Molson Coors Beverage Company

Good day and welcome to the Molson Coors Beverage Company First Quarter Fiscal Year 2022 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, Tracey Jabbair, Chief Financial Officer, and with that I'll hand it over to Greg Tierney, Vice President of FP&A and Investor Relations.

Thank you, Bricka, and hello, everyone. Following our prepared remarks today from Gavin and Tracy, we will take your questions. In an effort to address as many questions as possible, we ask that you limit yourself to one question. If you have more than one question, we will answer your first question and then ask you to re-enter the queue for any additional follow-ups. If you have technical questions on the quarter, please pick them up with our IR team in the days and weeks that follow. Today's discussion includes forward-looking statements, 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. Gap reconciliations for any non-U.S. gap measures are included in our new release. Also, unless otherwise indicated, all financial results the company discusses are versus the comparable prior year period in U.S. dollars and in constant currency when discussing percentage changes from the prior year period. So with that, over to you, Gavin.

Thank you, Greg. In the first quarter of 2022, Molson Coors continued to generate positive trends, giving us continued confidence in our ability to meet our full year guidance. We grew the top line by double digits and the bottom line on an underlying basis by triple digits. Top line growth has historically been the challenge for this business, but through our strong execution of the revitalization plan, we have now grown the top line for four consecutive quarters. The top line growth we generated in the last quarter was our largest quarterly top line growth in over a decade. Our core brands continue to outperform their peers. Our global above-premium portfolio continued to grow, again achieving a record portion of our overall portfolio by volume and revenue. To put a finer point on it, in the U.S., the economy segment accounted for more than 100% of our volume decline, following our decision to streamline and strengthen this part of our portfolio. Our expansion beyond the bear aisle continues meaningfully, as ZOA generated its largest sales month ever this March. And we continue to invest in our capabilities, most notably with a project that also increases the profitability of one of our fastest growing beverages, Topo Chico hard seltzer. Collectively, these are the core tenants of the revitalization plan we laid out for you over two years ago. And it is very heartening to see our business generating consistent results in each of these areas. Our core brands globally had another very strong quarter. In Canada, Coors Light grew share of the beer category, and our national champion brands in Emeo and Apex saw significant improvements with the reopening of the on-premise channel. You will recall that pubs in the UK were closed the entire first quarter of 2021. But by the end of the first quarter of 2022, beer sales in pubs were back to 98% of pre-coronavirus levels, and this was particularly beneficial to our Carling brand, the largest beer brand in the UK. As a result, in the first quarter, the EMEA and APAC business unit substantially improved its earnings and nearly doubled its 2021 revenue. In fact, we exceeded our EMEA and APAC first quarter 2019 revenues, which is a fantastic sign and further evidence of the value of increasing marketing spend behind our brands there. In the US, Coors Light and Miller Light continue their strong performance, made possible due to a multi-year approach that is clearly bearing fruit. These two brands compete in the same segment, so for years it seemed virtually impossible to get them both moving in the right direction at the same time. In the late summer and early fall of 2019, under Michelle Saint-Jacques, our chief marketing officer, the marketing team made a post on how they show up in ads. You can see that in the quiz like made to chill campaign and in Miller Lite's work since then.