SABMiller:

A Study of Plzensky Prazdroj

Miroslava Hoškova

Erik Rundquist

Justin Woods

Plzeňský Prazdroj, a.s. as a part of

SABMiller plc

3

SABMiller

60 Countries; 5 Continents

North and South America

Europe

Africa and Asia

North America: Miller Brewing Co. (2nd largest U.S. brewer)

Europe: Leading brewer in 8 countries including the Czech Rep.

Brands: Peroni Nastro Azzurro; Pilsner Urquell; Miller Genuine Draft; Castle Lager; Miller Lite

4

Plzeňský Prazdroj Ownership: SABMiller plc

Sales: 570 US$m

Total Sales Volume: 10.7 mil. hl. (+5.7% year-over-year)

Domestic Sales Volume: 8.1 mil. hl (+2.4%)

Export Volume: 786,000 hl (+10.6%)

Primary Importer: Germany

Key Brands: Pilsner Urquell; Gambrinus; Radegast; Velkopopovicky Kozel

Brand leader: Pilsner Urquell

Employees: 2,575

Breweries: 3

Sales and Distribution Centers: 13

5

Plzensky Prazdroj - Overview

Pilsner Urquell exportsto 53 countries world-wide

Pilsner Urquell

September 2002 mergered with the Brewery RADEGAST and the Brewery Velké

Popovice → formation of a single joint-stock company called Plzeňský Prazdroj,

expansion of the operating area

6

SABMiller Brand Portfolio

Miller Lite: Most Successful Miller Product

MGD: Marketed towards a more distinguished drinker

Premium International Beer: 45% Increase in International Sales (31 March 06)

Premium International Beer

7

Brand Portfolio

PILSNER URQUELLOriginal Pilsner, iconic superpremium, international flag ship

GAMBRINUSThe most popular Czech brand, every 4th beer sold, origins in

Pilsen

RADEGASTThe second largest, regional No1

in North Moravia, the only non-alcoholic in portfolio

VELKOPOPOVICKY KOZELTraditional Czech brand, dynamic growth, the only dark in portfolio

FRISCOLaunched May 2004, refreshing

malt beverage - cooler, lemon&apple taste

KLASIK; PRIMUSEconomy brands,

bottles only,no mktg support,

off-tradeprice fighters

8

SABMiller Financial Highlights

9

SABMiller: Impact on Financials

Strong Performance by Miller Brewing in the U.S. (meeting 3-year turnaround targets)

Market Share Gain Driving Growth in Europe

Group lager volumes +19% to 176 million hl (organic growth of 5%)

10

SABMiIler – NORTH AMERICA

2006 2005 %

Revenue (US$m) 4,912 4,892 -

EBITA (US$m) 454 487 (7)

EBITA margin (%) 9.3 10.0

Large Breweries 8 8

Avg # of Employees 5,887 5,760

0

100

200

300

400

500

2003 2004 2005 2006

NORTH AMERICA EBITA PERFORMANCE US$m

EBITA US$m

11

SABMiller – EUROPE

2006 2005 %

Revenue (US$m) 3,258 2,909 12

EBITA (US$m) 569 482 18

EBITA margin (%) 17.5 16.6

Large Breweries 19 18

Avg # of Employees 11,622 11,424

0

100

200

300

400

500

600

2002 2003 2004 2005 2006

EUROPEAN EBITA PERFORMANCE US$m

EBITA US$m

12

Financial Highlights of Plzeňský Prazdroj, a.s.

Revenue: Growth of 4%, to CZK

13.55bn ≈ 573.6 US$m

Operating Profit: Growth of 11%

to CZK 4.62bn ≈ 195.6 US$m

Net Profit for the current period

after tax: Increase of 15% to

CZK 3.38bn ≈ 143 US$m

13

Revenues

Revenues from Sales in US$m

$468

$564

$574

2004

2005

2006

14

Profits: Year-Over-Year

135

105

180

128

195

143

0

50100

150200

250

300350

2004 2005 2006

Years ended 31 March

Profits US$m

Profit for the currentperiod after tax

Operating profit

15

0100020003000400050006000700080009000

10000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Financial year

Progress of Trading Income and Owner's Equity CZK millions

Trading Income Ow ner's Equity

CZK mil. 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Trading Income 67 181 494 170 839 1 637 1 637 2 826 2 962 3 377

Owner's Equity 2 584 2 759 3 227 3 390 4 224 5 989 5 989 6 915 7 964 9 446

Progress of Trading Income and Owner’s Equity

16

Structure of Assets and Liabilities

Total 680.5(100%) Total 680.5(100%)

Receivables for Capital Subscription

0( 0%)

Equity 399.865(58.8%)

Fixed Assets 560.11(82.3%)

Liabilities 280.57(41.2%)

Current Assets 95.7(14.1%)

Other Liabilities 0,072(0%)

Other Current Assets 24.683(3.6%)

The fixed assets created the biggest part of total assets (82.3%), current assets made only

14.1 %. Concerning the liabilities structure you can see that the owner’s equity created the

more then half of total liabilities (58.8%).

17

Financial Ratios for the year ended 31 March 2006Profitability Ratios

Gross Profit Margin of Business Activity 27.96 %

Basic Earning Power Ratio (BEP) 28.76%

Return on Assets (ROA) 21.01 %

Return on Equity (ROE) 35.75 %

Return on Sales (ROS) 33 %

Return on Costs (ROC) 30%

Operating Ratio ( 1-ROS) 70%

Profitability ratios offer a glimpse into a company’s operational performance and help business owners determine if they are maximizing their bottom line.

All these ratios could be considered for the company as suitable and quite high.

18

Inventory Turnover10.69

Inventory Period34 days

Asset Turnover0.85

Receivables Turnover17.06

Average Collection Period21 days

Assets Turnover (Efficiency) Ratios

All these ratios are suitable because the periods are very short. The company does not have any problems with the inventory and collection of receivables.

The value of the Asset Turnover is quite low. The company should investigate the causes in order to improve it (by an increase in enterprise activity).

19

Days 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Inventory Period 43 38 32 31 35 35 35 30 35 34

Average Collection Period 44 33 48 46 35 31 31 24 24 24

Progress of Inventory and Average Collection Period

Period

0

10

20

30

40

50

60

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Years ended 31 March

Day

s

Inventory Period Average Collection Period

20

Liquidity Ratios

Year 2002 2003 2004 2005 2006

Current Ratio 1.18 1.17 0.96 1.19 0.95

Minimum 1.5 1.5 1.5 1.5 1.5

Maximum 2.5 2.5 2.5 2.5 2.5

Current Ratio 0.95

Quick Ratio 0.42

Cash Ratio 0.01

Liquidity ratios focus on a company’s ability

to pay its bills when they come due.

All the liquidity ratios are relatively low.

Progress of Current Ratio for last 5 years:

Progress of Current Ratio for last 5 years:

Year 2002 2003 2004 2005 2006

Quick Ratio 0.56 0.66 0.44 0.54 0.42

Minimum 1 1 1 1 1

Maximum 1.5 1.5 1.5 1.5 1.5

21

Financial Leverage Ratios

Debt Ratio 41.24 %

Debt-to-Equity Ratio 70.18 %

Times – Interest –Earned Ratio 88.09 %

Leverage ratios indicate how well a company’s uses borrowed funds (rather than stockholders’ equity or investments) to expand its business.

The company’s debt is appropriate. The chart below shows the progress for the last ten years. Debt has been gradually decreased except in the years 1998 and 2005.

Percentage 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Debt Ratio 66 61 40 69 62 61 61 54 49 41

Debt Ratio

0

10

20

30

40

50

60

70

80

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Years ended 31 March

Per

cen

tag

eDebt Ratio

Thank You for Your Attention.

Questions?