Molson Coors Beverage Company Q3 FY2025 earnings call

• Gavin Hattersley reflected on his tenure and introduced Rahul Goyal as the new CEO. • Rahul outlined strategic priorities: focusing on portfolio including core/economy beers (e.g., Miller Lite, Coors Light, Banquet, Miller High Life, Keystone Light), above premium (e.g., Peroni, Blue Moon), and beyond beer (e.g., Topo Chico, Fever-Tree partnership). • Announced restructuring of Americas business unit to reduce salaried headcount by ~400 positions, redeploy savings to invest in key brands and capabilities. • Tracey Joubert reviewed quarterly financials and reaffirmed 2025 guidance.

Consolidated net sales revenue was down 3.3%. Underlying pretax income was down 11.9% and underlying earnings per share was down 7.2%. The U.S. beer industry was down minus 4.7% internally. U.S. volume share was down 40 basis points. Contract brewing was a 450,000 hectoliter headwind to Americas financial volume. Excluding contract brewing, U.S. STWs outpaced STRs. EMEA and APAC volume were pressured by soft market demand and competition. A noncash partial goodwill impairment charge of $3.6 billion and noncash intangible asset impairment charges of $274 million were recorded.

• Reaffirmed 2025 guidance with net sales revenue declining 3%-4% on constant currency basis. • Underlying pretax income expected to decline 12%-15%, underlying EPS decline 7%-10%, underlying free cash flow $1.3B ±10%. • Lower year-end U.S. distributor inventory levels, Midwest Premium pricing pressures, and lapping softer comps from contract brewing impact guidance.

• Macro-related factors pressuring consumption behavior, particularly affecting lower income and Hispanic consumers. • Industry softness and heightened competition in EMEA and APAC. • Volatility in Midwest Premium pricing impacting COGS. • Noncash goodwill and intangible asset impairments affecting the balance sheet.

Q: Peter Grom asked about opportunities/challenges ahead for Rahul and color on 4Q top line for Tracey.

A: Rahul emphasized urgency and pace, focusing on listening to people and customers. Tracey noted better top line in EMEA, APAC, and Canada, and lapping softer comps from contract brewing in U.S.

Q: Chris Carey inquired about inventory and investing perspective.

A: Rahul stated distributor inventories are healthy, and capital deployment will balance returning cash to shareholders and filling portfolio gaps.

Q: Bonnie Herzog asked about beer category pressures and cyclical vs structural.

A: Rahul explained current category pressures are cyclical, expecting industry to return to pre-2025 levels, with opportunities in portfolio strengthening.

Q: Drew Levine asked about organic sales growth and portfolio gaps.

A: Rahul discussed pathway to growth with portfolio strengthening and potential M&A to fill gaps.

Q: Peter Galbo asked about bond maturity and impairment charge.

A: Tracey noted reviewing debt maturity, and Rahul explained impairment charge factors including performance and market multiples.

Q: William Kirk asked about portfolio gaps and focus.

A: Rahul outlined focus on portfolio, execution close to customers, and capabilities, emphasizing winning in current markets.

Q: Filippo Falorni asked about partnerships/acquisitions and restructuring savings.

A: Rahul discussed focus on beer and leveraging partnerships, while Tracey noted restructuring charges and ongoing details on savings.

Q: Steve Powers asked about restructuring enabling speed and portfolio balance.

A: Rahul explained restructuring to enable speed through regional focus and accountability, and balance between beer and beyond beer investments.

Q: Michael Lavery asked about economy brands and goodwill.

A: Rahul discussed economy brands' regional focus and goodwill factors including performance and market multiples.

Q: Robert Ottenstein asked about Board mandate and freedom.

A: Rahul stated Board focuses on maximizing shareholder value with no sacred cows.

Q: Eric Serotta asked about investment capabilities.

A: Rahul outlined focus on supply chain, commercial, and technology capabilities, ensuring ROI.

Q: Kevin Grundy asked about cost structure and investment.

A: Rahul discussed brewery efficiency and balanced investment for productivity.

Q: Kaumil Gajrawala asked about restructuring scale.

A: Rahul indicated more to come on total plan and cost efficiency.

Q: Lauren Lieberman asked about commercial changes.

A: Rahul explained need for faster response to market dynamics and regional resource deployment.

Q: Nadine Sarwat asked about consumer sentiment and cyclicality.

A: Rahul linked current category pressures to macro issues, expecting cyclical recovery.

Q: Robert Moskow asked about regional vs national marketing.

A: Rahul discussed opportunities for national brands with improved regional execution.

Q: Gerald Pascarelli asked about M&A and Midwest Premium.

A: Rahul indicated potential focus on beyond beer for M&A, and Tracey discussed Midwest Premium hedging and impact on guidance