Molson Coors Beverage Company

Today and welcome to the Molson Coors Beverage Company 3rd Quarter 2020 Earnings Conference Call. You can find related slides on the Investor Relations page of the Molson Coors website. Our speakers today are Gavin Hattersley, President and Chief Executive Officer, and Tracy Schobert, Chief Financial Officer. With that, I'll hand it over to Greg Tierney, Vice President of FP&A and Investor Relations.

All right, thank you, Danielle, and hello, everyone. Following prepared remarks from Gavin and Tracy, we will take your questions. Please limit yourself to one question. If you do have more than one question to ask, please ask your most pressing question first and then re-answer the queue to follow up. And if you have technical questions on the quarter, please pick them up with me or Tracy Mangini on the IR team in the days and weeks to follow. Today's discussion includes forward-looking statements and actual results or trends could differ materially from our forecast. For more information, please refer to the risk factors discussed in our most recent filings with the SEC. We assume no obligation to update forward-looking statements. And GAAP reconciliations for any non-US GAAP measures are included in our news release or otherwise available on our website. Also, unless otherwise indicated, all financial results the company discusses are versus the comparable prior year period and in US dollars. And with that, over to you, Gavin.

Thank you, Greg, and thank you all for joining us today. Well, what a year it's been so far. If you're like most people, there are probably a lot of words that come to mind when you think of 2020. But for Molson Coors, this year can be summarized in three words, persistence, perseverance, and progress. That is how 2020 has been defined by the Molson Coors Beverage Company as we drive for top-line growth. We're very pleased with our performance in the third quarter as we beat top and bottom line expectations and made tangible progress on our revitalization plan. We had bold plans at the beginning of 2020 to build on the strength of our iconic core brands, aggressively grow our above premium portfolio, expand beyond the bearer, invest in our capabilities, and support our people and our communities. Yet 2020 has presented new obstacles for everyone for which we've had to adjust. Like all other beverage companies, one of the biggest challenges this year has been packaging supply. To put into perspective the scope of the challenges, we sold 300 million more cans of beer in the first nine months of 2020 than we did in the same period in 2019 in the United States alone. And there have been times over the past few months when demand for tall cans was four times what it was in 2019. I'm pleased to report that while work remains, inventory is steadily improving in the U.S. We are approaching historical levels of paperboard supply. We are confirming most orders for bottled beer and seeing steady improvements in supply. Our 12-ounce industry standard can supply is stabilizing, and we anticipate it will continue to increase through the year as we return to full inventory. and we are starting to more fully cover demand for tall cans and expect steady improvement in inventory through the balance of the year. When 2020 has thrown us challenges like this, we've met each challenge head on and we have never lost sight of our plan. Now we're able to show what's possible as we execute that plan, as we drive toward top line growth. Coors Light and Miller Light grew 6% and 9.5% respectively in the US off-premise so far this year. As of today, Their combined segment share has grown for 24 consecutive quarters. That is six straight years. And our aim now is to stabilize our biggest brands in the total beer category. Above premium products, a record higher portion of our U.S. portfolio since the business formed in 2008, despite the on-premise restrictions. By the end of 2021, we plan to capture a double-digit share of the U.S. seltzer market. backed by what arguably is the most complete self-support portfolio in the business. Trust, our Canadian joint venture, has quickly become a market share leader of ready-to-drink cannabis beverages in Canada. The company estimates market share of over 50% in key markets, such as Quebec. And we believe that our emerging growth division can become a $1 billion business in revenue terms in three years' time. We are expanding our production capacity for seltzers by over 400% and for Blue Moon Light Sky by approximately 400%. We will continue prioritizing capital projects that will allow us to further expand our seltzer and innovation production capacity. We redefined our company values, set out to increase representation of people of color at all levels of our company, and redirected some social media spending support organizations dedicated to social justice, equity, and empowerment. We will continue to take tangible steps to build a brighter future for our people and our communities.