Molson Coors Delivers Third Quarter Top-Line Growth of 12.4%
Third Quarter Income Before Income Taxes Increased 99.3%, While
Underlying Income Before Income Taxes Increased 43.5% on a Constant
Currency Basis
Anticipates High End of 2023 Full Year Top-Line Guidance and
Raises 2023 Full Year Bottom-Line Guidance, While Continuing to
Reinvest in the Business
Molson Coors Beverage Company ("MCBC" or "Molson Coors") (NYSE:
TAP, TAP.A; TSX: TPX.A, TPX.B) today reported results for the 2023
third quarter.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20231102928261/en/
2023 THIRD QUARTER FINANCIAL HIGHLIGHTS1
- Net sales increased 12.4% reported and 11.0% in constant
currency.
- Net sales per hectoliter increased 8.9% reported and 7.6% in
constant currency.
- U.S. GAAP income before income taxes of $544.0 million
increased 99.3% reported.
- Underlying (Non-GAAP) income before income taxes of $525.4
million improved 43.5% in constant currency.
- U.S. GAAP net income attributable to MCBC of $430.7 million,
$1.98 per share on a diluted basis. Underlying (Non-GAAP) diluted
earnings per share ("EPS") of $1.92 per share increased 45.5%.
____________________
(1)
See Appendix for definitions and
reconciliations of non-GAAP financial measures including constant
currency.
CEO AND CFO PERSPECTIVES
In the third quarter of 2023, Molson Coors delivered another
quarter of strong results growing net revenue by 12.4% reported and
income before income taxes by 99.3% reported and by 43.5% on an
underlying constant currency basis. The strong performance was
driven by double-digit top and bottom-line growth across both
business units.
Given its strong performance, Molson Coors is reaffirming its
top-line guidance but anticipates it at the high end of the range
and is raising its underlying income before income tax guidance for
the full year 2023 on a constant currency basis. The guidance
increase is driven by a healthier U.S. beer industry than
previously anticipated, more robust brand volume performance,
higher than expected pricing primarily in Canada, as well as lower
net interest expense due to higher cash balances generating
increased interest income.
The trajectory of the business has been improving for several
years, positioning the Company well to benefit from the accelerated
demand in the U.S. for its core brands. The Company, in partnership
with its distributors, has worked diligently to ensure that the
U.S. share gains are sustainable - by supplying the elevated level
of demand, proactively engaging with retailers to secure more shelf
space or with on-premise accounts to add more tap handles and
executing targeted sales and marketing efforts to promote trial and
retention of consumers, among others.
Gavin Hattersley, President and Chief
Executive Officer Statement:
"Our third quarter results represent another
quarter of incredible growth across our global business, and we are
on track to deliver a second straight year of top and bottom-line
growth. The improvement in our business is not limited to one
market, a couple brands, or one segment of the category, and the
improvement in our business started before April 1. We believe
these gains are sustainable, and the strength of our brands coupled
with the work we are doing gives us confidence we can maintain the
gains we have achieved and grow off of them."
Tracey Joubert, Chief Financial Officer
Statement:
"We are proud to report another quarter of
strong results. Both our business units contributed to double-digit
top and bottom-line growth, while strong cash generation enabled us
to continue to invest in our business, reduce net debt and return
cash to shareholders. Our performance underscores the strength of
our business, which has consistently improved over the last several
years. As we continue to navigate a challenging and dynamic global
macro-economic environment, the fundamental strengths of our
business and our actions to sustain the momentum we have achieved
give us confidence we can sustainably deliver top and bottom-line
growth in the years to come."
CONSOLIDATED PERFORMANCE - THIRD
QUARTER 2023
For the Three Months
Ended
($ in millions, except per share data)
(Unaudited)
September 30, 2023
September 30, 2022
Reported Increase
(Decrease)
Foreign Exchange
Impact
Constant Currency Increase
(Decrease)(1)
Net sales
$
3,298.4
$
2,935.2
12.4
%
$
39.5
11.0
%
U.S. GAAP income (loss) before income
taxes
$
544.0
$
273.0
99.3
%
$
1.3
98.8
%
Underlying income (loss) before income
taxes(1)
$
525.4
$
364.6
44.1
%
$
2.2
43.5
%
U.S. GAAP net income (loss)(2)
$
430.7
$
216.4
99.0
%
Per diluted share
$
1.98
$
0.99
100.0
%
Underlying net income (loss)(1)
$
418.5
$
286.8
45.9
%
Per diluted share
$
1.92
$
1.32
45.5
%
For the Nine Months
Ended
($ in millions, except per share data)
(Unaudited)
September 30, 2023
September 30, 2022
Reported Increase
(Decrease)
Foreign Exchange
Impact
Constant Currency Increase
(Decrease)(1)
Net sales
$
8,911.3
$
8,071.5
10.4
%
$
(19.9
)
10.7
%
U.S. GAAP income (loss) before income
taxes
$
1,087.0
$
501.6
116.7
%
$
11.9
114.3
%
Underlying income (loss) before income
taxes(1)
$
1,185.4
$
776.2
52.7
%
$
8.9
51.6
%
U.S. GAAP net income (loss)(2)
$
845.6
$
415.2
103.7
%
Per diluted share
$
3.89
$
1.91
103.7
%
Underlying net income (loss)(1)
$
922.0
$
610.7
51.0
%
Per diluted share
$
4.24
$
2.81
50.9
%
(1)
Represents income (loss) before
income taxes and net income (loss) attributable to MCBC adjusted
for non-GAAP items. See Appendix for definitions and
reconciliations of non-GAAP financial measures including constant
currency.
(2)
Net income (loss) attributable to
MCBC.
QUARTERLY CONSOLIDATED HIGHLIGHTS (VERSUS THIRD QUARTER 2022
RESULTS)
- Net sales: The following table highlights the drivers of
the change in net sales and net sales per hectoliter for the three
months ended September 30, 2023 compared to September 30, 2022 (in
percentages):
For the Three Months Ended
September 30, 2023
Financial Volume
Price and Sales Mix
Currency
Net Sales
Consolidated - Net sales
3.2
%
7.8
%
1.4
%
12.4
%
Consolidated - Net sales per
hectoliter
N/A
7.6
%
1.3
%
8.9
%
Net sales increased 12.4% driven by favorable
price and sales mix, higher financial volumes, and favorable
foreign currency impacts. Net sales increased 11.0% in constant
currency.
Financial volumes increased 3.2%, primarily
due to higher financial volumes in the Americas segment, partially
offset by a decrease in EMEA&APAC financial volumes. Brand
volumes improved 1.1% due to a 3.6% increase in the Americas,
partially offset by a 5.2% decline in EMEA&APAC.
Price and sales mix favorably impacted net
sales and net sales per hectoliter by 7.8% and 7.6%, respectively,
primarily due to increased net pricing including the rollover
benefit of taking several price increases in the prior year, as
well as favorable sales mix driven by geographic mix.
- Cost of goods sold ("COGS"): remained relatively flat
compared to prior year with higher financial volumes and
unfavorable foreign currency impacts offset by lower cost of goods
sold per hectoliter. Cost of goods sold per hectoliter:
decreased 3.0%, including the unfavorable impact of currency of
1.3%, primarily due to changes to our unrealized mark-to-market
derivative positions of $133.4 million, cost savings initiatives
and the benefits of volume leverage, partially offset by cost
inflation related to materials and manufacturing expenses and
unfavorable mix. Underlying COGS per hectoliter: increased
2.6% in constant currency, primarily due to cost inflation related
to materials and manufacturing expenses and unfavorable mix,
partially offset by cost savings initiatives and volume
leverage.
- Marketing, general & administrative ("MG&A"):
increased 13.2% on a reported basis, primarily due to increased
marketing investment on core brands and higher incentive
compensation expense. Underlying MG&A: increased 11.6%
in constant currency.
- U.S. GAAP income (loss) before income taxes: increased
99.3% on a reported basis, primarily due to increased net pricing
to customers, changes in our unrealized mark-to-market derivative
positions of $133.4 million and higher financial volumes, partially
offset by cost inflation related to materials and manufacturing
expenses, higher MG&A expense and the loss on the sale of our
controlling interest in the Truss joint venture in Canada.
- Underlying income (loss) before income taxes: improved
43.5% in constant currency, primarily due to increased net pricing
to customers and higher financial volumes, partially offset by cost
inflation related to materials and manufacturing expenses and
higher MG&A expense.
QUARTERLY SEGMENT HIGHLIGHTS (VERSUS THIRD QUARTER 2022
RESULTS)
Americas Segment
- Net sales: The following table highlights the drivers of
the change in net sales and net sales per hectoliter for the three
months ended September 30, 2023 compared to September 30, 2022 (in
percentages):
For the Three Months Ended
September 30, 2023
Financial Volume
Price and Sales Mix
Currency
Net Sales
Americas - Net sales
6.6
%
4.6
%
(0.4
)%
10.8
%
Americas - Net sales per hectoliter
N/A
4.3
%
(0.4
)%
3.9
%
Net sales increased 10.8% driven by increased
net pricing, as well as higher financial volumes, partially offset
by unfavorable sales mix and unfavorable foreign currency impacts.
Net sales increased 11.2% in constant currency.
Financial volumes increased 6.6% primarily
due to an increase in U.S. domestic shipments driven by volume
growth in our core brands. The increase in U.S. volume was impacted
by the continued shifts in consumer purchasing behavior largely
within the premium beer segment. Americas brand volumes increased
3.6%, including a 4.5% increase in the U.S. driven by growth in our
core brands, with Coors Light and Coors Banquet each up double
digits and Miller Lite up high single digits, partially offset by
the timing impacts related to one less trading day in the current
quarter and cycling a shift in volume ahead of price increases
taken early in the fourth quarter in the prior year. Canada brand
volumes increased 0.2% mainly driven by growth in our above premium
brands. Latin America volume decreased 2.5% largely due to economic
conditions in key markets.
Price and sales mix favorably impacted net
sales and net sales per hectoliter by 4.6% and 4.3%, respectively,
primarily due to increased net pricing including the rollover
benefit of several price increases taken in the previous year,
partially offset by unfavorable sales mix.
- U.S. GAAP and Underlying income (loss) before income
taxes: U.S. GAAP income before income taxes improved 28.2% on a
reported basis and underlying income before income taxes improved
32.2% in constant currency, primarily due to increased net pricing,
higher financial volumes and lower logistics expenses, partially
offset by cost inflation related to materials and manufacturing
expenses, as well as higher MG&A expense. Higher MG&A spend
was primarily due to increased marketing investment behind our core
brands and higher incentive compensation expense.
EMEA&APAC Segment
- Net sales: The following table highlights the drivers of
the change in net sales and net sales per hectoliter for the three
months ended September 30, 2023 compared to September 30, 2022 (in
percentages):
For the Three Months Ended
September 30, 2023
Financial Volume
Price and Sales Mix
Currency
Net Sales
EMEA&APAC - Net sales
(5.5
)%
15.9
%
8.8
%
19.2
%
EMEA&APAC - Net sales per
hectoliter
N/A
16.8
%
9.3
%
26.1
%
Net sales increased 19.2% driven by favorable
price and sales mix as well as favorable foreign currency impacts,
partially offset by a decline in financial volumes. Net sales
increased 10.4% in constant currency.
Financial volumes decreased 5.5% and brand
volumes declined 5.2% in all regions throughout the segment driven
by continued industry softness and inflationary pressures on the
consumer in Central and Eastern Europe.
Price and sales mix favorably impacted net
sales and net sales per hectoliter by 15.9% and 16.8%,
respectively, primarily due to increased net pricing including the
rollover benefits from price increases taken in the prior year and
favorable sales mix.
- U.S. GAAP and Underlying income (loss) before income
taxes: U.S. GAAP income before income taxes improved 45.5% on a
reported basis and underlying income before income taxes improved
58.1% in constant currency, primarily due to increased net pricing
to customers and favorable sales mix, partially offset by lower
financial volumes and cost inflation on materials, logistics and
manufacturing expenses.
CASH FLOW AND LIQUIDITY HIGHLIGHTS
- U.S. GAAP cash from operations: net cash provided by
operating activities was $1,604.5 million for the nine months ended
September 30, 2023 which improved $487.0 million compared to the
prior year primarily due to higher net income and the favorable
timing of working capital in the Americas, partially offset by
higher income taxes paid.
- Underlying free cash flow: cash received of $1,121.6
million for the nine months ended September 30, 2023 which
represents an increase of $524.2 million from the prior year, was
primarily due to higher net cash provided by operating activities
and lower capital expenditures as a result of the timing of capital
projects.
- Debt: Upon its maturity on July 15, 2023, we repaid our
CAD 500 million 2.84% notes using cash on hand. Total debt as of
September 30, 2023 was $6,179.9 million and cash and cash
equivalents totaled $801.7 million, resulting in net debt of
$5,378.2 million and a net debt to underlying EBITDA ratio of
2.23x. As of September 30, 2022, our net debt to underlying EBITDA
ratio was 3.13x.
- Dividends: A cash dividend of $0.41 per share was
declared and paid to eligible shareholders of record on the
respective quarterly record dates during the nine months ended
September 30, 2023, for a total of $1.23 per share or a CAD
equivalent of CAD 1.63 per share. A cash dividend of $0.38 per
share was declared and paid to eligible shareholders of record on
the respective quarterly record dates during the nine months ended
September 30, 2022, for a total of $1.14 per share or a CAD
equivalent of CAD 1.45 per share.
- Share Repurchase Program: For the nine months ended
September 30, 2023, we repurchased 980,000 shares under the share
repurchase program at a weighted average price of $62.10 per share,
including brokerage commissions, for an aggregate value of $60.9
million. For the nine months ended September 30, 2022, we
repurchased 740,000 shares at a weighted average price of $52.36
per share, including brokerage commissions, for an aggregate value
of $38.8 million. On September 29, 2023, our Company's Board of
Directors approved a new share repurchase program authorizing the
repurchase of up to an aggregate of $2.0 billion of its Class B
common stock, with an expected program term of five years. The
program is part of our balanced and cohesive approach to
prioritizing capital allocation intended to improve shareholder
value creation. This repurchase program replaces and supersedes any
repurchase program previously approved by the Board.
OTHER RESULTS
Tax Rates Table
(Unaudited)
For the Three Months
Ended
September 30, 2023
September 30, 2022
U.S. GAAP effective tax rate
21
%
20
%
Underlying effective tax rate(1)
20
%
21
%
(1)
See Appendix for definitions and
reconciliations of non-GAAP financial measures.
- The increase in our third quarter U.S. GAAP effective
tax rate was primarily due to the impact of geographic mix with
higher pretax income in higher tax rate jurisdictions, partially
offset by the net effect of discrete tax items in the period. We
recognized $15.5 million GAAP discrete tax benefit in the three
months ended September 30, 2023 compared to $5.9 million GAAP
discrete tax expense in the three months ended September 30,
2022.
- The decrease in our third quarter Underlying
effective tax rate was primarily due to the net effect of
discrete tax items in the period, offset in part by the impact of
geographic mix with higher pretax income in higher tax rate
jurisdictions. We recognized $14.3 million underlying discrete tax
benefit in the three months ended September 30, 2023 compared to
$0.9 million underlying discrete tax expense in the three months
ended September 30, 2022. Geographic mix was less impactful to our
underlying rate due to the removal of non-GAAP items.
2023 OUTLOOK
Molson Coors is adjusting certain full year 2023 financial
guidance metrics.
- Net sales: reaffirming high single-digit increase versus
2022 on a constant currency basis but narrowing to the high end of
the range. The adjustment is due to the U.S. beer category being
healthier than projected as well as stronger than expected brand
volume growth, which we expect to accelerate in the fourth quarter.
Also, pricing across the Company's global markets, in particular
Canada, is better than previously expected.
- Underlying income (loss) before income taxes: 32% to 36%
increase compared to 2022 on a constant currency basis from our
previous guidance of a 23% to 26% increase. This is primarily due
to the net sales drivers described above as well as lower net
interest expense as described below.
- Consolidated net interest expense: $210 million, plus or
minus 5% from our previous guidance of $225 million, plus or minus
5%. The decrease is due to higher than previously anticipated cash
balances generating higher interest income.
The Company continues to expect the following targets for full
year 2023.
- Underlying free cash flow: $1.2 billion, plus or minus
10%.
- Capital expenditures: $700 million incurred, plus or
minus 5%.
- Underlying depreciation and amortization: $690 million,
plus or minus 5%.
- Underlying effective tax rate: in the range of 21% to
23% for 2023.
The Company's updated full year 2023 guidance implies the
following for the fourth quarter.
- Net sales: mid single-digit growth for the fourth
quarter on a constant currency basis as we will lap higher than
typical pricing taken in late 2022. In addition, we expect our
brand volume growth to outpace our financial volume growth due to
U.S. breweries shipping above expectations in the third quarter
resulting in healthy distributor inventories and planned downtime
in the U.S. network for system maintenance. We also expect a
financial volume headwind as the wind down of a large and
low-margin contract brewing agreement accelerates in the fourth
quarter.
- Underlying income (loss) before income taxes: at the
midpoint, a high single-digit decrease for the fourth quarter on a
constant currency basis, including mid single-digit top-line
growth. This is due to an increase in underlying COGS per
hectoliter due to continued high inflation in EMEA&APAC and
lower volume leverage than the prior two quarters. Furthermore, we
expect MG&A to be up approximately $90 million, largely related
to planned investment behind our core brands and higher incentive
compensation due to the Company's strong performance this
year.
NOTES
Unless otherwise indicated in this release, all $ amounts are in
U.S. Dollars, and all quarterly comparative results are for the
Company’s third quarter ended September 30, 2023 compared to the
third quarter ended September 30, 2022. Some numbers may not sum
due to rounding.
2023 THIRD QUARTER INVESTOR CONFERENCE CALL
Molson Coors Beverage Company will conduct an earnings
conference call with financial analysts and investors at 11:00 a.m.
Eastern Time today to discuss the Company’s 2023 third quarter
results. The live webcast will be accessible via our website,
ir.molsoncoors.com. An online replay of the webcast will be
available until 11:59 p.m. Eastern Time on February 12, 2024. The
Company will post this release and related financial statements on
its website today.
OVERVIEW OF MOLSON COORS BEVERAGE COMPANY
For more than two centuries Molson Coors Beverage Company has
been brewing beverages that unite people to celebrate all life’s
moments. From Coors Light, Miller Lite, Molson Canadian, Carling,
Ozujsko and Staropramen to Coors Banquet, Blue Moon Belgian White,
Vizzy Hard Seltzer, Leinenkugel’s Summer Shandy, Miller High Life
and more, Molson Coors produces many beloved and iconic beer
brands. While the company’s history is rooted in beer, Molson Coors
offers a modern portfolio that expands beyond the beer aisle as
well.
Our reporting segments include: Americas, operating in the U.S.,
Canada and various countries in the Caribbean, Latin and South
America; and EMEA&APAC, operating in Bulgaria, Croatia, Czech
Republic, Hungary, Montenegro, the Republic of Ireland, Romania,
Serbia, the U.K., various other European countries, and certain
countries within the Middle East, Africa and Asia Pacific. In
addition to our reporting segments, we also have certain activity
that is not allocated to our reporting segments and reported as
"Unallocated", which primarily includes financing-related costs
such as interest expense and income, foreign exchange gains and
losses on intercompany balances and realized and unrealized changes
in fair value on instruments not designated in hedging
relationships related to financing and other treasury-related
activities and the unrealized changes in fair value on our
commodity swaps not designated in hedging relationships recorded
within cost of goods sold, which are later reclassified when
realized to the segment in which the underlying exposure resides.
Additionally, only the service cost component of net periodic
pension and OPEB cost is reported within each operating segment,
and all other components remain unallocated.
Our Environmental, Social and Governance ("ESG") strategy is
focused on People and Planet with a strong commitment to raising
industry standards and leaving a positive imprint on our employees,
consumers, communities and the environment. To learn more about
Molson Coors Beverage Company, visit molsoncoors.com,
MolsonCoorsOurImprint.com or on X (formerly Twitter) through
@MolsonCoors.
ABOUT MOLSON COORS CANADA INC.
Molson Coors Canada Inc. ("MCCI") is a subsidiary of Molson
Coors Beverage Company. MCCI Class A and Class B exchangeable
shares offer substantially the same economic and voting rights as
the respective classes of common shares of MCBC, as described in
MCBC’s annual proxy statement and Form 10-K filings with the U.S.
Securities and Exchange Commission. The trustee holder of the
special Class A voting stock and the special Class B voting stock
has the right to cast a number of votes equal to the number of then
outstanding Class A exchangeable shares and Class B exchangeable
shares, respectively.
FORWARD-LOOKING STATEMENTS
This press release includes “forward-looking statements” within
the meaning of the U.S. federal securities laws. Generally, the
words "expects," "intend," "goals," "plans," "believes,"
"continues," "may," "anticipate," "seek," "estimate," "outlook,"
"trends," "future benefits," "potential," "projects," "strategies,"
"implies," and variations of such words and similar expressions are
intended to identify forward-looking statements. Statements that
refer to projections of our future financial performance, our
anticipated growth and trends in our businesses, and other
characterizations of future events or circumstances are
forward-looking statements, and include, but are not limited to,
statements under the headings "CEO and CFO Perspectives" and "2023
Outlook," with respect to expectations of cost inflation, limited
consumer disposable income, consumer preferences, overall volume
and market share trends, pricing trends, industry forces, cost
reduction strategies, shipment levels and profitability, the
sufficiency of capital resources, anticipated results, expectations
for funding future capital expenditures and operations, debt
service capabilities, timing and amounts of debt and leverage
levels, market share and expectations regarding future dividends.
In addition, statements that we make in this press release that are
not statements of historical fact may also be forward-looking
statements.
Although the Company believes that the assumptions upon which
its forward-looking statements are based are reasonable, it can
give no assurance that these assumptions will prove to be correct.
Important factors that could cause actual results to differ
materially from the Company’s historical experience, and present
projections and expectations are disclosed in the Company’s filings
with the Securities and Exchange Commission (“SEC”). These factors
include, among other things, the deterioration of general economic,
political, credit and/or capital market conditions, including those
caused by the ongoing Russia-Ukraine conflict or other geopolitical
tensions; our dependence on the global supply chain and significant
exposure to changes in commodity and other input prices and the
impacts of supply chain constraints and inflationary pressures;
weak, or weakening of, economic, social and other conditions in the
markets in which we do business, including cost inflation and
reductions in discretionary consumer spending; loss, operational
disruptions or closure of a major brewery or other key facility,
including those of our suppliers, due to unforeseen or catastrophic
events or otherwise; cybersecurity incidents impacting our
information systems, and violations of data privacy laws and
regulations; our reliance on brand image, reputation, product
quality and protection of intellectual property; constant evolution
of the global beer industry and the broader alcohol industry, and
our position within the global beer industry and success of our
product in our markets; competition in our markets; our ability to
successfully and timely innovate beyond beer; changes in the social
acceptability, perceptions and the political view of the beverage
categories in which we operate, including alcohol; labor strikes,
work stoppages or other employee-related issues; ESG issues,
including those related to climate change and sustainability;
climate change and other weather events; inadequate supply or
availability of quality water; our dependence on key personnel; our
reliance on third party service providers and internal and
outsourced systems for our information technology and certain other
administrative functions; impacts related to the coronavirus
pandemic; investment performance of pension plan holdings and other
factors impacting related pension plan costs and contributions; our
significant debt level subjects us to financial and operating
risks, and the agreements governing such debt, which subject us to
financial and operating covenants and restrictions; deterioration
in our credit rating; default by, or failure of, our counterparty
financial institutions; impairments of the carrying value of our
goodwill and other intangible assets; the estimates and assumptions
on which our financial projections are based may prove to be
inaccurate; our reliance on a small number of suppliers to obtain
the input materials we need to operate our business; termination or
changes of one or more manufacturer, distribution or production
agreements, or issues caused by our dependence on the parties to
these agreements; unfavorable outcomes of legal or regulatory
matters; our operations in developing and emerging markets; changes
to the regulation of the distribution systems for our products; our
consolidated financial statements are subject to fluctuations in
foreign exchange rates; changes in tax, environmental, trade or
other regulations or failure to comply with existing licensing,
trade and other regulations; risks associated with operating our
joint ventures; failure to successfully identify, complete or
integrate attractive acquisitions and joint ventures into our
existing operations; the dependence of our U.S. business on
independent distributors to sell our products, with no assurance
that these distributors will effectively sell our products, and
distributor consolidation in the U.S.; government mandated changes
to the retail distribution model resulting from new regulations on
our Canada business; indemnities provided to the purchaser of our
previous interest in the Cervejarias Kaiser Brasil S.A. business in
Brazil; economic trends and intense competition in European
markets; the potential for Pentland and the Coors Trust to disagree
on a matter submitted to our stockholders or the super-majority of
our board of directors to disagree on certain actions; the
interests of the controlling stockholders may differ from those of
other stockholders; shareholder activism efforts or unsolicited
offers from a third party; and other risks discussed in our filings
with the SEC, including our most recent Annual Report on Form 10-K
and our Quarterly Reports on Form 10-Q. All forward-looking
statements in this press release are expressly qualified by such
cautionary statements and by reference to the underlying
assumptions. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. We do
not undertake to update forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
MARKET AND INDUSTRY DATA
The market and industry data used, if any, in this press release
are based on independent industry publications, customer specific
data, trade or business organizations, reports by market research
firms and other published statistical information from third
parties, including Circana (formerly Information Resources, Inc.)
for U.S. market data and Beer Canada for Canadian market data
(collectively, the “Third Party Information”), as well as
information based on management’s good faith estimates, which we
derive from our review of internal information and independent
sources. Such Third Party Information generally states that the
information contained therein or provided by such sources has been
obtained from sources believed to be reliable.
APPENDIX
STATEMENTS OF OPERATIONS - MOLSON COORS
BEVERAGE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of
Operations
(In millions, except per share data)
(Unaudited)
For the Three Months
Ended
For the Nine Months
Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Sales
$
3,905.6
$
3,517.4
$
10,551.5
$
9,662.1
Excise taxes
(607.2
)
(582.2
)
(1,640.2
)
(1,590.6
)
Net sales
3,298.4
2,935.2
8,911.3
8,071.5
Cost of goods sold
(1,952.2
)
(1,951.5
)
(5,575.5
)
(5,340.0
)
Gross profit
1,346.2
983.7
3,335.8
2,731.5
Marketing, general and administrative
expenses
(746.8
)
(660.0
)
(2,096.7
)
(2,043.3
)
Other operating income (expense), net
(12.7
)
5.3
(13.0
)
(22.9
)
Equity income (loss)
5.5
1.1
12.8
3.7
Operating income (loss)
592.2
330.1
1,238.9
669.0
Interest income (expense), net
(48.8
)
(58.7
)
(162.5
)
(188.6
)
Other pension and postretirement benefits
(costs), net
2.5
14.8
7.7
35.7
Other non-operating income (expense),
net
(1.9
)
(13.2
)
2.9
(14.5
)
Income (loss) before income taxes
544.0
273.0
1,087.0
501.6
Income tax benefit (expense)
(112.4
)
(54.9
)
(236.1
)
(98.3
)
Net income (loss)
431.6
218.1
850.9
403.3
Net (income) loss attributable to
noncontrolling interests
(0.9
)
(1.7
)
(5.3
)
11.9
Net income (loss) attributable to MCBC
$
430.7
$
216.4
$
845.6
$
415.2
Basic net income (loss) attributable to
MCBC per share
$
1.99
$
1.00
$
3.91
$
1.91
Diluted net income (loss) attributable to
MCBC per share
$
1.98
$
0.99
$
3.89
$
1.91
Weighted average shares outstanding -
basic
216.1
216.8
216.3
217.0
Weighted average shares outstanding -
diluted
217.6
217.6
217.6
217.7
Dividends per share
$
0.41
$
0.38
$
1.23
$
1.14
BALANCE SHEETS - MOLSON COORS BEVERAGE COMPANY AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(In millions, except par value)
(Unaudited)
As of
September 30, 2023
December 31, 2022
Assets
Current assets
Cash and cash equivalents
$
801.7
$
600.0
Trade receivables, net
918.7
739.8
Other receivables, net
161.7
126.4
Inventories, net
852.6
792.9
Other current assets, net
353.1
378.9
Total current assets
3,087.8
2,638.0
Properties, net
4,268.2
4,222.8
Goodwill
5,320.8
5,291.9
Other intangibles, net
12,712.2
12,800.1
Other assets
1,179.4
915.5
Total assets
$
26,568.4
$
25,868.3
Liabilities and equity
Current liabilities
Accounts payable and other current
liabilities
$
3,358.9
$
2,978.3
Current portion of long-term debt and
short-term borrowings
878.8
397.1
Total current liabilities
4,237.7
3,375.4
Long-term debt
5,301.1
6,165.2
Pension and postretirement benefits
463.0
473.3
Deferred tax liabilities
2,706.8
2,646.4
Other liabilities
371.8
292.8
Total liabilities
13,080.4
12,953.1
Redeemable noncontrolling interest
28.2
—
Molson Coors Beverage Company
stockholders' equity
Capital stock
Preferred stock, $0.01 par value
(authorized: 25.0 shares; none issued)
—
—
Class A common stock, $0.01 par value
(authorized: 500.0 shares; issued and outstanding: 2.6 shares and
2.6 shares, respectively)
—
—
Class B common stock, $0.01 par value
(authorized: 500.0 shares; issued: 212.4 shares and 210.5 shares,
respectively)
2.1
2.1
Class A exchangeable shares, no par value
(issued and outstanding: 2.7 shares and 2.7 shares,
respectively)
100.8
102.2
Class B exchangeable shares, no par value
(issued and outstanding: 9.5 shares and 11.0 shares,
respectively)
356.0
413.3
Paid-in capital
7,099.8
7,006.4
Retained earnings
7,470.0
6,894.1
Accumulated other comprehensive income
(loss)
(1,198.6
)
(1,205.5
)
Class B common stock held in treasury at
cost (11.4 shares and 10.5 shares, respectively)
(584.1
)
(522.9
)
Total Molson Coors Beverage Company
stockholders' equity
13,246.0
12,689.7
Noncontrolling interests
213.8
225.5
Total equity
13,459.8
12,915.2
Total liabilities and equity
$
26,568.4
$
25,868.3
CASH FLOW STATEMENTS - MOLSON COORS BEVERAGE COMPANY AND
SUBSIDIARIES
Condensed Consolidated Statements of
Cash Flows
(In millions) (Unaudited)
For the Nine Months
Ended
September 30, 2023
September 30, 2022
Cash flows from operating
activities
Net income (loss) including noncontrolling
interests
$
850.9
$
403.3
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities
Depreciation and amortization
508.6
515.6
Amortization of debt issuance costs and
discounts
4.4
6.2
Share-based compensation
34.1
25.7
(Gain) loss on sale or impairment of
properties and other assets, net
8.2
16.8
Unrealized (gain) loss on foreign currency
fluctuations and derivative instruments, net
84.6
217.7
Equity (income) loss
(12.8
)
(3.7
)
Income tax (benefit) expense
236.1
98.3
Income tax (paid) received
(170.1
)
(71.2
)
Interest expense, excluding amortization
of debt issuance costs and discounts
174.0
185.0
Interest paid
(201.5
)
(211.5
)
Change in current assets and liabilities
and other
88.0
(64.7
)
Net cash provided by (used in) operating
activities
1,604.5
1,117.5
Cash flows from investing
activities
Additions to properties
(494.1
)
(530.7
)
Proceeds from sales of properties and
other assets
7.3
22.1
Acquisition of business, net of cash
acquired
(63.9
)
—
Other
(117.8
)
3.7
Net cash provided by (used in) investing
activities
(668.5
)
(504.9
)
Cash flows from financing
activities
Exercise of stock options under equity
compensation plans
7.7
2.5
Dividends paid
(266.7
)
(247.1
)
Payments for purchases of treasury
stock
(60.9
)
(38.8
)
Payments on debt and borrowings
(402.9
)
(507.3
)
Proceeds on debt and borrowings
7.0
7.0
Net proceeds from (payments on) revolving
credit facilities and commercial paper
—
121.1
Other
(12.8
)
(10.2
)
Net cash provided by (used in) financing
activities
(728.6
)
(672.8
)
Effect of foreign exchange rate changes on
cash and cash equivalents
(5.7
)
(52.0
)
Net increase (decrease) in cash and cash
equivalents
201.7
(112.2
)
Balance at beginning of year
600.0
637.4
Balance at end of period
$
801.7
$
525.2
SUMMARIZED SEGMENT RESULTS (hectoliter volume and $ in
millions) (Unaudited)
Americas
Q3 2023
Q3 2022
Reported % Change
FX Impact
Constant Currency %
Change
YTD 2023
YTD 2022
Reported % Change
FX Impact
Constant Currency %
Change
Net sales(1)
$
2,633.4
$
2,376.6
10.8
$
(10.0
)
11.2
$
7,194.1
$
6,580.2
9.3
$
(45.8
)
10.0
COGS(2)
$
(1,552.0
)
$
(1,476.5
)
(5.1
)
$
(4,332.5
)
$
(4,112.8
)
(5.3
)
MG&A
$
(589.3
)
$
(514.7
)
(14.5
)
$
(1,658.1
)
$
(1,623.8
)
(2.1
)
Income (loss) before income taxes
$
483.5
$
377.0
28.2
$
(5.2
)
29.6
$
1,204.2
$
812.1
48.3
$
(0.6
)
48.4
Underlying income (loss) before income
taxes
$
494.1
$
378.1
30.7
$
(5.7
)
32.2
$
1,215.6
$
892.9
36.1
$
(1.1
)
36.3
Financial volume(1)(3)
17.414
16.332
6.6
47.718
45.867
4.0
Brand volume
16.245
15.683
3.6
45.386
43.758
3.7
EMEA&APAC
Q3 2023
Q3 2022
Reported % Change
FX Impact
Constant Currency %
Change
YTD 2023
YTD 2022
Reported % Change
FX Impact
Constant Currency %
Change
Net sales(1)
$
670.4
$
562.6
19.2
$
49.5
10.4
$
1,729.5
$
1,502.0
15.1
$
25.9
13.4
COGS(2)
$
(440.9
)
$
(373.4
)
(18.1
)
$
(1,178.2
)
$
(1,030.3
)
(14.4
)
MG&A
$
(157.5
)
$
(145.3
)
(8.4
)
$
(438.6
)
$
(419.5
)
(4.6
)
Income (loss) before income taxes
$
67.5
$
46.4
45.5
$
3.4
38.1
$
106.3
$
48.6
118.7
$
5.4
107.6
Underlying income (loss) before income
taxes
$
69.1
$
41.5
66.5
$
3.5
58.1
$
111.5
$
45.0
147.8
$
5.1
136.4
Financial volume(1)(3)
6.120
6.477
(5.5
)
16.209
16.723
(3.1
)
Brand volume
6.077
6.407
(5.2
)
15.939
16.603
(4.0
)
Unallocated & Eliminations
Q3 2023
Q3 2022
Reported % Change
FX Impact
Constant Currency %
Change
YTD 2023
YTD 2022
Reported % Change
FX Impact
Constant Currency %
Change
Net sales
$
(5.4
)
$
(4.0
)
(35.0
)
$
(12.3
)
$
(10.7
)
(15.0
)
COGS(2)
$
40.7
$
(101.6
)
N/M
$
(64.8
)
$
(196.9
)
67.1
Income (loss) before income taxes
$
(7.0
)
$
(150.4
)
95.3
$
3.1
93.3
$
(223.5
)
$
(359.1
)
37.8
$
7.1
35.8
Underlying income (loss) before income
taxes
$
(37.8
)
$
(55.0
)
31.3
$
4.4
23.3
$
(141.7
)
$
(161.7
)
12.4
$
4.9
9.3
Financial volume
(0.002
)
—
N/M
(0.004
)
(0.005
)
20.0
Consolidated
Q3 2023
Q3 2022
Reported % Change
FX Impact
Constant Currency %
Change
YTD 2023
YTD 2022
Reported % Change
FX Impact
Constant Currency %
Change
Net sales
$
3,298.4
$
2,935.2
12.4
$
39.5
11.0
$
8,911.3
$
8,071.5
10.4
$
(19.9
)
10.7
COGS
$
(1,952.2
)
$
(1,951.5
)
—
$
(5,575.5
)
$
(5,340.0
)
(4.4
)
MG&A
$
(746.8
)
$
(660.0
)
(13.2
)
$
(2,096.7
)
$
(2,043.3
)
(2.6
)
Income (loss) before income taxes
$
544.0
$
273.0
99.3
$
1.3
98.8
$
1,087.0
$
501.6
116.7
$
11.9
114.3
Underlying income (loss) before income
taxes
$
525.4
$
364.6
44.1
$
2.2
43.5
$
1,185.4
$
776.2
52.7
$
8.9
51.6
Financial volume(3)
23.532
22.809
3.2
63.923
62.585
2.1
Brand volume
22.322
22.090
1.1
61.325
60.361
1.6
N/M = Not meaningful
The reported percent change and
the constant currency percent change in the above table are
presented as (unfavorable) favorable.
(1)
Includes gross inter-segment
volumes, sales and purchases, which are eliminated in the
consolidated totals.
(2)
The unrealized changes in fair
value on our commodity swaps, which are economic hedges, are
recorded as cost of goods sold within Unallocated. As the exposure
we are managing is realized, we reclassify the gain or loss to the
segment in which the underlying exposure resides, allowing our
segments to realize the economic effects of the derivative without
the resulting unrealized mark-to-market volatility.
(3)
Financial volume in hectoliters
for Americas and EMEA&APAC excludes royalty volume of 0.692
million hectoliters and 0.291 million hectoliters, respectively,
for the three months ended September 30, 2023, and excludes royalty
volume of 0.711 million hectoliters and 0.274 million hectoliters,
respectively for the three months ended September 30, 2022.
Financial volume in hectoliters for Americas and EMEA&APAC
excludes royalty volume of 1.955 million hectoliters and 0.697
million hectoliters, respectively, for the nine months ended
September 30, 2023, and excludes royalty volume of 1.957 million
hectoliters and 0.811 million hectoliters, respectively for the
nine months ended September 30, 2022.
WORLDWIDE BRAND AND FINANCIAL VOLUME
(In millions of hectoliters)
(Unaudited)
For the Three Months
Ended
September 30, 2023
September 30, 2022
Change
Financial Volume
23.532
22.809
3.2
%
Contract brewing and wholesale/factored
volume
(1.837
)
(1.770
)
3.8
%
Royalty volume
0.983
0.985
(0.2
)%
Sales-To-Wholesaler to Sales-To-Retail
adjustment
(0.356
)
0.066
N/M
Total Worldwide Brand Volume
22.322
22.090
1.1
%
N/M = Not meaningful
Worldwide brand volume (or "brand volume" when discussed by
segment) reflects owned or actively managed brands sold to
unrelated external customers within our geographic markets (net of
returns and allowances), royalty volume and our proportionate share
of equity investment worldwide brand volume calculated consistently
with MCBC owned volume. Financial volume represents owned or
actively managed brands sold to unrelated external customers within
our geographical markets, net of returns and allowances as well as
contract brewing, wholesale non-owned brand volume and
company-owned distribution volume. Contract brewing and
wholesale/factored volume is included within financial volume, but
is removed from worldwide brand volume, as this is non-owned volume
for which we do not directly control performance. Factored volume
in our EMEA&APAC segment is the distribution of beer, wine,
spirits and other products owned and produced by other companies to
the on-premise channel, which is a common arrangement in the U.K.
Royalty volume consists of our brands produced and sold by third
parties under various license and contract-brewing agreements and
because this is owned volume, it is included in worldwide brand
volume. Our worldwide brand volume definition also includes an
adjustment from Sales-to-Wholesaler ("STW") volume to
Sales-to-Retailer ("STR") volume. We believe the brand volume
metric is important because, unlike financial volume and STWs, it
provides the closest indication of the performance of our brands in
relation to market and competitor sales trends.
We also utilize net sales per hectoliter and cost of goods sold
per hectoliter, as well as the year over year changes in such
metrics, as key metrics for analyzing our results. These metrics
are calculated as net sales and cost of goods sold, respectively,
per our consolidated statement of operations divided by financial
volume for the respective period. We believe these metrics are
important and useful for investors and management because it
provides an indication of the trends in pricing and sales mix on
our net sales and the trends of sales mix and other cost impacts
such as inflation on our cost of goods sold.
USE OF NON-GAAP MEASURES
In addition to financial measures presented on the basis of
accounting principles generally accepted in the U.S. (“U.S. GAAP”),
we also use non-GAAP financial measures, as listed and defined
below, for operational and financial decision making and to assess
Company and segment business performance. These non-GAAP measures
should be viewed as supplements to (not substitutes for) our
results of operations presented under U.S. GAAP. We have provided
reconciliations of all historical non-GAAP measures to their
nearest U.S. GAAP measure and have consistently applied the
adjustments within our reconciliations in arriving at each non-GAAP
measure.
Our management uses these metrics to assist in comparing
performance from period to period on a consistent basis; as a
measure for planning and forecasting overall expectations and for
evaluating actual results against such expectations; in
communications with the board of directors, stockholders, analysts
and investors concerning our financial performance; as useful
comparisons to the performance of our competitors; and as metrics
of certain management incentive compensation calculations. We
believe these measures are used by, and are useful to, investors
and other users of our financial statements in evaluating our
operating performance.
- Underlying Income (Loss) before Income Taxes (Closest GAAP
Metric: Income (Loss) Before Income Taxes) – Measure of the
Company’s income (loss) before income taxes excluding the impact of
certain non-GAAP adjustment items from our U.S. GAAP financial
statements. Non-GAAP adjustment items include goodwill and other
intangible and tangible asset impairments, restructuring and
integration related costs, unrealized mark-to-market gains and
losses, potential or incurred losses related to certain litigation
accruals and settlements and gains and losses on sales of
non-operating assets, among other items included in our U.S. GAAP
results that warrant adjustment to arrive at non-GAAP results. We
consider these items to be necessary adjustments for purposes of
evaluating our ongoing business performance and are often
considered non-recurring. Such adjustments are subjective, involve
significant management judgment and can vary substantially from
company to company.
- Underlying COGS (Closest GAAP Metric: COGS) – Measure of
the Company’s COGS adjusted to exclude non-GAAP adjustment items
(as defined above). Non-GAAP adjustment items include the impact of
unrealized mark-to-market gains and losses on our commodity
derivative instruments, which are economic hedges, and are recorded
through COGS within Unallocated. As the exposure we are managing is
realized, we reclassify the gain or loss to the segment in which
the underlying exposure resides, allowing our segments to realize
the economic effects of the derivatives without the resulting
unrealized mark-to-market volatility. We also use underlying COGS
per hectoliter, as well as the year over year change in such
metric, as a key metric for analyzing our results. This metric is
calculated as underlying COGS divided by financial volume for the
respective period.
- Underlying MG&A (Closest GAAP Metric:
MG&A) – Measure of the Company’s MG&A expense excluding
the impact of certain non-GAAP adjustment items (as defined
above).
- Underlying net income (loss) attributable to MCBC (Closest
GAAP Metric: Net income (loss) attributable to MCBC) – Measure
of net income (loss) attributable to MCBC excluding the impact of
non-GAAP adjustment items (as defined above), the related tax
effects of non-GAAP adjustment items and certain other discrete tax
items.
- Underlying net income (loss) attributable to MCBC per
diluted share (also referred to as Underlying Earnings per Share)
(Closest GAAP Metric: Net income (loss) attributable to MCBC per
diluted share) – Measure of underlying net income (loss)
attributable to MCBC (as defined above) per diluted share. If
applicable, a reported net loss attributable to MCBC per diluted
share is calculated using the basic share count due to dilutive
shares being antidilutive. If underlying net income (loss)
attributable to MCBC becomes income excluding the impact of our
non-GAAP adjustment items, we include the incremental dilutive
shares, using the treasury stock method, into the dilutive shares
outstanding.
- Underlying effective tax rate (Closest GAAP Metric:
Effective Tax Rate) – Measure of the Company’s effective tax
rate excluding the related tax impact of pre-tax non-GAAP
adjustment items (as defined above) and certain other discrete tax
items. Discrete tax items include certain significant tax audit and
prior year reserve adjustments, impact of significant tax
legislation and tax rate changes and significant non-recurring and
period specific tax items.
- Underlying free cash flow (Closest GAAP Metric: Net Cash
Provided by (Used in) Operating Activities) – Measure of the
Company’s operating cash flow calculated as Net Cash Provided by
(Used In) Operating Activities less Additions to Properties and
excluding the pre-tax cash flow impact of certain non-GAAP
adjustment items (as defined above). We consider underlying free
cash flow an important measure of our ability to generate cash,
grow our business and enhance shareholder value, driven by core
operations and after adjusting for non-GAAP adjustment items, which
can vary substantially from company to company depending upon
accounting methods and book value of assets and capital
structure.
- Underlying depreciation and amortization (Closest GAAP
Metric: Depreciation & Amortization) – Measure of the
Company’s depreciation and amortization excluding the impact of
non-GAAP adjustment items (as defined above). These adjustments
primarily consist of accelerated depreciation or amortization taken
related to the Company’s strategic exit or restructuring
activities.
- Net debt to underlying earnings before interest, taxes,
depreciation, and amortization ("underlying EBITDA")
(Closest GAAP Metrics: Cash, Debt, & Income (Loss) Before
Income Taxes) – Measure of the Company’s leverage calculated as
Net debt (defined as current portion of long-term debt and
short-term borrowings plus long-term debt less cash and cash
equivalents) divided by the trailing twelve month underlying
EBITDA. Underlying EBITDA is calculated as Net Income (Loss)
excluding Interest expense (income), income tax expense (benefit),
depreciation and amortization, and the impact of non-GAAP
adjustment items (as defined above). This measure is not the same
as the Company’s maximum leverage ratio as defined under its
revolving credit facility, which allows for other adjustments in
the calculation of net debt to EBITDA.
- Constant currency - Constant currency is a non-GAAP
measure utilized to measure performance, excluding the impact of
translational and certain transactional foreign currency movements,
and is intended to be indicative of results in local currency. As
we operate in various foreign countries where the local currency
may strengthen or weaken significantly versus the U.S. dollar or
other currencies used in operations, we utilize a constant currency
measure as an additional metric to evaluate the underlying
performance of each business without consideration of foreign
currency movements. We present all percentage changes for net
sales, underlying COGS, underlying MG&A and underlying income
(loss) before income taxes in constant currency and calculate the
impact of foreign exchange by translating our current period local
currency results (that also include the impact of the comparable
prior period currency hedging activities) at the average exchange
rates during the respective period throughout the year used to
translate the financial statements in the comparable prior year
period. The result is the current period results in U.S. dollars,
as if foreign exchange rates had not changed from the prior year
period. Additionally, we exclude any transactional foreign currency
impacts, reported within the other non-operating income (expense),
net line item, from our current period results.
Our guidance for any of the measures noted above are also
non-GAAP financial measures that exclude or otherwise have been
adjusted for non-GAAP adjustment items from our U.S. GAAP financial
statements. When we provide guidance for any of the various
non-GAAP metrics described above, we do not provide reconciliations
of the U.S. GAAP measures as we are unable to predict with a
reasonable degree of certainty the actual impact of the non-GAAP
adjustment items. By their very nature, non-GAAP adjustment items
are difficult to anticipate with precision because they are
generally associated with unexpected and unplanned events that
impact our company and its financial results. Therefore, we are
unable to provide a reconciliation of these measures without
unreasonable efforts.
RECONCILIATION TO NEAREST U.S. GAAP
MEASURES
Reconciliation by Line Item
(In millions, except per share data)
(Unaudited)
For the Three Months Ended
September 30, 2023
Cost of goods sold
Marketing, general and
administrative expenses
Income (loss) before income
taxes
Net income (loss) attributable
to MCBC
Net income (loss) attributable
to MCBC per diluted share
Reported (U.S. GAAP)
$
(1,952.2
)
$
(746.8
)
$
544.0
$
430.7
$
1.98
Adjustments to arrive at underlying
Restructuring
—
—
1.5
1.5
0.01
Intangible and tangible asset impairments,
excluding goodwill
—
—
0.1
0.1
—
Gains and (losses) on other
disposals(1)
—
—
11.1
11.1
0.05
Unrealized mark-to-market (gains)
losses
(32.7
)
—
(30.8
)
(30.8
)
(0.14
)
Other items
—
0.7
(0.5
)
(0.5
)
—
Total
$
(32.7
)
$
0.7
$
(18.6
)
$
(18.6
)
$
(0.09
)
Tax effects on non-GAAP adjustments
—
—
—
7.5
0.03
Discrete tax items
—
—
—
(1.1
)
(0.01
)
Underlying (Non-GAAP)
$
(1,984.9
)
$
(746.1
)
$
525.4
$
418.5
$
1.92
(In millions, except per share data)
(Unaudited)
For the Nine Months Ended
September 30, 2023
Cost of goods sold
Marketing, general and
administrative expenses
Income (loss) before income
taxes
Net income (loss) attributable
to MCBC
Net income (loss) attributable
to MCBC per diluted share
Reported (U.S. GAAP)
$
(5,575.5
)
$
(2,096.7
)
$
1,087.0
$
845.6
$
3.89
Adjustments to arrive at underlying
Restructuring
—
—
1.8
1.8
0.01
Intangible and tangible asset impairments,
excluding goodwill
—
—
0.1
0.1
—
Gains and (losses) on other
disposals(1)
—
—
11.1
11.1
0.05
Unrealized mark-to-market (gains)
losses
81.8
—
81.8
81.8
0.38
Other items
—
5.0
3.6
3.6
0.02
Total
$
81.8
$
5.0
$
98.4
$
98.4
$
0.45
Tax effects on non-GAAP adjustments
—
—
—
(20.0
)
(0.09
)
Discrete tax Items
—
—
—
(2.0
)
(0.01
)
Underlying (Non-GAAP)
$
(5,493.7
)
$
(2,091.7
)
$
1,185.4
$
922.0
$
4.24
(1)
During the three months ended
September 30, 2023, we sold our controlling interest in the Truss
joint venture within our Americas segment and recognized a loss of
$11.1 million.
Reconciliation to Underlying Income (Loss) Before Income
Taxes by Segment
(In millions) (Unaudited)
For the Three Months Ended
September 30, 2023
Americas
EMEA&APAC
Unallocated
Consolidated
Income (loss) before income
taxes
$
483.5
$
67.5
$
(7.0
)
$
544.0
Add/Less:
Cost of goods sold(1)
—
—
(32.7
)
(32.7
)
Marketing, general &
administrative
0.7
—
—
0.7
Other non-GAAP adjustment items
9.9
1.6
1.9
13.4
Total non-GAAP adjustment items
$
10.6
$
1.6
$
(30.8
)
$
(18.6
)
Underlying income (loss) before income
taxes
$
494.1
$
69.1
$
(37.8
)
$
525.4
(In millions) (Unaudited)
For the Nine Months Ended
September 30, 2023
Americas
EMEA&APAC
Unallocated
Consolidated
Income (loss) before income
taxes
$
1,204.2
$
106.3
$
(223.5
)
$
1,087.0
Add/(less):
Cost of goods sold(1)
—
—
81.8
81.8
Marketing, general &
administrative
1.7
3.3
—
5.0
Other non-GAAP adjustment items
9.7
1.9
—
11.6
Total non-GAAP adjustment items
$
11.4
$
5.2
$
81.8
$
98.4
Underlying income (loss) before income
taxes
$
1,215.6
$
111.5
$
(141.7
)
$
1,185.4
(1)
Reflects changes in our
mark-to-market positions on our commodity hedges recorded as cost
of goods sold within Unallocated. As the exposure we are managing
is realized, we reclassify the gain or loss to the segment in which
the underlying exposure resides, allowing our segments to realize
the economic effects of the derivative without the resulting
unrealized mark-to-market volatility.
Effective Tax Rate
Reconciliation
(Unaudited)
For the Three Months
Ended
September 30, 2023
September 30, 2022
U.S. GAAP
Effective Tax Rate
21
%
20
%
Add/Less:
Tax effect of non-GAAP adjustment
items(1)
(1
%)
3
%
Add/Less:
Discrete tax items(1)(2)
—
%
(2
%)
Non-GAAP
Underlying (Non-GAAP) Effective Tax
Rate
20
%
21
%
(1)
Adjustments related to the tax
effect of non-GAAP adjustment items, as well as certain discrete
tax items excluded from our underlying effective tax rate. Discrete
tax items include certain significant tax audit and prior year
reserve adjustments, impact of significant tax legislation and tax
rate changes and significant non-recurring and period specific tax
items.
(2)
The change in the tax effect of
discrete tax items from prior year is primarily due to the
recognition of approximately $5 million of discrete tax expense
recorded in U.S. GAAP and removed from underlying for the three
months ended September 30, 2022.
Underlying Free Cash Flow
(In millions) (Unaudited)
For the Nine Months
Ended
September 30, 2023
September 30, 2022
U.S. GAAP
Net Cash Provided by (Used In)
Operating Activities
$
1,604.5
$
1,117.5
Less:
Additions to properties(1)
(494.1
)
(530.7
)
Add/Less:
Cash impact of non-GAAP adjustment
items(2)
11.2
10.6
Non-GAAP
Underlying Free Cash Flow
$
1,121.6
$
597.4
(1)
Included in net cash provided by
(used in) investing activities.
(2)
Included in net cash provided by
(used in) operating activities and primarily reflects costs paid
for restructuring activities for the nine months ended September
30, 2023 and September 30, 2022.
Net Debt to Underlying EBITDA Ratio
(In millions except net debt to underlying
EBITDA ratio) (Unaudited)
As of
September 30, 2023
September 30, 2022
U.S. GAAP
Current portion of long-term debt and
short-term borrowings
$
878.8
$
505.0
Add:
Long-term debt
5,301.1
6,082.7
Less:
Cash and cash equivalents
801.7
525.2
Net debt
$
5,378.2
$
6,062.5
Q3 Underlying EBITDA
742.9
593.5
Q2 Underlying EBITDA
725.2
566.4
Q1 Underlying EBITDA
388.4
320.5
Q4 Underlying EBITDA
555.5
457.3
Non-GAAP
Underlying EBITDA(1)
$
2,412.0
$
1,937.7
Net debt to underlying EBITDA
ratio
2.23
3.13
(1)
Represents underlying EBITDA on a
trailing twelve month basis.
Underlying EBITDA
Reconciliation
(In millions) (Unaudited)
For the Three Months
Ended
September 30, 2023
September 30, 2022
U.S. GAAP
Net income (loss) attributable to
MCBC
$
430.7
$
216.4
Add:
Net income (loss) attributable to
noncontrolling interests
0.9
1.7
U.S. GAAP
Net income (loss)
431.6
218.1
Add:
Interest expense (income), net
48.8
58.7
Income tax expense (benefit)
112.4
54.9
Depreciation and amortization
168.7
170.2
Adjustments included in underlying
income(1)
(18.6
)
91.6
Non-GAAP
Underlying EBITDA
$
742.9
$
593.5
(1)
Includes adjustments to income
(loss) before income taxes related to non-GAAP adjustment items.
See Reconciliations to Nearest U.S. GAAP Measures by Line Item
table for detailed adjustments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102928261/en/
Investor Relations Greg Tierney, (414) 931-3303 Traci
Mangini, (415) 308-0151 News Media Rachel Dickens, (314)
452-9673
Molson Coors Canada (TSX:TPX.B)
Historical Stock Chart
From Jun 2024 to Jul 2024
Molson Coors Canada (TSX:TPX.B)
Historical Stock Chart
From Jul 2023 to Jul 2024