Molson Coors(US:TAP)2022-02-23 21:35Financial Data and Key Metrics Changes - Consolidated net sales revenue increased by 13.7%, driven by EMEA and APAC growth of 56.5% and Americas growth of 7.1% [34] - Underlying EBITDA increased by 21.9% [41] - Consolidated net sales revenue for the full year increased by 4.7%, with Americas up 2% and EMEA and APAC up 19.6% [41][42] - Underlying free cash flow was $1.1 billion for the year, a decrease of $183 million from the prior year [47] Business Line Data and Key Metrics Changes - Coors Light grew net sales revenue by 4.4% and Miller Lite by 7.6% in the U.S. [17] - Above premium net sales revenue grew over 15% in 2021 [18] - Hard seltzer portfolio grew triple digits in 2021, with Topo Chico Hard Seltzer and Vizzy among the top five brands in the U.S. [19][21] Market Data and Key Metrics Changes - U.S. on-premise net sales revenue was approximately 86% of December 2019 levels, down from approximately 88% in the third quarter [33] - Canada was approximately 60% of December 2019 net sales revenue, down from approximately 80% in the third quarter [33] - UK net sales revenue was below 80% after being close to 100% in the third quarter [33] Company Strategy and Development Direction - The company aims to become a total beverage company, with beyond beer products contributing approximately $800 million to 2021 net sales revenue [25] - Continued investment in marketing and brand innovation is planned to support long-term growth [28] - The company expects to deliver mid-single-digit net sales revenue growth and high single-digit underlying income before income taxes growth in 2022 [51] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the Omicron variant and government restrictions impacting on-premise sales [11][12] - The company is optimistic about consumer return to on-premise venues as restrictions ease [71] - Management expressed confidence in the revitalization plan, indicating that the business is fundamentally more sound than before [62] Other Important Information - The company reduced net debt by nearly $1 billion in 2021, improving financial flexibility [49] - A dividend of $0.58 per share was declared, an increase of 12% [55] - A share repurchase program was approved, authorizing the purchase of up to $200 million of common stock [55] Q&A Session Summary Question: Sales guidance breakdown and outlook for Coors Light and Miller Lite - Management expects a mix shift into above premium and emerging growth, with price increases of 3% to 5% implemented [59][60] - Coors Light and Miller Lite ended the year with top-line growth, indicating a strong position heading into 2022 [62] Question: Business start in January and impact of Omicron - Management attributed January's challenges primarily to Omicron, with consumer behavior improving in February [71] Question: G&A savings and EBITDA guidance - Management clarified that while inflationary pressures exist, a robust hedging program and cost savings initiatives are in place to mitigate impacts [78][80] - The decision to provide guidance based on net income before tax aligns with the revitalization plan goals [86] Question: COGS outlook and inflation impact - Management expects continued inflation on commodities and packaging materials, but benefits from volume leverage and a robust hedging program are anticipated [104] Question: Gross margin expectations - Management indicated that gross margins may face pressure but expects pricing and positive mix to help offset COGS pressures [113]