SAB 201406240040A Annual Financial Report SABMiller plc JSEALPHA CODE: SAB ISIN CODE: SOSAB ISIN CODE: GB0004835483 Annual Financial Report SABMiller plc has today submitted a copy of the 2014 Annual Report and Accounts, Notice of the 2014 Annual General Meeting and Shareholder Proxy Form (UK) to the National Storage Mechanism and they will shortly be available for inspection at www.hemscott.com/nsm.do. The Annual Report and Notice of Annual General Meeting are also available on the Company’s website www.sabmiller.com SABMiller plc’s Annual General Meeting will be held on Thursday, 24 July 2014 at the InterContinental London Park Lane, One Hamilton Place, Park Lane, London W1J 7QY. A condensed set of SABMiller’s financial statements and information on important events that have occurred during the financial year and their impact on the financial statements were included in SABMiller’s preliminary results announcement released on 22 May 2014. That information, together with the information set out below, which is extracted from the 2014 Annual Report, constitutes the material required by Disclosure and Transparency Rule 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This announcement is not a substitute for reading the full 2014 Annual Report. Page numbers and cross- references in the extracted information below refer to page numbers and sections in the 2014 Annual Report. PRINCIPAL RISKS AND UNCERTAINTIES (page 18 & 19) Principal risks Focused on managing our risks The principal risks facing the group and considered by the board are detailed below. The group’s well-developed risk management process is described in the corporate governance section while financial risks are discussed in the Chief Financial Officer’s review on page 39 and in note 21 to the consolidated financial statements. Principal risk Context Specific risks Possible impact Mitigation Associated we face strategic elements Industry The global • Failing to Lower growth rate, • Continued competitor • Retaining a consolidation brewing and participate in the profitability and and target analysis to broad portfolio of beverages right financial returns. consider strategic and operations. industry is opportunities. financial implications of • Creating superior expected to • Paying too potential transactions. revenue growth continue to much to acquire • Potential transactions are and profitability for consolidate. a business. subject to continual and our investors. There will • Not rigorous analysis. Only continue to be implementing opportunities with potential opportunities to integration plans to create value are enter attractive successfully. pursued. growth markets, • Failing to • Proven integration to realise identify and processes, procedures synergy benefits develop the and practices are applied from integration capabilities to ensure delivery of and to leverage necessary to expected returns. our global scale. facilitate market • Activities to deliver and category synergies and leverage entry. scale are in place, monitored closely and continuously enhanced. • Developing non- traditional capabilities to enter and grow profitably in new markets. Change in Consumer • Failing to Market positions • Ongoing evaluation of • Offering beers consumer tastes and develop and come under our brand portfolios in and soft drinks preferences behaviours are ensure the pressure, market every market to ensure that appeal to constantly strength and opportunities are that they target current local tastes. evolving, and at relevance of our missed, lower top and future opportunities • Creating superior an increasingly brands with line growth rates for profitable growth. revenue growth rapid rate. consumers, and profitability. • Developing a beer and profitability for Competition in shoppers and category structure that our investors. the beverage customers. enables us to grow both • Producing industry is • Failing to the value of the beer economies of expanding and continue to category, and our share of scale and skill. becoming more improve our it. fragmented, commercial • Ensuring we have deep complex and capabilities to understanding of changing sophisticated. deliver brand consumer and industry propositions dynamics in key markets, which respond enabling us to respond appropriately to appropriately to changing opportunities and issues consumer which may impact our preferences. business performance. • Building our brand equities through innovation and compelling marketing programmes; creating a pipeline of opportunities to support our premium offering. • Focus on monitoring and benchmarking commercial performance and developing the critical commercial capabilities that are required in order to win in local markets. Management We believe that • Failing to Failure to deliver • Building the group’s • Offering beers capability our people are identify, develop the group’s leadership talent pipeline and soft drinks our enduring and retain an strategic and through our Global Talent that appeal to advantage and appropriate financial Management model, local tastes. therefore it is pipeline of ambitions. strategic people • Creating superior essential that we talented resourcing and long-term revenue growth develop and managers for Lower long-term talent pipeline. and profitability for maintain global the present and profitable growth. • Sustaining a strong our investors. management future needs of culture of accountability, • Producing capability. the group. empowerment and economies of personal development. scale and skill. Regulatory With an • Regulation Lower growth, • Rigorous adherence to • Retaining a changes increasingly high places profitability and the principle of self- broad portfolio of profile debate increasing reduced regulation backed by operations. over alcohol restrictions on contribution to appropriate policies and • Offering beers consumption in the availability local communities management review. and soft drinks many markets, and marketing of in some countries. • Building licence to trade that appeal to the alcohol beer. capabilities across the local tastes. industry is • Tax and excise Loss of consumer group to facilitate sound • Creating real and coming under changes cause goodwill and risk analysis and lasting economic more pressure pressure on public sentiment. mitigation plan and social benefits from national pricing. development. in communities. and international • Anti-alcohol • Constructive regulators, advocates erode engagement with NGOs and local industry government and all governments. reputation. external stakeholders on alcohol-related issues. Working collaboratively with them to address the harmful use of alcohol. • Investment to improve the economic and social impact of our businesses in local communities and working in partnership with local governments and NGOs. Acquisition A key aspect of • Failing to Lower growth • Embedding of the • Retaining a of Foster’s the Foster’s deliver rates and SABMiller Ways (its broad portfolio of acquisition was integration profitability. processes, systems and operations. the delivery of a objectives and tools) throughout the • Offering beers turnaround plan commercial and Damage to the Foster’s business. and soft drinks with specific and operational group’s reputation • Commercial efforts in that appeal to communicated excellence for strong market to effectively local tastes. financial value targets commercial deliver volume, value and • Creating superior creation. communicated capability and for market share gains. revenue growth as part of the making value • Continued monitoring of and profitability for turnaround plan. creating progress against the our investors. • Failing to acquisitions. integration plan, including • Producing achieve the frequent and regular economies of synergy and tracking of key scale and skill. cost saving performance indicators. commitments of the transaction. Delivering We continue to • Failing to Increased • Senior leadership closely • Creating superior business execute major derive the programme costs, involved in monitoring revenue growth transformation efficiency expected delays in benefit progress and in making and profitability for programmes benefits from the realisation, key decisions. our investors. that will simplify projects business • Mechanisms in place to • Producing processes, currently under disruption, track both costs and economies of reduce costs way. reputational benefits. scale and skill. and allow local • Failing to damage, reduced • Rigorous programme management contain competitive management and teams to focus programme advantage in the governance processes more closely on costs or ensure medium term. with dedicated resources their markets. execution is in and clear accountability. line with planned timelines. Information There is • Disruption of Loss of • Continued articulation • Producing and cyber increasing information competitive and implementation of economies of security sophistication of technology (IT) advantage and information security scale and skill. cyber-attack systems and a reputational policies. • Creating superior capabilities. loss of valuable damage through • Increased investment to revenue growth Business’s and sensitive the publicised loss improve information and profitability for increasing information and of key operating security awareness, our investors demand for assets. systems and intelligence and consumers’ and • Significant confidential data. implementation of sound customers’