SABMiller and Molson Coors Report Higher MillerCoors Second Quarter Earnings

Pricing remained strong in the second quarter as domestic net sales per barrel, excluding contract brewing and company-owned distributor sales, increased by 3.0 percent based on 2008 price increases.

4 Aug 2009 Driven by strong net revenue growth, cost management and continued synergy delivery, SABMiller plc and Molson Coors Brewing Company have reported double-digit profit growth for MillerCoors on a pro forma basis for the quarter ended June 30, 2009.

"Since combining operations last July, we have achieved double-digit growth in underlying earnings for four consecutive quarters," said MillerCoors CEO Leo Kiely. "These results show MillerCoors is connecting consumers with its new brand portfolio and effectively driving synergies to become stronger and more competitive in the U.S. beer industry."

"We have grown five of our six national focus brands in the past year. This demonstrates the power of our portfolio to drive profitable growth in this challenging economic environment," added Kiely.

Key operating results for the second quarter are compared to the prior year on a pro forma basis and include MillerCoors operations in the U.S. and Puerto Rico.

In a soft beer market, MillerCoors domestic sales-to-retailers (STRs) were down 0.8 percent versus the prior year pro forma quarter due to a decline in Miller Lite STRs and softness in above premium brands, mostly offset by positive results in five of the six national focus brands. Domestic sales-to-wholesalers (STWs) declined 1.1 percent driven by lower STRs and a slight reduction in distributor inventories.

Pricing remained strong in the second quarter as domestic net sales per barrel, excluding contract brewing and company-owned distributor sales, increased by 3.0 percent based on 2008 price increases.

Overall, premium light brand volumes (Miller Lite, Coors Light, MGD 64) were down slightly as current economic challenges continue to result in trade-down in the off-premise channel and ongoing softness in the on-premise channel. Coors Light was up low-single digits versus prior year driven in part by distribution gains. Miller Lite STRs were down mid-single digits due in part to the reduction of price promotions, trade-down from the premium-and-above categories and weakness in the on-premise channel.

MGD 64 continued to accelerate since its national launch in fall 2008. The MGD franchise has remained in growth after its positive performance for the first time in over a decade during the first quarter.

The craft and import portfolio grew slightly during the quarter, driven by Blue Moon and Leinenkugel's. Peroni Nastro Azzurro was virtually unchanged in a challenged import market. The domestic above-premium portfolio, which includes Miller Chill, Sparks and Killian's Irish Red experienced a double-digit decline.

Coors Banquet continued to generate good growth, but the premium regular portfolio, which includes Miller Genuine Draft, was down high-single digits. The below-premium portfolio was up low-single digits as double-digit growth by Keystone Light and low-single-digit growth by Miller High Life more than offset the mid-single digit decline by Milwaukee's Best.