Graham Mackay Chief Executive SABMiller

1. Graham MackayChief Executive SABMiller GIBS University PresentationMonday 25 October 2004

2. SABMiller today Europe 8 countries 18 breweries USA 8 breweries 1 country Asia* 32 breweries 2 countries Central America 2 breweries 2 countries Africa** 14 breweries 29 countries (17 countries jointly with Castel) Markets where SABMiller has brewing operations South Africa 7 breweries * Excludes 10 breweries in India ** Excludes 29 sorghum breweries

3. SABMiller drivers of future profit growth Leading positions in large emerging markets International premium brands Earnings growth Turnaround of Miller Strong domestic operations in growth markets Today T I M E H O R I Z O N S Illustrative

4. South Africa SAB transformation – 1995 to 2002 South African conglomerate to international beer & beverage company % Turnover 2002 1995 Manufacturing South AfricaBeer ComplementaryBeverages Hotels South AfricaBeer Central America InternationalBeer Retail & Hotels ComplementaryBeverages Africa & Asia Beer EuropeBeer

5. Acquiring (under-valued) assets in developing/emerging markets Enhancing industryconduct and pricing Building local market scale and leadershiparound a portfolio of (local)mainstream brands Driving operationaland cost leadership Securing route-to market control SAB applied a clearly defined acquisition strategy and a distinctive business model A shared model of how to create value

6. Supported by strong capabilities • Management talent and broad based culture (South African) • World class manufacturing and operational skills • Performance management culture • Efficient brand portfolio management • M&A and post merger integration expertise

7. South Africa 2002-2004 further business reshaping Acquisitions of Miller and Peroni % Turnover 2004 2002 ComplementaryBeverages Hotels ComplementaryBeverages Hotels South AfricaBeer South AfricaBeer Central America Central America EuropeBeer Africa & Asia Beer EuropeBeer North America Beer Africa & AsiaBeer

8. Overall scale and portfolio balance shifted Different model of value creationRequired capabilities different

9. Acquisition of Miller Brewing CompanyFirst major developed market acquisition • USA – World’s largest profit pool • Diversified currency and emerging market risk • Miller potential to establish as strong no. 2 • Market concerned about: • Consumer marketing skills • Ability to work with US distribution system • History of decline at Miller

10. Miller: application of our turnaround skills • Systematically analysed the problem – asked the right questions • Applied knowledge and expertise of the beer business • Launched holistic turnaround programme structured within four strategic thrusts Most importantly, reinvigorated the culture

11. Driving transformational culturechange through 3 key processes 1. Performance management • Translate strategies into goals • Drive execution at speed 2. Organisation alignment • Change the organisation to ensure strategic capabilities 3. Talent & capacity management • Get the right skills and talent for today • Build a pipe-line of talent for key positions

12. 1. Performance managementThe pattern prior to acquisition • Targets not taken seriously – rewards for completing activities • No correlation – business performance, individual performance and reward • No consequence for under-performance 2000: 55% of managers received excellent or superior ratings 2001: 61% of managers received excellent or superior ratings Target Performance Actual Performance Reward

13. ImplementationKey features & themes • Top-down goal setting – rigorous alignment process • Deliberate management against goals – intensity & passion • Goal adjustment as required – speed and agility • Tough performance reviews – no satisfactory underperformance • Performance directly linked to pay – differentiated consequence • Strong support from 60 champions Two years of rigorous implementation – a good foundation, a shift in culture felt

14. 2. Organisation alignment Strategy A Strategy B Structures Roles Resourcing Skills Processes Systems Structures Roles Resourcing Skills Processes Systems A change in strategy requires a change in the organisation’s capability

15. 3. Talent & capacity management • Extensive recruitment and selective training, to: • Get top caliber people in key jobs • Build a talent pipe-line of cover • Impact on rate of change* • Actual for F04 (full year) = 19% • Actual for F05 to date (5 months) = 24% [469 people] * Defined as external appointments + internal promotions + internal transfers

16. The challenge of global leadership • The beer industry is at a defining moment in its evolution • We have emerged as one of the leaders of the consolidation process • To retain our leadership position we must review: • Our existing models and drivers of growth • Our skills and modus operandi • What changes are required to maintain our leadership position?

17. Could our enablers to date inhibit change? ENABLER TO DATE Local strategies and strong decentralisation Focus on local brands and mainstream Infusion of SAB practice, expertise, process and culture SAB sole source of global talent Limited corporate centre Issues and stakeholders managed locally POSSIBLE INHIBITORS Failure to grasp matrix management Ability to capture value from premium drift Slowness in growing the talent pool globally and over reliance on SAB as a source Reluctance to adopt / leverage synergies Failure to manage global reputation

18. How are we addressing this? Applying local optimisation as the sole criteria for decision-making Stop (let go) Defaulting to local solutions for marginal gain over standard solutions Reluctance to build and exploit best-practice and shared resource Emphasis on winning the competitive battles locally Continue (keep) Focus on operational excellence in all aspects of business Devolved authority and Performance Management as an enabler Grow value of brands & portfolios, including international & “worthmore” Start (embrace) Actively developing local and global talent Systems, processes and structures to help leverage Group assets and skills

19. Focus of future efforts and capabilities • Developing a balanced portfolio of businesses, in high growth emerging markets and selected high value developed markets • Capturing maximum share of value through complete and differentiated brand portfolios in each market • Focus on winning at the point of purchase • Leveraging our scale to compete efficiently in and across markets • Managing and enhancing our reputation amongst all stakeholders • Building our people, organisation and capacity

20. Embracing global talent, particularly those with top-line capabilities Continuing to build strong and cohesive management teams in local markets Developing world class marketing, customer management and execution capabilities Leveraging our global talent pool through Strategic People Resourcing Institutionalising Best Operating Practices and SAB “Ways” Training and general management development programme Building our people, organisation and capacity Historically high relianceon recruiting, developingand exporting strongSouth African talent Beer division alumni are increasingly thinly spread!

21. Summary • SABMiller has transformed itself from a South African conglomerate into a successful global beer company • However, we recognise need to drive further change • Sources of future value growth changing • The competition • The scale and profile of our business • As a result, we are • Developing new capabilities to complement our traditional skills • Activating a series of initiatives to reshape the company