Despite an increase in market share for Miller Lite and Coors Light, MillerCoors reported a drop in net income and revenue for the fourth quarter and full year, driven by lower volume and increased marketing and technology investment.
The Chicago-based joint venture of Molson Coors and SABMiller reported net income for the year was down 8.2 percent from 2014 to $1.22 billion. Net income for the fourth quarter was down 48.6 percent to $109.5 million, although the company said its underlying net income was down just 10 percent in the quarter after accounting for costs for a planned plant closure and early settlement of a portion of its defined benefit pension plan liability.
The company said it was able to achieve $88 million of cost savings for the year, including $25 million in the fourth quarter through procurement savings and brewery efficiency.
MillerCoors reported revenue of $8.8 billion for the full year, down 1.9 percent from the previous year. In the fourth quarter, the company had $1.99 billion in sales, down 2.1 percent from the previous year.
The Miller Lite brand gained share in the premium light segment for the quarter and year, but sales-to-retail were down. The company said the brand’s “strong performance” was partially attributable to the limited-edition release of the steinie bottle and the company plans to continue to emphasize Miller Lite’s “authenticity and originality through brand messaging.”
Coors Light also gained share during both the quarter and year and had its best quarterly volume performance since the second quarter of 2014. Like Miller Lite, the brand saw a decrease in sales-to-retail.
Retail sales in the above premium were down slightly, but were up when excluding Miller Fortune, which the company deprioritized. The Redd’s brand was up double-digits, driven by the Green Apple and Wicked brands.
The company’s Tenth & Blake craft beer company was up for the year, driven by the Blue Moon Brewing Company. The Jacob Leinenkugel Brewing Company was down double digits for the fourth quarter because of production issues with the winter variety pack. For the full year the company was up in the low-single digits, driven by growth in the Shandy portfolio.
Denver-based Molson Coors in the process of purchasing SABMiller’s 58 percent stake in MillerCoors for $12 billion.
“The most important strategic development for Molson Coors in 2015 was the definitive agreement we reached late in the year to purchase the 58 percent of MillerCoors that we do not currently own, along with the international rights to the Miller brands,” said Mark Hunter, Molson Coors chief executive officer. “This is a game-changing transaction for our company that is compelling both financially and strategically.”
Asked on a conference call with analysts if the Miller Lite and Coors Light brands would be able to co-exist around the world, Hunter said the two brands are positioned differently, with one focused on refreshment and the other on authenticity.
“I think on different occasions, for different consumers, they can be very complimentary,” he said.
