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SABMiller PLC (SAB)

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Thursday 22 May, 2003

SABMiller PLC

Final Results

SABMiller PLC
22 May 2003

                                 SABMiller plc

                          PRELIMINARY ANNOUNCEMENT


                  Strong Organic Earnings Growth and Expansion


    London and Johannesburg, 22 May 2003. SABMiller plc today announces its
 preliminary (unaudited) results for the year to 31 March 2003. Highlights are:

      Financial
                                                                    2003        2002
                                                                  US$m #        US$m       % change


Turnover                                                           9,112       4,364          109

- excluding Miller                                                 5,639       4,364          29



EBITA *                                                            1,270         766          66

- excluding Miller                                                 1,020         766          33



Profit before tax                                                    770         606          27



Adjusted profit before tax                                         1,107         668          66



Adjusted earnings                                                    581         350          66



Adjusted earnings per share

- US cents                                                          54.0        48.7          11

- UK pence (up 3%)                                                  34.9        34.0

- SA cents (up 9%)                                                 513.0       472.5



Basic earnings per share (US cents)                                 27.5        40.7         (32)



Dividends per share (US cents)                                      25.0        25.0           -



#  Includes Miller Brewing Company for nine months, except where indicated.

*  Earnings before interest, taxation and goodwill amortisation, and before exceptional items (see note
4).

Note: Adjusted profit before tax and adjusted earnings exclude exceptional items and goodwill
amortisation.







Operational



  • Total beverage volumes up 52% to 151.4 million hectolitres (hls), organic
    growth of 3.0%
  • Total lager volumes increase 65% to 115.8 million hls, organic growth of
    4.2%
  • Strong performances and EBITA margin improvement in Beer South Africa,
    Europe and Africa & Asia
  • Adjusted earnings per share increase by 11%
  • Miller Brewing Company acquired and being integrated into the group
  • Birra Peroni and Shaw Wallace transactions announced





Statement from Meyer Kahn, Chairman





'This has been a year of outstanding growth from our businesses in South Africa,
Europe and Africa & Asia.  Strong operational performances and favourable
currency movements have led to an increase in EBITA of 33% from our businesses
excluding Miller.



The acquisition of Miller, an important strategic step for the group, was
completed in July. We remain confident that integrating the business into the
group and building a platform for growth can be achieved within three years.



Today, SABMiller has a brewing presence in over 40 countries. Through our
geographic reach and balance, the quality and breadth of our brand portfolio and
our widespread distribution network, we are well placed to continue delivering
shareholder value.'




Enquiries:


SABMiller plc                                                          Tel: +44 20 7659 0100

Sue Clark                      Director of Corporate Affairs           Mob: +44 7850 285471

Nick Chaloner                  Communications Director                 Mob: +44 7880 502755

Anna Miller Salzman            Head of Investor Relations              Mob: +44 7973 837070

Ciaran Baker                   Head of Corporate Communications        Mob: +44 7979 954493

Angus Maitland                 The Maitland Consultancy Ltd            Tel: +44 20 7379 5151

Philip Gawith                  The Maitland Consultancy Ltd            Tel: +44 20 7379 5151


     A live webcast of the management presentation to analysts will begin at 9.30am (BST) on 22 May 2003.
This announcement, a copy of the slide presentation and video interviews with management are available on the
                                                  SABMiller
   plc website at www.sabmiller.com . Video interviews with management can also be found at www.cantos.com.

                        Pictures for the media are available from www.newscast.co.uk.

Copies of the press release and the detailed Preliminary Announcement are available from the Company Secretary
              at the Registered Office, or from 2 Jan Smuts Avenue, Johannesburg, South Africa.

                    Registered office:  Dukes Court, Duke Street, Woking, Surrey, GU21 5BH

                                          Telephone: +44 1483 264000
                                          Telefax:   +44 1483 264117







        Incorporated in England and Wales (Registration Number 3528416)


CHIEF EXECUTIVE'S REVIEW                                                                                         3





Business review



During the past year we have clearly positioned SABMiller as a leader in the
global beer market.  The acquisition of Miller Brewing Company and, more
recently, transactions with Birra Peroni and Shaw Wallace demonstrate the
considerable financial strength of the group as it continues to expand.  We have
achieved organic sales growth and productivity improvements across many of our
markets, and added to our established positions with a number of smaller
acquisitions in Europe and Africa & Asia.



Total group beverage volumes of 151.4 million hectolitres (hls) were 52% above
last year's 99.4 million hls (organic growth 3%).  Lager volumes were up 65% to
115.8 million hls, with organic growth of 4.2%. Beer South Africa recorded a
second consecutive year of growth, with volumes up 0.8% to 24.4 million hls.
Other beverages totalled 35.6 million hls.



Our widespread portfolio of businesses delivered an impressive financial
performance over the year. Turnover, including share of associates, increased by
109% to US$9,112 million (organic growth 17.8%) and EBITA grew 66% to US$1,270
million, driven by continued focus on volume growth, productivity and cost
containment.  EBITA margins have continued to improve in most of our businesses,
reaching 18.1% for the group excluding Miller. The lower EBITA margin at Miller
has diluted the group's margin in comparison with the prior year.  Adjusted
earnings were up by 66%, to US$581 million, with adjusted earnings per share of
54 US cents, up 11% on the prior year.



The board has proposed a final dividend of 18.5 US cents per share, making an
unchanged total of 25 US cents per share for the year. The dividend is covered
2.2 times by adjusted earnings and is in line with our declared aim of achieving
dividend cover of 2.2 to 2.5 times. Shareholders will be asked to ratify this
proposal at the annual general meeting, scheduled for 30 July 2003.



North America



We acquired Miller Brewing Company in July 2002.  In the nine month reporting
period, after adjusting for a distributor stock reduction programme implemented
in March, total Miller volume was down 3.7% with domestic volume falling by 4.5%
(6.2% before adjustment). Contract brewing volumes grew 3.6% and international
volumes grew by 6.6%.



EBITA for the nine month period is US$250 million, before exceptional items,
reflecting volume decline, as well as the negative impact of brand, pack and
geographic mix, increased cost of raw materials and greater energy costs, offset
partly by higher selling prices.    EBITA for the period was determined after
providing for a number of significant one-time charges associated with the
Flavoured Malt Beverage (FMB) brands, Sauza Diablo and Stolichnaya Citrona, and
the reduction of four and one half days of inventory held in distributor
warehouses.



Since acquiring the business we have commenced the integration of Miller into
the group and strengthened the management team, whilst developing our longer
term strategy and action plans to deliver value. We expand on these issues in
the operational review, below.



Central America



Our Central America business delivered a first full year EBITA contribution of
US$56 million, before exceptional items, which was below our expectations. This
was largely due to aggressive, and in our view unsustainable, price-based
competition in the carbonated soft drinks (CSD) market in El Salvador. Since
acquisition we have undertaken a major restructuring of the business, reducing
costs and rationalising headcount and have brought in management with extensive
CSD experience. We are confident that the CSD profit pool in El Salvador will be
re-established over time and that the changes we have made in the business,
combined with positive forecasts for economic growth, will deliver improved
earnings performance in the year ahead.




CHIEF EXECUTIVE'S REVIEW (continued)                                                                             4





Europe



Our Europe operations delivered another excellent year of profit growth.  EBITA
was up 39% to US$275 million with almost every country improving volumes, market
share and margins. Poland, our largest contributing business, grew EBITA
strongly on the back of 9% volume growth.  Volumes in our Russian business grew
27% following the introduction of new brands and packaging.  The Pilsner Urquell
brand grew volumes by 12% in the Czech Republic, and volumes outside the country
increased by 17% to 653,000 hls.



On 14 May 2003, the group announced it had reached an unconditional agreement to
acquire a majority interest in Birra Peroni, the number two brewer in Italy,
with rights to increase the holding in the future.  The transaction is expected
to close within three weeks and SABMiller will have an initial stake of between
51% and 60%, to be determined on closing.  The acquisition will be funded in
cash, from existing resources.



Africa & Asia



Africa & Asia performed exceptionally well, with EBITA up 36% to US$233 million.
Africa benefited from strong volume growth in key markets, market share gains
and the results of successful acquisition activity. Our equity accounted
associate, Castel, also delivered strong results. In China, the Wuhan and Blue
Sword acquisitions have been successfully integrated and EBITA has more than
doubled.  In India we achieved our target of break even at the operating profit
level in our first full year incorporating four operating units.



On 21 May 2003, we announced that SABMiller had become a strong number two
brewer in India through a joint venture with the Shaw Wallace group of
companies. This positions us well in the high growth Indian beer market.



South Africa



Beer South Africa EBITA grew by 18% to US$338 million, with volumes up 0.8%.
Operating performance in this business is at an all time high, with operating
margin up 80 basis points. Improved productivity offset significant increases in
raw material prices and higher marketing spend on new product development and
introductions into the market place.



ABI succeeded in delivering good results through volume growth and overhead
productivity gains, and EBITA increased by 24%.  Southern Sun achieved strong
earnings growth this year with positive operational contributions coming from
both the hotel and gaming divisions.







Outlook



The global economic and socio-political outlook remains uncertain. However,
SABMiller is a business which has geographic reach and balance, a quality brand
portfolio, a widespread distribution network and financial strength, and it
remains well placed to continue to deliver value for shareholders.



We have commenced our restructuring of the Miller organisation, but major
benefits will only be evident over time.  There are some positive signs in
Central America, although competitive pressures remain.  Our other businesses
have all performed extremely well, and it is expected that this momentum will
continue into the current year.






CHIEF EXECUTIVE'S REVIEW (continued)                                                                             5





Operational review



North America


                                                                                  2003*
Financial summary                                                                  US$m

Turnover                                                                          3,473
EBITA**                                                                             250
EBITA margin (%)                                                                    7.2

Sales volumes (hls '000's)
- Lager   - excluding contract brewing                                           33,852
          - contract brewing                                                      8,172
- Carbonated soft drinks (CSDs)                                                      55




* Nine months.

** Before exceptional items being integration costs of US$17 million and
Tumwater brewery closure costs of US$35 million.





We acquired Miller Brewing Company in July 2002, giving the group access,
through a national player, to a growing beer market with the world's largest
profit pool, and at the same time diversifying the currency and geographic risk
of the group.



Since acquisition, we have commenced the integration of Miller into the group,
and we have made some important changes to the management team. Norman Adami,
previously Chief Executive of our highly successful Beer South Africa business,
was appointed as President and Chief Executive in February 2003. Whilst a number
of tactical initiatives have been implemented in the period under review, we are
focused on developing our longer term strategy and action plans to deliver
value.



In the nine month reporting period, US beer industry volumes were affected by
low consumer confidence, a lacklustre economy, recent world events, and poor
weather, resulting in industry volumes being level with those of the prior year.
Total Miller volume, after adjusting for a distributor stock reduction
programme implemented in March, was down 3.7% with domestic volume falling by
4.5% (6.2% before adjustment).  Certain of Miller's core brands have been losing
market share for a number of years. However, the rate of decline increased over
the past year and we believe this to be due to a combination of factors
including loss of management focus on core brands following the introduction of
four FMBs and perhaps some understandable disruption during the transaction and
subsequent integration into SABMiller.  Contract brewing volumes grew 3.6% and
international volumes grew by 6.6%.



EBITA, for the nine month period, of US$250 million, before exceptional items of
US$52 million, reflects the impact of the volume decline, as well as negative
brand, pack and geographic mix, increased cost of raw materials and greater
energy costs, partly offset by higher selling prices. There were also a number
of significant one-time restructuring charges including costs associated with
the uplift and write-off of excess production of the FMB brands, Sauza Diablo
and Stolichnaya Citrona, and the reduction of four and one half days of
inventory held in distributor warehouses, which together amount to US$40
million.  A further US$16 million of FMB launch costs, as reported in our
interim results, were also expensed during the year.  Before taking account of
the exceptional and other costs referred to above, EBITA for the nine month
period was US$306 million.




CHIEF EXECUTIVE'S REVIEW (continued)                                                                             6





A number of tactical initiatives, noted above, have been implemented in respect
of Miller Lite and Miller Genuine Draft (MGD).  New packaging for Miller Lite
was introduced at the beginning of this year and the recent advertising has
attracted considerable consumer attention, particularly with the 21-28 year old
target audience. This increase in brand visibility will be followed up with a
clear repositioning of the brand itself in the autumn of 2003. Supporting these
brand initiatives is the high quality of the Miller Lite product which has been
recognised and is evidenced by Miller Lite winning its third gold medal at the
2002 World Beer Cup. Miller High Life enjoyed modest volume gains, continuing
the 2% per annum growth trend established with the 1998 brand repositioning.
Award winning advertising, innovative packaging initiatives and a recent low
calorie brand extension have contributed to the success of this brand. We will
continue to invest behind this brand, building on our success.



SKYY Blue has become the fourth largest spirits branded FMB in the US with
volumes totalling over 500,000 hls since its introduction in April 2002. We
continue to view the FMB segment of the market as offering value and will invest
appropriately behind our brands.



Exports and international sales of Miller brands, led by MGD, continue to
provide volume growth and stable income.  We expect to achieve further growth in
this area through leveraging the distribution network across the SABMiller group
during the current year.



Much work  is being undertaken on rebuilding the Miller brands and reshaping the
portfolio. We will reposition the Miller trademark based upon extensive in-depth
consumer research and mapping, with the first elements of the new architecture
becoming visible in autumn 2003. We will, during the next 18 months, also be
implementing initiatives to strengthen sales and distribution based upon our
experience in other parts of the SABMiller group. These initiatives include
prioritisation of local markets, improved channel management, strengthening and
reorganising our sales force and improved management of distributors.



It will take time for the benefits of the brand repositioning and sales and
distribution initiatives to become evident.  However, we have identified
opportunities to reduce costs over and above those included in the US$50 million
of synergies described at the time of the acquisition.  Importantly, we are also
upgrading the performance management systems across the organisation and will be
taking appropriate actions to implement a productivity and cost reduction
programme.



Miller profitability will be impacted over the next two to three years by the
current volume declines, adverse mix effects and the ongoing restructuring and
reorganisation necessary to establish our platform for growth, although we are
confident that our efforts will deliver shareholder value in the medium term.
For the current financial year, we expect that EBITA, pre exceptional and before
restructuring and reorganisation costs, will be trending lower than comparable
previous periods.








CHIEF EXECUTIVE'S REVIEW (continued)                                                                             7





Central America


                                                                           2003            2002*
Financial summary                                                          US$m            US$m

Turnover                                                                    514             186
EBITA**                                                                      56              22
EBITA margin (%)                                                           10.8            11.9

Sales volumes (hls '000's)
- Lager                                                                   1,747             624
- Carbonated soft drinks (CSDs)                                           6,257           2,231
- Other beverages                                                         2,499             824




* Four months.

** Before exceptional items being reorganisation costs of US$12 million in 2003.





The current year represents the first full year of the group's ownership of its
Central American investments. The period under review was characterised by weak
economic performance in both El Salvador and Honduras and strong competitive
pressures in the CSD market, particularly El Salvador.  Major structural
changes, aimed at establishing a foundation for future growth, have been
actioned in both of our businesses.



Against this broad background, CSD volumes were down in both El Salvador and
Honduras, registering a 6.9% decline in total versus the comparable prior year.
In particular, El Salvador endured the entry of an aggressive CSD competitor,
which has effectively led to a short-term and, we believe, unsustainable
reduction in prices. Lager volumes fared better, and were flat on a pro forma
basis. Honduras achieved a 4.4% growth - the first time that growth has been
achieved in four years, but there was a 6.5% decline in El Salvador. Water
volumes in El Salvador were up 1%.



Sales declines have depressed the reported EBITA performance and reduced
operating margins. However, the year has been one of major structural change.
The restructuring of our Central American businesses has proceeded well.  In
each country we have merged the sales and distribution functions for beer and
CSDs.  We have rationalised packaging assets in the businesses and closed
certain production and distribution sites.  Across the region we have merged our
back office operations and integrated our financial systems. The above has
resulted in significant headcount reduction in both countries' operations and
will lead to substantial savings in future financial years.  The El Salvadorian
companies have been merged and we expect to do the same in Honduras in the
current year.



The strategy is to continue the conversion of the company into a marketing
focussed enterprise with a strong portfolio of relevant brands.  A number of
brand and packaging changes are planned, and these should support improved
performance in the market place.



Initiatives are also in place to improve production efficiencies with the roll
out of the World Class Manufacturing initiative, continued rationalisation of
surplus facilities and ongoing sales and distribution integration.






CHIEF EXECUTIVE'S REVIEW (continued)                                                                             8





Europe


                                                                    2003          2002
Financial summary                                                   US$m          US$m       % change

Turnover                                                          1,646         1,280             29
EBITA                                                               275           198*            39
EBITA margin (%)                                                   16.7          15.5

Sales volumes (hls '000's)
- Lager                                                          24,472        22,359              9
- Lager comparable                                               24,240        22,359              8
- Other beverages                                                   137           178            (23)




* Before exceptional items of US$8 million.





The division enjoyed another excellent year of profit growth with EBITA up 39%.
Lager comparable volumes grew 8% assisted by good summer weather in our two key
markets of Poland and Czech. Productivity (measured in hectolitres per person
per annum) improved by 12% and contributed to the 120 point expansion in EBITA
margin. Currencies in central Europe have strengthened against the US dollar,
and this has contributed to the improvement in reported results.



Growth in the Polish beer market was 5% for the twelve months to March 2003.
Kompania Piwowarska (KP) outperformed the industry with a volume increase of
10%, reaching 32% market share. A new brand Debowe, competing in the strong beer
segment, had a highly successful launch capturing over 20% of that segment
within nine months. Recently, we announced the acquisition of Browar Dojlidy Sp.
z.o.o. for US$38 million. This acquisition has now secured all regulatory
approvals and provides us with an economy brand in the mainstream segment,
adding a third production facility and improving KP's representation in the east
of the country.



In the Czech Republic, the Pilsner Urquell group exceeded expectations. The
overall market declined, as anticipated, by around 1% this past year. However,
we saw volumes grow by 4%, signalling good market share gains. In particular,
the premium Pilsner Urquell brand grew by some 12%, assisting margin expansion.
Local management is to be commended on rapid reaction to, and recovery from, the
devastating floods in August.



Our international premium brand Pilsner Urquell continues to perform well in the
key export markets of the USA, Germany, and the United Kingdom. Sales volumes in
these markets are encouraging, with volumes up 13%, 17% and 60% respectively on
the prior year. In total, volumes of Pilsner Urquell outside the Czech Republic
have increased by 17% to 653,000hls. The stand-alone Pilsner Urquell business in
the USA was integrated with the Miller Brewing Company operations shortly after
the financial year end and this will provide a strong platform for the future
potential of the brand in this market.



In Russia, industry volumes were up some 9% for the year and SABMiller enjoyed a
sharp recovery in the second half to end the year with 27% growth. This followed
the introduction of cans, a new brand Try Bogatyrya launched into the growing
mainstream segment, and the newly licensed production of Kozel from our Czech
brand portfolio. MGD, Holsten and Pilsner Urquell volumes all more than doubled
and our share of the Russian premium segment is now over 10%. Expansion to 3.5
million hectolitres at the Kaluga brewery is virtually complete and well within
budget.




CHIEF EXECUTIVE'S REVIEW (continued)                                                                             9





In Hungary, general price stability continued, assisting overall industry
profitability. Our Dreher subsidiary's volumes were up 5% against the industry's
3% and profits and cash flow surged during the year. Romania's beer market
continues to disappoint with virtually stagnant volumes. However, SABMiller's
volumes grew organically by 12% and this, together with ongoing synergy
developments from the prior year's Timosoreana acquisition, boosted Romania's
profitability albeit off a small base. Slovakia continues to benefit from
management and marketing integration with the Pilsner Urquell group. Volumes
were up 14% and our market share is now 25%. The Canary Islands have suffered
from the decline in global tourism and the beer industry lost ground this past
year; volumes were down by 3% though profits improved slightly.



Within Central and Eastern Europe, consolidation of the brewing industry
continues.  SABMiller expects to maintain a leading position in the region, and
to continue competing effectively.





Africa and Asia


                                                                    2003          2002
Financial summary                                                   US$m          US$m       % change

Turnover                                                           1,209           946            28
EBITA                                                                233           171            36
EBITA margin (%)                                                    19.2          18.1

Sales volumes (hls '000's) *
- Lager                                                           31,332        23,141            35
- Lager comparable                                                23,686        22,797             4
- Carbonated soft drinks (CSDs)                                    4,206         3,648            15
- Other beverages                                                  9,920        10,204            (3)




*Castel volumes of 10,680 hls '000's (2002: 9,633 hls '000's) lager, 8,925 hls '
000's (2002: 7,489 hls '000's) carbonated soft drinks, and 804 hls '000's
(2002: 569 hls '000's) other beverages are not included.



Africa



Africa performed exceptionally well in the year under review with the momentum
reported at the half year carrying through to the year-end.  The region
benefited from strong volume growth in key markets, market share gains in our
competitive markets and successful acquisition activity in a number of
countries.



Clear beer growth of 3.2% in our African businesses was achieved with strong
performances from Tanzania, Mozambique and Ghana.  Tanzania experienced a good
agricultural harvest, beer market growth and additional volume from the
restructuring of our East African operations; whilst Mozambique benefited from
the Laurentina acquisition.  Ghana enjoyed strong market share gains.  Our soft
drink volumes grew by 15.3% as a result of the inclusion of Zambia bottlers
following the February 2002 acquisitions and an outstanding performance from
Angola, where we exceeded the one million hectolitre mark and achieved organic
growth of 41.2% following the end of the civil war and an improving economy.
Traditional beer, however, ended below prior levels following the decision to
exit the low margin bulk beer segment in Zambia.



The introduction of VAT in Botswana, which resulted in across the board consumer
price increases, curbed the strong sales momentum enjoyed in prior years. US
dollar weakness assisted reported results in Botswana, Lesotho and Swaziland but
did not impact other African currencies to the same extent.


CHIEF EXECUTIVE'S REVIEW (continued)                                                                            10





Our SABMiller pan-African premium brands, Castle Lager and Castle Milk Stout,
grew 17% in total over prior year. Other key market initiatives included the
successful launch of Eagle Lager in Uganda, an innovative sorghum based clear
beer aimed at the low-income segment of the market.  The product has been well
received and aided market share growth in this competitive environment.



Throughout the region, the momentum in terms of unit cost reduction was
maintained via the combined effect of the application of our Manufacturing
Excellence Programme as well as purchasing, logistics and working capital
savings delivered by Sabex, our Johannesburg-based procurement subsidiary.



Associate volumes and earnings include Zimbabwe, which held up reasonably well
despite experiencing difficult political and economic conditions, and earnings
include our newly acquired stake in Kenya Breweries with effect from December
2002.



The Castel group, in which we have a 20% interest, posted strong results with
clear beer and soft drink volume growth of 10.9% and 19.2% respectively.
Operational benefits have been achieved by both groups from the relationship,
including areas such as procurement. We have recently entered Algeria with a
joint investment in soft drinks, to be supplemented with brewing in the short
term and we continue to evaluate other opportunities.



Asia



Within Asia, our Chinese joint venture performed well with a key area of
achievement being the successful integration of the Wuhan and Blue Sword
acquisitions. Volumes reached the 24 million hectolitre mark for clear beer and
total volumes exceeded 27 million hectolitres. The Chinese beer market is now
estimated to be the biggest in the world by volume. The roll-out of the
Snowflake brand throughout our 30 Chinese breweries continues, with the brand
achieving volumes in excess of five million hectolitres during the year.



Organic volume growth for the year of 5.7% was achieved against total volume
growth of 45.3%.  EBITA growth in China more than doubled year on year.



In India we achieved our target of break even at the operating profit level in
our first full year with the expanded base of four operating units, including
the acquisition of the Rochees brewery in Rajastan which was finally completed
towards the end of the period. During the year we launched Castle Lager in
Mumbai, Bangalore and Delhi with encouraging early signs.



On 21 May 2003, we announced that SABMiller had become a strong number two
brewer in India through a joint venture with the Shaw Wallace group of
companies.  This positions us well in the high growth Indian beer market.












CHIEF EXECUTIVE'S REVIEW (continued)                                                                            11





South Africa:



Beer South Africa


                                                           2003                   2002
Financial summary                                                   US$m          US$m       % change

Turnover                                                           1,270         1,112             14
EBITA                                                                338           287             18
EBITA margin (%)                                                    26.6          25.8

Sales volumes (hls '000's)                                        24,428        24,246              1






Volumes grew by 0.8%, despite the continuing tough trading conditions and the
period under review not benefiting from the inclusion of Easter.  Positive
growth in the second half of the year, particularly over the important peak
season, was driven by favourable weather conditions and the diminishing surplus
in the wine lake. Beer price increases at the retail level were lower than for
other liquor types, with evidence of some volume flow back to beer.



Operating performance, particularly relating to efficiencies and reliability,
are at record levels. Operating margins are up 80 basis points to 26.6%,
notwithstanding the continued focus on cost productivity being offset somewhat
by significant increases in raw material prices. Continued focus on operating
performance and asset management boosted EVA growth to a creditable 19% on a
five year compounded basis while working capital reflected improvement for the
eighth consecutive year.



Marketing spend on new product development has increased, with a number of
brands launched during the year and the company well positioned to go to market
with exciting new offerings during this year.  Sterling Light Lager was launched
during the year and received immediate consumer acceptance.  Redd's has gained
significant share through the 660ml returnable pack. Brutal Fruit, launched as a
new brand in June 2002, has shown significant potential but has been constrained
by packaging supply limitations since its launch.



Castle was a major sponsor of the recent Cricket World Cup tournament held in
South Africa. This event provided an excellent opportunity to support the brand
with a new advertising campaign and promotional activity.



The Premium/Light market segment reflected double digit growth. Two of
SABMiller's international brands, Pilsner Urquell and Miller Genuine Draft, will
be added to this segment to broaden the local portfolio during the early part of
the current financial year. This follows agreement between SAB Limited and
Heineken NV that their joint venture in South Africa to brew and distribute the
Heineken brand would end. The existing arrangement for the brewing and
distribution of the Amstel brand through the SAB network remains unchanged.



Legislation on the revised Liquor Bill is expected to be finalised in 2003. It
has again been confirmed that assurances from the relevant government department
regarding the retention by manufacturers of their depots and their ability to
deliver direct to retailers, remain intact.




CHIEF EXECUTIVE'S REVIEW (continued)                                                                            12





Other Beverage Interests


                                                                    2003          2002
Financial summary                                                   US$m          US$m       % change

Turnover                                                             788           676             17
- ABI                                                                594           500             19
EBITA                                                                120            95             27
- ABI                                                                 98            79             24
EBITA margin (%)                                                    15.3          14.0
- ABI                                                               16.5          15.8

Sales volumes (hls '000's)
Soft drinks                                                       12,489        11,912              5
ABI                                                               12,063        11,488              5






Amalgamated Beverage Industries (ABI)



The South African consumer environment improved during the second half of the
year under review, assisted by a strengthening of the rand and favourable tax
measures in the recent Government budget. Against this background ABI succeeded
in delivering good results, through volume growth and overhead productivity
gains.



Sales volume grew 5% in the year: 4.1% in CSDs, and 22.3% in other soft drinks.
This strong growth was a function of the good weather conditions, continued
improvement in market execution, and organic as well as market share growth in
certain areas of the expanding other soft drinks category.



Increased input costs and the adverse effect of mix changes towards lower margin
returnable glass packs were countered by strong productivity gains, leading to a
24% increase in EBITA.



Appletiser



Appletiser recorded a significantly increased trading profit, building upon last
year's successes with further volume growth in all markets other than the United
Kingdom. Focused brand activity to increase consumer awareness and Appletiser
brand equity in the United Kingdom has recently been implemented. Sales volumes
in the remaining international markets grew 10%. Combined volumes for Appletiser
and Grapetiser grew 16% in South Africa.



Distell



The group's 30% equity accounted listed associate, Distell, achieved sales
volume growth in its domestic and international markets. Operating profit was
significantly better, assisted by favourable sales mix at improved overall
margins.




CHIEF EXECUTIVE'S REVIEW (continued)                                                                            13





Hotels and Gaming


                                                                    2003          2002
Financial summary                                                   US$m          US$m       % change

Turnover                                                             212           164             30
EBITA**                                                               42            28             47
EBITA margin (%)                                                    19.7          17.4

Revpar - dollar *                                                 $32.10        $23.98             34




* Revenue per available room.

** Before exceptional profit on partial disposal of subsidiary US$4 million.





Hotels and Gaming achieved good earnings growth with increased operational
contributions from both segments. The transaction regarding the restructuring of
SABMiller's Hotels and Gaming interests became unconditional on 31 March this
year.  This consolidated subsidiary will in future be accounted for as an
associate. The new 'Tsogo Sun Group' is now set to pursue an independent future
with the expectation that SABMiller's 49% shareholding will be reduced over
time.



The hotel industry benefited from a significant increase in foreign visitor
arrivals to South Africa which has driven strong operating profit growth for the
period.  Occupancies at 72% were well up from the 66% achieved last year.
Average room rates increased by 19%, translating into an overall revpar increase
of 34% to $32.10.  The successful hosting of the World Summit on Sustainable
Development and the Cricket World Cup were also contributing factors.



Gaming division's results were strongly influenced by the performance of
Montecasino, the division's flagship casino and entertainment complex, which
continues to trade well.  The Gauteng casino market grew by approximately 15%
when measured against the previous financial year, with Montecasino marginally
gaining market share. Phase one of the Suncoast casino development in Durban was
successfully opened in late November at a capital cost US$95 million.






CHIEF EXECUTIVE'S REVIEW (continued)                                                                            14





Financial review



Segmental analysis



Our operating results by region are set out in the segmental analysis of
operations, and the disclosures accord with the manner in which the group is
managed. SABMiller believes that the reported profit measures - before
exceptional items and amortisation of goodwill - provide additional and more
meaningful information on trends to shareholders and allows for greater
comparability between segments. Following a study of head office services, the
group has introduced a method of allocation for head office service costs, which
increased during the year as a result of the expansion of the group following
the recent major acquisition. Segmental performance is reported after the
specific apportionment of attributable head office service costs.



Accounting for volumes



In the determination and disclosure of reported sales volumes, the group
aggregates the volumes of all consolidated subsidiaries and its equity accounted
associates, other than associates where primary responsibility for day to day
management rests with others (such as Castel and Distell). In these latter
cases, the financial results of operations are equity accounted in terms of UK
GAAP but volumes are excluded.  Contract brewing volumes are excluded from total
volumes, however turnover from contract brewing is included within group
turnover.



Acquisitions



With effect from 9 July 2002, South African Breweries plc (SAB) purchased the
entire share capital of Miller Brewing Company (Miller) from Philip Morris
Companies Inc. (Philip Morris) in exchange for the issue of 430 million shares
in SAB. The shares issued to Philip Morris comprise two classes of equity
capital: ordinary shares and unlisted participating shares. The total of these
shares is equivalent to an economic interest of 36.02% (excluding the shares
owned by Safari Ltd) in the enlarged SABMiller. Philip Morris' total voting
rights have been capped at 24.99% of the votes exercisable at a general meeting.
Further details of the acquisition, together with other acquisitions made in
the year, are given in note 11. The enlarged SAB group was renamed SABMiller
plc, and Philip Morris Companies Inc. was recently renamed Altria Group Inc.



Disposals



With effect on 31 March 2003, the group reduced its interests in the Hotels and
Gaming division to 49%, through the disposal of all its holdings in the Southern
Sun hotels group and the Tsogo Sun gaming group in exchange for cash and shares
in a new company, Tsogo Sun Holdings. Further details are given in note 11.



Profit before tax



Profit before tax, excluding exceptional items and goodwill amortisation, of
US$1,107 million was up 66% on prior year, reflecting performance improvements
from established businesses, and the impact of acquisitions, offset by increased
interest charges.



Exceptional items



The group recorded net exceptional items of US$66 million, comprising Tumwater
(USA) brewery closure and impairment costs of US$35 million, Miller and related
integration costs of US$23 million, Central America reorganisation costs of
US$12 million and a profit of US$4 million on partial disposal of the group's
holdings in the Hotels and Gaming group.  This compares to prior year net
exceptional items in Europe of US$8 million, comprising brewery closure costs in
Romania at Pitesti of US$9 million and an impairment of the Ursus brewery in
Romania of US$10 million offset by a release of a prior period impairment
provision in the Czech Republic (US$11 million).




                                                                                                                15

CHIEF EXECUTIVE'S REVIEW (continued)





Treasury



Gross borrowings have increased to US$3,523 million from US$1,535 million at 31
March 2002, principally as a result of the US$2 billion of borrowings assumed
with Miller Brewing Company.  Net debt has also increased to US$2,962 million.
The average loan maturity is less than 1.5 years and the average borrowing rate
is now below 4.5%.  Following these activities, the group's gearing increased at
the year-end to 42.4% from last year's 40.8%. Nevertheless, the group has
substantial unutilised borrowing facilities.  A review of the group debt
financial structure and debt refinancing proposals is taking place.



Interest



Net interest costs increased to US$163 million, a 65.9% increase on prior year's
US$98 million. This increase is due primarily to the borrowings acquired with
Miller, and interest cover is still viewed as satisfactory, at more than five
times.



Taxation



The effective tax rate, before goodwill amortisation and exceptional items, is
33.6%.  This, however, includes an exceptional US$9 million deferred tax credit
in relation to tax losses in one of ABI's wholly owned subsidiaries which have
been assessed in the year.  Excluding this, the effective tax rate before
goodwill amortisation is 34.4%.  The increase compared to the prior year is
attributable to increased profits earned in countries with higher effective tax
rates.



Pensions



Historically, the group has had limited exposures associated with defined
benefit pension schemes and post retirement benefits, with the ABI Pension Fund,
which is in surplus, and the South African post retirement medical aid schemes,
which are fully provided under SSAP24, being the most significant.  With the
acquisition of Miller, substantial defined benefit pension scheme and post
retirement medical aid liabilities were assumed, which were fully provided under
SSAP24 in the acquisition balance sheet.  The updated valuations as at the year
end, required for FRS17 disclosure purposes only, indicate a deficit on the
Miller schemes in aggregate, in excess of amounts provided in the balance sheet,
of some US$191 million, after taking account of the related deferred taxation.
The group has no other significant exposures to pension and post retirement
liabilities as measured in accordance with FRS17.



Goodwill



Intangible assets increased by US$4,647 million, due primarily to the inclusion
of goodwill of US$4,673 million arising on the Miller acquisition in July 2002.
Goodwill in ABI is considered to have an indefinite life (consistent with prior
years), all other goodwill being amortised over 20 years. The attributable
amortisation charge for the year under review rose to US$250 million from last
year's US$46 million.



Cash flow



Net cash inflow from operating activities before working capital movement
(EBITDA) rose to US$1,483 million, from last year's US$904 million. The ratio of
EBITDA to group turnover declined in the year to 17.9% (2002: 24.3%), with the
reduction attributable to lower margins in recently acquired businesses.



Currency



During the first half of the financial year, the SA rand demonstrated
significant weakness against the US dollar, before strengthening in the second
half, and the currency ended the financial year at R7.91 to the US dollar.  As a
result the weighted average rand/dollar rate improved by 2.2% to R9.50 (compared
with R9.71 in the prior year).




CHIEF EXECUTIVE'S REVIEW (continued)                                                                            16





Dividend



The board has proposed a final dividend of 18.5 US cents making an unchanged
total of 25 US cents per share for the year. Shareholders will be asked to
ratify this proposal at the annual general meeting, scheduled for 30 July 2003.
In the event that ratification takes place, the dividend will be payable on 8
August 2003 to shareholders on the London and Johannesburg Registers. The
ex-dividend trading dates, as stipulated by the London Stock Exchange will be 9
July 2003 on the London Stock Exchange and 7 July 2003 on the Johannesburg
Securities Exchange South Africa as stipulated by STRATE.  As the group reports
in US dollars, dividends are declared in US dollars. They are payable in
sterling to shareholders on the UK section of the register and in South African
rand to shareholders on the RSA section of the register. The rates of exchange
applicable on 16 May 2003, being the last practical date before the declaration
date, will be used for conversion ($/£ = 1.6240 and R/$ = 7.8000), resulting in
an equivalent final dividend of 11.3916 UK pence per share for UK shareholders
and 144.3000 SA cents per share for RSA shareholders. The equivalent total
dividend for the year for UK shareholders is 15.5081 UK pence (2002: 17.2931 UK
pence) and for RSA shareholders is 207.0250 SA cents (2002: 250.6000 SA cents).



To comply with the requirements of STRATE in South Africa, from the close of
business on 4 July 2003 until the close of business on 11 July 2003, no
transfers between the UK and South African Registers will be permitted and no
shares may be materialised or dematerialised.



The pro-rata interim dividend paid in US dollars to Altria on the 430,000,000
listed and unlisted shares held by them was apportioned to the number of days in
which they held the shares for the first half year, and was calculated at
2.98360 US cents a share. The final dividend is to be paid in full, thus giving
a total dividend of 21.48360 US cents a share.



Annual report and accounts



The group's unaudited summarised financial statements and certain significant
explanatory notes follow. The annual report will be mailed to shareholders in
early July 2003 and the annual general meeting of the company will be held at
1100hrs on 30 July 2003.








SABMiller plc
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
for the years ended 31 March                                                                                    17





                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                 Notes                  US$m                 US$m

Turnover (including share of associates' turnover)                 2                  9,112                4,364
     Continuing operations                                                            5,639                4,364
     Acquisitions                                                                     3,473                    -

Less: share of associates' turnover (all continuing)                                   (817)                (647)

Group turnover                                                     2                  8,295                3,717
Net operating costs                                                3                 (7,492)              (3,098)

Group operating profit                                             2                    803                  619
     Continuing operations                                                              780                  619
     Acquisitions                                                                        23                    -

Share of operating profit of associates (all continuing)           2                    126                   85
Profit on partial disposal of subsidiary                           4                      4                    -

Profit on ordinary activities before interest and taxation                              933                  704

Net interest payable                                                                   (163)                 (98)
Group                                                                                  (142)                 (83)
Associates                                                                              (21)                 (15)


Profit on ordinary activities before taxation                                           770                  606
Taxation on profit on ordinary activities                          5                   (349)                (208)

Profit on ordinary activities after taxation                                            421                  398
Equity minority interests                                                              (125)                (105)

Profit for the financial year                                                           296                  293
Dividends                                                                              (283)                (187)
Retained profit for the financial year                                                   13                  106

Basic earnings per share (US cents)                                6                   27.5                 40.7
Headline earnings per share (US cents)                             6                   52.6                 48.0
Adjusted basic earnings per share (US cents)                       6                   54.0                 48.7
Diluted earnings per share (US cents)                              6                   27.8                 40.3
Adjusted diluted earnings per share (US cents)                     6                   52.7                 47.7
Dividends per share (US cents)                                                         25.0                 25.0





On 9 July 2002, the group acquired the entire issued share capital of Miller
Brewing Company, the results of which are shown as acquisitions in the table
above.  During the year and the previous year, the group made a number of other
acquisitions and increased its shareholdings in several subsidiaries.  As
disclosed in note 11, these acquisitions were material to individual business
segments, however, they were not material to the group as a whole.  All
operations are continuing.



There is no material difference between the results disclosed above and those
disclosable on an unmodified historical cost basis.






SABMiller plc
CONSOLIDATED BALANCE SHEETS
at 31 March                                                                                                     18




                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                 Notes                  US$m                 US$m

Fixed assets
Intangible assets                                                  7                  6,451                1,804
Tangible assets                                                                       3,244                1,858
Investments                                                                           1,365                1,096
Investments in associates                                                               705                  462
Other fixed asset investments                                                           660                  634

                                                                                     11,060                4,758
Current assets
Stock                                                                                   456                  238
Debtors                                                                                 802                  405
Investments                                                        10                     2                   45
Cash at bank and in hand                                           10                   559                  245
                                                                                      1,819                  933

Creditors - amounts falling due within one year                                      (4,027)              (1,160)
Interest bearing                                                   10                (2,409)                (240)
Other                                                                                (1,618)                (920)


Net current liabilities                                                              (2,208)                (227)

Total assets less current liabilities                                                 8,852                4,531

Creditors - amounts falling due after one year                                       (1,130)              (1,311)
Interest bearing                                                   10                (1,114)              (1,295)
Other                                                                                   (16)                 (16)
Provisions for liabilities and charges                             8                   (743)                (166)
Net assets                                                                            6,979                3,054

Shareholders' funds                                                                   6,201                2,309
Equity minority interests                                                               778                  745
Capital employed                                                                      6,979                3,054










SABMiller plc
CONSOLIDATED CASH FLOW STATEMENTS
for the years ended 31 March                                                                                    19




                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                Notes                   US$m                 US$m

Net cash inflow from operating activities                         9                   1,568                  975

Dividends received from associates                                                       27                   13

Returns on investments and servicing of finance
Interest received                                                                        39                   35
Interest paid                                                                          (159)                (100)
Interest element of finance lease rental payments                                       (11)                (12)
Dividends received from other investments                                                 3                    2
Dividends paid to minority interests                                                   (137)                 (96)
Net cash outflow from returns on investments and servicing of                          (265)                (171)
finance

Taxation paid                                                                          (286)                (179)

Capital expenditure and financial investments
Purchase of tangible fixed assets                                                      (445)                (266)
Sale of tangible fixed assets                                                            16                   16
Purchase of investments                                                                 (21)                 (61)
Sale of investments                                                                       3                   12
Net cash outflow for capital expenditure and financial                                 (447)                (299)
investments

Acquisitions and disposals
Purchase of subsidiary undertakings                               11                    (52)                (672)
Net cash / (overdraft) acquired with subsidiary undertakings                              6                   (2)
Sale of subsidiary undertakings                                   11                     44                    1
Net cash disposed with subsidiary undertakings                                          (42)                   -
Purchase of shares from minorities                                11                     (8)                 (32)
Purchase of shares in associates                                                         (6)                 (57)
Net funding from / (to) associates                                                        4                   (6)
Net cash outflow for acquisitions and disposals                                         (54)                (768)

Equity dividends paid to shareholders                                                  (203)                (173)

Management of liquid resources
Sale of short-term liquid instruments                                                    43                   12
Cash withdrawn from short-term deposits                                                   1                    7
Net cash inflow from management of liquid resources               10                     44                   19

Financing
Issue of shares                                                                           1                  401
Issue of shares to minorities                                                             3                    1
New loans raised                                                  10                    190                1,189
Repayment of loans                                                10                   (330)                (892)
Net cash (outflow) / inflow from financing                                             (136)                 699
Increase in cash in the year                                      10                    248                  116




SABMiller plc
CONSOLIDATED STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES
for the years ended 31 March                                                                                  20




                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                        US$m                 US$m

Profit for the financial year                                                           296                  293
Currency translation differences on foreign currency net                                428                 (212)
investments
Other movements                                                                           3                    8
Total recognised gains and losses for the year                                          727                   89










CONSOLIDATED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the years ended 31 March




                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                        US$m                 US$m

Profit for the financial year                                                           296                  293
Other recognised gains and losses relating to the year (net)                            431                 (204)
Goodwill written back on partial disposal of subsidiary                                   8                    -
Dividends declared by SABMiller plc                                                    (283)                (187)
Issue of shares to SABMiller shareholders                                             3,440                  401
Net increase in shareholders' funds                                                   3,892                  303
Shareholders' funds at start of year                                                  2,309                2,006
Shareholders' funds at end of year                                                    6,201                2,309



The amount of cumulative goodwill in respect of purchased subsidiary and
associated undertakings which has been set off against shareholders' funds prior
to 31 March 1998 was US$167 million at 31 March 2003 (2002: US$151 million).






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS                                                                               21





1. Basis of preparation



The consolidated financial statements present the financial record for the years
ended 31 March 2003 and 31 March 2002.



The subsidiary and associated undertakings in the group operate in the local
currency of the country in which they are based. From a functional perspective,
the group regards these operations as being US dollar-based as the transactions
of these entities are, insofar as is possible, evaluated in US dollars. In
management accounting terms all companies report in US dollars.



The directors of the company regard the US dollar as the functional currency of
the group, being the most representative currency of its operations.  Therefore
the consolidated financial statements are presented in US dollars.



In accordance with s240 of the Companies Act, 1985, as amended, the above
statements do not set out the full group financial statements of SABMiller plc
and its subsidiary undertakings. Group financial statements for 2003 will be
delivered to the Registrar of Companies in due course. The board of directors
approved this financial information on 21 May 2003. The financial information
for the year ended 31 March 2002 does not comprise statutory accounts but has
been extracted from the statutory accounts for that year, which have been
delivered to the Registrar of Companies.  The auditors' report was unqualified
and did not contain a statement made under s237(2) or (3) of the Companies Act,
1985.







Safari Limited



On 27 September 1999, it was announced that SABMiller would purchase 10% of its
own shares via a special purpose vehicle (Safari Limited) established and
financed by SABMiller (Finance) BV, a wholly-owned overseas subsidiary of
SABMiller plc.  The purchase by Safari Limited was at an initial price of R44.05
per share representing a total cost of R3,408 million (US$560 million).  In
terms of the agreement, a top up payment of R5.95 per share, representing a
total cost of R460 million (US$58 million) was made to the selling shareholders
on 3 April 2001.  SABMiller shares acquired by Safari Limited remain in issue
and provide additional flexibility in the financing of future acquisitions by
the SABMiller group.







 Supplementary information



The accompanying consolidated supplementary information, which is unaudited,
presents the profit and loss accounts and cash flow statements of the SABMiller
plc group in South African rands, and for the second six month period of the
years ended 31 March 2003 and 31 March 2002 in US dollars, together with the
balance sheets at 31 March 2003 and 31 March 2002 in South African rands.



The exchange rates of rand to US dollars used in preparing the consolidated
financial statements in the supplementary section were as follows:




                                                                                     Weighted           Closing
                                                                                 average rate              rate
Year ended 31 March 2002                                                                 9.71             11.40
Year ended 31 March 2003                                                                 9.50              7.91





The weighted average exchange rates have been calculated based on an average of
the exchange rates during the relevant year and weighted according to the
turnover of the group's businesses.





Accounting policies



These preliminary financial statements should be read in conjunction with the
annual financial statements and the accounting policies laid down therein (which
will be distributed in early July 2003). They have been prepared under the
historical cost convention in accordance with accounting standards applicable in
the United Kingdom (UK GAAP), and all have been applied consistently throughout
the current and preceding year, as set out in the annual report for the year
ended 31 March 2002.






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    22





2. Segmental analysis


                                                             Turnover             EBITA             EBITA margin
                                                          2003     2002        2003      2002        2003     2002
                                                     Unaudited  Audited   Unaudited   Audited   Unaudited  Audited
                                          Notes           US$m     US$m        US$m      US$m           %        %
Business segment analysis

Americas:
North America                                           3,473         -         250         -         7.2        -

Central America                                           514       186          56        22        10.8     11.9

Europe                                                  1,646     1,280         275       198        16.7     15.5

Africa and Asia                                         1,209       946         233       171        19.2     18.1
Associates' share                                        (480)     (367)        (85)      (54)       17.7     14.6
                                                          729       579         148       117        20.2     20.3

South Africa:
Beer South Africa                                       1,270     1,112         338       287        26.6     25.8

Other Beverage Interests                                  788       676         120        95        15.3     14.0
Associates' share                                        (244)     (212)        (26)      (19)       10.5      9.0
                                                          544       464          94        76        17.4     16.3
                                                                                         
Hotels and Gaming                                         212       164          42        28        19.7     17.4
Associates' share                                         (93)      (68)        (21)      (15)       22.8     22.5
                                                          119        96          21        13        17.3     13.7

Central Administration                                      -         -         (44)      (35)          -        -

Group - excluding exceptional items                     9,112     4,364       1,270       766        13.9     17.6
Associates' share                                        (817)     (647)       (132)      (88)       16.1     13.6
                                                        8,295     3,717       1,138       678        13.7     18.3
Exceptional items                            4                                           
North America                                               -         -        *(58)        -           -        -
Central America                                             -         -         (12)        -           -        -
Hotels and Gaming                                           -         -           4         -           -        -
Europe                                                      -         -           -        (8)          -        -
                                                            -         -         (66)       (8)          -        -

Group - including exceptional items                     9,112     4,364       1,204       758        13.2     17.4
Associates' share                                        (817)     (647)       (132)      (88)       16.1     13.6
                                                        8,295     3,717       1,072       670        12.9     18.0



Analyses by business are based on the group's management structure.

* Includes US$6 million of integration costs incurred in other segments.


SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    23





2. Segmental analysis (continued)


                                                   Net operating assets    Operating profit     Operating margin
                                                         2003      2002       2003      2002       2003      2002
                                                    Unaudited   Audited  Unaudited   Audited  Unaudited   Audited
                                          Notes          US$m      US$m       US$m      US$m          %         %
Business segment analysis

Americas:
North America                                          5,147         -         75         -        2.2         -

Central America                                        1,089     1,135         10         7        1.7       3.5

Europe                                                 1,446     1,253        239       168       14.5      13.1

Africa and Asia                                          866       728        219       162       18.1      17.2
Associates' share                                       (424)     (306)       (79)      (51)      16.4      13.8
                                                         442       422        140       111       19.3      19.3

South Africa:
Beer South Africa                                        356       263        338       287       26.6      25.8

Other Beverage Interests                                 524       355        120        95       15.3      14.0
Associates' share                                       (114)      (74)       (26)      (19)      10.5       9.0
                                                         410       281         94        76       17.4      16.3

Hotels and Gaming                                     #  167       140         42        28       19.7      17.4
Associates' share                                     # (167)      (82)       (21)      (15)      22.8      22.5
                                                           -        58         21        13       17.3      13.7

Central Administration                                  (272)    (193)        (44)      (35)         -         -

Group - excluding exceptional items                    9,323     3,681        999       712       11.0      16.3
Associates' share                                       (705)     (462)      (126)      (85)      15.3      13.2
                                                       8,618     3,219        873       627       10.5      16.9
Exceptional items                            4
North America                                              -         -      * (58)        -          -         -
Central America                                            -         -        (12)        -          -         -
Europe                                                     -         -          -        (8)         -         -
                                                           -         -        (70)       (8)         -         -

Group - including exceptional items                    9,323     3,681        929       704       10.2      16.1
Associates' share                                       (705)     (462)      (126)      (85)      15.3      13.2
                                                       8,618     3,219        803       619        9.7      16.6



# Investment in new associate as at 31 March 2003.

* Includes US$6 million of integration costs incurred in other segments.


SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    24





2. Segmental analysis (continued)


                                                    Capital expenditure            EBITDA          EBITDA margin
                                                         2003      2002       2003      2002       2003      2002
                                                    Unaudited   Audited  Unaudited   Audited  Unaudited   Audited
                                          Notes          US$m      US$m       US$m      US$m          %         %
Business segment analysis

Americas:
North America                                              87        -         348         -       10.0         -

Central America                                            40       12          90        41       17.8      21.7

Europe                                                    169      130         387       293       23.5      22.9

Africa and Asia                                            42       39         166       151       22.8      26.1

South Africa:
Beer South Africa                                         58        47         403       343       31.7      30.9

Other Beverage Interests                                  38        23         119        89       21.7      19.2

Hotels and Gaming                                          4        13          27        21       22.9      22.1

Central Administration                                     7         2         (36)      (33)         -         -

Group - excluding exceptional items                      445       266       1,504       905       18.1      24.3

Exceptional items                            4
North America                                              -         -         (12)        -          -         -
Central America                                            -         -          (9)        -          -         -
Europe                                                     -         -           -        (1)         -         -
                                                           -         -         (21)       (1)         -         -

Group - including exceptional items                      445       266       1,483       904       17.9      24.3






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   25





3. Net operating costs


                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                        US$m                 US$m
Raw materials and consumable stores                                                   2,612                1,096
Changes in stock of finished goods and work in progress                                 (13)                  (6)
Excise duties                                                                         1,472                  686
Employee costs                                                                        1,015                  439
Depreciation of tangible fixed assets:                                                  344                  210
 owned assets                                                                           282                  170
 leased assets                                                                            7                    6
 containers                                                                              55                   34
Container breakages and shrinkage                                                        20                   10
Amortisation of intangible assets                                                       265                   51
Other operating income                                                                  (95)                 (78)
Other operating charges                                                               1,798                  682
Impairment costs in South Africa                                                          4                    -
Brewery closure costs in Tumwater (USA)                                                  35                    -
Miller integration costs                                                                 23                    -
Central America reorganisation costs                                                     12                    -
Brewery closure costs in Pitesti (Romania)                                                -                    9
Asset impairment provision in Ursus (Romania)                                             -                   10
Reversal of asset impairment provision in Velke Popovice (Czech)                          -                  (11)
                                                                                      7,492                3,098






4. Exceptional items



The following items were treated as exceptional items by the group during the
years ended 31 March:
                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                        US$m                 US$m
Recognised in operating profit:
North America                                                                           (58)                   -
Brewery closure costs in Tumwater (USA)                                                 (35)                   -
Miller integration costs                                                                (23)                   -

Central America
Reorganisation costs                                                                    (12)                   -

Europe                                                                                    -                   (8)
Brewery closure costs in Pitesti (Romania)                                                -                   (9)
Asset impairment provision in Ursus (Romania)                                             -                  (10)
Reversal of asset impairment provision in Velke Popovice (Czech)                          -                   11

                                                                                        (70)                  (8)
Taxation                                                                                 23                    -
Minority interests' share of the above items                                              4                    1











SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   26





4. Exceptional items (continued)



Following the acquisition of Miller Brewing Company, an operating review
resulted in management announcing, on 10 January 2003, the closure of the
Tumwater brewery effective from 1 July 2003.  Total brewery closure costs amount
to US$35 million and include the impairment of tangible fixed assets to net
recoverable value (US$20 million) and rationalisation costs, including
redundancy and associated closure costs (US$15 million).



The amalgamation of Miller Brewing Company with the rest of the group's business
has given rise to integration costs amounting to US$23 million.  These costs
include consultancy fees, office closure costs and expenses related to the
reorganisation of the Miller and Pilsner Urquell international businesses,
including severance costs and international brand realignment costs.



Following the group's acquisition of brewing and soft drink bottling interests
in Central America towards the end of 2001, US$12 million of reorganisation
costs have been incurred.  These consist of retrenchment costs (US$6 million),
consultancy fees (US$3 million) and other associated costs (US$3 million).



Following SABMiller's acquisition of Bere Timisoreana, an operating review
resulted in management announcing, in March 2002, the rationalisation of the
Pitesti brewery and a fair value adjustment/impairment of the Ursus brewery,
ahead of merging the two legal entities.  Closure costs and asset impairment
totalled US$19 million.



In 2002 the PU group (Czech) reversed an impairment provision of US$11 million
in respect of Velke Popovice, made at the date of acquisition.  The reversal was
occasioned by more resilient than expected volumes, and therefore improved
capacity utilisation, at the brewery following national integration of the three
subsidiaries in the country.




                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                        US$m                 US$m
Recognised after operating profit:
Hotels and Gaming
Gain on partial disposal (note 11)                                                       12                    -
Goodwill previously eliminated against reserves                                          (8)                   -
Profit on partial disposal of subsidiary                                                  4                    -
Taxation                                                                                  -                    -



On 31 March 2003, as part of an empowerment deal announced on 12 December 2002,
the group disposed of its holdings in the Southern Sun Hotels and Gaming group,
in return for cash, a 49% interest in the ordinary share capital of Tsogo Sun
Holdings (Pty) Ltd (TSH), together with R400 million (US$51 million) of
preference shares in TSH.  Effectively, the transaction has reduced the group's
holding in the Hotels division from 100% to 49%, and in the Gaming division from
50% to 49%.  The group's investment in TSH is being equity accounted.



The partial disposal of the Hotel and Gaming interests has resulted in a gain of
US$12 million, which consists of profit on the transaction, after taking into
account costs of disposal.  In addition, goodwill of US$8 million (which had
been written off against reserves) has been taken into account.





5. Taxation on profit on ordinary activities


                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                        US$m                 US$m

Current taxation                                                                        286                  173
- Charge for the year                                                                   285                  174
- Under / (over) provision in respect of prior years                                      1                   (1)
Withholding taxes and secondary taxation on companies                                    13                   10
Share of associates' taxation charge                                                     30                   21
Total current taxation                                                                  329                  204

Deferred taxation                                                                        20                    4
- Charge for the year                                                                    33                    3
- (Over) / under provision in respect of prior years                                    (15)                   1
- Rate change                                                                             2                    -

                                                                                        349                  208

Effective tax rate, before goodwill amortisation and exceptional                       33.6*                31.2
items (%)



*Effective tax rate before deferred tax credit of US$9 million on ABI assessed
losses from prior years was 34.4%.


SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    27





6. Earnings per share


                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                    US cents             US cents
Basic earnings per share                                                                27.5                 40.7
Headline earnings per share                                                             52.6                 48.0
Adjusted basic earnings per share                                                       54.0                 48.7
Diluted earnings per share                                                              27.8                 40.3
Adjusted diluted earnings per share                                                     52.7                 47.7



The calculation of basic earnings per share has been based on the profit for the
financial year as shown below, and on a weighted average number of shares in
issue of 1,076,143,990  (2002: 718,504,170).



At 31 March 2003 there were 12,051,400 share purchase options outstanding under
the RSA Executive Share Purchase Scheme, 5,590,729 share purchase options
outstanding under the SABMiller plc Executive Share Purchase Scheme (Approved
Scheme and Unapproved (No 2) Scheme combined) and 1,680,615 conditional awards
under the Performance Share Awards Scheme, which have not yet vested.  The
calculation of diluted earnings per share is based on a weighted average number
of shares in issue of 1,148,306,526, after adjusting for 72,162,536 weighted
potentially dilutive shares arising from the share options and the guaranteed
convertible bond, and the profit for the financial year as shown below, adjusted
for an interest saving of US$24 million (after tax), on the 4.25% guaranteed
convertible bond. The average share price of SABMiller plc since the beginning
of the financial year, used in determining the number of potentially dilutive
shares, is US$7.33, compared with an average strike price on the outstanding
options of US$6.58.



The group has also presented an adjusted basic earnings per share figure to
exclude the impact of amortisation and other non-recurring items in order to
present a more meaningful comparison for the years shown in the consolidated
financial statements. Adjusted earnings per share has been based on adjusted
headline earnings for each financial year and on the same number of weighted
average shares in issue as the basic earnings per share calculation.  Headline
earnings per share has been calculated in accordance with the Institute of
Investment Management and Research ('IIMR')'s Statement of Investment Practice
No. 1 entitled 'The Definition of Headline Earnings'.  The adjustments made to
arrive at headline earnings and adjusted earnings are as follows:




                                                                                          2003                2002
                                                                                     Unaudited             Audited
                                                                                          US$m                US$m
Profit for the financial year                                                             296                  293
Amortisation of goodwill                                                                  271                  54
Brewery closure costs in Tumwater (Miller)                                                 35                   -
Profit on partial disposal of subsidiary                                                   (4)                  -
Impairment costs in South Africa                                                            4                   -
Profit on sale of fixed assets and investments                                              -                  (4)
Brewery closure costs in Pitesti (Romania)                                                  -                   9
Asset impairment provision in Ursus (Romania)                                               -                  10
Reversal of impairment provision in Velke Popovice (Czech)                                  -                 (11)
Impairment costs in Africa                                                                  -                   2
Tax effects of the above items                                                            (15)                  -
Minority interests' share of the above items                                              (21)                 (7)
                                                                                          566                 346

Headline earnings (basic)
Integration / reorganisation costs *                                                       35                   7
Tax effects of the above items                                                             (9)                 (2)
Deferred tax adjustments due to assessed loss (ABI)                                        (9)                  -
Minority interests' share of above items                                                   (2)                 (1)
                                                                                          581                 350

Adjusted earnings



* Comprises integration costs of Miller (US$23 million) and reorganisation costs
in Central America (US$12 million) in the current year and reorganisation costs
of Distell Group Limited and Central America in the prior year.


SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    28





7. Intangible assets


                                                             Trademarks             Goodwill               Total
                                                                   US$m                 US$m                US$m
Net book amount

At 31 March 2002 (audited)                                           1                1,803               1,804

At 31 March 2003 (unaudited)                                         -                6,451               6,451




The goodwill balance of US$6,451 million at the end of the year includes
US$4,733 million due to acquisition activities. The acquisition of Miller
Brewing Company resulted in US$4,673 million goodwill and other acquisitions
within Europe, Central America and Africa and Asia added US$60 million.



Goodwill arising from acquisitions is being amortised over 20 years, with the
exception of purchased goodwill in respect of ABI which the directors believe
has an indefinite life.  This is consistent with the treatment of goodwill that
arose on the acquisition of Suncrush, which was acquired on 8 June 1998. The
directors consider the goodwill to be supported by the existence of bottlers'
agreements with Coca-Cola (Southern Africa) (Proprietary) Limited (CCSA).  ABI
has similar bottlers' agreements in respect of other regions within South
Africa.  These bottlers' agreements, which are based on the Coca-Cola system,
establish performance obligations as to production, distribution and marketing
arrangements to maximise long-term growth in volume, cash flow and shareholder
value of the bottler company.  The Coca-Cola system came into being during 1899
and has had a consistent history of growth and success since that date.



The Suncrush agreements with CCSA were established in 1955 and have been in
place since then.  The current agreements are for a period of ten years, with an
extension of five years, expiring on 30 September 2007 and contain provisions
for renewal at no cost.  ABI has had similar agreements since 1976 and they have
always been renewed prior to expiry. In the view of the directors, the bottlers'
agreements reflect a long and ongoing relationship between the respective
managements of ABI and CCSA.



The directors have given due consideration to financial forecasts in respect of
the ABI business, the history of dealings of ABI with CCSA and the established
international practice of The Coca-Cola Company in relation to its bottlers'
agreements. In light of the above factors, the directors believe that the
Suncrush agreements will continue to be renewed at the end of their legal expiry
dates and the commercial value of the Coca-Cola product will be maintained.
Accordingly, the directors are of the view that the goodwill, as underpinned by
the bottlers' agreements, currently has an indefinite economic life.  The
directors have performed a review for impairment at 31 March 2003 and are of the
opinion that no provision is required.



The amount of cumulative goodwill in respect of purchased subsidiary and
associated undertakings which has been set off against shareholders' funds prior
to 31 March 1998 was US$167 million at 31 March 2003 (2002: US$151 million).




SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    29





8. Provisions for liabilities and charges


                                                               Post-
                                              Demerged    retirement                          Deferred
                                              entities      benefits  Insurance       Other   taxation      Total
                                                  US$m          US$m       US$m        US$m       US$m       US$m
At 31 March 2001 (audited)                         25            22          -          25        117        189
Exchange adjustments                               (6)           (6)         -          (2)       (31)       (45)
Arising on the acquisition of subsidiary
    undertakings                                    -             -          -           9         11         20
Charged to profit and loss account                  -             8          -           1          5         14
Utilised in the year                               (5)           (3)         -          (5)         -        (13)
Transfer (to) / from creditors                      -            (1)         -           2          -          1
At 31 March 2002 (audited)                         14            20          -          30        102        166
Exchange adjustments                                6             7          -           3         35         51
Arising on the acquisition of subsidiary
    undertakings                                    -           414         28           5          -        447
Arising on the disposal of subsidiary
    undertakings                                    -            (2)         -           -          -         (2)
Hindsight adjustments                               -             8          -           5          -         13
Charged to profit and loss account                  -            51         57          32          6        146
Utilised in the year                                -           (16)       (50)         (9)         -        (75)
Transfer from / (to) creditors                      -             3          -          (6)         -         (3)
At 31 March 2003 (unaudited)                       20           485         35          60        143        743


Demerged entities



During the year ended 31 March 1998, the group recognised a provision of US$117
million for the disposal of certain demerged entities in relation to equity
injections which were not regarded as recoverable, as well as potential
liabilities arising on warranties and the sale agreements. During the year ended
31 March 2002, US$5 million was further utilised in regard to the disposal of
SAB Limited's remaining retail interests. The residual US$20 million relates
mainly to the disposal of OK Bazaars (1929) Limited to Shoprite Holdings Limited
(Shoprite). As disclosed in last year's annual report, a number of claims were
made by Shoprite in relation to the valuation of the net assets of OK Bazaars at
the time of the sale and for alleged breaches by SAB Limited of warranties
contained in the sale agreements. These claims are being contested by SAB
Limited and have been submitted for dispute resolution to independent
accountants acting as experts and not as arbitrators. In March 2000 an opinion
was received from the experts but subsequent to that year end Shoprite have
instituted action against the independent experts and SABMiller indicating an
intention to refute the expert opinion. While full provision for all claims has
already been made on the basis of prudence, the actual outcome of the dispute
cannot be estimated by the directors at this time. The further information
ordinarily required by Financial Reporting Standard 12 - 'Provisions, Contingent
Liabilities and Contingent Assets' - has not been disclosed on the grounds that
it can be expected to seriously prejudice the outcome of the dispute.



Post-retirement benefits



The provision for post-retirement benefits represents the provision for medical
benefits for employees and their dependants in South Africa, for post-retirement
medical and life insurance benefits for eligible employees and their dependants
in North America, and pension provisions for employees in North and Central
America, South Africa, Europe and Africa and Asia.  The principal assumptions on
which these provisions are based will be disclosed in the group's annual report.



Insurance



Insurance provisions of US$35 million represent amounts provided in respect of
claims made by employees for work-related accidents.  Management estimates that
the provision will be substantially utilised in the next one or two years.



Other provisions



At 31 March 2003 the group retained US$60 million of other provisions. The
principal individual components of this amount are as follows:



The group has provided for brewery closure costs in Tumwater totalling US$15
million.



The group has recognised various provisions, totalling US$11 million at 31 March
2003, in relation to taxation exposures it believes may arise. The provisions
principally relate to corporate taxation in respect of a number of group
companies and are not individually significant. Any settlement in respect of
these amounts will occur as and when the assessments are finalised with the
respective tax authorities.



US$8 million of provisions in respect of outstanding litigation within various
operations have been retained, none of which are expected to have adverse
material consequences to the group.



Payroll related provisions of US$8 million relate to Central America in order to
comply with labour legislation relating to employee service terminations and
rewards.




SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    30





9. Reconciliation of operating profit to net cash inflow from operating
activities


                                                                                          2003                2002
                                                                                     Unaudited             Audited
                                                                                          US$m                US$m
Operating profit                                                                          803                 619
Depreciation
  tangible fixed assets                                                                   289                 176
  containers                                                                               55                  34
Container breakages and shrinkage                                                          20                  10
Amortisation of intangible assets                                                         265                  51
Dividends received from other investments                                                  (3)                 (2)
Profit on sale of fixed assets                                                             (1)                 (3)
Impairment costs in South Africa                                                            4                   -
Brewery closure costs Tumwater (Miller)                                                    35                   -
Miller integration costs                                                                   11                   -
Central America reorganisation costs                                                        3                   -
Brewery closure costs in Pitesti (Romania)                                                  -                   8
Asset impairment provision in Ursus (Romania)                                               -                  10
Reversal of asset impairment provision in Velke Popovice (Czech)                            -                 (11)
Deferred income                                                                            (3)                  1
Other non-cash movements                                                                    5                  11
Net cash inflow from operating activities before working capital
   movements (EBITDA)                                                                   1,483                 904
Increase in stock                                                                         (44)                 (7)
Increase in debtors                                                                        20                 (37)
Increase in creditors                                                                     109                 115
Net cash inflow from operating activities                                               1,568                 975








SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    31





10. Analysis of net debt


                                                                     Finance   Finance
                       Cash at                  Funding   Funding     leases   leases              Liquid
                      bank and  Over-        due within due after due within due after            resour-      Net
                       in hand  draft  Total   one year  one year   one year  one year    Total       ces     debt
                          US$m   US$m   US$m       US$m      US$m       US$m      US$m     US$m      US$m     US$m
At 31 March 2001          165    (86)    79        (99)     (777)       (21)      (70)    (967)       53     (835)
(audited)
Cash flow                 105     11    116        133      (454)        17         7     (297)      (19)    (200)
Acquisitions               -       -      -       (59)      (213)         -         -     (272)       11     (261)
(excluding
cash and
overdrafts)
Exchange                  (25)    13    (12)        14        29          5        18       66         -       54
adjustments
Change in maturity          -      -      -       (153)      153        (15)       15        -         -        -
of net debt
Amortisation of             -      -      -          -        (3)         -         -       (3)        -       (3)
loan costs
At 31 March 2002          245    (62)   183       (164)   (1,265)       (14)      (30)  (1,473)       45   (1,245)
(audited)
Cash flow                 303    (55)   248        105        24         16        (5)     140       (44)     344
Acquisitions                -      -      -         (8)   (2,000)         -         -   (2,008)        -   (2,008)
(excluding cash
and overdrafts)
Disposals                   -      -      -          2         7          -         -        9         -        9
Exchange                   11     (1)    10        (33)      (19)        (6)      (11)     (69)        1      (58)
adjustments
Change in maturity          -      -      -     (2,173)    2,173        (16)       16        -         -        -
of net debt
Amortisation of             -      -      -          -        (4)         -         -       (4)        -       (4)
Loan costs
At 31 March 2003          559   (118)   441     (2,271)   (1,084)       (20)      (30)  (3,405)        2   (2,962)
(unaudited)



Note: Liquid resources comprise short-term deposits with banks, which mature
within 12 months of the date of inception, and amounts invested in short-dated
liquid instruments.







The group's net debt is denominated in the following currencies:
                                                                                  Denomination

                                                                                               Other
                                                                  US dollars       Rand   currencies      Total
                                                                        US$m       US$m         US$m       US$m
Gross borrowings (including overdrafts)                              (1,094)      (156)        (285)    (1,535)
Cash at bank and liquid resources                                       124         79           87        290
Net debt at 31 March 2002 (audited)                                    (970)       (77)        (198)    (1,245)

Gross borrowings (including overdrafts)                              (3,081)       (91)        (351)    (3,523)
Cash at bank and liquid resources                                       349         98          114        561
Net debt at 31 March 2003 (unaudited)                                (2,732)         7         (237)    (2,962)



SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    32





11. Acquisitions and disposals



All of the assets and liabilities relating to acquisitions have been accounted
for on an acquisition basis.



For the year ended 31 March 2003:



Acquisitions for the year ended 31 March 2003, excluding the acquisition of the
Miller Brewing Company which is separately disclosed below, had a net asset
value of US$3 million and consideration of US$63 million, resulting in goodwill
of US$60 million.  The fair values of the assets and liabilities acquired, which
are considered to be provisional as a number of matters are still under
consideration, were equal to book value.



In accordance with the group's accounting policy, the goodwill of US$60 million
arising on consolidation has been stated in the group's balance sheet as an
intangible asset.





Total consideration is comprised as follows:


                                                                                            US$m
Cash consideration                                                                           13
Shares in subsidiaries                                                                       50
Total consideration                                                                          63







The principal acquisitions made by SABMiller include the following:



•          East African Breweries Limited (EABL) and SABMiller Africa BV (SABMA)
entered into agreements relating to the operation of their businesses in Kenya
and Tanzania which were fully completed in December 2002.  In terms of the
agreement, SABMA disposed of its subsidiary Castle Brewing Kenya Limited (CBKL)
to EABL in exchange for a 20% shareholding in Kenya Breweries Limited, a
subsidiary of EABL and EABL in turn disposed of its subsidiary Kibo Breweries
Limited, in exchange for a 20% shareholding in SABMA's Tanzania Breweries
Limited.  To facilitate the deal SABMA bought out CBKL's minorities.



•          Effective 1 May 2002, Cervejas de Mozambique (CDM) purchased the
controlling interest, and management control, of Laurentina from Brasseries
International Holdings (BIH), a subsidiary of the Castel group.  As a result of
the deal, the Laurentina brand has been successfully integrated into the CDM
portfolio of brands.



•          On 26 March 2003 regulatory approval was granted for Mysore Breweries
Limited to acquire a 97.35% interest in Rochees Breweries Limited, thus
replacing a contract brewing arrangement that was in place for the full year.





Miller



With effect from 9 July 2002, South African Breweries plc (SAB) purchased the
entire share capital of Miller Brewing Company (Miller) from Altria Group Inc.
(formerly Philip Morris Companies Inc.) in exchange for the issue of 430 million
shares in SAB. The shares issued to Altria comprise two classes of equity
capital; ordinary shares and unlisted participating shares. The total of these
shares is equivalent to an economic interest of 36.02% (excluding the shares
owned by Safari Ltd) in the enlarged SABMiller. Altria's total voting rights
have been capped at 24.99% of the votes exercisable at a general meeting.



The fair values of the assets and liabilities acquired, which are considered to
be provisional as a number of matters are still under consideration, are as
follows:


                                                                   Book Fair value                   Provisional
                                                                  value          adjustments          fair value
                                                                   US$m                 US$m                US$m
Tangible fixed assets                                              961                  170               1,131
Intangible assets                                                  357                 (357)                  -
Other investments                                                    2                   (1)                  1
Stock                                                              131                    -                 131
Debtors                                                            503                 (103)                400
Cash and cash equivalents                                            6                    -                   6
Creditors due within one year                                     (408)                  12                (396)
Creditors due after one year                                    (2,007)                 (2)              (2,009)
Provisions for liabilities and charges                            (469)                  22                (447)
                                                                  (924)                (259)             (1,183)
Minority interest                                                  (24)                  18                  (6)
Net assets                                                        (948)                (241)             (1,189)
Goodwill                                                                                                  4,673
Consideration                                                                                             3,484



In accordance with the group's accounting policy, the goodwill of US$4,673
million arising on consolidation has been stated in the group's balance sheet as
an intangible asset.


SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    33





11. Acquisitions and disposals (continued)



Total consideration is comprised as follows:


                                                                                            US$m
Cash consideration                                                                           46
Issue of shares                                                                           3,438
Consideration per the above fair value table                                              3,484







Adjustments to align accounting policies and fair value adjustments comprise the
following:


                                                                                              US$m
Adjustments to align accounting policies
Tangible fixed assets (1)                                                                      13
Intangible assets (2)                                                                        (357)
Other investments (3)                                                                          (1)
Debtors (4)                                                                                  (135)
Creditors due within one year (5)                                                              27
Creditors due after one year (6)                                                               (2)
Provisions for liabilities and charges (7)                                                     68
Minority interest (8)                                                                          18

Other adjustments
Tangible fixed assets (1)                                                                     157
Debtors (4)                                                                                    32
Creditors due within one year (5)                                                             (15)
Provisions for liabilities and charges (7)                                                    (46)
                                                                                             (241)







The principal fair value adjustments may be explained as follows;

(1)     land and buildings fair valued based on an independent valuation.
Containers reclassified from stock.  Depreciation lives brought into harmony
with group policy;

(2)     intangible assets reversed;

(3)     investments reclassified to debtors;

(4)     pension assets decreased to comply with UK GAAP.  Deferred tax assets
were adjusted to state taxes on a UK GAAP basis and to recognise the impact of
fair value adjustments;

(5)     distributor configuration accruals were reversed to conform to UK GAAP.
Undisclosed liabilities and accruals were recorded.  Pension and other
provisions were reclassified to provisions for liabilities and charges to comply
with UK GAAP.  Sick pay and vacation accruals were increased to comply with UK
GAAP;

(6)     distributor configuration accruals were reversed to conform to UK GAAP;

(7)     provisions for defined benefit pension and other post retirement
benefits were increased to comply with UK GAAP.  Deferred tax was adjusted to
properly record taxes on a UK GAAP basis, to recognise the impact of fair value
adjustments and reclassified to debtors; and

(8)     minority interests were adjusted to align minorities due to other fair
value adjustments.









Reconciliation of cash consideration to cash paid per the cash flow statement


                                                                                              US$m
Cash consideration for Miller                                                                  46
Cash consideration for rest of the group                                                       13
Central America additional transaction costs                                                    1
                                                                                               60

Purchase of subsidiary undertakings per cash flow statement                                    52
Purchase of shares from minorities per cash flow statement                                      8
                                                                                               60








SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    34





11. Acquisitions and disposals (continued)



Hotels and Gaming



On 31 March 2003, SABMiller entered into an agreement with Tsogo Investment
Holding Company (Pty) Ltd whereby SABMiller contributed its entire hotel and
gaming interests, including 100% of Southern Sun's hotel interests and 50% of
Tsogo Sun's gaming interests, to the new company, Tsogo Sun Holdings (Pty) Ltd
(TSH), in exchange for ordinary shares representing 49% of TSH, R400 million
(US$42 million) of TSH redeemable preference shares and US$43 million cash net
of expenses.  Effectively, the transaction has reduced the group's holding in
the Hotels division from 100% to 49%, and in the Gaming division from 50% to
49%.  The transaction generated an after tax accounting profit of US$4 million
calculated as follows:


                                                                                              US$m
Tangible fixed assets                                                                         (75)
Other investments                                                                             (95)
Stock                                                                                          (1)
Debtors                                                                                       (16)
Cash and cash equivalents                                                                     (42)
Creditors due within one year                                                                  49
Creditors due after one year                                                                    7
Provisions for liabilities and charges                                                          2
                                                                                             (171)
Minority interest                                                                               1
Net assets disposed                                                                          (170)
Net proceeds on disposal                                                                      182
                                                                                               12
Goodwill written back on disposal                                                              (8)
Profit on disposal                                                                              4







The proceeds were comprised as follows:


                                                                                              US$m
Net cash                                                                                       43*
Investment in Tsogo Sun Holdings (49%)                                                         97
R400 million of Tsogo Sun Holdings redeemable preference shares                                42
                                                                                              182

* Includes US$1 million accrued costs.







Central America



On 29 November 2001, SABMiller plc acquired 58.4% of BevCo which owns interests
in Honduras and El Salvador.  The fair values of the assets and liabilities
acquired were as follows:


                                                            Provisional            Hindsight               Final
                                                             fair value          adjustments          fair value
                                                                   US$m                 US$m                US$m
Tangible fixed assets                                              227                   13                 240
Stock                                                               47                   (2)                 45
Debtors                                                            118                   (4)                114
Cash and cash equivalents                                           25                    -                  25
Creditors due within one year                                     (148)                   -                (148)
Creditors due after one year                                      (209)                   -                (209)
Provisions for liabilities and charges                             (15)                  (7)                (22)
                                                                    45                    -                  45
Minority interest                                                   (4)                   -                  (4)
Net assets                                                          41                    -                  41
Goodwill                                                           930                    1                 931
Consideration                                                      971                    1                 972



In accordance with the group's accounting policy, the goodwill of US$931 million
arising on consideration has been stated in the group's balance sheet as an
intangible asset.






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                    35





11. Acquisitions and disposals (continued)



Total consideration is comprised as follows:


                                                                                            US$m
Cash consideration                                                                          548
Trading balances with Dole Inc set-off                                                       24
Issue of shares to partner                                                                  400
Consideration per the above fair value table                                                972







The hindsight adjustments to align accounting policies and fair value
adjustments comprise the following:


                                                                                            US$m
Adjustments to align accounting policies
Tangible fixed assets (1)                                                                    (8)

Other adjustments
Tangible fixed assets(2)                                                                     21
Stock (3)                                                                                    (2)
Debtors (4)                                                                                  (4)
Provisions for liabilities and charges (5)                                                   (7)
                                                                                              -





The principal fair value adjustments may be explained as follows:

(1)     containers restated to align with group policy;

(2)     non-specialised land and buildings fair valued based on an independent
valuation.  Containers written down to net realisable value or value in use;

(3)     write-off of obsolete stock;

(4)     write-off of irrecoverable debtors; and

(5)     recognition of post retirement and other provisions, and the deferred
tax asset thereon.









12. Post-balance sheet events





On 14 May 2003, the group announced it had reached an unconditional agreement to
acquire a majority interest in Birra Peroni, the number two brewer in Italy,
with options to increase the holding in the future.  The transaction is expected
to close within three weeks and SABMiller will have an initial stake of between
51% and 60%, to be determined on closing.  The acquisition will be funded in
cash, from existing resources.



A US$2 billion bank bridge facility was put in place with an initial one year
term and a one year term out option.  This facility was fully drawn on 15 May
2003 and used to repay the Miller US$2 billion syndicated bank loan.  The
intention is to refinance this facility in the international capital markets at
an appropriate time within the bridge facility period.



On 21 May 2003, it was announced that SABMiller had become a strong number two
brewer in India through a joint venture with the Shaw Wallace group of
companies.  This positions the group well in the high growth Indian beer market.


                                                                                                                36





                                                     SUPPLEMENTARY
                                                      INFORMATION

                                                    Rand reporting
                                                 Half yearly reporting




SABMiller plc
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
for the years ended 31 March                                                                                    37





                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                          Rm                   Rm

Turnover (including share of associates' turnover)                                   86,564               42,373
     Continuing operations                                                           53,574               42,373
     Acquisitions                                                                    32,990                    -

Less: share of associates' turnover (all continuing)                                 (7,762)              (6,276)

Group turnover                                                                       78,802               36,097
Net operating costs                                                                 (71,170)             (30,090)

Group operating profit                                                                7,632                6,007
     Continuing operations                                                            7,411                6,007
     Acquisitions                                                                       221                    -

Share of operating profit of associates (all continuing)                              1,190                  828
Profit on partial disposal of subsidiary                                                 39                    -

Profit on ordinary activities before interest and taxation                            8,861                6,835

Net interest payable                                                                 (1,552)                (956)
Group                                                                                (1,353)                (810)
Associates                                                                             (199)                (146)


Profit on ordinary activities before taxation                                         7,309                5,879
Taxation on profit on ordinary activities                                            (3,312)              (2,021)

Profit on ordinary activities after taxation                                          3,997                3,858
Equity minority interests                                                            (1,190)              (1,020)

Profit for the financial year                                                         2,807                2,838
Dividends                                                                            (2,687)              (1,813)
Retained profit for the financial year                                                  120                1,025

Basic earnings per share (SA cents)                                                   260.9                395.0
Headline earnings per share (SA cents)                                                499.6                466.6
Adjusted basic earnings per share (SA cents)                                          513.0                472.5
Diluted earnings per share (SA cents)                                                 264.1                390.9
Adjusted diluted earnings per share (SA cents)                                        500.4                463.6






SABMiller plc
CONSOLIDATED BALANCE SHEETS
at 31 March                                                                                                     38




                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                          Rm                   Rm

Fixed assets
Intangible assets                                                                    51,029               20,570
Tangible assets                                                                      25,665               21,180
Investments                                                                          10,793               12,488
Investments in associates                                                             5,574                5,263
Other fixed asset investments                                                         5,219                7,225

                                                                                     87,487               54,238
Current assets
Stock                                                                                 3,606                2,714
Debtors                                                                               6,347                4,611
Investments                                                                              11                  514
Cash at bank and in hand                                                              4,424                2,793
                                                                                     14,388               10,632

Creditors - amounts falling due within one year                                     (31,852)             (13,217)
Interest bearing                                                                    (19,055)              (2,736)
Other                                                                               (12,797)             (10,481)


Net current liabilities                                                             (17,464)              (2,585)

Total assets less current liabilities                                                70,023               51,653

Creditors - amounts falling due after one year                                       (8,938)             (14,950)
Interest bearing                                                                     (8,812)             (14,761)
Other                                                                                  (126)                (189)
Provisions for liabilities and charges                                               (5,877)              (1,887)
Net assets                                                                           55,208               34,816

Shareholders' funds                                                                  49,053               26,323
Equity minority interests                                                             6,155                8,493
Capital employed                                                                     55,208               34,816












SABMiller plc
CONSOLIDATED CASH FLOW STATEMENTS
for the years ended 31 March                                                                                    39




                                                                                        2003                 2002
                                                                                   Unaudited              Audited
                                                                                          Rm                   Rm

Net cash inflow from operating activities                                            14,895                9,463

Dividends received from associates                                                      254                  122

Returns on investments and servicing of finance
Interest received                                                                       368                  339
Interest paid                                                                        (1,510)                (963)
Interest element of finance lease rental payments                                      (106)                (120)
Dividends received from other investments                                                28                   23
Dividends paid to minority interests                                                 (1,303)                (935)
Net cash outflow from returns on investments and servicing of                        (2,523)              (1,656)
finance

Taxation paid                                                                        (2,715)              (1,738)

Capital expenditure and financial investments
Purchase of tangible fixed assets                                                    (4,228)              (2,583)
Sale of tangible fixed assets                                                           150                  157
Purchase of investments                                                                (197)                (589)
Sale of investments                                                                      32                  113
Net cash outflow for capital expenditure and financial                               (4,243)              (2,902)
investments

Acquisitions and disposals
Purchase of subsidiary undertakings                                                    (495)              (6,524)
Net cash / (overdraft) acquired with subsidiary undertakings                             54                  (16)
Sale of subsidiary undertakings                                                         419                    9
Net cash disposed with subsidiary undertakings                                         (393)                   -
Purchase of shares from minorities                                                      (74)                (317)
Purchase of shares in associates                                                        (56)                (553)
Net funding from / (to) associates                                                       35                  (58)
Net cash outflow for acquisitions and disposals                                        (510)              (7,459)

Equity dividends paid to shareholders                                                (1,927)              (1,683)

Management of liquid resources
Sale of short-term liquid instruments                                                   408                  119
Cash withdrawn from short-term deposits                                                  11                   69
Net cash inflow from management of liquid resources                                     419                  188

Financing
Issue of shares                                                                          11                3,901
Issue of shares to minorities                                                            28                    9
New loans raised                                                                      1,801               11,544
Repayment of loans                                                                   (3,135)              (8,664)
Net cash (outflow) / inflow from financing                                           (1,295)               6,790
Increase in cash in the year                                                          2,355                1,125




SABMiller plc
SECOND SIX MONTHS CONSOLIDATED PROFIT AND LOSS ACCOUNTS
for the period ended 31 March                                                                                  40




                                                                                        2003                 2002
                                                                                   Unaudited            Unaudited
                                                                                        US$m                 US$m

Turnover (including share of associates' turnover)                                    5,135                2,188
     Continuing operations                                                            2,969                2,188
     Acquisitions                                                                     2,166                    -

Less: share of associates' turnover                                                    (429)                (330)

Group turnover                                                                        4,706                1,858
Net operating costs                                                                  (4,287)              (1,545)

Group operating profit                                                                  419                  313
     Continuing operations                                                              435                  313
     Acquisitions                                                                       (16)                   -

Share of operating profit of associates                                                  62                   43
Profit on partial disposal of subsidiary                                                  4                    -

Profit on ordinary activities before interest and taxation                              485                  356

Net interest payable                                                                    (89)                 (52)
Group                                                                                   (77)                 (45)
Associates                                                                              (12)                  (7)


Profit on ordinary activities before taxation                                           396                  304
Taxation on profit on ordinary activities                                              (201)                (117)

Profit on ordinary activities after taxation                                            195                  187
Equity minority interests                                                               (59)                 (55)
Profit for the financial period                                                         136                  132






SABMiller plc
SECOND SIX MONTHS CONSOLIDATED CASH FLOW STATEMENTS
for the period ended 31 March                                                                                 41




                                                                                        2003                 2002
                                                                                   Unaudited            Unaudited
                                                                                        US$m                 US$m

Net cash inflow from operating activities                                               874                  509

Dividends received from associates                                                       14                    7

Returns on investments and servicing of finance
Interest received                                                                        20                   16
Interest paid                                                                           (81)                 (66)
Interest element of finance lease rental payments                                       (11)                   -
Dividends received from other investments                                                 2                    -
Dividends paid to minority interests                                                    (53)                 (25)
Net cash outflow from returns on investments and servicing of finance                  (123)                 (75)

Taxation paid                                                                          (149)                 (82)

Capital expenditure and financial investments
Purchase of tangible fixed assets                                                      (259)                (133)
Sale of tangible fixed assets                                                             5                    9
Purchase of investments                                                                  (6)                   4
Sale of investments                                                                       -                   (1)
Net cash outflow for capital expenditure and financial investments                     (260)                (121)

Acquisitions and disposals
Purchase of subsidiary undertakings                                                      (6)                (590)
Net cash / (overdraft) acquired with subsidiary undertakings                              -                   13
Sale of subsidiary undertakings                                                          44                    -
Net cash disposed with subsidiary undertakings                                          (42)                   -
Purchase of shares from minorities                                                       (1)                 (17)
Purchase of shares in associates                                                          -                  (49)
Net funding to associates                                                                 -                   (2)
Net cash outflow for acquisitions and disposals                                          (5)                (645)

Equity dividends paid to shareholders                                                   (62)                 (45)

Management of liquid resources
Sale of short-term liquid instruments                                                     3                  259
Cash withdrawn from short-term deposits                                                   1                    4
Net cash inflow from management of liquid resources                                       4                  263

Financing
Issue of shares                                                                           -                  398
Issue of shares to minorities                                                             -                    -
New loans raised                                                                         35                   78
Repayment of loans                                                                     (111)                (229)
Net cash (outflow) / inflow  from financing                                             (76)                 247
Increase in cash in the period                                                          217                   58






SABMiller plc
ADMINISTRATION                                                                                                  42







                                 SABMiller plc

                           (Registration No. 3528416)



                               Company Secretary

                                A O C Tonkinson



                               Registered Office

                            Dukes Court, Duke Street

                                     Woking

                                Surrey, England

                                    GU21 5BH

                            Telefax +44-1483-264117

                           Telephone +44-1483-264000



                                  Head Office

                               One Stanhope Gate

                                London, England

                                    W1K 1AF

                            Telefax +44-20-7659-0111

                           Telephone +44-20-7659-0100



                                Internet address

                            http://www.sabmiller.com



                               Investor Relations

                        anna.millersalzman@sabmiller.com

                           Telephone +44-20-7659-0100



                              Independent Auditors

                           PricewaterhouseCoopers LLP

                               1 Embankment Place

                                London, England

                                    WC2N 6RH

                            Telefax +44-20-7804-4770

                           Telephone +44-20-7583-5000



                           Registrar (United Kingdom)

                               Capita Registrars

                                  The Registry

                               34 Beckenham Road

                                   Beckenham

                                 Kent, England

                                    BR3 4TU

                            Telefax +44-20-8658-3430

                    Telephone +44-208 639-2157 (outside UK)

                            0870-162-3100 (from UK)



                            Registrar (South Africa)

                    Computershare Investor Services Limited

                              70 Marshall Street,

                                  Johannesburg

                                  PO Box 61051

                               Marshalltown 2107

                                  South Africa

                            Telefax +27-011-370-5487

                           Telephone +27-011-370-5000



                          United States ADR Depositary

                              The Bank of New York

                                 ADR Department

                               101 Barclay Street

                               New York, NY 10286

                            United States of America

                            Telefax +1-212-815-3050

                           Telephone +1-212-815-2051



                        Internet http://www.bankofny.com

                    Toll free 1-888-269-2377 (USA & Canada)










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