1. SABMiller: A Study of Plzensky Prazdroj Miroslava Hoškova Erik Rundquist Justin Woods

2. Plzeňský Prazdroj, a.s. as a part of SABMiller plc

3. 3 SABMiller  60 Countries; 5 Continents  North and South America  Europe  Africa and Asia  North America: Miller Brewing Co. (2 nd 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. 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. 5 Plzensky Prazdroj - Overview Pilsner Urquell exports to 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. 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. 7 Brand Portfolio PILSNER URQUELL Original Pilsner, iconic superpremium, international flag ship GAMBRINUS The most popular Czech brand, every 4th beer sold, origins in Pilsen RADEGAST The second largest, regional No1 in North Moravia, the only non- alcoholic in portfolio VELKOPOPOVICKY KOZEL Traditional Czech brand, dynamic growth, the only dark in portfolio FRISCO Launched May 2004, refreshing malt beverage - cooler, lemon&apple taste KLASIK; PRIMUS Economy brands, bottles only, no mktg support, off-trade price fighters

8. 8 SABMiller Financial Highlights

9. 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. 10 SABMiIler – NORTH AMERICA 20062005% Revenue (US$m) 4,9124,892- EBITA (US$m) 454487(7) EBITA margin (%) 9.310.0 Large Breweries 88 Avg # of Employees 5,8875,760

11. 11 SABMiller – EUROPE 20062005% Revenue (US$m) 3,2582,90912 EBITA (US$m) 56948218 EBITA margin (%) 17.516.6 Large Breweries 1918 Avg # of Employees 11,62211,424

12. 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. 13 Revenues

14. 14 Profits: Year-Over-Year

15. 15 CZK mil.1997199819992000200120022003200420052006 Trading Income671814941708391 637 2 8262 9623 377 Owner's Equity2 5842 7593 2273 3904 2245 989 6 9157 9649 446 Progress of Trading Income and Owner’s Equity

16. 16 Structure of Assets and Liabilities Total680.5(100%)Total680.5(100%) Receivables for Capital Subscription0 ( 0%) Equity399.865 (58.8%) Fixed Assets560.11 (82.3%) Liabilities280.57 (41.2%) Current Assets95.7 (14.1%) Other Liabilities0,072 (0%) Other Current Assets24.683 (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. 17 Financial Ratios for the year ended 31 March 2006 Profitability 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. 18 Inventory Turnover 10.69 Inventory Period 34 days Asset Turnover 0.85 Receivables Turnover 17.06 Average Collection Period 21 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. 19 Days 1997199819992000200120022003200420052006 Inventory Period 4338323135 303534 Average Collection Period 443348463531 24 Progress of Inventory and Average Collection Period

20. 20 Liquidity Ratios Year20022003200420052006 Current Ratio1.181.170.961.190.95 Minimum1.5 Maximum2.5 Current Ratio0.95 Quick Ratio0.42 Cash Ratio0.01  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: Year20022003200420052006 Quick Ratio0.560.660.440.540.42 Minimum11111 Maximum1.5

21. 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. Percentage1997199819992000200120022003200420052006 Debt Ratio666140696261 544941

22. Thank You for Your Attention. Questions?