Favorable Mix and Strong Pricing Drove Positive Full Year Results,
Despite Q4 Profit Decline
LONDON & DENVER--(BUSINESS WIRE)--Feb. 14, 2013--
SABMiller plc (LN:SAB; OTC:SABMRY) and Molson Coors Brewing Company
(NYSE: TAP; TSX: TPX) reported that MillerCoors underlying net income
grew 9.5 percent for the full year 2012 to $1.223 billion, while fourth
quarter underlying net income decreased 4.2 percent to $185.8 million
versus the same quarter in the prior year. Positive pricing and
favorable sales mix drove strong profitability for the year, while
increased marketing investment reduced fourth quarter earnings.
“We delivered strong profit growth in 2012 while making significant
marketing investments in the fourth quarter behind our brands,” said
MillerCoors Chief Executive Officer Tom Long. “Our portfolio
transformation strategy is delivering solid results. Coors Light, which
is undoubtedly the healthiest major beer brand in the market, continued
to show momentum and we led Craft share growth as Tenth and Blake
delivered very strong results with Blue Moon and Leinenkugel’s.”
Fourth Quarter and Full Year 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. Quarterly sales-to-retailers (STRs) results are
presented on a trading-day-adjusted basis, as the fourth quarter of 2012
had one more trading day compared with the same quarter in the prior
year.
-
Underlying net income (a non-GAAP measure) increased 9.5 percent to
$1.223 billion for the year and decreased 4.2 percent to $185.8
million for the fourth quarter.
-
Total net sales increased 2.8 percent to $7.761 billion for the year
and 1.7 percent to $1.784 billion for the quarter.
-
Domestic net revenue per barrel, excluding contract brewing and
company-owned distributor sales, increased 3.5 percent for the year
and 2.9 percent for the quarter.
-
Total cost of goods sold (COGS) per barrel increased 1.4 percent for
the year and 1.6 percent for the quarter.
-
Domestic STRs decreased 1.3 percent for the year and 1.1 percent for
the quarter.
-
Domestic sales-to-wholesalers (STWs) decreased 1.1 percent for the
year and 1.3 percent for the quarter.
Brand Highlights for the Fourth Quarter and Full Year
Coors Light continued its momentum growing low-single digits for the
quarter, outpacing the total category and the Premium Light segment
which lost share in a flat industry. The brand enjoyed its eighth
consecutive year of volume growth and MillerCoors will enter 2013 with a
continued focus on multicultural outreach for Coors Light, including
sponsorship of The Mexican Soccer League, Liga MX and the return of
“Search for the Coldest” in partnership with Ice Cube. Building on the
success of its packaging innovations, MillerCoors will launch the new
Coors Light “World’s Most Refreshing Can” in the second quarter of 2013.
Miller Lite declined mid-single digits for the quarter and low-single
digits for the full year. We will continue to invest in the “It’s Miller
Time” campaign and will launch a new iconic bottle for the on-premise in
mid-2013, following the positive volume impact of the Miller Lite punch
top can in 2012. Miller64 STRs were down low-single digits in the
quarter and high-single digits for the full year. Volume trends on the
brand have improved significantly since it’s re-positioning in the first
quarter of 2012. MillerCoors Premium Light STRs declined low-single
digits in the fourth quarter and for the full year.
Tenth and Blake Beer Company grew the MillerCoors Craft and Import
portfolio by double digits in the quarter and the full year, driven by
Blue Moon Brewing Company and Jacob Leinenkugel Brewing Company. Due
primarily to the superior performance of Summer Shandy, Leinenkugel’s
grew double digits for the year and other offerings, such as Snowdrift
Vanilla Porter were drivers of Leinenkugel’s double-digit growth for the
quarter. Blue Moon grew double digits for the year and high-single
digits for the quarter. Peroni Nastro Azzurro once again delivered
strong results, growing mid-single digits in the quarter and high-single
digits for the year.
The MillerCoors Economy portfolio showed improvement for the fourth
quarter over the prior two quarters in 2012, declining mid-single digits
for the year and low-single digits for the quarter. Miller High Life
continued its veterans program and will kick off a partnership with
Harley Davidson in mid-2013. Keystone Light continued to drive its
“Always Smooth” positioning primarily through digital engagement and
localized marketing efforts. The brand will launch new packaging in
early 2013.
The Premium Regular portfolio showed its best performance since 2008,
down low-single digits for the quarter and down mid-single digits for
the year. Miller Genuine Draft’s double digit decline was partly offset
by continued growth of Coors Banquet, the only national Premium Regular
brand in the industry to gain market share in the quarter, versus prior
year. Coors Banquet grew high-single digits for the quarter and
mid-single digits for the year, delivering its sixth straight year of
volume growth.
Financial Highlights for the Fourth Quarter and Full Year
Domestic net revenue per barrel grew 3.5 percent for the year and 2.9
percent for the quarter as a result of strong net pricing and favorable
mix.
Total company net revenue per barrel, including contract brewing and
company-owned distributor sales, increased 3.3 percent for the full year
and 2.9 percent for the quarter. Third-party contract brewing volumes
were up 5.2 percent for the year and down 0.4 percent for the quarter.
Total COGS per barrel increased 1.6 percent for the quarter, driven by
commodity inflation and packaging innovation, partially offset by strong
cost savings.
Marketing, general and administrative costs increased 3.4 percent for
the year and 6.4 percent for the quarter, driven primarily by increased
marketing media investments in support of our premium light portfolio.
In the fourth quarter, $25 million of cost savings were achieved,
primarily related to procurement savings and brewery efficiencies.
Depreciation and amortization expenses for MillerCoors in the fourth
quarter were $70.3 million, and additions to tangible and intangible
assets totaled $178.5 million.
A $15.4 million write-off of Information Systems assets related to the
Business Transformation project was recorded as a special item in the
quarter.
Overview of MillerCoors
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 the United States, capturing nearly 30 percent of beer
sales in the U.S. and Puerto Rico. Led by two of the best-selling beers
in the industry, MillerCoors has a broad portfolio of brands across
every major industry segment. The portfolio is led by the company’s
premium light brands: Coors Light, Miller Lite and Miller64. Coors
Light, the World’s Most Refreshing Beer, offers consumers refreshment as
cold as the Rockies. Miller Lite established the American light beer
category in 1975, offering beer drinkers a light beer that tastes like
beer should. Miller64 is 64 calories of crisp, light taste that
complements a balanced lifestyle. MillerCoors brews premium beers Coors
Banquet and Miller Genuine Draft, and economy brands Miller High Life
and Keystone Light. Tenth and Blake Beer Company, MillerCoors craft and
import division, 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 Tenth 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 through great people changing
the way America enjoys beer. MillerCoors builds its brands the right way
through brewing quality, responsible marketing and sustainable
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 2012, the group reported EBITA of US$5,634
million and group revenue of US$31,388 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, Staropramen, 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, 2012, 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.
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 $US)
|
|
Dec 31,
2012
|
|
Dec 31,
2011
|
|
Dec 31,
2012
|
|
Dec 31,
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP: Net Income
Attributable to MillerCoors
|
|
$
|
170.4
|
|
|
$
|
194.0
|
|
$
|
1,190.9
|
|
|
$
|
1,003.8
|
|
|
Plus: Special/Exceptional Items1
|
|
|
15.4
|
|
|
|
-
|
|
|
31.8
|
|
|
|
113.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect of the adjustments to arrive at underlying net income2
|
|
-
|
|
|
|
-
|
|
-
|
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Underlying Net Income
|
|
$
|
185.8
|
|
|
$
|
194.0
|
|
$
|
1,222.7
|
|
|
$
|
1,116.8
|
|
|
Plus: Adjustments to IFRS Underlying EBITA3
|
|
|
11.9
|
|
|
|
39.6
|
|
|
107.3
|
|
|
|
140.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IFRS: MillerCoors underlying
earnings before interest, taxes and amortization before
exceptional items (EBITA4)
|
|
$
|
197.7
|
|
|
$
|
233.6
|
|
$
|
1,330.0
|
|
|
$
|
1,257.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent change versus prior year MillerCoors underlying EBITA4
|
|
|
-15.4
|
%
|
|
|
|
|
5.8
|
%
|
|
|
|
|
|
|
|
1Current year Special/Exceptional items
include a pension curtailment gain and the write-off of assets
related to the Home Draft package as well as information systems
assets. Prior year includes 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.
|
|
|
|
|
|
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 disposals, 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.
|
|
|
|
|
|
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,
2012
|
|
Dec 31,
2011
|
|
Dec 31,
2012
|
|
Dec 31,
2011
|
|
|
|
|
|
|
|
|
|
|
|
Volume in Barrels
|
|
|
14,823
|
|
|
|
15,000
|
|
|
|
65,020
|
|
|
|
65,321
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
2,058.0
|
|
|
$
|
2,029.7
|
|
|
$
|
8,966.6
|
|
|
$
|
8,763.3
|
|
|
Excise Taxes
|
|
|
(274.2
|
)
|
|
|
(275.8
|
)
|
|
|
(1,205.5
|
)
|
|
|
(1,213.1
|
)
|
|
Net Sales
|
|
|
1,783.8
|
|
|
|
1,753.9
|
|
|
|
7,761.1
|
|
|
|
7,550.2
|
|
|
Cost of Goods Sold
|
|
|
(1,106.8
|
)
|
|
|
(1,102.8
|
)
|
|
|
(4,689.7
|
)
|
|
|
(4,647.9
|
)
|
|
Gross Profit
|
|
|
677.0
|
|
|
|
651.1
|
|
|
|
3,071.4
|
|
|
|
2,902.3
|
|
|
Marketing, General and Administrative Expenses
|
|
|
(484.4
|
)
|
|
|
(455.1
|
)
|
|
|
(1,828.5
|
)
|
|
|
(1,768.6
|
)
|
|
Special Items, net
|
|
|
(15.4
|
)
|
|
|
-
|
|
|
|
(31.8
|
)
|
|
|
(113.4
|
)
|
|
Operating Income
|
|
|
177.2
|
|
|
|
196.0
|
|
|
|
1,211.1
|
|
|
|
1,020.3
|
|
|
Other Income (Expense), net
|
|
|
(3.2
|
)
|
|
|
0.7
|
|
|
|
0.3
|
|
|
|
1.2
|
|
|
Income Before Income Taxes and Non-controlling Interests
|
|
|
174.0
|
|
|
|
196.7
|
|
|
|
1,211.4
|
|
|
|
1,021.5
|
|
|
Income Taxes
|
|
|
(1.7
|
)
|
|
|
(1.5
|
)
|
|
|
(5.5
|
)
|
|
|
(7.5
|
)
|
|
Net Income
|
|
|
172.3
|
|
|
|
195.2
|
|
|
|
1,205.9
|
|
|
|
1,014.0
|
|
|
Net Income Attributable to Non-controlling Interests
|
|
|
(1.9
|
)
|
|
|
(1.2
|
)
|
|
|
(15.0
|
)
|
|
|
(10.2
|
)
|
|
Net Income Attributable to MillerCoors LLC
|
|
$
|
170.4
|
|
|
$
|
194.0
|
|
|
$
|
1,190.9
|
|
|
$
|
1,003.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: MillerCoors
SABMiller
Media Relations
Richard Farnsworth, Mob: +44
207 659 0188
or
Investor Relations
Gary Leibowitz, Mob:
+44 771 742 8540
or
Tel: +44 20 7659 0100 / 414 931 2000
or
Molson
Coors
Media Relations
Colin Wheeler, 303-927-2443
or
Investor
Relations
Dave Dunnewald, 303-927-2334