SABMiller plc. Interim results Half year ended 30 September November 2005 also available on website

Transcription

1 SABMiller plc Interim results Half year ended 30 September November 2005 also available on website

2 Forward-looking statements This presentation includes forward-looking statements. These statements contain the words anticipate, believe, intend, estimate, expect and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company s products and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based." SABMiller plc

3 Welcome Meyer Kahn Chairman

4 Agenda Financial and operating overview Malcolm Wyman, Chief Financial Officer % Looking Ahead: Near-term outlook drivers Graham Mackay, Chief Executive Q&A SABMiller plc

5 Financial and operating overview Malcolm Wyman Chief Financial Officer

6 Strong financial results % Adjusted EPS* up in our major currencies US $ + 10% (+14% on a comparable basis) Sterling + 10% Euro + 8% Rand + 9% Interim dividend up 8% to 13 US cents * Excluding additional 225m shares issued in respect of Bavaria transaction in October SABMiller plc

7 Key drivers of financial results Total volumes of 110.6mhl +10.4% Organic +6.3% Lager organic volumes of 86.6mhl +5.6% North America : total +0.9%* : domestic STRs -0.3%* Central America -7.3% Europe +4.4% Africa and Asia (comparable) +13.5% Beer South Africa (comparable) +2.9% * Excluding contract brewing SABMiller plc

8 Key drivers of financial results Organic group revenue +9% Organic constant currency +7% EBITA margin* Organic constant currency +20 bps +30 bps Organic EBITA* +12% Organic constant currency +9% * Pre exceptional, includes associates SABMiller plc

9 Group revenue Components of performance US$m 8,500 8, % +0.5% +1.8% +8.6% +1.5% 7,901 7,500 7,178 7,000 6,500 6,000 Sep 04 Volume Price/mix Currency Sep 05 Organic Acquisitions/ disposals/ (net) Sep 05 SABMiller plc

10 EBITA* Components of performance US$m 1, % +11.9% (0.2)% 1, % 1,200 1,130 1,100 1,000 Sep 04 Underlying Currency Sep 05 Organic * Pre exceptional Acquisitions/ disposals/ (net) Sep 05 SABMiller plc

11 EBITA margin performance* 25 % 20 Sep-04 Sep North America Central America * Organic, constant currency, pre-exceptional Europe Africa & Asia SA Beverages Group SABMiller plc

12 North America Sep 05 US$m Sep 04 US$m Change % Group revenue 2,662 2,615 2 EBITA* (5) EBITA margin* (%) (80)bps Volumes (hl 000) Total volumes** 25,697 25, Domestic STWs 1.1 Domestic STRs (0.3) Continued Miller Lite momentum despite intense price competition Turnaround on track * Pre-exceptional ** Excluding contract brewing SABMiller plc

13 Europe Sep 05 US$m Sep 04 US$m Change % Organic constant currency Group revenue 1,756 1,617 9 EBITA* EBITA margin* (%) bps Organic volumes (hl 000) Lager 20,667 19,797 4 Strong volume performance despite adverse weather in summer Margin benefits from productivity, price and mix * Pre exceptional SABMiller plc

14 Africa and Asia Sep 05 US$m Organic constant currency Group revenue EBITA* EBITA margin* (%) bps Organic volumes (hl 000) Sep 04 US$m Change % Lager 27,268 23, Carbonated soft drinks 1,939 2,000 (3) Other beverages 7,142 6, * Pre exceptional SABMiller plc

15 SA Beverages Sep 05 Organic constant currency US$m Sep 04 US$m Change % Group revenue 1,857 1, EBITA* EBITA margin* (%) bps Organic volumes (hl 000) Lager 12,153 11,992 1 Carbonated soft drinks 5,922 5, Other beverages Good underlying growth driven by premium brands Margin improvement from product and pack mix and cost efficiencies * Pre exceptional SABMiller plc

16 Cash flow and taxation EBITDA* up 11% to $1,418m EBITDA* margin up 30 bps to 20.1% Working capital requirement $(129)m Net cash flow from operations up 2% to $1,289m Capex $404m up 21% Effective tax rate* 35.3% * Pre exceptional SABMiller plc

17 Financial structure Interest bearing debt 30 Sep 05 US$m 1 Apr 05 US$m Medium/long term IBD 2,428 2,551 Short term IBD 1, Current investments/cash (1,142) (1,143) Net derivatives (12) (12) Net debt 2,428 2,210 Gearing (%) EBITDA interest cover* * Excluding associates SABMiller plc

18 Bavaria transaction Controlling shareholding (71.8%) w.e.f. 12 October 2005 Major minority shareholdings acquired Colombia (Leona): $176m Peru: $470m Colombian voluntary tender offer process initiated: $1,362m (1) Tender date 5 December 2005 Settlement on the 13 December 2005 Financing activities ongoing +6 months Refinancing $3.5bn bridge Review of Bavaria debt Credit ratings maintained: S&P BBB+ Moody's Baa1 (stable outlook) (1) Assumes full take-up on offer SABMiller plc

19 Financial outlook Continued underlying growth Ongoing investments in marketing and business infrastructure General cost pressures energy/commodity prices Rand likely to be at weaker levels than in H2 F05 Bavaria consolidated from 12 October 2005 SABMiller plc

20 Financial outlook Full year capex to be some US$1.1bn including Bavaria Full year tax rate* expected to be approximately 36% Net debt between $6 and $6.5 bn including Bavaria debt and minority buyouts * Before exceptional items SABMiller plc

21 Looking ahead: Near-term outlook drivers Graham Mackay Chief Executive

22 Profit drivers for the future Cumulative earnings growth Leading positions in large emerging markets International premium brands Turnaround of Miller Strong domestic operations in growth markets April 2003 Time horizons Illustrative SABMiller plc

23 Attractive exposure to growth markets Embedded volume growth 5yr CAGR : SABMiller markets 2.5 World 2.2 North America 0.8 West Europe % Source: Plato Logic SABMiller plc

24 Global beer growth outlook USA and Western Europe Encroachment of wines and spirits Cost and retailer driven margin pressure Drift towards off-premise, margins under strain Developing markets Robust growth continuing Consumers broadly trading into beer from spirits Brand and market development enable unit revenue and margin growth opportunities SABMiller plc

25 North America Highly competitive summer impacting margins and profitability Investment in business and brands continues Miller Lite strength holding up Encouraging response to Milwaukee s Best and Miller High Life marketing investment Worthmore focus in sales and marketing Local market planning synchronised with distributors Turnaround nears completion SABMiller plc

26 Central America Weak economic conditions prevail in markets Growth in CSDs driven by investment in Coca-Cola brands Competing effectively with our strong beer portfolio SABMiller plc

27 South America Integration team is in place Strong revenue performance continuing Five focus areas Category leadership Brand portfolio development Channel marketing and management Pricing management Operating efficiencies SABMiller plc

28 Europe Mid-single digit volume growth, despite Russian slow down Positive mix moderating, competitive pricing environment Italy restructuring continues with positive results Widespread marketing investment driving competitive advantage Share gains in most countries driven by innovation within core brands Poland: double-digit volume growth, 2.3% share gain SABMiller plc

29 Africa Portfolio delivers mid-single digit lager volume growth Tanzania: economic strength, full brand portfolio, focus on Castle Mozambique: new depots drive volume, scale efficiencies and consumer affordability Zambia: strength in traditional beer and Eagle Botswana: devaluation impact will accelerate in the second half Productivity gains Castel growth should continue SABMiller plc

30 Asia China Strong organic results - increased market share from c.12% to c.13% Improving national footprint with surge in sales of Snow Increasing marketing investment Average selling prices showing moderate increases Acquisitions made in 2004 bedding down India Strong growth of 12% pro-forma from low base Liberalisation of the beer market is key SABMiller plc

31 South African Beverages Beer volumes rose 3% on comparable basis, CSD growth stronger at 10% Favourable economic conditions continue Enhanced premium segment merchandising drives positive mix Increased premium brand support Success in broadening our CSD consumer base Licensing: slow progress SABMiller plc

32 Innovation in core brands: mainstream segment USA Recreated brand image and relevance to target demographics Mozambique Developing as core brand with expanding distribution; growth of 21% in H1 Romania Using platform to create strong national brand to accompany Ursus and Ciucas China Redefining the mainstream segment; building brand equity, portfolio focus and effectiveness in trade; growth of 51% in H1 SABMiller plc

33 Innovation in core brands: local premium segment Poland Renovated brand positioning, packaging, and channel focus; share up 2%, now #3 brand Romania Repositioning drove higher volumes, improved mix Czech Republic Further enhanced this historic brand equity, build enlarged onpremise presence South Africa Leveraging drift to premium with this, SAB s large and fastest growing premium brand; volumes doubled in H1 SABMiller plc

34 Innovation in core brands: lower mainstream segment USA Leveraging strong heritage; arguably best value for money offering in the market Uganda, Zambia Improved affordability of branded clear beer Poland Positioned as the natural choice for relaxation after hard work Honduras Designed to compete more effectively with low-priced spirits SABMiller plc

35 Poland: business upgrade case study Created leading full brand portfolio - Renovation of Tyskie and Lech - National presence of new Zubr - Full worthmore complement Led market innovation - Brands, proprietary bottles, multi-packs, displays, high impact fridges Poland s top 3 brands covering upper, middle and lower mainstream Upgraded channel performance, customer service and POS impact - On-premise share +3% to 39% with strong position among image outlets - Leadership in modern trade (share +8%) despite greater discounting by competitors A replicable strategy across emerging markets SABMiller plc

36 Looking ahead Benefit from exposure to attractive growth markets Increased commodity costs and investment in marketing Less favourable exchange rates Outlook for continued growth SABMiller plc

37 Q&A

38 Supplementary information

39 Central America Sep 05 US$m Sep 04 US$m Change % Organic constant currency Group revenue EBITA* (8) EBITA margin* (%) (150)bps Organic volumes (hl 000) Lager (7) Carbonated soft drinks 2,991 2,886 4 Other beverages 1,451 1,410 3 * Pre exceptional SABMiller plc

40 Financial results Sep 05 US$m Sep 04 US$m Change % Group revenue 7,901 7, EBITA* 1,264 1, EBITA margin* (%) bps Sales volumes (hl 000) Total 110, , Lager 90,603 81, Carbonated soft drinks 10,894 10, Other beverages 9,087 7, *Pre exceptional SABMiller plc

41 Volumes* Lager beer volumes by country HL 000 Sep 05 Poland 6,702 5, Czech Republic 4,650 4,573 2 Hungary 1,294 1,243 4 Russia 2,372 2,228 6 Romania 2,006 1, Italy 2,602 2,700 (4) Tanzania 1,111 1,038 7 Botswana (11) Mozambique China 26,703 20, * Domestic plus exports, excluding inter-group volumes Sep 04 Change % SABMiller plc

42 Operating results EBITA contribution* Sep 05 Sep 04 North America 22% South Africa 31% Central America 2% Africa & Asia 16% Europe 29% South Africa 30% Africa & Asia 15% North America 26% Europe 26% Central America 3% * Excluding Corporate and exceptional items SABMiller plc

43 Cash flow Sep 05 US$m Sep 04 US$m EBITDA 1,418 1,278 Working capital (129) (16) Servicing of finance (82) (70) Taxation (394) (272) Capital expenditure (404) (334) Operating free cash flow* Minority dividends (63) (76) Free cash flow * Excluding dividends from associates and proceeds from sale of fixed assets and investments SABMiller plc

44 Interest analysis Net interest payable Sep 05 US$m Sep 04 US$m Group Associates 8 13 Total EBITDA interest cover* Average interest rate - % * Excluding associates SABMiller plc

45 Financial structure Interest bearing debt Sep 05 Sep 04 Average interest rate (gross debt) - % Net debt currency profile US dollars 55% 101% Euro 10% 10% SA Rand 18% -21% Central Europe 3% 7% Africa and Asia & Central America 14% 3% SABMiller plc

46 Financial & commercial rand / US$:rate (CPI differentials) month-on-month basis Base 1 = Source: Bloomberg, JPMorgan SABMiller plc

47 Exchange rates Closing rates currency vs. US$ 30 Sep Mar Sep 04 Euro Poland Czech Republic Hungary Russia India China Tanzania 1,135 1,105 1,061 Botswana Mozambique 24,686 20,150 21,080 Kenya Honduras South Africa SABMiller plc