US/CANADA: Molson Coors toasts savings as FY rises

By | 13 February 2008

Molson Coors Brewing Company has posted a lift in sales and profits for 2007, having "delivered on the promise" of the merger between Molson and Coors in 2005.

The North American brewer said yesterday (12 February) that net profit in 2007 leapt by 37.7% year-on-year US$497.2m. Sales in the year came in 5.9% up at $6.19bn, despite a slight fall in sales, down to 42.0m barrels from 42.1m.

"We achieved these results while facing a very difficult cost environment and investing substantially in our brands," said company president and CEO Leo Kiely. "Our strategic brands showed robust growth in the fourth quarter and throughout the year, despite challenging competitive and economic conditions.

The US business gained market share and increased operating profit by over 28% in the year, while overcoming "significant" cost challenges. In Canada, the brewer said it gained market share for the first time in six years, while in the UK, strong cost discipline was "successfully imposed in a very difficult trading environment".

"For the third straight year, we have over-delivered on our synergies and other cost savings targets, allowing us to close out our merger synergies programme above our original goal," Kiely continued.

"We are working to complete the proposed MillerCoors US joint venture, which we expect to generate substantial additional earnings and cash flow for Molson Coors over time. The joint venture will enable us to compete even more effectively in an increasingly competitive worldwide market. It represents a huge step forward in our quest to become a top-performing global brewer."

For the full year, Molson Coors achieved merger synergies of $55m and closed out this year's cost saving programme $5m above its original three-year target of $175m. In the first year of the 'Resources for Growth' cost-reduction programme, savings of $91m were delivered, $25m above Molson Coors' first-year goal.

Sectors: Beer & cider

Companies: Molson Coors

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