Molson Coors(TAP) - 2025 Q1 - Quarterly Results

Financial Performance - Net sales decreased by 11.3% to $2,304.1 million, with a 10.4% decline in constant currency[6] - U.S. GAAP income before income taxes fell by 41.1% to $156.3 million, while underlying income before income taxes decreased by 49.5% in constant currency to $131.1 million[6] - U.S. GAAP net income attributable to Molson Coors was $121.0 million, or $0.59 per diluted share, representing a 39.2% decline[6] - The Americas segment reported net sales of $1,881.8 million, down 12.3%, with financial volumes decreasing by 15.6%[13] - EMEA&APAC segment net sales decreased by 6.0% to $427.3 million, driven by a 9.7% decline in financial volumes[21] - Financial volumes decreased by 14.3%, primarily due to lower shipments in both the Americas and EMEA&APAC segments[11] - Financial and brand volumes decreased by 9.7% and 9.8%, respectively, due to lower volumes across all regions driven by soft market demand and heightened competition[23] - Net income for Q1 2025 was $123.1 million, down from $209.9 million in Q1 2024, representing a decrease of 41.3%[40] - Consolidated net sales for Q1 2025 were $2,304.1 million, a decline of 11.3% compared to $2,596.4 million in Q1 2024[41] - The Americas segment reported net sales of $1,881.8 million in Q1 2025, down 12.3% from $2,145.4 million in Q1 2024[41] - Total Worldwide Brand Volume decreased by 8.0% to 15.547 million hectoliters for the three months ended March 31, 2025, compared to 16.899 million hectoliters in the same period of 2024[45] Cash Flow and Debt - Net cash used in operating activities was $90.7 million for Q1 2025, compared to net cash provided of $25.4 million for Q1 2024, primarily due to lower net income adjusted for non-cash items[24] - Cash and cash equivalents decreased to $412.7 million at the end of Q1 2025 from $969.3 million at the beginning of the year, a decline of 57.5%[40] - The company experienced a net cash outflow from operating activities of $90.7 million in Q1 2025, compared to a cash inflow of $25.4 million in Q1 2024[40] - Total current liabilities decreased to $2,865.8 million as of March 31, 2025, from $3,045.2 million as of December 31, 2024, a reduction of 5.9%[39] - Total debt as of March 31, 2025, was $6,237.8 million, resulting in a net debt to underlying EBITDA ratio of 2.47x, up from 2.29x as of March 31, 2024[30] - As of March 31, 2025, the net debt stood at $5,825.1 million, slightly up from $5,759.3 million a year earlier[62] - The net debt to underlying EBITDA ratio increased to 2.47 as of March 31, 2025, compared to 2.29 in the previous year, indicating a higher leverage position[62] Guidance and Future Outlook - The company updated its 2025 full year guidance, projecting a low single-digit decline in net sales on a constant currency basis, compared to a previous expectation of low single-digit growth[6] - Capital expenditures for 2025 are now expected to be approximately $650 million, down from a previous estimate of $750 million[6] - The company adjusted its 2025 guidance due to impacts from the global macroeconomic environment on the beer industry and consumer trends[27] Operational Metrics - Gross profit for Q1 2025 was $850.9 million, down from $963.5 million in Q1 2024[38] - Underlying (Non-GAAP) free cash flow was $1.3 billion, plus or minus 10%[30] - The company's underlying income before income taxes for Q1 2025 was $131.1 million, down 49.3% from $258.8 million in Q1 2024[41] - The underlying EBITDA (Non-GAAP) for Q1 2025 was $353.3 million, down from $476.2 million in Q1 2024, marking a decline of approximately 26%[63] - U.S. GAAP depreciation and amortization for Q1 2025 was $180.3 million, up from $169.0 million in Q1 2024, reflecting increased asset depreciation[59] Investments and Partnerships - The company is focusing on premiumization initiatives and has formed an exclusive partnership with Fever-Tree to enhance its nonalcoholic operations[5] - The company made an investment in Fevertree Drinks plc, recording a gain of $25.7 million as an unrealized fair value adjustment[55] Tax and Other Adjustments - The effective tax rate remained flat at 21% compared to the prior year[12] - The company recorded total non-GAAP adjustment items of $(25.2) million for Q1 2025, compared to $(6.6) million in Q1 2024, indicating increased adjustments impacting financial results[56][57] - Accelerated depreciation of $17.9 million was recorded in Q1 2025 due to the decision to wind down certain U.S. craft businesses, impacting overall depreciation expenses[59]