Molson Coors grew top and bottom line on underlying pre-tax basis for full-year 2022

For the first time in more than a decade, Molson Coors Beverage Company grew both revenue and underlying pre-tax income in its 2022 fiscal year, an achievement executives lauded as the product of three years of work under a revitalization plan that set out clear long-term goals for the business.  

Molson Coors said today its 2022 net sales grew 4.1% — 7% in constant currency — to $10.7 billion, up from $10.27 billion in 2021. Underlying pre-tax net income, which strips out a goodwill impairment and other one-time charges, increased 5.3% (7.6% in constant currency) to $1.1 billion.

Once again buoyed by sustained strong performance among its core brands — Coors Light and Miller Lite turned in their strongest combined full-year dollar share performance in a decade — and surging success of its above-premium portfolio, the company is “healthier today than it has been in many years, and our trajectory is strong,” said Molson Coors CEO Gavin Hattersley.

“Our 2022 results are not an aberration or a moment in time but a product of three years of work under our revitalization plan,” he said. “And it is a milestone on our path to delivering sustainable growth, year after year."

The company said fourth-quarter net sales rose 0.4% — 3.8% in constant currency — marking the seventh consecutive quarter of top-line growth on a constant-currency basis.

Aside from a non-cash $845 million partial goodwill impairment charge in the Americas and other one-time items, Molson Coors said underlying income before income taxes in the quarter rose 51.1% to a record $328.6 million.

The results come amid a challenging operating environment characterized by global inflationary pressures, an industry-wide decline in U.S. beer volumes and the nagging specter of overall economic uncertainty.

Despite the challenges, the company has stuck to its playbook — investing in its business, returning cash to shareholders and enhancing its financial flexibility in part by paying down debt, said Tracey Joubert, Molson Coors’ chief financial officer, in a call with analysts and investors.

In 2022, Molson Coors reduced its net debt by $562.4 million and said it expects to grow net sales revenue and underlying pre-tax income again in 2023.  

“We are proud of our accomplishments in 2022, particularly given the challenging inflationary and operating environment,” Joubert said. “While we expect these challenges to continue to impact us and our industry in 2023, we … anticipate continued growth while investing prudently in the long-term health of the business and returning cash to shareholders."

Core brands leading the way

The fourth quarter once again benefitted by the performance of Molson Coors’ core brands.

Coors Light and Miller Lite collectively grew U.S. volume and dollar share in the quarter, combining to outperform the combination of key competitors Michelob Ultra and Bud Light in U.S. volume-share performance for the fourth quarter, Hattersley said.

In Canada, flagship Molson Canadian grew revenue and industry share in 2022. And in the U.K., Carling continues to hold its spot as the No. 1 brand in the market.

“These trends didn’t just suddenly appear,” Hattersley said. “They’re the result of consistent brand messaging and more effective brand investment.”

Above-premium brands’ growing role

Molson Coors has aggressively focused on growing its stable of above-premium brands, which today account for more than 28% of its global net sales revenue, up from 23% in 2019.

In addition to its expanding hard seltzer portfolio, the company has built momentum behind a portfolio of above-premium beer and beyond-beer brands across its global footprint. No more so, perhaps, than in the U.S. — its biggest market.

In 2022, the Italian import Peroni grew revenue double digits in the U.S. compared with pre-pandemic 2019, and the Blue Moon family of brands also booked higher revenue last year versus 2019.

Simply Spiked Lemonade, which Molson Coors launched last summer in partnership with The Coca-Cola Company, was the fastest-growing new innovation in the U.S. flavored alcohol beverage category and is poised to grow in 2023.

Molson Coors’ Canadian craft division grew brand volume double digits in 2022, and its collection of hard seltzers finished the year as the only hard seltzer portfolio gaining industry share in Canada.

But the standout star globally is Madri Excepcional, a light-bodied lager that has taken the U.K. beer market by storm. In less than two years on the market, Madri has become one of Molson Coors’ top five above-premium brands globally, Hattersley said.

Growing beyond the beer aisle

Diversifying beyond beer remains a focus.

Molson Coors’ biggest play in the space, ZOA, posted triple-digit brand volume growth in the fourth quarter and the full year, with trends accelerating in the quarter. Redesigned packaging and retail programming aim to expand sales and build momentum even more in 2023.

The company’s first full-strength spirit, Five Trail Whiskey, continues to expand into more states and select international markets.

And Topo Chico Spirited – a line of ready-to-drink beverages made with real spirits and another product of Molson Coors’ relationship with The Coca-Cola Company — is slated to roll out to select markets this spring in a volley to grab a share of the fast-growing ready-to-drink cocktail space.

Navigating an uncertain 2023

Hattersley said the company “sees reasons for caution about the consumer landscape in the immediate term — not just for beer, but for consumer goods more broadly.”

Value-conscious consumers in the U.S. are trading down into smaller pack sizes. But while beer volumes have softened, beer still maintains its share of consumers’ total retail spend and gained share of total alcohol beverage in the quarter, projecting some optimism, Hattersley said.

“Even in this challenging and uncertain economic climate, we expect to deliver… by achieving top- and bottom-line growth, with margin improvement, on a consistent, long-term basis,” he said. “Our portfolio is strategically built for strength across the range of pricing tiers within the beer industry. That gives us greater stability than some of our competitors in any economic climate.”

*Please see Molson Coors' Q4 earnings release to find disclosure and applicable reconciliations of non-GAAP financial measures included in this story.