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News – 2013

SABMiller drives strong revenue and earnings growth

23 May 2013

SABMiller plc, one of the world's leading brewers, reports its preliminary (unaudited) results for the twelve months to 31 March 2013.

Operational Highlights

 

Financial highlights 2013
US$m
2012
US$m
% change
  1. Group revenue includes the attributable share of associates' and joint ventures' revenue of US$11,274 million (2012: US$9,628 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 computer 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$747 million (2012: US$542 million) and share of associates' and joint ventures' net finance costs of US$44 million (2012: US$30 million).
  5. Profit before tax includes exceptional charges of US$203 million (2012: credits of US$1,015 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 34,487 31,388 10
Revenueb 23,213 21,760 7
EBITAc 6,421 5,634 14
Adjusted profit before taxd 5,630 5,062 11
Profit before taxe 4,712 5,603 (16)
Profit attributable to owners of the parent 3,274 4,221 (22)
Adjusted earningsf 3,796 3,400 12
Adjusted earnings per share      
- US cents 238.7 214.8 11
- UK pence 151.1 134.4 12
- SA cents 2,031.3 1,607.0 26
Basic earnings per share (US cents) 205.9 266.6 (23)
Dividends per share (US cents) 101.0 91.0 11
Free cash flow 3,230 3,048 6

Chief Executive's review

John Manser, Acting Chairman, said:

"I am delighted to report another year of significant progress and strong results for the group. Through a combination of innovation, effective brand development and good commercial execution we continued to develop the beer category and widen the appeal of our products. Strong growth in our developing markets was supported by investments in additional capacity, commercial capability and distribution reach. Group revenue grew by 10% and the focus on operating efficiencies helped us achieve growth in profit margins."

Business review

The group delivered a strong financial performance achieving growth across a number of its businesses, led by its developing market operations in Africa, Latin America, Asia Pacific and South Africa. Total beverage volume growth of 4% on an organic basis was driven by new product innovations and expansion of brand portfolios, supported by significant investments in new capacity, particularly in Africa. Revenues grew ahead of volumes following selective price increases and a continued focus on expanding our portfolio up and down the price ladder. Following the Foster's acquisition, the business integration plan in Australia is ahead of schedule and showing positive early signs with the continuing brand portfolio returning to growth in the final quarter.

Group revenue grew by 10%, including business combinations and currency translation, with organic, constant currency growth of 7%. Currency movements had an adverse impact of five percentage points on reported group revenue growth mainly due to the weakening of the South African rand and Central European currencies against the US dollar.

EBITA increased by 14% on a reported basis, with significant impact from the Foster's acquisition. On an organic, constant currency basis EBITA grew by 9% through a combination of higher volumes, an increase in group revenue per hl in most divisions and cost efficiencies. Raw material input costs rose in line with expectations by mid-single digits due to higher key commodity costs, partially offset by procurement and other savings. Fixed costs increased due to inflation and investments in capacity and capability to drive growth in some developing markets, partially offset by efficiency initiatives elsewhere. There was continued investment in marketing to support brand and pack innovations, as well as existing offerings, across all divisions. Reported EBITA margin, at 18.6%, also benefited from the business combinations completed in the prior year resulting in overall margin growth of 70 bps. On an organic, constant currency basis EBITA margin advanced by 40 bps following strong group revenue growth on the same basis in Latin America, Africa and South Africa.

Adjusted earnings were 12% higher than the prior year driven by the 14% growth in EBITA and a 50 bps reduction in the effective tax rate to 27%, partially offset by increased finance costs relating to the Foster's acquisition debt. Adjusted earnings per share were up 11% to 238.7 US cents.

Free cash flow was US$3,230 million, an increase of US$182 million compared with the prior year. Higher adjusted EBITDA of US$6,835 million was driven by the benefits of the Foster's acquisition and growth in EBITA, partially offset by adverse currency translation effects due to the weakening of currencies against the US dollar, in particular the South African rand. A reduction in provisions and strong trading in the last month of the year led to an outflow in working capital following a significant inflow in the prior year. Capital expenditure for the year was US$1,479 million as we continued to invest in additional capacity, commissioning new breweries in Zambia, Nigeria and Uganda, and extend existing facilities elsewhere. Our tax cash flow benefited from a one off inflow in Australia that will reverse in the financial year ending 31 March 2014. Net interest increased compared with the prior year due to the addition of the Foster's acquisition debt.

Net debt reduced by US$2,161 million ending the year at US$15,701 million. The group's gearing ratio as at 31 March 2013 was 57.2%. The board has recommended a final dividend of 77.0 US cents per share which will be paid to shareholders on 23 August 2013. This brings the total dividend for the year to 101.0 US cents per share, an increase of 10.0 US cents over the prior year.

 

Group revenue Reported
2012
US$m
Net
acquisi-
tions and
dispo-
sals
US$m
Currency
transla-
tion
US$m
Organic
growth
US$m
Reported
2013
US$m
Organic,
constant
currency
growth
%
Reported
growth
%
               
Latin America 7,158 - 136 527 7,821 7 9
Europe 5,482 455 (387) 217 5,767 5 5
North America 5,250 9 - 96 5,355 2 2
Africa 3,686 (210) (221) 598 3,853 18 5
Asia Pacific 3,510 2,171 (106) 110 5,685 3 62
South Africa: 6,302 8 (825) 521 6,006 8 (5)
- Beverages 5,815 - (762) 487 5,540 8 (5)
- Hotels and Gaming 487 8 (63) 34 466 7 (4)
               
Total 31,388 2,433 (1,403) 2,069 34,487 7 10

 

Group volumes Reported
2012
hl m
Net
acquisi-
tions and
disposals
hl m
Organic growth
hl m
Reported
2013 hl m
Organic growth
%
Reported
growth %
             
Lager 229 6 7 242 3 6
Soft drinks 50 5 2 57 4 15
Other alcoholic beverages 7 - - 7 5 7
Total 286 11 9 306 4 7

 

EBITA Reported
2012
US$m
Net
acquisi-
tions and
dispo-
sals
US$m
Currency
transla-
tion
US$m
Organic
growth
US$m
Reported
2013
US$m
Organic,
constant
currency
growth
%
Reported
growth
%
               
Latin America 1,865 - 42 205 2,112 11 13
Europe 836 7 (63) 4 784 1 (6)
North America 756 (4) - 19 771 3 2
Africa 743 (2) (46) 143 838 20 13
Asia Pacific 321 524 (12) 22 855 7 166
South Africa: 1,303 2 (174) 132 1,263 10 (3)
- Beverages 1,168 - (155) 116 1,129 10 (3)
- Hotels and Gaming 135 2 (19) 16 134 11 (1)
Corporate (190) - 1 (13) (202)    
               
Total 5,634 527 (252) 512 6,421 9 14

 

1 Pro forma volumes and financial information are based on results reported under IFRS and SABMiller accounting policies for the period from 1 April 2011 to 31 March 2012, as if the Foster's and Pacific Beverages transactions had occurred on 1 April 2011.

2 Pro forma continuing basis adjusts for the impact of discontinued licensed brands in all comparative information.

Outlook

Trading conditions are expected to be broadly unchanged, affording opportunities to grow our categories further, particularly in developing markets. We will continue to develop and differentiate our beer and soft drink brand portfolios, leveraging local insights to bring the right products to each market and capture value. We will take price increases selectively and unit input costs are expected to rise in low to mid-single digits in constant currency terms. Focus will be maintained on cost effectiveness, including continued synergy delivery in Australia and expanding the scope of globally managed procurement. Cash generation will remain a priority. Targeted investments in production capacity, marketing and sales capability will continue in order to drive growth.

Download the F13 full year results announcement PDF 0.30MB


Enquiries:
   
  SABMiller plc Tel: +44 20 7659 0100
Catherine May Director of Corporate Affairs Tel: +44 20 7927 4709
Gary Leibowitz Senior Vice President, Investor Relations Tel: +44 20 7659 0119
Richard Farnsworth Business Media Relations Manager Tel: +44 20 7659 0188

A live audio webcast of a presentation to the investor community by Chief Executive, Alan Clark, and Chief Financial Officer, Jamie Wilson will begin at 9.30am (GMT) on 23 May 2013. To register for the webcast, download the slide presentation, view management video interviews and download photography and b-roll, visit our online Results Centre at www.sabmiller.com/resultscentre.

To monitor Twitter bulletins throughout the day follow www.twitter.com/sabmiller or #sabmillerresults.

Copies of the press release and detailed Preliminary Announcement are available from the Company Secretary at the Registered Office.

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