further aggressive price promotions. Our beervolumes were up 12% over the six month period and our prices on average havefallen. Nevertheless, in the final quarter, we held an approximate 92% nationalbeer market share and posted 15% growth in lager volumes over the prior yearcomparable 3 month period. Our principal brand, Cristal, gained market share inthe final quarter, reaching 46% as compared to 41% in the previous quarterreflecting focused promotion activity in Lima and Trujillo. Pilsen Callaomaintained its market share of 20% through focused promotional efforts in Callaoand in the jungle cities. Profitability has benefited from the strong volume trends in Colombia togetherwith robust growth in Ecuador and Panama whilst in Peru the impact of the morecompetitive environment has restricted profit growth. In South America, one-time integration and restructuring costs of US$11 millionwere incurred in the period under review and we expect further significant costsin the next financial year as integration initiatives get fully underway. Aregional office and management team have been established in Bogota and theoutgoing chief executives in Colombia and Peru have been replaced by experiencedSABMiller executives. We have completed market-mapping for the brand portfolios and segmentationstudies in each of the countries and will be completing our portfolio strategiesshortly. We have enhanced our marketing capabilities through the appointment ofspecialist resources in the regional office and have separated marketing andsales functions in Colombia and Peru. In the areas of trade marketing androute-to-market we are customising a channel marketing approach using the bestmethodologies sourced from around the group. The region's strategic commodityrequirements have been incorporated into the group's global procurementarrangements to access scale benefits. Although we believe Bavaria to have been well-managed and profitable,significant opportunities exist in the South America operations to createfurther value by leveraging SABMiller expertise in category leadership, brandportfolio development, channel marketing, pricing management and theintroduction of best in class operating practices. We have reviewed currentoperations in each of the countries and are refining our earlier broad estimatesof cost productivity and performance improvement opportunities. We arestructuring our findings into a prioritised integration programme, which will berolled out in the coming year, and remain confident that the value benefitestimates for 2010 indicated at the time of the transaction will be met. In Central America, performance in both El Salvador and Honduras was impacted byhurricanes. Total volumes for the year were 4% above prior year with carbonatedsoft drink volumes for the year at 6% above prior year, offsetting the declinein lager volumes which were 5% below prior year. Volume grew in Honduras despite the impact of heavy rains and Hurricane Gammaduring November 2005. Lager volume grew by 1% and a number of price increaseswere successfully implemented across the portfolio. Barena was launched to acontemporary target consumer segment and Port Royal was relaunched with a newbottle. Carbonated soft drink volumes grew by 3%, however overall CSD revenuefell due to mix issues in response to continuing competitor activity. Marketinginvestment grew significantly in support of Coca-Cola brands and increasedmarket activation in beer. The trading environment in El Salvador continues to be difficult, with continuedeconomic slowdown, severe flooding and diminishing purchasing power. Lagervolumes declined by 11%, following the excise tax increase in 2005 with theconsequent price increases leading to a contraction in the Salvadoran beermarket. In addition, a competitor entered the market in 2005 and whilstinitially gaining a market share of some 14%, this has fallen to 6% in the finalquarter. Carbonated soft drink volumes grew by 11% driven by a decrease inmarket pricing levels. Europe 2006 2005Financial summary US$m US$m % Revenue 3,258 2,909 12 EBITA* 569 482 18 EBITA margin (%)* 17.5 16.6 Sales volumes (hl 000)- Lager 35,664 33,669 6- Lager organic 35,519 33,669 5 * In 2005 before exceptional items of US$51 million being Naples brewery closurecosts of US$35 million and restructuring costs in the Canary Islands of US$16million. Total volumes rose 6% (5% on an organic basis) with strong volume growth inPoland, Russia and Romania. The business again produced excellent profit growth,with EBITA up 18% (14% in organic constant currency). Margin growth benefitedfrom improved sales mix, as worthmore volumes rose by 12%, and increasedproductivity. In Poland, volumes were up 11% compared to market growth of 5% and our marketshare improved to an estimated 37.5% for the year ended 31 March 2006. Severalnovel fridge and rack designs with improved trade service levels, plus targetedabove-the-line advertising executions and enhanced point of sale materialassisted this performance. In the upper mainstream segment, Lech's momentumcontinued with volume up 17%, and the first non-alcoholic variant of a majordomestic brand, Lech Free, was launched in March 2006. At the premium end Redd'swas up 12%, and two new flavoured variants, Redd's Red and Redd's Sun, wereintroduced. Tyskie is stabilizing at 4.9 million hl, with a 17% share of thetotal market. Growth was strong in the lower mainstream segment and our Zubrbrand grew by 48%. Further capacity has been installed in Poland bringing totalproduction capability to 12.5 million hl. Improving product visibility and cold availability, expanding on-trade share andkey account presence, and further development of premium brand organisationalcapabilities continue as major focus areas. Pricing remains constrained in theindustry and on average declined 3% in real terms, with Kompania Piwowarskaachieving selective price increases. In the Czech Republic, volumes grew 2% assisted by strong March volumes whilethe industry was level, and as a result our domestic market share increasedslightly. The Pilsner Urquell brand grew 2% domestically and 4% overall, whileGermany and the USA were strong export markets. Gambrinus remains the marketleader with a 26% share. A complete packaging redesign, including bottles,labels and crates, was launched for the Gambrinus brand at the end of the year. Industry pricing remains muted with a 1% real decrease during the year. PlzenskyPrazdroj (PP) on-trade volume grew 9% and continues to be a key value enhancingsegment, with its overall value share estimated to be 4-5 percentage pointsahead of its market volume share. During the year, productivity was improved,particularly through regional procurement activities, boosting margins. Capitalprojects currently under way will increase PP's production capacity to 9.8million hl. In October 2005, the remaining 3.1% interest in PP held by minorityshareholders was acquired. In Russia, second half volumes accelerated bringing the full year's volumegrowth to 14% against the industry's estimated 7%. We continue to focus on thepremium segment and, with a market share of 5%, we have an estimated 15% shareof the national profit pool. The combined growth of Miller Genuine Draft andRedds exceeded 7%. Kozel grew by 55%, making it the largest licensed brand inRussia according to AC Nielsen. Zolotaya Botchka, our local premium brand, grew11%. Margins were assisted by increased procurement from local sources. Anincrease of 20% in our sales force and the extended cooler programme haveimproved our focus on selected geographies as well as the on-trade. Additionalcanning capacity has been installed and planning for Kaluga's expansion to sixmillion hl is in progress. In Italy, Birra Peroni's performance was creditable given the effective 27%increase in excise on lager per hectolitre, which followed a similar increase inthe previous year. Total branded volumes grew by 1% with the trademark brands,Peroni and Nastro Azzurro, performing well with 2% and 9% growth respectively. Amanaged exit strategy from private label saw our volumes in this segment decline41%. The net result is a far better portfolio with revenues per hectolitre up 9%and a significant improvement in gross margins. Notwithstanding the overall weakness of the Italian economy and the pressure onFMCG pricing, Birra Peroni has been able to exploit limited pricingopportunities and successfully implemented increases of up to 3%. We increasedinvestment in marketing behind our trademark brands, introduced a new approachtowards independent distributors, focused on driving channel share in selectedlocal markets and established a new sales organisation. Ursus Breweries in Romania produced an improved performance with EBITA marginexpanding significantly driven by production efficiencies and an estimatedmarket value share increase to 23%. Our organic volume growth was constrained to5%, compared to the industry's 8%, due to capacity limits specifically for PET.Production capacity is now being expanded to 3.9 million hl. We continued tofocus on the Ursus Premium brand which grew 9%. Timisoreana Lux was the fastestgrowing brand in the market, up 48% as distribution reach expanded. Distributionand trade development of the imported Peroni Nastro Azzurro brand will beextended in the coming year, while recently launched Stejar (Strong) will berolled out selectively. Our Canary Islands operations benefited from the prior year's restructuring.Although both the industry and our volumes were down, EBITA was well ahead. InSlovakia, volumes were down 3% but productivity boosted margins, and profitswere up. The Pilsner Urquell brand continued its strong growth performance ofrecent years. In March 2006 the Slovakian Anti-monopoly office approved ouracquisition of an initial investment in Topvar a.s. with rights to acquire up toat least 67% by September 2006. The Dreher brewery in Hungary delivered improvedfinancial results in difficult market conditions reflecting continuedproductivity improvements. Volume was marginally ahead in a market down 4%.Overall market share was up 1% to 28%. In the United Kingdom, investment is being made behind Miller Brands (UK)Limited which was launched in 2005 to market, sell and distribute ourinternational premium beer brands. Peroni Nastro Azzurro, Miller Genuine Draft,Castle Lager and Pilsner Urquell have all been successfully transitioned fromtheir previous arrangements to the Miller Brands business and further investmentis planned for the current financial year. Africa and Asia 2006 2005Financial summary US$m US$m % Group revenue (including share of associates) 2,221 1,937 15 EBITA* 422 383 10 EBITA margin (%)* 19.0 19.7 Sales volumes (hl 000)**- Lager 50,956 39,505 29- Lager organic 45,211 39,505 14- Carbonated soft drinks (CSDs) 4,061 4,667 (13)- Other beverages 13,093 11,538 13 * In 2005 before exceptional items being profit on the disposal of the group'sinterest in Harbin Brewery Group Limited (Harbin) of US$103 million. ** Castel volumes of 13,991 hl 000 (2005: 12,771 hl 000) lager, 8,557 hl 000(2005: 8,260 hl 000) CSDs, and 3,015 hl 000 (2005: 2,985 hl 000) other beveragesare not included. Africa Reported lager volumes grew 3% overall, driven by strong underlying growth inMozambique (9%), Tanzania (5%), and Uganda (39%), where we benefited from goodeconomic fundamentals combined with an operational focus on improved productavailability. Volumes declined in Zimbabwe and Botswana, both of which wereimpacted by poor economic performance and currency devaluation. In Tanzania, new packaging was introduced during the year for Castle Lager,Redd's, Kilimanjaro and Pilsener Lager which accelerated the growth of the brandportfolio. Efficiency improvements in distribution were gained throughintroducing direct deliveries in the Kilimanjaro region to improve rural marketpenetration, outsourcing secondary distribution in other regions, and openingadditional warehouses and a new depot. In Mozambique, the key driver of volume growth was improved sales anddistribution execution on the back of an extended company depot network, as wellas improved on-premise trade service through provision of additionalrefrigeration and draught dispensing units. The upgrade in the Maputo brewerypackaging facilities during the year led to a significant change improvement inquality and production efficiencies. In Uganda, volume growth was driven by Eagle and Eagle Extra, our clear sorghumbeers, which were developed with the participation of local cereal farmers,together with strong demand for value brands in an expanding market. This hasled to a 5% increase in market share to 51%. The improvement in volumes and theincreased local sourcing of raw materials enhanced margin. In Botswana, currency devaluation of 12.5% announced in May 2005 followed an 8%devaluation in the previous year, fuelling domestic inflation and resulting in adecline in consumer discretionary spending that negatively impacted lagervolumes (down 6%) and CSD volumes (down 12%). The economic problems in Zimbabweled to significant volume declines in lager and soft drinks. CSD volumes, excluding Zimbabwe, recorded modest positive growth for the year.Angola recovered in the second half, recording 5% growth for the year fromimproved market focus, despite increased pricing competition following a newentrant to the market in the first half. Increased capacity was introduced inthe year with a new packaging line which has reduced the reliance on importswhilst growing the returnable market. EBITA margins grew, driven by improvements in productivity in most countriesthat offset the impacts of the Botswana and Zimbabwe devaluations on importedcosts and increased fuel prices across all operations. Our Castel associates enjoyed strong growth in lager beer up 10% withsignificant contributions coming from Angola and Ethiopia. Asia China maintained the momentum reported at the half year, recording organic lagervolume growth of 17% (28% reported) for the year, above industry levels. Allregions posted meaningful growth including the competitive North East region.The Snow brand enhanced sales mix by growing significantly at a higher averageprice and is now China's number one brand by volume at 17.3 million hl followingfocused initiatives in brand marketing and in distribution. The overall positive developments in pricing seen in the prior year continued inthe reported year despite increasingly competitive markets. Improvements inunderlying EBITA margin were achieved as the business was able to increase netrevenue per hectolitre by 6% during the year whilst absorbing the higher inputcosts through productivity improvements. Good progress has been made with integrating our previous year's acquisitions inthe Jiangsu region as well as the other smaller acquisitions made during theyear in the Central region. Phase one of the Guangdong greenfield brewery wasconcluded on time and within budget in February 2006 and is now fullycommissioned. India is consolidated in the results for the first time following the purchasein May 2005 of the balance of the joint venture with the Shaw Wallace group.Satisfactory annual volume growth of 9% was achieved for the year on a pro formabasis, despite a slow start to the year due to regulatory issues in AndhraPradesh. The last quarter ended strongly, up 17% year-on-year. Industry reformremains a key issue; however the business was able to achieve price increases inkey states during the year. Overall the business is well poised for ongoinggrowth with planned capacity expansion, particularly at Charminar in AndhraPradesh, and improvements being achieved in quality and productivity. South Africa: Beverages 2006 2005Financial summary US$m US$m % Group revenue (including share of associates) 4,204 3,995 5 EBITA 1,062 956 11 EBITA margin (%) 25.3 23.9 Sales volumes (hl 000)- Lager 25,951 25,912 -- Carbonated soft drinks (CSDs) 13,749 13,305 3- Other beverages 1,234 996 24 Lager and CSD volumes continued their positive growth trends during the yeardespite the absence of an Easter period. Buoyant first half volume growth washowever tempered by cooler weather, slower wage growth and increased consumerexpenditure on durable and semi durable items in the latter part of the year.Whilst reported lager volumes were level, volumes were up 1% on a comparablebasis after adjusting for a transfer of management responsibility to the Africaand Asia business for sales to Angola during 2004. Our premium brands (including Castle Lite, MGD and Amstel) grew by 45% on lastyear. During the year new 660ml packs were introduced for MGD and Brutal Fruitenhancing availability and value for money, as an accessible premium offering.Peroni Nastro Azzurro was launched during the year adding to the premiumportfolio. Market share of the liquor category increased to almost 59%, andshare of the premium beer segment increased to almost 80% Total soft drinks volumes increased by 5% with strong growth in other beverages,in particular the water portfolio, and 3% growth in CSD volumes. Volumes duringthe traditionally slower winter months were boosted by increased sales andpromotional activity, relatively warmer weather and improved operational focus,whilst volumes in the second half were impacted by cooler weather. Sales volume growth in both lager and soft drinks categories supported by priceincreases and favourable mix benefits, increased revenue. Low commodity pricesand the relatively firm currency resulted in brewing raw material costsincreasing only marginally, although fuel costs were significantly higher. The above combined with ongoing focus on cost productivity delivered strongEBITA growth of 14% in constant currency. Margins improved by 140 basis pointsto 25.3%. The market penetration initiatives in both the beer and soft drink marketsgained momentum. As a result of the issuance of liquor permits in two provincesand a greater emphasis on the sales and distribution in the beer business thecustomer base increased by almost 22% during the year. Soft drinks increased itscustomer base by 7%. The introduction of new labelling capability in our lager production plants ison schedule and will provide additional flexibility for improved productofferings to the consumer. During the year new sales and distribution systemswere introduced which will further enhance market information and our servicecapabilities. New production capability was introduced in the soft drinksbusiness with the commissioning of an aseptic packaging facility in Midrand. The normalisation of the liquor trade continues to progress slowly, hampered byadministrative and legislative constraints in a number of provinces. During theyear over 6,000 of our newly licensed taverners were trained in business skillsin line with our commitment to enhance their commercial skills. The development of the liquor industry charter in line with the BEE (Broad BasedBlack Economic Empowerment) Act is linked to the publication of draft codes ofgood conduct issued by the Department of Trade and Industry which is currentlyundergoing an extended consultation process. Completion of the codes is requiredbefore the liquor industry charter can be finalised. We believe that the finalcodes will be published later in 2006, following which the liquor charter willbe completed. The positive economic growth that has been experienced over the past years isexpected to continue, although lower wage settlements, as a result of reducedinflation levels, and increased consumer demand for durable and semi durablegoods may impact beverage consumption growth levels. Sales of Appletiser in South Africa continued to show strong growth buoyed bythe new pack design introduced at the end of last year, a new bulk pack size andeffective promotions. Grapetiser emulated the encouraging trend shown byAppletiser and the initial launch of Peartiser has been very well received byconsumers. International sales saw good growth in the year, particularly inEurope. EBITA margin improvements reflect the higher volumes and operating costcontrols. Distell's domestic sales volumes increased, with further gains in the spiritscategory contributing to improved sales mix. International volumes also grew,continuing the trends seen in prior years. The improved sales mix andcontainment of costs contributed to improved earnings. However our share ofearnings has been impacted in the current year by a one-off charge in relationto the BEE project announced in the current year which will result in a dilutionof the share of earnings attributable to all shareholders. South Africa: Hotels and Gaming 2006 2005Financial summary US$m US$m % Revenue (share of associate) 321 289 11 EBITA* 84 73 14 EBITA margin (%)* 26.1 25.2 Revenue per available room (Revpar) - US$ $55.87 $51.45 9 * In 2005 before a net exceptional credit of US$7 million being the share ofassociate's profit on the disposal of property, plant and equipment of US$11million and the share of associate's restructuring costs of US$4 million. The group is a 49% shareholder in the Tsogo Sun group. Tsogo Sun benefited fromthe strong South African economy, including reduced inflation, lower interestrates and tax relief. Consumer spending has grown as a result, and this has hada positive effect on both the Gaming and Hotel sectors. Tsogo Sun reported arevenue increase of 11% with group revenue rising to US$321 million. Tsogo Sun Gaming posted a 16% increase in gaming win in constant currency termsin line with regional industry growth levels. Market share was retained in theface of heightened competitor activity. The gaming market grew by 11% in Gautengand 20% in Kwa-Zulu Natal. Hotels reported improved occupancy levels which,together with higher room rates, assisted in improving Revpar by 12% in localcurrency terms. This improved level of trading, assisted by good overhead costcontrol, resulted in an EBITA margin improvement to 26.1%. Financial review New accounting standards and restatements The group previously prepared its financial statements under United KingdomGenerally Accepted Accounting Principles (UK GAAP). From 1 April 2005, SABMillerplc is required to adopt the International Financial Reporting Standards (IFRS)endorsed by the European Union (EU) and accordingly all financial information isnow stated under IFRS, with the exception of IAS 32 Financial Instruments:Disclosure and Presentation and IAS 39 Financial Instruments: Recognition andMeasurement, which in accordance with the exemption available in IFRS 1, thegroup has applied with effect from 1 April 2005, and hence has had no impact onthe prior period. The application of IAS 32 and IAS 39 has resulted inincreases in total assets of US$6 million and total liabilities of US$1 million,giving an increase in net assets of US$5 million, as at 1 April 2005. The impactincludes adjustments to the carrying value of borrowings where there was a fairvalue hedge and an increase in borrowings reflecting the reclassification ofinterest accruals, previously shown as creditors under UK GAAP. The accounting policies followed are the same as those published on 10 November2005 by the group within the Interim report at 30 September 2005, which isavailable on the group's website, http://www.sabmiller.com/. Reconciliationsbetween UK GAAP and IFRS for the year ended 31 March 2005 were also published on5 July 2005 and are available on the group's website. Segmental analysis The group's operating results are set out in the segmental analysis ofoperations, and the disclosures accord with the manner in which the group ismanaged. 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 to shareholdersand allow for greater comparability between segments. Segmental performance isreported after the specific apportionment of attributable head office servicecosts. This announcement includes segmental results and commentaries for South Africa:Beverages. This follows the acquisition in December 2004 of all of the shares inABI which the group did not own, and the commencement of a programme of work toestablish and leverage the benefits from the combination of our beveragebusinesses in South Africa. South Africa: Beverages combines two previouslyseparate business segments: Beer South Africa and Other Beverage Interests. Theannouncement also includes segmental results and commentaries for Latin America.This follows the investment in Bavaria whose operations are principallylocated in South America. Latin America combines the group's South Americanoperations with the geographical segment of Central America previously reported. 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 group revenue. Reportedvolumes exclude intra-group sales volumes. Organic, constant currency comparisons The group has made some disclosures of its results on an organic, constantcurrency basis, to analyse the effects of acquisitions and investments net ofdisposals and changes in exchange rates on the group's results. Organic resultsexclude the first twelve months' results of acquisitions and investments and thelast twelve months' results of disposals. Constant currency results have beendetermined by translating the local currency denominated results for the yearended 31 March 2006 at the exchange rates for the comparable period in the prioryear. Acquisitions and investments On 27 May 2005 the group announced that its Indian subsidiary, MBL Investmentshad acquired the Shaw Wallace Group's interest in the brewing operations of itsIndian investment, taking the group's interest to 99%. A major transaction with Bavaria was completed on 12 October 2005, in whichSABMiller plc obtained a 71.42% controlling effective interest in Bavaria, acompany listed on the Colombian Stock Exchange. As consideration, SABMiller plcissued 225 million ordinary shares (US$4,082 million excluding transactioncosts), amounting to some 15.02% of the enlarged ordinary share capital ofSABMiller. On the same date the group acquired class A voting shares fromminority interests representing 14.31% of the economic interest in Union deCervecerias Peruanas Backus y Johnston S.A.A. ("Backus"), Bavaria's primarylisted subsidiary in Peru, for a cash consideration of US$473 million andcertain other minority interests for a cash consideration of US$196 million,principally the remaining minority interest in Cerveceria Leona S.A. (Leona).Between 6 December 2005 and 31 March 2006 the group acquired further minorityinterests of 25.79% in Bavaria and non-voting shares representing 37.73% of theeconomic interest in Backus for considerations of US$1,243 million and US$365million respectively. At 31 March 2006 the group's shareholding in Bavaria was97.21% and it held an effective economic interest in Backus in Peru of 93.28%.The group will continue to purchase further minority interests in the Bavariagroup wherever practicable. On 21 November 2005 the group announced that it had acquired the remaining 41.8%minority interest in its Central American subsidiary, Bevco Limited (Bevco), theholding company for the businesses in Honduras and El Salvador, from existingshareholders for a cash consideration of US$396 million, which increasedSABMiller's interest to 100% of Bevco. 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. Exceptional charges of US$15 million incurred during the year relate tointegration costs associated with the investment in Bavaria of which US$11million was incurred in the region with the balance in the corporate centre. In the prior period, an exceptional profit of US$415 million was included withinoperating profit. This included a US$252 million profit on the disposal of thegroup's 21% investment in Edgars Consolidated Stores Ltd (Edcon), a US$104million gain in relation to changes to post-retirement plans (North America), aUS$103 million profit on the disposal of the group's 29.4% stake in HarbinBrewery Group Limited (Harbin), partly offset by US$35 million of breweryclosure costs in Italy and US$16 million of restructuring costs in the CanaryIslands. In addition there was a net exceptional profit within the share ofpost-tax results of associates of US$7 million. 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, have increased to US$7,755 million from US$3,353million at 1 April 2005 (restated). Net debt comprising gross debt net of cashand cash equivalents and the loan participation deposit has increased toUS$7,087 million from US$2,210 million at 1 April 2005 (restated) reflecting theadditional debt in the Bavaria group as well as the funding of payments tominority shareholders as detailed above. The group's gearing (presented as aratio of debt/equity) has increased to 52.1% from 25.2% (restated) at 1 April2005. The group previously had US dollar and sterling private placement notes in issuewith final maturity in 2008. As part of the refinancing for the Bavariatransaction, notice was given to repay all of these notes in accordance withtheir terms, with repayment on 22 September 2005. The amounts on repaymenttotalled US$179 million and £25 million (US$37 million) and were met out ofexisting resources. These amounts included an early redemption penalty of US$13million, included in interest payable, but which has been treated as anadjusting item for adjusted earnings purposes. The average loan maturity in respect of the US$ fixed rate debt portfolio is 4.6years. The average borrowing rate for the total debt portfolio at 31 March 2006was 6.9% (2005: 5.5%). On 9 September 2005 the group entered into a US$3,500 million 364 day revolvingcredit facility for general corporate purposes (including financing the Bavariaminority acquisitions). This facility can be extended at the group's electionfor a term of a further year. On 12 December 2005 the group also entered into aUS$2,000 million five year syndicated revolving credit facility, and thisfacility can be extended at the first anniversary of signing by a year and atthe second anniversary for a further year subject to the agreement of the groupand the lenders. The US$3,500 million facility was reduced to US$2,400 millionconcurrent with the signing of this agreement. Finance costs Net finance costs increased to US$299 million, a 109% increase on prior yearfinance costs of US$143 million. This increase in net debt is primarily due tothe transaction with Bavaria. Interest cover, based on pre-exceptional profitbefore interest and tax, has reduced to 9.2 times from 14.4 times in the prioryear. Profit before tax Profit before tax of US$2,453 million was down 4% on prior year, reflecting anumber of exceptional credits recorded in the prior year (as described above)partly offset by the investment in Bavaria and performance improvements acrossthe businesses. Taxation The effective tax rate of 33.6%, before amortisation of intangible assets(excluding software) and exceptional items, is lower than the prior year,reflecting a different mix of profits across the group together with benefitsfrom adjustments in respect of prior years and improved tax efficiencies. Earnings per share The group presents adjusted basic earnings per share to exclude the impact ofamortisation of intangible assets (excluding software) and other non-recurringitems, which include post-tax exceptional items, in order to present a moremeaningful comparison for the years shown in the consolidated financialstatements. Adjusted basic earnings per share was 109.1 US cents up 8% on prioryear, reflecting the improved performance noted above. An analysis of earningsper share is shown in note 5 to the financial statements. Goodwill and intangible assets Goodwill increased by US$5,358 million, due primarily to the inclusion ofprovisional goodwill of US$4,984 million arising on the consolidation of theinterests in South America, provisional goodwill of US$315 million arising onthe acquisition of the Shaw Wallace Group's interest in the brewing operationsof the group's Indian investment, and goodwill of US$75 million on theacquisition of the minorities in Central America. Intangible assets increased principally due to US$3,480 million of brandsarising on the consolidation of the interest in the Bavaria group. Cash flow Net cash generated from operating activities before working capital movement(EBITDA) increased by 22% to US$3,348 million compared to the prior year. Theratio of EBITDA to revenue increased in the year to 22% (2005: 21%). Currencies: South African rand/Colombian peso During the financial year, whilst the rand showed some strength against the USdollar and ended the financial year at R6.195 to the US dollar, the weightedaverage rand/dollar rate worsened by 3% to R6.41 compared with R6.22 in theprior year. The peso has stayed largely level against the US dollar since theBavaria transaction ending the financial year at COP2,292 to the US dollar,against COP2,300 at the time of the transaction. Dividend The board has recommended a final dividend of 31.0 US cents per share for theyear. Shareholders will be asked to approve this recommendation at the annualgeneral meeting, scheduled for 28 July 2006. If approved, the dividend will bepayable on 4 August 2006 to shareholders registered on the London andJohannesburg registers on 7 July 2006. The ex-dividend trading dates will be 5July 2006 on the London Stock Exchange and 3 July 2006 on the JSE SecuritiesExchange South Africa. As the group reports in US dollars, dividends aredeclared in US dollars. They are payable in South African rand to shareholderson the Johannesburg register, in US dollars to shareholders on the Londonregister with a registered address in the United States (unless mandatedotherwise), and in sterling to all remaining shareholders on the Londonregister. The rate of exchange applicable on 22 June 2006 will be used for US dollarconversion into South African rand and the rate of exchange on 10 July 2006 willbe used for US dollar conversion into sterling. Currency conversionannouncements will be made on the LSE's Regulatory News Service and on the JSE'sStock Exchange News Service, indicating the rates of exchange to be applied. To comply with the requirements of STRATE in South Africa, from the close ofbusiness on 22 June 2006 until the close of business on 7 July 2006, notransfers between the London and Johannesburg registers will be permitted, andfrom the close of business on 30 June 2006 until the close of business on 7 July2006, no shares may be dematerialised or rematerialised. Annual report and accounts The group's unaudited summarised financial statements and certain significantexplanatory notes follow. The annual report will be mailed to shareholders inearly July 2006 and the annual general meeting of the company will be held at11:00hrs on 28 July 2006. SABMiller plcCONSOLIDATED INCOME STATEMENTSfor the year ended 31 March 2006 2005 Unaudited Unaudited Notes US$m US$m Revenue 2 15,307 12,901 Net operating expenses (12,732) (10,354) Operating profit 2 2,575 2,547Operating profit before exceptional items 2,590 2,132Exceptional items 3 (15) 415 Net finance costs (299) (143)Interest payable and similar charges (377) (239)Interest receivable 78 96 Share of post-tax results of associates 177 148 Profit before taxation 2,453 2,552Taxation 4 (779) (823) Profit for the financial period 1,674 1,729 Profit attributable to minority interests 234 208Profit attributable to equity shareholders 1,440 1,521 1,674 1,729 Basic earnings per share (US cents) 5 105.0 125.5Diluted earnings per share (US cents) 5 104.3 121.2 All operations are continuing. SABMiller plcCONSOLIDATED BALANCE SHEETSat 31 March 2006 2005 Unaudited Unaudited Notes US$m US$m AssetsNon-current assetsGoodwill 7 12,539 7,181Intangible assets 7 3,596 122Property, plant and equipment 6,340 4,056Investments in associates 1,067 1,116Financial assets:- Available for sale investments 41 187- Derivative financial instruments 3 -Trade and other receivables 87 54Deferred tax assets 278 153 23,951 12,869Current assetsInventories 881 627Trade and other receivables 1,218 952Current tax assets 54 56Financial assets:- Derivative financial instruments 4 -- Loan participation deposit 196 -Cash and cash equivalents 472 1,143 2,825 2,778 Total assets 26,776 15,647 LiabilitiesCurrent liabilitiesFinancial liabilities:- Derivative financial instruments (3) -- Borrowings (1,950) (815)Trade and other payables (2,473) (1,941)Current tax liabilities (283) (381)Provisions (98) (62) (4,807) (3,199)Non-current liabilitiesFinancial liabilities:- Derivative financial instruments (175) -- Borrowings (5,632) (2,525)Trade and other payables (63) (53)Deferred tax liabilities (1,412) (188)Provisions (1,088) (927) (8,370) (3,693) Total liabilities (13,177) (6,892) Net assets 13,599 8,755 EquityTotal shareholders' equity 13,045 8,077Minority interests 554 678Total equity 13,599 8,755 SABMiller plcCONSOLIDATED CASH FLOW STATEMENTSfor the year ended 31 March 2006 2005 Unaudited Unaudited Notes US$m US$m Cash flows from operating activitiesCash generated from operations 8 3,291 2,792Interest received 80 94Interest paid (401) (228)Interest element of finance lease rental payments - (2)Tax paid (869) (625) Net cash from operating activities 2,101 2,031 Cash flows from investing activitiesPurchase of property, plant and equipment (999) (756)Proceeds from sale of property, plant and equipment 48 30Purchase of intangible assets (33) (12)Purchase of investments (7) (19)Proceeds from sale of investments 5 475Acquisition of subsidiaries (net of cash acquired) (717) (23)Purchase of shares from minorities (2,048) (793)Purchase of shares in associates (1) (13)Funding to associates - (68)Repayment of funding by associates 122 -Dividends received from associates 71 47Dividends received from other investments 2 10Net cash used in investing activities (3,557) (1,122) Cash flows from financing activitiesProceeds from the issue of shares 30 38Proceeds from the issue of shares to minorities - 1Purchase of own shares for share trusts (8) (21)Proceeds from borrowings 3,002 540Repayment of borrowings (900) (632)Capital element of finance lease payments (28) (25)Increase in loan participation deposit (196) -Dividends paid to shareholders of the parent (520) (412)Dividends paid to minority interests (167) (172)Net cash generated / (used) in financing activities 1,213 (683) Net cash from operating, investing and financing (243) 226activitiesEffects of exchange rate changes 11 (56)Net (decrease) / increase in cash and cash equivalents (232) 170 Cash and cash equivalents at 1 April 630 460Cash and cash equivalents at 31 March 398 630 SABMiller plcCONSOLIDATED STATEMENTS OF RECOGNISED INCOME AND EXPENSEfor the year ended 31 March 2006 2005 Unaudited Unaudited US$m US$m Currency translation differences on foreign currency net (128) 220investmentsActuarial gains / (losses) on defined benefit plans 42 (210)Tax on items taken directly to equity (17) 83Net investment hedges (2) -Net (losses) / gains recognised directly in equity (105) 93 Profit for the year 1,674 1,729 Total recognised income for the year 1,569 1,822- attributable to equity shareholders 1,360 1,601- attributable to minority interests 209 221 2006 US$mEffects of changes in accounting policy (adoption of IAS 32 and39)- attributable to equity shareholders 5- attributable to minority interests - 5 SABMiller plcNOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation The preliminary announcement for the year ended 31 March 2006 has been preparedin accordance with the International Accounting Standards and InternationalFinancial Reporting Standards (collectively IFRS) and International FinancialReporting Interpretation Committee (IFRIC) interpretations as adopted by the EUat 31 March 2006. Details of the accounting policies are set out in theSABMiller plc's Interim report for the six months ended 30 September 2005. The financial information in this preliminary announcement is not audited anddoes not constitute statutory accounts within the meaning of s240 of theCompanies Act 1985 (as amended). Group financial statements for 2006 will bedelivered to the Registrar of Companies in due course. The board of directorsapproved this financial information on 18 May 2006. Statutory accounts for theyear ended 31 March 2005, which were prepared under accounting practicesgenerally accepted in the UK, have been filed with the Registrar of Companies.The auditors' report on those accounts was unqualified and did not contain astatement made under s237(2) or (3) of the Companies Act 1985. The consolidated financial statements present the financial record for the yearsended 31 March 2006 and 31 March 2005. The subsidiary and associatedundertakings in the group operate in the local currency of the country in whichthey are based. From a presentational perspective, the group regards theseoperations as being US dollar-based as the transactions of these entities are,insofar as is possible, evaluated in US dollars. In management accounting termsall companies report in US dollars. The directors of the company regard the USdollar as the presentational currency of the group, being the mostrepresentative currency of its operations. Therefore the consolidated financialstatements are presented in US dollars. Accounting policies These preliminary financial statements should be read in conjunction with theannual financial statements and the accounting policies laid down therein (whichwill be distributed in early July 2006). The financial statements are preparedunder the historical cost convention, except for the revaluation to fair valueof certain financial assets and liabilities. This is the first year that thegroup's consolidated financial statements have been prepared under IFRS and IFRS1 (First time adoption of IFRS) has been applied. Accordingly, the comparativespresented in this document have been restated for IFRS, with the exception ofIAS 32 (Financial Instruments: Presentation and Disclosure) and IAS 39(Financial Instruments: Recognition and Measurement) for which the group tookadvantage of the one year exemption available. Therefore, for the comparativeinformation for the year ended 31 March 2005, financial instruments (includingborrowings) were accounted for and presented in accordance with UK GenerallyAccepted Accounting Principles (UK GAAP), with an adjustment made at 1 April2005 on adoption of IAS 32 and 39. 2. Segmental information (unaudited) The segmental information presented below includes the reconciliation of GAAPmeasures presented on the face of the income statement to non-GAAP measureswhich are used by management to analyse the group's performance. Share of Share of Segment associates' Group Segment associates' Group revenue revenue revenue revenue revenue revenue 2006 2006 2006 2005 2005 2005Revenue US$m US$m US$m US$m US$m US$m North America 4,912 - 4,912 4,892 - 4,892Latin America 2,153 12 2,165 521 - 521Europe 3,258 - 3,258 2,909 - 2,909Africa and Asia 1,203 1,018 2,221 1,003 934 1,937South Africa:- Beverages 3,781 423 4,204 3,576 419 3,995- Hotels and Gaming - 321 321 - 289 289South Africa: Total 3,781 744 4,525 3,576 708 4,284 15,307 1,774 17,081 12,901 1,642 14,543 Operating Operating profit before profit before Operating Exceptional exceptional Operating Exceptional exceptional profit items items profit items items 2006 2006 2006 2005 2005 2005Operating profit US$m US$m US$m US$m US$m US$m North America 454 - 454 598 (111) 487Latin America 376 11 387 90 - 90Europe 567 - 567 431 51 482Africa and Asia 257 - 257 352 (103) 249South Africa: Beverages 1,011 - 1,011 906 - 906Corporate (90) 4 (86) 170 (252) (82) 2,575 15 2,590 2,547 (415) 2,132 Operating Share of Amortisation EBITA Operating Share of Amortisation EBITA profit associates' of profit associates' of before operating intangible before operating intangible exceptional profit assets exceptional profit assets items before (excluding items before (excluding exceptional software) exceptional software) items items 2006 2006 2006 2006 2005 2005 2005 2005EBITA US$m US$m US$m US$m US$m US$m US$m US$m North 454 - - 454 487 - - 487America Latin 387 - 49 436 90 - - 90AmericaEurope 567 - 2 569 482 - - 482Africa and 257 164 1 422 249 134 - 383Asia SouthAfrica:- Beverages 1,011 51 - 1,062 906 50 - 956- Hotels - 84 - 84 - 73 - 73and GamingSouth 1,011 135 - 1,146 906 123 - 1,029Africa:TotalCorporate (86) - - (86) (82) - - (82)Group 2,590 299 52 2,941 2,132 257 - 2,389 The group's share of associates' operating profit is reconciled to the share of post-tax resultsof associates in the income statement as follows: 2006 2005 US$m US$m Share of associates' operating profit before 299 257exceptional itemsShare of associates' exceptional items - 7Share of associates' interest (16) (24)Share of associates' tax (81) (74)Share of associates' minority interests (25) (18) 177 148 EBITDA Cash EBITDA EBITDA Cash EBITDA before cash exceptional before cash exceptional exceptional items exceptional items items items 2006 2006 2006 2005 2005 2005 EBITDA US$m US$m US$m US$m US$m US$m North America 591 - 591 634 4 638 Latin America 574 (4) 570 129 - 129 Europe 733 - 733 649 (5) 644 Africa and Asia 321 - 321 293 - 293 South Africa: 1,205 - 1,205 1,101 - 1,101 Beverages Corporate (68) (4) (72) (69) - (69) Group 3,356 (8) 3,348 2,737 (1) 2,736 A reconciliation of profit for the year to EBITDA after cash exceptional items can be found in note 8. 3. Exceptional items 2006 2005 Unaudited Unaudited US$m US$m Subsidiaries' exceptional items included inoperating profit:North America - 111 Profit on disposal of Tumwater brewery - 4Reversal of provisions for Miller integration and - 2restructuring costsReversal of provision for brewery closure costs in - 1TumwaterGain in relation to changes to post-retirement plans - 104 Latin America Bavaria integration and restructuring costs (11) - Europe - (51) Brewery closure costs in Italy - (35)Restructuring costs in the Canary Islands - (16) Africa and AsiaProfit on disposal of investment - 103 Corporate (4) 252Profit on disposal of investment - 252Bavaria integration costs (4) - Exceptional items included in operating profit (15) 415 Taxation charge 5 (74) Minority interests' share of the above items - 8 Share of associates' exceptional itemsSouth Africa: Hotels and Gaming - 7Profit on disposal of property, plant and equipment - 11Restructuring costs - (4) Taxation credit - 1 Exceptional items (including share of associates' (15) 422exceptional items) 2006 Latin America and Corporate Integration and restructuring costs associated with the consolidation of Bavariaof $15 million were incurred during the year. 2005 North America In April 2004, the sale of the Tumwater brewery in North America was completedresulting in a profit on disposal of US$4 million. During 2005, US$1 million ofthe Tumwater closure costs previously provided were deemed surplus and werecredited to the income statement. During 2005, US$2 million of the restructuring and integration costs provided inthe prior year were deemed surplus and were credited to the income statement. During 2005, post-retirement arrangements were changed and post-retirementmedical healthcare liabilities were capped, which resulted in a gain of US$104million being recorded in the income statement. The related tax charge wasUS$41 million. Europe Following the acquisition of Birra Peroni SpA in 2004, an operating reviewresulted in an announcement in October 2004 of the closure of the Naples breweryat a total cost of US$35 million. Property, plant and equipment were writtendown to net recoverable value, resulting in a charge of US$21 million. Inaddition, the closure resulted in retrenchment costs of US$8 million, NastroAzzurro re-branding costs of US$2 million and other exit costs of US$4 million. In March 2005, a restructuring plan was announced for the Canary Islands,Europe. A provision of US$16 million was charged to the income statement tocover the costs which primarily relate to severance. Africa and Asia In June 2004, the group completed the disposal of its 29.4% interest in HarbinBrewery Group Limited (Harbin), realising a profit on disposal of US$103million. Corporate In July 2004, the group disposed of its entire 21% interest in Edgar'sConsolidated Stores Ltd (Edcon) realising a profit on disposal of US$252million. The associated capital gains tax amounted to US$30 million. South Africa: Hotels and Gaming In May 2004, Tsogo Sun Holdings (Pty) Ltd (Tsogo Sun) recorded a pre-tax profiton the sale of two Umhlanga Rocks hotels and land, of which the group's shareamounted to US$11 million. During 2005, US$4 million of costs were charged to the income statement inrelation to restructuring in the hotels and gaming division. 4. Taxation 2006 2005 Unaudited Unaudited US$m US$m Current taxation 701 681- Charge for the year (UK corporation tax: US$29 million charge (2005: US$4 million charge)) 717 638- Adjustments in respect of prior years (16) 43Withholding taxes and other taxes 78 126Total current taxation 779 807 Deferred taxation - 16- Charge for the year (UK corporation tax: US$6 million charge (2005: US$4 million credit)) 7 55- Adjustments in respect of prior years (5) (39)- Rate change (2) - 779 823 Effective tax rate, before amortisation of intangibles (excluding software and exceptional items) 33.6 37.1(%) * 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. * The 2005 effective tax rate before the South African secondary tax oncompanies (STC) charge on non-recurring dividends, following a restructuring ofthe group's holdings in South Africa, of US$38 million was 35.4%. 5. Earnings per share 2006 2005 Unaudited Unaudited US cents US centsBasic earnings per share 105.0 125.5Diluted earnings per share 104.3 121.2Headline earnings per share 108.3 95.3Adjusted basic earnings per share 109.1 101.0Adjusted diluted earnings per share 108.4 97.8Adjusted comparable earnings per share * 98.4 * Comparable figures adjusted for conversion of convertible bonds. The amountsare calculated as if the bonds had converted on 1 April 2004. The weighted average number of shares was: 2006 2005 Unaudited Unaudited Millions of shares Millions of shares Ordinary shares 1,376 1,216ESOP trust ordinary shares (4) (4)Basic shares 1,372 1,212Dilutive ordinary shares from share options 9 6Dilutive ordinary shares from the guaranteed convertible bond - 52Diluted shares 1,381 1,270 Adjusted and headline earnings The group has also presented an adjusted basic earnings per share figure toexclude the impact of amortisation of intangible assets (excluding capitalisedsoftware) and other non-recurring items for the years shown in the consolidatedfinancial statements. Adjusted earnings per share has been based on adjustedheadline earnings for each financial year and on the same number of weightedaverage shares in issue as the basic earnings per share calculation. Headlineearnings per share has been calculated in accordance with the Institute ofInvestment Management and Research (IIMR)'s Statement of Investment Practice No.1 entitled 'The Definition of Headline Earnings'. The adjustments made toarrive at headline earnings and adjusted earnings are as follows: 2006 2005 Unaudited Unaudited US$m US$m Profit for the financial year attributable to equity 1,440 1,521 holders of the parent Early redemption penalty in respect of private 13 - placement notes Loss on derivatives on capital items * 5 - Intangible amortisation excluding capitalised 52 - software Impairment of property, plant and equipment 4 9 (Profit) / loss on sale of property, plant and (5) 16 equipment and investments Share of associate's profit on disposal of property, - (11) plant and equipment (South Africa: Hotels and Gaming) Brewery closure costs in Tumwater (North America) - (1) Gain in relation to changes to post-retirement plans - (104) (North America) Profit on sale of investments (Africa and Asia, - (355) Corporate) Profit on disposal of Tumwater (North America) - (4) Brewery closure costs in Italy (Europe) - 21 Tax effects of the above items (19) 71 Minority interests' share of the above items (6) (9) Headline earnings (basic) 1,484 1,154 Integration / reorganisation costs (net of tax 13 32 effects) South African STC on non-recurring dividends - 38 Adjusted earnings 1,497 1,224 * This does not include all derivative movements but includes those in relationto capital items for which hedge accounting cannot be applied. 6. Dividends 2006 2005 Unaudited UnauditedEquity US$m US$m 2005 Final dividend paid: 26.0 US cents (2004: 22.5 US cents) per ordinary share 328 2692006 Interim dividend paid: 13.0 US cents (2005: 12.0 US cents) per ordinary share 192 144 520 413 In addition, the directors are proposing a final dividend of 31.0 US cents pershare in respect of the financial year ended 31 March 2006, which will absorb anestimated US$449 million of shareholders' funds. The dividends will be paid on4 August 2006 to shareholders registered on the London and Johannesburgregisters on 7 July 2006. 7. Goodwill and intangible assets Goodwill Intangible assets Unaudited Unaudited US$m US$mNet book amountAt 1 April 2004 6,513 94Exchange adjustments 130 5Acquisitions and net additions during the year 614 56Amortisation - (33)Adjustments to provisional fair values (76) -At 31 March 2005 7,181 122Exchange adjustments (76) (17)Acquisitions and net additions during the year 5,441 3,596Amortisation - (105)Adjustments to provisional fair values (7) -At 31 March 2006 12,539 3,596 Goodwill 2006 Goodwill arising on the consolidation of subsidiary undertakings principallyarose due to the Bavaria transaction on 12 October 2005 which resulted inUS$4,042 million of provisional goodwill, the acquisition of additional minorityinterests in Colombia and Peru which resulted in additional goodwill of US$942million, the consolidation of 99% of the brewing interests of the Shaw Wallacegroup in the India investment resulting in US$315 million of provisionalgoodwill and the acquisitions of the remaining minority interests in Bevco(Central America) and Plzensky Prazdroj a.s. (Czech) which resulted inadditional goodwill of US$107 million. 2005 The goodwill arose principally due to the acquisition of an additional 39.8% ofBirra Peroni SpA resulting in US$172 million of goodwill and the acquisition ofthe remaining 26.5% of Amalgamated Beverage Industries Ltd (ABI) resulting inUS$419 million of goodwill. Intangible assets 2006 Intangible assets acquired during the year principally comprised brands with avalue of US$3,480 million which were recognised as a result of the Bavariatransaction. 8. Reconciliation of profit for the year to net cash generated from operations 2006 2005 Unaudited Unaudited US$m US$m Profit for the year 1,674 1,729 Taxation 779 823 Share of post-tax results of associates (177) (148) Interest receivable (78) (96) Interest payable and similar charges 377 239 Operating profit 2,575 2,547 Depreciation: Property, plant and equipment 444 396 Containers 111 82 Container breakages, shrinkage and write-offs 77 51 (Profit) / loss on sale of property, plant and equipment (5) 16 Impairment of property, plant and equipment 4 8 Amortisation of intangible assets 105 33 Net loss from fair value hedges 5 - Dividends received from other investments (3) (10) Charge with respect to share options 17 18 Restructuring and integration costs (Latin America) 7 - Gain in relation to changes to post-retirement plans (North - (104) America) Profit on sale of investments (Africa and Asia, Corporate) - (355) Restructuring provision in the Canary Islands (Europe) - 16 Restructuring provision (North America) - (2) Brewery closure costs in Tumwater (North America) - (1) Brewery closure costs in Italy (Europe) - 30 Deferred income - (3) Other non-cash movements 11 14 Net cash generated from operations before working capital 3,348 2,736 movements (EBITDA) Increase in inventories (78) (24) Increase in receivables (67) (62) Increase in payables 86 188 (Decrease) / increase in provisions (31) 8 Increase / (decrease) in post-retirement provisions 33 (54) Net cash generated from operations 3,291 2,792 Cash generated from operations include cash flows relating to exceptional itemsof US$8 million in respect of South America integration and restructuring costs(2005: US$4 million cash inflow in respect of proceeds on the Tumwater disposal,and US$5 million cash outflow in respect of brewery closure costs in Italy). 9. Analysis of net debt (unaudited) Cash and Overdrafts Total cash Loan Borrowings Derivative Finance Total Net cash and cash participation financial leases gross debt equivalents equivalents deposit instruments borrowings (excluding overdrafts) US$m US$m US$m US$m US$m US$m US$m US$m US$m At 1 April 2004 682 (222) 460 - (3,437) - (42) (3,479) (3,019) Exchange (32) (24) (56) - (53) - (1) (54) (110) movements Cash flow 493 (268) 225 - 92 - 25 117 342 Reclassifications - 1 1 - - - (1) (1) - Amortisation of - - - - (7) - - (7) (7) bond costs Conversion of - - - - 597 - - 597 597 debt At 31 March 2005 1,143 (513) 630 - (2,808) - (19) (2,827) (2,197) Adoption of IAS - - - - (25) 12 - (13) (13) 32 and 39 At 1 April 2005 1,143 (513) 630 - (2,833) 12 (19) (2,840) (2,210) Exchange (2) 13 11 - 62 - - 62 73 adjustments Cash flow (651) 179 (472) 196 (2,102) - 28 (2,074) (2,350) Acquisitions 232 (3) 229 - (2,642) (138) (36) (2,816) (2,587) Other non-cash - - - - 34 (47) - (13) (13) movements At 31 March 2006 722 (324) 398 196 (7,481) (173) (27) (7,681) (7,087) (cash flow) Legal right of (250) - (250) - 250 - - 250 - offset At 31 March 2006 472 (324) 148 196 (7,231) (173) (27) (7,431) (7,087)(balance sheet) The group's net debt is denominated in the following currencies: US SA rand Euro Colombian Other Total dollars peso currencies US$m US$m US$m US$m US$m US$m Total cash and cash equivalents 883 146 38 - 76 1,143 Total gross borrowings (2,294) (230) (285) - (531) (3,340) Net debt at 31 March 2005 (1,411) (84) (247) - (455) (2,197) Total cash and cash equivalents 174 46 28 45 179 472 Loan participation deposit - - - - 196 196 Total gross borrowings (4,418) (225) (253) (2,031) (828) (7,755) Net debt at 31 March 2006 (4,244) (179) (225) (1,986) (453) (7,087) 10. Bavaria transaction A major transaction was completed on 12 October 2005, in which SABMiller plcobtained a 71.42% controlling effective interest in Bavaria, a company listed onthe Colombian Stock Exchange. As consideration, SABMiller plc issued 225 millionordinary shares (US$4,082 million excluding transaction costs), amounting tosome 15.02% of the enlarged ordinary share capital of SABMiller. On that samedate the group acquired class A voting shares from minority interestsrepresenting 14.31% of the economic interest in Backus, Bavaria's primary listedsubsidiary in Peru, for a cash consideration of US$473 million and certain otherminority interests for a cash consideration of US$196 million, principally theremaining minority interest in Leona, a subsidiary of Bavaria. Between 6December 2005 and 31 March 2006 the group acquired further minority interests of25.79% in Bavaria and non-voting shares representing 37.73% of the economicinterest in Backus for considerations of US$1,243 million and US$365 millionrespectively. At 31 March 2006 the group's effective interest in Bavaria was97.21%. The group continues and will continue to purchase further minorityinterests in the Bavaria group wherever practicable. 11. Share capital During the year ended 31 March 2006, 225,000,000 ordinary shares were issued asconsideration for the investment in Bavaria (2005: 69,191,006 ordinary sharesissued following the conversion of the 4.25% guaranteed convertible bonds) and3,673,590 ordinary shares (2005: 4,613,024 ordinary shares) were allotted andissued in accordance with the group's share purchase, option and award schemes. SUPPLEMENTARY INFORMATION Half yearly reporting SABMiller plcCONSOLIDATED INCOME STATEMENTSfor the six months ended 31 March 2006 2005 Unaudited Unaudited US$m US$m Revenue 8,256 6,458 Net operating expenses (6,784) (5,231) Operating profit 1,472 1,227Operating profit before exceptional items 1,487 1,128Exceptional items (15) 99 Net finance costs (222) (65)Interest payable and similar charges (260) (118)Interest receivable 38 53 Share of post-tax results of associates 77 66 Profit before taxation 1,327 1,228Taxation (402) (458) Profit for the financial period 925 770 Profit attributable to minority interests 135 107Profit attributable to equity shareholders 790 663 925 770 All operations are continuing. SABMiller plcCONSOLIDATED CASH FLOW STATEMENTSfor the six months ended 31 March 2006 2005 Unaudited Unaudited US$m US$m Cash flows from operating activitiesCash generated from operations 2,002 1,530Interest received 39 49Interest paid (278) (114)Interest element of finance lease rental payments - (1)Tax paid (475) (353)Net cash from operating activities 1,288 1,111 Cash flows from investing activitiesPurchase of property, plant and equipment (595) (422)Proceeds from sale of property, plant and equipment 27 18Purchase of intangible assets (18) (8)Net proceeds from sale of investments 16 (2)Acquisition of subsidiaries (net of cash acquired) (537) 1Purchase of shares from minorities (2,042) (793)Purchase of shares in associates (1) (5)Funding to associates - (9)Repayment of funding by associates 122 -Dividends received from associates 33 26Dividends received from other investments 1 -Net cash used in investing activities (2,994) (1,194) Cash flows from financing activitiesProceeds from the issue of shares 12 19Net purchase of own shares for share trusts - (16)Net proceeds from borrowings 2,737 13Repayment of borrowings (544) (66)Capital element of finance lease payments (19) (12)Increase in loan participation deposit (196) -Dividends paid to shareholders of the parent (192) (143)Dividends paid to minority interests (104) (96)Net cash generated / (used) in financing activities 1,694 (301) Net cash from operating, investing and financing (12) (384)activitiesEffects of exchange rate changes 9 (42)Net increase/(decrease) in cash and cash equivalents (3) (426) Cash and cash equivalents at 1 October 401 1,056Cash and cash equivalents at 31 March 398 630 SABMiller plcFORWARD-LOOKING STATEMENTS This announcement does not constitute an offer to sell or issue or thesolicitation of an offer to buy or acquire ordinary shares in the capital ofSABMiller plc (the "Company") in any jurisdiction or an inducement to enter intoinvestment activity. This announcement includes 'forward-looking statements'. These statementscontain the words "anticipate", "believe", "intend", "estimate", "expect" andwords of similar meaning. All statements other than statements of historicalfacts included in this announcement, including, without limitation, thoseregarding the Company's financial position, business strategy, plans andobjectives of management for future operations (including development plans andobjectives relating to the Company's products and services) are forward-lookingstatements. 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 fromfuture results, performance or achievements expressed or implied by suchforward-looking statements. Such forward-looking statements are based onnumerous assumptions regarding the Company's present and future businessstrategies 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.The Company expressly disclaims any obligation or undertaking to disseminate anyupdates or revisions to any forward-looking statements contained herein toreflect any change in the Company's expectations with regard thereto or anychange in events, conditions or circumstances on which any such statement isbased. SABMiller plcADMINISTRATION SABMiller plc (Registration No. 3528416) Company Secretary A O C Tonkinson 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:// 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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