Case
Supplementary Resources
Abstract
On 11 November 2015, Carlos Brito, chief executive of global leading beer brewer Anheuser-Busch InBev (AB InBev), presented his final offer of US$105.5 billion (£69.8 or £44 pounds per share), to acquire its rival, SABMiller, which the company accepted. The acquisition process had started in September and just over a month later, on 13 October, SABMiller had accepted the offer in principle, but had certain requirements before it would accept. Such a massive transaction could well present hurdles – one being anti-competitive issues. But would this acquisition deliver synergies soon enough for InBev, Brito wondered?
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Resources
Exhibit 1a AB InBev Consolidated Income Statement for the Year Ended 31 December 2014
Consolidated income statement
For the year ended 31 December 2014 Million US dollar, except earnings per shares in US dollar | Notes | 2014 | 2013 |
Revenue | 47 063 | 43 195 | |
Cost of sales | (18 756) | (17 594) | |
Gross profit | 28 307 | 25 601 | |
Distribution expenses | (4 558) | (4 061) | |
Sales and marketing expenses | (7 036) | (5 958) | |
Administrative expenses | (2 791) | (2 539) | |
Other operating income (expenses) | 7 | 1 386 | 1 160 |
Profit from operations before non-recurring items | 15 308 | 14 203 | |
Restructuring (including impairment losses) | 8 | (277) | (118) |
Business and asset disposal (including impairment losses) | 8 | 157 | 30 |
Acquisition costs business combinations | 8 | (77) | (82) |
Fair value adjustments | 8 | - | 6 410 |
Profit from operations | 15 111 | 20 443 | |
Finance cost | 11 | (2 797) | (3 047) |
Finance income | 11 | 969 | 561 |
Non-recurring net finance cost | 8 | 509 | 283 |
Net finance cost | (1 319) | (2 203) | |
Share of result of associates | 9 | 294 | |
Profit before tax | 13 801 | 18 534 | |
Income tax expense | 12 | (2 499 ) | (2 016) |
Profit | 11 302 | 16 518 | |
Attributable to: | |||
Equity holders of AB InBev | 9 216 | 14 394 | |
Non-controlling interest | 2 086 | 2 124 | |
Basic earnings per share | 21 | 5.64 | 8.90 |
Diluted earnings per share | 21 | 5.54 | 8.72 |
Basic earnings per share before non-recurring items 1 | 21 | 5.43 | 4.91 |
Diluted earnings per share before non-recurring items 1 | 21 | 5.32 | 4.81 |
Other comprehensive income: items that will not be reclassified to profit or loss: | |||
Re-measurements of post-employment benefits | (491) | 503 | |
Other comprehensive income: items that may be reclassified subsequently to profit or loss | |||
Translation reserves (gains/losses) | |||
Exchange differences on translation of foreign operations | (4 793) | (3 500) | |
Effective portion of changes in fair value of net investment hedges | 33 | (66) | |
Cash flow hedges | |||
Recognized in equity | 314 | 579 | |
Removed from equity and included in profit or loss | (190) | (36) | |
Share of other comprehensive results of associates | - | (67) | |
(4 636) | (3 090) | ||
Other comprehensive income, net of tax | (5 127) | (2 587) | |
Total comprehensive income | 6 175 | 13 931 | |
Attributable to: | |||
Equity holders of AB InBev | 4 465 | 12 285 | |
Non-controlling interest | 1 710 | 1 646 |
Exhibit 1b AB InBev Consolidated Cash Flow Statement for the Year Ended 31 December 2014
Consolidated cash flow statement
For the year ended 31 December Million US dollar | Notes | 2014 | 2013 |
Operating activities | |||
Profit | 11 302 | 16 518 | |
Depreciation, amortization and impairment | 10 | 3 353 | 2 985 |
Impairment losses on receivables, inventories and other assets | 108 | 91 | |
Additions/(reversals) in provisions and employee benefits | (85) | 109 | |
Net finance cost | 11 | 1 319 | 2 203 |
Loss/(gain) on sale of property, plant and equipment and intangible assets | 4 | (25) | |
Loss/(gain) on sale of subsidiaries, associates and assets held for sale | (219) | (85) | |
Revaluation of initial investment in Grupo Modelo | 6 | - | (6 415) |
Equity-settled share-based payment expense | 24 | 249 | 240 |
Income tax expense | 12 | 2 499 | 2 016 |
Other non-cash items included in the profit | (190) | (105) | |
Share of result of associates | (9) | (294) | |
Cash flow from operating activities before changes in working capital and use of provisions | 18 331 | 17 238 | |
Decrease/(increase) in trade and other receivables | (371) | (25) | |
Decrease/(increase) in inventories | (354) | (129) | |
Increase/(decrease) in trade and other payables | 1 540 | 1 020 | |
Pension contributions and use of provisions | (458) | (653) | |
Cash generated from operations | 18 688 | 17 451 | |
Interest paid | (2 476) | (2 214) | |
Interest received | 273 | 297 | |
Dividends received | 30 | 606 | |
Income tax paid | (2 371) | (2 276) | |
Income tax paid | (2 371) | (2 276) | |
Cash flow from operating activities | 14 144 | 13 684 | |
Investing activities | |||
Proceeds from sale of property, plant and equipment and of intangible assets | 273 | 257 | |
Sale of subsidiaries, net of cash disposed of | 6 | 426 | 42 |
Acquisition of subsidiaries, net of cash acquired | 6 | (7 126) | (17 439) |
Purchase of non-controlling interest | 21 | (92) | (99) |
Acquisition of property, plant and equipment and of intangible assets | 13/15 | (4 395) | (3 869) |
Net of tax proceeds from the sale of assets held for sale | (65) | 4 002 | |
Net proceeds from sale/(acquisition) of investment in short-term debt securities | 16 | (187) | 6 707 |
Net proceeds from sale/(acquisition) of other assets | 15 | (13) | |
Net repayments/(payments) of loans granted | (1) | 131 | |
Cash flow from investing activities | (11 152) | (10 281) | |
Financing activities | |||
Net proceeds from the issue of share capital | 21 | 83 | 73 |
Proceeds from borrowings | 18 382 | 22 464 | |
Payments on borrowings | (15 159) | (18 006) | |
Cash received for deferred shares instrument | - | 1 500 | |
Cash net finance (cost)/income other than interests | 239 | 563 | |
Dividends paid | (7 400) | (6 253) | |
Cash flow from financing activities | (3 855) | 341 | |
Net increase/(decrease) in cash and cash equivalents | (863) | 3 924 | |
Cash and cash equivalents less bank overdrafts at beginning of year | 9 833 | 7 051 | |
Effect of exchange rate fluctuations | (654) | (1 142) | |
Cash and cash equivalents less bank overdrafts at end of period | 20 | 8 316 | 9 833 |
Notes to the Financial Statements
1. Corporate information
2. Statement of compliance
3. Summary of significant accounting policies
4. Use of estimates and judgements
5. Segment reporting
6. Acquisitions and disposals of subsidiaries
7. Other operating income/(expenses)
8. Non-recurring items
9. Payroll and related benefits
10. Additional information on operating expenses by nature
11. Finance cost and income
12. Income taxes
13. Property, plant and equipment
14. Goodwill
15. Intangible assets
16. Investments securities
17. Deferred tax assets and liabilities
18. Inventories
19. Trade and other receivables
20. Cash and cash equivalents
21. Changes in equity and earnings per share
22. Interest-bearing loans and borrowings
23. Employee benefits
24. Share-based payments
25. Provisions
26. Trade and other payables
27. Risks arising from financial instruments
28. Operating leases
29. Collateral and contractual commitment for the acquisition of property, plant and equipment, loans to customers and other
30. Contingencies
31. Related parties
32. Events after the balance sheet date
33. AB InBev companies
Source: AB InBev (2014), “AB InBev Annual Report 2014”, available at: www.ab-inbev.com/media/annual-report.html (accessed 9 October 2015).
Exhibit 1c AB InBev Shareholder Structure (2014)
Source: InBev (n.d.), “AB InBev Shareholder Structure”, available at: www.abinbev.com/investors/shareholder-structure.html (accessed 9 October 2015).
Exhibit 1d AB InBev Key Financial Ratios: 2005–2014
Financials | 2005-12 | 2006-12 | 2007-12 | 2008-12 | 2009-12 | 2010-12 | 2011-12 | 2012-12 | 2013-12 | 2014-12 | TTM |
Revenue USD mil | 13 805 | 17 564 | 21 039 | 23 507 | 36 758 | 36 297 | 39 046 | 39 758 | 43 195 | 47 063 | 45 762 |
Gross margin % | 56.4 | 58.8 | 58.9 | 56.0 | 53.2 | 55.5 | 57.4 | 58.6 | 59.3 | 60.1 | 60.1 |
Operating income USD mil | 2 603 | 4 130 | 6 261 | 5 340 | 11 569 | 10 897 | 12 329 | 12 733 | 20 443 | 15 111 | 14 642 |
Operating margin % | 18.9 | 23.5 | 29.8 | 22.7 | 31.5 | 30.0 | 31.6 | 32.0 | 47.3 | 32.1 | 32.0 |
Net income USD mil | 1 661 | 2 806 | 4 444 | 1 927 | 4 613 | 4 026 | 5 855 | 7 243 | 14 394 | 9 216 | 9 636 |
Earnings per share USD | 1.78 | 3.04 | 5.23 | 1.93 | 2.90 | 2.50 | 3.63 | 4.45 | 8.72 | 5.54 | 5.77 |
Dividends USD | — | — | — | — | — | 0.49 | 1.18 | 1.57 | 3.03 | 3.25 | 3.49 |
Payout ratio % | — | — | — | — | — | 19.8 | 38.3 | 35.4 | 26.6 | 51.4 | 60.5 |
Shares mil | 603 | 613 | 613 | 1 000 | 1 593 | 1 611 | 1 614 | 1 628 | 1 650 | 1 665 | 1 669 |
Book value per share USD | — | — | — | — | 18.90 | 21.97 | 22.88 | 25.61 | 29.54 | 32.58 | 29.54 |
Operating cash flow USD mil | 2 708 | 4 338 | 5 925 | 6 158 | 9 124 | 9 905 | 12 486 | 13 268 | 13 864 | 14 144 | 14 137 |
Cap spending USD mil | −1 399 | −1 821 | −2 305 | −2 652 | −1 713 | −2 344 | −3 376 | −3 264 | −3 869 | −4 395 | −4 401 |
Free cash flow USD mil | 1 309 | 2 517 | 3 620 | 3 506 | 7 411 | 7 561 | 9 110 | 10 004 | 9 995 | 9 749 | 9 736 |
Free cash flow per share USD | — | — | — | — | 4.65 | 4.69 | 4.46 | 6.15 | 5.44 | 6.38 | — |
Working capital mil | −1 097 | −1 472 | −1 671 | −13 064 | −3 401 | −3 123 | −7 321 | 222 | −6 937 | −8 667 | — |
Margins % of sales | 2005-12 | 2006-12 | 2007-12 | 2008-12 | 2009-12 | 2010-12 | 2011-12 | 2012-12 | 2013-12 | 2014-12 | TTM |
Revenue | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 |
COGS | 43.60 | 41.16 | 41.14 | 43.97 | 46.79 | 44.50 | 42.60 | 41.37 | 40.73 | 39.85 | 39.91 |
Gross margin | 56.40 | 58.84 | 58.86 | 56.03 | 53.21 | 55.50 | 57.40 | 58.63 | 59.27 | 60.15 | 60.09 |
SG&A | 36.47 | 35.77 | 33.35 | 32.81 | 27.13 | 26.41 | 26.89 | 28.25 | 29.07 | 30.57 | 30.43 |
R&D | — | — | — | — | — | — | — | — | — | — | — |
Other | 1.07 | −0.44 | −4.25 | 0.50 | −5.39 | −0.93 | −1.07 | −1.64 | −17.13 | −2.53 | −2.34 |
Operating margin | 18.86 | 23.51 | 29.76 | 22.72 | 31.47 | 30.02 | 31.58 | 32.03 | 47.33 | 32.11 | 32.00 |
Net int inc & other | −3.47 | −3.55 | −4.14 | −6.55 | −10.63 | −8.86 | −6.44 | −3.98 | −4.42 | −2.78 | −0.94 |
EBT margin | 15.38 | 19.97 | 25.62 | 16.17 | 20.85 | 21.16 | 25.14 | 28.05 | 42.91 | 29.32 | 31.05 |
Profitability | 2005-12 | 2006-12 | 2007-12 | 2008-12 | 2009-12 | 2010-12 | 2011-12 | 2012-12 | 2013-12 | 2014-12 | TTM |
Tax rate % | 21.81 | 19.98 | 17.55 | 17.74 | 23.31 | 24.99 | 18.91 | 15.40 | 10.88 | 18.11 | 18.00 |
Net margin % | 7.76 | 10.60 | 15.23 | 8.20 | 12.55 | 11.09 | 15.00 | 18.22 | 33.32 | 19.58 | 21.06 |
Asset turnover (average) | 0.52 | 0.56 | 0.55 | 0.30 | 0.33 | 0.32 | 0.34 | 0.34 | 0.33 | 0.33 | 0.32 |
Return on assets % | 4.03 | 5.95 | 8.38 | 2.49 | 4.09 | 3.55 | 5.16 | 6.16 | 10.89 | 6.49 | 6.69 |
Financial leverage (average) | 2.05 | 2.14 | 2.11 | 5.04 | 3.71 | 3.24 | 3.00 | 2.98 | 2.81 | 2.85 | 2.91 |
Return on equity % | 8.20 | 12.51 | 17.78 | 9.11 | 17.49 | 12.28 | 16.10 | 18.42 | 31.46 | 18.37 | 19.29 |
Return on invested capital % | 6.22 | 11.29 | 15.57 | 5.30 | 9.74 | 8.34 | 10.49 | 11.17 | 17.69 | 10.52 | 10.51 |
Interest coverage | — | 5.16 | 6.19 | 3.01 | 2.56 | 2.80 | 3.75 | 5.37 | 7.08 | 8.01 | 8.57 |
Source: Morningstar (n.d.), “Anheuser-Busch Inbev SA ADR BUD”, available at: http://financials.morningstar.com/ratios/r.html?t=BUD (accessed 18 November 2015).
Exhibit 1e AB InBev Consolidated Statement of Financial Position for the Year Ended 31 December 2014
Consolidated statement of financial position
As at | Notes | 2014 | 2013 |
Million US dollar | |||
Assets | |||
Non-current assets | |||
Property, plant and equipment | 13 | 20 263 | 20 889 |
Goodwill | 14 | 70 758 | 69 927 |
Intangible assets | 15 | 29 923 | 29 338 |
Investments in associates | 110 | 187 | |
Investment securities | 16 | 118 | 193 |
Deferred tax assets | 17 | 1 058 | 1 180 |
Employee benefits | 23 | 10 | 10 |
Trade and other receivables | 19 | 1 769 | 1252 |
124 009 | 122 976 | ||
Current assets | |||
Investment securities | 16 | 301 | 123 |
Inventories | 18 | 2 974 | 2 950 |
Income tax receivable | 359 | 332 | |
Trade and other receivables | 19 | 6 449 | 5 362 |
Cash and cash equivalents | 20 | 8 357 | 9 839 |
Assets held for sale | 101 | 84 | |
18 541 | 18 690 | ||
Total assets | 142 550 | 141 666 | |
Equity and liabilities | |||
Equity | |||
Issued capital | 21 | 1 736 | 1 735 |
Share premium | 17 620 | 17 608 | |
Reserves | (4 558) | 18 | |
Retained earnings | 35 174 | 31 004 | |
Equity attributable to equity holders of AB Inbev | 49 972 | 50 365 | |
Non-controlling interest | 4 285 | 4 943 | |
54 257 | 55 308 | ||
Non-current liabilities | |||
Interest-bearing loan and borrowings | 22 | 43 630 | 41 274 |
Employee benefits | 23 | 3 050 | 2 862 |
Deferred tax liabilities | 17 | 12 701 | 12 841 |
Trade and other payables | 26 | 1 070 | 3 222 |
Provisions | 25 | 634 | 532 |
61 085 | 60 731 | ||
Current liabilities | |||
Bank overdrafts | 20 | 41 | 6 |
Interest-bearing loans and borrowings | 22 | 7 451 | 7 846 |
Income tax payable | 629 | 1105 | |
Trade and other payables | 26 | 18 922 | 16 474 |
Provisions | 25 | 165 | 196 |
27 208 | 25 627 | ||
Total equity and liabilities | 142 550 | 141 666 |
Source: AB InBev (2014), “AB InBev Annual Report 2014”, available at: www.ab-inbev.com/media/annual-report.html (accessed 9 October 2015).
Exhibit 2 AB InBev’s Global Presence (2015)
Source: AB InBev (2014), “AB InBev Annual Report 2014”, available at: www.ab-inbev.com/media/annual-report.html (accessed 9 October 2015).
Exhibit 3 AmBev Financial Highlights 2000 and 2001, Following the Merger with Brahma and Antarctica
Ambev Financial Highlights
2001 (US$)(1) | 2001 | 2000 | % change | |
SALES VOLUME (millions of hectolitres) | ||||
Beer – Brazil | - | 59.0 | 59.3 | −0.5 |
Beer – International | - | 3.3 | 2.9 | 13.8 |
Soft drinks | - | 18.5 | 17.2 | 7.4 |
Total | - | 80.8 | 79.3 | 1.9 |
INCOME STATEMENT DATA (R$ millions) | ||||
Net sales | 2 766.1 | 6 525.6 | 5 250.3 | 24.3 |
Gross profit | 1 344.1 | 3 159.3 | 2 406.6 | 31.3 |
EBITDA | 846.4 | 1 987.7 | 1 505.0 | 32.2 |
EBIT | 585.3 | 1 375.8 | 915.8 | 59.2 |
Net income | 333.8 | 784.6 | 470.2 | 66.9 |
EVA | 151.0 | 355.0 | 283.6 | 25.2 |
Return of equity | - | 23% | 15% | - |
BALANCE SHEET DATA (R$ millions) | ||||
Total assets | 4 691.9 | 11 028.8 | 8 639.6 | 28.7 |
Total debt | 1 943.9 | 4 569.3 | 2 192.9 | 108.4 |
Cash and cash equivalents | 1 080.2 | 2 539.0 | 1 028.3 | 146,9 |
Net debt | 863.7 | 2 030.3 | 1 164.6 | 74.3 |
Capital expenditure | - | 446.8 | 589.2 | −24.2 |
Shareholder’s equity | 1 430.9 | 3 363.4 | 3 076.9 | 15.2 |
PER SHARE DATA (R$/1 000 shares) | ||||
Book value | 37.24 | 87.54 | 79.89 | 10.91 |
EP5 | 8.69 | 20.42 | 12.19 | 67.20 |
Dividends (ON)(2) | 3.50 | 8.22 | 4.47 | 86.81 |
Dividends (PN)(2) | 3.85 | 9.04 | 4.84 | 86.81 |
Number of shares (millions)(3) | - | 39 741.4 | 38 646.1 | - |
Number of ADRs (millions)(3) | - | 91.0 | 94.8 | - |
Market capitalization (R$ millions) | - | 18 744.0 | 18 283.8 | 2.5 |
Market capitalization (US$ millions) | - | 8 077.9 | 9 350.4 | −13.6 |
(1) U.S. dollar amounts have been translated at R82.35 | ||||
(2) Includes all payments to shareholders, including dividends, interest on own capital and capital decrease | ||||
(3) Includes treasury shares |
Source: AmBev (2001), “AmBev Annual Report 2001”, available at: http://ri.ambev.com.br/arquivos/Ambev_AnnualRepl_2001_eng.pdf (accessed 4 November 2015).
Exhibit 4 Interbrew Financials for the Year Ended 31 December 2000 (Just Prior to Acquiring AmBev)
Year ended 31 December | |||
1998 | 1999 | 2000 | |
(€ in millions) | |||
Turnover | 3 478.5 | 4 346.4 | 7 999.6 |
Excise taxes | (763.5) | (1 102.6) | (2 343.0) |
Net turnover | 2 715.0 | 3 243.8 | 5 656.6 |
Other (1) | 4.0 | 9.3 | (10.3) |
Other operating revenue | 116.8 | 144.4 | 177.5 |
Net operating revenue | 2 835.8 | 3 397.5 | 5 823.8 |
Net operating expenses Raw material, consumables and goods for sale (excluding excise taxes) Services and other goods Payroll and benefits Depreciation and amortization Other (2) | 2 425.8 799.0 761.6 581.6 237.0 73.6 | 2 978.7 1 014.7 910.0 635.9 303.2 114.9 | 5 179.4 1 937.7 1 541.4 1 010.0 482.2 208.1 |
Operating profit | 383.0 | 418.8 | 644.4 |
Other data: | |||
EBITDA | 650.9 | 755.7 | 1 1985.5 |
ROIC (3) | 12.6% | 10.4% | 11.7% |
(1) Consists of increase (decrease) in inventory of finished goods, work and contracts in progress and operating expenses capitalised to capital assets.
(2) Consists of inventory provisions and bad debt expenses, decrease in provisions for liabilities and expenses, other operating expenses and amortisation of goodwill.
(3) Operating (EBIT) on depreciated net assets, including goodwill.
Source: Interbrew (2000), “Interbrew Annual Report 2000”, available at: www.ab-inbev.com/content/dam/universaltemplate/abinbev/pdf/investors/annual-and-hy-reports/2000/Financial_Report2000EN.pdf (accessed 9 November 2015).
Exhibit 5 InBev Financials 2004 (Including Interbrew 2000–2003)
InBev Key Figures: Five-year Review
Million euro unless stated otherwise | 2004 | 2003 | 2002 | 2001 | 2000 |
Net turnover | 8 568 | 7 044 | 6 992 | 7 303 | 5 657 |
Normalized EBITFA | 2 112 | 1 498 | 1 394 | 1 533 | 1 156 |
EBITDA | 2 325 | 1 498 | 1 394 | 1 533 | 1 156 |
Normalized profit from operations | 1 251 | 839 | 836 | 884 | 533 |
Profit from operations | 1 310 | 839 | 728 | 884 | 533 |
Normalized net profit | 621 | 505 | 467 | 537 | 271 |
Net profit from ordinary activities | 719 | 505 | 467 | 537 | 271 |
Net profit | 719 | 505 | 467 | 698 | (964) |
Normalized earnings per share before goodwill¹ (euro) | 1.69 | 1.45 | 1.51 | 1.44 | 1.04 |
Earnings per share before goodwill¹ (euro) | 1.95 | 1.45 | 1.51 | 1.44 | 1.04 |
Dividend per share (euro) | 0.39 | 0.36 | 0.33 | 0.29 | 0.21 |
Pay-out ratio (%) | 31.2 | 30.8 | 26.2 | 25.8 | 33.1 |
Weighted average number of ordinary shares (million shares) | 480 | 432 | 431 | 429 | 335 |
Fully diluted weighted average number of ordinary shares (million shares) | 483 | 434 | 435 | 434 | 343 |
Share price high (euro) | 29.1 | 23.2 | 34.5 | 37.5 | 38.1 |
Share price low (euro) | 20.3 | 15.0 | 19.1 | 25.5 | 34.0 |
Year-end share price (euro) | 28.8 | 21.2 | 22.5 | 30.75 | 37.12 |
Market capitalization | 16 442 | 9 141 | 9 712 | 13 257 | 15 865 |
Normalized return on invested capital (%) | 12.9 | 10.6 | 11.2 | 10.6 | 8.9 |
Return on invested capital (%) | 14.5 | 10.6 | 10.2 | 10.6 | 8.9 |
Net CAPEX | 725 | 595 | 510 | 488 | 425 |
Cash flow from operations | 1 384 | 1 151 | 1 045 | 1 053 | 871 |
Cash interest coverage | 7.5 | 7.6 | 6.8 | 5.4 | 2.8 |
Net financial debt | 3 271 | 2 434 | 2 583 | 2 662 | 2 906 |
Debt/equity ratio | 0.38 | 0.52 | 0.55 | 0.55 | 0.71 |
1. Adjusted for stock splits
Source: InBev (2004), “InBev Annual report 2004”, available at: www.ab-inbev.com/content/dam/universaltemplate/abinbev/pdf/investors/annual-and-hy-reports/2004/Light_Report2004_EN.pdf (accessed 5 November 2015).
Exhibit 6 InBev Historical Key Financials 2008–2014
Source: AB InBev (n.d.), “AB InBev Historical Key Financials 2008 to 2014”, available at: www.ab-inbev.com/content/…/Historical_financials_final_FY14.xlsx (accessed 28 September 2015).
Exhibit 7a SABMiller Share Price Chart
One-month Share Price Chart
One-year Share Price Chart
Source: ADVFN (2015), “SABMiller Share Chart”, available at: http://uk.advfn.com/stock-market/london/sabmiller-SAB/share-chart (accessed 5 November 2015).
Exhibit 7b AB InBev Share Price
One-month Share Price Chart
One-year Share Price Chart
Source: Author unknown (2015), “AB InBev Equities”, available at: http://markets.ft.com/research/Markets/Tearsheets/Summary?s=ABI:BRU (accessed 9 November 2015).
Exhibit 7c Share Price History: SABMiller and AB InBev
SABMiller share price history GBP London Stock Exchange | AB InBev share price history Euros Euronext Brussels | |||
30/11/2005 | 1 029.00 | 2/12/2005 | 37.18 | |
30/11/2006 | 1 064.00 | 8/12/2006 | 48.15 | |
30/11/2007 | 1 383.00 | 7/12/2007 | 58.62 | |
1/12/2008 | 1 014.00 | 5/12/2008 | 12.65 | |
1/12/2009 | 1 794.00 | 11/12/2009 | 35.75 | |
1/12/2010 | 2 083.50 | 3/12/2010 | 43.22 | |
2/12/2011 | 2 237.00 | 2/12/2011 | 44.51 | |
4/12/2012 | 2 820.00 | 7/12/2012 | 67.59 | |
4/12/2013 | 3 078.50 | 13/12/2013 | 72.56 | |
4/12/2014 | 3 372.50 | 5/12/2014 | 94.25 | |
9/11/2015 | 3 965.00 | 10/11/2015 | 110.90 |
Source: Bloomberg (2015), “AB InBev Share Price Chart”, 10 November, available at: www.bloomberg.com/quote/ABI:BB (accessed 10 November 2015); and SABMiller (2015), “SABMiller Share Price Chart”, available at: www.sabmiller.com/investors/share-price/share-price-monitor (accessed 10 November 2015).
Exhibit 8a SABMiller: Consolidated Income Statement for the Year Ended 31 March 2015
Consolidated income statement
for the year ended 31 March | |||
Notes | 2015 US$m | 2014 US$m | |
Revenue | 2 | 22 130 | 22 311 |
Net operating expenses | 3 | (17 746) | (18 069) |
Operating profit | 2 | 4 384 | 4 242 |
Operating profit before exceptional terms | 2 | 4 459 | 4 439 |
Exceptional terms | 4 | (76) | (197) |
Net finance costs | 5 | (637) | (645) |
Finance costs | 5a | (1 047) | (1 055) |
Finance income | 5b | 410 | 410 |
Share of post-tax results of associates and joint ventures | 2 | 1 083 | 1 226 |
Profit before taxation | 4 830 | 4 823 | |
Taxation | 7 | (1 273) | (1 173) |
Profit for the year | 27a | 3 557 | 3 650 |
Profit attributable to non-controlling interests | 258 | 269 | |
Profit attributable to owners of the parent | 26a | 3 299 | 3 381 |
3 557 | 3 650 | ||
Basic earnings per share (US cents) | 8 | 205.7 | 211.8 |
Diluted earnings per share (US cents) | 8 | 203.5 | 209.1 |
The notes on page 112 to 175 in the annual report are an integral part of these consolidated financial statements and are available at the source given below.
Source: SABMiller (2015), “SABMiller Annual Report 2015”, available at: www.sabmiller.com/investors/reports (accessed 28 September 2015).
Exhibit 8b SABMiller: Consolidated Balance Sheet for the Year Ended 31 March 2015
Consolidated balance sheet
at 31 March | |||
Notes | 2015 US$m | 2014 US$m | |
Assets | |||
Non-current assets | |||
Goodwill | 10 | 14 746 | 18 497 |
Intangible assets | 11 | 6 878 | 8 532 |
Property, plant and equipment | 12 | 7 961 | 9 085 |
Investments in joint ventures | 13 | 5 428 | 5 581 |
Investments in associates | 14 | 4 459 | 5 787 |
Available for sale investments | 21 | 22 | |
Derivative financial instruments | 22 | 770 | 628 |
Trade and other receivables | 16 | 126 | 139 |
Deferred tax assets | 19 | 163 | 115 |
40 552 | 48 366 | ||
Current assets | |||
Inventories | 15 | 1 030 | 1 168 |
Trade and other receivables | 16 | 1 711 | 1 821 |
Current tax assets | 190 | 174 | |
Derivative financial instruments | 22 | 463 | 141 |
Cash and cash equivalents | 17 | 965 | 2 081 |
4 359 | 5 385 | ||
Total assets | 44 911 | 53 751 | |
Liabilities | |||
Current liabilities | |||
Derivative financial instruments | 22 | (101) | (78) |
Borrowings | 20 | (1 961) | (4 519) |
Trade and other payables | 18 | (3 728) | (3 847) |
Current tax liabilities | (1 184) | (1 106) | |
Provisions | 24 | (358) | (450) |
(7 332) | (10 000) | ||
Non-current liabilities | |||
Derivative financial instruments | 22 | (10) | (37) |
Borrowings | 20 | (10 583) | (12 528) |
Trade and other payables | 18 | (18) | (25) |
Deferred tax liabilities | 19 | (2 275) | (3 246) |
Provisions | 24 | (338) | (433) |
(13 224) | (16 269) | ||
Total liabilities | (20 556) | (26 269) | |
Net assets | 24 355 | 27 482 | |
Equity | |||
Share capital | 25 | 168 | 167 |
Share premium | 6 752 | 6 648 | |
Merger relief reserve | 3 963 | 4 321 | |
Other reserves | 26b | (5 457) | (702) |
Retained earnings | 26a | 17 746 | 15 885 |
Total shareholders’ equity | 23 172 | 26 319 | |
Non-controlling interests | 1 183 | 1 163 | |
Total equity | 24 355 | 27 482 |
The notes on page 112 to 175 in the annual report are an integral part of these consolidated financial statements and are available at the source given at the end of the financial statements.
Source: SABMiller (2015), “SABMiller Annual Report 2015”, available at: www.sabmiller.com/investors/reports (accessed 28 September 2015).
Exhibit 8c SABMiller: Consolidated Cash Flow Statement for the Year Ended 31 March 2015
Consolidated cash flow statement
for the year ended 31 March | |||
Notes | 2015 US$m | 2014 US$m | |
Cash flows from operating activities | |||
Cash generated from operations | 27a | 5 812 | 5 770 |
Interest received | 352 | 365 | |
Interest paid | (1 003) | (1 108) | |
Tax paid | (1 439) | (1 596) | |
Net cash generated from operating activities | 27b | 3 722 | 3 431 |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (1 394) | (1 401) | |
Proceeds from sale of property, plant and equipment | 68 | 70 | |
Purchase of intangible assets | (178) | (84) | |
Purchase of available for sale investments | - | (1) | |
Proceeds from disposal of available for sale investments | 1 | - | |
Proceeds from disposal of associates | 979 | - | |
Proceeds from disposal of businesses (net of cash disposed) | - | 88 | |
Acquisition of businesses (net of cash acquired) | (5) | (39) | |
Investments in joint ventures | 13 | (216) | (188) |
Investments in associates | (3) | (199) | |
Dividends received from joint ventures | 13 | 976 | 903 |
Dividends received from associates | 430 | 224 | |
Dividends received from other investments | 1 | 1 | |
Net cash generated from/(used in) investing activities | 659 | (626) | |
Cash flows from financing activities | |||
Proceeds from the issue of shares | 202 | 88 | |
Proceeds from the issue of shares in subsidiaries to non-controlling interests | 29 | 20 | |
Purchase of own shares for share trusts | 26a | (146) | (79) |
Purchase of shares from non-controlling interest | (3) | (5) | |
Proceeds from borrowings | 594 | 2 585 | |
Repayment of borrowings | (4 413) | (3829) | |
Capital element of finance lease payments | (10) | (9) | |
Net cash receipts on derivative financial instruments | 243 | 228 | |
Dividends paid to shareholders of the parent | 9 | (1 705) | (1 604) |
Dividends paid to non-controlling interests | (173) | (194) | |
Net cash used in financing activities | (5 382) | (2 835) | |
Net cash outflow from operating, investing and financing activities | (1 001) | (30) | |
Effects of exchange rate changes | (117) | (61) | |
Cash decrease in cash and cash equivalents | (1 118) | (91) | |
Cash and cash equivalent at 1 April | 1 868 | 1 959 | |
Cash and cash equivalent at 31 March | 27c | 750 | 1 868 |
The notes on pages 112 to 175 are an integral part of these consolidated financial statements and are available at the source given below.
Source: SABMiller (2015), “SABMiller Annual Report 2015”, available at: www.sabmiller.com/investors/reports (accessed 28 September 2015).
Exhibit 8d SABMiller Shareholder Structure (Percentage), September 2015
Source: Pooler, M. and Dombey, D. (2015), “Profiles: AB InBev-SABMiller’s key shareholders”, Financial Times, 16 September, available at: www.ft.com/intl/cms/s/0/eed72990-5c6e-11e5-a28b-50226830d644.html#axzz3rY0uq33A (accessed 15 October 2015).
Exhibit 8e SABMiller Key Financial Ratios: 2005–2014
Financials | 2006-03 | 2007-03 | 2008-03 | 2009-03 | 2010-03 | 2011-03 | 2012-03 | 2013-03 | 2014-03 | 2015-03 | TTM | |
Revenue USD mil | 15 307 | 18 620 | 21 410 | 18 703 | 18 020 | 19 408 | 21 760 | 23 213 | 16 704 | 22 130 | 20 754 | |
Gross margin % | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 71.8 | 79.7 | — | |
Operating income USD mil | 2 575 | 3 027 | 3 448 | 3 148 | 2 619 | 3 127 | 5 013 | 4 203 | 4 242 | 4 384 | 3 845 | |
Operating margin % | 16.8 | 16.3 | 16.1 | 16.8 | 14.5 | 16.1 | 23.0 | 18.1 | 25.4 | 19.8 | 18.5 | |
Net income USD mil | 1 440 | 1 649 | 2 023 | 1 881 | 1 910 | 2 408 | 4 221 | 3 274 | 3 381 | 3 299 | 2 965 | |
Earnings per share USD | 1.04 | 1.10 | 1.34 | 1.25 | 1.22 | 1.52 | 2.64 | 2.04 | 2.09 | 2.04 | 1.83 | |
Dividends USD | 0.35 | 0.42 | 0.47 | 0.55 | 0.54 | 0.69 | 0.79 | 0.91 | 0.99 | 1.00 | 1.10 | |
Pay-out ratio % | 33.1 | 39.2 | 35.1 | 44.2 | 44.2 | 45.7 | 47.2 | 31.8 | 46.6 | 44.3 | 60.4 | |
Shares mil | 1 381 | 1 505 | 1 508 | 1 510 | 1 564 | 1 586 | 1 600 | 1 609 | 1 617 | 1 621 | 1 622 | |
Book value per share USD | 8.71 | 8.78 | 11.65 | 10.20 | 12.58 | 13.87 | 13.57 | 15.80 | 15.76 | 16.11 | 13.37 | |
Operating cash flow USD mil | 2 032 | 2 498 | 2 577 | 1 908 | 3 050 | 2 775 | 3 382 | 4 101 | 3 431 | 3 722 | 3 576 | |
Cap spending USD mil | −1 032 | −1 461 | −2 037 | −2 147 | −1 528 | −1 315 | −1 639 | −1 479 | −1 485 | −1 572 | −1 458 | |
Free cash flow USD mil | 1 000 | 1 037 | 540 | −239 | 1 522 | 1 460 | 1 743 | 2 622 | 1 946 | 2 150 | 2 118 | |
Free cash flow per share USD | 0.72 | 0.95 | 0.36 | −0.16 | 0.97 | 0.92 | 1.07 | 1.25 | 1.19 | 1.41 | — | |
Working capital USD mil | −2 036 | −2 123 | −2 122 | −1 873 | −2 083 | −1 774 | −2 048 | −2 820 | −4 615 | −2 973 | — |
Margins % of sales | 2006-03 | 2007-03 | 2008-03 | 2009-03 | 2010-03 | 2011-03 | 2012-03 | 2013-03 | 2014-03 | 2015-03 | TTM |
Revenue | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 |
COGS | — | — | — | — | — | — | — | — | 28.20 | 20.31 | — |
Gross margin | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 71.80 | 79.69 | — |
SG&A | 11.74 | 12.15 | 12.81 | 12.20 | 11.40 | 11.59 | 11.77 | — | 14.77 | 10.97 | — |
R&D | 0.05 | 0.03 | 0.04 | 0.04 | 0.02 | 0.04 | 0.03 | — | 0.02 | 0.02 | — |
Other | 72.45 | 71.48 | 72.33 | 70.87 | 75.92 | 74.28 | 67.46 | 81.89 | 33.88 | 50.43 | 61.47 |
Operating margin | 16.82 | 16.26 | 16.10 | 16.83 | 14.53 | 16.11 | 23.04 | 18.11 | 25.40 | 19.81 | 18.53 |
Net int inc & other | −0.80 | −1.20 | −0.86 | −1.02 | 1.72 | 2.57 | 2.71 | 2.19 | 3.48 | 2.02 | 2.34 |
EBT margin | 16.03 | 15.06 | 15.25 | 15.82 | 16.25 | 18.68 | 25.75 | 20.30 | 28.87 | 21.83 | 20.86 |
Profitability | 2006-03 | 2007-03 | 2008-03 | 2009-03 | 2010-03 | 2011-03 | 2012-03 | 2013-03 | 2014-03 | 2015-03 | TTM |
Tax rate % | 31.76 | 32.85 | 29.90 | 27.08 | 28.95 | 29.48 | 20.10 | 25.49 | 24.32 | 26.36 | 25.70 |
Net margin % | 9.41 | 8.86 | 9.45 | 10.06 | 10.60 | 12.41 | 19.40 | 14.10 | 20.24 | 14.91 | 14.29 |
Asset turnover (average) | 0.72 | 0.67 | 0.66 | 0.55 | 0.52 | 0.51 | 0.46 | 0.41 | 0.30 | 0.45 | 0.44 |
Return on assets % | 6.73 | 5.91 | 6.24 | 5.56 | 5.53 | 6.29 | 8.91 | 5.85 | 6.14 | 6.69 | 6.24 |
Financial leverage (average) | 2.08 | 1.99 | 2.06 | 2.06 | 1.88 | 1.78 | 2.22 | 2.13 | 2.04 | 1.94 | 1.95 |
Return on equity % | 13.64 | 12.02 | 12.66 | 11.43 | 10.83 | 11.49 | 17.93 | 12.73 | 12.83 | 13.33 | 12.43 |
Return on invested capital % | 10.14 | 9.20 | 9.69 | 9.04 | 8.32 | 9.58 | 12.86 | 8.55 | 8.72 | 8.99 | 8.27 |
Interest coverage | 8.01 | 5.54 | 6.69 | 4.21 | 4.81 | 6.22 | 8.09 | 5.22 | 5.91 | 8.45 | 9.87 |
Source: Morningstar (n.d.), “SABMiller PLC ADR SBMRY”, available at: http://financials.morningstar.com/ratios/r.html?t=SBMRY (accessed 18 November 2015).
Exhibit 9 SAB Financials for 1999 (Including 1995, 1996, 1997 and 1998)
SAB Financial Highlights 1995–1999
Cash flow (in millions of rand) | |||||
95/96 | 96/97 | 97/98 | 98/99 | 99/00E | |
EBIT | 3 511 | 3 742 | 3 929 | 4 012 | 4 177 |
Depreciation | 1 086 | 1 169 | 1 379 | 1 439 | 1 700 |
Increase, decrease (−) in provisions | 50 | 54 | 1 | −322 | 64 |
Operating cash flow | 4 290 | 4 305 | 4 881 | 4 860 | 7 576 |
Interest paid (−) and received | −603 | −425 | −343 | −464 | −531 |
Tax paid | −889 | −942 | (1 002) | (1 042) | (1 043) |
Dividends paid | −29 | −263 | −375 | 0 | −272 |
Capex | 1 956) | (1 824) | (2 562) | (3 451) | (2 936) |
Net other investments | −245 | −625 | (1 614) | (1 309) | −927 |
Other cash flow-related items | −44 | −116 | −389 | 1 184 | (2 489) |
Change in net debt (−) cash (+) | 551 | 1 918 | (1 380) | 1 412 | −621 |
Balance sheet (millions of rand) | |||||
Net working capital | 1 282 | 1 317 | −229 | (3 154) | (1 591) |
Net financial debt (−) cash (+) | (3 218) | (1 301) | (2 681) | (1 269) | (1 890) |
Gross tangible fixed assets | 12 876 | 14 676 | 16 486 | 18 358 | 22 221 |
Net tangible fixed assets | 8 480 | 9 284 | 10 329 | 11 711 | 13 407 |
Goodwill | 1 094 | 1 454 | 3 040 | 2 971 | 2 080 |
Other long-term assets | 227 | 401 | 413 | 2 025 | 0 |
Other long-term provisions | 405 | 459 | 460 | 138 | 2 550 |
Other LT liabilities | 0 | 0 | 0 | 0 | 0 |
Stated shareholder’s equity | 6 364 | 8 654 | 9 613 | 13 389 | 10 936 |
Minorities | 2 510 | 3 010 | 2 159 | 1 001 | 1 641 |
Total net worth | 8 874 | 11 664 | 11 772 | 14 390 | 12 577 |
Shareholders equity after goodwill write-off | 5 270 | 7 200 | 6 573 | 10 418 | 8 856 |
Valuation comparisons
P/E | 1995 | 1996 | 1997 | 1998 | 1999E |
An. Busch | 25.2 | ||||
Ambev/Brahma | 31.3 | ||||
Asia Pacific (Singapore) | 27.4 | ||||
Bass (UK) | 11.1 | ||||
Carlsberg | 16.7 | 19.3 | 19.5 | 16.6 | 20.4 |
Femsa | 19.4 | ||||
Fosters | 20.2 | ||||
Grupo Modelo | 30 | ||||
Hartwall (Finland) | 17.5 | ||||
Heineken | 16.6 | 25.6 | 21.8 | 26.1 | 27.8 |
Lion Natham (Australia) | 14.5 | ||||
Nambrew (Namibia) | 12.1 | ||||
Quilmes (Argentina) | 16.8 | ||||
San Miguel (Philippines) | 20.5 | ||||
Scottish & Newcastle | 9.4 | ||||
SAB | 24.3 | 20.7 | 20.5 | 18 | 17.8 |
SUN Interbrew (Russia) | 26.8 | ||||
Whitbread | 10.4 | ||||
Zywiec (Poland) | 77.4 | ||||
SAB share performance (cents per share) | 1998 | 1999 | 2000 | ||
Adjusted earnings (US cents) | 56.6 | 54 | 56.6 | ||
Adjusted earnings (SA cents) | 271.4 | 315.9 | 348.4 | ||
Net asset value (US cents) | 151 | 20.1 | 279.3 |
Source: Wits Business School (2000), South African Breweries: Achieving Growth in the Global Beer Market, ase study [WBS-2000-4], Wits Business School Case Centre, Johannesburg.
Exhibit 10 SABMiller Financials 2002 (Including 1999, 2000 and 2001)
Extracts from Consolidated Profit and Loss Accounts for the Years Ended 31 March in US$ (Excluding Notes)
Source: SABMiller (2002), “SABMiller Annual Report 2002”, available at: www.portalchemy.com/Report.asp?ShareCode=SAB.L&arYear=2002 (accessed 13 November 2015).
Exhibit 11 SABMiller Key Financials 2005 for the Year Ended 31 March
2005 US$m | 2004 US$m | % change | |
Turnover | 14 543 | 12 645 | 15 |
EBITA* | 2 409 | 1 893 | 27 |
Profit before tax | 2 194 | 1 391 | 58 |
Adjusted profit before tax* | 2 242 | 1 705 | 31 |
Adjusted earnings* | 1 251 | 925 | 35 |
Adjusted earnings per share* US cents UK pence (up 22%) SA cents (up 17%) | 103.2 55.9 641.8 | 77.6 45.8 547.6 | 33 |
Adjusted diluted earnings per share* (US cents) | 99.8 | 75.2 | 33 |
Basic earnings per share (US cents) | 94.1 | 54.1 | 74 |
Dividends per share (US cents) | 38.0 | 30.0 | 27 |
Net cash inflow from operating activities | 2 792 | 2 292 | 22 |
*EBITA and adjusted profit before tax comprise profit before interest and tax (US$2 361 million) and profit before tax (US$2194 million) respectively before goodwill amortisation (US$366 million), and before exceptional items (net credit US$318 million – see note p. 77 in annual report available at the source below). The calculations of adjusted earnings and adjusted earnings per share measure are given in note 11, p. 81 in the annual report. All references to EBITA refer to pre-exceptional EBITA.
Source: SABMiller (2005), SABMiller Annual Report 2005, available at: www.sabmiller.com/docs/default-source/investor-documents/reports/2005/financial-reports/annual-report-2005.pdf?sfvrsn=2 (accessed 13 November 2015).
Exhibit 12 SABMiller Consolidated Income Statement for 2010 the Year Ended 31 March
Notes | 2010 US$m | 2009 US$m | |
Revenue | 2 | 18 020 | 18 703 |
Net operating expenses | 3 | (15 401) | (15 555) |
Operating profit | 2 | 2 619 | 3 148 |
Operating profit before exceptional items | 2 | 3 091 | 3 146 |
Exceptional items | 4 | −472 | 2 |
Net finance costs | 5 | −563 | −706 |
Interest payable and similar changes | 5a | −879 | 1 301) |
Interest receivable and similar income | 5b | 316 | 595 |
Share of post-tax results of associates and joint ventures | 2 | 873 | 516 |
Profit before taxation | 7 | 2 929 | 2 958 |
Taxation | −848 | −801 | |
Profit for the financial year | 27a | 2 081 | 2 157 |
Profit attributable to minority interests | 171 | 276 | |
Profit attributable to equity shareholders | 1 910 | 1 881 | |
2 081 | 2 157 | ||
Basic earnings per share (US cents) | 8 | 122.6 | 125.2 |
Diluted earnings per share (US cents) | 8 | 122.1 | 124.6 |
All operations are continuing.
The notes on pages 75 to 142 are an integral part of these consolidated financial statements (available at the source below)
Source: SABMiller (2010), SABMiller Annual Report 2010, available at: www.portalchemy.com/Report.asp?arYear=2001&sharecode=SAB.L (accessed 13 November 2015).
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