But size is not an end in itself. Our growth has been driven
by our objective to add value for you, our shareholders. We now
have a spread of operations and currencies with an attractive balance
between fast growing developing markets and cash generative developed
markets. We have created a quality brand portfolio with very strong
regional and local market positions and in the Pilsner Urquell and
Miller brands we have considerable opportunity for cross-selling
in our existing markets.
Through our size, geographical balance, quality brand portfolio,
extensive distribution network and financial strength we should
be able to enhance the competitiveness of our business and in turn
drive incremental value.
Financial and operational performance
We are pleased to report that in the 12 months to 31 March 2003
adjusted earnings per share increased by 11% to 54.0 US cents and
we have recommended a maintained final dividend of 18.5 US cents
per share, making 25.0 US cents per share for the full year, which
is now in line with our declared aim of achieving dividend cover
of 2.2 to 2.5 times.
The balance sheet remains strong, despite financing the Miller acquisition,
and net cash inflow generated from operating activities reached
US$1,568 million with gearing and interest cover at very acceptable
levels of 42.4% and over five times respectively.
This has been a year of outstanding growth from our businesses in
South Africa, Europe and Africa & Asia. Strong operational performances
and favourable currency movements have led to an increase in EBITA
of 33% from our business excluding Miller. Our plans for the Miller
business are addressed later in the chief executive's review. We
remain confident that integrating the business into the group and
building a platform for growth can be achieved within three years.
Subsequent to the year end the group gained control of Birra Peroni
in Western Europe and a joint venture, through our Mysore Breweries
subsidiary, was formed with Shaw Wallace Breweries in India, which
will further strengthen our operations in these areas.
Over the last year growth in the global economy has weakened, political
uncertainty has increased and the climate for business has become
tougher. Share prices on stock markets worldwide have been volatile
and your company has not been immune to this. However, since SABMiller
moved its primary listing to the London Stock Exchange in March
1999 the FTSE 100 has produced a Total Shareholder Return (TSR)
of negative 29% while your company has produced a TSR of negative
0.6%as at the time of our preliminary results announcement.
Since the beginning of the year, UK listed companies, and those
in the FTSE 100 in particular, have been assessing the implications
of the recommendations in the Higgs Review on the role of boards
and their effectiveness. It is not yet clear in what form these
will be incorporated into the Combined Code. We are, nevertheless,
concerned that rules should not take precedence over appropriate
and practical principles. In addition, they should be capable of
being applied in ways that take full account of contractual obligations,
and of the different circumstances of companies which operate in
various jurisdictions and which in our case have a high proportion
of overseas shareholders. The mechanism in Higgs of allowing companies
to "comply or explain" will also need to be applied so that companies
are able to balance specific internal needs around the applicable
The board strongly supports the ethical values underlying the Combined
Code and is understanding of the efforts in the UK and elsewhere
to enhance the governance standards of companies across markets.
I consider all our directors to be of unquestioned integrity and
our company has always, as a corporate citizen, applied the highest
quality standards in all its financial and operational reporting,
as evidenced by the numerous awards bestowed upon SABMiller in this
regard. I wish to assure shareholders that the board will continue
to act in the best interest of the company and all its stakeholders.
Throughout the year we continued our active programme of Corporate
Social Investment contributing almost 2% of pre tax profit to a
range of projects in the local communities in which we work. These
projects include major programmes spread across such diverse areas
as health, welfare, education and entrepreneurship. The company
also takes seriously its commitment to promoting responsible alcohol
consumption and actively engages with stakeholders around the world
on alcohol issues.
On the conclusion of the Miller transaction we welcomed Altria,
(formerly called Philip Morris) as a supportive long-term shareholder
in SABMiller, with a 36% economic interest and a 24.99% voting interest.
This necessitated a restructuring of the board which now consists
of two executive directors Graham Mackay, chief executive, and Malcolm
Wyman, chief financial officer, and 11 non-executive directors.
We were pleased that Altria nominated Louis Camilleri, their chairman
and chief executive, Geoffrey Bible, their former chairman and chief
executive and Nancy De Lisi, their senior vice-president of mergers
and acquisitions, to join the board. As a consequence of the board
restructure, Hank Slack, Conrad Strauss, Norman Adami, Pete Lloyd,
André Parker and Michael Simms retired from the board. I
would like to thank Hank and Conrad for their valuable contributions
and my special thanks go to the former executive directors who have
given long and meritorious service to the company and will no doubt
continue to do so in their respective operational roles.
Our continuing success as a business depends on the quality of our
people and their determination, experience and creativity. I salute
my fellow directors for their commitment and the contribution they
make to our strategic deliberations and on behalf of the board I
applaud every one of our employees for their contribution to the
continuing success of the company.