Graham Mackay Chief Executive SABMiller

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Graham Mackay Chief Executive SABMiller GIBS University Presentation Monday 25 October 2004

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SABMiller today Europe 8 nations 18 bottling works USA 8 distilleries 1 nation Asia* 32 bottling works 2 nations Central America 2 breweries 2 nations Africa** 14 distilleries 29 nations (17 nations mutually with Castel) Markets where SABMiller has fermenting operations South Africa 7 bottling works * Excludes 10 bottling works in India ** Excludes 29 sorghum bottling works

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SABMiller drivers of future benefit development Leading positions in extensive developing markets International premium brands Earnings development Turnaround of Miller Strong household operations in development showcases Today T I M E H O R I Z O N S Illustrative

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South Africa SAB change – 1995 to 2002 South African combination to global lager & refreshment organization % Turnover 2002 1995 Manufacturing South Africa Beer Complementary Beverages Hotels South Africa Beer Central America International Beer Retail & Hotels Complementary Beverages Africa & Asia Beer Europe Beer

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Acquiring (underestimated) resources in creating/developing markets Enhancing industry direct and evaluating Building nearby market scale and initiative around an arrangement of (neighborhood) standard brands Driving operational and cost administration Securing course to market control SAB connected an obviously characterized procurement procedure and a particular plan of action A common model of how to make esteem

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Supported by solid abilities Management ability and expansive based culture (South African) World class producing and operational aptitudes Performance administration culture Efficient brand portfolio administration M&A and post merger joining skill

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South Africa 2002-2004 further business reshaping Acquisitions of Miller and Peroni % Turnover 2004 2002 Complementary Beverages Hotels Complementary Beverages Hotels South Africa Beer South Africa Beer Central America Central America Europe Beer Africa & Asia Beer Europe Beer North America Beer Africa & Asia Beer

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Overall scale and portfolio adjust moved Different model of significant worth creation Required capacities distinctive

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Acquisition of Miller Brewing Company First major created advertise obtaining USA – World's biggest benefit pool Diversified coin and developing business sector hazard Miller potential to set up as solid no. 2 Market worried about: Consumer promoting aptitudes Ability to work with US circulation framework History of decay at Miller

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Miller: use of our turnaround abilities Systematically dissected the issue – asked the right inquiries Applied learning and mastery of the brew business Launched all encompassing turnaround program organized inside four key pushes above all, reinvigorated the way of life

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Driving transformational culture change through 3 key procedures 1. Execution administration Translate systems into objectives Drive execution at speed 2. Association arrangement Change the association to guarantee key abilities 3. Ability & limit administration Get the right aptitudes and ability for now Build a pipe-line of ability for key positions

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1. Execution administration The example preceding obtaining Targets not considered important – rewards for finishing exercises No relationship – business execution, singular execution and reward No outcome for under-execution 2000: 55% of directors got fantastic or unrivaled evaluations 2001: 61% of supervisors got amazing or prevalent appraisals Target Performance Actual Performance Reward

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Implementation Key elements & topics Top-down objective setting – thorough arrangement handle Deliberate administration against objectives – power & energy Goal alteration as required – speed and readiness Tough execution audits – no attractive underperformance Performance specifically connected to pay – separated result Strong support from 60 champions Two years of thorough usage – a great establishment, a move in culture felt

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2. Association arrangement Strategy A Strategy B Structures Roles Resourcing Skills Processes Systems Structures Roles Resourcing Skills Processes Systems An adjustment in methodology requires an adjustment in the association's capacity

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3. Ability & limit administration Extensive enlistment and specific preparing, to: Get best gauge individuals in key occupations Build an ability 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 outer arrangements + inward advancements + inside exchanges

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The test of worldwide initiative The brew business is at an extremely important occasion in its development We have risen as one of the pioneers of the combination procedure To hold our authority position we should audit: Our current models and drivers of development Our aptitudes and usual methodology What changes are required to keep up our initiative position?

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Could our empowering influences to date hinder change? Empowering agent TO DATE Local procedures and solid decentralization Focus on nearby brands and standard Infusion of SAB practice, skill, process and culture SAB sole wellspring of worldwide ability Limited corporate focus Issues and partners oversaw locally POSSIBLE INHIBITORS Failure to handle grid administration Ability to catch esteem from premium float Slowness in developing the ability pool all inclusive and over dependence on SAB as a source Reluctance to embrace/influence cooperative energies Failure to oversee worldwide notoriety

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How are we tending to this? Applying neighborhood improvement as the sole criteria for basic leadership Stop (let go) Defaulting to nearby answers for minor increase over standard arrangements Reluctance to fabricate and abuse best-rehearse and shared asset Emphasis on winning the aggressive fights locally Continue (keep) Focus on operational brilliance in all parts of business Devolved power and Performance Management as an empowering agent Grow estimation of brands & portfolios , including universal & "worthmore" Start (grasp) Actively creating nearby and worldwide ability Systems, procedures and structures to influence Group resources and aptitudes

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Focus of future endeavors and capacities Developing an adjusted arrangement of organizations, in high development developing markets and chose high esteem created markets Capturing most extreme share of significant worth through entire and separated brand portfolios in every market Focus on winning at the purpose of procurement Leveraging our scale to contend proficiently in and crosswise over business sectors Managing and upgrading our notoriety among all partners Building our kin, association and limit

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Embracing worldwide ability, especially those with top-line abilities Continuing to assemble solid and durable administration groups in neighborhood markets Developing world class showcasing, client administration and execution capacities Leveraging our worldwide ability pool through Strategic People Resourcing Institutionalizing Best Operating Practices and SAB "Ways" Training and general administration advancement program Building our kin, association and limit Historically high dependence on selecting, creating and sending out solid South African ability Beer division graduated class are progressively meagerly spread!

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Summary SABMiller has changed itself from a South African aggregate into a fruitful worldwide brew organization However, we perceive need to drive encourage change Sources of future esteem development changing The opposition The scale and profile of our business subsequently, we are Developing new abilities to supplement our conventional aptitudes Activating a progression of activities to reshape the organization