SABMiller PLC SAB MillerCoors Third Quarter Earnings

  SABMiller PLC (SAB) - MillerCoors Third Quarter Earnings

RNS Number : 5299Q
SABMiller PLC
07 November 2012




             MillerCoors delivers profit growth in THIRD quarter

Strong Pricing, Favorable Brand Mix and Cost Management Drive Positive Results



November 7, 2012 (London and Denver) - SABMiller plc (LN:SAB; OTC:SABMRY) and
Molson Coors Brewing Company (NYSE: TAP; TSX: TPX) reported that MillerCoors
third quarter underlying net income increased 13.5 percent to $325.6 million
versus prior year driven by positive pricing, favorable brand mix and
continued strong cost management. Coors Light continued to grow volume and
market share, and Tenth and Blake Beer Company continued to grow ahead of the
overall craft segment.



"This quarter we delivered significant profit growth and improved our
year-to-date share trend," said MillerCoors Chief Executive Officer Tom Long.
"Strong investment, clear positioning and packaging innovation for Coors Light
have helped drive nearly eight consecutive years of growth for our largest
brand. Tenth and Blake demonstrated the power of its portfolio, marked by the
continued growth of Blue Moon Belgian White and Leinenkugel's Summer Shandy.
We have a pipeline of innovation to drive our largest brands, and we're
launching exciting above premium products nationally in early 2013. Strong
cost management remains a priority, and we are committed to our net revenue
strategy and focus on positive brand mix to drive value."



Third Quarter 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 (STRs) results are presented on a
trading-day-adjusted basis, as the third quarter of 2012 had one fewer trading
day compared with the same quarter in the prior year.

o Underlying net income (a non-GAAP measure) increased 13.5 percent to $325.6
million.

o Total net sales increased 1.5 percent to $1.994 billion.

o Domestic net revenue per barrel, excluding contract brewing and
company-owned distributor sales, increased 3.6 percent.

o Total cost of goods sold (COGS) per barrel increased 0.5 percent.



MillerCoors domestic STRs declined 2.4 percent. Domestic sales-to-wholesalers
(STWs) decreased 2.6 percent. 



Brand Highlights for the Third Quarter

MillerCoors Premium Light STRs declined low-single digits in the third quarter
versus prior year. Coors Light continued its momentum growing low-single
digits for the quarter and outpacing the total premium light segment. The
brand will benefit from increased fourth quarter marketing investment and
visibility in national advertising. Miller Lite declined mid-single digits,
representing a slight decline in performance versus the first half of the
year. Sales of 12- and 16- ounce Miller Lite punch-top cans increased
low-single digits, marking the first time that the Miller Lite can business
has been positive since the formation of MillerCoors. Miller Lite will also
invest heavily to seed the "It's Miller Time" campaign for the remainder of
the year, specifically around fall football programming. Miller64 STRs were
down mid-single digits in the quarter and volume trends have improved
significantly and sequentially since its re-positioning in the first quarter
of 2012.



Tenth and Blake grew the MillerCoors Craft and Import portfolio by double
digits in the quarter and outperformed the overall craft segment. This growth
was driven primarily by Leinenkugel's Summer Shandy and Blue Moon Belgian
White. In the quarter, Leinenkugel's Summer Shandy nearly doubled in volume
versus the prior year. Blue Moon grew low double digits, attributable to
marketing support around the Blue Moon lunar event in August 2012. Peroni
Nastro Azzurro once again delivered strong results in the quarter, growing
high-single digits.



The Economy portfolio declined mid-single digits as the company narrowed the
price gaps between economy and premium beer. Miller High Life continued to
build brand awareness with its "Welcome Veterans Back to the High Life"
program. Keystone Light continued to drive its "Always Smooth" positioning
primarily through digital engagement and localized marketing efforts.



The Premium Regular portfolio was down high-single digits with a double-digit
decline by Miller Genuine Draft partly offset by continued growth of Coors
Banquet, which was up low-single digits.



Financial Highlights for the Third Quarter

Domestic net revenue per barrel grew 3.6 percent as a result of strong net
pricing and an acceleration of favorable brand mix, driven by Tenth and Blake
growth and the Economy portfolio decline.



Total company net revenue per barrel, including contract brewing and
company-owned distributor sales, increased 3.0 percent. Third-party contract
brewing volumes were up 8.7 percent.



Total COGS per barrel increased 0.5 percent driven by packaging innovation and
commodity inflation, largely offset by strong cost savings.



Marketing, general and administrative costs increased 0.4 percent driven by
increased marketing investments, partially offset by timing of general and
administrative expenses.



In the third quarter, $29 million of cost savings were achieved, primarily
related to procurement savings and brewery efficiencies.



Depreciation and amortization expenses for MillerCoors in the third quarter
were $71.0 million, and additions to tangible and intangible assets totaled
$58.2 million.



An $18.7 million write-off of assets related to the Home Draft package 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 releaseincludes "forward-looking statements" within the meaning of
theU.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
theirrespective 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.


                                   Contacts

For further information, please contact:

SABMiller 

Tel: +44 20 7659 0100 / 414 931 2000

Richard  Farnsworth  Media  Relations,  SABMiller 
Mob: +44 207 659 0188

Gary Leibowitz Investor Relations, SABMiller
Mob: +44 771 742 8540



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 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       Nine Months Ended 
(In millions of       Sept 30,                   Sept 30,                 
$US)                    2012     Sept 30, 2011     2012     Sept 30, 2011
                                                                          
U.S. GAAP: Net         $       $       $       $
Income Attributable       306.9          176.4     1,020.5          809.8 
to MillerCoors
Plus:
Special/Exceptional             
Items¹                     18.7          110.9        16.4          113.4
Tax effect of the
adjustments to
arrive at                                                                 
underlying net                                 
income^2                  -          (0.4)       -          (0.4)
                                                                          
Non-GAAP Underlying     $                      $                
Net Income                325.6  $ 286.9     1,036.9  $ 922.8
Plus: Adjustments
to IFRS Underlying                                                        
EBITA^3                    15.8           29.1        95.4          100.6
                                                                          
IFRS: MillerCoors       $  $ 316.0        $   $ 1,023.4
underlying earnings       341.4                    1,132.3
before interest,
taxes and                                                                 
amortization before
exceptional items
(EBITA^4)
                                                                          
Percent change             8.0%                      10.6%
versus prior year
MillerCoors                                                               
underlying EBITA^4


¹ Current year Special/Exceptional items include a pension curtailment
gain and the write-off of assets related to the Home Draft package. 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 for       
our workers 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, 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                 Nine Months Ended
                    Sept 30,          Sept 30,

                      2012              2011         Sept 30, 2012    Sept 30, 2011
Volume in                                       
Barrels                   16,915     17,167           50,197   50,321
Sales             $ 2,306.8     $ 2,285.2   $ 6,908.6   $ 6,733.6
                                              
Excise Taxes             (313.3)           (320.3)          (931.3)          (937.3)
                                                  
Net Sales                1,993.5           1,964.9          5,977.3          5,796.3
Cost of Goods                                             
Sold                   (1,201.1)         (1,213.3)        (3,582.9)        (3,545.1)

                                            
Gross Profit               792.4             751.6          2,394.4          2,251.2


Marketing,
General and
Administrative                                      
Expenses                 (463.2)           (461.5)        (1,344.1)        (1,313.5)
Special Items,                                
net                       (18.7)           (110.9)           (16.4)          (113.4)
Operating                             
Income                     310.5             179.2          1,033.9            824.3


Other Income          
(Expense), net               1.1               2.4              3.5              0.5


Income Before
Income Taxes
and
Non-controlling                       
Interests                  311.6             181.6          1,037.4            824.8
                              
Income Taxes               (1.3)             (1.6)            (3.8)            (6.0)
                                      
 Net Income              310.3             180.0          1,033.6            818.8


Net Income
Attributable to
Non-controlling               
Interests                  (3.4)             (3.6)           (13.1)            (9.0)


Net Income
Attributable to
MillerCoors LLC  $ 306.9    $ 176.4   $ 1,020.5  $ 809.8







                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


MSCZMMGMGNMGZZM -0- Nov/07/2012 12:00 GMT
 
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