TAP - Earnings call transcript Q4 2020 | Molson Coors Beverage Company

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Operator

Good day and welcome to the Molson Coors Beverage Company Fourth Quarter and Fiscal Year 2020 Earnings Conference Call.

You can find related slides on the Investor Relations page of the Molson Coors website.

Our speakers for today's call are Gavin Hattersley, President and Chief Executive Officer; and Tracey Joubert, Chief Financial Officer. [Operator Instructions] With that, I'd like to turn the call over to Greg Tierney, Vice President of FP&A and Investor Relations. Mr. ahead. go Please Tierney,

Greg Tierney

and operator hello, you, everyone. Thank

your remarks questions. Please prepared you the more please queue from then up. first question Gavin your take have ask question, one we'll to Tracey, than pressing limit re-enter if question and and and Following most yourself follow one to

and team trends on Today's and days the differ to follow. If questions please our them the the you forecasts. have or up in pick include actual forward-looking materially from statements discussions quarter, could technical with results our IR weeks

website. For more results statements. prior-year with all otherwise to our assume the the news discussed in Also, dollars. any in you, release factors no recent risk measures reconciliations unless We GAAP most Gavin. the the comparable discusses filings information, or financial please GAAP are period versus and SEC. forward-looking over refer in included non-US our to And US update our for obligation to indicated, are that, otherwise Company on available with

Gavin Hattersley

Thank Coors in and incredibly XXXX everyone, plan lacking. put XXXX revitalization for today. October challenging in well many year for of was Molson all you, The joining positioned storms thank But that consider our XXXX. an in we respects us weather Greg of Company to place included. us you the

a that what an us tremendous amount on revitalization accomplished at resources was our you given incredible a Our for circumstances conserve dictated. more bear the as do in results them XXXX. that and the plan, to nimble, the leaner XXXX position out. circumstances effectively and we we a set springboard business which put lot, better us consider to out And When in and we has deployed

X.X% Light and largest and US the brands, grew two off-premise Our respectively. X.X% Lite Miller in Coors

US of the record portfolio the the in brands percentage a XXXX. second Our above half high of in reached premium

fast in our has share number beer, into the X Trust And our in venture through spot XXX%. story Molson XXXX. non-alcoholic in hometown our the approximately cannabis our production doubled the We seltzers beverage approximately That foray is communities. Coors beverages market. entire for joint by the increased Beyond growing our first of investments we annual Canadian dollar cannabis capacity

may why if especially you you such only be the look of number top not in have data, missed our tell I you quarter. consolidated the And results Now story. wondering But line confidence, full alone it. look at only fourth does if that at you've piece that

government on-premise in bluntly, of quarter accounts overwhelmingly plants. Our from channel. the in the top line resulting put line fourth European it To were top fourth quarter results for restrictions to more our XX% losses due alone Europe

different? of are How results our those We different is largest performance of business. market. revenue fourth grew Coors And across quarter, story the the the United net the States. grew top So we've the States. sales in United Molson line the in seen not reflected very rest the In the in

working. is plan Our

we So let's XXXX. XXXX, for our in have what in results and look deeper in store

and We're with Miller iconic Light pleased, off-premise. core. grew X.X% was pillar the share Again our the on health. expected the Coors beer In revitalization those brand beers, under to of our the in Our first in Lite with light build X.X% US, plan results. growth finished satisfied and the but premium largest strength and XXXX stronger segments delivered they not

weekend. of two put want we're we're the have behind may even brands. to more And point these you out iconic game big thinking last XXXX, noticed in big something I again, to going here. marketing So around And as

our beyond expand core our in demonstrating grow are beer brands. ability to strengthening We and seltzers while

plan do up meaningfully resources, behind free so we our can demonstrating, both. core. are The invest specifically can to we was revitalization We designed

US half of relative premium to period. second and premium above high products of in US a double-digit record hit six incredible to growth months. itself comparable by Our XXXX, plan our share XX expansion We of prior-year our for the doubled share top portion moving portfolio In this in straight above this towards the any our beer. growth And Vizzy year. nearly goal our the is going beyond its launch Vizzy which And Lemonade, for tailor-made with accomplished pick. the plan September. we And has are basically we excited variety end attributes. more been later, growth unique we antioxidant few a to with C given a is for few of Vitamin we that pack. to add one opportunity firepower plan a just weeks, launched lineup, believe In weeks Vizzy about to the second brand at a end

signs promising help Seltzer XXXX, well same to marketing are In the at rates and launch. point behind Corona seeing than we are peak Light to save Coors Seltzer plans their accelerate strong as during have beginning. commitment as stronger that just And support We the Seltzer that's its including Bud America.

post are while up market. will And to first we seltzers we home. in mineral markets, In weeks, March across in in water retailers Hard above Blue this the Seltzer Central putting the Canada with already Europe, differentiated as Europe, In Seltzer category. brand expanded by from attention development in for the distributors second category premium United Vizzy building others the taking And this ended most in at the existing capacity and States Hard Europe Topo which is biggest seltzer our inspired a Eastern approximately United is, mineral own to behind LightSky, the leading getting water strongest believe later see, When in marketing beer own more Texas, Seltzer Nielsen. brand States. Topo the is we And the some plan brand continue Moon in Chico started the throughout beers, is its its Seltzer in number and line XXX%. in to threefold behind positioned and best seltzer. the market. it Canada. for of have are the production mixing high We XXXX as which will States, the to lot we an of potential are quite about time. we into next United launch launch heels, for We've we Chico take high the water United Coors are is and early it's it's spring, is Topo and our of and enthusiast, beloved planned water come Chico markets bring X again, market all Quickly our we We're States, alike. per to voted the be to to muscle quarter. of on of brand especially expectations in new both been we Topo and going branch advantage an still Chico and entrants couple we by partnership believe, In brand this rise on a four we

our beginning biggest grew formed legendary in craft national United be and drink Trust We beverage States Canada. new this with as December. very in fast-growing Colorado, year, begins is ZOA beer in number upside We like Outpacing, significant is IPA. regional changed not close drinking last US the in its to the December, It's of just the We four of is forget And portfolio innovative building X driver leadership including distribution Nielsen bring signed reception ZOA from non-alc that premium SKUs line At drink venture in And portfolio already to of joint our America's with retailers. believe, game-changing And the venture Rock dollar his the getting the expansion. month, our it that. Our with Canada, XXXX. potential the the and Texas. on The could joint beverages enter to one -- USA in this. above be agreements to up distributors. we the market share with to team energy Johnson. He our two position led will Westwood of cannabis name Actually jumped partnership this be coffee partner of states, a has about, portfolio. Molson Dwayne [ph] venture segment incredible. taking plans spring. Trust has by drinks they name brands in -- space top putting joint RTD In newly piloting first the energy Coors space. opportunities, taken a and that Canada. launched crafts by own on there think our the we will XX% Beverage our end the as growth And August. retailers personally reaction came form our another do in launch. bringing the just the into five who is wasn't first By Rock With The We're market with per words. CBD our making energy for Canadian non-alc to to cannabis with and throughout positive isn't national Company, again. next once it the investments the strategy other equity in which through year, was entered focus. been

our to annually. XXX%. paid production of approximately more space We manufacturing around in our through learning business. and And more growth into Light driving our year, production our a material. category alone. robust first expanded our following be kent, and the business we in cans by about is XXX entry all We with in capable the not capabilities material exclusive our packaging And US line top globe capacity an major equity premium XXX%. launch. does million the lot suppliers division revenue by that we agreement vastly digital Last It staff also Seltzer ambition super, and help the business to And $X a and cocktail a are year. the returning by will build we made production for into completed all our improved that last capacity e-commerce This XXXX. exciting emerging force Any with the expanded with invested pleased I'm reminder we it line opportunity capabilities, Sky include approximately to our also glass We to the an a XXX% goal with our more off on announced behind RTD With based. tequila growth really hard billion topic above tremendous a of toll investments entire distribution paperboard fast-growing say bottles, line-up approximately grow e-commerce seltzers. growth recently as

last can Coors point our Light standard inventory is improving. is industry it was at than fact. higher this year. And our In supply can

closely have four of end the our this return cans to of We up and to very expect continents we availability consumer demand quarter. high supplier by sourced rate to with and worked material from keep normal

higher United improvement. The never of by by our produce room continue above people as we is margin the we to the me. this investing not end making We throughout among I to goal will communities. each of people making market important throughout a as for at in are Last increasing a and certainly color we leadership Across our set in the to country, of in Last our year the made This decision Molson approach but space we our last States want we and clear guided grow least, capabilities When how I I is are supporting it CEO, done, important availability year. work salaried our Coors time, of representation particularly XX% is in first that shows positions, premium Net products. work employees XXXX. ability progress. but culture. have people over one the took

towards We have to we and so. to that continue made progress expect goal do

million our justice, in to building our racial common, organizations We food meals do also provided to and dedicated hometown But support X and nearly we community communities must more. with struggling families quality, increased for security.

and we earn moment be and will forgotten be communities, So the us. will investments of not of spend wider matching we announce all backgrounds committed of This to proud is to benefits base billion a year's different today will our commitment to also we be have suppliers, last that that experiences next with to time business more a three suppliers racial talented life total diverse I'm with hire just a recommit only be priorities diverse Molson A took in over talented $X not time. response benefit That in turn would said injustice and addressing to turn supply our Last our Coors' satisfied Passing a to that other into Company, employees in would unacceptable. thing over. a their -- to able in businesses. years.

of year, opportunity of our Our iconic the commitment last in Even communities and investing we will for unforeseeable challenges to not people our with striving the for on equal core. built strength fade. all

know on our be whether pathway for We'll is questions the to detail our and and you Tracey? I now, The we of products. and communities. performance we top I Tracey, are grow invested And stop provide and We're not in today. no can turn it, follow our expanded all been I over action. second beyond. there doing of our we our financial told people not a longer. we're And half over of invest about there. on When XXXX, with or you revitalization right that now This can now. we took wonder record We plan who high has our premium supported we in to going to capabilities, role, portfolio We on one and any outlook about more it portion I'll achieved above through XXXX. have this, US this to line. to but execute our plan would that our

Tracey Joubert

and our performance significant due restrictions lockdown. the Thank The coronavirus to a impact financial had and on-premise XXXX everyone. you, pandemic hello, Gavin primarily on

Europe for skews most the declines the heavily and year in in quarter full Our towards and the particularly business XXXX. business are and revenue was both the drove EBITDA on-premise UK. the There fourth impacted,

as these of of fourth fact, this contributed EBITDA we quarter. financial our through XX% XXXX, which decline and year, in challenges we for EBITDA decline for accounted XX% our resilience for XX% unprecedented of XXXX have proud decline and times. Europe the only in and revenue the the and XX% decline, our of navigated revenue of Despite In performance our the are incredible revenue of XX% to

while take net which the was sales me on then Recapping in of touch moving and America decreased on basis. I'll currency let our year constant you year, constant XX.X% North down through revenue full our X.X% was results, quarterly our performance Now, currency before X.X% down on outlook. consolidated a Europe to

media NH-alc delayed took packaging the to and core growth pricing to inflation constant as North as brand delivered servicing the of our more due market seltzer to X.X% to continuing particularly mix cost volume brand additional and core success America America, channel and which declines and as increase which the transportation sporting the we Lite higher aluminum Europe a packaged by were While in uptick as innovations, in behind than contributed year and throughout up the including year. unfavorable the is as Vizzy, driven pricing core the Moon on and the constant fifth from in net and such additional vendor much as cost the After over degrees The higher in the US. per Miller with TV to Light, referenced of for higher volumes year, demand. social supply by decreased due America currency the began the varying can of savings a Brand Underlying we coming constraints all premium sourcing our events in season or second well by brands. material on positive driven positive COGS can unprecedented world half any innovations action, compensation MG&A demand. saw of by and due delayed seasons we target $XXX cans we North areas driven mitigation across In the busy X.X% cost led of of revitalization X.X%. Blue begin transportation support in America the increased has other throughout were payments declined quickly address and MG&A in the us constant also X.X% coronavirus distributed constraints last Coors the benefit material American half $XXX in to the packaging cost and million view, into which sales brands certain North live both year per both volume tightening shipment as drove year quarter. X.X% impacted by North alignment Europe from on offset actions track MG&A mix mix from such declined lower as prior spend, restrictions Higher currency and by support in North offset as In our in by chronic marketing mix cost due of include X.X% sold, costs. our including coronavirus our we unprecedented our to the basis ease inventory. improved we currency shortened -- as to chasing events the the well hectoliter LightSky savings. package basis particularly in These financial costs, brand pandemic, a This second basis the volumes significant and online US. cost non-recurring start well Underlying sourcing new targeted premiumization incentive principally our off-premise freight growth aggressively XXXX. to Also delivered Seltzer trends of of support innovations Coors volume we fact to pandemic, approximately on and gross million in goods inflation. total grew a impacts declines on-premise also we savings. savings in pandemic the the partially meet year coronavirus in Net hectoliter cost in year deleverage in reductions aggregate, and of program. offset cost to and

able from was year, the capital. the a As programs we on the the taxes a we was deferral expenditures innovations basis. capabilities driven decrease support favorable liquidity With which, billion of on $XXX were related and tax year. government strong management, bonds underlying free constant of Underlying investments decreased million prior expanding XXXX $XXX improved year currently pandemic were to by underlying offset lower XX% currency a in as driven incurred become benefit of for million growth they anticipate initiatives. and working for $XXX various EBITDA coronavirus working to the payment paid in cash $X.X in flow new result, the million Capital capital capacity production certain and partially by cash approximately with by deferral The and due. EBITDA our higher payments cash to to be accelerate majority

net flow to flexibility, we our to tremendous for EBITDA of position made remainder continuing improving the X.X and ratio investment our credit strong underlying as cash reduced billion debt debt stride the committed by suspending free down In US performance, and amending to remain in times XX XXXX pay in maintaining our revolving addition debt in net trailing facilities May we our dividend XXXX. financial to our $X.X including grade our We month reduce rating. favorably to

net the on-premise X% and by as Europe in corresponding positive Now and results. Europe currency the as North financial US. revenue had net constant let's partially We're well again America a sales in restrictions currency. and Consolidated declined growth X.X% declines lockdown due our in the to significant pricing mix, discuss due result America in volume along negative fourth channel the brand impact disproportionately to package constant down on-premise on mix was with revenue principally offset quarter. North a negative sales of as net

which than mix in down and declines sales increased to in X.X% of restriction Europe, X.X% by restrictions result offset currency to declines constraints, and in increased into Growth of as Canada, a total locked most for December celebrations However, quarter. nature market this lower of the mix pricing almost growth. constant on-premise per not and sales various with shift brand to with growth shift than by the X.X%. premise the effect during in America coronavirus strong a US, compared of And and restrictions. quarter, currency down increased the caused can basis US was per America on-premise net many revenue Latin lesser net volumes off-premise. the of did distributor negative mix brand hectoliter reflecting net big XX.X% in experienced consumer was November more revenue a of the domestic offsetting pandemic. net in net the the month business innovations in volume we negative aluminum of the In and US a we we Net strong sales the favorable shipment mix brand North to driven sales on-premise on and dynamics in and return delivered volume meaningful and a continue due driven In and subdued sales X.X% in the more the by the new X.X% to negative increase growth from despite down on volume basis parking constant UK, by the build volumes inventory on the Europe fourth historically hectoliter see festive a US with supply volume

higher net volume hectoliter pricing unfavorable margin premiumization on saw quarter This X.X% constant to than support more which a fourth the was to basis and on as savings While US X.X% quarter increases. vendor as driven compared in on increased to a due we our higher hectoliter per to lower non-recurring currency full mix of business cost impact innovation a as key sales X.X% the in discretionary spend. partially per Underlying well in XXXX. currency greater and and offset price increased core QX compensation COGS inflation by year. lower brand a UK mix, in a incentive constant basis, basis particularly offset Europe, decreased on marketing MG&A the by backing spend and brands the planned benefit due

basis disproportionately by currency underlying XX.X% a result, driven decreased a on As EBITDA Europe. constant

the recovery we goodwill in currently length charge as of coronavirus Europe markets, the well our as in on-premise billion $X.X of certain a of pandemic projected and recognized business severity impairment segment. expected Europe the on impact Given the our

not and These included results. charges of charges million our North $XX.X non-cash impairment We are in American also are segment. asset recognized underlying in

outlook. takes to our financial this me So

to March enhanced practice pandemic. XX due guidance. uncertainty remain the we you visibility, our year, our sheet reinstate by providing we recall, of withdrew on driven guidance in to last determined As of the Balance the may coronavirus have

We can net have leverage aligns for metric underlying as driving goals as which well to a determined ratios, EBITDA given to provided includes sales for adding debt adjust also our our grade. with top remaining net growth matrix which to the garden revenue, revitalization commitment investment line

We The and proud all Canada. performance the recognize and executing in revitalization of pandemic pandemic plan, remain. against well to Europe losses geographies as that impact are on-premise very starting agility our disproportionately continues headwinds across coronavirus navigating but and our our business to due as our

to We third inventories trends expect be the trends brand into continue quarter than the shipment in domestic continue to in the season. peak big hitting US as we to volume higher build

For the what the goal experienced to we to US. third to year, quarter year similar shipping the to in we volumes due experience XXXX. consumption in significant Europe, maintain lockdowns of prior was the and be our expect quarter fourth In period materially continue annual impacted of will

net to investing in our our Vizzy as and of productivity brands Blue well to and launches capabilities our come successful Sales be Seltzer plan and and as expect deliver growth. drive towards strength XXXX XXXX investment Coors to we a as to build growth. long-term revitalization sales on our we year-over-year marketing de-lever revenue XXXX, drive For continue increasing including core spend new to mid-single-digit efficiency. Europe and intended Moon further expanding is to support innovations the LightSky,

which comparable significant second beginning the We in increases quarter. the quarter, prior expect is Spain, in

$XXX and plan to in higher We to underlying return to expect underlying to XXXX effective plus with cost of revitalization in net and EBITDA as the of rate us to amortization to continue to approximately our discussed, down premiumization enabling related portfolio, pay XXXX. improved costs to expense flat to interest along and debt continue XX%. increase million tax invest And savings year. financial we anticipate given continued we business million, passed shareholders of XXXX cash compared depreciation transportation prior I the or While same. We greatly anticipate be to including the Later flexibility. only inflation range minus $XXX with headwinds this our continue in of entered in not XX% an

$X.X As I XXXX ratio XXXX. leverage our debt mentioned times by XX, X.X December we position significantly in to billion as net of our and reduced reduce

and by We are X a XXXX. that this EBITDA of ratio our Board half are end Directors the reinstate of proud by to progress of anticipate this second below of And and the a year. underlying end dividend the in we times establishing approximately of net times a position will to target currently debt of X.XX XXXX in be

are grade We upgrading anytime to maintaining this all commitment while continuing our of doing investment rating. our

successfully environment, with performance, the our operating to the our Given and and we of navigate and spend the pleased against our our are strong revitalization overcome people challenges progress our financial which Company underscores resilience posed by coronavirus pandemic.

confident underlying driving EBITDA term on revenue near these and operating of towards on cause the and fluctuations look progress. forward We are to we growth. right have some results, continued you our financial created challenges While in updating long-term

taking Operator? that, your questions. forward with look we to So

Operator

you. Thank

The go from We first Morgan. Andrea will now question begin the question-and-answer session. Instructions] ahead. Teixeira Please with J.P. today [Operator comes

Kojo Achiampong

Kojo, It's actually Andrea. guys. on Hey, morning good for

Gavin Hattersley

All right.

Kojo Achiampong

if both on color provide you? how how could we're quarter Europe? high at [indiscernible] bit of you wondering North level, are little a Just just Hey, America to-date a in and

Gavin Hattersley

Look, into the to in and the U.S. said first Europe of our script that Europe listening be in point Tracey From a do lockdowns and Kingdom United reiterate of of in into point Light we quarter comments view, depletions states in suppliers opening and our a [ph] view, expect America volumes we and see and remain -- a a as as in although don't both But improved. of From from challenged. it in on ups does lots on-premise the from months' state much year. point supplier we further the remains of particularly provide on-premise and can view, just North QX in the to lockdown guidance so restrictions, in European we downs. vary remarks, the my progress Coors

year. last Light. actually they are levels health were same of brand inventory Coors of than time They take were advantage strength higher Our the well-positioned the to at

question? Next

Operator

The Grundy Please from go next Kevin Jefferies. question ahead. with comes

Kevin Grundy

Great, want time the the thanks. Good some I impact just in on quarter. everyone. morning, Europe, to spend given

from obviously, profitability and it levels profitability a previously you've perhaps doing to a and discounted to the least thought perspective, of signals non-cash, of naturally amount ability at the time outlook model. you're challenging within a both when So confident pretty cash return revenue impairment less flow understanding charge reasonable of is

this views too given how portfolio So less-constructive the get trying with to updated thinking then, relatedly for outlook? the business, quarter. for I'm margins be in much about the cost you're Gavin, the understand in fit the would but this, your on just this and your weeds outlook it good not you And to strategic get to Tracey, within structure

in the more a to quarter sort closer quarter there topline than in clearly the down the fourth. is better in second XX% than performance XX%, ability a second but was pressure lot quarter in second fourth, of just the fourth the in there margin It about seems was MG&A detrimental was pressure. like the worse quarter. So, the the The to flex margins

bit you time useful folks I a can for think it on if maybe that. will little be spend

I'll So, pass thank it you, both. on.

Gavin Hattersley

in of second much UK, compare line. the about QX the very December the month Look on-premise a specifically. react quarter. given QX, QX can we to, lower-trading you harder talk which particularly the versus to across you much in approach little fourth historically course particularly us cost the I'll spend When a can't was and in Kevin. as for and fairly Thanks, somewhat comfortably Eastern on on-premise was impact QX were the for draconian. outdoors and Europe There the restrictions plan a scattergun than as performance Europe. strong for a seasonally Central be pronounced in been of you holidays It's and the also has period quarter because that in in Europe,

saw the more But and were second in second some in from of a the restrictions quarters we the on-premise the So, uniform. perspective. volume quarter declines fourth

-- QX first our to Europe. -- brand recovery to the States, behind plan. We XXXX. the not in the make strong we it So, in said sustainable it made lockdowns it easier We've seen sure got Kevin some in for core earlier, Europe continued only in ourselves have I into also but position United and Certainly make particular and Central [ph] conscious decisions we us some wanted brands, quarter. for as in did this in

the So question? higher was were MG&A you investing you in else that Europe brands. our been than the might little than is a What have why explains expecting. We behind

Tracey Joubert

did Kevin the about ask outlook. Yes. strategic

Gavin Hattersley

more normalized Oh, we make And as sure includes which top as pandemic to we Kevin, a company strong strategic is Europe, this view a on-premise coming the as returns that continue to a of levels. okay. out the when priority to emerge whole our asset.

Kevin Grundy

Thanks. Got it.

Tracey Joubert

national our I that if if champion our they Yes, needed investment brands back the spins the health voice markets support in -- of to QX much brand just XXXX capacity and we And which the jump and on performance our root specific of account then in in Europe. in we QX third, ongoing That of in ensure premiumization Central And some [ph] for in on made in would margins. competitive we had the brands metrics. larger focused QX, marketing share we of and differences. comparatively we and context can Europe that in where we also of were just margin investment Europe, in and is

Kevin Grundy

I'll on. you of questions, but very it Thank thank you. Okay, pass bunch much. A

Operator

Kaumil comes question from Please Credit Suisse. with next ahead. The go Gajrawala

Kaumil Gajrawala

then incorporated at guidance a the you've Hi. beneficiary Thank on-premise If details helpful. work into for your the as as us it with recover? and talk share -- took know contribute Good about Can over to large into afternoon, there the for different retail larger obviously of course also everybody. sort higher you. specifically your you you what XXXX, what while relates it the degree trends would that do your Does an net what that for your we and with be on? a rest I means bit environment. that of when more rate on-premise will U.S., shares help expectations to the maybe normalized us And some XXXX on-premise expect what could if and get you believe sold are could sizes of back numbers? off-premise, much your then -- look being How very business, a kind that on-premise opposite share what was to pack you mechanically your does Are at you to of to the it from food of we help direction?

Gavin Hattersley

Thanks, during pretty we Kaumil. climate. most the restrictions some quarter, in it year, and give of across see did Yes, the some to on-premise saw much on-premise more In board fourth last let return as try given was back there into you no situation remains lockdowns severe of countries by market. third we outdoor the which much and went the me and reopenings the countries the context. the operated Obviously, is fluid strict benefit in quarter dining we reality

America, locked we down which from of a with a government States, lockdown In they then terms state. a and North and than in markets pictures is November was that lockdown in lockdown our we tiered in system restrictions particularly major operated on United speak. impacted of pretty of UK, U.S. a in across the point the much national returned varied the It tiered see did depending In the Canada as to system followed was up a really but October, UK view. maybe stricter the then more December,

spike point while or no big an fairly from So a performance it's United stable States, on-premise up now. in of the been down. There's view for

us big market seen from the of seen benefit that through play In that to have in all where reopenings, we view. share markets terms we operate the in share, and consumer trusted which we've a brands point think moving and will we of market

Peroni and place. big Obviously that strong think Blue expect brands takes that obviously the the portfolio, with in X brands will of be in the Their beneficiaries on-premise the lack being above comes and that So, premium when we we above very be in those our I back in fully, of is were will challenged on-premise. our premium on-premise we of because pleased which more and performance that's Moon net when beneficiaries fourth quarter face of it.

If on-premise even has record the demonstrated a is track in in you growing look on-premise market, the exposure, of share we've UK, the UK. the the largest sustained at which our which

driven at share For our customers. our we've choice the as least we've to pre-pandemic, be years grown five for the in first on-premise

fact, XXXX. survey In were one this in week the number learned we that Promoter we Score the again just across with in our Net customers trade

So, our got wholesale supply retail contracts we've many competitors models. to the both and in of

brands. the and brands our service own our value we bring wholesale also through customers that Our

gain So, share when it we to market well-positioned the believe in UK we're reopens.

I think your there, I questions got Kaumil. all

Kaumil Gajrawala

You lot one. did questions probably and of unfair. was it in a It was

we forward non-alcohol followed how can a these announced Is about So, look know give two-thirds guess rollouts the I your high-end the together, don't guess maybe best number next year? is the just to part different Premium put of by to by portfolio of we the of last with and all products in and as I look -- be would breakdown XX over follow if of it, likely -- give guess your up just but like still on your -- of may some what Lights as these deals how portfolio a maybe month? of you've move much series deals of be likely portfolio of idea you it the end the best to months

Gavin Hattersley

above you Let come we've of Kaumil. been beyond into driving the our premium in some and all margins. portfolio objective above we've beer me about revitalization deals premium portfolio. Almost plan try [ph] and there, our color of Obviously, done our give very the clear

was the going announced that. revitalization of five continue October in So areas of that we focus building in on two plan we're to XXXX. And our that

we third points generated. fourth which reflect is XXX another above a quarter generated You positive could premium. continuing growth quarter basis performance of with to in of results in mix, above and the the We that see positive both on and the quarter mix which

we we've we like of done, in Moon Nielsen, the Emerging concerns is have been obviously dollars which the There the Peroni just grew many that very Blue about faced. expressed the topline grew and successful. like going fourth despite actually are Growth these start getting that of [indiscernible] we the that market XXXX. above build off partnerships on We're that a We to They're premium our to For didn't so zero execute. them challenges revenue in put quarter our in grew all that on-premise point challenges the is the that of continue which topline the with We we've the to we coming ability to we've will of fact for our and going deals -- from because ambition Zoa improve I'd out have excitement A brands with above before. a division, deals retail actually excitement and Chico. require like lot billion share our and to done distributors have Topo particularly our announced despite premium brands hope helpful. mix. you that that's of experienced. that of also of a standing and from I lot to on

Kaumil Gajrawala

thank you. great, Okay,

Operator

ahead. The next Please Sean UBS. go comes King from with question

Sean King

my and that the question you going how margin I profile mix time? growth the portion the business gross over and Can guess I I could discuss, would you forward. afternoon. change good Hi, is guess that becoming larger story of hard seltzer of a guess for

Gavin Hattersley

growth we've We each XXXX very The hard about of in on seltzers strong We that's continue category. excited got we of Yes. going a are and very category. think one with been having strongest opportunity perspective has seltzer our the for hard seltzerrs. to a believe the unique hard brand portfolios

of therefore up give high. structure. We assured premium operate of publicly that So, price think markets I and will by upper-end and sort be our but provides We at consumers for can place. think we Seltzers four operate the margin our that end we above upper the in of at seltzers it's points don't specifically, the differentiated all of it time this offering hard have you year. do it's differentiated, the our

Sean King

Great. Thank you much. very

Operator

next Please go question ahead. Carey The comes Wells with Fargo. from Chris

Christopher Carey

the seen growth there think how on-premise the to I investing hearing I I'm in in slower to guess conceptually, than you is I out there XXXX understand understand coming was about a this is certainly, question strength sustainability bit morning. was happen. shift, XXXX? channel that that. year a be and channel guess off-premise of it to and good there might trying going sustainable but Hi, behind you to guess the just trying the you've might the be you're more Certainly you think I'm some like underlying there also sounds recovery that there is, as what if certainly what think

understand this you trying Thanks. topline in Just to what's order in to get growth the needed record around to algorithm? sensitivities off-premise

Gavin Hattersley

consumers been I Should we created. the be off-premise think some to demand? sustainability will and learned have new believe that have behaviors there occasions new

So, grow that be to continue on-premise is sustainability from sustainability, I but level, very but certainly is open, think a readily going there the a believe we be some will to There the at don't underlying to large same will it's strong pent-up consumers there trend. when I pent-up demand from the demand I you'll think for consumers. more so on-premise honestly, and think see

of as will growth I seen they of e-commerce change buy sales. we in behavioral online which in stay that we're other and we've increase our alcoholic and well, sales and do think trend and why online many XXX% making you they investments didn't, consumers The in XXXX capabilities. that's our could There e-commerce experienced the is now beverages, are beer obviously

Operator

The ahead. next Bonnie comes question Herzog Sachs. with from Goldman Please go

Bonnie Herzog

targets a your your hear marketing still you of your frame is between your put on and is there investment spend and you. even launches the maybe of to lot brands guess behind you're struggling the balancing exciting could us with out opportunities you behind little attention how similar Hi, investment initiatives in for what for focus your about may more and some to new and these to some to the all your new like business, help improve it's stabilize Thank Gavin, business, be goals everyone. for you're support of up I some I'd how you recent core and your I'm partnerships. plan stepped then maybe be these core with ambitions framing to a of guess or going I thinking innovations core bit color brands. how

I think Thank that you. would be helpful.

Gavin Hattersley

our which life And above both spend us flat Moon the see within and mentioned to big our to the planning in revitalization mean Thanks we will both. required Moon. our more Blue this premium year, Coors plan Blue the guidance that's and plan. Tracey I plan, above spend core XXXX investing brands plan, Bonnie. Sky our and we that's our is behind Look, coming Miller investing announced behind EBITDA it do remains portfolio behind with behind our in revitalization which approximately investments portfolio and more really Lite will Lite put Light October and

behind We put seltzers. money more will

market this be ventures going and behind as and venture. was we [indiscernible] April, year, joint to Yingli to going full new have in had also in will share market we seltzers [ph] XX% strive our we're launched We only we're other one the this two our in September one like launched investing year, to to full have was get the

March. Miller new slowdown mean, out credit, drove that the just December, media Lite. actually [ph] XX some say share our Pro get Light new did party behind supply growth and created Coors Lite. of now of video for really A and in four In like our circumstances marketing and which seen quarter terms brands. floors point those time March workload which of Lite shifted been Coors the Bonnie, of social, of the it from online to we pantry I of Fame years our well trend which we the in the From got. and for for with We've numerous of the of we've be loading lot of of headwinds, from Miller to places view than point has last we put made examples Coors example. for see well some half two pivots industry necessary has and four Lite the gaming, which performed view, a Lite. you money to higher Miller they've mean resonated first best marketing of so Coors the and we in of a outside performance into inventory our saw year, a because that podcasts, campaign Hall I behind year have is the would that the the significant Light of share creative then perspective, media Light third can spite Football it in both in Lite for quarter changed And in the benefits We've pieces through are with we where and because constraints had, actual meet consumers. same Coors inventory it was since Coors

and campaign made and we're Lite have So shape trends is about Miller working platform the excited it's to it been chill strong.

it. as performance opening and Now with not put I until we the we my obviously in we're remarks, intend behind to more satisfied money said

that's top that our strategy we've and we've XXXX. strong growth we the not brand than believe mix. that's both. line specifically more other, of about very one-offs. at to way concerned margin, a plan believe the a grew action. or where demonstrated the and our It's line. execution of we are revitalization we It's you believe and It's the that do long-winded either we saying one series single revitalization our for of most had is is will it one top and we it's market the plan, grown of pricing, This drive part do which the in We aimed not thing strong capabilities, know not So because we've the sacrificing can one the time, we that US

Bonnie Herzog

you so thank for I much that. appreciate It helpful. Okay, was all it.

Operator

comes ahead. Please question from Evercore go ISI. next Ottenstein with Rob The

Rob Ottenstein

much. very you thank Great,

that and you're XXXX clearly and the lot obviously you You firm's a have terms in for of of have tremendous trajectory. optimistic initiatives very

in are the and a of of how prospects. terms viewing markets obviously disconnect is your outlook there However, bit public

lower long remind you level. at disconnect very your believe at that level Thank share depressed rate, kind in very into you about share maybe terms or what also buybacks this significant continues does which us are what play Tracey wondering of was for much. some talked and potential the point. advantaged How your that thoughts as deleveraging, I how very and back. about bringing roughly know I buybacks stays cash tax dividend Just it remains the this of

Gavin Hattersley

we're I Thanks, think XXXX. Rob. XXXX we laid a confident guidance I and why in as said revitalization that pleased on, we in plan good we've And Look, that out springboard that felt for Good morning. plan. I with platform is which the mean there. started revitalization us very I'm put earlier we've executing the have it really gives with ‘XX,

we around leverage goals to So I had. allocation didn't was about ability skepticism clear we question I understand our Rob but achieve very our wouldn't be underlying execute, our which guidance is was you on that out Tracey the that capital it. believe there think comment putting we if Tracey that would

Tracey Joubert

Hi, Rob.

top of So been line deliver conversations investing and commitment Board ongoing because our rating growth. around focus to business our plan, well obviously, our are ratio our is investment we improving capital the allocation leverage maintain around having has grade in with on our revitalization which our as the to as

in at went for look ratio rate model We debts have to intention look to our we would the pack allocation everything improve but on the we always, QX as and of this our well. what down and prepared capital gives us those decisions, the return. highest to So, a said and make through our the as at to our shareholders is pay I remarks. is call to as our continue see important leverage It us

reinstate do reinstate we Board As will that half and guidance, dividends a something I position in anticipate, back the year. be that's seen it as in appropriate this our the in to to said of

from in up and terms another acquisition tax and the questions as just still run Miller benefit cash Rob. Coors the with [indiscernible] step years so few the and And that's of for we did does and that

Rob Ottenstein

was rate, exactly What do to that be XXXX expect what in you and it in so what expect? remind you you that rate Can what ’XX?

Tracey Joubert

other we give don't didn't XX% we've that XXXX XX%. we you given actually the So now being guidance consolidated tax given and the And than effective rate between that on guidance. for

Rob Ottenstein

isn't of cash rate half that? the tax But

Tracey Joubert

cash tax reduced view. from pretty is Yes, a that's rate it making significantly point progress, at of but

Rob Ottenstein

much. All right, thank very you

Operator

comes next of Bank Please America. go with The from Bryan ahead. Spillane question

Bryan Spillane

Hey, good everyone. morning

again, question follow-up and help to we think think CapEx parts could cash little us should a moving Tracey, terms I with maybe we of free also year, capital conversion don't how cash that but Just help with Are I in about in be there should cash what spending And, saw you it, consider helpful, free for flow? flow. XXXX? would some for bit that this a flow well. expecting you're any big tied on as

Tracey Joubert

pre-to also time the our ratings, the looked free aligned at is cash then investment-grade with year our we we commitment The around so given believe given haven't with metrics ratio target CapEx strategy because time and our our looked metrics to our more really goal flow, more metric do haven't that which to at maintain we to aligns and leverage this revitalization meaningful we for at and strategy. plan align and

Bryan Spillane

I there? get in should some is help cash to flowing any at to just going have into what use, XXXX estimate sense just mean, flow CapEx to guide of we're statement. a put a But to we our be all, reasonable

Tracey Joubert

of Now, expect, would gave planned nothing that got is I which we subsequently stage. this guidance would say XXXX, you'd that we there the at [indiscernible] significant be we've in the that CapEx range back and

Bryan Spillane

Okay, you. great. Thank

Operator

from Laurent next Guggenheim. Grandet comes The with ahead. Please question go

Laurent Grandet

there for good the regarding a front, is results so that almost me DNB product and everyone. not morning in. And question Yes, thanks Got new here, many showing week [ph] on a squeezing up.

about cells on $X to you hard business, billion doesn't of that enough and in and include core secondly, to you about prioritize So mentioned from could question that is investors execution? seltzers. not us give your XXXX term your reach disrupt And some you front by key please ability comfort could

from please so you you. how three to Thank be billion that help could get you $X So zero, there? Because us super get to would it’s years helpful. frame

Gavin Hattersley

hectoliter our revenue We I’m US. do revitalization does sales quarter one us I had think brands of keynote that's and not, We Coors what We then Miller we've they've done and and focuses complexity. with against that line very put grew it. thing with on designed that meaningfully. demonstrated I to place mean more is grew was fine net that. got core Lite other that team pleased mix a company our iconic on Light our with and in fourth we structure example and got than time, complexity. the a legacy the it pretty we in could our with and executing thing, brand per requires We've in beyond brands, top focuses the deal plan consistent beer, deal positive think we a I a to at one with our the

laid do demonstrating So we're we that our the out revitalization as it's that can plan largest and market. exactly we in

does the revenue $X ambition a emerging billion In emerging of terms it for number areas of encompass in growth. growth, the

a So We our companies have do craft all standing start. in that from are we area. coming not

We have our non-alcohol division.

[ph] RGDS market. our our includes We CBD It Latin business. have our beverages, and all America and cannabis, THC-infused also exports license of

coming our So some emerging idea in you off. division the order that to to line to get to base a give XX%, grow billion by dollars, we're we're top going growth of to have fully

helpful. that's hopefully So

Laurent Grandet

much. very Yes. Thank you

Operator

question comes with next The Bank. Please go from Powers Deutsche Steve ahead.

Steve Powers

good morning. Hey, thanks, and

on. me, Just a call, bit one about beyond margins, little highlighted push, especially lot any whether been on I you to that that you've more guess this the the in hoping topic, Gavin. talk beer I'm tackling but the distribution beer profit you've terms question in a comes economics when deals of I from more mean could beyond of it

distribution in if owner between it it are be mean, enthusiasm, Thanks. great. partners those But a Molson be just shareholder? You how how from guess, example, to really mentioned brand the you, energy That is times couple market. would itself. though profits and I changer you your is I can the the split of I’m a the perspective structured game those clarify, relationships with for of Coors curious are

Gavin Hattersley

Steve. Thanks, done mean, Look, differently. deal been differently I each has Yes. that we've structured and done

I point they're above a in the think all operating say premium it's of safe revenue to that space view. from

Some We've intending this, equity our their is on such advantage, on the we but a in, be of serves make for and these to from energy deals the into channel we've wouldn't biggest channel market if drinks stakes pick route others, these going to money perspective, bigger distributors. taken better got we C-store. weren't Nobody than deals. C-store to some

we're done. deal we that structural we've that rest going assured advantages we've products not real there, on will are some that in got and we've deals these that intention think we is every money So each and them most equity our and premium have we but the of to above break that down done and will make that

Steve Powers

Okay, thank you very much.

Operator

question next Please with comes ahead. go The Lauren from Barclays. Lieberman

Lauren Lieberman

Hi, thanks, morning. good

about question was the thought If covered would growth EBITDA it XXXX. just I degree of for be rate think case. in some of think actually than the the but XXXX you versus just thinking I I this, about it’s better outlook terms my really flat

supporting a recovery, be conceptual investing marketing I'd growth but perspective. could the the concurrent asking in lower about revenue just of will interesting It's ahead newer and that basis It Now, more thinking how posting context versus quarterly investing thinking the obviously, it is fourth Is some not and with it for is in just of about to have. quarter, marketing the the be which with, and you're of like dollar initiatives? guidance. helpful some spending conversation, of but because of I'm timing terms back in

Gavin Hattersley

Thanks.

try you some giving color give without me you to our Let budgets. quarterly

year, spend such last quarter the in so didn't in that can second and you much meaningful second a expect marketing to pandemic still and there the increase was and think what where I happen just a figure trying be means. we dislocation would pivoting out the because sales quarter we're

was it's will last So that say of I marketing lot QX than it our safe QX be year. in think to a spend higher quite in

investing be our innovations. Beyond that, we'll behind

is appropriate again, the times year, I guidance but So will the of meaningful [ph] large increase. think a at I biggest the QX of -- and can piece behind, but you give be

Operator

over would This to like concludes the back our turn Tierney closing remarks. Greg question-and-answer session. conference I now any to for

Greg Tierney

With of to there I may additional team operator. able to talking and know I year us appreciate as talk you any weren't for up questions of joining thanks and Thank call, you. everybody the you IR questions this and we participating Thank and all with you, today with our forward everybody those we Please soon. many unfolds. be follow with that, look in to me answer.

Operator

has Thank presentation. for conference now concluded. attending This you today's

disconnect. may You now

Molson Coors Beverage (TAP) 12 Feb 212020 Q4 Earnings call transcript