Molson Coors Q4 profit up 42%, STRs down in U.S.


Press Release:

(Denver, CO) – Molson Coors Brewing Company (NYSE: TAP; TSX) today reported 12.2 percent higher net sales and a 42.4 percent increase in underlying after-tax income for the fourth quarter 2011, driven by positive pricing, the benefit of cost reduction initiatives and an additional week in the fourth quarter of fiscal 2011.

Underlying earnings per share from continuing operations increased 47 percent to $0.97 per diluted share. Net income from continuing operations attributable to MCBC (a U.S. GAAP earnings measure) increased 54.9 percent.

Full-year income from continuing operations increased 0.9 percent to $674.0 million, while 2011 underlying after-tax income increased 5.2 percent to $701.5 million, or $3.76 per diluted share, due to positive pricing, cost reduction initiatives, foreign currency movements, and the additional week in fiscal 2011.

Molson Coors president and chief executive officer Peter Swinburn said, “The fourth quarter for Molson Coors was a positive finish to a challenging year, with underlying after-tax income up more than 42 percent, earnings per share up 47 percent, and net sales growth of 12 percent. The fourth quarter benefited from solid pricing, an additional week in our fiscal 2011 calendar, and cycling comparatively weak quarterly results the year before. For the full year, net sales increased 8 percent, and underlying earnings per share grew nearly 6 percent, driven by positive pricing, cost reduction initiatives, and favorable foreign currency movements, and an additional trading week.

“Despite some challenging market conditions, our focus continues to be on growing our business. Rather than waiting for the market to come to us, we’re building on the three pillars of our growth strategy, which are:

1. To grow profitably in our core businesses through brands and innovation;
2. To grow in new and emerging markets; and
3. When it meets our strict shareholder return criteria, to grow through M&A.

Our primary focus remains on the first of these pillars as we continue to invest in our key brands and fill our innovation pipeline in our core markets. We will increase our investment behind our brands to drive top-line growth and take advantage of changing consumer tastes and new market segments as they emerge. Our approach to global organic growth is based upon disciplined market development, strong strategic partnerships and sound investment in our brands. These growth strategies, paired with disciplined cash use and cost management, will drive profit, cash flow, and long-term value for our shareholders.”

U.S. Segment Highlights:

Molson Coors underlying U.S. segment pretax income increased 27.2 percent to $85.5 million in the quarter.

MillerCoors Operating and Financial Highlights:

MillerCoors underlying net income for the quarter, excluding special items, increased 32.5 percent to $194.0 million, driven by higher pricing and results of cost savings initiatives, which more than offset the impact of lower volume and higher input inflation.

MillerCoors domestic sales-to-retailers (STRs) declined 3.3 percent on a trading-day adjusted basis. Domestic sales-to-wholesalers (STWs) declined 1.6 percent, with the variance to STRs driven by the quarterly timing of shipments last year.

Domestic net revenue per hectoliter, which excludes contract brewing and company-owned-distributor sales, grew 2.9 percent primarily due to front-line pricing. Total company net revenue per hectoliter, including contract brewing and company-owned distributor sales, increased by 2.3 percent for the quarter. Third-party contract brewing volumes were up by 11.2 percent.

COGS per hectoliter increased 0.9 percent in the quarter driven by higher freight, packaging innovations, brand mix and commodity inflation. Increases in these areas were partially offset by continued cost savings.

MG&A costs decreased 3.7 percent for the quarter to $455.1 million.

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.


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