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Financial structure

Gross borrowings have decreased to US$3,339 million from US$3,707 million at 31 March 2004. The financial ratios have strengthened considerably with gross borrowings relative to net cash inflow from operating activities before working capital movement (EBITDA), reduced to 1.2 from 1.7 at the prior year end, and a ratio of net debt to EBITDA of less than 1 at 31 March 2005 (2004: 1.4).

In April 2004 SABMiller plc and SABMiller Finance BV signed a five-year US$1,000 million revolving credit bank facility agreement (at year end only US$168 million was drawn down). This replaced the US$720 million facility in existence at 31 March 2004. The average loan maturity in respect of the US$ fixed rate debt portfolio is some six years, and an analysis of debt as at 31 March 2005 is included in the notes to the accounts.

The average borrowing rate for the total debt portfolio at March 2005 was 5.5%, and the increase from the prior year’s 4.8% reflects the changed mix of currency in the group’s borrowings, and the prevailing rates of interest. The group’s gearing (presented as a ratio of debt/equity), decreased at the year-end to 26.4% from last year’s 43.3%, and the group has substantial unutilised borrowing facilities. Our strong financial structure provides us with medium term flexibility to assess our investments in appropriate growth opportunities, and also to manage the balance sheet.

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