Slide 1: SABMiller plc Preliminary results
SABMiller plc Preliminary results Year ended 31 March 2014 Presented by Alan Clark, Chief Executive Jamie Wilson, Chief Financial Officer
Slide 2: Forward looking statements
Forward looking statements This presentation includes „forward-looking statements‟ with respect to certain of SABMiller plc‟s plans, current goals and expectations relating to its future financial condition, performance and results. These statements contain the words “anticipate”, “believe”, “intend
Slide 3: Strong operational and financial performance
Strong operational and financial performance • Volume, and group NPR1 growth despite significant headwinds • Strong EBITA1 growth and margin expansion • Tight cost management and scale leverage becoming visible • Solid performance in developing markets Growth on organic, constant currency basis 160
Slide 4: Developing markets continue to deliver
Developing markets continue to deliver • We continue to deliver strong profit and margin growth across our developing market beer businesses • A range of headwinds including FX, excise / regulatory changes and political uncertainty • Broad geographical footprint diversifies risk • Underlying beer fu
Slide 5: Leading local portfolios
Leading local portfolios Country Brand Rank • Leading market shares Poland Tyskie, Zubr 1, 2 • Deep local heritage with leading consumer equity Czech Gambrinus 1 Romania Timisoreana 1 • Superior profitability Italy Peroni 2 South Africa Carling Black Label, 1, 2, 3 Hansa Pilsener, Castle Tanzania Sa
Slide 6: Financial review
Financial review Jamie Wilson Chief Financial Officer 6
Slide 7: Adjusted EPS and dividends
Adjusted EPS and dividends Adjusted EPS growth vs. prior year 21% 2% 1% US dollar Sterling Rand Annual dividend 105 US cents per share – up 4% © SABMiller 2014 7
Slide 8: Group NPR and earnings growth
Group NPR and earnings growth Year ended 31 March 2014 Reported Organic Total volumes 3.8% 1.6% Lager volumes 1.2% 0.9% Organic, Reported constant currency Group net producer revenue (NPR) (0.8)% 3.4% EBITA 1.2% 7.1% EBITA margin progression 50bps 90bps All figures include our share of associates an
Slide 9: Group NPR and EBITA growth rates
Group NPR and EBITA growth rates Group NPR Group EBITA Year ended 31 March 2014, year on year growth % % Reported growth rate (0.8) 1.2 Impact of currency translation 5.3 6.2 Reported, constant currency growth rate 4.5 7.4 Impact of acquisitions and disposals (1.1) (0.3) Organic, constant currency g
Slide 10: Organic, constant currency group NPR per hl performance
Organic, constant currency group NPR per hl performance Group NPR per hl performance, YoY % Year ended 31 March 2014 SABMiller total Latin America Europe North America Africa Asia Pacific SA: Beverages (3%) (2%) (1%) 0% 1% 2% 3% 4% 5% 6% Figures include our share of associates and joint ventures © S
Slide 11: Input costs at the lower end of expectations
Input costs at the lower end of expectations • Full year constant currency increase per hl: – Total raw materials: Flat – Total COGS: Up low single digits • Commodity price increases mitigated by savings achieved through our global procurement programme • FX headwinds partially offset by increased l
Slide 12: Organic, constant currency EBITA margin
Organic, constant currency EBITA margin EBITA margin* performance, YoY basis points change Year ended 31 March 2014 SABMiller total Latin America Europe North America Africa Asia Pacific SA: Beverages (400) (300) (200) (100) 0 100 200 300 * Expressed as a percentage of group NPR Figures include our
Slide 13: Business capability programme has concluded
Business capability programme has concluded • Incremental operating benefits in the year of US$175m • Cumulative US$496m per annum of net operating benefits generated since programme launched in 2009 • Key programme goals delivered: – The creation of our global procurement organisation which now has
Slide 14: Launch of a new cost and efficiency programme
Launch of a new cost and efficiency programme • Building upon capabilities developed to continue to deliver cost savings and efficiencies • Programme to deliver incremental direct cost and efficiency savings rising to approximately US$500m by 31 March 2018 • Key programme initiatives: – Establish a
Slide 15: Cash flow, finance costs and taxation
Cash flow, finance costs and taxation US$m (reported) March 14 March 13 Adjusted EBITDA* 6,639 6,564 Working capital inflow/(outflow) (incl. provisions) 93 (204) Capex** 1,485 1,479 Free cash flow*** 2,563 3,230 Adjusted net finance costs 645 738 Adjusted EBITDA margin* 31.3% 30.0% Effective tax rat
Slide 16: Net debt
Net debt US$m March 14 March 13* Non-current borrowings (12,528) (16,079) Current borrowings (4,519) (2,469) Cash and cash equivalents 2,081 2,171 Financing derivative financial instruments 663 777 Net debt (14,303) (15,600) Gearing (%) 52.0 56.8 Net debt / Adjusted EBITDA** 2.2 2.4 Weighted average
Slide 17: Financial outlook – current financial year
Financial outlook – current financial year • Full year trading conditions to remain broadly unchanged, with developing markets continuing to drive growth • Continued development of our brand and pack portfolios • Focus will remain on pricing and premiumisation • Input costs per hl expected to rise:
Slide 18: Operational review
Operational review Alan Clark Chief Executive 18
Slide 19: Latin America: Solid performance despite multiple headwinds
Latin America Solid performance despite multiple headwinds • Continued growing share of alcohol and beer per capita consumption • Delivered strong NPR by improving our above mainstream mix: – Broadening appeal with lighter beers in upper mainstream segment – Accelerated the development of our intern
Slide 20: Latin America: Solid performance despite multiple headwinds
Latin America Solid performance despite multiple headwinds • Continued growing share of alcohol and beer per capita consumption • Delivered strong NPR by improving our above mainstream mix: – Broadening appeal with lighter beers in upper mainstream segment – Accelerated the development of our intern
Slide 21: Latin America: Solid performance despite multiple headwinds
Latin America Solid performance despite multiple headwinds • Continued growing share of alcohol and beer per capita consumption • Delivered strong NPR by improving our above mainstream mix: – Broadening appeal with lighter beers in upper mainstream segment – Accelerated the development of our intern
Slide 22: North America: Revenue management and strong mix driving profit growth
North America Revenue management and strong mix driving profit growth • Stable share in premium lights • Driving above premium share expansion: – Redd‟s Apple Ale and variants – Miller Fortune • Tenth and Blake growing in crafts and imports with: – Leinenkugel‟s Summer Shandy – Blue Moon Belgian Whi
Slide 23: North America: Revenue management and strong mix driving profit growth
North America Revenue management and strong mix driving profit growth • Stable share in premium lights • Driving above premium share expansion: – Redd‟s Apple Ale and variants – Miller Fortune • Tenth and Blake growing in crafts and imports with: – Leinenkugel‟s Summer Shandy – Blue Moon Belgian Whi
Slide 24: North America: Revenue management and strong mix driving profit growth
North America Revenue management and strong mix driving profit growth • Stable share in premium lights • Driving above premium share expansion: – Redd‟s Apple Ale and variants – Miller Fortune • Tenth and Blake growing in crafts and imports with: – Leinenkugel‟s Summer Shandy – Blue Moon Belgian Whi
Slide 25: Europe: Improvement in trend but challenging market conditions remain
Europe Improvement in trend but challenging market conditions remain • Weak consumer sentiment • Continuing challenging competitive and channel dynamics • Volume performance improved in the second half • Protecting our leading equities • Our innovation pipelines are strong • Cutting costs and evolvi
Slide 26: Europe: Improvement in trend but challenging market conditions remain
Europe Improvement in trend but challenging market conditions remain • Weak consumer sentiment • Continuing challenging competitive and channel dynamics • Volume performance improved in the second half • Protecting our leading equities • Our innovation pipelines are strong • Cutting costs and evolvi
Slide 27: Europe: Improvement in trend but challenging market conditions remain
Europe Improvement in trend but challenging market conditions remain • Weak consumer sentiment • Continuing challenging competitive and channel dynamics • Volume performance improved in the second half • Protecting our leading equities • Our innovation pipelines are strong • Cutting costs and evolvi
Slide 28: South Africa: NPR growth despite pressures on consumer spending power
South Africa NPR growth despite pressures on consumer spending power • NPR per hl rose 6% on an organic, constant currency basis, driven by price increases and positive lager brand mix • Market share gain • Local premium portfolio performed strongly • Castle Lite and Castle Milk Stout delivered comb
Slide 29: South Africa: NPR growth despite pressures on consumer spending power
South Africa NPR growth despite pressures on consumer spending power • NPR per hl rose 6% on an organic, constant currency basis, driven by price increases and positive lager brand mix • Market share gain • Local premium portfolio performed strongly • Castle Lite and Castle Milk Stout delivered comb
Slide 30: Africa: Strong profit growth despite weak fourth quarter
Africa Strong profit growth despite weak fourth quarter • Optimistic about the overall macro-economic and business outlook: – Growth potential for personal incomes – Beer‟s share of alcohol still <20% (including informal) • Innovation in focus: – Chibuku Super which has now expanded to five markets.
Slide 31: Africa: Strong profit growth despite weak fourth quarter
Africa Strong profit growth despite weak fourth quarter • Optimistic about the overall macro-economic and business outlook: – Growth potential for personal incomes – Beer‟s share of alcohol still <20% (including informal) • Innovation in focus: – Chibuku Super which has now expanded to five markets.
Slide 32: Asia Pacific - Australia: Soft trading but delivering synergies
Asia Pacific - Australia Soft trading but creating value and delivering synergies • Weakening consumer confidence and continued competitive intensity • „Contemporary‟ brands growing strongly • Tight revenue and cost management protecting margins • Integration and synergy delivery ahead of schedule ©
Slide 33: Asia Pacific
Asia Pacific China • Continuing market share increase, complemented by acquisitions • Volume growth resumed in 2013, with strong NPR per hectoliter growth driven by premiumisation • Short term margin headwinds, including the impact of Kingway acquisition India • Continued regulatory headwinds couple
Slide 34: Strategic focus
Strategic focus 1 Focus on beer category growth 2 Leveraging skill and scale 3 Stakeholder partnership 34
Slide 35: Focus on beer category growth
Focus on beer category growth 1 Focus on beer category growth Improving premium mix Extending Capturing refreshment wine and occasions Romancing spirits e.g. core lager occasions Radlers, lighter e.g. beer, new beer styles non alcohol Ensuring affordability © SABMiller 2014 35
Slide 36: Romancing core lager
Romancing core lager Miller Lite original can Kozel Hero North America Europe Africa © SABMiller 2014 36
Slide 37: Improving premium mix
Improving premium mix MGD and Miller Lite Redd’s Apple Ale / Redd’s Strawberry Castle Lite Latin America North America Africa © SABMiller 2014 37
Slide 38: Ensuring affordability
Ensuring affordability Bulk packs Steel Reserve Alloy Eagle Series Blk Berry Latin America North America Africa © SABMiller 2014 38
Slide 39: Extending refreshment occasions
Extending refreshment occasions Flying Fish Radlers Carlton Cold South Africa Europe Asia Pacific © SABMiller 2014 39
Slide 40: Capturing wine and spirit occasions
Capturing wine and spirit occasions Miller Fortune Redd’s Vodka Lemon Ksiazece North America Africa Europe © SABMiller 2014 40
Slide 41: Global business services
Global business services 2 Leveraging skill and scale Latin Asia Pacific South Africa Europe Africa Corporate America Shared service lines Supply chain Sales and and Order Record to Source Hire marketing operations to cash report to pay to retire services services ERP © SABMiller 2014 41
Slide 42: End to end supply chain integration
End to end supply chain integration World-class customer service and unparalleled quality at optimal cost Sharpen focus Stimulate Drive functional 1 on the consumer and customer 2 excellence 3 innovation through technical insight Demand and supply planning Sales and operations planning Innovation Su
Slide 43: Stakeholder partnership: Successes in 2014
Stakeholder partnership Successes in 2014 3 Stakeholder partnership Economic contribution Beer in society Water-food-energy nexus • “4e” Tenderos programme in Latin • Over a hundred programmes to • Achieved water efficiency target of America reduce harmful use of alcohol 3.5 hl/hl a year early • Use
Slide 44: Conclusion
Conclusion • Strong performance in the context of significant headwinds • Our profit and margin delivery in developing markets remains strong • Beer category developed across all geographies • Our focus on increased cost savings continuing to deliver Strategy in place to innovate, rejuvenate and g
Slide 45: Q&A
Q&A 45
Slide 46: Supplementary information
Supplementary information © SABMiller 2014 46
Slide 47: EBITA growth
EBITA growth EBITA (including associates and joint ventures) components of performance, US$m 7.1% 0.5% 0.9% (6.2)% 6,425 6,453 6,367 March '13* Underlying Currency March '14 organic Acquisitions March '14 reported performance * Restated and adjusted for disposals © SABMiller 2014 47
Slide 48: Group NPR growth
Group NPR growth Group NPR (including associates and joint ventures) components of performance, US$m 1.8% 1.6% 1.2% (1.8%) (5.2%) 26,867 26,719 26,389 March '13* Volume Price/mix Currency March '14 organic Acquisitions March '14 reported * Adjusted for disposals © SABMiller 2014 48
Slide 49: Net debt: currency and maturity profile
Net debt: currency and maturity profile Currency profile Maturity profile * 18% 17% 43% 41% 6% 13% 5% 4% 17% 36% US dollar Euro Rand < 1 year 1-2 years 2-5 years > 5 years Colombian peso Australian dollar Other * Cash and cash equivalents netted against current borrowings © SABMiller 2014 49
Slide 50: Reported EBITA contribution
Reported EBITA contribution* March 2014 March 2013** 2% 2% 15% 17% 33% 32% 13% 13% 14% 11% 13% 12% 12% 11% Latin America Europe North America Africa Asia Pacific South Africa: Beverages * Before corporate costs ** Restated © SABMiller 2014 50
Slide 51: Financial results
Financial results March March Change US dollar m. 14 13* % Reported Group net producer revenue 26,719 26,932 (1) EBITA 6,453 6,379 1 EBITA margin** (%) 24.2 23.7 50 bps Sales volumes (hl m) Total 318 306 4 Lager 245 242 1 Soft drinks 65 57 15 Other alcoholic beverages 8 7 4 * Restated ** Expressed a
Slide 52: Group NPR by division
Group NPR by division March March Change US dollar m. 14* 13** % Organic, constant currency Latin America 6,051 5,757 5 Europe 4,301 4,300 - North America 4,665 4,656 - Africa 3,470 3,290 5 Asia Pacific 4,128 3,986 4 South Africa: Beverages 4,737 4,474 6 South Africa: Hotels and Gaming 432 404 7 * R
Slide 53: EBITA by division
EBITA by division March March Change US dollar m. 14* 13** % Organic, constant currency Latin America 2,305 2,101 10 Europe 664 784 (15) North America 797 740 8 Africa 949 838 13 Asia Pacific 924 854 8 South Africa: Beverages 1,201 1,119 7 South Africa: Hotels and Gaming 144 134 8 * Results for the
Slide 54: EBITA margin performance
EBITA margin* performance Organic, constant currency basis March 14 March 13** 38.1% 36.5% 27.3% 25.5% 25.4% 25.0% 24.6% 23.7% 22.4% 21.4% 18.2% 17.1% 15.4% 15.9% Latin America Europe North America Africa Asia Pacific South Africa: Group Beverages * Expressed as a percentage of group NPR ** Restated
Slide 55: Reported EBITA margin performance
Reported EBITA margin performance March 14 March 13* 38.2% 36.4% 27.4% 25.5% 25.4% 25.0% 24.2% 23.7% 21.4% 21.3% 18.2% 17.1% 15.4% 15.9% Latin America Europe North America Africa Asia Pacific South Africa: Group Beverages * As restated and expressed as a percentage of group NPR © SABMiller 2014 55
Slide 56: Reported volumes
Reported volumes* Reported lager volumes by country, hl ’000 March March % Change % Change 14 14 China ** 58,893 10 Czech Republic 6,462 (4) South Africa 27,245 - Australia 7,138 (8) Colombia 20,201 2 Ecuador 5,804 2 Poland 13,266 (9) India 5,146 (7) Peru 12,960 - Italy 3,375 (2) Romania 5,719 2 Tan
Slide 57: Exchange rates
Exchange rates Closing rates vs US$ 31 Mar 30 Sept 31 Mar 31 Mar 30 Sept 31 Mar 14 13 13 14 13 13 Australia 1.08 1.07 0.96 Mozambique 30.50 29.04 29.69 China 6.22 6.12 6.21 Peru 2.81 2.79 2.59 Colombia 1,965 1,915 1,832 Poland 3.03 3.12 3.26 Czech 19.90 19.05 20.07 Romania 3.24 3.29 3.44 Republic Eu
Slide 58: Balance sheet
Balance sheet March March US dollar m. 14 13 Goodwill and intangible assets 27,029 29,497 Property, plant and equipment 9,065 9,059 Investment in joint ventures and associates 11,368 10,963 Other non-current assets 904 1,069 Current assets excluding cash 3,303 3,512 Cash and cash equivalents 2,081 2