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Turnover 1,964 1,270 55
EBITA 522 338 54
EBITA margin (%) 26.6 26.6  
Sales volumes (hls 000s)      
– Lager 25,261 24,428 3

Beer volumes continued the positive trends of the first half, ending the year 3.4% above prior year. The improved economic climate in South Africa has underpinned this growth and has led to trading up amongst consumers both in the beer segment and in the broader liquor market where beer has continued to take share primarily from natural wine, with our share of the liquor market now 59.3%, up from last year’s 57.1%. This trend has been enhanced by effective in-trade execution and the price and value of offerings of products within our portfolio.

For the first time in many years the mainstream market grew, and there has been continued strong growth from the premium and alcoholic fruit beverage segments of the portfolio with year on year growth of 30% and 50% respectively. These segments continue to be the prime focus of our innovation programme with the introduction of our international premium brands, Miller Genuine Draft and Pilsner Urquell, and a new variant of Brutal Fruit, ‘Sultry Strawberry’. Our international premium brands have achieved widespread availability in their target markets.

The higher volumes, improvements in pricing and positive mix trends led to turnover being up 15% in constant currency. EBITA margins have been maintained notwithstanding the launch costs and higher ongoing marketing costs of the international premium brands introduced in the year, the negative impact of the stronger rand on export margins and higher raw material costs arising in part from the previous year’s hedging strategy.

As a result EBITA has also improved by 15% in constant currency. This profit performance has been further enhanced by the strengthening of the rand leading to a 54% increase in reported EBITA.

Disciplined cost management enhanced productivity in all areas. Investments in the manufacturing excellence programmes over the past few years have resulted in a significant improvement in production raw material usage, with efficiencies at an all time high.

The new liquor act, which was approved in November 2003, has yet to be enacted. The material contents of the act remain unchanged from the time of approval and the department of Trade and Industry is currently developing the regulations applying to the act, which we expect to be published later this year.

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