Molson Coors(US:TAP)2024-02-13 20:42Financial Data and Key Metrics Changes - In 2023, the company's global net revenue grew more than 9%, with underlying pre-tax income increasing by 36.9% and underlying free cash flow climbing to $1.4 billion, exceeding expectations [21][59][76] - The company ended the year with net debt of $5.4 billion, down over $600 million, achieving a net debt to underlying EBITDA ratio of 2.2x, aligned with long-term goals [23][90] - Gross profit is expected to increase driven by mix and cost savings, although underlying cost of goods sold per hectoliter is anticipated to rise due to inflation and premiumization [24][90] Business Line Data and Key Metrics Changes - Coors Light and Miller Lite each grew more in dollars in the on-premise than any other beer brand, contributing to an incremental $1 billion in distributor revenue [2][68] - Coors Banquet brand volume grew by nearly 20% for the full year, gaining industry share for 11 consecutive quarters [3] - Simply Spiked more than doubled its volume in the U.S. in 2023, with Simply Spiked Peach being the top innovation by volume and dollar sales in the grocery channel [6] Market Data and Key Metrics Changes - In the U.K., Madri Excepcional was the fastest growing major beer brand, with volumes growing by 80% for the full year [5] - In Canada, brand volume increased by 0.7%, with the company gaining nearly 2 share points, marking the strongest growth of any major brewer in the country [11] - In Latin America, brand volume was down 5% due to challenging economic conditions, while EMEA and APAC saw a decline of 2.2% [11] Company Strategy and Development Direction - The company plans to focus on core brands like Coors Light, Miller Lite, and Coors Banquet, with significant marketing campaigns to support growth [68][81] - The company is committed to premiumization, aiming for one-third of total global net brand revenue to come from above premium products [77] - The company continues to invest in capital projects, with approximately $690 million allocated for modernization and efficiency improvements [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum of brands and plans for 2024, citing strong results in 2023 despite industry challenges [7][85] - The company anticipates low single-digit net sales revenue growth and mid-single-digit underlying pre-tax income growth for 2024 [90] - Management noted that the changes in the U.S. beer industry are permanent, with expectations to gain market share moving forward [25][130] Other Important Information - The company raised its dividend by 8% and repurchased approximately 150 million shares under a new share repurchase program [21][41] - The company is launching new products like Simply Spiked Lemonade and has plans for further expansion of the Madri brand [84][112] Q&A Session All Questions and Answers Question: What are the expectations for market share and volume performance in 2024? - Management expects to continue building market share from Q4 into 2024, with strong volume performance anticipated in the first quarter [93][126] Question: What factors contributed to the upside surprise in Q4? - The industry performed better than expected in the U.S. market, contributing to a slight exceedance of underlying profit guidance [129] Question: How does the company view the impact of cannabis on beer consumption? - Management stated that cannabis beverages have not significantly impacted alcohol beverage consumption, particularly in developed markets like Canada [48]