USA/Canada: Molson Coors posts first full-year revenue growth in a decade

Molson Coors Beverage Co. said today it posted full-year revenue growth in 2021 for the first time in a decade, led by growth of its biggest brands, a sales rebound in bars, restaurants and at events, and a continued shift into higher-priced, above-premium beverages, which reached a record level of the company's global portfolio.

The company reported double-digit revenue and profit growth in its fiscal fourth quarter — the second consecutive quarter it has posted both top- and bottom-line gains versus the year-ago quarter — and issued guidance for 2022 projecting both top-line and bottom-line growth for the year. The achievement would mark the first time in more than a decade the company would grow revenues and profits for a full fiscal year.

Especially the two problem children Miller Lite and Coors Light showed positive sales growth in 2021 as the company’s turnaround plan began bearing fruit. The company's two top-selling brands each grew net sales revenue globally, with a particularly strong performance in the U.S., where Coors Light finished the year up 4.4% and Miller Lite up 7.6%. In Canada, Molson Coors' second-largest market, Coors Light reported revenue growth in the fourth quarter while Miller Lite accelerated its growth in the fourth quarter to finish 2021 up double digits.

"Today our top line is growing for the first time in ten years, our core brands are growing net sales revenue for the first time in years, our portfolio is premiumizing to levels never before achieved, we are moving to scale beyond beer, and our business is making tangible progress toward achieving the goals of our revitalization plan," Molson Coors CEO Gavin Hattersley said in a morning call with analysts and investors. "We are set up for a strong 2022."

The global beverage company also said it paid down USD 900 million in debt for the year and its board increased its quarterly dividend 12% to 38 cents per share.

Fourth-quarter net sales revenue rose to USD 2.62 billion, up 14.2% compared with the year-ago quarter. The company swung to net income of USD 80 million, or 37 cents per diluted share. That’s compared with a net loss of USD 1.4 billion, or USD 6.32 per diluted share, in the fourth quarter of 2020, which was largely attributed to one-time charges.

Full-year net sales revenue rose 6.5% to USD 10.28 billion, up from USD 9.65 billion in 2020. The company reported 2021 net income of USD 1.01 billion, or USD 4.62 per diluted share, compared to a net loss of USD 949 million, or USD 4.38 per diluted share, in 2020.

Molson Coors' 2021 gains came despite another bumpy year in the beverage industry, which included the double-punch of a snarled global supply chain and significant inflation, which resulted in soaring prices for transportation and key raw materials. The year also was marred by persistent issues wrought by the global pandemic, which resulted in a fourth-quarter pullback and renewed restrictions amid the rapid spread of the omicron variant in key markets.

"That impacted our business, creating a whole host of challenges," Hattersley said. "And yet, through it all, Molson Coors made tremendous progress. Molson Coors finished 2021 as a healthier business than we were at the end of 2019."

Molson Coors finished 2021 with above-premium beverages comprising the largest percentage of sales in the company's history, fueled by growth in hard seltzers in the U.S. and Canada and beer innovations in the U.K. and Central and Eastern Europe.

In the U.S., the company boasted the fastest-growing hard seltzer portfolio among major beverage companies, posting triple-digit growth in 2021, per data from market research firm IRI. Its two entries, Vizzy and Topo Chico Hard Seltzer, each rank in the top five hard seltzer brands in the country and continue to grow quarter after quarter, Hattersley said.

Molson Coors is particularly bullish on Topo Chico Hard Seltzer, which launched nationwide in January. With momentum in both established and new markets, and more innovation on the way, the company thinks the brand can become a top-3 hard seltzer in the competitive U.S. market. Twelve-packs of the brand's newest entry, Topo Chico Ranch Water, are now the fastest-turning ranch water in the U.S.

The company's hard seltzer portfolio also is taking flight in Canada, where Vizzy and Coors Seltzer have combined to amass a 9 share in just nine months on the market.

Back in beer, Blue Moon Belgian White and Peroni each grew in the U.S. in 2021, and Molson Coors’ portfolio of regional craft brands outpaced the category, per IRI. The company is gaining total share of craft in Canada, as well, led by strong performance of Brasseur de Montreal and Trou du Diable.

In Europe, a pair of beers, Madrí Excepcional and Pravha, are posting impressive results. Madrí Excepcional is delivering the fourth-highest rate of sale for all draught world lagers in the U.K., according to data from CGA. And Pravha in 2021 became the fastest-growing premium 4% lager, per CGA.

Finally, in Latin America, Molson Coors brands generated double-digit growth, with record sales in many of the markets in which the company operates, Hattersley said.

Molson Coors made significant strides in its effort to transform into a modern beverage company in 2021, led by the performance of its beyond beer portfolio, particularly the runaway success of ZOA, the fastest-growing energy drink the U.S., per IRI.

The Dwayne “The Rock” Johnson-backed ZOA, which now ranks as the No. 2 health energy drink in the convenience channel, helped Molson Coors’ Emerging Growth business contribute nearly USD 800 million in 2021 net sales revenue, tracking ahead of its USD 1 billion annual revenue target by 2023. The brand, which launched last year, has plenty of blue sky ahead as it continues to expand distribution across the U.S., Hattersley said.

Molson Coors invested more than a half billion on capital investments in 2021, including on projects to modernize its Golden brewery, to open its new brewery in Montreal and to expand its hard seltzer capacity in Canada and the U.K.

In 2022, the company plans to continue pouring money behind enhancements, including projects to bring online new hard seltzer capabilities in the U.S. and Canada and add new canning and production capabilities in the U.K. Molson Coors also plans to increase its marketing investments in 2022, said CFO Tracey Joubert“We expect to continue to invest behind our core brands and key innovations, which entails increasing the level of marketing investment from the prior year,” she said.

The commitment to continue investing behind the business, combined with positive results from the company’s biggest brands and biggest bets in 2021 has set a “strong foundation” for Molson Coors to achieve sustainable growth in the future, Hattersley said. “While we’re proud of the steps we’ve taken, we’re even more excited about where we can go from here,” he said.

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