Altria Group, Inc. (NYSE: MO) (previously named Philip Morris Companies Inc.) is based in Henrico County, Virginia, and is the parent company of Philip Morris USA, John Middleton, Inc., United States Smokeless Tobacco, Inc., Philip Morris Capital Corporation, and Chateau Ste. Michelle Wine Estates. It is one of the world's largest tobacco corporations. Philip Morris International was spun off in 2008. In addition, Altria Group, Inc. has a 28.7% economic and voting interest in one of the world's largest brewing companies, UK based SABMiller plc, where it has 3 seats on the 11-person board of directors. It is a component of the S&P 500 and was a component of the Dow Jones Industrial Average until February 19, 2008. The company has its headquarters in unincorporated Henrico County, Virginia, less than five miles West of the city limit of Richmond and less than ten miles from its downtown Richmond buildings.
On January 27, 2003, Philip Morris Companies Inc. changed its name to Altria Group, Inc. On March 30, 2007, a spin out of Kraft Foods subsidiary (publicly traded since 2001) was concluded through distribution of the remaining stake of shares (88.1%) to Altria shareholders. As a result, Altria no longer holds any interest in Kraft Foods. On March 28, 2008 a similar spin out of Philip Morris International was completed with 100% of shares being distributed to Altria shareholders.
On January 6, 2009, Altria Group, Inc. completed the acquisition of UST Inc., a moist smokeless tobacco manufacturer; UST owned Ste Michelle Wine Estates, a wine company.
Altria Group, Inc., incorporated in 1985, is a holding company. As of December 31, 2010, Altria Group, Inc.’s wholly owned subsidiaries included Philip Morris USA Inc. (PM USA), which is engaged in the manufacture and sale of cigarettes and certain smokeless products in the United States; UST LLC (UST), which through its subsidiaries, is engaged in the manufacture and sale of smokeless products and wine, and John Middleton Co. (Middleton), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco. Philip Morris Capital Corporation (PMCC), another wholly owned subsidiary of Altria Group, Inc., maintains a portfolio of leveraged and direct finance leases. As of December 31, 2010, in addition, Altria Group, Inc. held a 27.1% economic and voting interest in SABMiller plc (SABMiller). As of December 31, 2010, Altria Group, Inc.’s segments included cigarettes, smokeless products, cigars, wine and financial services.
Altria Sales & Distribution Inc. provides centralized sales, merchandising and distribution services to Altria Group, Inc.’s three tobacco operating companies, which includes PM USA, U.S. Smokeless Tobacco Company LLC (USSTC) and Middleton. Altria Consumer Engagement Services Inc. provides marketing and promotion services to Altria Group, Inc.’s three tobacco operating companies primarily through execution of one-to-one adult consumer programs.
Tobacco Space
PM USA is engaged in the manufacture and sale of cigarettes and certain smokeless products in the United States. PM USA includes cigarette brands, such as Marlboro; other premium brands, such as Virginia Slims, Parliament and Benson & Hedges, and discount brands, which include Basic and L&M, and other discount brands. All of its brands are marketed to take into account differing preferences of adult smokers. During the year ended December 31, 2010, PM USA’s total cigarettes shipment volume was 140.8 billion units. During 2010, shipments of premium cigarettes accounted for 93.9% of PM USA’s total volume.
USSTC and other subsidiaries of UST are engaged in the manufacture and sale of smokeless products to customers, substantially all of whom are located in the United States. USSTC’s smokeless tobacco products include the premium brands, Copenhagen and Skoal, and the value brands, Red Seal and Husky. In addition, the smokeless products segment includes Marlboro Snus, a PM USA spit-less smokeless tobacco product. Smokeless products are defined as moist smokeless tobacco (MST) and spit-less tobacco products. Other includes USSTC and PM USA smokeless tobacco products other than Copenhagen and Skoal. During 2010, USSTC’s total smokeless products shipment volume was 724.4 million cans and packs.
Middleton is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco to customers, substantially all of whom are located in the United States. Black & Mild, the principal cigar brand of Middleton, is engaged in selling machine-made large cigar in the United States. Middleton defines machine-made large cigars as cigars made by machine that weigh greater than three pounds per thousand, except cigars sold at retail in packages of 20 cigars. During 2010, Middleton’s total cigar shipment volume was 1,246 million units. The Company’s tobacco subsidiaries sell their tobacco products principally to wholesalers (including distributors), and large retail organizations, including chain stores and the armed services.
Wine
Ste. Michelle Wine Estates Ltd. (Ste. Michelle), a subsidiary of UST, is a producer of premium varietal and blended table wines. Ste. Michelle is a producer of Washington state wines, primarily Chateau Ste. Michelle and Columbia Crest, and owns wineries in or distributes wines from several other wine regions and foreign countries. Ste. Michelle holds an 85% ownership interest in Michelle-Antinori, LLC, which owns Stag’s Leap Wine Cellars in Napa Valley. Ste. Michelle also owns Conn Creek in Napa Valley and Erath in Oregon. In addition, Ste. Michelle distributes Antinori and Villa Maria Estate wines and Champagne Nicolas Feuillatte in the United States. During 2010, Ste. Michelle’s wine shipment volume was 6.7 million cases. During 2010, Ste. Michelle gained distribution rights to Villa Maria Estate. Ste. Michelle’s distributes its wines to restaurants, wholesale clubs, supermarkets, wine shops and mass merchandisers.
Financial Services
The Company’s finance subsidiary, PMCC, holds investments in finance leases, principally in transportation (including aircraft), power generation and manufacturing equipment and facilities. As of December 31, 2010, PMCC’s investments in finance leases principally consisted of investment categories, which included rail and surface transport (30%), aircraft (25%), electric power (24%), real estate (12%) and manufacturing (9%).
By fiscal 2002, just eight years after its first brewing acquisition outside of Africa, 55 percent of SAB's $4.36 billion in revenues were derived from its non-South African operations. This figure would shoot up to an even more remarkable 75 percent just one year later following the company's boldest move yet--its takeover of Miller Brewing Company, the number two beer maker in the world's largest beer market, the United States, whose main brands included Miller Genuine Draft, Miller High Life, Miller Lite, and Milwaukee's Best. Consummated in July 2002, the deal consisted of a stock swap with Miller's owner, Philip Morris Companies Inc., that was valued at $3.48 billion. SAB additionally absorbed $2 billion in Miller debt. Upon completion of the acquisition, SAB changed its name to SABMiller plc and was now the world's number two brewer, behind only Anheuser-Busch. Philip Morris (which changed its name to Altria Group, Inc. in 2003) became the biggest SABMiller shareholder with a 36 percent economic interest and 25 percent of the voting rights (the total at which it was capped) and also gained three seats on the SABMiller board. Miller had recorded 2001 revenues of $4.24 billion but had for some time been losing market share to the number one and number three U.S. players, Anheuser-Busch and Adolph Coors Company, respectively. SABMiller took immediate action to try to reverse Miller's fortunes, announcing that one of Miller's nine U.S. breweries would be closed, and bringing in a new CEO for Miller, Norman Adami, who had headed up the South African brewery operations of SABMiller.
In March 2003, in a further pullback from noncore operations, SABMiller moved its entire hotel and gaming interests into a new company called Tsogo Sun Holdings (Pty.) Ltd., which was to be majority controlled by black empowerment company Tsogo Investments. SABMiller held an initial 49 percent interest in the new company but said that it intended to continue to reduce its hospitality holdings. Despite having just completed the Miller acquisition, the company did not shy away from making additional purchases and deals. Early in 2003 Browar Dojlidy, a brewer in northeastern Poland, was acquired for $38 million. In June SABMiller made its first major investment in Western Europe, buying a 60 percent stake in Birra Peroni S.p.A., the number two brewing company in Italy, for EUR 246 million ($279 million). Later in 2003 Peroni ended its licensed brewing and selling of the Budweiser brand in Italy and instead started import sales of Miller Genuine Draft. Similar synergies between SABMiller's increasingly global operations were being implemented, such as the launch of Pilsner Urquell and Miller Genuine Draft in South Africa in early 2003 and the introduction of Miller Genuine Draft into several more European countries, including Russia, Romania, the Czech Republic, and Poland. Over in Asia, SABMiller consolidated its operations in India under Mysore Breweries; the operations of Mysore were then consolidated with the brewing operations of Shaw Wallace and Company Limited, the second largest brewing group in India, to form a joint venture called Shaw Wallace Breweries Limited, 50 percent owned by Mysore. This deal cost SABMiller $132.8 million. The firm spent an additional HK$675 million ($87 million) for a 29.6 percent stake in Harbin Group Limited, China's fourth largest brewer and the leader in that country's northeastern region.
The SABMiller of the early 21st century, a globally active company with a sharp focus on beverages--mainly beer--was a far different company from the apartheid-era SAB, which was centered largely in South Africa where it had diversified interests. SABMiller had been built through a bold yet focused program of international expansion. It faced a real challenge, however, in turning around Miller Brewing, a process that Mackey said in late 2002 could take two to three years. In addition to attempting to make Miller Genuine Draft an international premium brand and launching new advertising campaigns in the United States, the new owners of Miller also planned to prune the more than 57 brands in the Miller portfolio, focusing more on the higher end of the market. SABMiller's bold moves, though clearly not yet fully realized, had the potential for a huge payoff.
Principal Subsidiaries: CENTRAL ADMINISTRATION: SABMiller Finance B.V. (Netherlands); SABSA Holdings (Pty.) Ltd.; SABMiller Africa and Asia B.V. (Netherlands). MILLER--US OPERATIONS: Miller Brewing Company (U.S.A.); Foster's USA, LLC (50%); Jacob Leinenkugel Brewing Co., Inc. (U.S.A.). CENTRAL AMERICAN OPERATIONS: BevCo Ltd. (British Virgin Islands; 58%); Cervecería Hondureña, S.A. (Honduras; 58%); Industrias La Constancia, S.A. (El Salvador; 58%); La Constancia, S.A. (El Salvador; 58%); Embotelladora Salvadoreña, S.A. (El Salvador; 58%); Industrias Cristal, S.A. (El Salvador; 58%). EUROPEAN OPERATIONS: SABMiller Europe B.V. (Netherlands); Birra Peroni S.p.A. (Italy; 60%); Compania de Bere Romania (97%); Compania Cervecera de Canarias S.A. (Spain; 51%); Dreher Sörgyárak Rt. (Hungary; 99%); Kaluga Brewery Company OOO (Russia); Kompania Piwowarska S.A. (Poland; 72%); Pivovar Saris AS (Slovakia); Plzenský Prazdroj S.A. (Czech Republic; 97%). AFRICAN OPERATIONS: SABMiller Africa B.V. (Netherlands; 62%); SABMiller Botswana B.V. (Netherlands; 62%); Accra Brewery Ltd. (Ghana; 43%); Botswana Breweries (Pty.) Ltd. (29%); Cervejas de Moçambique SARL (Mozambique; 43%); Coca-Cola Bottling Luanda Ltd. (Angola; 28%); Coca-Cola Bottling Sul de Angola SARL (37%); Chibuku Products Ltd. (Malawi; 31%); Kgalagadi Breweries (Pty.) Ltd. (Botswana; 29%); Lesotho Brewing Company (Pty.) Ltd. (Lesotho; 24%); National Breweries plc (Zambia; 43%); Nile Breweries Ltd. (Uganda; 59%); Swaziland Brewers Ltd. (37%); Tanzania Breweries Ltd. (33%); Zambian Breweries plc (53%). ASIAN OPERATIONS: SABMiller Asia B.V. (Netherlands); Mysore Breweries Ltd. (India; 83%); Narang Breweries (Pvt.) Ltd. (India; 85%); Rochees Breweries Ltd. (India; 81%). BEER SOUTH AFRICA: The South African Breweries Ltd.; South African Breweries Hop Farms (Pty.) Ltd.; Southern Associated Maltsters (Pty.) Ltd. OTHER BEVERAGE INTERESTS: Other Beverage Interests (Pty.) Ltd.; Amalgamated Beverage Industries Ltd. (74%); Appletiser South Africa (Pty.) Ltd.
Principal Competitors: Adolph Coors Co.; Anheuser-Busch Companies, Inc.; Heineken N.V.; Interbrew S.A.; Carlsberg A/S; Companhia de Bebidas das Américas.
OVERALL
Beta: 0.47
Market Cap (Mil.): $55,786.44
Shares Outstanding (Mil.): 2,093.30
Annual Dividend: 1.52
Yield (%): 5.70
FINANCIALS
MO Industry Sector
P/E (TTM): 13.80 1.09 20.45
EPS (TTM): 17.10 -- --
ROI: 13.53 1.53 7.81
ROE: 82.67 12.44 14.13
Statistics:
Public Company
Incorporated: 1895 as The South African Breweries Limited
Employees: 42,402
Sales: $9.11 billion (2003)
Stock Exchanges: London Johannesburg
Ticker Symbol: SAB.L
NAIC: 312120 Breweries; 551112 Offices of Other Holding Companies; 312111 Soft Drink Manufacturing
Key Dates:
1895: The South African Breweries Limited (SAB) is incorporated in London, with a listing on the London Stock Exchange and ownership of Castle Brewery in Johannesburg, South Africa.
1897: SAB becomes the first industrial company to be listed on the Johannesburg Stock Exchange.
1898: Company begins producing Castle lager, which becomes a phenomenal success.
1899: The outbreak of the Boer War forces Castle Brewery to close for nearly a year.
1925: Company diversifies into soft drinks, buying a stake in the Schweppes Company.
1950: The head office is moved from London to Johannesburg.
1956: SAB acquires Ohlsson's Cape Breweries and United Breweries, thereby uniting the three largest South African brewing companies and gaining 90 percent of the domestic market.
1970: SAB is reincorporated in South Africa.
1977: Company takes control of Amalgamated Beverage Industries Ltd., a Coca-Cola bottler in South Africa.
1979: SAB acquires the beer interests of the Rembrandt Group--giving it nearly 99 percent of the South African market--and turns over its wine and spirits operation to an independent subsidiary in which it owned a 30 percent interest; 49 percent stake is taken in Appletiser South Africa (Pty.) Ltd., a producer of fruit drinks.
1990: Dismantling of apartheid begins.
1993: International expansion into emerging markets begins with the purchase of majority control of Dreher Breweries, the largest brewer in Hungary.
1994: SAB enters the Chinese beer market through a joint venture with China Resources Enterprise Limited.
1997: Two-year program of divesting noncore assets begins.
1999: SAB relocates headquarters to London, reincorporates as South African Breweries plc; divestment program reduces interests to beer, soft drinks, wine and spirits, and hotels and gaming.
2000: Company buys its first brewery in India.
2001: SAB enters Central American market through purchase of Honduran beverage company and creation of a joint venture, BevCo Ltd., with a prominent family in El Salvador.
2002: SAB acquires Miller Brewing Company, the number two U.S. beer maker, from Philip Morris Companies Inc. for $3.48 billion in stock; company renames itself SABMiller plc.
2003: Company makes its first major investment in Western Europe, purchasing a 60 percent stake in Birra Peroni S.p.A., Italy's number two brewer.
Name Age Since Current Position
Szymanczyk, Michael 62 2008 Chairman of the Board, Chief Executive Officer
Beran, David 56 2011 Vice Chairman
Barrington, Martin 57 2011 Vice Chairman
Willard, Howard 47 2011 Chief Financial Officer, Executive Vice President
Gifford, William 40 2009 President and Chief Executive Officer of Philip Morris USA Inc
Paoli, Peter 53 2009 President & Chief Executive Officer of U.S. Smokeless Tobacco Company LLC
Nelson, John 59 2008 Executive Vice President, Chief Technology Officer
Keane, Denise 59 Executive Vice President, General Counsel
Johnson, Craig 58 2009 Executive Vice President
Mancuso, Salvatore 45 Vice President, Treasurer
Warren, Linda 62 2008 Vice President, Controller
Heuhsen, Louanna 60 Vice President - Corporate Governance, Associate General Counsel
Surgner, W. Hildebrandt 45 Corporate Secretary, Senior Assistant General Counsel
Brennan, Nancy 58 Senior Vice President - Marketing of Altria Client Services Inc.
Huntley, Robert 80 Presiding Director
Devitre, Dinyar 63 2008 Independent Director
Bailey, Elizabeth 72 1989 Independent Director
Jones, Thomas 61 2002 Independent Director
Munoz, George 59 2004 Independent Director
Baliles, Gerald 70 2008 Independent Director
Farrell, Thomas 56 2008 Independent Director
Sakkab, Nabil 64 2008 Independent Director
Casteen, John 67 2010 Independent Director
Address:
One Stanhope Gate
London W1K 1AF
United Kingdom
On January 27, 2003, Philip Morris Companies Inc. changed its name to Altria Group, Inc. On March 30, 2007, a spin out of Kraft Foods subsidiary (publicly traded since 2001) was concluded through distribution of the remaining stake of shares (88.1%) to Altria shareholders. As a result, Altria no longer holds any interest in Kraft Foods. On March 28, 2008 a similar spin out of Philip Morris International was completed with 100% of shares being distributed to Altria shareholders.
On January 6, 2009, Altria Group, Inc. completed the acquisition of UST Inc., a moist smokeless tobacco manufacturer; UST owned Ste Michelle Wine Estates, a wine company.
Altria Group, Inc., incorporated in 1985, is a holding company. As of December 31, 2010, Altria Group, Inc.’s wholly owned subsidiaries included Philip Morris USA Inc. (PM USA), which is engaged in the manufacture and sale of cigarettes and certain smokeless products in the United States; UST LLC (UST), which through its subsidiaries, is engaged in the manufacture and sale of smokeless products and wine, and John Middleton Co. (Middleton), which is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco. Philip Morris Capital Corporation (PMCC), another wholly owned subsidiary of Altria Group, Inc., maintains a portfolio of leveraged and direct finance leases. As of December 31, 2010, in addition, Altria Group, Inc. held a 27.1% economic and voting interest in SABMiller plc (SABMiller). As of December 31, 2010, Altria Group, Inc.’s segments included cigarettes, smokeless products, cigars, wine and financial services.
Altria Sales & Distribution Inc. provides centralized sales, merchandising and distribution services to Altria Group, Inc.’s three tobacco operating companies, which includes PM USA, U.S. Smokeless Tobacco Company LLC (USSTC) and Middleton. Altria Consumer Engagement Services Inc. provides marketing and promotion services to Altria Group, Inc.’s three tobacco operating companies primarily through execution of one-to-one adult consumer programs.
Tobacco Space
PM USA is engaged in the manufacture and sale of cigarettes and certain smokeless products in the United States. PM USA includes cigarette brands, such as Marlboro; other premium brands, such as Virginia Slims, Parliament and Benson & Hedges, and discount brands, which include Basic and L&M, and other discount brands. All of its brands are marketed to take into account differing preferences of adult smokers. During the year ended December 31, 2010, PM USA’s total cigarettes shipment volume was 140.8 billion units. During 2010, shipments of premium cigarettes accounted for 93.9% of PM USA’s total volume.
USSTC and other subsidiaries of UST are engaged in the manufacture and sale of smokeless products to customers, substantially all of whom are located in the United States. USSTC’s smokeless tobacco products include the premium brands, Copenhagen and Skoal, and the value brands, Red Seal and Husky. In addition, the smokeless products segment includes Marlboro Snus, a PM USA spit-less smokeless tobacco product. Smokeless products are defined as moist smokeless tobacco (MST) and spit-less tobacco products. Other includes USSTC and PM USA smokeless tobacco products other than Copenhagen and Skoal. During 2010, USSTC’s total smokeless products shipment volume was 724.4 million cans and packs.
Middleton is engaged in the manufacture and sale of machine-made large cigars and pipe tobacco to customers, substantially all of whom are located in the United States. Black & Mild, the principal cigar brand of Middleton, is engaged in selling machine-made large cigar in the United States. Middleton defines machine-made large cigars as cigars made by machine that weigh greater than three pounds per thousand, except cigars sold at retail in packages of 20 cigars. During 2010, Middleton’s total cigar shipment volume was 1,246 million units. The Company’s tobacco subsidiaries sell their tobacco products principally to wholesalers (including distributors), and large retail organizations, including chain stores and the armed services.
Wine
Ste. Michelle Wine Estates Ltd. (Ste. Michelle), a subsidiary of UST, is a producer of premium varietal and blended table wines. Ste. Michelle is a producer of Washington state wines, primarily Chateau Ste. Michelle and Columbia Crest, and owns wineries in or distributes wines from several other wine regions and foreign countries. Ste. Michelle holds an 85% ownership interest in Michelle-Antinori, LLC, which owns Stag’s Leap Wine Cellars in Napa Valley. Ste. Michelle also owns Conn Creek in Napa Valley and Erath in Oregon. In addition, Ste. Michelle distributes Antinori and Villa Maria Estate wines and Champagne Nicolas Feuillatte in the United States. During 2010, Ste. Michelle’s wine shipment volume was 6.7 million cases. During 2010, Ste. Michelle gained distribution rights to Villa Maria Estate. Ste. Michelle’s distributes its wines to restaurants, wholesale clubs, supermarkets, wine shops and mass merchandisers.
Financial Services
The Company’s finance subsidiary, PMCC, holds investments in finance leases, principally in transportation (including aircraft), power generation and manufacturing equipment and facilities. As of December 31, 2010, PMCC’s investments in finance leases principally consisted of investment categories, which included rail and surface transport (30%), aircraft (25%), electric power (24%), real estate (12%) and manufacturing (9%).
By fiscal 2002, just eight years after its first brewing acquisition outside of Africa, 55 percent of SAB's $4.36 billion in revenues were derived from its non-South African operations. This figure would shoot up to an even more remarkable 75 percent just one year later following the company's boldest move yet--its takeover of Miller Brewing Company, the number two beer maker in the world's largest beer market, the United States, whose main brands included Miller Genuine Draft, Miller High Life, Miller Lite, and Milwaukee's Best. Consummated in July 2002, the deal consisted of a stock swap with Miller's owner, Philip Morris Companies Inc., that was valued at $3.48 billion. SAB additionally absorbed $2 billion in Miller debt. Upon completion of the acquisition, SAB changed its name to SABMiller plc and was now the world's number two brewer, behind only Anheuser-Busch. Philip Morris (which changed its name to Altria Group, Inc. in 2003) became the biggest SABMiller shareholder with a 36 percent economic interest and 25 percent of the voting rights (the total at which it was capped) and also gained three seats on the SABMiller board. Miller had recorded 2001 revenues of $4.24 billion but had for some time been losing market share to the number one and number three U.S. players, Anheuser-Busch and Adolph Coors Company, respectively. SABMiller took immediate action to try to reverse Miller's fortunes, announcing that one of Miller's nine U.S. breweries would be closed, and bringing in a new CEO for Miller, Norman Adami, who had headed up the South African brewery operations of SABMiller.
In March 2003, in a further pullback from noncore operations, SABMiller moved its entire hotel and gaming interests into a new company called Tsogo Sun Holdings (Pty.) Ltd., which was to be majority controlled by black empowerment company Tsogo Investments. SABMiller held an initial 49 percent interest in the new company but said that it intended to continue to reduce its hospitality holdings. Despite having just completed the Miller acquisition, the company did not shy away from making additional purchases and deals. Early in 2003 Browar Dojlidy, a brewer in northeastern Poland, was acquired for $38 million. In June SABMiller made its first major investment in Western Europe, buying a 60 percent stake in Birra Peroni S.p.A., the number two brewing company in Italy, for EUR 246 million ($279 million). Later in 2003 Peroni ended its licensed brewing and selling of the Budweiser brand in Italy and instead started import sales of Miller Genuine Draft. Similar synergies between SABMiller's increasingly global operations were being implemented, such as the launch of Pilsner Urquell and Miller Genuine Draft in South Africa in early 2003 and the introduction of Miller Genuine Draft into several more European countries, including Russia, Romania, the Czech Republic, and Poland. Over in Asia, SABMiller consolidated its operations in India under Mysore Breweries; the operations of Mysore were then consolidated with the brewing operations of Shaw Wallace and Company Limited, the second largest brewing group in India, to form a joint venture called Shaw Wallace Breweries Limited, 50 percent owned by Mysore. This deal cost SABMiller $132.8 million. The firm spent an additional HK$675 million ($87 million) for a 29.6 percent stake in Harbin Group Limited, China's fourth largest brewer and the leader in that country's northeastern region.
The SABMiller of the early 21st century, a globally active company with a sharp focus on beverages--mainly beer--was a far different company from the apartheid-era SAB, which was centered largely in South Africa where it had diversified interests. SABMiller had been built through a bold yet focused program of international expansion. It faced a real challenge, however, in turning around Miller Brewing, a process that Mackey said in late 2002 could take two to three years. In addition to attempting to make Miller Genuine Draft an international premium brand and launching new advertising campaigns in the United States, the new owners of Miller also planned to prune the more than 57 brands in the Miller portfolio, focusing more on the higher end of the market. SABMiller's bold moves, though clearly not yet fully realized, had the potential for a huge payoff.
Principal Subsidiaries: CENTRAL ADMINISTRATION: SABMiller Finance B.V. (Netherlands); SABSA Holdings (Pty.) Ltd.; SABMiller Africa and Asia B.V. (Netherlands). MILLER--US OPERATIONS: Miller Brewing Company (U.S.A.); Foster's USA, LLC (50%); Jacob Leinenkugel Brewing Co., Inc. (U.S.A.). CENTRAL AMERICAN OPERATIONS: BevCo Ltd. (British Virgin Islands; 58%); Cervecería Hondureña, S.A. (Honduras; 58%); Industrias La Constancia, S.A. (El Salvador; 58%); La Constancia, S.A. (El Salvador; 58%); Embotelladora Salvadoreña, S.A. (El Salvador; 58%); Industrias Cristal, S.A. (El Salvador; 58%). EUROPEAN OPERATIONS: SABMiller Europe B.V. (Netherlands); Birra Peroni S.p.A. (Italy; 60%); Compania de Bere Romania (97%); Compania Cervecera de Canarias S.A. (Spain; 51%); Dreher Sörgyárak Rt. (Hungary; 99%); Kaluga Brewery Company OOO (Russia); Kompania Piwowarska S.A. (Poland; 72%); Pivovar Saris AS (Slovakia); Plzenský Prazdroj S.A. (Czech Republic; 97%). AFRICAN OPERATIONS: SABMiller Africa B.V. (Netherlands; 62%); SABMiller Botswana B.V. (Netherlands; 62%); Accra Brewery Ltd. (Ghana; 43%); Botswana Breweries (Pty.) Ltd. (29%); Cervejas de Moçambique SARL (Mozambique; 43%); Coca-Cola Bottling Luanda Ltd. (Angola; 28%); Coca-Cola Bottling Sul de Angola SARL (37%); Chibuku Products Ltd. (Malawi; 31%); Kgalagadi Breweries (Pty.) Ltd. (Botswana; 29%); Lesotho Brewing Company (Pty.) Ltd. (Lesotho; 24%); National Breweries plc (Zambia; 43%); Nile Breweries Ltd. (Uganda; 59%); Swaziland Brewers Ltd. (37%); Tanzania Breweries Ltd. (33%); Zambian Breweries plc (53%). ASIAN OPERATIONS: SABMiller Asia B.V. (Netherlands); Mysore Breweries Ltd. (India; 83%); Narang Breweries (Pvt.) Ltd. (India; 85%); Rochees Breweries Ltd. (India; 81%). BEER SOUTH AFRICA: The South African Breweries Ltd.; South African Breweries Hop Farms (Pty.) Ltd.; Southern Associated Maltsters (Pty.) Ltd. OTHER BEVERAGE INTERESTS: Other Beverage Interests (Pty.) Ltd.; Amalgamated Beverage Industries Ltd. (74%); Appletiser South Africa (Pty.) Ltd.
Principal Competitors: Adolph Coors Co.; Anheuser-Busch Companies, Inc.; Heineken N.V.; Interbrew S.A.; Carlsberg A/S; Companhia de Bebidas das Américas.
OVERALL
Beta: 0.47
Market Cap (Mil.): $55,786.44
Shares Outstanding (Mil.): 2,093.30
Annual Dividend: 1.52
Yield (%): 5.70
FINANCIALS
MO Industry Sector
P/E (TTM): 13.80 1.09 20.45
EPS (TTM): 17.10 -- --
ROI: 13.53 1.53 7.81
ROE: 82.67 12.44 14.13
Statistics:
Public Company
Incorporated: 1895 as The South African Breweries Limited
Employees: 42,402
Sales: $9.11 billion (2003)
Stock Exchanges: London Johannesburg
Ticker Symbol: SAB.L
NAIC: 312120 Breweries; 551112 Offices of Other Holding Companies; 312111 Soft Drink Manufacturing
Key Dates:
1895: The South African Breweries Limited (SAB) is incorporated in London, with a listing on the London Stock Exchange and ownership of Castle Brewery in Johannesburg, South Africa.
1897: SAB becomes the first industrial company to be listed on the Johannesburg Stock Exchange.
1898: Company begins producing Castle lager, which becomes a phenomenal success.
1899: The outbreak of the Boer War forces Castle Brewery to close for nearly a year.
1925: Company diversifies into soft drinks, buying a stake in the Schweppes Company.
1950: The head office is moved from London to Johannesburg.
1956: SAB acquires Ohlsson's Cape Breweries and United Breweries, thereby uniting the three largest South African brewing companies and gaining 90 percent of the domestic market.
1970: SAB is reincorporated in South Africa.
1977: Company takes control of Amalgamated Beverage Industries Ltd., a Coca-Cola bottler in South Africa.
1979: SAB acquires the beer interests of the Rembrandt Group--giving it nearly 99 percent of the South African market--and turns over its wine and spirits operation to an independent subsidiary in which it owned a 30 percent interest; 49 percent stake is taken in Appletiser South Africa (Pty.) Ltd., a producer of fruit drinks.
1990: Dismantling of apartheid begins.
1993: International expansion into emerging markets begins with the purchase of majority control of Dreher Breweries, the largest brewer in Hungary.
1994: SAB enters the Chinese beer market through a joint venture with China Resources Enterprise Limited.
1997: Two-year program of divesting noncore assets begins.
1999: SAB relocates headquarters to London, reincorporates as South African Breweries plc; divestment program reduces interests to beer, soft drinks, wine and spirits, and hotels and gaming.
2000: Company buys its first brewery in India.
2001: SAB enters Central American market through purchase of Honduran beverage company and creation of a joint venture, BevCo Ltd., with a prominent family in El Salvador.
2002: SAB acquires Miller Brewing Company, the number two U.S. beer maker, from Philip Morris Companies Inc. for $3.48 billion in stock; company renames itself SABMiller plc.
2003: Company makes its first major investment in Western Europe, purchasing a 60 percent stake in Birra Peroni S.p.A., Italy's number two brewer.
Name Age Since Current Position
Szymanczyk, Michael 62 2008 Chairman of the Board, Chief Executive Officer
Beran, David 56 2011 Vice Chairman
Barrington, Martin 57 2011 Vice Chairman
Willard, Howard 47 2011 Chief Financial Officer, Executive Vice President
Gifford, William 40 2009 President and Chief Executive Officer of Philip Morris USA Inc
Paoli, Peter 53 2009 President & Chief Executive Officer of U.S. Smokeless Tobacco Company LLC
Nelson, John 59 2008 Executive Vice President, Chief Technology Officer
Keane, Denise 59 Executive Vice President, General Counsel
Johnson, Craig 58 2009 Executive Vice President
Mancuso, Salvatore 45 Vice President, Treasurer
Warren, Linda 62 2008 Vice President, Controller
Heuhsen, Louanna 60 Vice President - Corporate Governance, Associate General Counsel
Surgner, W. Hildebrandt 45 Corporate Secretary, Senior Assistant General Counsel
Brennan, Nancy 58 Senior Vice President - Marketing of Altria Client Services Inc.
Huntley, Robert 80 Presiding Director
Devitre, Dinyar 63 2008 Independent Director
Bailey, Elizabeth 72 1989 Independent Director
Jones, Thomas 61 2002 Independent Director
Munoz, George 59 2004 Independent Director
Baliles, Gerald 70 2008 Independent Director
Farrell, Thomas 56 2008 Independent Director
Sakkab, Nabil 64 2008 Independent Director
Casteen, John 67 2010 Independent Director
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