Weak consumer demand for beer in the US weighed on MillerCoors in the third quarter of 2010, but cost savings boosted profits for the SABMiller and Molson Coors-owned brewer.
MillerCoors saw beer volume sales fall for the three months to the end of September by 2.7% to to 17.9m barrels compared to the same period of 2009 and by 3.76% on Q3 2008, it said today (3 November).
Lower excise taxes and lower costs helped the US-based brewer to eke out a 0.3% increase in net sales for the quarter, to $2.015bn. MillerCoors’ sales performance underlines the ongoing weakness on the US beer market and has forced the firm to focus more greatly on cost savings.
The brewer achieved $83m in synergies during the quarter. The brewer said that $56m of this was part of the planned integration of SABMiller and Molson Coors operations in the US, but a further $27m of “additional cost savings” was achieved by cutting media, transport and raw materials spend.
Savings boosted profits for the Miller Genuine Draft brewer, which is 58%-owned by SABMiller and 42%-owned by Molson Coors. Operating profits leapt by 38% to $320.8m for the quarter, while net profits jumped by 36% to $313m.
MillerCoors’ CEO, Leo Kiely, said that he saw reasons for optimism in the brewer’s sales performance. “It is still a tough market environment, but we are encouraged by our recent premium light trends and the continued strong momentum of our Tenth and Blake portfolio,” he said.
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By GlobalDataCoors Light and Miller Lite lager volumes fell by low single-digits for the quarter, while MGD 64 fell by double-digits.
For the first nine months of 2010, the brewer’s net sales were flat, slipping by 0.2% to $5.85bn. Net profits jumped by 23% to $912.8m.
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