MillerCoors Delivers Four Consecutive Quarters of Double-Digit
Underlying Profit Growth Since Beginning Combined Operations July
2008 LONDON and DENVER, Aug. 3 /PRNewswire-FirstCall/ -- Driven by
strong net revenue growth, cost management and continued synergy
delivery, SABMiller plc (SAB.L) and Molson Coors Brewing Company
(NYSE: TAP; TSX) today reported double-digit profit growth for
MillerCoors on a pro forma basis for the quarter ended June 30,
2009. "Since combining operations last July, we have achieved
double-digit growth in underlying earnings for four consecutive
quarters," said MillerCoors CEO Leo Kiely. "These results show
MillerCoors is connecting consumers with its new brand portfolio
and effectively driving synergies to become stronger and more
competitive in the U.S. beer industry." "We have grown five of our
six national focus brands in the past year. This demonstrates the
power of our portfolio to drive profitable growth in this
challenging economic environment," added Kiely. Key operating
results for the second quarter are compared to the prior year on a
pro forma basis(1) 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.) -- Six national focus brands(2) increased
sales-to-retailers by 1.3%, led by Coors Light and MGD 64 --
Underlying net income, excluding special items, increased by 16.4%
to $325.3 million -- Total net sales increased by 1.6% to $2.14
billion -- Domestic net revenue per barrel increased by 3.0% -- $60
million delivered in synergies, bringing year-to-date synergy total
to $110 million In a soft beer market, MillerCoors domestic
sales-to-retailers (STRs) were down 0.8 percent versus the prior
year pro forma quarter due to a decline in Miller Lite STRs and
softness in above premium brands, mostly offset by positive results
in five of the six national focus brands. Domestic
sales-to-wholesalers (STWs) declined 1.1 percent driven by lower
STRs and a slight reduction in distributor inventories. Pricing
remained strong in the second quarter as domestic net sales per
barrel, excluding contract brewing and company-owned distributor
sales, increased by 3.0 percent based on 2008 price increases.
Overall, premium light brand volumes (Miller Lite, Coors Light, MGD
64) were down slightly as current economic challenges continue to
result in trade-down in the off-premise channel and ongoing
softness in the on-premise channel. Coors Light was up low-single
digits versus prior year driven in part by distribution gains.
Miller Lite STRs were down mid-single digits due in part to the
reduction of price promotions, trade-down from the
premium-and-above categories and weakness in the on-premise
channel. MGD 64 continued to accelerate since its national launch
in fall 2008. The MGD franchise has remained in growth after its
positive performance for the first time in over a decade during the
first quarter. The craft and import portfolio grew slightly during
the quarter, driven by Blue Moon and Leinenkugel's. Peroni Nastro
Azzurro was virtually unchanged in a challenged import market. The
domestic above-premium portfolio, which includes Miller Chill,
Sparks and Killian's Irish Red experienced a double-digit decline.
Coors Banquet continued to generate good growth, but the premium
regular portfolio, which includes Miller Genuine Draft, was down
high-single digits. The below-premium portfolio was up low-single
digits as double-digit growth by Keystone Light and
low-single-digit growth by Miller High Life more than offset the
mid-single digit decline by Milwaukee's Best. SECOND QUARTER
FINANCIAL HIGHLIGHTS (All amounts are in U.S. dollars and
calculated in accordance with U.S. GAAP, unless otherwise
indicated.) -- Underlying net income attributable to MillerCoors,
excluding special items, increased 16.4% to $325.3 million versus
the prior pro forma quarter -- Total net sales increased by 1.6% to
2.14 billion -- Domestic net revenue per barrel increased by 3.0%,
driven by firm pricing and reduced discounts, offset by consumer
trade-down between industry segments -- Cost of goods sold (COGS)
per barrel increased by 5.1% -- Marketing, general and
administrative costs decreased by 10.8% driven primarily by
synergies and other cost savings MillerCoors total net sales
increased by 1.6 percent to $2.14 billion versus the prior pro
forma quarter. Excluding contract brewing and company-owned
distributor sales, net sales increased 1.7 percent to $2.00
billion. Third-party contract brewing volumes declined 6.5 percent,
though profits were in line with the prior-year comparable quarter.
Though MillerCoors continues to realize supply chain related
synergies and deliver savings from its cost leadership programs,
Cost of Goods Sold per barrel increased by 5.1 percent due to
significant prior year hops sales, as well as increased brewing and
packaging material costs this year, primarily glass, aluminum and
barley. For the quarter, marketing, general and administrative
costs decreased by 10.8 percent, driven primarily by synergies and
other cost savings. For the quarter, underlying net income
attributable to MillerCoors (excluding special items) increased by
16.4 percent to $325.3 million versus the prior-year pro forma
quarter. Depreciation and amortization expenses for MillerCoors in
the second quarter was approximately $72 million, and additions to
tangible and intangible assets totaled $120 million. INTEGRATION
AND COST SYNERGIES MillerCoors achieved $60 million in synergies in
the second quarter, largely due to the network optimization savings
realized from moving production of the Coors brands into former
Miller breweries, continued realization of organizational savings,
and savings in marketing investment. Year-to-date, MillerCoors has
delivered $110 million in synergies, and MillerCoors now expects to
achieve $260 million of cumulative synergies by the end of calendar
2009 surpassing its original commitment of $225 million. While the
timing of synergy delivery has accelerated, MillerCoors $500
million synergy goal is unchanged. During the second quarter of
2009, MillerCoors reported special items totaling $20.4 million due
to a charge for pension curtailment and integration expenses.
During the key summer selling season, MillerCoors remains focused
on driving the great taste platform of Miller Lite, while
accelerating Coors Light growth with new Rocky Mountain cold
refreshment messaging and cold activated packaging. MillerCoors is
also working to add new legal-age drinkers to the premium light
category by driving repeat purchases on MGD 64. As we continue to
see shifts in both segments and channels, we will be leveraging our
full brand portfolio to meet changing consumer and customer needs.
Finally, MillerCoors is committed to driving sustainable net
revenue growth. Footnotes: (1) MillerCoors pro forma figures are
based on results for Miller and Coors reported under either
International Financial Reporting Standards (IFRS) for the fiscal
quarter ended June 2008, or U.S. GAAP for the fiscal quarter ended
June 2008. Adjustments have been made to reflect comparative data
including amortization of definite-life intangible assets and the
exclusion of significant one-time items. (2) MillerCoors six
national focus brands are Coors Light, Miller Lite, MGD 64, Blue
Moon, Miller High Life and Keystone Light. Overview of MillerCoors
MillerCoors produces, 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 288 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, WI and two
microbreweries, the 10th Street Brewery in Milwaukee and the Blue
Moon Brewing Company at Coors Field in Denver. MillerCoors' vision
is to become 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 Grolsch, Miller Genuine Draft, Peroni
Nastro Azzurro and Pilsner Urquell, as well as market-leading local
brands such as Aguila, Castle, Miller Lite, Snow and Tyskie.
SABMiller plc is also one of the largest bottlers of Coca-Cola
products in the world. In the year ended March 31, 2009, the group
reported $3,405 million adjusted pre-tax profit and group revenue
of $25,302 million. SABMiller plc is listed on the London and
Johannesburg stock exchanges. For more information on SABMiller
plc, visit the company's website: http://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,
http://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, 2009, and in other documents which are
available on SABMiller's website at http://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. 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. 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. Prior year results are presented on a pro
forma basis. Adjustments have been made to reflect comparative data
including amortization of definite life intangible assets and the
exclusion of significant one-time items. MillerCoors Reconciliation
of US GAAP Net Income to Underlying Net Income (non-GAAP measure)
and to EBITA, calculated under IFRS, noting that 2008 numbers are
Pro Forma. MillerCoors Three Months Ended Six Months Ended
------------------ ---------------- (In millions of $US) June 30,
June 30, June 30, June 30, 2009 2008 2009 2008 -------- --------
-------- -------- US -GAAP: Net Income 304.9 174.6 510.9 311.2
-------------------- Plus: Special items(1) 20.4 104.8 30.8 116.1
Non - GAAP Underlying Net Income 325.3 279.4 541.7 427.3
--------------------- Plus: Adjustments to arrive at IFRS
Underlying EBITA(2) 42.6 45.9 61.3 51.6 IFRS: MillerCoors
underlying earnings before interest, taxes and amortization before
exceptional items (EBITA(3)) 367.9 325.3 603.0 478.9
---------------------------- Percent change vs. prior year
MillerCoors pro-forma underlying EBITA(3) 13.1% 25.9% (1) Current
year special items include one-time integration charges related to
the MillerCoors Joint Venture, and a charge for pension
curtailment. Prior year special items include one-time integration
charges, asset impairment charges, and a loss on sale of a company
owned distributorship. (2) US - 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. (3) EBITA - Earnings
Before Interest, Taxes, and Amortization, excluding exceptional
items. These financial results are not necessarily indicative of
the results for Molson Coors Brewing Company or SABMiller plc for
the comparable periods. This announcement is for information only
and does not constitute an offer or an invitation to acquire or
dispose of any securities or investment advice or an inducement to
enter into investment activity. This announcement does not
constitute an offer to sell or issue or the solicitation of an
offer to buy or acquire the securities of SABMiller or Molson Coors
(the "Companies") in any jurisdiction. The distribution of this
announcement may be restricted by law. Persons into whose
possession this announcement comes are required by the Companies to
inform themselves about and to observe any such restrictions.
MILLERCOORS LLC RESULTS OF OPERATIONS (VOLUMES IN THOUSANDS,
DOLLARS IN MILLIONS) (UNAUDITED) Three Months Ended Six Months
Ended ------------------ ---------------- June 30, June 30, June
30, June 30, 2009 2008 2009 2008 -------- -------- --------
-------- Actual Pro Actual Pro Forma Forma -------- --------
-------- -------- Volume in barrels 19,547 19,878 35,246 35,891
====== ====== ====== ====== Sales 2,499.4 2,469.7 4,505.1 4,416.8
Excise Taxes (362.7) (365.7) (652.5) (660.4) ------ ------ ------
------ Net Sales 2,136.7 2,104.0 3,852.6 3,756.4 Cost of Goods Sold
(1,302.3) (1,259.8) (2,352.2) (2,276.8) Gross profit 834.4 844.2
1,500.4 1,479.6 Marketing, General and Administrative Expenses
(500.6) (561.2) (942.4) (1,047.1) Special Items (net) (20.4)
(104.8) (30.8) (116.1) Operating Income 313.4 178.2 527.2 316.4
Other Income (Expense), net (0.2) 2.2 (0.7) 4.8 ---- --- ---- ---
Income before Income Taxes and Minority Interests 313.2 180.4 526.5
321.2 Income Tax Expense (2.5) - (4.6) - ---- --- ---- --- Net
Income 310.7 180.4 521.9 321.2 Net income attributable to
Non-controlling interest (5.8) (5.8) (11.0) (10.0) ---- ---- -----
----- Net Income Attributable to MillerCoors LLC 304.9 174.6 510.9
311.2 ===== ===== ===== ===== DATASOURCE: Molson Coors Brewing
Company; SABMiller plc CONTACT: SABMiller plc, +44 20 7659 0100,
+1-414-931-2000, or Media Relations, Nigel Fairbrass, mobile, +44
7799 894 265, or Investor Relations, Gary Leibowitz, mobile, +44
7717 428 540, both of SABMiller plc; or Media Relations, Colin
Wheeler, +1-303-927-2443, or Investor Relations, Dave Dunnewald,
+1-303-927-2334, or Leah Ramsey, +1-303-927-2397, all of Molson
Coors Brewing Company. Web Site: http://www.sabmiller.com/
http://www.molsoncoors.com/
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