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SABMiller plc Annual Report 2007

Financial statements


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

Financial definitions

Adjusted earnings

Adjusted earnings are calculated by adjusting headline earnings for the amortisation of intangible assets (excluding software), integration and reorganisation costs and the fair value movements in relation to capital items for which hedge accounting cannot be applied. The tax and minority interests in respect of these items are also adjusted.

Adjusted profit before tax (Clean PBT)

This is defined as profit before tax and exceptional items and includes the share of post-tax results of associates (before exceptional items).


The Compound Annual Growth Rate (CAGR) is the average compounded growth rate recorded over a series of years for a particular metric such as volume or revenue.

Constant currency

Constant currency results have been determined by translating the local currency denominated results for the year ended 31 March at the exchange rates for the comparable period in the prior year.


This comprises operating profit before exceptional items, amortisation of intangible assets excluding software and includes the group’s share of associates’ operating profit on a similar basis.

EBITA margin (%)

This is calculated by expressing EBITA as a percentage of group revenue (including share of associates’ revenue).


Earnings Before Interest Taxation Depreciation and Amortisation of intangibles excluding software (EBITDA). This comprises the net cash generated from operations before working capital movements.

EBITDA margin (%)

This is calculated on a pre-exceptional basis, by expressing EBITDA as a percentage of revenue (excluding share of associates’ revenue).

Effective tax rate (%)

This is calculated by expressing total taxation (including share of associates’ tax), excluding tax on exceptional items (both group and share of associates’) and tax on amortisation of intangible assets (excluding software), as a percentage of profit before tax, exceptional items, items of a capital nature and amortisation of intangible assets (excluding software) and including share of operating profit of associates and including their share of net finance costs (before tax, minority interest and exceptional items).

Net asset value per share

This is calculated by expressing shareholders’ funds as a percentage of the closing number of shares in issue.

Return on equity (%)

This is calculated by expressing adjusted earnings as a percentage of total shareholders’ equity.


Total shareholder return (TSR) is the measure of the returns that a company has provided for its shareholders, reflecting share price movements and assuming reinvestment of dividends.


In the determination and disclosure of reported sales volumes, the group aggregates the volumes of all consolidated subsidiaries and its equity-accounted associates, other than associates where primary responsibility for day-to-day management rests with others such as Castel and Distell. In these latter cases, the financial results of operations are equity accounted in terms of IFRS but volumes are excluded. Although contract brewing volumes are excluded from total volumes, turnover from contract brewing is included within group turnover.

Non-financial definitions

Combined Code

The Combined Code on Corporate Governance, published by the UK Financial Reporting Council.

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.


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.

International brewers index

The index of International brewers charts the share price progression of an index of the company’s closest peers in the global brewing industry (Anheuser-Busch, Carlsberg, Heineken, Inbev and MolsonCoors) relative to 1 April 2003. The index is weighted relative to the market capitalisation of the brewers as at 1 April 2003.

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. Mainstream brands tend to be local.

Organic growth

Refers to a company’s growth rate, excluding the effects from, acquisitions or disposals.


PET is short for polyethylene terephthalate, a form of plastic which is used for bottling alcoholic and non-alcoholic drinks.

Premium segment (worthmore segment in the US)

The premium 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 and premium brands index at around 120 and above. As a result, the premium segment, although small in volume terms, often generates a disproportionate level of profit, when compared to the mainstream and economy segments.


STRATE stands for Share Transactions Totally Electronic and is an unlisted company owned by JSE Limited and Central Securities Depository Participants (CSDP) and exists to allow share transactions in South Africa to be settled electronically.

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