Molson Coors(TAP) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter net sales decreased by 2.0% to $2,735.6 million, resulting in a full year decline of 0.6$11,627.0 million[10]. - U.S. GAAP income before income taxes increased by 109.2% to $346.3 million in Q4, and full year income improved by 20.0$1,503.0 million[10]. - Full year diluted EPS grew by 22.4% to $5.35, while underlying diluted EPS increased by 9.8$5.96[10]. - The underlying income before income taxes improved by 54.9% in constant currency to 185.9 million for the EMEA&APAC segment, compared to 126.8 million in 2023[22][30]. - The income before income taxes for the consolidated results in Q4 2024 was $346.3 million, a substantial increase of 109.2$165.5 million in Q4 2023[54]. - The company reported a 20.0% increase in income before income taxes for the full year 2024, totaling $1,503.0 million compared to$1,252.5 million in 2023[54]. - Net income attributable to Molson Coors Beverage Company for 2024 was $1.12 billion, an increase from$948.9 million in 2023[51]. - The underlying (Non-GAAP) net income for the year ended December 31, 2024 was $1,250.1 million, reflecting an increase from$1,179.4 million in 2023[66]. - U.S. GAAP Net income for Q4 2024 was $293.7 million, significantly up from$105.5 million in Q4 2023[80]. Sales and Volume - Financial volume decreased by 6.4% in Q4, primarily due to lower shipments and contract brewing volumes in the Americas[12]. - The Americas segment faced challenges due to a negative 3% impact from the wind down of a contract brewing agreement[5]. - Core power brands in the U.S. retained over 80% of their combined volume share gains compared to the previous year, with a 1.7 share point increase[6]. - Net sales for the year ended December 31, 2024, decreased by 0.6% to $9,240.2 million compared to$9,425.2 million in 2023, driven by lower financial volumes, partially offset by a favorable price and sales mix[27][28]. - Financial volumes decreased by 5.0% for the year, primarily due to lower shipments in the Americas and a decline in EMEA&APAC volumes[28]. - The Americas segment reported a net sales decrease of 2.6% for the three months ended December 31, 2024, primarily due to lower financial volumes and unfavorable foreign currency impacts[18][19]. - In Q4 2024, net sales in the Americas decreased by 2.6% to $2,173.9 million compared to$2,231.1 million in Q4 2023[54]. - The total worldwide brand volume for the Americas in Q4 2024 was 14.215 million hectoliters, down 2.2% from 14.531 million hectoliters in Q4 2023[55]. - For the full year 2024, financial volume in the Americas was 58.905 million hectoliters, a decline of 5.7% from 62.491 million hectoliters in 2023[56]. - In EMEA&APAC, net sales increased by 0.4% to $568.7 million in Q4 2024, compared to$566.6 million in Q4 2023[54]. Costs and Expenses - Cost of goods sold decreased by 3.4% on a reported basis, while cost of goods sold per hectoliter increased by 3.2% due to inflation and unfavorable mix[14]. - The cost of goods sold (COGS) decreased by 3.3% on a reported basis, primarily due to lower financial volumes, despite a 1.8% increase in COGS per hectoliter due to cost inflation[31]. - The company reported a COGS of $1,698.1 million for the three months ended December 31, 2024, compared to$1,757.8 million for the same period in 2023, reflecting a year-over-year decrease of approximately 3.4%[65]. - Total depreciation and amortization for Q4 2024 was $247.3 million, compared to$174.2 million in Q4 2023, reflecting a 42.0% increase[80]. Shareholder Returns - The company returned over $1 billion in cash to shareholders through dividends and share repurchases in 2024[4]. - The company declared a cash dividend of$0.44 per share, totaling $1.76 per share for the year ended December 31, 2024[36]. - The company declared a quarterly dividend of$0.47 per share, to be paid on March 14, 2025[41]. - The company paid dividends totaling $369.2 million in 2024, compared to$354.7 million in 2023, an increase of approximately 4.00%[53]. Debt and Cash Flow - The net debt to underlying EBITDA ratio ended the year at 2.09 times, aligning with the long-term target of under 2.5 times[9]. - Total debt as of December 31, 2024, was $6,146.1 million, with a net debt to underlying EBITDA ratio of 2.09x, down from 2.21x in 2023[36]. - The underlying free cash flow generated was$1,240.6 million for the year, a decrease of $179.4 million from the prior year[36]. - The company expects underlying free cash flow of approximately$1.3 billion for 2025, with a margin of plus or minus 10%[43]. - The company incurred a consolidated net interest expense of $215 million for 2025, with a margin of plus or minus 5$1,138.4 million from financing activities in 2024, compared to a decrease of $981.4 million in 2023, indicating a worsening cash flow situation[53]. - Cash and cash equivalents rose to$969.3 million in 2024, compared to $868.9 million in 2023, an increase of approximately 11.88$750 million, with a margin of plus or minus 5%[43]. - The underlying effective tax rate for 2025 is expected to be in the range of 22% to 24%[43]. Acquisitions and Investments - The company has acquired exclusive rights to produce and sell Fever-Tree products in the U.S. and invested approximately $90 million in Fever-Tree Drinks Plc[39]. Non-GAAP Measures - The company emphasized the importance of underlying free cash flow as a measure of its ability to generate cash and enhance shareholder value, calculated as net cash provided by operating activities less capital expenditures[64]. - The underlying effective tax rate for the company was adjusted to exclude the tax impact of non-GAAP adjustment items, which can significantly affect reported earnings[64]. - Non-GAAP adjustments for Q4 2024 included a restructuring cost of$83.8 million, while the previous year had a minimal impact from restructuring of $2.3 million[65]. - The company provided guidance for non-GAAP financial measures, indicating that these metrics are essential for operational and financial decision-making despite the challenges in predicting non-GAAP adjustment items[64].