MillerCoors Delivers 32.5% Growth In Underlying Net Income in Q4

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.

Feb 17 2012 --- SABMiller plc and Molson Coors Brewing Company 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."

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.
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.