Molson Coors(TAP) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales decreased by 2.3% to $2,973.5 million, with a 3.3% decline in constant currency[6] - U.S. GAAP loss before income taxes was $3,495.5 million, a decline of $3,826.9 million from the prior year, primarily due to a $3,645.7 million non-cash partial goodwill impairment charge[5] - Underlying (Non-GAAP) income before income taxes decreased by 11.9% in constant currency to $426.0 million[5] - U.S. GAAP net loss attributable to Molson Coors was $2,927.6 million, resulting in a diluted loss per share of $14.79[5] - Financial volume decreased by 6.0%, driven by lower shipments in both the Americas and EMEA&APAC segments[9] - Brand volume decreased by 4.5%, including a 4.4% decrease in the Americas segment and a 5.0% decrease in the EMEA&APAC segment[9] - Underlying net income for the nine months ended September 30, 2025, was $844.8 million, a decrease of 13.9% compared to the prior year[6] - Total net sales in the Americas decreased by 3.6%, driven by a 6.5% decline in financial volume, partially offset by a 3.0% favorable price and sales mix[18][19] - EMEA&APAC segment net sales increased by 2.4% to $721.0 million, with a reported income loss before income taxes of $110.4 million, a decline of $162.0 million from the prior year[22][30] - Underlying (Non-GAAP) income before income taxes decreased by 15.1% in constant currency, primarily due to lower financial volume and cost inflation[30] Cash Flow and Dividends - Cash provided by operating activities for the nine months ended September 30, 2025, was $1,243.7 million, a decrease of $172.1 million compared to the prior year[28] - Underlying (Non-GAAP) free cash flow for the nine months ended September 30, 2025, was $782.1 million, a decrease of $73.9 million from the prior year[33] - The company paid cash dividends of $285.7 million for the nine months ended September 30, 2025, compared to $279.4 million in the prior year[33] - Dividends paid in the nine months ended September 30, 2025, totaled $285.7 million, compared to $279.4 million in 2024[43] Debt and Financial Ratios - Total debt as of September 30, 2025, was $6,292.0 million, resulting in a net debt to underlying EBITDA ratio of 2.28x, up from 2.10x in the prior year[33] - Net debt (Non-GAAP) as of September 30, 2025, was $5,341.8 million, compared to $5,219.0 million as of September 30, 2024, reflecting an increase of 2.4%[74] - The net debt (Non-GAAP) to underlying (Non-GAAP) EBITDA ratio increased to 2.28 as of September 30, 2025, from 2.10 in the prior year[74] Operational Changes and Restructuring - A restructuring plan was announced, involving the elimination of approximately 400 salaried positions across the Americas segment, with expected charges of $35 million to $50 million[31] - The company expects to implement cost reduction strategies, including a restructuring plan announced in October 2025, to address cost inflation and market challenges[39] Future Outlook - The company expects a 3% to 4% decline in net sales on a constant currency basis for the full year 2025, anticipating being at the low end of the range[33] - Future outlook includes expectations for improved capital expenditures and operational funding, alongside anticipated impacts from macroeconomic forces and consumer preferences[39] Impairments and Losses - The company incurred a goodwill impairment of $3,645.7 million for the three months ended September 30, 2025[41] - The company recorded a partial goodwill impairment loss of $3,645.7 million during the three months ended September 30, 2025, with $77.5 million attributable to noncontrolling interests[59] - Intangible impairment losses totaled $273.9 million for the nine months ended September 30, 2025, with $18.9 million attributable to a noncontrolling interest[60] Taxation - The effective tax rate decreased to 16% from 31% in the prior year, influenced by the non-deductible portion of the goodwill impairment[11][13] - The effective tax rate under U.S. GAAP for Q3 2025 was 16%, down from 31% in Q3 2024, showing a significant improvement[72] - The underlying (Non-GAAP) effective tax rate for Q3 2025 was 22%, slightly down from 24% in Q3 2024[72] Volume and Sales Metrics - Q3 2025 net sales decreased by 3.6% to $2,260.0 million compared to Q3 2024[44] - Total worldwide brand volume decreased by 4.5% to 20.366 million hectoliters in Q3 2025 from 21.332 million hectoliters in Q3 2024[46] - The company reported a significant decline in contract brewing and wholesale/factored volume, down 50.1% in the Americas[46] - Financial volume in the Americas for Q3 2025 was 13.738 million hectoliters, down 6.5% from 14.695 million hectoliters in Q3 2024[46] - EMEA&APAC financial volume for Q3 2025 was 5.649 million hectoliters, a decrease of 4.9% compared to 5.938 million hectoliters in Q3 2024[46] Non-GAAP Measures - Non-GAAP measures are used for operational and financial decision-making, providing a clearer view of business performance[51] - The total non-GAAP adjustment items for the three months ended September 30, 2025, amounted to $3,921.5 million[64] - The underlying (Non-GAAP) income before income taxes for the nine months ended September 30, 2025, was $1,088.6 million[66]