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Definitions

An explanation of some of the terms and abbreviations used in this annual report.

Financial definitions

Adjusted earnings
This comprises the profit for the financial year after adjusting for profits and losses on items of a capital nature, as well as the impact of exceptional items and goodwill amortisation.
Adjusted profit before tax
This is defined as profit before tax, goodwill amortisation and exceptional items.
Cash operating margin (%)
This is calculated on a pre-exceptional basis, by expressing EBITDA as a percentage of turnover, excluding associates.
Cash operating return (%)
This is calculated on a pre-exceptional basis, by expressing the sum of EBITDA and cash dividends received from associates and other investments, as a percentage of net operating assets, adjusted for cumulative goodwill eliminated against shareholders’ funds and accumulated depreciation and amortisation.
EBITA
This is calculated by expressing earnings before interest, taxation and goodwill amortisation.
EBITA margin (%)
This is calculated by expressing earnings before interest, taxation and goodwill amortisation as a percentage of turnover (including associates).
EBITDA
This comprises net cash inflow from operating activities, before working capital movements.
Effective tax rate (%)
This is calculated by dividing the tax charge for the year by the profit before taxation excluding exceptional items and goodwill amortisation.
Free cash flow
This comprises net cash inflow from operations plus dividends received from associates and other investments, and cash from the sales of tangible fixed assets and investments less net interest paid, taxation paid and cash paid for capital expenditure on tangible fixed assets.
Net asset value per share
This is calculated by dividing shareholders’ funds by the closing number of shares in issue.
Net interest cover (EBIT)
This is the ratio of profit before interest, taxation and exceptional items to net financing costs before exceptional items.
Net operating assets
This is the sum of fixed assets, stocks and debtors less interest free liabilities. A reconciliation of this number is provided in note 3.
Operating margin (%)
This is calculated on a pre-exceptional basis, by expressing profit before interest and taxation as a percentage of turnover, including associates.
Operating return (%)
This is calculated on a pre-exceptional basis, by expressing profit before interest and taxation, including associates, as a percentage of net operating assets, excluding goodwill.
Return on equity (%)
This is calculated by dividing adjusted earnings by shareholders’ funds.
Total borrowings
This comprises the sum of the interest bearing liabilities included in creditors due within and after one year.
UK GAAP
Stands for Generally Accepted Accounting Principles in the UK and is the overall body of regulation establishing how company accounts must be prepared in the United Kingdom. This includes not only accounting standards but also UK company law.

Non-financial definitions

ACNielsen
ACNielsen is a leading global provider of marketing research information. Its principal clients are retailers and manufacturers of fast moving consumer goods (FMCGs).
BEE
Black Economic Empowerment has been created by the government in South Africa to help redress the imbalances in South African society created by apartheid. The empowerment process has been identified as being crucial to the future viability of the country’s economy.
CSD
Carbonated soft drinks such as Coca-Cola, Fanta, etc.
Channel marketing
Channel marketing is a term used to describe the focus of sales and marketing effort of a brand on a particular style outlet and towards a specifically identified type of customer.
DMA
Defined Market Areas, a collective term used by the Miller Brewing Company to describe its 61 differentiated markets in the USA.
Economy segment
Taking an index where the bulk of the market volume is at a price index of 100, the economy sector would index at around 85. Normally, all brands in this segment will be local brands. In the beer market, the economy segment is usually dominated by local brands.
FAB
Flavoured alcoholic beverage. A ready-mixed alcoholic drink, often containing some form of fruit flavouring. ‘FAB’ also stands for fruit alcohol beverage which specifically refers to a ready-mixed alcoholic drink containing fruit flavouring as opposed to non-fruit flavouring such as caramel.
FMB
Flavoured malt beverage. A ready mixed alcoholic drink specifically derived from a malt base, often containing some form of fruit flavouring.
Mainstream segment
Mainstream represents the group of brands that constitute the bulk of the market volume at a price index of 100. Key to this group is the leading volume brand in any market. Brands tend to be mainly local.
Organic growth
Refers to a company’s growth rate, excluding any growth from takeovers, acquisitions or mergers.
PET
PET is short for polyethylene terephthalate, a form of plastic which is used for bottling alcoholic and non alcoholic drinks.
Worthmore segment
The worthmore segment is dominated by international brands. They are brands which consumers perceive to offer greater value than mainstream brands and for which they are willing to pay a premium. Mainstream brands are priced at about a price index of 100, worthmore brands index at around 120 and above. As a result, the worthmore segment, although small in volume terms, often generates a disproportionate level of profit, when compared to the mainstream and economy segments.
STRATE
STRATE stands for Share Transactions Totally Electronic and is an unlisted company owned by the Johannesburg Securities Exchange (JSE) and Central Securities Depository Participants (CSDP) and exists to allow share transactions in South Africa to be settled electronically.
Premium segment
Premium segment is an alternative term for the worthmore segment.

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