SABMiller plc (LN:SAB; OTC:SABMRY) and Molson Coors Brewing Company
(NYSE: TAP; TSX: TPX) reported that MillerCoors posted underlying profit
growth of 11.7 percent and a 4.1 percent increase in domestic net
revenue per barrel versus the same quarter in the prior year.
“Led by Redd’s, Leinenkugel’s and Blue Moon, our strategy to grow share
in the high-margin and fast-growing above premium space is driving
excellent sales mix,” said MillerCoors Chief Executive Officer Tom Long.
“The quality of our beers continues to be second to none and we are
pleased consumers and customers are responding. And even though we
continue to increase total company net revenue and total company net
income, we are not satisfied with the on-premise distribution or volume
performance of our premium light brands. Our recently announced
restructuring will reduce our fixed cost base and allow increased brand
investment moving forward, particularly on our premium lights.”
Third Quarter Highlights
Unless otherwise indicated, all amounts are in U.S. dollars and
calculated in accordance with accounting principles generally accepted
in the U.S. (U.S. GAAP). All percentages are versus the prior year
comparable period and include MillerCoors operations in the U.S. and
Puerto Rico. Quarterly sales-to-retailers (STRs) results are presented
on a trading-day-adjusted basis, as the third quarter of 2013 had one
more trading day compared with the same quarter in the prior year.
-
Total net revenue increased 2.9 percent to $2.051 billion for the
quarter.
-
Total cost of goods sold (COGS) per barrel increased 3.8 percent.
-
Underlying net income (a non-GAAP measure) increased 11.7 percent to
$363.8 million.
-
Domestic net revenue per barrel, excluding contract brewing and
company-owned distributor sales, increased 4.1 percent, representing
the best quarterly performance since first quarter, 2009.
-
Domestic STRs decreased 1.9 percent.
-
Domestic sales-to-wholesalers decreased 1.5 percent.
Brand Highlights for the Third Quarter
Coors Light continued to gain share within the premium light segment
according to Nielsen, and leveraged its “Rocky Mountain
Cold Refreshment” positioning. Volume declined low-single digits in the
quarter. Miller Lite declined mid-single digits in the quarter. The
“Don’t Mess with Miller Time” Hispanic advertising campaign, featuring
actor Danny Trejo, began in early October and is airing on
Spanish-language television and digital outlets. The brand will be
bringing back the original Miller Lite can design from January 1 – March
15, 2014 to drive new interest and trial by legal drinking age
millennials.
Tenth and Blake Beer Company grew the MillerCoors Craft and Import
portfolio by high-single digits. Leinenkugel’s Summer Shandy expanded
nationally and increased double digits. In 2013, Summer Shandy is the
single largest driver of craft volume growth, accounting for nearly 10
percent of total craft industry growth, according to Nielsen. In
addition, Leinenkugel’s Orange Shandy has made a promising start and is
outperforming initial expectations. Blue Moon Belgian White grew
mid-single digits in the quarter, continuing its run of 72 consecutive
quarters of growth. Batch 19 volumes grew 275 percent as it continued to
expand nationally.
MillerCoors new brands delivered exceptional volume and value growth in
above premium. Redd’s Apple Ale has quickly become one of the fastest
growing beer brands in the United States. Redd’s Strawberry Ale was
introduced in the third quarter and has had a strong start, gaining
incremental shelf space for the Redd’s franchise. Third Shift
Amber Lager continues to perform well and is now a top 15 craft brand by
dollar sales according to Nielsen.
Coors Banquet grew double digits fueled by the new 12-ounce “stubby”
heritage bottle modeled after the brand's post-Prohibition era
packaging. It’s making an extraordinary comeback in the American lager
category and is on track to achieve its 7th consecutive year of growth.
Miller High Life continued its military veteran program and completed a
partnership with Harley-Davidson to celebrate the 110th anniversaries of
the two iconic American brands. Miller High Life and Keystone Light will
begin national television advertising campaigns next spring.
Financial Highlights for the Third Quarter
Domestic net revenue per barrel grew 4.1 percent for the quarter as a
result of higher net pricing and favorable brand mix. Brand mix
favorability was driven largely by the success of Redd’s and
Leinenkugel’s Shandy variants.
Total company net revenue per barrel, including contract brewing and
company-owned distributor sales, increased 3.9 percent. Third-party
contract brewing volumes were up 2.8 percent.
Total COGS per barrel increased 3.8 percent, driven by commodity and
brewery inflation and higher costs associated with brand innovation.
Marketing, general and administrative costs decreased by 3.4 percent for
the quarter, driven primarily by lower pension expense, a
reduction in costs associated with the business transformation
initiative and less promotional activity, which more than offset
increased investments in support of new brand offerings.
In the third quarter, MillerCoors achieved $33 million of cost savings,
primarily related to procurement, logistics and brewery efficiencies.
Depreciation and amortization expenses in the third quarter were $71.6
million, and additions to tangible and intangible assets totaled $88.1
million.
Severance costs of $15.0 million related to a restructuring were
recorded as a special item in the quarter.
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, Coors Light and Miller Lite, MillerCoors has a
broad portfolio of highly complementary brands across every major
industry segment. The company offers a variety of leading craft and
import brands, including Blue Moon and Leinenkugel’s, through its Tenth
and Blake division. 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 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. Learn more at MillerCoors.com, at facebook.com/MillerCoors or
on Twitter through @MillerCoors.
Overview of SABMiller
SABMiller plc is one of the world’s leading brewers with more than 200
beer brands and some 70,000 employees in over 75 countries. The group’s
portfolio includes global brands such as Pilsner Urquell, Peroni Nastro
Azzurro, Miller Genuine Draft and Grolsch; as well as leading local
brands such as Aguila (Colombia), Castle (South Africa), Miller Lite
(USA), Snow (China), Victoria Bitter (Australia) and Tyskie (Poland).
SABMiller also has growing soft drinks businesses and is one of the
world’s largest bottlers of Coca-Cola products.
In the year ended 31 March 2013 the group reported group lager volumes
of 242 million hectolitres, group net producer revenue of US$26,932
million and EBITA of US$6,379 million. SABMiller plc is listed on the
London and Johannesburg stock exchanges.
On 17th October 2013 SABMiller announced new and revised reporting
metrics in which a new reporting metric ‘group net producer revenue’ and
a restatement of the calculation of EBITA, among other things, were
explained. These new and revised metrics are included for the year ended
31 March 2013.
Further information is also available on
www.sabmiller.com
www.facebook.com/sabmiller
www.twitter.com/sabmiller
www.youtube.com/sabmiller
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, Blue Moon, Staropramen, Carling,
Coors Banquet and Keystone Light in North America, Europe and Asia. For
more information regarding 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, 2013, 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 U.S. 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 as
adopted by the European Union. 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 between companies.
|
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
(In millions of $U.S.)
|
|
|
Sept 30, 2013
|
|
|
Sept 30, 2012
|
|
|
Sept 30, 2013
|
|
|
Sept 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP: Net Income
Attributable to MillerCoors
|
|
|
$ 348.8
|
|
|
$ 306.9
|
|
|
$ 1,033.4
|
|
|
$ 1,020.5
|
Plus: Special/Exceptional Items¹
|
|
|
15.0
|
|
|
18.7
|
|
|
15.0
|
|
|
16.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Underlying Net Income
|
|
|
$ 363.8
|
|
|
$ 325.6
|
|
|
$ 1,048.4
|
|
|
$ 1,036.9
|
Plus: Adjustments to IFRS Underlying EBITA-Reported2 |
|
|
33.1
|
|
|
15.8
|
|
|
63.9
|
|
|
95.4
|
Less: Restatement Adjustments to IFRS Underlying
EBITA-Restated3
|
|
|
-
|
|
|
(13.0)
|
|
|
-
|
|
|
(25.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS: MillerCoors underlying
earnings before interest, taxes and amortization excluding
exceptional items
(EBITA-Restated4)
|
|
|
$ 396.9
|
|
|
$ 328.4
|
|
|
$ 1,112.3
|
|
|
$ 1,106.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change versus prior year MillerCoors underlying
EBITA-Restated4
|
|
|
20.9%
|
|
|
|
|
|
0.5%
|
|
|
|
|
1Current year Special/Exceptional items include
severance costs related to a restructuring. Prior year includes the
write-off of assets related to the Home Draft package and a pension
curtailment gain.
|
|
2U.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, share-based compensation, severance expenses and certain
special items between U.S. GAAP and IFRS. Amortization of intangible
assets, interest, taxes and non-controlling interest have been
removed to arrive at underlying EBITA.
3With effect from April 1, 2013, SABMiller
has adopted the amended IAS 19, “Employee Benefits.” The new
accounting standard has been applied retrospectively and
SABMiller’s fiscal year ended March 31, 2013 results have been
restated accordingly.
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
|
|
|
Nine Months Ended
|
|
|
|
Sept 30, 2013
|
|
|
Sept 30, 2012
|
|
|
Sept 30, 2013
|
|
|
Sept 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume in barrels
|
|
|
16,745
|
|
|
16,915
|
|
|
48,739
|
|
|
50,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
$ 2,360.6
|
|
|
$ 2,306.8
|
|
|
$ 6,901.7
|
|
|
$ 6,908.6
|
Excise taxes
|
|
|
(309.6)
|
|
|
(313.3)
|
|
|
(903.4)
|
|
|
(931.3)
|
Net sales
|
|
|
2,051.0
|
|
|
1,993.5
|
|
|
5,998.3
|
|
|
5,977.3
|
Cost of goods sold
|
|
|
(1,234.0)
|
|
|
(1,201.1)
|
|
|
(3,592.8)
|
|
|
(3,582.9)
|
Gross profit
|
|
|
817.0
|
|
|
792.4
|
|
|
2,405.5
|
|
|
2,394.4
|
Marketing, general and administrative expenses
|
|
|
(447.5)
|
|
|
(463.2)
|
|
|
(1,343.6)
|
|
|
(1,344.1)
|
Special items, net
|
|
|
(15.0)
|
|
|
(18.7)
|
|
|
(15.0)
|
|
|
(16.4)
|
Operating income
|
|
|
354.5
|
|
|
310.5
|
|
|
1,046.9
|
|
|
1,033.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net
|
|
|
(0.5)
|
|
|
(0.4)
|
|
|
(1.4)
|
|
|
(1.1)
|
Other income (expense), net
|
|
|
0.3
|
|
|
1.5
|
|
|
1.6
|
|
|
4.6
|
Income before income taxes and non-controlling interests
|
|
|
354.3
|
|
|
311.6
|
|
|
1,047.1
|
|
|
1,037.4
|
Income taxes
|
|
|
(1.4)
|
|
|
(1.3)
|
|
|
(3.1)
|
|
|
(3.8)
|
Net income
|
|
|
352.9
|
|
|
310.3
|
|
|
1,044.0
|
|
|
1033.6
|
Net income attributable to non-controlling interests
|
|
|
(4.1)
|
|
|
(3.4)
|
|
|
(10.6)
|
|
|
(13.1)
|
Net income attributable to MillerCoors LLC
|
|
|
$ 348.8
|
|
|
$ 306.9
|
|
|
$ 1,033.4
|
|
|
$ 1,020.5
|
Copyright Business Wire 2013