US: MillerCoors FY profits, sales dip
- Full-year net profits down by 5.6% to US$1.01bn
- Net sales dip by 0.3% to $7.55bn
- Operating profits drop by 5.4% to $1.02bn
- Weak beer demand persists but optimism grows
MillerCoors has reported a dip in full-year sales and profits amid weak consumer demand for big beer brands, but a fourth-quarter gain offered some grounds for optimism.
MillerCoors said today (16 February) that net sales dipped by 0.3% for the 12 months to the end of December, to US$7.55bn. Net profits also fell versus 2010, by 5.6% to $1.01bn, even though the brewer delivered the final tranche of $765m in synergies related to its formation as a joint-venture between SABMiller and Molson Coors.
Consumer demand for mainstream beer has remained weak in the US in general. Beer has lost alcohol market share to spirits in the past 12 months, but high unemployment among young men has also hit the sector.
MillerCoors' craft and import beer business, Tenth & Blake, again reported double-digit rises in volume sales in 2011. At the same time, Coors Light overtook Budweiser to become the second largest beer brand in the US.
But, this did not prove enough to offset problems on core brands. Overall group beer sales to wholesalers dropped by 3% in volume for the year.
However, signs of improvement in the fourth quarter of the year gave MillerCoors limited cause for optimism. "The indications are a little rosier," the firm's CEO, Tom Long, told analysts on a conference call following the results statement. Fourth-quarter volume sales to wholesalers slipped by 1.6%, but group net sales rose by 2% to $1.75bn and net profits increased by a third to $195.2m, driven by extra synergy savings.
So far in 2012, the brewer said that Coors Light has returned to year-on-year volume growth, but group beer sales are still down. For 2011, operating profits fell by 5.4% to $1.02bn. Fourth-quarter operating profits rose by almost 32% to $196m.
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