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Dec 31, 2020
Molson Coors Q4 2020 Earnings Report
reported fourth quarter and full year results and reinstated guidance for 2021.
Key Takeaways
Molson Coors reported a decrease in net sales revenue by 7.7% and a net loss of $1.4 billion for the fourth quarter of 2020, primarily driven by declines in Europe and Canada due to coronavirus pandemic restrictions and a $1.5 billion Europe goodwill impairment charge. However, U.S. net sales revenue increased by 1.9%. The company is reinstating financial guidance for 2021 and expects to reinstate a dividend in the second half of the year.
Net Sales Revenue decreased 7.7% reported and 8.3% in constant currency, primarily driven by Europe and Canada declines resulting from restrictions in the on-premise channel as a result of the coronavirus pandemic.
Net Sales Revenue in the U.S. increased 1.9%, on a brand volume basis, partially offsetting the Europe and Canada results.
U.S. GAAP Net Loss of $1.4 billion ($6.32 per share) primarily driven by $1.5 billion Europe goodwill impairment charge.
Non-GAAP EPS of $0.40 decreased 60.8%.
Molson Coors
Molson Coors
Molson Coors Revenue by Segment
Revenue by Segment
Americas Revenue
CapyFin.comEMEA&APAC Revenue
CapyFin.com Forward Guidance
Molson Coors expects a mid-single digit increase in net sales revenue on a constant currency basis and approximately flat underlying EBITDA compared to 2020. The company intends to maintain its investment grade rating and expects to achieve a net debt to underlying EBITDA ratio of approximately 3.25x by the end of 2021 and below 3.0x by the end of 2022. The company also expects to reinstate a dividend in the second half of 2021.
Positive Outlook
- Net sales revenue: mid-single digit increase on a constant currency basis.
- Deleverage: We intend to maintain our investment grade rating as demonstrated by our continued deleveraging.
- We expect to achieve a net debt to underlying EBITDA ratio of approximately 3.25x by the end of 2021 and below 3.0x by the end of 2022.
- Underlying depreciation and amortization: approximately $800 million.
- Underlying effective tax rate: in the range of 20% to 23% for 2021.
Challenges Ahead
- While uncertainty remains regarding the coronavirus pandemic, including the timing and strength of the recovery, we currently expect the following for full year 2021, which we consider a year of investment
- Underlying EBITDA: approximately flat compared to 2020 on a constant currency basis.
- Consolidated net interest expense: approximately $270 million, plus or minus 5%.
- Unspecified impacts of the coronavirus pandemic
- Uncertainty regarding the timing and strength of the recovery.