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I - Financial Reporting: SABMiller PLC - Essay Example

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I - Financial Reporting: SABMiller PLC

The opportunities are growing due to the trends and life style changes in the emerging markets with youngsters as consumers. The consolidation taking place in the industry over the period of time and the innovative market development activities undertaken by the company with its strong brands and wider geographical expansion portrays a good future outlook for the company as well as the industry in the long run. Evaluation of the company’s Performance The consolidated financial statements include the financial information of the subsidiaries, associates and joint venture entities owned by the company. For evaluating the company’s performance, its performance over a period of time needs to be compared. Figure 1SABMiller Financial Highlights Return on equity Revenue growth and return on equity over the period of time is impressive considering the financial crisis faced by the world and slowdown in economies internationally. There is all-round improvement in performance. In spite of the increasing competition in the industry, the company has been able to maintain its revenue growth. Maintaining EBITA margin with the increase in revenues over the period of time resulted into robust growth in gross profit and profits attributable to equity shareholders. The retained earnings added to the shareholders’ equity during 2012 is 11,863 (2011: 8,991) whereas the other components of the equity shareholders’ funds such as share capital, share premium, merger relief reserve and other reserves are more or less at the same levels. This is reflecting in earnings per share (EPS) and continuously increasing dividends per share from 58.00? in 2008 to 91.00? in 2012. With the acquisitions like Foster’s, expansion into emerging markets like China and India and revival of the global economy the revenue growth is expected to be good in future as well subject to the risks identified by the company. The other important ratios are given bellow. 2012 2011 2010 2009 2009 Interest cover (times) 11.4 10.8 9.3 6.7 9.2 Total borrowings to total assets (%) 34.5 21.6 25.1 30.4 26.8 Revenue per employee (US$000’s) 305.9 280.4 256.9 272.5 309.8 Interest cover is at healthy level which indicates the company’s ability to borrow more, if necessary. The increase in borrowings is due to acquisitions which include Australian beverage business of Foster’s in December 2011. The efficiency in operation is reflected well in the key performance measure ‘revenue per employee’. Cash generating ability, uses of cash and financial adaptability As per the data available in Annual Report, 2012 summary of free cash flow can be worked out as below. Cash flow 2012 2011 Net cash generated from operating activities 3937 3043 Net cash used in investing activities -11600 -517 Net cash generated from/(used in) financing activities 7495 -2327 Net cash (outflow)/inflow from operating, investing and financing activities -168 199 The cash flow on account of financing activities and dividends have been considered in this summary. It could be observed from the above analysis that the company has maintained its cash generating ability and shrewdly ploughed back the funds into the business for investment purposes. In this process, in spite of the increased level of activity in the business, the company is also able to maintain the liquidity ratio more or less at t ...Show more


I - Financial Reporting: SABMiller PLC Introduction SABMiller Plc formerly known as The South African Breweries is a multinational company in brewing and beverages business with its renowned international brands such as Pilsner Urguell, Miller Genuine Draft and Grolsch and several strong local brands with over 200 brands in its portfolio…
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I - Financial Reporting: SABMiller PLC essay example
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