Miller Earnings Up 27 Percent

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Brew Blog

Worthmore portfolio grows 49 percent.

Miller Brewing Company’s earnings before interest, taxes and amortization increased 27 percent to $477 million during the year ended March 31, the brewer’s parent reported today.

Revenues grew by 4.8 percent to $5.12 billion.

Miller’s results were driven by growth by Miller Lite, double digit growth by its worthmore portfolio, an industry-leading increase in revenue per barrel, and ongoing cost savings, SABMiller said.

Miller’s US domestic sales to retailers (STRs) were up 3.1% when adjusted for one additional trading day against the prior year (up 3.5% unadjusted). Miller’s shipments grew 3.9% on an unadjusted basis, and were up 1.5% on an organic basis (excluding Sparks and Steel Reserve).

Revenue per barrel increased by an industry-leading 4 percent.

By brand:

— Miller Lite STRs increased by 1.1% (1.5% unadjusted) as Miller took a “hard right turn” to marketing that focused on the brand’s taste and intrinsics.

— Miller High Life sales increased 1.1% (1.5% unadjusted) on the strength of its successful “Take Back the High Life” campaign, which helped reverse a three-year decline in the franchise.

— Miller Genuine Draft declined by 10.6% adjusted (10.2% unadjusted) for the year in a declining segment.

— Milwaukee’s Best continued to experience declines due to strong distribution gains by competition in the economy sector.

— Icehouse and Mickey’s both grew, partially offsetting declines by Miller Genuine Draft and Milwaukee’s Best.

Miller continued to migrate its portfolio to higher margin and higher growth segments with the launch of Miller Chill, which sold more than 490,000 barrels in its first year. That helped drive a 49% increase in Miller’s worthmore portfolio. Sparks, Peroni and Leinenkugel’s, all grew at double digit rates.

Miller’s results benefited from a gain of $33 million following a retrospective canning cost adjustment.

Miller also recorded a charge of $51 million for staff retention arrangements and other integration costs in preparation for the proposed joint venture with Coors Brewing Company, which is still subject to regulatory clearance. SABMiller expects to record further charges up to completion of the transaction, which is not anticipated to occur before mid-2008. These amounts were included in the previously announced estimates of costs associated with the joint venture.

 

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