TAP - Earnings call transcript Q2 2021 | Molson Coors Beverage Company

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Molson Coors Beverage Company in Second Quarter Fiscal Year 2021 Earnings Conference Call.

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

Our speakers today are Gavin Hattersley, President and Chief Executive Officer; and Tracey Joubert, Chief Financial Officer. With that, I'll hand it over to Greg Tierney, Vice President of FP&A and Investor Relations.

Greg Tierney

Thank you, operator, and hello everyone.

Gavin from remarks prepared and Tracey. Following

then take question and will please the first your for than questions. one to ask and question pressing yourself limit most the if question, queue follow-up. Please one We re-enter you more have

have In the quarter, forecast. technical results forward-looking and today's with discussion them you and days or on in differ actual our team includes IR the questions materially trends weeks you pick up If our to from could follow. statements

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

Gavin Hattersley

nearly from expand pandemic and to had doubters severe a doubters line growth. cyber-attack joining that portfolio, we Coors we many only you on a with growth. same beyond those bottom the business Under deliver of while can our later aisle, the on then a our people few since sustainable a winter strength reinvesting Molson communities. the unexpected to premium grow we Thanks, streamlined above years in time Coors sustainable a our our beer to bottom a two strategy Greg. storms line global the the challenges aggressively delivering is Texas and some our Good deliver and multi-year two had for years, revitalization for out thank those our morning confidence Molson at savings build plan have enhance capabilities company. company line the plan, to everybody to call, iconic sustainable ago top We us laid Nearly and path that support we But alluded and has growth to years say top today.

itself. for new that our campaigns. about because performance quarter launches new two partnerships, new and the for we've speaks Our a this new years, I lot investments, outputs product of revitalization talked say plan, nearly

with today decade start outcomes that's delivered we most we plan the despite an I'm levels sales talking quarter. to line currency XXXX nearly we're what during but our quarter through it's restrictions, is So constant the pandemic and second a top able revitalization the indicator strong a this incredibly shift. revenue this despite on from pleased net any plan. meaningfully achieved over growth important to pandemic revitalization a progress, restrictions basis this ongoing and come in of quarter, yet of In the

things. progress by primarily Our driven three was

US US outcomes. hard brand a continue fastest fact segment by by in fourth took in in are seltzer US in joint in in States delivered driven significant with brewer We the our achieving and year-end. seltzers that share the total portfolio share seltzer of led of it the as share second strong XXXX. seltzer recently was XX First, we brewer US our hard the the MillerCoors another by the our the growing quarter. of as United global where since major Those the move passed over we we towards was goal the mix premiumization US to venture best the our our doubled growth we portfolio of inception the This of

traction to busy continuing also are see with innovation. We our strong

expectations to mix in the Fold number original of perform now looking we forward Moment in and regions seltzers And to the develop is seltzer with in build fast to our growing with these what a their and positioned our our to Topo popularity our been another Canada, Lemonade, hard Chico with seltzer strong continues with not turning and sold alone, Madri specifically well in win brand our brand. key as far to just share beer is hit is in X Wai grow. few Three the are and we're we the Europe, which aggressive the premiumization portfolio an it's and That's more brand well. In portfolio The very our Eastern but spot around by the [ph] weeks which a in a momentum in country. consumer second it's this family driving mean Vizzy of ago. the initial in has of UK European an Pravha expectations to unprecedented portfolio distribution launched Ontario are in improving far. expectations Outside continues still US, the Vizzy outcome. and US is is of The like in The advertising. a in Hard With Vizzy combination Seltzer thus positioned exceed beating fuel in variety largest almost premise continue in for is I early with retailers US. awareness share continues outpaced new brand the more outcome. Central of the the Seltzer demand Vizzy Hard as UK markets and category a this pack retailer marketing Eastern Central Chris and is consumer stage, quarter, to new XX%. demand on which Europe, XX brands to point fast estimates markets, ahead on-premise with Lemonade we than and to supply than performing with be hard gain the the plans Watermelon, added of the That Vizzy XX exceed and just hard Hard more help in Seltzer package is category full Canadian share continues

the first of expectations virus the throughout American volume Latin levels region Collectively, the period brand exceeded in primarily for the continued restrictions. operate exceeding despite the Our where pandemic segment government issued is given our corona business price XXXX premium comparable XXXX half region. above pandemic has brands global the for

Shandy which are high. Light been shipments is Rican outcomes. had its In further in and Product XXXX Pints weeks, volume been week building grown retail In Those customer currently the operations, Puerto to and joint where base its of And example, For Sky venture State date, up double while XX% beer our distributor, Division reliance the to digits scheduled Canada, will few despite August US Blue off next Six volume the retailer year was Summer XXrd. decline Moon the on long-term strong in Texas absolute item Cross and growing. one on-premise. brand are growing is our number in year, new this just begin outcomes. then, a the launch Leinenkugel's is incredibly hit interest has Yuengling by has

a tail than The other decade the in portfolio brand is our the rationalization factor of long more a in the economy the US. of drove best

As of portfolio intend low brewing of discussed, have slow and we also inventories SKUs. production US, margins. level improved brands margin moving premiumization service. in efficiency it post a recent our brands, to and of the in smaller we and This that our economy We of number high our improve premiumized and to maintain stabilize core our us months allowed

our improve business, us flexibility around economy elimination XXX brands innovation our an chain will of dependable brands, after on-time streamlining shipments focus better and to SKUs, of priority discontinuing distributors. more and we premiumizing XX our portfolio, analysis resources efforts, are including This altogether. supply meaningfully profitable enhance extensive US enable the So our for and ensure our to

saw clear; be the are discontinued. economy as Mickey's you while Let's typically are of brands been not and a is like feel going when to brands focus Magnum community, it distributors investment they

distributors on makes market-by-market exit So sense. plans and on identify local swaps basis our and teams to partnering sales are that a retailers with

growing invest So, Molson We're our here are is global portfolio headline behind simple portfolio a we legacy and the to is going smaller premiumization to hard streamline seltzer to Coors. brands. bigger going permanently of fast state

we're excited are the now. progress making stop about We to and not about we're

of line a second the way US of the Coors segment. four Light on-premise, its grain quarters. Lite, Light and Coors the across the specifically return rose time retail X.X% years of growing Miller brands STRs is in also Miller XXXX is Coors US, reopening the the driven in our pace Light best largest X top In on-premise in straight and the were their in to brew trend for achieved Canada, the quarter. quarter. volume total XX% share by the STR second core its light X.X% share Lite in premium the brands half US the growth Our in accounts by of and same customer year the at US big strength with grew At With share our a quarter.

media US, our the cannabis retailers large are social with in presence area, of at the in and venture Canadian year, ventures was billion surpassed expanded joint investments and with campaign state, the by progress We're initiatives. has of aided and making both as also Colombe already in across And Bella product US XX Olympics HEXO grown of July, distribution at Metro topXX was XXXX in one beyond more the and a X hold Canada, the above the to far Truss a continue Johnson has starting to new through the estimated here amplify industry the other during of brands. we drug in the category. entire to its convenience-store have growth SKUs The regional line have than Dwayne joint month. end excited beverage about its and La as premium beer for country. the market Truss vote expectations of RTD success Standing coffee confidence across our the top distribution well owner share of in continues independent Denver Our to this national a now retailers to we the debuted current channels. massive TV and made plan has the the the ranked $X.X his is the and and strong distributors our number in

starting revitalization second off. As results said earlier, to the I from plan demonstrated pay quarter the is

and will in continue going our projects in as hard we're to our last two production and hard starting seltzer in we profit and in ultimately our Upon the the we're We and investments the capacity. announced add our Trent canning seltzer communities in-house bring that similar saw production lasting UK, our production plans hard are hard the in Burton increase people global capacity, fivefold seltzer to announced not two stopping a to our new to announced quarter long results U.S. follow there. business, a have we in investments improve facilities production plans drive we more seltzer driving to increase The quadruple Canada, to capacity These our we in-house effort to as benefits in Those upgrading margin. investments business in to So new continue our beer last our our investing see. year Brewery line while packaging efficiencies. cider

Finally, than fully related year after more pandemic brands. our to challenges we're be going a invest behind to more able of

while fully makes a you Seltzer up, the the the marketing. in biggest Now of would over in and sense brand as UK boost Molson to year And time have by our first the behind recovered mean more into backed for what see a our the back a marketing markets new opening it sticking inventory half does has year for to the for over local made to Fold spending reactivating is ever well. Three category. Hard can alliances the Coors in expect our a that brand point moment, are second a UK invest investment that That's

diverse employees XX engaged American XXXX. are communities the effort what entirely Justice, line call our Project that scholarship our Through by for is, as in expanding isn't just working an and world. color why we employees organizations are As we this That's and XX,XXX defined hometown more continued determined create we we part started we're we're and or bring industry. to all as also have and improve representation biggest how that's of business. failure are directly of And to within world. top the a in careers in across around growth. more That's who pursuing also support women part that success we support the organization college our why our why people color work by summer students to Canada our we US as on supporting our across our and and a the inclusive in sciences last important initiative, well our fermentation It's approximately company to voices of of looking US North program brewing

just two through work two in are support released project thing, planet. annual gallons the results revitalization spaces. in Molson line over pillars, operate, we We're and called people pedal we improving. a also rings de-leveraging on From thinking communities the eliminating we've the annually to investing We're which portfolio water Brewery the UK We saving continue Golden business, we're refreshed our our is our business. that support towards brands, same years key our to Coors' years, our we've challenges people, for to our and put ESG growth significant imprint we firmly we're best our sounds our more drive the plastic into initiatives bright progress are we and succeeding. even people about last bottom how on reinstated into with also ESG tuned We've strategy and we're that million behind top future reshaping revitalization of Europe, as more are changing, is gas made going is against our report our over Nearly the sustainable doing this had of to consciously that XXX modernization focuses our the our the as new goals but plan, dividend, plan share and and our our today we in expanding we great foot several stay Tracey? journey. our

Tracey Joubert

Gavin, and which exceeded strong We Thank second everyone. you, quarter expectations. a posted hello,

and operating executing to the our to plan we performance. continue see our make We real in starting results are progress revitalization

flexibility our we to noted, continue in business, brands a dividend. premiumize enabled improved our to our reinstate invest sheet and to our deliver continuing financial core and and strengthen our while has Gavin us As business to balance

on increased me our we XXXX somewhat to pressures, continuing by our investments Now, uptake by volume most revitalization currency, as on-premise strong performance a delivering offset sales quarterly line quarter higher currency on impacted well through of packaging costs. per to brand marketing of brand Net geographic improved which our revenue as in outlook. net more US, X% increased given as favorable the the currency, with growth constant XX% for restrictions. by Top increased pricing continue in basis, let America. channel with financial portfolio. This brand Consolidated second we XX.X% net cost driven and you premiumize plan. volumes sales increased driven levels benefited growth our levels volume by basis line Consolidated per detail X.X% global hectoliter on-premise Underlying most was US coupled from product constant Europe major channel including and in consumer our an X.X% growth the results well as inflationary hectoliter in pricing, and degrees mix inflation update to as provide constant operate of favorable and in markets, growth shipments. mix as of continue offset volumes take varying brand Latin X% higher a strong company cost despite by on top and in execute positive freight domestic driven in positive reopenings quarter partially Europe historic mix, mix, and

as in with hedging to inflationary robust a mitigate constant spend prior we year have been MG&A marketing shifts due currency and the cost However, program, to basis virus the XX.X% timing and corona savings the pandemic. increased significantly quarter reductions on much period we targeted of to the pressures. in able cycle

programs quarter free the Underlying pressure period. innovations million EBITDA benefits cash prior to we currency Underlying letting a [indiscernible] half putting X.X% planned, levels. significantly for in we due core $XXX.X year, capability XXXX and of the and second of behind roughly constant partially but deferrals tax expenditure offset behind first strong increased was by quarter, was key a decrease favorable to driven the and on of $XXX capital increased from capital was the to Capital decrease the year million spend. prior related the half year such paid previously Capital lower as project decreased to wholly lower year for continue working Brewery in the project as year in were our flow invest This million governmental primarily first expenditures the the by first to programs compared brewery. new was compared in basis, due announced timing. marketing Montreal modernization of to commercial the prior Golden our and half As investments year, our brands. $XXX

business to net by North period In brand of in inventory due brand following of The to driven supply double-digits US volume US, the level. America on which down US, In in the re-openings while market. premise restrictions US, the second in declines as of entirely volumes. revenue volumes revenue during results X.X% quarter net largest SKUs. economy, timing the volume was we was continue focused our note, domestic sales the continue constant the act our same in XX% the as approximately positive non-core declines and as significant disruption. currency deprioritize vary growth, quarter in up shipment sales at first America, see we exceeded pre-pandemic brand with XXXX America, on shipment over about quarter XXXX of net volume increased the look outpacing higher quarter net X% were certain by to channel rebuilding US in American Of X.X% Latin progressive level. by our favorable market, end. mix North pricing strong In of North quarter quarter for of In America we let's In and revenue the one Latin on-premise accounted XX% compared re-openings the XX% levels approximately continue restrictions units. quarter sales Now, XXXX. ease to attained on-premise Canada to

digits were up single digits. portfolio double Our was our best premium and up premium brands low

of the MillerCoors a our America core hectoliter of The prior net on driven all venture triple-digit growth, volumes experienced fact, US Canada strong since levels in volume high the portfolio across sales volume brand by In of brand to volumes historic brand by above-premium growth pricing delivered mix. creation driven brand increased record performance. and X.X%, a US increased positive with joint XXXX. reached any brand our brand portion X.X% geographies. quarter per Latin while Net declined compared basis pricing in currency X.X% constant

increased in economy this decline environment intension led driven per Hard core the impacts strong revenue growth from in from innovation and in Underlying X.X% Latin due Miller by Underlying marketing America. higher and and above brands, innovation and due materials Topo half and offset increased While factors a premiumization. higher to was Light the increased trading spending Chico growth Canadian media including restricted Seltzer investments. in premium hectoliter to by increased business Coors our mixed We Lite. investment were we of performance by including transportation cost about record was behind positive contributor, marketing packaging mixed behind Bella. COGS higher inflation, MG&A brands mix partially brands negative the resulting and geographic core These XX.X% Vizzy, iconic

and spend volume premise year constant Europe media US a net by on decreased constant brand brand the increased portion volume driven our as Europe significant from the premium and XX.X% and XX.X% reopening, currency underlying higher UK reached our by high per volumes hectoliter spend record tactical particularly on on revenue in volume. basis volumes in volume offset full to Portfolio. by higher Europe was in prior North increased EBITDA Our was financial mix the driven gross brand geographic volumes by Underlying increases premise spend. lock Net on progressive pricing. quarter. currency, brand mix, premise local to premise to somewhat meaningfully than restrictions channel favorable business sales brand increased constant planned due on premise impacts in offset compared sales increase a as nearly mix most margin UK, MG&A. eased gradual channel Above geographic increased throughout as channel, in of the XX.X% and geographic XX.X% on given favorable brand due while positive in up reduced and higher down by UK positive which well restrictions a result more both partially driven driven of XX.X% quarter. premise XXXX of reopening gross was currency as by higher levels of EBITDA margin MG&A on profit higher approached constrained America XXX% and

of our X.XX net to second the down $X.X the respectively XX, $X.X to as times EBITDA December from XXXX, billion, our debt to outstanding the capacity, credit balance net balance XXXX. no with X.X $X.X lowered Turning to billion underlying and We quarter our US facility. of XXst on June sheet, reduced we times and strong as billion borrowing ended with ratio debt had

to again Turning guidance annual on February financial our XXXX. our are originally XX, reaffirming provided XXXX outlook, we

taking While and year it corona an we evasive than it pertains to the to varying a as its degrees market. reminding variance bears ago, place remains by are were virus we that uncertainty

context Now, for provide some additional expectations I'll to the year. of provide balance underlying the some

optimal net US build We in digit we aggressively in the the to revenue to level. grow a currency Building UK premise shipment restrictions expect benefit to deliver mix. we on province, for In premise growth mid-single should constant inventories we are more from seeing full both off the varying XXth. growth year In should in expect continue we the which gradual on second lack basis. reopenings to on year in the strong quarter, by trends In to to US the as the Europe, premise period. prior July positive the continue full Canada, on channel improve reopening provide sales

open for the However, of is than was the full XXXX. it the for the quarter comparison second quarter difficult more third largely on-premise was given

in against plan. emerging continued ahead against of solid anticipates expect of our above billion growth Also tracking particularly premium Our revenue strength also portfolio seltzer. three-year discussed continued previously progress hard $X our we guidance which we goal are

more expected headwinds, XXXX revitalization cost from on be build by continue our against continued increased growth underlying is be to of anticipate We to line to core significantly to to to flat support but plan. deliver our intend brands roughly marketing and inflationary compared strength top innovations. increase successful We to investments offset investments as EBITDA the

As the we and the third of year, notably year-on-year investments quarter. significant expect increases marketing over most the a result, in balance in

the have third and higher quarter the the we the first line, following expect than strengthen this XXXX investments will XXXX marketing brands. the on will in but of higher also particularly third quarter. impact second quarter than continue bottom the We quarter quarter, XXXX. Obviously, as in up Also an disruptions a this our third to the plan in ramp be future of of as our to reminder

Our working to this be payments related various paid the pivotal capital become as from pandemic. sponsored anticipate from virus currently in corona year of government to the benefited deferral majority We program payment they $XXX million the approximately due. tax

we to drive to continue investing allocation, to returning and in shareholders. and business prioritize to Moving our cash debt growth capital reducing top line efficiencies,

initiatives pre-efficiencies investing prudently brewery capabilities and production to advance support new and sustainability towards in to goals. and capacity growth to plan continue and modernization innovations we First, our

we a to anytime Second, strong desire rating. have grade investment upgrade our maintain

our to using and that goal, XXth, hand. we pay X.XX reinstate cash XXth, X.X% net paper And determine that end commercial EBITDA also third, dollars, a were of on Directors Class to on on that to end and ratio and Board of our As the Class debt the commitment and our dividend by and A a repaid gives quarterly we our improves. down quarterly of we they July combination day full by such, billion and business the the Demonstrating sustainable $X.XX July B at this maturing level common on to Board for of room that $X increases dividend announced dividend had below shares senior in share. The reinstate approximately to times to as XXXX. debt decision the to As three times per expect target of performance is underlying made be continue indicated XXXX believe a reaffirm announced notes future

in execution plan. underscores operational of successful proud the our against which performance revitalization quarter, our are We

your We Molson sustainable underlying of And are we and goal to growth. drive with as excited about future toward taking Coors we Operator? long-term the forward that, of our revenue look EBITDA questions.

Operator

Thank you.

answer Instructions] the from Rob comes now and question Evercore. will session. [Operator Ottenstein, first We begin Our question

Robert Ottenstein

understand, much. bit at issues a there I'm with Clearly, it you you've and this proliferation seltzer what could XXX beer same branded the the time some is wondering various learned more about then, using love not to and so understand then and have why your you want hard got I from in trademark the more get trademarks Vizzy different Great, you but you ready-to-drinks that to on thank the far also sorts need little seems Europe there And about that if so very brands that. trademarks, you're Gavin, is thoughts to of competition UK that talk you've there. market. of or feel

learned Thank going you. you've questions, that seltzers get thoughts what what's on about segment. hard your of to and on lot a love just So really in

Gavin Hattersley

good weren't might levels we've at Look, that Thanks mean, were the Robert always the seen. others I growth morning. elevated going to rates and continue that that said and have

there we've you growth year us slow the comps and huge we're last it because really Robert is distribution stated beneficiary on-premise reopened distribution. in know, to is and past is a starting the the category so was no of the and on-premise said exposure off-premise as seltzers shutdown that in less know surprise You is because the the such

And so surprise this a is us. to not

really anything saying else at in we've that's for a there We've it's XX%, growing while, quickly. growing saying the isn't been if almost for that XX%, been I a even XX%, space also think beer year. this

a is view US, to So two very X double-digit years point our product between and it's probably and good Vizzy that differentiated retailers do for and we've in we've for many Coors Canada. the clear and Chico beer Canada brands believe category launches continue crowded the Coors Hard of be most focus up you the Hard and it's company Vizzy Now Seltzer. We Seltzer, to the doing you Seltzer in our will achieved Chico continue in in and Seltzers America, it's that accelerate, there In that succeed Seltzer Coors well would and Coors some and and to good to up got wasn't. for North future Robert, space struggled referred as in Hard winners I had from in Seltzer actually we on the already really share while near say plan to shakeout really, successful us. Topo Vizzy Topo it's our in a

why space material Coors the energy, and US decision busy the our made to Vizzy Topo to supply discontinue so commit and we that's resources, And the our we've our shelf in in seltzer Chico. got

early point as obviously it's brand read did. going in to from in was all as days very dynamics our trends different well well. Europe a tested stay in and the performed we've Eastern has Canada, the exhibiting to it market and the And brand it's the go the early options the course, in I of Fold said, and was UK same Europe, that the brand of of with some In Of is landed Three are really Central US the view right the well. it's

same Central it Moment We if the we're strong a takes best job the from view. Eastern the Why? are of well really do fantastic Central was did in resonated capacity applies and it with building brand, The there. US. point team execution think there off positioned the well consumers Eastern European player like Europe. an I be And in the the and UK to a

good Europe. Central advantage we really actually and in the execution first have Eastern and is So mover

as very feel Central position we with Europe well. about in Eastern and a good leading that brand So,

from I questions all I happy I think a didn't, to follow-up Robert, you. take if hit your

Robert Ottenstein

between believe few detail. the I the your there's same I'm Yes, you. and and doing only play how say as some not know but look I other ready-to-drink It's observers the you The XXX%, much interaction. to Thank there's things that well, hard get going love a that do seltzers thank that thoughts coming how up concoction to interaction that ready and are sure at was forward to intend really one drinks, on you space for not you're you various occasion. in there. that

Gavin Hattersley

is segments growing gaps an bottles products packaging the RTD to in out space Competing in working yes with in beverages get sales partners fact in likely RTD our ourselves future. this emerging, for Sure, who natural emerging beverages fit spirits think, experience cans fast there. and are going to already like XX-ounce companies Rob. got I outpaced and and I and mean, a those widen have that distributor

our So, we pipeline. we that category is believe top in look launched offerings the you which year, consumers Superbird in and earlier forward well, got this to Proofpoint competing which and we we as that, appeal know have of with end innovation will this other to we've

Robert Ottenstein

how do it in interaction is with too seltzers products these see And hard ready-to-drink early much you or to say?

Gavin Hattersley

been too volume it's there more this it it's beer to of than to and from mean say, category I category. as think interaction, coming and inside outside seltzers I is question obviously is beer category the coming we've it's asked of is there interesting from early some Rob, the the growth beer relates

it's segment certainly and overall view. the competitors, beer would an say suggest Our of thing seen our same that positive been from very point category, beer I've data

Robert Ottenstein

Terrific. very Thank much. you

Operator

Our next Bill MKM question with from Kirk Partners. comes

William Kirk

thank question. taking Hey, the for you

Coors economy the streamline a sizes like SKUs talked pack brands some there on about bit you to but it also some like Lite. Miller brands, for of rationale looks Light is and So, discontinuing

So - talk it guess can to streamline sizes to efficiency I about efforts? relates decision pack as you the your

Gavin Hattersley

were all the you and our and space. brand brands. of reductions, reductions well. the we could the be did Look, a would economy so SKUs, We few outside there space. majority have of all effective Bill, a would of SKU SKUs thorough morning us make in to more other a of that certainly good economy of economy profitable SKUs did few are the the thanks rationalized, as with majority space moving review majority and I would been more slow vast is SKUs just our we the which the in and brand substituted or and identify Yes, of which say it the that

William Kirk

volumes US that Tracey were the follow-up, And declines still economy US do said economy. Does think excluding you volume the discontinued brand brands the drag remaining negative? mean entirely positive economy number that as that brands it. into Got that or brand a I

Tracey Joubert

the driving recent portfolio economy would the that sort that so say of that really SKU it's so prior just is and I is down. No,

Gavin Hattersley

as to said, been And Bill with and as or very done second of well did very in and our Light able years so, XX Lite Miller strongly, portfolio well prepared premium coming back I our the back I last seltzer with coming above Moon pleased franchise the quarter grew. performance. in sort Blue craft our thing I brands say the we're my that over I've haven't and Coors think often remarks

William Kirk

I guys. appreciate you. it Thank

Gavin Hattersley

Thanks, Bill.

Operator

comes Barclays. with Lauren Our fourth question from Lieberman

Lauren Lieberman

morning. thanks. Good Great,

about talk just more number us Let thinking bit strategy and about little premise, brand on a and portfolio. one,

as I you're discussion gaining was for then, of in expand was case curious think for brands I play got industry positioning so the to in but apologize, if first you that reopening more and degree about the trying I Vizzy I on-premise, big which I and degree was wrong, curious, you're if as of curious think And process an on mentioned hard the which that to had presence, just continues. been seltzer, was I that wide your the U.S.? to So, to Canada, as on on-premise brands Staropramen thought starting or that also to be I see in the Thanks. presence premise that reopens

Gavin Hattersley

we Lite as like brands the obviously seeing and this into certainly to we and in particularly trusted owning that normal. large Yes, premise and particular thanks, Lauren. are increased for Many did is pandemic, yes Miller us see the trend for Look, this and benefits in on-premise. during brands faster we moving Light, Coors of sticking on sort the brands demand new stick true

the also our up Coors Lite We're said growth seeing nearly share grow with earlier, is we in Blue Light for in for and Moon Miller segment I in Chico we last and opportunity that offerings, opportunity actually our and it Moon Vizzy quarter, which to Seltzer an like year. outstanding and Peroni nearly is sample provided Blue Hard up missed Topo us quarter. US XXth portfolio LightSky above-premium the example newer XX% with As has the did XX%

wouldn't has beyond obviously just the states been in than US restrictions Vizzy as it's very, half early it fairly would Chico and it's So say too as markets, little Topo number of as very seltzer, certainly, for the to hard because say they in going in on-premise, limited States. good Vizzy a Chico of be little the the it's doing, that's premise longer well than did both United Topo there is I those desire I say on good. less the and it's in have Canada, states to on a drag

Canadian to is up. how the seem to on premise it's Europe, going pleasing. to So, open tell been very In

As on-premise. know, the you significantly over-indexed to

And UK for recovery July, levels the So, hold XXXX in approach been very on-premise so on-premise seen start place in in taking very us. that's the in the fact and been Europe encouraging there; that has business has positive to for we've us.

Lauren Lieberman

a you're degree follow-up that's it's because within on-premise within outlet distribution to within of any the that just And just or believe opened, of do clarify, channel? gaining greater share presence you those relative

Gavin Hattersley

In call the ready yes. lags data that, yes. the bit, the UK not US to answer In is so the a little

in the can to are, that Lauren. not that we hypothesis yet, Canada, we We have market, biggest data answer that. I have the is where but support In yes determine to is reopening a obviously in place but our that yet a don't

Lauren Lieberman

capacity great. hard plans plan a that for do looking in more this get that Vizzy in and US then, And the is is Okay, Chico on of you is XXXX? your to Topo into year premise seltzer and that the bring to to have the

Gavin Hattersley

supply It Topo only capacity, been perform to little to challenging continues the a It one that on has production markets distribution, allows our since to a our a got with tight, of distributors have be is to improving also the demand from have year. point include is in meet push had have Topo campaign to on-premise, got with Chico SKU, to we it us beginning allow obviously Lauren. supplier that marketing all the the well of distribution we is us for Vizzy turning but more able Chico and the Vizzy has behind Certainly, ready view. would which and but extremely continues going well. XX start as

So, it's convoluted a I of guess saying, way yes.

Lauren Lieberman

much. you so thank great, Okay,

Operator

Bank. Deutsche Steve Powers with Next question;

Steve Powers

to about absolute in were questions to very And correct, are two, you compare was centered couple timeframe? they highest first I you've 'XX to the to you you'll and presumably, from as to we volume think back in much. is you half, Thank It is are you similar quarter, quarter, as in curious America, Thank one, the quarter. think of number down back index and XX% which about if similar brands And whether great. looks how dynamics. were where plan at do in you. of is that your as the that ever half, of from XXXX think which North the In question, I'm in index seen. guess up guess, number 'XX you were terms, but XX% my overall mid-XXs vision economy you just half, pivot But we mentioned think hold at premium brand the I - kind XX% you numbers in you're A the on also last of that like Europe, mix about the in back at those number do you're mid-XXs or do percentage steady level premium above price index quarter the one. at recover 'XX as as that think deprioritized, the you the tiers improvement,

Gavin Hattersley

Thanks, Steve.

Look has above That's that, levels. actually settled if approaching it XXXX as levels and all in to UK Okay, I but little in actually are at see the from actually, Eastern on were view a last and on-premise by point impacted you. in so than stable bit and a increased last, I approach the little more we've on-premise I think a of not we've substantially expecting higher Europe said distorted we're Europe, being We probably we US, bit seen, and now that said, a the the seen most know for as where we Euro down quite a let said actually the Central important XXXX of you and certainly by us quite and me is you as into more finals. the UK particularly outlets were well Actually, I weeks get fairly call, UK, and for and can the levels Central on-premise in an know as these Eastern Europe the XXXX is actually tourism levels. really was initially spiked level. I few back down in settled opened volume July. than for

opportunities have for year, which the festivals, drinking I'm lot football of half referring occasion have big didn't and a will we is We in us. more which last alliance primarily, phase half back to second year, a the the of in

by So, got out point we're to said. then seeing we and from you of question encouraged wasn't what on-premise, without there price particular your sure put totally I tiers view, point are an goals wishing of Steve volume I

XXXX; based it we on seen so mean, me an in for it teens hadn't above actually was share of encouraging we level, NSR in the I the our had premium of sure. haven't second up our And view the as well. like said, into NSR levels shot. venture being particularly Let strongest signs a joint portfolio did, working high QX, I which started, so of quarter give since the that our was above point

Steve Powers

North America, half levels Okay. can volume the No, is in portfolio, expect fair quarter, do the a total approach back in better XXXX just the I on-premise, put not but back it sounds helpful. total saw that's If we second the that portfolio versus it you you, just playback? to the brand like what that in

Gavin Hattersley

Because Right. decisions around our the really, not No, economy Steve. of portfolio.

cut I economy distributors portfolio our as and taking our as prepared announced are a we economy we, to said on rationalize to the that. portfolio So we my in meaningful as today, remarks

our a at share us. be performance. look negative you if for would that So And

a and of I announced SKUs XX% us often won't some of is them that, think paused brands our and it's quoted that lot we for performance in today shares back. of portfolio the as we decline and share come economy of

a about good view, and which our certainly momentum. we're lac So really above feeling our premium seltzers premium include from of position point and

Steve Powers

helps. it. that very Thank Appreciate you much. Okay,

Operator

Our Kevin of Grundy next question Jefferies. comes from

Kevin Grundy

spoke premise together the of and kind to wanted I it everyone. guidance, morning far assessing pull you're you year, discussed the the is the back the to good EBITDA community revenue the specifically so the around on we've some When of puts Hey, balance months of the X investment year and kind Gavin at call, of looking bring kind of takes. of to topics the and first running June, ahead major also it the months ahead seems of similarly probably of recovery than year. folks you and portfolio that running has X in to performance ahead greater ago, SKU on where said rationalization, pace plan, seltzer the your anticipated be you running perhaps company seems commodity certainly of was plan of thought plan, the worse environment of at then like the and the certainly start

it could So over you puts anything on takes your past can point back look put perhaps could we're the for you the just confirm to perhaps progressed how level given top this balance like the finer And reinvest look you months then I of as any kind confirm just to set if you the the missing up together? you just upside, here company be as of pull on sounds a hoping year? the has that? confidence and the strategy; was comment the line inclination will all six and of this

Gavin Hattersley

going lot on there. A Kevin. Thanks,

be I the we Canada. was be behind didn't the you of are we, meaningfully which in spend increased for we the I in Canada all And line bottom make delayed were plan is on continuation were meaningful things, June, the growth would and two sense. view, we community the Freedom year, marketing you, to reopening Day revitalization transpire the July. couple reinvesting to that the didn't guess the down mean always the going so called first why was were our back we're things for in the in revitalization reinvestment a do two would out premise didn't the sense things There like year QX the on investment at the were From through certainly be it are for we line second lock didn't supposed and went brands to say rationale I I but expecting that quarter. to the which And plan know, as in into of longer expecting a us was closed reasons delaying to So that point Canada, than both while and year, say time. UK when of to know and our talked last this marketing been that top we've of was we investing a expecting yes, was and that those at UK, drive make whole as we year, which month.

third half SKUs that in our really as that or really are And fast QX, said move as which have Topo moving now I higher to quarter Tracey us of has since partners the or levels marketing were probably is supply the will spent in year. our of improved our was now in allows than would brands said we at into we back spend meaningfully and And the brands. time QX, to with one the primarily last So two and and well worked Chico that supply, our the cyber-security beyond. sub-segments, inventory exception year, put which our they our behind with situation supply increase same attack the SKUs emphasis

put which through, our allow behind really be will to will And that. coming teams so that emphasis marketing

I question, - So I've answered and but if think haven't. Kevin, help I your me

Kevin Grundy

helpful. and in any where that and but level follow-up reason couple not the Gavin. pass total think ability should that the at, balancing think the discussion they pre-pandemic back of to a company then one lot in levels, I profile reach there it of for how lot were of thanks levels this on. is get could the about sort that over to company. to environment, margin at cadence years next extremely reinvest on I'll It's still need should investors levels investment understand margins Tracey XXXX, the the the reach of of just it's as squeeze volatility look to the quick a company you with No, I on is in If There's for there pre-pandemic

Tracey Joubert

with from our have a margin, as we obviously in view, the help. given the comes And Yes. cost this is should initiatives not as beyond which well of premiumization as breweries year, but Gavin guidance it about plan is revitalization that about so says savings G&A point higher that

Beyond that revitalization. but related consider those items, guidance, I and haven't would we to just specifically given

Kevin Grundy

good, luck. there. leave you. it Very Good Thank I'll

Gavin Hattersley

Thanks, Kevin.

Tracey Joubert

Thank you.

Operator

Our Bernstein. with next question from comes Sarwat Nadine

Nadine Sarwat

taking everybody. Thank my good morning you for Yes, question.

Day in I Europe a So came you want to of to June, said think little it then on meant you. of and I as update or zoom was on from especially on the volume can in and so trade to bit how now Freedom moved retailers, much you distributor restocking inventories that the was more Europe. growth levels at Then in QX? state us of July, that help any the be Thank in mean, how state saw the

Gavin Hattersley

Thanks, Nadine.

the U.S.? question Europe or for a that levels, is far As inventory as

Nadine Sarwat

Maybe with and follow-up my then, was Europe be we kick on can that off the U.S.? actually

Gavin Hattersley

July, in July average indoors increase reopened Okay. wasn't big more don't Well, mean, we've it, on I I progressive on-premise was one fully consumption XXXX on as obviously really volumes start the we and in hold as experienced the week to only XXth know seen that all. and QX for two-week would premise as then outdoor then on strategy of XX premise progressive. so approach into in May and would April the in buildup moved Europe around you been I inventory Freedom the said in look, on at levels, have inventories out We be levels. say pre-pandemic on of XX% There XXth. saw or UK frankly, we we

in place inventory the by going material be we good said Xth look, concerned, fast-moving and on another cans one brands our big July as in we Day they and are want challenge were be it going were a we XXXX. SKUs big actually always the do big far to better point have and brands to then, with be certainly were to are and as been way of for level said place for in cans and levels we going same levels to was packs be impact by a or those delivered not we the And it's what to our with and in inventory and SKUs Memorial the a continue from an So view. and inventories U.S. above large our we as

good making we're So, progress today.

Nadine Sarwat

follow-up, a data Great, Can I in And how if would additional lot give be so Chico. from consumers, us is squeeze you're of new that indication Topo to one or helpful. much that's very more respect the you to you helpful. buys? trials questions performance getting could then far Any as any repeat color coming of with

Gavin Hattersley

seeing it's is Nadine. taking mean, and all we've demand Chico said, of in groups features, less the got Texas, White allow to the share half our It's number a partners number trading but Trudy sure. XX that in incredibly in brand where country our and I behind supply well. the some no us coming to fastest for distribution only brand as coming improved be growth Yes, across that a, and from markets. the overall fastest quickly the and particular new sure strong as our belief is have the push XX and got productions a distribution the distributors, continues in a Claw three demographic one From than actually our to three top It's going we're demographic tight, I got brand strong, of and one in of retail really only view become the competitors, consumer SKU that this right seltzer point segment. the group our Topo and It's is, item of states. of I'm yes, and from already is seltzer from turning volume from, it's dominates it's

Nadine Sarwat

Okay, it thank I'll you. turn over.

Gavin Hattersley

Thanks, Nadine.

Operator

with Grandet Laurent from is Guggenheim. question next Our

Laurent Grandet

Thank everyone. good you and afternoon,

of is trying their one questions seltzer. sets So to really exhausting from first in the questions and

in year XX% to this carried seltzer that mentioned goal seltzer by Coors stopped, obviously but You be your of end. is reach can

in gap get manufacturing to more So be loss and to probably got in-house are some sooner. can, also, you space term short shelf would Vizzy and to [indiscernible] from got to comfortable would I these we virtually and the seltzer are gain where of launch how faster you that some to right the more pushing on you the to Chico and say you Topo capacity if really would on the for with XX% how Coors now re-provide you color seltzer bridge

know if to line more Chico states? wanted impacting the we be to stop view been So has this Topo in that time in-house for did relaunching to

Gavin Hattersley

Laurent. Thanks

three in As Topo the brought, pack far SKUs Lemonade. concerned, Vizzy we, winners particularly seeing on differentiated is the velocities. Vizzy think with retailers, XX% a I we to two as Vizzy increase those variety we almost We're With said, two shelf and Vizzy all we've that goal third that SKUs we got clear see each of share innovation got Chico. strong and our I traction we with and with seeing are as

more to Vizzy's innovation momentum And we're continue coming. fuel going we've got so to

a recently just launched LTOs innovation pack, like pack. We variety have had we've and June Watermelon pride

we brands on hand will a into Vizzy So do the to that our despite to category, hard the space. the segment so and going space take we're Vizzy seltzer's are to Coors innovation utilize of to four we put XXXX. which it's becoming on new show you number out difference in carved in going can the from way innovation point not much our have assume coming of seltzer in well that Coors terms hard entrants and unique all so that space, spot I'm that but in

and repeat of as XX a Nadine, about that, be I good I of to to said big not remain suppliers to certainly improving. goal am feel Vizzy we Topo incredibly Vizzy, will but getting share so all And our does will it as going Chico, strong, part

on We can our go have believe in to I worked mean, and national a time. ramp say when their equally XX highest been other in demand states. with in supply wherever third-party share. will Topo supply all not Texas I point we supply doing able because we suppliers we this we as the markets up Chico at haven't that clear high we're the is quite yet to our we well.

plan margins going slightly on we've improve we in-house, do our terms to it Coors in going are always of it's different a when track. perhaps said will it well bring bring to seltzer. So, XXXX we're we than that in When it and in-house process is Vizzy as

a So it's liquid question, a it's but availability a got of we've more not take capacity that point to I view, direct point certainly Happy of substitution from and one ready. view, operator. think, cans from

Operator

Sean from comes question with next Our King UBS.

Sean King

cadence me in from, I depletions a April could of is, right, Any All was getting like insights, July? you back mid-single to what on question the the in in -X% heard provide have back digits maybe positive the thanks I guess into quarter. for in One for you're here. we what seeing the US the

Gavin Hattersley

Thanks, a Sean. look our economy I from mean I at you in quarter decline mean if from share. would the second most space, been Look, of have a point view of

we've in we'll doesn't to of I our segments XX% made. this segment economy. point because largest mean choiceful our don't the we decision loss we of demands we've very a ensure matter believe that is we meet approaching almost that we time. think that do consumers think that It of all matter share chosen do, said at the segments I It's

we would be most by the made that around driven of decline So, choice economy.

don't but matter guidance principle second we a volume used of do know give we to into the going half, anymore Sean, as far as in we're past, to As and now. I years that that it do not

Sean King

was you. All but shot, right. appreciate Thank I worth It a the color.

Gavin Hattersley

Thanks, Sean.

Operator

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

Gavin Hattersley

we weren't the Thanks very get to to questions Look they given operator. understand today time constraints. able more much, that were I

Relations of and talking if could to please we progresses. team So, year forward you up follow Investor with our you look the with as many

in participating for everybody call. you thank today's So,

Operator

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

disconnect. now may You

Molson Coors Beverage (TAP) 29 Jul 212021 Q2 Earnings call transcript