SABMILLER was seen as the “only world-class” South African firm 20 years ago. Since its move to London it has done its shareholders proud if you look at the growth in the firm’s value — especially in rand terms. For every year bar one from 2005, its market capitalisation has more than doubled the tangible asset base.

It tells us shareholder expectations are high because management made its strategy clear and stuck to it.

However, does profitability meet what they expect?

Market capitalisation tracks the growth in assets. As much of executive pay today is stock-based, does that also correlate to asset growth, do you think? Despite the fact that asset productivity is the fundamental driver of a firm’s longterm value, most analysts and financial journalists do seem to favour growth instead, don’t they? So, would that make it in managers’ interests to keep growing the asset base if the number and value of their share options follow?

There has been so much consolidation of brewers that opportunities to acquire more firms are few — Foster ’s is one of them. It means focus can now shift to a return on assets managed. During this seven-year period, with assets growing 140%, sales 50% and operating profit only 20%, you would expect SABMiller’s return on assets managed to droop. It has happened to all of them after the long acquisition binge.

That is not to say its asset management skills are not very good. One key measure of efficiency is the cash-to-cash cycle. This is the measure: add the number of sales days of inventory you hold to the time it takes your customers to pay you. Next, subtract from that total the number of days you take to pay your suppliers.

If you end up with a negative number, it means you generate cash from your day-to-day and month-to-month operating cycles. You’ll have cash in the bank. Except for retail firms, many companies find it difficult, even impossible, to achieve zero or a negative cash-to-cash cycle. Every year since 2005, SABMiller has achieved that or close to it. No mean feat, and it shows up in positive cash flows.

It has also reduced its material costs from 30% to about 25% of sales — a key productivity measure.

The operating people in SABMiller are way up the experience curve. They make good, low-cost beer. Their low cost-of sales creates a big gross margin sandpit for the marketing people to play in.

But how are these “brand” champions doing — the ones who seem to get all the kudos? Their “assets” are the “intangible” ones but shareholders still expect them to generate sales and profits.

They weigh heavy on the balance sheet and account for about 50% of the assets to be managed. Bring them into the return on assets managed calculation and it cuts the return down to 8%. That being the case, how good are they at marketing?

Unfortunately, in the annual report, you cannot separate beer from soft drinks. Also, there’s no split of operating assets. There used to be, but not any more.

Nevertheless, with some guessing as to the level of assets for the last couple of years, an interesting picture emerges.

Operating margins have plunged from a high of 27,3% — higher than anywhere else in SAB’s world — to a still healthy 16%. Brewing beer is good business.

In the interests of consumers — not employees — the trade unions and the government should take note. It shows what a bit of tough competition does.

Didn’t Heineken make its entrance in 2008? What effect has that had on the price of beer, do you think?

If there have been positive cost effects for us, that’s all the more reason to encourage investment and competition from outside the country. Today, we seem to want to do the opposite.

However, to get back to marketing, are the brand-building strategies as good as they make them out to be?

If they are, when can shareholders expect a better return on the “brands” management bought with a lot of their cash — all $16bn of it?

It’s now time for a steeper return-on-assets-managed curve. It does show signs of stirring. Maybe dawn has arrived at last after the long party. If they get Foster’s but quickly flog the wine assets, it could perk up even more.

Black, an affiliate of Schaffer Consulting, is an executive coach and mentor.