Board of Directors Authorizes $2 Billion Share
Repurchase Program Over Five Years
Molson Coors Beverage Company (NYSE: TAP, TAP.A; TSX: TPX.B,
TPX.A) today introduced a new plan to accelerate its growth, its
long-term financial outlook, and new capital deployment plans. The
Acceleration Plan, designed to build upon the Company’s growth in
the years ahead, was shared at the Company’s 2023 Strategy Day in
New York City.
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the full release here:
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“Getting to growth was the focus of our 2019 Revitalization
Plan, and as a result of three plus years of work we are on track
to deliver our second straight year of top and bottom-line growth,”
said Gavin Hattersley, President and Chief Executive Officer. “Over
the past few years, long before controversy upended the U.S. beer
industry, we changed how we invest, market, and operate, and we
changed our future. Today we believe we are built for growth, we
expect growth, and we are delivering growth. We turned around
Molson Coors over the past few years, and our focus now is on
accelerating the growth we created in the years ahead.”
“Our long-term growth algorithm anticipates net sales revenue
growth, margin expansion, and attractive earnings per share growth,
while our expected compelling free cash flow generation supports
reinvestment in value creation,” said Tracey Joubert, Chief
Financial Officer. “With substantially improved financial
flexibility, we are pleased to announce a new $2 billion share
repurchase program as part of our balanced and cohesive approach of
prioritizing capital allocation among investing in our business,
reducing net debt, and returning cash to shareholders. As we look
to the future, we are confident in our strategy and ability to
drive compelling returns for our shareholders.”
The Company’s new Acceleration Plan builds off the successes
Molson Coors achieved under its Revitalization Plan since 2019. As
the Company’s Leadership Team outlined during the Strategy Day, the
plan centers on five pillars.
Grow core power brand net revenue. Molson Coors core
brands have been gaining strength, and the Company plans to
consistently grow its core power brand revenue in the years ahead.
In the U.S., Coors Light, Miller Lite, and Coors Banquet, have been
on an upward trajectory for several years, making them well
positioned to benefit from the shifts in consumer purchasing
behavior largely in the premium segment that have occurred in 2023.
Core brands in other large global markets have also been gaining
industry share, including Molson trademark in Canada and Ozujsko in
Croatia. Carling continues to be a top brand in the U.K. The
Company is focused on continuing that momentum for these
brands.
Aggressively premiumize its portfolio. The Company has
aggressively premiumized its portfolio, in both Beer and Beyond
Beer, to meaningfully change the shape of its product portfolio.
With the benefit of major innovation successes, including Madri in
the U.K. and Simply Spiked in North America, the Company has
increased its Net Sales Revenue from its Above Premium portfolio
from 23% in 2019 to 28% in 2022. Building on this strength along
with compelling new innovations, particularly in Beyond Beer, the
Company’s goal is for its Above Premium portfolio to reach
approximately one-third of its Net Sales Revenue excluding contract
brewing, factored and distributor owned brands in the medium
term.
Scale and expand in beyond beer. The Company’s Beyond
Beer portfolio includes Flavor, Spirits, and Non-Alcoholic. This
Beyond Beer portfolio supports the Company’s premiumization efforts
and is focused on scalable products in higher-growth segments. From
diversified flavor, including winners like Simply Spiked and Arnold
Palmer Spiked, to acclaimed whiskey brands under the Coors Spirits
Company, to energy drinks through its partnership with Dwayne
Johnson’s ZOA Energy, the Company expects its Beyond Beer portfolio
to drive about half of its Above Premium net sales revenue growth
over the medium term.
Invest in its capabilities. Molson Coors intends to
continue to invest in building leading capabilities and
efficiencies, including digital transformation, marketing
effectiveness, sales execution, and sustainability initiatives.
Since 2019, the Company increased aluminum can production capacity,
built a new U.S. variety packer, added a can line in Croatia, built
a new state-of-the-art brewery in Canada, broke ground on a major
modernization in its Golden Colorado brewery, and added flavor
production capabilities in the U.S., Canada, and the U.K. The
Company’s digital transformation has enhanced the effectiveness of
its marketing and sales efforts as well. Continued investments in
these capabilities are expected to help drive growth and margin
expansion through productivity improvements, operating
efficiencies, and cost savings.
Support its people, communities, and planet. The Company
recommitted to its core values, the first of which is “Put People
First” along with investing in their success and supporting the
communities in which it operates globally. Hattersley commended the
more than 16,000 employees around the world who helped deliver
growth over the past several years, along with the fundamentals of
the Revitalization Plan.
Financial Outlook:
Long-term Financial Outlook:
- Low-single-digit annual Net Sales Revenue growth, on a constant
currency basis
- Mid-single-digit annual Underlying Income before Income Taxes
growth, on a constant currency basis
- High-single-digit annual Underlying Earnings per Share
growth
- Net Debt to Underlying EBITDA of under 2.5x over the long
term
Share Repurchase:
Today, the Company announced that its Board of Directors
authorized a $2 billion share repurchase program with an expected
program term of five years. The Company intends for its repurchases
to be a mixture of sustained and opportunistic purchases that the
Company believes, with its balanced and cohesive approach, will
improve shareholder value creation.
A webcast of the event is accessible via the Investor Relations
page of the Molson Coors Beverage Company website,
ir.molsoncoors.com. A replay of the webcast will be available once
the event concludes.
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,
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 Molson Coors’ history is rooted in beer, Molson Coors offers
a modern portfolio that expands beyond the beer aisle as well.
Molson Coors Beverage Company is a publicly traded company that
operates through its Americas and EMEA&APAC reporting segments
and is traded on the New York Stock Exchange and Toronto Stock
Exchange. 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 Twitter through @MolsonCoors.
About Molson Coors Canada
Inc.
Molson Coors Canada Inc. (MCCI) is a subsidiary of Molson Coors
Beverage Company (MCBC). 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,"
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
"Financial Outlook," and “Share Repurchase” 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; 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; loss, operational disruptions or closure of a major
brewery or other key facility; 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; labor strikes, work stoppages or
other employee-related issues; ESG issues; 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; impacts
related to the coronavirus pandemic; 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;
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; 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.
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 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.
- 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. The percentage changes for net sales and
underlying income (loss) before income taxes in constant currency
consider the impact of foreign exchange by translating the 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, any transactional foreign currency
impacts, reported within the other non-operating income (expense),
net line item, are excluded 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231003616121/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)
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