Molson Coors Sees Net Sales Decline In Q2, CEO To Retire
Molson Coors Brewing Co has reported a year-on-year net sales decline of 2.9% on a constant currency basis, to $2.95 billion (€2.65 billion), in the second quarter of its financial year.
The underlying EBITDA fell 12.8%, at constant currency, to $676.0 million (€607.1 million) from $783.3 million (€703.5 million) in 2018.
Molson Coors chief executive, Mark Hunter, said, "After a solid start in the first four months of the year, May and June were challenging reflecting unfavourable weather and weak industry demand across our major geographies, resulting in a disappointing volume performance in the quarter."
However, its constant currency net sales per hectolitre increased by 3.7%, driven by favourable net pricing in all segments and a positive global mix.
"We also saw strong premium light share growth in the US as Miller Lite and Coors Light each gained segment share.
"This was ahead of the newly launched Coors Light "Made to Chill" advertising, which is focused on new drinker recruitment by dramatising Coors Light's purpose to refresh the spirit through its mountain cold refreshment credentials," Hunter added.
Net sales declined by 2.9% in the United States and Canada in the second quarter, while it fell by 2.4% in Europe.
In Europe, the brewer saw brand volumes drop 6.5% due to unfavourable weather and soft industry demand.
In the United States, brand volumes declined 4.8%, while Canada registered a 5.1% decline.
Net sales in the beer maker's international business fell 12.1%, in constant currency, to $58.9 million, driven by the shift to local production in Mexico.
Its international brand volume decreased 11.9% during the quarter because of higher net pricing on Coors Light in Mexico, and supply chain constraints in India.
The brewer's first-half net sales saw a 1.4% year-on-year decline on a constant currency basis to $5,251.6 million.
Underlying EBITDA dropped by 8.2% in constant currency to $1.1 billion from $1.21 million in the same period last year.
Hunter said, "We remain resolute on the ambition to improve our top-line through increased investments in our brands, premiumisation and innovation initiatives, including the launch of our Truss cannabis-infused non-alcoholic beverage portfolio in Canada later this year.
"We are committed to doing this while maintaining our investment-grade credit rating and strengthening our quarterly dividend, which increased by 39% to $0.57 per share,” he added.
Meanwhile, US unit head Gavin Hattersley will replace chief executive officer Mark Hunter, who will retire in September after more than a decade with the brewer.
Under, Hunter, 56, the company bought out SABMiller's $12 billion stake in MillerCoors in 2016, which helped it grow sales in the United States.
Before becoming CEO in 2015, Hunter held several top positions and played a key role in the acquisition of the Carling business in the UK in 2002.
Hattersley, 56, has been heading the US unit since 2015 and was Molson's chief financial officer for three years before taking the role.