Chairman's Statement
"Today, SABMiller has a brewing presence in over
40 countries. Through our geographic reach and balance, the quality and breadth of our brand portfolio and our widespread distribution network, we are well placed to deliver shareholder value."

Meyer Kahn Chairman
Dear Shareholder,
The financial year to 31 March 2003 has been a year of strong growth for your company. Following the acquisition of the Miller Brewing Company in July 2002 we are now a truly international business with a brewing presence in over 40 countries and across four continents. In size terms, we are the second largest brewer in the world by volume and in the carbonated soft drinks market we remain one of the largest bottlers and distributors of Coca-Cola products outside the US.
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.  

Corporate governance
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 benchmarks.

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.
Board changes
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.

Meyer Kahn