MillerCoors Rides Specialty Success, Price Hikes, Cost Savings To Earnings Growth

MillerCoors’s depletions in North America fell by 3% in the fiscal year ended March 31, but a combination of price hikes, a favorable sales mix and significant cost savings sparked a 20% EBITA jump. While Miller Lite has been on the decline and Coors Light has been flat for the past few years, the company’s Tenth and Blake craft and import division enjoyed double-digit growth during the year. Tenth and Blake’s portfolio includes such fast-rising brands as Blue Moon, Peroni and Leinenkugel’s. Meanwhile, price hikes across much of the portfolio have helped the MillerCoors bottom line, as have the $684 million in synergies and cost savings achieved during the recently completed fiscal year—a 67% surge over the previous year’s savings. MillerCoors—a joint venture between SABMiller (58% ownership) and MolsonCoors (42%) is the second-biggest brewer in the U.S. market, behind Anheuser-Busch.

The U.S. accounts for roughly 19% of SABMiller’s global volume, making it the company’s second-largest market, after China, which comprises around 21% of company volume. For the fiscal year, SABMiller experienced a 2% increase in global beer volume to 218 million hectoliters, while achieving 7% group revenue growth (to $28.3 billion) and 15% EBITA growth (to $5.04 billion). Volume rose by 10% in China for the year, while earnings there surged by 31%. China’s Snow brand (49%-owned by SABMiller through its CR Snow joint venture with local conglomerate China Resources Enterprise Ltd) is on pace to overtake the Budweiser franchise as the world’s biggest beer brand this year. SABMiller’s sales also advanced by 10% in India, where it’s the second-leading brewer behind UB Group.

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