(London, ENGLAND and Denver, CO) – SABMiller plc (SAB.L) and Molson Coors Brewing Company (NYSE: TAP; TSX) reported that MillerCoors second quarter underlying net income, excluding special items, increased 2.6 percent to $400 million versus the second quarter 2010, driven by positive pricing growth, favorable brand mix, and strong cost management amid a challenging industry environment.
“We delivered profit growth in the second quarter despite a weakening economy combined with an array of headwinds, including record rainfall in key markets and high fuel prices, all of which dampened consumer spending on beer,” said Chief Executive Officer Tom Long. “But we are not satisfied with profit growth alone and we remain committed to investing behind our brands to drive volume and share growth over time.”
Key operating results for the second quarter are compared to the prior year comparable quarter and include MillerCoors operations in the U.S. and Puerto Rico.
SECOND QUARTER HIGHLIGHTS
(Unless otherwise indicated, all amounts are in U.S. dollars and calculated in accordance with U.S. GAAP, and all percentages are versus the prior-year comparable period.)
Underlying net income increased 2.6 percent to $400 million
Total net sales were in line with the prior year second quarter at $2.132 billion
Domestic net revenue per barrel, excluding contract brewing and company-owned distributor sales, increased 2.9 percent
Total cost of goods sold (COGS) per barrel increased 2.3 percent, driven by increases in freight and fuel and commodity costs
For the quarter, MillerCoors domestic sales-to-retailers (STRs) were down 2.7 percent as a result of a continued weak economic environment combined with record rainfall in key markets and high gas prices throughout the U.S. Domestic sales-to-wholesalers (STWs) were down 3.1 percent.
Second Quarter Brand STR Highlights
Premium Light STRs were down low-single digits, as Coors Light grew slightly, Miller Lite declined mid-single digits and MGD 64 declined by double digits. The Coors Light Super Cold packaging launched in May helped drive volume on the brand in the quarter.
Tenth and Blake Beer Company grew the MillerCoors Craft and Import portfolio double digits, driven by double-digit increases in Blue Moon and Leinenkugel’s. The company continues to experience success with its growing line-up of innovative seasonal craft brand extensions, including Leinenkugel’s Summer Shandy and Blue Moon Summer Honey Wheat. Peroni Nastro Azzurro also delivered good growth.
The Below Premium portfolio declined mid-single digits, as reduced price gaps between Premium and Below Premium beers drove continued trading up in the MillerCoors portfolio.
The Premium Regular portfolio was down high-single digits, with a double-digit decline by Miller Genuine Draft, partially offset by a low-single-digit increase by Coors Banquet.
Second Quarter Financial Highlights
MillerCoors total net sales were in line with the prior year second quarter at $2.132 billion.
Domestic net producer revenue per barrel grew 2.9 percent, due to frontline pricing and favorable brand mix.This growth was an acceleration over first quarter 2011 primarily driven by improved mix.
Total company net producer revenue per barrel, including contract brewing and company-owned distributor sales, increased by 3.5 percent. Third-party contract brewing volumes were down 7.0 percent for the quarter.
Total COGS per barrel increased 2.3 percent driven by increases in freight and fuel and commodity costs, partially offset by synergies and cost savings.
Marketing, general and administrative costs increased 0.4 percent, driven primarily by higher information system spending, which was offset in part by continued cost savings.
Depreciation and amortization expenses for MillerCoors in the second quarter were $72.6 million and additions to tangible and intangible assets totaled $62.5 million.
Special items for the quarter were $1.1 million primarily related to relocation costs associated with the joint venture integration.
Synergies and Cost Savings
In the second quarter, synergy savings of $18 million were delivered, which comprised of savings in procurement, corporate services and brewing materials.
To date, MillerCoors cumulative synergies total $546 million, surpassing the original commitment of $500 million to be achieved by June 30, 2011.
In addition to synergies, $9 million of other cost savings were realized, driven by a variety of initiatives within the integrated supply chain. Cumulative cost savings realized to date total $165 million.
MillerCoors has delivered $711 million in total annualized synergies and cost savings since July 1, 2008, and is ahead of plan to deliver its target of $750 million of total synergies and other cost savings by the end of 2012.
Overview of MillerCoors
MillerCoors brews, markets and sells the MillerCoors portfolio of brands in the U.S. and Puerto Rico. Built on a foundation of great beer brands and nearly 300 years of brewing heritage, MillerCoors continues the commitment of its founders to brew the highest quality beers. MillerCoors is the second-largest beer company in America, capturing nearly 30 percent of U.S. beer sales. Led by two of the best-selling beers in the industry, MillerCoors has a broad portfolio of highly complementary brands across every major industry segment. Miller Lite is the great-tasting beer that established the American light beer category in 1975, and Coors Light is the brand that introduced consumers to Rocky Mountain cold refreshment. MillerCoors brews premium beers Coors Banquet and Miller Genuine Draft, and economy brands Miller High Life and Keystone Light. The company also offers innovative products such as MGD 64, Miller Chill and Sparks. Tenth and Blake Beer Company, MillerCoors new craft and import company, imports Peroni Nastro Azzurro, Pilsner Urquell and Grolsch and features craft brews from the Jacob Leinenkugel Brewing Company, Blue Moon Brewing Company and the Blitz-Weinhard Brewing Company. MillerCoors operates eight major breweries in the U.S., as well as the Leinenkugel’s craft brewery in Chippewa Falls, Wisconsin, and two microbreweries, the 10th Street Brewery in Milwaukee and the Blue Moon Brewing Company at Coors Field in Denver. MillerCoors vision is to create the best beer company in America by driving profitable industry growth. MillerCoors insists on building its brands the right way through brewing quality, responsible marketing and environmental and community impact. MillerCoors is a joint venture of SABMiller plc and Molson Coors Brewing Company.
Overview of SABMiller
SABMiller plc is one of the world’s largest brewers with brewing interests and distribution agreements across six continents. The group’s wide portfolio includes global brands Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller is also one of the world’s largest bottlers of Coca-Cola products.
In the year ended 31 March 2011, the group reported US$4,491 million adjusted pre-tax profit and group revenue of US$28,311 million. SABMiller plc is listed on the London and Johannesburg stock exchanges. For more information on SABMiller plc, visit the company’s website: www.sabmiller.com.
Overview of Molson Coors
Molson Coors Brewing Company is one of the world’s largest brewers. It brews, markets and sells a portfolio of leading premium quality brands such as Coors Light, Molson Canadian, Molson Dry, Carling, Coors Banquet and Keystone Light in North America, Europe and Asia. For more information on Molson Coors Brewing Company, visit the company’s web site,www.molsoncoors.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws, and language indicating trends, such as “anticipated” and “expected”.It also includes financial information, of which, as of the date of this press release, the Companies’ independent auditors have not completed their review.Although the Companies believe that the assumptions upon which their respective financial information and their respective forward-looking statements are based are reasonable, they can give no assurance that these assumptions will prove to be correct.Important factors that could cause actual results to differ materially from the Companies’ projections and expectations are disclosed in Molson Coors’ filings with the Securities and Exchange Commission or in SABMiller’s annual report and accounts for the year ended March 31, 2011, and in other documents which are available on SABMiller’s website at www.sabmiller.com.These factors include, among others, changes in consumer preferences and product trends; price discounting by major competitors; failure to realize anticipated results from synergy initiatives; and increases in costs generally.All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions.Neither SABMiller nor Molson Coors undertakes to update forward-looking statements relating to their respective businesses, whether as a result of new information, future events or otherwise.You should not place undue reliance on any forward-looking statement. Neither SABMiller nor Molson Coors accepts any responsibility for any financial information contained in this press release relating to the business or operations or results or financial condition of the other or their respective groups.
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Minnesota is currently in day 13 of a statewide government shutdown after a budget proposal impasse.
According to local affiliate, KSTP, MillerCoors alleges that it submitted payment and paperwork for brand registration/renewal prior to the July 1st shutdown. However, the state did not process the paperwork in time so the company’s 39 brands are now on shelves without proper registration. The fee per brand is a mere $30 every three years.
According to reports, the brewing company must come up with a way to remove the product from shelves. Meanwhile, retailers are asserting that they own the product outright and that what was purchased while the brands were properly registered should not be affected. For now, it looks like MillerCoors cannot sell anymore product to its Minnesota wholesale partners until the government shutdown ends and the liquor board approves those brands for renewal. Whether product needs to be pulled should be known soon enough.
MillerCoors is obviously disputing it.
…But it gets worse.
Several hundred Minnesota liquor establishments were unable to renew their buyers’ cards meaning that they cannot order more liquor until the shutdown is over and agencies get back to issuing renewals.
Startup breweries like Steel Toe Brewing cannot open with the shutdown. Steel Toe needs a signature providing clearance for them to be able to use their boiler.
On a local but unrelated note, Lift Bridge Brewing is crying foul over Cold Spring Brewery not honoring its production contract. Cold Spring says that it gave Lift Bridge plenty of warning that it was facing capacity issues while Lift Bridge says that it got extremely short notice.
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Blue Moon Spiced Amber Ale: I’m not entirely sure whether this will be a new beer or is just a label re-design and a renaming from Winter Abbey Ale. Should find out soon enough…
5 Rabbit 5 Vulture Oaxacan-style Dark Ale: Ale brewed with Ancho chili. “In Aztec mythology, 5 Vulture is one of the 5 Gods of Excess the serve to warn us of our baser instincts. The scavenging nature of the vulture represents the stripping off of deeply rooted impulses like lust and envy from our souls, encouraging us to live wisely and modestly, great advice for a long and happy life.”
Perennial South Side Blonde: Second(?) label approval from new St. Louis brewery. More info on Perennial Artisanal Ales.
Lavery Imperial French-style Ale: From the label, “our IFA is a misbehaving fusion of French, Belgian and American brewing culture. A combination of pale, wheat and rye malts with a little extra kick of sugar in the kettle for good measure. Then hopped with the four American ‘C’ hops (Centennial, Cascade, Chinook, Columbus) and fermented with our special blend of French and Belgian yeast strains.”
Cutters Full Court Imperial IPA
Cutters Half Court IPA
Cutters Lost River Summer Ale
…Per a press release, “Cutters Brewing Co. is owned and operated by long time friends and accomplished homebrewers Monte Speicher and Chris Inman as well as their spouses and business partners Amanda Speicher and Emma Inman. They recently received government approval to brew at their brewery at 1927 S. Curry Pike. Their hand crafted and packaged beers will be available for purchase in and around Bloomington [...]” In addition to the above, Monon Wheat and Empire Imperial Stout are two more in the portfolio.
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First Flavored Super Low-Calorie Beer Launches Nationwide May 1
(Chicago, IL) – MGD 64, the beer that established the super low-calorie beer category, is furthering its reputation as a category innovator with the creation of the first-ever flavored super low-calorie beer. The limited-edition MGD 64 Lemonade, a 64-calorie light beer with the taste of lemonade, launches nationally beginning May 1.
The special brew will be available only until Labor Day.
The MGD 64 Lemonade national launch will be supported with television, radio, digital and out-of-home advertising targeting light beer drinkers looking for a twist on their summertime beer occasions. Available in 6-pack bottles and 12-pack bottles and cans, MGD 64 Lemonade will be available at bars, restaurants and grocery stores across the country this summer.
“With the growing interest in flavored beers, we wanted to provide light beer drinkers the opportunity to enjoy the beer they love – with a refreshing lemonade twist for the summer,” said Tim Carter, MGD 64 marketing manager at MillerCoors. “Whether it’s at the bar with friends, after a round of golf or during a backyard barbeque, an MGD 64 Lemonade served with a fresh lemon slice pairs perfectly with every summer occasion.”
MGD 64 Lemonade, with only 64 calories and 2.4 grams of carbohydrates per 12 ounces, offers significantly fewer calories than other flavored alcoholic beverages:
A 12-ounce serving of Bud Light Lime contains 116 calories and 8 grams of carbohydrates.
An 11.2-ounce serving of Mike’s Lite Hard Lemonade contains 109 calories and 14 grams of carbohydrates.
A 12-ounce serving of Michelob Ultra Lime Cactus contains 95 calories and 5.5 grams of carbohydrates.
MGD 64 has been the most popular choice for calorie-conscious consumers since it launched nationally in the summer of 2008. For more information on MGD 64 Lemonade, visit mgd64.com.
About MillerCoors
MillerCoors brews, markets and sells the MillerCoors portfolio of brands in the U.S. and Puerto Rico. Built on a foundation of great beer brands and nearly 300 years of brewing heritage, MillerCoors continues the commitment of its founders to brew the highest quality beers. MillerCoors is the second-largest beer company in America, capturing nearly 30 percent of U.S. beer sales. Led by two of the best-selling beers in the industry, MillerCoors has a broad portfolio of highly complementary brands across every major industry segment. Miller Lite is the great-tasting beer that established the American light beer category in 1975, and Coors Light is the brand that introduced consumers to refreshment as cold as the Rockies. MillerCoors brews premium beers Coors Banquet and Miller Genuine Draft, and economy brands Miller High Life and Keystone Light. The company also offers innovative products such as MGD 64, Miller Chill and Sparks. The new MillerCoors craft and import company, Tenth and Blake, imports Peroni Nastro Azzurro, Pilsner Urquell, Grolsch and Molson Canadian and features craft brews from the Jacob Leinenkugel Brewing Company, Blue Moon Brewing Company and the Blitz-Weinhard Brewing Company. MillerCoors operates eight major breweries in the U.S., as well as the Leinenkugel’s craft brewery in Chippewa Falls, Wisconsin, and two microbreweries, the 10th Street Brewery in Milwaukee and the Blue Moon Brewing Company at Coors Field in Denver. The MillerCoors vision is to create the best beer company in America by driving profitable industry growth. MillerCoors insists on building its brands the right way through brewing quality, responsible marketing and environmental and community impact. MillerCoors is a joint venture of SABMiller plc and Molson Coors Brewing Company.
[Disclaimer: Beernews.org is a leader in craft beer news and is the original source of this article. If you would like to check out more, please visit the original site. Thanks!]
(Toronto, CANADA) – Labatt Breweries of Canada announced today it has been informed by the National Hockey League that the league intends to terminate its relationship with Labatt at the end of June 2011. The NHL stated it has entered into a sponsorship agreement with Molson Coors in Canada and MillerCoors in the US.
“Labatt has been the official beer sponsor of the NHL in Canada for more than a decade and we began sponsorship renewal negotiations with the league several months ago to secure sponsorship rights,” said Labatt Vice President, Corporate Affairs, Charlie Angelakos. “These negotiations with the NHL proceeded positively and in good faith to the point where the parties had agreed upon the terms of renewal of a sponsorship agreement until 2014. Nothing has happened to change that situation.”
“We have an agreement with the league and are pursuing all legal remedies available to us to enforce this agreement,” said Angelakos. “Bud and hockey belong together and we will pursue our case aggressively.”
In addition to Labatt’s NHL sponsorship in Canada, sibling Anheuser-Busch and its Bud Light brand have a long and proud hockey history and currently sponsor 22 of the 24 NHL teams based in the United States.
Angelakos added, “Budweiser and hockey are a natural fit and in addition to the league sponsorship, we are actively looking for opportunities on a team and grass-roots level to reinforce that connection.”
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Despite Soft Volumes, Fourth Quarter Premium Light Sales Trends Improved
Brewer Surpasses $500 Million in Annualized Synergy Savings Six Months Ahead of Schedule
(London, ENGLAND & Denver, CO) – SABMiller plc (SAB.L) and Molson Coors Brewing Company (NYSE: TAP; TSX) reported that MillerCoors underlying net income increased at double-digit rates in the fourth quarter and full year ended December 31, 2010, despite one of the most challenging years on record for the U.S. beer industry.
“Our consistent focus generated positive net revenue per barrel growth for the fourth quarter. We are building brand equity and improving our mix to meet the challenges ahead in 2011.”
MillerCoors fourth quarter underlying net income, excluding special items, increased 38.0 percent to $146 million compared with the prior year period, while full year underlying net income increased 21.9 percent to $1.087 billion behind positive pricing, favorable brand mix, and continued strong cost management. While industry volumes remained soft in the quarter, MillerCoors’ Premium Light portfolio saw continued trend improvements.
“We continue to invest in innovation behind our premium light brands, drive growth in our craft and import portfolio and deliver synergy and cost savings as promised,” said Leo Kiely, chief executive officer, MillerCoors. “Our consistent focus generated positive net revenue per barrel growth for the fourth quarter. We are building brand equity and improving our mix to meet the challenges ahead in 2011.”
Key operating results for the fourth quarter are compared to the prior year comparable quarter and include MillerCoors operations in the U.S. and Puerto Rico.
FOURTH QUARTER AND FULL YEAR HIGHLIGHTS
(Unless otherwise indicated, all amounts are in U.S. dollars and calculated in accordance with U.S. GAAP, and all percentages are versus the prior-year comparable period.)
Fourth quarter underlying net income, excluding special items, increased 38.0% to $146 million, while full-year underlying net income, excluding special items, grew 21.9% to $1.087 billion
Fourth quarter total net sales increased 0.4% to $1.720 billion, while full-year total net sales were unchanged;
Revenue per barrel growth was positive in the fourth quarter, as domestic net revenue per barrel (NRPB), excluding contract brewing and company-owned distributor sales, increased 1.7 percent, driven by pricing growth and favorable mix. For the full year, domestic NRPB increased 2.3 percent.
Fourth quarter total cost of goods sold (COGS) per barrel increased 1.8%, while domestic COGS per barrel were flat. Full-year total COGS per barrel increased 2.1%.
MillerCoors surpassed its three-year synergies goal six months ahead of schedule delivering $60 million of synergy savings in the fourth quarter, for a total of $505 million in cumulative synergy savings realized since July 1, 2008. Additional cost savings of $31 million were achieved in the fourth quarter, bringing total synergy and cost savings to $655 million since July 1, 2008.
For the quarter, MillerCoors domestic sales-to-retailers (STRs) declined 2.5 percent, about half the decline in the third quarter due to trend improvements in premium light sales. For the full year, STRs were down 3.2 percent.
Domestic sales-to-wholesalers (STWs) declined 2.2 percent in the quarter driven by STR declines. Full-year STWs were down 3.0 percent.
Fourth Quarter Brand STR Highlights
Premium Light STRs were down slightly in the fourth quarter, as Coors Light was up low-single digits due to strong distribution gains in the quarter; and Miller Lite trends continued to stabilize since the launch of the Miller Lite Vortex bottle and expanded distribution of the Miller Lite Aluminum Pint. MGD 64 declined at a double-digit rate.
MillerCoors Craft and Import portfolio managed by Tenth and Blake Beer Company grew double digits in the quarter, driven by the strong performance of Blue Moon, the biggest-selling craft beer brand in the country. The smaller Domestic Above-Premium portfolio continued to experience double-digit declines.
The Below Premium portfolio was down mid-single digits due to declines in Miller High Life and Milwaukee’s Best. Keystone Light was down low-single digits.
Fourth Quarter Financial Highlights
MillerCoors total net sales increased 0.4 percent to $1.720 billion versus fourth quarter 2009. Full-year total net sales were $7.571 billion, virtually unchanged from prior year. Third party contract brewing volumes were down 3.7 percent for the quarter. Full-year contract brewing was down 0.7 percent.
Fourth quarter COGS per barrel increased 1.8 percent versus the prior year. The increase was primarily due to Coors Distributing Company’s acquisition of Western Beverage in Denver. Domestic COGS per barrel were flat for the quarter despite higher fuel costs and unfavorable mix, which were offset by synergy and cost saving programs. Full-year COGS per barrel increased 2.1 percent.
Marketing, general and administrative costs decreased 5.4 percent to $472.5 million in the fourth quarter, primarily due to synergy savings and lower promotional and tactical spending.
Depreciation and amortization expenses for MillerCoors in the fourth quarter were $70.6 million and additions to tangible and intangible assets totaled $124.0 million.
During the fourth quarter, special items were $2.2 million primarily related to integration charges.
Integration, Synergies and Cost Savings
In the fourth quarter, synergy savings of $60 million were realized, driven by non-organizational synergies of $58 million. The non-organizational savings were primarily realized from media, regional tactical spending, inbound and outbound freight, packaging and brewing materials and point-of-sale materials.
To date, MillerCoors cumulative synergies have grown to $505 million, surpassing the original commitment to deliver $500 million by June 30, 2011.
In addition to synergies, an additional $31 million of cost savings were realized in the quarter driven by various cost savings initiatives led by the integrated supply chain, marketing and sales divisions. Cumulative cost savings to date total $150 million.
In total, MillerCoors has delivered $655 million in cumulative synergies and cost savings since July 1, 2008, and is on track to deliver $750 million of total synergies and cost savings by the end of 2012.
Overview of MillerCoors
MillerCoors brews, markets and sells the MillerCoors portfolio of brands in the U.S. and Puerto Rico. Built on a foundation of great beer brands and nearly 300 years of brewing heritage, MillerCoors continues the commitment of its founders to brew the highest quality beers. MillerCoors is the second-largest beer company in America, capturing nearly 30 percent of U.S. beer sales. Led by two of the best-selling beers in the industry, MillerCoors has a broad portfolio of highly complementary brands across every major industry segment. Miller Lite is the great-tasting beer that established the American light beer category in 1975, and Coors Light is the brand that introduced consumers to Rocky Mountain cold refreshment. MillerCoors brews premium beers Coors Banquet and Miller Genuine Draft, and economy brands Miller High Life and Keystone Light. The company also offers innovative products such as MGD 64, Miller Chill and Sparks. Through its new craft and import company, Tenth and Blake, imports Peroni Nastro Azzurro, Pilsner Urquell, Grolsch and Molson Canadian and features craft brews from the Jacob Leinenkugel Brewing Company, Blue Moon Brewing Company and the Blitz-Weinhard Brewing Company. MillerCoors operates eight major breweries in the U.S., as well as the Leinenkugel’s craft brewery in Chippewa Falls, Wisconsin, and two microbreweries, the 10th Street Brewery in Milwaukee and the Blue Moon Brewing Company at Coors Field in Denver. MillerCoors vision is to create the best beer company in America by driving profitable industry growth. MillerCoors insists on building its brands the right way through brewing quality, responsible marketing and environmental and community impact. MillerCoors is a joint venture of SABMiller plc and Molson Coors Brewing Company.
Overview of SABMiller
SABMiller plc is one of the world’s largest brewers with brewing interests and distribution agreements across six continents. The group’s wide portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller plc is also one of the world’s largest bottlers of Coca-Cola products. In the year ended March 31, 2010, the group reported $3,803 million adjusted pre-tax profit and group revenue of $26,350 million. SABMiller plc is listed on the London and Johannesburg stock exchanges. For more information on SABMiller plc, visit the company’s website: www.sabmiller.com.
Overview of Molson Coors
Molson Coors Brewing Company is one of the world’s largest brewers. It brews, markets and sells a portfolio of leading premium quality brands such as Coors Light, Molson Canadian, Molson Dry, Carling, Coors Banquet and Keystone Light in North America, Europe and Asia. For more information on Molson Coors Brewing Company, visit the company’s web site, www.molsoncoors.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws, and language indicating trends, such as “anticipated” and “expected”. It also includes financial information, of which, as of the date of this press release, the Companies’ independent auditors have not completed their review. Although the Companies believe that the assumptions upon which their respective financial information and their respective forward-looking statements are based are reasonable, they can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Companies’ projections and expectations are disclosed in Molson Coors’ filings with the Securities and Exchange Commission or in SABMiller’s annual report and accounts for the year ended March 31, 2010, and in other documents which are available on SABMiller’s website at www.sabmiller.com. These factors include, among others, changes in consumer preferences and product trends; price discounting by major competitors; failure to realize anticipated results from synergy initiatives; and increases in costs generally. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Neither SABMiller nor Molson Coors undertakes to update forward-looking statements relating to their respective businesses, whether as a result of new information, future events or otherwise. You should not place undue reliance on any forward-looking statement. Neither SABMiller nor Molson Coors accepts any responsibility for any financial information contained in this press release relating to the business or operations or results or financial condition of the other or their respective groups.
MillerCoors Results and Related Reconciliations
The table below reconciles net income attributable to MillerCoors, reported in accordance with US GAAP as used for inclusion within Molson Coors reported results, to MillerCoors EBITA as used for inclusion within SABMiller’s reported results in accordance with IFRS. Underlying net income and EBITA are non-GAAP measures. Management of both companies believes that underlying net income and EBITA provide shareholders with a useful basis for assessing the profit performance of MillerCoors. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similarly named non-GAAP measures whose calculations may differ from the company’s calculations.
MillerCoors LLC
Dollars in Millions Three Months Ended Twelve Months Ended
December
31, 2010
December
31, 2009
December
31, 2010
December
31, 2009
US -GAAP: Net Income, attributable to MillerCoors
144.2 102.2 1,057.0 842.8
Plus: Special (Exceptional) items¹ 2.2 3.9 30.3 49.4
Non – GAAP Underlying Net Income
146.4 106.1 1,087.3 892.2
Plus: Adjustments to IFRS Underlying EBITA² 37.3 35.2 141.0 141.7
IFRS: MillerCoors underlying earnings before interest, taxes and
amortization before exceptional items (EBITA³ )
183.7 141.3 1,228.3 1,033.9
Percent change vs. prior year MillerCoors underlying EBITA³ 30.0% 18.8%
¹Special, or Exceptional items include one-time integration charges related to the MillerCoors Joint Venture
²US – GAAP Underlying Net Income to IFRS EBITA adjustments relate to differing treatment of step-up depreciation,
pension, post retirement benefits, consolidation of container joint ventures, share based compensation and severance
expenses between US – GAAP and IFRS. Amortization of intangible assets, Interest, Taxes, Equity Income and Minority
interest have been removed to arrive at underlying EBITA.
³EBITA – Earnings Before Interest, Taxes, and Amortization, excluding exceptional items.
MILLERCOORS LLC
RESULTS OF OPERATIONS
(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS)
(UNAUDITED)
US GAAP Three Months Ended Twelve Months Ended
Dec 31,
2010
Dec 31,
2009
Dec 31,
2010
Dec 31,
2009
Volume in barrels
15,051 15,411 67,175 69,098
(278.2)
(283.6)
(1,247.1)
(1,277.3)
Net Sales
1,719.7
1,712.2 7,570.6 7,574.3
Cost of Goods Sold
(1,096.2)
(1,102.1) (4,686.3) (4,720.9)
Gross Profit
623.5
610.1 2,884.3 2,853.4
Marketing, General and
Administrative Expenses
(472.5)
(499.5) (1,775.1) (1,937.9)
Special Items, net
(2.2)
(3.9) (30.3) (49.4)
Operating Income
148.8
106.7 1,078.9 866.1
Other Income (Expense), net
(1.1)
(0.7)
2.4
0.9
Income Before Income Taxes
and Non-controlling Interests
147.7
106.0 1,081.3 867.0
Income Tax Expense
(1.7)
(1.5)
(7.6)
(8.4)
Net Income
146.0
104.5
1,073.7
858.6
Net Income Attributable to
Non-controlling Interests
(1.8)
(2.3) (16.7) (15.8)
Net Income Attributable to
MillerCoors LLC
$144.2
$102.2 $1,057.0 $842.8
[Disclaimer: Beernews.org is a leader in craft beer news and is the original source of this article. If you would like to check out more, please visit the original site. Thanks!]
Sales-To-Retailer Trend Improvements Show Signs of Progress Behind Brand Innovation
(LONDON & DENVER, CO) – Despite volume headwinds which continue to affect the beer industry at-large, SABMiller plc (SAB.L) and Molson Coors Brewing Company (NYSE: TAP; TSX) reported double-digit underlying earnings growth for MillerCoors in the second quarter ended June 30, 2010.
“Now that we’re into the home stretch of the summer selling season, our results show some positive signs of progress”
MillerCoors second quarter underlying net income, excluding special items, increased 19.8 percent to $389.7 million versus the prior year comparable quarter due to strong innovation, solid price gains, delivery of synergies, and lower marketing, general and administrative costs, which were partially offset by soft volumes.
“Now that we’re into the home stretch of the summer selling season, our results show some positive signs of progress,” said Leo Kiely, chief executive officer, MillerCoors. “We grew profit by double digits in an unfavorable selling environment. A few of our key brands showed significant trend improvements from the last quarter, and the craft and import portfolio posted very strong results, driven by our investments in brand innovation.”
Key operating results for the second quarter are compared to the prior year comparable quarter and include MillerCoors operations in the U.S. and Puerto Rico.
SECOND QUARTER HIGHLIGHTS
(All amounts are in U.S. dollars and calculated in accordance with U.S. GAAP, unless otherwise indicated. )
Underlying net income, excluding special items, increased 19.8% to $389.7 million;
Total net revenue declined by 0.1% to $2.134 billion;
Domestic net revenue per barrel (NRPB), excluding contract brewing and company-owned distributor sales, increased 2.8%;
Cost of goods sold per barrel increased 1.6%;
Synergies and other cost savings were $72 million, bringing cumulative synergies and cost savings (including legacy cost savings programs) to $481 million since July 1, 2008.
MillerCoors domestic sales-to-retailers (STRs) declined 2.4 percent. Helped by MillerCoors premium light, craft and import brands, the second quarter showed a trend improvement from the first quarter, which was down 4.0 percent. Domestic sales-to-wholesalers (STWs) declined 3.5 percent in the second quarter, driven primarily by lower STRs.
Second Quarter Brand STR Highlights
In the Premium Light portfolio, Coors Light volumes were unchanged and MGD 64 was down low-single digits, while Miller Lite fell by low single digits and cut its decline rate by more than half since the last quarter.
MillerCoors Craft and Import portfolio grew double-digits in the quarter, driven by double-digit-growth of Blue Moon, Leinenkugel’s and Peroni Nastro Azzurro. The Premium Regular and smaller domestic Above Premium portfolios experienced double-digit declines.
The Below Premium portfolio was down low-single digits due to Miller High Life which declined low-single digits and Milwaukee’s Best which decreased at a high-single-digit rate. Keystone Light grew at a low-single-digit rate partially offsetting the declines in the Below Premium Portfolio.
Second Quarter Financial Highlights
MillerCoors total net revenue declined 0.1 percent to $2.134 billion versus second quarter 2009. Excluding contract brewing and company-owned distributor sales, domestic net revenue decreased 0.8 percent to $1.980 billion, with NRPB up 2.8 percent, driven by firm net pricing and slightly favorable sales mix. Third-party contract brewing volumes were up 3.0 percent.
Costs of goods sold per barrel increased 1.6 percent, reflecting a significant trend improvement versus the first quarter. This increase was driven by higher freight rates, product mix and increases in promotional packaging, which were largely offset by the continued delivery of synergies and cost savings.
Marketing, general and administrative costs decreased by 9.3 percent primarily due to synergies and lower marketing spending.
Depreciation and amortization expenses for MillerCoors in the second quarter were $71 million, and additions to tangible and intangible assets totaled $58 million.
During the second quarter, special items reflect a benefit of $1.5 million driven largely by a reduction in estimates for integration costs as a result of the formation of MillerCoors.
Synergies and Cost Savings
MillerCoors remains on track to deliver $750 million in total synergies and other cost savings by the end of 2012. In the second quarter, MillerCoors delivered total cost reductions of $72 million comprising $63.8 million in synergies and $8.6 million in additional cost savings. These cost reductions were primarily realized from agency fees, media, regional tactical spending, inbound and outbound freight; and packaging and brewing materials.
Total synergy and other cost savings since July 1, 2008, now stand at $481 million, made up of $50 million in Resources for Growth (RFG) and Unicorn cost initiatives, $389 million in synergies and $42 million in additional cost savings.
Overview of MillerCoors
MillerCoors brews, markets and sells the MillerCoors portfolio of brands in the U.S. and Puerto Rico. Built on a foundation of great beer brands and more than 289 years of brewing heritage, MillerCoors continues the commitment of its founders to brew the highest quality beers. MillerCoors is the second-largest beer company in America, capturing nearly 30 percent of U.S. beer sales. Led by two of the best-selling beers in the industry, MillerCoors has a broad portfolio of highly complementary brands across every major industry segment. Miller Lite is the great-tasting beer that established the American light beer category in 1975, and Coors Light is the brand that introduced consumers to Rocky Mountain cold refreshment. MillerCoors brews premium beers Coors Banquet and Miller Genuine Draft, and economy brands Miller High Life and Keystone Light. The company also imports Peroni Nastro Azzurro, Pilsner Urquell, Grolsch and Molson Canadian and offers innovative products such as Miller Chill and Sparks. MillerCoors features craft brews from the Jacob Leinenkugel Brewing Company, Blue Moon Brewing Company and the Blitz-Weinhard Brewing Company. MillerCoors operates eight major breweries in the U.S., as well as the Leinenkugel’s craft brewery in Chippewa Falls, Wisconsin, and two microbreweries, the 10th Street Brewery in Milwaukee and the Blue Moon Brewing Company at Coors Field in Denver. MillerCoors vision is to create the best beer company in America by driving profitable industry growth. MillerCoors insists on building its brands the right way through brewing quality, responsible marketing and environmental and community impact. MillerCoors is a joint venture of SABMiller plc and Molson Coors Brewing Company.
Overview of SABMiller
SABMiller plc is one of the world’s largest brewers with brewing interests and distribution agreements across six continents. The group’s wide portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller plc is also one of the world’s largest bottlers of Coca-Cola products. In the year ended March 31, 2010, the group reported $3,803 million adjusted pre-tax profit and group revenue of $26,350 million. SABMiller plc is listed on the London and Johannesburg stock exchanges. For more information on SABMiller plc, visit the company’s website: www.sabmiller.com.
Overview of Molson Coors
Molson Coors Brewing Company is one of the world’s largest brewers. It brews, markets and sells a portfolio of leading premium quality brands such as Coors Light, Molson Canadian, Molson Dry, Carling, Coors Banquet and Keystone Light in North America, Europe and Asia. For more information on Molson Coors Brewing Company, visit the company’s web site, www.molsoncoors.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the U.S. federal securities laws, and language indicating trends, such as “anticipated” and “expected”. It also includes financial information, of which, as of the date of this press release, the Companies’ independent auditors have not completed their review. Although the Companies believe that the assumptions upon which their respective financial information and their respective forward-looking statements are based are reasonable, they can give no assurance that these assumptions will prove to be correct. Important factors that could cause actual results to differ materially from the Companies’ projections and expectations are disclosed in Molson Coors’ filings with the Securities and Exchange Commission or in SABMiller’s annual report and accounts for the year ended March 31, 2010, and in other documents which are available on SABMiller’s website at www.sabmiller.com. These factors include, among others, changes in consumer preferences and product trends; price discounting by major competitors; failure to realize anticipated results from synergy initiatives; and increases in costs generally. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Neither SABMiller nor Molson Coors undertakes to update forward-looking statements relating to their respective businesses, whether as a result of new information, future events or otherwise. You should not place undue reliance on any forward-looking statement. Neither SABMiller nor Molson Coors accepts any responsibility for any financial information contained in this press release relating to the business or operations or results or financial condition of the other or their respective groups.
MillerCoors Results and Related Reconciliations
The table below reconciles net income attributable to MillerCoors, reported in accordance with US GAAP as used for inclusion within Molson Coors reported results, to MillerCoors EBITA as used for inclusion within SABMiller’s reported results in accordance with IFRS. Underlying net income and EBITA are non-GAAP measures. Management of both companies believes that underlying net income and EBITA provide shareholders with a useful basis for assessing the profit performance of MillerCoors. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similarly named non-GAAP measures whose calculations may differ from the company’s calculations.
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