TIDMSAB

RNS Number : 9844Q

SABMiller PLC

23 June 2015

23 June 2015

SABMiller plc

Annual Financial Report

SABMiller plc has today submitted a copy of the 2015 Annual Report and Accounts, Notice of the 2015 Annual General Meeting and Shareholder Proxy Form (UK) to the National Storage Mechanism and they will shortly be available for inspection at www.hemscott.com/nsm.do.

The Annual Report and 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, 23 July 2015 at the InterContinental London Park Lane, One Hamilton Place, Park Lane, London W1J 7QY.

A condensed set of SABMiller's financial statements and information on important events that have occurred during the financial year and their impact on the financial statements were included in SABMiller's preliminary results announcement released on 13 May 2015. That information, together with the information set out below, which is extracted from the 2015 Annual Report, constitutes the material required by Disclosure and 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 2015 Annual Report. Page numbers and cross-references in the extracted information below refer to page numbers and sections in the 2015 Annual Report.

PRINCIPAL RISKS AND UNCERTAINTIES (page 16 & 17)

Principal risks

Focused on managing our risks

The principal risks facing the group and considered by the board and the executive committee 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 finance review on page 45 and in note 21 to the consolidated financial statements.

 
 Principal         Context              Specific             Possible             Mitigation          Associated 
  risk                                   risks we             impact                                   strategic 
                                         face                                                          priorities 
----------------  -------------------  -------------------  -------------------  ------------------  ----------------- 
 Consistent        Consumer             -- Failing           Topline growth       -- Continuous       -- Drive 
  sustainable      tastes and           to develop           progression          evaluation of        superior 
  revenue          behaviours           and ensure           does not             our brand            topline growth. 
  growth           are constantly       the strength         meet internal        portfolios           -- Actively 
                   evolving,            and relevance        and external         in every market      shape our 
                   and at an            of our brands        expectations.        to ensure that       global mix 
                   increasingly         with consumers,                           they target          to drive 
                   rapid rate.          shoppers             Market positions     current and          a superior 
                                        and customers.       come under           future               growth profile. 
                   Competition          -- Failing           pressure,            opportunities        -- Build 
                   in the beverage      to continue          market               for profitable       a globally 
                   industry             to improve           opportunities        growth.              integrated 
                   is expanding         our commercial       are missed           -- Developing        organisation 
                   and becoming         capabilities         and lower            a beer category      to optimise 
                   more fragmented,     to deliver           profitability.       structure that       resources, 
                   complex              brand propositions                        enables us to        win in market 
                   and sophisticated.   that respond                              grow both the        and reduce 
                                        appropriately                             value of the         costs. 
                                        to changing                               beer category, 
                                        consumer                                  and our share 
                                        preferences.                              of it. 
                                                                                  -- Ensuring 
                                                                                  we have deep 
                                                                                  understanding 
                                                                                  of changing 
                                                                                  consumer and 
                                                                                  industry dynamics 
                                                                                  in key markets, 
                                                                                  enabling us 
                                                                                  to respond 
                                                                                  appropriately 
                                                                                  to opportunities 
                                                                                  and issues which 
                                                                                  may impact our 
                                                                                  business 
                                                                                  performance. 
                                                                                  -- Building 
                                                                                  our brand 
                                                                                  equities 
                                                                                  through 
                                                                                  innovation 
                                                                                  and compelling 
                                                                                  marketing 
                                                                                  programmes; 
                                                                                  creating a 
                                                                                  pipeline 
                                                                                  of opportunities 
                                                                                  to support our 
                                                                                  premium offering. 
                                                                                  -- Focusing 
                                                                                  on monitoring 
                                                                                  and benchmarking 
                                                                                  commercial 
                                                                                  performance 
                                                                                  and developing 
                                                                                  the critical 
                                                                                  commercial 
                                                                                  capabilities 
                                                                                  that are required 
                                                                                  in order to 
                                                                                  win in local 
                                                                                  markets. 
----------------  -------------------  -------------------  -------------------  ------------------  ----------------- 
 Industry          The global           -- Failing           Lower growth         -- Continued        -- Actively 
  consolidation    brewing              to participate       rate,                competitor and       shape our 
                   and beverages        in the right         profitability        target analysis      global mix 
                   industry             opportunities.       and financial        to consider          to drive 
                   is expected          -- Paying            returns.             strategic and        a superior 
                   to continue          too much                                  financial            growth profile. 
                   to consolidate.      to acquire           Failure to           implications         -- Drive 
                   There will           a business.          maintain             of potential         superior 
                   continue             -- Not               our competitive      transactions.        topline growth. 
                   to be                implementing         position             -- Potential 
                   opportunities        integration          relative             transactions 
                   to enter             plans                to our peers.        are subject 
                   attractive           successfully.                             to continual 
                   growth markets,      -- Failing                                and rigorous 
                   to realise           to identify                               analysis. Only 
                   synergy              and develop                               opportunities 
                   benefits             the capabilities                          with potential 
                   from integration     necessary                                 to create value 
                   and to leverage      to facilitate                             are pursued. 
                   our global           market and                                -- Proven 
                   scale.               category                                  integration 
                                        entry.                                    processes, 
                                                                                  procedures 
                                                                                  and practices 
                                                                                  are applied 
                                                                                  to ensure 
                                                                                  delivery 
                                                                                  of expected 
                                                                                  returns. 
                                                                                  -- Activities 
                                                                                  to deliver 
                                                                                  synergies 
                                                                                  and leverage 
                                                                                  scale are in 
                                                                                  place, monitored 
                                                                                  closely and 
                                                                                  continuously 
                                                                                  enhanced. 
                                                                                  -- Development 
                                                                                  of 
                                                                                  non-traditional 
                                                                                  capabilities 
                                                                                  to enter and 
                                                                                  grow profitably 
                                                                                  in new markets. 
----------------  -------------------  -------------------  -------------------  ------------------  ----------------- 
 Regulatory        With an              -- Unreasonable      Lower growth,        -- Rigorous         -- Drive 
  changes          increasingly         regulation           profitability        adherence to         superior 
                   high profile         places increasing    and reduced          the principle        topline growth. 
                   debate over          restrictions         contribution         of                   -- Actively 
                   alcohol              on the               to local             self-regulation      shape our 
                   consumption          availability         communities          backed by            global mix 
                   in many              and marketing        in some countries.   appropriate          to drive 
                   markets,             of beer.                                  policies and         a superior 
                   the alcohol          -- Tax and           Loss of consumer     management           growth profile. 
                   industry             excise changes       goodwill             review.              -- Build 
                   is coming            cause pressure       and public           -- Building          a globally 
                   under more           on pricing.          sentiment.           and maintaining      integrated 
                   pressure             -- Anti-alcohol                           licence to trade     organisation 
                   from national        advocates                                 capabilities         to optimise 
                   and international    erode industry                            across the group     resources, 
                   regulators,          reputation.                               to facilitate        win in market 
                   NGOs and                                                       sound risk           and reduce 
                   local governments.                                             analysis             costs. 
                                                                                  and mitigation 
                                                                                  plan development. 
                                                                                  -- Constructive 
                                                                                  engagement with 
                                                                                  government and 
                                                                                  all external 
                                                                                  stakeholders 
                                                                                  on 
                                                                                  alcohol-related 
                                                                                  issues. Working 
                                                                                  collaboratively 
                                                                                  with them to 
                                                                                  address the 
                                                                                  harmful use 
                                                                                  of alcohol. 
                                                                                  -- Investment 
                                                                                  to improve the 
                                                                                  economic and 
                                                                                  social impact 
                                                                                  of our businesses 
                                                                                  in local 
                                                                                  communities 
                                                                                  and working 
                                                                                  in partnership 
                                                                                  with local 
                                                                                  governments 
                                                                                  and NGOs. 
                                                                                  -- Driving our 
                                                                                  Prosper shared 
                                                                                  imperatives 
                                                                                  to make a 
                                                                                  sustainable 
                                                                                  and measurable 
                                                                                  difference to 
                                                                                  the communities 
                                                                                  and ecosystems 
                                                                                  in which we 
                                                                                  operate. 
----------------  -------------------  -------------------  -------------------  ------------------  ----------------- 
 Management        We believe           -- Failing           Failure to           -- Building         -- Build 
  capability        that our             to identify,         deliver the         the group's          a globally 
                    people are           develop              group's strategic   leadership talent    integrated 
                    our enduring         and retain           and financial       pipeline through     organisation 
                    advantage            an appropriate       ambitions.          our Global Talent    to optimise 
                    and therefore        pipeline                                 Management model,    resources, 
                    it is essential      of talented          Lower long-term     strategic people     win in market 
                    that we              managers             profitable          resourcing and       and reduce 
                    develop              for the              growth.             long-term talent     costs. 
                    and maintain         present                                  pipeline.            -- Drive 
                    global management    and future                               -- Sustaining        superior 
                    capability.          needs of                                 a strong culture     topline growth. 
                                         the group.                               of 
                                                                                  accountability, 
                                                                                  empowerment 
                                                                                  and personal 
                                                                                  development. 
----------------  -------------------  -------------------  -------------------  ------------------  ----------------- 
 Delivering        We continue          -- Failing           Increased            -- Senior           -- Build 
  business          to execute           to derive           programme            leadership           a globally 
  transformation    major efficiency     the expected        costs, lower         closely involved     integrated 
                    programmes           benefits            benefits             in monitoring        organisation 
                    that will            from the            than planned,        progress and         to optimise 
                    simplify             projects            delays in            in making key        resources, 
                    processes,           currently           benefit              decisions.           win in market 
                    reduce costs         under way.          realisation          -- Mechanisms        and reduce 
                    and allow            -- Failing          and business         in place to          costs. 
                    local management     to contain          disruption.          track both costs     -- Actively 
                    teams to             programme                                and benefits.        shape our 
                    focus more           costs or            Reputational         -- Rigorous          global mix 
                    closely              ensure execution    damage and           programme            to drive 
                    on their             is in line          reduced              management           a superior 
                    markets.             with planned        competitive          and governance       growth profile. 
                                         timelines.          advantage            processes 
                                                             in the medium        (including 
                                                             term.                independent 
                                                                                  programme 
                                                                                  assurance) 
                                                                                  with dedicated 
                                                                                  resources and 
                                                                                  clear 
                                                                                  accountability. 
----------------  -------------------  -------------------  -------------------  ------------------  ----------------- 
 Information       There is             -- Disruption        Loss of              -- Continued        -- Build 
  and cyber         increasing           of information      competitive          development,         a globally 
  security          sophistication       technology          advantage            articulation         integrated 
                    of cyber-attack      (IT) systems        and reputational     and                  organisation 
                    capabilities.        and a loss          damage through       implementation       to optimise 
                    Business's           of valuable         the publicised       of information       resources, 
                    increasing           and sensitive       loss of key          security             win in market 
                    demand for           information         operating            policies.            and reduce 
                    consumers'           and assets.         systems and          -- Increased         costs. 
                    and customers'       -- Significant      confidential         investment to 
                    personal             business            data.                improve 
                    data means           disruption.                              information 
                    legislators          -- Failing          Adverse effect       security 
                    rightly              to comply           of profitability,    awareness, 
                    continue             with tightening     cash flows           intelligence 
                    to impose            legislation         or financial         and 
                    tighter              poses a             position.            implementation 
                    data management      threat of                                of sound security 
                    control.             significant                              processes. 
                                         financial                                -- Building 
                                         penalties                                and enhancing 
                                         or restrictions.                         processes to 
                                                                                  deal with IT 
                                                                                  security 
                                                                                  incidents. 
----------------  -------------------  -------------------  -------------------  ------------------  ----------------- 
 Acquisition       A key aspect         -- Failing           Lower growth         -- Embedding        -- Actively 
  of CUB            of the CUB          to deliver           rates,               of the SABMiller     shape our 
                    acquisition         integration          profitability        Ways (its            global mix 
                    was the             objectives           and asset            processes,           to drive 
                    delivery            and commercial       values.              systems and          a superior 
                    of a turnaround     and operational                           tools) throughout    growth profile. 
                    plan with           excellence           Damage to            the CUB business.    -- Build 
                    specific            targets              the group's          -- Commercial        a globally 
                    and communicated    communicated         reputation           efforts in market    integrated 
                    financial           as part              for strong           to effectively       organisation 
                    value creation.     of the turnaround    commercial           deliver volume,      to optimise 
                                        plan.                capability           value and market     resources, 
                                        -- Failing           and for making       share gains.         win in market 
                                        to achieve           value creating       -- Continued         and reduce 
                                        the synergy          acquisitions.        monitoring of        costs. 
                                        and cost                                  progress to 
                                        saving commitments                        complete the 
                                        of the                                    integration 
                                        transaction.                              objectives, 
                                                                                  including 
                                                                                  frequent 
                                                                                  and regular 
                                                                                  tracking of 
                                                                                  key performance 
                                                                                  indicators. 
----------------  -------------------  -------------------  -------------------  ------------------  ----------------- 
 

RELATED PARTY TRANSACTIONS

Note 31 to the consolidated financial statements on page 171 details the following related party transactions.

31. Related party transactions

a. Parties with significant influence over the group: Altria Group, Inc. (Altria) and 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 ended 31 March 2015. During the year ended 31 March 2014 Bavaria SA and its subsidiaries made donations of US$14 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 and its subsidiaries would be donated to various charities, including the Fundación Mario Santo Domingo. There were no balances owing to the SDG at 31 March 2015 and 31 March 2014.

b. Associates and joint ventures

Details relating to transactions with associates and joint ventures are analysed below.

 
                                                2015    2014 
                                                US$m    US$m 
--------------------------------------------  ------  ------ 
 Purchases from associates1                    (173)   (168) 
  Purchases from joint ventures2                (88)    (93) 
  Sales to associates3                             9       9 
  Sales to joint ventures4                        21      23 
  Dividends receivable from associates5          423     224 
  Dividends received from joint ventures6        976     903 
  Royalties received from associates7             18      25 
  Royalties received from joint ventures8          1       2 
  Management fees, guarantee fees and other 
   recoveries received from associates9           14      11 
  Marketing fees paid to associates10            (1)       - 
  Management fees paid to joint ventures11       (2)     (2) 
--------------------------------------------  ------  ------ 
 

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); and Delta Corporation (Delta); and accommodation from Tsogo Sun.

2 The group purchased lager from MillerCoors LLC (MillerCoors).

3 The group made sales of lager to Tsogo Sun, Delta, Anadolu Efes Biracılık ve Malt Sanayii A (Anadolu Efes), International Trade and Supply Ltd (ITSL) and Distell.

4 The group made sales to MillerCoors.

5 The group had dividends receivable from China Resources Snow Breweries Ltd (CR Snow) of US$228 million (2014: US$nil), Castel of US$108 million (2014: US$97 million), Coca-Cola Canners of US$5 million (2014: US$5 million), Distell of US$18 million (2014: US$20 million), Tsogo Sun of US$24 million (2014: US$34 million), Delta of US$18 million (2014: US$17 million), International Trade and Supply Limited of US$21 million (2014: US$18 million), Grolsch (UK) Ltd of US$1 million (2014: US$1 million) and Anadolu Efes US$nil (2014: US$32 million).

6 The group received dividends from MillerCoors.

7 The group received royalties from Delta and Anadolu Efes.

8 The group received royalties from MillerCoors.

9 The group received management fees from Delta, consulting fees from Anadolu Efes and other recoveries from AFP.

10 The group paid marketing fees to ITSL.

11 The group paid management fees to MillerCoors.

 
 At 31 March                             2015    2014 
                                         US$m    US$m 
-------------------------------------  ------  ------ 
 Amounts owed by associates - trade1       28      42 
  Amounts owed by joint ventures2           4       5 
  Amounts owed to associates3            (38)    (39) 
  Amounts owed to joint ventures4        (18)    (16) 
-------------------------------------  ------  ------ 
 

1 Amounts owed by AFP, Delta, Coca-Cola Canners, Castel, ITSL, and Anadolu Efes.

2 Amounts owed by MillerCoors.

3 Amounts owed to AFP and Castel.

4 Amounts owed to MillerCoors.

Guarantees provided in respect of associates' bank facilities are detailed in note 21.

c. Transactions with key management

The group has a related party relationship with the directors of the group and members of the excom as key management. Key management compensation is provided in note 6c.

DIRECTORS' RESPONSIBILITY STATEMENT IN RESPECT OF THE CONSOLIDATED FINANCIAL STATEMENTS (page 100)

The directors are responsible for preparing the annual report, the directors' remuneration report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. The directors have prepared the consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, and the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards) and applicable law.

Under company law the directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss of the group for that period.

In preparing those financial statements, the directors are required to:

-- select suitable accounting policies and then apply them consistently;

-- make judgements and accounting estimates that are reasonable and prudent;

-- state whether IFRSs as adopted by the European Union and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the group and parent company financial statements respectively; and

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the transactions of the company and group and disclose with reasonable accuracy at any time the financial position of the company and group and enable them to ensure that the company and consolidated financial statements and the directors' remuneration report comply with the Companies Act 2006 and, as regards the consolidated financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

A copy of the consolidated and company financial statements is placed on the company's website. The directors are responsible for the maintenance and integrity of the statutory and audited information on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the group's performance, business model and strategy.

Each of the directors, whose names and functions are listed on pages 52 and 53 of this annual report, confirm that, to the best of his or her knowledge:

-- the consolidated financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, the Companies Act 2006 and Article 4 of the IAS Regulation, give a true and fair view of the assets, liabilities, financial position and profit of the group; and

-- the management report contained in this annual report includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal risks and uncertainties that it faces.

The directors in office at the date of this report have each confirmed that:

-- so far as the director is aware, there is no relevant audit information of which the group's auditors are unaware; and

-- he or she has taken all the steps he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

Stephen Shapiro

Group Company Secretary

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 or its subsidiaries or associates 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 and expectations relating to its future financial condition, performance and results. 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 announcement, 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 announcement. Factors which may cause differences between actual results and those expected or implied by the forward-looking statements include, but are not limited to: material adverse changes in the economic and business conditions in the markets in which SABMiller operates; increased competition and consolidation in the global brewing and beverages industry; changes in consumer preferences; changes to the regulatory environment; failure to deliver the integration and cost-saving objectives in relation to the Foster's acquisition; failure to derive the expected benefits from the global efficiency programmes; and fluctuations in foreign currency exchange rates and 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 and financial performance of SABMiller plc is not to be relied on as an indication of its future performance.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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