Molson Coors Beverage Company reported today a net loss of USD 1.4 billion, or USD 6.32 per share, on net sales of USD 2.3 billion in its fourth quarter, missing Wall Street’s expectations for the top and bottom line. The loss was primarily driven by a USD 1.5 billion goodwill impairment charge in Europe, where sales, primarily in the U.K., were decimated by government restrictions that largely shut down the on-trade to help curb the spread of the novel coronavirus.
Sales dropped 7.7% compared to the year-ago quarter, due primarily to performance in Europe and Canada, where governments enacted sustained restrictions to on-premise venues such as bars, restaurants, taverns, pubs and stadiums. In the U.K., in particular, the shutdowns were harmful for Molson Coors, which derives a significant amount of its sales from taverns, pubs and restaurants.
The results in Europe accounted for 92% of Molson Coors’ fourth-quarter top-line decline.
Molson Coors CEO Gavin Hattersley said in a call with analysts that although 2020 was “an incredibly challenging year for everyone,” he considered Molson Coors fortunate because the revitalization plan it implemented in late 2019 positioned it “well to weather the storms of 2020.”
Despite the ravages of the global pandemic, a “leaner and more nimble” Molson Coors was able to “accomplish an incredible amount in 2020,” Hattersley said. That has primed the company, providing “a tremendous springboard for 2021,” in which he projects mid-single-digit net sales revenue growth for the full year as Molson Coors continues to execute its revitalization plan.
In the U.S., the company’s largest market, net sales revenue rose 1.9% on a brand volume basis, reflecting success from new brands such as Vizzy Hard Seltzer (inside.beer, 8.2.2020) and Blue Moon LightSky and off-premise growth from Coors Light and Miller Lite, its top-selling brands that combined to grow share of the premium lights segment for the 25th consecutive quarter.
“We grew the top line in the U.S.,” Hattersley said. “Our plan is working.”
Hattersley also said, the top-line numbers in the fourth quarter do “not tell the full story” of the company’s performance during a year defined by unprecedented disruptions wrought by the global pandemic.
The company said it eliminated USD 1.1 billion of debt in 2020; booked growth of its core brands, Coors Light and Miller Lite, in the off-premise; and its portfolio of above-premium brands hit a record-high percentage of the company’s overall U.S. portfolio in the second half of 2020.
Molson Coors also spent more than a half billion during the year in capital projects, including several to expand production and packaging capacity of emerging beverages such as hard seltzers.
After doubling its share in the hard seltzer category in the U.S. in 2020, the company plans to invest more behind its growing portfolio in 2021, a plan that includes adding a new variety pack of Vizzy Hard Seltzer and Vizzy Lemonade; beefing up marketing spend behind Coors Seltzer; and launching Topo Chico Hard Seltzer, Topo Chico Ranch Water and Proof Point in the U.S. (inside.beer. 29.9.2020)
Vizzy and Coors Seltzer also will launch in Canada this spring, and Three Fold hard seltzer is planned to debut in the U.K..
Inside its beer portfolio, Molson Coors plans to continue investing behind Miller Lite and Coors Light in 2021 while taking craft brand Hop Valley across North America and launching Yuengling’s portfolio of beers in Texas, and eventually in other markets, via a new joint venture with D.G. Yuengling & Son Inc. (inside.beer, 15.9.2020)
On the non-alc side, its Canadian joint venture Truss (inside.beer, 27.8.2020) captured the top dollar share in the Canadian cannabis beverage market in December. And, the company says deals signed in 2020 and early this year will help build its emerging growth division into a USD 1 billion revenue business by 2023, Hattersley said. That includes distribution agreements with La Colombe on ready-to-drink coffee (inside.beer, 1.10.2020) and ZOA, a new energy drink Molson Coors will distribute in partnership with a team led by star Dwayne Johnson. (inside.beer, 11.1.2021)
Molson Coors, he said, is “going to follow through” on its plan to grow its top line, noting that “we are on the pathway there.”
The full report with fourth quarter and full year 2020 results and a guidance for 2021can be found here.