SABMiller Management Report for MBA Boardroom Activity

SABMiller plc Management Report2 SABMiller plc Management Report2
Contents
What’s Inside
Overview
Financial and opera onal highlights of year
thus far, an overview of the group and a
descrip on of our business ac vi es
3 Performance Highlights
4 What we do
6 Group at a glance
8 Chief Execu ve’s report
11 Four strategic priori es
12 CFO’s report
14 Sustainability report
16 Opera ons review
16 La n America
18 Asia Pacific
20 Africa
22 North America
24 Europe
26 External Analysis
26 PESTEL
26 Five Forces
27 Internal Analysis
27 SWOT
27 VRINE Analysis
28 Value Chain
28 Mergers & acquisi ons meline
29 Compe ve landscape
30 New Product Development Strategy
32 Premiumisa on Strategy
34 Diversifica on Strategy
35 Three-year financial data
36 References
36 Group 6/F informa on
Business Review
Statements from our CEO and execu ve
directors, an overview of our markets,
strategy, our business model, the way
we manage risk, how our opera ons
performed and our approach to sustainable
development and people
Situa on Analysis
An analysis of the company’s current
situa on and business environment using
standard internal and external analysis
frameworks
Business Strategies
Proposed business strategies suppor ng the
current corporate strategies
Financial Forecasts
Three-year growth projec ons
Shareholder Informa on
References and group details

SABMiller plc Management Report 3SABMiller plc Management Report 3
OverviewBusinessReviewSituaonAnalysisBusinessStrategiesFinancialForecastsShareholderInformaon
Performance Highlights*
Driving strong results in developing markets
Group revenue Lager volumes EBITA
+12% +5% +12%
2013: USD 35,155m
2012: USD 31,388m
2013: 240m hectolitres
2012: 229m hectolitres
2013: USD 6,479m
2012: USD 5,634m
*Expected ﬁgures by end of
FY 2013.
Net debt Adjusted EPS Free cash ﬂow
+2% +16% -37%
2013: USD 18,308m
2012: USD 17,862m
2013: 249.1 US cents
2012: 214.8 US cents
2013: USD 1,918m
2012: USD 3,048m

SABMiller plc Management Report4
Our vision
• To be the most admired company in the global beer industry
Our mission
• To own and nurture local and interna onal brands that are the first
choice of the consumer
Our values
• Our people are our enduring advantage
• Accountability is clear and personal
• We work and win in teams
• We understand and respect our customers and consumers
• Our reputa on is indivisible
Our strategic priori es
• Crea ng a balanced and a rac ve global spread of businesses
• Developing strong, relevant brand por olios that win in the local
market
• Constantly raising the profitability of local businesses, sustainably
• Leveraging our skills and global scale
Local brands
Typically brewed and consumed in the same community, beer
is an inherently local business. At SABMiller we respect and nurture
the history and heritage of local brands and give our businesses
considerable freedom to meet local needs. We’re also innovators
– be it new, affordable brands made from locally grown ingredients,
cra beers for the aficionado or the concept of the ‘local premium’
for consumers aspiring to affordable luxury.
Global brands
Our four global brands have their own dis nct provenance and
characteris cs. They comprise the stylishly Italian Peroni Nastro
Azzurro; the world’s original golden beer, the Czech-brewed Pilsner
Urquell; the Northern European Grolsch; and the embodiment
of American urban cool, Miller Genuine Dra .
Five minute read
Our business in brief
SABMiller is one of the world’s leading brewers with
more than 200 beer brands and some 70,000 employees
in over 75 countries. We also have growing businesses in
so drinks and we are one of the world’s largest bo lers
of Coca-Cola products.
Our strategic direc on
Our brands and businesses
SABMiller has become a global leader by
doing business locally, pursuing opera onal
excellence and offering high-quality products
backed by innova on and a commitment
to sustainability.
Our success is built on a clear strategic direc on, a shared vision
and mission and a common set of values.
At the heart of our business is a passion
for producing quality beers. In crea ng
and building our brands, we draw on deep
insights into local culture and consumers
and seek to win with products that tap into
local preferences.
Our focus on local businesses with tailored brand por olios makes
us, we believe, the most local of the global brewers.

SABMiller plc Management Report 5
Opera onal highlights
• Reported EBITA grew 12%, with organic, constant currency EBITA
growth of 8%:
–– La n America EBITA grew by 15% as a result of volume
growth, pricing and mix
–– Europe EBITA increased by 5% due to lower volumes, adverse
mix and increased raw material costs
–– Strong pricing and favourable mix increased North America
EBITA by 16% despite lower volumes
–– Volume growth, strong pricing and mix drove Africa’s EBITA
growth of 42%
–– Asia Pacific EBITA grew by 8% with good growth in
both China and India
• EBITA margin increased by 40 basis points (bps) to 18.4%
• Foster’s integra on proceeding well
• Acquisi on of Kingway Brewery Holdings in China finalised
The strategy in ac on
Building value depends on being in the right markets, both high-
growth, emerging economies and profitable, mature markets. It
means having the right brand por olio – one that spans a range
of consumer segments, drinking occasions and price points. It also
calls for value-crea ng partnerships and an opera ng process that
supports local accountability and facilitates the sharing of best
prac ce.
Inclusive growth
We believe we create best value for our shareholders by also bringing
value to the communi es in which we operate. Because our business
is not separate from society but embedded within it, the success
of SABMiller is inextricably linked to the wellbeing of the wider
community. So along with crea ng jobs and paying taxes, we seek
to s mulate local enterprise, to support economic development, to
collaborate with governments and others on shared challenges and
to help tackle the effects of alcohol abuse – all essen al
underpinnings of our ongoing licence to trade.
Our expected performance in 2013
How we create value
We delivered another year of strong financial
results. Successful development of our brand
por olios and intensified sales execu on,
together with rising consumer spending,
drove strong performance in most of our
developing markets.
Total lager volumes grew 5% totalling 240 million hectolitres.
Reported group revenue rose by 12% to USD35,155m.
We create long-term value by establishing
leading posi ons in key markets; by inves ng
in, and building, a rac ve brands and brand
por olios; and by taking a local approach to
running our businesses, based on effec ve
opera ng processes.
We concentrate on building brands and businesses and make
acquisi ons only where they have the poten al to add value.

Group at a glance
Our opera ons around the world
Expanding from our roots in Africa, we’ve built leading posi ons
in all regions of the world in both emerging and developed
markets. Last year our businesses sold 229 million hectolitres
of lager, over 90% of which was sold in markets in which we’re
the number one or number two brewer.
La n America Asia Pacific Africa
32%Projected contribu on to group
EBITA 2013
EBITA 2013
EBITA 2013
17 breweries
14 bo ling plants
26,933 employees
23 breweries
2 bo ling plants
3,804 employees
39 breweries
25 bo ling plants
25,535 employees
• Our primary brewing and beverage
opera ons cover six countries across
South and Central America (Colombia,
Ecuador, El Salvador, Honduras, Panama,
and Peru).
• In each of these countries, we are the
number one brewer by market share.
• We are also the third largest brewer in
Argen na.
• We bo le so drinks for The Coca-Cola
Company in El Salvador and Honduras,
and for Pepsico Interna onal in Panama.
• Regional office: Bogotá, Colombia
• CR Snow, our partnership with China
Resources Enterprise, Limited, is the
largest brewer in China.
• With the acquisi on of Foster’s in
December 2011, we have a major
business in Australia. CUB only
contributed to our results from mid-
December 2011.
• We are the second largest brewer in
India.
• We have an opera on in Vietnam and
we export to various markets including
South Korea and Cambodia.
• Regional office: Hong Kong
• Our brewing and beverage opera ons in
Africa cover 16 countries. A further 21
are covered through a strategic alliance
with the Castel group and we also have
an associated undertaking in Zimbabwe.
• In most of these countries we are the
number one brewer by market share.
• We bo le so drinks for The Coca-Cola
Company in 20 of our African markets
(in alliance with Castel in 14 of these
markets).
• We have hotel and gaming interests in
Tsogo Sun Holdings Ltd, the largest hotel
and gaming group in South Africa.
• Regional office: Johannesburg, South
Africa.

North America Europe
EBITA 2013
EBITA 2013
8 breweries
8,812 employees
17 breweries
14,095 employees
• MillerCoors is a joint venture with
Molson Coors Brewing Company, formed
in 2008 by bringing together the US and
Puerto Rican opera ons of both groups.
• Headquartered in Chicago, MillerCoors
is the second largest brewer in the USA,
with 29% of the beer market.
• Our wholly owned Miller Brewing
Interna onal business is based in
Milwaukee, USA and exports our brands
to Canada and Mexico and throughout
the Americas.
• Regional office: Chicago, USA.
• Our primary brewing opera ons cover 8
countries – the Czech Republic, Hungary,
Italy, Poland, Romania, Slovakia, Spain
(Canary Islands) and the Netherlands.
• In the majority of these countries, we
are the number one or two brewer by
market share.
• A further 16 countries including Russia,
Turkey and Ukraine are covered in a
strategic alliance with Anadolu Efes
through either brewing, so drinks or
export opera ons.
• We export significant volumes to a
further 8 European markets, of which
the largest are the UK and Germany.
• Regional office: Zug, Switzerland.

Chief Execu ve’s review
Consistent strategy delivers growth
Luminita Iancu, Chief Execu ve
Based on our vast experience accumulated over
the years and our knowledge-empowered team,
we are op mis c that we can design our future
ac ons in the best way to deliver interes ng and
a rac ve products to our consumers and add
more value to our shareholders.
For the current financial year, our growth can be
a ributed to the con nuous global development
of our brands and on rising consumer confidence
in emerging markets. Our strong presence and in
developing countries provided the counterweight
for the lagging sales in mature markets of Europe
and North America, boos ng overall global
growth despite the difficult economic situa on.
At the Group level, we achieved at the end of
the first half of the current financial year an
increase of revenue by 11.4 % with a strong
contribu on from organic growth. Reported
EBITA experienced an increase of 17.5% primarily
based on 9.4 % organic growth at constant
currency level.
The rise in barley and malt prices and higher
level of fuel cost are the main challenging issues
of our procurement system. Through effec ve
marke ng efforts and product innova on, we
remain confident that by 31 March 2013, our
company will show another robust performance.
OUR VISION
Our focused strategy based on four key ac ons:
• Crea ng a balanced and a rac ve global
spread of businesses
• Developing strong, relevant brand por olios
that win in the local market
• Constantly raising the profitability of local
businesses, sustainably
• Leveraging our skills and global scale
con nues to present indisputable proof that
our business is based on a strong and long-term
commitment with a high capacity to adapt
our unique concepts to different economic
landscapes.
In this report, I would like to highlight that our
performance is based on our belief that:
• we grow by crea ng strong partnerships
• being in the right place with the right
products can bring value to our business
• having the appropriate opera ons system,
we are able to respond to customer
demand
Beer consump on is realized in a social
context, so being close to our consumers and
understanding their expecta ons are considered
key factors in our company.
Despite an increasingly compe ve global environment, our
company is expected to have another strong performance
for 2013, building on the good earnings growth achieved in the
first half of the year. Our expanding global presence, especially in
key areas in developing regions, offers us new challenges and the
possibility to see new advantages.
76%
Propor on of group
EBITA from developing or
emerging economies

Our model of leading local flagship brands, innova on and
expanding premium assortments is working. We con nue to
invest in capacity, systems and capability.
“
”Based on our thinking framework Marke ng Way,
we are able to iden fy consumers preferences in
local markets and to be er fit our product range
to specific growth market opportuni es.
KEY STEPS IN OUR PLANS
Acquisi on/ Integra on of Foster’s (Australia)
This was one of our big steps with a great future
impact on our posi on in the industry. Even if
the integra on plan of our Australian business
Pacific Beverages into CUB (Carlton and United
Breweries- the Australian company of Foster’s)
has been already completed, our work here
is s ll con nuing. In Australia, we will embark
on other new and challenging plans such as
increasing efficiency, developing new distribu on
channels, reevalua ng our brand posi oning;
all of which with the aim of boos ng profitable
growth.
The integra on programme in Australia remains
ahead of schedule with respect to both synergy
delivery and capability build. It is important to
men on the progress realized by the flagship
brand VICTORIA BITTER, which has recently
experienced modest growth a er a long
period, benefi ng from the brand restora on
programme and improved retail engagement.
Acquisi on of Kingway Brewery (China)
In February 2013, we acquired through our
partner in China CR Snow, Kingway Brewery
Holdings, a deal of approximately USD864m. We
see this as an important transac on with a new
posi ve perspec ve in the long-run.
This contract offers us access to a rac ve
regional markets in China and also enhances CR
Snow’s compe ve posi on. The poten al value
of Kingway could be seen in the next 2-3 years
a er the integra on plan is completed.
OUR CAPABILITY PROGRAMMES:
ON THE RIGHT WAY
Our procurement system con nues to deliver
benefits and the proof of this progress is the fact
that our net opera ng results are developing as
expected.
It is also important to men on that the first
implementa on of the ERP Project was
completed and tested in Poland. I would also like
to highlight the progress achieved in our project
to realize a centralized treasury opera ons
system.
OUR TEAM
With regard to our People, SABMiller currently
employs about 70,000 people across six
con nents. Our team is characterized by cultural
differences and diversity in its backgrounds. By
inves ng in our people and empowering them
through con nuous skill development programs,
we aim to create a performing and successful
team.
Our approach regarding our
workforce of being a flexible, fair
and equitable employer is the
founda on of our success.
OUR HUMAN RESOURCES PROGRAMMES
I would like to highlight a few of our main
programmes designed to assure and enhance our
workforce performance:
• Safety, health and well-being programs
• The advancement of women in the company
• Transparent measurement systems
• Promo ng talents
• Regular educa on on alcohol responsibility
One of our most recent programs, Global Talent
Model, was launched in 2012 and is currently
in line with the corporate HR plan. The program
involves top 200 cri cal roles and “future
leaders” who demonstrate a great poten al for
our company.
RESEARCH & DEVELOPMENT ARE ON OUR LIST
The investment in low-energy boiling technology
and the ini a ve of crea ng a brewing research
facility in UK in 2011 are examples of how
our company understands the importance of
innova on and con nuing development. This
facility was designed to achieve improvements in
water and energy efficiency.
SUSTAINABILITY
Our global facili es are embracing the aim of
opera ng in a more sustainable way. Each of
our facili es employs professionals oriented on
safety, health and environment and engaged in
a con nuous ac vity of finding ways to reduce
waste and emissions, minimize the use of water
in beer produc on, to improve the recycling
systems and ensure the health of our employees.
Chief Execu ve’s review con nued
“
”

Chief Execu ve’s review con nued
OPERATIONS
In Africa, plans of inves ng heavily to grow
capacity in order to stay ahead of the demand
across this con nent are ongoing.
Our investment of USD80m in a new brewery in
our Ugandan subsidiary, NILE BREWERIES (NBL)
which has doubled the design capacity to 3.6m
hectolitres demonstrated our commitment to
further inves ng in Africa. This project has been
recently accomplished in MBARARA, western
Uganda, the fastest-growing regional beer
market and has been chosen as the op mum
loca on with the aim to meet the increasing
local demand.
Regarding the project of expansion our
brand CHIBUKU into 10 countries across the
con nent, we remain confident that following
our investment of USD16m by the end of this
financial year, we can expect the achievement or
exceed a total of half a million hectolitres.
This expansion of our CHIBUKU opera ons
demonstrates our con nuing interest in an
affordable strategy and product innova on. By
offering an affordable beer for lower income
consumers across Africa, we can decrease the
role of unsafe and informal alcohol market by
shrinking its share as much as possible.
Other produc on capaci es are in the final
stage and should be ready to start in Nigeria
and Zambia. In Peru and South Sudan, we are
currently inves ng in some extensions of our
produc on lines.
The con nued investment in packaging
innova on remains a key driver in some markets
such as La n America, Africa and East-Europe.
Adap ng our products to local demand is the
way we want to respond to our consumers.
TOWARDS ZERO-WASTE OPERATIONS
The increasing cost of raw materials, or in some
cases the scarcity (water), the growth in global
popula on and economies – which led to a
important increase in the amount of waste sent
to landfill – are the key drivers for SABMiller in
our con nuous waste reduc on program. In the
brewing process, most waste by-products are
recyclable or reusable to some extent. Reducing
the amount of waste is also a way of saving
money and reducing the environmental impact.
The company is con nuing to invest in research
about how to reduce, to reuse and recycle the
waste in our produc on.
HOW WE SEE THE FUTURE
In light of recent global trends and challenging
economic environment – e.g. the decline of beer
consump on in richer na ons and increasing in
wine consump on or other spirits, the openness
of new geographical areas to global businesses,
the increase in income disposal of consumers
in emerging markets – we remain confident
that our strategic direc ons are created to
con nuously strength our posi on in this
industry.
SABMiller Company will con nue
to make strategic investments in
different new regions with the aim
to create a balanced and a rac ve
global spread of our business.
We will also embark on a new stages of our
journey which aim to con nuously create and
adapt our brand por olio to local consump on
behavior. Offering the right products, in the
right markets and with the appropriate range of
prices is how we want to be successful. But our
achievements will depend on new and innova ve
ideas. Remaining confident of our plans to
step up profitability through organic growth in
fast-growing markets of Africa, China and India,
or developing areas of La n America and East-
European countries, we will tackle also the most
difficult issues that confront our teams from
western Europe and North America.
We experience a challenging me and for this
reason, it is very important for the Board and our
management team to work closely together in
order to see our plans through.
As a sign of our confidence in our future
today, we are proposing three strategies
designed by our execu ve team with the aim
of strengthening our posi on in developing
geographies, of stepping up profitability and free
cash flow through organic growth, and of driving
new market penetra on.
We believe that it is important to realize a
balance between our investments in premium
levels and affordable products, as well as in new
products or long-term projects. To be flexible
and responsive to our local markets are the key
driving forces in our ac on.
Our first strategy, Non-alcoholic Beer, is a
medium-term project designed to expand our
current por olio by developing new products
and focusing on growth areas such as the Middle
East and North Africa.
The second short-medium term
strategy aims to capitalize on
economic development in emerging
markets by rebranding or developing
premium level products.
Our third strategy is intended to be
a long-term project with the aim to
create an addi onal revenue stream
on wine growth opportuni es in
emerging markets, especially in
Africa.
Luminita Iancu
Chief Execu ve“
”

Four strategic priori es
Guiding our progress, driving our growth
Our four strategic priori es define how SABMiller will achieve its
overall financial goal. While they naturally evolve and their
rela ve importance changes in line with market condi ons, these
priori es con nue to guide our short, medium and long-term
growth.
Key Competences Strategic Priori es Strategies Projects Region
Global presence
Crea ng a balanced and
a rac ve global spread
of businesses
Acquisi on of local
brands
Kingway acquisi on China
Foster’s integra on Australia
Diversifica on Winery South Africa
Global company,
local brands
Developing strong,
relevant brand por olios
that win in the local
market
Product por olio
expansion
Non-alcoholic beer and
malts
Middle East
(Turkey, Iran)
Cider project North America
Cra beer project Europe
Premiumisa on
Premium beer
re-branding
La n America
(Peru), Asia Pacific
(China)
Local sustainable
focus with
opera onal
efficiency
Constantly raising the
profitability of local
businesses, sustainably
Ten Priori es
Programme
Na onal barley industry
project
Zambia
Water Futures Peru
70,000 strong
workforce
Leveraging our skills and
global scale
Alcohol responsibility
training
Worldwide
HIV/AIDS training Africa
Global learning strategy
Global Talent Model Worldwide
European Management
Development Programme
(EMDP)
UK

Chief Financial Officer’s review
Another stong performance
Sunny Thok, CFO
Share Price
The share price of SABMiller has appreciated by
over 126% ll date since April 2012, owing to
its history of strong financial performance and
successful strategic mergers and acquisi ons.
The latest acquisi on—brewery business
Kingway Brewery Holdings Limited in China for a
total cash considera on of USD 864m, has had a
posi ve impact on the share price in the month
of February 2013.
Volume
The company’s volume growth for the year
ending March 2013 is expected to be 240 million
hectolitres, growth of 5% over the prior year.
Acquisi ons of Fosters and Kingway breweries
have had posi ve impact on volume growth.
Revenue
Group revenue is expected to be USD35,155m
by March 2013. This will represent an increase
of 12% (8% on an organic, constant currency
basis) driven by higher volumes, focused price
increase and favorable brand mix. Acquisi ons
have posi vely impacted the group revenue and
expected growth rate is 5%.
EBITA
Company is expected to deliver strong financial
performance at the end of the current year with
EBITA growth of 8% on an organic, constant
currency basis, with all beverage divisions
except for Europe contribu ng marginally to
the increase. Expected EBITA is USD6,479m
(including the impact of acquisi ons) at a
growth rate of 15% compared with the prior
year. Cost of goods sold for the year is expected
to increase by approximately 3% over the prior
year, on a constant currency per hectoliter basis
with a slightly higher increase in the cost of raw
material.
Financial highlights
• Group revenue up 12% to USD35,155m
• EBITA of USD6,479m, an increase of 12%
• EBITA margin of 18.4%, 40 bps higher
than the prior year
• Free cash flow declined by USD1,130m
to USD1,918m
• Expected adjusted EPS to be up by 16%
to 249.1 US cents per share.
• Expected Net debt to be USD18,308m,
an increase of USD446m from prior year
The Company is expected to deliver
strong financial performance at the
end of the current year with EBITA
growth of 8% on an organic, constant
currency basis.
Source : London Stock Exchange website
210
213
218
229
240
09 10 11 12 13
Group Volume (m hl)
25,302
26,350
28,311
31,388
35,155
09 10 11 12 13
Group Revenue (USDm)
4,129
4,381
5,044
5,634
6,479
09 10 11 12 13
EBITA (USDm)

Principal risk Context Mi ga on
Dividends
The company’s 5-year average dividend growth
rate has been 12.72%. It has posi vely influenced
the share price and shareholder confidence
by providing steady cash flow in the form of
dividend and has kept the outlook of investors
posi ve (CANACCORD Genuity Limited, 2013).
Credit Ra ngs
The Standard & Poor’s ra ngs service has rated
the company’s bonds as follows:
Foreign Long Term - BBB+ (posi ve outlook):
Signifies that in the long term the company
has adequate capacity to meet financial
commitments, but is subjec ve to adverse
economic condi ons.
Foreign Short Term - A- (posi ve outlook):
Signifies that in the short term the company has
strong capacity to meet financial commitments,
but somewhat suscep ble to adverse economic
condi ons and changes in circumstances.
Capital Expenditure
Capital expenditure is expected to be
USD1,885m in 2013, a rise of USD246m due to
increased produc on capaci es, par cularly in
Africa. Also, new breweries are currently being
constructed in Nigeria, Uganda and Zambia and
there has been capacity expansion in Peru and
South Sudan. The company has acquired Kingway
Brewery Holdings Limited in China at a total cash
considera on of USD864m on the 5th February
2013. Capital expenditure of approximately
USD2,100m is expected in the next financial year.
32
14
13
35
6
Latin America
Europe
North America
Africa
Asia Pacific
EBITA Contribu on
Compe on The company faces s ff compe on from
some of these large brewers namely: Heineken,
Anheuser-Busch InBev and Carlsberg.
• Proven integra on processes, procedures and prac ces are applied
to ensure delivery of expected returns.
• Develop non-tradi onal capabili es to enter and grow profitably in
new markets.
Change in
consumer
preferences
Consumer tastes and behaviors are constantly
evolving, and at an increasingly rapid rate
• Con nued enhancement of the SABMiller Marke ng Way which sets
out the best-prac ce approach for our commercial processes.
• Ongoing evalua on of our brand por olios in every market to ensure
that they target current and future opportuni es for profitable growth.
Currency
fluctua ons
Company has a global presence and thus foreign
exchange remains one of the principal risks
• Use of Forward exchange contracts and Forwards Exchange swaps
Interest rates Increasing interest rates have an exponen al
impact on the company’s debts
• Borrow (directly or synthe cally) principally in floa ng rates,
reflec ng the view that Floa ng rates are generally lower than fixed
rates in the medium term to mi gate the Interest rate increase risk
16
16.63
17.82
17.95
18.43
09 10 11 12 13
EBITA Margin (%)
Principal risks
Monitoring and managing the risks we face
Chief Financial Officer’s review con nued

Sustainability report
Genera ng inclusive growth
Mia Orcullo, Corporate Affairs
One of SABMiller’s four strategic priori es
is ‘Constantly raising the profitability of
local businesses, sustainably’. Sustainable
development is therefore integral to the way
SABMiller does business.
We have in the past five years, con nually
ini ated and implemented programs aimed
at achieving sustainability goals of our Ten
Priori es, SABMiller’s approach on how to focus
our efforts and resources. The Ten Priori es
also provide a strong framework, offering clarity
to our local opera ons and demonstra ng
our commitment to shareholders and other
stakeholders on issues material to our business.
At the global level however, special focus is given
to three areas that SABMiller considers most
relevant to the business: alcohol responsibility,
water, and enterprise development in their value
chain.
4.5
4.3
4.2
4.0
3.8
09 10 11 12 13
Water to lager ra o
(hl water/ hl lager)
Guided by the Global Repor ng Ini a ve
recommenda ons, SABMiller’s 2013 direct
economic value crea on from its sustainable
development ac vi es is expected to amount to
USD25,945m from USD23,921m of the previous
year. This makes a significant contribu on to
livelihoods around the world where SABMiller is
present.
The group corporate accountability and risk
assurance commi ee (CARAC), a sub-commi ee
of the SABMiller plc board, is responsible for
overseeing progress against the company’s 10
sustainable development priori es.
Twice a year, the company measures its progress
using the Sustainability Assessment Matrix
(SAM). Performance is assessed against five
levels of performance, from a minimum standard
(level one) to leading edge (level five), and is
reviewed by both regional and group CARACs.
In 2013, the average score expected to be
achieved by SABMiller across all priori es is 3.5,
an increase over the 2012 score of 3.2. Group
average scores increased across all 10 priori es,
with a par cularly strong improvement on
discouraging irresponsible drinking, where the
score increased by almost 20%, from 3.5 to 4.2.
To make a fair assessment of and to provide
an expert view on the company’s repor ng
prac ces, SABMiller has commissioned Corporate
Ci zenship, a global corporate responsibility
consultancy. This shows SABMiller’s commitment
to mee ng its sustainability goals.
Water Conserva on
SABMiller has extensive programmes in place
that aim to improve water and energy efficiency
and reduce waste in its breweries. This year the
company’s water ra o – the amount of water
required to produce a hectolitre of lager –
decreased from 4.0 hl/hl in 2012 to 3.8 hl/hl, a
5% improvement.

Sustainability report con nued
Legal issues
Sustainable development group average scorecard 2013Stairway level assessment criteria
Across our opera ons, we aim to
become 25% more water-efficient
by 2015.
In Uganda, for example, Nile Breweries Ltd
has reduced its water consump on from eight
hectolitres of water per hectolitre of lager
produced in 2006 to 4.7 hectolitres today.
In the USA, MillerCoors is working with The
Nature Conservancy to safeguard the watershed
and improve habitats in the barley-growing Silver
Creek Valley in Idaho.
In Peru, Through the Water Futures partnership
we work with NGOs such as WWF and The
Nature Conservancy to protect the watersheds
on which our businesses depend. This year
through our local Water Futures partnership in
Peru, we started a series of studies to examine
the water resources available in the basins that
supply each of Backus’ breweries.
Research and Development
SABMiller is ac vely involved in research and
development opera ons for enhancing exis ng
products as well as innova ng new beverages.
The company principally focuses on key areas
such as brewing, flavor stability, raw materials,
packaging materials and energy and water
saving. It also involves in development of
novel packaging, processes and manufacturing
technologies.
In May 2011, the company announced that it has
commissioned a GBP3m global brewing research
facility in No ngham, with the aim of pioneering
new developments in the science of brewing. In
associa on with No ngham University’s School
of Biosciences, the company focuses on new
technologies and processes that enhance beer
quality and shelf life, whilst improving the
sustainability of brewing. In 2013, the company’s
R&D expenses will reach USD8m. We believe our
focused R&D opera ons offer us a compe ve
edge over our peers.
Legal Issues
In its most recent report, OECD head Angel
Guria has called a crackdown on tax avoidance
by mul na onals. The G20 have been urged
to modernize their tax systems to combat
avoidance, which was undermining the ability of
the governments to recover from the financial
crisis. This issue is par cularly relevant for
SABMiller because the company has been
accused of tax avoidance by an advocacy
group in 2010. Aside from avoiding GBP20m
of taxes in Africa and India every year, the
organisa on also objected to the company’s use
of tax haven places, procurement services via
a Mauri us-based subsidiary, and payment of
management fees. These recent issues might
increase government scru ny on the company’s
opera ons both in London and in other countries
where SABMiller is present, and increase risk of
li ga on and penal es.
As part of our Ten Priori es,
SABMiller is commi ed to
Transparency. Tax within the
group operates within a strong
governance process. We seek
to be fully transparent in our
tax returns and disclosures to
revenue authori es. In 2013, total
taxes borne and collected by the
group is expected to amount to
USD10,528m from USD9,400m the
previous year, an increase of 12%
$10.5bn
Expected total taxes borne
and collected by the group
in 2013
“
”

Opera ons review
La n America
Emily Alberico, Managing Director
Financial summary 2013 2012 %
Revenue (USDm) 8,086 7,158 13
EBITA (USDm) 2,140 1,865 15
EBITA margin (%) 26.5 26.1
Lager volume (m hl) 43.5 41.6 5
Strategic focus areas
• Drive strong top-line growth by
expanding consumer occasions and
entering adjacent categories
• Increase share of alcohol and capitalise
on differen ated and expanded brand
and package por olios
• Op mise and extend distribu on
network and sales reach
• Protect our licence to trade and business
sustainability
• Pursue opera onal excellence and
efficiency in our businesses, op mising
resources and costs
The La n American market con nues
to offer significant growth poten al
and profitability opportuni es as
an emerging market with growing
economies and increasing consumer
disposable incomes.
Regional Overview
Our brewing and beverage opera ons in La n
America span 7 countries including Colombia,
Ecuador, El Salvador, Honduras, Panama, Peru,
and Argen na. We hold primary market share in
all of these markets, except Argen na, where we
hold the number 3 posi on a er acquiring CASA
Isenbeck in 2010.
We bo le so drinks for the Coca-Cola Company
in El Salvador and Honduras and for Pepsico
Interna onal in Panama. We operate 17
breweries throughout the region, 14 bo ling
plants, and employ approximately 26,933
people.
The La n American region accounts for 13% of
global beer consump on and 21% of EBITA. The
market benefits from high pricing power and
high profitability due to oligopolis c nature of
markets within the region. The dominant brewer
typically enjoys very strong pricing power,
economies of scale in branding, manufacturing,
distribu on and overhead absorp on.
Financial Overview
La n America is expected to deliver another
strong performance for fiscal year 2013.
Group revenue is expected to increase 13%
from USD7,158m in 2012 to USD8,086m for
2013. EBITA is forecasted to increase 15% from
USD1,865m and a margin of 26.1% in 2012 to
USD2,140m and a margin of 26.5% for fiscal
2013, reflec ng a margin increase of 40 basis
points.
Lager volumes are expected to increase 5% while
so drink volumes will see an increase of 4%.
Strong volume and EBITA growth is a result of
the affordability of key lager brands, building
differen ated brand por olios and expanding
the premium segment. Addi onally, the growth
in the region was driven by combina on of
volume growth, selec ve price increases and
improved overall mix. Increased commodity costs
were partly offset by improved manufacturing
efficiencies and con nued distribu on gains, as
ongoing fixed cost produc vity improvements
are made.
We will con nue to focus on organic growth
within the region. This market represents the
largest contribu on to overall EBITA and revenue
for the group.
Revenue (USDm)
Cusqueña
Origin: Peru
www.cusquena.com.pe
Cusqueña is Peru’s premium beer and is
brewed with malt, yeast and hops of the
highest quality. It retains the mystery and
magic of its origin in Cusco and is specially
made for those consumers who value the
best brands.
5,495
5,905
6,335
7,158
8,086
09 10 11 12 13

Country Opera ons Overview
Colombia reflects SABMiller’s largest market
in the La n American region. We hold the #1
posi on from the acquisi on of Bavaria S.A., with
99% market share, opera ng 6 breweries and 5
bo ling plants. There are 6 brands in the region:
Aguila, Aguila Light, Club Colombia, Poker,
Costena, and Pilsen. Lager volumes are expected
to grow 7% reflec ng healthy consumer spending
and a result of selec ve price increases as well as
mix. The light beer category has seen con nued
growth with Aguila Light performing par cularly
well. Premium brands con nue to grow with the
local premium brand franchise, Club Colombia.
SABMiller enjoys the #1 posi on in Ecuador
with 97% share of the beer market, opera ng
2 breweries and 2 bo ling plants through
acquisi on of Cervecería Nacional CN S.A.
There are 4 brands in the region: Club Premium
Lager, Conquer, Dorada, and Pilsener. Ecuador
con nues to see a growth in share of the overall
alcohol market. Lager volume growth of 7% is
expected in 2013 driven by con nued expansion
of the direct service model and improved
product availability of cold beer at point of sale
as well as con nuing expansion of presence
in fes vals and events. The upper mainstream
offering and local premium are seeing con nued
growth.
In El Salvador, SABMiller occupies 89% beer
market share and 47% of so drinks market
with 1 brewery and 2 bo ling plants with
subsidiary Industrias La Constancia S.A. There
are 6 Salvadoran brands: Barena, Golden Light,
Pilsener, Pilsener Lite, Regia Extra, and Suprema.
The focus on affordable bulk pack in the region
as well as widened trade coverage has resulted
in double digit volume growth. Our flagship
brand, Pilsener and local premium brand
Suprema con nue to see healthy volume growth.
Consequently, overall alcohol market share has
increased. So drink volumes are expected to
grow 7% a ributed greatly from success of mul -
serve packs, and the con nued success of the
non-alcoholic malt brand Ac malta.
In Honduras, SABMiller has 96% beer market
share, 58% so drinks market share with1
brewery and 1 bo ling plant with subsidiary
Cervecería Hondureña S.A. There are 4 Honduran
brands including: Barena, Imperial, Port Royal,
and SlavaVida. Lager volumes for 2013 are
expected to rise 10% due to a boost in premium
brands. The super premium category saw healthy
growth with Miller Lite doubling its volumes.
Overall alcohol market share con nues to
increase, reaching historic highs. So drinks
volumes are expected to grow 8%, while the
juices and tea categories introduced in 2011
con nue to grow.
SABMiller has 67% beer market share in
Panama with 1 brewery and 2 bo ling plants
with Cervecería Nacional, S.A.The 2 brands of
Panama are Atlas and Balboa. Lager volume
growth con nues in 2013 due to the notable
performance of global premium brands Miller
Lite and MGD. Mainstream brands Atlas and
Balboa benefited from investment behind new
campaigns and improved in-outlet execu on.
Peru is the 2nd strongest market in our La n
American por olio, where we hold 93% beer
market share, operate 5 breweries and 2 bo ling
plants through subsidiary Unión de Cervecerías
Peruanas Backus y Johnston S.A.A. Peru boasts
a mul tude of brands including: Arequipena,
Cristal, Cusquena, Cusquena Malta, Pilsen Callao,
Pilsen Polar, Pilsen Trujillo, and San Juan. The
region will finish with another strong year driven
by healthy economic growth. The area also
benefited from selec ve price increases taken
in December 2012 as well as expanded trade
and fridge coverage. The premium por olios
performance from 2012, with volume growth
of 22%, has con nued into 2013, which we
intend to capitalize on going forward. The
so drinks category con nues to see volume
growth, as the non-alcoholic malt brand, Mal n
Power, benefited from campaigns highligh ng
its nutri onal a ributes. Capital investments
made to increase capacity and support future
expansion in Peruvian subsidiary Backus, will
further enable growth prospects for this country
in the future.
SABMiller entered the Argen na market in 2010
by acquiring Cervecería Argen na SA Isenbeck
from Warteiner, the 3rd largest brewer in the
region. The company holds 3% market share with
1 brewery, and the brands Isenbeck, Warsteinek
and Miller Genuine Dra . The region has seen
healthy volume growth of mainstream brand
Isenbeck. The integra on and upgrading of
SABMiller’s capabili es in Argen na con nues to
progress since acquisi on.
Sustainable Development
We are involved in a mul tude of sustainability
ini a ves throughout La n America. For
example, the water reclama on programme
adopted in Colombia has resulted in a number
of innova ve ways to reuse the brewery’s water
waste. Through the Water Futures
partnership SABMiller works with
NGOs to protect watersheds on
which business depends, not
only for SABMiller but the local
community. Addi onally, in 2008
Bavaria in Colombia ini ated its
Grain Project to explore how it
could be er support local suppliers
of mal ng barley to help ensure a
sustainable long-term supply and
increase levels of rural employment
and economic development. An
important aspect of sustainability
for SABMiller is growing and
working with local economies as
beer is innately a local business.
Compe on
The La n American market is highly
consolidated with one or two
brewers domina ng in the majority
of countries. ABInBev is La n
America’s leading brewer, holding
the #1 posi on in the largest market
of Brazil, which accounts for half of
the region’s volume, as well as the
top spot in Argen na, followed by
SABMiller and then Heineken.
These Big 3 global brewers
combined account for 88% of the
La n American beer profit pool.
Heineken’s stake in the market is a
result of their acquisi on of FEMSA/
CCU a er outbidding SABMiller.
Kirin entered the market in 2011 by
acquiring the #2 brewer in Brazil,
Schincariol, however ABInBev and
SABMiller are the largest brewers in
La n America by far.
Opera ons review con nued
La n America
88%
Market share of the Big
3 global brewers in La n
America

Opera ons review
Asia Pacific
Sandeep Nadubedi, Managing Dir. Regional Overview
SABMiller entered the Asian market by a joint
venture in China with China Resources Enterprise
Ltd. The opera on is called China Resources
Snow Breweries (CR Snow) a priva za on arm
of the government of the People’s Republic of
China. Later on they expanded their opera ons
in India by acquiring Narang breweries in 2000.
In 2011 the company has further boosted its
global presence with the acquisi on of
Foster’s Group, and became the leading
brewer in the Australian beer market. Currently
SABMiller has its manufacturing opera ons in 4
countries (China, India, Australia & Vietnam) in
Asia Pacific region & exports to Korea , Fiji & New
Zealand. In APAC region, it’s all about volume
business with thin profit margin.
Financial Overview
The acquisi on of Foster’s and higher profits in
China and India has resulted in an increase in
reported EBITA in Asia Pacific by 31% (7% on an
organic, constant currency basis). Lager volumes
are expected to increase by 5% on an organic
basis, with reported volumes higher by 8%.
EBITA will grow by 30.6% with good growth in
both China and India (5% lager volume growth).
In Australia, lager volumes are projected to
go down 8 % on a pro forma basis including
the impact of two fewer trading days and the
termina on of some licensed brands from our
por olio. EBITA also will decline as a result of
the lower volumes and increased commercial
investment. On a pro forma basis, CUB full year
lager volumes in Australia will be 4% below the
prior year, largely due to subdued consumer
sen ment. EBITA also will decline on a pro
forma basis as a result of the lower volumes and
increased commercial investment.
In China, our CR Snow joint venture has
succeeded in crea ng the country’s first na onal
beer brand by concentra ng resources behind
a single brand. It decided 10 years ago to make
its Snow brand the country’s number one brand
by volume by 2006 and to achieve na onal scale
by 2011. In 2011, sales volumes by CR Snow
passed 100 million hectoliters. Today, Snow is the
biggest brand by volume, not just in China, but in
the world.
Overall, CR Snow con nued to expand its market
Revenue (USDm) 5,241 3,510 49
EBITA (USDm) 419 321 8
• Integrate the Foster’s acquisi on and
deliver the commercial and opera onal
targets
• Further build market leadership in
China and enhance profitability by
concentra ng more on premium brands
• Pursue market liberaliza on in India
and focus investment on growth
and profitability in selected states.
Concentrate more on branding &
marke ng ac vi es
• Introduce new range of non-alcoholic
beer brands with some energizing
variants in all markets.
In February 2013, we acquired
Kingway’s brewery business for
USD864m. The partners see clear
economies of scale in the deal and
and we foresee a strengthening of
CR Snow’s posi on in Guangdong.
Revenue (USDm)
Snow Brave the World
Origin: China
www.snowbeer.com.cn
A bright, clean-drinking, well balanced
beer, yellow-green in colour with a white
head and a lacy ‘cling’ on the glass, Snow
Brave the World exemplifies the proud,
adventurous spirit of modern China.
1,565
1,741
2,026
3,510
5,241
09 10 11 12 13

Asia Pacific
share although organic growth was affected by
heavy and prolonged rains that affected certain
key provinces. Good market share increases were
delivered in Anhui, Zhejiang, Jiangsu, Tianjin,
Liaoning, Guizhou, Shanghai and Heilongjiang,
although market share was lost in Sichuan. In
China, there are 83 breweries in opera on with
22% market share and currently there are 7
brands. With a per capita consump on of 36
litres, China is one of the largest beer consuming
na ons in the world.
In February 2013, SABMiller acquired Kingway’s
brewery business for a total cash considera on
of CNY 5.38 billion (USD 864m). Kingway’s
business comprises seven breweries in China
and has total annual produc on capacity of
14.5 million hectoliters. In 2011, Kingway
sold 9.3m hectoliters of beer. The partners
see clear economies of scale in the deal and
a strengthening of CR Snow’s posi on in
Guangdong.
SABMiller India is the subsidiary of SABmiller
plc & is the second-largest brewer in India,
employing over 2,900 people and with a
market share of 24%. The company operates
11 breweries, including the largest in India in
Andhra Pradesh which has a capacity of 1.5
million hectoliters. In 2012, SABMiller India’s
lager volumes grew 3% and market share
increases were achieved in key high-margin
states. There are 6 brands in total in India
(Hayward’s 5000, foster’s , Royal challenge,
Knock out, Hayward’s Black, Peroni).
SABmiller also launched a first of its kind
innova on, Thermo chroma c labels for
the Knock Out brand. The label will change
colour when the beer reaches the op mum
temperature for a great drinking experience, as
well as enabling consumers to confirm that the
beer he is buying is cold.
Knock Out and Foster’s witnessed growth of 17%
and 5% respec vely in volumes. In India, volumes
grew by 23%. Con nued strong growth in Andhra
Pradesh, cycling trading restric ons in the state
through to the end of August, was assisted by
double digit growth achieved in the important
states ofPunjab, Maharashtra, Rajasthan, Orissa,
West Bengal and U ar Pradesh. Growth was
more muted in the other key states of Karnataka
and Haryana with slower market growth
compared with the prior period.
The alcoholic beverage industry in India operates
under a very complex regulatory environment
which is the biggest challenge. In addi on
to restric ons on adver sing, distribu on
infrastructure and retailing, varied tax structures,
controlled pricing and licensing make opera ons
more complex, consequently leading to higher
costs, though providing entry barriers for new
entrants as well.
SABMiller entered Australia with Coca Cola
Ama l by forming Pacific Beverages Pty Ltd,
a joint venture to market, sell and distribute
Peroni Nastro Azzurro, Pilsner Urquell, and Miller
Genuine Dra in Australia in 2006.The venture
also agrees to sell and distribute the por olio of
global premium spirits distributor Maxxium.
Foster’s Group was acquired by SABMiller plc in
December 2011 providing exposure to Australia’s
strong economic growth prospects, a leading
posi on in the stable and profitable Australian
beer industry. Foster’s dominates the Australian
beer market, with a volume share of around
45% and ownership of seven of the top 10 beer
brands. Australia’s beer market offers rela vely
high margins, par cularly compared to some
emerging beer markets where SABMiller is a
leading player.
The integra on programme is progressing
well, with synergy delivery and capability build
running ahead of schedule. The sale of Foster’s
interests in its Fijian beverage opera ons,
Foster’s Group Pacific Limited, to Coca-Cola
Ama l Ltd (CCA) was completed on 7 September
and Foster’s so drinks assets were also sold to
CCA on 28 September. There was no gain or loss
on either disposal. With effect from 1 October,
our associate distribu on business in Dubai
previously reported as part of Australia has been
transferred to our Europe division.
SABMiller entered the high-growth Vietnam
beer market in 2006 through a joint venture
with Vinamilk, subsequently purchasing 100%
of the joint venture in March 2009. A greenfield
brewery was built in 2007, with the launch of
Zorok beer as our mainstream entry later that
year. During the 2012 financial year Czech beer,
Gambrinus was introduced as a premium brand
and Peroni Nastro Azzurro as a super-premium
brand in support of our strategy to focus on
higher margin brands.Lager volumes in Vietnam
were below the prior year, but revenue increased
reflec ng a focus on higher margin brands,
channels and geographies.
From Vietnam, SABMiller exports to various
markets including South Korea, Singapore and
Cambodia.
SABMiller con nues to lay emphasis
on sustainable development
throughout Asia Pacific. We
con nued to see improvement
in our water usage and energy
consump on levels. Water usage
stood at 4.4 hl / hl against Group’s
global standard of 4.66 hl / hl while
energy usage was at 202.3 MJ / hl
against Group’s global standard of
204.5 MJ / hl.
SABMiller ini ated steps with
farmers to provide them access to
good quality seeds, agronomical
advice and training to enhance
the quality of the crops. Farmers
are also provided informa on on
proper irriga on, fer lizer usage
and harves ng. The programme
has improved barley yield by 20%
to 25% and be er price realiza on
to farmers as they sell directly
to your company avoiding the
intermediaries. Be er yield coupled
with preferen al price translate into
real income hike for farmers.
Compe on
Asia’s USD258bn beer market is
growing twice as fast as the rest
of the world, leading to rising
compe on and expecta ons
of more industry deals in the
region. Asia is the final fron er
for the world’s top brewers, and
there is plenty of room to grow.
Only a quarter of market share is
dominated by interna onal brands.
Current market condi on is all
about volume business with thin
profit margins. Strong compe tors
for SABMiller are United Breweries,
InBev and Anheuser-Busch, Tsingtao
Brewery Co. and Beijing Yanjing
Brewery Co.
$258bn
Asia’s beer market size

Opera ons review
Africa
Sonny Iduh, Managing Director SABMiller is Africa’s largest brewers with brewing
interests and distribu on agreements across 16
countries (including South Africa) and a strategic
alliance with the Castle group in 21 countries
across the con nent. SABMiller is also the largest
bo lers of Coca-Cola products. The company
has 39 brewery and 25 bo ling plants across the
con nent and over 25,000 employees.
SABMiller is a 39.7% shareholder in the Tsogo
Sun Group, which is listed on the Johannesburg
Stock Exchange.
Business Overview
Within Africa, South Africa is the largest beer
market, accoun ng for over 25% of the region’s
volume, net revenue and profit. This is mainly
driven by the advanced economic development
of South Africa versus the rest of Africa. Other
key markets are Nigeria, Angola, Cameroon,
Democra c Republic of Congo (DRC), Kenya
and Tanzania, Ethiopia, Uganda, Congo and
Mozambique.
Across the con nent, we’re developing a new
genera on of affordable brands to cater for
the aspira ons of low-income consumers in
emerging markets. These are typically made
from locally grown raw materials and offer a safe,
quality alterna ve to informal and illicit beers
and spirits.
Total revenue for the con nent’s business is
expected to grow to USD 10,250m in 2013, an
increase of 22% compared to 2012 (USD9,988m).
The business is also likely to grow in volume with
the following breakdown:
Lager 50,414 hectolitres 14%
So drinks 33,970 hectolitres 8%
Alcoholic beverages 7,830 hectolitres 7%
EBITA contribu on from the region will be 35%
driven by the successful rejuvena on of Castle
Lite and Castle Milk Stout ed to the 2013 Africa
Cup of Na ons, and effec ve sourcing of raw
material locally with the introduc on of Impala
(Cassava beer).
Country Opera ons Review
Our opera on in Botswana is through the
Kgalagadi Breweries Ltd and Botswana Breweries
Ltd, both enjoy well in excess of 90% of their
respec ve markets for lager and tradi onal
beer. The combined businesses employ 1,000
people throughout the country. They operate
Revenue (USDm) 10,250 9,988 22
EBITA (USDm) 3,917 2,766 42
For emerging markets
• Drive growth through full brand
por olios, wider price ranges and
expansion into adjacent categories
• Further develop sales and distribu on to
enhance our outlet presence and extend
our geographic coverage
• Mi gate high imported input costs
through innova on and local supply
chains
For mature markets
• Leverage scale to drive produc vity and
reinvest savings in market-facing ac vi es
• Engage the compe on in all alcohol
categories
Across Africa, we’re developing a
new genera on of affordable brands
to cater for the aspira ons of low-
income consumers in emerging
markets.
Nile Special
Origin: Uganda
www.nilebreweries.com
The flagship brand of Nile Breweries for
over 50 years and an eight mes Gold
award and three mes Grand Gold winner
at the Brussels-based Monde Selec on
Interna onal, Nile Special has been trusted
over the genera ons for its sa sfying
full-bodied character and consistency.
Revenue (USDm)
6,522
7,493
8,852
9,988
11,250
09 10 11 12 13

Africa
four tradi onal beer breweries, a lager brewery,
a sparkling so drinks produc on plant and six
sales and distribu on depots. It is es mated
that our share of total beer market is 82%,
share of total so drinks market 98% and share
of total formal sorghum market 99% and beer
consump on per capita is 23 litres. Brandhouse
is our compe tor in the market with less than
10% 0f the market share.
Accra Brewery in Ghana became a subsidiary
of SABMiller in 1997. Today, ABL produces both
alcoholic and non-alcoholic beverages. Vol c is
the market leader in bo led water produc on
in Ghana with an 85% share of the mineral
water market. Our share of total beer market is
es mated to be 38% and beer consump on is at
7 litres per capita. Diageo is currently the leading
brewer in this market.
Our Lesotho business, Malu Mountain Brewery,
recently reinvigorated its Malu Premium Lager
to counter new, premium compe on arriving
from South Africa. Trading on the brand’s local
heritage, the business developed a ‘pride in
origins’ posi oning along with new packaging
and a na onal promo on celebra ng Lesotho’s
best-known loca ons. Having outstripped
all volume forecasts, the product now has a
premium market share of over 70% and is one
of the most profitable brands in the brewery’s
por olio. We have over 90% share of beer
market and over 95% of share of so drinks with
an es mated beer consump on of 17 litres per
capita.
In 2011, our business in Mozambique launched
Impala, the first-ever commercial beer made
from cassava. With the government recognising
the economic benefits and reducing the excise
on Impala, more low-income consumers will be
able to make the transi on from home brews
to commercial beer. We have about 80% share
of beer market and not represented in the
so drinks market. Analysts es mated beer
consump on to be in the range of litres per
capita.
Despite cycling a strong compara ve, lager
volumes in Tanzania grew by 15% during 2012
a ributable to the successful mainstream brand
renova ons of Safari and Kilimanjaro, as well as
strong premium segment growth driven by Castle
Lite. We have about 73% share of beer market
and not represented in the so drinks market. It
is es mated that beer consump on is 9 litres per
capita.
Lager volumes in Uganda grew year-on-year
by 19% supported by an enhanced distribu on
network into western Uganda, rigorous in-
trade execu on and a strong mainstream and
affordable por olio. We have about 56% share of
beer market and an es mated beer consump on
of 10 litres per capita.
The South African Breweries
(Pty) Ltd. (SAB) is South Africa’s
leading producer and distributor of
lager and so drinks.
It is the largest market for SABMiller in terms
of revenue, volume and profit and also exports
brands for distribu on across Namibia.
Our so drinks division is South Africa’s leading
producer of products for The Coca-Cola
Company. We have hotel and gaming interests
through our associate Tsogo Sun Holdings Ltd,
the largest hotel and gaming group in South
Africa. We have over 90% share of beer market
and over 72% of share of so drinks with an
es mated beer consump on of 60 litres per
capita. Although we dominate the market,
Brandhouse (a JV between Heineken, Diageo and
Namibian Breweries) has volume share and is
now stabilized around 10%.
Nigeria had approximately 13% of the popula on
and the most populated in the con nent,
analyst projects that the country will have the
highest GDP by 2017 in Africa. We acquired the
consolidated breweries with 3 breweries in 2010
and commissioned a new factory in Onitsha
with the inten on develop and distribute VFM
brand. Heineken is the dominant player, through
Nigerian Breweries (54% stake) and Consolidated
Breweries (51% stake). We have less than 4%
share of beer market and an es mated beer
consump on of 19 litres per capita.
In Angola, Castel is the dominant player by far,
accoun ng for 80% volume share and SAB is
a distant number two, with approximately 4%
market share in Angola on propor onal basis
(9% on a consolidated basis). SAB’s opera ons
in Angola going forward will be combined with
Castel’s opera ons and managed by Castel.
We have developed the SAB (Pty) Ltd Tavern
Interven on Programme (TIP) which is run
in partnership with Men for Development in
South Africa (MEDSA). The programme takes
par cipants through structured modules
covering Responsible Alcohol Consump on,
HIV/Aids, Gender-based Violence
and Children’s Rights and Parental
Responsibili es.
Our HIV/Aids programmes mainly
focus on those countries where the
prevalence of HIV/Aids is high, i.e.
more than 5% – a list that includes
South Africa, Swaziland, Botswana,
Lesotho, Zambia, Mozambique,
Uganda, Malawi and Tanzania.
We seek to provide educa on
and awareness training for all our
employees, spouses and their
dependants.
Increasingly our approach is
extending into local communi es
as we build on the success of
our internal programmes. We
constantly monitor the prevalence
in each of the countries where we
operate.
We have developed a global
framework to address local water
issues. Through the ‘5Rs’, each of
our breweries in Africa focus on
issues upstream, downstream and
within their opera ons.
As well as managing water within
our own opera ons and value
chains, we take an ac ve role in
shaping the water debate. Through
our Water Futures partnership, we
share learnings and promote be er
watershed management.
“
”
25%
South Africa’s share of
the region’s volume, net
revenue and profit

Opera ons review
North America
Susie Huang, Managing Director Regional Overview
The North America segment includes the group’s
58% share in MillerCoors and 100% of Miller
Brewing Interna onal. MillerCoors is a joint
venture with Molson Coors Brewing Company,
formed in 2008 by bringing together the US and
Puerto Rican opera ons of both groups.
MillerCoors is the second largest brewer in the
USA, with 29% of the beer market. The wholly
owned Miller Brewing Interna onal business is
based in Milwaukee, USA and exports to Canada
and Mexico and throughout the Americas.
Financial Overview
SABMiller North America is the second largest
brewer in the USA, occupying 29% of the local
beer market, contribu ng 14.4% to group EBITA
margin in 2012. North America is expected to
deliver steady performance for fiscal year 2013.
Revenue and Volume is expected to decrease
about 1% from USD5,250m to USD5,191m and
from 41,346 to 40,933 (hl 000) from year 2012
to 2013 as economic pressures con nued to
affect key consumer groups. The predicted EBITA
increase is mainly a result of revenue growth
from pricing and favourable brand mix along with
cost savings partly offset by higher raw material
and distribu on costs and investment in systems.
MillerCoors’ Tenth and Blake division will
con nue to see growth driven par cularly
by the con nued success of Blue Moon and
Leinenkugel’s and their seasonal variants,
together with Peroni Nastro Azzurro. The below
premium segment is expected to go down,
as consumers con nue to trade up to other
segments.
The US beer market is mature, growing at a
CAGR of 3% over 2006-2012 and reaching
USD61.1 billion at the end of 2012. Imports
account for 31% of the market, with Mexico, the
Netherlands and Canada the most important
trade partners. Turnover of local producers
stands at USD28.9 billion in 2012, up 21% on
2006. Export volume more than doubled over
2006-2012, s mula ng local producers. In
this highly concentrated industry, the largest
companies generate 77% of total turnover.
The industry outlook is dependent on shi s in
consumer structure and the development of new
flavours.
Revenue (USDm) 5,191 5,250 1
EBITA (USDm) 869 756 16
Lager volume (m hl) 40.9 41.3 -1
• Win in premium lights with strengthened
posi oning of Coors Light, Miller Lite and
Miller 64
• Through Tenth and Blake Brewing
Company extend and grow MillerCoors’
import and cra por olio
• Create value through strong revenue
management
• Create leading capability and superior
growth in retail sales
• Support the three- er distribu on system
to drive effec veness and value
MillerCoors’ Tenth and Blake division
will con nue to see growth driven
par cularly by the con nued success
of Blue Moon and Leinenkugel’s and
their seasonal variants, together
with Peroni Nastro Azzurro.
Blue Moon
Origin: USA
www.bluemoonbrewingco.com
Blue Moon Belgian White is an ar ully
cra ed beer, with a cloudy white, opaque
appearance. Brewed in the Belgian style
it has a refreshing, medium-bodied,
unfiltered wheat ale taste spiced with
fresh coriander and orange peel crea ng a
unique experience and an uncommonly
smooth finish.
Revenue (USDm)
5,227
5,228
5,223
5,250
5,191
09 10 11 12 13

North America
Beer in Canada has been a mature category for
some me.
Overall demand for beer remains
weak, but cra beers con nue to
show healthy growth.
Unit prices of beer in Canada con nue to rise
but frequent promo on ac vity mi gates the
extent of price increases. Laba Brewing and
Molson Canada retain their leadership together,
accoun ng for over 79% share of beer sales
in Canada. Value sales are expected to grow
at a CAGR of 1% in constant terms over the
forecast period, whilst volume sales will decline
marginally
Compe on
USA
The largest six companies, generated just 77%
of total industry turnover, further indica ng the
high concentra on within industry. The largest
three industry players are:
Anheuser-Busch InBev is the largest global
brewer by volume, engaged in producing,
marke ng, distribu ng and selling a por olio of
approximately 200 beer brands. The company
operates in seven regions: North America, La n
America North, La n America South, Western
Europe, Central & Eastern Europe, Asia Pacific
and Global Export & Holding Companies. The
company employs about 114,000 people. As
of December 2012, the company operated 13
beverage plants in the US and controlled 48% of
the local market.
Boston Beer, a cra brewer, engages in the
produc on and sale of alcohol beverages.
The company produces malt beverages and
hard cider at company-owned breweries and
under contract arrangements at other brewery
loca ons. The company has a strong presence in
both dark beers and lagers, with the company’s
flagship brand Samuel Adams Boston Lager. The
company sells its products primarily in the US
and employs over 840 people. It is listed on NYSE
and reported net sales of beer in 2011 of US$0.5
billion.
Yuengling Brewery is an American company
focusing on premium lager produc on. Its
products are generally posi oned as high-
quality alterna ves to domes c standard lager,
but they are not considered as being as rich
or flavorsome as domes c cra beers. The
company’s flagship brand, Yuengling Tradi onal
Lager, ranked second only to Michelob Ultra in
domes c premium lager, despite its more limited
regional distribu on. Following the comple on of
a second brewery in Po sville, and an acquisi on
in Tampa Bay (Florida), the company’s products
can be found in 14 states along the eastern
seaboard;
Canada
Beer sales in Canada con nue to be dominated
by Laba Brewing and Molson Canada (including
Molson Coors and Modelo Molson divisions).
Laba Brewing remained the top brand by
domina ng three main categories of beer.
The Alexander Keith brand led pale ale lager
with an overwhelming 62% of volume sales in
Canada. Laba ’s standard brands combined to
make up 52% of domes c standard lager sales.
The manufacturer‟s brands also have a strong
presence in economy lager sales with 42%
volume share.
Molson Canada was named one of Canada‟s
top 10 marketers by Marke ng Magazine. To
grow its presence in the cra beer segment,
the company announced in 2011 the crea on
of the Six Pints stand-alone brewery division,
largely based on the previously acquired cra
beer makers Creemore Springs and Granville
Island Brewing. The decision to create a stand-
alone division that will be responsible for its own
product development, pricing and distribu on
in large part reflects the a empt to overcome
o en mes nega ve percep ons associated with
cra breweries and brands being operated by
large corpora ons.
29%
SABMiller USA’s market
share
“
”

Opera ons review
Europe
Hiroshi Hirai, Managing Director Regional Overview
Our primary brewing opera ons cover eight
countries - the Czech Republic, Hungary, Italy,
Poland, Romania, Slovakia, Spain (Canary
Islands) and the Netherlands. In the majority of
these countries, we are the number one or two
brewer by market share. A further 16 countries
including Russia, Turkey and Ukraine are covered
in a strategic alliance with Anadolu Efes through
either brewing, so drinks or export opera ons.
We export significant volumes to a further 8
European markets, of which the largest are the
UK and Germany.
The European region sold 45,000 hl of beer in
2013 which account for 19% of SABMiller’s total.
In terms of revenue, it was USD5,537m, EBITA
USD961m, respec vely in 2013.
Financial Overview
Beer markets con nued to be affected by
consumer downtrading and industry focus on
economy brands and packs. European region
achieved stable sales in 2013. Revenue grew
from USD5,482m (2012) to USD 5,532m (2013), a
growth of 1%. The European region is the second
largest contributor to SABMiller.
Poland is the largest market for SABMiller
Europe. In 2012, we sold 13,480m hl lager beer
down by 4% from previous year impacted by
compe tor price reduc ons and promo onal
ac vi es along with planned destocking of
wholesaler inventories. The beer market has
been increasingly characterised by downtrading
together with con nued development of the
modern trade, especially discounters, resul ng
in growth of the economy segment. In this
environment, our economy brand Wojak has
performed well and gained market share.
However, key mainstream brands and the
premium segment have been nega vely affected.
In Poland market, our market share is 37% and
main brands are TYSKIE, ZUBR and LECH.
Czech Republic is the second largest market for
SABMiller. In 2012, we sold 6,928m hl lager beer.
With a full brand por olio, Plzeňský Prazdroj
enjoys a leading market posi on in a mature
beer market with a per capita consump on
amongst the highest in the world. Our premium
brand, Pilsner Urquell, is exported to more than
50 countries around the world while Gambrinus
is the leading mainstream brand with 20%
market share. Our market share in Czech is 46%.
Revenue (USDm) 5,536 5,482 1
EBITA (USDm) 878 836 5
• Drive superior organic revenue growth
and margin expansion through growing
perceived category benefits and value
per serving
• Structure and shape the category by
driving our full brand por olios in
growth segments in key markets through
innova ve 360 degree marke ng
programmes
• Con nue to drive differen a on through
innova ng in product, packaging and
dispense systems
• Design for scale, cost advantage and
focus
Beer markets con nued to be
affected by consumer downtrading
and industry focus on economy
brands and packs. Despite this,
SABMiller Europe achieved stable
sales in 2013.
Grolsch
Origin: Netherlands
www.grolsch.com
Grolsch has a dis nc ve, bold and hoppy
taste developed through almost four
centuries of cra ed brewing tradi on. It
owes its superb quality to the selec on of
the finest ingredients and its unique double
fermenta on brewing process.
Revenue (USDm)
6,145
5,577
5,394
5,482
5,537
09 10 11 12 13

Europe
SABMiller sold 4,500m hl lager beer in Romania
for 2012. Ursus Breweries has three breweries
in Brasov, Buzau and Timisoara and a mini
produc on unit in Cluj. During 2012, lager
volumes declined by 8% in a market in which
consumers have downtraded. This emphasis
on the economy segment and bulk packs has
involved heavy discoun ng and led to adverse
brand and pack mix. Our performance was also
impacted by planned wholesaler destocking in
the second half of the year. In Romania market,
our market share is 26% and main brands are
URSUS, Timisoreana and Ciucas.
Miller Brands markets, sells and distributes our
interna onal premium beers in the UK and
Ireland. During 2012 the con nued growth
of Peroni Nastro Azzurro through expansion
in on-premise channels has resulted in lager
volume growth of 8%. This was achieved despite
a decline in the beer market and lower MGD
volumes as distribu on was refocused on key
regions. EBITA grew strongly supported by
good revenue per hl growth in the on-premise
channel.
In 2012, SABMiller undertook a “Building a
talent pipeline” ini a ve. To achieve our growth
strategies we need our leaders to have the skills,
behaviours and passion to drive value through
their teams.
We developed our European
Management Development
Programme (EMDP) to develop a
talent pipeline by preparing our
most talented current and future
managers for their next challenges.
In partnership with Ashridge Business School, we
design the programme around a different theme
each year. This year the theme was ‘Impact’,
whether personal, team or organisa onal. As
part of the learning experience, par cipants
are given real business problems to address,
enabling them to make their own impact
through on-the-job learning. The programme
is delivering results. We have seen an increase
in the confidence, performance and impact of
those involved and 25% of the par cipants in
2010 were promoted within one year, taking
new knowledge and innova ve thinking into the
business in their new roles.
Compe on
The European beer market is fairly concentrated,
with the top three players holding 52.1% of the
total market volume. The market leaders own
a variety of recognized brands and operate in
various segments of the market, which is possible
due to the ease of increase in produc on
capacity once a company is established. There
is a high degree of product differen a on in the
market, as there are many varie es of beer, such
as ales, stouts, low/no alcohol, standard and
premium lager, and specialty beer.
Western Europe accounts for 15% of global
beer consump on, but only 12% of EBITA. Beer
volumes have declined over the last decade as a
result of nega ve demographic trends and lower
per capita consump on. Markets are more o en
than not fragmented and compe ve, leading
to overall lower margins by global standards,
despite rela vely high selling prices. However,
many of the region’s brewers are undertaking
significant cost-cu ng programs.
Central and Eastern Europe accounts for 14%
of global beer consump on, but only 10% of
EBITA. Beer volumes have grown rapidly over
the last decade, fuelled by strong economic
development. However, as is the case in
Western Europe, most local markets are strongly
compe ve (albeit retailer power is much lower),
leading to low pricing power and rela vely
low margins by global standards. These have
been compounded by recent specific market
issues related to duty and raw materials in the
region’s biggest market, Russia.
52%
Market share of the top 3
European beer companies
“
”

Situa on Analysis
External Environment
Poli cal Factors Economical Factors Social Factors
• The poli cal stability in a country could
have a crucial influence on businesses
and especially on big investments
such as big capacity brewers (e.g. the
Botswana case)
• Regula ons and quality laws are
different all over the world, and
some mes could influence the
produc on on a large scale (esp. China).
• Ban and restric on on alcohol
adver sing (e.g. Czech Republic where
the government introduced a blanket
ban on all spirits)
• Most economies face an increase in
taxes for alcohol
• The slow economic growth of mature
markets (Europe and US) influences the
evolu on of beer market
• The rise in costs of fuel, energy,
aluminum and other raw materials
affects the profitability in this industry
• The skill level of workforce is important
for beer business management
• For global players, vola lity of exchange
rates, devalua on of so currencies,
high level of infla on in some countries
(especially on emerging markets) should
be considered.
• Consumers are more health conscious.
The lifestyle in developing countries
has changed due to an increase in
disposable income, and this has led to
an increase in beer consump on
• Demographic and cultural aspects
(e.g. younger popula on in emerging
regions spend more me in coffee shops
and pubs)
• Football and other sports events
affects consumer behavior and is very
important in beer consump on
• Beer makers can be affected by the new
trend in consump on, for instance the
growing preference for wines or spirits
PESTEL Analysis of the Beer Industry
Porter’s Five Forces
Power of Suppliers - LOW Power of Buyers - MID to HIGH Power of Subs tutes - MID
The main raw materials in the beer industry
are malted grain and bo les (or barrels).
Brewers tradi onally buy the raw materials
directly from producers or from third-party
mal ngs. There are beer makers which
own their mal ng house, determing a weak
supplier power. S ll, hop growers can find
alterna ves for their products such as spirits
producers (for dis lla on) or animal feed
purposes. The quality of raw materials is
determinant in this business, so overall, the
suppliers’ power in this industry could be
considered quite low.
The most important buyers of beer makers
are supermarket chains with a strong power
and ability to nego ate. Also, the level of
switching cost for these kinds of buyers is
low. The bigger players in the beer industry
are capable of offering a wide range of
products with different tastes and prices. We
can consider a high level of buyers’ power,
although, in specific countries or regions,
it could be moderate due to fewer product
offerings (Vietnam, Africa, La n America).
The demand of regular beer is inelas c (-0.7)
but the premium beer is elas c.
The power of subs tutes can be considered
moderate, but is growing due to increasing
consciousness of people about healthy
habits. Individuals are more interested in
low calorie products and also tend to prefer
nonalcoholic beverages. It is important to
men on the increasing demand of wine,
due to the perceived health benefits of this
beverage.
The beer industry is characterized by a high level of compe veness.
From the total beer market volume, approximately 47% is held by
four major players: Anheuser Busch Inbev, SABMiller, Heineken
and Carlsberg. In order to differen ate their products from those
of the compe tors, the main players in this industry invest a lot in
marke ng and in product innova on. This contributes to a high fixed
costs (due to the maintenance of a high level of product quality,
strong distribu on channels, etc). The strong bargaining power of
buyers (e.g. big supermarkets chains) can lead to high pressure on
price levels. All these factors determine a strong rivalry in the beer
industry.
For a 4million barrel capacity brewery, the minimum investment is
approximately USD250m. A significant amount of capital is required
to buy all the machineries for the plant, raw materials, storage
facili es etc. If we also consider the s rict government regula ons,
barriers for new entrants can be very high. To achieve large scale
produc on, a new business needs a lot of experience with building
strong distribu on channels, high investment in produc on lines, and
marke ng campaigns. It is very hard to compete with exis ng brands
that are already popular among the consumers. The entrance in this
industry could be risky because there are li le alterna ves uses for
a brewery. For small businesses like micro-breweries, the barriers
to entry can be considered a moderate one. In the last decade, this
industry has witnessed a lot of exits and plenty of new entrants from
micro-breweries, especially in the US and Africa.
Rivalry of Compe tors - HIGH Threat of New Entrants - MID to HIGH

Technological Factors Environmental Factors Legal Factors
• Investments in R&D, automa on
technology are influencing factors of
produc vity in the beer industry
• Due to new technology, new packaging
can be easily adopted in the beverage
industry
• The high level of technology provides
the beer producers with the capacity
to manage a developed and complex
distribu on network
• An advanced technology offers high
level of flexibility; companies could
introduce a variety of products with
different flavors
• Weather condi ons could affect beer
consump on (e.g. La n America in
2006, China in 2012)
• Increasing awareness about water
consump on; most big players are
engaged in special programs for water-
use reduc on
• Increasing awareness of reduc on in
carbon emissions should be considered
for the future management of this
business
• Recycling systems of packaging and
other materials used in beer produc on
is a substan al financial investment
• The workforce laws and regula ons
differ from country to country, and this
could be an influencing factor in the
management of globally opera ng beer
makers
• Local laws could affect takeover
a empts and may develop legal
complica ons to a business
• Laws and regula ons regarding mergers
and acquisi ons, and compe on
regula ons as a whole should be
considered as an extremely important
influencing factor for a globally
opera ng beer producer
VALUE: Significant ac vi es that meet
customers’ needs
• Being in the right markets, having the
right por olio: The company operates
in a range of markets with different
characteris cs - price ladders approach
and market segmenta on maximise
profitability from different markets
• Building the right partnerships by
crea ng successful rela onships with
their partners and crea ng the right
opera ng process
• Sharing best prac ce and implemen ng
measurement procedures (KPIs) to
ensure con nuous improvements
Situa on Analysis con nued
RARITY: Bases of value crea on that are rare
• The capacity of SABMiller to operate
and to easily deal in challenging
environments could be consider rare.
Their experience in South Africa market,
during the apartheid regime enabled
them to enter on new and different
markets, organizing an aggressive
growth strategy in order to increase
their global market share.
IMITABILITY: Aspects of value crea on that
are difficult to imitate
• The experience gained by SABMiller
South Africa shaped the further
Helpful Harmful
Internal
Strengths
• Strong corporate sustainability efforts
• Global presence
• Por olio of interna onal and local brands
• Most diversified beer company
• Implementa on of corporate best prac ces
• Uses global exper se to grow local brands
• Worldwide alliances
Weaknesses
• “Lacks controlling shareholders” - easy to pick apart by
compe tors if they can afford it
• No breweries in Germany and the UK which are the first and
the second largest market in EU
• Lack of presence in Brazil, Japan
External
Opportuni es
• Economic downturn posi ve effect on consumer behavior:
Many drinkers were indulging in premium beers as a “treat
or reward” during the difficult economic mes
• Drinking age bracket is growing
• Ban on spirits in Czech Republic
• Con nued growth in emerging markets
• Partnerships with local brands
Threats
• Tax avoidance allega ons in Europe & Africa
• Possibility of takeover from AB InBev
• Tax laws on alcohol
• Beer industry consolida on
• Increasing cost of raw materials & fuel
• Limits on alcohol adver sing (Africa, India)
• US & Europe economic downturn
• Nega ve health percep on of beer
SWOT Analysis
Key Business Capabili es
evolu on of the interna onal company.
It was developed in a unique corporate
culture with a special capacity to
approach new and emerging markets.
This unique capacity of learning from
historical experience is less imitable.
NON-SUBSTITUTABILITY: Aspects of the
value chain which are not vulnerable to
subs tu on
• The unique capability of SABMiller
to apply global exper se and local
knowledge to manage brands is less
vulnerable to subs tu on.
VRINE Analysis

Situa on Analysis con nued
Internal
Industry Consolida on Trend
Mergers & Acquisi ons
SupportAcvies
Infrastructure: IT system, general management, finance and accoun ng
The IT management is centralised, company has a USD100m contract for 8 years with HP (BLAD System Products), star ng with 2010
Technology and development:
“Its global brewing technical team has developed innova ve technology which drama cally reduces the energy input required in the
boiling process”. The company invested in a low-energy boiling technology and “is commi ed to reduce its fossil fuel emmissions by 50
% per litre of beer by 2020 and its water use by 25% per litre of beer by 2015, compared to 2008 levels”(SABMiller, 2013).
Human resources:
Also improved with the Trinity Program. The project of implemen ng Accenture’s Supply Chain Academy at SABMiller La n America
could be considered a real success. Through this project the company was able to offer “specific kowledge and skill gaps in a wide range
of supply chain roles accros La n American opera ons” (The employees were involved in a series of courses for “specific areas including
procurement, planning, inventory management, logis cs, manufacturing and customer service).
Procurement: The implementa on of Trinity Procurement (2012), a global procurement organisa on, with headquarters in Switzerland,
and four regional offices in Johannesburg (SA), Miami (USA), Baar (Switzerland) and Melbourne (Australia). Responsible for acquisi on
of: brewing materials, packaging, capital equipment, marke ng materials and business services (SABMiller, 2013).
PrimaryAcvies
Inbound logis cs
The company has long
term contracts with its
suppliers (usually with
local communi es) for
raw materials in order
to ensure consistency in
their produc on ac vity
Opera ons
The ability to develop
low cost produc on
facili es capable of
producing consistent
product anywhere in the
world
Well developed raw
material prac ces
that leverage deep
industry knowledge and
economies of scale.
The company has
developed an
interna onal reputa on
for “opera onal
excellence” known as the
“SABMiller Way.”
Outbound logis cs
The company
con nuously invests in
order “to op mise their
distribu on network for
a maximum efficiency.”
“Ra onalising
distribu on centres,
consolida ng a
fragmented distribu on
network, introducing
and standardising
performance incen ves
for distributors” are only
some of the main aspects
of their logis c ac vity
(SABMiller, 2013).
Marke ng & Sales
Sales programmes locally
designed in strong
rela onship with local
partners. The ability
to nurture and grow
brands that consumers
want is one of the most
important assets of
SABMiller.
Four global brands, 200
local brands
The company developed
a global approach to
digital marke ng ac vity
for worlwide brands
(Marke ng Week, 2011).
Service
The company has
a collabora ve
approach regarding
the rela onships with
its customers, because
“working together with
them will yield results”.
“BEER” (Building
Execu on Excellence at
Retail). The management
team view is to
realize “an improved
customer rela onship
model, centred on
mutually beneficial
solu ons for brand-led
growth.”
Value Chain Analysis
2007
2006
2005
2004
2003
2002
2001
2000
1999
1895
Global
growth
Primary lis ng on the
London Stock Exchange
Carlsberg and Orkla
merger, Carlsberg
acquisi on of
Kronenbourg
India Italy
South
America
El Salvador,
Honduras,
Strategic alliance with
Castel Group in Africa
Crea on of SABMiller
following the purchase of
Miller Brewing Company
Pacific Beverages JV
with Coca-Cola Ama l
formed in Australia
Heineken acquisi on
of Brau AG
Belgium Interbrew
and Brazilian Ambev
merger, forming InBev
Anheuser-Busch
acquisi on of Harbin
in China

Company
Volume
(%)
EBITA
(%)
Global Presence
Anheuser-Busch InBev 18 29 N. America, La n America, Europe, APAC
SABMiller 12 15
N. America, La n America, Europe, APAC,
Africa
Heineken 9 10 Western Europe, Africa, Middle East
Carlsberg 6 5 Europe
% Total of beer market 45 59 2012
Compe ve Landscape
The global top 4 brewers (AB InBev, SABMiller,
Heineken and Carlsberg) collec vely account
for 45% of volume, 48% of revenue and 59% of
EBITA, on a propor onate basis.
Anheuser-Busch InBev is the largest global
brewer by volume, engaged in producing,
marke ng, distribu ng and selling a por olio
of approximately 200 beer brands and employs
about 114,000 people. The company also
produces and distributes so drinks, par cularly
in La n America. The group has best-in-class
margins, benefi ng from scale, top-cost
management and favorable market structures in
the Americas.
Heineken has a more balanced geographic mix
of mature/emerging markets, owning, marke ng
and selling more than 250 brands and employing
around 70,000 people. However, the group is
s ll heavily dependent upon low-growth, lower-
margin Western Europe. In addi on, the group
has leading posi ons in many African markets,
where it benefits from strong pricing power and
superior margins.
Carlsberg primarily operates in Europe, which
accounts for 90% of its beer profits. The
Carlsberg beer por olio includes more than 500
brands and employs 41,000 people. In Eastern
Europe, Carlsberg is largely concentrated in
Russia, where Bal ka enjoys close to 40% market
share. Given the scale of the Russian beer
market, the group has high margins in Eastern
Europe. In contrast, Carlsberg has rela vely low
margins in Western Europe, where markets are a
lot more compe ve.
2014
2013
2012
2011
2010
2009
2008
Ukraine,
Southern Sudan,
Acquisi on of Royal Grolsch N.V.,
Crea on of MillerCoors JV
in USA and Puerto Rico
Acquisi on of remaining
shares in Poland
Acquisi on of Foster’s
Group in Australia
Acquisi on of Kingway
Brewery in China
Argen na
SABMiller forms
strategic alliance
with Anadolu Efes
Proposed acquisi on of
Distell Group in Africa
Anheuser-Busch and
InBev merger
AB-InBev a empts to
buy Grupo Modelo
AB-InBev
SABMiller
Carlsberg
Heineken

Business Strategies
Product Por olio Expansion Strategy: Non-alcoholic beer & malts
$25m
To introduce a non-alcoholic
beer brand in the Middle
East region
Alloca on of funds:
• Building a new produc on line in one of
Anadolu Efes’ facili es: USD 15 million
• Se ng up opera ons: USD 5 million
• R&D / Marke ng / Legal: USD 5 million
Strategy Objec ves
• To expand our current product por olio by
developing new products and focusing on
growth areas such as the Middle East and
North Africa
• To enhance profitability by capitalizing on
emerging market economic growth and
increasing consumer disposable income
Expected Outcome/Growth
We expect to produce 2.3million hl of the
product and generate USD460m of revenue in 3
years.
Ra onale
In the Middle East, nonalcoholic beer has
been showing strong growth in recent years.
Although it remains a niche category, accoun ng
only for 1% of global beer volumes (2011), the
nonalcoholic beer category is forecasted to
show the most dynamic growth within beer,
with a 7% volume CAGR over 2011-2016, thanks
to the growing popularity of non-alcoholic
beer in Middle East and Africa due to religious
proscrip on of alcoholic drinks (Passport, 2012).
This could offer growth poten al for SABMiller.
Due to the religious ban of alcoholic drinks,
Middle East and Africa is the world’s most
important market for nonalcoholic beer. In 2011,
volumes grew by 15% in the region, to exceed
1.3 billion litres. Heineken leads the category
with a 25% volume share in the region, but its
volumes are concentrated mainly in Nigeria.
However, Iran is expected to post the strongest
growth in nonalcoholic beer, with a 24% volume
CAGR (Passport, 2012), accoun ng for two thirds
of the region’s total actual volume growth over
2011-2016; the country is expected to overtake
Nigeria by 2013 in terms of volume.
The ban on alcoholic drinks con nues to be
in force in Saudi Arabia due to Sharia law.
Therefore, nonalcoholic beer remains the only
product available. Youth con nued to be the
largest consumer group for nonalcoholic beer.
However, the product also started to a ract
female consumers, par cularly flavoured
nonalcoholic beer.
With Iran posi oned at the conserva ve end of
the religious spectrum, the fact that it features
prominently in the top slots in terms of per
capita consump on, size and growth of low/
nonalcohol beer should come as no surprise.
Nonalcohol beer is set to post further strong
growth (18% CAGR, 2010-2015) driven by Iran,
which is expected to post a 33% CAGR over the
same period.
The recent alliance with Anadolu Efes has also
given SABMiller access to Turkey, Russia, CIS,
2.3m hl
$460m
Expected outcome in terms
of volume and revenue in
the next 3 years
Timeline
• Year 1: Iran & Turkey
(including 3-6 month pilot in
one city in each country)
• Year 2: The rest of Middle
East
• Year 3: North Africa
Corporate Strategy Focus Area
Alignment
• Crea ng a balanced and
a rac ve global spread of
businesses
• Developing strong, relevant
brand por olios that win in
the local market with a brand
presence
For Board Approval
USD 25m for introducing non-alcoholic beer brand called SHARAF
(Honor) and Malts as a pilot project in alliance with Anadolu Efes
in Middle East region i.e. Iran & Turkey.

Business Strategies con nued
and Central Asia. Anadolu is already distribu ng
SABMiller’s beer brands in the region and has a
strong market presence. With our closer es with
the Turkish brewer, SABMiller might be able to
compete more eﬀec vely against its compe tors
in the region for nonalcoholic beer products.
Moreover, by taking advantage of Anadolu’s wide
distribu on network, SABMiller can push its
other nonalcoholic beer products.
Implementa on (Year 1)
Produc on Facility
We propose se ng up a dedicated produc on
line in exis ng produc on capacity of Anadolu
Efes. The total cost of this pilot project will
be taken up by SABMiller. Anadolu Efes is
compensated on cost plus 5% of revenue basis
on this project.
Opera ons
Opera ons and distribu on channels are
designed with the exper se of Anadolu Efes in
the region
Framework Support
• Strength: Strength of
strategic alliances
• Opportuni es: Increase
in disposable income in
emerging markets
Non-alcoholic beer & malts
Marke ng and Legal
• Develop non-alcoholic beer brand and seek
cer ﬁca on from religious authori es i.e.
Halal.
• Create a new subsidiary to handle the
marke ng and selling of the product in
considera on of religious sensibili es
(i.e. Muslims do not want to patronize
products of companies that are known to
manufacture alcoholic beer).
Risks
• Brand (SABMiller) associa on with alcohol
can be a deterrent with respect to Muslims
beliefs
• Other health and energy drinks in the
market
• Non acceptance of new brands ini ally,
requires more me to build trust in the
consumers
• Compe on from Exis ng old local players
Anadolu Efes’ Presence in the Middle East (• alcoholic • nonalcoholic)

Business Strategies
Premiumisa on Strategy
$15m
For premiumisa on efforts
in emerging markets,
beginning with La n America
and China
Alloca on of funds:
• La n America: USD 10 million
• China: USD 5 million
Strategy Objec ves
To enhance profit margins by capitalizing
on emerging market economic growth and
increasing consumer disposable income.
• La n America: Revitalize the Cusqueña
premium brand and expand throughout the
region
• China: Exploit premium growth through
our joint venture with CR Snow and recent
increase in capacity through our acquisi on
of Kingway and enhance overall profit
margins
Expected Outcome/Growth
• La n America: 12% growth forecast in
revenue from the premium segment
• China: 3% growth forecast in revenue from
the premium segment
Ra onale
Emerging markets are expected to con nue to
drive global beer volume growth over 2011-
2016, while mature markets are predicted
to remain sluggish. In value terms however,
developed markets remain important due to
their higher margins, but as premiumisa on
con nues, emerging markets are expected
to gain share in value terms as consumer’s
disposable income increases encouraging
consumers to trade up to more premium
products. Premium lager products are expected
to post the strongest growth with a 3% volume
CAGR over the period, mainly thanks to growing
premiumisa on in Asia Pacific and La n America
(Passport, 2012).
In terms of premium lager volumes, La n
America is expected to show significant growth.
The region’s economic development is expected
to con nue to fuel consump on growth, and
consumers with greater disposable income will
be able to trade up to more premium products.
SABMiller’s key market, Peru, is set to grow at
a 12% CAGR over 2011-2016 in premium lager,
more than twice the growth of standard lager,
and its share of total beer volumes is expected
to increase from 10% in 2011, to reach 14%
by 2016. Addi onally, there has been strong
performance in premium brands in Panama
as well as Honduras. The opportunity to grow
premium in our exis ng markets of opera on
offers significant poten al for exponen al
organic growth. (Passport, 2012)
With a 5% volume CAGR (+14 billion litres)
over 2011-2016, China will remain the key
growth driver of global beer volumes, and in
addi on to the strong volume growth, there is
an opportunity for us to improve our margins
as well, as growing wealth allows consumers
to trade up from the dominant economy lager.
Although premium and standard lager accounted
12%
3%
Expected outcome in
terms of revenue growth
in La n America and China,
respec vely
Timeline
• Year 1: La n America & China
(including 3-6 month pilot in
one city in each region)
• Year 2: Ini ate
premiumisa on efforts in
Africa as well as start tes ng
premiumisa on ini a ves in
other regions (ex. Australia,
India)
• Year 3: Roll out
premiumisa on in iden fied
regions
For Board Approval
USD15 million for premiumisa on efforts in emerging markets
beginning with La n America and China. Funds are specifically for
rebranding and marke ng related ini a ves.

SABMiller Management Report for MBA Boardroom Activity

SABMiller Management Report for MBA Boardroom Activity

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