SABMiller plc and Molson Coors Announce Launch of MillerCoors

Tag : USA Distributors and WholeSalers



MillerCoors, which will begin operating as a combined entity onJuly 1, 2008, will be a dynamic, brand-led U.S. brewer with thescale, resources and distribution platform to succeed in the highlycompetitive marketplace.
"As a unified company with a world-class board and leadership teamin place, MillerCoors will be able to create tremendousopportunities for innovations in products and services that willallow us to drive profitable growth," said Pete Coors, Chairman ofMillerCoors. "Personally, I am thrilled to be part of such anexciting and innovative organization and look forward to serving asthe Chairman of this new business."
Graham Mackay, Chief Executive of SABMiller, said, "Today is anhistoric day in the American beer business, not only for theshareholders of both SABMiller and Molson Coors, but forMillerCoors consumers, employees, distributors and businesspartners. Now that the transaction has closed and MillerCoors is areality, the strong leadership team we have put in place is readyto execute and realize the tremendous potential of this greatorganization."
Leo Kiely, Chief Executive of MillerCoors, said, "MillerCoors willbe entrepreneurial, with the ability to operate with speed andagility in the marketplace, backed by the powerful combinedresources of two exceptionally successful companies. We will driveprofitable growth and bring new energy to the U.S. beer industry.Our focus now is to deliver on the $500 million in identifiedannualized cost synergies by improving sourcing across our eightmajor breweries, building a streamlined organization and leveragingthe scale of the new company. Our talented people are experiencedand passionate about this business and - importantly - aredetermined to win."
SABMiller and Molson Coors have each named five representatives tothe MillerCoors Board of Directors, as follows:
-- Pete Coors, Vice-Chairman of Molson Coors Brewing Company andChairman of the MillerCoors Board
-- Graham Mackay, Chief Executive Officer of SABMiller plc andVice-Chairman of the MillerCoors Board
-- Peter Swinburn, President and Chief Executive Officer of MolsonCoors
-- Sam Walker, Global Chief Legal Officer and Corporate Secretaryof Molson Coors
-- Stewart Glendinning, Global Chief Financial Officer of MolsonCoors
-- Dave Perkins, President, Global Brand and Market Development ofMolson Coors
-- Malcolm Wyman, Chief Financial Officer of SABMiller plc
-- Nick Fell, Group Marketing Director of SABMiller plc
-- Johann Nel, Group Human Resources Director of SABMiller plc
-- Sue Clark, Corporate Affairs Director of SABMiller plc
Updated Pro Forma Figures
Based on results for Miller and Coors reported under InternationalFinancial Reporting Standards (IFRS) for the year ended March 31,2008, and U.S. GAAP for the four fiscal quarters ended March 30,2008, respectively, MillerCoors' annual pro forma combined beersales were 70.1 million U.S. barrels (82.3 million hectoliters),which is a 1.6 percent increase versus the comparable pro formaperiod a year earlier. Pro forma net revenues were approximately$7.0 billion for the most recent year, a 6 percent increase versusa year earlier. Pro forma combined EBITDA totaled approximately$991 million, an 18 percent year-over-year increase. Pro forma EBITof $743 million increased 27 percent from a year earlier.
MillerCoors Joint Venture Pro Forma----------------------------------------------------------------------Miller(1) Coors(2) For the Four Pro Forma Pro Forma For the FiscalCombined Combined Fiscal Quarters For the For the Year Ended EndedYear Ended Year Ended----------------------------------------------------------------------March 31, March 30, 2008 2008 March 2008 March 2007----------------------------------------------------------------------Net Revenue (US $billion) $4.2 $2.8 $7.0 $6.6----------------------------------------------------------------------EBITDA* (US $million) $580 $411 $991 $842----------------------------------------------------------------------EBIT** (US $million) $431 $312 $743 $583----------------------------------------------------------------------Sales to Wholesalers*** (millions of US barrels) 45.5 24.6 70.169.0----------------------------------------------------------------------(1)Miller results are composed of the US and Puerto Rico businessesand exclude the International segment ("Miller"). Net revenue,EBITDA, EBIT and sales to wholesalers (in millions of hectoliters),as reported in SABMiller's Annual Financial Statements, under IFRS,before exceptional items. EBITDA and EBIT include a non-recurringgain of US $33 million from the October 2007 settlement of adispute with the Ball Metal Beverage Container Corporation.(2)Coors results are composed of the U.S. business unit of MolsonCoors, including Puerto Rico, as reported under US GAAP, excludingspecial items. *EBITDA - Earnings before interest, taxes,depreciation and amortization, excluding exceptional and specialitems - a non GAAP measure. See tables below for reconciliations tonearest U.S. GAAP and IFRS measures. **EBIT - Earnings beforeinterest and taxes, excluding exceptional and special items - a nonGAAP measure. See tables below for reconciliations to nearest U.S.GAAP and IFRS measures. ***Sales to Wholesalers in millions ofhectoliters - Miller: 53.4, Coors: 28.9, Pro Forma Combined 2008:82.3, Pro Forma Combined 2007: 80.9.
MillerCoors Financial Reporting Schedule
SABMiller and Molson Coors Brewing Company will release MillerCoorsquarterly financial results in U.S. GAAP on the same day as MolsonCoors' scheduled earnings announcements and prior to the opening ofthe London Stock Exchange. These results will also contain areconciliation from U.S. GAAP results to IFRS results.
The current anticipated 2008-2009 financial reporting calendar forMillerCoors is set out below. (These dates are subject to changewithout notice.)
Quarter End MillerCoors Release----------------------------------------------------------------------September 2008 November 5, 2008----------------------------------------------------------------------December 2008 February 10, 2009----------------------------------------------------------------------March 2009 May 5, 2009----------------------------------------------------------------------June 2009 August 3, 2009----------------------------------------------------------------------September 2009 November 4, 2009----------------------------------------------------------------------December 2009 February 9, 2010----------------------------------------------------------------------
Overview of SABMiller
SABMiller plc is one of the world's largest brewers with brewinginterests or distribution agreements in over 60 countries acrosssix continents. The group's brands include premium internationalbeers such as Miller Genuine Draft, Peroni Nastro Azzurro, Grolschand Pilsner Urquell, as well as an exceptional range of marketleading local brands. Outside the USA, SABMiller plc is also one ofthe largest bottlers of Coca-Cola products in the world. In theyear ended March 31, 2008, the group reported $3,560 millionoperating profit before exceptional items and revenue of $21,410million. SABMiller plc is listed on the London and Johannesburgstock exchanges. For more information on SABMiller plc, visit thecompany's website: www.sabmiller.com.
Overview of Molson Coors
Molson Coors Brewing Company is one of the world's largest brewers.It brews, markets and sells a portfolio of leading premium qualitybrands such as Coors Light, Molson Canadian, Molson Dry, Carling,Coors, and Keystone Light in North America, Europe and Asia. Formore information on Molson Coors Brewing Company, visit thecompany's Web site, http://www.molsoncoors.com.
Overview of Miller and Coors and Related Reconciliations
The tables below reconcile EBIT and EBITDA, each a non-U.S. GAAPmeasure, to the nearest U.S. GAAP and IFRS measures. Management ofboth companies believes that EBIT and EBITDA provide shareholderswith a useful basis for assessing the profit and cash generationperformance of MillerCoors. There are limitations to using non-GAAPfinancial measures, including the difficulty associated withcomparing companies that use similarly named non-GAAP measureswhose calculations may differ from the company's calculations.
Miller
Miller produces, markets and sells the Miller portfolio of brandsin the U.S. and Puerto Rico. The Miller business to be contributedto the joint venture ("Miller") does not include the sales ofMiller brands outside the U.S. and Puerto Rico, but does includethe sale of other SABMiller brands in the U.S and Puerto Rico.
Miller EBIT and EBITDA - Fiscal Year ended March 31, 2008 Miller--------------------- (In millions of $US) Fiscal Year Ended March31, 2008----------------------------------------------------------------------IFRS: North America segmental operating profit before exceptionalitems - reported 462----------------------------------------------- Less: Internationalsegment operating profit before exceptional items (EBIT(1)) (31)IFRS: Miller operating profit before exceptional items (EBIT) 431----------------------------------------------- Percent change vs.prior year Miller operating profit before exceptional items(EBIT(1)) 26%----------------------------------------------------------------------Add back: Miller depreciation & amortization 149 Non-GAAP:Miller EBITDA(2) 580----------------------------------------------- Percent change vs.prior year EBITDA(2) 20%----------------------------------------------------------------------Fiscal Year Ended March 31, 2007----------------------------------------------------------------------IFRS: North America segmental operating profit before exceptionalitems - reported 366----------------------------------------------- Less: Internationalsegment operating profit before exceptional items (EBIT) (24) IFRS:Miller operating profit before exceptional items (EBIT(1)) 342===============================================-----------------------Add back: Miller depreciation & amortization 142 Non-GAAP:Miller EBITDA(2) 484===============================================-----------------------(1)EBIT - Earnings Before Interest and Taxes, before exceptionalitems (2)EBITDA - Earnings Before Interest, Taxes, Depreciation andAmortization, before exceptional items
Coors
Coors produces, markets and sells the Coors portfolio of brands inthe U.S. and Puerto Rico, which is managed as an integral part ofthe U.S. business, and also holds 50% interests in the RockyMountain Metal Corporation and Rocky Mountain Bottle Corporationjoint ventures. The Coors business contributed to the joint venture(the "Coors Business") does not include the sales of Coors brandsoutside the U.S. and Puerto Rico. The business contributed doesinclude the sale of other Molson Coors brands in the U.S. andPuerto Rico.
Coors U.S. Underlying Pretax Earnings - Four Fiscal Quarters endedMarch 30, 2008 (Pretax Income, Excluding Special Items) (Note: Somenumbers may not sum due to rounding.) Coors U.S.------------------- Four Fiscal (In millions of $US) Quarters EndedMarch 30, 2008----------------------------------------------------------------------U.S. GAAP: Pretax income - reported 311------------------------------------------------- Add back: Pretaxspecial items - net (described below) 2 Non-GAAP: Underlying pretaxincome (EBIT(1)) 312------------------------------------------------- Percent changevs. prior year underlying pretax income (EBIT(1)) 29%----------------------------------------------------------------------Add back: Depreciation & amortization 99 Non-GAAP: UnderlyingEBITDA(2) 411 -------------------------------------------------Percent change vs. prior year underlying EBITDA(2) 15%----------------------------------------------------------------------Four Fiscal Quarters Ended April 1, 2007----------------------------------------------------------------------U.S. GAAP: Pretax income 189------------------------------------------------- Add back: Pretaxspecial items - net (described below) 52 Non-GAAP: Underlyingpretax income (EBIT(1)) 241=================================================---------------------Add back: Depreciation & amortization(3) 117 Non-GAAP:Underlying EBITDA(2) 358=================================================---------------------(1)EBIT - Earnings Before Interest and Taxes, excluding specialitems (2)EBITDA - Earnings Before Interest, Taxes, Depreciation andAmortization, excluding special items (3)Depreciation andamortization, excluding $40 million of Memphis brewery accelerateddepreciation (special item) Special Items:------------------------------------------------- Q2 '06 - U.S.results included a $26.4 million pretax special charge relatedprimarily to the scheduled closure of the Company's Memphis breweryin early September. These charges include accelerated depreciationof Memphis assets and limited restructuring and project expenses.Q3 '06 - U.S. results included a $25.5 million pretax specialcharge related primarily to the closure of the Company's Memphisbrewery, which was completed on September 6. These charges includeaccelerated depreciation of Memphis assets, severance and otherplant closure costs. Q3 '07 - Pretax special charges of $2.8million in the U.S. were due to supply chain restructurings. Q4 '07- U.S. results included a $6.7 million special charge for aretention program for Coors Brewing Company employees during thejoint-venture approval waiting period. Q1 '08 - The $8.0 millionnet benefit in the U.S. resulted from the sale of a company-owneddistributorship, partially offset by MillerCoors joint ventureplanning and employee retention costs.
This announcement is for information only and does not constitutean offer or an invitation to acquire or dispose of any securitiesor investment advice or an inducement to enter into investmentactivity. This announcement does not constitute an offer to sell orissue or the solicitation of an offer to buy or acquire thesecurities of SABMiller or Molson Coors (the "Companies") in anyjurisdiction.
The distribution of this announcement may be restricted by law.Persons into whose possession this announcement comes are requiredby the Companies to inform themselves about and to observe any suchrestrictions.
Forward-Looking Statements
This press release includes "forward-looking statements" within themeaning of the U.S. federal securities laws, and languageindicating trends, such as "anticipated" and "expected". It alsoincludes financial information, of which, as of the date of thispress release, the Companies' independent auditors have notcompleted their review. Although the Companies believe that theassumptions upon which their respective financial information andtheir respective forward-looking statements are based arereasonable, they can give no assurance that these assumptions willprove to be correct. Important factors that could cause actualresults to differ materially from the Companies' projections andexpectations are disclosed in Molson Coors' filings with theSecurities and Exchange Commission and in SABMiller's annual reportand accounts for the year ended March 31, 2008, and in otherdocuments which are available on SABMiller's website atwww.sabmiller.com. These factors include, among others, changes inconsumer preferences and product trends; price discounting by majorcompetitors; failure to realize anticipated results from synergyinitiatives; and increases in costs generally. All forward-lookingstatements in this press release are expressly qualified by suchcautionary statements and by reference to the underlyingassumptions. Neither SABMiller nor Molson Coors undertakes toupdate forward-looking statements relating to their respectivebusinesses, whether as a result of new information, future eventsor otherwise. Neither SABMiller nor Molson Coors accepts anyresponsibility for any financial information contained in thispress release relating to the business or operations or results orfinancial condition of the other or their respective groups.
SOURCE: SABMiller plc / Molson Coors Brewing Company
SABMiller / Miller Nigel Fairbrass, +44 20 7659 0100/ 414 931-6313Mob: +44 7799 894265 Media Relations or Molson Coors / Coors KabiraHatland, 303-277-2555 Media Relations Morning Coffee with TradingMarkets -- Free Newsletter