SABMiller plc JSEALPHA CODE: SAB ISIN CODE: SOSAB ISIN CODE: GB0004835483 Annual Financial Report SABMiller plc has today submitted a copy of the 2013 Annual Report Accounts, Notice of the 2013 Annual General Meeting Shareholder Proxy Form (UK) to the National Storage Mechanism they will shortly be available for inspection at www.hemscott.com/nsm.do. The Annual Report Notice of Annual General Meeting are also available on the Company s website www.sabmiller.com SABMiller plc s Annual General Meeting will be held on Thursday, 25 July 2013 at the InterContinental London Park Lane, One Hamilton Place, Park Lane, London W1J 7QY. A condensed set of SABMiller s financial statements information on important events that have occurred during the financial year their impact on the financial statements were included in SABMiller s preliminary results announcement released on 23 May 2013. That information, together with the information set out below, which is extracted from the 2013 Annual Report, constitutes the material required by Disclosure Transparency Rule 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This announcement is not a substitute for reading the full 2013 Annual Report. Page numbers cross-references in the extracted information below refer to page numbers sections in the 2013 Annual Report. PRINCIPAL RISKS AND UNCERTAINTIES (page 16 & 17) Principal risks Focused on managing our risks The principal risks facing the group considered by the board are detailed below. The group s well-developed risk management process is described in the corporate governance section while financial risks are discussed in the Chief Financial Officer s review in note 22 to the consolidated financial statements. Principal risk Context Specific risks we face Industry consolidation The global brewing beverages industry is expected to continue to consolidate. There will continue to be opportunities participate in value-adding transactions. - Paying too much to acquire a business. - Not implementin Possible impact Lower growth rate, financial returns. Mitigation - Potential transactions are subject to rigorous analysis. Only opportunities with potential to create value are pursued. - Proven integration processes, procedures Associated strategic priorities - Creating a balanced attractive global spread of businesses.
Change in consumer preferences to enter attractive growth markets, to realise synergy benefits from integration to leverage our Consumer tastes behaviours are constantly evolving, at an increasingly rapid rate. Competition in the beverage industry is exping becoming more fragmented, complex sophisticated. g integration plans successfully. identify develop new approaches to market category entry. develop ensure the strength relevance of our brs with consumers, shoppers customers. continue to improve our capabilities to deliver br propositions which respond appropriately to changing consumer preferences. Market positions come under pressure, market opportunities are missed, lower top line growth rates. practices are applied to ensure delivery of expected returns. - Activities to deliver synergies leverage scale are in place, monitored closely continuously enhanced. - Developing nontraditional capabilities to enter grow profitably in new markets. - Ongoing evaluation of our br portfolios in every market to ensure that they target current future opportunities for profitable growth. - Building our br equities through innovation compelling marketing programmes. - Ensuring we have deep understing of changing consumer industry dynamics in key markets, enabling us to respond appropriately to issues which may impact our business performance. - Continued enhancement of the SABMiller Marketing Way which sets out the best practice approach for our - Developing strong, relevant br portfolios that win in the local market. - Leveraging our skills
Management capability Regulatory changes We believe that our people are our enduring advantage therefore it is essential that we develop maintain global management capability. With the debate over alcohol consumption intensifying in many markets, the alcohol industry is coming under increasing pressure from national international regulators, NGOs identify, develop retain an appropriate pipeline of talented managers for the present future needs of the group. - Regulation places increasing restrictions on the availability marketing of beer. - Tax excise changes cause pressure on pricing. Lower longterm profitable growth. Lower growth, reduced contribution to local communities in some countries. processes. - Focus on monitoring benchmarking performance developing the critical capabilities that are required in order to win in local markets. - Further develop the group s leadership talent pipeline through our Global Talent Management model strategic people resourcing. - Sustaining a strong culture of accountability, empowerment personal development. - Stardisation of key processes best practices across the group through the rollout of the SABMiller Ways. - Rigorous adherence to the principle of selfregulation backed by appropriate policies management review. - Constructive engagement with government all external stakeholders on alcohol-related issues working with them to - Developing strong, relevant br portfolios that win in the local market. - Leveraging our skills - Creating a balanced attractive global spread of businesses. - Developing strong, relevant br portfolios that win in the local market.
Acquisition of Foster s Delivering business transformatio n local governments. Following the Foster s acquisition, the group has committed to delivering a turnaround plan with specific communicate d financial value creation. The group continues to execute a major business capability programme that will simplify processes, reduce costs allow local management deliver integration objectives operational excellence targets communicate d as part of the turnaround plan. achieve the synergy cost saving commitment s of the transaction. derive the expected benefits from the projects currently under way. contain programme costs or ensure execution is in line with Lower growth rates. Damage to the group s reputation for strong capability for making value-creating acquisitions. Increased programme costs, delays in benefit realisation, business disruption, reduced competitive advantage in the medium term. address the harmful use of alcohol. - Investment to improve the economic social impact of our businesses in local communities working in partnership with local governments NGOs. - Embedding of the SABMiller Ways (its processes, systems tools) throughout the Foster s business. - Ongoing monitoring of progress versus the integration plan, including frequent regular tracking of key performance indicators. - Senior leadership closely involved in monitoring progress in making key decisions. - Mechanisms in place to track both costs benefits. - Rigorous programme management governance processes with - Creating a balanced attractive global spread of businesses. - Developing strong, relevant br portfolios that win in the local market. - Leveraging our skills - Leveraging our skills
teams to focus more closely on their markets. planned timelines. dedicated resources clear accountability. RELATED PARTY TRANSACTIONS Note 32 to the consolidated financial statements on page 160 details the following related party transactions. 32. Related party transactions a. Parties with significant influence over the group: Altria Group, Inc. (Altria) the Santo Domingo Group (SDG) Altria is considered to be a related party of the group by virtue of its 26.8% equity shareholding. There were no transactions with Altria during the year. SDG is considered to be a related party of the group by virtue of its 14.0% equity shareholding in SABMiller plc. There were no transactions with SDG during the year. During the year ended 31 March 2012 the group made donations of US$33 million to the Fundación Mario Santo Domingo, pursuant to the contractual arrangements entered into at the time of the Bavaria transaction in 2005, under which it was agreed that the proceeds of the sale of surplus non-operating property assets owned by Bavaria SA its subsidiaries would be donated to various charities, including the Fundación Mario Santo Domingo. No donations were made to the Fundación Mario Santo Domingo during the year ended 31 March 2013. At 31 March 2013 US$nil (2012: US$nil) was owing to the SDG. b. Associates joint ventures Details relating to transactions with associates joint ventures are analysed below. Purchases from associates1 Purchases from joint ventures2 Sales to associates3 Sales to joint ventures4 Dividends receivable from associates5 Dividends received from joint ventures6 Royalties received from associates7 Royalties received from joint ventures8 Management fees, guarantee fees other recoveries received from associates9 Management fees paid to joint ventures10 Sale of associate to joint venture 11 2013 US$m (227) (97) 46 25 113 886 27 2 17 (2) 21 2012 US$m (214) (86) 39 28 150 896 13 2 24 (1) - 1 The group purchased canned Coca-Cola products for resale from Coca-Cola Canners of Southern Africa (Pty) Limited (Coca-Cola Canners); inventory from Distell Group
Ltd (Distell) Associated Fruit Processors (Pty) Ltd (AFP); accommodation from Tsogo Sun Holdings Ltd (Tsogo Sun), all in South Africa. 2 The group purchased lager from MillerCoors LLC (MillerCoors). 3 The group made sales of lager to Tsogo Sun, Delta Corporation Ltd (Delta), Anadolu Efes Biracılık ve Malt Sanayii A S (Anadolu Efes), Distell, in the prior year also to Empresa Cerve jas De N Gola SARL (E CN), Société des Brasseries et Glacieres Internationales Brasseries Internationales Holding Ltd (Castel). 4 The group made sales to MillerCoors in the prior year also to Pacific Beverages Pty Ltd. 5 The group had dividends receivable from Castel of US$21 million (2012: US$60 million), Coca-Cola Canners US$11 million (2012: US$6 million), Distell US$21 million (2012: US$22 million), Tsogo Sun US$33 million (2012: US$41 million), Delta US$12 million (2012: US$3 million), International Trade Supply Limited $14 million (2012: US$6 million), Grolsch (UK) Ltd US$1 million (2012: US$2 million) Kenya Breweries Ltd US$nil (2012: US$9 million). 6 The group received dividends from MillerCoors. 7 The group received royalties from Delta, Anadolu Efes in the prior year also Kenya Breweries Ltd. 8 The group received royalties from MillerCoors. 9 The group received management fees from Delta, guarantee fees from Delta BIH Brasseries Internationales Holding (Angola) Ltd (BIH Angola), other recoveries from AFP. In the prior year management fees were also received from ECN. 10 The group paid management fees to MillerCoors. 11 The group sold its interest in Foster s USA LLC to MillerCoors for cash consideration. At 31 March 2013 US$m Amounts owed by associates trade1 68 Amounts owed by associates loans2 - Amounts owed by joint ventures3 5 Amounts owed to associates4 (150) Amounts owed to joint ventures5 (14) 2012 US$m 145 60 6 (42) (17) 1 Amounts owed by AFP, Delta, BIH Angola Anadolu Efes. 2 Amounts owed by BIH Angola in the prior year. 3 Amounts owed by MillerCoors. 4 Amounts owed to Coca-Cola Canners, Castel Tsogo Sun. At 31 March 2013 this balance included US$100 million received in compensation for the loan participation deposit relating to the Angolan businesses managed by Castel (see note 17). 5 Amounts owed to MillerCoors. Guarantees provided in respect of associates bank facilities are detailed in note 22. c. Transactions with key management The group has a related party relationship with the directors of the group members of the excom as key management. At 31 March 2013 there were 26 (2012: 27) members of key management. Key management compensation is provided in note 6c.
DIRECTORS RESPONSIBILITY STATEMENT IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS (page 86) The directors are responsible for preparing the consolidated financial statements in accordance with applicable law regulations. Company law requires the directors to prepare consolidated financial statements for each financial year. The directors have prepared the consolidated financial statements in accordance with International Financial Reporting Stards (IFRSs) as adopted by the European Union. The consolidated financial statements are required by law to give a true fair view of the state of affairs of the group of the profit or loss of the group for that year. In preparing those financial statements, the directors are required to: - select suitable accounting policies then apply them consistently; - make judgements estimates that are reasonable prudent; - state that the financial statements comply with IFRSs as adopted by the European Union; - prepare the consolidated financial statements on the going concern basis, unless it is inappropriate to presume that the group will continue in business, in which case there should be supporting assumptions or qualifications as necessary. The directors confirm that they have complied with the above requirements in preparing the financial statements. The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the group to enable them to ensure that the consolidated financial statements comply with the Companies Act 2006 Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the group hence for taking reasonable steps for the prevention detection of fraud other irregularities. Each of the directors, whose names functions are listed in the Governance section of the Annual Report, confirms that, to the best of their knowledge: - the consolidated financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true fair view of the assets, liabilities, financial position profit of the group; - the management report incorporated into the directors report contained in the Governance section of the Annual Report includes a fair review of the development performance of the business the position of the group, together with a description of the principal risks uncertainties that it faces. In addition, the Companies Act 2006 requires directors to provide the group s auditors with every opportunity to take whatever steps undertake whatever inspections the auditors consider to be appropriate for the purpose of enabling them to give their audit report. Each of the directors, having made appropriate enquiries, confirms that:
- so far as the director is aware, there is no relevant audit information of which the group s auditors are unaware; - each director has taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information to establish that the group s auditors are aware of that information. The directors have reviewed the group s performance for the year the principal risks it faces, together with the budget cash flow forecasts, in particular with reference to the period to the end of September 2014, the application of reasonably possible sensitivities associated with these forecasts. On the basis of this review, in the light of the current financial position existing committed borrowing facilities, the directors are satisfied that the group has adequate resources to continue in operational existence therefore have continued to adopt the going concern basis in preparing the consolidated financial statements. A copy of the financial statements of the group is placed on the company s website. The directors are responsible for the maintenance integrity of statutory audited information on the company s website. Information published on the internet is accessible in many countries with different legal requirements. Legislation in the United Kingdom governing the preparation dissemination of financial statements may differ from legislation in other jurisdictions. John Davidson General Counsel Group Company Secretary 24 June 2013 Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd This announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire ordinary shares in the capital of SABMiller plc (the company ) or any other securities of the company in any jurisdiction or an inducement to enter into investment activity. This announcement is intended to provide information to shareholders. It should not be relied upon by any other party or for any other purpose. This announcement includes forward-looking statements with respect to certain of SABMiller plc s plans, current goals expectations relating to its future financial condition, performance results. These statements contain the words anticipate, believe, intend, estimate, expect words of similar meaning. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the company s financial position, business strategy, plans objectives of management for future operations (including development plans objectives relating to the company s products services) are forward-looking statements. Such forward-looking statements involve known unknown risks, uncertainties 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 future business strategies the environment in
which the company will operate in the future. These forward-looking statements speak only as at the date of this announcement. Factors which may cause differences between actual results those expected or implied by the forward-looking statements include, but are not limited to: material adverse changes in the economic business conditions in the markets which SABMiller operates; increased competition consolidation within the global brewing beverages industry; changes in consumer preferences; changes to the regulatory environment; failure to deliver the integration cost-saving objectives in relation to the Foster s acquisition; failure to derive the expected benefits from the business capability programme; fluctuations in foreign currency exchange rates interest rates. 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. The past business financial performance of SABMiller plc is not to be relied on as an indication of its future performance.