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    Molson Coors Beverage Co (TAP)

    CEO Change

    Business Description

    Molson Coors Beverage Company, with a history spanning over two centuries, is primarily engaged in brewing beverages that unite people for celebrations. The company produces a diverse range of products, including core power beer brands such as Coors Light, Miller Lite, Coors Banquet, Molson Canadian, Carling, and Ožujsko . Additionally, they offer above premium brands like Madri, Staropramen, Blue Moon Belgian White, and Leinenkugel’s Summer Shandy, as well as economy and value brands like Miller High Life and Keystone . Beyond beer, their portfolio includes flavored beverages like Vizzy Hard Seltzer, spirits such as Five Trail whiskey, and non-alcoholic beverages .

    1. Core Power Beer Brands - Produces popular beer brands including Coors Light, Miller Lite, Coors Banquet, Molson Canadian, Carling, and Ožujsko.
    2. Above Premium Brands - Offers premium beer options such as Madri, Staropramen, Blue Moon Belgian White, and Leinenkugel’s Summer Shandy.
    3. Economy and Value Brands - Provides budget-friendly beer options like Miller High Life and Keystone.
    4. Flavored Beverages - Includes products like Vizzy Hard Seltzer, catering to consumers seeking flavored alcoholic drinks.
    5. Spirits - Features products such as Five Trail whiskey, expanding the company's offerings beyond beer.
    6. Non-Alcoholic Beverages - Offers a range of non-alcoholic drink options to cater to diverse consumer preferences.

    Q3 2024 Summary

    Initial Price$51.12July 1, 2024
    Final Price$57.35October 1, 2024
    Price Change$6.23
    % Change+12.19%

    What went well

    • Molson Coors increased its ownership in ZOA Energy to 51%, seeing significant potential in the better-for-you energy drink segment that is outpacing category growth. ZOA is already a top 10 brand on Amazon, attracting new drinkers, and with the increased stake, Molson Coors now has control over marketing and distribution to drive growth.
    • The company retained and slightly increased the significant shelf space gains achieved in prior resets during the latest fall resets, indicating strong retailer relationships and confidence in Molson Coors' brands.
    • Coors Banquet continues to deliver double-digit growth year-to-date, gaining industry share for the 13th consecutive quarter and becoming the fastest-growing top 15 beer brand in the U.S. Molson Coors is confident in its capacity to support this growth due to brewery investments.

    Q&A Summary

    1. Guidance and Volume Impact
      Q: Explain the impacts on volumes and updated sales guidance?
      A: Management reported that U.S. shipments were down 17.9% , with brand volume declining 6.2% , partly due to a 2.6% headwind from the Pabst unwind. Despite tough conditions in July and August, they saw improvements in September and early Q4, expecting better performance in Q4.

    2. Pricing and Promotional Environment
      Q: What is the current pricing and promo environment?
      A: Prices are maintained at the top end of the historical 1-2% range. They avoided deeper discounting in the above-premium tier observed this summer , particularly with brands like Peroni, which is moving to onshore production for better margins and consistent supply. They stuck to their pricing strategy despite some consumer shifts due to macroeconomic factors.

    3. Long-term Growth Prospects
      Q: How confident are you in long-term growth?
      A: Excluding Pabst, they are in positive territory on the top line. Core power brands have gained 190 basis points over the first nine months , retaining about 80% of last year's share gains. Pricing is stable at around 2% , and they have strong premiumization efforts and innovation plans, including expanding Peroni and Madri.

    4. Marketing Investment Levels
      Q: Are current marketing levels sufficient for growth?
      A: Marketing investment is expected to be up versus 2022 but without significant step-ups. They don't plan to match last year's additional $50 million spend in Q4. Investment will focus on core brands and innovations like Blue Moon, Madri, and Peroni.

    5. Blue Moon and Coors Banquet Performance
      Q: Updates on Blue Moon and Coors Banquet?
      A: Blue Moon shows signs of stability with sequential improvements in total industry dollar share. Blue Moon non-alcoholic is now the #2 craft non-alc brand. Coors Banquet has gained industry share for 13 consecutive quarters and is growing double digits year-to-date.

    6. Consumer Trends and Industry Outlook
      Q: Any changes in consumer behavior or trends?
      A: Value-seeking behavior continues, with shifts to singles and larger packs. While July and August showed economic pressures, September and October saw improvements. Premiumization persists, and consumer confidence has ticked up.

    7. Simply Spiked and Happy Thursday Performance
      Q: Thoughts on Simply Spiked slowdown and Happy Thursday?
      A: Simply Spiked remains significant with $100 million in revenue. They've launched seasonal offerings like Cranberry LTO to drive engagement. Positive feedback on Happy Thursday indicates appeal to Gen Z, though it's early to project its impact.

    8. Shelf Space and Retailer Resets
      Q: Have you retained shelf space gains from last year?
      A: They've successfully retained and slightly increased shelf space gained last fall and spring. Future resets are expected to involve only small adjustments, and they are pleased with the outcome.

    9. Q4 Guidance and Outlook Assumptions
      Q: What's embedded in your Q4 outlook?
      A: They have a good handle on Q4 drivers, including shipments, remaining Pabst impact, and pricing actions. They expect recent industry improvements to continue but are prepared for variability.

    10. EMEA/APAC Volume Weakness
      Q: Why are volumes down in EMEA/APAC?
      A: Soft consumer demand in the U.K. due to poor weather and high promotional intensity led to volume declines. They chose not to engage in heavy discounting, focusing on value over volume. Madri continues to drive growth, and easing inflation may improve consumer behavior.

    11. ZOA Energy Drink Potential
      Q: What's the outlook for ZOA energy drink?
      A: ZOA targets the growing better-for-you energy segment. It's a top 10 brand on Amazon year-to-date , attracting new consumers and gaining distribution. With majority ownership, they now control marketing and expect it to contribute significantly to revenues.

    Key Metrics

    View all financials →
    Revenue by Segment - in Millions of USDFY 2013Q1 2014Q2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024
    Americas1,939.02,621.72,633.42,231.19,425.22,145.42,575.92,345.0
    EMEA&APAC410.1649.0670.4566.62,296.1454.7683.3704.4
    North America--------
    Europe--------
    Inter-segment Eliminations-2.8----19.2-3.7--
    United States--------
    International--------
    Canada--------
    Corporate--------
    - Parent Guarantor--------
    - Subsidiary Guarantors--------
    - Subsidiary Non Guarantors--------
    Total Revenue2,346.33,266.63,298.42,790.811,702.12,596.43,252.33,042.7
    Revenue by Geography - in Millions of USDFY 2013Q1 2014Q2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024
    Americas1,939.02,621.72,633.42,231.19,425.22,145.42,575.92,345.0
    EMEA&APAC410.1649.0670.4566.62,296.1454.7683.3704.4
    - United States----8,059.6---
    - Canada----1,224.0---
    - United Kingdom----1,313.7---
    - Other countries----1,104.8---
    North America--------
    Europe--------
    International--------
    Corporate--------
    Inter-segment Eliminations-----19.2-3.7--
    Total Revenue2,346.33,266.63,298.42,790.811,702.12,596.43,252.33,042.7
    KPIs - MetricFY 2013Q1 2014Q2 2014Q3 2014Q4 2014FY 2014Q1 2015Q2 2015Q3 2015Q4 2015FY 2015Q1 2016Q2 2016Q3 2016Q4 2016FY 2016Q1 2017Q2 2017Q3 2017Q4 2017FY 2017Q1 2018Q2 2018Q3 2018Q4 2018FY 2018Q1 2019Q2 2019Q3 2019Q4 2019FY 2019Q1 2020Q2 2020Q3 2020Q4 2020FY 2020Q1 2021Q2 2021Q3 2021Q4 2021FY 2021Q1 2022Q2 2022Q3 2022Q4 2022FY 2022Q1 2023Q2 2023Q3 2023Q4 2023FY 2023Q1 2024Q2 2024Q3 2024
    Financial Volume (million hl)17.00623.38523.53219.849-17.97422.43020.629
    COGS per Hectoliter (% Change)22.7%-5.3%-3.0%2.2%-1.9%-2.1%7.5%

    Executive Team

    NamePositionStart DateShort Bio
    Gavin D.K. HattersleyPresident and Chief Executive OfficerSeptember 2019Gavin D.K. Hattersley has been the President and CEO of Molson Coors since September 2019. He has extensive experience in the beer industry, having served in various roles at Molson Coors since 2002 .
    Tracey I. JoubertChief Financial OfficerNovember 2016Tracey I. Joubert has been the CFO of Molson Coors since November 2016. She previously served as CFO and Executive VP of MillerCoors from 2012 to November 2016 .
    Sergey YeskovPresident and CEO of Molson Coors EMEA & APACJanuary 2022Sergey Yeskov has been serving as the President and CEO of Molson Coors EMEA & APAC since January 2022. He was previously the Managing Director for Central and Eastern Europe .
    Natalie MaciolekChief Legal & Government Affairs Officer and SecretarySeptember 5, 2023Natalie Maciolek has been serving as the Chief Legal & Government Affairs Officer and Secretary at Molson Coors since September 5, 2023. She previously held senior roles at Kohler Co. .
    Michelle E. St. JacquesChief Commercial OfficerMarch 1, 2023Michelle E. St. Jacques has been the Chief Commercial Officer of Molson Coors since March 1, 2023. She was previously the Chief Marketing Officer of Molson Coors from November 2019 to February 2023 .
    Miroslav HoljevacPresident of Management BoardN/AMiroslav Holjevac serves as the President of the Management Board at Zagrebačka Pivovara d.o.o., part of the Molson Coors Group. Specific details about his start date are not provided.
    Alina RuzicMember of Management BoardOctober 17, 2024Alina Ruzic serves as a Member of the Management Board at Molson Coors. She was involved in signing an agreement on behalf of the company on October 17, 2024 . Further details about her career background are not provided.

    Questions to Ask Management

    1. Given that you have adjusted your net sales revenue guidance to down approximately 1% from low single-digit growth previously , how confident are you in your ability to achieve positive top-line growth in the coming year , especially considering the softer-than-anticipated U.S. industry performance during the peak summer selling season and the potential pressures on consumer spending?

    2. With the closure of your two underutilized U.S. regional craft breweries, Chippewa Falls and Tenth Street in Wisconsin, and shifting production to Milwaukee , can you elaborate on how this decision impacts your craft beer strategy and what steps you are taking to address the challenges in the U.S. above-premium segment ?

    3. You've increased your ownership stake in ZOA to 51% , despite its current small presence in scanner data and limited performance ; what gives you confidence that this investment will drive significant growth, and how do you plan to scale the brand in a highly competitive energy drink market ?

    4. You mentioned plans to onshore production of Peroni to improve supply consistency and introduce new pack sizes ; given the competitive and promotional environment in the import beer segment , what is your strategy to achieve significant growth for Peroni in the U.S. and how will you differentiate it from established European imports ?

    5. Considering that you are expecting annual net price increases of 1% to 2% in North America , and mix to be a meaningful growth driver as you aim to reach about one-third of global net brand revenue from above premium , how do you plan to balance pricing and premiumization efforts with potential impacts on volume, particularly in light of shifting consumer preferences and economic uncertainties ?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateSeptember 29, 2023
    End Date/DurationFive years
    Total additional amount$2.0 billion
    Remaining authorization amount$1,416,863,668
    DetailsThe program allows flexibility to repurchase shares based on market conditions, liquidity needs, and other factors. It replaces and supersedes any previous repurchase programs. The Board may suspend, modify, or terminate the program at any time without prior notice.

    Past Guidance

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Net Sales Revenue: Adjusted to down approximately 1% from previously expected low single-digit growth.
      2. Underlying Pretax Income: Reaffirmed mid-single-digit growth.
      3. Underlying Earnings Per Share: Reaffirmed mid-single-digit growth, narrowed to the higher end of the range.
      4. Underlying Free Cash Flow: Expected to be $1.2 billion, plus or minus 10%.
      5. Cost of Goods Sold (COGS) per Hectoliter: Impacted by volume deleverage.
      6. SG&A Expenses: Expected to be down compared to the prior-year period.
      7. Shipments and Sales to Retailers (STRs) vs. Shipments to Wholesalers (STWs): STRs expected to outpace STWs by about 200,000 hectoliters in Q4.
      8. Impact of Pabst Contract Brewing Agreement Termination: Headwind of about 500,000 hectoliters .

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Net Sales Revenue Growth: Low single-digit growth on a constant currency basis.
      2. Underlying Pretax Income Growth: Mid-single-digit growth on a constant currency basis.
      3. Underlying Earnings Per Share Growth: Mid-single-digit growth.
      4. Underlying Free Cash Flow: $1.2 billion, plus or minus 10% .

    Q1 2024 Earnings Call

    • Issued Period: Q1 2024
    • Guided Period: FY 2024
    • Guidance:
      1. Net Sales Revenue Growth: Low single digits on a constant currency basis.
      2. Underlying Pretax Income Growth: Mid-single digits on a constant currency basis.
      3. Underlying Earnings Per Share Growth: Mid-single digits.
      4. Underlying Free Cash Flow: Approximately $1.2 billion, plus or minus 10%.
      5. Pricing in the U.S. and Canada: Between 1% and 2%.
      6. Pricing in EMEA and APAC: In line with inflation.
      7. Underlying Cost of Goods Sold per Hectoliter: Expected to increase.
      8. MG&A Expenses: Roughly in line with 2023 .

    Q4 2023 Earnings Call

    • Issued Period: Q4 2023
    • Guided Period: FY 2024
    • Guidance:
      1. Net Sales Revenue Growth: Low single-digit growth on a constant currency basis.
      2. Underlying Pretax Income Growth: Mid-single-digit growth on a constant currency basis.
      3. Underlying Earnings Per Share Growth: Mid-single-digit growth.
      4. Underlying Free Cash Flow: $1.2 billion, plus or minus 10%.
      5. Underlying Depreciation and Amortization: $700 million, plus or minus 5%.
      6. Net Interest Expense: $210 million, plus or minus 5%.
      7. Underlying Effective Tax Rate: In the range of 23% to 25%.
      8. Capital Expenditures: $750 million, plus or minus 5% .

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • Anheuser-Busch InBev SA/NV (ABI): Competes directly with Molson Coors in the U.S. and Canada .
    • Asahi: Primary competitor in European countries where Molson Coors operates .
    • Carlsberg: Primary competitor in European countries where Molson Coors operates .
    • Heineken: Primary competitor in European countries where Molson Coors operates .

    Latest news

    Recent developments and announcements about TAP.

    Corporate Leadership

      CEO Change

      ·
      Oct 18, 2024, 12:00 AM

      Sergey Yeskov, the President and Chief Executive Officer of Molson Coors Beverage Company's EMEA&APAC business, has resigned from the company for personal reasons. His resignation was effective as of October 17, 2024. Mr. Yeskov will be on 'garden leave' until December 31, 2024, after which his employment will officially terminate. He will receive a severance payment and other benefits as part of a mutual termination agreement .