Molson Coors Brewing Company has reported net sales of $2.33 billion (€1.95 billion), a decrease of 4.8%, in the first quarter of its financial year.
The drinks company said that this is mainly due to lower financial and royalty volumes, negative global mix, adoption of the new revenue recognition accounting standard, and the approximate $50 million (€41.7 million) impact of cycling the indirect tax provision in Europe that was reversed a year ago.
These factors were partially offset by positive global pricing and foreign currency movements. Net sales, the group added, declined 7.2% in at constant currency levels.
Targets Still On Course
Molson Coors president and chief executive officer Mark Hunter said, “In the first quarter, which is seasonally the smallest profit quarter of the year for us, our Canadian, European and International businesses maintained their underlying progress from 2017.
“The U.S. beer industry had a softer-than-anticipated start to the year, which impacted both top- and bottom-line performance and which, when coupled with the U.S. distributor inventory destocking and the anticipated cycling of the indirect tax provision benefit in Europe last year, led to an underlying EBITDA reduction of 18.5% for our company in the first quarter.
“We do not see these results as indicative of our full-year performance versus our plan, and we remain committed to delivering our 2018 guidance."
In 2018, Molson Coors is expecting an underlying free cash flow of $1.5 billion (€1.25 billion), plus or minus 10%, which excludes the $328 million (€273 million) cash payment received in January 2018 related to resolving a purchase price adjustment to the October 2016 acquisition of the Miller International business.
In January Molson Coors completed the acquisition of UK cider company Aspall, as the American beer giant looked to strengthen its position in the UK and international cider market.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Aidan O'Sullivan. Click subscribe to sign up to ESM: European Supermarket Magazine