MillerCoors JV reports strong performance

Releasing earnings for the third quarter, the JV reported higher sales-to-retailers, pricing, revenue, as well as strong double-digit underlying income for the fiscal third quarter ended September 2008.

Total net sales increased 2.1% to $1.950 billion versus the prior period pro forma results. Excluding contract brewing, net sales were up 2.3% to $1.818 billion. Third-party contract brewing volumes decreased 3.3%.

Pricing remained strong as total company net sales per barrel increased 3%. Excluding contract brewing, net sales per barrel grew at 2.9% versus the prior year pro forma results, driven by strong pricing.

MillerCoors revenue growth outlook for the balance of the year is expected to remain strong, as the company implemented selective price increases on the majority of its beer volume in September and October this year, it said.

Net sales mix was virtually unchanged due to strong growth by the company's premium light, craft and import brands, largely offset by cycling significant Miller Chill launch ramp-up volumes in the prior year.

Marketing, general and administrative expenses decreased 9.1%, reflecting favourability due to the non-recurrence of prior year Miller Chill launch costs, which were partially offset by MGD 64 launch costs, as well as a reduction in share-based compensation expenses.

Underlying net income, excluding special items, for the quarter rose 28.2% to $191 million from the prior year pro forma result.

"As expected, MillerCoors is already driving profitable growth based on our early efforts to build a stronger and more competitive US brewer with the people, partners, brands and scale to win," said MillerCoors CEO Leo Kiely.

"Despite the challenging US economy and ongoing changes to the competitive dynamics in the US beer industry, our first quarter of combined performance demonstrates the tremendous potential of our new company," Kiely added.

MillerCoors total brand portfolio grew sales-to-retailers (STRs) by 0.7% on a comparable basis and seven of the 12 largest MillerCoors brands increased STRs, led by strong Coors Light growth.

Five brands grew share including Coors Light, Blue Moon, Miller High Life, Peroni Nastro Azzuro and Coors Banque, while Blue Moon, Peroni Nastro Azzuro, Coors Banquet, Sparks and Keystone Light achieved double-digit growth.

MGD 64 grew well ahead of expectations in the early stages of its national launch, the JV said. MillerCoors said it is aggressively working to deliver against its stated goal of achieving $500 million of cost synergies in the first three years of combined operations commencing 1 July 2008.

During the third quarter, MillerCoors reported special or exceptional items of $22.6 million related to one-time integration costs. Incurring these costs will enable MillerCoors to capture organisational synergies, as part of its stated $500 million three-year synergy savings plan.

The third quarter 2007 pro forma results include special items of $2.8 million relating to a one time charge for supply chain restructuring in the Legacy Coors organisation.

Published courtesy of