SABMiller plc announces new and revised reporting metrics

SABMiller plc has amended and expanded a number of its non-GAAP reporting metrics to reflect more accurately how the business is managed, to reflect changes in accounting standards and to aid comparability with other beverage companies. The revised metrics will be used for the first time in the announcement of the group’s interim results for the six months ended 30 September 2013 scheduled to be released on 21 November 2013.

Group net producer revenue (NPR)

The group presents revenue gross of excise duties and similar taxes as it considers these as a direct cost to the group. In order to show more clearly the group’s underlying revenue performance, excluding the impact of excise and similar taxes charged to the group by tax authorities, the group will also present an additional new metric, group net producer revenue (NPR), which is defined as group revenue less excise duties and similar taxes and the group’s share of associates and joint ventures on a similar basis. This measure will be used for segmental reporting.

A summary of the growth rates for group NPR and group NPR per hectolitre (hl) on an organic, constant currency basis for each quarter in the last financial year, together with the first quarter of the current financial year, is shown in table 1 of the PDF (see link below) which includes supplementary tables to this statement.

A summary of the reported value for group NPR by segment for each of the last two half years and the last two full financial years, together with the reported and organic, constant currency growth rates is shown in table 2.

EBITA and EBITA margin

EBITA for the half year ended 30 September 2012 and the full year ended 31 March 2013 have been restated for the implementation of the amendment to IAS19 ‘Employee Benefits’. The restated reported EBITA by segment for these periods, together with the reported and organic, constant currency growth rates are shown in table 3 below. In addition, the half year ended 30 September 2011 and the full year ended 31 March 2012 have been presented on the same basis to demonstrate longer term trends.

Following the introduction of the group NPR metric, the group will calculate EBITA margin using group NPR as the denominator rather than group revenue. This will demonstrate the underlying margin progression without the distortions of changes in excise duties and similar taxes charged to the group.

A summary of the revised EBITA margin by segment for each of the last two half years and the last two full financial years, together with the reported and organic, constant currency basis point (bps) growth is shown in table 4.

EBITDA

Historically the group has used a cash flow-based EBITDA metric, with a number of non-cash adjustments in addition to depreciation and amortisation. However, with an increasing number of non-cash items, this measure has become more complicated. Consequently, in an effort to simplify the calculation of the metric and to aid comparability with other beverage companies, the group will present an income statement-based EBITDA metric instead, which only adjusts for depreciation and amortisation. EBITDA comprises EBITA plus depreciation and amortisation of computer software, including the group’s share of associates’ and joint ventures’ depreciation and amortisation of computer software.

A summary of the revised EBITDA by segment for each of the last two half years and the last two full financial years, together with the reported and organic, constant currency growth rates is shown in table 5.

Net debt

Additionally the group has amended its net debt definition to include derivative financial instruments designated as net investment hedges as these hedges are considered to be inextricably linked to the underlying borrowings because they are used to mitigate the foreign exchange risk arising from the group’s foreign currency borrowings. This will enable a more appropriate presentation of the currency profile of the group’s borrowings.

A summary of the previously reported and the revised net debt position as at 31 March 2012, 30 September 2012 and 31 March 2013 is shown in table 6.

Reconciliation of previously reported to revised metrics

Table 7 provides a summary reconciliation of the previously reported metrics to the new metrics, along with restated adjusted earnings and adjusted EPS, for the six months ended 30 September 2012 and the twelve months ended 31 March 2013.

Download the full statement which includes all tables referred to above.

The Analyst Workbook for the year ended March 2012 and March 2013 has been restated to reflect the amended and expanded disclosures. Download the Excel document.