Buoyed by ‘craft’ and imports, MillerCoors second quarter show signs of improvement

Despite volume headwinds which continue to affect the major breweries, SABMiller and Molson Coors Brewing Company reported double-digit underlying earnings growth for MillerCoors in the second quarter ended June 30, 2010.

Domestic sales-to-retailers declined 2.4 percent. Helped by MillerCoors premium light, craft and import brands, the second quarter showed a trend improvement from the first quarter, which was down 4.0 percent. MillerCoors Craft and Import portfolio grew double-digits in the quarter, driven by double-digit-growth of Blue Moon, Leinenkugel's and Peroni Nastro Azzurro. The Premium Regular and smaller domestic Above Premium portfolios experienced double-digit declines.

"Now that we're into the home stretch of the summer selling season, our results show some positive signs of progress," said Leo Kiely, chief executive officer, MillerCoors. "We grew profit by double digits in an unfavorable selling environment. A few of our key brands showed significant trend improvements from the last quarter, and the craft and import portfolio posted very strong results, driven by our investments in brand innovation."

Net revenue per barrel in the US, excluding contract brewing and company-owned distributor sales, increased 2.8% while cost of goods sold per barrel increased 1.6%;

The company reported that synergies and other cost savings from the joint venture between the Miller and Coors were $72 million, bringing cumulative synergies and cost savings (including legacy cost savings programs) to $481 million since July 1, 2008.