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F12 full year results: SABMiller drives strong results in developing markets

24 May 2012

SABMiller plc, one of the world's leading brewers, reports its preliminary (unaudited) results for the twelve months to 31 March 2012.

Operational Highlights

1 Segmental EBITA growth is shown on an organic, constant currency basis.
2 As defined in the financial definitions section. See also note 11b.

Financial highlights 2012
US$m
2011
US$m
%
change
  1. Group revenue includes the attributable share of associates' and joint ventures' revenue of US$9,628 million (2011: US$8,903 million).
  2. Revenue excludes the attributable share of associates' and joint ventures' revenue.
  3. Note 2 provides a reconciliation of operating profit to EBITA which is defined as operating profit before exceptional items and amortisation of intangible assets (excluding software) but includes the group's share of associates' and joint ventures' operating profit, on a similar basis. EBITA is used throughout this preliminary announcement.
  4. Adjusted profit before tax comprises EBITA less adjusted net finance costs of US$542 million (2011: US$518 million) and share of associates' and joint ventures' net finance costs of US$30 million (2011: US$35 million).
  5. Profit before tax includes exceptional credits of US$1,015 million (2011: charges of US$467 million). Exceptional items are explained in note 3.
  6. A reconciliation of adjusted earnings to the statutory measure of profit attributable to owners of the parent is provided in note 6.
Group revenuea 31,388 28,311 11
Revenueb 21,760 19,408 12
EBITAc 5,634 5,044 12
Adjusted profit before taxd 5,062 4,491 13
Profit before taxe 5,603 3,626 55
Profit attributable to owners of the parent 4,221 2,408 75
Adjusted earningsf 3,400 3,018 13
Adjusted earnings per share
- US cents 214.8 191.5 12
- UK pence 134.4 123.4 9
- SA cents 1,607.0 1,369.6 17
Basic earnings per share (US cents) 266.6 152.8 74
Dividends per share (US cents) 91.0 81.0 12
Free cash flow 3,048 2,488 23

Chief Executive's review

Meyer Kahn, Chairman of SABMiller, said:

"I am delighted to report another year of significant progress and strong results. Through our successful marketing, portfolio development and commercial execution we continued to build on our position in the world's developing consumer economies. Strong profit growth continued, driven by an organic total volume increase of 4% and complemented by favourable mix and pricing. We continued to expand our global footprint with the acquisition of Foster's, the merger of our Russian and Ukrainian businesses with Anadolu Efes in exchange for a stake in the enlarged business, and the further development of our alliance with Castel.”

Segmental EBITA performance 2012
EBITA
US$m
Reported
growth
%
Organic, constant
currency
growth
%
Latin America 1,865 15 14
Europe 836 (6) (9)
North America 756 2 2
Africa 743 15 16
Asia Pacific 321 247 30
South Africa: Beverages 1,168 9 14
South Africa: Hotels and Gaming 135 (2) 3
Corporate (190)
Group 5,634 12 8

Business review

The group delivered a strong financial performance. Group revenue grew by 11% (7% on an organic, constant currency basis) as a result of the higher volumes, selective price increases and higher growth in premium brands. Total beverage volumes of 286 million hl were 4% ahead of the prior year on an organic basis, with lager volumes up 3%, soft drinks volumes up 7% and other alcoholic beverages up 4%. Successful development of our brand portfolios and intensified sales execution, together with rising consumer spending drove strong performance in most of our developing markets. Latin America and Africa were particularly notable, while South Africa and the Asia Pacific region also generated significant, profitable growth. Despite strong results in a number of its markets, Europe's financial performance was affected by volume declines in Poland and Romania and significant increases in raw material input costs.

EBITA increased by 12% on a reported basis (8% on an organic, constant currency basis), with all beverage divisions except for Europe contributing to EBITA growth. EBITA margin was 10 bps ahead of the prior year at 17.9%. Group revenue growth (up 4% on an organic, constant currency per hl basis) offset increases in raw material costs (up low single digits on a constant currency per hl basis). Marketing investment rose in line with revenue, while fixed costs increased as a result of expenditure on sales and systems capabilities across our operations and in the corporate centre.

Adjusted earnings were 13% higher as a result of the increased EBITA. Adjusted net finance costs were 5% higher than in the prior year, and the effective tax rate was 27.5%. Adjusted earnings per share were 12% higher at 214.8 US cents.

The group's free cash flow was US$3,048 million, an increase of US$560 million compared with the prior year. Working capital cash flows of US$258 million continued recent positive trends, and reflected ongoing benefits of the group's business capability programmes. Capital expenditure was US$1,639 million, an increase of US$324 million compared with the prior year, with higher spend particularly to increase production capacity in Africa. Net debt at 31 March 2012 was US$17,862 million, up from US$7,091 million at the end of the previous financial year primarily due to the financing of the Foster's acquisition. The Board has recommended a final dividend of 69.5 US cents per share which will be paid to shareholders on 17 August 2012. This brings the total dividend for the year to 91 US cents per share, an increase of 10 US cents (12%) over the prior year.

On 16 December 2011 the group completed the acquisition of Foster's Group Limited (Foster's) in Australia. The acquisition provides us with exposure to Australia's strong economic growth prospects, a leading position in the stable and profitable Australian beer industry, and the opportunity to apply our capabilities and scale to improve Foster's financial and operating performance. The integration of the Foster's business has progressed very well to date despite the loss of some brand licences, which was a known risk at the time of acquisition. With effect from 1 January 2012, together with Castel we implemented a number of organisational changes in our African operations as part of our strategic alliance agreement. Operational management of the Nigerian businesses is now with SABMiller and the Angolan businesses with Castel. On 6 March 2012 we completed our strategic alliance with Anadolu Group and Anadolu Efes Biracilik ve Malt Sanayii AS (Anadolu Efes), exchanging our Russia and Ukraine beer businesses for a 24% equity stake in the enlarged Anadolu Efes group. Anadolu Efes is now the vehicle for both groups' investments in Turkey, Russia, the CIS, Central Asia and the Middle East.

(1)CUB pro forma volumes and financial information are based on results for CUB reported under IFRS for the period from 1 April 2010 to 31 March 2011. Adjustments have been made to reflect SABMiller group accounting policies. CUB (Carlton and United Breweries) is the Australian beverage business of the recently acquired Foster's group.

Outlook

Trading conditions are expected to be broadly unchanged with further growth in our developing markets but no more than modest improvements in consumer spending in some more developed economies. We will continue to develop and differentiate our brand portfolios, taking opportunities to improve sales mix and raise prices selectively. Unit input costs are expected to rise in mid-single digits in constant currency terms. Focus will be maintained on cost effectiveness, including synergy delivery in Australia, and on expanding our globally-managed procurement programmes. While healthy cash generation will again be a priority, targeted investments in production capacity, marketing and sales capability and business systems will continue in order to drive medium term growth.

Download the Full Year F12 full announcement PDF 0.21Mb

Enquiries:    
SABMiller plc   Tel: +44 20 7659 0100
Sue Clark Director of Corporate Affairs Tel: +44 20 7659 0184
Gary Leibowitz Senior Vice President, Investor Relations Tel: +44 20 7659 0119
Nigel Fairbrass Head of Global Communications Mob: +44 77 9989 4265

A live audiocast of the management presentation to the investment community will begin at 9.30am (BST) on 24 May 2012. Access details for this audiocast, video interviews with management and copies of this announcement and the slide presentation are available on the SABMiller plc website at www.sabmiller.com.

Images: Our media image library has a large selection of images for use in print and digital media.  Visit www.sabmiller.com/imagelibrary.

Broadcast footage: Our broadcast footage library has stock footage for media organisations to view and download for use in TV programmes or news websites. Visit www.sabmiller.com/broadcastfootage.

Copies of the press release and detailed Preliminary Announcement are available from the Company Secretary at the Registered Office, or from 2 Jan Smuts Avenue, Johannesburg, South Africa.

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