| Thu 16 Feb 2012, 14:00 | | SAB - SABMiller plc - Millercoors delivers 32.5% growth in underlying net |
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SAB
SOSAB
SAB - SABMiller plc - Millercoors delivers 32.5% growth in underlying net
income for the fourth quarter
JSEALPHA CODE: SAB
ISIN CODE: SOSAB
ISIN CODE: GB0004835483
MILLERCOORS DELIVERS 32.5% GROWTH IN UNDERLYING NET INCOME FOR THE FOURTH
QUARTER
Brewer Surpasses Costs and Synergy Goal, Increases Full Year Underlying
Net Income by 2.7%
February 16, 2012 (London and Denver) - SABMiller plc (SAB.L) and Molson
Coors Brewing Company (NYSE: TAP; TSX) reported that MillerCoors fourth
quarter underlying net income increased 32.5 percent to $194.0 million versus
the fourth quarter 2010. Despite a weak economy and low consumer confidence,
the brewer reported a 2.7 percent increase in underlying net income for 2011.
"By raising the bar on execution, increasing net revenue per barrel and over-
delivering on our synergy and cost savings goal, we grew underlying profit in
a tough year," said MillerCoors Chief Executive Officer Tom Long. "In 2011,
we grew Coors Light to become the nation`s second biggest beer brand,
surpassing Budweiser for the first time ever. We also saw strong growth in
our craft and import brands like Blue Moon, Leinenkugel`s and Peroni Nastro
Azzurro and we improved our brand mix. Our investment with retail chains is
paying off as our distributors execute against new category management
approaches with focus and discipline."
Fourth Quarter and Year End Highlights
Unless otherwise indicated, all amounts are in U.S. dollars and calculated in
accordance with U.S. GAAP. All percentages are versus the prior-year
comparable period and include MillerCoors operations in the U.S. and Puerto
Rico. All sales to retail results are presented on a trading-day-adjusted
basis, as the fourth quarter and full year 2011 had one fewer trading day
than the prior year periods.
- Underlying net income (a non-GAAP measure) increased 32.5 percent to
$194.0 million for the quarter and increased 2.7 percent to $1.117
billion for the year.
- Total net sales increased 2.0 percent to $1.754 billion for the quarter,
but declined 0.3 percent to $7.550 billion for the year.
- Domestic net revenue per barrel, excluding contract brewing and company-
owned distributor sales, increased 2.9 percent for the quarter and 2.4
percent for the year.
- MillerCoors domestic sales-to-retailers (STRs) were down 3.3 percent for
the quarter and 2.3 percent for the year.
- Domestic sales-to-wholesalers (STWs) were down 1.6 percent for the
quarter and 3.0 percent for the year.
- Total cost of goods sold (COGS) per barrel increased 0.9 percent for the
quarter and 2.0 percent for the year.
Brand Highlights for the Fourth Quarter
Premium Light STRs were down low-single digits in the fourth quarter as Coors
Light declined low-single digits while Miller Lite declined mid-single digits
and MGD 64 declined double-digits.
Tenth and Blake Beer Company grew the MillerCoors Craft and Import portfolio
by double digits in the quarter driven by a double digit increase in Blue
Moon and strong growth of Leinenkugel`s and Peroni Nastro Azzurro. Blue Moon
Belgian White is now the nation`s largest craft brand. Peroni Nastro Azzurro
continues to deliver mid-single digit growth, primarily through the on-
premise channel.
The Below Premium portfolio declined mid-single digits, as the company
reduced price gaps between Premium and Below Premium beers.
The Premium Regular portfolio was down high-single digits with a double-digit
decline by Miller Genuine Draft offset somewhat by low-single digit growth of
Coors Banquet.
Financial Highlights for the Fourth Quarter and Full Year
For the quarter, MillerCoors total net sales increased 2.0 percent to $1.754
billion. Full year total net sales declined 0.3 percent to $7.550 billion.
Domestic net producer revenue per barrel grew 2.9 percent for the quarter and
2.4 percent for the year, primarily due to front line pricing and favorable
brand mix.
Total company net producer revenue per barrel, including contract brewing and
company-owned distributor sales, increased by 2.3 percent for the quarter and
2.6 percent for the year. Third-party contract brewing volumes were up by
11.2 percent in the quarter but declined 0.1 percent for the year.
Total COGS per barrel increased 0.9 percent for the quarter and 2.0 percent
for the year driven by higher freight costs, packaging innovations, brand mix
and commodity inflation. Increases in these areas were partially offset by
continued cost savings.
Marketing, general and administrative (MG&A) costs decreased 3.7 percent for
the quarter to $455.1 million. For the year, MG&A costs decreased 0.4 percent
to $1.769 billion for the year, primarily as a result of the successful
completion of our synergy and cost reduction programs.
Depreciation and amortization expenses for MillerCoors in the fourth quarter
were $70.7 million and additions to tangible and intangible assets totaled
$130.5 million.
There were no special charges during the fourth quarter.
Synergies and Cost Savings for the Fourth Quarter and Full Year
In the fourth quarter, $27 million of cost savings were realized, driven by
various initiatives primarily within the integrated supply chain. The three
year MillerCoors synergy initiative concluded on June 30, 2011, delivering
cumulative synergies of $546 million. To date, cumulative cost savings have
risen to $219 million, bringing the company`s combined synergies and cost
savings to $765 million, achieving the goal of $750 million in total savings
a full year earlier than planned.
###
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
Miller64 and Sparks. Tenth and Blake Beer Company, MillerCoors 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, Wisc. 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, Tyskie and Victoria Bitter. 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 audit. 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.
Contacts
For further information, please contact:
SABMiller
Tel: +44 20 7659 0100 / 414 931 2000
Richard Farnsworth Media Relations, SABMiller Mob: +44 7734 776 317
Gary Leibowitz Investor Relations, SABMiller Mob: +44 7717 428540
Molson Coors
Colin Wheeler Media Relations, Molson Coors 303 927 2443
Dave Dunnewald Investor Relations, Molson Coors 303 927 2334
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.
Three Months Ended Twelve Months
Ended
(In millions of Dec 31, Dec 31, Dec 31, Dec 31,
$US) 2011 2010 2011 2010
U.S. - GAAP: Net $ $ $ $
Income Attributable 194.0 144.2 1,003.8 1,057.0
to MillerCoors
Plus: Special -
(Exceptional) Items 2.2 113.4 30.3
Tax effect of the - -
adjustments to (0.4) (0.1)
arrive at
underlying net
income2
Non - GAAP $ $ $ $
Underlying Net 194.0 146.4 1,116.8 1,087.2
Income
Plus: Adjustments 39.6 37.3 140.2 141.1
to IFRS Underlying
EBITA3
IFRS: MillerCoors $ $ $ $
underlying earnings 233.6 183.7 1,257.0 1,228.3
before interest,
taxes and
amortization before
exceptional items
(EBITA4)
Percent change vs. 27.2% 2.3%
prior year
MillerCoors
underlying EBITA4
Current year, Special, or Exceptional items include a write-down
in the value of the Sparks brand, a charge related to the planned
assumption of a multi-employer pension plan and integration
charges related to the MillerCoors Joint Venture. Prior year
includes pension and post-retirement benefit curtailments and
integration charges related to the MillerCoors Joint Venture.
2The tax effect of the adjustments to arrive at underlying net
income attributable to MillerCoors, a non-GAAP measure, is
calculated based on the estimated tax rate applicable to the
item(s) being adjusted in the period in which they arose.
3U.S. - 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, asset disposal, share based compensation and
severance expenses between U.S. - GAAP and IFRS. Amortization
of intangible assets, interest, taxes, equity income and non-
controlling interest have been removed to arrive at
underlying EBITA.
4EBITA - Earnings Before Interest, Taxes, and Amortization,
excluding exceptional items.
MILLERCOORS LLC
RESULTS OF OPERATIONS
(VOLUMES IN THOUSANDS, DOLLARS IN MILLIONS $US)
(UNAUDITED)
U.S. - GAAP
Three Months Ended Twelve Months Ended
Dec 31, Dec 31, Dec 31, Dec 31,
2011 2010 2011 2010
Volume in
Barrels 15,000 15,051 65,321 67,175
Sales $ $ $ $
2,029.7 1,997.9 8,763.3 8,817.7
Excise Taxes
(275.8) (278.2) (1,213.1) (1,247.1)
Net Sales
1,753.9 1,719.7 7,550.2 7,570.6
Cost of Goods
Sold (1,102.8) (1,096.2) (4,647.9) (4,686.3)
Gross Profit 651.1 623.5 2,902.3 2,884.3
Marketing, (455.1) (472.5) (1,768.6) (1,775.1)
General and
Administrative
Expenses
Special Items, --
net (2.2) (113.4) (30.3)
Operating Income
196.0 148.8 1,020.3 1,078.9
Other Income 0.7 (1.1) 1.2 2.4
(Expense), net
Income Before 196.7 147.7 1,021.5 1,081.3
Income Taxes and
Non-controlling
Interests
Income Taxes
(1.5) (1.7) (7.5) (7.6)
Net Income
195.2 146.0 1,014.0 1,073.7
Net Income (1.2) (1.8) (10.2) (16.7)
Attributable to
Non-controlling
Interests
$ $ $ $
Net Income 194.0 144.2 1,003.8 1,057.0
Attributable
to MillerCoors
LLC
Date: 16/02/2012 14:00:01 Produced by the JSE SENS Department.
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