Overview

Molson Coors Beverage Company has a long history of brewing iconic beers and expanding into adjacent beverage categories. The company operates in two main segments - the Americas and EMEA&APAC. In 2024, Molson Coors generated $11.6 billion in net sales, a 0.6% decrease from the prior year, driven by lower financial volumes partially offset by favorable pricing and sales mix.

Financial Performance

Molson Coors’ consolidated net income attributable to the company increased 18.3% to $1.12 billion in 2024, up from $948.9 million in 2023. This was driven by higher operating income, which grew 21.9% to $1.75 billion, as the company benefited from cost savings initiatives and favorable changes in commodity derivative positions. However, total non-operating expenses increased 34.7% due to higher interest costs and pension settlement losses.

The Americas segment, which includes the U.S. and Canada, saw net sales decline 2.0% in 2024 due to lower contract brewing volumes and softer industry demand, though this was partially offset by higher net pricing and favorable sales mix. Income before taxes for the Americas fell 2.8% to $1.52 billion.

In the EMEA&APAC segment, net sales increased 5.0% in 2024, driven by favorable pricing and sales mix as well as positive foreign currency impacts, despite a 2.6% decline in financial volumes. Income before taxes for EMEA&APAC improved significantly, turning a loss of $41.1 million in 2023 into a $145.3 million profit in 2024, as the segment cycled a large impairment charge the prior year.

Molson Coors’ effective tax rate decreased to 23% in 2024 from 24% in 2023, primarily due to the non-taxable gain recognized on the consolidation of the ZOA energy brand.

Strengths and Weaknesses

A key strength for Molson Coors is its portfolio of iconic beer brands like Coors Light, Miller Lite, and Molson Canadian, which continue to drive revenue and profitability. The company has also successfully expanded beyond beer into adjacent categories like hard seltzers, spirits, and non-alcoholic beverages, exemplified by the consolidation of the ZOA energy brand in 2024.

However, Molson Coors faces some challenges, including lower financial volumes in both the Americas and EMEA&APAC segments due to softer industry demand and the wind-down of certain U.S. craft beer businesses. The company also incurred significant restructuring costs related to these craft beer divestitures. Additionally, the company remains highly leveraged, with over $6 billion in debt outstanding as of the end of 2024.

Outlook and Risks

Looking ahead, Molson Coors is focused on executing its strategic priorities, including growing its core beer brands, expanding its premium and above-premium offerings, and scaling its non-beer businesses. The company believes these initiatives, combined with continued cost savings, will drive improved financial performance.

However, the company faces several risks that could impact its future outlook. These include ongoing macroeconomic uncertainty, continued cost inflation pressures, potential regulatory changes limiting alcohol sales, and integration challenges with recent acquisitions and partnerships. Molson Coors’ high leverage also leaves it vulnerable to rising interest rates.

Overall, Molson Coors delivered improved profitability in 2024 despite some volume headwinds. The company’s diversified portfolio, cost discipline, and strategic initiatives provide reasons for optimism, but it will need to navigate various industry and economic challenges to sustain its momentum going forward.