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SABMiller PLC - Interim Results

RNS Number:2829S
SABMiller PLC
20 November 2003



                                 SABMiller plc



                              INTERIM ANNOUNCEMENT



                         STRONG ORGANIC EARNINGS GROWTH





London and Johannesburg, 20 November 2003. SABMiller plc today announces its
six-month results to 30 September 2003. Highlights are:



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

Turnover                                                            6,328             3,977           59

EBITA *                                                               889               553           61

Profit before tax                                                     666               374           78

Adjusted profit before tax                                            801               479           67

Adjusted earnings                                                     423               257           64

Adjusted earnings per share

- US cents                                                           35.5              26.8           32

- UK pence                                                           22.0              17.8           24

- SA cents                                                          268.3             276.7           (3)

Basic earnings per share (US cents)                                  25.9              16.7           55

Dividends per share (US cents)                                        7.5               6.5            15

Net cash inflow from operating activities                           1,088               694            57



£  Includes Miller Brewing Company for three months.

*  Earnings before interest, taxation and goodwill amortisation, and before 
exceptional items (see note 3).

Note: Adjusted profit before tax excludes exceptional items and goodwill 
amortisation. The calculation of adjusted earnings is given in note 5.



Operational

  * Lager beer volumes up 31% to 76 million hls, organic up 3.2%

  * Group EBITA up 61%
      - organic, constant currency EBITA up 21%

  * Excellent performance in Europe, EBITA up 51
      - organic, constant currency EBITA up 27%

  * Strong results from Beer South Africa, EBITA up 56%
      - organic, constant currency EBITA up 14%

  * Africa and Asia EBITA up 18%

  * Miller performance on plan





Statement from Graham Mackay, Chief Executive



"Strong underlying business performance delivered excellent results with group
EBITA up 61% and adjusted earnings per share up 32%.  Organic, constant currency
EBITA growth of 21% was impressive with, notably, Europe up 27% and Beer South
Africa up 14%. Our Africa and Asia business once again delivered a good
performance from its widespread portfolio with EBITA up 18%.



In Miller, the emphasis remains firmly on our longer term strategy and action
plans.  Progress is being made in each of the four key focus areas, whilst
financial performance remains in line with our expectations.  Our Central
America operation is starting to benefit from our initiatives to enhance its
brand portfolio and distribution activities.



We have strengthened our international operations and enhanced our future growth
potential through selective strategic acquisitions, which we have financed from
our strong internal cash flows and available borrowing facilities."




Enquiries:

                               SABMiller plc                           Tel: +44 20 7659 0100

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

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

Gary Leibowitz                 VP of Investor Relations (USA)          Mob: +44 7717 428540

Nigel Fairbrass                Head of Financial Media                 Mob: +44 7799 894265



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
(GMT) on 20 November 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.


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

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





CHIEF EXECUTIVE'S REVIEW                3





Business review



In the first half of the year we have delivered good organic volume increases
and strong earnings growth particularly from our European, South African and
Africa and Asian businesses, whilst continuing to enhance our operations
internationally through selective strategic acquisitions. In North and Central
America we are pursuing vigorously our strategies and action plans and
performance there remains in line with our previously stated expectations.



Total beverage volumes were 93 million hectolitres (hls), a 24% increase on the
comparable six-month period, with organic growth of 2.3%.  Lager beer volumes
were up 31% to 76 million hls, representing organic growth of 3.2%.  Strong
business performance has delivered reported EBITA of US$889 million (up 61%),
assisted generally by favourable currency movements, in particular the South
African rand.  On an organic, constant currency basis, EBITA increased 21%.
Adjusted earnings are up by 64%, to US$423 million, with adjusted earnings per
share of 35.5 US cents, up 32% on the first six months of the prior year.



The board has authorised an interim dividend of 7.5 cents, a rise of 15.4%.
This partly reflects the increase in earnings together with an intention to
raise the interim dividend as a percentage of the full year dividend.



The balance sheet remains strong and net cash inflow generated from operating
activities reached US$1,088 million. In August SABMiller launched a successful
US$2,000 million debt offering.  The credit rating agencies, Moody's and
Standard & Poor's, attached ratings of Baa1 stable and BBB+ stable respectively,
to the bonds.



North America



In North America the Miller management team is building a foundation for the
stabilisation, recovery and long-term growth of the business emphasising the
four key focus areas we outlined at the end of the previous financial year.
Within the second fiscal quarter, improved market execution and advertising
stimulated sales of the Miller Lite brand.  However overall company volumes
continued to decline albeit at a slower rate.  The new marketing approach to
re-energise the Miller brands has been launched and initial reaction has been
good.



Central America



The EBITA contribution from our Central American business was below prior year.
However, the first half results do not reflect benefits from the extensive work
that has been taking place to strengthen our brand portfolios and improve
distribution for both beer and CSDs. Sales trends from September have improved
and we are confident that we will begin to see the benefits coming through
during the second half.



Europe



Our European businesses delivered a 51% increase in EBITA in the half year,
assisted by generally good summer weather, with 27% organic growth in constant
currency terms. We anticipate continued growth in our key European markets,
supported by favourable economic and structural trends as new countries enter
the European Union.  We will build on our strong in-country positions to take
advantage of the growing demand for international premium brands.  In Italy the
integration of our newly acquired operation, Peroni, is proceeding according to
our expectations.




CHIEF EXECUTIVE'S REVIEW  (continued)    4





Africa and Asia



Our portfolio of businesses, combined with our Castel alliance, diversifies
country risk and gives us a unique footprint across the African continent.  The
African countries produced a good EBITA performance in the half year with
benefits from the East African restructuring initiatives, strong operational
performances and an increased contribution from Castel.



We have further consolidated our position in China through the acquisition in
June of a 29.6% stake in Harbin, and we have established ourselves as the number
two brewer in India, through a joint venture with the Shaw Wallace group of
companies.



South Africa



Further opportunities to grow volumes and drive margin improvement continue to
be pursued by Beer South Africa.  We aim to continue our growth in share of the
total alcoholic drinks market in the medium term through the introduction of new
products and driving the shift from other alcoholic drinks to beer.



In the last month the uncertainty surrounding the introduction of new liquor
legislation has been removed, with the Government committing itself to ensuring
that the new Bill would not adversely affect the industry's efficiency.



Outlook



Over the last ten years the Company has pursued a clear strategy to build an
international beer business with a global footprint. This strategy of rapid
geographic expansion positions the company to deliver sustainable earnings
growth by building on our strong domestic operations in growing markets, through
the turnaround of the Miller business over time, from developing our positions
in large emerging markets, such as China and India, and by distributing our
portfolio of international premium brands through our global platform.



Our businesses are well placed to continue the momentum of organic growth.
However the rate of reported earnings growth achieved in the first six months,
which was enhanced by favourable currency movements, is not expected to be
repeated in the second half of the year.






CHIEF EXECUTIVE'S REVIEW  (continued)    5





Americas:



North America


                                                                          2003         2002*
Financial summary                                                         US$m          US$m

Turnover                                                                 2,579         1,307
EBITA £                                                                    249           102
EBITA margin (%) £                                                         9.7           7.8

Sales volumes (hl 000's)
Lager - excluding contract brewing                                      25,030        12,734
Lager - contract brewing                                                 5,734         3,001
Carbonated soft drinks                                                      44            21



* Three months

£ Before exceptional restructuring costs of US$13 million in 2003 (2002: before
integration costs of US$5 million and after one-off FMB launch costs of 
US$16 million).





Throughout 2003, subdued economic conditions, the Iraq conflict and poor weather
in some areas combined to curtail growth in the US beer industry, resulting in
an industry volume decline of 1.4% for the first nine months of the calendar
year.  Within this challenging environment, Miller shipments continued a decline
that began in the early 1990s.  On a pro forma basis, domestic sales to
retailers fell by 4.4%, whilst total shipment volumes fell by 5.7% to 25.0
million hls.



Accounting for more than a third of Miller's total volume, Miller Lite
performance began to demonstrate an improving trend during the period, with
sales to retailers down approximately 1%.  Within the second fiscal quarter,
improved market execution and Miller Lite advertising that emphasises the beer's
low-carbohydrate characteristics, stimulated sales.  However, broader Miller
volume performance was negatively impacted by a substantial decline in flavoured
malt beverage ("FMB") sales and weakness in Miller Genuine Draft.  Miller High
Life continued to post stable results, whilst the balance of the economy brands
declined.  Pilsner Urquell continued to grow off a low base as further
distribution and marketing gains were realised.



Turnover during the first half fell 5.9% versus the pro forma adjusted prior
year1, to US$2,579 million.  The maintenance of firm pricing policies and
implementation of general price increases were offset by the impacts of adverse
brand, package and geographic mix.  Overall international revenues reflected a
stable performance whilst contract brewing revenues declined in line with
expected volume declines.



EBITA for the period, of US$249 million before exceptional restructuring charges
of US$13 million, was down 2.7% versus the pro forma adjusted prior year1.
However, marketing expenditure in the first half has been lower than initially
expected, due to a delay in the timing of marketing spend of some US$35 million
in anticipation of the planned Miller brand marketing activity that commenced in
early November 2003.  These costs will now be incurred in the second half of the
financial year, instead of the period under review.  EBITA for the six months to
30 September reflects the results of lower sales revenues, an increase in the
cost of malt and the negative mix impacts referred to above.  These impacts were
partly offset by lower fixed manufacturing costs (following the Tumwater
facility closure), lower administrative costs (following headquarters and other
cost restructuring), and reduced and more focused marketing expenditure (driven
by lower FMB spending).  Our expectation that full year EBITA will trend lower
than comparable prior periods remains unchanged.





1  Pro forma adjusted prior year turnover was US$2,740 million, consisting of
US$1,307 million (as shown above) plus US$1,433 million under the ownership of
Altria during the period April-June 2002.  Pro forma adjusted prior year EBITA
was US$256 million, consisting of US$102 million (as shown above) plus US$16
million of one-time costs associated with the launch of FMBs, plus US$138
million under the ownership of Altria during the period April-June 2002.




CHIEF EXECUTIVE'S REVIEW  (continued)    6





North America (continued)



The new management of Miller has begun to build a foundation for the
stabilisation and long-term recovery of the business.  After conducting a
thorough analysis of business positioning and overall health, Miller will
relentlessly focus on four strategic aspects to improve operations: brand
building and portfolio shaping; sales and distribution execution; cost
leadership and productivity; and organisational effectiveness.



As part of our first area of focus, progress has been made in upgrading our
Miller brand family advertising, including an emphasis on the superior intrinsic
qualities of these beers.  In November, we unveiled the early results of that
new approach, built on well-grounded consumer insights and targeted brand
profiles. Our advertising is now supported by multiple agencies operating to
precise briefs that ensure disciplined execution against strategy.



Our second initiative focuses on strengthening our ability to develop and
execute tailored local market plans.  Implementation in key markets is on
schedule, and is accompanied by progress towards improving the effectiveness of
our local marketing expenditures.



Our third area of focus is directed at cost savings to counter the impact of the
current volume decline and provide a competitive cost base for the future.
Opportunities have been identified to reduce variable and overhead costs,
including a recent reduction in the corporate employee base (by a net 200) and
transition of our information systems from the previous Altria platform.  We
also continue to integrate our pension, health care, treasury and other
functions previously performed by Altria.



Finally, our performance management system is beginning to stabilise the
business as we establish different structures, skills and behaviours, based on
clear accountability.  We are investing and building the capacity and skills of
the organisation through selective recruitment in the crucial areas of marketing
and sales.



We firmly believe that the combination of these efforts will result in a
stabilisation of the Miller business within the timeframe of two to three years
as previously described.




CHIEF EXECUTIVE'S REVIEW  (continued)                                                                           7





Central America


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

Turnover                                                                  282           261            8
EBITA £                                                                    32            35           (9)
EBITA margin (%)£                                                        11.4          13.2

Sales volumes (hl 000's)
Lager                                                                     882           851            4
Carbonated soft drinks                                                  3,044         3,250           (6)
Other beverages                                                         1,307         1,293            1



£ Before exceptional reorganisation costs of US$2 million (2002: before
reorganisation costs of US$4 million).





During the period under review progress was made in converting the business into
a market-focused enterprise with a strong portfolio of relevant brands. Beer
volumes rose by 4% as we strengthened our brand portfolio, established
differentiated brand identities and further improved our El Salvador
distribution coverage. Our mainstream portfolio initiatives included significant
brand rejuvenation through refocused advertising, enhanced labels and improved
pack ranges.  We are targeting the premium segment, and we are also
strengthening our economy offerings to compete more effectively with low-priced
spirits.



Overall CSD volumes fell by 6%, reflecting the competitive activity that
intensified in El Salvador in the latter half of 2002.  We have strengthened our
marketing of Coke and other branded products, reinforcing attributes that
resonate with consumers.  Trends improved from September, and Honduras moved
into growth against a backdrop of firm pricing.



Turnover for the period grew by 8% (11% excluding the impact of currency
movements) as a result of price increases for both beer (in Honduras) and CSDs,
reduced discounting, beer brand and channel mix, and a CSD package mix shift
towards higher-priced, non-returnable bottles and cans.



Lower EBITA and margins stemmed in part from lower CSD sales volumes and the
resulting impact on the operating leverage of the business.  In addition, CSD
package mix shifts and increases in certain materials costs had a significant
negative impact on gross margins.  These impacts were, however, partly offset by
lower fixed costs resulting from a wide-ranging restructuring programme embarked
upon in the prior year.  Asset rationalisation (between beer and CSD
activities), greater focus on cost efficiencies in marketing, sales,
distribution and production and employee headcount reductions all led to
overhead cost savings.



Our efforts to stimulate further growth in beer consumption and a gradual
recovery of the CSD profit pool will continue.  Financial results for the second
half of this year will benefit from our initiatives and more favourable
comparisons with the weaker prior year period.






CHIEF EXECUTIVE'S REVIEW  (continued)                                                                           8





Europe


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

Turnover                                                                  1,337          899           49
EBITA                                                                       256          169           51
EBITA margin (%)                                                           19.2         18.8

Sales volumes (hl 000's)
Lager                                                                   17,961        14,212           26
Other beverages                                                             63            75          (16)





The European operations recorded a very strong performance for the first half of
the year with organic beer volume up 8% versus prior year, driven primarily by a
strong performance in Russia and higher sales in the Czech Republic compared to
the same period in the prior year when sales were affected by severe flooding.
The recently acquired Peroni business saw its volumes grow ahead of our
expectations, with hot weather playing a significant part. EBITA for Europe on
an organic, constant currency basis was ahead by 27%, before benefiting from
stronger currencies primarily in the Czech Republic, Poland and Hungary. Margin
enhancement resulted mainly from improved productivity and pricing generally
ahead of local costs. We expect that earnings growth in the next six months will
be affected by the marked seasonality of the Italian market and increased
marketing spend, including the launch of Miller Genuine Draft in Italy.



The Polish beer market grew by around 4%, with Kompania Piwowarska total volumes
up by 5%, and organic volumes marginally ahead of the same period last year.
Changes within our distributor incentive programme caused some short term volume
difficulties in the second quarter however these have since been resolved and
volume growth has resumed.  Our strong Kompania Piwowarska brand portfolio,
which includes the leading Tyskie brand, drove double-digit EBITA growth for the
first six months, with price increases outpacing costs.  We are pleased with the
progress of the recently acquired Dojlidy business, where the brand portfolio
has been significantly restructured. The Zubr brand, acquired with Dojlidy, is
already generating a substantial increase in sales.



Results in the Czech Republic were boosted this year by higher sales compared to
the prior year, when sales were somewhat affected by severe flooding. Volumes
grew 5%, in line with the market, and within this, our premium brand, Pilsner
Urquell, was up by 13%, which assisted margin development.  A firm currency
enhanced an impressive earnings performance.



Despite significant competition in all segments of the Russian market, which
grew 8% over the period, our business has posted substantial volume growth, of
68%.  Sales of Miller Genuine Draft were up over 80% and the recent launch of
our Czech beer, Kozel, has been highly successful. Significant investment in
marketing initiatives continues and notwithstanding this, profitability improved
further.  In Hungary volumes increased by over 5%, we gained market share, and
EBITA grew strongly, reflecting sales price increases and cost savings.



In May, SABMiller acquired 60% of Birra Peroni SpA for Euro246 million (US$295
million, including acquisition costs).  Industry volume growth in Italy has been
strong, at around 12%, against a poor period last year impacted by very bad
weather. Our market share is level at 25% and Peroni maintains its position as
the largest brand in the market. Management is currently evaluating the overall
brand portfolio and positioning, as well as reviewing route to market strategies
and key operating practices.  The business has marked seasonality and this,
together with the introduction of Miller Genuine Draft, will impact Peroni's
earnings in the remainder of this year.  Overall, the business is performing in
line with our expectations at the time of the acquisition.



Positive organic volume performances in all other countries, particularly
Romania where sales volumes grew by over 16% and market share growth was
achieved, were helped by the generally good summer weather and led to notable
EBITA improvements.




CHIEF EXECUTIVE'S REVIEW  (continued)                                                                           9





Africa and Asia


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

Turnover                                                                  744           590            26
EBITA                                                                     134           114            18
EBITA margin (%)                                                         18.0          19.3

Sales volumes (hl 000's)*
Lager                                                                  20,677        19,283             7
Carbonated soft drinks                                                  1,671         1,902           (12)
Other beverages                                                         5,369         5,328             1



* Castel volumes of 6,091 (2002: 4,971) hls 000's lager beer and 4,967 (2002:
4,391) hls 000's carbonated soft drinks and 1,964 (2002: 404) hls 000's other
beverages are not included.





Africa



Our portfolio of businesses, combined with our Castel alliance, diversifies
country risk and gives us a unique footprint across the African continent.  The
benefits of this are seen in the performance for the six months to September
with good beer volume gains in Uganda, driven by the Eagle brand, Mozambique,
Tanzania and Swaziland, offset by a decline in Botswana and a significant
reduction in Zimbabwe. The net result was unchanged total African lager volumes
compared to prior year (excluding Castel sales). A similar pattern was apparent
in CSD volumes, with good gains in Angola, offset by steep declines in Zimbabwe.



EBITA performance was strong, with benefits from the East African restructuring
initiatives that were started last year, and strong operational performances in
Botswana, Ghana and Uganda, the latter two enjoying further market share gains
over the period. In addition, currency strength in Botswana, Swaziland and
Lesotho improved the overall reported performance.



Beverage volumes in Castel, in which we have a 20% interest, were up 33%, and
our share of their reported EBITA has increased accordingly. We are currently
negotiating our interest in Castel's recent acquisitions in Algeria and Morocco,
in line with our strategic alliance arrangements.



Asia



Our Chinese beverage volume growth for the first six months was 8%.  Within
this, organic beer volume growth was up by 3%, impacted by the SARS epidemic,
with a marginal increase in EBITA. In June SABMiller announced the acquisition
of a 29.6% stake in Harbin from its largest shareholder, China Enterprise
Development Fund ("CEDF"), for HK$675 million (approximately US$87 million) in
cash.



In May SABMiller became the strong number two brewer in the high growth Indian
beer market, through a joint venture with the Shaw Wallace group of companies.
The integration process is underway, and the business is performing to our
initial expectations despite the high level of monsoon rainfall.




CHIEF EXECUTIVE'S REVIEW  (continued)                                                                          10





South Africa:



Beer South Africa


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

Turnover                                                                  831           524            59
EBITA                                                                     184           118            56
EBITA margin (%)                                                         22.2          22.6

Sales volumes (hl 000's)                                               11,651        11,083             5





Beer volumes for the six months to September grew by 5.1%, boosted by the timing
of Easter.  Volume growth has been assisted by effective trade promotions, price
point management and increased availability of alcoholic fruit beverages (AFBs),
and through the introduction of the premium brands, Pilsner Urquell and Miller
Genuine Draft.



Strong operational performance is evident across the business, with
manufacturing efficiencies at an all-time high. Together with the benefit of
increased pricing, this has led to a 14% increase in South African rand EBITA.
This performance has been enhanced by the strengthening of the rand, leading to
a 56% increase in EBITA over the prior year. EBITA margin of 22.2% is impacted
negatively by the launch costs of our premium brands, raw material hedging and a
reduced margin on our export business due to the strength of the local currency.



Beer South Africa increased its share of the total alcoholic drinks market to
58.3%, with gains in the mainstream, premium and AFB segments through successful
brand marketing and improved promotions.  Strong growth in the premium segment
is driven mainly by Amstel, Castle Lite, Pilsner Urquell and Miller Genuine
Draft, whilst Brutal Fruit has recorded further robust growth in the AFB
segment. We expect Pilsner Urquell and Miller Genuine Draft to replace all of
the previous Heineken volume following the ending last year of our joint venture
arrangement. In addition, the availability of low priced wine has reduced over
the past few months, with a consequential increase in wine retail selling
prices.



In September 2003 the National Assembly approved the new Liquor Bill, which
accommodates most of the industry's concerns, and in particular allows companies
to hold licences in both manufacturing and distribution.  There is to be an
automatic conversion of existing licences and licence holders must demonstrate
within twelve months that they meet certain criteria set by the Minister of
Trade and Industry.  We believe that the criteria are sound. During the
legislative process the Government committed itself to ensuring that the Bill
would not adversely affect the industry's efficiency.




CHIEF EXECUTIVE'S REVIEW  (continued)                                                                          11





Other Beverage Interests


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

Turnover                                                                  455           305            49
- ABI                                                                     353           228            55
EBITA *                                                                    42            29            45
- ABI                                                                      32            22            45
EBITA margin (%) *                                                        9.0           9.5
- ABI                                                                     9.0           9.4

Sales volumes (hl 000's)
Soft drinks                                                             5,374         5,146             4
- ABI                                                                   5,261         4,962             6



   * Before exceptional profit of US$13 million on disposal of trademarks in
2003.





Amalgamated Beverage Industries (ABI)



For the six months to 30 September 2003 ABI achieved a positive performance with
beverage volumes growing 6% to 5.26 million hectolitres. Volume growth was
supported by increases in consumer disposable income, the timing of Easter and
new pack and flavour innovations. Vanilla Coke was successfully launched and
contributed to growth in brand Coke and ABI moved into the cordial market with
the launch of the new Bibo cordial.



EBITA increased by 45% to US$32 million, as a result of higher volumes, price
increases, and improved market execution and efficiency improvements, assisted
by currency strength. The factors were offset to a degree by product input cost
pressures and negative mix effects.





Appletiser



Total volumes in South Africa were in line with prior year, with earnings
benefiting from the strength of the rand. Appletiser has continued to invest in
marketing in the UK, with the objectives of improved brand awareness and volume
growth over time.



The Just Juice and Valpre spring water brands were sold to a subsidiary of The
Coca-Cola Company with effect from 24 April 2003, and the profit on disposal of
these trademarks of US$13 million is excluded from the EBITA tabled above.





Distell



Turnover in local currency is broadly in line with prior year, whilst earnings
have increased following the merger between Distillers Corporation and
Stellenbosch Farmers' Winery.  This increase in earnings has been enhanced by
the strengthening rand exchange rate.




CHIEF EXECUTIVE'S REVIEW  (continued)                                                                          12





Hotels and Gaming


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

Turnover                                                                  100            91            10
EBITA                                                                      19            17            12
EBITA  margin (%)                                                        19.4          19.2

Revpar *                                                               $37.79        $28.45            33



   £ SABMiller 49% share of the new Tsogo Sun Group formed on 31 March 2003.

   ^ SABMiller 100% share of Hotels and 50% share of Gaming.

   * Revenue per available room.





With effect from 31 March 2003, SABMiller disposed of 51% of its hotel
operations and a 1% interest in its gaming business, and as a result became a
49% shareholder in the Tsogo Sun Group (TSG).  The business reported a strong
first half performance and our share of EBITA for the period was US$19 million.



The gaming market has grown strongly, up 12% in the Gauteng district, with TSG
benefiting from the opening of phase II of the Suncoast development in Durban.
While hotel occupancies were down on the same period last year this was offset
by an increase in average room rates.




CHIEF EXECUTIVE'S REVIEW  (continued)                                                                          13





Financial information



Segmental analysis



Information is provided on volumes, turnover, EBITA and EBITA margin, together
with a commentary on each segment, in accordance with the basis on which the
businesses are managed.



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 the group exercises significant
influence but primary responsibility for day to day management rests with others
(such as Distell and Castel). 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.  Reported volumes exclude
intra-group sales.



Constant currency comparisons



The group has made some disclosures of its results on a constant currency basis,
to analyse the effects of changes in exchange rates.  Constant currency results
have been determined by translating the local currency denominated results for
the six months to 30 September 2003 at the exchange rates for the comparable
period in the prior year.



Acquisitions



The acquisition of a 60% interest in Birra Peroni SpA, the number two brewer in
Italy, with options to increase the holding in the future, was completed on 4
June 2003, although control passed to SABMiller on 21 May 2003 when the
SABMiller appointed directors assumed control of the business.  Consequently the
business has been accounted for from 21 May 2003.  The acquisition was funded in
cash from existing resources.



With effect from 21 May 2003, SABMiller's Indian subsidiary, Mysore Breweries
Limited, and Shaw Wallace and Company Limited (Shaw Wallace) entered into a
joint venture agreement whereby the brewing interests and licences of the two
businesses will be combined in one company, Shaw Wallace Breweries Limited, in
which each will hold 50% upon completion.



SABMiller completed the acquisition of a 29.6% stake (28.1% effective interest)
in Harbin Brewery Group Limited, China's fourth largest brewer, on 29 June 2003.



Goodwill amortisation



Goodwill amortisation at US$178 million for the half year is significantly
higher than prior periods reflecting the major acquisition activity undertaken
over the past 18 months.



Treasury



Gross borrowings have increased to US$3,947 million from US$3,523 million at 31
March 2003, principally as a result of the borrowings made to fund acquisitions,
whilst net debt has also increased to US$3,344 million. In August 2003 the
US$2,000 million bank facility assumed with Miller Brewing Company was
refinanced with the successful issue of US$1,100 million ten-year bonds and
US$600 million five-year bonds by Miller Brewing Company, with effective
interest rates of 5.21% and 3.94% respectively, the balance being repaid from
surplus cash resources.  Concurrently SABMiller plc also issued US$300 million
30-year bonds with an effective interest rate of 6.41%.  The effective interest
rates are after taking into account hedges, which were put in place prior to the
issuance of the bonds, to protect against rising interest rates.  The average
loan maturity, in respect of the US$ fixed term debt portfolio is some 8 years,
whereas the various other currency borrowings tend to be of a one year revolving
nature and the average borrowing rate is now 5.3%.




                                                                                                               14

CHIEF EXECUTIVE'S REVIEW  (continued)





Interest



Net interest payable of US$88 million is up from US$74 million in the prior
period due to the increase in borrowings incurred regarding the acquisitions
undertaken over the past eighteen months.



Taxation



The effective tax rate, before goodwill amortisation and exceptional items, is
34.5%.  This compares to 32.5% in the prior year, excluding the exceptional
deferred tax credit.  The increase compared to the prior year and the year to 31
March 2003 is attributable to an increased proportion of profits being earned in
companies with higher effective tax rates, principally Miller.



Associates



The share of operating profit of associates has increased by US$19 million
compared to the same period in the prior year, with the majority of the increase
coming from Castel in Africa and from the Hotels and Gaming division, now
treated as an associate following the partial disposal at 31 March 2003.



Dividend



The board has declared an interim dividend of 7.5 US cents per share. The
dividend will be payable on 22 December 2003 to all shareholders registered on
the London and Johannesburg Registers on 5 December 2003. The ex-dividend
trading dates as stipulated by the London Stock Exchange will be 3 December 2003
on the London Exchange and 1 December 2003 on the Johannesburg Securities
Exchange as stipulated by STRATE. As the group reports primarily in US dollars,
dividends are declared in US dollars. They are payable in sterling to
shareholders on the UK section of the register and South African rand to
shareholders on the RSA section of the register. The rates of exchange
applicable on 14 November 2003, being the last practical date before the
declaration date will be used for the conversion ($/£ = 1.6853 and R/$ =
6.6875), resulting in an equivalent interim dividend of UK 4.4502 pence per
share for UK shareholders and SA 50.1563 cents per share for RSA shareholders.



To comply with the requirements of STRATE in South Africa, from the close of
business on 28 November 2003 until the close of business on 5 December 2003 no
transfers between the UK and South African Registers will be permitted and no
shares will be materialised or dematerialised.




DIRECTORS' RESPONSIBILITY FOR FINANCIAL REPORTING                                                               15





This statement, which should be read in conjunction with the independent review
report of the auditors set out below, is made to enable shareholders to
distinguish the respective responsibilities of the directors and the auditors in
relation to the consolidated interim financial information, set out on pages 16
to 28, which the directors confirm has been prepared on a going concern basis
and follows all applicable accounting standards. The directors consider that the
group has used appropriate accounting policies, consistently applied and
supported by reasonable and prudent judgements and estimates.



A copy of the interim report of the group is placed on the company's website.
The directors are responsible for the maintenance and integrity of information
on the company's website.  Information published on the internet is accessible
in many countries with different legal requirements.  Legislation in the United
Kingdom governing the preparation and dissemination of the financial statements
may differ from legislation in other jurisdictions.



On behalf of the board




E A G Mackay                                         M I Wyman
Chief Executive                                      Chief Financial Officer





20 November 2003







INDEPENDENT REVIEW REPORT TO SABMILLER plc





Introduction



We have been instructed by the company to review the financial information which
comprises the profit and loss account, the statement of total recognised gains
and losses, the balance sheet, the cash flow statement, comparative figures and
associated notes. We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.



Directors' responsibilities



The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.



Review work performed



We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial
data, and based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed.



A review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit performed in accordance with United Kingdom Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do
not express an audit opinion on the financial information.



This report has been prepared for and only for the company for the purpose of
the Listing Rules of the Financial Services Authority and for no other purpose.
We do not, in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.



Review conclusion



On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2003.





PricewaterhouseCoopers LLP

Chartered Accountants



London

20 November 2003




SABMiller plc
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
for the six months ended 30 September                                                                          16






                                                                 Six months   Six months   Year ended
                                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                        Notes          US$m         US$m         US$m

Turnover (including share of associates' turnover)        2          6,328      
 3,977        9,112
Less: share of associates' turnover                                   (585)        (388)        (817)

Group turnover                                            2          5,743        3,589        8,295
Net operating costs                                                 (5,130)      (3,205)      (7,492)

Group operating profit                                    2            613          384          803
Share of operating profit of associates                   2             83           64          126
Profit on disposal of trademarks                          3             13            -            -
Surplus on pension fund of disposed operation             3             45            -            -
Profit on partial disposal of subsidiary                  3              -            -            4

Profit on ordinary activities before interest and                      754          448          933
taxation
Net interest payable                                                   (88)         (74)        (163)
Group                                                                  (71)         (65)        (142)
Associates                                                             (17)          (9)         (21)


Profit on ordinary activities before taxation                          666          374          770
Taxation on profit on ordinary activities                 4           (271)        (148)        (349)

Profit on ordinary activities after taxation                           395          226          421
Equity minority interests                                              (86)         (66)        (125)
Profit for the financial period                                        309          160          296

Basic earnings per share (US cents)                       5           25.9         16.7         27.5
Headline earnings per share (US cents)                    5           34.7         26.7         52.6
Adjusted basic earnings per share (US cents)              5           35.5         26.8         54.0
Diluted earnings per share (US cents)                     5           25.4         16.6         27.4
Adjusted diluted earnings per share (US cents)            5           34.4         26.0         52.7
Dividend per share (US cents)                                          7.5          6.5         25.0






SABMiller plc
CONSOLIDATED BALANCE SHEETS
at 30 September                                                                                                17






                                                                     30/9/03      30/9/02      31/3/03
                                                                   Unaudited    Unaudited      Audited
                                                                        US$m         US$m         US$m

Fixed assets
Intangible assets                                                     6,645        6,486        6,451
Tangible assets                                                       3,617        3,098        3,244
Investments                                                           1,692        1,145        1,365
Investments in associates                                             1,029          497          705
Other fixed asset investments                                           663          648          660


                                                                     11,954       10,729       11,060
Current assets
Stock                                                                   557          407          456
Debtors                                                               1,046          829          802
Investments                                                              17            5            2
Cash at bank and in hand                                                586          319          559
                                                                      2,206        1,560        1,819

Creditors - amounts falling due within one year                      (2,662)      (1,547)      (4,027)
Interest bearing debt                                                  (850)        (212)      (2,409)
Other                                                                (1,812)      (1,335)      (1,618)


Net current (liabilities)/assets                                       (456)          13       (2,208)

Total assets less current liabilities                                11,498        10,742       8,852

Creditors - amounts falling due after one year                       (3,163)      (3,362)      (1,130)
Interest bearing debt *                                              (3,097)      (3,346)      (1,114)
Other                                                                   (66)         (16)         (16)

Provisions for liabilities and charges                                 (862)        (651)        (743)
Net assets                                                            7,473        6,729        6,979

Ordinary shareholders' funds                                          6,637        6,002        6,201
Equity minority interests                                               836          727          778
Capital employed                                                      7,473        6,729        6,979




* Includes US$592 million (30/9/02: US$588 million, 31/3/03: US$590 million)
4.25% guaranteed convertible bonds.




SABMiller plc
CONSOLIDATED CASH FLOW STATEMENTS
for the six months ended 30 September                                                                          18






                                                                 Six months   Six months   Year ended
                                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                       Notes           US$m         US$m         US$m

Net cash inflow from operating activities                6           1,088          694        1,568

Dividends received from associates                                      11           13           27

Returns on investments and servicing of finance
Interest received                                                       20           19           39
Interest paid                                                          (72)         (73)        (159)
Interest element of finance lease rental payments                       (1)          (5)         (11)
Dividends received on other investments                                  3            1            3
Dividends paid to minority interests                                   (85)         (84)        (137)

Net cash outflow from returns on investments and
servicing of finance                                                  (135)        (142)        (265)

Taxation paid                                                         (244)        (137)        (286)

Capital expenditure and financial investments
Purchase of tangible fixed assets                                     (258)        (186)        (445)
Sale of tangible fixed assets                                           14           11           16
Purchase of investments                                                 (4)         (15)         (21)
Sale of investments                                                      6            3            3

Net cash outflow for capital expenditure and financial
investments                                                           (242)        (187)        (447)

Acquisitions and disposals

Purchase of subsidiary undertakings                                   (331)         (46)         (52)
Net (overdraft)/cash acquired with subsidiary                          (98)           6            6
undertaking
Sale of subsidiary undertakings                                         30            -           44
Net cash disposed with subsidiary undertakings                          (8)           -          (42)
Proceeds from pension fund of disposed operation                        45            -            -
Proceeds from disposal of trademarks                                    13            -            -
Purchase of shares from minorities                                     (16)          (7)          (8)
Purchase of shares in associates                                      (247)          (6)          (6)
Net funding from associates                                              1            4            4

Net cash outflow for acquisitions and disposals                       (611)         (49)         (54)

Equity dividends paid to shareholders                                 (219)        (141)        (203)


Management of liquid resources
Sale of short-term liquid instruments                                    -           40           43
Cash (placed in)/withdrawn from short-term deposits                    (15)           -            1

Net cash (outflow)/inflow from management of liquid
resources                                                              (15)          40           44

Financing
Issue of shares                                                          1            1            2
Issue of shares to minorities                                            2            3            2
New loans raised                                                     2,711          155          190
Repayment of loans                                                  (2,468)        (219)        (330)
Net cash inflow/(outflow) from financing                               246          (60)        (136)

(Decrease)/increase in cash in the period                7            (121)          31          248









SABMiller plc
CONSOLIDATED STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 30 September                                                                            19






                                                                Six months   Six months   Year ended
                                                                     ended        ended      31/3/03
                                                                   30/9/03      30/9/02
                                                                 Unaudited    Unaudited      Audited
                                                                      US$m         US$m         US$m

Profit for the financial period                                        309          160          296
Currency translation differences on foreign currency net               216          154          428
investments
Other movements                                                        (1)            2            3
Total recognised gains and losses for the period                       524          316          727



CONSOLIDATED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the six months ended 30 September






                                                                 Six months   Six months  Year ended
                                                                      ended        ended     31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Profit for the financial period                                        309          160          296
Other recognised gains and losses relating to the period (net)         215      
   156          431
Goodwill written back on sales of subsidiaries                           -            -            8
Dividends declared by SABMiller plc *                                  (89)         (63)        (283)
Nominal value of shares issued for the acquisition of Miller
Brewing
Company                                                                  -           43           43
Merger relief reserve arising on shares issued for the
acquisition of Miller
Brewing Company                                                          -        3,395        3,395
Net proceeds on ordinary shares issued for cash                          1            2            2

Net increase in shareholders' funds                                    436        3,693        3,892

Shareholders' funds at start of period                               6,201        2,309        2,309


Shareholders' funds at end of period                                 6,637        6,002        6,201


* Safari Limited waives its right to a dividend (prior year dividend received on
shares held by Safari Limited netted off).






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS                                                                              20







1.  Basis of preparation



The consolidated financial statements have been prepared under the historical
cost convention in accordance with Accounting Standards applicable in the United
Kingdom, and, on the basis of the accounting policies, all of which have been
applied consistently throughout the period and the preceding year as set out in
note 2 of the 2003 annual report.



The group financial statements consolidate those of the company and all of its
subsidiary undertakings together with the attributable share of the results of
associated undertakings. The principal subsidiary and associated undertakings
are all coterminous with those of the company, except for the group's
significant associated undertaking, Distell Group, which has a statutory
accounting reference date of 30 June and is therefore accounted for three months
in arrears.



The financial information in this report does not constitute statutory accounts
within the meaning of s240 of the Companies Act 1985 (as amended).






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS                                                                              21







2.  Segmental analysis


                                                                 Six months   Six months   Year ended
Turnover                                                              ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Business segment analysis

Americas:

North America                                                        2,579        1,307        3,473

Central America                                                        282          261          514

Europe                                                               1,337          899        1,646


Africa and Asia                                                        744          590        1,209
Associates' share                                                     (342)        (253)        (480)
                                                                       402          337          729
South Africa:

Beer South Africa                                                      831          524        1,270

Other Beverage Interests                                               455          305          788
Associates' share                                                     (143)         (98)        (244)
                                                                       312          207          544

Hotels and Gaming                                                      100           91          212
Associates' share                                                     (100)         (37)         (93)
                                                                         -           54          119


Group                                                                6,328        3,977        9,112
Associates' share                                                     (585)        (388)        (817)
                                                                     5,743        3,589        8,295







SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   22



2.  Segmental analysis (continued)


                                                                 Six months   Six months   Year ended
Operating profit                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Business segment analysis



Americas:

North America                                                          132           39           75

Central America                                                          9            7           10

Europe                                                                 229          151          239


Africa and Asia                                                        123          109          219
Associates' share                                                      (51)         (48)         (79)
                                                                        72           61          140
South Africa:
Beer South Africa                                                      184          118          338

Other Beverage Interests                                                42           29          120
Associates' share                                                      (13)          (8)         (26)
                                                                        29           21           94

Hotels and Gaming                                                       19           17           42
Associates' share                                                      (19)          (8)         (21)
                                                                         -            9           21

Central administration                                                 (27)         (22)         (44)

Group - excluding exceptional items                                    711          448          999
Associates' share                                                      (83)         (64)        (126)
                                                                       628          384          873
Exceptional items

North America                                                          (13)           -          (58)
Central America                                                         (2)           -          (12)

Group - including exceptional items                                    696          448          929

Associates' share                                                      (83)         (64)        (126)
                                                                       613          384          803






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   23







2.  Segmental analysis (continued)


                                                                 Six months   Six months   Year ended
EBITA                                                                 ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Business segment analysis



Americas:

North America                                                          249           97          250

Central America                                                         32           31           56

Europe                                                                 256          169          275


Africa and Asia                                                        134          114          233
Associates' share                                                      (58)         (49)         (85)
                                                                        76           65          148

South Africa:
Beer South Africa                                                      184          118          338

Other Beverage Interests                                                42           29          120
Associates' share                                                      (13)          (8)         (26)
                                                                        29           21           94

Hotels and Gaming                                                       19           17           42
Associates' share                                                      (19)          (8)         (21)
                                                                         -            9           21

Central administration                                                 (27)         (22)         (44)

Group - excluding exceptional items                                    889          553        1,270
Associates' share                                                      (90)         (65)        (132)
                                                                       799          488        1,138
Exceptional items

North America                                                          (13)           -          (58)
Central America                                                         (2)           -          (12)
OBI (Appletiser)                                                        13            -            -
Hotels and Gaming                                                        -            -            4
Central administration                                                  45            -            -

Group - including exceptional items                                    932          553        1,204

Associates' share                                                      (90)         (65)        (132)
                                                                       842          488        1,072








SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   24







2.  Segmental analysis (continued)


                                                                 Six months   Six months   Year ended
EBITDA                                                                ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Business segment analysis

Americas:

North America                                                          322          133          348

Central America                                                         53           54           90

Europe                                                                 323          223          387


Africa and Asia                                                         93           86          166

South Africa:
Beer South Africa                                                      226          143          403

Other Beverage Interests                                                45           29          119

Hotels and Gaming                                                        -           12           27

Central administration                                                 (25)         (31)         (36)

Group - excluding exceptional items                                  1,037          649        1,504

Exceptional items

North America                                                           (1)           -          (12)
Central America                                                         (2)           -           (9)

Group - including exceptional items                                  1,034          649        1,483



SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   25


3.  Exceptional items

The following items were treated as exceptional items by the group during the
six months ended 30 September:


                                                                 Six months   Six months   Year ended
                                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Recognised in operating profit:
North America                                                          (13)           -          (58)

Miller integration and restructuring costs                             (13)           -          (23)
Brewery closure costs in Tumwater (USA)                                  -            -          (35)

Central America

Restructuring costs                                                     (2)           -          (12)
                                                                       (15)           -          (70)

Taxation                                                                 6            -           23
Minority interests' share of the above items                             1            -            4







Following the acquisition of Miller Brewing Company, its amalgamation with the
rest of the group's business has given rise to integration and restructuring
costs during the six months under review amounting to US$13 million (2002: US$
nil).  These costs relate mainly to severance expenses.



Following the group's acquisition of brewing and soft drink bottling interests
in Central America towards the end of 2001, costs have been incurred to
restructure the Central American operations.  These expenses consist of
retrenchment costs of US$2 million (2002: US$ nil).




                                                                 Six months   Six months   Year ended
                                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Recognised after operating profit:
The South African Breweries Limited

Surplus on pension fund of disposed operation                           45            -             -

Appletiser SA

Profit on disposal of trademarks                                        13            -             -


Hotels and Gaming

Gain on partial disposal of subsidiary                                   -            -           12
Goodwill previously eliminated against reserves                          -            -           (8)
Profit on partial disposal of subsidiary                                 -            -            4

                                                                        58            -            4

Taxation                                                                (1)           -            -








The group is still in dispute resolution with Shoprite Holdings Limited
regarding the disposal of the OK Bazaars some years ago.  As a result of a
surplus arising from the liquidation of the OK Bazaars pension fund, which was
returned to the Shoprite group, Shoprite has paid The South African Breweries
Limited, OK Bazaars' former parent company, an after tax equivalent amount of
$45 million, pursuant to the sale agreement.



In the period, Appletiser SA recorded a pre-tax profit on the disposal of its
Valpre and Just Juice trademarks of $13 million, which were sold to a subsidiary
of The Coca-Cola Company (TCCC).  Appletiser continues to produce the Valpre and
Just Juice brands under a manufacturing agreement with TCCC.




SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   26







4.  Taxation on profit on ordinary activities


                                                                 Six months   Six months    Year ended
                                                                      ended        ended       31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Current taxation                                                       252          135          285
Under/(over) provision in respect of prior year                          1           (1)           1
Withholding taxes and secondary taxation on companies                    8            4           13
Share of associates' taxation charge                                    16           12           30
Deferred taxation                                                       (6)          (2)          20
                                                                       271          148          349

Effective tax rate, before goodwill amortisation and                  34.5         30.8         33.6
exceptional items (%)



Effective tax rate before deferred tax credit of US$8 million on ABI assessed
loss from prior years in the six months ended 30 September 2002 (US$9 million
for the year ended 31 March 2003) was 32.5% (34.4%).









5.  Earnings per share


                                                                 Six months   Six months   Year ended
                                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                   US cents     US cents     US cents

Basic earnings per share                                              25.9         16.7         27.5

Headline earnings per share                                           34.7         26.7         52.6

Adjusted basic earnings per share                                     35.5         26.8         54.0

Diluted earnings per share                                            25.4         16.6         27.4

Adjusted diluted earnings per share                                   34.4         26.0         52.7





The calculation of basic earnings per share has been based on the profit for the
financial period as shown below, and on a weighted average number of shares in
issue of 1,191,857,007 (2002: 960,541,589).



At 30 September 2003 there were 12,789,564 share options outstanding under the
SABMiller plc Executive Share Purchase Scheme (South Africa), 7,774,184 share
options outstanding under the SABMiller plc Executive Share Option Scheme
(Approved Scheme and Unapproved (No 2) Scheme combined) and 1,909,533
conditional awards under the SABMiller plc Performance Share Awards Scheme which
have not yet vested, 1,822,643 share purchase options outstanding under
SABMiller plc International Employee Share Scheme and 3,799,000 stock
appreciation rights under the SABMiller plc International Employee Stock
Appreciation Rights Scheme.  The calculation of diluted earnings per share is
based on a weighted average number of shares in issue of 1,263,355,903 after
adjusting for 71,498,896 weighted potentially dilutive ordinary shares arising
from the share options and the guaranteed convertible bond, and the profit for
the financial period as shown below, adjusted for an interest saving of US$12
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 ordinary shares, is US$6.99
compared with an average strike price on the outstanding options of US$7.19.
The guaranteed convertible bond was not dilutive in respect of basic earnings
per share for the six months ended 30 September 2002 nor the year ended 31 March
2003.



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:






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   27







5.  Earnings per share (continued)


                                                                 Six months   Six months   Year ended
                                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Profit for the financial period                                        309          160          296
Amortisation of goodwill                                               178          105          271
Surplus on pension fund of disposed entity                             (45)           -            -
Profit on disposal of trademarks                                       (13)           -            -
Brewery closure costs in Tumwater (USA)                                  -            -           35
Profit on partial disposal of subsidiary                                 -            -           (4)
Impairment costs in South Africa                                         -            -            4
(Profit)/loss on sale of fixed assets and investments                   (4)           3            -
Tax effects of the above items                                           1           (1)         (15)
Minority interests' share of the above items                           (11)         (10)         (21)
Headline earnings (basic)                                              415          257          566
Integration/reorganisation costs *                                      15            9           35
Tax effects of the above items                                          (6)          (1)          (9)
Deferred tax adjustment due to assessed loss (ABI)                       -           (8)          (9)
Minority interests' share of the above items                            (1)           -           (2)
Adjusted earnings                                                      423          257          581



* Comprises integration costs of Miller of US$13 million (30/9/02: US$5 million;
31/3/03: US$23 million) and reorganisation costs in Central America of US$2
million (30/9/02: US$4 million; 31/3/03: US$12 million).







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


                                                                 Six months   Six months   Year ended
                                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

Operating profit                                                       613          384          803
Depreciation: Tangible fixed assets                                    187          134          289
Depreciation: Containers                                                34           20           55

Container breakages and shrinkage                                       15            8           20

Amortisation of intangible fixed assets                                171          104          265

Dividends received from other investments                               (3)          (1)          (3)
(Profit)/loss on sale of fixed assets                                   (3)           3           (1)
Miller integration costs                                                12            -           11
Impairment provision in South Africa                                     -            -            4
Brewery closure costs in Tumwater (USA)                                  -            -           35
Central America reorganisation costs                                     -            -            3
Deferred income                                                         (1)           -           (3)
Other non-cash movements                                                 9           (3)           5

Net cash inflow from operating activities before working
capital movements ('EBITDA')                                         1,034          649        1,483
Increase in stock                                                      (12)         (30)         (44)
Increase in debtors                                                    (56)         (33)          20
Increase in creditors                                                  122          108          109
Net cash inflow from operating activities                            1,088          694        1,568



Operating cash flows include cash outflows relating to exceptional items of US$1
million (30/9/02: nil; 31/3/03 US$12 million) in respect of Miller integration
costs and US$2 million (30/9/02: nil; 31/3/03: US$9 million) in respect of
reorganisation costs in Central America.






SABMiller plc
NOTES TO THE FINANCIAL STATEMENTS (continued)                                                                   28







7.  Reconciliation of net cash flow to movement in net debt


                                                                 Six months   Six months   Year ended
                                                                      ended        ended      31/3/03
                                                                    30/9/03      30/9/02
                                                                  Unaudited    Unaudited      Audited
                                                                       US$m         US$m         US$m

(Decrease)/increase in cash                                           (121)          31          248
Net cash (inflow)/ outflow from (increase)/decrease in debt           (243)          64          140
and lease
financing
Cash outflow/(inflow) from increase/(decrease) in liquid                15          (40)         (44)
resources

Change in net debt resulting from cash flows                          (349)          55          344
Loans and finance leases acquired with subsidiary undertakings        (110)     
(2,019)      (2,008)
Loans and finance leases disposed with subsidiary undertakings          29            -            9
Exchange movements                                                      (5)         (23)         (58)
Cash inflow from interest rate hedges                                   56            -            -
Amortisation of bond costs                                              (3)          (2)          (4)

Movement in net debt in the period                                    (382)      (1,989)      (1,717)
Opening net debt                                                    (2,962)      (1,245)      (1,245)
Closing net debt                                                    (3,344)      (3,234)      (2,962)





A total of US$56 million was received in relation to the interest rate hedges on
the bond issues, which is being amortised through the profit and loss account
over the life of the bonds.




SABMiller plc
FORWARD LOOKING STATEMENTS                                                                                     29











This press release does not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire ordinary shares in the capital of
SABMiller plc (the "Company") in any jurisdiction or an inducement to enter into
investment activity.



This press release includes 'forward-looking statements'.  These statements
contain the words "anticipate", "believe", "intend", "estimate", "expect" and
words of similar meaning.  All statements other than statements of historical
facts included in this press release, including, without limitation, those
regarding the Company's financial position, business strategy, plans and
objectives of management for future operations (including development plans and
objectives relating to the Company's products and services) are forward-looking
statements.  Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company to be materially different from
future results, performance or achievements expressed or implied by such
forward-looking statements.  Such forward-looking statements are based on
numerous assumptions regarding the Company's present and future business
strategies and the environment in which the Company will operate in the future.
These forward-looking statements speak only as at the date of this press
release.  The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company's expectations with regard thereto
or any change in events, conditions or circumstances on which any such statement
is based.



Any information contained in this press release on the price at which the
Company's securities have been bought or sold in the past, or on the yield on
such securities, should not be relied upon as a guide to future performance.




SABMiller plc
ADMINISTRATION                                                                                                 30







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 264103

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

investor.relations@sabmiller.com

Telephone +44 20 7659 0100



Independent Auditors

PricewaterhouseCoopers LLP

1 Embankment Place

London, England

WC2N 6RH

Telefax +44 20 7822 4652

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 20 8639 2157 (outside UK)

Telephone 0870 162 3100 (from UK)



Registrar (South Africa)

Computershare Limited

70 Marshall Street, Johannesburg, 2000

Postal address

PO Box 61051

Marshalltown 2107

South Africa

Telefax +27 11 370 5487

Telephone +27 11 370 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: www.bankofny.com

Toll free +1 888 269 2377 (USA & Canada only)



--------------------------








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