Johannesburg - Global brewing giant SABMiller and
Molson Coors Brewing Company on Monday reported double-digit profit growth for
MillerCoors on a pro forma basis for the quarter ended June.
The companies said the
growth was driven by strong net revenue growth, cost management and continued synergy
delivery.
"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 US 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.
MillerCoors reported total net sales increased by 1.6% to $2.14bn in the
second quarter, while domestic net revenue per barrel increased by 3.0%. Underlying
net income, excluding special items, increased by 16.4% to $325.3m.
Some $60m has been delivered in synergies, bringing year-to-date synergy
total to $110m, the companies said. This was largely due to the network
optimisation savings realised from moving production of the Coors brands into former
Miller breweries, continued realisation of organisational savings, and savings in
marketing investment.
MillerCoors now expects to achieve $260m of cumulative synergies by the
end of calendar 2009 surpassing its original commitment of $225m. While the
timing of synergy delivery has accelerated, MillerCoors's $500m synergy goal
is unchanged, it said.
Softness in the market
The group said in a soft beer market, MillerCoors domestic sales-to-retailers
(STRs) were down 0.8% 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% 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%
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 autumn 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.
-I-Net Bridge